00-004920RU Fred Goodman, D/B/A Eyes And Ears Investigative Services vs. Department Of Banking And Finance Status: Closed DOAH Final Order on Wednesday, April 11, 2001.

Summary: Petitioner challenged as an unpromulgated rule a statement by the Department denying consolidation of unrelated claims; also challenged Department`s action of exceeding 90-day determination period. Failed to prove each issue.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FRED GOODMAN, d/b/a EYES AND )

EARS INVESTIGATIVE SERVICES, )

)

Petitioner, )

)

vs. ) Case No. 00-4920RU

)

DEPARTMENT OF BANKING AND )

FINANCE, )

)

Respondent. )

)

FINAL ORDER

On January 17, 2001, a formal administrative hearing was

held in this case in Tallahassee, Florida, before William R.

Pfeiffer, Administrative Law Judge, Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Philip J. Stoddard

Qualified Representative

288 St. George Street

St. Augustine, Florida 32084

For Respondent: Jo Schultz, Esquire

Department of Banking and Finance

101 East Gaines Street

Fletcher Building, Suite 526

Tallahassee, Florida 32399-0350

STATEMENT OF THE ISSUES

There are two issues presented in this case. The first

issue is whether a statement by the Department of Banking and

Finance (the "Department"), denying joinder of multiple

unrelated abandoned property claims, in a Final Order directed

to Petitioner is an unpromulgated rule in violation of Section

120.54(1)(a), Florida Statutes. The second issue is whether the

Department has a policy of delaying decisions on unclaimed

property claims past the statutory 90th day, such that the

policy constitutes an unpromulgated rule in violation of Section

120.54(1)(a), Florida Statutes.

PRELIMINARY STATEMENT

On December 6, 2000, Petitioner filed the instant Petition,

dated December 1, 2000, with the Division of Administrative

Hearings. In his Petition, Petitioner challenges as an

unpromulgated rule a statement by the Department of Banking and

Finance which notified Petitioner that his attempted

consolidation of four unrelated claim denials was inappropriate.

The challenged statement was contained in an Order which denied

Petitioner's single petition for hearing based on noncompliance

with Rule 28-106.201, Florida Administrative Code.

Petitioner also alleges that the Department has a tacit

policy of delaying determinations on claims for unclaimed

property beyond the 90th day, thus denying claimants a point of

entry for administrative proceedings. Petitioner claims this

tacit policy is an unpromulgated rule.

The undersigned was appointed to hear the matter, which was

then set for hearing on January 17, 2001.

The Department responded to the Rule Challenge Petition

with a Motion for Summary Final Order which was filed

January 10, 2001. The motion was heard on January 14, 2001, and

an Order denying the Motion was docketed on January 16, 2001.

The matter was heard as scheduled. Petitioner testified at

the hearing and presented the testimony of two additional

witnesses, Pat Traylor and Brenda Carson. Ten exhibits were

entered into evidence.

Respondent presented one witness, Peter DeVries, the Bureau

Chief for Unclaimed Property, and entered one exhibit into

evidence.

Official recognition was taken of Chapter 717, Florida

Statutes, Rules 3D-20.0021 and 3D-20.0022, Florida

Administrative Code, and Rule 1.110, Florida Rules of Civil

Procedure.

A Transcript of the proceedings was filed on February 6,

2001. In early March 2001, each of the parties filed Proposed

Final Orders which have been duly considered by the undersigned

in the preparation of this Final Order.

FINDINGS OF FACT

1. The Department is the State agency responsible for

administering the Florida Unclaimed Property Act, Chapter 717,

Florida Statutes. As such, the Department is responsible for

collecting and maintaining unclaimed property and processing

claims for the return of the unclaimed property to its missing

owners.

2. The Department accomplishes this task through a staff

composed of 12 full-time employees and 14 OPS employees.

3. Individuals as well as private investigative agencies

file claims for property held by the Department. Private

investigative agencies account for appropriately 12 percent to

14 percent of the claims filed and approximately 38 percent to

42 percent of the property value returned to owners.

The Department's Claims Process

4. The Department has established internal procedures so

that claims are processed timely, efficiently, and accurately.

