The Issue The issues presented, as framed by the Fifth District’s December 16, 2020, Order are: (1) whether the School Board is entitled to appellate attorney’s fees pursuant to section 1002.33(8)(b), Florida Statutes; and (2) the amount of attorney’s fees to which the School Board is entitled.
Findings Of Fact The Underlying Matter (DOAH Case No. 19-6424) The underlying matter concerned whether Legacy’s school charter for the Legacy Academy Charter School should be terminated for the reasons set forth in the School Board’s November 20, 2019, 90-Day Notice of Proposed Termination of Charter, pursuant to section 1002.33(8)(b). A detailed recounting of the underlying matter can be found in The School Board of Brevard County v. Legacy Academy Charter, Inc., DOAH Case No. 19-6424 (DOAH Aug. 18, 2020), which concluded that the School Board met its burden, by clear and convincing evidence, that it may terminate the Amended Charter. Attorneys’ Fees and Costs for Underlying Matter (DOAH Case No. 20-3911F) On August 28, 2020, the School Board filed a Motion for Attorneys’ Fees, Costs, and Sanctions, which was assigned DOAH Case No. 20-3911F. The undersigned conducted a final hearing in DOAH Case No. 20- 3911F on November 6, 2020. The School Board’s expert on attorneys’ fees at that hearing, Nicholas A. Shannin, Esquire, testified that the hourly rate of $200 for partners and associates at the School Board’s Orlando-based law firm of Garganese, Weiss, D’Agresta & Salzman, P.A. (GWDS), was “incredibly reasonable.” The undersigned held that the $200 hourly rate GWDS charged the School Board for its attorneys was reasonable, and ultimately ordered Legacy, pursuant to section 1002.33(8)(b), to pay the School Board a total of $312,147.80, broken down as follows: (a) $271,162.00 in attorneys’ fees; and (b) $40,985.80 in costs. See The School Bd. of Brevard Cty. v. Legacy Academy Charter, Inc., DOAH Case No 20-3911F (DOAH Dec. 4, 2020). Attorney’s Fees for Appeal (Case No. 5D20-1762) The School Board’s Affidavit of Attorneys’ Fees details the attorney’s fees that the School Board seeks in the appeal, and includes the detailed billing records of GWDS. This affidavit avers that the hourly rate actually billed by counsel was $200 for attorney Erin O’Leary, Esquire, who is Board Certified in Appellate Practice by The Florida Bar, and who handled the appeal. The affidavit further avers that Ms. O’Leary’s total number of hours billed in the appeal was 42.5 hours. Although GWDS attorney Debra Babb-Nutcher, Esquire, participated as counsel in the appeal, including supervising Ms. O’Leary and assisting in case strategy, preparation of documents, and communications with the School Board and opposing counsel, the School Board only seeks to recover the total amount of attorney’s fees charged by Ms. O’Leary. In DOAH Case No. 20-3911F, the undersigned found that the $200 hourly rate GWDS charged the School Board of its attorneys was reasonable, and the undersigned finds that a $200 hourly rate charged by Ms. O’Leary for representing the School Board on appeal is reasonable. The hours expended in this matter are reasonable given the time and labor required, the unique arguments raised by Legacy in attempting to stay the closure of its school, the lack of legal precedent, the multiple factual claims that required rebuttal, the short time frame in which to respond making other work impossible, the significant effort required to defend against the stay, as well as the ultimate success achieved in defeating Legacy’s attempted stay. The School Board has demonstrated that the attorney’s fees sought are reasonable based upon the reasonable rate charged and the reasonable hours expended in the appeal. Legacy has filed nothing to dispute the School Board’s request for appellate attorney’s fees. The Lodestar figure (i.e., the fees charged and hours expended) by Ms. O’Leary in this appeal is $8,500.00 for the work performed between August 19, 2020, through December 3, 2020. The undersigned finds that this Lodestar figure is reasonable in light of the factors enumerated in the Rules of Professional Conduct, found in Rule 4-1.5 of the Rules Regulating The Florida Bar, as well as Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985), and Standard Guaranty Insurance Company v. Quanstrom, 555 So. 2d 828 (Fla. 1990). The undersigned finds that the total fee amount of $8,500.00 for the appeal of the underlying matter, Case No. 5D20-1762, shall be recoverable by the School Board, as prescribed in section 1002.33(8)(b).2
The Issue Whether Petitioner owes sales and use tax (plus penalties and interest) to the Department of Revenue (Department), as alleged in the Department's November 1, 1999, Notice of Decision.
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following findings of fact are made to supplement and clarify the Stipulations of Fact set forth in the parties' Joint Pre-Hearing Stipulation: 1/ Mr. Wiviott is a very successful, "hands-on" entrepreneur who presently owns approximately five or six businesses. Since 1958, when he and his brother opened a carpet store in Milwaukee, Mr. Wiviott has owned approximately 30 different businesses (including nine restaurants and a yacht service business), many of which he has sold "for literally millions of dollars of profit." Approximately two-thirds of the businesses that he has owned he has "started from scratch." There have been instances where Mr. Wiviott has invested in businesses that were in industries in which, at the time of his investment, he had no prior experience. In these instances, he overcame his lack of experience by being "extremely industrious" and doing "research." When Mr. Wiviott has needed to consider a "feminine viewpoint" in making a business decision, he has used Mrs. Wiviott, his wife of 43 years, as a "sounding board." For the past 35 years, William Becker has been Mr. Wiviott's accountant. In 1991 or 1992, Mr. Wiviott purchased two "brand new" boats as business investments. The boats were sold to Mr. Wiviott together as a package. Mr. Wiviott paid a total of $1.1 million for the two boats. The larger of the boats was a 63-foot sport fisherman. Although unfinished, it was seaworthy. Mr. Wiviott named this boat the "Choice One." Mr. Wiviott named the other boat, a 56-foot sport fisherman, the "Choice Too." Mr. Wiviott accepted delivery of the Choice One and Choice Too in the Bahamas. He did not pay any sales tax on his purchase of the boats. After accepting delivery, Mr. Wiviott brought the boats to Fort Lauderdale. In 1993, Mr. Wiviott explored the possibility of entering (for the first time) the yacht charter business. He spoke to various people involved in the industry, including two charter brokers (Bob Offer and Bob Saxon) and a charter yacht owner (Bernie Little). He also had discussions with Mr. Becker. Together, he and Mr. Becker made cost and revenue projections. He ultimately made a "value judgment" to go into the business. Mr. Wiviott retained the services of Mr. Offer to help him find a suitable yacht for the business. One of the yachts that Mr. Offer showed Mr. Wiviott was the Fifty-One, a Washington State-built, Fort Lauderdale- based "mega" yacht owned by an Italian national, Dr. Moretti. The Fifty-One's interior design made it particularly well suited for chartering. It had four levels, including a sky deck/lounge equipped with a complete kitchen (to complement the galley located on the bottom level). There were five staterooms that could comfortably accommodate ten charter guests. Each of the regular staterooms had its own head. The master stateroom had "his and her" heads. There was also a stateroom for the captain, as well as quarters for six other crew members (the number needed to properly service a charter party). The Fifty-One had not been well maintained during the time it had been owned by Dr. Moretti. Although Dr. Moretti had made the Fifty-One available for charter, the yacht had a poor reputation among charter brokers and, as a result, it just "sat at the dock," unchartered, while under Dr. Moretti's ownership. In October of 1993, Mr. Wiviott offered to purchase the Fifty-One from Dr. Moretti for $5.1 million, subject to a satisfactory marine survey and sea trial. Dr. Moretti initially rejected the offer, but subsequently agreed to sell the Fifty- One at Mr. Wiviott's offering price (which was considerably less than the $9 million that Dr. Moretti had paid for the Fifty-One a year and a half earlier). Before the deal was consummated, Mr. Wiviott contracted with a marine survey company, Patton Marine, Inc. (Patton), to perform a thorough inspection of the Fifty-One. Patton performed an extensive pre-purchase survey of the Fifty-One, which included various sea trials and other tests (conducted in Fort Lauderdale and off the Fort Lauderdale coast). The survey revealed that the Fifty-One had various "deficiencies." Most of these "deficiencies" were "small items" and were remedied before the sale was finalized. The most serious of the remaining "deficiencies" was the excessive amount of interior vibration. Notwithstanding the known "deficiencies" that remained, Mr. Wiviott thought that, at $5.1 million, the Fifty- One was a good buy. At worst, he believed, he "could make a pretty good profit" by reselling the Fifty-One. Mr. Wiviott retained Robb Maass, whom Mr. Wiviott was told was the "top marine attorney in the [Fort Lauderdale] area," to assist him in forming a Florida corporation which would purchase the Fifty-One and operate a yacht charter business. With Mr. Maass' assistance, B. W. Marine, Inc. (Petitioner) was organized under the laws of the State of Florida, effective January 20, 1994, with Mr. Wiviott as its sole officer, director, and shareholder. Petitioner's principal corporate address was, at the time of incorporation, and has remained, 757 Southeast 17th Street, #389, Fort Lauderdale, Florida 33316. On January 28, 1994, shortly after Petitioner's incorporation, Petitioner closed on the purchase of the Fifty- One. No Florida or other state sales tax was paid on the purchase. The newly purchased yacht (which had been registered in the Cayman Islands by the previous owner, Dr. Moretti) was immediately registered with the United States Coast Guard, and it thereafter began to fly an American flag. Based upon on Mr. Maass’ advice, Petitioner also took steps to obtain a "certificate of documentation with appropriate endorsement for employment in the coastwise trade" for the Fifty-One. It was not until the following year, however, that the United States Congress (passing a bill introduced by Florida Congressman E. Clay Shaw, Jr.) authorized the Secretary of Transportation to issue such a "certificate of documentation." 2/ After taking delivery of the yacht in the Bahamas, Petitioner imported the Fifty-One into Florida. It did so because Mr. Wiviott wanted the Fifty-One to be marketed in the south Florida area and to have access to the exceptional yacht repair and maintenance facilities that were available there. The South Florida area is where the "mega" yacht charter brokers (who, in most instances, effectively "make[] the decision [as to] which boat a charter client is going to use") are concentrated and where the reputation (or, as Mr. Wiviott put it in his hearing testimony, the "aura" or illusion") of a "mega" yacht is established (in part, by the owner, captain, and crew "pander[ing]" to the broker community during showings of the yacht). It is therefore important for a "mega" yacht available for charter to have a presence in the south Florida area so that it can seen by, and shown to, the "mega" charter brokers who are concentrated there. Although most "mega" yachts are marketed in Florida, "the chartering experience [generally occurs] elsewhere," in such places as New England (in the summer) and the Caribbean and Mediterranean (in the winter). Aware of this, Mr. Wiviott, at the time that the Fifty-One was imported into Florida, had no expectation that that the Fifty-One would be used exclusively for charters in Florida waters. Mr. Wiviott wanted the Fifty-One to be imported into Florida without Petitioner having to pay any use tax. Mr. Maass advised Mr. Wiviott that Petitioner would not have to pay Florida use tax if it registered with the Department as a "dealer" and used the Fifty-One "only . . . for bare boat charter[s]." Mr. Maass cautioned Mr. Wiviott that "[t]here could be no personal recreational use, no personal use aboard the boat whatsoever." Before importing the Fifty-One into Florida, Petitioner registered with the Department as a "dealer" that would be engaging in "bare boat" charter operations in Florida. Mark Newcomer was the first captain of the Fifty-One under Petitioner's ownership. Mr. Wiviott considered Captain Newcomer to be, not a "charter captain," but a "yard captain," that is, a captain "who specializes in repairs, maintenance and upgrades of yachts." Captain Newcomer was hired by Petitioner "to take delivery [of the Fifty-One] and to oversee the renovation and retrofit[ting] of the yacht." He was responsible for ensuring that the Fifty-One was brought up to American Bureau of Shipping (ABS) standards. Obtaining certification that the Fifty-One met ABS standards was an "essential part" of any campaign to effectively "market[] the boat" for charter. Mr. Wiviott did not have any intention of continuing Captain Newcomer's employment with Petitioner following completion of "the renovation and retrofit[ting] of the yacht." Captain Newcomer brought the Fifty-One into Florida on or about February 1 or 2, 1994, and docked it at a Fort Lauderdale marina (either Pier 66 Marina or the Bahia Mar Marina). On February 3, 1994, Captain Newcomer moved the Fifty- One to the Bradford Marine Shipyard (Bradford Marine), a Department-registered Fort Lauderdale repair facility able to service boats up to 150 feet in length. The Fifty-One underwent repairs and improvements at Bradford Marine until February 12, 1994, by which time the work that had to be done with it out of the water had been completed. At Bradford Marine, Petitioner had to pay a 20 to 30 percent "surcharge on all outside vendors that c[a]me in." On February 13, 1994, Captain Newcomer moved the Fifty-One to the Bahia Mar Marina (Bahia Mar), a more cost- effective location, to do (with the help of others) the remaining repair and improvement work on the yacht (which could be done with the yacht in the water). Because Captain Newcomer was "very good friends" with the dockmaster at the Bahia Mar, he and those he supervised were allowed to perform work on the Fifty-One (involving the use of noise-generating power tools) that would have otherwise been prohibited. The Fifty-One remained at the Bahia Mar until March 14, 1994, undergoing repairs and improvements. On March 15, 1994, Captain Newcomer, accompanied by Mr. and Mrs. Wiviott (and with less than a full crew), took the Fifty-One on a cruise to the Jockey Club, a "private club" that was part of a "condominium complex resort" located in Miami. He did so pursuant to the instructions of Mr. Wiviott, with whom he spoke to on a daily basis regarding the repair and improvement work that was being done on the Fifty-One under his (Captain Newcomer's) supervision. Mr. Wiviott wanted "to take the boat out to stretch it out [and to] see the progress that Captain Newcomer was making." Furthermore, Mr. Wiviott thought that it was important for Petitioner's charter business for the Fifty- One "to be seen." Near the Jockey Club, the Fifty-One ran aground "in the mud," where it "sat . . . for about eight hours until the tide came back in." After the Fifty-One arrived at the Jockey Club, divers "g[o]t under the boat and clean[ed] the prop[eller]s [and] clean[ed] the drivetrain." The Fifty-One remained docked at the Jockey Club for three days. On March 17, 1994, the Fifty-One returned to the Bahia Mar to undergo further repairs and improvements. By mid-April of 1994, the work necessary to bring the Fifty-One up to ABS standards had been completed. Petitioner therefore applied for, and on April 19, 1994, was issued, an ABS "Class Certificate." The Fort Lauderdale Charter Broker's Boat Show (1994 Boat Show) was held at Pier 66 Marina (Pier 66) from April 14, 1994 to April 20, 1994. The Fifty-One was one of the boats entered in the 1994 Boat Show, and it remained at Pier 66 for the entire show. Mr. Wiviott was aboard throughout the event to show the boat to charter brokers and others. Captain Newcomer helped Mr. Wiviott show the boat. Food and drinks were served. Fresh flowers adorned the boat. The crew wore their dress uniforms. After the end of each day's session, Mr. Wiviott stayed aboard the Fifty-One overnight in lieu of spending company money to rent a hotel room. Following the 1994 Boat Show, from April 20, 1994 until April 28, 1994, the Fifty-one was taken on a "shakedown" cruise to Key West and back to Fort Lauderdale, during which it was run at various speeds and systems were "overloaded" to determine whether they worked properly. At the time of the cruise, the Fifty-One was not equipped with all of the staff and other accoutrements necessary to provide the "five star service" that those who charter "mega" yachts pay to receive. During the cruise, the boat docked at the Ocean Reef Club, an exclusive private resort community in Key Largo; the Galleon Marina, a public facility in Key West; Fisher Island; and the Jockey Club. There were a "few breakdowns" during the cruise, including a "crane breakdown" at the Ocean Reef Club. With the help of vendors, the necessary repairs were made. Aboard during the cruise, in addition to Captain Newcomer and a partial crew, was Mr. and Mrs. Wiviott; Mr. Wiviott's brother, Howard Wiviott; Howard's wife; Mr. Becker, whose firm provided Petitioner with accounting services (primarily through the efforts of Stacey Torchon, one of its accountants); and Mr. Becker's wife. There was no marine surveyor, no representative of a registered repair facility, and no "mega" yacht charter broker aboard during the cruise. 