STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ALICE P. WHITE, d/b/a MISS )

PATTY'S DAY CARE CENTER, )

)

Petitioner, )

)

vs. ) CASE NO. 93-7160F

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

FINAL ORDER

On April 1, 1994, a formal administrative hearing was held in this case in Bradenton, Florida, before J. Lawrence Johnston, Hearing Officer, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Donald B. Hadsock, Esquire

1806 Manatee Avenue West Bradenton, Florida 34205

For Respondent: Raymond R. Deckert, Esquire

Ziona Kopelovich, Esquire District 6 Legal Office

W. T. Edwards Facility

4000 West Dr. M. L. King, Jr., Boulevard Fifth Floor, Room 500

Tampa, Florida 33614 STATEMENT OF THE ISSUES

This case went to hearing on the Amended Petition for Award of Attorney Fees and Costs filed by the Petitioner, Alice P. White, d/b/a Miss Patty's Day Care Center, under Section 57.111, Fla. Stat. (1993), the Florida Equal Access to Justice Act. The issues are: (1) whether the Respondent, the Department of Health and Rehabilitative Services (HRS), was "substantially justified" in filing the Administrative Complaint against the Petitioner in Division of Administrative Hearings (DOAH) Case No. 92-7148 and in denying the Petitioner's application to renew her day care license (DOAH Case No. 92-7447); (2) if not, whether HRS waived any dispute as to the reasonableness of the amount of attorney fees for which the Petitioner has applied by failing to file an affidavit raising the issue properly under Section 57.111(4)(c), Fla. Stat. (1993), and F.A.C. Rule 60Q-2.035(4); (3) if not, the amount of reasonable attorneys fees; and (4), if the amount of reasonable attorneys fees and costs exceeds $15,000, whether a "double" statutory $15,000 cap on fees and costs (one each for both DOAH Case No. 92-7148 and DOAH Case No. 92-7447) applies, for a

total statutory cap of $30,000, or whether a single statutory cap applies to both underlying cases, for a total of $15,000, under Section 57.111(4)(d)2., Fla. Stat. (1993).

PRELIMINARY STATEMENT

On December 23, 1993, the Petitioner filed a pleading entitled Respondent's Application for Award of Attorney Fees and Costs, Affidavit of Counsel and Request for Administrative Hearing. HRS did not respond to the application. On January 26, 1994, the hearing officer to whom the case initially was assigned entered an Order Dismissing Petition Without Prejudice to Amend, acknowledging that, under F.A.C. Rule 60Q-2.035, HRS' failure to respond to a proper petition would allow the petition to be adjudicated without the necessity of a hearing, but also concluding that the application was deficient under the rule.

On January 31, 1994, HRS filed a belated response in opposition to the original application. It contended: (1) that HRS was "substantially justified" in filing the Administrative Complaint in DOAH Case No. 92-7148 and in denying the Petitioner's application to renew her day care license (DOAH Case No. 92- 7447); and (2) that a single statutory cap applied to both underlying cases, for a total of $15,000. It did not otherwise question the reasonableness of the amount of attorney fees for which the Petitioner was applying. The response in opposition was supported by an Affidavit of Counsel for HRS.

Petitioner's Amended Petition for Award of Attorney Fees and Costs was filed on February 2, 1994. A week later, taking note that HRS had filed a belated response in opposition to the original application and making the assumption that the response applied to the Amended Petition for Award of Attorney Fees and Costs, the Petitioner filed a Request for Evidentiary Hearing. On February 11, 1994, a Notice of Hearing was issued, scheduling final hearing for March 24, 1994.

On February 21, 1994, HRS filed Respondent's Response to Petition for Attorney Fees and Costs and Motion to Dismiss Petition for Attorney Fees and Costs. This pleading questioned the reasonableness of the amount of attorney fees for which the Petitioner was applying, in addition to renewing the issues raised in the response in opposition to the original application, i.e., that HRS was "substantially justified" and that a single $15,000 statutory cap applied.

The Respondent's Response to Petition for Attorney Fees and Costs and Motion to Dismiss Petition for Attorney Fees and Costs was not supported by an affidavit.

On March 11, 1994, an Order Denying Motion to Dismiss Petition for Attorney Fees and Costs was entered, and the matter proceeded towards final hearing. On the same day, HRS noticed the taking of the deposition of the Petitioner's attorney on March 21, 1994. At the deposition, HRS inquired extensively into the issue of the reasonableness of the amount of the attorney fees for which the Petitioner had applied.

Shortly before the scheduled hearing, the case was continued for one week, to March 31, 1994. Then it was transferred to the undersigned hearing officer and continued one more day, to April 1, 1994.

At final hearing, the Petitioner objected to any evidence on the reasonableness of the amount of attorney fees for which the Petitioner was applying, on the ground that, under Section 57.111(4)(c), Fla. Stat. (1993), and

1. Rule 60Q-2.035(4), HRS waived any dispute as to the reasonableness of the amount of attorney fees by failing to file an affidavit placing the issue in

   dispute. When it was indicated that the objection would be sustained, HRS moved ore tenus to bifurcate the issues to allow HRS to submit a suitable affidavit and challenge the reasonableness of the amount of the attorney fees later if the hearing officer determined that HRS was not "substantially justified." Ruling was reserved on the ore tenus motion to bifurcate.

