BEFORE THE

STATE OF FLORIDA

COMMISSION ON ETHICS

 

 

In re IRVING ELLSWORTH,          )

                                                            )                                               Complaint No. 02-108

            Respondent.                             )                                               DOAH Case No. 04-0701EC

                                                            )                                               COE Final Order No. 06-024

______________________________)

 

 

FINAL ORDER

 

 

This matter comes before the Commission on Ethics, meeting in public session on April 21, 2006, pursuant to the Recommended Order of the Division of Administrative Hearings' Administrative Law Judge rendered in this matter on January 11, 2006.  The Recommended Order (a copy of which is attached and incorporated herein by reference), recommends that the Commission enter a final order finding that Irving Ellsworth violated Section 112.3143(3)(a), Florida Statutes, and that a public censure and reprimand and a civil penalty of $5,000 be imposed.

BACKGROUND

This matter began with the filing of an ethics complaint in 2002 alleging that the Respondent, Irving Ellsworth, as a member of the Treasure Island City Commission violated Section 112.3143(3)(a), Florida Statutes, by voting in his official capacity on Resolution 02-48 and the resulting ordinance.  The allegations were found to be legally sufficient and Commission staff undertook a preliminary investigation to aid in the determination of probable cause.  On July 29, 2003, the Commission on Ethics issued an order finding probable cause to believe the Respondent had violated Section 112.3143(3)(a), Florida Statutes, by voting in his official capacity on Resolution 02-48 and the resulting ordinance.  The matter was then forwarded to the Division of Administrative Hearings (DOAH) for assignment of an Administrative Law Judge (ALJ) to conduct the formal hearing and prepare a recommended order.  Prior to the hearing the Advocate (representing the Commission on Ethics) and the Respondent submitted a joint prehearing stipulation containing a number of stipulations of fact and law.  A formal evidentiary hearing was held before the ALJ on December 1, 2005 and January 18, 2006.  A transcript was filed with the ALJ and the Advocate and the Respondent timely filed proposed recommended orders.  The ALJ's Recommended Order was transmitted to the Commission, the Respondent, and the Advocate on January 12, 2006, and the parties were notified of their right to file exceptions to the Recommended Order.  Thereafter, the Respondent filed Exceptions to the ALJ's Recommended Order and the Advocate filed a Response to the Respondent's Exceptions. 

Having reviewed the Recommended Order, the record of the proceedings, and Respondent’s Exceptions, the Commission makes the following findings, conclusions, rulings and determinations:

STANDARDS FOR REVIEW

            Under Section 120.57(1)(l), Florida Statutes, an agency may not reject or modify findings of fact made by the ALJ unless a review of the entire record demonstrates that the findings were not based on competent, substantial evidence or that the proceedings on which the findings were based did not comply with the essential requirements of law.  See, e.g., Freeze v. Dept. of Business Regulation, 556 So.2d 1204 (Fla. 5th DCA 1990); and Florida Department of Corrections v. Bradley, 510 So.2d 1122 (Fla. 1st DCA 1987).  Competent, substantial evidence has been defined by the Florida Supreme Court as such evidence as is "sufficiently relevant and material that a reasonable mind would accept it as adequate to support the conclusions reached."  DeGroot v. Sheffield, 95 So.2d 912, 916 (Fla. 1957).

            The agency may not reweigh the evidence, resolve conflicts therein, or judge the credibility of witnesses, because those are matters within the sole province of the ALJ.  Heifetz v. Dept. of Business Regulation, 475 So.2d 1277, 1281 (Fla. 1st DCA 1985).  Consequently, if the record of the DOAH proceedings discloses any competent, substantial evidence to support a finding of fact made by the ALJ, the Commission is bound by that finding.