3/ Mr. Becker and his wife did not remain aboard for the entire cruise. They disembarked in Key Largo on April 23, 1994. During the time that he was aboard, Mr. Becker spoke to Captain Newcomer and the crew about the financial and accounting procedures that needed to be followed in conducting Petitioner's charter operations, information that Mr. Becker could have provided by telephone from his California office. (Stacey Torchon, who was "more involved [than Mr. Becker] in the day-to-day operations" of Petitioner, never met personally with any Fifty-One crew member; rather, she communicated with the crew by telephone.) While they were aboard, Mr. Becker and the other guests Mr. Wiviott had invited to take part in the cruise (referred to, collectively, hereinafter as the "Invited Guests") ate, relaxed, and enjoyed the hospitality and ambiance. The Invited Guests' presence on the Fifty-One during the "shakedown" cruise was not solely for the purpose of furthering Petitioner's charter business. Mr. Wiviott was motivated by personal reasons in inviting them aboard. The assertion (made by Petitioner in its Proposed Recommended Order) that one of the purposes of the "shakedown" cruise was to determine, through the feedback given by the Invited Guests, "whether the Petitioner was delivering the chartering experience in terms of comfort, ambiance and service that people willing to spen[d] $50,000 per week would expect" simply does not ring true. Mr. Wiviott knew full well that the Fifty-One, with a "yard captain" at the helm and less than a full crew, was not equipped to provide such service. He did not need to take the "Fifty-One" on a lengthy cruise with family and friends to find this out. Had Mr. Wiviott really wanted to learn if the Fifty-One offered a "chartering experience" for which someone would be willing to pay $50,000.00, he would have asked "mega" yacht charter brokers, not family and friends, to come aboard the Fifty-One for a cruise and give him their feedback. On April 28, 1994, following the "shakedown" cruise, the Fifty-One returned to the Bahia Mar, where, in the ensuing days, defects discovered during the "shakedown" cruise were remedied. By May 7, 1994, the Fifty-One was ready for charter. The Fifty-One, at that time, was not the only vessel in Petitioner's fleet. Shortly after acquiring the Fifty-One, Petitioner had purchased (in Florida) the Choice One and Choice Too 4/ from Mr. Wiviott. Petitioner paid Mr. Wiviott $1,138,804.28 for the Choice One. Inasmuch as the purchase was made under Petitioner's sales tax exemption certificate (that Petitioner had obtained from the Department based upon its representation that it intended to use the Fifty-One exclusively for "bare boat" charter operations in Florida), no Florida sales tax was paid. At the time of the purchase, Mr. Wiviott envisioned that Petitioner would use the Choice One as a "chase boat" for the Fifty-One (from which charterers and guests could fish). The Choice One, however, was never used by Petitioner for this purpose because it turned out that it was not feasible to do so. The Choice One wound up sitting at the dock in Fort Lauderdale, leaving only "to be stretched" or moved to another docking facility by its captain (initially Steven Ernst and then later Carl Roberts). Before its sale by Petitioner in 1995, the Choice One was chartered on only one occasion, during which time it remained at the dock in Fort Lauderdale (positioned so that those aboard could view a passing "boat parade"). The Fifty-One was chartered on a more frequent basis. Of the 15 charters of the Fifty-One during the Audit Period, however, only two (the Gerardo Cabrera and Jean Foss charters) were in Florida waters. The Gerardo Cabrera charter was the first charter of the Fifty-One following the completion of the "renovation and retrofit[ting] of the yacht." It started in Fort Lauderdale on May 18, 1994, and ended in Fort Lauderdale on May 21, 1994. The captain of the Fifty-One for the Gerardo Cabrera charter was Jon Cheney, who had replaced Captain Newcomer on May 7, 1994. The charter agreement between Petitioner (as the "Owner") and Mr. Cabrera (as the "Charterer") was dated May 13, 1994, and read, in pertinent part, as follows: In consideration of the covenants hereinafter contained, the Owner agrees to let and the Charter[er] agrees to hire the Yacht from noon on the 18th of May 1994 to noon on the 21st of May 1994 for the total sum of $18,000.00 + expenses + 6% FSST ($1,080 Dollars) of which amount $18,000 + $1,080 + $5,000 (ADVANCE toward expenses) for a total of $24,080 shall be paid on the signing of this Agreement . . . . The Owner agrees to deliver the Yacht at Bahia Mar Yachting Centre, Ft. Laud. on the 18th day of May 1994 in full commission and working order, outfitted as a yacht of her size, type and accommodations, with full equipment, inclusive of that required by law, and fully furnished, including galley and dining utensils and blankets; staunch, clean and in good condition throughout and ready for service; and agrees to allow demurrage pro rata to the Charterer for any delay in delivery. . . . The owner's insurance policy does not cover Charterer's protection and indemnity during the term of the Charter. . . . * * * The Charterer agrees to accept the yacht delivered as hereinbefore provided and to pay all running expenses during the term of the charter. The Charterer, his agents and employees have no right or power to permit or suffer the creation of any maritime liens against the yacht, except the crew's wages and salvage. The Charterer agrees to indemnify the Owner for any charges or losses in connection therewith, including reasonable attorney's fees. * * * The Charter[er] agrees to redeliver the yacht . . . to the Owner at Bahia Mar Yachting Centre, Ft. Lauderdale, FL . . . . The Charter[er] agrees that the yacht shall be employed exclusively as a pleasure vessel for the sole and proper use of himself, his family, guests and servants during the term of this charter and shall not transport merchandise or carry passengers for pay, or engage in any trade nor in any way violate the Revenue Laws of the United States, or any other Government within the jurisdiction of which the yacht may be at any time, and shall comply with law in all other respects. * * * 11. It is mutually agreed that full authority regarding the operation and management of the yacht is hereby transferred to the Charter[er] for the term thereof. In the event, however, that the Charterer wishes to utilize the services of a Captain and/or crew members in connection with the operation and management of the yacht, whether said Captain and/or crew members are furnished by the Owner or by the Charterer, it is agreed that said Captain and/or Crew members are agents and employees of the Charterer and not of the Owner. In the further event that local United States Coast Guard or other regulations require the Owner exclusively to provide a Captain and/or crew, or the Owner wishes to provide his own Captain and/or crew, the Owner agrees to provide a Captain who is competent not only in coastwise piloting but in deep sea navigation, and to provide a proper crew. The Captain shall in no way be the agent of the Owner, except that he shall handle clearance and the normal running of the yacht subject to the limitations of this charter party. The Captain shall receive orders from the Charterer as to ports to be called at and the general course of the voyage, but the Captain shall be responsible for the safe navigation of the yacht, and the Charterer shall abide by his judgment as to sailing, weather, anchorages, and pertinent matters. The Charterer assumes total control and liability as if the Charterer were the owner of the yacht during the term of the charter. . . . This agreement, by "industry standard," is "considered a 'bare boat' charter agreement." On May 13, 1994, Mr. Cabrera (as "Employer") also entered into a separate "Yacht Employment Agreement" with Captain Cheney (as "Yacht Captain"). It provided as follows: WHEREAS, Charterer has under charter the yacht FIFTY ONE pursuant to his bare boat charter party agreement wherein it is Employer's obligation to furnish the said yacht with a competent master and crew; and WHEREAS, Yacht Captain is a competent master, having over two years' experience in the coastal and inland waters of FLORIDA and THE BAHAMAS and is able to furnish a crew for the management and navigation of the said yacht; and WHEREAS, the parties desire to reduce their agreement to written term; NOW THEREFORE in consideration of the premises and of the agreements hereinafter contained, it is agreed as follows: Employer hereby hires yacht Captain as the Master of the said yacht to act as such Master as long as the yacht is under charter to Employer. Yacht Captain agrees to furnish 6 crew men to assist in operating and navigating the said yacht. The Captain and crew, if any, shall be properly uniformed. The crew to comprise the following: [left blank] Yacht Captain shall be paid for his services and the services of his crew a total sum of TEN DOLLARS AND OTHER GOOD AND VALUABLE CONSIDERATION and Employer shall furnish the Yacht Captain and his crew, quarters and food, during the term of this Agreement. The term of this Agreement shall commence on the 18th day of MAY 1994, or at such time that the yacht shall be ready to sail pursuant to the bare boat charter party agreement with the Owner and shall terminate on the 21st day of MAY, 1994, unless sooner terminated by the termination of the yacht party agreement for any reason whatsoever. In the event that the yacht charter party agreement is sooner terminated, the Master and crew will receive a pro-rated share of the agreed compensation for their services. After collecting from Mr. Cabrera all the monies Mr. Cabrera owed under both the charter agreement and the "Yacht Employment Agreement," Rikki Davis (the broker representing Mr. Cabrera) handed these monies over to Mr. Offer (the broker representing Petitioner). (It is commonplace in the "mega" yacht chartering industry "to have the amount paid for the use of the vessel under [a] bare boat charter agreement and amount for the captain and crew paid together by the charterer as a lump sum."). Mr. Offer, in turn, forwarded the monies he was given by Ms. Davis to Petitioner. The Gerardo Cabrera charter was the only charter that took place before the captain and crew of the Fifty-One became employees of Papa's Yacht Services, Inc. (Papa's), Petitioner's sister corporation, which, like Petitioner, was incorporated in Florida and has maintained a Florida corporate address from its inception. Papa's was formed solely for the purpose of enabling Petitioner to be in "compliance [with] the bare boat charter concept." Papa's dealings with Petitioner was Papa's sole source of revenue. Petitioner paid Papa's a "management fee" for providing a captain and crew for the Fifty-One. Although the Fifty-One's captain and crew had become Papa's employees, Petitioner continued to pay for their health insurance and provide them with free room and board on the Fifty-One at all times during the Audit Period, except when the Fifty-One was under charter and the charterers provided the captain and crew with room and board. Having a full-time captain and crew aboard a "mega" yacht available for charter, even when the yacht is not under charter, is essential to conduct successful charter operations. The captain and crew must be available, on the vessel, to host the "mega" yacht charter brokers who come aboard between charters (sometimes with little or no advance notice) and to perform those everyday tasks necessary to maintain the vessel. To attract and keep qualified onboard personnel, it is necessary to provide them with, as part of their compensation package, free room and board on the "mega" yacht. Doing so is the "standard in the industry." The Fifty-One was chartered by Jean Foss from December 27, 1995 to January 3, 1996, approximately a year and a half after Papa's had become the employer of the Fifty-One's captain and crew. Ms. Foss cruised to the Bahamas during the charter. The charter originated and concluded in Fort Lauderdale. "[T]he only reason [the Fifty-One] was in Florida [for the charter was] because [Ms. Foss] wouldn't fly to the Bahamas." The charter agreement between Petitioner (as the "Owner") and Mr. Foss (as the "Charterer") was similar to the charter agreement into which Mr. Cabrera and Petitioner had entered. It was dated August 15, 1995, and read, in pertinent part, as follows: TERM, HIRE & PAYMENTS: In consideration of the covenants hereinafter contained, the OWNER agrees to let and the CHARTERER agrees to hire the Yacht for the term from 12 noon . . . on the 27th day of December, 1995 to 12 noon . . . on the 3rd day January, 1996 for the total sum of $44,800 + All Expenses of which amount $22,400.00 shall be paid on the signing of this AGREEMENT and the balance thereof as follows: remaining 50% deposit (US$22,400.00) and Florida State Sales Tax of 6% US$2,668 for a total sum of $25,088.00 due by 24 November, 1995. DELIVERY. The OWNER agrees to deliver the yacht to CHARTERER at Fort Lauderdale, Florida at 12 noon . . . on the 27th day of December, 1995, in full commission and in proper working order, outfitted as a yacht of her size, type, and accommodations, with safety equipment required by law, and fully furnished, including gallery and dining utensils and blankets; staunch, clean and in good condition throughout and ready for service, and agrees to allow demurrage pro rata to the CHARTERER for any delay in delivery. . . . * * * 5. RUNNING EXPENSES. The Charterer agrees to accept the yacht as delivered as hereinbefore provided and to pay all shipboard expenses during the term of the charter period. * * * 8. RE-DELIVERY and INDEMNIFICATION. The CHARTERER agrees to redeliver the yacht, her equipment, and furnishings, free and clear and of any indebtedness for CHARTERER's account at the expiration of this charter, to the OWNER at Fort Lauderdale, Florida at 12:00 noon on the 3rd day of January, 1996 in as good condition as when delivery was taken, ordinary wear and tear and any loss or damage for which the OWNER is covered by his own insurance, and CHARTERER's insurance (if any) set forth in Paragraph 3 of this AGREEMENT, excepted. . . . * * * 10. RESTRICTED USE. The CHARTERER agrees that the yacht shall be employed exclusively as a pleasure vessel for the sole and proper use of himself, his family, passengers and servants, during the term of this charter, and shall not transport merchandise, or carry passengers for hire, or engage in any trade, nor any way violate the Revenue Laws of the United States, or any other Government within the jurisdiction of which the yacht may be at any time, and shall comply with the laws in all other respects. * * * 12. CHARTERER'S AUTHORITY OVER CREW. It is mutually agreed that full authority regarding the operation and management of the yacht is hereby transferred to the CHARTERER for the term thereof. In the event, however, that the CHARTERER wished to utilize the services of a captain and/or crew members in connection with the operation and management of the yacht, whether said captain and/or crew members are furnished by the OWNER or by the CHARTERER, it is agreed that said captain and/or crew members are agents and employees of the CHARTERER and not of the OWNER. In the further event that local United States Coast Guard or other regulations require the OWNER exclusively to provide a captain and/or crew, or the OWNER agrees to provide a proper captain who is competent not only to coastwise piloting, but in deep sea navigation, and to provide crew, the captain shall in no way be the agent of the OWNER, except that he shall handle clearance and the normal running of the yacht subject to ports to be called at, and the general course of the voyage. The captain shall be responsible for the safe navigation of the yacht, and the CHARTERER shall abide by his judgment as to sailing, weather, anchorages, and pertinent matters. The captain and crew shall be selected by the CHARTERER with the approval of the OWNER or the OWNER's Agent. CHARTERER is aware that he has a choice of captains. CHARTERER has full right to terminate the captain and/or crew; however, replacements shall be hired as under Paragraph 12 of this AGREEMENT. . . . Ms. Foss also entered into a "Yacht Services Agreement." The agreement, dated August 16, 1995, was with Papa's, which agreed to provide a seven person crew for the Fifty-One for the charter period (December 27, 1995, through January 3, 1996). Ms. Foss, in turn, agreed to pay Papa's $11,200.00 for such crew services and, in addition, to provide the captain (Arthur "Butch" Vogelsang) and crew with food and quarters aboard the Fifty-One during the charter period. Petitioner collected and remitted to the Department the sales tax owed by Mr. Cabrera and Ms. Foss on their rentals of the Fifty-One. No Florida sales tax was due on any of the other 13 charters of the Fifty-One during the Audit Period because they all took place outside Florida. In the case of 11 of these 13 other charters, like in the Jean Foss charter, the charterer entered into a charter agreement with Petitioner for the rental of the Fifty-One, as well as a separate agreement with Papa's for employment of a captain and crew for a fee (that "represent[ed] the actual cost [to Papa's] of the crew"). Typically, the total amount due under both agreements was sent to Petitioner, and Mr. Becker's firm (which also provided accounting services to Papa's) "moved the [portion of the] funds" due Papa's to Papa's bank account. Two charterers during the Audit Period (Mutual of Omaha Marketing Company and Prince Faisal Aziz of Saudi Arabia) refused Mr. Wiviott's request that they enter into two separate agreements, one (with Petitioner) for the rental of the Fifty- One and another (with Papa's) for employment of a captain and crew. Instead, they insisted on signing a single document, a Mediterranean Yacht Brokers Agreement (or MYBA Agreement), wherein Petitioner agreed to provide both the Fifty-One and a captain and crew. Not wanting to lose the business, Mr. Wiviott, on behalf of Petitioner, entered into these MYBA Agreements, notwithstanding that he had been instructed by Mr. Maass "not [to] take MYBA contracts." The MYBA Agreement between Petitioner (as "Owner") and Mutual of Omaha Marketing Company (as "Charterer") was dated December 16, 1995, and provided that: the "charter period" would begin 12:00 noon on March 3, 1996, and end 12:00 noon on March 17, 1996; the "cruising area" would be the Caribbean; the "port of delivery" would be Guadeloupe; the "port of re- delivery" would be Grenada; the crew would consist of a captain and six other crew members; the charter fee would be $48,000.00 per week for a total (for 2 weeks) of $96,000.00; the "Advance Provisioning Allowance" would be $48,000.00; and the "delivery/re-delivery fee" would be $6,857.00. In addition, it contained the following "clauses," among others: CLAUSE 1 AGREEMENT TO LET AND HIRE The OWNER agrees to let the Yacht to the Charterer and not to enter into any other Agreement . . . for the Charter of the Yacht for the [s]ame period. The CHARTERER agrees to hire the Yacht and shall pay the Charter Fee, the Security Deposit, the Advance Provisioning Allowance and any other agreed charges in cleared funds, on or before the dates and to the Account specified in this Agreement. * * * CLAUSE 6 CREW The OWNER shall provide a suitably qualified Captain acceptable to the insurers of the Yacht and a suitably experienced Crew, properly uniformed, fed and insured. The OWNER shall ensure that no member of the Crew shall carry or use any illegal drugs on board the Yacht or keep any firearms on board (other than those declared on the manifest) and shall ensure that the Captain and Crew comply with the laws and regulations of any country into whose waters the yacht shall enter during the course of this Agreement. The MYBA Agreement between Petitioner (as "Owner") and Prince Aziz (as "Charterer") was dated March 19, 1996, and provided that: the "charter period" would begin 12:00 noon on April 2, 1996, and end 12:00 noon on April 9, 1996; the "cruising area" would be the Caribbean; St. Maarten would be the "port of delivery" and "the port of re-delivery"; the crew would consist of a captain and six other crew members; the charter fee would be $50,000.00; and the "Advance Provisioning Allowance" would be $10,000.00. It contained the following additional provisions, among others: 30. AGREEMENT TO LET The OWNER shall let the yacht for the charter period and agrees not to enter into any other agreement for the charter of the yacht for the same period, and agrees not to sell the yacht before completion of the charter period, unless otherwise agreed by the Charterer. * * * 32. CREW The Owner shall provide a properly qualified Captain approved by the insurers of the yacht and a properly qualified crew, uniformed and insured. . . . Upon the advice of Mr. Maass, Petitioner assigned to Papa's its MYBA Agreements with Mutual of Omaha Marketing Company and Prince Aziz. It also entered into "Bareboat Charter Agreements" with Papa's for the rental of the Fifty-One for the same periods covered by the MYBA Agreements (notwithstanding that the MYBA Agreements expressly prohibited Petitioner from doing so). According to what Mr. Maass told Mr. Wiviott, by Petitioner taking such action, "the MYBA contract[s] could be accepted without violating the requirement that [Petitioner] engage only in bare boat chartering." The written assignment of the MYBA Agreement with Mutual of Omaha Marketing Company was dated December 16, 1995, the same date as the MYBA Agreement, and read, in pertinent part, as follows: BW Marine owns the vessel "Fifty-One," a 125 foot motoryacht, bearing official number 1020419 (the "Vessel"); BW Marine entered into a Yacht Charter Party Agreement dated December 16, 199[5] (the "Charter") between BW Marine and Mutual of Omaha Marketing Company (Charterer"); BW Marine desires to assign to Papa's Yacht Services, and Papa's Yacht Services agrees to accept, all BW Marine's right, title, and interest in and to the Charter; NOW THEREFORE, in consideration of the premises, the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: Assignment BW Marine assigns to Papa's Yacht Services all its right, title, and interest in and to the Charter. Papa's Yacht Services accepts the assignment and assumes all obligations of BW Marine under the Charter. Payment For administrative convenience, Charterer shall pay BW Marine the charter hire under the Charter. BW Marine, in turn, shall remit the surplus of these funds over the lease amount due from Papa's Yacht Services to BW Marine under that certain Bare Boat Charter Agreement between the parties of even date herewith. . . . Mutual of Omaha Marketing Company was not a signatory to this written assignment (and no other document offered into evidence reflects that Mutual of Omaha Marketing Company consented to the assignment). 