03-001966 Steven A. Ramunni vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Wednesday, September 3, 2003.

Summary: Part-time city attorney who also maintained private law firm serving general public per Rule 60S-6.001(33) was an independent contractor and not eligible to participate in the Florida Retirement System.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STEVEN A. RAMUNNI, )

)

Petitioner, )

)

vs. ) Case No. 03 - 1966

)

DEPARTMENT OF MANAGEMENT )

SERVICES, DIVISION OF )

RETIREMENT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice and in accordance with Section 120.569

and Subsection 120.57(1), Florida Statutes, a final hearing was

held in this case, on July 30, 2003, in LaBelle, Florida, before

Fred L. Buckine, the designated Administrative Law Judge of the

Division of Administrative Hearings.

APPEARANCES

For Petitioner: Steven A. Ramunni, Esquire

Post Office Box 1118

LaBelle, Florida 33975

For Respondent: Thomas E. Wright, Esquire

Department of Management Services

Division of Retirement

4050 Esplanade Way, Suite 260

Tallahassee, Florida 32399 - 0950

STATEMENT OF THE ISSUE

The issue for determination is whethe r Petitioner,

Steven A. Ramunni, owner of Steven A. Ramunni, P.A., employed by

the City of Moore Haven, Florida, as the part - time city

attorney, is entitled to participate in the Florida Retirement

System from November 25, 1986, through the present.

PRELI MINARY STATEMENT

By letter dated March 21, 2003, Respondent, Department of

Management Services, Division of Retirement, informed

Petitioner, Steven A. Ramunni, that Respondent had reconsidered

its prior determination that Petitioner was ineligible for

part icipation in the Florida Retirement System. After

consideration of all supporting documentation provided,

Respondent again reviewed Petitioner's request and determined

for a second time that the relationship between Petitioner and

the City of Moore Haven, Florida, was that of an independent

contractor and, as such, Petitioner was excluded from Florida

Retirement System participation. Petitioner was advised that

the independent contractor relation determination was final

agency action.

On May 27, 2003, Pet itioner's Petition for Review and

Formal Request for Administrative Hearing, the Final Agency

Action, and the Agency Referral were received at the Division of

Administrative Hearings.

On June 5, 2003, the Initial Order was entered, and on

June 13, 2003, a Notice of Hearing was entered scheduling the

final hearing for July 30, 2003, in LaBelle, Florida.

At the final hearing, Petitioner testified in his own

behalf and offered three exhibits (P - A through P - C), which were

accepted in evidence. Respondent pres ented the testimony of two

witnesses: Cathy Brantley, Benefits Administrator, Division of

Retirement; Maxine Brantley, City Clerk, City of Moore Haven,

Florida; and Petitioner. Respondent offered seven exhibits (R - 1

through R - 7), which were accepted in e vidence.

At the request of the parties, official recognition was

taken of Subsections 121.021(22), (24), (50), (52), and (53) and

Subsection 121.051(1)(d)2., Florida Statutes; Rule 60S -

1.004(3)(g), (5)(b), and (5)(d) and Rule 60S - 6.001(6)(b),

(16)(b), (33) , (52), and (63), Florida Administrative Code; and

Sections 6.01 and 7.01 of the City of Moore Haven Charter. All

citations are to Florida Statutes (2002) unless otherwise

indicated.

No transcript was requested, and the parties were allowed

ten days to f ile their proposed recommended orders. On

August 11 and 21, 2003, Respondent and Petitioner, respectively,

filed their Proposed Recommended Orders, and they have been

considered in the preparation of this Recommended Order.

FINDINGS OF FACT

Based upon o bservation of the witnesses and their demeanor

while testifying in person and the documentary materials

received in evidence, stipulations by the parties, evidentiary

rulings made pursuant to Section 120.57, and the entire record

compiled herein, the follo wing relevant and material facts are

found:

1. The City of Moore Haven, Florida (City), is a Florida

Municipal Corporation classified as a local agency and

participates in the Florida Retirement System (FRS).

2. The city attorney part - time position is es tablished by

Article IV of the City of Moore Haven Charter.

3. The City has no legal department. The cost for legal

services rendered by its part - time city attorney is included in

the City's annual budget.

4. Petitioner, Steven A. Ramunni (Mr. Ramunni), owner of

Steven A. Ramunni, P.A., was hired November 25, 1986, as the

City's part - time city attorney. His immediate supervisors are

the mayor and the City Council of Moore Haven (City Council).

