00-001600RX Ronald A. Grimaldi vs. Florida State Boxing Commission Status: Closed DOAH Final Order on Thursday, February 15, 2001.

Summary: Rule 61K-1.0011(3)(c), Florida Administrative Code, is valid but Rule 61K1-1.0011(3)(g), Florida Administrative Code, extends and enlarges upon Respondent`s rulemaking authority.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RONALD A. GRIMALDI, )

)

Petitioner, )

)

vs. ) Case No. 00-1600RX

)

FLORIDA STATE BOXING )

COMMISSION, )

)

Respondent, )

)

and )

)

DANNY SANTIAGO, )

)

Intervenor. )

______________________________)

FINAL ORDER

This case came on for consideration based on the parties'

agreement to proceed upon a record presented without a hearing,

before the Division of Administrative Hearings, by its

Administrative Law Judge, Suzanne F. Hood.

APPEARANCES

For Petitioner: William M. Powell, Esquire

Powell & Steinburg, P.A.

Waterside Plaza

3515 Del Prado Boulevard, Suite 101

Cape Coral, Florida 33904

For Respondent: Thomas G. Thomas, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-2202

For Intervenor: Bruce A. Minnick, Esquire

Bruce A. Minnick, P.A.

Post Office Drawer 15588

Tallahassee, Florida 32317-5588

STATEMENT OF THE ISSUE

The issue is whether Rules 61K1-1.0011(3)(c) and 61K1-

1.0011(3)(g), Florida Administrative Code, and a portion of Form

BPR-08-451 (currently Form BPR-0009451), which is incorporated

therein by reference, constitute an invalid exercise of

delegated legislative authority.

PRELIMINARY STATEMENT

On or about April 12, 2000, Petitioner Ronald A. Grimaldi

(Petitioner) filed a Petition with the Division of

Administrative Hearings pursuant to Sections 120.56(1) and

120.56(3), Florida Statutes. Said petition alleged that Rules

61K1-1.0011(3)(c) and 61K1-1.0011(3)(g), Florida Administrative

Code, and a portion of Form BPR-0009451, which is incorporated

by reference therein, constitute an invalid exercise of

delegated legislative authority.

A Notice of Hearing dated April 20, 2000, scheduled the

case for final hearing on May 15, 2000. However, Respondent

Florida State Boxing Commission (Respondent) filed an unopposed

Motion to Continue on May 3, 2000. By order dated May 4, 2000,

the motion was granted and the hearing rescheduled for June 20,

2000.

On April 26, 2000, Intervenor Danny Santiago (Intervenor)

filed a Petition for Leave to Intervene. An order granting the

Petition for Leave to Intervene was issued May 9, 2000.

On May 18, 2000, Petitione r filed a Motion to Reconsider.

Said motion requested the undersigned to reconsider the order

granting Intervenor's Petition for Leave to Intervene.

Petitioner alleged that he had not had an opportunity to respond

to the Petition for Leave to Intervene due to a lack of notice.

The undersigned granted this motion by order dated May 23, 2000.

On May 15, 2000, Intervenor filed a Motion for Continuance

and Rescheduling of Hearing. On May 22, 2000, Petitioner filed

a response in opposition to this motion.

On May 30, 2000, Intervenor filed and served on all parties

a Petition for Leave to Intervene.

On June 13, 2000, the undersigned issued two orders. The

first order granted Intervenor's Petition for Leave to

Intervene. The second order granted Intervenor's request for a

continuance and placed the case in abeyance. On June 15, 2000,

Petitioner filed a response stating that he had no objection to

Intervenor's request for a continuance and for leave to

intervene.

On July 13, 2000, the undersigned issued a Third Notice of

Hearing. This notice scheduled the case for hearing on

August 16, 2000.

On July 24, Petitioner filed a Motion to Compel Answers to

Interrogatories. This motion sought sanctions against

Respondent.

On August 8, 2000, Respondent filed an unopposed Motion to

Continue. That same day, Respondent also filed a Response to

Petitioner's Motion to Compel and for Sanctions. By order dated

August 10, 2000, the undersigned granted a continuance and

rescheduled the hearing for November 1, 2000.

