94-005096 Global Touring, Inc. vs. Department Of Agriculture And Consumer Services Status: Closed Recommended Order on Tuesday, December 27, 1994.

Summary: Travel agency that had contracted with Airline Recording Company for a total of more than 3 years (albeit not the past 3 consecutive yreas) entitled to exemption.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GLOBAL TOURING, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 94-5096

)

DEPARTMENT OF AGRICULTURE )

AND CONSUMER SERVICES, )

)

Respondent. )

___________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this case on October

28, 1994, in Fort Lauderdale, Florida, before Stuart M. Lerner, a duly

designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Robert Vanderkay

Jennifer Pickens

Global Touring, Inc.

1150 Southwest 10th Avenue, Suite 204W

Pompano Beach, Florida 33069

For Respondent: Jay S. Levenstein, Esquire

Senior Attorney

Department of Agriculture and

Consumer Services

Room 515 Mayo Building

Tallahassee, Florida 32399-0800

STATEMENT OF THE ISSUE

Whether Petitioner is entitled to an exemption from the requirements of

Section 559.927, Florida Statutes, under subsection (12)(h) of the statute.

PRELIMINARY STATEMENT

By letter dated August 10, 1994, the Department of Agriculture and Consumer

Services (hereinafter referred to as the "Department") notified Petitioner of

its intention to deny Petitioner's application for a statement certifying

Petitioner's exemption from the requirements of Section 559.927, Florida

Statutes, under subsection (12)(h) of the statute. Petitioner requested a

formal administrative hearing on the Department's proposed denial of its

application. On September 14, 1994, the case was referred to the Division of

Administrative Hearings for the assignment of a Hearing Officer to conduct the

formal administrative hearing Petitioner had requested.

At the hearing, which was held on October 28, 1994, each party presented

the testimony of one witness. Robert Vanderkay, one of Petitioner's

representatives in this proceeding, testified on behalf of Petitioner. Gloria

Van Treese, Chief of the Department's Bureau of Consumer Protection, testified

on behalf of the Department. The only other evidence presented at hearing was

Petitioner's Exhibits 1 through 10, which were admitted without objection.

At the close of the evidentiary portion of the hearing, the Hearing Officer

advised the parties on the record that post-hearing submittals had to be filed

no later than thirty days following the Hearing Officer's receipt of the hearing

transcript. The Hearing Officer received the hearing transcript on November 4,

1994.

Petitioner filed a post-hearing submittal on November 28, 1994. Appended

to its post-hearing submittal was what Petitioner described in the submittal as

"a directory list printed out from [Petitioner's] computer showing that

[Petitioner] applied for another ARC number on February 28, 1992." Inasmuch as

this document was not offered and received into evidence at hearing, the Hearing

Officer has not relied on it making any findings of fact or conclusions of law

in the instant case. See Trujillo v. Southern Wine & Spirits, 525 So.2d 481,

483 (Fla. 1st DCA 1988)(error for workers' compensation deputy commissioner to

rely on deposition that was not admitted into evidence at hearing).

The Department filed its post-hearing submittal on December 5, 1994. On

December 12, 1994, Petitioner filed a written response to the Department's post-

hearing submittal. Because such written response is an unauthorized pleading,

the Hearing Officer has not considered it.

The findings of fact proposed by the parties in their post-hearing

submittals have been carefully considered and are specifically addressed in the

Appendix to this Recommended Order.

FINDINGS OF FACT

Based upon the evidence adduced at hearing, and the record as a whole, the

following Findings of Fact are made:

1. Global Touring, Inc., is in the wholesale travel business.

2. It sells Australia and New Zealand travel packages to travel agencies.

3. Jennifer Pickens is Global Touring, Inc.'s sole shareholder and its

President.

4. Pickens has been in the travel business in Broward County, Florida,

since 1983, when she started her own travel agency, Global Travel Service, which

she operated as a sole proprietorship.

5. At the time, the Air Traffic Conference (hereinafter referred to as the

"ATC") had an airline ticket purchase and payment program for participating

travel agents.

6. In September of 1983, Pickens contracted with the ATC to participate in

its program. She was given an ATC Agency Code Number (618310) and placed on the

official ATC Agency List.

7. Approximately a year later, Pickens began a wholesale travel operation,

Global Touring Service, which sold tours to Australia and New Zealand.