5/ The written assignment of the MYBA Agreement with Prince Aziz was dated March 19, 1996, the same date as the MYBA Agreement. It was identical to the December 16, 1995, written assignment of the MYBA Agreement with Mutual of Omaha Marketing Company (with the exception of the dates contained therein). Prince Aziz was not a signatory to this written assignment (and no other document offered into evidence reflects that Prince Aziz consented to the assignment). The first "Bareboat Charter Agreement" between Petitioner (as "Owner") and Papa's (as "Charterer") was dated December 16, 1995, and provided, in pertinent part, as follows: Owner owns the vessel "Fifty-One," a 125 foot motorcoach bearing official number 1020419 (the "Vessel"); and Charterer desires to charter the Vessel from Owner and Owner is willing to make the Vessel available to Charterer for such purpose, subject to the terms and conditions contained herein. NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: Term Owner agrees to let and Charterer to hire, the Vessel for a term commencing March 3, 1996, and ending March 17, 1996. Payment Charterer shall pay Owner charter hire of One Hundred Two Thousand Eight Hundred Fifty Seven Dollars ($102,857.00), plus state sales tax, if applicable. Control The Vessel is chartered on a bare boat or demise basis. Owner hereby transfers to Charterer full authority regarding the operation and management of the Vessel for the charter term. Charterer is solely responsible for retaining a master and crew. Guest Limitation When the Vessel is underway, the number of persons on board the Vessel, other than the master and crew, shall be limited to the Charterer (or the Charterer's representative, if Charterer is a corporation) and twelve (12) guests. * * * Delivery Owner agrees to deliver the Vessel at Guadeloupe. Redelivery Charterer shall redeliver the Vessel to Owner at Granada at the end of the charter term, in as good condition as when delivery was taken, ordinary wear and tear excepted. . . . * * * 9. Expenses Charterer shall pay all running expenses during the term of the charter. Charterer shall pay for routine maintenance and repair of the Vessel during the charter term. * * * 12. Non-Assignment Charterer agrees not to assign this Agreement or subcharter the Vessel without the consent of the Owner in writing, which Owner may withhold in Owner's sole discretion. . . . The second "Bareboat Charter Agreement" between Petitioner and Papa's was dated March 19, 1996, and was identical to the first "Bareboat Charter Agreement" between them (with the exception of the charter period, charter cost, and delivery/redelivery locations). The evidence is insufficient to support a finding that Papa's ever entered into a sub-charter agreement with either Mutual of Omaha Marketing Company or Prince Aziz. Both Mutual of Omaha Marketing Company and Prince Aziz paid Petitioner the entire charter fee prescribed under their respective MYBA Agreements. They did not make any payments to Papa's. Petitioner paid Papa’s a “management fee” for providing the captain and crew during these charters. On one of the 15 charters during the Audit Period, Mr. Wiviott was aboard the Fifty-One as a guest of the charterer, the Choice Meat Co., Inc., a company that he and his son, Greg Wiviott, owned. Choice Meat Co., Inc., paid the "going charter rate" for the rental, but no broker's commission because "there was no broker to pay." There were occasions during the Audit Period, when the Fifty-One was not under charter, that Mr. Wiviott, members of his family (including his wife; children; grandchildren; his bother, Howard; and Howard's wife), and his friends used the Fifty-One outside Florida for non-business-related, personal purposes, sometimes for "one or two weeks at a time." For instance, in June of 1994 (after the Gerardo Cabrera charter and before the next charter, which began on July 21, 1994), when the Fifty-One was in New England, the Wiviott family was aboard for approximately "a couple of weeks." At the end of that summer, just before the Fifty-One returned from New England to Fort Lauderdale, the family again used the Fifty-One, this time "for a week or so." In November of 1994, around the Thanksgiving holiday, the Fifty-One traveled to the Caribbean so that the family could use it there for recreational purposes. The Fifty-One remained in the Caribbean for ten to 14 days with the family aboard. After the Wiviott children and grandchildren got off, the Fifty- One went on to the Virgin Islands, where Mr. and Mrs. Wiviott's friends came aboard and were entertained by the Wiviotts. In January of 1995, some time "shortly after the 1st," when the Fifty-One was in St. Maarten (where it was based for the winter), the Wiviott family once again spent time aboard the Fifty-One. The foregoing instances of out-of-state, non-charter, non-business-related use of the Fifty-One by the Wiviott family occurred when Captain Cheney was in command of the vessel. The Wiviott family continued to make such use of the Fifty-One during the time Captain Elario was captain. When Captain Elario took over the Fifty-One in St. Lucia (from Paul Canvaghn, who had been captain for only a day or two), Mr. and Mrs. Wiviott were aboard the vessel. They remained on board for approximately a week as the Fifty-One cruised the Caribbean. During that week, Mrs. Wiviott swam, laid in the sun, relaxed, and ate meals prepared by the Fifty- One's chef. She did not perform any tasks designed to further Petitioner's charter business. Subsequently, while Captain Elario was still captain, Mr. and Mrs. Wiviott took a non-charter, non-business-related trip on the Fifty-One to the Bahamas. Also during the time Captain Elario was captain, when the Fifty-One was in Hilton Head, South Carolina, Mr. Wiviott's brother, Howard, and Howard's wife, came aboard, and they remained on the yacht as it traveled to Norfolk, Virginia. Howard and his wife did not perform any tasks designed to further Petitioner's charter business while aboard the Fifty- One. Mr. and Mrs. Wiviott's daughter, along with her two young children, stayed overnight on the Fifty-One when, while under Captain Elario's supervision, it was docked at the Capital Marina in Washington, D.C. During the daughter's and children's stay, there was a party celebrating the youngest child's birthday. Indicative of the amount of time that Mr. and Mrs. Wiviott spent aboard the Fifty-One were the clothing and other personal items that (as a convenience) they stored (in a locker) on the Fifty-One (so that they would not have to bring these items with them each time they boarded the vessel). (These items were moved from the locker to another area on the Fifty- One, when necessary, to accommodate charterers using the stateroom in which the locker was located). Whenever the Fifty-One returned to Florida, it underwent needed repairs and maintenance. It also cruised the waters of the south Florida area, docking at various facilities. It did so not only "to be stretched," but to gain additional exposure among "mega" yacht charter brokers. In addition, while in Florida, the Fifty-One was stocked with supplies and provisions (including rack of lamb, veal, lobster tails, baked goods, gourmet foods, specialty items, wines, bath and beauty products, and party supplies) to be available for use by those on board when the Fifty-One was outside Florida, including not only charterers (such as Mutual of Omaha Marketing Company and Prince Aziz) and their guests, but also Mr. Wiviott, his family, and friends (when they were on board the Fifty-One for non-business-related, personal purposes). The Fifty-One, while in Florida, was also provided with fuel for charter, as well as non-charter, non-business related, trips outside Florida. Petitioner's charter business proved to be unprofitable. Expenses far exceeded revenues. (Petitioner, however, was able to sell the Fifty-One for more than the purchase price it had paid, receiving approximately $5.7 million, excluding commissions, for the Fifty-One in February of 2000.) By letter dated October 11, 1996, the Department informed Petitioner that it was going to audit Petitioner's "books and records" for the Audit Period. Petitioner was selected for audit because it had reported only a relatively small amount of taxable charter revenue on the Florida sales and use tax returns it filed during the Audit Period. The Department's "audit findings" were that the Fifty-One "was purchased for [a] dual purpose, for leasing and to be used by the shareholder" and therefore "the vessel and other purchases [made by Petitioner during the Audit Period under its sales tax exemption certificate, including its purchase of the Choice One] are taxable at the cost price." Based upon these audit findings, the Department issued a Notice of Intent to Make Audit Changes, in which it advised Petitioner that Petitioner owed $430,047.95 in sales and use taxes, $215,023.97 in penalties, and $169,672.70 in interest through July 18, 1997, for a total of $814,744.62, "plus additional interest of $141.39 per day . . . from 07/18/97 through the date [of] payment." By letter dated April 22, 1998, Petitioner protested the Department's proposed assessment. On November 1, 1999, the Department issued its Notice of Decision sustaining the proposed assessment and announcing that, as of October 6, 1999, Petitioner owed the Department $929,270.52, with "interest continu[ing] to accrue at $141.39 per day until the postmarked date of payment." Petitioner subsequently filed a Petition for Chapter 120 Administrative Hearing on the Department's proposed action.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department enter a final order sustaining its assessment against Petitioner in its entirety. DONE AND ENTERED this 26th day of October, 2001, in Tallahassee, Leon County, Florida. STUART M. LERNER 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 October, 2001.
The Issue The issue in this case is whether the Education Practices Commission should deny Petitioner's application for a teaching certificate on the grounds that she lacks good moral character, has committed act(s) for which such a certificate could be revoked, and is guilty of gross immorality or an act of moral turpitude based on a plea of guilty to a felony and a judgment against her in a civil proceeding.
Findings Of Fact Petitioner Shirley McCallum Simmons is academically certified to be an exceptional student education (ESE) teacher and a non-native English speaking language students (ESAU) mathematics teacher. She teaches at Royal Palm Beach High School. Ms. Simmons' April 28, 2003, application for Florida Educator's Certificate Number 910106 (a permanent teaching certificate) was denied. Respondent, as Commissioner of Education and head of the Department of Education (DOE), recommends to the EPC that it deny Ms. Simmons' application for a permanent teaching certificate based on a finding that she lacks good moral character. The Amended Notice of Reasons for the denial of the application is as follows: On or about January 6 or 7, 1998, Applicant engaged in a conspiracy with others to obtain a passport through the use of false and fictitious statements. As part of this conspiracy, Applicant knowingly and unlawfully provided a false affidavit to the United States Department of State concerning her relationship to and the identity of an applicant for a passport. Applicant was indicted and charged with: Count 1, Conspiracy to Commit Passport Fraud; Count 2 (Count 5 of Indictment), Making False Statement in an Application for a Passport; and Count 3 (Count 6 of Indictment), False Statements. On or about January 28, 1998, Applicant pled guilty to Count 1. The other counts were dismissed. The court adjudicated Applicant guilty. Among other sanctions, the court placed Applicant on probation for 2 years and ordered her to pay a fine of $100.00. On or about April 1, 1997, the Applicant married Raymond Douchard, an individual she had only known briefly. Shortly thereafter, the Applicant applied for four (4) insurance policies on her husband's life totaling One Million Two Hundred Thousand Dollars ($1,200,000.00) in coverage. The policies became effective April 9, 1997, April 11, 1997, June 28, 1997 and July 1, 1997. On or about July 6, 1997, Applicant's husband was murdered as a result of a gun shot wound to his head. His body was discovered in a trunk of a vehicle parked behind a business entity in Broward County named Flanagan Lounge. Applicant immediately filed death claims with the insurance companies to collect on the policies. After a refusal of coverage, Applicant filed a federal lawsuit against one of the carriers, Shirley M. (Douchard) Simmons v. Valley Forge Life Insurance Co., Case Number 00-8514-CIV- HURLEY. Following a trial on the matter, a jury rendered its verdict on January 25, 2002 determining that the policy was properly rescinded on several basis, including that the Applicant had a murderous intent and the death of her husband was caused by the criminal acts of Applicant. Ms. Simmons has a bachelor's degree in social work from Florida State University, and a master's degree in educational leadership from Lynn University. She also received a certification in law enforcement from Palm Beach Community College, and a bachelor's degree in cosmetology from Dudley University in North Carolina. Ms. Simmons enrolled in ROTC while in college, then was commissioned as an army officer. She served in Germany until approximately 1986 or 1987. When Ms. Simmons returned to the United States and left military service, she was employed with the Palm Beach County Sheriff's Department for five to six years. To avoid working night shifts after her son was born in 1989, Ms. Simmons decided to go into business for herself. Ms. Simmons opened a salon called The Beauty Spa in 1992. At about the same time she began volunteering in public schools, received her academic certification to teach, and began work with the Palm Beach County School District. Ms. Simmons had been married and divorced twice when she met Raymond Douchard in 1995, whose name she believed was Robert Douchard. On April 1, 1997, Ms. Simmons and Mr. Douchard were married, but they never lived together. Ms. Simmons said they never lived together because he lied to her, including about his real name before they got married. He would also, according to Ms. Simmons, disappear for three or four days, telling her he was with a friend or cousin in Boca Raton. She felt there was something wrong or suspicious. Mr. Douchard was an automobile mechanic. Ms. Simmons testified that he told her that he was involved in stealing vehicles and sending them to Haiti. In March 1997, before they married, Mr. Douchard obtained three separate life insurance policies, each for $300,000, with Ms. Simmons as the beneficiary. Ms. Simmons was the owner of a fourth policy, also for $300,000.00 naming Mr. Douchard as the insured and Ms. Simmons the beneficiary. Ms. Simmons testified that the policy was intended to put her at ease because she did not trust Mr. Duchard. Although they were not married at the time, Ms. Simmons signed the Midlife application as beneficiary using the name Shirley Douchard. Her claim that it was after her marriage and that someone else back dated the application to "3/27/97" is not credible. Other policies were signed "Shirley Simmons, Fiance." Ms. Simmons said that Mr. Douchard set up appointments on March 27, 1997, with a life insurance agent who came to her salon, and prepared the applications for the policies. Ms. Simmons testified that she knew the policies had a two-year contestable period in the event of a death because she had similar policies on her former husbands. At least one insurance company was paid with a check drawn on the account of The Beauty Spa. On Sunday evening, July 6, 1997, at approximately 10:00 p.m., the body of Raymond Douchard was found in the trunk of a car parked behind a place called "Flanigan's Lounge" in Broward County. He had been shot in the head while in the trunk. The medical examiner estimated that the time of death was between 12:00 a.m. and 6:00 a.m., the morning of July 6, 1997. Homicide detective Glenn Bukata informed Ms. Simmons of Mr. Douchard's death and interviewed her at The Beauty Spa and at her home on the evening of July 8, 1997. She told him that she had last seen Mr. Douchard after she beeped him and he came to The Beauty Spa between 11:00 p.m. and 12:00 a.m. the evening of Saturday, July 5, 1997. After he was with her for approximately 45 minutes, Ms. Simmons said Mr. Douchard received another page on his beeper and left. During the homicide investigation, Ms. Simmons was interviewed at least ten more times, including the longest questioning for 12 to 14 hours that lasted from 12:15 p.m. until 2:15 a.m. Detective Bukata found Ms. Simmons various statements to be evasive and contradictory. Although her stories about who might have been responsible for Mr. Douchard's death changed, Ms. Simmons never admitted that she was guilty or involved. On December 11, 1997, Ms. Simmons was married for a fourth time to Deniche Altime, a Haitian immigrant who was in the United States illegally. Ms. Simmons took Mr. Altime to the passport office in Miami to apply for a passport, where he used her nephew's name and identification. Ms. Simmons initially testified that she only signed the United States Department of State Affidavit Identifying Witness, in support of the passport application claiming to be Mr. Altime's aunt, who had known him for 20 years. At the hearing, she conceded that, in addition to her signature, the handwriting filling out the affidavit also could be hers. Ms. Simmons said she was complicit in the passport misrepresentation because Mr. Altime became violent after they married, always carried a gun, and she was afraid of him. When Mr. Altime returned to the federal office to pick up his passport, he was arrested and subsequently deported. Ms. Simmons was arrested and charged with conspiracy to commit passport fraud. On January 29, 1998, she pled guilty to one count in violation of 18 USC § 371. She was placed on probation for two years, prohibited from possessing a firearm, and assessed a penalty of $100. At the time she entered her guilty plea, court documents indicate that Ms. Simmons was represented by counsel. Other than her self-serving testimony, which is rejected, there is no evidence that Ms. Simmons did not understand her plea of guilty to conspiracy to commit passport fraud or that she claimed, after he was deported, that her crime was based on a fear of Mr. Altime. After Ms. Simmons was released from federal custody, she was arrested by Broward County authorities and charged with first degree murder in the death of Mr. Douchard. She was in jail for about two years with no bond. Having been born in Jamaica, Ms. Simmons was considered at risk for fleeing the country. Ms. Simmons was tried for murder and, at the conclusion of the prosecution's case, the defense motion for judgment of acquittal was granted. After the murder charges were dismissed, Ms. Simmons filed suit against Valley Forge Life Insurance Company, Midland Insurance Company, Jackson National Life Insurance Company, and Primerica Life Insurance Company in 2000, to collect on the policies that named Raymond Douchard as the insured. Primerica settled before trial. On January 25, 2002, a jury verdict was entered against Ms. Simmons based on findings of "Material misrepresentations, fraud in policy application, murderous intent of beneficiary, and disenfranchisement - Florida Slayer Statute." Ms. Simmons filed for bankruptcy to discharge a judgment against her for $13,845 in the civil case and debts that she said accumulated during her two years in jail. There is evidence, however, that her testimony that she had good credit in March and April 1997, when she married Mr. Douchard was not the truth. Lieutenant Jeffrey Jackson worked with Ms. Simmons at the Sheriff's Department for approximately five-to-seven years, beginning in 1989 or 1990. He recalled that she was a good employee, who handled the different inmate population in her assigned housing unit well. Sheila Henry, a principal with the Palm Beach County School District for 27 years, was the principal at Royal Palm Beach High School for the two years (2004-2006) that Ms. Simmons worked there. Ms. Henry described Ms. Simmons as a good employee, who taught ESE classes, with no complaints from students or parents. Ms. Simmons' evaluations support a finding that she is a competent teacher. Ms. Henry was not aware of any civil or criminal proceedings against Ms. Simmons.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Education Practices Commission deny the application of Shirley Simmons for a permanent educator's certificate. DONE AND ENTERED this 6th day of October, 2009, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 6th day of October, 2009. COPIES FURNISHED: Kathleen M. Richards, Executive Director Education Practices Commission Department of Education 325 West Gaines Street, Room 224 Tallahassee, Florida 32399-0400 Deborah K. Kearney, General Counsel Department of Education Turlington Building, Suite 1244 325 West Gaines Street Tallahassee, Florida 32399-0400 Marian Lambeth, Bureau Chief Bureau of Professional Practices Services Department of Education Turlington Building, Suite 224-E 325 West Gaines Street Tallahassee, Florida 32399-0400 Charles T. Whitelock, Esquire Whitelock & Associates, P.A. 300 Southeast 13th Street Fort Lauderdale, Florida 33316 Thomas Johnson, Esquire Johnson, Haynes & Miller, P.A. 510 Vonderburg Drive, Suite 305 Brandon, Florida 33511
The Issue The issue is whether, pursuant to section 1002.33(8)(a)2., 3., and 4., and (c), Florida Statutes (2019), Petitioner has proved violations of law and other good cause to immediately terminate a charter school agreement with Respondent dated February 27, 2018, due to the immediate and serious danger to the health, safety, and/or welfare of the students of Lincoln Memorial Academy, Inc. ("LMA" or "Respondent").