   
   

   At the outset of the presentation of the evidence, the parties had Joint Exhibit 1 admitted in evidence. Then HRS called two witnesses and had HRS Exhibit 1 admitted in evidence on the issue whether HRS was "substantially justified." The Petitioner testified in her own behalf and had Petitioner's Exhibits 1, 2 and 4 admitted in evidence on that issue.

   
   

   At that point in the hearing, the parties agreed to proceed to try the issue of the reasonableness of the amount of the attorney fees, subject to a ruling on whether HRS waived the issue. Each party called one expert witness on this issue. Petitioner's Exhibit 2 and HRS Exhibit 2 also were admitted in evidence on this issue, subject to a ruling on the Petitioner's objection on the ground of waiver.

   
   

   HRS ordered the preparation of a transcript of the final hearing. The parties were given ten days from the filing of the transcript in which to file proposed final orders. The transcript was filed on April 20, making proposed final orders due May 2, 1994. Explicit rulings on the proposed findings of fact contained in the parties' proposed final orders may be found in the Appendix to Final Order, Case No. 93-7160F, infra.

   
   

   FINDINGS OF FACT

   
   

   Justification for Agency Action

   
   

   1. On August 14, 1992, the Manatee County Sheriff's office reported to HRS that a 911 emergency telephone call had been made reporting that an infant died apparently as a result of an accidental choking while at the day care facility owned and operated by the Petitioner, Alice P. White, d/b/a Miss Patty's Day Care Center.

      
      

   2. On or about August 17, 1992, an autopsy report on the infant found that the cause of death was sudden infant death syndrome (SIDS), which was inconsistent with an accidental choking, and an HRS child day care facility licensing inspector placed a followup call to the Petitioner. Among other things, staffing at the facility on August 14, 1992, was discussed, and the Petitioner assured the inspector that staffing was adequate. They then discussed the incident itself. The Petitioner reported that the infant choked while the Petitioner was sitting in a rocking chair, holding the infant in her arms and feeding the infant.

      
      

   3. On August 19, 1992, the HRS inspector was instructed to return to the Petitioner's facility for documentation of proper staffing on August 14, 1992. When the HRS inspector arrived, the Petitioner was being interviewed by Manatee County Sheriff's office personnel. While the law enforcement interview was going on, the HRS inspector was able to observe that 18 preschool children were unattended in the bedroom of the Petitioner's son, an unlocked room that officially was not part of the facility. She also was unable to obtain any documentation that the facility was properly staffed on August 14, 1992.

   4. The HRS inspector prepared a Child Day Care Inspection Checklist for August 19, 1992, reporting that 18 children were not under direct supervision and that there were 36 children at the facility, six more than the maximum capacity for which the Petitioner's facility was licensed.

      
      

   5. On August 20, 1992, the HRS inspector returned to the facility because the Sheriff's office had referred the matter to HRS and HRS investigators were at the facility conducting interviews of the facility's staff. One member of the staff informed the HRS personnel that, on the day the infant died, the infant had been left in one of the rooms at the facility without direct supervision at least one time for approximately 30 minutes. When the Petitioner was confronted with the staff member's statement, the Petitioner confessed that she had made, and had been repeating, a false report as to what had occurred on August 14, 1992. In fact, the infant did not die of an accidental choking while the Petitioner was holding the infant in her arms. Rather, the infant was in one of the rooms at the facility without direct supervision; when the Petitioner entered the room and discovered that the infant was not breathing, she called 911 and tried to rescusitate the infant. She stated that she had made, and had been repeating, the false report on the incident in order to personally assume responsibility and to protect her staff from being made responsible.

      
      

   6. During a prior routine inspection on July 29, 1992, HRS cited the Petitioner for several violations, including insufficient staff ratio, in violation of F.A.C. Rule 10M-12.002(5)(a)(1), and failure to directly supervise, in violation of F.A.C. Rule 10M-12.002(5)(a)(2).

      
      

   7. On a reinspection on August 12, 1992, the deficiencies cited on July 29, 1992, were corrected; but, in light of the facts HRS learned on August 20, 1992, it appeared that two days later, on the day the infant died, the Petitioner was out of compliance again.

      
      

   8. In addition, similar violations were observed during inspections on January 13, 1992, and on April 12, 1989. Like all of the other minor violations observed during inspections of the Petitioner's facility over the years, the staff ratio and direct supervision violations were corrected by the time of the following inspection.

      
      

   9. In response to the inspection report for August 19, 1992, the Petitioner prepared a list of the facility's weak points and steps initiated to correct them. The Petitioner also voluntarily closed her day care center pending the completion of the HRS investigations.

      
      

      Underlying Administrative Proceedings

      
      

   10. On September 15, 1992, HRS filed an Emergency Final Order suspending the Petitioner's license. On September 21, 1992, HRS filed an Administrative Complaint. The Petitioner requested formal administrative proceedings on the Administrative Complaint, and it was referred to the Division of Administrative Hearings (DOAH), where it was given DOAH Case No. 92-7148.