5. Mr. Ramunni's primary legal duties consist of mandatory

appearances at two regularly scheduled monthly meetings and

attendance at special meetings at the discretion of the City

Council. He performs the legal duties and services needed or

required by the City Council. He represents the City in all

litigation a nd official business. He provides legal

advice/opinions to the mayor, the City Council, and to all city

department heads. Mr. Ramunni, by virtue of a monthly retainer,

is obligated to be available as needed by his retainer client on

a daily basis, if nec essary.

6. The City provides administrative assistance to

Mr. Ramunni when he is engaged in legal projects for the City.

However, the City hires and supervises the administrative staff.

Additionally, Mr. Ramunni has authority and does use his private

l aw firm's administrative staff to assist him in performing

legal services for the City. The City is billed separately from

the monthly retainer agreement for other legal services. The

City pays for those legal seminars attended by Mr. Ramunni that

are re lated to local agencies as that term is defined in

Subsection 121.021(52)(b). Mr. Ramunni is responsible for

attending and making payment for additional seminars necessary

to comply with mandatory Florida Bar requirements.

7. Mr. Ramunni has held the pos ition of part - time city

attorney for the City and has continuously performed legal

services as the part - time city attorney continually since

November 25, 1986.

8. There was no formal contract of employment entered into

by Mr. Ramunni and the City on N ovember 25, 1986, and no formal

contract of employment presently exists.

Reimbursement for legal services rendered to the City

9. For attending City Council meetings twice a month,

Mr. Ramunni is on a fixed monthly retainer. Other than

attending the two monthly City Council meetings, Mr. Ramunni has

no other established legal duties as the part - time city

attorney. He is available and he does provide requested legal

counsel and engages in litigation when needed only on those

issues determined by the City Council and/or the mayor.

10. Other than his fixed monthly retainer for attending

City Council meetings, any and all other legal services

performed for the City require additional compensation, billed

by the hour, plus cost, to be paid to Mr. Ramunni. This hourly

billing rate plus expenses is separate and apart from his fixed

monthly retainer for attending City Council meetings as part -

time city attorney.

Reporting income paid Mr. Ramunni for services rendered

11. Mr. Ramunni asserts that he has not received an

Internal Revenue Service (IRS) Form 1099 or a Form W - 2

reflecting annual compensation paid him by the City from

November 25, 1986, to the present. The Department of Management

Services, Division of Retirement's (the Agency), ERQ - 1 form,

dated October 3, 2002, question 15, page 3, completed with the

assistance of Maxine Brantley, City Clerk, and submitted to the

Agency, answered the question, "How did the worker report the

earnings for income tax purposes?" to the contrary.

12. Answering the a bove question regarding how monies paid

to Mr. Ramunni are reported to state and federal agencies for

income tax purposes, the ERQ - 1 form confirms that the City does

not report annual earned income payments made to Mr. Ramunni as

"Wages" for income tax pur poses by Form W - 2. The City chose to

report, and Mr. Ramunni acquiesced, annual earned income paid to

Mr. Ramunni by the City as "self employed income" for tax

purposes by using Form 1099.

13. The City chose, and Mr. Ramunni acquiesced, not to

withhold federal income taxes and federal social security

deductions from Mr. Ramunni's payment for services rendered.

14. The City chose, and Mr. Ramunni acquiesced, not to

withhold medicare deductions from Mr. Ramunni's annual pay.

15. The City chose, and Mr. Ramunni acquiesced, not to

make matching contributions for Mr. Ramunni's federal social

security or medicare payments.

16. The City chose, and Mr. Ramunni acquiesced, not to

provide statutorily required workers' compensation coverage for

Mr. Ramunni .

17. The City is insured by its Public Risk Management Self

Insurance coverage, to include legal work performed on behalf of

the City by Mr. Ramunni. This coverage is not insurance

coverage for legal malpractice claims that may be made against

Mr. Ramu nni, personally.

18. Mr. Ramunni maintains a law firm, Stevens A. Ramunni,

P.A., with offices in LaBelle and Fort Myers, Florida, offering

legal services to the general public. Mr. Ramunni does not have

office equipment or office space on the City's pre mises. The

City makes remittance of the monthly retainer and of fees

charged by Mr. Ramunni to Steven A. Ramunni, P.A., and not Mr.

Ramunni personally. The City's remittance checks are deposited

in the Steven A. Ramunni, P.A., law firm's account and not Mr.

Ramunni's personal banking account.

19. Mr. Ramunni, at his sole discretion, uses the

administrative staff of his private law firm to assist him with

the City's legal projects. The cost for use of the

administrative staff of his private law firm is an integrated

portion of his hourly total billing totals to the City.

