STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SAMUEL E. WHITENER, )

)

Petitioner, )

)

vs. ) CASE NO. 91-5410F

)

DEPARTMENT OF PROFESSIONAL )

REGULATION, CONSTRUCTION )

INDUSTRY LICENSING BOARD, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a formal hearing in the above- styled case on November 5, 1991, at Tampa, Florida.

APPEARANCES

For Petitioner: Brian A. Burden, Esquire

Post Office Box 2893 Tampa, Florida 33601

For Respondent: Wellington H. Meffert, II, Esquire

Department of Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792 STATEMENT OF THE ISSUES

Whether Petitioner is entitled to attorney's fees and costs as prevailing party in DOAH Case No. 90-5657.

PRELIMINARY STATEMENT

By Petition For Reimbursement Of Attorney's Fees And Costs dated August 26, 1991, Samuel E. Whitener, Petitioner, seeks reimbursement of $2047.47 for attorney's fees and costs incurred in connection with defending the Administrative Complaint filed against him by the Department of Professional Regulation, Construction Industry Licensing Board, Respondent, in DOAH Case No. 90-5657. As grounds therefor, it is alleged that Petitioner was the prevailing party in the proceeding, that he qualifies as a small business party, and the actions of the Department in filing the Administrative Complaint were not substantially justified. The Petitioner was forwarded to the Division of Administrative Hearings, and these proceedings followed.

At the commencement of these proceedings, the parties stipulated that Petitioner was the prevailing party in the earlier proceeding, that the amount claimed is reasonable, that Petitioner qualifies as a small business party as

defined in Section 57.111(3)(d), Florida Statutes, and that no special circumstances exist which would make the award unjust. Thus, the sole issue to be determined in these proceedings is whether the actions of the Department in initiating the initial proceeding was substantially justified.

At the hearing, Petitioner testified in his own behalf, Respondent called two witnesses, and two exhibits were admitted into evidence. Proposed findings submitted by the parties are accepted. Those proposed findings not included herein were deemed unnecessary to the conclusions reached.

After having considered the stipulations and all evidence produced, I make the following.

FINDINGS OF FACT

1. In late 1988, information was received by Department of Professional Regulation (DPR) investigators that a Georgia licensed contractor was building Shoney's restaurants in Florida with a permit pulled in the name of a deceased Florida licensed contractor, Donald Loftin.

   
   

2. The contractor, Quality Construction Builders, Inc., owned by Fred Pringle, was not licensed in Florida. Prior to 1986, Pringle had worked for a restaurant management services who had built several Shoney's restaurants in Florida and Georgia. Pringle, in 1980, obtained a power of attorney from Donald Loftin, a licensed Florida contractor, to pull permits under Loftin's license. Loftin died in December 1981, but Pringle renewed Loftin's license once or twice after Loftin's death and pulled construction permits under this license.

   
   

3. An extensive investigation was commenced with particular emphasis on construction projects commenced under permits pulled with Loftin's license. Some 25 witnesses were interrogated, including contractors who had pulled permits for Shoney's restaurants on which construction had been stopped, or

   threatened with stoppage by local officials, because of the initial permit being pulled on Loftin's license.

   
   

4. One of these contractors contacted in this investigation was Samuel Whitener who had pulled a permit for a Shoney's restaurant under construction in Ellenton, Florida, on which a stop order had been issued because of the invalid permit. Other contractors who had pulled similar permits for a fee were questioned as were numerous subcontractors, the superintendent for Quality Construction Builders, Inc., and officials of Restaurant Management Services.

   
   

5. When the restaurant at Ellenton was approximately 80 percent completed, the local construction authorities stopped work on the project because of the invalid permit which had been pulled using Loftin's license.

   
   

6. After the stop order was issued, Restaurant Management Services (RMS), an arm of Shoney's restaurants, entered into a contract with Petitioner herein to complete the project for which Petitioner was paid $4000. When questioned by DPR investigators regarding this function, Petitioner acknowledged that he was paid $4000, that the subcontractors working on the restaurant continued on the job, that these subcontractors were paid by RMS, that he could not hire or fire the subcontractors, and the construction was supervised by Shoney's general contractor, Quality Construction Builders, who had built several other Shoney's restaurants in Florida.

7. Petitioner further told, or led the investigators to conclude, that he had no responsibility for the ongoing construction and that he visited the site once or twice per week; and that the superintendent was primarily in charge of the construction.

   
   

8. Other Florida contractors who had also pulled permits for Shoney's restaurants admitted that, although they had pulled the permits, they did not hire, fire, or pay subcontractors and that they performed little, if any, supervision of the construction.

   
   

9. Based on this information, the investigator concluded that Petitioner and other contractors were aiding and abetting an unlicensed contractor to do contracting in this State, and submitted this investigative report recommending that Petitioner be charged with violation of Section 489.129(1)(e) and (f), Florida Statutes.

   
   

10. The investigative file, which also included a copy of the Construction Management Services contract between Whitener and RMS, was forwarded to the Probable Cause Panel with recommendation that probable cause for a violation of the Construction Industry License Law be found.

    
    

11. This contract contains six specific management services which Whitener would supply on the Ellenton project. The contract did not provide that Whitener would obtain the building permit, gave Whitener no control over the financial aspects of the construction, provided for RMS to pay all subcontractors, and did not provide for Whitener to be the qualifying contractor for RMS or Quality Construction.

    
    

12. After reviewing the investigation file, including the management services contract, the Probable Cause Panel found probable cause that Whitener violated Section 489.129(1)(e) and (f), Florida Statutes.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

    
    

    Section 57.111(4)(a), Florida Statutes, provides:

    
    

    Unless otherwise provided by law, an award of attorney fees and costs shall be made to a prevailing small business party in any adjudicatory proceeding or administra- tive proceeding pursuant to chapter 120 initiated by a state agency, unless the actions of the state agency were sub- stantially justified or special circum- stances exist which would make the award unjust.

