03-002966 Gina M. Layden vs. Department Of Education Status: Closed Recommended Order on Monday, October 13, 2003.

Summary: Respondent entitled to full amount of lottery prize Petitioner claimed on behalf of her "Lotto pool," where her indebtedness to Respondent exceeded the amount of prize.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GINA M. LAYDEN, )

)

Petitioner, )

)

vs. ) Case No. 03 - 2966

)

DEPARTMENT OF EDUCATION, )

)

Respondent. )

_________________________________)

RECOMMENDED ORDER

Pursuant to notice, a hearing was conducted in this case

pursuant to Sectio n 120.569, Florida Statutes, and Section

120.57(1), Florida Statutes, on September 22, 2003, by video

teleconference at sites in Fort Lauderdale and Tallahassee,

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

Administrative Law Judge of the Division o f Administrative

Hearings (DOAH).

APPEARANCES

For Petitioner: Gina M. Layden, pro se

10823 Cypress Glenn Drive

Coral Springs, Florida 33071

For Respondent: Jose Blas Lorenzo, Jr., Esquire

Department of Education

Office of Student Financial Assistance

1940 North Monroe Street, Suite 70

Tallahassee, Florida 32303

STATEMENT OF THE ISSUE

Whether the full amount of the lottery prize winnings

(remaining afte r deduction of federal tax withholding) that

Petitioner claimed (on behalf of herself and 13 other members of

her "Lotto pool") should be used to offset the debt Petitioner

owes the Department of Education, Office of Student Financial

Assistance.

PRELIMINA RY STATEMENT

By letter dated July 2, 2003, the Department of Education,

Office of Student Financial Assistance (OSFA) advised Petitioner

that the Florida Department of the Lottery had "transmitted

[Petitioner's] prize of $3,262.00" to OSFA after being noti fied

by OSFA that Petitioner owed OSFA $12,389.88, and that OSFA

"plan[ned] to apply the total amount of [Petitioner's] $3,262.00

prize to this unpaid claim." In a letter dated July 21, 2003,

Petitioner requested a hearing on OSFA's announced intention to

take such action. The matter was referred to DOAH on August 15,

2003.

As noted above, the final hearing in this case was held on

September 22, 2003. Petitioner was the only witness to testify

at the hearing. In addition to Petitioner's testimony, nin e

exhibits (Respondent's Exhibits 1 through 9) were offered and

received into evidence.

October 10, 2003, was established as the deadline for the

filing of proposed recommended orders. On October 10, 2003,

OSFA filed a proposed recommended order, which the undersigned

has carefully considered. Petitioner has not filed any post -

hearing submittal. 1

FINDINGS OF FACT

Based upon the evidence adduced at hearing, and the record

as a whole, including the factual stipulations of the parties, 2

the following find ings of fact are made:

1. Petitioner is in default on three student loans that

OSFA, as guarantor, purchased (upon Petitioner's default) from

the lender on December 27, 2001, and continues to hold.

2. As of September 10, 2003, Petitioner owed OSFA

$12,50 3.79 on these defaulted loans.

3. In May of 2003, Petitioner participated in a "Lotto

pool" with 13 other individuals. Pool members agreed to

contribute equally to the purchase of Florida lottery tickets

and to share equally in any winnings. Petitioner was assigned

the task of purchasing the tickets on behalf of the pool.

4. One of the tickets Petitioner purchased was a winner

(having five of the six selected numbers). The amount of the

prize, after making an appropriate deduction for federal income

ta x withholding, was $3,262.00.

5. On behalf of the pool, Petitioner submitted the winning

ticket, with her name on it, to the Florida Department of the

Lottery to claim the prize. At the request of the Florida

Department of the Lottery, she completed an Internal Revenue

Service (IRS) Form 5754. On the form, among other things, she

identified the others in the pool with whom she intended to

share the proceeds of the prize.

6. On May 27, 2003, Olga Roca, a Program Specialist with

OSFA, sent the following letter to the Florida Department of the

Lottery:

I hereby certify that the above referenced

person [Petitioner] has an outstanding

defaulted student[] loan. Under terms of §

24.115, F.S, I am requesting that lottery

prize money won by that person be

trans mitted to the Florida Department of

Education to be credited toward that debt.

