STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DONALD BELVEAL, )

)

Petitioner, )

)

vs. ) CASE NO. 94-3926F

)

DEPARTMENT OF REVENUE, ) DIVISION OF CHILD SUPPORT ) ENFORCEMENT, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Mary Clark, held a formal hearing by telephonic conference in the above-styled case on September 19, 1994.

APPEARANCES

For Petitioner: Donald W. Belveal, Esquire

300 North Franklin Street Tampa, Florida 33602-5124

For Respondent: Kevin J. O'Donnell, Esquire

Department of Revenue Post Office Box 6668

Tallahassee, Florida 32314-6668 STATEMENT OF THE ISSUES

This is a proceeding pursuant to the Florida Equal Access To Justice Act, Section 57.111, Florida Statutes, and Rule 60Q-2.035, Florida Administrative Code.

Petitioner seeks to recover attorney's fees incurred during a bid protest proceeding.

The issue for determination is whether Petitioner was a prevailing party in Case No. 92-5015BID and, if so, whether the actions of the agency were substantially justified. The reasonableness of fees, up to the statutory maximum of $15,000.00 is not at issue.

PRELIMINARY STATEMENT

Following the entry of a Corrected Final Order dated June 22, 1994, in Law Offices of Donald W. Belveal, Chartered v. Department of Health and Rehabilitative Services, DOAH Case No. 92-5015 BID, HRS Case No. 92-179-FOF-BID, an Application for Attorney's Fees and Costs was timely filed by Petitioner. On August 1, 1994, Respondent served its Notice of Extension of Time for Filing

Response, along with its Answer and its Response to Petitioner's Application.

On August 10, 1994, a prehearing conference was held and the final hearing was set for September 19, 1994. During the conference, the issues were narrowed and the parties were ordered to exchange copies of documents which they intended to introduce, along with witness lists. This was confirmed by entry of an Order on August 19, 1994.

Petitioner served a Motion for Summary Final Order and Waiver of Evidentiary Hearing on August 15, 1994, to which Respondent served its response on August 23, 1994. Petitioner's motion was denied by Order entered September 7, 1994, and the time for final hearing remained unchanged.

The final hearing consisted of oral argument and the presentation of documentary evidence. These documents introduced by Petitioner were received in evidence: (Respondent submitted no documents.)

1. Donald W. Belveal v. State of Florida, DHRS, 2nd District Court of Appeal Opinion, February 25, 1994.

   (Exhibit A, Petition for Attorney's fees.)

   
   

2. Amended Order of 2nd District Court of Appeal entered February 25, 1994, granting attorneys' fees in appellate case #93-01121. (Exhibit B, Petition for Attorney's fees.)

   
   

3. Affidavit of Attorney Fees and Costs (Exhibit D, Petition for Attorney's fees.)

   
   

4. Corrected Final Order of the Department of Health and Rehabilitative Services in case

   #92-5015BID, dated June 22, 1994.

   
   

5. Recommended Order of Hearing Officer, Veronica Donnelly, in DOAH #92-4937BID/92-4938BID

   /92-4939BID/92-5015BID, dated December 22, 1992.

   
   

6. Final order of the Department of Health and Rehabilitative Services in 92-4937BID/ 92-4938BID/92-4939BID/92-5015BID/

HRS-93-032-FOF-BID), dated March 17, 1993.

After the hearing, both parties submitted proposed final orders. The findings of fact proposed by each are addressed in the attached appendix.

FINDINGS OF FACT

1. In July, 1992, the Department of Health and Rehabilitative Services (HRS) published notice soliciting proposals from interested attorneys to provide intrastate and interstate child support legal services HRS District VI. The services were to be provided from October 1, 1992, through June 30, 1993. (Exhibit #4).

   
   

2. Within relevant deadlines, protests to the written specifications of the solicitation were filed by Petitioner, Donald W. Belveal, and others. HRS determined that material disputes of fact existed and the protests were referred

   to the Division of Administrative Hearings (DOAH) where the cases were consolidated and set for final hearing. (Exhibit #5)

   
   

3. Hearing Officer, Veronica Donnelly, conducted the hearing and issued a recommended order on December 22, 1993, recommending that the specifications be rejected as flawed and that they be extensively revised. (Exhibit #5). Exceptions were filed, and upon a suggestion of mootness HRS entered a final order on March 17, 1993, dismissing the proceedings and finding further:

   
   