Claimants must submit claims in writing on a form supplied by

the Department. The Department logs-in each claim on the day it

is received. If the Department determines a claim is in

compliance with Rules 3D-20.0021 and 3D-20.0022, Florida

Administrative Code, and the proof submitted with the claim is

sufficient to establish the claimant's ownership and entitlement

to the funds, it is paid. If the Department determines that the

claim is incomplete, within 5 to 15 days of its receipt of the

claim, the Department sends the claimant a pre-screen letter

advising the claimant of the additional information required to

prove the claim. Rule 3D-20.0021(1), Florida Administrative

Code. When the claimant resubmits the claim with the additional

material that has been requested, the claim is re-logged into

the computer and a 90th day is set. Rule 3D-20.0021(2), Florida

Administrative Code.

5. Claims supervisors receive a daily computer report

alerting them of the claims which are 61 days old and aging.

They receive high priority. Complex claims which are submitted

with initial insufficient proof are referred to the legal

department for review and resolution.

6. During fiscal year 1999/2000 the Department processed

and approved approximately 107,000 claims having an aggregate

value of approximately $67 million. Throughout the review

process, the Department assists claimants in developing the

proof necessary to prove the claim in lieu of summarily denying

the claim.

7. In mid-1999, the Department's Unclaimed Property

Program went on-line, which significantly increased the number

of claims filed.

8. From around July 1, 1999 through December 31, 2000, the

Department processed claims for approximately 132,900 unclaimed

property accounts. The statutory 90-day period for

determination was exceeded for an estimated 5000 of those

accounts: 1,146 claims were denied and 3,991 claims were

approved. However, of those 3991 approved accounts, 1,254

accounts were from an extended project with the FDIC which took

about a year to complete. In sum, excluding the 1,254 FDIC

accounts, the Department exceeded the 90th day on approximately

3 percent of the claims filed during this period.

The Petitioner

9. Petitioner is a licensed private investigator who

specializes in the recovery of unclaimed property held by the

Comptroller's office. Petitioner maintains both an individual

and an agency license to engage in the business of locating

missing owners of unclaimed property. He has been licensed by

the Florida Department of State as a private investigator since

1993.

10. In the course of Petitioner's business, his clients

sign a form agreement which authorizes Petitioner to represent

the client in recovering the abandoned property held by the

Comptroller's Office. Petitioner represents the client through

the entire claims process until the claim is either paid to his

trust account or denied. If the claim is paid, Petitioner

deducts his fractional share and costs and forwards the net

value of the claim to the client. If the claim is denied,

Petitioner's agreement with his client authorizes him to file a

request for hearing on the client's behalf.

Petitioner's Agreement Form

11. Petitioner's agreement states that Petitioner has

located property which may belong to the client, and pending the

requisite proof of ownership, that Petitioner will recover the

property for the client. The agreement provides that for his

services, the "Agent is assigned a fee of 30 percent" and

further provides that the agreement is an "irrevocable limited

power of attorney." Lastly, the agreement recites that in any

dispute between Petitioner and his client, "proper venue is in

Volusia County, Florida."

Petitioner's Business

12. Since 1998, Petitioner has filed claims for

approximately 3,000 unclaimed property accounts. Of those 3,000

accounts, 152, roughly 5 percent of Petitioner's claims, have

exceeded the 90-day determination period.

13. Petitioner files claims for all types of unclaimed

property, but primarily involving dissolved corporations.

14. Because of the nature of his business niche,

Petitioner's claims are often more complex because they involve

older accounts, lost or destroyed corporate documents, and

archived banking information. Moreover, a decision by a

bankruptcy trustee about whether or not to reopen a bankruptcy

estate may also be needed to establish entitlement to the

property, if the company was liquidated through a bankruptcy

proceeding.

15. Claimants, including Petitioner, routinely request the

Department's assistance in obtaining additional information from

the reporting company in order to establish ownership and

entitlement on behalf of their client.

16. Prior to August 2000, Petitioner had not requested the

Department provide a denial letter of any of his claims in which

the 90th day had exhausted while additional information was

gathered.

The Controversy

17. In August 2000, Petitioner had six claims,

representing four separate clients, pending with the Department,

all of which were over the 90 days. In each case the Department

determined the evidence provided was insufficient to establish

the client's ownership of the property. Over the months during

which these claims were pending, Petitioner met with the

Department on several occasions to address the proof issues.

18. On August 9, 2000, the Department sent Petitioner a

letter outlining the deficiencies in each of the four files and

advising Petitioner that unless he could provide the evidence

needed by August 25, 2000, the Department would deny each claim.

