STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BOBBIE G. SCHEFFER, )

)

Petitioner, )

)

vs. ) CASE NO. 91-1019F

) DEPARTMENT OF PROFESSIONAL ) REGULATION, DIVISION OF REAL ) ESTATE, )

)

Respondent. )

)

FINAL ORDER

This matter came on for final hearing in Tallahassee, Florida, before Robert T. Benton, II, Hearing Officer of the Division of Administrative Hearings, on June 17, 1991. Counsel for petitioner participated by telephone. The parties filed proposed orders on July 1 and 3, 1991.

APPEARANCES

For Petitioner: Michael T. Webster, Esquire

Post Office Box 876 Shalimar, Florida 32579

For Respondent: James H. Gillis, Esquire

Hurston Building North Tower, Suite N-308 Post Office Box 1900

Orlando, Florida 32802-1900 STATEMENT OF THE ISSUE

Whether respondent was substantially justified in filing an administrative complaint alleging that petitioner violated Section 475.25(1)(b), Florida Statutes?

PRELIMINARY STATEMENT

Formal administrative proceedings had on an administrative complaint respondent filed against petitioner, alleging she had violated Section 475.25(1)(b), Florida Statutes, eventuated in recommended and final orders dismissing the administrative complaint as to Mrs. Scheffer. Department of Professional Regulation, Division of Real Estate v. Scheffer and Ecoff, No. 89- 4699 (RO; Dec. 20, 1990) (FO; Jan. 15, 1991).

An application for award of attorney's fees and costs styled as a pleading in Department of Professional Regulation, Division of Real Estate v. Scheffer and Ecoff, No. 89-4699 was docketed as the initial pleading in the present case. Subsequently amended, the petition for award of fees and costs was met by an

answer, response and motion to dismiss amended petition for award of attorney's fees and costs, filed March 28, 1991.

In its answers, respondent conceded that petitioner was the prevailing party but demanded strict proof that petitioner "qualifies as a small business party," and demanded strict proof of domicile, principal office and net worth. At hearing, however, the agency stipulated that Mrs. Scheffer did qualify as a small business party and agreed that the only issue remaining was whether there was substantial justification for the filing of the administrative complaint, at the time it was filed.

No party brought exhibits to the hearing but both parties stipulated that the transcript of the final hearing held in No. 89-4699, together with exhibits, and the proposed recommended orders, the recommended order and the final order, should be received as exhibits in the present proceeding. Respondent wanted to assemble other papers into additional late filed exhibits, but petitioner's objection to this procedure was sustained.

FINDINGS OF FACT

1. Petitioner Bobbie G. Scheffer was one of two respondents in Department of Professional Regulation, Division of Real Estate v. Scheffer and Ecoff, No. 89-4699, administrative proceedings respondent Department of Professional Regulation (DPR) initiated by filing an administrative complaint alleging, as summarized in the recommended order:

   
   

   that respondent Scheffer "[a]t all times material . . . licensed and operating as qualifying broker for Rivard Realty, Inc." and respondent Ecoff "a licensed real estate salesman . . . provided a copy of MLS computer print out sheet pertaining to certain residential property . . . to Daniel

   H. and Dorothy M. Stacy . . . [to verify] that the house was eight years old and on a commercial sewer system", that respondent "Ecoff was the owner of the property and the listing salesman"; that the Stacys "entered into a contract to purchase the property

   . . . relying upon the representations made by the [r]espondents"; that "Scheffer was the broker who handled the sale while Ralph S. Ecoff was licensed as a salesman in her employ"; that respondents "failed to disclose

   or point out to the buyers the true age of the house being 14 years or that the house was actually on a septic system"; that "the buyers closed on the house believing the age of the house to be eight years old and having a commercial sewer system"; that respondent "Ecoff admitted knowing that the house was on a septic tank"; and that respondents are therefore both guilty of "misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction in violation of

   Subsection 475.25(1)(b), Florida Statutes" and of "having placed or caused to be placed an advertisement which is false, deceptive or misleading in violation of Rule 21V-10.025," Florida Administrative Code.

   
   

   But the recommended order concluded that "the evidence did not clearly and convincingly show that respondent Scheffer actually knew or had reason to know the listing was inaccurate." At page 7. The final order adopted this conclusion.

   
   

2. By stipulation, petitioner qualifies as a prevailing small business party who meets all rule and statutory requirements under the Florida Equal Access to Justice Act and Rule 22I-6.035, Florida Administrative Code.