The balance due including interest accrued

as of 6/11/03 totals $12,389.88.

7. By letter dated June 2, 2003, the Florida Department of

the Lottery advised Petitioner that, "[ p]ursuant to Section

24.115(4), Florida Statutes, [it had] disbursed [her] winnings

according to [Ms. Roca's May 27, 2003, letter]."

8. A month later, on July 2, 2003, OSFA sent Petitioner a

letter informing her that it "plan[ned] to apply the total

amoun t of [her] $3,262.00 prize to [her] unpaid claim." 3 It is

this proposed agency action which is the subject of the instant

controversy.

CONCLUSIONS OF LAW

9. DOAH has jurisdiction over the subject matter of this

proceeding and of the parties hereto.

10. Petitioner does not dispute OSFA's claim that she is

in default on three student loans held by OSFA and, as a result,

owes OSFA in excess of $12,000.00.

11. She disagrees with OSFA, however, that the entire

amount of the prize she claimed on behalf of th e pool should be

used to offset this indebtedness. It is her position that only

her share of the prize (1/14 of $3,262.00 or $233.00) is subject

to such offset and that the remainder of the proceeds should go

to the 13 other members of the pool in equal s hares. 4

12. The law does not support Petitioner's position.

13. Section 24.115, which is part of the Florida Public

Education Lottery Act, 5 addresses the subject of the "[p]ayment

of [lottery] prizes." It provides, in pertinent part, as

follows:

(1) Th e department [of the lottery] shall

promulgate rules to establish a system of

verifying the validity of tickets claimed to

win prizes and to effect payment of such

prizes; . . .

* * *

(4) It is the responsibility of the

appropr iate state agency . . . to identify

to the department [of the lottery], in the

form and format prescribed by the department

[of the lottery], persons owing an

outstanding debt to any state

agency . . . . Prior to the payment of a

prize of $600 or more to any claimant having

such an outstanding obligation, the

department [of the lottery] shall transmit

the amount of the debt to the agency

claiming the debt and shall authorize

payment of the balance to the prize winner

after deduction of the debt. . . .

14 . Exercising the rulemaking authority granted it by the

Legislature, the Florida Department of the Lottery adopted an

emergency rule, Rule 53ER02 - 61, Florida Administrative Code,

describing the "[p]rocedures for [a]warding [p]rizes." The

rule, which has been in effect since November 15, 2002,

provides, in pertinent part, as follows:

Procedures for Awarding Prizes

* * *

(7) Regardless of how many persons or

entities claim an ownership interest in a

winning ticket, payment will be made to only

one person or entity.

(8) The person to whom payment will be made

for winning tickets submitted to the Lottery

shall be determined as follows:

(a) If only one name appears on the back of

the ticket, payment will be made to that

person o r entity.

* * *

(i) Any claimant of a prize of $600 or

more, and any person whose name appears on

an Internal Revenue Service (IRS) Form 5754

filed by a claimant whose portion of the

prize is $600 or more, will be compared to

t he State Owed Debt system. All persons

ultimately entitled to receive Florida

Lottery winnings from a claim valued at $600

or more filed by a legal entity, other than

a corporation whose shares are publicly

traded, will be compared to the State Owed

Debt system. If such claimant or other

person is identified as owing an outstanding

debt to a state agency . . . as provided in

subsection 24.115(4), Florida Statutes,

following deduction of federal tax

withholding, the remaining prize amount will

be allocated as follows:

1. If the debt is owed by the claimant,

notwithstanding taxability interests set

forth on an IRS Form 5754, an amount

sufficient to cover the amount owed, up to

the total remaining prize amount, will be

transferred to the state agency owed t he

debt. Any monies remaining after federal

tax withholding and after collection of the

debt will be paid to the claimant and

reported as taxable as directed in the IRS

Form 5754.

2. If the debt is of a person whose name

appears on an IRS Form 5754 and subparagraph

1. is inapplicable, or who is entitled to

receive Lottery winnings claimed by a legal

entity, an amount sufficient to cover the

person's debt, but not to exceed his or her

percentage interest in the prize or entity,

will be transferred to the state agency owed

the debt. The monies remaining will be paid

to the claimant on the ticket.

