00-001934 Elf Services, Inc. vs. Department Of Revenue Status: Closed Recommended Order on Wednesday, October 25, 2000.

Summary: Where taxpayer failed to make payments in accordance with Stipulation Agreement and had an unpaid tax liability balance in excess of the funds in taxpayer`s business accout at bank, Department could levy on funds in account.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ELF SERVICES, INC., )

)

Petitioner, )

)

vs. ) Case No. 00-1934

)

DEPARTMENT OF REVENUE, )

)

Responde nt. )

_________________________________)

RECOMMENDED ORDER

Pursuant to notice, a hearing was held in this case in

accordance with Section 120.57(1), Florida Statutes, on September

1, 2000, by video teleconference at sites in West Palm Beach and

Tallahassee, Florida, before Stuart M. Lerner, a duly-designated

Administrative Law Judge of the Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Rafael J. Fanjul, President

ELF Services, Inc.

4109 North Lake Boulevard

Palm Beach Gardens, Florida 33410

For Respondent: John Mika, Esquire

Assistant Attorney General

Office of the Attorney General

The Capitol, Tax Section

Tallahassee, Florida 32399-1050

STATEMENT OF THE ISSUE

Whether Respondent may levy upon property belonging to

Petitioner (specially, funds in Petitioner's account, number

300126719, at Admiralty Bank), as proposed in Respondent's March

30, 2000, Notice of Intent to Levy?

PRELIMINARY STATEMENT

In a Notice of Intent to Levy dated March 22, 2000, the

Department of Revenue (Department) advised Petitioner that it

intended to levy upon property belonging to Petitioner

(specifically, "Bank Account in the amount of

$2,320.07, . . . in the possession or control of Admiralty Bank")

"for nonpayment of taxes, penalty and interest in the sum of

$75,581.47." By letter dated April 10, 2000, Petitioner

challenged the proposed levy and requested an administrative

hearing on the matter. On May 5, 2000, the case was referred to

the Division of Administrative Hearings (Division) for the

assignment of a Division Administrative Law Judge to conduct the

hearing Petitioner had requested.

As noted above, the hearing was held on September 1, 2000.

1/ At the outset of the hearing, the parties agreed that it was

appropriate to litigate in the instant case a March 30, 2000,

Notice of Intent to Levy, identical in all respects to the March

22, 2000, Notice of Intent to Levy, except to the extent that it

reflected that Petitioner's account at Admiralty Bank contained

$7,293.36, instead of $2,320.07.

Four witnesses testified at the final hearing: Cheryl

Kimber, Roberta Diamond, Rafael Fanjul, and William Moore. In

addition to the testimony of these four witnesses, 12 exhibits

(Petitioner's Exhibits A through C and Respondent's Exhibits A

through I) were offered and received into evidence.

During his testimony, Mr. Fanjul, in his capacity as

Petitioner's representative, moved for permission to withdraw the

technical admissions resulting (by operation of Rule 1.370(b),

Florida Rules of Civil Procedure) from Petitioner's failure to

have timely responded to Respondent's Requests for Admissions 7,

15, and 16, 2/ a motion the Department opposed. 3/ The

undersigned deferred ruling on the motion to provide the parties

the opportunity to present written argument (in their proposed

recommended orders) in support of their respective positions

thereon. Evidence relating to the matters asserted in the

Department's Requests for Admissions 7, 15, and 16, however, was

presented for the undersigned to consider in the event he decided

to grant Petitioner's withdrawal motion.

Inasmuch as the "presentation of the merits of the action

w[ ould] be subserved by it" and the Department has "fail[ ed] to

satisfy the [undersigned] that withdrawal . . . w[ ould] prejudice

[the Department]," the undersigned hereby GRANTS Petitioner's

motion for leave to withdraw its technical admissions to the

matters set forth in the Department's Requests for Admissions 7,

15, and 16. Rule 1.370(b), Florida Rules of Civil Procedure; see

also Wilson v. Department of Administration , 538 So. 2d 139 (Fla.

4th DCA 1989), which stands for the proposition that "such relief

[may] be granted even for mere inadvertence," provided that the

opposing party is not prejudiced by the withdrawal.

At the conclusion of the evidentiary portion of the hearing,

the undersigned, on the record, advised the parties of their

right to file proposed recommended orders and established a

deadline (30 days from the date of the undersigned's receipt of

the transcript of the hearing) for the filing of proposed

recommended orders. The hearing Transcript was filed on

September 21, 2000. On October 17, 2000, and October 20, 2000,

respectively, the Department and Petitioner filed Proposed

Recommended Orders. These post-hearing submittals have been

carefully considered by the undersigned.

