STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

THOMAS E. KEHOE, d/b/a )

KEHOE ON THE BAY, )

)

Petitioner, )

)

vs. ) CASE NO. 90-3236F

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

FINAL ORDER

Pursuant to written Notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Daniel Manry, held a formal hearing in the above-styled case on September 14, 1990, in Miami, Florida.

APPEARANCES

For Petitioner: F. William Harvey, Esquire

Sherman and Fischman, P.A.

3050 Biscayne Boulevard, Suite 600

Miami, Florida 33137

For Respondent: Leonard T. Helfand, Esquire

Licensure and Certification Department of Health and

Rehabilitative Services

401 Northwest 2nd Avenue North Tower, Room 526 Miami, Florida 33128

STATEMENT OF THE ISSUES

The ultimate issue for determination in this proceeding is whether Respondent is entitled to fees and cost pursuant to the Florida Equal Access to Justice Act promulgated in Section 57.111, Florida Statutes.

PRELIMINARY STATEMENT

Petitioner filed a motion for attorney's fees and costs with the Division of Administrative Hearings (the "Division") on May 24, 1990. The matter was assigned to Hearing Officer Dorsey on May 31, 1990, and scheduled for formal hearing on September 5, 1990, pursuant to a Notice of Hearing issued on June 21, 1990. The matter was rescheduled for September 14, 1991, pursuant to an Order Resetting Hearing issued on August 27, 1990, and transferred to the undersigned prior to the date of the formal hearing.

At the formal hearing, the parties stipulated to the amount and reasonableness of the fees and costs requested by Petitioner. Respondent disputed the issues of whether Petitioner was the prevailing party, whether Petitioner was a small business, and whether Respondent was substantially justified in bringing the prior action for which Petitioner seeks fees and costs under Section 57.111, Florida Statutes.

A transcript of the formal hearing was not requested by either party. The parties were granted more than 30 days to file proposed findings of fact and conclusions of law. Petitioner timely filed his proposed findings of fact and conclusions of law on October 22, 1990. Respondent filed its proposed findings of fact and conclusions of law on October 12, 1990. The parties proposed findings of fact are addressed in the Appendix to this Final Order.

FINDINGS OF FACT

1. Petitioner seeks reimbursement of fees and costs paid to defend an administrative proceeding conducted by former Hearing Officer Jane Hayman in Case Number 89-3883, Division of Administrative Hearings (the "Division"). Respondent sought fines against Kehoe on the Bay, a licensed Adult Congregate Living Facility, for four alleged deficiencies determined to have existed during a follow up visit to an annual survey of the facility.

   
   

2. The four allegations of deficiencies were: (a) one smoke detector did not work; (b) the facility had failed to document that the fire alarm system had been tested; (c) the facility failed to document that the smoke detectors had been tested; and (d) seven doors did not close properly in violation of fire safety requirements. At the outset of the formal hearing, Respondent voluntarily dismissed the allegation concerning the faulty smoke detector and proceeded on the remaining three allegations.

   
   

3. Respondent prevailed in the Final Order with respect to two of the three allegations at issue. The Final Order reversed findings of fact in the Recommended Order with respect to two of the allegations. The Final Order found that the facility had failed to document that the smoke detectors had been tested, and that seven of the doors did not close properly. The Final Order sustained the findings in the Recommended Order that the facility had documented the testing of the fire alarm system. No penalty was imposed in the Final Order due to mitigating circumstances proved at the formal hearing. Petitioner did not appeal the Final Order, and the time for seeking judicial review of the Final Order has expired.

   
   

4. Petitioner's fees and costs are not allocated or apportioned among the four original allegations in Case Number 89-3883. The affidavit of counsel for Petitioner contains 39 entries for fees and costs totalling $4,729.49. Additional fees in the amount of $705 and costs in the amount of $225 were incurred by Petitioner through the date of the formal hearing in this proceeding. The total amount of fees and costs stipulated to by the parties is

   $5,002.50. There is no evidence, however, of what proportion of those fees and costs are attributable to either the single allegation in Case Number 89-3883 with respect to which Petitioner prevailed or the allegation voluntarily dismissed by Respondent.

5. Petitioner has 30 employees at all the five facilities owned and operated by Petitioner in Florida. Petitioner owns and operates five facilities. Two are Dade County facilities, two are Department of Health and Rehabilitative Services facilities, and one is a veteran's administration facility. Petitioner has reported no profit on his facilities for seven years.

