STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SILVIA S. IBANEZ, )

)

Petitioner, )

and )

) JAMES R. BREWSTER and AMERICAN ) ASSOCIATION OF ATTORNEY CERTIFIED ) PUBLIC ACCOUNTANTS, )

)

Intervenors, )

)

vs. ) CASE NO. 92-4271F

)

DEPARTMENT OF PROFESSIONAL ) REGULATION, BOARD OF ACCOUNTANCY, )

)

Respondent, )

and )

) FLORIDA INSTITUTE OF CERTIFIED ) PUBLIC ACCOUNTANTS, )

)

Intervenor. )

)

FINAL ORDER OF DISMISSAL

This matter comes before the Division of Administrative Hearings (DOAH) on Petitioner Silvia S. Ibanez' July 13, 1992 Motion for Attorney's Fees and upon the July 21, 1992 Motions to Dismiss filed by the Florida Institute of Certified Public Accountants (FICPA) and the Florida Board of Accountancy (Board). Ibanez' August 17, 1992 First Supplement to Motion for Attorney's Fees, with attachments, has been considered as if it were part of the petition/motion.

Also before DOAH are Ibanez' August 24, 1992 Motion for Official Recognition and August 24, 1992 Motion Requesting Leave to File a Supplement to the Motion for Attorney's Fees. Because this final order grants the Motions to Dismiss, Ibanez' August 24, 1992 Motion for Official Recognition and August 24, 1992 Motion to Supplement are moot and require no action.

APPEARANCES

For Petitioner: J. Lofton Westmoreland, Esquire

Moore, Hill, Westmoreland, Hook & Bolton Post Office Box 1792

Pensacola, Florida 32598

Silvia S. Ibanez, Esquire Silvia S. Ibanez, P.A. Post Office Drawer 7667

Winter Haven, Florida 33883

For Respondent: John J. Rimes, Esquire

Assistant Attorney General Department of Legal Affairs The Capitol, Suite LL04

Tallahassee, Florida 32399-1050

For Intervenor: Kenneth R. Hart, Esquire

J. Jeffry Wahlen, Esquire Ausley, McMullen, McGehee,

Carothers & Proctor Post Office Box 391

Tallahassee, Florida 32302 STATEMENT OF THE ISSUES

Whether Petitioner, Silvia S. Ibanez (Ibanez), is entitled to recover attorney's fees and costs pursuant to an underlying rule challenge case in which she prevailed.

PRELIMINARY STATEMENT

This cause, DOAH Case No. 92-4271F, arises by a motion (sic, petition) which prays, on behalf of Silvia S. Ibanez (the individual), that attorney's fees be awarded to "the Firm of Silvia S. Ibanez, P.A., in the amount of

$43,130.00 and reimbursement of out-of-pocket expenses in the amount of

$6,223.99 for a combined total of $49,353.99, representing total fees and costs incurred by the Holland & Knight and Silvia S. Ibanez, P.A., law firms, and for such other and further relief as is appropriate."

According to DOAH custom and procedure in cases based solely on Section

57.111 F.S., DOAH's Clerk assigned a new DOAH case number to the motion/petition herein. The Clerk did so despite there having been two previous cases (DOAH Cases 91-3336R and 91-4100) involving some of the same litigants, and even though Petitioner's motion (sic) originally relied upon multiple statutory theories of recovery: Sections 57.111, 120.57(1)(b)5, and 120.59(6) F.S. (See, "Statement of the Issues" supra.)

The parties have been permitted wide latitude in submitting written argument and authority for their positions. Extensive oral argument and stipulations were heard by telephonic conference call on September 16, 1992. The facts necessary to dispose of the motion are not in dispute. However, each party has also submitted a proposed final order in a timely fashion, the proposed findings of fact of which have been ruled upon in the appendix to this final order, pursuant to Section 120.59(2) F.S.

FINDINGS OF FACT

1. Herein, Ibanez seeks recovery of attorney's fees and costs she claims to have incurred in DOAH Case No. 91-3336R styled Silvia S. Ibanez et al. v. State of Florida, Department of Professional Regulation, Board of Accountancy et al. In that case, Ibanez challenged the validity of Board of Accountancy Rule 21A-20.012 F.A.C. (the "holding out rule"). Ibanez unsuccessfully tried to initiate that case by filing a petition on May 10, 1991 with the Department of Professional Regulation. Ibanez successfully initiated the rule challenge on May 30, 1991, by filing with DOAH a Petition for Formal Administrative Hearing under Section 120.56 F.S. This type of action is commonly referred to as a "challenge

   to an existing agency rule." In such a case, the Petitioner is fully the initiator, challenger, or sword-wielder in the proceeding and bears both the duty to go forward and the burden of proof.