            Under Section 120.57(1)(l), Florida Statutes, an agency may reject or modify the conclusions of law over which it has substantive jurisdiction and interpretation of administrative rules over which it has substantive jurisdiction.  When rejecting or modifying such conclusions of law or interpretations of administrative rules, the agency must state with particularity its reasons for rejecting or modifying such conclusions of law or interpretations of administrative rules and must make a finding that its substituted conclusion of law or interpretation of administrative rule is as or more reasonable than that which was rejected or modified.  An agency may accept the recommended penalty in a recommended order, but may not reduce or increase it without a review of the complete record and without stating with particularity its reasons therefore in the order, by citing to the record in justifying the action.      

RULINGS ON EXCEPTIONS

Exception 1

The Respondent's first exception speaks to a Finding of Fact in paragraph 10 of the Recommended Order that on May 21, 2002, the Respondent voted "in favor of passing proposed modifications to the City's LDR's" and argues that there is no competent substantial evidence in the record to support the finding.  As this fact was specifically stipulated to by the Respondent in the Joint Prehearing Stipulation, in item 4, Section E, headed "Facts Which are Admitted and Will Require no Proof at Hearing" this exception is denied. 

Exception 2

The Respondent's second exception is to the Finding of Fact in paragraph 11 of the Recommended Order that a May 28, 2002 vote to refer Resolution 02-48 to the Planning and Zoning  Board "was a required step in the process of adopting the amendments to the LDR's."  The stated ground for the exception is that the finding is not supported by competent substantial evidence.  That is not the case; the finding is supported by the testimony at the hearing. Transcript of Hearing December 1, 2004, Vol. II, p. 231; Transcript of Hearing January 18, 2005, p. 157.

The Respondent argues that the referral of the Resolution to the Planning and Zoning Board was, of itself, was no guarantee of any ultimate outcome.  While this is true as far as it goes, it misses the point that in a multi-stage process, the first step is as important as the last.  More important, to take the view that because no ultimate outcome was assured meant the initial step was not mandatory would be to reweigh the evidence, something we are not at liberty to do here.  The exception is therefore denied.

Exception 3

The Respondent's third exception speaks to an "implicit" finding by the ALJ that the commercial general (CG) zoning classification was included in the proposed changes to the LDR's voted on by the City Commission on October 8 and 22, 2002.  Section 120.57(1)(k), Florida Statutes, states in relevant part that, "[a]n agency need not rule on an exception that does not clearly identify the disputed portion of the recommended order by page number or paragraph . . . ."  As no particular finding is disputed here, we need not rule on this exception.

It should nevertheless be pointed out that CG property was affected by the October 8 and 22, 2002 votes.  Changes in regulations pertaining to CG property in the initial draft were listed by the ALJ in paragraph 12 of the Recommended Order, a paragraph the Respondent does not challenge.  Those changes included permitting mixed uses, permitting density/intensity averaging under certain circumstances, and a height incentive plan.  At the October 8 meeting, the City Commission removed CG property from the height incentive plan, and the ALJ acknowledges this in Findings of Fact 15 and 16.  But as the ALJ recognizes in paragraph 45, the other amendments remained intact. 

The Respondent suggests that because the height incentives for CG were removed from the draft at the October 8 meeting there was no special private gain or loss to CG property as a result of either that vote or the October 22 vote on the final draft.  This assertion ignores two facts: first, that the removal of CG from the height incentives was itself a loss to CG property, and second, that the remaining provisions affecting CG stayed in the ordinance.[1]

Exception 4

The Respondent's fourth exception goes to paragraph 30 of the Recommended Order, in which, the Respondent argues, the ALJ found "in effect" that the Respondent was employed by Agnes Rice, and "suggest[ed]" that Ms. Rice was a principal by whom the Respondent was retained, or the parent organization or subsidiary of a corporate principal by which the Respondent was retained.  The Respondent argues that such inferences were not based on competent, substantial evidence but, significantly, does not argue that any part of the finding itself is not based on competent, substantial evidence. 

