21-000905 Department Of Highway Safety And Motor Vehicles vs. Perotte Driving And Traffic School, Inc. Status: Closed Recommended Order on Friday, October 22, 2021.

Summary: Respondent failed to comply with the provisions of the contract. Termination of the contract is recommended.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

D EPARTMENT OF H IGHWAY S AFETY A ND

M OTOR V EHICLES ,

Petitioner ,

vs. Case No. 21 - 0905

P EROTTE D RIVING A ND T RAFFIC S CHOOL ,

I NC . ,

Respondent .

/

R ECOMMENDED O RDER

Administrative Law Judge (ÑALJÒ) Brittany O. Finkbeiner conducted the

final hearing in this case for the Division of Administra tive Hearings

(ÑDOAHÒ) on September 2 , 202 1 , by Zoom conference.

A PPEARANCES

For Pe titioner: Elana J. Jones, Esquire

Roberto R. Castillo, Esquire

Department of Highway Safety

and Motor Vehicles

Room A - 432

2900 Apalachee Parkway

Tallahassee, Florida 32399

For Respondent: Matthew E. Ladd, Esquire

Matthew E . Ladd P . A .

Suite 301

4649 Ponce De Leon Boulevard

Coral Gables, Florida 33146

S TATEMENT OF T HE I SSUE

The issue to be determined in this case is whether the Dep artment of

Highway Safety and Motor Vehicles (ÑPetitionerÒ) may properly terminate its

contract with Perotte Driving and Traffic School, Inc. (ÑRespondentÒ) , on the

basis of failure to comply with the provisions of the contract, pursuant to

section 322.56( 3)(f), Florida Statutes.

P RELIMINARY S TATEMENT

On February 4, 2021, Petitioner issued a three - count Administrative

Complaint (ÑComplaintÒ) notifying Respondent of Ñits intent to enter a Final

Order imposing one or more of the following penalties: imposit ion of an

administrative fine, suspension or revocation of RespondentÔs license, and/or

any other relief deemed appropriate.Ò The Complaint allege s that Respondent

violated specified provisions of its contract with Petitioner as the bases for its

intended action. Respondent timely requested a hearing at DOAH on

February 19, 2021 .

The final hearing took place on September 2, 2021. At the hearing,

Petitioner offered the live testimony of William Ray Graves , Chief of the

Bureau of Motorist Compliance ; and Bea trice Dume (ÑMs. DumeÒ) ,

Regulatory Specialist . Respondent presented the live testimony of

Wilner Perotte (ÑMr. PerotteÒ) , CEO of Respondent . PetitionerÔs Exhibits 1

through 6 were admitted into evidence. RespondentÔs composite exhibits were

also entered i nto evidence. The one - volume Transcript was filed with DOAH

on September 24, 2021. Both parties filed proposed recommended orders,

which were duly considered in the preparation of this Recommended Order.

Following the final hearing, the undersigned conve ned a telephon ic

conference with the parties to discuss whether jurisdiction for this case was

proper at DOAH. Both Petitioner and Respondent agreed that jurisdiction

was proper and that the administrative case should proceed.

All references to Florida Statutes are to the 20 20 codification in effect at

the time of the matters relevant to these proceedings.

F INDINGS OF F ACT

1. Petitioner is the State agency authorized to enter into contract s with

driving schools to administer driving and skills portions of examination s for

driver licenses , pursuant to section 322.56 . Petitioner regulates third - party

administrators for compliance with contract provisions in furtherance of

PetitionerÔs mission to ensure safe roads in the State of Florida.

2. Section 322.56 authorizes Petitioner to contract with private sector

entities to conduct services in the same manner Petitioner conducts services

at both its driver license offices and tax collector offices.

3. Respondent is a t hird - p arty a dministrator under contract wit h

Petitioner to conduct Class E Knowledge Examinations for State of Florida

driver licenses.

4. Ms. Dume is employed as a Regulatory Program Specialist for

Petitioner. Her duties include visiting third - party administrators and

monitoring their activities t o ensure that they are abiding by the terms of

their contract s with Petitioner.

Assistance by Misrepresentation

5. On October 8, 2020, Ms. Dume was present at RespondentÔs school

conducting an on - site inspection. She left at 5:45 p.m., having been informe d

by Mr. Perotte that the school closed at 6:00 p.m.

6. Ms. Dume returned to continue her inspection on October 9, 2020,

arriving at 10:20 a.m. She monitored the school from the parking lot before

entering at 11:20 a.m. Then, Ms. Dume observed Mr. Perotte entering

information into his computer showing that a student had completed the

four - hour Traffic Law Substance Abuse Education course (ÑTLSAEÒ). The

TLSAE is a requirement to earn a Florida driver license. The course must be

taken in one consecutive four - hour period. Ms. Dume obtained the certificate

for TLSAE course completion for the student, which reflected a completion

date of October 9, 2020. However, based on Ms. DumeÔs credible testimony, it

would have been impossible for the student to have comple ted the four - hour

TLSAE course on the date that Mr. Perotte entered into the computer

because Ms. Dume was present up until 15 minutes prior to the school closing

and did not observe the student taking the course. Mr. PerotteÔs claim that

the student took the course after Ms. Dume left was not credible. His

credibility was further diminished by his inconsistent and illogical testimony

that he entered the erroneous date of course completion by mistake.

