vs. ) Case Nos. 99-2761F
Respondents. )
Pursuant to notice, a formal hearing in these cases was held on September 21, 1999, in Tallahassee, Florida, before Donald R. Alexander, the assigned Administrative Law Judge of the Division of Administrative Hearings.
For Petitioner: Donna H. Stinson, Esquire
The issue is whether Petitioner's request for attorney's fees and costs should be approved.
This proceeding began on January 15, 1999, when Petitioner, Couch Construction, L.P., filed two Motions for Sanctions, Including Costs and Attorney's Fees under Section 120.569(2)(e), Florida Statutes, seeking to impose sanctions against Respondents, Darel Holland and Diane Lowery, on the ground that both Respondents had filed petitions in a permit proceeding before the Department of Environmental Protection "for an improper purpose, to harass and to cause unnecessary delay."
The matters were eventually referred by the agency to the Division of Administrative Hearings on June 22, 1999, with a request that an Administrative Law Judge be assigned to conduct a formal hearing. The two cases were assigned Case Nos. 99-2261 and 99-2262, and they were later consolidated by order dated
July 12, 1999.
By Notice of Hearing dated July 14, 1999, a final hearing by videoconferencing was scheduled on September 21, 1999, in Tallahassee and Pensacola, Florida. Respondent Darel Holland elected to attend the hearing in Tallahassee rather than by videoconferencing from Pensacola.
At the final hearing, Petitioner offered Petitioner's Exhibits 1 and 2, which were received in evidence. Respondent Darel Holland testified on his own behalf. Respondent Diane Lowery did not appear at the final hearing. On the undersigned's own motion, the papers filed in both cases have been used, where
relevant, to assist in the development of the factual background of these matters.
There is no transcript of the hearing. Proposed Findings of Fact and Conclusions of Law were filed by Petitioner on
October 1, 1999, and they have been considered in the preparation of this Recommended Order. In addition, on October 5, 1999, Respondent Diane Lowery filed a paper styled Response to Proposed Recommended Order of Couch Construction, L.P. Because the rules do not contemplate the filing of a response, the paper has been disregarded.
In these cases, Petitioner, Couch Construction, L.P., seeks to impose sanctions against Respondents, Darel Holland (Holland) and Diane Lowery (Lowery), on the ground that they allegedly filed petitions for an improper purpose challenging the issuance of a permit by the Department of Environmental Protection (DEP). In responsive papers filed by Respondents, both deny that the actions were initiated for an improper purpose.
The facts in the underlying DEP case involving Holland (OGC Case No. 98-3015) show that on October 30, 1998, Petitioner published a copy of DEP's Notice of Intent to Issue Permit to Petitioner authorizing the construction of a hot mix asphalt
concrete plant at 2780 North Highway 95-A, Cantonment, Florida, with potential emissions of up to 29 tons per year of particulate matter.
After learning of the proposed action, various citizens in the Cantonment area signed a petition opposing the project. In addition, a local attorney, John T. Reading, Jr., Esquire (Reading), offered to provide them with pro bono assistance as a
"community service." Among other things, Reading prepared a form petition challenging the issuance of the permit and requesting a formal hearing. That form was apparently made available to the local citizens so that they could sign and file it, if they chose to do so. Holland says that he did, and it is fair to infer that this form was the source of Lowery's petition as well.
Holland lives only 9 blocks from the proposed plant and suffers from a lung disease which has left him with only
58 percent of his lung capacity. Because of his legitimate concerns about the projected amount of particulate emissions and their potential effect on his respiratory system, on November 12, 1998, he filed in proper person a Petition for Formal Administrative Hearing challenging the proposed issuance of the permit.
Holland's petition alleged that he was a property owner in the area where the plant would be constructed; that "due to respiratory problems," he would be "substantially affected by the permitted 29 tons of particulate emissions"; that his property
"may be substantially reduced in value and peaceful enjoyment" as a result of the permit being issued; and that the petition was not "being interposed merely for the purposes of delay, or any other improper purpose as listed in F.S. 120.57(1)(b)(5)." There was no showing that the petition was filed for an improper purpose or that Holland's concerns were not genuine.
Holland's petition also requested an extension of time "to determine which rules or statutes require reversal or modification of the Department's action" and "to obtain counsel" to assist him in his action.
On December 21, 1998, DEP entered an order dismissing Holland's petition on the ground that he failed to allege the information required by Rule 28-106.201(2)(e), Florida Administrative Code. It also determined that no good cause had been shown to warrant an extension of time for Holland to determine if any rules or statutes supported his position. He was, however, granted leave to file an amended petition within
15 days from the date of service of DEP's dismissal order (December 23, 1998). This meant that an amended petition had to be filed with DEP no later than January 7, 1999.