FINDINGS OF FACT

Based upon the evidence adduced at hearing, and the record

as a whole, the following findings of fact are made:

1. Petitioner operates a Chevron station at 4109 Northlake

Boulevard in Palm Beach Gardens, Florida, at which it engages in

the business of selling motor fuels at posted retail prices.

2. Petitioner maintains a business account at Admiralty

Bank. The number of its account is .

3. Petitioner's Local Option Motor Fuel License number is

60-023068.

4. Petitioner was delinquent in remitting to the Department

"local option gas tax" payments for the period from July 1, 1995,

through June 30, 1996.

5. The Department provided Petitioner notice of

Petitioner's failure to make these payments.

6. The Department filed with the Clerk of the Circuit Court

in Palm Beach County a Tax Warrant "for collection of delinquent

local option gas tax[es]," in the amount of $106,904.62, plus

penalties (in the amount of $59,556.47), interest (in the amount

of $12,026.25), and the amount of the "filing fee" ($12.00), for

a "grand total" of $178,499.34.

7. Rafael Fanjul is the president and sole owner of

Petitioner.

8. On May 2, 1997, Mr. Fanjul, on behalf of Petitioner,

entered into a Stipulation Agreement with the Department, which

provided as follows:

THE FLORIDA DEPARTMENT OF REVENUE AND ELF

SERVICES, D/B/A PALM BEACH CHEVRON S/S

THE TAXPAYER, TAX IDENTIFICATION NO. 60-

123068, HEREBY AGREE THAT THE $178,024.29 TAX

LIABILITY IS DUE THE STATE OF FLORIDA. IT IS

FURTHER AGREED THE SUM OF TAX, PENALTY, AND

INTEREST REFERENCED ON THE WARRANT OR

WARRANTS DATED 02/20/97 IS SUBJECT TO THE

FOLLOWING STIPULATIONS:

1. The taxpayer will retire the tax,

penalty, and interest shown on the Tax

Warrant or Warrants whose dates or dates are

shown above.

2. The taxpayer waives any and all rights to

institute any further judicial or

administrative proceedings under S.72.011,

F.S., with respect to this liability and;

3. The taxpayer further agrees to meet each

payment term which is detailed on the

Amortization Schedule and Payment Coupons

provided by the Department of Revenue.

IN THE EVENT THE TAXPAYER FAILS TO MEET THE

PAYMENT TERMS DETAILED ON THE ENCLOSED

AMORTIZATION SCHEDULE AND PAYMENT COUPONS OR

FAILS TO TIMELY REMIT ALL TAXES WHICH BECOME

DUE AND PAYABLE SUBSEQUENT TO THE DATE OF

THIS AGREEMENT, ANY UNPAID BALANCE OF TAX,

PENALTY, AND/OR INTEREST SCHEDULED PURSUANT

TO THIS AGREEMENT SHALL BECOME IMMEDIATELY

DUE AND PAYABLE.

Mr. Fanjul had the authority to bind Petitioner to the terms set

forth in the Stipulation Agreement. There has been no showing

that, in so doing, he acted involuntarily or under coercion or

duress.

9. Petitioner made some, but not all of the payments, set

forth on the Amortization Schedule incorporated by reference in

the Stipulation Agreement. 4/

10. On May 1, 1998, Petitioner entered into a second

Stipulation Agreement with the Department, which provided as

follows:

THE FLORIDA DEPARTMENT OF REVENUE AND ELF

SERVICES, D/B/A PALM BEACH CHEVRON S/S 4806,

THE TAXPAYER, TAX IDENTIFICATION NO. 60-

123068, HEREBY AGREE THAT THE $142,701.38 TAX

LIABILITY IS DUE THE STATE OF FLORIDA. IT IS

FURTHER AGREED THE SUM OF TAX, PENALTY, AND

INTEREST REFERENCED ON THE WARRANT OR

WARRANTS DATED 02/20/97 IS SUBJECT TO THE

FOLLOWING STIPULATIONS:

1. The taxpayer will retire the tax,

penalty, and interest shown on the Tax

Warrant or Warrants whose dates or dates are

shown above.

2. The taxpayer waives any and all rights to

institute any further judicial or

administrative proceedings under S.72.011,

F.S., with respect to this liability and;

3. The taxpayer further agrees to meet each

payment term which is detailed on the

Amortization Schedule and Payment Coupons

provided by the Department of Revenue.

