STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LEAMINGTON, INC. OF FLORIDA, )

)

Petitioner, )

)

vs. ) CASE NO. 94-2919F

) based on Cases Nos.

DEPARTMENT OF TRANSPORTATION, ) 94-1508BID and

) 94-1509BID

Respondent. )

)

FINAL ORDER

A hearing was held in this case by telephone conference call on June 27, 1994, before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Was not present and was not represented. For Respondent: Cindy S. Price, Esquire

Department of Transportation

605 Suwannee Street

Tallahassee, Florida 32399-0458 STATEMENT OF THE ISSUES

The issue for consideration is whether the Department of Transportation, (Department), is entitled to an award of attorney's fees and costs in these bid protest proceedings initiated by Leamington, Inc. of Florida, (Leamington), which, the Department alleges, were filed for an improper purpose.

PRELIMINARY MATTERS

By Motion for attorneys fees and costs, dated May 24, 1994, the Department of Transportation claims reimbursement as a result of Leamington, Inc. of Florida's protest of the Department's announced rejection of all bids on State Projects 16906-9117, 13906-9412, and 17906-9415 and requested an evidentiary hearing on its motion. Leamington did not respond to the Motion.

Though the Department filed a Motion for Attorney's Fees and Costs in DOAH Cases 94-1508BID and 94-1509BID, in which Leamington was Petitioner and the Department the Respondent, the Clerk of the Division of Administrative Hearings opened a new file for this matter. In this new file, the Department should be Petitioner and Leamington the Respondent. To avoid any confusion, however, the undersigned has intentionally avoided the use of the words Petitioner and Respondent, choosing, instead, to refer to the parties by name where necessary.

By Order dated June 7, 1994, the undersigned ordered a telephone conference call to hear evidence and arguments by both parties on the issues. A copy of

the Order, which set out the time and date of the telephone conference call and the "meet me" number by which parties could access the conference call at no expense to them, was sent by US Mail to both parties. At the time and date of the conference call, a hearing was held attended by the undersigned, counsel for the Department, the Department's witnesses, and a court reporter. Leamington's representative was not a party to the conference call at its initiation, nor did any such representative join the conference at any time during the period it was in session.

At the conference, the Department presented the testimony of Edward C. Thompson, its Contracts Administrator at its District One Headquarters; Richard

H. Marion, its District Contract Maintenance Engineer; and Thomas H. Duffy, its Assistant General Counsel. The Department also introduced Department's Exhibits

1 through 3. Leamington did not participate and no evidence was presented on its behalf.

A transcript was provided. Counsel for the Department submitted Proposed Findings of Fact which have been ruled upon in the Appendix to this Final Order. Leamington did not submit any matters subsequent to hearing.

FINDINGS OF FACT

1. At all times pertinent to the issues herein, the Department of Transportation, Department), was the state agency responsible for the construction and maintenance of public funded highways within this state not otherwise maintained by federal, county or local government instrumentalities.

   
   

2. On or about February 24, 1994, the Department indicated its intention to reject all bids in the two procurements pertinent to the issues herein on the basis that every bid received, from several bidders, exceeded its official cost estimate prepared as a part of the procurement process. This is consistent with a Department policy, itself consistent with statute, to reject all bids on a particular procurement, if the lowest bid received is for a sum greater than the Department's official cost estimate plus 15 percent.

   
   

3. Leamington's bids in both procurement actions were rejected for the additional reason that it was not a responsible bidder since it had been declared in default on other state projects.

   
   

4. By letter dated March 2, 1994, filed in each procurement in issue here, Leamington formally protested its rejection by the Department for the stated non-responsive, (default), grounds. Leamington's protests made no reference to the rejection of all bids. The matters were referred for formal hearing on the protests and were subsequently set for hearing on April 4, 1994.

   
   

5. On March 31, 1994, pursuant to direction by the Hearing Officer, Thomas

   H. Duffy, counsel for the Department, contacted John Hummel, Leamington's President, to confirm the hearing time and location and, if possible, to agree upon the terms of a pre-hearing stipulation. During that conversation, Mr. Hummel indicated his intention to be present at the scheduled hearing. He also indicated to Mr. Duffy his dissatisfaction with the Department's procurement procedures and his intention to bid on and file protests on as many Department procurements as he could in order to disrupt the Department's procurement operations.

   
   

6. Mr. Hummel did not appear at the protest hearing at the scheduled time nor any time thereafter. The hearing was postponed an additional fifteen

   minutes to allow him ample time to appear. He also did not advise the Hearing Office of his intention not to appear before the hearing, nor did he contact the Hearing Officer thereafter with any reason for his nonappearance.

   
   

7. At the hearing, counsel for the Department advised he had received a facsimile notice from Mr. Hummel withdrawing Leamington's protest in both protest cases. Thereafter, the undersigned entered a Recommended Order on the procurement issues recommending approval of the procurement action taken by the Department in each case. A Final Order on those matters has not, as of the date of this Final Order, been issued by the Department.

   
   

8. Leamington has also filed bids in several other Department procurements. In some, it failed to post the required bid bonds and in others, failed to be pre-qualified as required due to the amount involved in the bids. Its bids were unusually similar even though the procurements were different, raising the inference that the bids were not serious but made only as a predicate for a disruptive, frivolous protest action. At no time did a representative from Leamington appear to present evidence in support of its protests. To the contrary, Leamington's actions appear to establish a pattern of harassment and abuse of the procurement process consistent with Mr. Hummel's stated intention.

