STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MALCOLM LEVIS HARDY AND ) AQUATIC REALTY, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 89-0055F

) DEPARTMENT OF PROFESSIONAL ) REGULATION, DIVISION OF ) REAL ESTATE, )

)

Respondent. )

)

FINAL ORDER

This cause arose upon a filing of an affidavit requesting attorney's fees pursuant to Section 57.111, Florida Statutes, and Rule 22I-6.035, Florida Administrative Code.

APPEARANCES

For Petitioner: John Jeffrey Whitton

Post Office Box 1956

Panama City, Florida 32402

For Respondent: John Alexander, Senior Attorney

Department of Professional Regulation 1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399-0792 STATEMENT OF THE ISSUES

The issue to be resolved involves whether the Petitioner is entitled to Attorney's Fees and costs pursuant to Section 57.111, Florida Statutes. In view of the stipulated facts, the issue remaining to be resolved concerns whether the affidavit or request for attorney's fees was timely filed within sixty days "after the date the small business party becomes a prevailing small business party."

PRELIMINARY STATEMENT

This cause arose upon the filing of a request for attorney's fees pursuant to Section 57.111, Florida Statutes, and Rule 22I-6.035, Florida Administrative Code. The petition for fees arose out of a prosecution of the petitioners for alleged violations of Chapter 475, Florida Statutes, "The Real Estate Practice Act." The Petitioners herein were totally exonerated in that proceeding by the Hearing Officer's Recommended Order, as adopted in its entirety by the agency's Final Order. Although a hearing was briefly convened, it developed that the parties had stipulated to all relevant facts and only disputed the issue of whether the request for fees was timely.

FINDINGS OF FACT

1. This cause originated in a disciplinary action resulting from an administrative complaint filed by the Department of Professional Regulation, Division of Real Estate against the Petitioners herein, Malcolm Lewis Hardy and Aquatic Realty, Inc. The Petitioners herein were the Respondents in the licensure disciplinary proceeding. That proceeding was resolved in their favor by the Recommended Order of the Hearing Officer and by the Final Order filed April 15, 1988 by the Department of Professional Regulation. They have accordingly filed a request for attorney's fees and costs on the ground that the prosecution involved in the underlying case was not "substantially justified."

   
   

2. The cause came on for a brief hearing. The parties elected to dispense with calling witnesses at the hearing because they entered into a factual stipulation whereby all germane facts were placed of record.

   
   

3. It was thus established that Petitioners Malcolm Lewis Hardy and Aquatic Realty, Inc. (hereafter Hardy) were the Respondents in a licensure disciplinary action brought against them by the above-named Respondent. That disciplinary action was resolved by Final Order filed April 15, 1988 by the Department of Professional Regulation. The Respondents in that case, the Petitioners herein, were totally absolved of any wrongdoing with regard to the charges in the administrative complaint in that proceeding.

   
   

4. A copy of that Final Order was mailed by the agency to "Diane Cleavinger, Esquire, 300 East 15th Street, Panama City, Florida 32405." Ms. Jan Nelson, a secretary at that address, and employed by Ms. Cleavinger's former law firm, received a copy of that order and executed the return receipt appearing on the envelope on April 18, 1988. Ms. Nelson was not Ms. Cleavinger's secretary, but rather the secretary of Ms. Fitzpatrick, one of Ms. Cleavinger's former law partners. In any event, Ms. Nelson executed the return receipt on April 18, 1988, but Ms. Cleavinger never received the Final Order nor notification of its filing or receipt by Ms. Nelson. Mr. Hardy never became aware of or received a copy of the Final Order either, until the agency sent another copy to him on September 12, 1988. The affidavit and request for attorney's fees was filed within sixty days of that date. Ms. Cleavinger had left her law firm on January 1, 1988 to become a Hearing Officer with the Division of Administrative Hearings. Mr. Hardy only learned of the Order when he made a direct contact with the Department of Professional Regulation and they learned that he had not received the Final Order. It was thus mailed to him on September 12, 1988 and received on September 14, 1988.