IN THE EVENT THE TAXPAYER FAILS TO MEET THE

PAYMENT TERMS DETAILED ON THE ENCLOSED

AMORTIZATION SCHEDULE AND PAYMENT COUPONS OR

FAILS TO TIMELY REMIT ALL TAXES WHICH BECOME

DUE AND PAYABLE SUBSEQUENT TO THE DATE OF

THIS AGREEMENT, ANY UNPAID BALANCE OF TAX,

PENALTY, AND/OR INTEREST SCHEDULED PURSUANT

TO THIS AGREEMENT SHALL BECOME IMMEDIATELY

DUE AND PAYABLE.

Mr. Fanjul had the authority to bind Petitioner to the terms set

forth in the second Stipulation Agreement. There has been no

showing that, in so doing, he acted involuntarily or under

coercion or duress.

11. Petitioner made some, but not all of the payments, set

forth on the Amortization Schedule incorporated by reference in

the second Stipulation Agreement. 5/

12. On August 12, 1999, Petitioner entered into a third

Stipulation Agreement with the Department, which provided as

follows:

THE FLORIDA DEPARTMENT OF REVENUE AND ELF

SERVICES, D/B/A PALM BEACH CHEVRON S/S 4806,

THE TAXPAYER, TAX IDENTIFICATION NO. 60-

123068, HEREBY AGREE THAT THE $88,375.04 TAX

LIABILITY IS DUE THE STATE OF FLORIDA. IT IS

FURTHER AGREED THE SUM OF TAX, PENALTY, AND

INTEREST REFERENCED ON THE WARRANT OR

WARRANTS DATED 02/20/97 IS SUBJECT TO THE

FOLLOWING STIPULATIONS:

1. The taxpayer will retire the tax,

penalty, and interest shown on the Tax

Warrant or Warrants whose dates or dates are

shown above.

2. The taxpayer waives any and all rights to

institute any further judicial or

administrative proceedings under S.72.011,

F.S., with respect to this liability and;

3. The taxpayer further agrees to meet each

payment term which is detailed on the

Amortization Schedule and Payment Coupons

provided by the Department of Revenue.

IN THE EVENT THE TAXPAYER FAILS TO MEET THE

PAYMENT TERMS DETAILED ON THE ENCLOSED

AMORTIZATION SCHEDULE AND PAYMENT COUPONS OR

FAILS TO TIMELY REMIT ALL TAXES WHICH BECOME

DUE AND PAYABLE SUBSEQUENT TO THE DATE OF

THIS AGREEMENT, ANY UNPAID BALANCE OF TAX,

PENALTY, AND/OR INTEREST SCHEDULED PURSUANT

TO THIS AGREEMENT SHALL BECOME IMMEDIATELY

DUE AND PAYABLE.

Mr. Fanjul had the authority to bind Petitioner to the terms set

forth in the third Stipulation Agreement. There has been no

showing that, in so doing, he acted involuntarily or under

coercion or duress.

13. The Amortization Schedule incorporated by reference in

the third Stipulation Agreement required Petitioner to make 47

weekly payments of $1,000.00 each from August 12, 1999, to

June 29, 2000, and to make a final payment of $28,994.57 on

July 6, 2000.

14. As of January 12, 2000, Petitioner was five payments

behind. Accordingly, on that date, the Department sent a Notice

of Delinquent Tax to Admiralty Bank, which read as follows:

RE: ELF SERVICES INC.

DBA: PALM BEACH GARDENS CHEVRON STA 48206

FEI: 65-0055086

ACCT:

ST#:

To Whom It May Concern:

You are being notified, under the authority

contained is Subsection 212.10(3), Florida

Statutes, that the referenced dealer is

delinquent in the payment of gas tax

liabilities in the amount of $75,581.47 to

the State of Florida.

You may not transfer or dispose of any

credits, debts, or other personal property

owed to the dealer, that are to become under

your control during the effective period of

this notice. Any assets in your possession

exceeding the dollar amount shown above may

be released in the ordinary course of

business. This notice shall remain in effect

until the Department consents to a transfer

or disposition or until sixty (60) days

elapse after receipt of this notice,

whichever period expires the earliest.

Please furnish a list of all credits, debts,

or other property owed to the dealer in your

possession and the value of these assets to

the Department. Chapter 212.10(3), F.S.

requires this list within five (5) days.