Findings Of Fact LMA converted to a charter school from Lincoln Memorial Middle School by receiving a majority vote of the parents and a majority vote of the teachers by an election pursuant to Florida Administrative Code Rule 6A-6.0787 (Ballot Process for Teacher and Parent Voting for Charter School Conversion Status). On August 22, 2017, the School Board approved Lincoln Memorial Middle School's application for conversion charter school status, which allowed Lincoln Memorial Middle School to become LMA. In February 2018, the School Board and LMA entered into a charter school contract memorializing the agreed-upon terms between the School Board and LMA with the School Board acting as LMA's sponsor. Then Governing Board Chair Edward Viltz and Governing Board Secretary Cornelle Maxfield signed the Contract on LMA's behalf. LMA officially began its operations on July 1, 2018, with the 2018-2019 school year being LMA's first year as a conversion charter school. As a conversion charter school, LMA technically remained a public school within the School District, but LMA's day-to-day operations ran independently from the School District. LMA had its own Governing Board completely separate from the School Board. Pursuant to the Contract (discussed in more detail below) and applicable statutes, LMA's Governing Board was dominantly and/or solely responsible for LMA's operations—-not the School District or School Board. In fact, according to LMA Founder and CEO Eddie Cantrel Hundley, this level of autonomy afforded to charter schools was one of the benefits of converting. Further, although LMA could have opted into several of the School District's services, including, but not limited to, the School District's food services program and transportation, LMA chose to independently render such services. The Contract under which LMA operated is a model state contract that Florida school districts and charter schools must use per Florida law. It sets forth LMA's obligations with respect to various topics, including, but not limited to, governance, hiring and screening of employees, financial management, federal funding, and other matters of compliance, in addition to circumstances upon which either party may choose not to renew or terminate the contract. Pursuant to the Contract, LMA's governance was regarded to be in accordance with its by-laws. Therefore, the general direction and management of LMA's affairs was required to be vested in the Governing Board. All meetings and communications involving members of the Governing Board were to be held in compliance with Florida's Sunshine Law. The Governing Board and principal were charged with specific duties and responsibilities: The Governing Board's primary role will be to set policy, provide financial oversight, annually adopt and maintain an operating budget, exercise continuing oversight over the school's operations, and communicate the vision of the school to community members. It shall be the Governing Board's duty to keep a complete record of all its actions and corporate affairs and supervise all officers and agents of the school and to see that their duties are properly formed. The Governing Board will serve as the sole responsible fiscal agent for setting the policies guiding finance and operation. School policies are decided by the Governing Board, and the principal ensures that those policies are implemented. The Governing Board shall exercise continuing oversight over school operations and will be held accountable to its students, parents/guardians, and the community at large, through a continuous cycle of planning, evaluation, and reporting as set forth in section 1002.33. The Governing Board will be responsible for the over-all policy decision making of the school, including the annual approval of the budget. The Governing Board shall perform the duties set forth in section 1002.345, including monitoring any financial corrective action plan or financial recovery plan. Additionally, the Contract stated that LMA would be a public employer and would participate in the FRS, that upon nomination and "prior to appointment to the Governing Board," a member must undergo a background screening in accordance with section 1002.33(12)(g), and that LMA must allow reasonable access to its facilities and records to duly authorized School District representatives. Regarding the employment of teachers and other staff, LMA was responsible for selecting its own personnel. However, in selecting its own personnel, LMA was required to employ only teachers certified pursuant to chapter 1012. LMA was to (1) refrain from employing any individual to provide instructional services or to serve as a teacher's aide whose certification or licensure as an educator is suspended or revoked by the State of Florida or any other state; and (2) refrain from knowingly employing an individual who has resigned from a school or school district in lieu of disciplinary action with respect to child welfare or safety or who has been dismissed for just cause by any school or school district with respect to child welfare or safety or who is under current suspension from any school or school district. Further, the Contract states that the school shall implement policies and procedures for background screening of all prospective employees, volunteers, and mentors and the school shall require all employees and members of the Governing Board to be fingerprinted. The results of all background investigations and fingerprinting "will be reported in writing to the Superintendent and/or his/her designee[;] . . . [n]o school employee or member of the Governing Board may be on campus with students until his/her fingerprints are processed and cleared"; and "the School shall ensure that it complies with all fingerprinting and background check requirements." Regarding financial management, the Governing Board shall be responsible for the operation and fiscal management of LMA, and the school must submit a monthly financial statement to the Sponsor (the School District) no later than the last day of the month being reported. LMA agreed to provide the School District, upon request, proof of sufficient funds or a letter of credit to assure prompt payment of operating expenses associated with the school, including, but not limited to, teacher and other staff salaries and benefits. Regarding federal funding, the School Board agreed to reimburse LMA on a monthly basis "for all invoices submitted by the School for federal funds." Regarding the renewal or termination of the Contract, the Contract's terms closely mimic terms of the applicable statute, section 1002.33. Specifically, the School Board may choose not to renew or terminate the charter for reasons set forth in section 1002.33(8) including, but not limited to, failure to meet generally accepted standards of fiscal management, violation of law, and other good cause shown. The Contract further provides that the School shall have 30 days from written notice of default to cure, "absent any circumstances permitting immediate termination." There is no requirement that the Sponsor issue written notice to the school before it immediately terminates a charter for reasons that pose a serious and immediate danger to the health, safety, and welfare of the students. LMA's Fiscal Mismanagement was an Immediate and Serious Danger to the Students' Health, Safety, and Welfare Pursuant to the Contract and applicable statute, LMA was responsible for submitting monthly financial reports. On or about May 15, 2019, School District Chief Financial Officer ("CFO") Heather Jenkins learned that LMA's January, February, and March 2019 financials showed a negative fund balance—meaning that LMA's expenditures exceeded their revenues. When the School District received LMA's monthly fund balance for April 2019, it again showed a negative fund balance. By this time, LMA's net deficit totaled $235,438.00. LMA's negative fund balance triggered LMA and the School District's statutory obligation to report LMA's financial situation to the Florida Department of Education, pursuant to section 1002.345(b). Pursuant to statute, if the School District and LMA were unable to reach a consensus on a corrective action plan within 30 days, intervention would be necessary by the Florida Commissioner of Education. § 1002.345(1)(d), Fla. Stat. LMA and the School District had until June 28, 2019, to reach a consensus on a corrective action plan. As the School District began receiving monthly financials showing LMA's negative fund balance, the School District also began receiving notices from various sources reporting that LMA was delinquent on certain payments, including, but not limited to, the Florida Department of Management Services regarding LMA's failure to make payments on behalf of its employees to the FRS; LMA employees reporting LMA's failure to make payroll; and LMA's failure to pay Best and Brightest bonuses to teachers, who had been awarded those bonuses by the State. The School District made repeated attempts to reach a consensus on a corrective action plan with LMA by having numerous meetings with LMA's CFO Cornelle Maxfield and providing feedback on LMA's proposed corrective action plan. Each time, Ms. Jenkins identified numerous issues with LMA's proposed corrective action plan, including, but not limited to LMA's failure to segregate federal funds because such funds cannot be used to balance the budget. Each time, Ms. Jenkins also requested the documentation and information necessary to develop a corrective action plan, including requests for a detailed budget, support for revenue increases estimated by LMA, documentation supporting LMA's cash flow analysis and documentation evidencing payment of payroll taxes, workers' compensation, FRS, all utilities, and Best and Brightest bonus payments. Each time, LMA failed to provide the requested documentation or correct the issues identified. The School District also continued to remind LMA that the next School Board meeting was scheduled for July 23, 2019, and that the School District hoped to have a recommendation for LMA's solvency at that time. Even so, LMA repeatedly failed or refused to respond to these requests. As a result, LMA and the School District were unable to reach a consensus on a corrective action plan. LMA's financial mismanagement and the danger this mismanagement posed to the students' health, safety, and/or welfare rendered it unable to adequately provide the most basic services for its students, including food and water. The testimony and evidence presented by the School Board on this issue remains undisputed that LMA could not pay the invoices and debts identified below, as they came due. Further, LMA offered no evidence to rebut the severity of LMA's financial mismanagement and its inability to protect the health, safety, and welfare of its students. Given LMA's inability to protect student health, safety, and welfare, the School Board had substantial bases to immediately terminate the Contract pursuant to section 1002.33(8)(c). Within two days of the issuance of the initial Notice of Immediate Termination, the School Board requested the assistance of Carr, Riggs, & Ingram, LLC ("CRI"), to complete a forensic audit of LMA's documents, data, and other information. Although the School Board already possessed significant information at the time of termination showing that LMA's financial mismanagement posed an immediate and serious danger to student health, safety, and/or welfare, LMA's refusal to cooperate and produce financial records resulted in the School Board not knowing the full extent of LMA's debt. CRI's task was to fully review the revenues and expenses of LMA to determine whether all funds due to LMA had been received and properly spent by the charter school. CRI completed its Forensic Investigation Report ("CRI Report"), dated August 23, 2019. However, although LMA attempted to justify why documents had not been provided to CRI, as will be discussed at length later in this Final Order, at the time of the hearing, the School Board still could not fathom the true extent of LMA's debt, since LMA had not produced the required financial records despite numerous requests from the School Board and Orders from the undersigned. Therefore, CRI explained that the CRI Report was based on findings as of August 23, 2019, because they still lacked information to paint a complete picture of LMA's finances. As of August 23, 2019, LMA's outstanding liabilities totaled $1,539,476.29. This amount includes $780,127.43 in unpaid invoices/liabilities, $499,636.23 in debt funding, and $259,712.63 in payroll owed. As of August 3, 2019, LMA's operating account had a negative balance of $526.97. Of the $780,127.43 owed in unpaid invoices and liabilities, LMA owed $373,852.01 to the IRS. A review of available employee payroll records showed that taxes were deducted from employee gross pay, but were not always remitted to the IRS. When asked about these payments at deposition, both Ms. Maxfield and Mr. Hundley chose to assert their Fifth Amendment rights and refused to answer the questions. Mr. Hundley did not attempt to offer testimony at hearing regarding the unpaid payroll taxes. Ms. Maxfield was not called by LMA to testify at hearing. The CRI Report also revealed that LMA owes $81,917.45 to the FRS. Beginning as early as March 2019, the Florida Department of Management notified both LMA and the School Board of LMA's failure to pay statutory dues pursuant to section 121.78, Florida Statutes, which requires that contributions made to FRS shall be paid by the employer, including the employee contributions, to the Division of Retirement by electronic funds transfer no later than the fifth working day of the month immediately following the month during which the payroll period ended. The statute further provides that employers, who fail to timely provide contributions and accompanying payroll data, shall be assessed a delinquent fee and/or be required to reimburse each member's account for market losses resulting from late contributions. § 121.78(3)(a)-(c), Fla. Stat. Despite LMA's failure to remit FRS payments, FRS contributions were deducted from employee gross pay throughout the 2018-2019 school year. When asked about these payments at deposition, both Ms. Maxfield and Mr. Hundley chose to assert their Fifth Amendment rights. As of August 23, 2019, LMA owed $76,118.88 to Humana for employee's health insurance coverage. Although payments to Humana remained unpaid at the time of the hearing, LMA did deduct contributions for Humana insurance coverage from employee gross pay throughout the 2018-2019 school year. When asked about these payments at deposition, both Ms. Maxfield and Mr. Hundley chose to assert their Fifth Amendment rights. At the time of hearing, LMA also owed a total of $74,306.76 to various technology service vendors that LMA relied upon for the provision of internet, voice services, and support for equipment used by students. For example, LMA owed $43,542.00 to Indian River Networks for various services, including, but not limited to, webhosting; network management site support; helpdesk services for faculty, staff, and board members; technology support services for student computers; monthly site visits; and onsite emergency services. LMA owed Spectrum Business a total of $539.90 for internet and voice services. When asked about Indian River Networks at deposition, Ms. Maxfield chose to assert her Fifth Amendment right. With respect to educational services for its students, LMA owes $35,895.00 to Children's Therapy Solutions, Inc. Child Therapy Solutions, Inc., provided speech language pathology services to LMA students. Because LMA was not eligible for any direct funding pursuant to the Individuals with Disabilities Education Act ("IDEA") for the 2018-2019 school year, LMA's Exceptional Student Education ("ESE") funding came through its monthly Florida Education Finance Program ("FEFP") payments from the School District. As evidenced by the unpaid invoices from Children's Therapy Solutions, Inc., LMA did not properly allocate these funds. In addition to the foregoing vendors, LMA failed to pay teacher recruitment and retention awards earned in the form of Best and Brightest bonuses. On or about March 26, 2019, LMA received $19,531.74 from the State of Florida pursuant to the Best and Brightest program. LMA possessed a list of the employees, who were entitled to receive these funds. In fact, on May 30, 2019, Ms. Jenkins e-mailed Ms. Maxfield, notifying her that two Best and Brightest recipients contacted the School District because they had not received their Best and Brightest checks. When asked about these payments at deposition, both Ms. Maxfield and Mr. Hundley chose to assert their Fifth Amendment rights. LMA failed to properly pay its employees. It owes approximately $259,712.63 in unpaid salaries. When asked about these payments at deposition, Ms. Maxfield and Mr. Hundley chose to assert their Fifth Amendment rights. When asked at that same deposition whether she continued to be paid when LMA was unable to pay their other employees, Ms. Maxfield chose to assert her Fifth Amendment right. Payroll records show that LMA paid Ms. Maxfield through July 15, 2019. Payroll records show that Mr. Hundley received a salary of $175,000.00, while Ms. Maxfield received a salary of $92,500.00 for the 2018-2019 school year. In addition to their base salaries, Mr. Hundley was paid an additional $32,150.00 and Ms. Maxfield was paid an additional $31,300.00 prior to LMA's opening on July 1, 2018, ostensibly for work performed in advance of the school year. LMA also paid Mr. Hundley an additional $2,450 per month and Ms. Maxfield an additional $1,150 per month for expenses during the 2018-2019 school year and 2019 summer. Neither of these additional monthly payments, allegedly for "expenses," required documentation of how the additional compensation was spent. This equates to $29,400.00 annually in addition to Mr. Hundley's $175,000.00, and $13,800.00 annually in addition to Ms. Maxfield's $92,500.00. Mr. Hundley's salary was nearly double what he previously received as principal of Lincoln Memorial Middle School, where he earned $105,560.00. When asked at their depositions about these salaries and expenses and the purposes of the additional compensation labeled "expenses," Mr. Hundley and Ms. Maxfield asserted their Fifth Amendment rights. To obtain additional funding to continue operations, LMA was issued promissory notes by third parties and employees and sold receivables prior to and throughout the 2018-2019 school year to raise additional capital. As of August 23, 2019, LMA owed approximately $499,636.26 to numerous promissory note holders in addition to the $780,127.43 owed in unpaid invoices and liabilities. With respect to its sales of receivables, LMA entered into purchase agreements with several holders, including Charter School Capital, Pearl Capital Funding, CFG Merchant Solutions, and ROC Funding Group. By entering into these agreements, LMA authorized some of these holders to make daily deductions from LMA's bank account. For example, bank statements show that there was a daily debit of $1,479.00 by CFG Merchant Solutions, a daily debit of $725.00 by ROC Funding Group, and a daily debit of $1,499.00 by Pearl Capital Funding. This equates to $18,515.00 each Monday through Friday workweek. Further, on July 15, 2019, Mr. Hundley signed an ACH Debit form, additionally allowing Pearl Capital to debit $7,495.00 from LMA's operating checking account. When asked about these promissory notes and loans at their depositions, Ms. Maxfield and Mr. Hundley chose to assert their Fifth Amendment rights. These facts went unrebutted by LMA at hearing. LMA also allowed its insurance for student athletes to lapse while LMA students were on campus participating in student athletics. Although outrage was expressed by Mr. Hundley that such an accusation was made, no credible evidence was offered into the record to rebut this fact. Instead, at his deposition, Mr. Hundley asserted his Fifth Amendment right, when asked whether Ms. Maxfield kept him apprised of outstanding invoices related to student health, safety, and welfare. As a school within the School District, LMA was required to offer insurance to its student athletes. Maintenance of insurance for student athletes ensures that the student athletes are able to pay any necessary medical bills and, therefore, furthers the health, safety, and welfare of LMA's student athletes. As such, this failure to maintain coverage alone constitutes a danger to student health, safety, and/or welfare. The School Board disbursed all funds owed to LMA, which amounted to a total of $4,095,973.08 in federal, state, and local funding. Funding disbursed by the School Board to LMA included $150,256.00 for Title I, $133,067.16 for the 21st Century program, and $19,531.74 for Best and Brightest bonuses. When asked at her deposition whether the School Board paid all FEFP payments to LMA in a timely manner, rather than responding to such a direct and verifiable question as that, Ms. Maxfield asserted her Fifth Amendment right. When asked whether LMA timely received Title I funds, Ms. Maxfield asserted her Fifth Amendment right. When asked whether LMA timely received all allocations from the School Board, she asserted her Fifth Amendment right. When asked whether the School Board ever withheld funds from LMA to which LMA was entitled, she asserted her Fifth Amendment right. When asked if LMA timely received all 21st Century program funding owed, she asserted her Fifth Amendment right. When asked whether LMA timely received all federal, state, and local funding distributed through the School Board, Ms. Maxfield asserted her Fifth Amendment right. Ms. Maxfield, as LMA's highly compensated CFO, was in the best position to know what the state of the finances were of LMA, yet refused throughout the hearing process to provide documentation or testimony to clarify the issues raised by the School Board in its Notice of Immediate Termination. After the close of the hearing, the School Board received for the first time a copy of an agreement signed on July 1, 2019, by Mr. Hundley on behalf of Total Life Prep, LLC ("TLP"), and Ms. Dawson on behalf of LMA. In the agreement, LMA agrees to pay TLP an annual fee of $275,000.00 in year one, the greater of $500 per student or $280,000.00 in year two, $285,000.000 in year three, $290,000.000 in year four, and $295,000.00 in year five to pay for TLP products. Mr. Hundley is TLP's registered agent. Although this document was clearly responsive to discovery requests, it was never produced to the School Board by LMA. The School Board filed a Motion for Leave to Submit Supplemental Evidence Supporting Petitioner's Proposed Order on September 18, 2019 (a subsequent amended and second amended motion were filed on September 19, 2019, but changed only the paragraph concerning conferring with opposing counsel), including an affidavit from School Board General Counsel Mitchell Teitelbaum, as to when and how he received the document. The School Board was deprived of the opportunity to cross-examine