STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RONALD D. NUTT, )

)

Petitioner, )

)

vs. ) CASE NO. 85-3499F

) DEPARTMENT OF PROFESSIONAL ) REGULATION, CONSTRUCTION ) INDUSTRY LICENSING BOARD, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, a final hearing was held on December 30; 1985 in Tallahassee Florida before Donald D. Conn, a duly designated Hearing Officer of the Division of Administrative Hearings. The parties were represented by:

Petitioner: David H. Simmons, Esquire

Post Office Box 87 Orlando, Florida 32802

Respondent: Reynolds Sampson, Esquire

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

At the hearing, Ronald D. Nutt, Petitioner, testified on his own behalf, and introduced three (3) exhibits. Respondent introduced four (4) exhibits, and also sought to introduce a letter addressed to the Department of Business Regulation dated October 25, 1983 and the transcript of the evidentiary hearing in Case Number 84-2920 held on March 27, 1985, both of which were rejected. The Hearing Officer took official recognition, without objection, of the Administrative Complaint, Recommended Order and Final Order in Case Number 84-2920. No transcript of the hearing has been filed.

The parties were allowed to submit proposed findings of fact and conclusions of law following the hearing pursuant to Section 120.57(1)(b)4, Florida Statutes, and a ruling on each proposed finding has been included in the Appendix to this Final Order.

ISSUE

The issue in this case is whether Petitioner is entitled to attorney's fees and costs under Section 57.111, Florida Statutes, the Florida Equal Access to Justice Act.

FINDINGS OF FACT

1. On or about July 12, 1984, a probable cause panel of the Construction Industry Licensing Board met to receive and review an investigative report resulting from complaints received from Carl Mayer Forrest Morgan, and Walter Booth concerning certain activities of Ronald D. Nutt, Petitioner. The panel found probable cause that Petitioner's activities had violated applicable statutory and rule provisions, and subsequently, on or about July 19, 1984, a five-count Administrative Complaint was issued against Petitioner charging him with disregarding an applicable building code, abandoning a construction project, making misleading and false representations, and engaging in fraud and misrepresentation in the practice of contracting.

   
   

2. Petitioner disputed the allegations contained in the Administrative Complaint and requested a hearing. The case was sent to the Division of Administrative Hearings to conduct an evidentiary hearing and to issue a Recommended Order based thereon. The matter was given Division of Administrative Hearing's Case Number 84-2920, and a hearing was held on March 27, 1985 before R. T. Carpenter, Hearing Officer. At the hearings one count arising from the Booth complaint was voluntarily dismissed.

   
   

3. On June 13, 1985, a Recommended Order was issued in Case Number 84-2920 which recommended that the Construction Industry Licensing Board issue a Final Order dismissing the Administrative Complaint filed against Ronald D. Nutt. On or about July 11, 1985, the Board considered the Recommended Order, and after a review of the complete record adopted the findings of facts, conclusions of law and recommendation contained in the Recommended Order. The Board issued its Final Order dismissing the Administrative Complaint in Case Number 84-2920 on August 7, 1985.

   
   

4. In pertinent part, the following facts were found in Case Number 84-2920 by both the Hearing Officer and the Construction Industry Licensing Board:

   
   

5. The principal disagreement (between Nutt, who was the Respondent in this prior case, and Mayer, the complaining

   witness) concerned the roof design, which Respondent contends was improper. Mayer initially refused to agree to modifications suggested by Respondent and would not retain an architect to clarify his intended design.

6. Other disagreements led to Mayer's withholding of scheduled draw payments. Mayer refused to pay the first draw on completion of the foundation, even though it had been approved by the Melbourne Building Department.

7. By August, 1983, Respondent's firm had completed work to the approximate point of the third draw, but had still received no draw payments. By this

   time Mayer had retained an attorney, and several unproductive meetings had been held regarding difficulties in completing the project.

8. Mayer subsequently contacted the Melbourne Building Department to complain that the roof was being constructed according to plans not filed with the Building Department. This complaint was verified and a stop work order was placed on the project on August 10, 1983.

9. The evidence adduced at the hearing established that Respondent had changed Mayer's roof design to one he believed was correct, but had failed to obtain Mayer's approval or file the change with the Building Department.

