STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DOUGLAS REYMORE, )

)

Petitioner, )

)

vs. ) CASE NO. 96-1123F

)

DEPARTMENT OF REVENUE, )

)

Respondent. )

)

FINAL ORDER

THIS CAUSE came before the undersigned on the Petition for Attorney's Fees and Costs and on the Response to Petition for Attorneys' Fees and Costs.

Neither party timely requested an evidentiary hearing. This Final Order is based on the record in this cause and the record in the underlying proceeding (DOAH Case No. 95-3137BID.)

APPEARANCES

For Petitioner: Carolyn S. Raepple, Esquire

David L. Powell, Esquire

T. Kent Wetherell, Esquire

Hopping Green Sams and Smith, P.A.

123 South Calhoun Street Tallahassee, Florida 32314

For Respondent: Peter S. Fleitman, Esquire

Brian F. McGrail, Esquire Department of Revenue

204 Carlton Building Tallahassee, Florida 32399

STATEMENT OF THE ISSUES

The issues presented are whether Petitioner is entitled to an award of (1) the reasonable attorney's fees and costs he incurred in DOAH Case No. 95-3137BID pursuant to the Florida Equal Access to Justice Act and (2) his attorney's fees and costs incurred in this proceeding pursuant to Section 120.569(2)(c) [formerly 120.57(1)(b)5], Florida Statutes.

PRELIMINARY STATEMENT

This matter arose from the Department's solicitation of proposals to provide legal services for child support enforcement (hereinafter "CSE") in Martin and Okeechobee Counties for the 1995-96 contract year. On May 22, 1995, the Department issued notice of its intent to award the contract to Thomas and Associates. Petitioner filed a protest, and the Department transferred the dispute to the Division of Administrative Hearings where it was assigned DOAH Case No. 95-3137BID. An evidentiary hearing was conducted on July 14, 1995, and

a Recommended Order was entered on September 11, 1995. The Department adopted that Recommended Order but for one finding of fact not relevant to this proceeding. The Department's December 1, 1995, Final Order awarded the contract to Petitioner.

On March 4, 1996, Petitioner initiated this proceeding, seeking an award of the reasonable attorney's fees and costs incurred by him in the bid protest, the underlying proceeding. On March 25, 1996, the Department timely filed its Response and did not dispute that the Department initiated the underlying proceeding, that Petitioner prevailed in the underlying proceeding, that the Department was not merely a nominal party in the underlying proceeding, that the amount of attorney's fees and costs incurred by Petitioner in the underlying proceeding were reasonable and necessary, and that no special circumstances exist which would make an award to Petitioner unjust. Further, the Department did not dispute the factual allegations regarding Petitioner's form of doing business, office location, domicile, number of employees or net worth; rather, the Department only disputed the capacity in which Petitioner litigated the underlying proceeding and whether the Department was substantially justified in initiating the underlying proceeding.

As a result of certain pleadings filed in this cause by the Department, Petitioner seeks an additional award of attorney's fees and costs, alleging that the Department filed those specific pleadings for an improper purpose.

Petitioner was afforded an opportunity to specify those pleadings alleged to be improper and to file affidavits as to the amount of attorney's fees and costs sought. Petitioner timely did so. Although the Department was afforded an opportunity to respond and file opposing affidavits, the Department failed to do so.

FINDINGS OF FACT

1. Petitioner is the sole proprietor of an unincorporated professional practice through which he practices law.

   
   

2. Petitioner's principal office and his domicile are located in Stuart, Florida.

   
   

3. At all times relevant hereto and at the time the underlying proceeding was initiated, Petitioner had fewer than 25 full-time employees and a net worth of less than $2,000,000, including both business and personal investments.

   
   

4. Petitioner submitted his proposal in response to the Department's solicitation on Petitioner's law firm's letterhead and clearly represented the offeror to be "Douglas Reymore, Attorney at Law. The words "my law firm" appear throughout Petitioner's proposal. The proof of insurance submitted was "for the firm". The required lobbying and public entity crime certifications identified the organization as "Douglas E. Reymore, Jr., Attorney at Law". Further, the proposal included resumes for the law firm's paralegals, clerks, and secretaries who would be assigned to perform work pursuant to the contract if the contract were awarded to Petitioner's law firm.

