01-003340 Department Of Education, Division Of Vocational Rehabilitation vs. Sandra Lewis Status: Closed Recommended Order on Wednesday, October 31, 2001.

Summary: Agency relied on hearsay to deny funding of existing individualized education plan, and preponderance of evidence did not support other grounds for denial.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF EDUCATION, )

DIVISION OF VOCATIONAL )

REHABILITATION, )

)

Petitioner, ) Case No. 01 - 3340

)

vs. )

)

SANDRA LEWIS, )

)

Respondent. )

)

RECOMMENDED ORDER

Administrative Law Judge Daniel Manry conducted the

administrative hearing of this proceeding on September 25, 2001,

in Orlando, Florida, on behalf of the Division of Administrative

Hearings ("DOAH").

APPEARANCES

For Petitioner: Joseph L. Shields, Esquire

Department of Education

Division of Vocational

Rehabilitation Services

2002 Old St. Augustine Road

Building A, Roo m 343

Tallahassee, Florida 32301 - 4862

For Respondent: Sandra Lewis , pro se

3813 Columbia Street

Orlando, Florida 32811

STATEMENT OF THE ISSUE

The issue is whether Petitioner shou ld terminate the

existing individual plan of employment ("IPE") that was

developed pursuant to Section 413.30, Florida Statutes (2001),

because the existing IPE is no longer viable. (All chapter and

section references are to Florida Statutes (2001) unless

otherwise stated.)

PRELIMINARY STATEMENT

By letter dated July 23, 2001, Petitioner advised

Respondent that her IPE was no longer viable and that Petitioner

would no longer fund the plan. Respondent timely requested an

administrative hearing.

At t he hearing, Petitioner presented the testimony of one

witness and submitted three exhibits for admission in evidence.

Respondent testified and submitted 11 exhibits for admission in

evidence. The identity of the witnesses and exhibits and the

rulings reg arding each are set forth in the official record of

the hearing. Neither party requested a transcript of the

hearing.

Respondent timely filed her Proposed Recommended Order

("PRO") on October 1, 2001. Petitioner timely filed its PRO on

October 26, 200 1.

FINDINGS OF FACT

1. Respondent has been a client of Petitioner for many

years and has received thousands of dollars in benefits from

Petitioner in accordance with an existing IPE. The existing IPE

provides that Respondent's employment goal is for self -

employment as an administrator of a beauty academy in the

Orlando metropolitan area.

2. Sometime prior to March 30, 2000, the parties entered

into mediation to resolve certain differences between them.

On March 30, 2000, the parties executed a Me diation Agreement.

3. The Mediation Agreement required Respondent's business

plan to include expenses described as the cost of accreditation

and the cost of financial aid software. It also required the

Small Business Development Center ("SBDC") at the U niversity of

Central Florida to evaluate Respondent's business plan.

4. Petitioner agreed to pay the expenses of accreditation

and financial aid software if the SBDC found that the business

plan is viable. In relevant part, the Mediation Agreement

provi ded:

If the business plan . . . is found by SBDC

to be viable and the business plan includes

the 2 expenses referred to . . . above, VR

agrees to provide theses expenses as part of

its services in the IPE.

Respondent's Exhibit A

5. On April 4, 20 00, the SBDC issued a written evaluation

of Respondent's business plan. The parties agree that the

business plan evaluated by SBDC includes the requisite expenses.

6. At the hearing, Petitioner claimed that Respondent did

not satisfy the relevant requir ement in the Mediation Agreement

for a finding by SBDC that the business plan is viable, in part,

because the written evaluation does not use the term "viable."

Petitioner cited no statute, rule, or judicial decision that

establishes a technical definition for the term "viable." In

the absence of a technical definition, the term should be

interpreted according to its common and ordinary meaning.

7. The American Heritage Dictionary of the English

Language , at 1915, (4th Ed. Houghton Mifflin Co. New York 2000),

defines the term "viable" to mean, "Capable of success or

continuing effectiveness; practicable. . . . See synonyms at

possible." The written evaluation issued from SBDC to

Petitioner's consultant found that Respondent's business plan is

viable. In relevant part, the written evaluation finds:

. . . this business plan has been very

carefully researched and written. It is a

thorough description of Sandra's business

concept. If implemented as described, this

document should serve as tool (sic) to h elp

insure her business success. I would like

to add that this plan is more comprehensive

than any that I have ever evaluated for

Vocational Rehab clients.

Respondent's Exhibit A.

8. Petitioner designated the SBDC as Petitioner's agent

for the evaluat ion of Respondent's business plan. SBDC issued

the written evaluation to Petitioner's consultant and provided

copies to Respondent and others. Petitioner is bound by the

findings of SBDC as Petitioner's designated agent.

