STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PROSPECTIVE TENANT REPORT , INC., ) DUEANE L. BURNES, OWNER, )

)

Petitioner, )

)

vs. ) CASE NO. 94-0792F

) DEPARTMENT OF STATE, DIVISION ) OF LICENSING, )

)

Respondent. )

)

FINAL ORDER

A hearing was held in this case by telephone conference call, on April 5, 1994, before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings.

APPEARANCES

For the Petitioner: Mark A. Neumaier, Esquire

Post Office Box 8623 Tampa, Florida 33674-8623

For the Respondent: Henri C. Cawthon

Assistant General Counsel Department of State Division of Licensing

The Capitol, Mail Station 4 Tallahassee, Florida 32399-0250

STATEMENT OF THE ISSUES

The issue for consideration in this matter is whether Petitioner is entitled to recover attorney's fees and costs expended as a result of the Department's initiation of disciplinary proceedings against it because, as alleged, there was no substantial justification for such disciplinary action.

PRELIMINARY MATTERS

On February 11, 1994, Petitioner, Prospective Tenant Report, Incorporated, Dueane Burnes, Owner, (Prospective), filed an Application for Award of Attorney Fees and Costs, under the provisions of Section 57.111, Florida Statutes, as a result of its being a prevailing small business party in a disciplinary proceeding initiated against it by the Respondent, Department of State, (Department). Thereafter, Respondent filed a Motion to Dismiss. This Motion was denied by the undersigned by Order dated February 24, 1994, in which Petitioner was also ordered to file an Amended Petition to include those matters required by the pertinent rule.

Thereafter, on March 8, 1994, Petitioner filed its Amended Petition and by Order dated March 14, 1994, the undersigned set the matter for hearing in Tampa on April 5, 1994. By that Order, however, the undersigned made provision for hearing by telephone conference call in the event the parties so desired, and this was the action ultimately taken.

No witnesses were called by either party at the hearing. Both parties submitted documents and authorities in support of their positions and entered into a stipulation of fact which was made a part of the evidence.

No transcript was provided. Both parties have submitted post-hearing Proposed Findings of Fact which, in light of the lack of dispute as to fact, have been accepted and, as appropriate, are incorporated in this Final Order.

FINDINGS OF FACT

1. By Administrative Complaint dated April 23, 1991, the Department sought to take disciplinary action against Prospective for alleged unlicensed activity as a private investigative agency and private investigator. Respondent initiated its action on the basis of a newspaper article which described Prospective's business of providing landlords with reports on prospective tenants. This article, in pertinent part, described Prospective's activities as follows:

   
   

   Taking information from a prospective tenant's rental application, Burnes telephones previous landlords, uses his computer to get credit information and drives downtown to check public records for law suits, judgements, evictions, misdemeanor and felony convictions. His search of public records has turned up applicants who've been

   convicted of murder, rape and child molesting, he said. When the work's done he gives a detailed report to the landlord who decides how to use it.

   
   

2. Prospective does not perform a credit check or make direct contact with other than prior landlords. All other information is derived from computer data or public records. No recommendation is made nor is advice given to the client by the Petitioner.

   
   

3. On the basis of the newspaper article, which appeared in The Tampa Tribune, Respondent initiated an investigation into Petitioner's activities. No evidence was offered of any complaints having been filed against Petitioner either by clients or those upon whom it reported. In the course of its investigation, the Department's investigator conferred with Petitioner, Burnes, and his attorney, and thereafter concluded that Petitioner's activities fell within the definition of private investigation which required a license from the state. An Administrative Complaint was thereafter filed against the Petitioner which resulted in Petitioner requesting an informal hearing.

   
   

4. By Recommended Order dated November 26, 1991, entered after the informal hearing was held, the Department's Hearing Officer recommended dismissal of the Administrative Complaint concluding that Petitioner's activities were exempt from licensure requirements because it was a consumer

   credit reporting agency regulated under 15 U.S.C. 1681 et. seq. as listed in Section 493.6102(7), Florida Statutes.