   11. Both the Emergency Final Order and the Administrative Complaint alleged the death of the infant and the false initial report and alleged that the infant actually was left alone without supervision for 30 minutes. Both also alleged that, during HRS' investigation of the incident on August 19, 1992, the following "items of noncompliance" were discovered:

       
       

       1. The center had 18 school aged children in part of the facility with no staff or direct supervision. This is a violation of Rule 10M-12.002(5)(a)2, F. A. C.

       2. The total number of children in the facility was 36, which exceeded the maximum licensed capacity of 30 for the facility. This is a violation of Rule

          10M-12.001(2)(j), F. A. C.

       3. The staff-to-child ratio was not correct. This is a violation of Rule

          10M-12.002(5)(a)1, F. A. C.

          
          

          Both also alleged all of the prior violations found during the inspection history for the facility.

          
          

   12. On or about October 24, 1992, based on the same information on which the Administrative Complaint was based, HRS gave notice of intent to deny the application which the Petitioner had filed for renewal of her child day care facility license. The Petitioner requested formal administrative proceedings on the intended denial, and it was referred to DOAH, where it was given DOAH Case No. 92-7447, assigned to the same hearing officer as Case No. 92-7148, and consolidated for further proceedings and for final hearing. Final hearing was held on May 12, 1993.

       
       

   13. The Recommended Order entered in Case Nos. 92-7148 and 92-7447 on May 28, 1993, found the Petitioner not guilty on all charges in the Administrative Complaint and recommended that her license be renewed "forthwith." Among other things, the Recommended Order found:

1. The only charges in the Administrative Complaint regarding this incident [i.e., the death of the infant] is [sic] contained in paragraphs 5 and 8 of the Administrative Complaint. Paragraph 5 alleges the baby died and paragraph 8 alleges that

   Respondent had provided the sheriff's department with misinformation regarding the infant choking while she was feeding him and that this infant had been left alone for 30 minutes without supervision before being noticed by Respondent. No credible evidence to support the lack of adequate supervision of this infant before its death was presented.

2. The discrepancies found during the quarterly inspections of the facility for

the past 3 1/2 years were predominantly minor offenses such as inadequate record keeping, failure to document all staff had received prescribed training or innoculations, lack

of current vehicle driver certificate, unsafe outdoor equipment, or minor food service violations, failure to provide employee background screening, inadequate staff to child ratio, inadequate bathroom supplies, and lack of immunization records. These are all classified as Class III violations as defined in Rule 10M-12.011(7)(c), Florida Administrative Code.

* * *

1. During the investigation at this day care center following the infant's death, and while the sheriff's deputies were on the scene questioning Respondent and her employees, three additional violations are noted in paragraph 7 of the Administrative Complaint. The first of these allege the center had 18 children in part of the facility with no staff present in the room. At the time this infraction occurred Respondent was out on the patio being interrogated by a deputy and another deputy had called the aide supervising the 18 children out of the room to question her. When Respondent returned inside the center and observed the aide being questioned by

   the deputy she sent another aide into the room with the 18 school age children.

2. The second allegation was that there were 36 children in the facility although the center was licensed for only 30. Without attempting to justify the violation Respondent testified that this occurred a day or two before school started when the teachers had to be at school but the pupils did not. These excess children were children of teachers who requested Respondent to take them during the time these teachers had to be at school. As a favor to these mothers who had previously used her day care center Respondent temporarily exceeded her authorized number of children.

3. The third violation resulted when Respondent left the children she was supervising to open the door to admit the HRS inspector who supervised the facility. While Respondent was opening the door to let the inspector into the facility the proper ratio of staff to child was not maintained.

4. In response to the inspection reporting the lack of supervision of the 18 school age and excess children in the facility (Exhibit

   20) Respondent prepared a list of the facility's weak points and steps initiated to correct them (Exhibit 23).

   
   

   law:

5. On August 28, 1992 Respondent voluntarily closed her day care center pending the completion of all investigations (Exhibit 24).

1. Among other things, the Recommended Order concluded, as a matter of

   
   

   1. Neither paragraph 5 nor 8 of the Administrative Complaint alleges a violation of either Section 402.310, Florida Statutes or Rule 10M-12.011, Florida Administrative Code which list the grounds for disciplinary action. Since all of the violations charged in the Administrative Complaint were corrected within the prescribed time frame, none of these violations constitute grounds for levying an administrative fine. (Class II violations, if timely corrected, are also not subject to the assessment of a fine) A fortiori, they do not constitute grounds for revocation or refusal to renew a license.

   2. Obviously the death of an infant at Respondent's facility on August 14, 1992 led to the decision to deny renewal of the license and the filing of the Administrative Complaint to revoke the license. However, there is no evidence linking any act of Respondent with the death of this infant. There is no dispute that the infant died of SIDS. The infant stopped breathing and had the aide been in the room at the time the infant stopped breathing it is unlikely this would have been noticed had the aide not been looking closely at the child.

      * * *

      24. Even if the minor violations charged in the Administrative Complaint could now be considered to be grounds for revocation, Section 402.310(1)(b), Florida Statutes provides:

      In determining the appropriate disciplinary action to be taken for a violation as provided in paragraph (a), the following factors shall be considered:

      1. The severity of the violation, including the probability that death or serious harm

         to the health or safety of any person will result or has resulted, the severity of the actual or potential harm, and the extent to which the provisions of this part have been violated.