9. The parties did not agree in the Mediation Agreement

that SBDC would, as a condition of Petitioner's obligation to

pay expenses, find that Respondent's business would be viable.

Rather, the parties agreed, as a condition of funding, to a

finding by SBDC that the business plan is v iable. Respondent

satisfied that express condition of funding.

10. Petitioner knew, or should have known, that SBDC

would not make a finding that the proposed business would be

viable. In relevant part, the written evaluation issued to

Petitioner's c onsultant stated:

As I am sure you know the ability to prepare

a "good" business plan does not necessarily

mean that someone will or will not be

successful. The SBDC, therefore, will not

pass judgment on the feasibility or

likelihood of success of any bus iness. We

limit our remarks to a critique of the plan

itself as a written document only.

Id .

11. After SBDC issued the written evaluation, Petitioner

executed the existing IPE. By letter dated May 23, 2000,

Petitioner provided Respondent with a copy of the IPE.

12. In relevant part, the IPE provides that Petitioner

will pay for the costs of accreditation and software that were

conditioned on the written evaluation from SBDC. The IPE

further provides that Petitioner will pay for specific services

for counseling and guidance, physical restoration by physicians

of Respondent's choice, mental restoration by providers of

Respondent's choice, miscellaneous training required for

accreditation, maintenance, and transportation. In addition,

the IPE provid es that Petitioner will pay for other goods and

services associated with the new business including auditing

expenses, licensing expenses, advertising, a video camera and

tripod, video tapes, work clothing, rent in the amount of

$16,119, the cost of staff development, office supplies,

janitorial services, utilities of $4,400, and a computer

workstation.

13. After May 23, 2000, the parties amended the IPE

approximately four times to include additional expenses not

included in the original IPE. The additio nal expenses included

the cost of beauty equipment and legal fees.

14. Between May 23, 2000, and June 1, 2001, Petitioner

disputed some of the expenses submitted by Respondent. When

Respondent requested that Petitioner pay a security deposit

equal t o three months rent for office space for the new

business, Petitioner denied the request on the grounds that a

security deposit is not rent and that the IPE obligates

Petitioner to pay only rent.

15. The proposed landlord refused to register as vendor

with Petitioner. A real estate broker agreed to act as the

conduit - vendor for the security deposit and rent. However,

Petitioner's consultant refused to proceed with the arrangement

without approval from his Tallahassee office.

16. The security deposit was rent within the meaning of

the IPE. Payment of the security deposit would not have

increased the total amount paid as rent but would have come from

the monies already allocated to rent.

17. The delay in obtaining approval for the security

deposit caused Respondent to lose her option to lease the

original office space. Respondent located a second site for the

new business, but the new site requires some renovation before

it will be suitable for opening. Petitioner refuses to pay the

renovation ex pense on the grounds that such expenses are not

rent.

18. On June 6, 2001, Petitioner retained the services of

a specialist to provide a market analysis to determine whether

the proposed business, as opposed to the business plan, is

viable. The speci alist issued a written market analysis on

June 27, 2001.

19. By letter dated July 23, 2001, Petitioner's

consultant advised Respondent that her IPE was no longer viable

(the "termination letter"). In relevant part, the letter

stated:

I have decided t hat there is no likelihood

that your planned services relating to your

self - employment as the administrator of a

beauty academy will lead to your employment

in that capacity. This decision is made for

a number of reasons but I shall take the

opportunity t o list some of them below;

1)the loss of your previously anticipated

referrals. . ., 2)my reluctance to provide

payment(s) for the required (3 months)

security deposit on your intended commercial

lease, 3)the continuing unwillingness of [an

organization de signated as NACCAS] to

certify your academy, 4)my belief that you

can not qualify as a financial aid approved

facility without certification. . . 5)the

apparent lack of sponsoring . . . sources

6)my unwillingness to sponsor repairs for

your intended place of business, 7)tuition

costs higher than those at public

institutions in the community and 8)current

market analysis suggesting that additional

cosmetology/beauty schools in the metro

Orlando area would have a difficult time

obtaining profitability. (empha sis supplied)

Petitioner's Exhibit 1.

20. The preponderance of evidence does not support the

findings in grounds 1) and 5) in the termination letter.

Respondent testified that she had commitments for referrals and

sponsors and provided written state ments from approximately 13

sources that supplemented and explained her testimony. The

sources of referral and sponsorship include the Sanctuary of

Praise Ministries, The Bridge, two radio stations, the NAACP,

and the Central Florida Advocate.

21. Gro unds 2) and 6) of the termination letter pertain

to the security deposit and renovation expenses. A security

deposit equal to three months rent is "rent" covered by the IPE.