   
   

5. Notwithstanding the recommendation of its Hearing Officer, the Department, by Final Order dated April 28, 1992, overruled his Conclusions of Law and, while dismissing the Administrative Complaint, ordered Petitioner to "cease and desist performing investigations for consideration, other than credit history background checks, without first becoming licensed pursuant to Chapter 493, Florida Statutes."

   
   

6. Petitioner then filed an appeal with the Second District Court of Appeal which, in an opinion dated November 17, 1993, reversed the Department's Final Order. The Department's Motion for Rehearing was denied by the Court.

   
   

7. The parties stipulated at hearing that Petitioner is a prevailing small business party, and that the Department initiated the disciplinary proceeding. There is no issue of fact regarding what actions Petitioner was carrying on as a part of its business. The parties also stipulated that the amount claimed by Petitioner, $7,600.00 in attorneys fees and $160.14 in costs, for a total of

   $7,760.14 is appropriate and reasonable, in the event finding herein is for the Petitioner.

   
   

   CONCLUSIONS OF LAW

   
   

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

   
   

9. Section 57.111(4)(a), Florida Statutes, permits a prevailing small business party to claim reimbursement of attorneys fees and costs in a case where an adjudicatory proceeding under Chapter 120, Florida Statutes, was initiated against it by a state agency, unless either the action of the state agency was substantially justified, or special circumstances exist which would make an award of attorneys fees and costs unjust.

   
   

10. The parties stipulated at hearing that Petitioner is a prevailing small business party and that the adjudicatory proceeding involved here was initiated by the Respondent. Therefore, the burden has shifted to the Respondent to demonstrate that it falls within one or both of the two above- mentioned exceptions. Gentele v. Department of Professional Regulation, Board of Optometry, 513 So.2d 672 (Fla. 1DCA 1987).

    
    

11. No evidence was introduced to indicate the award sought here by Petitioner would be unjust. Therefore, the only issue of fact and law is whether the adjudicatory action by the agency was substantially justified. Section 57.111(3)(e), Florida Statutes, provides a state action is substantially justified if it had a reasonable basis in law and fact at the time it was initiated. In that regard, the agency need not prevail in the underlying administrative action or prove that its decision to prosecute was based on a substantial probability of prevailing. The standard to be applied is one merely of reasonableness. Ashburn v. U.S., 74 F.2d 843 (11th Cir. 1984).

    
    

12. To make that determination, one must look at the evidence available at the time the administrative complaint was filed, not only the evidence received at hearing. Lindsay v. Department of Insurance and Treasurer, DOAH Case No. 88- 3059F, Final Order entered December 9, 1988).

13. Prior to 1990, Section 493.30(4), Florida Statutes, defined "private investigation" as the investigation by a person or persons for the purpose of obtaining information with reference to:

    
    

    1. Crimes or wrongs done or threatened against the United States or any state or territory of the United States, when operating under express written authority of the government official responsible for authorizing such investigations.

    2. The identity, habits, conduct, movements, whereabouts, affiliations, associations, transactions, reputation, or character of any person, group of persons, association, organization, society or other group of persons or partnership, or corporation.

    3. The credibility of witnesses or other persons.

    4. The whereabouts of missing persons, including heirs to estates, abandoned property, or escheated property.

    5. The location or recovery of lost or stolen property.

    6. The causes and origin of, or responsibility for, fires, libels, slanders, losses, accidents, damage, or injuries to real or personal property.

    7. The business of securing evidence to be used before investigating committees or boards of award or arbitration or in the trial of civil or criminal cases and the preparation therefore.

       
       

14. Section 493.301(1)(f) and (h), of the earlier statute exempted from the regulation of the activities of private investigators:

    
    

    Any person, firm, company, partnership, corporation, bureau, or agency whose business is exclusively the furnishing of information concerning the business and financial standing and credit responsibility of persons, firms, or corporations or concerning the personal habits and financial responsibility of applicants for insurance, indemnity bonds, or commercial credit.

    and

    Any state or national bank or bank holding company, credit union, or small loan company operating pursuant to chapters 516 and 520; any consumer credit reporting agency regulated under 15 U.S.C. ss 1681 et seq.; or any collection agency or to any permanent employee thereof.

