STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GARY J. DeBELLONIA & CAPITAL ) GROWTH FINANCIAL SERVICES, INC., )

)

Petitioners, )

)

vs. ) CASE NO. 90-7349F

)

DEPARTMENT OF BANKING AND )

FINANCE, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, a formal hearing was conducted in this case on April 12, 1991, in Tampa, Florida, before Veronica E. Donnelly, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioners: Michael C. Mone, Esquire

111 Eighth Street East Belleair Beach, Florida 34635

For Respondent: Susan E. Steinberg, Esquire

Steven M. Christian, Esquire Office of the Comptroller 1313 Tampa Street, Suite 615

Tampa, Florida 33602-3394 STATEMENT OF THE ISSUES

Whether the Petitioners are entitled to an award of attorney's fees and costs pursuant to Section 57.111, Florida Statutes, and Rule 22I-6.035, Florida Administrative Code.

PRELIMINARY STATEMENT

On February 20, 1990, the Department of Banking and Finance (the Department) filed a Cease and Desist Order directed to Gary J. DeBellonia (DeBellonia) and Capital Growth Financial Services, Inc. (CGFS, Inc.). The order alleged that the Respondents DeBellonia and CGFS, Inc. have acted as a mortgage broker and a mortgage brokerage business without the proper license, in violation of the Mortgage Brokerage Act. The Respondents denied the factual allegations within the order, and requested a formal hearing to resolve the factual dispute. The hearing was conducted on July 24, 1990, and a Recommended Order was issued on September 21, 1990. Based upon the evidence adduced at hearing, it was the Hearing Officer's recommendation that the Cease and Desist Order issued by the Department on February 20, 1990, be dismissed. The Recommended Order of the Hearing Officer was adopted by the agency and made part

of the Final Order issued by the Department on October 16, 1990. On October 19, 1990, DeBellonia and CGFS, Inc. applied for attorney's fees and costs as a prevailing party in an action brought by a governmental agency. The Department timely filed its responses to the original application for attorney's fees and the subsequent filings.

At the formal hearing of April 12, 1991, Petitioners presented two witnesses and three exhibits. The Department called three witnesses and filed seven exhibits. All of the exhibits were received into evidence. Both parties waived the filing of the transcript with the Hearing Officer. Both parties timely submitted recommended final orders by April 29, 1991. All proposed findings of fact are specifically addressed in the Appendix to this Final Order.

FINDINGS OF FACT

1. The Department, a state agency, initiated the underlying proceeding when the Cease and Desist Order was filed on February 20, 1990.

   
   

2. Petitioner, CGFS, Inc., is a corporation which has its principal office in this state. At the time the action was initiated by the Department, the corporation had less than 25 full-time employees and a net worth of less than $2 million dollars. Petitioner DeBellonia is the sole shareholder in the subchapter S corporation and does not have an independent claim for attorney's fees and cost.

   
   

3. A Final Order dismissing the Cease and Desist Order was entered in favor of the Petitioners DeBellonia and CGFS, Inc. on October 16, 1990. The time for seeking judicial review of that order has expired and the order has become final agency action as a matter of law.

   
   

4. The underlying Cease and Desist Order directed to Mr. DeBellonia and CGFS, Inc. was based upon a complaint made by Ms. Connie Jones, a client of CGFS, Inc. who dealt with Mr. DeBellonia. Ms. Jones, who contacted the Department, told representatives of the agency that Mr. DeBellonia, as president of CGFS, Inc., had agreed to arrange a mortgage loan on her behalf which was to be secured by real estate in Dade City, Florida.

   
   

5. During the time period in which Ms. Jones had the business meeting with DeBellonia, neither Mr. DeBellonia nor CGFS, Inc. were licensed as a mortgage broker or a mortgage brokerage business. If the business transaction had occurred as originally represented by Ms. Jones, both Mr. DeBellonia and CGFS, Inc. would have been in violation of the Mortgage Brokerage Act.

   
   

6. Based upon the complaint initiated by Ms. Jones prior to the Department's filing of the Cease and Desist Order, the agency had reason to believe that Mr. DeBellonia and CGFS, Inc. were violating or about to violate the law by acting as a mortgage broker and mortgage brokerage business without the proper licenses.

   
   

7. Mr. DeBellonia and CGFS, Inc. were able to reveal during the formal hearing process that Ms. Jones' impressions of what occurred during her meeting with Respondent DeBellonia were faulty. It was necessary, however, for the Hearing Officer to resolve the question of what weight should be given to Ms. Jones' testimony and what credibility assessment should be made to resolve the disputed issues of material facts involved in the case.