      2. Actions taken by the licensee to correct the violations or to remedy complaints.

      3. Any previous violations of the licensee.

      1. All of the violations charged in the Administrative Complaint are minor and were corrected forthwith. Respondent submitted a proposed plan to inhibit further violations by increasing staff and preparing written orders for staff guidance. As noted above this is the first Administrative Complaint ever filed against Respondent.

      2. From the foregoing it is concluded that there are no violations listed in the Administrative Complaint which were not

      timely corrected; that once timely corrected these alleged violations do not constitute grounds for further disciplinary actions; and Petitioner has failed to prove, by clear and convincing evidence, or even by a preponderance of the evidence, that Respondent committed any act which constituted grounds for revocation of her license.

      
      

2. Over objection, the HRS Secretary allowed its personnel involved in the administrative litigation to file exceptions after the procedural deadline for filing exceptions.

   
   

3. HRS' Final Order was rendered on November 1, 1993.

   
   

4. It granted an exception to the finding in paragraph 8 of the Recommended Order on the ground that paragraph 4(o) of the Administrative Complaint also was a charge "regarding this incident" in that it charged the Petitioner "with filing a false police report."

   
   

5. It also granted an exception to the finding in paragraph 9 of the Recommended Order on the ground that "there was insufficient evidence adduced upon which to base a finding of fact that inadequate staff to child ratios or lack of direct supervision constitute minor discrepancies." (It also was held that "it is the department's duty, not the Hearing Officer's, to interpret what is and is not a minor discrepancy.") The Final Order also observed:

   
   

   The AC also does not charge lack of direct supervision of the dead child. Therefore, the decision in this case does not turn on that issue.

   
   

6. The Final Order also granted an HRS exception to part of paragraph 22 of the Recommended Order to the extent that it implied that HRS took action only because of the death of the child. The Final Order noted: "Although the child died from SIDS, counsel for the department is correct in pointing out that if the child had been under direct supervision at all times, the child might still be alive." In a footnote, the Final Order added: "If the department had alleged in the AC a specific lack of direct supervision as to the deceased child, and proved it at the hearing, this case might have turned out differently."

7. Finally, the Final Order granted an exception disagreeing "with any general rule that once timely corrected, previous violations no longer constitute grounds for further disciplinary action." The Final Order observed:

   
   

   The violations cited and corrected over the

   3.5 year period preceding the AC in this case are not sufficient to support denial or revocation of a license. That is not to say that in a proper case, previously corrected violations cannot support later disciplinary action.

   
   

8. Having granted the foregoing exceptions, the Final Order's disposition of the case was:

   
   

9. Based upon the foregoing, it is

   
   

   ADJUDGED, that Alice P. White, d/b/a Miss Patty's Day Care Center is not guilty of the charges legally alleged in the Administrative Complaint. The charge of giving false information to the police is not a violation, under these facts, of the child care licensure statute or rule. It is further ADJUDGED that the license to resume operations be issued forthwith . . ..

   
   

10. The Final Order was not appealed. On December 16, 1993, the HRS personnel involved in the prosecution of the administrative proceedings moved for clarification of the Final Order and for remand to DOAH. This action was not appropriate, and on December 29, 1993, the Petitioner initiated action to enforce the Final Order by notifying HRS and the Attorney General of the Petitioner's intent to file an enforcement action under Section 120.69, Fla. Stat. (1993), as required by the statute.

    
    

11. On January 14, 1994, an Order Clarifying Final Order was rendered, but in substance the order explained why no clarification was necessary and why the Final Order should be implemented. On or about January 24, 1994, HRS issued the Petitioner a "provisional license."

    
    

    Reasonable Attorney Fees

    
    

12. The reasonable amount of time and labor required on this case was approximately 93 hours. (This does not include time spent after entry of the HRS Final Order.) HRS' expert questioned the 93 hours as being perhaps excessive, but she also conceded that she would not question the veracity of representations made by counsel for the Petitioner and that she only had a short period of time in which to study and consider the matter.

    
    

13. The legal questions involved in the Petitioner's case were not particularly novel. The most novel question occurred after entry of the Final Order, when HRS inappropriately sought clarification of its own Final Order, and this should be taken into consideration in determining the appropriate fee. In addition, representation of the Petitioner was made difficult by her false reports as to the cause of death of the infant and her subsequent admission to the false reports.

14. A fairly high level of skill was required to perform the legal service properly. The extensive general trial practice experience of counsel for the Petitioner enabled him to perform the service well even though he did not have exceptional experience specifically in the area of administrative law. He also was required to advise the Petitioner on related criminal, tort and bankruptcy matters, and his skills enabled him to do so. Not every specialist in administrative law would have been able to do as good a job in those areas. However, his lack of experience in the area of administrative law required him to expend considerable time devoted to researching pertinent law.

    
    

15. There was no evidence that counsel's acceptance of the Petitioner's case precluded other employment. To the contrary, the evidence was that counsel is known for accepting notorious cases and that his practice is not adversely affected by this.

