STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SALEM VILLAGES MRDD, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 92-1778F

)

SUNRISE COMMUNITY, INC., )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, a hearing was conducted by telephone, in the above- styled case on June 8, 1992.

APPEARANCES

For Petitioner: Michael J. Bittman, Esquire

Subin, Shams, et al.

111 North Orange Avenue, Suite 900 Post Office Box 285

Orlando, Florida 32802-0285

For Respondent: Steven M. Weinger, Esquire

Kurzban, Kurzban, et al. 2650 Southwest 27th Avenue Miami, Florida 33133

STATEMENT OF THE ISSUES

On March 16, 1992, Petitioner filed motions for attorney's fees and costs pursuant to Sections 57.105 and 120.57(1)(b)5., Florida Statutes. At hearing, Petitioner conceded that Section 57.105 is inapplicable to administrative hearings and the case proceeded on the issue of entitlement under Subsection 120.57(1)(b)5., Florida Statutes.

The issue of an appropriate amount of fees and costs is moot, for the reasons set forth below, although that issue was reserved for ruling, if necessary, after an evidentiary hearing.

PRELIMINARY STATEMENT

This case arose from related cases challenging proposed bid awards by the Department of Health and Rehabilitative Services (HRS) to Salem Villages MRDD, Inc. (Salem). Two of the related cases, DOAH number 92-0247BID and DOAH number 92-0343BID, were voluntarily dismissed by the challenger, Sunrise Community, Inc. (Sunrise), and the intervenor, Salem, filed its motion for fees and costs in both cases, requesting consolidation.

Consolidation was denied in an order entered on April 15, 1992, and the cases were abated while the parties proceeded to formal hearing in a third bid protest case, DOAH number 92-0342BID.

When the instant case was set for hearing, the order dated May 13, 1992, provided that in the absence of extraordinary circumstances the intention of the Hearing Officer was to determine the issue of entitlement to fees based on oral argument, the pleadings in this case, and the record in the underlying case, DOAH number 92-0247BID.

At the commencement of the telephone hearing, no extraordinary circumstances were raised to defeat that intent, but at the parties' request, the Hearing Officer clarified that the issue as to amount of award would be reserved for a later evidentiary hearing, if necessary.

At the close of oral argument the parties were granted leave to file memoranda of law and rebuttal memoranda by a deadline of June 29, 1992.

No post hearing memoranda nor other pleadings have been filed.

FINDINGS OF FACT

The following findings are gleaned from the record in case number 92- 0247BID.

1. On June 21, 1991, the Department of Health and Rehabilitative Services (HRS), Developmental Services Program Office, published its need for six (6) bed or less intermediate care facilities for the developmentally disabled (ICF/DD) throughout the state, in each of eleven HRS planning districts. The notice solicited competitive proposal applications for varying numbers of beds in each district. The notice stated that applications would be received in each district no later than 5:00 p.m., September 19, 1991, and that final awards would be made on November 22, 1991.

   
   

2. Sunrise Community, Inc. (Sunrise), filed petitions for formal hearing in response to denial of its proposal applications in several HRS districts. On January 2, 1992, the petitions were dismissed by HRS with leave to amend.

   
   

   An amended notice of bid protest and petition for formal hearing was filed by Sunrise on January 9, 1992, as to HRS District VII, and was forwarded to the Division of Administrative Hearings (DOAH) for conduct of the hearing. DOAH number 92-0247BID was assigned to the undersigned Hearing Officer and was set for hearing on January 31, 1992, within the deadline required by Section 120.53(5), Florida Statutes.

   
   

3. HRS filed a motion to dismiss the amended petition on January 22, 1992, alleging that Petitioner, with its third-ranked proposal, lacked standing to protest, and further alleging that the amended petition lacked specificity.

   
   

   On January 23, 1992, Salem Village MRDD, Inc. (Salem), filed a Petition to Intervene, as the apparent successful bidder in HRS District VII.

   
   

   The second-ranked bidder, Community Services of Orange and Seminole, Inc. (CSOS) also petitioned to intervene in DOAH Case number 92-0247BID and had filed a separate Amended Notice of Bid

   
   

   Protest on January 17, 1992.

4. HRS' motion to dismiss was heard on January 27, 1992. An order was entered on January 29, 1992, consolidating the Sunrise and CSOS petitions, granting Salem's petition to intervene, and denying HRS' motion to dismiss, but requiring Petitioner, Sunrise, to provide specifics of its factual allegations either through responses to discovery or in an amended petition to be served on opposing counsel prior to commencement of the hearing on January 31st.

   
   

5. In the meantime, the parties were engaging in discovery, filing motions related to discovery and were proceeding towards hearing in this and the other cases arising from Sunrise's bid protests in other HRS districts.

   
   

6. On the afternoon of January 30, the day before the scheduled hearing, after learning that CSOS was dismissing its petition, Sunrise withdrew its challenge in this District VII case and notified the parties by telephone. The Hearing Officer was notified directly by telephone by counsel for CSOS and the hearing scheduled to commence in Tallahassee on January 31 was cancelled.

