Florida Bridge Co. v. Bevis, 52341

• Decision Date: 05 October 1978
• Docket Number: No. 52341,52341
• Parties: FLORIDA BRIDGE COMPANY, Petitioner, v. William H. BEVIS, Paula F. Hawkins, and William T. Mayo, as and constituting the Florida Public Service Commission, Respondents.
• Court: Florida Supreme Court

Page 799

363 So.2d 799

FLORIDA BRIDGE COMPANY, Petitioner, v. William H. BEVIS, Paula F. Hawkins, and William T. Mayo, as and constituting the Florida Public Service Commission, Respondents.

No. 52341.

Supreme Court of Florida.

Oct. 5, 1978.

Peter J. Winders and James W. Ault of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, Tampa, for petitioner.

Prentice P. Pruitt, Legal Director, and Norman H. Horton, Jr., Staff Counsel, Tallahassee, for Florida Public Service Commission, respondents.

ENGLAND, Chief Justice.

Section 347.08, Florida Statutes (1975), authorizes the Public Service Commission to fix and regulate the tolls and charges of any toll bridge in the State of Florida. Florida Bridge owns the bridge and causeway in Charlotte County running between Placida and Gasparilla Island across Gasparilla Sound. Following an investigation of the earnings, rates and charges of Florida Bridge, the Commission ordered a reduction in the rates which the company charges bridge users. The company has asked us to review the Commission's order, alleging several defects.

1. President's salary. Florida Bridge's president is paid an annual salary of $25,000 and, in addition, receives a $7,000 expense account for time spent in the home office of the company in Venice, Florida. The Commission determined that the president was in his office only 142 days out of approximately 250 working days during the 1974 test year, and on that basis disallowed 108/250Ths of the president's combined compensation of $32,000. The Commission's justification for reducing the salary allowance is the absence of evidence to establish that the president acted as chief officer of the company on a full-time basis during the days he was away from the home office.

The Commission's action was arbitrary and constitutes a substantial departure from the essential requirements of law. The record reflects no evidence that the company president rendered services for any business other than Florida Bridge while not present in the company's home office, nor is there evidence to suggest that the president's duties were confined to those which he could perform while sitting at his desk in the home office. Indeed, the Commission has made no attempt to determine whether the president's compensation is excessive in view of the services he provides. The arbitrary ratio by which the Commission reduced the salary and expense account the ratio of days physically absent from the home office to the total number of workdays in the test year has no support in logic, precedent, or policy. Metropolitan Dade County Water & Sewer Board v. Community Utilities Corp., 200 So.2d 831 (Fla. 3d DCA 1967). As to this expense item, the Commission's order is reversed.

2. Non-recurring legal fees. The Commission identified a $5,014.93 legal expense paid in the test year for a challenge to the tax valuation of company property in Charlotte County, and it directed that the fee be spread over five years. By capitalizing and prorating the fee, only $1,002.93 was included as an expense in the test year.

We have held that the Commission has discretion in rate-making proceedings to remove from a test year computation items which are non-recurring in nature. Gulf Power Co. v. Bevis, 289 So.2d 401 (Fla.1974). Rather than entirely removing Florida Bridge's tax litigation expense from the test year, the Commission, in effect, deleted from the test year those legal expenses which exceeded the average legal fees for a period of five years. Such treatment of legal fees is clearly within the Commission's authority. See Westwood Lake, Inc. v. Metropolitan Dade County Water & Sewer Board, 203 So.2d 363 (Fla. 3d DCA 1967).

3. Maintenance expense. The Commission found that maintenance expenses incurred during the 1974 test year were extraordinary and should be allocated over a five-year period rather than all to a single year. Florida Bridge complains that the Commission failed to consider supportive evidence, tendered after the hearing was over but before the Commission's final decision, showing that the maintenance expenses were not extraordinary. We have previously held that the Commission has discretion to terminate its data-gathering function, ¹ and we find no abuse of that discretion here. The reports which Florida Bridge tendered to the Commission after the hearing were newly prepared and had not been subjected to examination by the Commission and its staff, cross-examination or other evidentiary evaluation.

Florida Bridge also contends that the Commission improperly determined that test-year maintenance expenses were extraordinarily high. On this point, there was conflicting evidence before the Commission. It is within the Commission's authority to evaluate conflicting testimony and accord to each opinion whatever weight it deems appropriate. United Telephone Co. v. Mayo, 345 So.2d 648, 654 (Fla.1977). Consequently, the Commission did not depart from the essential requirements of law in spreading extraordinary maintenance expenses over more than one year for rate-making purposes.

4. Capitalized franchise valuation. In 1968 petitioner recorded on its books an intangible asset entitled "unpaid franchise valuation" in the amount of $657,700. This amount represents losses sustained by the predecessor of Florida Bridge. A witness for Florida Bridge testified that $657,700 was the actual cost of securing...