   
   

2. Ibanez initiated the rule challenge in her capacity as a licensed certified public accountant (CPA). She is a sole practitioner and an employee of a law firm called "Silvia S. Ibanez, P.A.," but the law firm "Silvia S. Ibanez, P.A.," was not a party and did not participate in the rule challenge, except as one of several legal representatives for Silvia S. Ibanez, the individual. The Board participated in the rule challenge case to defend the holding out rule. The Florida Institute of Certified Public Accountants (FICPA) intervened in the rule challenge in support of the position of the Board that the holding out rule was valid.

   
   

3. While Ibanez' petition in the rule challenge contained a prayer for "other appropriate relief, including award of costs as appropriate," her petition therein did not request an award of attorney's fees. Ibanez' Proposed Findings of Fact and Conclusions of Law and her accompanying Memorandum of Law submitted after formal hearing for that case, both of which pleadings were dated October 11, 1991, did not contain proposed findings of fact or proposed conclusions of law addressing the issue of attorney's fees and costs. Neither of Ibanez' post- hearing filings contained a request for attorney's fees or costs or a request to reserve jurisdiction in that case for such an award.

   
   

4. The undersigned hearing officer rendered a final order declaring invalid the holding out rule on January 15, 1992. That final order did not award attorney's fees and costs, nor did it reserve jurisdiction to decide attorney's fees and costs at another time. Neither Ibanez nor any of her corporate entities nor any of her supporting intervenors filed any motion requesting a reservation of jurisdiction or requesting reconsideration.

   
   

5. The Board and FICPA each appealed the final order in the rule challenge to the First District Court of Appeal in February 1992, but dismissed those appeals on May 6, 1992, by filing a Joint Notice of Voluntary Dismissal. The First District Court of Appeal issued an order acknowledging the Joint Dismissal on May 14, 1992.

   
   

6. The Joint Dismissal and First District Court of Appeal Order were both attached to the material filed by the parties in this instant case. For purposes of deciding the pending motions to dismiss herein, the undersigned has considered the Joint Dismissal, the First District Court of Appeal Order, and the record in the rule challenge case, DOAH Case No. 91-3336R.

   
   

7. Due to the unique arguments advanced in Ibanez' fees and costs motion (sic) herein, it also has been necessary and appropriate to consider the record in DOAH Case No. 91-4100.

   
   

8. On May 22, 1991, a probable cause panel of the Board held a probable cause hearing involving Ibanez. As a result of that hearing, the Board initiated a disciplinary proceeding styled State of Florida, Department of Professional Regulation, Board of Accountancy v. Silvia S. Ibanez, DOAH Case No. 91-4100, by filing an administrative complaint on June 13, 1992. That case was a disciplinary action arising under Section 120.57(1) F.S. which was prosecuted by the Department of Professional Regulation on behalf of the Board against Ibanez. At one time, the disciplinary case was consolidated with the rule

   challenge case. The two cases were bifurcated prior to formal hearing of the merits of either case. FICPA never intervened in the disciplinary case, nor had they any standing to do so.

   
   

9. The undersigned hearing officer conducted a 120.57(1) F.S. hearing in the disciplinary case on August 27, 1991, and issued a recommended order to the Board on January 15, 1992. The Board issued its final order in the disciplinary case on April 23, 1992. Therein, contrary to the recommended order, the Board held that Ibanez had violated Sections 473.323(1)(a), (f), (g), and (h) F.S. and Rule 21A-24.001 F.A.C. The Board accordingly issued a reprimand to Ibanez, which reprimand was stayed by the Board pending appeal. Ibanez has appealed the Board's final order in the disciplinary case to the First District Court of Appeal, which appeal is still pending.

   
   

10. Ibanez served on July 9, 1992 her Motion for Attorney's Fees which is here under consideration. In doing so, Ibanez elected to use the style of the underlying rule challenge case, DOAH 91-3336R, the style of which still included intervenors James R. Brewster and American Association of Attorney Certified Public Accountants. Those intervenors have never attempted to appear in the instant fees and costs case and apparently seek no relief via Ibanez' pending fees and costs motion.

    
    

11. The rule challenge case was final for all purposes before DOAH as of January 15, 1992 and before the District Court of Appeal on May 14, 1992. The DOAH case file for DOAH Case No. 91-3336R has been closed for several months. Ibanez' Motion for Attorney's Fees was received and deemed filed by DOAH on July 13, 1992. It was filed with DOAH sixty-eight (68) days after the rule challenge appeals were voluntarily dismissed by FICPA and the Board and sixty (60) days after the First District Court of Appeals entered its order ratifying the voluntary dismissal.