Renovation expenses are not rent but would not increase the

total rent in the IP E because the current space is less

expensive than the original space.

22. Grounds 3) and 4) in the termination letter are only

temporary. The certifying organization is the National

Accrediting Commission of Cosmetology Arts and Sciences (the

"NACCAS") . After November 15, 2001, Respondent will be eligible

to apply for accreditation from the NACCAS and, once obtained,

will be eligible for financial aid for her students.

23. The preponderance of evidence does not support a

finding pertaining to ground 7) in the termination letter. The

parties submitted conflicting evidence on this issue.

24. Ground 8) is a mixed question of fact and law.

Petitioner failed to show that there is "no likelihood" that

Respondent will achieve her goal of self - employmen t as an

administrator of a beauty academy.

CONCLUSIONS OF LAW

25. DOAH has jurisdiction over the parties and subject

matter of this proceeding. Section 120.57(1). The parties were

duly noticed for the administrative hearing.

26. Petitioner has the b urden of proof in this

proceeding. This case does not involve a denial by a state

agency of an initial application. Petitioner approved the

initial application by Respondent, developed the existing IPE,

and now proposes that the IPE should be terminated. The party

seeking to prove the affirmative of an issue has the burden of

proof. Florida Department of Transportation v. J.W.C. Company,

Inc. , 396 So. 2d 788 (Fla. 1st DCA 1981); Balino v. Department

of Health and Rehabilitative Services , 348 So. 2d 350 (Fla. 1st

DCA 1977).

27. Petitioner must show by a preponderance of evidence

that the existing IPE is no longer viable. J.W.C. Company,

Inc. , 396 So. 2d at 778; Balino , 348 So. 2d at 349. Petitioner

failed to satisfy its burden of proof by the requisi te standard.

28. The preponderance of evidence shows that Respondent

satisfied relevant conditions in the Mediation Agreement by

obtaining a finding from the SBDC that her business plan is

viable. Petitioner then issued an IPE in accordance with the

Med iation Agreement. Petitioner subsequently sought to

terminate the IPE on the grounds stated in the termination

letter.

29. Petitioner failed to establish all of the eight

grounds stated in the termination letter by a preponderance of

the evidence. Th e preponderance of evidence shows that

Petitioner refused to pay a security deposit that the IPE

required Petitioner to pay as rent. The refusal delayed

Respondent's acquisition of office space for her business.

Petitioner failed to prove the other groun ds in the termination

letter including the market analysis that formed the basis of

ground 8)in the termination letter.

30. Respondent submitted evidence to contradict several of

the assumptions underlying the conclusion in the market

analysis. Responde nt's evidence raises issues concerning the

reliability of the market analysis.

31. The market analysis is hearsay within the meaning of

Section 90.801(1)(c). The specialist who prepared the market

analysis did not testify at the hearing.

32. Unlike the written evaluation by SBDC that is an

admission, within the meaning of Section 90.803(18)(b) - (d), the

market analysis does not fall within any of the exceptions

authorized in Section 90.803. In addition, Petitioner failed to

satisfy the requirements o f Section 90.804 that otherwise would

allow the market analysis to be admitted if the declarant were

unavailable.

33. The witness for Petitioner was neither tendered nor

qualified as an expert. Therefore, the witness is not an expert

who is authorized by Section 90.702 to rely on the market

analysis as a basis for his expert opinion.

34. Section 120.57(1)(c) prohibits the ALJ from basing a

finding of fact on hearsay. The market analysis is the only

evidence relied on by Petitioner to determine the m arket

feasibility of the proposed business. The market analysis does

not explain or supplement other competent and substantial

evidence within the meaning of Section 120.57(1)(c).

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclus ions

of Law, it is

RECOMMENDED that Respondent enter a final order finding

that there is some likelihood that the IPE will lead to

Respondent's self - employment as an administrator of a beauty

academy; and requiring Petitioner to continue the IPE towa rd

that goal.

DONE and ENTERED this 31st day of October, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

DANIEL MANRY

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Park way

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 31st day of October 2001.

COPIES FURNISHED :

James A. Robinson, Gen eral Counsel

Department of Education

The Capitol, Suite 1701

Tallahassee, Florida 32399 - 0400

Carl F. Miller, Jr., Director

Division of Vocational Rehabilitation

Department of Education

2002 Old St. Augustine Road

Building A

Tallahassee, Florida 32301 - 4 862

Joseph L. Shields, Esquire

Department of Education

Division of Vocational

Rehabilitation Services

2002 Old St. Augustine Road

Building A, Room 343

Tallahassee, Florida 32301 - 4862

Sandra Lewis

3813 Columbia Street

Orlando, Florida 32811

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.