The finding of fact summarizes a matter which would seem to be undisputed in this case: that the Respondent saw himself, at least up until the time of the hearing, as being employed by Agnes Rice.  The thrust of the Respondent's argument is that the Respondent's view of his relationship with Ms. Rice is irrelevant and in any case subordinate to evidence that he was employed by a corporation having a separate legal identity from Ms. Rice, notwithstanding that she was the corporation's sole owner.  Along these same lines, the Respondent excepts to paragraphs 22, 23, 24, 26, and 27, (which discuss Ms. Rice's ownership interest in various parcels and the effect the LDR changes would have on those properties) "to the extent that properties personally owned by Ms. Rice are not applicable to this case."

Disagreement as to the relevance of a finding of fact is not a proper ground for exception; even were we to concur with the Respondent, we could not reject a finding of fact on that basis.  The Respondent does not contend that any of the enumerated Findings of Fact are not based on competent, substantial evidence, and the exception is therefore denied.

Exception 5

In his fifth exception, the Respondent contests the ALJ's conclusions of law in paragraphs 41 and 44, contending that the ALJ "concluded as a matter of law that Agnes Rice was a principal by whom Mr. Ellsworth was retained."  Again, this is not a statement made by the ALJ, but rather an inference drawn by the Respondent.  Paragraph 41 observes that the Respondent viewed himself as being in Ms. Rice's employ at the time of the votes; paragraph 44 discusses the benefit to John's Pass Marina, Inc., and its owner, Agnes Rice, as a result of the votes.  The paragraphs are part of a reasoned analysis and we find no basis on which to reject them.

Moreover, to the extent that the Recommended Order can be read as reaching an alternative finding that Ms. Rice was the Respondent's "principal," such finding is supported by competent, substantial evidence.  Ms. Rice owned and controlled the corporate entities through which the Respondent was paid, and was an active participant in the assignment of his responsibilities.  As her son testified, "On a day-to-day basis, my mom tells everybody what to do."  Transcript of Hearing, January 18, 2005, p. 75.

The Respondent is correct that this Commission has generally recognized the separate identity of corporate entities from their owners or officers.  However, we have also been quite clear that we would not "slavishly adhere" to that model, which evolved in the context of business and tort law, when it defeats the very aim of the voting conflicts statute: that a local public officer is not to vote on measures regarding which his objectivity is compromised or questioned due to his private, economic connections.  For example, in CEO 03-13 we found a voting conflict of interest would be created were a city council member to vote on measures concerning expansion of a medical center owned by a corporation that was owned by another corporation which owned yet another corporation which owned still another corporation which employed the member.  In In re James Gordon, 13 FALR 1864 (Ethics Commission 1990), affirmed in part, reversed in part on other grounds, 609 So. 2d 125 (Fla. 4^th DCA 1992) we found that a City Council member had a prohibited contractual relationship under Section 112.313(7), Florida Statutes, where his consulting company performed services for Waste Management while that entity was regulated by the City.  Gordon argued that it was not he, but a separate corporate entity (his consulting company) which was doing business with Waste Management.  We rejected the argument in part because the evidence showed that Waste Management sought Gordon's services specifically; Gordon simply directed that the payments for those services be made to his company.  The fact that the payment mechanism called for the funds to go through a separate entity did not, in our view, exempt the relationship from Section 112.313(7).  Similarly, it is evident here that Agnes Rice was the Respondent's employer—she just paid him through the mechanism of a corporate account.[2]  Thus, to the extent the Recommended Order can be read as finding that Ms. Rice was the Respondent's principal, such finding is not inaccurate.

Exception 6

The Respondent's sixth exception speaks to paragraphs 44 and 45 of the Recommended Order, in which the ALJ analyzes the gain to John's Pass Marina, Inc., and to Agnes Rice as a result of the votes on the Resolution and Ordinance. 

The thrust of the Respondent's argument is that the property owned by John's Pass Marina, Inc., was so small a part of the class of properties affected by the LDR amendments that the gain or loss could not be described as "special." 

In paragraph 44, the ALJ points out that the percentage of property owned by John's Pass Marina in the affected land use categories is 1.18%, a fact which the Respondent does not dispute.  Instead, he asserts that 1.18% is not a sufficient interest to trigger the application of the statute. 