    
    

16. The customary fee in Manatee County for handling a case like the Petitioner's ranges anywhere from $135 to $200 an hour.

    
    

17. Counsel's fee for handling the Petitioner's case was totally contingent on any sums recoverable from HRS under any applicable statute for the award of attorney fees. If no award is recoverable, he would not expect the Petitioner to pay him any fee.

    
    

18. The Petitioner was emotionally distraught during counsel's representation. This presented special problems in the representation and required counsel to expend more time than might otherwise be required for a case like the Petitioner's. Otherwise, the Petitioner's case did not impose any unusual time limitations on counsel.

    
    

19. There was no amount of money at issue in the Petitioner's case. But at issue was the Petitioner's licensure, which was her means of earning a living. As for the results obtained, counsel's representation was, in the words of his expert, "devastatingly successful." In fact, it is not clear how counsel was able to achieve such a "devastatingly successful" result on the facts and law of the case. The key seems to have been in persuading the hearing officer and, ultimately, HRS that the Administrative Complaint did not allege lack of direct supervision or improper staff ratio on August 14, 1992, and in persuading the hearing officer that the Petitioner's false reports were of no consequence in the licensure proceeding. See Conclusions of Law 35-36, infra.

    
    

20. To the extent not already addressed, the evidence was clear that the experience, reputation, and ability of the Petitioner's attorney is very good.

    
    

21. The Petitioner's case would have to be classified as "undesirable." The case was notorious in the community. It involved the Petitioner's false reports as to the cause of death of an infant, to which the Petitioner later admitted. In addition, the Petitioner had no money to pay legal fees. If counsel had not taken the case on the generous terms he did, the Petitioner probably have had serious difficulty obtaining legal representation.

    
    

22. Before agreeing to represent the Petitioner in her case, counsel had no prior professional relationship with her, and no future financially rewarding professional relationship with the Petitioner can be anticipated.

    
    

23. There was no evidence of any awards in previous cases.

24. Based on the foregoing factors, it is found that a reasonable attorney's fee for counsel representation of the Petitioner in her licensure proceedings is $18,600 (93 hours at $200 per hour.)

    
    

    CONCLUSIONS OF LAW

    
    

25. This case went to hearing on the Amended Petition for Award of Attorney Fees and Costs filed by the Petitioner, Alice P. White, d/b/a Miss Patty's Day Care Center, under Section 57.111, Fla. Stat. (1993), the Florida Equal Access to Justice Act. In pertinent part, Section 57.111 provides for the payment of attorney fees and costs incurred in a formal administrative proceeding to a "prevailing small business party," as defined in the statute, "unless the actions of the state agency were substantially justified "

    Section 57.111(4)(a). HRS concedes, and the evidence is clear, that the Petitioner is a "prevailing small business party." "A proceeding is substantially justified if it had a reasonable basis in law and in fact at the time it was initiated by the state agency." Section 57.111(3)(e).

    
    

    Substantial Justification

    
    

26. HRS has the burden to prove that its administrative actions in this case--filing the Administrative Complaint in Case No. 92-7148 and giving notice of intent to deny the Petitioner's license renewal application (Case No. 92- 7447)--were "substantially justified." See Dept. of Prof. Reg. v. Toledo Realty, Inc., 549 So. 2d 1715 (Fla. 1st DCA 1989).

    
    

27. It is concluded that HRS would have had "a reasonable basis in law and in fact" to initiate proceedings to discipline the Petitioner, and deny her renewal application, on the ground that her facility was in violation of the requirements for staff ratio and direct supervision on August 14 and 19, 1992, and that such administrative actions would have been "substantially justified" under Section 57.111. See Gentele v. Dept. of Prof. Reg., 513 So. 2d 672, 673 (Fla. 1st DCA 1987). It is noted that, while the Recommended Order concluded that "there was no evidence linking any act of Respondent with the death" (apparently because, given the autopsy report's finding that the cause of death was SIDS, "it is unlikely this would have been noticed had the aide not been looking closely at the child"), the Final Order granted HRS' exceptions to those conclusions, noting: "Although the child died from SIDS, counsel for the department is correct in pointing out that if the child had been under direct supervision at all times, the child might still be alive." In a footnote to the ruling, the Final Order added: "If the department had alleged in the AC a specific lack of direct supervision as to the deceased child, and proved it at the hearing, this case might have turned out differently."

    
    

28. At bottom, the HRS Final Order's concurrence with the hearing officer's recommendation to find the Petitioner "not guilty on all charges" seems to be based on the Final Order's conclusion that the Administrative Complaint did not "charge lack of direct supervision" and that "the decision in this case does not turn on that issue." The basis for this conclusion is not apparent on its face. Rather, it would appear on first blush that, in fact, the Administrative Complaint in this case alleged both a lack of direct supervision and insufficient staff-to-child ratio on August 14, 1992 (as well as on August 19, 1992, and on two prior occasions.) Indeed, paragraph 8 of the findings of fact in the Recommended Order acknowledges the allegation in paragraph 8 of the Administrative Complaint alleged that, on the day the infant died, the infant "had been left alone for 30 minutes without supervision before being noticed by

    the Respondent." However, apparently both the hearing officer and HRS in its Final Order concluded that the pleadings were not specific enough to raise the issue.