After learning that his petition had been dismissed, Holland had a brief conversation with Reading about the dismissal and was left with a somewhat vague understanding that Reading "would get an extension" from DEP. Thereafter, on January 12, 1999, or 5 days after the due date, Reading filed with DEP an
Amended Petition of Darel Holland for Administrative Hearing. The petition was signed by Reading, and it represented that a copy of the petition had been served on Petitioner's counsel on January 5, 1999.
On January 14, 1999, Reading also filed with DEP on behalf of Holland a paper styled Plaintiff's Motion to Enlarge Time in which Reading claimed that "due to circumstances not known," the amended petition had not been timely filed. Reading accordingly requested that DEP authorize the untimely filing.
By order dated January 28, 1999, DEP denied the Motion to Enlarge Time and dismissed the amended petition, with prejudice, as being untimely. No appeal from that final agency action was taken.
Lowery did not attend the final hearing. However, according to Holland, Lowery lives only 500 feet from the proposed cement plant. She boards horses on her property and frequently has children visit the property to ride their horses. The papers filed in her underlying case (OGC Case No. 98-2932) reflect that the facts in that case are essentially the same as those involving Holland.
On November 12, 1998, Lowery filed in proper person a Petition for Formal Administrative Hearing which was virtually identical to the petition filed by Holland. As an additional ground, however, she alleged that the October 30, 1998, notice published by Petitioner was defective, and she requested that DEP
require Petitioner to re-advertise the matter. There was no evidence that this petition was filed for an improper purpose or that Lowery's concerns were not genuine.
On December 21, 1998, Lowery's petition was dismissed by DEP because she had failed to comply with the requirements of Rule 28-106.201(4), Florida Administrative Code. Like Holland, she was given until January 5, 1999, in which to file an amended petition.
In papers filed by Lowery after this sanction proceeding arose, she denies that she had any knowledge that any further papers in the permit case would be filed on her behalf after the DEP dismissal order was entered. In any event, on January 12, 1999, or five days after the due date, Reading filed on Lowery's behalf with DEP an Amended Petition for Formal Administrative Hearing which was identical to that filed on behalf of Holland. Also, on January 14, 1999, Reading filed a Plaintiff's Motion to Enlarge Time seeking to excuse his tardiness in filing the amended petition. Both papers were served on Petitioner's counsel.
On January 28, 1999, DEP entered its Final Order Denying Motion to Enlarge Time and dismissing Lowery's amended petition, with prejudice. No appeal from that final order was taken.
Because no appeal was taken by either Respondent, DEP's intent to issue a permit became final, and it is fair to infer that a permit has been issued to Petitioner.
On January 7, 1999, or prior to DEP's final order of dismissal, Petitioner's counsel noticed both Respondents for a deposition in Pensacola, Florida, on January 14, 1999. Because Reading had signed the amended petitions, Petitioner's counsel logically served the notices by Federal Express on Reading. However, Reading failed to notify Respondents, and neither he nor Respondents appeared at the deposition or advised counsel prior to the depositions that they would not appear. As a result, Petitioner incurred the costs and fees for having its counsel travel to Pensacola. In addition, Petitioner presumably incurred the cost of a court reporter's appearance fee. Assuming that Petitioner's claim is meritorious, those costs would be the responsibility of Reading, and not Respondents.
At the hearing, it was represented that Reading is no longer a member of the Florida Bar. This is because in an unpublished order dated January 7, 1999, the Florida Supreme Court revoked his license to practice law effective 30 days thereafter, or on February 7, 1999. His current address is unknown.
Petitioner has asserted that in defending against Respondents' petitions, "the bulk" of its costs and fees are related to the deposition and that a few other undisclosed fees
and costs have been incurred. At the final hearing, Petitioner did not specify the amount of fees and costs that it seeks or provide any breakdown of those amounts; rather, it opted to provide an affidavit detailing those costs after this final order is rendered, assuming it prevails in this action.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties hereto pursuant to Sections 120.57 and 120.569, Florida Statutes (Supp. 1998).
Section 120.569(2)(e), Florida Statutes (Supp. 1998), governs this dispute and reads as follows:
(2)(e) All pleadings, motions, or other papers 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 includes 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 fees.
Under the foregoing statute, the administrative law judge, rather than the agency, has the authority to impose
sanctions, when appropriate. Dep't of Health and Rehab. Servs. v. S. G., 613 So. 2d 1380, 1384 (Fla. 1st DCA 1993). This is
because an agency does not have the "authority to review fee and cost awards that administrative law judges make under the authority of section 120.569(2)." Procacci Comm. Realty, Inc. v. Dep't of Health and Rehab. Servs., 690 So. 2d 603, 606 n. 5 (Fla. 1st DCA 1996). Therefore, disposition of the motions by final order is appropriate.