   
   

3. In successfully defending against the administrative complaint, Ms. Scheffer incurred reasonable attorney's fees in the amount of $1,980 and costs in the amount of $219.75, for a total of $2,199.75. She incurred additional reasonable attorney's fees in the amount of $330 in the present proceeding. 1/

   
   

4. The facts proven at hearing are set out in detail in the attached recommended order entered in Case No. 89-4699 and are adopted by reference in their entirety here. No evidence adduced in the present proceeding proved respondent had materially different or additional information when it decided to file the administrative complaint. 2/

   
   

   CONCLUSIONS OF LAW

   
   

5. In accordance with Sections 57.111 and 120.57(1), Florida Statutes (1989) and Rule 22I-6.035, Florida Administrative Code, the Division of Administrative Hearings has jurisdiction of proceedings like these initiated pursuant to the Florida Equal Access to Justice Act. Section 57.111(4)(b)1., Florida Statutes (1989). The petition was filed well within 60 days of entry of the final order. Section 57.111(4)(b)2., Florida Statutes (1989); Rule 22I- 6.035, Florida Administrative Code.

   
   

6. The parties' stipulation establishes that Mrs. Scheffer qualifies as a "prevailing small business party . . . [in a] proceeding pursuant to Chapter 120 initiated by a state agency." Section 57.111(4)(a), Florida Statutes (1989). Although clearly more than a "nominal party," Section 57.111(4)(d)(1), Florida Statutes (1989), DPR is not liable for attorney's fees and costs in unsuccessful administrative prosecutions like these, if their commencement was substantially justified. Section 57.111(4)(a), Florida Statutes (1989).

   
   

7. If a proceeding "had a reasonable basis in law and fact at the time it was initiated," Section 57.111(3)(e), Florida Statutes (1989), the Florida Equal Access to Justice Act does not shift prevailing small business parties' obligations to pay their own attorney's fees and costs. The Act is designed to discourage unreasonable governmental action, not to paralyze agencies doing the necessary and beneficial work of government.

   
   

8. In appropriate cases, agencies must bear a small business party's costs and fees, up to a maximum of $15,000, unless the agency can demonstrate that "the actions of the agency were substantially justified or special circumstances exist which would make the award unjust." Section 57.111(4)(a), Florida Statutes (1989). The agency has the burden to show substantial justification or special circumstances. Anthony Gentele, O.D. vs. Department of Professional

   Regulation, Board of Optometry, No. 85-3857F (DOAH; June 20, 1986) aff'd 513 So.2d 672 (Fla. 1st DCA 1987).

   
   

9. In its proposed order, respondent quotes from the recommended order's finding in Department of Professional Regulation, Division of Real Estate v. Scheffer and Ecoff, No. 89-4699, that petitioner did not "personally instruct salespeople to verify information sellers give them by independent inspection." Even if this was known to the agency when it filed the administrative complaint and even if this omission is deemed significant in light of other guidance and instruction petitioner Scheffer gave, it did not afford substantial justification for filing the administrative complaint in No. 89-4699, because the salesman responsible for the listing had in fact inspected the property and had obtained accurate information. Respondent offers nothing else as justification for the administrative complaint. 3/

   
   

10. Assuming arguendo that DPR did not have the burden to "affirmatively raise and prove," Gentele vs. Department of Professional Regulation, No. 85- 4465F (DOAH; Feb. 7, 1986) a substantial basis for the administrative complaint, and that petitioner had the burden to prove the negative, see Nutt vs. Department of Professional Regulation, No. 85-3499F (DOAH; January 28, 1986) ("Petitioner . . . [has] burden of establishing that governmental action has been unreasonable," at p. 6), Mrs. Scheffer has successfully demonstrated the lack of a substantial basis or special circumstances here. See Nutt, pp.6, 8; Rodney G. Green and Charter Realty, Inc. vs. Department of Professional Regulation, Division of Real Estate, No. 85-3015F (DOAH; Dec. 5, 1985).

ORDERED

It is, accordingly, ordered that DPR pay petitioner two thousand five hundred twenty-nine and three quarter dollars ($2,529.75).

DONE and ENTERED this 16th day of July, 1991, in Tallahassee, Florida.

ROBERT T. BENTON, II

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 16th day of July, 1991.

ENDNOTES

1/ The finding regarding fees incurred in the present proceeding is predicated on petitioner's uncontroverted claim in her proposed attorney fee and cost order, a claim fully consonant with the character of counsel's presentation.

2/ No portion of the buyer's testimony rejected in the recommended order is material to issues in this proceeding. Whether the agency had Ms. Scheffer's

version of events (the source of the findings regarding instructions to salespeople) when it filed the administrative complaint is not clear.

3/ Petitioner's employee's culpable negligence is not automatically attributable to her, and gives rise to no presumption of culpability on her part. See George H. McDonald v. Department of Professional Regulation, No. 89-

246 (Fla. 1st DCA; June 13, 1991).

COPIES FURNISHED:

Darlene F. Keller, Division Director Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, FL 32801

George Stuart, Secretary Department of Professional

Regulation

1940 North Monroe Street Tallahassee, FL 32399-0850

Jack McRay, General Counsel Department of Professional

Regulation

1940 North Monroe Street Tallahassee, FL 32399-0792

Michael T. Webster, Esquire Post Office Box 876 Shalimar, FL 32579

James H. Gillis, Esquire Hurston Building North Tower Suite N-308

Post Office Box 1900 Orlando, FL 32802-1900

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 RULE 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: 91-001019F

Orders for Case No: 91-001019F