8. The Department disputes portions of the application for attorney's fees and costs relating to time spent with a private investigator and the review of a title search. Based upon the attorney's testimony at hearing in which he gave the reasons for the use of the investigator and the title search, the 1.33 hours spent by him on these matters during his preparation of the case was reasonable and necessary. As there is no other dispute as to the reasonableness of the hours spent by Mr. Mone in defending the Petitioners, it is determined that the

   11.65 hours he spent in defending CGFS, Inc. as to the Cease and Desist Order should be included in his fee charges.

   
   

9. Although the Hearing Officer specifically finds that $300.00 an hour is a reasonable hourly rate for an attorney of Mr. Mone's experience when the matter pursued is a civil action, this case is an administrative proceeding. Based upon the affidavit of Burton Wiand, whose law practice includes civil trial litigation as well as administrative law proceedings, $150.00 per hour is a reasonable fee within the Pinellas County and Hillsborough County area for services similar to those reasonably required from Mr. Mone in these proceedings. Great weight is given to Mr. Wiand's affidavit, and $150.00 per hour is a reasonable fee in this case.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter pursuant to Sections 57.111 and 120.57(1), Florida Statutes.

    
    

11. This case arises under the Florida Equal Access to Justice Act, Section 57.111, Florida Statutes. At Section 57.111(4)(a), Florida Statutes, the act states:

    
    

    Unless otherwise provided by law, an award of attorney's fees and costs shall be made to a prevailing small business party in any adjud- icatory proceeding or administrative proceed- ing pursuant to chapter 120 initiated by a state agency, unless the actions of the agency were substantially justified or special circum- stances exist which would make the award unjust.

    
    

12. Once the party claiming attorney's fees has established by the preponderance of evidence its entitlement to attorney's fees, the burden shifts to the agency to establish that it was "substantially justified" in initiating the action. Dept. of Professional Regulation v. Toledo Realty, 549 So.2d 715 (Fla. 3d DCA 1989).

    
    

13. Based upon the original complaint made by Ms. Jones, the Department had a reasonable basis in law and fact for filing the Cease and Desist Order which alleged that Mr. DeBellonia and CGFS, Inc. were violating or about to violate the law by acting as a mortgage broker and a mortgage broker business without the proper licenses.

    
    

14. As the Department has demonstrated in the underlying proceeding and this administrative hearing that the Cease and Desist Order was "substantially justified" within the meaning of the Florida Equal Access to Justice Act, the Petitioners application for an award of attorney's fees and costs must be denied. Business Telephone Systems v. State of Florida, Dept. of General Services, 11 FALR 5934 (DOAH 1989).

ORDER

Based upon the foregoing, it is ordered the Petitioners application for attorney's fees and costs is denied.

DONE and ORDERED this 15th day of May, 1991, in Tallahassee, Leon County, Florida.

VERONICA E. DONNELLY

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904)488-9675

Filed with the Clerk of the

Division of Administrative Hearings this 15th day of May, 1991.

APPENDIX TO FINAL ORDER, CASE NO. 90-7349F

Petitioner's proposed findings of fact are addressed as follows:

1. Accepted.

2. Accepted. See HO number 3.

3. Accepted. See HO number 2.

4. Rejected. Contrary to fact. See HO number 6.

5. Rejected. Pursuant to 57.111(3)(a), relates only to the underlying proceeding and not the hearing on the application for attorney's fees and costs. The corrected amount of the hours set forth in the attorney's affidavit are accepted as reasonable. See HO number 8.

6. Accepted. See HO number 8.

7. Rejected. Contrary to fact. See HO number 9.

Respondent's proposed findings of fact are addressed as follows:

1. Accepted. See HO number 2.

2. Accepted. See HO number 3.

3. Accepted.

4. Accepted.

5. Rejected. Contrary to fact. It is clear that the Cease and Desist Order was filed before Ms. Jones ever signed the affidavit entered into evidence

   as Respondent's Exhibit B.

6. Accepted. See HO number 4 - HO number 6.

7. Accepted. See HO number 8.

8. Rejected. Contrary to fact. See HO number 8.

9. The affidavit of Steven Christian is rejected. Otherwise, the affidavit of the other three lawyers is accepted and the determination has been made that $150.00 per hour is a reasonably hourly rate for the type of services necessary in an administrative proceeding within the Pinellas County/Hillsborough County area. See HO number 9.

COPIES FURNISHED:

Michael C. Mone, Esquire

11 Eighth Street

Belleair Beach, Florida 34635

Susan E. Steinberg, Esquire Stephen M. Christian, Esquire Office of the Comptroller 1313 Tampa Street, Suite 615

Tampa, Florida 33602-3394

Honorable Gerald Lewis William G. Reeves, Gen. Counsel Comptroller of Florida Dept. of Banking & Finance

The Capitol, Plaza Level The Capitol, Plaza Level Tallahassee, Florida 32399-0350 Tallahassee, Florida 32399-0350

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: 90-007349F

Orders for Case No: 90-007349F