If you fail to comply with this notice, you

may become liable to the State of Florida to

the extent of the value of the property or

amount of debts or credits disposed of or

transferred.

Thank you for your cooperation. If you have

any questions, please contact the undersigned

at the telephone number below.

15. On or about January 18, 2000, in response to the

foregoing notice, Admiralty Bank advised the Department in

writing that "the balance being held" in Petitioner's account at

the bank was $2,223.53.

16. On February 10, 2000, the Department sent Admiralty

Bank a Notice of Freeze, which read as follows:

RE: Elf Services Inc.

DBA Palm Beach Gardens Chevron

FEI: 65-0055086

ACCT:

ST#:

Dear Custodian:

You are hereby notified that pursuant to

Section 213.67, Florida Statutes, the person

identified above has a delinquent liability

for tax, penalty, and interest of $75,581.47,

which is due the State of Florida.

Therefore, as of the date you receive this

Notice you may not transfer, dispose, or

return any credits, debts, or other personal

property owned/controlled by, or owed to,

this taxpayer which are in your possession or

control. This Notice remains in effect until

the Department of Revenue consents to a

transfer, disposition, or return, or until 60

consecutive calendar days elapse from the

date of receipt of this Notice of Freeze,

whichever occurs first.

Further, Section 213.67(2), F.S., and Rule

12-21, Florida Administrative Code, require

you to advise the Department of Revenue,

within 5 days of your receipt of this Notice,

of any credits, debts, or other personal

property owned by, or owed to, this taxpayer

which are in your possession or control. You

must furnish this information to the office

and address listed below.

Your failure to comply with this Notice of

Freeze may make you liable for the amount of

tax owed, up to the amount of the value of

the credits, debts or personal property

transferred.

Thank you for your cooperation. If you have

any questions please contact the undersigned

at the telephone number listed below.

17. On March 22, 2000, the Department sent to Petitioner a

Notice of Intent to Levy upon Petitioner's "Bank Account

# , in the amount of $2,320.07, . . . in the possession

or control of Admiralty Bank" "for nonpayment of taxes, penalty

and interest in the sum of $75,581.47."

18. After receiving information from Admiralty Bank that

Petitioner actually had $7,293.36 in its account at the bank, the

Department, on March 30, 2000, sent Petitioner a second Notice of

Intent to Levy, which was identical in all respects to the March

22, 2000, Notice of Intent to Levy except that it reflected that

Petitioner's account at Admiralty Bank contained $7,293.36,

instead of $2,320.07.

19. Petitioner's account at Admiralty Bank does not contain

any monies paid by a third party to Petitioner as salary or

wages.

20. The amount of the Petitioner's current outstanding

delinquent "tax liability" is $75,581.47.

CONCLUSIONS OF LAW

21. At all times material to the instant case, Section

336.025(1), Florida Statutes (1995), authorized Florida counties

to impose, in addition to other taxes allowed by state law, a

"local option gas tax" upon "every gallon of motor fuel and

special fuel sold in [the] county."

22. Pursuant to Section 336.025(2)(a), Florida Statutes

(1995), the "person engaged in selling at retail motor fuel or

using or selling at retail special fuel within a county in which

the tax is authorized" was required to collect and remit to the

Department this "local option gas tax."

23. During the period from July 1, 1995, through June 30,

1996, Petitioner was such a "person" 6/ responsible for

collecting and remitting to the Department "local option gas tax"

monies."

24. Petitioner failed to fully meet its responsibility.

25. In response to Petitioner's failure to pay "local

option gas tax" monies due the Department, the Department, on

February 20, 1997, issued and filed with the Clerk of the Circuit

Court in Palm Beach County a tax warrant in accordance with

Section 206.075, Florida Statutes, which, at all times material

to the instant case, authorized the Department, "[u] pon the

determination and assessment of the amount of unpaid taxes and

penalties due, [to] issue a warrant, under its official seal,

directed to the sheriff of any county of the state, commanding

said sheriff to levy upon and sell the goods and chattels of such

person found within the sheriff's jurisdiction for the payment of

the amount of such delinquency, with the added penalties and

interest and the cost of executing the warrant and conducting the

sale, and to return such warrant to the department and pay the

department the money collected by virtue thereof," with the

caveat that "any surplus resulting from said sale after all

payments of costs, penalties, and delinquent taxes have been made

shall be returned to the person in default." The Department's

Tax Warrant indicated that it was "for collection of delinquent

local option gas tax[ es]," in the amount of $106,904.62, plus

penalties (in the amount of $59,556.47), interest (in the amount

of $12,026.25), and the amount of the "filing fee" ($12.00), for

a "grand total" of $178,499.34.