   
   

5. The Department evaluated Petitioner's proposal based upon a number of firm-based factors, including the attorney and non-attorney personnel who would be performing services for the Department if Petitioner were awarded the contract.

6. The formal written protest filed by Petitioner in DOAH Case No. 95- 3137BID was on Petitioner's law firm's letterhead and identified Petitioner in that proceeding as "Douglas Reymore, Attorney at Law".

   
   

7. Petitioner's status as a "small business party" within the meaning of the Florida Equal Access to Justice Act was not a condition of the contract to perform CSE services or of the award of the contract and was, therefore, not at issue in the underlying proceeding.

   
   

8. The Department's Solicitation Package and Instructions to CSE Regions provided to the Department's evaluation committee identified certain "Mandatory Requirements" and provided that a proposal was not to be considered if it failed to meet any mandatory requirement.

   
   

9. The proposal submitted by Thomas and Associates represented that under certain circumstances that law firm would hire additional attorneys to perform work under the CSE contract. Yet, the proposal failed to identify those attorneys and failed to include resumes or certificates of good standing from The Florida Bar for those additional attorneys as dictated by the Mandatory Requirements of the Department's solicitation.

   
   

10. Another Mandatory Requirement was for each proposal to include references from three persons for whom the proposer had rendered CSE services. The Thomas and Associates proposal included no references for the additional attorneys and only two references for one of the identified attorneys who would perform services under the Department's contract.

    
    

11. The Department's evaluation committee evaluated the Thomas and Associates proposal even though it did not include the mandatory references or the mandatory resumes and certificates from The Florida Bar for each attorney who would perform work under the CSE contract. Because the Thomas and Associates proposal did not meet the mandatory requirements, that proposal should not have been evaluated by the Department's evaluation committee. It should have been rejected as being non-responsive. The Department's Final Order in the underlying proceeding adopted the conclusion of law in the Recommended Order that the Department acted arbitrarily in determining that it would award the CSE contract to a proposer whose proposal was not responsive to the Department's solicitation package.

    
    

12. The instructions the Department gave to its evaluation committee were unclear with respect to how to score the proposals in the areas of references, minority ownership, and attorney experience. Further, the instructions contained contradictory or "hidden" directions for awarding points for attorney experience. The evaluation committee asked the Department for clarification and guidance as to points to be awarded for minority ownership, but none was given. Conversely, the evaluation committee failed to follow the instructions it was given when it awarded points to Thomas and Associates based upon letters of recommendation rather than personal interviews. The Department's Final Order in the underlying proceeding adopted the conclusion in the Recommended Order that the Department acted arbitrarily in awarding the CSE contract to Thomas and Associates due to the manner in which that proposal was scored.

    
    

13. The evaluation committee was not composed of qualified persons familiar with the provision of services under the Department's CSE contract. None of the members was an attorney, none was familiar with a high-volume CSE practice, and none had computer expertise. The lack of qualifications of the evaluation committee members resulted in the Thomas and Associates proposal

    being awarded points not supported by the facts or by logic. The Department's Final Order in the underlying proceeding adopted the conclusion in the Recommended Order that the evaluation committee arbitrarily awarded Thomas and Associates a substantial number of points.

    
    

14. The Department's Final Order in the underlying proceeding adopted the Recommended Order, found that the Thomas and Associates proposal was non- responsive, and awarded the CSE contract to Petitioner. The Final Order adopted each of the determinations that the Department had acted arbitrarily in several different ways in scoring the facially non-responsive Thomas and Associates proposal and announcing its intent to award the CSE contract to Thomas. Each of the actions determined by the Department in its Final Order to have been arbitrary was known to the Department at the time it announced its decision to award the CSE contract to Thomas and Associates, the preliminary agency action which initiated the underlying proceeding.

    
    

15. The total attorney's fees and costs incurred by Petitioner in the underlying proceeding were $52,950.96. Petitioner initiated this proceeding to seek reimbursement for those attorney's fees and costs.