Mr. Hundley, Ms. Maxfield, and Ms. Dawson about this agreement, because it was not produced in discovery. Based upon these facts, and the fact that LMA either concealed or refused to produce such a substantive piece of evidence, the undersigned hereby accepts the document and grants the School Board's motion to include the additional evidence in the record as Petitioner's Exhibit 52 in Binder 3-3. Although LMA, based upon the verified $4 million in state, federal, and local funds it actually received, should have been able to meet its employees' payroll, insurance, and FRS benefits, as well as pay for its students' food deliveries and the water utility bill, LMA decided to enter into an agreement that would require it to pay TLP (and/or Mr. Hundley) approximately $1,425,000.00 over a five-year period. Since the document was not produced, no explanation was given by LMA as to why it sought this additional funding or whether TLP was a company-owned or controlled by Mr. Hundley or any employees of LMA. This contract is indicative of a pattern of behavior by LMA leaders, who continuously made decisions that presented a serious and immediate danger to the health, safety, and/or welfare of LMA students for self-gain. Further, it appears that this agreement was entered into in an attempt to circumvent section 1012.795, by paying Mr. Hundley as TLP rather than as CEO of LMA. Regardless of the fact that LMA could not pay its employees' payroll, insurance, or FRS benefits and could not pay for its students' food deliveries or the water utility bill, the charter school decided to enter into an agreement that would require it to pay TLP (and/or Mr. Hundley) approximately $1,425,000.00 over a five-year period. Regardless of how this agreement is characterized, Mr. Hundley and the Governing Board acted in direct violation of the EPC Order revoking Mr. Hundley's certification as an educator, and were dismissive of the Commissioner of Education's clear warnings to LMA, the EPC's Final Order, the ALJ, and, most recently, the School Board throughout the discovery period. This put the School Board at a distinct disadvantage in preparation for and presenting its case at hearing. Ultimately, by the limited testimony they chose to offer at hearing, LMA has not disputed the fact that it has a debt of at least $1,539,476.29. By invoking their Fifth Amendment rights, Ms. Maxfield, the CFO of LMA, and Mr. Hundley, the CEO of LMA, have not denied their knowledge of the shortfall in funds for the first-year operations of LMA. LMA's actions in seeking outside funding, issuing promissory notes, and withholding payments to teachers and staff, speak far louder than two individuals' refusal under the Fifth Amendment to answer any pertinent questions about LMA's financial picture. LMA has not offered any evidence challenging the fact that its financial mismanagement was a consequence of poor decision-making and inadequate oversight by LMA's Governing Board, CEO and Principal Hundley, and CFO Maxfield. A lengthy discussion will follow below concerning LMA's contention that all their woes were the result of the School Board not directly intervening in the day-to-day operations of LMA, an independent charter school. However, regardless of such a claim by LMA, the poor decision-making by the leaders of LMA directly interfered with LMA's ability to ensure student health, safety, and welfare. Accordingly, and in the absence of any evidence to the contrary, the School Board had substantial basis to immediately terminate LMA's charter pursuant to section 1002.33(8)(c). LMA's Failure to Adequately Comply with Nutritional and Recordkeeping Requirements and Inability to Pay Invoices for Food Services was a Danger to Student Health, Welfare and/or Safety The Contract requires LMA to provide food services to its students consistent with applicable law and to comply with federal requirements for free and reduced meal service. If the charter school chooses to participate in the NFSP, the Contract additionally requires that the charter school follow all applicable federal rules and regulations. Records of all property acquired with federal funds must be maintained. Although the Contract expressly states that the school is entitled to receive all funds provided by the federal and state government for its food service program, it also expressly states that the School Board "shall provide no administrative support for the School's food service program." LMA chose to independently run its food services program. LMA also chose to participate in the NFSP and had its own agreement with the Florida Department of Agriculture and Consumer Services ("Florida Department of Agriculture") regarding implementation of the NFSP. Because LMA had its own agreement with the Florida Department of Agriculture, it would have been inappropriate for the School Board to become involved unless LMA specifically requested the School Board's involvement. By participating in the NFSP, LMA was able to serve 100 percent of its students a free breakfast, lunch, and snack on a daily basis. The NFSP provides federal funding in the form of reimbursement to schools for the purpose of providing free and/or reduced priced lunches for students. As a reimbursement program, funding is issued based on the content of the meals served. To be reimbursable, the meals must comply with certain nutritional standards. Such standards include the meal pattern requirements issued by the United States Department of Agriculture. For example, according to the meal pattern, a reimbursable lunch must include two full components and a fruit or vegetable. Additionally, during the 2018-2019 school year, all grains served had to be whole grain. If a meal does not meet these requirements, it is not reimbursable. Unlike other sources of federal, state, and local funding that is disbursed by the School Board, the Florida Department of Agriculture directly issued reimbursement to LMA. During the 2018-2019 school year, LMA received $390,277.46 in NFSP reimbursements. Of the $390,277.46, approximately $173,381.93 was spent on food-related expenses. Of the food related expenses, $162,828.90 was paid to U.S. Foods, Inc., and Borden Dairy, while $10,553.03 was spent at local grocery stores, such as Sam's Club, Publix, and Aldi. Of the total $390,277.46 received, CRI was able to account for $268,339.71 spent on food services expenses, leaving $121,937.75 in excess reimbursement. When asked at deposition whether he knew where NFSP funds were deposited, Mr. Hundley asserted his Fifth Amendment right. When asked whether he had any knowledge regarding how NFSP funds were utilized, Mr. Hundley asserted his Fifth Amendment right. When asked whether he had knowledge regarding how LMA spent the excess reimbursement from NFSP, Mr. Hundley asserted his Fifth Amendment right. LMA received another $40,402.01 in NFSP funding for May 2019 and $17,250.43 for June 2019. As of August 3, 2019, LMA's operating account was $526.97 in the negative. LMA currently owes U.S. Foods, Inc., $18,900.59 and Borden Dairy $3,704.59. How LMA spent this excess $121,937.75 remains unknown. To receive this reimbursement, LMA was required to send the number of reimbursable meals served to the Florida Department of Agriculture on a monthly basis. All reimbursable meals must be accounted for. One way to account for and substantiate the reimbursable meals served is through the maintenance of food production records. Production records detail what is served on a particular day and serve as backup documentation showing that the school followed the U.S. Department of Agriculture's meal pattern with respect to meals claimed for reimbursement. The Florida Department of Agriculture conducts an administrative review of records belonging to schools participating in the NFSP every three years. When such a review is done, the Florida Department of Agriculture generally reviews the production records to substantiate the meals claimed for reimbursement and to ensure that the meals claimed followed the meal patterns. Copies of any child nutritional labels or other nutritional information for products served may also be required. In light of these administrative reviews, participating schools are required to maintain these records for a period of five years. If a school's claims for reimbursement cannot be substantiated, the Florida Department of Agriculture may request repayments of the funds previously distributed. The Florida Department of Agriculture may also suspend or terminate its services pursuant to the NFSP. Despite numerous requests by the School Board, LMA has not produced any food production records. And following its termination of LMA's charter, the School Board (with the assistance of CRI) was only able to recover one week's worth of LMA's production records for the 2018-2019 school year. Director of Food and Nutrition for the School District, Regina Thoma, explained that LMA's Cafeteria Manager, Angela Enrisma, told her that she no longer had access to the production records or the software that held the production records. Ms. Enrisma also told Ms. Thoma that CFO Maxfield took the paper production records. Ms. Enrisma similarly testified during her deposition that she kept the production records in a box in her office, and that Ms. Enrisma gave Ms. Maxfield the box of productions on the last day of school. Ms. Enrisma additionally testified that she did not make electronic copies of the production records and that she did not know where the production records were presently located. Despite the fact that LMA's qualified representative Christopher Norwood advised the undersigned that he would ask Ms. Maxfield to produce the box of production records, neither Ms. Maxfield nor anyone else at LMA has produced those records. The location of LMA's production records remains unknown, as is whether these records remain accessible digitally, or even exist. LMA has also failed to rebut the fact that, in the absence of such records, LMA would be liable for penalties for failing to preserve these records, including, but not limited to, repaying funds already received totaling $390,277.46 and suspension or termination of the NFSP program. During the hearing, the School Board requested that the undersigned apply an adverse inference with respect to LMA's failure to comply with the law if LMA failed to produce the requested production records. In response, the undersigned stated that "either these records exist, or they have been destroyed or misplaced or lost. And if they're destroyed, misplaced, or lost, then the inference will be that no such records exist." The undersigned further advised that "there have to be records . . . [a]nd if there aren't records, the inference I make is that the records have been destroyed or hidden." In the conclusions of law to follow, a ruling on the use of adverse or negative inferences will be made concerning both this issue and the invoking of the Fifth Amendment by the CEO and CFO of LMA on all questions relating to the fact and location of LMA funds that remain unaccounted for. The location of these records--aside from the one week CRI (not LMA) was able to find--remains unknown. As will be discussed below, the defense from LMA that the School Board took over the school and had access to all records that existed on the day control was assumed, does not absolve LMA from protecting records either electronically or with back-up copies. Concerning the food service program at LMA, the undersigned must infer that the production records do not exist, were hidden, destroyed and/or were lost and that, consequently, LMA failed to comply with applicable law, rules, and regulations pursuant to the NFSP. As noted previously, LMA served 100 percent of its students a free breakfast, lunch, and snack on a daily basis using funds received from the NFSP. Many students were dependent upon these meals as their only daily nourishment. To the extent that students relied upon the provision of free meals given pursuant to the NFSP, discontinuation of this service would clearly pose a danger to the students' health, safety, and/or welfare. Given LMA's failure to comply with NFSP's requirements, the School Board had substantial basis to immediately terminate the Contract pursuant to section 1002.33(8)(c). Moreover, school was scheduled to start within just a few weeks of the July 23, 2019, School Board meeting. As proof of another lack of attention to detail, LMA has not produced any records showing that it properly screened student meals for allergens. For example, the School District uses software that notifies cafeteria employees when a student has an allergy. Once the software notifies the cafeteria employee of a student's allergy, the employee checks the student's tray to make sure the student does not have any products containing the allergen. Such precautions are implemented because food allergies can be life threatening. LMA refused or failed to produce any records showing that it implemented a similar process or otherwise screened for allergens when serving student meals. LMA also did not offer any rebuttal evidence during the course of discovery or during the hearing showing that LMA screened for allergens. As already noted, the undersigned acknowledged during the hearing that in the absence of records or rational explanation, LMA would be unable to rebut issues raised by the School Board in its Notices of Immediate Termination. The undersigned further advised that, in the absence of requested records or rebuttal evidence, the undersigned would infer that these records did not exist or were hidden and/or destroyed. Accordingly, in the absence of any records or rebuttal evidence, the undersigned finds that LMA failed to properly screen student meals for allergens. Given the serious and potentially life-threatening nature of allergies, any failure to screen student meals for allergens clearly poses a danger to student health, safety, and/or welfare. In the case of a school that boldly claims it was formed to do better by its community, such lack of institutional control is disheartening at best. Accordingly, LMA had substantial basis to immediately terminate LMA's charter pursuant to section 1002.33(8)(c). LMA was not able to pay for its food deliveries. A case in point involves U.S. Foods, a mainline food distributor that provides food service, food, and related supplies to restaurants, schools, and other institutions. Schools, especially those that participate in the NFSP, use mainline distributors, such as U.S. Foods, Inc., because their products include child nutrition labels. Child nutrition labels contain information specifically used to assist in complying with the U.S. Department of Agriculture's meal patterns. Without child nutrition labels, it is much more difficult, although not impossible, to ensure that meals meet the meal pattern and are, therefore, reimbursable. Throughout the 2018-2019 school year, LMA had issues paying U.S. Foods, Inc., for its food deliveries. On May 8, 2019, U.S. Foods, Inc., stopped making deliveries to LMA altogether due to nonpayment. LMA currently owes U.S. Foods, Inc., $18,900.59. Borden Dairy was LMA's milk provider. Borden Dairy stopped delivering to LMA on May 24, 2019, due to nonpayment. LMA currently owes Borden Dairy $3,704.59. After U.S. Foods, Inc., and Borden Dairy stopped making these deliveries, Ms. Enrisma, began purchasing foods from local grocery stores, including, but not limited to, Sam's Club, Aldi, Winn Dixie, and Publix. Products purchased from Sam's Club, Aldi, Winn Dixie, and Publix do not have child nutrition labels. At least three receipts, one for purchases made at Sam's Club and two for purchases made at Winn Dixie, contained food items that do not meet the U.S. Department of Agriculture's meal patterns. If LMA served students any items that did not meet meal pattern requirements, such meals would not be reimbursable pursuant to the NFSP. Notably, LMA sought reimbursement for meals pursuant to the NFSP after U.S. Foods, Inc., stopped making deliveries to LMA. When asked at deposition whether he was aware that LMA purchased food from Publix and Aldi to be served to LMA students, Mr. Hundley asserted his Fifth Amendment right. Ms. Thoma visited LMA for the first time since the July 23, 2019, termination of LMA's charter on July 29, 2019. When she arrived, Ms. Enrisma expressed relief because school was starting in two weeks and she was not sure how they were going to feed the students. LMA failed to offer any rebuttal to the following: (1) LMA's financial mismanagement resulted in U.S. Foods, Inc., ceasing services due to nonpayment; (2) the discontinuation of these deliveries resulted in LMA's cafeteria manager purchasing products from local grocery stores that did not have child nutrition labels; (3) products purchased from these local grocery stores did not meet NFSP's meal patterns; (4) these products were not screened for allergens; and (5) despite all of this, the food was served to students. Further, LMA has failed to offer any evidence or rebut the fact that LMA's inability to provide free and nutritional meals to its students posed a serious and immediate danger to student health, safety, and/or welfare. For example, it remains undisputed that upon Ms. Thoma's arrival at the school, LMA's own cafeteria manager expressed that she was unsure how she was going to feed the students moving forward. It is also undisputed that LMA students depended upon LMA's provision of these meals. In light of the foregoing, the School Board had substantial basis to immediately terminate the Contract pursuant to section 1002.33(8)(c). Perhaps the most inexplicable failure to pay issue in this case involved LMA's water utility bill. On or about July 22, 2019, LMA received a water shut-off notification from the City of Palmetto, Florida ("City"), due to an unpaid balance of $3,216.67. In the notice, the City indicated that LMA's payment was 45 days past due and that the payment must be made by 5:00 p.m. on July 29, 2019. The City further indicated that it would shut off LMA's water on July 30, 2019, if LMA failed to make this payment. On July 10, 2019, just twelve days earlier, LMA had received $281,229.85 in FEFP funds. By August 3, 2019, LMA's operating account had a negative balance of $526.97. Notably, this was not LMA's first water shut-off notice from the City. On or about June 17, 2019, LMA received a water shut-off notification due to an unpaid balance of $12,439.23. The notice advised that the City would turn off LMA's water if payment was not made. Mr. Hundley testified that he was aware that LMA received water shut-off notices in both June and July. Accordingly, it is undisputed that LMA received notices from the City threatening to turn off LMA's water due to nonpayment. Further, LMA began receiving notices from the City regarding their failure to pay the water bill as far back as April 2019. For example, the City records state that on April 1, 2019, Ms. Maxfield admitted to a City representative that LMA has not paid "in a while" and that she would make payment that day. However, she did not pay that day. The City representative called her three more times and left a voicemail. The following day, the City representative again attempted to contact Ms. Maxfield. Ms. Maxfield indicated that "state funds are slow coming in." When the City representative attempted to follow up later that day, the City representative was informed that Ms. Maxfield was gone for the day. On April 3, 2019, the City representative was unable to reach Ms. Maxfield, but did speak with Mr. Hundley. Mr. Hundley informed the City representative that, "Lincoln Memorial have exhausted their reserves and that is why they haven't paid for the last four months." The City representative subsequently made numerous attempts to create a payment plan, but Mr. Hundley and Ms. Maxfield--"the only ones that can help"--were consistently unavailable. It is undisputed that a school cannot operate without running water. It is also undisputed that LMA's failure to have running water would pose a serious and immediate danger to the students' health, safety, and welfare. Even Christine Dawson, chair of LMA's Governing Board, admitted that protecting student safety means ensuring students have adequate access to water. The failure of LMA to ensure the school was able to provide such a basic necessity as running water further demonstrates that the School Board had substantial basis to immediately terminate the Contract pursuant to section 1002.33(8)(c). LMA's Failure to Background Screen Employees was an Immediate and Serious Danger to the Health, Safety, and Welfare of Charter School Students The Contract sets forth the processes that LMA must follow with respect to background screening and fingerprinting its employees. As discussed previously, the Contract expressly states that the school shall implement policies and procedures for background screening of all prospective employees, volunteers, and mentors, and the school shall require all employees to be fingerprinted. The Contract further provides that the results of all background investigations and fingerprinting "will be reported in writing to the Superintendent and/or his/her designee"; that "[n]o school employee or member of the Governing Board may be on campus with students until his/her fingerprints are processed and cleared"; and that "the School shall ensure that it complies with all fingerprinting and background check requirements." "Cleared" means that any criminal history that shows up as a result of such background screening is reviewed. LMA was solely responsible for hiring and background screening its personnel. The School Board was not responsible for interviewing, hiring, selecting, or background screening LMA employees. The terms of the Contract mimic Florida statutory law requiring that instructional personnel, non-instructional personnel, and governing board members undergo a Level 2 background screening prior to hire, pursuant to section 1012.32(2). If the results of a background screening reveal that an individual has been arrested for and/or charged with certain offenses, the law forbids the school from employing the individual. Examples of such offenses include felony theft in excess of $3,000.00. See §§ 1012.315(1)(z) and 435.04(2)(cc), Fla. Stat. LMA contracted with DeAnna King and her company, King HR Services, LLC ("King"), to operate LMA's human resources ("HR") department. Pursuant to King's contract with LMA, the company was hired to provide "complete employee support," recruit employees, and implement policies and procedures for background screening of employees, volunteers, and mentors. The School Board was not a party to LMA's contract with King. Despite King's contractual duties to properly background screen and fingerprint employees prior to hire, LMA never shared the Contract with Ms. King. Despite this, Ms. King testified that she was familiar with Florida statutory law and legal requirements regarding employment of school employees, including sections 453.04 and 1012.32, Florida Statutes. Ms. King also testified that she understood that employees