RONALD A. GRIMALDI, )
vs. ) Case No. 01-0833F
Respondent. )
A formal hearing was conducted in this case on April 12, 2001, in Tallahassee, Florida, before the Division of Administrative Hearings, by its Administrative Law Judge, Suzanne F. Hood.
For Petitioner: William M. Powell, Esquire
Powell & Steinberg, P.A.
3515 Del Prado Boulevard, South Waterside Plaza, Suite 101 Cape Coral, Florida 33904
For Respondent: Thomas G. Thomas, Esquire
The issues are whether Petitioner is entitled to attorney fees and costs pursuant to Section 120.595(3), Florida Statutes, and if so, in what amount.
DOAH 00-1600RX (Final Order, February 15, 2001). In that order, the undersigned retained jurisdiction to determine Petitioner Ronald A. Grimaldi's (Petitioner) entitlement to attorney's fees and costs pursuant to Section 120.595(3), Florida Statutes, after an evidentiary hearing.
On February 28, 2001, Petitioner filed a Motion for Attorney Fees and Costs pursuant to Section 120.595(3), Florida Statutes.
A Notice of Hearing dated March 16, 2001, scheduled the case for hearing on April 12, 2001.
Petitioner filed a Notice of Filing and Affidavit of Fees and Costs on March 19, 2001. That same day, Respondent Florida State Boxing Commission (Respondent) filed a Statement of Defenses to Petition for Attorney Fees.
On March 27, 2001, Petitioner filed a Request for Evidentiary Hearing.
On April 11, 2001, Petitioner filed a Response to Initial Order.
During the hearing, Petitioner presented testimony of one expert witness. Petitioner's Affidavit of Attorney Fees and Cost was examined by the parties during the hearing and is accepted in the record.
Respondent presented no witnesses and offered no exhibits during the hearing. Respondent was granted permission to file two depositions in lieu of testimony on or before May 2, 2001. As of the date of this order, Respondent had not filed any depositions.
The parties agreed to file a stipulation as to any fees and costs that should be deducted from the total amount reflected in the attachment to Petitioner's Affidavit of Fees and Costs.
That stipulation, which was due to be filed on or before April 27, 2001, has not been filled.
The undersigned takes official recognition of the pleadings and record on file in DOAH Case No. 00-1600RX.
The Transcript of the proceeding was filed on April 17, 2001. Respondent filed a Proposed Final Order on May 11, 2001. Petitioner filed a proposed Order on May 14, 2001.
Petitioner was the prevailing party in DOAH Case
No. 00-1600RX on one of two challenged rule provisions. In that case, the challenge to Rule 61K1-1.0011(3)(c), Florida Administrative Code, which required all contracts between a manager and a boxer to be filed with Respondent within seven days of execution, was dismissed on its merits. Rule 61K1- 1.0011(3)(g), Florida Administrative Code, and Form BPR-0009451 incorporated therein, were found to be invalid exercises of delegated legislative authority to the following extent:
(a) that Rule 61K1-1.0011(3)(c), Florida Administrative Code, deemed contacts between managers and boxers to contain all provisions set forth in Form BPR-0009451; and (b) that Form BRP- 0009451 deemed contracts between managers and boxers to be void if the managers were unlicensed on the date their contracts were executed or if the managers failed to file the contracts with Respondent within seven days of execution.
Respondent presented no evidence, testimonial or documentary, in DOAH Case No. 00-1600RX or the instant case, showing that it had a reasonable basis in fact to promulgate Rule 61K1-1.0011(3)(g), Florida Administrative Code, and Form BPR-0009451 incorporated therein, in 1985 or thereafter to amend, enforce, or defend said rule and form. Respondent admits
that it has not maintained the pertinent rulemaking record required by Section 120.54(8), Florida Statutes.
There is no competent evidence that Respondent in fact conducted the mandatory rule reviews required by Section 9 of Chapter 96-159, Laws of Florida, or Section 3 of Chapter 99-379, Laws of Florida. Respondent did not file post-hearing depositions showing that it ever conducted these rule reviews. Respondent admitted during the hearing of the instant case that it had no written documentation confirming that the rule reviews took place.