19. Petitioner faxed a letter dated September 7, 2000, to

the Department stating he would be out of the country during the

month of September and requested that the denials for the files

listed in the August 9, 2000, letter be held until after he

returned home on September 26, 2000. Petitioner's letter also

requested that the "DOAH hearing be held in Daytona Beach,

Florida, when each of the hearings takes place."

20. To accommodate Petitioner's request, the Department

delayed issuing the Individual Notices of Intent to Deny each of

the four claims until October 3, 2000.

21. Petitioner timely responded to the four denials with a

single Petition for Hearing, attempting to consolidate the four

unrelated cases. On November 27, 2000, the Department entered

an Order denying his Petition for failure to comply with the

Florida Administrative Code and granted Petitioner 20 days in

which to re-file a conforming petition. The Order also advised

Petitioner that consolidating these unrelated cases was

inappropriate.

22. On December 1, 2000, Petitioner signed and mailed the

instant Rule Challenge, which specifically identified these four

files. It was received by DOAH on December 6, 2000.

23. On December 1, 2000, the same day the Rule Challenge

was mailed to DOAH, Petitioner and Respondent entered into a

standstill agreement, tolling all matters related to these four

files as well as several other files. The agreement was reduced

to writing and signed on December 7 and 8, 2000.

24. On December 13, 2000, Petitioner and his attorney

again met with the Department to discuss the evidence required

to prove the claims in these four files.

The Challenged Statement

25. Petitioner challenges the "joinder" statement in the

Department's Order which advised him that "it is inappropriate

to consolidate four unrelated cases in a single Petition for

Hearing." Petitioner contends this statement is a rule which

has not been adopted pursuant to Section 120.54, Florida

Statutes. He further contends that the statement as applied is

contrary to Rule 1.110(g), Florida Rules of Civil Procedure.

The Challenged Policy

26. As a separate but related matter, Petitioner also

asserts that the Department has a tacit policy of delaying

determinations on claims past the 90th day. Petitioner argues

that the effect of this policy is to deny the claimant a point

of entry into administrative proceedings. He contends that this

policy has the force of a rule which has not been adopted

pursuant to Section 120.54, Florida Statutes.

Sanctions

27. The Department requested that attorneys' fees be

assessed against Petitioner. The Department incorrectly asserts

this matter is completely without merit and was brought for an

improper purpose, namely, to harass.

CONCLUSIONS OF LAW

28. The Division of Administrative Hearings has

jurisdiction of the parties to and the subject matter of this

proceeding. Section 120.56(4), Florida Statutes.

29. Petitioner has the burden of proof in a rule challenge

proceeding instituted pursuant to Section 120.56(4), Florida

Statutes, to establish by a preponderance of the evidence, that

the challenged statement or policy has the effect of a rule.

30. The Administrative Procedures Act defines as a rule

. . . each agency statement of general

applicability that implements, interprets,

or prescribes law or policy or describes the

procedure or practice requirement of an

agency. . . .

Section 120.52(15), Florida Statutes.

The Challenged Statement

31. Not every statement made by an agency qualifies or

comes within the definition of a rule, nor is every statement an

agency statement of general applicability implementing,

interpreting, or prescribing law or policy or describing the

procedure of practice requirements of that agency.

32. The challenged statement which denied joinder of

multiple unrelated abandoned property claims simply notified

Petitioner of the standard pleading practices as identified in

the rules of civil procedure, specifically, Rule 1.110(g),

Florida Rules of Civil Procedure. Similarly, Rule 28-106.108,

Florida Administrative Code, the consolidation rule of the

Uniform Rules for the Division of Administrative Hearings,

states that separate matters which involve similar issues of law

or fact, or identical parties, may be consolidated for judicial

economy when such action would not unduly prejudice the rights

of a party. The challenged statement was a statement referring

to the Rules of Civil Procedure and the Uniform Rules. It was

not a statement describing a procedure or practice requirement

of the Department of Banking and Finance.

33. Petitioner therefore has failed to establish by a

preponderance of evidence that the challenged statement is an

agency statement within the definition of a rule.

34. The foregoing notwithstanding, Petitioner argues

alternatively that he is an agency "coupled with an interest,"

or has an "equitable interest in the claim," and is therefore

proceeding in his own right and should be allowed to consolidate

his denials.