26. Following the issuance and filing of the Tax Warrant,

on May 2, 1997, the Department entered into a stipulated time

payment agreement (first Stipulation Agreement) with Petitioner,

through Rafael Fanjul, Petitioner's president and sole owner,

pursuant to Section 213.21(4), Florida Statutes, which, at all

times material to the instant case, has authorized the Department

"to enter into agreements for scheduling payments of taxes,

interest, and penalties."

27. At all times material to the instant case, Rule 12-

17.003, Florida Administrative Code, has set forth the following

"[r] equirements for [e] ntering into [s] tipulated [t] ime [p] ayment

agreements":

(1) A taxpayer requesting a stipulated time

payment agreement must admit liability for

the total amount of tax, interest, and

penalty finally determined to be due by the

Department.

(2) The taxpayer must demonstrate to the

satisfaction of the Department that the

taxpayer is currently unable to fully satisfy

a liability for tax, interest, or penalty or

that a lump sum payment of the amounts due

would impose an undue hardship on the

taxpayer.

(3) The taxpayer shall also waive the right

to institute administrative or judicial

proceedings under s. 72.011, F.S., with

respect to the liability.

In the first Stipulation Agreement, Petitioner admitted that it

owed the Department $178,024.29 as of the date of the agreement

and it agreed to waive "any and all rights to institute any

further judicial or administrative proceedings under s. 72.011,

F. S., with respect to this liability," as it was required to do

by Rule 12-17.003, Florida Administrative Code, in order to

obtain the benefit of being able to pay off its liability in

installments over a period of time rather than in one lump sum

payment. Pursuant to Section 72.011, Florida Statutes (1996), a

taxpayer, like Petitioner, had the right to contest the legality

of an assessment made by the Department by filing an action in

circuit court or filing a petition under the provisions of

Chapter 120, Florida Statutes, provided that the taxpayer did so

"60 days from the date the assessment bec[ ame] final," a

requirement that, according to subsection (5) of the statute, was

"jurisdictional." Section 120.80(14)(b), Florida Statutes ( Supp.

1997), set forth the procedures to be followed in such a

"taxpayer contest proceeding." It provided among other things,

that, in any "taxpayer contest [administrative] proceeding," "the

. . . department's burden of proof, except as otherwise

specifically provided by general law, shall be limited to a

showing that an assessment has been made against the taxpayer and

the factual and legal grounds upon which the . . . department

made the assessment."

28. At all times material to the instant case, Rule 12-

17.007(7), Florida Administrative Code, has required the

Department to "furnish the taxpayer with a detailed schedule of

payments required for satisfaction of the tax, interest, and

penalty referenced in the stipulated time payment agreement."

Such a "detailed schedule" was appended to and incorporated by

reference in the first Stipulation Agreement.

29. At all times material to the instant case, Rule 12-

17.008(4), Florida Administrative Code, has provided that, "[ i]n

all [stipulated time payment] agreements made pursuant to

[Chapter 12-17, Florida Administrative Code], interest shall

continue to accrue on the unpaid balance of the tax at the rate

provided by law." The payment schedule incorporated in the first

Stipulated Agreement made provision for the payment of such

"additional interest."

30. At all times material to the instant case, Rule 12-

17.008(5), Florida Statutes, has provided that, "[u] pon a showing

of good cause, the Department is authorized to renegotiate

stipulated agreements for an extended period." The Department

did so on two occasions (on May 1, 1998, and again on August 12,

1999) in the instant case. In the May 1, 1998, "renegotiate[d]

stipulated agreement[]" (second Stipulation Agreement),

Petitioner admitted that it owed the Department $142,701.38 as of

the date of the agreement. In the August 12, 1999,

"renegotiate[d] stipulated agreement[]" (third Stipulation

Agreement), it admitted that it owed the Department $88,375.04 as

of the date of the agreement. In both of these "renegotiate[d]

stipulated agreements," as it had done in the first Stipulation

Agreement, Petitioner indicated that it was waiving "any and all

rights to institute any further judicial or administrative

proceedings under s. 72.011, F. S., with respect to [its

admitted] liability."

31. At all times material to the instant case, Rule 12-

17.009, Florida Administrative Code, has provided as follows:

(1) The Department may void a stipulated

time payment agreement under the following

conditions:

(a) The taxpayer fails to make full payment

when due under the terms of the agreement, or

(b) The taxpayer fails to remit in full

taxes which become due and payable after the

execution of the agreement.