20. Although Mr. Ramunni may terminate his independent

relationship with the City as city attorney without personal

financial liability, he continues to have a professional and

ethical duty to assist in the transition of ongoing litigation

to a new attorney. As part - time city attorney, Mr. Ramunni may

not substitute another attorney to provide legal services

assigned to him by the City without expressed authority and

approval of the pr oposed new attorney from the City Council and

the mayor.

21. Based upon the Findings of Fact herein above, the

evidence demonstrates that Mr. Ramunni's relationship as the

part - time city attorney is not that of an "employee" of the City

as that term is de fined by rule of the Agency, for participation

in the FRS.

22. Based upon the Findings of Fact herein above,

Mr. Ramunni has failed to prove that his part - time city attorney

relationship with the City is and always has been an employer -

employee relations hip as that term is defined by rule of the

Agency and that he is eligible for participation in the FRS.

CONCLUSIONS OF LAW

23. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of these

proceedings pursuan t to Section 120.569 and Subsection

120.57(1).

24. The FRS is codified in Chapter 121. Section 121.051

provides for compulsory participation in the FRS for all

employees hired after December 1, 1970. Subsection 121.021(11)

defines employee as any person receiving salary payment for work

performed in a regularly established position and, if employed

by a city or special district, employed in a covered group.

25. Subsection 121.021(52)(b) defines a regularly

established position as follows:

In a local age ncy (district school board,

county agency, community college, city, or

special district), the term means a

regularly established position which will be

in existence for a period beyond 6

consecutive months, except as provided by

rule.

26. Herein, the dut y to go forward and the burden of proof

by a preponderance of the evidence is upon Petitioner. See

Subsections 120.57(1)(j) and (k), Florida Statutes (2000); Young

v. Department of Community Affairs , 625 So. 2d 831 (Fla. 1993);

Florida Department of Trans portation v. J.W.C. Company , 396 So.

2d 778 (Fla. 1st DCA 1981); and Balino v. Department of Health

and Rehabilitative Services , 348 So. 2d 349 (Fla. 1st DCA 1977).

27. Petitioner has not proffered evidence that he was

employed in any capacity other tha n that of an independent

contractor on a month - by - month retainer basis and that he would

handle, at an additional hourly rate, plus cost, travel and

other expenses, all other legal matters assigned.

28. At hearing, Petitioner asserted, notwithstanding his

private law firm's serving the general public, the personal

legal service he provides his private clientele, the absence of

an employment contract with the City, and the City's method of

payment for his services, that he is and always has been an

"employe e" of the City. However, Petitioner offered nothing in

support of his assertion.

29. Petitioner's Proposed Findings of Fact and Conclusions

of Law submit that "[A]lthough Petitioner works for other

persons or organizations, this is based upon Moore Haven 's needs

for a part - time rather than full - time attorney." However, this

is not what the evidence shows. ( See Findings of Fact 11

through 17)

30. Petitioner's proposals advanced the legal theory that

he is " subject to the control and direction of the May or and/or

City Council " not only as to what duties are assigned him but

also as to how those assigned duties shall be done by him.

Citing as an example of this subjection and control Petitioner

maintains that "the Mayor and/or City Council can direct

Peti tioner to proceed with a foreclosure action instead of a

demand letter or some lesser form of collection." This

argument, advancing the theory that an attorney representing a

client in the judicial system in Florida is subjected to,

controlled and directe d by that client, defeats professional

legal independence of counsel and is without merit.

31. Pursuant to Subsection 121.021(50) an "independent

contractor" is defined as follows:

"Independent contractor" means an individual

who is not subject to the con trol and

direction of the employer for whom work is

being performed, with respect not only to

what shall be done but to how it shall be

done. If the employer has the right to

exert such control, an employee - employer

relationship exists, and, for purposes of

this chapter, the person is an employee and

not an independent contractor. The division

shall adopt rules providing criteria for

determining whether an individual is an

employee or an independent contractor.

32. Factors to be considered by the fact f inder in

determining whether one is an Independent Contractor are found

in Rule 60S - 6.001(33), Florida Administrative Code, which

provides:

INDEPENDENT CONTRACTOR -- Means an

individual who is not subject to the control

and direction of the employer for wh om work

is being performed, with respect not only to

what shall be done but to how it shall be

done. If the employer has the right to

exert such control, an employee - employer

relationship exists and the person is an

employee and not an independent contrac tor.

