vs. ) Case No. 97-1488F
Respondent. )
RECOMMENDED ORDER SUPPLEMENTAL TO RECOMMENDED ORDER IN CASE NO. 96-3037
Following notice to the parties, the Division of Administrative Hearings, by its duly designated Administrative Law Judge Don W. Davis, held a formal hearing upon Respondent’s Motion for Award of Fees and Costs in the above-styled case on August 14, 1997, in Tallahassee, Florida, pursuant to a reservation of jurisdiction to consider that issue in the Recommended Order issued in Division of Administrative Hearings Case No. 96-3037. Petitioner has not responded to the motion. The following appearances were entered:
For Respondent: Murray M. Wadsworth, Jr., Esquire
Whether Petitioner should be ordered to pay reasonable costs and attorney's fees to Respondent, and, if so, the determination of the amounts of costs and attorney's fees.
Petitioner originally requested formal proceedings by letter dated June 7, 1996, with regard to Respondent’s decision not to grant certification to Petitioner as a qualified bidder on construction contracts in excess of $250,000.
Subsequent to referral to the Division of Administrative Hearings for conduct of formal proceedings in accordance with Section 120.57, Florida Statutes, the matter was assigned Division of Administrative Hearings Case No. 96-3037. At the Final Hearing on October 8, 1996, Petitioner did not appear and no evidence was presented on his behalf.
Inasmuch as Petitioner’s nonappearance was not anticipated, Counsel for Respondent made an ore tenus motion that the undersigned retain jurisdiction to determine whether fees and costs should be awarded to Respondent as a consequence of Petitioner’s nonappearance. The motion was granted and jurisdiction was retained on that issue. Thereafter, Respondent’s written motion was filed and notice of the August 1997, final hearing provided to the parties.
At the final hearing, Respondent presented two exhibits and official recognition was taken with regard to exhibits attached
to Respondent’s motion. No transcript of the final hearing was provided. Respondent’s proposed findings of fact and conclusions of law have been reviewed in the preparation of this supplemental Recommended Order. Petitioner did not appear at the final hearing and provided no post-hearing submissions.
On April 16, 1996, pursuant to Section 337.14, Florida Statutes, Petitioner submitted its Application for Qualification (Application) to bid on road and bridge contracts.
On May 29, 1996, Respondent notified Petitioner of Respondent’s intent to deny the Application, based in part upon the findings of a federal administrative law judge that Petitioner had violated numerous provisions of the Occupational Safety and Health Act of 1970, 29 U.S.C. Sections 651-678 (1970) and should be assessed penalties in the amount of $2,662,834.
Petitioner challenged Respondent’s denial with a request for formal administrative hearing before the Division of Administrative Hearings. Following requested continuances, a formal hearing on Petitioner’s request was convened on March 18, 1997, in Division of Administrative Hearings Case No. 96-3037.
In the course of discovery proceedings, Petitioner manifested his intention to participate in the final administrative hearing. However, Petitioner did not appear at the final hearing and did not notify the undersigned or counsel
for Respondent that an appearance for Petitioner would not be made. Also, Petitioner did not provide explanation for its nonappearance subsequent to that hearing.
Petitioner was previously denied pre-qualification to bid on road and bridge contracts. On June 21, 1995, Petitioner had submitted its Application to Respondent and, following Respondent’s denial dated August 23, 1995, requested formal administrative proceedings. After a formal hearing in that case before the Division of Administrative Hearings, Respondent adopted the Recommended Order in its entirety, denying Petitioner’s Application. See, Recommended Order issued February 23, 1996, in Division of Administrative Hearings Case No. 95-5904 (Final Order issued March 28, 1996).
On March 17, 1997, the day before the final hearing scheduled in Division of Administrative Hearings Case No. 96- 3037, Respondent received yet another Application from a firm named Anastasios Corporation. This firm performs the same type of work as E. Smalis Painting, Inc., the Petitioner in this matter, and contains an almost identical list of employees to that of E. Smalis Painting, Inc. Both applications have been filled out by hand, with handwriting that appears identical on both documents.
The proof presented at final hearing in this case establishes that E. Smalis Painting, Inc., is providing financial
backing for Anastasios Corporation and that Ernest Smalis is the chief executive officer of both business entities.
Petitioner’s expressed intention to pursue this matter to conclusion; its subsequent failure to follow through on that intention by appearing at the final hearing in Division of Administrative Hearings Case No. 96-3037, or providing either notification of such absence or subsequent explanation; its previous application filing in Division of Administrative Hearings Case No. 95-5904; and its latest filing of an Application for Anastasios Corporation one day before the final hearing in Division of Administrative Hearings Case No. 96-3037, establish that Petitioner has participated in this proceeding for a frivolous, improper purpose.
Respondent incurred significant time and expense in preparing its case in this matter which would not have been incurred but for Petitioner’s action in requesting these proceedings for a frivolous, improper purpose. Those expenses include:
$711.92 for travel, lodging, shuttle, and parking (Pittsburgh, Pennsylvania) expenses incurred in connection with the depositions of John Morris, a representative of OSHA, and Ernest Smalis, Petitioner’s representative.
$893.50 for transcript and service of process costs associated with the above- mentioned depositions.
$7,768.75 for attorney time.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this cause, pursuant to Section 120.595(1)(c) and (d), Florida Statutes.