    
    

12. Because petitions brought solely under Section 57.111 F.S. result in final orders, it is DOAH's standard operating procedure to open new files for all fees and costs cases arising under Section 57.111 F.S. Upon receipt of Ibanez' motion, DOAH's Clerk assigned Ibanez' motion the instant new case number (DOAH 92-4271F), primarily on the basis that the motion prayed for relief upon grounds of Section 57.111 F.S., among other statutes. The other statutory grounds cited in the motion were Sections 120.57(1)(b)5 and 120.59(6) F.S.

    
    

    CONCLUSIONS OF LAW

    
    

13. On its face, Ibanez' Motion seeks attorney's fees and costs from both the Board of Accountancy and FICPA under each of three statutory provisions: Sections 57.111(4)(b)(2), 120.59(6), and 120.57(1)(b)5 F.S.

    
    

14. In her response to the motions to dismiss and in oral argument, Ibanez conceded that Section 57.111(4)(b)(2) F.S. does not apply to FICPA and that Section 120.59(6) F.S. does not apply to the Board. Therefore, it only remained to be decided whether the following claims under the following statutes should be dismissed: (1) Section 57.111(4)(b)(2) with regard to the Board, (2) Section 120.59(6) with regard to the FICPA, and (3) Section 120.57(1)(b)5 with regard to the FICPA and Board.

    
    

15. After oral argument, the parties were invited to make any further written arguments they wished, including the submittal of proposed final orders. Ibanez' proposed final order did not discuss any grounds for an award except

    those arising under Section 57.111 F.S. against the Board. In fact, Ibanez' proposed conclusions of law specifically set out on page 8:

    
    

    1. As to recovery of fees under Section 120.59(6) F.S. it is found that Petitioner does not meet the statutory requirements.

       13. (sic) As to recovery of fees under Section 120.57(1)(b)5. F.S., it is found that Petitioner does not meet the statutory requirements.

       
       

       Thus, it would appear that Ibanez has abandoned her claims against all Respondents under Sections 120.59(6) and 120.57(1)(b)5, and it is not necessary for the undersigned to discuss those issues, either substantively or how they could be procedurally resolved in this newly-numbered case file, DOAH Case No. 92-4271F. However, in an abundance of caution, it is specifically concluded that the motions to dismiss raised several grounds for dismissing each of the remaining claims under Sections 120.59(6) and 120.57(1)(b)5 F.S., all of which grounds have merit which would entitle Respondents to a dismissal of claims brought under those statutes.

       
       

    2. Section 57.111 F.S., the Florida Equal Access to Justice Act (FEAJA), requires that a petition for fees and costs against the Board be filed with DOAH within sixty (60) days after becoming a prevailing small business party." See, Section 57.111(4)(b)(2) F.S. A small business party becomes 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. See, Section 57.111(3)(c) F.S.

          
          

    3. Upon authority of Eager and Calusa Camp Resort v. Florida Keys Aquaduct Authority, 17 FLW D1889 (Fla. 3d DCA August 11, 1992), it is concluded that Ibanez' July 13, 1992 Motion for Attorney's Fees herein was timely filed.

       
       

    4. Nonetheless, the Motions to Dismiss should be granted as to the remaining claim brought under Section 57.111 F.S. against the Board because Silvia S. Ibanez initiated the underlying rule challenge, because Section 57.111

       F.S. simply does not apply to rule challenges, and because Silvia S. Ibanez does not qualify as a "small business party."

       
       

    5. Section 57.111(3)(b) defines "initiated" by a state agency" as an action in which a state agency:

       
       

       1. Filed the first pleading in any state or federal court in this state;

       2. Filed a request for an administrative hearing

          pursuant to Chapter 120; or

       3. Was required by law or rule to advise a small business party of a clear point of entry after some recognizable event in the investigatory or other free-form proceeding of the agency.

          
          

    6. Ibanez' motion (sic) does not seek fees and costs for the disciplinary case which was initiated against her and in which she did not prevail. Ibanez' motion does seek recovery of fees and costs related to the rule challenge, which she initiated and won.