There are only a handful of cases which have construed the term "improper purpose" in the context of a claim for sanctions. In an earlier case, the court defined an improper purpose as being one "which is of little significance or importance" in the administrative process. Mercedes Lighting & Electrical Supply, Inc. v. State, Dep't of Gen. Servs., 560 So. 2d 272, 278 (Fla. 1st DCA 1990). In the same case, the court cited examples of an improper purpose as litigation which ties up a competitor's application leaving your business free to continue running as a monopoly for the length of the litigation, or creating administrative delays and costs over a permit so as to bankrupt a competing developer. Id. at 277-78 n. 5. Thus, using that rationale, sanctions were imposed against the challenger in Friends of Nassau County, Inc. v. Fisher Develop. Co., et al., 1998 WL 929876 (Fla. Div. Admin. Hrgs., Oct. 13, 1998), where the challenger signed the initial petition without knowledge of the facts, and it did so for the express purpose of delaying the
project and to gain an advantage for a competitor of the applicant.
More recent court cases construing the term all involved situations where the matter proceeded to final hearing, and the motion for sanctions turned on whether, at hearing, the opposing party offered "a reasonably clear legal justification for its [initial] filing," Dep't of Health and Rehab. Servs. v. S. G., 613 So. 2d 1380, 1385 (Fla. 1st DCA 1993); whether the challenger offered any evidence or testimony in support of its pleadings at the final hearing, Burke v. Harbor Estates Associates, Inc., 591 So. 2d 1034 (Fla. 1st DCA 1991) and Dolphins Plus v. Residents of Key Largo Ocean Shores, 598 So. 324 (Fla. 3d DCA 1992); or whether the initial petition, as later amended, "wholly lacked legal merit." Aloha Utilities, Inc. v. Public Service Comm., 723 So. 2d 919, 920 (Fla. 1st DCA 1999). In the instant cases, the matters were dismissed with prejudice by DEP at the outset of the process and were never forwarded to the Division of Administrative Hearings to be set down for hearing. Therefore, the more recent cases offer no precedential value.
For the following reasons, the undersigned concludes that Petitioner should not prevail. First, in a sanction case, the moving party (Petitioner) bears the burden of proving that the challenged papers were filed for an improper purpose. Here, Petitioner's only evidence was that Respondents failed to appear
at a discovery deposition. Discovery violations and the filing of frivolous papers are two different things, and the former does not constitute a basis for finding a party in violation of Section 120.595(2), Florida Statutes.
In addition, there was no evidence to demonstrate that Respondents were not sincere and well-intentioned in filing their objections to having a hot mix asphalt concrete plant constructed near their homes. Indeed, the record shows that Holland lives only 9 blocks from the project site and suffers from a respiratory disease, while Lowery resides no more than 500 feet from the proposed plant. The permit authorizes Petitioner to discharge air emissions totaling as much as 29 tons of particulate matter per year in their neighborhoods. Given these circumstances, and the fact that Respondents did not yet have an opportunity to make further inquiry, an allegation in their initial petitions that they feared an adverse impact on their respiratory systems is hardly a frivolous claim. The undersigned has also rejected a contention that the untimely filing of amended petitions equates to an improper filing.
At the same time, the purpose of the statute itself must be considered. It is logical to conclude that an award of fees and costs under Section 120.595(2), Florida Statutes, should be made only "where an opponent is abusing its legal power in a manner warranting harsh punitive action." Marguerite H. Davis, Attorney[']s Fees and Costs in Administrative Proceedings,
13 Fla. Bar. Admin. L. Sec. Newsl. at 9 (Mar. 1992). Or, as another commentator has stated, the award of attorney's fees "is intended to deter the most egregious of violations." Seann M. Frazier, Award of Attorney's Fees in Administrative Litigation, Fla. Bar J., July/Aug. 1995, at 76. Here, Respondents' actions clearly are not "the most egregious of violations" and do not constitute an abuse of legal power "warranting harsh punitive action."
Given these considerations, the motions should be denied. This being so, it is unnecessary to consider Petitioner's request that it be authorized to file a post-hearing affidavit detailing its fees and costs, a matter that is normally resolved at the hearing on the merits of the motions.
ORDERED that Petitioner's Motions for Sanctions, Including Costs and Attorney's Fees are denied.
DONE AND ORDERED this 11th day of October, 1999, in Tallahassee, Leon County, Florida.
DONALD R. ALEXANDER
Filed with the Clerk of the Division of Administrative Hearings this 11th day of October, 1999.
Martha L. Nebelsiek, Esquire Department of Environmental Protection 3900 Commonwealth Boulevard
Donna H. Stinson, Esquire
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.