10. The change made by Respondent was, according to his testimony, necessary to correct Mayer's design deficiency. Mayer's testimony to the contrary is rejected. Mayer refused to retain an architect as suggested by Respondent, and demonstrated no expertise in building design. Respondent's testimony on this point is, therefore, accepted.

11. Further efforts to resolve disputes were unsuccessful. On February 1, 1984, Hallmark Builders, Inc. filed a claim of lien on the Mayer property for $28,559. Mayer counter-claimed, and the suits were ultimately settled through payment of $21,000 by Mayer to Hallmark

Builders, Inc.

1. Based upon these findings of fact, the following conclusion of law was reached by the Hearing Officer and Board in Case Number 84-2920:

   Respondent is guilty of violating a local building code by failing to file his change in plans prior to commencing construction under the change. He acknowledged this, but believed it was sufficient com- pliance to file such plans before the next inspection.

   
   

   This violation is not a serious one, and no disciplinary action was taken by local authorities other than the stop work order. Therefore, the charge under Subsection 489.129(1)(d), F.S., should be dismissed.

   
   

2. The parties stipulated that at the conclusion of the Department of Professional Regulations Construction Industry Licensing Board's case-in-chief in Case Number 84-2920, Nutt moved for a directed verdict on the four counts remaining in the Administrative Complaint on which evidence was presented and this motion was denied by the Hearing Officer.

   
   

3. Petitioner herein has established that his reasonable and necessary attorney fees and costs associated with Case Number 84- 2920 were $13,153.28.

   
   

4. Petitioner has established that he is a "small business party" as defined in Section 57.111(3)(d), Florida Statutes, since he operated as a professional practice and also a corporation with his principal office in Florida, and did not have more than 25 full-time employees or a net worth of more than two million dollars when the action in Case Number 84-2920 was initiated by the Department of Professional Regulation, Construction Industry Licensing Board on or about July 12, 1984 with the finding of the probable cause panel.

   
   

5. Petitioner has established that he was a prevailing small business party in Case Number 84-2920 since the Board's Final Order dismissing the charges in the Administrative Complaint was clearly in his favor and was not appealed.

   
   

6. Petitioner has not established that the actions in Case Number 84-2920 of Respondent herein constituted unreasonable governmental action. This prior proceeding was therefore

   substantially justified at the time it was initiated on July 12, 1984 with the finding of the probable cause panel.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this case. Sections 57.111(4) and 120.57(1), Florida Statutes.

   
   

8. In expressing the purpose and intent for enactment of the Florida Equal Access to Justice Act (Section 57.111, Florida Statutes), the Legislature found that:

   
   

   ....certain persons may be

   deterred from seeking review of, or defending against, unreasonable governmental action because of the expense of civil actions and admin- istrative proceedings. Because of the greater resources of the state, the standard 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. (e.s.) Section 57.111(2), Florida Statutes.

   
   

9. Petitioner argues that this statute places the burden on the state to overcome, by clear and convincing evidenced the presumption that attorney fees and costs shall be awarded to a prevailing small business party in an administrative proceeding initiated by the state. See Section 57.111(4)(a), Florida Statutes. Further, according to Petitioner such awards should be the norm, and only if the agency establishes by clear and convincing evidence that its actions were substantially justified or special circumstances exist which could make such an award unjust can the agency meet its burden.

   
   

10. Petitioner's argument appears to ignore the expression of legislative intent set forth above which clearly directs this

    statute at "unreasonable governmental action." Rather than these awards being the norm; the statute is more restrictive than Petitioner would urge and provides for awards "in certain situations." It places upon Petitioner the equal burden of establishing that governmental action has been unreasonable. If agencies show that "a reasonable basis in law and fact" existed for the action taken in initiating administrative proceedings, they can avoid the payment of these fees and costs. Section 57.111(3)(e), Florida Statutes.

    
    

11. Based on the evidence presented, Respondent has established by the requisite level of proof that its actions were substantially justified in Case Number 84-2920, and that therefore it did not act unreasonably. Respondent has pointed out that its actions were taken in accordance with the requirements of Section 455.225, Florida Statutes, which states in pertinent:

    
    

    1. The department shall cause to be investigated any complaint which is filed before it if the complaint is in writing, signed by the complainant, and legally sufficient. A complaint is legally sufficient if it contains ultimate facts which show that a violation of this chapter, of any of the practice acts relating to the professions regulated by the department, or of any rule promulgated by the department or a regulatory board in the department has occurred....