35. While Rule 1.110(g), Florida Rules of Civil Procedure,

provides that a pleader may plead as many claims, causes of

action, or defenses as the pleader has, the pleader is limited

to only those claims, causes of action, or defenses, the pleader

has "in the same right." The courts have consistently

interpreted the "in the same right" qualification in Rule

1.110(g), Florida Rules of Civil Procedure, to prevent a party

from combining multiple causes of action brought in different

representative capacities into a single lawsuit. See Pages v.

Dominguez by and through Dominguez , 652 So. 2d 864 (Fla. 4th DCA

1995); Department of Insurance v. Coopers & Lybrand , 570 So. 2d

369 (Fla. 3rd DCA 1990); Metropolitan Dade County v. Hicks , 323

So. 2d 590 (Fla. 3rd DCA 1975) citing Pensacola Electric Co. v.

Soderlind , 60 Fla. 164, 53 So. 722 (Fla. 1910).

36. The laws of agency is equally well-settled. The

"principal always has the power to terminate an agency, though

he may be subject to liability if he has agreed not to do so."

Peacock v. American Agronomics Corp. , 422 So. 2d 55 (Fla. 2d DCA

1982). It is necessary that "the interest be in the subject

matter of the power and not in the proceeds which will arise

from the exercise of the power. . . ." Id. At 58. Petitioner

has no ownership or entitlement to the unclaimed property held

by the Department independent from the power granted by his

client. The interest Petitioner seeks to protect is his fees.

Where the interest arises only from

commissions or out of the proceeds of a

transaction, or where the agent's interest

is merely his right to receive, by way of

compensation or commissions, a certain

percent of a collection or sale effected by

him, there is no agency coupled with an

interest.

Bowling v. National Convoy & Trucking Co. , 135 So. 541 (Fla.

1931). Petitioner therefore does not qualify for this limited

exception.

37. Similarly, Petitioner has no equitable interest in a

claim which has not been approved or denied. There is no value

to the claim prior to a determination on the merits. There is

no inherent value in the claim itself.

38. In sum, Petitioner has failed to establish that the

challenged statement is an unpromulgated rule in violation of

Section 120.56(4), Florida Statutes. The challenged statement

is not an agency statement within the definition of a rule.

The Challenged Policy

39. The Department's established procedures are to

facilitate an efficient, timely, and accurate return of

unclaimed property to the rightful owners.

40. Pursuant to Section 717.124, Florida Statutes, and

Rule 3D-20.0021(1), Florida Administrative Code, the Department

has 90 days from the date of receipt of a complete claim in

which to make a determination on the claim. While there are

admitted instances of exceeding the 90-day determination period,

the Department makes a determination of 97 percent of the claims

filed in less than 90 days.

41. However, contrary to Petitioner's allegations, the

evidence is clear that the Department's policy as reflected in

its internal processing procedures, is to make determinations on

claims within the statutory 90 days. Although delays have

periodically occurred, they resulted from unavoidable

circumstances including the Department's continued assistance to

claimants with evidentiary proof issues, the Department's lack

of sufficient personnel, and the significant increase in claims

filed after the agency went on-line. The Department has

identified the circumstances creating the delays, and has taken

steps to remedy their process.

42. Based on the foregoing, Petitioner has failed to carry

his burden of establishing by a preponderance of the evidence

that the Department has a policy of delay. Petitioner has shown

that delays exceeding the 90th day for file processing did occur

for approximately 3 percent of the claims filed in the last 18

months, but these delays do not show a policy.

ORDER

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is

ORDERED that petition er has not established that the

challenged joinder statement, nor the alleged delay policy, are

rules within the meaning of Section 120.52, Florida Statutes.

Accordingly, the Rule Challenge Petition filed herein is

dismissed. Sanctions are inappropriate in this matter.

DONE AND ORDERED this 11th day of April, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

WILLIAM R. PFEIFFER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apala chee 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 11th day of April, 2001.

COPIES FURNISHED :

Jo Schultz, Esquire

Department of Banking and Finance

101 East Gaines Street

Fletcher Building, Suite 526

Tallahassee, Florida 32399-0350

Philip J. Stoddard

Qualified Representative

288 St. George Street

St. Augustine, Florida 32084

Robert Beitler, Acting General Counsel

Department of Banking and Finance

Fletcher Building, Suite 526

101 East Gaines Street

Tallahassee, Florida 32399-0350

Honorable Robert F. Milligan

Office of the Comptroller

Department of Banking and Finance

The Capitol, Plaza Level 09

Tallahassee, Florida 32399-0350

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.