(2) Before voiding a stipulated time payment

agreement, the Department will notify the

taxpayer of the failure to meet the terms of

the agreement and afford the taxpayer the

opportunity to present evidence of timely

remittance of the payment(s) in question.

(3) Should the Department void the

agreement, any unpaid balance due under the

stipulated time payment agreement will

immediately become due and payable.

(4) If paragraph (a) or (b) of subsection

(1) are applicable or if an agreement has

otherwise expired, after notice and demand

for payment, the Department may issue a

warrant for the remaining liability and may

execute that warrant or a warrant previously

issued with respect to the liability.

(5) The provisions of the Florida Statutes

relating to jeopardy assessments will

continue to apply to a taxpayer who has

entered into a stipulated time payment

agreement.

32. Petitioner failed to make payments in compliance with

the Amortization Schedule incorporated by reference in the third

Stipulation Agreement. Where a taxpayer, like Petitioner, is

noncompliant, the Department has the authority, pursuant to

Section 213.67, Florida Statutes, to "[l] evy . . . upon credits,

other personal property, or debt" of the noncompliant taxpayer,"

but "only after the executive director or his or her designee has

notified such person in writing of the intention to make such

levy." According to Subsection (6)(c) of Section 213.67, Florida

Statutes,

The notice . . . must include a brief

statement that sets forth in simple and

nontechnical terms:

1. The provisions of this section relating

to levy and sale of property;

2. The procedures applicable to the levy

under this section;

3. The administrative and judicial appeals

available to the taxpayer with respect to

such levy and sale, and the procedures

relating to such appeals; and

4. The alternatives, if any, available to

taxpayers which could prevent levy on the

property.

See also Rule 12-21.204, Florida Administrative Code, which sets

forth "procedures," consistent with those prescribed by Section

213.67, Florida Statutes, governing the "issuance of [a] Notice

of Intent to Levy." Such a notice of intent to levy was issued

and served on Petitioner on or about March 22, 2000, and a second

such notice, intended to supercede the first, was issued and

served on Petitioner on or about March 30, 2000. In both

notices, the Department stated its intent to levy upon

Petitioner's business account at Admiralty Bank, which, as of the

date of the second notice, was in the amount of $7,293.36.

Petitioner has neither alleged nor shown that this property is

exempt from levy pursuant to any statutory or rule provision. 7/

33. A noncompliant taxpayer, like Petitioner, who receives

a notice of intent to levy may, in accordance with Subsection (7)

of Section 213.67, Florida Statutes, "contest the notice . . . by

filing an action in circuit court [or] [a] lternatively, [by]

fil[ ing] a petition under the applicable provisions of chapter

120." "An action may not be brought to contest a notice of

intent to levy under chapter 120 or in circuit court, later than

21 days after the date of receipt of the notice of intent to

levy." Section 213.67(8), Florida Statutes.

34. In the instant case, Petitioner contested the

Department's proposed action to levy upon Petitioner's account at

Admiralty Bank by filing a petition under Chapter 120, Florida

Statutes, and an administrative hearing conducted pursuant to

Section 120.57(1), Florida Statutes, was held on the matter.

35. At the hearing, the Department established by a

preponderance of the evidence 8/ that, as of the date of the

hearing, Petitioner was delinquent in its payment of taxes,

penalties, and interest totaling $75,581.47, an amount greater

than "the balance being held" in Petitioner's account at

Admiralty Bank, and no showing was made that any portion of the

monies in Petitioner's account is exempt from levy pursuant to

Chapter 222, Florida Statutes.

36. In an attempt to demonstrate that it was not liable to

the Department in the amount ($75,581.47) alleged in the March

22, 2000, and March 30, 2000, Notices of Intent to Levy,

Petitioner, through the testimony of Mr. Fanjul, claimed at

hearing that its original "tax liability" was considerably less

than the amount ($178,024.29) that Mr. Fanjul, on behalf of

Petitioner, stipulated to in the first Stipulation Agreement. 9/

According to Mr. Fanjul, he entered into this Stipulation

Agreement "under duress." He explained that he had been accused

by the Department of having "run off with State funds" and told

"that [his] life could be ruined, and [he] could go to jail" if

he did not sign the agreement. Under such circumstances,

Petitioner argues in its Proposed Recommended Order, its

"stipulations should . . . be considered null and void."