    
    

16. The Department's Response to Petition for Attorneys' Fees and Costs filed in this cause does not raise any disputed issues of material fact and does not purport to raise any factual issues. Other than setting forth the procedural history of this cause, the Department's Response contained only legal arguments as to two issues: whether Petitioner is a small business party due to the capacity in which Petitioner appeared in the underlying proceeding and whether the Department was substantially justified in initiating the underlying proceeding. The Department did not dispute any of the factual allegations as to Petitioner's small business status alleged in the Petition for Attorneys' Fees and Costs.

    
    

17. On March 28, 1996, after expiration of the time period during which the Department could request an evidentiary hearing, the Department filed a Request for Evidentiary Hearing. On April 2, Petitioner filed and served by hand-delivery his Motion to Strike and for Other Prehearing Relief and Request for Award of Attorneys' Fees and Costs. On April 22, the Department filed its Response to the Petitioner's Motion to Strike and for Other Prehearing Relief and Request for Award of Attorneys' Fees and Costs, and Petitioner filed his Motion to Strike the Department's Response. Both of Petitioner's Motions to Strike the Department's untimely pleadings were granted.

    
    

18. On April 17, 1996, the Department served its First Set of Interrogatories to Petitioner and its "Notice of Request to Produce". Neither party has filed a copy of the Department's Interrogatories or any answers thereto. The Department's request to produce, however, was filed. That request seeks production of records of the law firm representing Petitioner in this and in the underlying proceeding, pertaining to other clients of the law firm and not Petitioner.

    
    

19. On July 3, 1996, the Department served its Motion to Correct Order, Motion for Reconsideration, and Motion for Clarification. That single Motion raised no argument which had not been previously rejected and failed to set forth any alleged error contained in the Order to which the Motion was directed. On July 9 Petitioner filed his Response to that Motion.

20. Petitioner incurred reasonable and necessary attorney's fees and costs in the amount of $4,946 in this proceeding as a result of the Department's Response to Petition for Attorneys' Fees and Costs.

    
    

21. Petitioner incurred reasonable and necessary attorney's fees and costs in the amount of $555.50 in this proceeding as a result of the Department's Request for Evidentiary Hearing.

    
    

22. Petitioner incurred reasonable and necessary attorney's fees and costs in the amount of $1,104.50 in this proceeding as a result of the Department's Notice of Request to Produce.

    
    

23. Petitioner incurred reasonable and necessary attorney's fees and costs in the amount of $178 in this proceeding as a result of the Department's First Set of Interrogatories.

    
    

24. Petitioner incurred reasonable and necessary attorney's fees and costs in the amount of $1,105 in this proceeding as a result of the Department's Motion to Correct Order, Motion for Reconsideration, and Motion for Clarification.

    
    

    CONCLUSIONS OF LAW

    
    

25. The Division of Administrative Hearings has jurisdiction over the parties hereto and the subject matter hereof. Sections 57.111, 120.569 and 120.57(1), Florida Statutes.

    
    

26. Section 57.111(3)(d), Florida Statutes, the Florida Equal Access to Justice Act, defines "small business party" to include:

    
    

    A sole proprietor of an unincorporated business, including 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. . . .

    
    

27. The Petition for Attorneys' Fees and Costs filed herein alleges that Petitioner is the sole proprietor of an unincorporated professional practice with its principal office in Stuart, Florida; that Petitioner is domiciled in Stuart; that the professional practice has only one full-time employee and a maximum of six full-time contract personnel; and that Petitioner's net worth is less than $2,000,000. The Department has not disputed any of those allegations.

    
    

28. The Department argues, instead, that Petitioner is not a small business party because he was not found to be one in the underlying proceeding, a frivolous argument since Petitioner's status as a small business party was not an issue in the underlying proceeding. The Department also argues that Petitioner participated in the underlying proceeding as an individual, not as an attorney or on behalf of his professional practice, another frivolous argument.