On October 31, 2000, Respondent filed a Motion to Continue

and to Hold in Abeyance. The motion stated that Petitioner and

Intervenor concurred in the request for a continuance. The

undersigned granted the motion and placed the case in abeyance

by order dated November 2, 2000.

On November 3, 2000, Intervenor filed a Notice of Objection

to any Abeyance and Motion to Amend Order Accordingly. An order

dated November 22, 2000, denied this motion.

On November 27, 2000, Petitioner filed an Emergency Motion

to Quash Subpoena and Notice of Taking Depositions. After

hearing oral argument in a telephone conference on November 28,

2000, the undersigned granted the motion.

On December 18, 2000, Petitioner and Respondent filed a

Status Report and Joint Motion for Final Order. On December 20,

2000, Intervenor filed Objections and Request for Final

Evidentiary Hearing. In a telephone conference on December 21,

2000, the parties agreed to proceed upon a record presented

without hearing.

On January 22, 2001, Petitioner filed the following:

(1) deposition testimony of Louis Grimaldi and John Cristian

Meffert; (2) Copies of Sections 120.52 and 548.01-548.09,

Florida Statutes; (3) Department of Business and Professional

Regulation Form BPR-0009451; (4) Rule 61K1-1.011, Florida

Administrative Code; (5) Affidavit of Ronald A. Grimaldi dated

January 16, 2001; (6) Memorandum of Law; and (7) proposed Final

Order.

On January 22, 2001, Respondent filed a Memorandum of Law.

On January 25, 2001, Intervenor filed the following:

(1) Proposed Findings of Fact and Conclusions of Law; (2) nine

documents in support of Intervenor's Proposed Final Order; and

(3) transcribed excerpt of Respondent's meeting on December 6,

2000.

On January 29, 2001, Petitioner filed a Motion to Strike

Intervenor's Proposed Documents in Support of Memorandum of Law

and Proposed Final Judgement. Intervenor filed a response in

opposition to this motion on January 31, 2001. The motion is

hereby granted as to the Stipulation dated October 31, 2000, and

signed by Petitioner and Respondent and as to the Joint Proposed

Order offered by Petitioner and Respondent to settle this case.

The motion is denied in all other respects.

On February 1, 2001, Intervenor filed copies of Sections

548.001-548.079, Florida Statutes (1997).

FINDINGS OF FACT

1. Respondent, formerly known as the Florida State

Athletic Commission, licensed Petitioner as a manager of

participants in boxing matches effective September 5, 1997.

2. On or about September 17, 1997, Petitioner and

Intervenor entered into a contract for Petitioner to be

Intervenor's manager and for Intervenor to render services for

Petitioner in professional boxing contests.

3. Petitioner did not file a copy of this contract with

Respondent within seven days of its execution.

4. Petitioner and Intervenor had a disagreement after

several fights regarding their respective rights and duties

under the contract.

5. On or about April 26, 1999, Intervenor filed a

Complaint for Declaratory Relief and Permanent Injunction in the

Circuit Court, Fifth Judicial Circuit, in and for Marion County,

Florida, Case No. 99-781-CA-D. Among other things, Intervenor

requested the court to declare the September 17, 1997, contract

to be null and void for two reasons: (a) because Petitioner had

not filed it with Respondent within seven days of its execution

as required by Rule 61K1-1.011(3)(c), Florida Administrative

Code; and (b) because the contract did not contain all

provisions specifically set forth in Respondent's Form BPR-

0009451, entitled Letter of Agreement Between Participant and

Manager, as required by Rule 61K1-1.0011(3)(g), Florida

Administrative Code.

6. Petitioner filed a counter-claim in Marion County

Circuit Court Case No. 99-78-CA-D, bringing Respondent in as a

party. Petitioner's counter-claim alleged that there was no

legislative authority for an administrative rule to declare a

contract between a manager and a boxer void. As of December 6,

2000, the civil suit was in abeyance pending issuance of the

final order in the instant case.

7. On April 5, 2000, Respondent issued a Notice to Show

Cause directed to Petitioner. Said notice alleged that

Petitioner as a manager had entered into a contract with

Intervenor, a licensed boxer, and that Petitioner had not filed

the contract with Respondent. The Notice to Show Cause

referenced Rules 61K1-1.011(3)(c) and 61K1-1.011(3)(g), Florida

Administrative Code.