    
    

15. In 1990, the Florida Legislature, by Chapter 90-364, Laws of Florida, enacted Part II of Chapter 493, Florida Statutes, into which it placed, under

    new subsections, the former definition of the term, "private investigation", and changed the previous exemptions, cited above, to read, at Section 493.6102:

    
    

    (5) Any person or bureau whose business is exclusively the furnishing of information concerning the business and financial standing and credit responsibility of personal or the financial habits and financial responsibility of applicants for insurance, indemnity bonds, or commercial credit. [emphasis supplied]

    and

    (7) Any bank or holding company, credit union or small loan company operating pursuant to Chapters 516 and 520; any consumer credit reporting agency regulated under 15 U.S.C. 1681 et seq.; or any collection agency not engaged in repossessions or to any permanent employee thereof.

    
    

16. A "consumer credit reporting agency" as noted by the statute, supra, is, Respondent claims, different from a "consumer reporting agency", the term described in 15 U.S.C. 1681a(f) as:

    
    

    ... any person which, for monetary fees, dues, or on a cooperative non-profit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.

    
    

17. Respondent also claims that the legislature intended, and made clear, that any investigation beyond that of a consumer credit reporting agency report is investigative action subject to licensure. Thus, the question is whether Petitioner's actions constitute the exempt "consumer credit reporting" or non- exempt private investigation, and whether the dispute on this issue at the time enforcement action was initiated was reasonable. It was not.

18 The Florida statute grants the exemption to consumer credit reporting activities regulated by a particular provision of the United States Code. The Second District Court of Appeals carefully analyzed the activities of the Petitioner herein as they related to both the federal and state statutes and concluded they were exempt from the requirement for licensure. Nothing has been presented to the undersigned sufficient to cause a different conclusion to be reached here.

19. What is pertinent here is that the enforcement action was initiated by the Department on the most innocuous of activities. The evidence clearly shows that Petitioner made few if any personal contacts with others than prior landlords, relying almost exclusively on computer inquiries and public records available to anyone. The Department's own Hearing Officer concluded Petitioner was not subject to licensure requirements, but the Department steadfastly rejected that conclusion and recommendation. Thereafter, the Second District Court of Appeal found in favor of Petitioner. Nothing has been presented to

indicate Respondent's attempted enforcement actions were substantially justified either in law or by fact, even under the test of reasonableness. It is, therefore:

ORDERED THAT

Respondent, Department of State, Division of Licensing, pay to Petitioner herein, Prospective Tenant Report, Inc., Dueane L. Burnes, Owner, attorney's fees in the amount of $7,600.00 and costs in the amount of $164.14, for a total award of $7,760.14.

DONE and ORDERED in Tallahassee, Florida this 12th day of May, 1994.

ARNOLD H. POLLOCK, 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 12th day of May, 1994.

COPIES FURNISHED:

Mark A. Neumaier, Esquire Post Office Box 8623 Tampa, Florida 33674

Henri C. Cawthon, Esquire Department of State Division of Licensing

The Capitol, MS-4

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

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

IN THE FIRST DISTRIC COURT OF APPEAL FIRST DISTRICT, STATE FLORIDA

DEPARTMENT OF STATE, NOT FINAL UNTIL TIME EXPIRES TO DIVISION OF LICENSING, FILE MOTION FOR REHEARING AND

DISPOSITION THEREOF IF FILED

Appellant,

vs. CASE NO. 94-1871

DOAH CASE NO. 94-792F

PROSPECTIVE TENANT REPORT, INC., DUEANE L. BURNES, OWNER,

Appellee

/ Opinion filed April 12, 1995.