7. Although it was established that the same student d id complete the

TLSAE in 2013 , that fact is immaterial to Mr. PerotteÔs clear

misrepresentation of the course completion date.

Ensuring Only Applicants Allowed in Examination Area

8 . During Ms. DumeÔs on - site inspection on October 8, 2020, she observed

a n applicant inside the testing room taking the knowledge exam with an

instructor also inside the testing room .

9 . The instructor explained to Ms. Dume that she was inside the testing

room to have the applicant sign paperwork , but Ms. Dume believed that the

reason was pretextual based on her observations.

10 . On October 14, 2020, during another on - site inspection of Respondent,

Ms. Dume observed Mr. Perotte inside the testing room standing over a

customer who was sitting down taking the knowledge exam.

11 . Mr. Perotte testified that he was inside the testing room while a test

was in progress to fix a technical issue with the computer . H e also testified,

however, that in the event of a technical issue, he would ask the examinee to

exit the testing room while a staff member addressed the issue. Mr. PerotteÔs

testimony was unconvincing and inconsistent.

Allowing the Department to Conduct Random In s pections

12 . Ms. Dume testified that for each of her on - site inspections that are

relevant to this proceeding, on October 8, 9, and 14, 2020, she entered

RespondentÔs facility through an unlocked door.

13 . During her October 14, 2020, inspection, Ms. Dume observed that

there were a number of customers present when she arrived at 12:30 p.m. A

few minutes later, all o f the customers were gone, and Mr. Perotte stopped

others from entering the school. Ms. Dume believed that the customers were

discouraged by Mr. Perotte from patronizing the school while Ms. Dume was

present. Ms. Dume left around 2:30 p.m., due to the scho ol being empty. The

reasons why customers may have left or decided not to enter the school in

Ms. DumeÔs presence were based on assumptions and were not conclusively

established.

C ONCLUSIONS OF L AW

14 . DOAH has jurisdiction over the parties to and the su bject matter of

this proceeding. § 120.569 and 120.57(1), Fla. Stat. Contract disputes are

traditionally settled in the civil courts with state agencies being treated the

same as any other cont r acting party . Vincent J. Fasano, Inc. , v. Sch. Bd. of

Palm Bch . Cnty , 436 So. 2d 201, 202 - 03 (Fla. 4th DCA 1983).

Section 120.57(1) , Florida Statutes, however, provides for a full evidentiary

hearing before an ALJ when an agencyÔs determination affects a partyÔs

substantial interests. See Diaz v. AHCA , 65 So. 3d 78, 82 (Fla. 3d DCA 2011).

A party does not have a substantial interest where a contract is terminable at

will by the agency. Id. In the present case, Petitioner has the right to take

adverse action with respect to the contract at issue only if the third - party

administrator Ñfails to comply with any terms of the contract.Ò § 322.56 (1)(f) ,

Fla. Stat. Thus, Respondent has a substantial interest in its entitlement to

continued participation as a third - party administrator if it comp lies with the

terms of the contract.

15 . Petitioner has the burden to prove the allegations in the

Administrative Complaint by clear and convincing evidence. See DepÔt of

Banking & Fin. v. Osborne Stern & Co ., 670 So. 2d 932 (Fla. 1996); Ferris v.

Turling ton , 510 So. 2d 292 (Fla. 1987).

16 . Clear and convincing evidence Ñrequires more proof than a

Ópreponderance of the evidenceÔ but less than Óbeyond and to the exclusion of a

reasonable doubt.ÔÒ In re Graziano , 696 So. 2d 744, 753 (Fla. 1997). As stated

by the Florida Supreme Court:

Clear and convincing evidence requires that the

evidence must be found to be credible; the facts to

which the witnesses testify must be distinctly

remembered; the testimony must be precise and

lacking in confusion as to the fact s in issue. The

evidence must be of such a weight that it produces

in the mind of the trier of fact a firm belief or

conviction, without hesitancy, as to the truth of the

allegations sought to be established.

In re Davey , 645 So. 2d 398, 404 (Fla. 1994) ( quoting Slomowitz v. Walker ,

429 So. 2d 797, 800 (Fla. 4th DCA 1983)). ÑAlthough this standard of proof

may be met where the evidence is in conflict, it seems to preclude evidence

that is ambiguous.Ò Westinghouse Elec. Corp. v. Shuler Bros . , 590 So. 2d 986 ,

98 8 (Fla. 1st DCA 1991).

17 . Section 322.56(3)(f) mandates that contracts between Petitioner and

third - party administrators include a provision as follows:

Reserve to the department the right to take prompt

and appropriate action against a third party th at

fails to comply with state or federal standards for a

driver license examination or that fails to comply

with any terms of the contract.