Respondent’s Motion For Award Of Fees And Costs is grounded upon provisions of Section 120.569(2)(c), Florida Statutes, which provide:
All pleadings, motions, or other papers filed in the proceeding must be signed by the party, the party’s attorney, or the party’s qualified representative. The signature constitutes a certificate that the person has read the pleading, motion, or other paper and that, based upon reasonable inquiry, it is not interposed for any improper purposes, such as to harass or to cause unnecessary delay, or for frivolous purpose or needless increase in the cost of litigation. If a pleading, motion, or other paper is signed in violation of these requirements, the presiding officer shall impose upon the person who signed it, the 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.
The case law instructs that "at the earliest stage at which a violation of the [provision] can be determined," an Administrative Law Judge is obligated to act. See, Mercedes Lighting and Electrical Supply Inc. v. Department of General Services, 560 So. 2d 272 at 277 (Fla. 1st DCA 1990) and Harvey v. Trans Pac, Inc., 12 F.A.L.R. 4378 (1990). In the present
instance, Respondent’s counsel brought the violation to attention of the undersigned upon Petitioner’s failure to appear at the final hearing in Division of Administrative Hearings Case No.
96-3037. An immediate ruling issued to retain jurisdiction solely with regard to the matter of attorney fees and costs, upon Respondent’s filing a written pleading which would provide Petitioner an opportunity to respond.
The method of resolving the issue with regard to Section 120.569(2)(c), Florida Statutes, by an evidentiary hearing is discretionary with the Administrative Law Judge and was deemed appropriate in this case, given the recent enactment of provisions of Section 120.595(1)(c) and (d), Florida Statutes, which read as follows:
In proceedings pursuant to s. 120.57(1), and upon motion, the administrative law judge shall determine whether any party participated in the proceeding for an improper purpose as defined by this subsection and s. 120.569(2)(c). In making such determination, the administrative law judge shall consider whether the nonprevailing adverse party has participated in two or more other such proceedings involving the same prevailing party and the same project as an adverse party and in which such two or more proceedings the nonprevailing party did not establish either the factual or legal merits of its position, and shall consider whether the factual or legal position asserted in the instant proceeding would have been cognizable in the previous proceedings. In such event, it shall be rebuttably presumed that the nonprevailing adverse party participated in the pending proceeding for an improper purpose.
In any proceeding in which the administrative law judge determines that a party participated in the proceeding for an improper purpose, the recommended order shall so designate and shall determine the award of costs and attorney’s fees.
An improper purpose has been defined in Section 120.595(1)(e)1., Florida Statutes, as follows:
"Improper purpose" means participation in a proceeding pursuant to s. 120.57(1) primarily to harass or to cause unnecessary delay or for frivolous purpose or to needlessly increase the cost of licensing or securing the approval of an activity.
As stated in Good Samaritan Hospital v. Dept. of Health and Rehabilitative Services, 582 So. 2d 722 (Fla. 4th DCA 1991) (4th DCA July 3, 1991), quoting from Mercedes:
If a reasonably clear legal justification can be shown for the filing of the paper in question, improper purpose cannot be found.
As an example . . . improper purpose may be manifested by excessive persistence in pursuing a claim or defense in the face of adverse rulings, or by obdurate resistance out of proportion to the amounts or issues at stake.
In "Attorneys Fees and Costs in Administrative Proceedings," Vol. XIII, No. 3 Fla. Bar Administrative Law Section Newsletter, Marguerite H. ("Ditti") Davis, a judge of the First District Court of Appeals, commented that, "repetitive litigation on the same issue, asserting vacuous factual allegations or a legal argument having no basis constitutes an improper purpose."
Something of the same approach is available in a review of Burke v. Harbor Estates Assocs., 591 So. 2d 1034 (Fla. 1st DCA 1991). Burke presents some instructive points and established the existence of an improper purpose where a layman, acting as a qualified representative, submitted no evidence to show facts necessary to sustain the petition; fact witnesses' testimony was not material; there was a consistent demonstration of lack of knowledge of the applicable law and scope of formal hearing; and there was a complete absence of a justiciable issue of law.
Further, the Burke court rejected the argument that a lay qualified representative in a Section 120.57(1) proceeding should be held to a lesser standard of conduct than a licensed attorney. However, findings of "improper purpose" should be narrowly construed on a case-by-case basis to avoid creating a chilling effect upon citizens' legitimate interests.
To those ends, the evidence in this matter has been thoughtfully considered, and legal and public policy considerations, rooted in the intent of Chapter 120, Florida Statutes, to create a predominantly layman's forum have been weighed in Petitioner's favor.
Giving the Petitioner in this matter every benefit of the doubt, no reasonably clear legal justification has been shown for the filing of the Petition in Division of Administrative Hearings Case No. 96-3037. The Petitioner never presented evidence to sustain its allegations of substantial interests
within the terms of Agrico Chemical Co., Inc. v. Dept. of Environmental Regulation, 406 So. 2d 478 (Fla. 2d DCA 1981) and Friends of the Everglades Inc. v. Trustees, 595 So. 2d 186 (Fla. 1st DCA 1992).
RECOMMENDATION
Accordingly, it is recommended that a final order be entered granting Respondent’s motion for fees and costs in the following amounts:
$711.92 for travel, lodging, shuttle, and parking (Pittsburgh, Pennsylvania) expenses incurred in connection with depositions.
$893.50 for transcript and service of process costs associated with the depositions.
$7,768.75 for attorney time.