    
    

29. Without a sufficient allegation of inadequate staff ratio or lack of direct supervision on August 14, 1992, as a basis for the imposition of discipline, the HRS Administrative Complaint was left with the allegations of those violations on August 19, July 29, and January 13, 1992, and on April 12, 1989, and the various other minor violations in the Petitioner's inspection history.

    
    

30. The Petitioner contends in part that those allegations cannot be substantially justified in light of the conclusions of law in the Recommended Order "that once timely corrected these alleged violations do not constitute grounds for further disciplinary actions." Under the F.A.C. Rule 10M- 12.011(7)(b) and (c) "guideline for determining the severity of the violation and the amount of the fine," no fine should be assessed for a Class III or Class II violation that is "corrected" within the time established by the Department.

    
    

31. One of HRS' arguments is that neither the alleged August 19, 1992, violation nor the attempted allegation of an August 14, 1992, violation was observed by HRS during normal inspections and that F.A.C. Rule 10M-12.011(6) and

    (7) does not apply. But the application of F.A.C. Rule 10M-12.011(6) and (7) is not, by its terms, limited to normal HRS inspections. HRS cannot interpret its rules in a manner contrary to their plain meaning. See Section 120.68(12)(b), Fla. Stat. (1993).

    
    

32. Granted, as recited in the Recommended Order and as argued by the Petitioner, that under the F.A.C. Rule 10M-12.011(7)(b) and (c) "guideline for determining the severity of the violation and the amount of the fine," no fine should be assessed for a Class III or Class II violation that is "corrected" within the time established by the Department. Yet, in light of subsequent events, including those raising reasonable doubt as to the Petitioner's credibility, it was reasonable for HRS to question whether the previous violations, especially the staff ratio and direct supervision violations, actually were corrected or whether the Petitioner only "corrected" them for purposes of passing a reinspection and then lapsed into noncompliance.

    
    

33. It also is noted that, while F.A.C. Rule 10M-12.011(6) and (7) speaks to the factors to be considered in determining the amount of fine to be imposed, Section 402.310(1)(b) refers to the factors to be considered in "determining the appropriate discipline." (Emphasis added.) Having concluded that F.A.C. Rule 10M-12.011(6) and (7) prohibited the imposition of a fine against the Petitioner on the allegations of the Administrative Complaint, the Recommended Order went on conclude: "A fortiori, they do not constitute grounds for revocation or refusal to renew a license." (See Recommended Order Conclusion of Law 21, at paragraph 14, supra.) However, the Final Order disagreed on this point. (See Final Order Ruling on Exceptions, cited at paragraph 16.D., supra.) It was not unreasonable for HRS to follow its own agency interpretation of its own rule on this point.

    
    

34. As indicated by the language of Section 57.111(3)(e), the question whether an agency proceeding is "substantially justified" hinges on the basis for the proceeding "at the time it was initiated by the state agency." See Final Order, Woodson v. Dept. of Prof. Reg., DOAH Case No. 91-4278F, entered October 31, 1991; Final Order, Lindsey v. Dept. of Ins. and Treasurer, 11

    F.A.L.R. 94, 99 (DOAH 1988); Final Order, Romaquera v. Dept. of Prof. Reg., 10

    F.A.L.R. 929 (DOAH 1988). The evidence presented at a final hearing is not directly relevant to the inquiry, and the failure of evidence to persuade the finder of fact is not determinative. In this case, it is concluded that HRS' actions--filing the Administrative Complaint in DOAH Case No. 92-7148 and denying the Petitioner's license renewal application (Case No. 92-7447)--"had a reasonable basis in law and in fact at the time they were initiated" by HRS and that they were "substantially justified."

    
    

    Waiver of Dispute as to Amount of Reasonable Fees

    
    

35. Section 57.111(4)(c), Fla. Stat. (1993), provides: "The state agency may oppose the application for the award of attorney's fees and costs by affidavit."

    
    

36. F.A.C. Rule 60Q-2.035 provides in pertinent part:

    
    

    (4) The state agency shall either admit to the reasonableness of the fees and costs claimed or file a counter affidavit, along with its response. The counteraffidavit shall specify each item of cost and fee in dispute.

    (5)(a) A state agency against which a petition for costs and fees has been filed shall file a response within twenty (20) days of filing of the petition, which shall state whether the state agency seeks an

    evidentiary hearing and shall specify whether the state agency asserts:

    1. That costs and attorney's fees claimed in the affidavit are unreasonable;

    2. That the petitioner is not a prevailing business party;

    3. That the agency's actions were substantially justified;

    4. That circustances exist which would make the award unjust; or

    5. That the agency was a nominal party only.

    (b) When a state agency relies upon any of the grounds listed in (a), it shall state the facts supporting its position with particularity.

