STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PEGGY WATKINS, d/b/a/ )

WATKINS HEALTH CARE CENTER )

)

Petitioner, )

)

vs. ) CASE NO. 95-4816F

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, this matter came on for hearing in Tallahassee, Florida before the Division of Administrative Hearings by its duly designated Hearing Officer, Diane Cleavinger, on March 12, 1996.

APPEARANCES

For Petitioner: Fred H. Flowers, Esquire

518 North Calhoun Street Tallahassee, Florida 32301

For Respondent: John R. Perry, Esquire

Department of Health and Rehabilitative Services

2639 North Monroe Street, Suite 252-A Tallahassee, Florida 32399-2949

STATEMENT OF ISSUE

The issue in this proceeding is whether Petitioner is entitled to an award of reasonable costs and attorney fees pursuant to Section 57.111, Florida Statutes.

PRELIMINARY STATEMENT

On October 2, 1995, Petitioner, P. W., filed a Petition for an award of attorney's fees and costs pursuant to Section 57.111, Florida Statutes. The Petition alleged, among other things, that Petitioner had prevailed in the underlying administrative action.

P.W. v. Department of Health and Rehabilitative Services, DOAH Case No. 94-1729C, Rendition No. HRS-95-192-FOF-RCD (Fla. DHRS

1. issued August 3, 1995), and that the Department was not substantially justified in its initial determination denying Petitioner an exemption from disqualification from employment. On October 26, 1995, Respondent, Department of Health and

   Rehabilitative Services filed a response to the Petition alleging that it was substantially justified in its denial of an exemption from employment to Petitioner and challenging the reasonableness and accuracy of the hours and services Petitioner's attorney alleged he performed in the underlying exemption hearing.

   
   

   At the final hearing, Petitioner testified in her own behalf and called two (2) additional witnesses. Petitioner, also offered four (4) exhibits into evidence. Respondent offered the testimony of two (2) witnesses and offered five (5) exhibits into evidence.

   
   

   After the hearing, Petitioner filed a Proposed Final Order on June 14, 1996. The Petitioner's Proposed Findings of Facts have been considered and utilized in the preparation of this Final Order except where those facts were cumulative, subordinate, irrelevant, immaterial or were not shown by the evidence. Specific rulings on the Petitioner's Proposed Findings of Fact are contained in the Appendix to this Final Order.

   
   

   FINDINGS OF FACT

   
   

   1. Peggy Watkins and operates Watkins Health Care Center. The center employs under 25 employees and earns less than two million dollars in revenue.

      
      

   2. Peggy Watkins was the prevailing party in the exemption hearing, P.W. v. Department of Health and Rehabilitative Services, DOAH Case No. 94-1729C, Rendition No. HRS-95-192-FOF- RCD (Fla. DHRS F.O. issued August 3, 1995), which is the action underlying the request for fees and costs in this case.

      
      

   3. The underlying exemption action in this case resulted from the Department's denial of Petitioner's request for exemption from disqualification from employment in a caregiver capacity to disabled adults on February 14, 1994. The disqualifying factor used by the Department in its decision was a confirmed report of adult abuse, FPSS Number 92-021519 involving the exploitation of W.W. a disabled adult. The report stated in part:

      
      

      Capacity to consent: . . . W.W. does not have the capacity to consent.

      Findings/classification": W.W. has been living

      in a mobile home owned by Peggy Watkins for the past four and one half years. It is filthy, run down, and according to local realtor, Yvonne Mediate, would only be worth $150/month, if it were to be cleaned. W.W. actually pays Peggy Watkins $600/month, not including utilities, which he has to pay for separately. She also takes $200 out of his check every month prior

      to depositing it, and provides no receipts nor gives any explanation as to how this money is spent. Separate checks are drawn on W.W.'s account for food, gas and incidentals, etc.

      Out of $1,074/month he receives, he has not saved a penny in the four and a half years that Peggy has been payee on his check She

      provided no receipts for any of the appliances she claims to have bought him and he has no appliances either. She claims that he has sold his appliances for drugs. W.W. denies that this is so . . . , a drug screen was done and W.W.'s system was found to be free of drugs. . . . .

      Although W.W. complained loud and long about

      the misappropriation of his funds, at the begin- ning of this investigation, it wasn't long before he did a 180 degree turn about Improper

      management of finances: verified. . . .

      
      

   4. The evidence at the exemption hearing demonstrated that there were multiple payments for utilities throughout the course of any given month. Also the evidence at the hearing showed that the Department considered a document which purported to outline a rental/services agreement between Petitioner and W.W. The agreement indicated that Petitioner's rent included utilities and housekeeping services which appeared not to be being performed or paid out of the rent.