The Respondent correctly points out that we have used a "size of the class" test[3] in determining whether a gain is "special" and have found that a percentage of 1.2% was too small to constitute a "special" gain.  CEO 00-13.  But his argument overlooks the fact that the statute establishes no hard and fast percentage threshold.  The "size of the class" test is a tool developed by the Commission to aide in the analysis of voting conflicts, which are addressed on a case-by-case basis, based on all the known facts and circumstances.  It is not an arbitrary boundary separating legal behavior from illegal on the basis of a tenth of a percentage point.

More significantly though, while the ALJ labels this finding a "conclusion of law" the determination of whether the benefit to John's Pass Marina, Inc., was "special" is in truth an ultimate finding of fact, as it reflects that the ALJ was persuaded by the evidence that the benefit was sufficiently substantial to be deemed "special."  A finding of fact, whether labeled as such or denominated a "conclusion of law," cannot be reversed by this Commission absent a review of the complete record and a statement that the finding was not based upon competent substantial evidence or that the proceedings on which the findings were based did not comply with essential requirements of law.  Goin v. Commission on Ethics, 658 So. 2d 1131 (Fla. 1^st DCA 1995). 

As there is competent, substantial evidence in the record to support the finding, the exception is denied.

Exception 7

The Respondent, in his seventh exception, disputes the ALJ's conclusion in paragraphs 46-48 that the vote of May 28, 2002, which referred the proposed LDR amendments to the Planning and Zoning Board for review, was not procedural or preliminary.  Again, this is in essence a finding of fact, and is supported by record evidence[4] that the move was a first step –and a necessary one—in a lengthy process.  As in Exception 2, the Respondent here attempts to have us reweigh the evidence to reach a different conclusion, something we cannot do. 

In addition, we point out that in stating that the Commission has taken a "recognized position that procedural and preliminary votes do not fall within the ambit of Section 112.3143(3), Fla. Stat.," the Respondent overstates our pronouncements on this issue. 

Of the more than 200 opinions dealing with voting conflict issues, only a handful speak to this issue.  In CEO 78-74, where a school board member voted to remove from the board's consent agenda a school audit report critical of the transfer of a certificate of deposit to a bank of which said board member was a stockholder and director, and further voted to defer acceptance of the report pending a reexamination of the interest rate paid by the bank, we found no voting conflict was created because there was no gain on anyone's part as a result of either vote.  In CEO 83-50, where a metropolitan planning organization member voted to amend a motion concerning the scheduling of the extension of a road, where part of property he owned would have to be acquired as right-of-way for the proposed road, we found that no voting conflict would be created on grounds that the amendment of the motion was merely preliminary or procedural, and did not result in any benefit to the official. 

In 1990, Chavez v. City of Tampa, 560 So. 2d. 1214 (Fla. 2^nd DCA) was decided.  Chavez dealt with an award of attorney's fees for a public official who had successfully defended against an allegation of voting conflict.  In the underlying case, Chavez had petitioned the City Council on which she served for an alcoholic beverage zoning classification.  A necessary first step in obtaining the classification was a vote by the City Council to refer her petition to the legal department to draft an ordinance.  Chavez abstained, but the motion died on a tie vote, meaning the petition was denied and could not be resubmitted for 12 months.  At that point Chavez decided to vote to break the tie and send the petition to the legal department.  The court observed that the vote was critical to Chavez' application going forward, that her decision to break the impasse was calculated to move the matter toward its ultimate successful conclusion, and that this was exactly the type of situation the legislature intended to address with the conflict statute.

The Respondent is correct in asserting that the court's statements in Chavez were dicta, but its reasoning was sound and has subsequently been cited by this Commission.  For example, in CEO 93-10, we found that a member of a town council involved in a real property ownership dispute between the town and private property owners (including herself) was prohibited by Section 112.3143(3)(a), from voting on whether to procure a survey for use in the property dispute resolution, because dispute resolution measures to come before the town council would be effectively killed absent a survey.  In CEO 94-10, an opinion ignored by the Respondent, we recognized that "certain measures are merely 'preliminary and procedural' measures and, as such, do not trigger a voting conflict" but cautioned "also be advised that any measure that is essential to keeping a project or matter alive is not merely preliminary or procedural." (emphasis supplied.)