37. An agreement may be voided if it is the product of

legal duress. "To prove duress under Florida law it must be

shown (1) that the act sought to be set aside was effected

involuntarily and thus not as an exercise of free choice or will

and (2) that this condition of mind was caused by some improper

and coercive conduct of the opposite side. . . . However, it is

not improper and therefore not duress to threaten what one has a

legal right to do." G.E.E.N. Corporation v. Southeast Toyota

Distributors, Inc. , 1994 WL 695364 (M.D. Fla. 1994), citing City

of Miami v. Kory , 394 So. 2d 494, 497 (Fla. 3d DCA 1981) and

Spillers v. Five Points Guaranty Bank , 335 So. 2d 851 (Fla. 1st

DCA 1976); see also Paris v. Paris , 412 So. 2d 952, 953 (Fla. 1st

DCA 1982)("[T]here can be no duress without there being a threat

to do some act which the threatening party has no legal right to

do-some illegal exaction or some fraud or deception."). The

burden is on the party seeking have the agreement voided to show

that the agreement resulted from duress. See Jacobs v.

Vaillancourt , 634 So. 2d 667, 671 (Fla. 2d DCA 1994)("[O] nce a

proponent makes a prima facie showing of the formal execution and

attestation thereof, the burden of proof shifts to the contestant

and he must establish the facts constituting the grounds upon

which the revocation is sought."); Corporaci ó n Peruana de

Aeropuertos y Aviación Comercial v. Boy , 180 So. 2d 503, 506

(Fla. 2d DCA 1965)("[T]he burden of proof to show duress . . . is

on the Defendant [the party alleging duress].").

38. Petitioner failed to prove that any one of its three

Stipulation Agreements with the Department was the product of

legal duress. While Petitioner presented Mr. Fanjul's testimony

that he was threatened with jail time if he did not sign the

first Stipulation Agreement, the greater weight of the evidence

establishes that no such threat was made, 10/ nor does the

record reveal that Department personnel at any time threatened to

take any action against Mr. Fanjul or Petitioner it was not

authorized to take.

39. Not having demonstrated that there is any reason to

treat either the first Stipulation Agreement, or its successors,

as a nullity, Petitioner is bound by the stipulation set forth in

each of these agreements as to the amount of its "tax liability"

as of the date of the agreement. See Kwastel v. Department of

Business and Professional Regulation , 736 So. 2d 762, 763 (Fla.

5th DCA 1999)("[W]e cannot overlook the provisions of the binding

stipulation. Appellants agreed not to seek judicial review of

the order adopting the stipulation and are thus precluded from

challenging the terms of the stipulation and the order adopting

same."). While it may now appear to Petitioner, in hindsight,

that it made a poor decision in entering into these Stipulation

Agreements and " waiv[ ing] any and all rights to institute any

further judicial or administrative proceedings under S.72.011,

F.S. with respect to th[e] liability" to which it stipulated in

each agreement, mere dissatisfaction with the outcome of a

decision to enter into an agreement does not give the

dissatisfied party the right to unilaterally rescind the

agreement and proceed as if the agreement had never been made.

Cf. Amerifirst Federal Savings and Loan Association v. Cohen , 454

So. 2d 626, 627 (Fla. 3d DCA 1984)("Cohen gained much from this

[settlement] agreement and cannot now be permitted to back out of

those provisions of the agreement which he deems harsh or

onerous."); and Steinhardt v. Rudolph , 422 So. 2d 884 (Fla. 3d

DCA 1982)("All of this does not mean, however, that a court will

relieve a party of his obligations under a contract because he

has made a bad bargain containing contractual terms which are

unreasonable or impose an onerous hardship on him. Indeed, the

entire law of contracts, as well as the commercial value of

contractual arrangements, would be substantially undermined if

parties could back out of their contractual undertakings on that

basis. 'People should be entitled to contract on their own terms

without the indulgence of paternalism by courts in the

alleviation of one side or another from the effects of a bad

bargain.'").

40. Because the preponderance of the evidence establishes

that Petitioner has an unpaid "tax liability" balance (that,

pursuant to the terms of the third Stipulation Agreement, became

"immediately due and payable" when Petitioner failed to pay the

Department in accordance with the agreement's Amortization

Schedule) in excess of the funds in Petitioner's account at

Admiralty Bank, and Petitioner has failed to show that these

funds are exempt from levy or that there is any other reason why

these funds may not be taken by the Department to satisfy

Petitioner's "tax liability," the Department should proceed to

take the action proposed in its March 30, 2000, Notice of Intent

to Levy.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of

Law, it is hereby

RECOMMENDED that the Department enter a final order

upholding its March 30, 2000, Notice of Intent to Levy and

proceed with the garnishment of the funds in Petitioner's account

at Admiralty Bank.