An appeal from an order of the Division of Administrative Hearings. Henri C. Casthon, Assistant General Counsel, Tallahassee, Flor Apellant. Mark A. Neumaier, Tampa, for Appellee.

PER CURIAM

AFFIRMED

ZEHMER, C. J. and BARFIELD, J., and SHIVERS, SENIOR JUDGE, CONCUR

MANDATE

From

DISTRICT COURT OF APPEAL OF FLORIDA FIRST DISTRICT

To the Honorable Arnold H. Pollock, Hearing Officer

WHEREAS, in that certain cause filed in this Court styled: Division of Administrative Hearings

PROSPECTIVE TENANT REPORT, INC., DUEANE L. BURNES, OWNER,

v. Case No. 94-1871

Your Case No. 94-792F

DEPARTMENT OF STATE, DIVISION OF LICENSING

The attached opinion was rendered on April 12, 1995.

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

WITNESS the Honorable E. Earle XZehmer

Chief Judge of the District Court of Appeal of Florida, First District and the Seal of said court at Tallahassee, the Capitol, on this 28th day of April, 1995.

(SEAL) KAREN ROBERTS

Deputy Clerk, District Court of Appeal of Florida, First District

================================================================= DISTRICT COURT ORDER

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

DISTRICT COURT OF APPEAL, FIRST DISTRICT

Tallahassee, Florida 32399-1850

Telephone (904) 488-6151

DATE: April 12, 1995

CASE NO. 94-1871

LT 94-1636

DEPARTMENT OF STATE, vs. PROSPECTIVE TENANT REPORT, DIVISION OF LICENSING INC., DUEANE L. BURNES, OWNER

Appellant. Appellee.

BY ORDER OF THE COURT

Appellee's motion for appellant attorney fees is granted. This case is remanded to the hearing officer for determination of the amount of the appellate attorney fee.

I HEREBY CERTIFY that the foregoing is a true copy of the original court order.

JON S. WHEELER, CLERK

by: Deputy Clerk

Copies:

(SEAL)

Michael Guy Phyllis Slater

Mark A. Newmaier Nancy Downing

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

DOAH ORDER AFTER REMAND

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

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PROSPECTIVE TENANT REPORT, INC., ) DUEANE L. BURNES, OWNER, )

)

Petitioner, )

)

vs. ) CASE NO. 94-0792F

) DEPARTMENT OF STATE, DIVISION ) OF LICENSING, )

)

Respondent. )

)

ORDER

By Opinion filed April 12, 1995, the Florida First District Court of Appeals, per curiam affirmed the Final Order entered by the undersigned in this case, awarding attorney's fees to Petitioner in the amount of $7,600, and entered an Order granting appellate attorney's fees to the Petitioner herein.

By the same order, this matter was remanded to the Hearing Officer for determination of the amount of the appellate attorney fee. Thereafter, by Mandate dated April 28, 1995, the Court directed the undersigned to conduct further proceedings in accordance with the Court's opinion. It is, therefore:

ORDERED THAT

1. The parties will confer, and within 10 days from the date of this Order, advise the undersigned in writing whether this matter can be resolved through submittals in writing, or whether further hearing should be held, in which case the parties will submit agreed dates for hearing no less than 30 and no more than 120 day from the date of response. Should further hearing be elected, the parties will indicate the agreed venue for the hearing.

   
   

2. In the event the parties agree that this matter may be resolved without further hearing, they shall, within 15 days of the date of the initial response, submit such memoranda, authority, argument or position paper as they deem appropriate to assist the Hearing Officer in the determination of the issues presented. Failure to respond in timely manner will result in the entry of a Final Order at the expiration of the designated time for response.

DONE and ORDERED in Tallahassee, Florida this 23rd day of August, 1995.

ARNOLD H. POLLOCK, 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 23rd day of August, 1995.