8. Global Touring Service and Global Travel Service operated out of the

same office.

9. Pickens used her ATC Agency Code Number to write airline tickets for

both operations.

10. Effective the close of business on December 30, 1984, the ATC

terminated its airline ticket purchase and payment program for travel agents.

The ATC program, however, was replaced by a similar program operated by the

Airlines Reporting Corporation (hereinafter referred to as the "ARC").

avel agents on the official ATC Agency List were given an

opportunity, at their option, to be placed on the official ARC Agency List "in

substantially the same status as that agent st[ood] on the ATC list on December

30[, 1984,]" by entering into an agreement with the ARC to participate in its

replacement program.

12. Pickens opted to participate in the program. She was assigned an ARC

Agency Code Number and placed on the official ARC Agency List.

13. On November 20, 1985, Pickens incorporated her business enterprises.

She created one corporate entity, Jennifer R. Pickens Travel, Inc., with two

operating divisions: Global Travel Service and Global Touring Service. The

newly formed corporation continued to operate under the contract Pickens had

entered into with the ARC.

14. In 1986, Jennifer R. Pickens Travel, Inc., purchased another travel

agency, Lighthouse Travel Services.

15. Jennifer R. Pickens Travel, Inc., assumed Lighthouse Travel Services'

contract with the ARC and Lighthouse Travel Services' ARC Agency Code Number and

it cancelled the ARC agreement under which it had been conducting business prior

to its purchase of Lighthouse Travel Services.

16. Lighthouse Travel Services and Global Travel Service were combined

into one retail travel operating division bearing the name of the former.

17. In December of 1991, Jennifer R. Pickens Travel, Inc., changed its

name to Global Touring, Inc., and eliminated its retail travel operating

division. Since that time, it has engaged only in the wholesale travel

business.

18. On or about March 1, 1992, Global Touring, Inc., sold the assets of

its former retail travel operating division, including its ARC contract and ARC

Agency Code Number, to YAM, Inc.

19. Following the sale, Global Touring, Inc., sought to enter into another

contract with the ARC and obtain a new ARC Agency Code Number. Because the

paperwork Global Touring, Inc., initially submitted to the ARC was lost, it was

not until on or about December 9, 1992, that Global Touring, Inc., entered into

such a contract and received a new ARC Agency Code Number (10-53349-3).

20. The contract is still in effect.

21. Since its inception, with the exception of the period from on or about

March 1, 1992, to on or about December 9, 1992, Global Touring, Inc., has

continuously operated under a contract with the ARC.

22. While it has undergone a name change, it has remained under the

ownership and control of the same person, Jennifer Pickens, during the entire

time that it has had a contractual relationship with the ARC.

23. Earlier this year, Global Touring, Inc. submitted to the Department an

application for a statement certifying that, based upon the total number of

years it has contracted with the ARC, it is exempt from the requirements of

Section 559.927, Florida Statutes.

24. Pickens, who prepared the application, failed to sign it.

25. In the application, she asserted that Global Touring, Inc., had been

"a member of ARC since: 09/14/83," holding "ARC Number 618310."

26. The Department preliminarily determined to deny the application.

27. In its letter to Pickens advising her of its preliminary determination

(hereinafter referred to as the "Notice of Proposed Denial"), the Department

gave the following reasons for its proposed action:

1) Application for exemption unsigned, with

wrong data;

2) ARC approval 10-53349-3, made 12/9/92 is

less than 3 years.

28. Such proposed action is consistent with the Department's practice of

granting exemptions under subsection (12)(h) of Section 559.927, Florida

Statutes, only to those sellers of travel who are able to show that they have an

agreement with the ARC which has been in effect for at least the immediately

preceding three years.

29. Pickens responded to the Department's advisement with a letter of her

own, the body of which read as follows:

We wish to apply for a Formal Procedure Hearing.

We applied for an exemption on July 22, 1994

and it seems that the reviewer completely

ignored all the enclosures. We have been in

the travel business since 1983. We took over

Lighthouse Travel in 1985 and had the ARC number

618310 for seven years until selling Lighthouse

Travel in 1992 and allowing the ARC number to

remain with that part of the business.