   
   

   Without the participation of the second-ranked bidder, CSOS considered its chances of prevailing, as third-ranked bidder, were substantially reduced.

   
   

7. A "Modified Amended Notice of Bid Protest," clearly mailed prior to Sunrise's voluntary dismissal, was filed at the DOAH on January 31, 1992. The identical pleading was apparently filed in this party's other bid protest cases in the other HRS districts, as the certificate of service reflects service on various other HRS district counsel. The pleading provides in paragraph 6.(a)- (z), pages 6-8, some specifics of Sunrise's allegations of defects in Salem's proposal and the bid committee's evaluation.

   
   

8. The bid protest of Sunrise filed, not simultaneously, but at least contemporaneously with the protest of CSOS, the second-ranked bidder, did not itself cause delay in the process, and it was orally dismissed within hours or minutes of the attorney's discovery of dismissal by CSOS. The substantial weight of evidence in the record supports a finding that Sunrise's initiation and pursuant of a bid protest in Case number 92-0247BID was not for an improper purpose.

   
   

9. There was a delay of several weeks between the oral dismissal and the order entered on March 20, 1992, remanding the file to HRS and closing DOAH's file. This delay was occasioned by the Hearing Officer's reluctance to close a file without written confirmation of dismissal, particularly since pleadings were still being docketed, erroneously, under the DOAH file number 92-0247BID. Those pleadings were identical to pleadings filed in several other HRS district bid cases that were still active.

   
   

   Salem, a party in those other cases, one of which proceeded to formal hearing and is waiting a recommended order, has not demonstrated any prejudice by that delay.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction in this matter pursuant to Subsection 120.57(1)(b)5., Florida Statutes, which provides:

    
    

    5. All pleadings, motions, or other papers filed in the proceeding must be signed by a party, the party's attorney, or the party's

    qualified representative. The signature of a party, a party's attorney, or a party's qualified representative constitutes a certificate that he has read the pleading, motion, or other paper and that, to the best of his knowledge, information, and belief formed after 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 hearing officer, upon motion or his own initiative, shall impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include 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 fee.

    
    

11. A party cannot escape liability simply by taking a dismissal or withdrawing a request for hearing. Corporation of the President of the Church of Jesus Christ of Later Day Saints v. St. Johns River Water Management District, 13 FALR 1014 (DOAH 1991).

    
    

12. Patterned after Rule 11, Federal Rules of Civil Procedure, Subsection 120.57(1)(b)5., Florida Statutes, may be interpreted in part by resort to the abundant federal cases analyzing that rule. Mercedes Lighting and Electrical Supply, Inc. v. State Department of General Services, 560 So.2d 272 (Fla. 1st DCA 1990).

    
    

    Nothing in the text of Subsection 120.57(1)(b)5., Florida Statutes, mandates an evidentiary hearing. The imposition of sanctions pursuant to Rule

    11 does not require an evidentiary hearing. See, International Shipping v. Hydra Offshore, Inc., 875 F.2d 388 (2nd Cir. 1989), and other federal cases cited in Corporation of the President, supra, 1019-20.

    
    

13. While distinguishing the federal rule's three-pronged standard from the statutory standard in Section 120.57(1), Mercedes, supra, still borrows this objective test:

    
    

    ". . . courts should not delve into an attorney's or party's subjective intent or into good faith-bad faith analysis. Instead, if a reasonably clear legal justification can

    be shown for the filing of the paper in question, improper purpose cannot be found and sanctions are not appropriate."

    p. 278.

    
    

14. Sunrise articulated a reasonably clear legal justification for filing its petition. Although its amended petition lacked factual specifics, it still withstood a motion to dismiss for lack of standing. It failed to provide the required specifics prior to voluntary dismissal, but scant time allowed for

that, and a modified amended petition provided some clarification of its otherwise general allegations.

It was never patently clear that this claimant had absolutely no chance of success. Oliveria v. Thompson, 803 F.2d 1265 (2nd Cir. 1986). And, when its chances of success were reduced by the withdrawal of a co-petitioner's claim, it promptly dismissed, and saved for all parties the time and expense of a hearing.

Based on the foregoing, it is hereby, ORDERED:

The motion for attorney's fees and costs by Salem Villages, MRDD, Inc., is DENIED.

DONE AND ORDERED in Tallahassee, Leon County, Florida, this 4th day of August 1992.

MARY W. CLARK

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 4th day of August 1992.

COPIES FURNISHED:

Michael J. Bittman, Esquire Subin, Shams, et al.

Suite 900

111 North Orange Avenue Post Office Box 285 Orlando, Florida 32802-0285

Steven M. Weinger, Esquire Kurzban, Kurzban, et al.

2650 S.W. 27th Avenue Miami, Florida 33133

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: 92-001778F

Orders for Case No: 92-001778F