    
    

29. Petitioner's proposal repeatedly identified the offeror as "Douglas Reymore, Attorney at Law" and repeatedly referred to "my law firm". In

    addition, Petitioner's proposal contained a certificate from The Florida Bar that Petitioner was admitted to practice law in the State of Florida and that he was a member of The Florida Bar in good standing, a certification required by the Department for Petitioner's proposal to be considered responsive to the Department's solicitation of proposals to provide the Department with CSE legal services. Further, in evaluating Petitioner's proposal the Department specifically evaluated Petitioner's law firm's resources, including its personnel. Finally, Petitioner's formal written protest was on his law firm's letterhead and clearly identified the protestor as "Douglas Reymore, Attorney at Law".

    
    

30. The second issue raised by the Department in this proceeding involves the Department's allegation that it was substantially justified in initiating the underlying proceeding. Section 57.111(3)(e), Florida Statutes, provides that "[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."

    
    

31. The Department's assertion that it was substantially justified in awarding the legal services contract to Thomas and Associates, the action which caused the underlying proceeding to be initiated, is in direct conflict with the determination of the Department's Executive Director embodied in the Department's Final Order in the underlying proceeding. By adopting the Recommended Order entered in that cause, the Department's agency head specifically determined that the proposal of Thomas and Associates should have been rejected as non-responsive, that even evaluating that proposal was arbitrary, that the composition of the evaluation committee was deficient and arbitrary, that the scoring of the proposal of Thomas and Associates was arbitrary in several different areas, and that the Department's preliminary determination to award the contract to Thomas and Associates was arbitrary.

    
    

32. An arbitrary action is one which is not supported by facts or by logic. Agrico Chemical Co. v. Department of Environmental Regulation, 365 So.2d 759, 763 (Fla. lst DCA 1979). If an agency action must have a reasonable basis in law and in fact to be substantially justified under the Florida Equal Access to Justice Act, then a fortiori an arbitrary action cannot be substantially justified, an ingredient which is indispensable under the Florida Equal Access to Justice Act. Accordingly, the Department in its Final Order in the underlying proceeding has already determined that the Department's argument in this proceeding is frivolous.

    
    

33. Contrary to the Department's assertions, all facts relevant to show that the Department's intended award to Thomas and Associates was arbitrary were known to the Department at the time the Department issued its intended award thereby causing Petitioner to file the underlying proceeding. The Department knew that the Thomas and Associates proposal was facially non-responsive, that its evaluation committee was not qualified to evaluate the proposals, and that it had refused to clarify its instructions for scoring the proposals when its evaluation committee advised the Department that its instructions were confusing and in need of clarification. Accordingly, the Department's award of the legal services contract to Thomas and Associates was not substantially justified at the time the Department issued its intent.

    
    

34. Petitioner's entitlement to an award of reasonable and necessary attorney's fees and costs for the underlying proceeding is clear based upon a review of the record, including the Final Order, in the underlying proceeding. The maximum award of attorney's fees and costs pursuant to the Florida Equal Access to Justice Act is $15,000. Section 57.111(4)(d)2, Florida Statutes.

    Since Petitioner incurred a total of $52,950.96 in attorney's fees and costs in the underlying proceeding, Petitioner is entitled to receive the maximum award.

    
    

35. The final issue is Petitioner's entitlement to an award of attorney's fees and costs incurred for this proceeding. Section 120.569(2)(c), Florida Statutes, authorizes the award of reasonable fees against a party who files any pleading, motion, or other paper for any improper purpose, such as to harass or cause delay or for frivolous purpose or to needlessly increase the cost of litigation.

    
    

36. A frivolous purpose means having little significance or importance in the context of the proceeding. It is to be determined based upon the objective reasonableness of the pleading in light of the facts and circumstances of the proceeding in which it was filed, not upon the subjective good faith or bad faith of the party filing the pleading or the person signing it. Mercedes Lighting and Elec. Supply, Inc. v. Dept. of Gen. Services, et. al., 560 So.2d 272, 278 (Fla. 1st DCA 1990)

    
    

37. The only issues raised by the Department in its Response to the Petitioner for Attorney's Fees and Costs filed herein are that the Petitioner did not participate in the underlying proceeding as a small business party and that the Department was substantially justified when it made the determination that the contract for CSE legal services should be awarded to Thomas and Associates rather than to Petitioner. As to the first issue, the record in the underlying proceeding reveals that Petitioner did participate in that proceeding as a small business party, and the Department did not controvert that assertion in this proceeding. As to the second issue, the Executive Director of the Department has already determined by the Final Order in the underlying proceeding that the Department was not substantially justified in initiating that proceeding. The Department's failure to raise any issues to be adjudicated in this proceeding leads to the inescapable conclusion that pleadings filed by the Department in this proceeding were filed for an improper purpose; they were frivolous and they were filed to cause unnecessary delay or to needlessly increase the cost of litigation.