   
   

9. Thomas Duffy, counsel for the Department during the period leading up to and for the hearing on Leamington's pertinent protests, expended 26.4 hours in preparation for that hearing. He estimates the fair market value of his time as an attorney at $100.00 per hour. This estimate appears reasonable.

   
   

10. Waldemar H. Clark, Jr., the Department's District Contracts Attorney, expended approximately 6.25 hours on the two procurements involved here. He estimates the fair value of his time as an attorney as $30.20 per hour for a total cost of $189.31. This estimate appears reasonable but somewhat low.

    
    

11. Edward C. Thompson, the Department's District Contract Administrator expended 1.75 hours on the instant procurements and estimates the value of his time at $26.04 per hour for a total cost of $45.57. This appears reasonable.

    
    

12. Richard A. Marino, an employee of the Department's Maintenance Contracts section expended a total of $555.90 in travel expenses and hearing preparation time. His breakdown of expenses appears reasonable.

    
    

13. A.J. Spalla, an attorney in private practice in Tallahassee who previously worked for the Department of Transportation, and an expert regarding reasonableness of attorney's fees evaluated the matter in issue here and concluded that a reasonable attorney's fee for legal services rendered by the staff attorneys for the Department in this matter would be $4,000.00. Paul Martin, also an attorney, and currently an Assistant Attorney General opines that $2,000.00 would be a reasonable attorney's fee for the work done for the Department in this case. The combination of $2,829.31 for both attorneys involved in this matter on behalf of the Department is well within the range of estimates by the Department's experts. No evidence to contradict these estimates was presented, and it is found that the estimated amounts are reasonable. The other expenses are, as well, reasonable.

    CONCLUSIONS OF LAW

    
    

14. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this case. Section 120.57(1), Florida Statutes.

    
    

15. Section 120.57(1)(b)5, Florida Statutes, provides:

    
    

    ... The signature of a party, a party's attorney, or a party's qualified representative constitutes a certificate that he has read the pleading, ... and that, to the best of his knowledge, information, and belief formed after reasonable inquiry, it is not interposed for any improper purposes, such as to harass or cause unnecessary delay or for frivolous purpose or needless increase in the cost of litigation. If a pleading, ... or other paper is signed in violation of these requirements, the hearing officer upon motion or his own initiative, shall impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay the other party or parties the amount of reasonable expenses incurred because of the filing of the pleading, motion, or other paper, including a reasonable attorney's fee.

    
    

16. The evidence of record indicates that Mr. Hummel, as president of Leamington, Inc. of Florida, filed the protests involved herein not for any legitimate contest of the Department's action, but, by his own admission, as a part of a premeditated plan to harass the Department and disrupt its procurement operations. This is clearly for an improper purpose.

    
    

17. The evidence of record also clearly demonstrates that the Department expended the following reasonable expenses, including its attorney's fees:

    
    

    1. Attorney's fees for Mr. Duffy $2,640.00

    2. Attorney's fees for Mr. Clark 189.31

    3. Hourly wage for Mr. Thompson .......... 45.57

    4. Travel expense for Mr. Marino 555.90

       Total $3,430.78

18. Ordinarily only attorney's fees and specified costs are recoverable by a successful party. As such, the hourly wage for Mr. Thompson and a portion of the expense expended by Mr. Marino would, generally, be excluded from an award of attorney's fees and costs. In the instant case, however, the statutory provision under which reimbursement is sought specifically states that when it is clear the pleading in issue is signed for a frivolous or improper purpose, the hearing officer shall impose an appropriate sanction which may include "an order to pay the other party or parties the amount of reasonable expenses [emphasis supplied] incurred because of the filing of the pleading, including a reasonable attorney's fee."

19. Clearly the differentiation of attorney's fees from other reasonable expenses in the statute indicates the legislature's intention that in those cases where it is clear a party has filed pleadings for an improper or frivolous purpose, that party must pay all reasonable expenses of his opponent in countering that document, not just his attorney's fees. For that reason, the travel expenses of Mr. Marino and the hourly wage of Mr. Thompson, not normally taxable, in so far as they pertain to the Department's response to Leamington's frivolous bids and protests, are compensable under the circumstances of this case.

    
    

20. Based on the foregoing Findings of Facts and Conclusions of Law, it is, therefore:

ORDERED that John Hummel, President of Leamington, Inc. of Florida, and Leamington, Inc. of Florida, jointly and/or severally, pay to the State of Florida, Department of Transportation, the sum of $3,430.78 as reasonable expenses and attorney's fees in this matter.

DONE and ORDERED in Tallahassee, Florida this 19th day of July, 1994.

ARNOLD H. POLLOCK, 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 19th day of July, 1994.

APPENDIX TO FINAL ORDER IN CASE NO. 94-2919F

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case.

FOR THE DEPARTMENT:

1. - 6. Accepted and incorporated herein.

7. - 10. Accepted.

FOR LEAMINGTON, INC. OF FLORIDA

No Proposed Findings of Fact were submitted.

COPIES FURNISHED:

Cindy S. Price, Esquire Department of Transportation 605 Suwannee Street, MS 58

Tallahassee, Florida 32399-0458

John Hummel President

Leamington, Inc. of Florida 6742 Richardson Road

Sarasota, Florida 34240

Ben G. Watts, Secretary Department of Transportation Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32399-0450

Thornton J. Williams General Counsel

Department of Transportation Haydon Burns Building, Suite 562 605 Suwannee Street

Tallahassee, Florida 32399-0450

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: 94-002919F

Orders for Case No: 94-002919F