The Division has adopted the following

factors as guidelines to aid in determining

whether an individual is an employee or an

independent contractor. The weight given

each factor is not always the same and

varies depending on the particular

situatio n.

(a) INSTRUCTIONS: An employee must comply

with instructions from his employer about

when, where, and how to work. The

instructions may be oral or may be in the

form of manuals or written procedures which

show how the desired results is to be

accomp lished. Even if no actual

instructions are given, the control factor

is present if the employer has the right to

give instructions.

(b) TRAINING: An employee is trained to

perform services in a particular manner.

This is relevant when the skills and

experience which would be used as in

independent contractor were gained as a

result of previous employment. Independent

contractors ordinarily use their own methods

and received no training from the purchasers

of their services.

(c) INTEGRATION: An employee's services

are integrated into the business operations

because the services are critical and

essential to the success of continuation of

an agency's progress/operation. This shows

that the employee is subject to direction

and control.

(d) SER VICES RENDERED PERSONALLY: An

employee renders services personally. This

shows that the employer is interested in the

methods as well as the results. Lack of

employer control may be indicated when a

person has the right to hire a substitute

without the employer's knowledge or

approval.

(e) HIRING ASSISTANTS: An employee works

for an employer who hires, supervises, and

pays assistants. An independent contractor

hires, supervises, and pays assistants under

a contract that requires him or her to

provi de materials and labor and to be

responsible only for the results.

(f) CONTINUING RELATIONSHIP: An employee

has a continuing relationship with an

employer. A continuing relationship may

exist where work is performed at frequently

recurring, although irregular intervals.

(g) SET HOURS OF WORK: An employee

usually has set hours of work established by

an employer. An independent contractor is

the master of his or her own time and works

on his own schedule.

(h) FULL - TIME OR PART - TIME WORK: An

e mployee may work either full - time or part -

time for an employer. Full - time does not

necessarily mean an 8 - hour day or a 5 or 6 -

day week. Its meanings may vary with the

intent of the parties, the nature of the

occupation and customs in the locality.

These conditions should be considered in

defining "full - time." An independent

contractor can work when and for whom he or

she chooses.

(i) WORK DONE ON PREMISES: An employee

works on the premises of an employer, or

works on a route or at a location design ated

by an employer. The performance of work on

the employer's premises is not controlling

in itself; however, it does imply that the

employer has control over the employee.

Work performed off the employer's premises

does indicate some freedom from contr ol;

however, it does not in itself mean the

worker is not an employee.

(j) ORDER OR SEQUENCE OF SERVICES: An

employee generally performs services in the

order or sequence set by an employer. This

shows that the employee is subject to

direction and co ntrol of the employer.

(k) REPORTS: An employee submits oral or

written reports to an employer. This shows

that the employee must account to the

employer for his or her actions.

(l) PAYMENTS: An employee is usually

paid by the hour, week, or mon th. An

independent contractor is paid periodically

(usually a percent of the total payment) by

the job or on a straight commission.

(m) EXPENSES: An employee's business

and/or travel expenses are paid by an

employer. This shows that the employer is

in a position to control expenses and

therefore the employee is subject to

regulations and control.

(n) TOOLS AND MATERIALS: An employee is

furnished significant tools, materials, and

other equipment by an employer. An

independent contractor usually provides his

own tools, materials, etc.

(o) INVESTMENT: An employee is usually

furnished the necessary facilities. An

independent contractor has a significant

investment in the facilities he or she uses

in performing services for someone else.

(p) PROFIT OR LOSS: An employee performs

the services for an agreed upon wage and is

not in a position to realize a profit or

suffer a loss as a result of his services.

An independent contractor can make a profit

or suffer loss. Profit or loss implies the

use of capital by the individual in an

independent business of his own.

(q) WORKS FOR MORE THAN ONE PERSON OR

FIRM: An employee usually works for one

organization. However, a person may work

for a number of people or organizations and

still be an em ployee of one or all of them.

An independent contractor provides his or

her services to two or more unrelated

persons or firms at the same time.

(r) OFFERS SERVICES TO GENERAL PUBLIC:

An independent contractor makes his or her

services available to t he general public.

This can be done in a number of ways:

Having his/her own office and assistants,

hanging out a "shingle", holding business

licenses, having listings in business

directors and telephone directories, and

advertising in newspapers, trade j ournals,

etc.

(s) RIGHT TO TERMINATE EMPLOYMENT: An

employee can be fired by an employer. An

independent contractor cannot be fired so

long as he or she produces a result that

meets the specifications of the contract.

An independent contractor can b e terminated

but usually he will be entitled to damages

for expenses incurred, lost profit, etc.