   
   

5. That Order dismissed all claims against Hardy and Aquatic Realty, Inc. and thus those parties are in fact "prevailing, small business parties," within the meaning of Section 57.111, Florida Statutes.

   
   

6. It was stipulated at hearing, as well, that these Petitioners are small business, prevailing parties and that they incurred attorney's fees in the amount of $1,642.04 for services rendered by Ms. Cleavinger when she represented them in the underlying case-in-chief and that costs amount to $333.71. Additionally, Mr. Hardy further incurred attorney's fees and costs in the amount of $500 in connection with the pursuit of this fee claim by attorney Whitton.

   It was stipulated that that amount is reasonable. Additionally, the Department accepted its burden of establishing that its action was "substantially justified," within the meaning of Section 57.111, Florida Statutes, and have

   stipulated that they have not done so. Thus the only issue for resolution concerns whether the claim of Hardy was time-barred.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction of the subject matter of and the parties to this proceeding. Sections 120.57(1), Florida Statutes, and Section 57.111, Florida Statutes.

   
   

8. Section 57.111(4)(b)2. requires that an application for award of attorney's fees be made within sixty days after the date that the small business party becomes a prevailing small business party. This provision is reiterated in Rule 22I-6.35, Florida Administrative Code.

   
   

9. The question thus becomes one of determining when the Petitioner became a "prevailing party." If the Petitioner "became" a prevailing party upon the filing of the Final Order, then the sixty day requirement expired before this attorney's fees affidavit of Petitioner was filed. On the other hand, if the Petitioner herein did not "become" a prevailing party until notice of that Final Order, then the petition for attorney's fees was timely filed since it was filed within sixty days of actual notice to the Petitioner.

   
   

10. Section 57.111(3)(c) provides that a small business party is a "prevailing small business party" when:

    
    

    1. A final judgment or order has been entered in favor of the small business party and

       such judgment or order has not been reversed on appeal or the time for seeking judicial review of the judgement or order has expired, ....

       
       

11. The statutory provisions don't answer the question presented by this case. The Department argues that the time periods involved are "jurisdictional" and thus must be strictly enforced. In support of this position the Department cites the Minkes v. Department of Professional Regulation, DOAH Case No. 89- 0792F (Recommended Order filed March 8, 1989). That Recommended Order is not applicable to this situation however, because it does not address the question of the point of commencement of the sixty day time period, when notice of prevailing party status, as a trigger for that time period, has not been given at all, as is the case herein. Instead, that order is concerned with which agency action or event starts the sixty days running, instead of a situation where the prevailing party did not even know he prevailed. That case involved the question of whether a voluntary dismissal, which the Hearing Officer ruled ended her jurisdiction, or the issuance of a closing order started the sixty days running. In that case, the filing of the voluntary dismissal by the agency of its disciplinary claim against that Respondent automatically meant that the Respondent became a prevailing party at that point. That is not the situation in the case at bar. The sixty days here could not begin running until the Final Order was entered and served upon the prevailing party. The prevailing party cannot file his claim for fees if he doesn't know that he is entitled to them. Therefore, it is illogical to think that the sixty day time for filing the fee request could begin running merely upon entry, without service, of the Final Order.

    
    

12. The Department relies on the well-known principle, by analogy, that the time period for taking an appeal of a lower tribunal's decision is not

    extended, although timely notice of the rendition of the trial court's order is not given, citing Sulliman v. Department of Professional Regulation, 474 So.2d 3 (Fla. DCA 1985). This case is not determinative, however, because, in the situation of the Appellate rules and the principle that the time period for an appeal is not tolled, even if timely notice of rendition of the lower court's order is not given, the trial court must still grant relief from judgment and thus re-trigger the thirty day appeal process, when rendition of the Final Order is not reasonably known to the party or counsel who is seeking an appeal. See Gibson v. Buice, 381 So.2d 349 (Fla. 5th DCA 1980); Spanish Oaks Condo. v.