      
      

   5. Given these facts, there is no question that the Department acted reasonably in relying on the confirmed adult abuse report as a basis for denying the Petitioner's request for exemption. As it turned out the evidence at the exemption hearing cast serious doubt on the strength of the abuse report and it was recommended that she be granted an exemption which recommendation was adopted in the Final Order. However, those facts do not demonstrate the Department was not justified in relying on the abuse report as it was established and maintained in the Department's abuse registry in making its initial decision in that case. At the time of making its decision the Department had to decide issues of credibility and reliability in weighing whether to grant Petitioner an exemption. The Hearing Officer's determination was at odds with the determination of the

      Department, however, the Department's reliance on the veracity of the reports in its abuse registry was not unreasonable.

      
      

   6. Finally, the total attorney's time spent on this case based on the amendments and deletions to the attorney's affidavit made at the hearing is 97.4 hours. Given the numerous changes made to the affidavit at the hearing and the inclusion of time and work spent on behalf of Petitioner in her other cases, the evidence did not demonstrate a reliable factual basis for the amount of time spent by Petitioner's attorney relative to this proceeding.

      
      

   7. Given these facts, Petitioner is not entitled to an award of Attorney's fees and costs.

      
      

      CONCLUSIONS OF LAW

      
      

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

      
      

   9. Section 57.111, Florida Statutes, provides for an award of reasonable attorney's fees and costs where an agency's action has not been substantially justified. Section 57.111, Florida Statutes states:

      
      

      1. This section may be cited as the 'Florida Equal Access to Justice Act.'

      2. The Legislature finds that certain persons may be deferred from seeking review of, or defending against, unreasonable govern- mental action because of the expense of civil

         actions and administrative proceedings. Because of the greater resources of the state, the stan- dard for an award of attorney's fees and costs against the state should be different from the standard for an award against a private litigant. The purpose of this section is to diminish the deterrent effect of seeking review of, or defending against, governmental action by providing in certain situations an award of attorney's fees and costs against the state.

      3. As used in this section:

         1. The term 'attorney's fees and costs' means the reasonable and necessary attorney's fees and costs incurred for all preparations, motions, hearings, trials, and appeals in a proceeding.

         2. The term 'initiated by a state agency' means that the 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 small business party of a clear point of entry

            after some recognizable event in he investigatory or other free-form proceeding of the agency.

         3. 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.

         4. The term 'small business party' means:

            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, including both personal and business investments; 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 subparagraph 1., 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 to contest the legality of any assessment of tax imposed for the sale or use of services as provided in

            chapter 212, or interest thereon, on penalty therefor.

         5. A proceeding is 'substantially justified' if it had a reasonable basis in law and fact at the time it was initiated by a state agency.

         (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 circumstances exist which would make the award unjust.

         1. 1. To apply for an award under this section, the attorney for the prevailing small business party must submit an itemized affidavit to the court which first conducted the adversarial proceeding in the underlying action, or to the Division of Administrative Hearings which shall assign a hearing officer, in the case of a proceeding pursuant to chapter 120, which affidavit shall reveal the nature and extent of the services rendered by the attorney as well as the costs incurred in preparations, motions, hearings, and appeals in the proceeding.

            2. The application for an award for attorney's fees must be made within 60 days after the date that the small business party becomes a prevailing small business party.

         2. The state agency may oppose the application for the award of attorney's fees and costs by affidavit.

         3. The court, or the hearing officer in the case of a proceeding under chapter 120, shall promptly conduct an evidentiary hearing on the application for an award of attorney's fees and shall issue a judgment, or a final order in the case of a hearing officer. The final order of a hearing officer is reviewable in accordance with the provisions of Section 120.68. If the court affirms the award of attorney's fees and costs in whole or in part, it may, in its discretion, award

         additional attorney's fees and costs for the appeal.

         1. No award of attorney's fees and costs shall be made in any case in which the state agency was a nominal party.

         2. No award of attorney's fees and costs for an action initiated by a state agency shall exceed

         $15,000.

         (5) If the state agency fails to tender payment of the award of attorney's fees and costs within

         30 days after the date that the order or judgment becomes final, the prevailing small business party may petition the circuit court where the subject matter of the underlying action arose for enforce- ment of the award by writ of mandamus, including

         additional attorney's fees and costs incurred for issuance of the writ.

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

         (b) This section only applies to actions initiated by state agencies after July 1, 1984.

         (7) Each state agency shall report on or before October 1 of each year to the President of the Senate and the Speaker of the House of Represent- atives the amount of attorney's fees and costs paid pursuant to the provisions of this section during the preceding fiscal year by that agency. The report shall describe the number, nature, and amount of the awards; the claims involved in the actions; and other relevant information which might aid the Legislature in evaluating the scope and impact of these awards.