The opinion relied on by the Respondent, CEO 79-76, contains only a general observation that "if the measure pending before the official's public body is merely procedural in nature, for example, and would not result of itself in gain or loss to the official's employer, no memorandum of voting conflict need be filed."  It does not suggest, nor have we ever suggested, that a vote which is necessary to advance an issue could be considered "preliminary or procedural."

This exception is denied.

Exception 8

The Respondent's eighth exception attacks the ALJ's failure to find that any benefit from the votes was too remote and speculative to constitute a special private gain.  The exception does not identify any disputed portion of the recommended order by page number or paragraph, and therefore we are not required to rule on it.  Section 120.57(1)(k), Florida Statutes. 

The exception is denied.

Exception 9 (Recommended Penalty)

The Respondent's ninth exception goes to the recommended penalty.  The Respondent contends that rather than the recommended penalty of $5,000 and public censure and reprimand, no penalty should be imposed.  Each of the reasons he offers is essentially a restatement of arguments made in his Exceptions.  As we have not granted any of the Exceptions, we decline to amend the recommended penalty. 

FINDINGS OF FACT

            The Findings of Fact as set forth in the Recommended Order are approved, adopted, and incorporated herein by reference.

CONCLUSIONS OF LAW

            1.         The Conclusions of Law as set forth in the Recommended Order are approved, adopted, and incorporated herein by reference.

            2.         Accordingly, the Commission on Ethics concludes that the Respondent, as a member of the Treasure Island City Commission violated Section 112.3143(3)(a), Florida Statutes, by voting in his official capacity on Resolution 02-48 and the resulting ordinance.

RECOMMENDED PENALTY

            The ALJ's recommendation of a public censure and reprimand and a civil penalty in the amount of $5,000 for the Respondent's violation on Section 112.3143(3)(a), Florida Statutes, is accepted.

            In consideration of the foregoing and pursuant to Sections 112.317 and 112.324, Florida Statutes, the Commission recommends that the Governor issue a public censure and reprimand and impose a civil penalty of $5,000 upon the Respondent IRVING ELLSWORTH.

DONE and ORDERED by the State of Florida Commission on Ethics meeting in public session on Friday, April 21, 2006.

 

                                                                        _______________________________

                                                                        Date Rendered

 

 

                                                                        _______________________________

                                                                        Thomas P. Scarritt, Jr.

                                                                        Chair

 

  THIS ORDER CONSTITUTES FINAL AGENCY ACTION. ANY PARTY WHO IS ADVERSELY AFFECTED BY THIS ORDER HAS THE RIGHT TO SEEK JUDICIAL REVIEW UNDER SECTION 120.68, FLORIDA STATUTES, BY FILING A NOTICE OF ADMINISTRATIVE APPEAL PURSUANT TO RULE 9.110 FLORIDA RULES OF APPELLATE PROCEDURE, WITH THE CLERK OF THE COMMISSION ON ETHICS, 3600 Maclay Boulevard South, Suite 201, P.O. DRAWER 15709, TALLAHASSEE, FLORIDA 32317-5709; AND BY FILING A COPY OF THE NOTICE OF APPEAL ATTACHED TO WHICH IS A CONFORMED COPY OF THE ORDER DESIGNATED IN THE NOTICE OF APPEAL ACCOMPANIED BY THE APPLICABLE FILING FEES WITH THE APPROPRIATE DISTRICT COURT OF APPEAL. THE NOTICE OF ADMINISTRATIVE APPEAL MUST BE FILED WITHIN 30 DAYS OF THE DATE THIS ORDER IS RENDERED.

 

 

cc:        Mr. Mark Herron, Attorney for Respondent Irving Ellsworth

            Mr. James H. Peterson, III, Commission Advocate

            Mr. Kenneth Weiss, Attorney for Complainants

            The Honorable Susan B. Harrell, Administrative Law Judge

                        Division of Administrative Hearings