18 . Accordingly, the contract between Petitioner and Respondent states,

in pertinent part, at Section VIII, paragra ph A.:

The Department reserves the right to terminate

this agreement upon determining the Third Party

Administrator or Third Party Examiner in the

employ of a Third Party Administrator fails to

comply with the terms of the contract È

Count I

19 . Count I o f t he Administrative Complaint charges Respondent with

failing to comply with Section VIII, paragraph A., 2 . of the contract, which

requires :

A dminister ing Class E Knowledge Exams honestly

and without false statement, without obtaining or

assisting a perso n in obtaining any driver license

through fraudulent means or by misrepresentation,

to include falsification of course completions that

are required to obtain or reinstate driver license

privilege.

20 . Petitioner proved, by clear and convincing evidence, that Respondent

violated the contract by assisting a person in obtaining a driver license

through misrepresentation to include falsification of course completion.

2 1 . Ms. DumeÔs observations with respect to Mr. PerotteÔs

misrepresentation of a studentÔs TLSAE completion were credible and

distinctly remembered. Mr. Perotte admitted that he entered a completion

date that he knew was false, although he said that he somehow entered the

date by mistake. The contract, however, does not contemplate any exception s

for misrepresentations made by mistake.

Count II

2 2 . Count II of t he Complaint charges Respondent with failing to comply

with Section III, paragraph G ., 2. and 4. of the contract, which respectively

state :

The Third Party Administrator must ensure that

the examination area is free from distractions or

interference that would affect the examining ability

of any applicant.

The Third Party Administrator must ensure that

only the actual examining applicants are allowed in

the examination area.

2 3 . Petit ioner proved, by clear and convincing evidence, that Respondent

violated the contract by failing to ensure that only examining applicants were

allowed in the examination area.

2 4 . The unrefuted evidence shows that persons other than examining

applicant s were inside the examination area on two separate occasions. The

only dispute is as to why those persons were inside examination area.

2 5 . Even if Mr. PerotteÔs version of events were credible Ð that he was

inside the testing room on October 14, 2020, with a n applicant actively taking

a test to fix a technical issue Ð it would not change the fact that he violated

the plain language of the contract. The contract clearly states that

Respondent is required to Ñensure that only the actual examining applicants

are a llowed in the examination area.Ò The contract does not contain an

exception for technical issues, or for any other reason. By the same logic, the

reason for an instructor being inside the testing room with an applicant on

October 8, 2020, is immaterial.

C ount III

2 6 . Count I of t he Complaint charges Respondent with failing to comply

with Section V, paragraph I., 1., b., of the contract, which states :

Statutory requirements of the Third Party

Administrator:

Requirements of Section 322.56, Florida Statutes :

Allow the Department, or its representative, to

conduct random examinations, inspections, and

audits without prior notice.

2 7 . Petitioner did not prove, by clear and convincing evidence, that

Respondent failed to allow random examinations, inspections, and audits. To

the contrary, Ms. Dume testified that she entered the school on each visit

without incident. PetitionerÔs allegation that customers were turned away to

intentionally impede inspection is entirely speculative.

Conclusion

2 8 . Petitioner prov ed Counts I and II of the Complaint by clear and

convincing evidence. Petitioner did not meet its burden to prove Count III.

Termination of the contract, however, is within PetitionerÔs discretion based

on failure to comply with Ñ any terms Ò of the contract under s ection

322.56(3)(f). Further, the contract, by its own terms, contemplates possible

termination if the third - party administrator Ñfails to comply with the terms of

the contract.Ò

R ECOMMENDATION

Based on the foregoing Findings of Fact and Conclusio ns of Law, it is

R ECOMMENDED that Respondent be found in violation of the contract, as

alleged in the Complaint, and that the contract be terminated.

D ONE A ND E NTERED this 2 2nd day of October , 2021 , in Tallahassee, Leon

County, Florida.

S

B RITTANY O. F I NKBEINER

Administrative Law Judge

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 2 2nd day of October , 2021 .

C OPIES F URNISHED :

Elana J. Jon es, Esquire Christie S. Utt, General Couns el

Department of Highway Safety Department of Highway Safety

and Motor Vehicles and Motor Vehicles

Room A - 432 Neil Kirkman Building, Room A - 432

2900 Apalachee Parkway 2900 Apalachee Parkway

Tallahassee, Florida 32399 Tallahassee, Florida 32399 - 050 0

Joseph R. Gillespie, Agency Clerk Matthew E. Ladd, Esquire

Department of Highway Safety Matthew E . Ladd P . A .

and Motor Vehicles Suite 301

Neil Kirkman Building, Room A - 432, MS02 4649 Ponce De Leon Boulevard

2900 Ap alachee Parkway Coral Gables, Florida 3314 6

Tallahassee, Florida 32399 - 0504

Terry L. Rhodes, Executive Director

Department of Highway Safety

and Motor Vehicles

Neil Kirkman Building, Room B - 443

2900 Apalachee Parkway

Tallahassee, Florida 32399 - 050 0

N OTICE OF R IGHT T O S UBMIT E XCEPTIONS

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 Orde r in this

case.