There is no factual evidence showing the existence of special conditions that would make an award of attorney's fees and costs unjust in this case.
There is no evidence showing how to allocate Petitioner's requested attorney's fees and costs between the two challenged rule provisions.
The record in DOAH Case No. 00-1600RX does not indicate that the Intervenor Danny Santiago created duplicitous and unnecessary work for Petitioner and Respondent. Two of the depositions taken on December 5, 2000, at the instance of Intervenor Danny Santiago and over Respondent's objections, were filed in DOAH Case No. 00-1600RX, becoming part of the record in that case. Moreover, there is no evidence showing how to
allocate a portion of Petitioner's requested attorney's fees and costs to work created exclusively by Intervenor Danny Santiago.
Petitioner filed an Affidavit of Attorney Fees and Costs on March 19, 2001. Petitioner seeks to recover $13,235 in fees and costs. Petitioner presented competent evidence that the requested attorney's fees were reasonable based on the number of hours expended (66.175) and the rate charged per hour ($200). Petitioner also presented competent evidence that an expert witness fee in the amount of $1,000 is reasonable in this case.
Respondent objected to Petitioner's requested attorney's fees as they relate to the following specific charges: (a) charges pertaining to an unrelated case in which Respondent sought to discipline Petitioner for violating Respondent's rules; (b) charges relating to Petitioner's Motion to Compel Discovery after Petitioner improperly served the original discovery requests and was required to serve the discovery requests a second time; and (c) charges relating to the preparation of the instant motion for fees and costs.
Petitioner agreed to reduce his claim for fees and costs by the amount of the disputed charges if Respondent could provide the total amount. After much discussion, the parties agreed to file a post-hearing stipulation as to the amount to be
deducted from Petitioner's claim. The parties never filed that stipulation.
The undersigned has compared the record in DOAH Case No. 00-1600RX with the list of charges for fees and costs attached to Petitioner's Affidavit of Attorney Fees and Costs. The undersigned has also taken into consideration Respondent's objections to certain charges and Petitioner's acquiescence to those objections. The record reveals that Petitioner is not entitled to recover the following: (a) charges on April 13 and 27, 2000, in the amount of $100 that pertain to a request for and granting of oral argument that did not occur in the underlying case; (b) charges on July 6, 2000, and July 31, 2000, in the amount of $100, relating to review of an unidentified motion to compel and review of an order granting that motion, which did not occur in the underlying case; (c) charges on
July 17 and 27, 2000, and August 14, 2000, in the total amount of $320, relating to Petitioner's improper motion to compel discovery after Petitioner incorrectly served the original discovery requests on the Attorney General and was required to serve the discovery requests a second time; (d) a charge on August 24, 2000, in the amount of $200 for attendance at court, which did not occur in the underlying case; (e) a charge on September 11, 2000, in the amount of $50 for review of an order dismissing with prejudice, which did not occur in the underlying
case; (f) charges on February 23, 2001, in the amount of $80, relating to the preparation of the instant motion for fees and costs; and (g) charges on October 26, 2000, in the amount of
$500 for travel to a deposition.
The reduction amount for attorney's fee charges totals
$1,350. There are no other identifiable disputes over amounts claimed by Petitioner as recoverable expenses or costs.
Therefore, Petitioner is entitled to recover $11,885 in attorney's fees and costs incurred in DOAH Case No. 00-1600RX and an additional $1,000 for expert witness fees in the instant case, for a total recovery in the amount of $12,885. This amount is reasonable under the facts of this case.
The record in DOAH Case No. 00-1600RX clearly reflects that Respondent had sufficient and timely notice of Petitioner's intent to seek attorney's fees and costs prior to the entry of the Final Order. In Respondent's meeting on December 6, 2000, Respondent's counsel advised Respondent several times that it would be liable for attorney's fees and costs if the challenged rules or portions thereof were found to lack statutory authority. Counsel for Petitioner and Intervenor Danny Santiago made appearances on behalf of their respective clients at that meeting.