must undergo a Level 2 background screening before setting foot on campus, that she needed to submit fingerprints to the Florida Department of Law Enforcement ("FDLE") to adequately complete a Level 2 background screening, and that an offer of employment at a school is conditional pending the results of a Level 2 background screening. Following the School Board's immediate termination of LMA's charter, the School District was required to validate that LMA had properly subjected LMA employees to a Level 2 background screening. During the validation process, the School District discovered that LMA did not have fingerprint results or clearance letters on file for 13 of LMA's employees. Pursuant to the Contract, clearance letters should have been on file for each of these individuals prior to their beginning employment with LMA. Among the individuals listed were CFO Maxfield and a "security official" named John Walker. LMA initially hired John Walker on July 30, 2018. Once properly screened by the School District, Mr. Walker's background results revealed that he was arrested for felony grand theft in the third degree in February 2016, and was re-arrested for violating his probation for grand theft on July 10, 2018, less than two weeks before LMA hired him. Based on these results, the School District would not have cleared him to work at LMA. In fact, absent any evidence of disposition, the statute forbids it. See §§ 435.04(2)(cc) and 1012.315(1)(z), Fla. Stat. Ms. King admitted that she never received the fingerprinting results for any LMA employees. Ms. King also admitted that she allowed the 13 employees identified by the School District to start working at LMA, but never reviewed their background screening results. When asked at deposition whether she understood the background screening process, Ms. Maxfield, who supervised Ms. King, asserted her Fifth Amendment right. When asked whether she was aware that LMA allowed employees to work that did not pass their background screening, Ms. Maxfield asserted her Fifth Amendment right. When asked to describe LMA's hiring process, Ms. Maxfield asserted her Fifth Amendment right. When asked whether Ms. Maxfield was responsible for overseeing the background clearance process, Ms. Maxfield asserted her Fifth Amendment right. As evidenced by the foregoing, LMA has failed to offer any evidence rebutting the fact that LMA allowed individuals to start working at the school prior to reviewing their background screening results or receiving clearance letters from the School District; that Ms. King never reviewed the fingerprint results for any employees, including the 13 employees identified by the School District, before allowing them to work at LMA; that the School District would not have cleared at least one of these individuals, John Walker, to work at LMA; and that failure to subject individuals to a Level 2 background screening prior to employment poses an immediate and serious danger to student health, safety, and welfare. The very purpose of background screening is to protect students and ensure their safety. LMA's failure to adequately protect its students and ensure their safety further supports the fact that the School Board had substantial basis to immediately terminate the Contract pursuant to section 1002.33(8)(c). Eddie Cantrel Hundley's Presence on Campus, with Permission of LMA's Governing Board, Constituted an Immediate and Serious Danger to the Student's Health, Safety, and Welfare Eddie Cantrel Hundley served as LMA's founder, principal, and CEO for the 2018-2019 school year. Mr. Hundley's employment agreement described his responsibilities as principal to include managing and overseeing all of the day-to-day operations of the school, which encompassed effective management of all functions, including, but not limited to: facilities, transportation, staff, faculty, food service, safety and security. With respect to his role as CEO, Mr. Hundley described his job responsibilities to include maintaining a "visible and accessible presence to the school's families and the local communities"; "supervising and directing the corporation's day- to-day activities and affairs"; and executing all decisions approved by the Governing Board. According to Mr. Hundley, he was "always" CEO. Although he appeared to be reluctant to admit this when testifying at hearing, as CEO, "the buck stopped" with Mr. Hundley. No others supervised Mr. Hundley, except for LMA's Governing Board. Also, no other individuals directly reported to the Governing Board, except Mr. Hundley. According to Mr. Hundley, as both CEO and principal, he was responsible for ensuring that the appropriate people were hired for the appropriate roles. LMA Governing Board Chair, Christine Dawson, testified that Mr. Hundley only acted as principal "when necessary" since the role of principal was not required. Ms. Dawson further explained that Mr. Hundley's role as principal was only necessary when "the district needed to require that a principal be at their meetings" or when the district, media, school, and board "recognized and noted" Mr. Hundley as principal. When asked about Mr. Hundley's duties as principal, Ms. Maxfield asserted her Fifth Amendment right. When asked about Mr. Hundley's duties as CEO, Ms. Maxfield asserted her Fifth Amendment right. When asked whether Mr. Hundley worked at the school each day when he was not CEO or principal, Ms. Maxfield asserted her Fifth Amendment right. When asked whether Mr. Hundley came to school each day, Ms. Maxfield asserted her Fifth Amendment right. On March 8, 2019, ALJ Lynne A. Quimby-Pennock issued a Recommended Order to the EPC (DOAH Case No. 18-5733PL), recommending that Mr. Hundley's educator's certificate be revoked for a period of five years pursuant to section 1012.795(1), thereby denying him the right to teach or otherwise be employed by a district school board or public school in any capacity requiring direct contact with students. Judge Quimby-Pennock recommended revocation due to Mr. Hundley's decision to give a positive reference in his official capacity as principal to another school district in support of a former employee, who was under investigation for having an inappropriate relationship with a minor. With respect to her findings of fact, Judge Quimby- Pennock concluded that, at the time Mr. Hundley gave the reference, which included Mr. Hundley answering "no" to the question of whether he had any reason to believe that the individual should not work with children, Mr. Hundley was aware of three different investigations into the employee, all involving allegations of inappropriate conduct with a student. Ms. Dawson testified that in response to the Recommended Order, the Governing Board decided on April 24, 2019, to remove Mr. Hundley's title as principal. The Governing Board also allegedly decided that Mr. Hundley would only have "supervised access" to students moving forward, meaning that Mr. Hundley would "not be alone with students." However, no one exceeded Mr. Hundley's rank at the school, and no one was assigned to accompany or supervise Mr. Hundley's interactions with students. The Governing Board placed no real restrictions on Mr. Hundley. Although Mr. Hundley's title as principal was eliminated, he remained CEO. The Governing Board did not remove or change Mr. Hundley's duties or restrict Mr. Hundley's ability to walk around campus or speak with students. Mr. Hundley also continued to use his same office on campus. Mr. Hundley found no reason to move his office. On May 13, 2019, the EPC issued a Final Order adopting Judge Quimby-Pennock's Recommended Order, including the revocation of Mr. Hundley's educator's certificate for a period of five years pursuant to section 1012.795(1). Even though the Governing Board members received the EPC's Final Order, they did not take any additional action with respect to Mr. Hundley's role as CEO or with respect to Mr. Hundley's presence on campus with students. On or about May 30, 2019, Ms. Dawson received a letter from Chief Randy Kosec, Jr., of the Florida Department of Education's Office of Professional Practices Services. In that letter, Chief Kosec notified Ms. Dawson of the EPC's revocation of Mr. Hundley's educator's certificate and asked if Mr. Hundley was still employed by or working on behalf of LMA. In the event that the answer was yes, Chief Kosec asked Ms. Dawson to explain Mr. Hundley's duties and how those duties could be carried out without Mr. Hundley having direct contact with students. Ms. Dawson waited until nearly a month later to respond to Chief Kosec's May 30 letter. When Ms. Dawson did finally respond on June 25, 2019, she explained that the Governing Board decided at its last board meeting that Mr. Hundley would no longer serve as principal, but would continue to serve as CEO/Founder of LMA. According to Ms. Dawson, LMA's last board meeting was held on April 24, 2019. Ms. Dawson further explained that Mr. Hundley's "executive functions," included "senior level leadership and oversight, strategic planning, program selection, and development of partnerships and resources beneficial to LMA." Mr. Hundley did not limit his future activities to these designated areas of responsibility. Subsequent to April 24, 2019, and throughout the month of June, Mr. Hundley continued to go to LMA's campus approximately three-four days per week to perform his duties as CEO. Video surveillance introduced into evidence shows Mr. Hundley in the cafeteria, while students are present, on June 18, 2019, throwing a ball with students in the cafeteria on June 20, 2019, and speaking with students in the gym on June 24, 2019. When asked whether LMA paid Mr. Hundley in June for work performed at LMA, Mr. Hundley asserted his Fifth Amendment right. LMA students were present on LMA's campus in both June and July of 2019 to take classes for credit recovery and as a part of the 21st Century Community Learning Centers Program ("21st Century"). The 21st Century is a program that supports the creation of community learning centers to provide academic enrichment opportunities, "particularly students who attend high- poverty and low-performing schools." Programs must include remedial educational activities and academic enrichment learning programs, mathematics and science education activities, tutoring services, and recreational activities. The state awards eligible entities funds to carry out 21st Century programing. LMA was the recipient of such funds, and had over 100 students enrolled during the 2019 summer months. On or about July 2, 2019, Chief Kosec responded to Ms. Dawson's June 25 letter, stating that he understood that Mr. Hundley would be serving as CEO/Founder of LMA, but that Ms. Dawson's response failed to explain how Mr. Hundley could carry out his duties without direct contact with students "which would mean that he would not be on campus at times when students are present, especially the function of 'senior level leadership and oversight.'" Ms. Dawson never responded. On July 16, 2019, Florida Commissioner of Education Richard Corcoran e-mailed Ms. Dawson and others, including, but not limited to, Governing Board members James Ward, C.J. Czaia, School District Superintendent Cynthia Saunders, and School Board General Counsel Mitchell Teitelbaum, to discuss his concerns regarding Mr. Hundley's ongoing presence on LMA's campus. In that letter, Commissioner Corcoran summarized the ruling of the EPC and the restrictions imposed upon Mr. Hundley as the result of the five-year revocation received by Mr. Hundley. The Commissioner stated that Mr. Hundley's actions giving rise to the revocation "had in fact jeopardized the healthy [sic], safety, and welfare of students. . . . As a result of the actions taken by the EPC, Mr. Hundley cannot legally perform the duties of a school administrator." If he cared as much about LMA and its students as he professes to, this language alone should have resulted in Mr. Hundley removing himself from any active administrative duties with LMA. When asked what action, if any, was taken in response to Commissioner Corcoran's July 16 correspondence, Ms. Dawson testified that "[t]he action taken happened on April 24th," when the Governing Board removed Mr. Hundley's title as principal and "addressed the direct contact with students, our interpretation of it, through our research and the law." The School Board argued that, notwithstanding the Governing Board's alleged interpretation of law, the plain meaning of the applicable statute is clear. An administrator whose educator's license is revoked cannot be employed in any capacity requiring direct contact with students for the duration of the revocation period, pursuant to section 1012.795. The Florida Department of Education has additionally interpreted this statute to mean that an individual cannot be employed in a position that would require him to be on campus while students are present. Despite the law's clear language and the Commissioner of Education's letter quoting the same, Mr. Hundley was back on campus the following day, July 17, 2019. In fact, video surveillance on this date shows Mr. Hundley speaking with students and hugging a student in the cafeteria. When asked at his deposition in what capacity he worked in July 2019, Mr. Hundley asserted his Fifth Amendment right. On July 16, 2019, Commissioner Corcoran also e-mailed Superintendent Cynthia Saunders and School Board Chair Dave Miner. Analogous to his July 16 correspondence to the LMA Governing Board, Commissioner Corcoran expressed extreme concern regarding Mr. Hundley's presence on campus. After receiving Commissioner Corcoran's detailed letter expressing his concerns with Mr. Hundley being on the LMA campus following the revocation of his certification, Superintendent Cynthia Saunders, School Board Member Reverend James Golden, and School Board General Counsel Mitchell Teitelbaum met with two of LMA's Governing Board members, individually, to ask that they remove Mr. Hundley from campus. The Governing Board did not cooperate. On July 22, 2019, Mr. Hundley sent an e-mail to LMA staff with the subject title, "moving forward." The e-mail included an attachment, which stated: After careful consideration and appreciation for the events of the past several years and with specific interest in obtaining the peaceful resolution of the issue of my leadership at LMA, I am stepping down from my position as Principal, effective immediately. . . . The revocation of my licensee [sic] was an action taken by an overreaching law judge that is being exploited by a biased school district and misinformed commissioner of education. Our own LMA Board disagreed with their erroneous findings in consideration of a state statute and kept their confidence in me as I remained in place in my role at LMA. . . . Rest assured, I will continue to provide the needed guidance and direction to the school leadership to ensure the progress of our mission of providing the best possible teaching and learning experience for all students . . . . Prior to that date, despite the testimony that the Governing Board had removed Mr. Hundley as principal of LMA on April 24, 2019, LMA staff was unaware of any changes with respect to Mr. Hundley's role as CEO or principal. Mr. Hundley's last day on campus was July 24, 2019, the same day that the School Board issued its Notice of Immediate Termination pursuant to section 1002.33(8)(c). It is undisputed that Mr. Hundley continued to come to campus until the School Board terminated the charter. It is undisputed that Mr. Hundley remained CEO even after issuance of the May 13, 2019, EPC Order, since even his e-mail of July 22, 2019, "stepping down" as principal after having been removed from the post by the Governing Board on April 24, 2019, did not include a statement that he was stepping down as CEO. It is undisputed that students were on campus for the 21st Century program and for credit recovery during the summer months. It is undisputed that Mr. Hundley continued to have direct contact with students while on campus. Finally, even if Mr. Hundley did nothing to harm any student while on campus after his certification was revoked by the EPC, it is undisputed that his presence on campus, by operation of law, posed a danger to the students' health, safety, and/or welfare, due to the revocation of his educator's certificate. This evidence remains unrebutted due primarily to his refusal to testify to the essential elements leading to the Notice of Immediate Termination. Respondent Failed to Rebut Any of the Foregoing Evidence and Failed to Otherwise Prove Any of the Allegations Asserted in its Defense On July 23, 2019, the School Board held its regularly scheduled School Board Workshop ("Workshop"). The Workshop had an agenda item for the discussion of the financial condition of LMA. During the Workshop, Mitchell Teitelbaum addressed the School Board regarding the immediate and serious danger to the health, safety, and welfare of LMA students, including the concern related to Mr. Hundley's continued presence on campus despite the Final Order of the EPC revoking his educator's certificate pursuant to section 1012.795. Tammy Taylor, director of finance, and CFO Heather Jenkins addressed the dire financial condition of LMA. During the Workshop, Mr. Teitelbaum presented multiple documents to the School Board regarding LMA's continuous failure to cooperate with the School Board and refusal to provide essential information necessary to ensure that the health, safety, and welfare of its students were being met. During the Workshop, 13 members of the public signed up for the public comment portion of the meeting, and approximately 12 community members spoke in support of LMA. At the end of the Workshop, School Board Member Scott Hopes requested that Chairman Dave Miner amend that evening's School Board meeting agenda to address whether the School Board should assume the responsibility of the continuing operation of LMA and immediately terminate its charter. Later that same day, July 23, 2019, the School Board hosted its regularly scheduled meeting. At the beginning of the meeting, School Board Member Hopes moved to amend the agenda to include the issue of LMA. School Board Member Golden seconded the motion. The amended agenda was adopted unanimously. During the public comment portion of the School Board meeting, 41 members of the public signed up to participate, including a teacher from LMA who spoke about her 2018-2019 employment contract and unpaid wages. Approximately 23 members of the public spoke in support of LMA. Notably, Ms. Maxfield spoke in support of LMA, and Mr. Hundley was in the audience. At the conclusion of the public comments, Chairman Miner opened the discussion on the LMA topic. The School Board discussed the immediate and serious danger to the health, safety, and welfare of LMA students. School Board Member Hopes made the following motion: Approval of the Manatee County School Board to: Terminate the Charter of Lincoln Memorial Academy immediately in accordance with section 1002.33(8)(c), Florida Statutes, and section 1(d) of the Charter between the School Board of Manatee County and Lincoln Memorial Academy, Inc., d/b/a Lincoln Memorial Academy; Take over the operational control of Lincoln Memorial Academy Charter School and assume and continue the operation of the Charter School; Forthwith appoint an appropriate person to act as Interim Principal of the Charter School after requesting the School District administration to provide, if available, the names of appropriate candidates with their qualifications who are willing to serve as Principal; Direct the School District Administration to take steps to immediately secure all Lincoln Memorial Academy Charter School property; Take steps to prepare the Charter School to timely open for the 2019-2020 school year with appropriate staff, supplies and equipment; Authorize a forensic audit of the finances and property of the school. The School Board voted on the motion made by School Board Member Hopes, adopting the motion four to one, with James Golden, Scott Hopes, Gina Messenger, and Dave Miner approving the motion, and Charles Kennedy rejecting the motion. The day after the School Board meeting, on July 24, 2019, the School Board issued a written Notice of Immediate Termination. The School Board then issued an Amended Notice of Immediate Termination on August 5, 2019. As previously addressed, the Contract only allows LMA 30 days from written notice of a breach to cure "absent any circumstances permitting immediate termination." Under circumstances presenting grounds for immediate termination, such as a serious and immediate danger to the health, safety, and/or welfare of the students, the Contract does not require the Sponsor to issue written notice to the school before it immediately terminates a charter. However, even if Petitioner had an obligation to provide LMA notice and an opportunity to cure, as LMA argued at hearing, Petitioner adequately provided such notice. For example, following numerous meetings with Ms. Maxfield and unfulfilled requests for documentation and information, School District CFO Heather Jenkins notified Ms. Maxfield on May 29, 2019, that LMA was in a deteriorating financial condition pursuant to section 1002.345 and as a result, both LMA and the School District had a statutory obligation to reach a consensus on a corrective action plan by June 28, 2019. Ms. Jenkins followed up on both June 10, 2019, and June 21, 2019, with additional requests for information and documentation and proposed revisions to LMA's corrective action plan. LMA failed to adequately respond or otherwise address the issues identified by Ms. Jenkins. On or about July 8, 2019, Ms. Jenkins summarized her numerous attempts to work with LMA in a Notice of Non-Compliance addressed to LMA's Governing Board. This notice included a copy of each attempt by the School Board to work with LMA to reach a consensus on a corrective action plan, demonstrating that LMA knew long before receipt of this July 8, 2019, notice that it had a statutory obligation to develop a corrective action plan with the School Board. Regardless, however, and consistent with Petitioner's overall contention that additional notice was not required prior to immediate termination, section 1002.345(5) provides that "[t]his subsection does not affect a sponsor's authority to terminate or not renew a charter pursuant to s. 1002.33(8)." During this same time frame, the School District also issued LMA numerous notices of noncompliance and/or contractual breach regarding a variety of other related topics. For example, on April 1, 2019, Director of District Support Frank Pistella notified Ms. Maxfield that the School District had received a letter from the Florida Department of Management Services, Division of Retirement, stating that LMA had not paid FRS contributions for two months. On June 25, 2019, Ms. Jenkins e-mailed Ms. Maxfield to notify her that the School District received an alert that LMA failed to make payroll despite the fact that LMA cashed its final 2019 Referendum Disbursement in the amount of $61,288.75 and its June FEFP