    
    

38. The only issues raised by the Department's Response to the Petition for Attorney's Fees and Costs were legal, not factual, issues. The Department's legal assertions were contradicted by the undisputed factual allegations in Petitioner's Petition and the record and the Department's own Final Order in the underlying proceeding. Petitioner is entitled to attorney's fees and costs resulting from the Department's Response which was facially interposed for an improper purpose.

    
    

39. The Department's Request for Evidentiary Hearing was untimely. Further, since the Department raised no factual issues in its Response, there were no factual issues to be adjudicated in an evidentiary hearing. The Department's Request for Evidentiary Hearing was, on its face, filed for improper purposes. Although Petitioner's Motion to Strike that Request was granted, the Department caused Petitioner to incur attorney's fees preparing the Motion to Strike the Department's frivolous Request.

    
    

40. The Department's "Notice of Request to Produce" sought records from Petitioner's law firm regarding other clients. The Department filed no opposition to the Petitioner's motions responding to that pleading. Similarly, the Department's Interrogatories to Petitioner sought to engage Petitioner in discovery when no facts were in dispute. Those discovery requests are obvious examples of pleadings interposed for an improper purpose.

41. The Department's Motion to Correct Order, Motion for Reconsideration, and Motion for Clarification (contained in one motion, not three) was, on its face, filed for an improper purpose. It contained no allegation as to the erroneous ruling in need of "correction," failed to allege any source of confusion in need of clarification, and either re-argued matters previously rejected or argued nonsensical matters.

    
    

42. An award pursuant to the Florida Equal Access to Justice Act does not include an award of fees or costs incurred by the prevailing small business party in the proceeding brought to obtain the award for the underlying proceeding. Therefore, the amount Petitioner can recover in this proceeding would be effectively reduced by the amount the Petitioner must expend in this proceeding. Although Section 120.569(2)(c), Florida Statutes, authorizes the imposition of any appropriate sanction where a party has filed a pleading for an improper purpose, imposing a sanction other than additional attorney's fees and costs in this proceeding would only further the Department's improper purpose. Furthermore, the law is well settled that a party can recover attorney's fees and costs under more than one statutory authorization. See, for example, City of Naples Airport Authority v. Collier Development Corp., 515 So.2d 1058 (Fla. 2d DCA 1987).

Based upon the foregoing Findings of Fact and Conclusions of Law, it is ORDERED that the Department shall reimburse Petitioner the amount of

$15,000 for attorney's fees and costs incurred by him in the underlying proceeding pursuant to Section 57.111, Florida Statutes, and the amount of

$7,889 for attorney's fees incurred by him in this proceeding pursuant to Section 120.569(2)(c), Florida Statutes, for a total of $22,889.

DONE AND ORDERED this 31st day of October, 1996, in Tallahassee, Florida.

LINDA M. RIGOT

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 31st day of October 1996.

COPIES FURNISHED:

Carolyn S. Raepple, Esquire David L. Powell, Esquire

T. Kent Wetherell, Esquire

Hopping Green Sams and Smith, P.A.

123 South Calhoun Street Tallahassee, Florida 32314

Peter S. Fleitman, Esquire Brian F. McGrail, Esquire Department of Revenue

204 Carlton Building Tallahassee, Florida 32399

Linda Lettera, General Counsel

204 Carlton Building Tallahassee, Florida 32399-0100

Larry Fuchs, Executive Director

104 Carlton Building Tallahassee, Florida 32399-0100

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: 96-001123F

Orders for Case No: 96-001123F