       
       

    2. The department shall expeditiously investigate complaints. When its investigation is complete, the department shall prepare and submit to the probable cause panel of the appropriate regulatory board the investigative report of the department. The report shall contain the investigative findings and the recommendations of the department concerning the existence of probable cause.

       
       

    3. The determination as to whether probable cause exists shall be made by majority vote of a probable cause panel

       of the boards or by the departments as appropriate. Each regulatory board shall provide; by ruled that the determination of probable cause shall be made by a panel of its members or by the department...If the probable cause

       panel finds that probable cause exists, it shall direct the department to send the licensee a letter of guidance or to file a formal complaint against the licensee. The department shall follow the directions of the probable cause panel regarding the filing of a formal complaint; and, if directed to do so, the department shall file a formal complaint against the regulated professional or subject of the investigation and prosecute that complaint pursuant to the provisions of chapter 120....(Emphasis supplied)

       
       

12. It has been established that on July 12, 1984 a probable cause panel of the Construction Industry Licensing Board did find probable cause that Petitioner violated applicable statutory and rule provisions, and as a result thereof an Administrative Complaint was issued against Petitioner. By initiating its action after the finding of probable cause in accordance with Section 455.225, above, Respondent was substantially justified in its actions. The finding of the probable cause panel establishes that there was a reasonable basis in law and fact" for initiating this action.

    
    

13. Further support for Respondent's position is found in the fact that while the Hearing Officer and the Board dismissed the previous charges against Petitioner herein, a violation of a local building code was found as had been charged in the Administrative Complaint. The fact that no penalty was imposed does not turn a finding of a probable cause panel, and also of a violations into unreasonable governmental action.

    
    

14. While Petitioner has otherwise met the requirements for an award-under Section 57.111, Florida Statutes, Respondent has shown that an award should not be made under Section 57.111(4)(a) since its actions herein were substantially justified. Accordingly, it is

ORDERED that the Application for Award of Attorney Fees and Costs filed on behalf of Petitioner is hereby DENIED.

DONE and ORDERED this 28th day of January, 1986, in Tallahassee, Florida.

DONALD D. CONN

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 28th day of January, 1987.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 85-3499F

Rulings on Petitioner's Proposed Findings of Fact:

1-6 Adopted in part in Finding of Fact 8, but otherwise rejected as irrelevant, unnecessary and not based on competent substantial evidence.

7,8 Adopted in Findings of Fact 1 and 2.

1. Adopted in part in Findings of Fact 3 and 4, but otherwise rejected as irrelevant and unnecessary.

2. Adopted in part in Finding of Fact 9, but otherwise rejected as not based on competent substantial evidence and as contrary to Finding of Fact 10.

3. Adopted in part in Finding of Fact 7, but otherwise rejected as irrelevant and unnecessary.

4. Rejected as argument rather than a proposed finding of fact.

5. Rejected as irrelevant and unnecessary since there has been no dispute as to the timeliness of this action.

Rulings on Respondent's Proposed Findings of Fact:

1. Rejected as irrelevant and unnecessary.

2. Rejected in Finding of Fact 8.

3-6 Rejected as irrelevant, unnecessary and not based on competent substantial evidence.

7 Adopted in part in Findings of Fact 6 and 10, but otherwise rejected as irrelevant, unnecessary and not based on competent substantial evidence.

8,9 Adopted in Findings of Fact 4, 5 and 10.

10 Rejected as irrelevant and unnecessary.

COPIES FURNISHED:

T. Kevin Knight, Esquire David H. Simmons, Esquire Post Office Box 87 Orlando Florida 32802

Reynolds Sampson, Esquire Department of Professional

Regulation

130 North Monroe Street Tallahassee Florida 32301

James Linnan, Executive Director Construction Industry

Licensing Board Post Office Box 2

Jacksonville Florida 32202

Fred Roche Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Salvatore A. Carpino Esquire General Counsel

Department of Professional Regulation

130 North Monroe Street

NOTICE OF RIGHT TO JUDICIAL REVIEW

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: 85-003499F

Orders for Case No: 85-003499F