       
       

    7. Ibanez' theory herein is that she is entitled to recover fees and costs for DOAH Case No. 91-3336R, the underlying rule challenge case, because that case should be deemed a review of allegedly unreasonable governmental actions, namely an investigation in 1986 which resulted in a finding of "no probable cause" and the new 1991 investigation, finding of probable cause, and filing of DOAH Case No. 91-4100, the disciplinary case. She also seeks recovery because, she asserts, the rule challenge case was "required" as part of her defense strategy for the disciplinary case filed in 1991 as DOAH Case No. 91- 4100. Because Section 57.111(3)(b)3 discusses "a clear point of entry," as triggering attorney's fees and costs under that statute, Ibanez claims entitlement to attorney's fees and costs. Ibanez' foregoing arguments are rejected as not supported by law.

       
       

    8. The Board found "no probable cause" against Ibanez in 1986. Therefore, there was no case even contemplated against her until 1991. Ibanez'

       "clear point of entry" with regard to the Board's 1991 disciplinary concerns was exercised by her through her election of rights for a formal Section 120.57(1)

       F.S. hearing of the administrative complaint in DOAH Case No. 91-4100, the only disciplinary case initiated against her. She has not yet ultimately prevailed in that case, which remains on appeal from a final order adverse to her position.

       
       

    9. Ibanez here seeks recovery of fees and costs related to the rule challenge, which she initiated and in which she prevailed. However, in the rule challenge, the Board did not file the first pleading, did not file a request for an administrative hearing pursuant to Chapter 120 F.S., and was not required by law to give a new 1991 clear point of entry. Ibanez or any other licensed certified public accountant (CPA) was entitled to file a rule challenge at any time whether or not there was a pending disciplinary action.

       
       

    10. By its express terms, FEAJA applies only to administrative proceedings initiated by a state agency. See, 57.111(4)(a) F.S. The sole purpose of this statute is to "diminish the deterrent effect. . .of defending against government action." See, Section 57.111(2) F.S. The courts have recognized that the Legislature passed FEAJA to provide a means "for a small business to recover costs and attorney fees when a state agency initiates actions against it." See, City of Naples Airport Auth. v. Collier Dev. Corp., 515 So.2d 1058, 1059 (Fla. 2d DCA 1987)(emphasis added). Herein, the underlying rule challenge was initiated by Ibanez, not the Board.

        
        

    11. Also, the rule challenge case involved the validity of a duly- promulgated rule which had been in existence for eight years, and Section 57.111(6)(a) F.S. sets forth that,

        This section does not apply to any proceeding involving the establishment of a rate or rule or any action sounding in tort.

        
        

        In Allen v. Administration Commission, 11 FALR 4462 (1989), it was held, upon authority of Section 57.111(6)(a), that FEAJA does not apply in challenges to proposed rules. That case further pointed out that rule challenges clearly are not initiated by the state. Similarly, Ibanez cannot use the FEAJA to claim fees and costs associated with the underlying challenge to an existing rule.

        Ibanez' claim that she was somehow "forced" or "required" to initiate the rule challenge to defend herself in the disciplinary case is belied by the fact that Ibanez attempted to initiate the rule challenge before the Board's probable cause panel ever met on the disciplinary case. To reiterate, Ibanez or anyone else "substantially affected" by the rule, i.e., any CPA could have initiated the rule challenge at any time, with or without the existence of a pending disciplinary action. Ibanez' decision to do so for some strategic reason is immaterial.

        
        

    12. Under Section 57.111(3)(d) F.S., a "small business party" is:

        
        

        1.a. A sole proprietor of an unincorporated business, including a professional practice, whose principal office is in this state, who is domiciled in this state, and whose business or professional practice has, at the time the action is initiated by a state agency, not more than 25 full-time employees or a net worth of not more than $2 million; or

        b. A partnership or corporation, including a professional practice, which has its principal office in this state and has at the time the action is initiated by a state agency not more than 25 full-time employees or a net worth of not more than $2 million; or

        2. Either small business party as defined in sub- paragraph 11, without regard to the number of its employees or its net worth, in any action under section 72.011 or in any administrative proceeding under that section and section 120.575(1)(b) to contest the legality of any assessment of tax imposed for the sale or use of services as provided in Chapter 212, of interest thereon, or penalty therefore. (emphasis supplied).

        
        

    13. Although the determination of whether an entity is a small business party is a factual matter to be determined in an evidentiary hearing, Section

        57.111 F.S. requires at the outset that the entity alleging that it is a small business party must have participated in the underlying proceeding in that capacity. Having said that, it is clear that no new evidence can modify Ibanez' status from the assertions in prior pleadings and determinations in the prior orders.