Petitioner made his first formal demand for attorney's fees and costs in his Proposed Final Order, which was filed in
DOAH Case No. 00-1600RX on January 22, 2001. Respondent filed its Statement of Defenses to Petition for Attorney Fees in the instant case on March 19, 2001. Respondent raised the issue that Petitioner's demand for attorney's fees and cost was untimely for the first time in Respondent's Proposed Final Order filed in the instant case on May 11, 2001.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding. Section 120.595(3), Florida Statutes.
Section 120.595(3), Florida Statutes, provides as follows, in pertinent part:
If the court or administrative law judge declares a rule or portion of a rule invalid pursuant to s. 120.56(3), a judgment or order shall be rendered against the agency for reasonable costs and reasonable attorney's fees, unless the agency demonstrates that its action were substantially justified or special conditions exist which would make the award unjust. An agency's action are "substantially justified" if there was a reasonable basis in law and fact at the time the actions were taken by the agency.
Respondent first raises the issue of Petitioner's failure to plead entitlement to attorney's fees and costs in the initial petition in DOAH Case No. 00-1600RX. Respondent relies on Stockman v. Downs, 573 So. 2d 835, 837-838 (Fla. 1991), where the court held that a claim for attorney's fees, whether based
on statute or contract, must be pled prior to the final judgment, and that failure to do so constitutes a waiver of the claim. However, Stockman also recognized the following exception to its ruling:
Where a party has notice that an opponent claims entitlement to attorney's fees, and by its conduct recognizes or acquiesces to that claim or otherwise fails to object to the failure to plead entitlement, that party waives any objection to the failure to plead a claim for attorney's fees.
Stockman, 573 So. 2d at 838.
In Palacios v. Department of Business and Professional Regulation, DOAH Case Nos. 99-4163F and 99-4164F (Final Order, November 20, 2000), the Administrative Law Judge denied claims for attorney's fees and costs pursuant to Section 120.595(1), Florida Statutes, because the petitioners, who were the prevailing parties in cases initiated under Section 120.57(1), Florida Statutes, had not requested fees and costs in the underlying proceedings prior to the issuance of the recommended order or subsequent final orders. Likewise, in Earnest Sellars v. Broward County School Board, DOAH Case No. 97-3540F (Final Order, September 25, 1997), the Administrative Law Judge denied claims for attorney's fees and costs pursuant to Section 120.595(1), Florida Statutes, because the petitioner, who was the prevailing party in a case initiated under Section 120.57(1), Florida Statutes, had not requested attorney's fees
and costs in the underlying proceeding prior to the issuance of the recommended order.
Respondent's reliance on the above-referenced cases to defeat Petitioner's claim for attorney's fees and costs is misplaced. In the instant case, Petitioner seeks attorney's fees and costs under Section 120.595(3), Florida Statutes, where the Administrative Law Judge has authority to issue a final order. Petitioner raised his claim formally for the first time in his proposed final order in the underlying case before the issuance of the Final Order. Therefore, Petitioner's claim for attorney's fees and costs was timely pled.
Moreover, the record in DOAH Case No. 00-1600RX clearly reveals that Respondent had sufficient notice of Petitioner's potential claim and Respondent's liability for attorney's fees and costs at least as early as December 6, 2000. Respondent did not raise a defense to Petitioner's claim in Respondent's proposed final order in DOAH Case No. 00-1600RX or in its Statement of Defenses to Petition for Attorney's Fees, which was filed on March 19, 2001, in the instant case. To the extent that Petitioner did not timely plead entitlement to attorney's fees and costs, Respondent has waived any objection under the exception to the rule announced in Stockman, 573 So. 2d at 838.
Respondent argues that it was "substantially justified" in promulgating Rule 61K1-1.0011(3)(g), Florida Administrative Code, and Form BPR-0009451 incorporated therein, and/or that there were special circumstances that make an award of fees and costs in this case unjust.