8. Petitioner filed this rule challenge proceeding on

April 11, 2000. Petitioner seeks a determination that Rules

61K1-1.011(3)(c) and 61K1-1.011(3)(g), Florida Administrative

Code, including a portion of Form BPR-0009451, constitute an

invalid exercise of delegated legislative authority to the

extent they purport to automatically void a contract if the

manager is not licensed when the contract is executed or if the

manager fails to file a copy of the contract with Respondent

within seven days of the execution date.

9. Rules 61K1-1.0011(3), Florida Administrative Code,

states as follows in pertinent part:

(3) Contracts Between Manager and

Participant.

* * *

(c) All contracts shall be in writing and

shall be filed with the commission within 7

calendar days of execution . . . .

* * *

(g) All contracts entered into in Florida

between a manager and a participant, and all

such contracts entered into outside of

Florida involving participants and managers

licensed by or subsequently licensed by the

commission, shall expressly contain all

provisions specifically as worded in Form

BPR-0009451, entitled Letter of Agreement

Between Participant and Manager,

incorporated herein by reference and

effective May, 1990, and if they do not,

shall be deemed to contain such provisions.

10. The specific language in Form BPR-0009451 that

Petitioner objects to is:

This contract is automatically void if

manager is not licensed on the date this

contract is signed or fails to file with the

Florida State Athletic Commission, a copy of

this contract within 7 calendar days of its

execution.

CONCLUSIONS OF LAW

11. The Division of Administrative Hear ings has

jurisdiction over the parties and the subject matter of this

proceeding. Sections 120.56(1) and 120.56(3), Florida Statutes.

12. Section 120.56(1), Florida Statutes, provides that

"[a]ny person substantially affected by a rule may seek an

administrative determination of the invalidity of the rule on

the ground that the rule is an invalid exercise of delegated

legislative authority." Pursuant to Section 120.56(3)(a), "[a]

substantially affected person may seek an administrative

determination of the invalidity of an existing rule at any time

during the existence of the rule." In this case, Petitioner and

Intervenor are substantially affected by the rules at issue

because they are parties to a contract that is or is not void,

depending on the validity of the rules.

13. The burden of proof, absent a statutory directive to

the contrary, is on the party asserting the affirmative of the

issue in a Chapter 120, Florida Statutes, proceeding. See

Florida Dep’t of Transp. v. J.W.C. Co., Inc. , 396 So. 2d 778,

788 (Fla. 1st DCA 1981); see also Department of Banking and

Finance v. Osborne Stern and Co. , 670 So. 2d 932, 934 (Fla.

1996)("The general rule is that a party asserting the

affirmative of the issue has the burden of presenting evidence

as to that issue.")

14. Because Petitioner is asserting that existing Rules

61K1-1.0011(3)(c) and 61K1-1.0011(3)(g), Florida Administrative

Code, and a portion of Form BPR-0009-451 incorporated therein,

constitute an invalid exercise of delegated legislative

authority, he has the burden of proving the invalidity of the

challenged rules. See St. Johns River Water Management Dist. v.

Consolidated-Tomoka Land Co. , 717 So. 2d 72, 76-77 (Fla. 1st DCA

1998).

15. In accordance with Petitioner's challenge, Section

120.52(8), Florida Statutes, states as follows:

(8) "Invalid exercise of delegated

legislative authority" means an action which

goes beyond the powers, functions, and

duties delegated by the Legislature. A

proposed or existing rule constitutes an

invalid exercise of delegated legislative

authority if any one of the following

applies:

* * *

(b) The agency has exceeded its grant of

rulemaking authority;

(c) The rule enlarges, modifies, or

contravenes the specific provision of law

implemented;

* * *

(e) The rule is arbitrary or capricious;

* * *

A grant of rulemaking authority is necessary

but not sufficient to allow an agency to

adopt a rule; a specific law to be

implemented is also required. An agency may

adopt only rules that implement, interpret

or make specific the particular powers and

duties granted by the enabling statute. No

agency shall have authority to adopt a rule

only because it is reasonably related to the

purpose of the enabling legislation and is

not arbitrary and capricious, nor shall an

agency have the authority to implement

statutory provisions setting forth general

legislative intent or policy. Statutory

language granting rulemaking authority or

generally describing the powers and

functions of an agency shall be construed to

extend no further than the particular powers

and duties conferred by the same statute.