   
   

6. The administrative proceeding brought by Respondent in Case Number 89- 3883 had a reasonable basis in law and fact at the time it was initiated by Respondent. That proceeding was based upon an annual survey and follow up visit conducted by one of Respondent's inspectors in the ordinary course of business, and the credibility assessment of the testimony of Respondent's inspector. Respondent's inspector had been inspecting similar facilities since 1986. Prior to that, the inspector inspected homes for the elderly in New York for approximately 23 years. The assessment of the inspector's testimony regarding the results of the annual survey and follow up visit was not so unclear that no general counsel would have prosecuted the case, and it was not unreasonable for Respondent to do so.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this proceeding. Section 57.111(4)(d), Florida Statutes. The parties were duly noticed for the formal hearing.

   
   

8. Petitioner has the burden of proof to show by a preponderance of the evidence that Petitioner is a small business party and that Petitioner prevailed in the earlier administrative proceeding. If Petitioner meets its burden of proof, the burden of proof is on Respondent to show by a preponderance of evidence that it was substantially justified in prosecuting the administrative complaint. Department of Professional Regulation, Division of Real Estate v. Toledo Realty, Inc., 549 So.2d 715 (Fla. 1st DCA 1989).

   
   

9. Petitioner failed to show by a preponderance of the evidence that Petitioner is a small business party. Section 57.111(3)(d), Florida Statutes, 1/ in relevant part, defines a small business party as either a sole proprietor, partnership, or corporation which has no more than 25 employees at the time that Case Number 89-3883 was initiated by Respondent. Petitioner testified that he owns and operates five facilities in Florida employing 30 people.

   
   

10. Petitioner failed to show by a preponderance of the evidence that Petitioner was the prevailing party in Case Number 89-3883. One of the original four allegations against Petitioner was voluntary dismissed by Respondent. Petitioner prevailed in the Recommended Order with respect to all three of the allegations at issue. However, Petitioner prevailed in the Final Order with respect to only one of those allegations. Section 57.111(3)(c), Florida Statutes, further defines a prevailing party as one against whom the state agency has sought a voluntary dismissal of its complaint. A prevailing party is not defined as one against whom the state agency has sought a voluntary dismissal of only one of four counts in its complaint. Assuming arguendo that Petitioner prevailed in two of the original four allegations against him, there was no evidence to support an allocation of fees and costs among the four allegations.

11. Respondent showed by a preponderance of the evidence that it was substantially justified in initiating Case Number 89-3883. Section 57.111(3)(e), in relevant part, provides that Respondent is substantially justified if it had a reasonable basis in law and fact at the time it initiated the proceeding against Petitioner. Respondent brought the proceeding in Case Number 89-3883 on the basis of information gained in the regular course of an inspection conducted by one of Respondent's inspectors. Respondent's assessment of the credibility of the testimony of its inspector was not so unclear that no general counsel would have initiated the proceeding, and it was not unreasonable for Respondent's counsel to do so. Therefore, Respondent had a reasonable basis in law and fact to initiate the proceeding in Case Number 89-3883. Gentele, O.D., v. Department of Professional Regulation, Board of Optometry, 513 So.2d 672 (Fla. 1st DCA 1987).

CONCLUSION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is ordered that Petitioner's motion for attorney's fees and costs is DENIED.

DONE AND ORDERED in Tallahassee, Leon County, Florida, this 5th day of April, 1991.

DANIEL MANRY

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 5th day of April, 1991.

ENDNOTE

1/ All statutory references are to Florida Statutes (1989) unless provided otherwise.

APPENDIX TO FINAL ORDER, CASE NO. 90-3236F

Petitioner submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.

Petitioner's Proposed Findings of Fact

Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection

1. Accepted in Finding 1

2. Accepted in Finding 2

3. Accepted in Findings 2

4. Rejected as irrelevant and immaterial

5. Accepted in Finding 3

Respondent submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.

Respondent's Proposed Findings of Fact

Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection

Rejected in part as irrelevant and immaterial

5 Rejected as irrelevant and immaterial

6-7 Rejected as irrelevant and immaterial

COPIES FURNISHED:

Leonard T. Helfand, Esquire Licensure and Certification Department of Health and

Rehabilitative Services North Tower, Room 526

401 N.W. 2nd Avenue Miami, Florida 33128

Sam Power, Agency Clerk Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Linda K. Harris, Esquire Acting General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, FL 32399-0700

F. William Harvey, Esq. Sherman and Fischman, P.A.

3050 Biscayne Boulevard, Suite 600

Miami, Florida 33137

Docket for Case No: 90-003236F

Orders for Case No: 90-003236F