STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ROBERT R. HAMBLEY, )

)

Petitioner, )

)

vs. ) CASE NO. 91-0386F

)

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

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a final hearing in this case on February 26, 1991, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Leslie M. Conklin

LARSON CONKLIN STANLEY PROBST & BOBENHAUSEN, P.A.

16120 US Highway 19 North, Suite 210

Clearwater, Florida 34624

For Respondent: James H. Gillis, Esquire

Department of Professional Regulation Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

STATEMENT OF THE ISSUE

Whether or not Petitioner Robert R. Hambley is entitled to an award of attorney's fees pursuant to Section 57.111, Florida Statutes.

PRELIMINARY STATEMENT

Petitioner Robert R. Hambley timely filed a petition for an award of attorneys fees pursuant to Section 57.111, Florida Statutes, seeking an award of attorneys fees under the Florida Equal Access to Justice Act. As grounds therefor, Petitioner alleged that he was entitled to reasonable attorneys fees because Respondent was not substantially justified in aggravating the proposed penalty. Petitioner appealed the aggravation of penalty to the Second District Court of Appeal and the appeal resulted in a favorable decision to him.

At the hearing, Petitioner presented the testimony of Leslie M. Conklin, Esquire, as to the issue of whether Petitioner was a small business party as

defined in Section 57.111(3)(d), Florida Statutes. Respondent made oral argument but presented no live testimony.

The record consisted of Petitioner's petition and affidavit in support thereof and Respondent's answer and motion to dismiss the petition for fees and costs, and an affidavit in opposition to the petition.

No transcript was filed with the Division of Administrative Hearings.

Upon consideration of the entire record compiled herein, I hereby make the following relevant factual findings.

FINDINGS OF FACT

1. This case arises in the wake of Robert R. Hambley v. Department of Professional Regulation, DOAH Case No. 88-4788, for formal administrative proceeding stemming from a complaint filed against Petitioner on September 28, 1987.

   
   

2. On July 5, 1989, the undersigned Hearing Officer entered a Recommended Order imposing an administrative fine against the Petitioner in the amount of

   $1,000.00 and placing the Petitioner's license on probation for a period of one

   (1) year. Petitioner did not file exceptions to the subject recommended order.

   
   

3. On August 22, 1989, the Respondent, Department of Professional Regulation, Division of Real Estate, rejected the proposed order and revoked the Respondent's license.

   
   

4. Thereafter, Petitioner retained the services of the law firm of LARSON, CONKLIN, STANLEY, PROBST & BOBENHAUSEN, P.A. to represent him, which attorney's filed an appeal in the Second District Court of Appeal contesting the Division of Real Estate's Final Order, specifically the aggravation of the penalty, to wit, revocation of Petitioner's license. In connection with Petitioner's legal representation, he incurred reasonable costs and fees in the amount of $504.49 and $3,393.00, respectively.

   
   

5. On October 5, 1990, the Second District Court of Appeal entered its order affirming the findings as found by Recommended Order, but reversed and remanded for implementation of the recommended penalty of $1000.00 and rejecting the recommended penalty of probation, since that was not an authorized penalty at the time of the hearing. The basis of the Court's decision is that Respondent failed to adequately comply with Section 120.57(1)(b)(10), Florida Statutes, in order to properly increase the severity of the recommended penalty. See Bernal v. Department of Professional Regulation, 517 So.2d 113, (Fla. 3d DCA 1987), affirmed 531 So.2d 967 (Fla. 1988). Thereafter, on October 10, 1990, the Respondent filed a motion for rehearing which motion was denied on November 1, 1990. On November 11, 1990, a Mandate issued from the Second District Court of Appeal and Petitioner's license was reinstated on November 21, 1990, with Respondent issuing a Final Order rescinding its prior order of August 15, 1989, and by issuing a supplemental Final Order on December 4, 1990. That December 4, 1990, order implemented the recommended penalty with the exception of probation which was not statutorily authorized.

   
   

6. The Administrative Complaint which was filed jointly against Petitioner was a six count administrative complaint and the entity through which he dealt, Real Pro Associates, Inc. Petitioner was found guilty of participating in five transactions which conduct amounted to proscribed conduct within the purview of

   Subsection 475.25(1)(a), Florida Statutes, by paying real estate commissions totaling over $28,500.00 to Paul George, an unlicensed person. Petitioner was also found guilty of culpable negligence and breach of trust in a business transaction in violation of Subsection 475.25(1)(b), Florida Statutes, for having failed to inform or otherwise disclose to Stewart Fidelity Title Company, the company which handled the closing for the transactions, that the stated escrow deposits were never placed in an escrow account as represented in the contracts for sale and purchase which would alert the lender that the purported purchaser had a "no equity" position in the purchases. Petitioner was, via Recommended Order, required to pay an administrative fine of $1,000.00 within thirty (30) days of the entry of the Final Order. Petitioner was found guilty of all violations for which he was cited in the Administrative Complaint filed by Respondent and a monetary penalty was imposed.