disbursement in the amount of $261,009.97. Ms. Jenkins requested confirmation and documentation that LMA fully paid all employment contracts and confirmation that LMA fully paid FRS payments due to employees. Ms. Jenkins also sent this e-mail to Mr. Hundley, Ms. Dawson, and other members of the Governing Board. On or about July 3, 2019, Dr. Pistella notified LMA's Governing Board members of their failure to comply with sections 121.78 and 1002.33(9)(k)2. Specifically, section 1002.33(9)(k) requires the governing body of a charter school to annually report its progress to the Sponsor and the Commissioner of Education. Section 1002.33(9)(k) additionally requires the charter school to report its financial status, "which must include revenues and expenditures at a level of detail that allows for analysis of the charter school's ability to meet financial obligations and timely repayment of debt. In the July 3, 2019, letter, Dr. Pistella not only quoted the statutory language, but also listed every single time that the School District requested proof of LMA's FRS payments and included attachments evidencing the same. On or about July 16, 2019, Dr. Pistella sent the LMA Governing Board and Mr. Hundley a letter summarizing each and every time the School District attempted to notify LMA of statutory and contractual breach and/or requested unfulfilled requests for information between April 1, 2019, and July 12, 2019. This July 16, 2019, correspondence served as a cumulative notice and summary of all prior correspondence with LMA regarding these issues. This letter also included every prior notice cited therein as an attachment. The School Board again sent this correspondence, and all of its attachments, to LMA as an exhibit to the Notice of Immediate Termination sent to LMA on July 24, 2019. LMA received this correspondence and was notified of all prior attempts by the School Board to notify LMA of its statutory and contractual violations not once, not twice, but at least three times. LMA does not dispute that it received the foregoing notices. And more importantly, LMA has not offered any evidence rebutting the fact that the circumstances identified above as grounds for Petitioner's immediate termination of LMA, i.e., Mr. Hundley's ongoing presence on campus, LMA's financial mismanagement, LMA's inability to pay for food deliveries, LMA's inability to pay the water bill, and LMA's failure to properly background screen employees, posed an immediate and serious danger to LMA students. Regardless of whether notice was issued, substantial basis existed to terminate LMA's charter pursuant to section 1002.33(8)(c). As evidenced by the plain terms of section 1002.33(8)(c) and the Contract, opportunity to cure is not afforded under these circumstances. During the hearing and his deposition, Mr. Hundley did not dispute the fact that LMA is in significant debt, but suggested that Petitioner was to blame with respect to LMA's current financial state and current inability to ensure the health, safety, and welfare of its students. For example, Mr. Hundley testified that LMA did not receive Title I funds when it should have and that LMA should have received "at least" $283,000.00 in Title I funds, with a per pupil allocation of at least $800. According to Mr. Hundley, this alleged delay of LMA's receipt of Title I funds and receipt of less Title I funds than initially projected, impacted LMA because "[w]hen you need to extend [sic] funds before you can get them back, if you don't have a sizeable reserve, that can become problematic if those funds are not being reimbursed on [sic] a timely manner and you're having to pay them out continuously.” Mr. Hundley's contentions that LMA's current financial state and current inability to ensure the health, safety, and welfare of its students is a result of any act or omission by the School Board, are not supported by any evidence in the record. To the contrary, the undisputed evidence shows that the School District paid LMA a total of $4,095,973.08 in federal, state, and local funding. Included in the $4,095,973.08 is the $3,096,731.26 in FEFP funding that LMA received between July 2018 and July 2019, with the last payment of $281,229.85 being issued on or about July 10, 2019. The $4,095,973.08 total also includes $150,256.00 in Title I funds. Title I is a federal program designed to mitigate the impact of poverty on students. The application for Title I funds is district-wide, meaning one application is submitted on behalf of the entire School District. Poverty rankings are based on a school's Community Eligibility Provision ("CEP") classification or free and reduced lunch applications. The amount of funds distributed to each school depends upon two factors: (1) the number of enrolled students and (2) the school's poverty level pursuant to a "rank and serve" system. "Rank and serve" means that the School District cannot give a school with a lower poverty level more funds than a school with a higher poverty level. As such, it is not only the school's poverty that matters, but also the school's poverty level in relation to the poverty of other schools. Accordingly, the amount of Title I funds issued may fluctuate from year to year. While FEFP funds, and other state and local funding, can be used to run a school's core program, federal funding, such as Title I funds can only be used "to supplement, not supplant." As such, Title I funds can be used for supplemental materials, supplemental positions, parent involvement, and after-school programs. Whether a school is properly using Title I funds for supplementing, rather than supplanting, depends upon whether the school can operate without relying on the Title I funds. The school must be able to run its program even in the absence of Title I funds. As a result of the charter school conversion, LMA was considered a new school; it was no longer Lincoln Memorial Middle School. As a new school, the Department of Education assigned LMA a master school ID number. Because LMA was a new school, it had to establish its eligibility as a Title I school, despite any prior history as Lincoln Memorial Middle School. As a new school, the allocation set forth in LMA's application was based upon projections for the 2018-2019 school year. Accordingly, the School District assigned LMA a "K Code," signifying that LMA was projected to be a Title I school, but that LMA's eligibility could not be proven until their receipt of Survey 2 data in October 2018. Once received, the Survey 2 data would then replace the initial projections with actual numbers. Title I applications are generally approved between September and December. In the meantime, LMA was permitted to submit requests for reimbursement to the School District based upon the projected allocation. The School District worked with LMA on an individual basis to assist in planning, purchasing, and reimbursement with respect to Title I funds. In correspondence and meetings with LMA, the School District repeatedly reminded LMA that its initial application for Title I funds was based on projections and that LMA's projections would be updated with the October 2018 Survey 2 data. In September 2018, the Department of Education notified the School District and LMA that LMA must revise its application by removing the 1.6 multiplier generally assigned to CEP schools because it was a new school. The School District admitted its error in previously informing LMA that the multiplier would apply. With the multiplier removed, LMA's per pupil allocation changed from a projection of $283,000.00 to $117,000.00. Despite the $117,000.00 allocation, the School District used other funds to increase LMA's total allocation to $150,256.00, the most the School District could give pursuant to the rank and serve system. Although Mr. Hundley disagreed with the amount of Title I funds LMA was entitled to receive, he did not disagree with the fact that Title I funds can only supplement, not supplant. When asked how Title I funds can be used during his deposition, Mr. Hundley answered: "It can be used to supplement. It cannot be used to supplant. It can be used for certain materials." When asked a similar question during the hearing, Mr. Hundley again admitted that LMA could not rely on Title I funds for core costs and expenses, yet his testimony consisted in part of the statement that "I was absolutely relying on Title I funds to run my school." As evidenced by the foregoing testimony, Mr. Hundley admits that LMA could not use Title I funds for core costs and expenses while also admitting that he was relying on Title I funds to do just that. Yet, Mr. Hundley, who has 20 years of experience working in Title I schools and is "the most senior Title I principal in Manatee County," continues to suggest that LMA's receipt of $150,256.00 versus the $283,000.00 initially projected in Title I funds caused LMA's financial woes and related failure to ensure student health, safety, and welfare. While the difference between $283,000.00 and $150,256.00 is a significant amount ($132,744.00), it is less than 10 percent of the LMA shortfall discovered by CRI of more than $1.5 million. This suggestion that the reduced amount of Title I funds caused the downfall of LMA is both completely unreasonable and completely unsupported by any evidence or facts. Neither Mr. Hundley nor anyone else at LMA has explained, or even attempted to explain, how LMA could prevent the serious and immediate danger posed to the health, safety, and welfare of its students by being unable to meet its financial obligations for its utilities, food, insurance, and salaries of its teachers by such a large amount. LMA's CFO, Ms. Maxfield, the individual charged with overseeing LMA's budget and financials, also failed to provide any evidence in support of Mr. Hundley's suggestion that LMA's current financial situation is a result of any failure by the School District to properly disburse funds to LMA. Rather, when asked a series of financial questions on her deposition, Ms. Maxfield, in every instance, asserted her Fifth Amendment right. When asked whether LMA timely received Title I funds, Ms. Maxfield asserted her Fifth Amendment right. When asked whether LMA timely received all allocations from the School District, she asserted her Fifth Amendment right. When asked whether the School District ever withheld funds from LMA to which LMA was entitled, Ms. Maxfield asserted her Fifth Amendment right. When asked whether LMA timely received all federal, state, and local funding distributed through Manatee County, Ms. Maxfield asserted her Fifth Amendment right. When Mr. Hundley further contends that the School District's alleged rezoning of LMA impacted LMA's funding, such contention also misses the mark. During the hearing, Mr. Hundley testified that "zoning changes, as well as other actions" negatively impacted LMA's enrollment, and that this enrollment, in turn, impacted LMA's financial viability. However, when asked whether it was Mr. Hundley's testimony that he could zone children to LMA as a school of choice, he answered, "no." When asked whether Mr. Hundley understood that students who desire to go to LMA would affirmatively have to choose to go there as a school of choice, Mr. Hundley answered, "[a]s a charter school, yes, they can choose to go to LMA." As admitted by Mr. Hundley, enrollment by students at LMA is based on the affirmative choice of students and parents, not upon zoning. Mr. Hundley's contention regarding zoning restrictions is without merit. As evidenced by the foregoing, LMA has received all funds to which it is entitled. LMA's financial deterioration and the debilitating effects of that deterioration on LMA's ability to ensure student health, safety, and welfare are the result of poor decision making, large payments to its administrators, and misuse of funds by LMA leadership, not the result of any failure by the School District or any other entity to disburse funds. These facts remain unrebutted. LMA Attempted to Paint a Wholly Different Picture of the Events Leading to the Notice of Immediate Termination of the Charter School With its CEO/principal, Mr. Hundley, and its CFO, Ms. Maxfield, invoking their Fifth Amendment rights against self- incrimination hundreds of times in their depositions, LMA was left with an impaired case in trying to give its defense to the immediate termination of the charter. By invoking the Fifth Amendment on any matters regarding LMA's expenditures, payment of payroll taxes, FRS contributions, unpaid invoices to food and educational vendors, payment of earned Best and Brightest awards by hard-working teachers, and even payment of the water utility bill, LMA focused only on its position of the reason LMA was created. LMA attempted repeatedly to place blame for any issues raised in the Notice of Immediate Termination on the School District, accepting no responsibility whatsoever. The hearing room was filled throughout the proceedings with concerned LMA parents, teachers, and staff, none of whom were identified by name or called to testify on any issues, let alone those relevant to whether LMA should lose its charter. Ostensibly, the respectful and close-listening audience was there to support the fact that the charter school was created by a groundswell of concerned parents and community members, who wanted a better education for their children and neighbors than they believed was previously being offered at Lincoln Memorial Middle School. The undersigned has no reason to doubt their sincerity and desire to want the best possible education for the students, but LMA did not take advantage of this resource to support its case. None of the parents, teachers or staff, with the exception of LMA's head custodian, Mr. Saul Johnson, its HR vendor through its leader Ms. King, and Mr. Hundley testified. With the limitations on their knowledge of the essential facts leading to the immediate termination (Mr. Johnson and Ms. King) and the limitation of what Mr. Hundley would testify about once he repeatedly invoked his Fifth Amendment right, the picture of a high-functioning charter school painted by LMA was incomplete, at best. The substance of Mr. Johnson's testimony was that the School District, prior to the creation of LMA, allowed persons having "no contact with students" restrictions to be in buildings where students could be found during the school day. This testimony was offered, presumably, to support the fact that Mr. Hundley should be allowed on campus during the 21st Century program, regardless of the fact his certification as an educator had been revoked by the EPC. The testimony offered by Mr. Johnson, while earnest and factual to the best of his knowledge, is not relevant to the issues in this matter. Mr. Hundley's contact appeared, via video and photographs admitted into evidence, to be direct and substantial when he entered LMA while the summer program was underway. Mr. Johnson's testimony that a staff member may have been on some part of campus where students could be present was based wholly on hearsay and without knowledge of the restrictions, if any, imposed on that specific individual. Even if true and accurate, the staff member discussed by Mr. Johnson was neither in a supervisory role, nor in a role that required direct contact with students. The gentleman described was a custodian. The testimony is discredited as inadmissible hearsay. Further, testimony offered by Mr. Hundley, although limited by his asserting his Fifth Amendment right, conflicted with that given by LMA's Governing Board chair, Ms. Christine Dawson. Ms. Dawson and Mr. Hundley contradicted each other and themselves when attempting to answer simple questions, such as when the Governing Board removed Mr. Hundley's title as principal. Specifically, Ms. Dawson testified that Mr. Hundley's job title changed following a Governing Board meeting on April 24, 2019, while Mr. Hundley testified that his job title changed in mid-June. As found previously, Mr. Hundley notified the staff at LMA that he was "stepping down" as principal on July 16, 2019. To further compound the lack of consistent testimony regarding when Mr. Hundley's responsibilities as principal ceased, Ms. Maxfield simply asserted her Fifth Amendment right when asked about the subject at deposition. Even when Mr. Hundley "formally" renounced his title as principal, he notified the LMA staff that he would "continue to provide the needed guidance and direction to the school leadership." When asked at her deposition about Mr. Hundley's responsibilities as CEO as opposed to principal, Ms. Maxfield again asserted her Fifth Amendment right. The facts presented by Mr. Hundley, Ms. Dawson, and the reasonable inferences drawn from Ms. Maxfield's asserting the Fifth Amendment when asked about Mr. Hundley's duties compel the undersigned to conclude that Mr. Hundley acted dishonestly towards LMA's staff, the very parents he testified stood behind him as the individual to bring Lincoln Memorial Middle School to a place of prominence in the educational system of Manatee County as LMA, School District personnel, and in these proceedings. One fact rings true here regarding Mr. Hundley: the undersigned believes that the parents, staff, and community served by LMA put their faith in him to lead them to better educational opportunities for their children and neighbors. His actions in more than doubling his salary and expense account when compared with his previous experience in Manatee County, in hiring Ms. Maxfield at a high salary and with an expense account, in hiring an HR vendor with whom he has a personal relationship, and in not taking any responsibility for the whereabouts of more than a $1.5 million shortfall out of an annual allocation of slightly more than $4 million, as significantly proven by the CRI Report, leave the undersigned with only one conclusion. Namely, while Mr. Hundley's motives in helping found LMA may have started as pure, they quickly became about the riches he could accumulate at the expense of the education, health, safety, and welfare of LMA's students and their families, as well as the staff, who bought into the college preparatory program he promised to provide them. At the center of LMA's case at hearing lies the pointing of fingers at the School District. Repeatedly throughout LMA's presentation of its case, their Qualified Representative, Mr. Norwood, asked School District personnel how many times they had visited LMA during the first year of its operations; why had they not visited more frequently, especially those who testified they had never visited the campus since that was not part of their job duties; and, above all, why the School District did not intervene and attempt to take over or counsel LMA's staff on the School District's concerns. Moreover, Mr. Norwood asked witnesses for the School District why they did not send more "Notice Letters of Breach of Contract," every time a real or perceived shortcoming on the part of LMA was made known to the School District. The response was invariably from the School District witnesses was that they repeatedly attempted to have serious questions answered concerning payroll taxes, FRS contributions, payment of allocated funds for Best and Brightest award winners, and why the water utility bills were constantly in arrears. LMA refused every request to respond to these issues, leading, ultimately, to the School District, after the vote by the School Board, to proceed with the most drastic measure (and the only one remaining) imaginable, issuing a Notice of Immediate Termination of LMA's charter. The testimony presented by both parties to this proceeding leads the undersigned to the conclusion that no tools were left for the School District in dealing with a charter school that failed to address their repeated efforts at gathering information. Another factor that has not gone unnoticed by the undersigned in the course of these expedited proceedings is that LMA's pattern of refusing to respond to requests for information made by the School District during discovery has continued into these proceedings. The undersigned can only imagine Petitioner's frustration with the constant refusal of LMA to provide the documents requested during discovery, with the common refrain of "you already have the documents because you (the School District) seized all of LMA's records, computers and laptops, leaving us (the former staff) with nothing to provide you." However, this cry by LMA fails to ring true. No HR company, CFO, school principal, or school CEO, in this 21st century digital age, can continuously be deemed credible when asserting that no backup, whether hard copy, DVD, thumb drives, or in the Cloud, exists. When forensic accountants and long-time public officials cannot find all of the necessary records to continue the operation of the school, just two days after being taken over by the School District, to answer the questions about payroll taxes, FRS contributions, Best and Brightest awards, food service menus and purchases, and utilities payments, someone is hiding the ball. No evidence was presented through testimony, and certainly not through documentation, that LMA provided the complete records of their activities in this first year of the charter school's operations. The presumption here must be that the complete records were destroyed, lost, or intentionally withheld from production by LMA to the School District. Even with limited records available, however, the School District has made a strong case for immediately terminating the charter. When the two principal leaders of LMA refused to answer most of the questions posed to them in deposition on the grounds their answers might tend to incriminate them, no conclusion can be reached by the undersigned other than that those records have been kept from the view of the School District intentionally and improperly. Therefore, following the issuance of this Final Order, the undersigned will reserve jurisdiction on the issue of sanctions for refusal or failure by LMA to provide all the documents in its or its vendors' possession. A hearing will be held solely on the issue of the appropriate sanctions to be imposed. The parties will be given the opportunity to state they intend to rely on the previous motions and responses filed regarding sanctions, or, in the case of LMA, to offer additional reasons for not complying with the reasonable discovery requests, even when given the opportunity to continue to do so after the hearing. LMA will also be permitted to provide any defenses and mitigating factors, as permitted by law, concerning their ability to pay any monetary sanctions that might be awarded by the undersigned. To summarize, the facts, corroborating evidence, and corroborating testimony offered by Petitioner in support of its decision to immediately terminate LMA's charter remain unrebutted and undisputed. Testimony by itself without any records is not sufficient. Moreover, the testimony provided by LMA is, largely, not credible. LMA has failed to produce any records or documentation corroborating or supporting the inconsistent, evasive, and ultimately non-credible testimony of its witnesses.