    Compson of Florida, 453 So.2d 838 (Fla. 4th DCA 1984); and Kanecke v. Lennar Homes, Inc., 14 FLW 903 (April 11, 1989). It certainly seems logical to think that if a prevailing small business party is not made aware that he is a prevailing party, because he has not been served with the order which makes him so, then his time period for asserting a claim for attorney's fees and costs cannot begin running until he knows, by service on the party or his counsel, that he has acquired that status. To conclude otherwise would seem to flout basic principles of due process and fundamental fairness. It is true that counsel is her client's agent and notice to her would be imputed to her client by authority of Re Estate of Brugh, 306 So.2d 599 (Fla. 2nd DCA 1975), and other cases, but the fact remains that counsel did not receive notice of the Agency's order. The failure of counsel to receive notice was not shown to be due to inexcusable neglect on her part. There is no evidence, for example, concerning any failure to take appropriate steps to have mail forwarded from her former law office. Notice to a secretary not employed by counsel, when counsel is no longer practicing at the law firm involved cannot, under the circumstances, be notice to that attorney for the petitioner.

    
    

13. Further, Section 57.111(2), Florida Statutes, states that:

    
    

    The legislature finds that certain persons may be deterred from seeking review of, or defending against, unreasonable governmental action because of the expense of civil actions and administrative proceedings. Because of the greater resources of the state, the standard for an award of attorneys fees and costs against the state should be different from the standard for an award against a private litigant. The purpose of this section is to diminish the deterrent effect of seeking review of or defending against a governmental action by providing in certain situations an award of attorneys fees and costs against the state.

    
    

14. The announced purpose of this statutory provision would be frustrated by a restrictive interpretation of a time bar under the circumstances involved in this case, where the prevailing party obviously did not become aware of the Final Order rendered in his favor until September 14, 1988. That legislative purpose would be furthered by only triggering the 60 day remedy period on notification to the party of his success against the agency. The doctrine of "Equitable Tolling" is applicable to a situation such as this, where the litigant is not at fault for failing to timely pursue his remedy in the context of "Timeliness" under a literal reading of the operative statute. See Machules

    v. Department of Admin., 523 So.2d 1132 (Fla. 1988). Accordingly, it is concluded that a small business party does not "become prevailing" until such time as that party receives notice of the decision.

15. Further, it should be pointed out that the purpose of the act would also be obstructed if the Department can deny attorney's fee claims and thus put litigants to the expense and trouble of prosecuting those fee claims, even to the extent of going to hearings thereon, without those parties being able to include fees and costs incurred in prosecuting the attorney's fee claim as part of the fees and costs assessable against the agency. The statutory purpose of diminishing the deterrent effect of litigation expense on persons seeking to contest agency action would not be served if a party who undergoes expense in order to prosecute a fee claim, related to an earlier agency action against him, cannot recover the fees and costs necessary to prosecute the fee claim, wherein it is proven that the action was not substantially justified. Therefore it must be concluded that Section 57.111 contemplates the award of a reasonable attorney's fee and costs attributable to the litigation of the Section 57.111 claim.

It is, therefore,

ORDERED that the Department of Professional Regulation, Division of Real Estate pay attorney's fees and costs to Malcolm Lewis Hardy and Aquatic Realty, Inc., in the amount of $2,455.75.

DONE and ENTERED this 22nd day of September, 1989, at Tallahassee, Florida.

P. MICHAEL RUFF Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 22nd day of September, 1989.

COPIES FURNISHED:

John Jeffrey Whitton, Esquire Post Office Box 1956

Panama City, Florida 32402

John Alexander Senior Attorney

Department of Professional Regulation

Suite 60

1940 North Monroe Street Tallahassee, Florida 32399-0792

Darlene F. Keller, Director Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801

Kenneth D. Easley General Counsel

Department of Professional Regulation

Suite 60

1940 North Monroe Street Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED, TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

Docket for Case No: 89-000055F

Orders for Case No: 89-000055F