   
   

7. Respondent was substantially justified in asserting that the Petitioner was in violation of the real estate licensing law when it issued the subject complaint. That proceeding was premised on a reasonable basis in law and fact when it was initiated. See Miller v. Department of Professional Regulation, Division of Real Estate, DOAH Case No. 89-5042F, 12 FALR 2312, 2314 filed 5/16/90.

   
   

8. The Florida Real Estate Commission enhanced the penalty to recommendations which were within the parameters set forth in the disciplinary guidelines of the Florida Real Estate Commission as provided for by Rule Sections 21V-24.001(2) and (3), Florida Administrative Code. The rule sections provided that the Petitioner Hambley could have been fined, for such violations, up to $1,000.00 per count and may have had all his licenses, registrations, certifications and permits penalized as follows:

   
   

   (h) 475.25(1)(b) - Up to 5 years suspension or revocation. [Emphasis supplied]

   (n) 475.25(1)(h) - Up to 2 years suspension.

   
   

9. Petitioner has not demonstrated that it was a prevailing small business party under Section 57.111, Florida Statutes. Moreover, the actions of the Florida Division of Real Estate were substantially justified as defined by Subsection 57.111(3)(e), Florida Statutes. This is borne out by the findings as found by the undersigned Hearing Officer, which provides both a reasonable basis in law and fact as well as substantial justification of the administrative action when it was initiated. Particularly, the complaint against Petitioner was reviewed by a probable cause panel on September 15, 1987. That material which was reviewed by the panel included an investigative report and documentary evidence, all of which was presented to the panel and ultimately to the undersigned Hearing Officer. Appended to the investigative report was some 30 pages of exhibits which provided an adequate basis to support the charges of culpable negligence and breach of trust in a business transaction.

   CONCLUSIONS OF LAW

   
   

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

    
    

11. Section 57.111(4)(a), Florida Statutes provides in pertinent part:

    
    

    Unless otherwise provided by law, an award of attorney's fees and costs shall be paid to a prevailing small business party in any adjudicatory proceeding or administrative proceeding, pursuant to chapter 120 initiated by a state agency, unless the actions of the agency were substantially justified or special circumstances exist which would make the award unjust.

    
    

12. In order to prevail, Petitioner must show by a preponderance of the evidence that he prevailed in the earlier disciplinary proceeding and that he was a small business party as defined by statute. See Department of Professional Regulation v. Toledo Realty, 549 So.2d 715 (Fla. 1st DCA 1989).

    
    

13. Petitioner has failed to show that he is a prevailing small business party as defined by statute.

    
    

14. Section 57.111(3)(c), Florida Statutes, provides in pertinent part:

    
    

    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 judgment or order has expired;

    2. A settlement has been obtained by the small business party which is favorable to the small business party on the majority of issues which such party raised during the course of the proceeding; or

    3. The state agency has sought a voluntary dismissal of its complaint.

       
       

15. In the case at issue, Petitioner has failed to establish that at the time the matter was initiated, the Respondent's position was not substantially justified. This is demonstrated by the documents which were presented to the probable cause panel, which recommended issuance of a complaint against the Petitioner. At the final hearing, these facts were established and a recommendation was entered finding Petitioner guilty of all violations as charged.

    
    

16. Since the actions of the Department were substantially justified at the time of the initiation of the case, the Petitioner can not prevail. The statute under which Petitioner seeks recovery does not allow for the fees which Petitioner now seeks to recover. 1/ Accordingly, Petitioner's claim must fail.

ORDER

Based on the foregoing, it is ordered that Petitioner's motion to tax costs and attorney's fees is hereby DENIED.

DONE and ENTERED this 1st day of May, 1991, in Tallahassee, Leon County, Florida.

JAMES E. BRADWELL

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 1st day of May, 1991.

ENDNOTE

1/ In certain circumstances, Petitioner arguably may have had a cause of action against the Respondent provided it wasestablished that Respondent was not substantially justified or acted in an arbitrary manner when it increased the penalty and the action for fees and costs had been made in a judicial proceeding pursuant to Section 120.57(1)(b)(10), Florida Statutes. However, that issue is not before the undersigned and therefore no ruling is made upon such a request.

COPIES FURNISHED:

Leslie M. Conklin, Esquire LARSON CONKLIN STANLEY PROBST

& BOBENHAUSEN, P.A.

16120 US Highway 19 North

Suite 210

Clearwater, Florida 34624

James H. Gillis, Esquire DPR-Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

Darlene F. Keller, Executive Director DPR - Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

Jack McRay, General Counsel Department of Professional

Regulation

Northwood Centre, 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: 91-000386F

Orders for Case No: 91-000386F