Section 120.536(1), Florida Statutes, repeats verbatim the above

quoted language that discusses an agency's rulemaking authority.

16. As identified in the challenged rules , Section

548.003(2), Florida Statutes, sets forth Respondent's specific

rulemaking authority as follows:

The Florida State Boxing Commission, as

created by subsection (1), shall administer

the provision of the chapter. The

commission has authority to adopt rules

pursuant to ss. 120.536(1) and 120.54 to

implement the provisions of this chapter and

to implement each of the duties and

responsibilities conferred upon the

commission, including, but not limited to:

development of an ethical code of conduct

for commissioners, commission staff, and

commission officials, procedures for

hearings and resolution of disputes;

qualifications for appointment of referees

and judges; and setting fee and

reimbursement of schedules for officials

appointed by the commission.

17. Section 548.006, Florida Statutes, states as follows:

The commission has exclusive jurisdiction

over every match held within the state which

involves a professional. Matches shall be

held in accordance with this chapter and the

rules adopted by the commission.

18. Section 548.011, Florida Statutes, provides as

follows:

The commission has exclusive jurisdiction to

issue, withhold, suspend, or revoke any

license or permit provided for in this

chapter.

19. Section 548.017, Florida Statutes, states as follows:

(1) A professional participant, manager,

trainer, second, timekeeper, referee, judge,

announcer, physician, matchmaker, or booking

agent or representative of a booking agent

shall be licensed before directly or

indirectly acting in such capacity in

connection with any match involving a

professional.

(2) A violation of this section is a

misdemeanor of the second degree, punishable

as provided in s. 775.082 or 775.083.

20. As to control over the content of contracts between

managers and participants, Respondent is charged with

implementing Section 548.05, Florida Statutes, which provides as

follows:

(1) The commission shall adopt rules

governing the form and content of contracts

between promoters, foreign co-promoters, and

professionals. All such contracts shall be

in writing.

(2) Each contract between an manager and a

professional shall contain provisions

governing its duration, division of the

professional's purses, and any minimum sum

guaranteed annually to the professional by

the manager. Each contract shall provide

that it is automatically terminated if the

license of either party is revoked by the

commission or if the manager fails to renew

her or his license within 30 days after its

expiration date. If the license of either

party is suspended, the contract is not

binding upon the other party during the

period of suspension.

(3) The commission may require that each

contract contain language authorizing the

Florida State Boxing Commission to withhold

any or all of any manager's share of a purse

in the event of a contractual dispute as to

entitlement to any portion of a purse. The

commission may establish rules governing the

manner of resolution of such dispute. In

addition, if the commission deems it

appropriate, the commission is hereby

authorized to implead interested parties

over any disputed funds into the appropriate

circuit court for resolution of the dispute

prior to release of all or any part of the

funds.

(4) Each contract subject to this section

shall contain the following clause: "This

agreement is subject to the provisions of

chapter 548, Florida Statutes, and to the

rules of the Florida State Boxing Commission

and to any future amendments of either."

21. Section 548.071(1), Florida Statutes, gives Respondent

authority to revoke or suspend a license upon a finding that the

licensee is guilty of violating Chapter 548, Florida Statutes, or

Respondent's rules. Respondent may impose an administrative fine

on licensees pursuant to Section 548.075, Florida Statutes.

22. In this case, Respondent has not exceeded or enlarged

upon its rulemaking authority as to Rule 61K1-1.0011(3)(c),

Florida Administrative Code. In Section 548.05, Florida Statutes,

the Legislature specified that every contract must contain certain

provisions. Respondent has the responsibility to enforce those

provisions. Sections 548.003(2) and 548.05, Florida Statutes. In

order for Respondent to fulfill its responsibility, the contracts

must be filed within a reasonable time after execution.

Respondent's rule requiring the contracts to be filed within seven

days of execution is reasonable and not arbitrary or capricious.