    
    

14. By virtue of the parties' stipulation, the only issue here remaining is whether the actions of the Department in prosecuting the administrative complaint were substantially justified. Section 57.111(3)(e), Florida Statutes, provides:

    A proceeding is "substantially justified" if it had a reasonable basis in law and fact at the time it was initiated.

    
    

15. These proceedings were initiated by the Probable Cause Panel finding cause to file the administrative complaint. It is at this time, as compared to some later date, that substantial justification must be found. Union Trucking Inc. v. Dept. of Transportation, 10 F.A.L.R. 6039 (1988).

    
    

16. In these proceedings, the agency has the burden of proving its actions were substantially justified. The standard of proof here required is less strict than the " . . . complete absence of justiciable issue of either law or fact" standard found in Section 57.105, and is more restrictive than an automatic award of fees to every prevailing small business party. Alario v. Dept. of Professional Regulation, Division of Real Estate, 10 F.A.L.R. 2134 (1988).

    
    

17. Federal Law defining the standard is persuasive. Gentele v. Dept. of Professional Regulation, Board of Optometry, 513 So.2d 572 (Fla. 1st DCA 1987). In discussing the meaning of the term "substantially justified" the court in Ashburn v. United States, 740 F.2d 843 (11th Cir. 1984), said:

    
    

    The government bears the burden of showing that its position was sub- stantially justified. The standard is one of reasonableness; the govern- ment must show "that its case had a reasonable basis both in law and in fact." The fact that the government lost its case does not raise a pre-

    sumption that the government's position was not substantially justified. Nor is the government required to establish that its decision to litigate was based

    on a substantial probability of prevail- ing. (citation omitted)

    
    

18. It is the evidence deemed available at the time the charges were preferred in DOAH Case No. 90-5657 which is determinative of the substantial justification for the charges--not the evidence presented at the hearing.

    
    

19. The material presented to the Probable Cause Panel included evidence that several contractors, including Whitener, had pulled permits for buildings (principally restaurants) contracted for in the name of Qualify Construction Builders, a Georgia company controlled by Fred Pringle who is not licensed in Florida; that Pringle paid these contractors approximately $2000 to pull the permits; that generally these Florida contractors had no authority over the subcontractors employed by Quality Construction Builders; could not hire or fire these subcontractors; and had no responsibility for the supervision of the construction. These acts constitute a prima facie case of aiding and abetting an unlicensed contractor to do business in Florida, an act proscribed by Section 389.129(1)(e) and (f), Florida Statutes.

    
    

20. Section 489.119, Florida Statutes, provides that a contractor qualifying a construction business be

    . . . legally qualified to act for the business organization in all matters connected with its contracting business and that he has authority to supervision construction undertaken by such business organization.

    
    

21. A business organization may only engage in contracting in Florida if a licensed contractor qualifies the company. Gatwood v. McGee, 475 So.2d 720 (Fla. 1st DCA 1985). As stated in Gatwood, supra,

    
    

    Under Part I, Chapter 489, Florida Statutes (1979), the licensing and regulatory provi- sions governing construction contracting, the only way a company may be a contractor is by obtaining an individual licensed as a contractor as its qualifying agent.

    
    

22. Since the permit can be issued only to a licensed contractor, the statutory scheme and legislative intent is to allow a company to act as a contractor only through a licensed contractor to insure that projects undertaken by a company are to be supervised by one certified and licensed by the Board.

    To allow a contractor to be the "qualifying agent" for a company without placing any requirements on the contractor to exercise any supervision over the work done under his license would permit a contractor to loan or rent his license.

    Alles v. Dept. of Professional Regulation, Construction Industry Licensing Board, 423 So.2d 624 (Fla. 5th DCA 1982).

    
    

23. Whitener's statement to the investigators regarding his lack of supervisory responsibility for the Shoney's Restaurant at Ellenton confirmed the investigator's conclusion that Whitener's primary, if not sole, responsibility was the pulling of permit for a fee. These were the facts presented to the Probable Cause Panel and constitute probable cause for the filing of the administrative complaint.

    
    

24. The fact that, at the hearing, Whitener presented credible evidence that he did take a responsible role supervising the construction of the Ellenton restaurant and, therefore, was not guilty of aiding and abetting an unlicensed contractor, is immaterial to whether the Department was substantially justified in bringing the charges.

    
    

25. From the foregoing, it is concluded that the Department was substantially justified in bringing the charges of aiding and abetting an unlicensed contractor against Whitener and, therefore, Whitener is not entitled to attorney's fees and costs. It is therefore,

ORDERED that the Petition of Samuel E. Whitener for attorney's fees and costs as a small business prevailing party in DOAH Case No. 90-5657 be denied.

DONE and ORDERED this 10th day of December, 1991, in Tallahassee, Florida.

K. N. AYERS 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 10th day of December, 1991

COPIES FURNISHED:

Brian A. Burden, Esquire Post Office Box 2893 Tampa, FL 33601

Wellington H. Meffert, II, Esquire Department of Professional Regulation 1940 North Monroe Street

Tallahassee, FL 32399-0792

Daniel O'Brien Executive Director

Construction Industry Licensing Board Post Office Box 2

Jacksonville, FL 32202

George Stuart Secretary

Department of Professional Regulation

Northwood Centre

1940 North Monroe Street Suite 60

Tallahassee, FL 32399-0792

Jack McRay General Counsel

Department of Professional Regulation

Northwood Centre

1940 North Monroe Street Suite 60

Tallahassee, FL 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: 91-005410F

Orders for Case No: 91-005410F