    
    

37. Although HRS did not timely respond to the Petitioner's original application for attorney fees and costs, that pleading was dismissed with leave to amend. Although HRS' belated response to the original application did not dispute the reasonableness of the amount of attorney fees for which the Petitioner applied, within 20 days after the Petitioner's Amended Petition for Award of Attorney Fees and Costs was filed, HRS filed Respondent's Response to Petition for Attorney Fees and Costs and Motion to Dismiss Petition for Attorney Fees and Costs. Although it did not include an affidavit, this second response clearly disputed the reasonableness of the amount of attorney fees for which the Petitioner had applied. In addition, a deposition noticed on March 11 was conducted on the issue on March 21, 1994. Under the circumstances of this case, it is concluded that HRS did not waive its dispute as to the reasonableness of the amount of attorney fees for which the Petitioner applied. Contrast Dept. of Environmental Reg. v. Puckett Oil Co., 577 So. 2d 988 (Fla. 1st DCA

1991)(response filed four days late) with Dept. of Insurance v. The Administrators Corporation and Zalis, 17 F.L.W. D1960 (Fla. 1st DCA 1992)(no response filed at all) and Final Order, Heisler v. Dept. of Prof. Reg., DOAH Case No. 88-3356F, entered May 19, 1989.

Statutory Cap on Fees and Costs

51. Section 57.111(4)(d)2., Fla. Stat. (1993), provides:

No award of attorney's fees and costs for an action initiated by a state agency shall exceed $15,000.

1. The "action initiated by" HRS in both Case No. 92-7148 and Case No. 92-7447 was the action to terminate the Petitioner's license. Due to the license renewal statute, HRS had to accomplish that action both by filing and prosecuting the Administrative Complaint in Case No. 92-7148 and by giving

   notice of intent to deny the Petitioner's application for renewal of the license (Case No. 92-7447.)

   
   

2. As a matter of law, HRS only could sustain the denial of the Petitioner's renewal application (Case No. 92-7447) by prevailing on the Administrative Complaint in Case No. 92-7148. It is a longstanding general principle of administrative law that, in license renewal proceedings, the agency has the burden to prove the grounds for denying license renewal. See Vocelle v. Riddell, 119 So. 2d 809 (Fla. 2d DCA 1960). Having determined to file the the Administrative Complaint in Case No. 92-7148, it was a mere formality to also deny the license renewal application.

   
   

3. The two cases were immediately consolidated into one proceeding, and the Petitioner essentially had to mount only a single defense to the charges.

   
   

4. It is concluded that, under these circumstances, a single $15,000 cap applies. Cf. Dept. of Insurance v. The Administrators Corporation and Zalis, supra (implying that a single $15,000 cap would apply to both petitioners where the same legal work was provided for both of them).

   
   

   Amount of Reasonable Attorney Fees

   
   

5. Assuming that the award of reasonable attorney fees were appropriate in this case, their calculation would depend upon the proper application of the difficult case law on the subject. The Florida Supreme Court in Standard Guar. Ins. Co. v. Quanstrom, 55 So. 2d 828 (Fla. 1990), upheld but attempted to clarify its prior decision in Florida Patient's Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985), regarding the calculation of reasonable attorney fees under a statute authorizing such an award, in light of intervening U.S. Supreme Court decisions in Blanchard v. Bergeron, 489 U.S. 87, 109 S.Ct. 939, 103 L.Ed. 2d 67 (1989), and Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 483 U.S. 711, 107 S.Ct. 3078, 97 L.Ed. 2d 585 (1987). Quanstrom established three categories of cases: I, public policy enforcement cases; II, tort and contract cases; and III, family law, eminent domain, and estate and trust proceedings. Generally, Quanstrom held that no contingency multiplier is appropriate in Category I or III, but that consideration should be given to the application of such a multiplier in Category II cases to account for the attorney's risk of non-payment.

6. Unfortunately, Section 57.111, Fla. Stat. (1993), does not fit neatly into any of the three categories. Unlike the statutes usually under consideration by the courts in deciding whether a contingency multiplier is appropriate, fee awards under Section 57.111 come into play when their is no "substantial justification" for an agency's action leading to administrative litigation regardless into which category the agency action (or non-governmental party's response) would fall. In this case, it is difficult to categorize the nature of the underlying administrative proceedings (DOAH Case Nos. 92-7148 and 92-7447) using the Quanstrom categories. Cf. Weaver v. School Bd. of Leon County, 624 So. 2d 761 (Fla. 1st DCA 1993)(court even had difficulty categorizing a Florida Human Relations Commission proceeding using the Quanstrom categories).

   
   

7. Perhaps, most telling on the question whether a contingency multiplier should be applied to Section 57.111, the award only applies if there was no "substantial justification" for the agency action. It is difficult to see how an attorney receiving an award of fees under Section 57.111, where there was no "substantial justification" for the agency's action, ever was truly at much risk of non-payment. In other words, assuming "no substantial justification" for the agency action in the first place, it is difficult to see why a contingency multiplier would be appropriate.

   
   

8. When a contingency multiplier is not used, Quanstrom nonetheless instructs that the following twelve factors , as set forth in Johnson v. Georgia Highway Express, 488 F.2d 714 (5th Cir. 1974), should be considered to determine a reasonable attorney's fee:

   
   

   1. the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained;

      (9) the experience, reputation, and ability of the attorneys; (10) the "undesirability" of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.

      
      

      Quanstrom, supra, at 834.