15. "As a part of playing Lotto, [Petitioner] by contract

agreed to [and is therefore bound by] these announced

[procedures]" set forth in Rule 53ER02 - 61, Flori da

Administrative Code. Miller v. State, Department of Lottery ,

638 So. 2d 172 (Fla. 1st DCA 1994).

16. Inasmuch as Petitioner is the "claimant," as that term

is used is Rule 53ER02 - 61, Florida Administrative Code, and the

amount she owes OSFA exceeds th e prize winnings remaining

" following deduction of federal tax withholding," Subsection

(8)(i) of Rule 53ER02 - 61 requires that OSFA receive (and apply

as an offset against her indebtedness) the entire amount of

these remaining winnings, notwithstanding tha t, under

Petitioner's agreement with the other members of the pool, she

was to receive only 1/14 of any prize winnings, with the rest of

the proceeds to be distributed equally among the other 13 pool

members. 6

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that OSFA take the action proposed in its

July 2, 2003, letter to Petitioner.

DONE AND ENTERED this 13th day of October, 2003, in

Tallahassee, Leon County, Florida.

S

___________________________________

STUART M. LERNER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

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 13th day of October, 2003.

ENDNOTES

1/ All citations are to Florida Statutes (2003) unless

otherwise ind icated.

2/ At the outset of the final hearing, Petitioner stated that

she did not dispute any of the assertions made in the Statement

of Facts contained in OSFA's Response to Order [of] Pre - Hearing

Instructions. The undersigned has accepted these undisp uted

factual assertions as true and accurate. See Gunn Plumbing,

Inc. v. The Dania Bank , 252 So. 2d 1, 4 (Fla. 1971)("A

stipulation properly entered into and relating to a matter upon

which is appropriate to stipulate is binding upon the parties

and the C ourt."); Johnson v. Johnson , 663 So. 2d 663, 665 (Fla.

2d DCA 1995)("[T]o foster the legal policy of encouraging

stipulations to minimize litigation and expedite resolution of

disputes, the law provides that '(s)uch stipulations should be

enforced if enter ed into with good faith and not obtained by

fraud, misrepresentation, or mistake, and not against public

policy.'"); EGYB, Inc. v. First Union National Bank of Florida ,

630 So. 2d 1216, 1217 (Fla. 5th DCA 1994)("Unless grounds for

recission or withdrawal a re shown, the trial court is bound to

strictly enforce the agreement between the parties."); and

Robertson v. Robertson , 106 So. 2d 590, 593 (Fla. 2d DCA

1958)("It is undisputed that a court must accept as true facts

which are undisputed . . . .")."

3/ P etitioner has already paid the other pool members (from the

proceeds of a loan she obtained) the amount they each would

receive if OSFA did not take this proposed agency action.

4/ OSFA has not challenged, and therefore the undersigned has

not addressed, Petitioner's standing to make this argument. Cf.

Krivanek v. Take Back Tampa Political Committee , 625 So. 2d 840,

842 (Fla. 1993)("With regard to the first issue, we find that

Krivanek has waived the right to raise the issue of standing

because this issu e has been raised for the first time in her

petition to this Court. The issue of standing should have been

raised as an affirmative defense before the trial court, and

Krivanek's failure to do so constitutes a waiver of that

defense, precluding her from r aising that issue now.").

5/ See Section 24.101 (" This act may be cited as the "Florida

Public Education Lottery Act.").

6/ Had a pool member not " owing an outstanding debt to any

state agency or owing child support collected through a court"

claimed t he prize winnings for the pool instead of Petitioner,

OSFA would not have been entitled to receive, as an offset

against Petitioner's indebtedness, any portion of the prize

winnings since Petitioner's share of the winnings would be less

than $600.00.

COPIES FURNISHED :

Gina M. Layden

10823 Cypress Glen Drive

Coral Springs, Florida 33071

Jose Blas Lorenzo, Jr., Esquire

Departme nt of Education

Office of Student Financial Assistance

1940 North Monroe Street, Suite 70

Tallahassee, Florida 32303

Honorable Jim Horne

Commissioner of Education

Turlington Building, Suite 1514

325 West Gaines Street

Tallahassee, Florida 32399 - 0400

Daniel J. Woodring, General Counsel

Department of Education

1244 Turlington Building

325 West Gaines Street

Tallahassee, Florida 32399 - 0400

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.