In 1992, after having our application lost, we

again became members of ARC, and all of the above

under the same company, Jennifer R. Pickens Travel

Inc. which changed its name in 1991 to Global Tour-

ing, Inc. In the interim we have become one of

the 10 largest American Wholesalers to Australia

and New Zealand.

Our company can obviously prove an ARC relationship

for 3 years (actually 11 years) and a history of

selling travel for the same period.

We therefore request an exemption as per our submis-

sion and inasmuch as a formal hearing seems to be

the procedure, we hereby request such a hearing.

30. The letter was dated August 25, 1994, and signed by Pickens in her

capacity as the President of Global Touring, Inc.

31. After receiving Pickens' letter, the Department referred the instant

matter to the Division of Administrative hearings.

CONCLUSIONS OF LAW

32. Section 559.927, Florida Statutes, imposes certain requirements on

"sellers of travel" in the State of Florida.

33. According to subsection (1)(a) of Section 559.927, Florida Statutes, a

"seller of travel" is:

any resident or nonresident person, firm,

corporation, or business entity maintaining

or purporting to maintain a business location

or branch office in this state who offers for

sale directly or indirectly, at wholesale or

retail, prearranged travel, tourist-related

services, or tour-guide services for individuals

or groups, through vacation or tour packages,

or through lodging or travel certificates in

exchange for a fee, commission, or other valuable

consideration. The term includes any business

entity offering membership in a travel club or

travel services for an advance fee or payment,

even if no travel contracts or certificates or

vacation or tour packages are sold by the business

entity.

34. Subsection (12)(h) of Section 559.927, Florida Statutes, exempts from

the requirements of the statute "[p]ersons directly issuing airline tickets who

have contracted with the Airlines Reporting Corporation for 3 years or more

under the same ownership and control."

35. The Department is charged with the responsibility of administering and

enforcing the provisions of Section 559.927, Florida Statues.

36. In discharging its responsibility, the Department has adopted rules

pursuant to the rulemaking procedures of Section 120.54, Florida Statutes,

implementing Section 559.927, Florida Statues.

37. Among these rules is Rule 5J-9.0015(2), Florida Administrative Code,

which defines the phrase "same ownership and control" used in subsection (12)(h)

of Section 559.927, Florida Statutes, as follows:

(a) If a corporation, at least 51 percent

of the stock or shares of the business has been

held by the same person or persons for three

consecutive years; or

(b) If a partnership, at least 51 percent of

the business interest has been held by the same

person or persons for three consecutive years.

None of the other language used in subsection (12)(h) of Section 559.927,

Florida Statutes, including the phrase "3 years or more," is defined in the

Department's rules.

38. Petitioner is seeking from the Department a written acknowledgment of

its entitlement to an exemption under subsection (12)(h) of Section 559.927,

Florida Statutes.

39. As an applicant for such a letter of exemption from the Department, it

"carries the 'ultimate burden of persuasion' of entitlement." Florida

Department of Transportation v. J.W.C., Inc., 396 So.2d 778, 787 (Fla. 1st DCA

1981). It need address, however, only those entitlement issues raised in the

Department's Notice of Proposed Denial. See Woodholly Associates v. Department

of Natural Resources, 451 So.2d 1002 (Fla. 1st DCA 1984).

40. In its Notice of Proposed Denial, the Department indicated that it

intended to deny Petitioner's application on the following grounds:

1) Application for exemption unsigned, with

wrong data;

2) ARC approval 10-53349-3, made 12/9/92 is

less than 3 years.

41. Although Petitioner's application may have been incomplete at the time

the Department issued its Notice of Proposed Denial, the application has since

been supplemented, clarified and modified by: Pickens' signed letter dated

August 25, 1994; the sworn testimony and documentary evidence that Petitioner

presented at hearing: and the post-hearing submittal it filed. As a result,

any deficiencies in Petitioner's application that may have previously existed

have been remedied and there is now no reason for the Department not to

determine whether Petitioner is entitled to the exemption Petitioner claims in

its application. See Wistedt v. Department of Health and Rehabilitative

Services, 551 So.2d 1236 (Fla. 1st DCA 1989).