      
      

9. As found, if an attorney fee award were appropriate in this case, the amount of reasonable attorney fees in this case would be $18,600, using the factors set out in Quanstrom. However, since it also has been concluded that a

$15,000 statutory cap applies, the maximum allowable award for attorney fees and costs would be $15,000 (assuming they were appropriate.)

DISPOSITION

Based on the foregoing Findings of Fact and Conclusions of Law, the Petition for an Award of Attorney's Fees and Costs is dismissed.

DONE AND ORDERED this 25th day of May, 1994, in Tallahassee, Florida.

J. LAWRENCE JOHNSTON 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 25th day of May, 1994.

APPENDIX TO FINAL ORDER CASE NO. 93-7160F

To comply with the requirements of Section 120.59(2), Fla. Stat. (1993), the following rulings are made on the parties' proposed findings of fact:

Petitioner's Proposed Findings of Fact.

1.-9. Accepted and incorporated to the extent not subordinate or unnecessary.

1. First sentence, accepted and incorporated.Second sentence, rejected as an incorrect conclusion of law, and as contrary to facts found.

2. Accepted but unnecessary. (HRS did not contest but rather waived the issue.)

3. Last clause of last sentence, rejected as contrary to facts found. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary.

4. Last sentence, rejected as contrary to the greater weight of the evidence. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary.

5. Accepted but unnecessary. (HRS did not contest but rather waived the issue.)

6. Accepted in part, accepted and incorporated to the extent not subordinate or unnecessary. Rejected in part; as a matter of law, the contingency multiplier does not apply. (There was a high risk of non-payment if there was substantial justification for HRS' actions; if not, there was little risk of non-payment.)

7. Rejected as being argument and conclusion of law.

8. Accepted but unnecessary. (HRS did not contest but rather waived the issue.)

9. Rejected as not proven; also, conclusion of law.

Respondent's Proposed Findings of Fact.

1.-10. Accepted and incorporated to the extent not subordinate or unnecessary.

11. First sentence, rejected as not proven. Second sentence, accepted but unnecessary.

12.-15. Accepted and incorporated to the extent not subordinate or unnecessary.

16. First sentence, accepted and incorporated. Second sentence, rejected as not proven (that it made it appear that way); accepted that credibility concerns and concerns as to the Petitioner's regard for these requirements were part of the justification for HRS' actions.

17.-21. Accepted and incorporated.

22. Second and fifth sentences, rejected as not proven. The rest is accepted and incorporated.

23.-24. Accepted and incorporated.

25. Accepted but unnecessary. (HRS did not contest but rather waived the issue.)

26.-32. Accepted but subordinate and unnecessary.

33.-34. Rejected as being subordinate and conclusions of law.

35. Conclusion of law.

36.-37. Rejected as contrary to facts found and to the greater weight of the evidence. (However, as to 37., the evidence was not persuasive. See Conclusions of Law, supra.)

1. Accepted and incorporated.

2. Conclusion of law.

3. First sentence, conclusion of law. The rest is accepted and subordinate to facts found.

41.-42. Conclusions of law.

COPIES FURNISHED:

Donald B. Hadsock, Esquire 1806 Manatee Avenue West Bradenton, Florida 34205

Raymond R. Deckert, Esquire Ziona Kopelovich, Esquire District 6 Legal Office

W. T. Edwards Facility

4000 West Dr. M. L. King, Jr., Blvd. Fifth Floor, Room 500

Tampa, Florida 33614

Robert L. Powell Agency Clerk

Department of Health and Rehabilitative Services

1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Kim Tucker, Esquire General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

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.

=================================================================

DISTRICT COURT OPINION

=================================================================

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED

ALICE P. WHITE, d/b/a MISS IN THE DISTRICT COURT OF APPEAL PATTY'S DAY CARE CENTER, OF FLORIDA SECOND DISTRICT

Appellant, CASE NO. 94-02049

DOAH CASE NO. 93-7160F

v.

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,

Appellee.

/ Opinion filed February 8, 1995.

Appeal from the Division of Administrative Hearings. Donald B. Hadsock, Bradenton, for Appellant.

Raymond R. Deckert, Department of Health and Rehabilitative Services, Tampa, for Appellee.

PER CURIAM.

Affirmed.

RYDER, A.C.J., and ALTENBERND and LAZZARA, JJ., Concur.

MANDATE

From

DISTRICT COURT OF APPEAL OF FLORIDA SECOND DISTRICT

STYLE: Alice P. White v. Dept. of HRS COUNTY: Manatee

APPELLATE CASE NO: 94-02049 TRIAL COURT CASE NO.: 93-7160F

This cause having been brought to this Court by appeal, and after due consideration the Court having issued its opinion;

YOU ARE HEREBY COMMANDED that such further proceedings be had in said cause in accordance with the opinion of this Court, and with the rules of procedure and laws of the State of Florida.

WITNESS, the Honorable Richard H. Frank, Chief Judge of the District Court of Appeal of the State of Florida, Second District, and the seal of said Court at Lakeland, Florida on this day.

March 7, 1995

William A Haddad

Clerk, District Court of Appeal of Florida, Second District

Docket for Case No: 93-007160F

Orders for Case No: 93-007160F