   10. In determining whether to award attorney's fees under this section to a person who was the subject of an administrative proceeding in which the person prevailed, the initial burden is on the Petitioner to establish by a preponderance of the evidence that he or she prevailed in the earlier proceeding and that it is a small business party as defined by this section; once this burden is met, the burden is on the agency to establish whether it was substantially justified in beginning the administrative action. Department of Professional Regulation Div. of Real Estate

       v. Toledo Realty, Inc., 549 So. 2d 715 (Fla. 1st DCA 1989).

       
       

   11. The Act is designed to discourage unreasonable governmental action, not to paralyze the agencies doing the necessary and beneficial work of government. Rudlow v. Department of Environmental Regulation, 33 Fla. Supp. 2d 203 (DOAH 1987).

       
       

   12. In this case, the Department of Health and Rehabilitative Services has established that it was substantially justified in its determination to deny Petitioner an exemption from disqualification from employment at the inception of the underlying proceeding in this matter. The Department relied on a legally confirmed report of adult exploitation to deny Petitioner an exemption. At the time of the hearing there was a legitimate dispute as to the constitutionality of the exploitation portions of Chapter 415, Florida Statutes. Moreover, there was a dispute of facts regarding the ability and reliability of the abused adult to retract his earlier charges. Given these facts, Petitioner is not entitled to an award of attorney's fees and costs.

ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law, it is ordered that

ORDERED:

That the Petition for Attorney's Fees and Costs filed by Petitioner is denied.

DONE and ORDERED this 2nd day of August, 1996, in Tallahassee, Leon County, Florida.

DIANE CLEAVINGER, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675 SunCom 278-9675

Filed with the Clerk of the Division of Administrative Hearings this 2nd day of August, 1996.

APPENDIX

1. The facts contained in paragraphs 2, 3, 4 and of Petitioner's Proposed Findings of Fact are adopted in part, in so far as material.

2. The facts contained in paragraphs 1, 5, 6, 7, 8, 9, 10, 11, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29 and 30 of Petitioner's Proposed Findings of Fact are subordinate.

3. The facts contained in paragraphs 12, 13 and 15 of Petitioner's Proposed Findings of Fact were not shown by the evidence.

COPIES FURNISHED:

John R. Perry, Esquire Department of Health and

Rehabilitative Services

2639 North Monroe Street, Suite 252-A Tallahassee, Florida 32399-2949

Fred H. Flowers, Esquire

518 North Gadsden Street Tallahassee, Florida 32301

Gregory D. Venz, Agency Clerk Department of Health and

Rehabilitative Services Building 7, Suite 204-X 1317 Winewood Boulevard

Tallahassee, Florida 32399-0700

Richard Doran, Esquire Department of Health and

Rehabilitative Services Building 7, Suite 204

1317 Winewood Boulevard

Tallahassee, Florida 32399-0700

NOTICE OF RIGHT TO APPEAL

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 the 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.

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DISTRICT COURT OPINION

=================================================================

IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA

PEGGY WATKINS, NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND

Appellant, DISPOSITION THEREOF IF FILED.

v. CASE NO. 96-3278

DOAH CASE NO. 95-4816F

FLORIDA DEPARTMENT OF HEALTH AND REHABILATIVE SERVICES,

Appellee.

/

Opinion filed April 15, 1997.

An appeal from an order of the Division of Administrative Hearings.

Fred H. Flowers, Tallahassee, for Appellant.

John R. Perry, Assistant District Legal Counsel, Department of Children and Families, Tallahassee, for Appellee.

PER CURIAM.

AFFIRMED.

BARFIELD, C.J., KAHN, and DAVIS, JJ., CONCUR.

M A N D A T E

from

DISTRICT COURT OF APPEAL OF FLORIDAA

FIRST DISTRICT

To the Honorable Diane Cleavinger, Hearing Officer Division of Administrative Hearings

WHEREAS, in that certain cause filed in this Court styled:

PEGGY WATKINS, d/b/a WATKINS HEALTH CARE CENTER

v. Case No. 96-3278

Lower Tribunal Case No. 95-4816F

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES

The attached opinion was issued on April 15, 1997.

YOU ARE HEREBY COMMANDED that further proceedings, if required, be had in accordance with said opinion, the rules of Court, and the laws of the State of Florida.

WITNESS the Honorable Edward T. Barfield, Chief Judge

of the District Court of Appeal of Florida, First District, and the Seal of said Court done at Tallahassee, Florida,

on this 1st day of May, 1997.

(SEAL) JON S. WHEELER

Clerk, District Court of Appeal of Florida First District

Docket for Case No: 95-004816F

Orders for Case No: 95-004816F