(t) RIGHT TO QUIT: An employee can quit

his or her job at any time without incurring

liability. An independent contractor

usually agrees to complete a sp ecific job

and is responsible for its satisfactory

completion, or is legally obligated to make

good for failure to complete it.

33. Applying Rule 60S - 6.001(33)(a), (b), (e), (g), (h),

(i), (j), (k)(1), (n), (o), (q), (r) and (t), of the above

criteria to the Findings of Fact hereinabove, it is evident that

Petitioner is not an "employee" of the City, and the City is not

his "employer."

34. First, regarding subsection (a) of the rule -- the City

cannot instruct Petitioner on where and how to practice law.

Venue, for example, is determined by statute, not the City. The

City can only instruct him on the legal problem -- leaving the

legalities necessary to resolve the problem to his independent

professional expertise.

35. Second, regarding subsection (c) -- Peti tioner's legal

training, skills, and legal expertise were gained as a result of

law school, and his legal experiences were acquired prior to

being appointed part - time city attorney.

36. Third, regarding subsection (e) -- Petitioner hires,

supervises, and pa ys his law firm's administrative assistants,

the City provides him only with City letterhead for

correspondence.

37. Fourth, regarding subsection (g) -- Petitioner manages

and bills his own time. Dividing his time and his billing for

servicing other clien ts and for servicing the City evidences

that Petitioner is the master of his own schedule, subject only

to judicial rules and constraints.

38. Fifth, regarding subsection (h) -- Petitioner can work

for whom he chooses and when he chooses from among his gene ral

public clients -- with the City having priority only on his

presence during their twice a month meetings. Petitioner can

choose what legal action to file first, when to file, how to

prepare, how to proceed, and how to resolve each legal matter

submitted for his attention.

39. Sixth, regarding subsection (i) -- Petitioner does a

majority, if not all, of his legal preparation work off the

City's premises in his office at Steven A. Ramunni, P.A.

40. Seventh, regarding subsection (j) -- the City cannot

order t he sequence of legal functions before the courts,

notwithstanding counsel who is representing the City.

41. Eighth, regarding subsection (l) -- Petitioner is paid a

monthly retainer for a specific function - attending meetings. He

is paid periodically, usual ly at the conclusion, for all other

legal work determined by the City Council to be performed.

42. Ninth, regarding subsections (n) and (o) -- Petitioner

provides his own legal tools and materials and has a significant

investment in the facilities of his la w firm, all of which he

uses to perform legal services for the City and for his general

public clients.

43. Tenth, regarding subsection (q) -- Petitioner provides

his legal services to the City. He provides his legal services

to more than two general publi c persons or firms, who are not

related to each other nor related to the City, at the same time.

44. Eleventh, regarding subsection (r) -- Petitioner makes

his services available to the general public by means of

advertisement in the phone book.

45. Twelft h, regarding subsection (t) - - although

Petitioner can quit his part - time city attorney position at any

time without incurring liability, he is, however, professionally

obligated to complete the City's ongoing legal matters entrusted

in his care and/or effe ctuate a transfer of unfinished legal

matters to another attorney, only with the advice and consent of

the City Council or by order of the courts.

46. Based upon the Findings of Fact and the Conclusions of

Law herein above, Petitioner has failed to carry the burden of

proof and demonstrate by a preponderance of evidence that the

City is his "employer" and that he, as the part - time city

attorney performing only professional legal services to the

City, a retainer client, as the City's "employee." The evide nce

demonstrated that Petitioner's professional legal relationship

with the City is that of an "independent contractor" as defined

by applicable elements of Rule 60S - 6.001(33), Florida

Administrative Code.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department of Management Services,

Division of Retirement, enter a final order denying Petitioner's

request to participate in the Florida Retirement System from

November 25, 1986, through the present.

DONE AND ENTERED this 3rd day of September, 2003, in

Tallahassee, Leon County, Florida.

S

FRED L. BUCKINE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahass ee, 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 3rd day of September, 2003.

COPIES FURNISHED :

Steven A. Ramunni, Esquire

Post Office Box 1118

LaBelle, Florida 33975

Thomas E. Wright, Esquire

Department of Management Services

Division of Retirement

4050 Esplanade Way, Suite 260

Tallahassee, Florida 32399 - 0950

Erin Sjostrom, Director

Division of Retirement

Department of Managem ent Services

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399 - 1560

Monesia Taylor Brown, Acting General Counsel

Department of Management Services

4050 Esplanade Way

Tallahassee, Florida 32399 - 1560

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.