DONE AND ENTERED this 25th day of October, 2000, in

Tallahassee, Florida.

___________________________________

STUART M. LERNER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 25th day of October, 2000.

ENDNOTES

1/ The hearing was originally scheduled for July 14, 2000, but

was continued at the parties' request.

2/ Although Petitioner did not timely respond to any of the

Department's Requests for Admissions, Mr. Fanjul indicated, on

the record at hearing, that Petitioner did not dispute the

matters asserted in any of the Department's Requests for

Admissions other than Requests 7, 15, and 16.

3/ Rule 1.370(a), Florida Rules of Civil Procedure, provides, in

pertinent part, that "the matter is admitted unless the party to

whom the request is directed serves upon the party requesting the

admission a written answer or objection addressed to the matter

within 30 days after service of the request or such shorter or

longer time as the court may allow . . . ." Pursuant to Rule

1.370(b), Florida Rules of Civil Procedure, "[a] ny matter

admitted under this rule is conclusively established unless the

court on motion permits withdrawal or amendment of the

admission."

4/ If payments had been made in accordance with the Amortization

Schedule, Petitioner's tax debt would have been paid off on April

24, 1998.

5/ If payments had been made in accordance with the Amortization

Schedule, Petitioner's tax debt would have been paid off on

February 26, 1999.

6/ "Person," was defined in Section 1.01(3), Florida Statutes

(1995) as including "individuals, children, firms, associations,

joint adventures, partnerships, estates, trusts, business trusts,

syndicates, fiduciaries, corporations, and all other groups or

combinations."

7/ See Section 222.11, Florida Statutes, which exempts certain

"disposable earnings of a head of a family" from garnishment and

further provides that such earnings that "are credited or

deposited in any financial institution are exempt from . . .

garnishment for 6 months after the earnings are received by the

financial institution if the funds can be traced and properly

identified as earnings."

8/ "Findings of fact [in proceedings conducted pursuant to

Section 120.57(1), Florida Statutes] shall be based upon a

preponderance of the evidence, except in penal or licensure

disciplinary proceedings or except as otherwise provided by

statute, and shall be based exclusively on the evidence of record

and on matters officially recognized." Section 120.57(1)(j),

Florida Statutes; see also Florida Department of Health and

Rehabilitative Services, Division of Health v. Career Service

Commission , 289 So. 2d 412, 415 (Fla. 4th DCA 1974)("'As a

general rule the comparative degree of proof by which a case must

be established is the same before an administrative tribunal as

in a judicial proceeding--that is, A preponderance of the

evidence. It is not satisfied by proof creating an equipoise,

but it does not require proof beyond a reasonable doubt.'").

9/ In Proposed Finding of Fact 8 in its Proposed Recommended

Order, Petitioner asserts that "[t]he total amount of the tax

owed as of July 1996 amounted to $84, 521.11" and that "[t]he

total amount [owed] at that time including penalty and taxes

amounted to $106,000.00."

10/ Mr. Fanjul's testimony was rebutted by William Moore, who

testified on behalf of the Department. Mr. Moore was the

Department employee who, Mr. Fanjul alleged, had threatened him.

Having carefully reviewed their differing versions of the events

that led up to the execution of the first Stipulation Agreement

to determine which is more plausible, and taking into account Mr.

Fanjul's and Mr. Moore's respective interests in the outcome of

this case as well as other factors bearing on their credibility,

the undersigned has concluded that Mr. Fanjul's testimony that he

was threatened by Mr. Moore with jail time should be rejected in

favor of Mr. Moore's testimony to the contrary.

COPIES FURNISHED:

Rafael J. Fanjul, President

ELF Services, Inc.

4109 North Lake Boulevard

Palm Beach Gardens, Florida 33410

John Mika, Esquire

Assistant Attorney General

Office of the Attorney General

The Capitol, Tax Section

Tallahassee, Florida 32399-1050

James Zingale, Executive Director

Department of Revenue

104 Carlton Building

Tallahassee, Florida 32399-0100

Linda Lettera, General Counsel

Department of Revenue

204 Carlton Building

Tallahassee, Florida 32314-6668

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15

days from the date of this R ecommended O rder. Any exceptions to

this R ecommended O rder should be filed with the agency that will

issue the F inal O rder in this case.