        
        

    14. Silvia S. Ibanez is the movant/petitioner in the instant fees and costs case. Silvia S. Ibanez was the petitioner in the rule challenge case. Since Ibanez has consistently maintained that she was not operating a business "practicing public accounting," she cannot now be heard to assert that mere attainment/possession of her CPA license rendered her, in the rule case, a "sole

        proprietor of an unincorporated business, including a professional association" in her capacity as a CPA. Therefore, she cannot qualify as a "small business party" under Subparagraph 1.a. of the statute. Silvia S. Ibanez P.A. was never a party to the rule challenge case. Therefore, Silvia S. Ibanez P.A. cannot qualify under Subsection 1.b. of the statute. Subsection 2. simply does not apply here. Assuming, arguendo, that one could legitimately call the law firm

        P.A. a "small business," the law firm P.A. was never a party to the rule case, and even if it had been a party to the rule case, Ibanez' status therein was that of an employee of the P.A.

        
        

    15. Employees of a partnership or corporation or professional association are not considered a "small business party" under FEAJA. See, Department of Professional Regulation v. Toledo Realty, Inc., 549 So.2d 715 (Fla. 2d DCA 1989); Thompson v. Department of Health and Rehabilitative Services, 533 So.2d 840 (Fla. 1st DCA 1988).

        
        

    16. Ibanez' situation is distinguishable from the situation in Gentele v. Department of Professional Regulation, Board of Optometry, 9 FALR 311, upheld on other grounds in Gentele v. DPR, Board of Optometry, 513 So.2d 672 (Fla. 1st DCA 1987), which dealt with disciplinary actions initiated against professionals in their alter ego status as professional associations. Here, Ms. Ibanez selected which "hat" she was wearing dependent upon which case (rule challenge versus disciplinary case) she was pursuing. The disciplinary case specifically contained stipulations with regard to the status of the P.A. and the status of Silvia S. Ibanez as an employee of the P.A. The outcome of the disciplinary case is still in the hands of the First District Court of Appeal, but as yet, neither Ibanez nor the P.A. has "prevailed" in that case. Neither Silvia S. Ibanez, the individual, nor Silvia S. Ibanez P.A. is entitled to fees and costs under FEAJA as a small business party because of success in the underlying rule case.

CONCLUSION

Upon the foregoing findings of fact and conclusions of law, it is ORDERED:

1. The Motions to Dismiss are granted.

   
   

2. Petitioner's Motion (sic) for Attorney's Fees is dismissed.

   
   

3. The Board of Accountancy and the Florida Institute of Certified Public Accountants shall go hence without day.

DONE and ORDERED this 23rd day of November, 1992, at Tallahassee, Florida.

ELLA JANE P. DAVIS, 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 f Administrative Hearings this 23rd day of November, 1992.

APPENDIX FINAL ORDER DOAH CASE NO. 92-4271F

Although all facts necessary to dispose of the pending issues have been stipulated, the following constitute specific rulings, pursuant to Section 120.59(2) F.S., upon the parties' respective proposed findings of fact (PFOF)

Petitioner's PFOF:

1. Accepted as modified. No petition under Section 120.56 F.S. is subject to referral by

an agency. It must be filed directly with DOAH.

2-5, 7 Accepted but not adopted because it is totally, or contains material which is, unnecessary, subordinate, or cumulative to the facts as found, because it constitutes mere argumentation, and because the proposed facts are not dispositive of the pending issues.

6, 8 Accepted.

Respondents' PFOF:

The proposed order mixes proposed findings of fact and conclusions of law and consequently cannot be ruled upon pursuant to Section 120.59(2) F.S. however, all proposals of fact perceived by the undersigned are accepted as modified, even if not specifically adopted.

COPIES FURNISHED:

Silvia S. Ibanez, Esquire Silvia S. Ibanez, P.A. Post Office Drawer 7667

Winter Haven, Florida 33883

J. Lofton Westmoreland, Esquire Moore, Hill, Westmoreland, Hook

& Bolton

Post Office Box 1792 Pensacola, Florida 32598

John J. Rimes, Esquire Department of Legal Affairs The Capitol Suite LL04

Tallahassee, Florida 32399-1050

Kenneth R. Hart, Esquire

J. Jeffry Wahlen, Esquire Ausley, McMullen, McGehee,

Carothers & Proctor

P. O. Box 391

Tallahassee, Florida 32302

Martha Willis Executive Director Board of Accountancy Suite 16

4001 Northwest 43rd Street Gainesville, Florida 32606

Jack McRay, General Counsel Department of Professional

Regulation

1940 North Monroe Street 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: 92-004271F

Orders for Case No: 92-004271F