23. Rule 61K1-1.0011(3)(c), Florida Administrative Code,

does not specify which of the parties to the contract is obligated

to file the contract with Respondent. Therefore, both parties to

the contract, if licensed, would share that duty or face an

administrative penalty of license revocation or suspension under

Section 548.071(1), Florida Statutes, or an administrative fine

under Section 548.075, Florida Statutes. Rule 61K1-1.0011(3)(c),

Florida Administrative Code, is not an invalid exercise of

delegated legislative authority.

24. Rule 61K101.0011(3)(g), Florida Administrative Code, is

invalid to the extent that it exceeds or enlarges upon

Respondent's rulemaking authority. The rule requires that all

contracts between managers and participants shall contain all

provisions set forth in Form BPR-0009451, which is incorporated by

reference. The rule also states that contracts not containing the

express language in the form are deemed to contain such language.

25. There is no specific statutory authority for Respondent

to create a rule inserting any language it chooses into a contract

between a manager and a boxer. Section 548.05, Florida Statutes,

mandates that certain provisions be contained in contracts,

leaving open the prospect of disciplinary action for failure to

include the statutory language. Moreover, the Legislature did not

go on to declare that if a contract failed to include the

statutory provisions, those provisions would automatically become

part of the contract by operation of law. As a consequence, the

portions of Rule 61K1-1.0011(3)(g), Florida Administrative Code,

that attempts to impose provisions into a contract through a

"deemer" clause is invalid and must be struck.

26. Form BPR-0009451 includes language that a contract is

void if: (a) if the manager is not licensed when the contract is

signed; and (b) the manager fails to file the contract within

seven days of its execution. Section 548.05(2), Florida Statutes,

requires contracts to provide that they are automatically

terminated: (a) if Respondent revokes the license of either

party; or (b) if a manager does not timely renew his or her

license. Section 548.05(2), Florida Statutes, also states that a

contract is not binding during the suspension of a party's

license. The statute does not address the situation where a

manager or a party has never been licensed. The statute does not

state that a contract is terminated during the suspension of a

party's license. The statute never references the termination of

a contract which has not been timely filed. Respondent's language

in Form BPR-0009451 is invalid and must be struck to the extent it

contemplates that a contract is void if a manager who has never

been licensed enters into a contract and if the manager, licensed

or not, fails to file the contract in a timely fashion. Possible

statutory penalties for failure to timely file do not extend to

voiding a contract.

27. Petitioner is entitled to reasonable costs and

attorney's fees pursuant to Section 120.595(3), Florida Statutes.

The undersigned retains jurisdiction to make such an award after

an evidentiary hearing.

ORDER

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is

ORDERED:

that the challenge to Rule 61K1-1.0011(3)(c), Florida

Administrative Code, is dismissed, and the challenge to Rule

61K1-1.0011(3)(g), Florida Administrative Code, and Form BPR-

0009451 incorporated therein, are determined to be invalid to

the extent described.

DONE AND ORDERED this 15th day of February, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

SUZANNE F. HOOD

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 15th day of February, 2001.

COPIES FURNISHED:

William M. Powell, Esquire

Powell & Steinburg, P.A.

Waterside Plaza

3515 Del Prado Boulevard, Suite 101

Cape Coral, Florida 33904

Thomas G. Thomas, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-2202

Bruce A. Minnick, Esquire

Bruce A. Minnick, P.A.

Post Office Drawer 15588

Tallahassee, Florida 32317-5588

Hardy L. Roberts, III, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Kim Binkley-Seyer, Secretary

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Liz Cloud, Chief

Bureau of Administrative Code

The Elliott Building

Tallahassee, Florida 32399-0250

Carroll Webb, Executive Director

Joint Administrative Procedure Committee

120 Holland Building

Tallahassee, Florida 32399-1300

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entitled to judicial review pursuant to Section 120.68, Florida

Statutes. Review proceedings are governed by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing one copy of a notice of appeal with the Clerk of the

Division of Administrative Hearings and a second copy,

accompanied by filing fees prescribed by law, with the District

Court of Appeal, First District, or with the District Court of

Appeal in the Appellate District where the party resides. The

notice of appeal must be filed within 30 days of rendition of

the order to be reviewed.