The Issue Whether there was “just cause” for the termination of Respondent’s employment, as that term is referred to in section of the Policies and Procedures Manual of the School Board of Manatee County, Florida, by: Respondent’s using school district property for personal gain, by working on tasks related to a student-based educational European trip through Education First (EF) during her district duty hours in the spring of 2009. Respondent’s consuming excessive alcoholic beverages in the presence of students and parents of Buffalo Creek Middle School (BCMS) during an EF trip in the summer of 2009. Respondent’s reporting to BCMS on August 14, 2009, in order to collect her personal belongings, and appearing to be inebriated Respondent’s contacting witnesses to the investigation to discuss details of the investigation. Respondent’s coming on school grounds on December 7, 2009, while under the influence of alcoholic beverages.
Findings Of Fact The School Board of Manatee County, Florida, is the duly-authorized entity responsible for providing public education in Manatee County, Florida. Respondent, Tammy M. Johnson, has been employed with the School District of Manatee County since February 8, 2000. She was most recently employed as the senior secretary at BCMS. As the senior secretary to the principal of BCMS, Respondent served as the point person for the principal of the school, working hand-in-hand with the principal. Her duties included screening the principal’s mail and phone calls, handling substitute teachers, performing payroll duties, handling leave forms, coordinating clerical office staff, and handling emergency situations as they arose within the school. Respondent was exposed to confidential school information on a regular basis, such as complaints regarding faculty and staff and policy changes being considered within the district. Respondent was employed on an annual contract basis, which was renewed from year to year. Her employment contract was for a term of 11 months and lasted typically from early August to June of the following year. While employed full-time as the senior secretary, in the fall of 2008 and the spring of 2009, Respondent organized a trip to Europe through the student-based educational travel company EF. Respondent sought to recruit BCMS students and their family members to sign up for the trip by placing fliers on campus, posting a sign-up board at the incoming students’ open house, and placing a notice about the trip in the school newsletter. Respondent routinely included a signature line in her school-assigned email address that identified her not only as a Senior Secretary but as an EF tour guide in every email that she sent from her school account. Announcements about informational meetings related to the EF trip were made over the school intercom and these meetings occurred on school property in the evenings. Respondent made fliers at BCMS advertising the EF trip on at least two occasions using school equipment. On one occasion, she made 750 fliers using school paper. During the time Respondent was conducting these activities, her principal was Scott Cooper. Cooper knew of Respondent’s activities in promoting the trip, and that she was using school resources to accomplish it. He did not object or tell Respondent to stop doing so; in fact, he encouraged such trips. Respondent ultimately recruited 10 student participants for the EF trip, all of whom were students at BCMS. The trip also included 15 adult participants, all of whom were family members of BCMS students. In exchange for her work organizing, promoting and chaperoning the EF European trip, Respondent was to receive, and did receive a free spot on the trip to Europe. Respondent served as the group leader for the EF group of BCMS students and parents. Three other BCMS teachers became involved in the EF trip as chaperones: Joseph Baker, Malissa Baker and Jessica Vieira. They also used school resources to promote the trip. The EF trip to Europe took place from June 22, 2009, to July 1, 2009. On June 17, 2009, the Office of Professional Standards (OPS) received a complaint that Respondent was misusing school resources for personal gain. OPS opened an investigation into these allegations. Shortly before Respondent left for Europe, Scott Cooper was replaced as principal. The newly-appointed BCMS Principal Matt Gruhl, met with Respondent to discuss his concern that she included an EF tagline in the signature block of all of her school emails. Gruhl asked Respondent to remove the EF tagline from her email, take the EF poster off of her door, make any necessary copies at a non-school location, and pay standard rates in the future for any advertising done in the school newsletter. Respondent complied with the directive. On June 22, 2009, the flight for the EF trip left from Tampa. Prior to the flight’s departure, Respondent purchased several small bottles of vodka in the airport duty-free shop. Several students observed Respondent doing so. Respondent drank two vodka-and-cranberry drinks on the flight to Europe in the presence of BCMS students and parents. Upon arrival in London, Respondent went with several other parents to a pub across the street from the hotel. While there, Respondent had too much to drink that evening and became intoxicated. Several BCMS students said that Respondent was speaking so loudly that they were able to hear her all the way across the street and up to the fifth story of the hotel. These students were upset by Respondent’s behavior. Respondent was very loud when she returned from the pub. BCMS parents had to help Respondent into the lobby, as she was falling over and laughing loudly. The adults tried to persuade Respondent to go to bed, but she insisted on ordering another drink in the lobby. Respondent was finally coaxed to go upstairs to bed, and she began banging on all the doors to the hotel rooms in the hallway. Respondent had to be physically restrained from banging on the doors. On more than four occasions Respondent was observed mixing vodka-and-cranberry juice drinks in a Styrofoam to-go cup before leaving the hotel with students for the day. The BCMS students on the EF trip commented on multiple occasions about Respondent’s drinking on the trip. The students did not want to go off alone with Respondent because they did not feel safe with her. The students also made observations that Respondent was drunk and stumbling around. On the return plane ride from Europe to Tampa, Respondent again was drinking alcoholic beverages to excess and exhibiting loud and boisterous behavior. While Respondent was in Europe with the EF trip, she had received a text message notifying her that she may be under an OPS investigation. Shortly after Respondent returned, she approached Gruhl and asked him whether there was an investigation concerning her being conducted by OPS. When Gruhl declined to comment on any pending OPS investigations, Respondent then called Debra Horne, specialist in the Office of Professional Standards, and asked whether there was an investigation being conducted. Horne confirmed that there was an open investigation and told Respondent that it might not be resolved until after school started because it involved students and parents. After speaking to Horne, on or about July 20, 2009, and being made aware that she was involved in an open investigation, Respondent called Vieira and told her that they needed to get their stories straight. Respondent also left messages for Joe and Malissa Baker stating that she heard that there was an OPS investigation and wanted to know if they had any information or had heard anything about the investigation. Respondent was only partially aware of a School Board rule which prohibited contacting potential witnesses during an investigation, although she was aware that she was expected to abide by all School Board rules. Gruhl spoke to Horne and reported Vieira and Malissa Baker’s concerns. Horne expanded her open investigation to include the allegations about Respondent’s behavior on the trip. Effective August 3, 2009, Respondent was removed from her position and placed on administrative leave with pay pending the completion of an investigation of her conduct by the Petitioner’s Office of Professional Standards. During the time of paid leave she was required to report daily to her principal and could not travel outside the country without permission. After Respondent was placed on paid administrative leave, she came to the BCMS campus on August 14, 2009, to pick up her belongings from her office. She met Gruhl and Assistant Principal Nancy Breiding at the school. Gruhl observed that Respondent smelled strongly of alcohol. She had difficulty keeping her balance and ran into walls, ran into doorways and almost fell when she tried to adjust her flip-flop. Respondent also had great difficulty following the line of conversation when she was speaking with Gruhl and repeated herself numerous times. Concerned, Gruhl permitted Respondent to leave campus after observing that her husband was driving her. He did not seek to send her for drug or alcohol testing, as provided in school board rules. Respondent testified that she had “just one” vodka and grapefruit drink at lunch earlier that day. She denied that Gruhl’s observations were accurate, but also alleged that she was on a prescription medication, Cymbalta, and stated that it caused her to be increasingly emotional and somewhat dizzy. However, she testified that she was completely unaware that combining the medication with alcoholic beverages would have an adverse effect on her. Respondent’s testimony in this regard is not credible. Gruhl’s observations of Respondent’s behavior on August 14, 2009, were incorporated into the OPS investigation. Horne interviewed Respondent on August 20, 2009, regarding the allegations made prior to the trip and the allegations made concerning her behavior on the EF trip. On September 1, 2009, the results of the OPS investigation was presented within the chain-of-command, who recommended to Superintendant Tim McGonegal that Respondent’s employment be terminated. The Superintendant concurred with their recommendation, and on September 21, 2009, the Superintendant notified Respondent that he intended to seek termination of her employment, or, should she request an administrative hearing, suspension without pay pending the outcome of that hearing. Respondent requested an administrative hearing. At their meeting on October 13, 2009, the School Board suspended Respondent without pay. While on unpaid suspension, Respondent had no duties, was not required to report to anyone, and was not limited in her ability to travel. However, she was still a School District employee. On December 7, 2009, while on suspension without pay, Respondent returned by car to the BCMS campus while school was in session to check her son out early for a doctor’s appointment. Aware that she was under investigation for excessive drinking, Respondent admitted that she nonetheless had a drink at lunchtime before going to pick up her son from school around 2 p.m. While on campus, Respondent’s eyes were glassy, she smelled of alcohol, and she was unkempt, which was out of keeping with her usual appearance. When Gruhl learned of the incident on December 7, 2009, he recommended to the Superintendant that Johnson not be permitted to return to the BCMS campus On December 7, 2009, the OPS opened an addendum investigatory file on Respondent concerning the events of December 7, 2009. The addendum OPS investigation alleged that, on December 7, 2009, Johnson entered the BCMS campus while under the influence of alcohol. The testimony of Horne, Keefer, Vieira, Hosier and Gruhl is credible. Respondent’s testimony is found to be unreliable.
The Issue Whether the Broward County School Board (School Board) has an unwritten policy excluding all charter schools, including the City's charter schools, from consideration in the distribution of funds under Section 1011.71(2), Florida Statutes1 (Challenged Statement) and, if so, whether that unwritten policy constitutes a "rule," within the meaning of Section 120.52(16), Florida Statutes, that violates Section 120.54(1)(a), Florida Statutes, as alleged by the City of Pembroke Pines (City).
Findings Of Fact On February 7, 14 and 21, 1989, respondent, School Board of Pinellas County (Board), published a legal advertisement in an area newspaper inviting prospective bidders to submit proposals for certain construction work to be performed on two elementary schools, Walsingham and Cross Bayou, located in Largo and Pinellas Park, Florida, respectively. The bidders were advised that their bids must be "prepared and submitted in accordance with the drawings and specifications" and that such drawings and specifications could be obtained from the Board. Such bids were to be filed with the Board no later than 2:00 p.m. on March 6, 1989. The notice also provided that the bids would be opened the same day. Bids were timely filed by at least five contracting firms, including petitioner, Prelude Construction Company, Inc. (Prelude), and intervenors, Lincoln Construction Company (Lincoln) and Bandes Construction Company (Bandes). In filing these proposals, each bidder represented he had "thoroughly examined all of the contract documents." After the bids were opened and reviewed by Board personnel, Lincoln, Prelude and Bandes were ranked first, second and fourth, respectively, based upon the dollar amount of their proposals. 2/ Thereafter, the Board issued its notice of intended action on March 7, 1989, wherein it advised all parties of its intention to award the contract to Lincoln. In doing so, the Board concluded that, although a bid bond accompanying Lincoln's proposal was not dated March 5 or 6 as required by the specifications, the deviation was minor and could be waived. That action prompted Prelude to file its protest. Through testimony of Lincoln's vice-president, it was established that the Board staff intended to change its initial position and to recommend to the Board that Lincoln's bid proposal be rejected and the contract awarded to Bandes. This change was prompted by the Board staff's discovery on the day of hearing (April 3) that, with the exception of Bandes, all bidders had failed to list the, roofing subcontractor on their bid proposals. The Board staff accordingly concluded that all bidders except Bandes should be disqualified. The bid specification upon which the Board relies to award the contract to Bandes is found in Part One, paragraph 1.1 of section 07511 of the bid specifications. The requirement is a relatively new one and imposes the following requirement upon bidders: NOTE: The contractor is required to list the name of the roofing subcontractor on the form of proposal, Section 1C. Section 1C is entitled "Form of Proposal" and includes the following section on page 1C-3 to be filled in by the bidder: The following subcontractors will be contracted with on this project. Type of Subcontractor Name of Subcontractor (Trade Specialty) (Company/Firm) The column on the left side is intended to identify the subcontractor by specialty, such as plumbing or roofing, while the blank spaces in the right hand column are to be filled in by the bidders with the name of the subcontractor who will perform the specialty. The Board has not been consistent in requiring bidders to list the name of subcontractors on the bid documents. According to the uncontroverted testimony of Lincoln, the Board requires the listing of subcontractors on some projects but not on others. For example, on the specifications for the recently let contract for the prototype new media center at four elementary schools, the left hand column on the above form was filled in by the Board with five types of subcontractors who were required on the project, including roofing. This meant that the bidder was to fill in the blanks in the right hand column with the name of the subcontractor who he intended to use on each specialty. However, on other contracts, including the one under challenge, both columns in the Form for Proposal have been left blank, and Lincoln construed this to mean that the name of the subcontractor was not required. Indeed, Lincoln pointed out, without contradiction, that on a recent contract which left both columns blank, as was true in this case, it was awarded the contract even though it did not identify the roofing subcontractor on its proposal. Because of this prior agency practice, Lincoln assumed the same policy would be used again. However, Lincoln conceded it had failed to read the requirement in paragraph 1.1 of section 07511 before preparing its proposal. There was no evidence that Lincoln gained any substantial advantage over other bidders by this omission. Also relevant to this controversy is Paragraph 10A of the General Requirements. This item is found on page 1B-11 and reads as follows: Each bidder shall indicate the names of specific major Subcontractors if called for on the form of proposal. If listing of Subcontractors is required and the Bidder fails to list them, the bid may, at Owner's option, be disqualified. (Emphasis added) This authority to waive the requirement is reinforced by language in Paragraph 21 of the General Requirements which provides in part that "(t)he owner reserves the right to waive minor technicalities." According to the Board's outside architectural consultant, who was the author of a portion of the contract specifications including section 07511, the omission of the name of the roofing subcontractor is a "minor" technicality that can be waived. However, the consultant had no personal knowledge as to whether the provision had actually been waived by the Board on prior contracts.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered awarding the contract in question to Bandes Construction Company. DONE AND ORDERED this 20th day of April, 1989, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of April, 1989.