   No Final Order has been issued in this cause which granted any affirmative relief to Petitioners. Therefore, they are not a prevailing party, and are not entitled to attorney fees. The request for a determination of attorney fees is DENIED. The request to dismiss the department's exceptions to the Recommended Order is DENIED. (Exhibit #6)

   
   

4. Donald Belveal appealed this final order to the Second District Court of Appeal. The full opinion of the court in Donald W. Belveal v. State of Florida, Department of Health and Rehabilitative Services, case no. 93-01121, dated February 25, 1994, provides:

   
   

   The law firm of Donald Belveal appeals a final agency order entered by the Florida Department of Health and Rehabilitative Services (HRS) which dismisses administrative proceedings and denied Belveal's motion for attorney's fees and costs under section 57.111(4), Florida Statutes (1991) on the ground that Belveal was not a prevailing party. We reverse.

   Belveal and other lawyers formally protested a bid solicitation package prepared by HRS to procure legal services for its child support program in Hillsborough County. The Department of Administrative Hearings (DOAH) held a formal hearing after which the hearing officer entered a recommended order that the package be revised, citing numerous improprieties. HRS filed excep- tions to the order. In addition, to prevent a

   lapse in services during the protest proceedings, HRS extended the existing contract for legal services to cover the remainder of the bid proposal period. Arguing that the extension nullified the bid solicitation and rendered the administrative contest moot, Belveal and the others filed a motion to dismiss the exceptions. They also asked that the case be remanded to DOAH for an award of attorney's fees and costs under the Florida Equal Access to Justice Act, section 57.111(4), Florida Statutes (1991).

   The deputy secretary for human services of HRS entered a "final order" which concluded that Belveal's motion to dismiss/suggestion of mootness was tantamount to a request that the proceedings be discontinued. The department dismissed the proceedings, denied the request to dismiss HRS's

   exceptions, and denied the request for attorney's fees stating, "[n]o final order has been issued in this cause which granted any affirmative relief to Petitioners. Therefore, they are not a prevailing party, and are not entitled to attorney fees."

   HRS exceeded its authority in entering this order.

   First, the dismissal of the action exceeded the scope of the motion to dismiss the exceptions. Second, the determination of whether Belveal was a prevailing party entitled to attorney's fees and costs was solely within the jurisdiction of the DOAH hearing officer. See Dep't. of Health and Rehabilitative Services v. S. G., 613 So. 2d 1380, 1384 n.1 (Fla. 1st DCA 1993).

   Because HRS denied the motion to dismiss the exceptions yet never ruled on the hearing officer's recommended order, we remand the case to HRS for further proceedings in accordance with section 120.57, Florida Statutes.

   Reversed; remanded.

   
   

5. In addition, the appellate court issued its order granting fees in the appeal, "...provided that appellant is ultimately the prevailing party in the proceeding below." (Exhibit #2)

   
   

6. HRS entered its corrected final order on June 22, 1994, finding the case to be moot with the exception of the attorney's fees issue, acknowledging that the agency is without jurisdiction to determine who is the prevailing party and entitled to fees, and dismissing the case. (Exhibit #4)

   
   

7. It is undisputed that Donald Belveal is a small business party. (Respondent's proposed final order, paragraph 8).

   
   

8. Donald Belveal claims total fees of $21,292.25, incurred in the administrative proceeding, which fees are based on 121.67 hours at an hourly rate of $175. He claims additional fees for the appeal. (Exhibit #3) As stipulated, the claimed fees are reasonable, but the award may not exceed

   $15,000. (Respondent's proposed final order, paragraph 9.)

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction in this proceeding pursuant to section 57.111, F.S. and section 120.57(1), F.S..

   
   

10. Respondent, the Department of Revenue became the proper party, substituted for the Department of Health and Rehabilitative Services when the legislature transferred the child support enforcement function, effective July 1, 1994. See Section 1, Chapter 94-124, Laws of Florida.

11. Section 57.111(4)(a), F.S. provides, in pertinent part: (4)(a) Unless otherwise provided by law, an

    award of attorney's fees and costs shall be made 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 circum- stances exist which would make the award unjust.

    
    

12. Thus, an award of fees is mandated when,

    
    

    1. a small business party

    2. prevails

    3. in an administrative proceeding pursuant to chapter 120 initiated by a state agency,

    4. unless the actions of the agency were substantially justified or special circumstances exist which would make the award unjust.