Because the term "substantially justified" was apparently borrowed from the Florida Equal Access to Justice Act (FEAJA) codified in Section 57.111, Florida Statutes (1999), the same standards developed in case law under the FEAJA are useful here. In Helmy v. Dep't of Bus. and Prof. Reg., 707 So. 2d 366,
370 (Fla. 1st DCA 1998), the court followed the test for "substantially justified" set forth by the United States Supreme Court in Pierce v. Underwood under the analogous federal Equal
Access to Justice Act. There, the court found "substantially justified" to mean:
"justified in substance or in the main" - that is, justified to a degree that could satisfy a reasonable person. That is no differen[t] [than] the "reasonable basis both in law and fact" formulation adopted by
. . . the vast majority of other Courts of Appeals that have addressed this issue
. . . . To be "substantially justified" means, of course, more than merely undeserving of sanctions for frivolousness; that is assuredly not the standard for Government litigation of which a reasonable person would approve.
Helmy, 707 So. 2d at 368, quoting Pierce v. Underwood, 487 U.S. 552, 565 (1988). Thus, under Florida law, "the 'substantially
justified' standard falls somewhere between the no justiciable issue standard of Section 57.105 . . . and an automatic award of fees to a prevailing party." Helmy at 368. At the same time, an agency must have a solid, but not necessarily correct, basis in law and fact for the position that it took when it initiated the action. Dep't of Health and Rehab. Services v. S.G., 613 So. 2d 1380, 1386 (Fla. 1st DCA 1993). In order to be substantially justified, "an agency must, at the very least, have a working knowledge of the applicable statutes under which it is proceeding." Helmy at 370.
Although the underlying rule challenge was primarily based on an issue of law, the determination of whether or not attorney's fees and costs should be awarded turns on the factual determination of whether or not Respondent was substantially justified in law and fact or had some special circumstances which would make the award unjust.
Here, the evidence shows that there was no substantial justification for Respondent's actions. Additionally, there were no special circumstances present, which would make an award of attorney's fees and costs unjust.
In reaching this conclusion, the undersigned has considered Respondent's contention that it was substantially justified because it relied on the advice of counsel who performed rule reviews mandated by Section 9 of Chapter 96-159,
Laws of Florida, and Section 3 of Chapter 99-379, Laws of Florida, for the good faith belief that Respondent's rules had the requisite statutory authority. Respondent's argument is without merit in law or fact. First, as a matter of law, reliance on the advice of counsel cannot protect an agency from liability because an agency that relies on legal advice could never be held responsible for a decision that lacked substantial justification. Anderson Columbia Company, Inc., et al. v. Board of Trustees of the Internal Improvement Trust Fund, DOAH Case
Nos. 00-0754F, 00-0755F, 00-0756F, 00-0757F, and 00-0828F (Final
Order, July 18, 2000). Second, Respondent never provided evidence that the rule review in fact took place.
Respondent also argues that it was "substantially justified" in promulgating and defending the subject rule and form because the exact standard to be used by agencies in the promulgation of rules under Chapter 120, Florida Statutes, is in a state of confusion. To support its argument in this regard, Respondent cites the rulings in the following cases: St. Johns River Water Management District v. Consolidated-Tomoka Land Co., 717 So. 2d 72 (Fla. 1st DCA 1998); Department of Business and Professional Regulation v. Calder Race Course, Inc., 724 So. 2d
100 (Fla. 1st DCA 1998); Southwest Fla. Water Management District v. Save the Manatee Club, Inc., 773 So. 2d 594 (Fla.
1st DCA 2000); and Southwest Florid Water Management District v.
Charlotte County, 774 So. 2d 903 (Fla. 2nd DCA 2000).
Respondent's argument that it was "substantially justified" because the existing case law was in "a state of flux" was rejected in Anderson Columbia Company, Inc., et al. v.
Board of Trustees of the Internal Improvement Trust Fund, DOAH Case Nos. 00-0754F, 00-0755F, 00-0756F, 00-0757F, and 00-0828F
(Final Order, July 18, 2000).