COPIES FURNISHED:

Mark A. Neumaier, Esquire

P.O. Box 8623

Tampa, Florida 33674

Michelle Guy, Esquire Department of State Division of Licensing The Capitol, MS 4

Tallahassee, Florida 32399-2050

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

DOAH ORDER ON REMAND

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

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PROSPECTIVE TENANT REPORT, INC., ) DUEANE L. BURNES, OWNER, )

)

Petitioner, )

)

vs. ) CASE NO. 94-0792F

) DEPARTMENT OF STATE, DIVISION ) OF LICENSING, )

)

Respondent. )

)

ORDER ON REMAND

By Mandate from the District Court of Appeal of Florida, First District, dated April 28, 1995, the undersigned was directed to hold further proceedings in accordance with the Court's Opinion rendered in this matter on April 12, 1995. In a Per Curiam opinion, the Court affirmed a Final Order of the Division of Administrative Hearings entered by the undersigned on May 13, 1994, directing the Department of State, Division of Licensing, to pay to Prospective Tenant Report, Inc., Dueane L. Burnes, owner, (Prospective), the sum of $7,600.00 attorney's fees and $164.14 in costs as a result of the agency's unsuccessful and inappropriate attempt to discipline Prospective for alleged unlicensed activity as a private investigative agency.

Consistent with the Court's Opinion, on April 12, 1995, the Court granted Prospective's motion for appellate attorney fees and remanded the matter to the hearing officer for "determination of the amount of the appellate attorney fee."

Section 57.041, Florida Statutes, provides:

The party recovering judgement shall recover all his legal costs and charges which shall be included in the judgement; ....

Section 57.111(4)(d), Florida Statutes, permits the award of attorney's fees incurred by a prevailing small business party for its participation in any adjudicatory proceedings or administrative proceeding pursuant to Chapter 120 initiated by a state agency which led to the award of attorney fees and costs in the Final Order affirmed by the Court. The statute provides in pertinent part:

(4)(d) ... The final order of a hearing officer is reviewable in accordance with the provisions

of s. 120.68. If the court affirms the award of attorneys fees and costs in whole or in part it may, in its discretion, award additional attorneys fees and costs for the appeal.

* * *

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

$15,000.

The Department has not contested the propriety of the claim for attorney's fees and costs for the appeal, and in fact the parties agree that the amount of

$14,303.76 for both fees and costs for the appeal is reasonable. Since the parties have agreed that figure is $14,303.76, it is so found. The Department's sole objection to the claim is based on the statutory limit of $15,000 for fees and costs which, it contends, places a cap in that amount on the total which can be awarded for fees and costs for both the original proceeding before DOAH and the appellate proceeding before the Court of Appeal. Therefore, the Department claims, since an award of $7,760.14 has already been made in this matter, the amount of appellate fee and cost would be limited to $7,239.86.

Section 57.111 provides for the payment of attorneys fees and costs for the original proceeding, and "additional attorneys fees and costs for the appeal," and, further, that no award shall exceed $15,000. However, the Florida courts have held that the language of section 57.111 did not directly indicate that "the legislature intended for the section to operate to limit costs and attorney's fees to $15,000 in every case where the prevailing party is a 'small business party.'" The court held that Section 57.111 does not take away any rights a party has under Section 57.041. City of Naples Airport Authority v.

Collier Development Corporation, 515 So.2d 1058 (2nd DCA 1987). It is, therefore:

ORDERED THAT

The appropriate appellate attorney fee in this matter is $14,303.76, over and above the amount previously awarded.

DONE and ORDERED in Tallahassee, Florida this 18th day of September, 1995.

ARNOLD H. POLLOCK, 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 18th day of September, 1995.

COPIES FURNISHED:

Michele Guy, Esquire Department of State Division of Licensing The Capitol, MS #4

Tallahassee, Florida 32399-0250

Mark A. Neumaier, Esquire Post Office Box 8623 Tampa, Florida 33674-8623

Honorable Sandra B. Mortham Secretary of State

The Capitol

Tallahassee, Florida 32399-0450

Don Bell General Counsel

Department of State The Capitol, PL-02

Tallahassee, Florida 32399-0250

Docket for Case No: 94-000792F

Orders for Case No: 94-000792F