42. The evidence adduced at hearing establishes that Petitioner has

contracted with the ARC for a total of more than three years and that at all

times that it has had a contractual relationship with the ARC, it has been owned

and controlled by the same person, Pickens, who has held 100 percent of the

shares of the business since Petitioner's creation as a corporate entity on

November 20, 1985, or, to use the language employed in Rule 5J-9.0015(2),

Florida Administrative Code, for more than "three consecutive years."

43. Petitioner therefore has met its burden of demonstrating that it has

"contracted with the Airlines Reporting Corporation for 3 years or more under

the same ownership and control," as required by subsection (12)(h) of Section

559.927, Florida Statutes.

44. That Petitioner has not contracted with the ARC for the past three or

more consecutive years does not provide the Department with a basis upon which

to reach a contrary conclusion.

45. To hold otherwise would require the Department to add qualifying

language to subsection (12)(h) of Section 559.927, Florida Statutes, that the

Legislature, by all appearances, intentionally omitted. This the Department may

not do. 1/ See Chaffee v. Miami Transfer Company, Inc., 288 So.2d 209, 215

(Fla. 1974); Hialeah, Inc., v. B & G Horse Transportation, Inc., 368 So.2d 930

(Fla. 3d DCA 1979).

46. In subsection (12)(h) of Section 559.927, Florida Statutes, the

Legislature has provided that, to qualify for an exemption thereunder, sellers

of travel have to have contracted with the ARC for "3 years or more," not "3

consecutive years or more."

47. When the language used in subsection (12)(h) of Section 559.927,

Florida Statutes, is compared with the language used elsewhere in the statute,

in particular subsection (10)(b)5, which provides that a seller of travel

otherwise required to obtain a performance bond may be exempted from such

requirement if, among other things, it "has had 5 or more consecutive years of

experience as a seller of travel in Florida," it becomes apparent that the "3

years or more" referenced in subsection (12)(h) need not be "consecutive" years.

48. The presence of the modifier "consecutive" in subsection (10)(b)5 of

Section 559.927, Florida Statutes, and its absence from subsection (12)(h) of

the statute is compelling evidence that the Legislature did not intend for

sellers of travel who have contracted with the ARC for a total of 3 years to be

denied an exemption under subsection (12)(h) simply because the 3 years they

have contracted with the ARC have not been "consecutive" years. See Myers v.

Hawkins, 362 So.2d 926, 929 (Fla. 1978); Florida State Racing Commission v.

Bourquardez, 42 So.2d 87, 89 (Fla. 1949); Department of Professional

Regulation, Board of Medical Examiners v. Durani, 455 So.2d 515, 518 (Fla. 1st

DCA 1984); Ocasio v. Bureau of Crimes Compensation Division of Workers'

Compensation, 408 So.2d 751, 753 (Fla. 3d DCA 1982); U.S. v. Wong Kim Bo, 472

F.2d 720, 722 (5th Cir. 1972).

49. The Department must give effect to this legislative intent. See In Re

Order on Prosecution of Criminal Appeals by the Tenth Judicial Circuit Public

Defender, 561 So.2d 1130 (Fla. 1990); State v. Webb, 398 So.2d 820, 824-25

(Fla. 1981).

50. Accordingly, it may not deny the exemption for which Petitioner has

applied on the ground that Petitioner has not contracted with the ARC for 3 or

more consecutive years.

51. Because Petitioner has met its burden of proving that it has

"contracted with the Airlines Reporting Corporation for 3 years or more under

the same ownership and control," the Department should issue a letter

acknowledging that Petitioner is exempt from the requirements of Section

559.927, Florida Statutes, pursuant to subsection (12)(h) of the statute.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is

hereby

RECOMMENDED that the Department enter a final order granting Petitioner's

application for a letter of exemption pursuant to Section 559.927, Florida

Statues.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 27th day of

December, 1994.

___________________________________

STUART M. LERNER

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 27th day of December, 1994.