       
       

13. Element a) is not in dispute. Subsection 57.111(3)(c), F.S. describes "prevails":

    
    

    (c) 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 pro- ceeding; or

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

    
    

    The agency cannot avoid the consequences of this provision by continuing to insist that the proceeding was merely "moot" by the passage of time. By any reasonable interpretation of the circumstances, Donald Belveal obtained a favorable settlement when the agency backed away from the offending specifications and extended the existing contract for legal services to cover the remainder of the bid proposal period. Only three months of the nine month contract period had lapsed when the hearing officer entered her recommended order. The agency could have ruled, but did not, on the recommended order as provided in subsection 120.57(1)(b) 10., F.S.

    
    

14. Similarly, the agency cannot extricate itself with a denial that it "initiated" the proceeding. As provided in subsection 57.111(3)(b), F.S., the term "initiated by a state agency" means that the 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 investi- gatory or other free-form proceeding of the agency.

15. The agency either "filed a request for administrative hearing" when it sent the protests to the Division of Administrative Hearings; or it was required to advise the small business party of a clear point of entry, notwithstanding the exemption of legal services from section 287.057, F.S. In either event, the substantial interests of Donald Belveal were being determined by the agency pursuant to section 120.57(1), F.S. In referring the cases to the Division of Administrative Hearings, the agency acceded to its legal obligations under chapter 120 or it voluntarily invoked the jurisdiction of Division of Administrative Hearings by "requesting a hearing". There is no support in section 57.111, F.S. or in the cases interpreting it, for the agency's contention that the remedy of fees and costs is available only when an agency initiates a proceeding with an administrative complaint.

    
    

16. Donald Belveal has met his burden of proving that he qualifies as a prevailing small business party. The agency, in turn, must prove that its action was "substantially justified", or as provided in subsection 57.111(3)(e), F.S., that the proceeding had a "reasonable basis in law and fact at the time it was initiated by the agency." State of Florida, Division of Health and Rehabilitative Services v. South Beach Pharmacy, 635 So 2d 117, 121 (Fla 1st DCA 1994)

    
    

17. The agency presented no evidence, and rests its "substantial justification" argument primarily on its exemption from the bidding requirements of chapter 287, F.S.. In other words, the agency argues it could establish any procedures and award the contract in any manner. This argument was properly rejected by Hearing Officer Donnelly. The agency chose to proceed with a competitive proposal process and could not ignore the legal benefits and obligations applied over years to that process.

    
    

18. A fee award under section 57.111, F.S. is limited to $15,000, for all preparations, motions, hearings, trials, and appeals in a proceeding. See subsection 57.111(3)(a), F.S. Donald Belveal's application for fees, the only matter before this hearing officer, is based solely on that statute. His reliance on City of Naples Airport Authority v. Collier Development Corporation,

515 So 2d 1058 (Fla 2nd DCA 1987), is, therefore, misplaced.

ORDER

Based on the foregoing, it is hereby, ORDERED:

That Petitioner's application for fees, subject to the $15,000 statutory limitation is GRANTED.

DONE AND ORDERED this 19th day of December, 1994, in Tallahassee, Leon County, Florida.

MARY CLARK

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 December, 1994.

APPENDIX

The following constitute specific rulings on the findings of fact proposed by the parties:

Petitioner's Proposed Findings

Petitioner's proposed findings of fact are set out in a "statement of the facts" in unnumbered paragraphs, and in an attached order provided for the hearing officer's signature. The proposals are substantially adopted here in different form, in the findings of fact and conclusions of law.

Respondent's Proposed Findings

1. Adopted in paragraph 1.

2-3. Adopted in paragraph 2.

1. Adopted in paragraph 3.

2. Adopted in paragraph 4.

3. Adopted in part in paragraph 6; otherwise rejected as unnecessary.

4. Adopted in part in paragraph 6; the characterization of the order is addressed in conclusions of law.

5. Adopted in paragraph 7.

6. Adopted in paragraph 8.

10-14. Rejected as argument or legal conclusions and addressed in the conclusions of law portion of the above order.

COPIES FURNISHED:

Larry Fuchs, Executive Director Department of Revenue

104 Carlton Building Tallahassee, Florida 32399-0100

Linda Lettera, General Counsel Department of Revenue

204 Carlton Building Tallahassee, Florida 32399-0100

Donald W. Belveal

300 N. Franklin Street Tampa, FL 33602-5124

Kevin J. O'Donnell, Esquire Department of Revenue

P.O. Box 6668

Tallahassee, FL 32314-6668

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 RULE 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: 94-003926F

Orders for Case No: 94-003926F