In 1985, when the subject rule and form were promulgated, administrative rules had to be "reasonably related" to their enabling statutes in order to withstand a challenge that they were invalid exercises of delegated legislative authority. Department of Professional Regulation v. Durrani,
455 So. 2d 515, 517 (Fla. 1st DCA 1984); Agrico Chemical Co. v.
Department of Environmental Regulation, 365 So. 2d 759, 763
(Fla. 1st DCA 1979), cert. Denied, 376 So. 2d 74 (Fla. 1979).
In 1996, the Legislature amended Chapter 120, Florida Statutes, eliminating the "reasonably related" rulemaking standard and requiring agencies to have specific statutory authority to adopt rules. Section 120.536(1), Florida Statutes (Supp. 1996). In 1999, the Legislature again tightened the rulemaking standard, making it clear that agencies did not have authority to enact a rule without specific statutory authority. Section 120.536(1), Florida Statutes (1999).
In this case, Petitioner presented no evidence showing that it had statutory authority to promulgate the subject rule and form in 1985 under the "reasonably related" rulemaking standard or to defend their validity in 2000 under the new requirement for a "specific law to be implemented." At no point in time did Respondent have statutory authority to void a contract between a manager and a boxer even if the contract was not filed with Respondent within seven days of execution and regardless whether the manager was licensed at the time of the contract's execution.
In this case, there is an absence of a solid, though not necessarily correct, basis in fact or law for such requirement. Respondent has failed to carry its burden of showing that it was substantially justified in promulgating the subject rule and form or that there are special circumstances, which would make an award unjust. Therefore, Petitioner is entitled to an award of reasonable attorney's fees and costs.
In light of the foregoing conclusions, it is necessary to determine the appropriate amount of fees and costs. Petitioner claims that he is entitled to recover $13,235 in fees and costs incurred in DOAH Case No. 00-1600RX, plus $1,000 for an expert witness fee in the instant case, in the total amount of $14,235. Neither party identified any charges for expenses or costs that are in dispute.
The record indicates that Petitioner is not entitled to recover charges in the amount of $1,350 because they were not incurred in this case or they were incurred due to Petitioner's improper service of discovery requests or they were incurred in preparing the Petition for Attorney's Fees and Costs. During the hearing, Petitioner conceded that some of the charges for fees were improper and should be deducted from the total amount recovered. The parties also were made aware that fees for travel are not recoverable unless specifically authorized by statute. State of Florida, Department of Health v. Discovery Experimental and Development, Inc., 767 So. 2d 1244 (Fla. 1st DCA 2000).
Respondent does not argue in its Proposed Final Order that Petitioner's entitlement to fees and cost should be reduced for fees and costs attributable to the challenge of Rule 61K1- 1.0011(3)(c), Florida Administrative Code, on which Petitioner did not prevail. Review of the record does not reveal how charges for the two challenged rule provisions could be separated. In any event, there is no evidence showing how to allocate Petitioner's requested attorney's fees and costs between the two challenged rule provisions.
Respondent also does not argue in its Proposed Final Order that Petitioner's entitlement to fees and costs should be reduced because Intervenor Danny Santiago created duplicitous
and unnecessary work for the other parties. The record in the underlying case clearly refutes this argument. Additionally, there is no evidence showing how to allocate a portion of Petitioner's fees and costs to work created exclusively by Intervenor Danny Santiago.
In conclusion, Petitioner is entitled to recover
$12,885. Under the circumstances of this case, this amount constitutes reasonable attorney's fees and costs.
That the Petition for Attorney's Fees and Costs is granted and Petitioner is awarded $12,885 in attorney's fees and costs.
DONE AND ORDERED this 17th day of May, 2001, in Tallahassee, Leon County, Florida.
SUZANNE F. HOOD
Filed with the Clerk of the Division of Administrative Hearings this 17th day of May, 2001.
William M. Powell, Esquire Powell & Steinberg, P.A.
3515 Del Prado Boulevard, South Waterside Plaza, Suite 101 Cape Coral, Florida 33904
Thomas G. Thomas, Esquire Department of Business and
Hardy L. Roberts, III, General Counsel Department of Business and
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 coy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or in 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.