ENDNOTE

1/ In furtherance of its attempt to convince the Hearing Officer that he should

recommend adoption of the interpretation of the phrase "3 years or more" offered

in its proposed recommended order, the Department argues that such

interpretation should be "given great deference" since the Department is charged

with administering and enforcing the provisions of Section 559.927, Florida

Statutes. In support of this contention, the Department cites cases which stand

for the proposition that an appellate court, in reviewing final agency action,

must give great weight to the agency's construction of a statute that the agency

is responsible for administering and enforcing. These cases upon which the

Department relies, however, are inapposite to the instant case. Unlike an

appellate court, a Hearing Officer in a Section 120.57(1) proceeding does not

review final agency action. Indeed, there is no final agency action yet for him

to review. Rather than performing a review function, the Hearing Officer's role

in such a proceeding is to assist the agency in deciding what final action it

should take, including how it should construe applicable statutory language to

the extent that the agency has not already adopted an interpretation of such

language pursuant to the rulemaking procedures set forth in Section 120.54,

Florida Statutes. To effectively render such assistance in a manner that

promotes responsible decision making with respect to matters of statutory

interpretation, the Hearing Officer must be free to evaluate a proposed

interpretation based exclusively upon its merit without regard to whether the

interpretation was proposed by the agency or another party to the proceeding.

See McDonald v. Department of Banking and Finance, 346 So.2d at 582-83. The

Hearing Officer has conducted such an unfettered evaluation of the respective

interpretations advanced by the parties in the instant case of the "3 years or

more" requirement and, based upon this evaluation, recommends that the

Department utilize the interpretation offered by Petitioner in determining

whether Petitioner has met this requirement.

APPENDIX TO RECOMMENDED ORDER

IN CASE NO. 94-5096

The following are the Hearing Officer's specific rulings on the findings of

facts proposed by the parties:

Petitioners' Proposed Findings

All of Petitioner's proposed factual findings, which are found in numbered

paragraph 1 of its post-hearing submittal, have been accepted and incorporated

in substance, although not necessarily repeated verbatim, in this Recommended

Order.

The Department's Proposed Findings

1. Accepted and incorporated in substance.

2. To the extent that this proposed finding states that "ARC Number 10-

533493 had been granted to GLOBAL on December 9, 1992, less than three years

prior to [GLOBAL] claiming the exemption," it has been accepted and incorporated

in substance. To the extent that this proposed finding states that the ARC

provided the Department with such information regarding Petitioner's ARC

"affiliation," it has not been incorporated in this Recommended Order because it

would add only unnecessary detail to the factual findings made by the Hearing

Officer.

3. To the extent that this proposed finding states that Petitioner "had

not previously been under contract with [the ARC]," it has been rejected because

it is contrary to the greater weight of the evidence. To the extent that this

proposed finding states that the ARC had so advised the Department, it has not

been incorporated in this Recommended Order because it would add only

unnecessary detail to the factual findings made by the Hearing Officer.

4-6. Accepted and incorporated in substance.

7. To the extent that this proposed finding states that airline tickets

were not written as a part of Global Touring Service's business operations, it

has been rejected because it is contrary to the greater weight of the evidence.

Otherwise, it has been accepted and incorporated in substance.

8-13. Accepted and incorporated in substance.

COPIES FURNISHED:

Robert Vanderkay

Jennifer Pickens

Global Touring, Inc.

1150 Southwest 10th Avenue

Suite 204W

Pompano Beach, Florida 33069

Jay S. Levenstein, Esquire

Senior Attorney

Department of Agriculture and

Consumer Services

Room 515 Mayo Building

Tallahassee, Florida 32399-0800

Richard Tritschler, Esquire

General Counsel

Department of Agriculture and

Consumer Services

Room 515 Mayo Building

Tallahassee, Florida 32399-0800

Honorable Bob Crawford

Commissioner of Agriculture

The Capitol, PL-10

Tallahassee, Florida 32399-0810

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

ALL PARTIES HAVE THE RIGHT TO SUBMIT WRITTEN EXCEPTIONS TO THIS RECOMMENDED

ORDER. ALL AGENCIES ALLOW EACH PARTY AT LEAST 10 DAYS IN WHICH TO SUBMIT

WRITTEN EXCEPTIONS. SOME AGENCIES ALLOW A LARGER PERIOD OF TIME WITHIN WHICH TO

SUBMIT WRITTEN EXCEPTIONS. YOU SHOULD CONTACT THE AGENCY THAT WILL ISSUE THE

FINAL ORDER IN THIS CASE CONCERNING AGENCY RULES ON THE DEADLINE FOR FILING

EXCEPTIONS TO THIS RECOMMENDED ORDER. ANY EXCEPTIONS TO THIS RECOMMENDED ORDER

SHOULD BE FILED WITH THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE.