STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MITCHELL BROTHERS, INC., )

)

Petitioner, )

)

1. ) CASE NUMBER: 95-1096F

   )

   STATE OF FLORIDA, ) DEPARTMENT OF TRANSPORTATION, )

   )

   Respondent. )

   )

   
   

   FINAL ORDER

   
   

   THIS CAUSE came on for final hearing before Suzanne F. Hood, Hearing Officer with the Division of Administrative Hearings, on April 17 and May 9, 1995, in Tallahassee, Florida.

   
   

   APPEARANCES

   
   

   For Petitioner: Mike Piscitelli, Esquire

   Christopher T. McRae, Esquire Cummings, Lawrence & Vezina, P.A. 1004 DeSoto Park Drive Tallahassee, Florida 32301

   
   

   For Respondent: Louis E. Stolba, Esquire

   Jack R. Leonard, Esquire

   Florida Department of Transportation Haydon Burns Building

   605 Suwannee Street, Mail Station 58

   Tallahassee, Florida 32399-0458 STATEMENT OF THE ISSUES

   The issues are whether Petitioner Mitchell Brothers, Inc. is entitled to recover attorneys' fees and costs from Respondent State of Florida, Department of Transportation, under Section 120.57(1)(b)(5), Florida Statutes, and if so, in what amount.

   
   

   PRELIMINARY STATEMENT

   
   

   On December 29, 1994, Respondent State of Florida, Department of Transportation (FDOT) gave notice to Petitioner Mitchell Brothers, Inc. (Mitchell) that FDOT intended to declare Mitchell delinquent on State Project No. 59100-3512 (Project) and to suspend its Certificate of Qualification and that of its subsidiaries. Mitchell filed a Request for Formal Hearing with FDOT on January 12, 1995. By letter dated January 23, 1995, FDOT referred Mitchell's request to the Division of Administrative Hearings (DOAH) for the assignment of a Hearing Officer.

   On January 27, 1995, the former Hearing Officer issued a Notice of Hearing in Department of Transportation v. Mitchell Brothers, Inc., DOAH Case No. 95- 289, scheduling the matter for formal hearing on February 8, 1995. The Hearing Officer subsequently rescheduled the hearing in DOAH Case No. 95-289 for February 15 and 16, 1995, in order to provide additional time for the parties to complete discovery.

   
   

   On February 15, 1995, FDOT, as petitioner in DOAH Case No. 95-289, presented the testimony of one (1) witness and offered (9) exhibits which the Hearing Officer accepted into evidence. On February 16, 1995, FDOT filed a Notice of Withdrawal of Notice of Delinquency and Motion for Relinquishment and Remand of Jurisdiction. FDOT's motion stated that FDOT was withdrawing its notice of intent to declare delinquency without prejudice because it appeared that FDOT may not have addressed all of Mitchell's requests for additional time.

   
   

   The Hearing Officer did not immediately rule on FDOT's motion. Before the hearing adjourned on February 16, 1995, the Hearing Officer granted Mitchell's ore tenus request to file a posthearing motion as to whether the parties could file proposed recommended orders. The Hearing Officer stated that FDOT would have an opportunity to respond to Mitchell's posthearing motion.

   
   

   On February 20, 1995, Mitchell filed a Motion to Permit Submittal of Proposed Findings and for Entry of a Recommended Order, a proposed recommended order for the Hearing Officer's signature, and a Motion for Attorney's Fees.

   DOAH's Clerk docketed Mitchell's motion to submit proposed findings and the proposed recommended order in DOAH Case No. 95-289. The Clerk docketed Mitchell's motion for attorney's fees under DOAH Case No. 95- 1096F. That same day, the former Hearing Officer entered an Order Closing File granting FDOT's motion to relinquish but not retaining jurisdiction over any issue in DOAH Case No. 95-289.

   
   

   On March 3, 1995, DOAH issued an Initial Order in the instant case, DOAH Case No. 95-1096F. On March 10, 1995, FDOT filed its Final Order dismissing DOAH Case No. 95-289, without prejudice, because it appeared before the Hearing Officer in testimony that not all pending requests for additional time had been specifically addressed by the Department. Mitchell immediately filed a Notice of Appeal, dated March 10, 1995, of the Final Order dismissing Case No. 95-289.

   
   

   On March 16, 1995, the Hearing Officer entered an Order for Parties to Provide Hearing Dates in DOAH Case No. 95-1096F. This order advised the parties that Mitchell's Motion for Attorney's Fees had been set up as a separate file in accordance with DOAH's procedure.

   
   

   On March 27, 1995, the Hearing Officer issued a Notice of Hearing and Order scheduling the hearing in DOAH Case No. 95-1096F for April 17, 1995. The Notice of Hearing directed the parties to contact the Hearing Officer's office on April 10, 1995, to confirm their desire to proceed to hearing as scheduled.

   
   

   On April 10, 1995, FDOT filed Department of Transportation's Objection to Jurisdiction of Division of Administrative Hearings to Conduct Hearing on Whether Petitioner (Mitchell) is Entitled to Attorney's Fees and Costs. That same day, the Hearing Officer entered an Order overruling FDOT's objections and advised the parties that the hearing in DOAH Case No. 95-1096F would proceed as scheduled. The Order states that Mitchell's motion for attorney fees in DOAH Case No. 95-289 was administratively set up as DOAH Case No. 95-1096F on the same day that the Hearing Officer granted FDOT's motion to relinquish jurisdiction in DOAH Case NO. 95-289. The Hearing Officer ruled that DOAH never

   relinquished jurisdiction over the attorney fees issue because the motion for attorney's fees was an ancillary proceeding.

   
   

   On April 13, 1995, FDOT filed a Motion to Disqualify the former Hearing Officer. Mitchell responded by filing a Motion to Strike FDOT's Motion to Disqualify on April 14, 1995.

   
   

   Prior to the hearing on April 17, 1995, FDOT filed Department's Objection, Motion to Dismiss or, in the alternative, Motion to Abate. FDOT also filed Department's Response to Mitchell Brother's Motion to Strike.

   
   

   At the hearing on April 17, 1995, the former Hearing Officer heard oral argument on FDOT's Motion to Disqualify and denied it. However, the Hearing Officer sua sponte recused himself in DOAH Case No. 95-1096F. DOAH immediately substituted the undersigned as Hearing Officer and the hearing proceeded.

   
   

   Continuing with the hearing in DOAH Case No. 95-1096F on April 17, 1995, the undersigned declined to reconsider the former Hearing Officer's denial of FDOT's Objection to Jurisdiction of Division of Administrative Hearings to Conduct Hearing on Whether Mitchell Brothers is Entitled to Attorney's Fees and Costs. The undersigned then heard oral argument on FDOT's motion entitled Department's Objection, Motion to Dismiss or, in the alternative, Motion to Abate. The undersigned reserved ruling on this motion and advised the parties that they could address the issues raised therein in their proposed final orders. The undersigned's ruling on this pleading is contained in the Conclusions of Law set forth below.

   
   

   Mitchell presented the testimony of three (3) witnesses and offered one (1) exhibit which the undersigned accepted into evidence. Mitchell also offered to submit the transcript in DOAH Case No. 95-289 as an exhibit as soon as it was available. The undersigned agreed to leave the record open for submission of further exhibits. The undersigned granted FDOT's ore tenus motion for a continuance and subsequently issued an order rescheduling the case for May 9, 1995. On April 26, 1995, Mitchell filed a copy of the transcript in DOAH Case No. 95-289.

   
   

   Pursuant to Rule 1.330 (a) (3), Florida Rules of Civil Procedure, FDOT took the deposition of Thomas Kinsella, Esquire, on May 1, 1995. On May 4, 1995, FDOT filed Respondent's Motion for Involuntary Dismissal. Mitchell filed Mitchell Brothers, Inc. Notice of Intent to Use Summaries on May 5, 1995. On May 8, 1995, Mitchell filed a Notice of Filing and Affidavit of Carolyn S. Raepple.

   
   

   The hearing in DOAH Case No. 95-1096F resumed on May 9, 1995. FDOT read a portion of Thomas Kinsella's deposition testimony into the record. FDOT offered and the undersigned accepted into evidence the entire transcript of Mr.

   Kinsella's deposition, together with ten (10) exhibits thereto. Mitchell offered and the undersigned accepted two (2) additional exhibits into evidence including the DOAH Case No. 95-289 hearing transcript with nine (9) exhibits. At the close of the hearing, the undersigned heard oral argument and reserved ruling on FDOT's Motion for Involuntary Dismissal. The undersigned's ruling on this motion is contained in the Conclusions of Law set forth below.

   
   

   The hearing transcript for April 17, 1995 was filed on April 26, 1995. The hearing transcript for May 9, 1995, was filed on May 24, 1995. On June 14, 1995, FDOT filed a proposed Recommended Order of Involuntary Dismissal.

   Mitchell also filed a proposed Order on June 14, 1995. Specific rulings on the parties proposed facts are contained in the Appendix to this Final Order.

   
   

   FINDINGS OF FACT

   
   

   1. Mitchell is a highway construction contractor with its principal place of business located in Tallahassee, Florida.

      
      

   2. FDOT is the agency of the state of Florida which is responsible for the construction and maintenance of the roads designated as part of the State Highway System.

      
      

   3. On July 15, 1994, the parties entered into Contract No. 18,784 (contract) which required Mitchell to resurface the existing roadway, construct four (4) foot wide paved shoulders and perform other related work for

      $626,347.44 in State Project No. 59100-3512 (project) in Wakulla County, Florida. The contract incorporated by reference special provisions attached thereto and FDOT's Standard Specifications for Road and Bridge Construction (1991) (Standard Specifications).

      
      

   4. The contract required Mitchell to complete the project within 84 calendar days. Construction began on August 31, 1994, which was contract day one (1).

      
      

   5. In order to construct and pave the shoulders, Mitchell had to remove the top soil and stabilize the subgrade. After removing the top soil, Mitchell hauled borrow material to the project site. Mitchell spread the borrow along the roadside and mixed it with the existing sub-soil. Mitchell then attempted to attain a certain required density by compacting the shoulders.

      
      

   6. Mitchell hauled borrow to the project site from October 5, 1994, through October 8, 1994, and on October 13, 1994.

      
      

   7. Mitchell rolled the surface of the shoulders on October 18, and 20-22, 1994. The contractor was unable compact the subgrade to the required density.

      
      

   8. On or about October 22, 1994, FDOT refused to pay Mitchell for additional material to reestablish grade on the shoulders. From approximately October 24, 1994, through November 11, 1994, Mitchell remixed and compressed the subgrade soil in an unsuccessful attempt to stabilize the shoulders.

      
      

   9. From October 25, 1994, through November 7, 1994, Mitchell wrote at least four (4) letters to FDOT discussing the problems at the project site in achieving required density and stabilization of the subgrade on the shoulders. These letters are not a part of the record in this case. However, the hearing transcript from February 15, 1995, clearly shows Mitchell's position: (1) Plastic materials beneath the subgrade (unexpected conditions not contemplated under the contract) were causing a delay on the project and preventing Mitchell from achieving the required density and stabilization of the subgrade; (2) Mitchell would have to excavate the plastic material and haul in additional borrow to reestablish the grade of the shoulders before stabilization could be obtained; (3) Mitchell needed an extension of time in which to complete the project; and (4) Mitchell wanted FDOT to pay for the expenses (not covered under the contract) that Mitchell would incur in curing the problem.

   10. On or about November 11, 1994, Mitchell informed FDOT in writing that Mitchell was suspending work on the project. Mitchell suspended work without obtaining FDOT's approval as required by the contract.

       
       

   11. By letter dated November 14, 1994, FDOT responded to Mitchell's four

       (4) letters. FDOT's letter did not specifically deny each of Mitchell's requests but made it clear that Mitchell's claims were unsubstantiated. FDOT took the position that Mitchell created the problems with compaction by failing to follow FDOT procedures: (1) Prior to hauling in stabilizing material, Mitchell did not submit a sample of the existing on-site material so that a lime rock bearing ratio (LBR) could be established to determine how much, if any, stabilizing material would be needed to obtain the required LBR; (2) Mitchell did not submit samples or get FDOT's approval of the material used for stabilization before spreading and mixing it on the project site; (3) Mitchell did not sufficiently mix the material used for stabilization so that density could be obtained; (4) Soil samples of the material beneath the area being stabilized, to a depth of approximately three and one half feet, indicated that it was suitable for compaction; (5) The sources of borrow material used in attempting to stabilize the subgrade were not approved as required by the contract; (6) Mitchell added unapproved material, in excess of what was required, to the borrow material hauled to the project site.

       
       

   12. FDOT wrote this November 14, 1994, letter after investigating the problem and performing certain field and laboratory soil tests.

       
       

   13. On December 12, 1994, Stephen Benak, District Construction Engineer for FDOT, made a visit to the project site to conduct further investigation. Later that day the parties had a meeting. Mitchell again explained to FDOT that unexpected conditions at the job site were causing problems and preventing the contractor from obtaining density requirements on the subgrade. FDOT again informed Mitchell: (1) The unapproved borrow material that Mitchell previously hauled to the project site was unsuitable and causing the problem; and (2) Mitchell's proposal to under-cut (excavate and haul more borrow material) was a drastic cure and not compensable under the contract.

       
       

   14. Mitchell did not immediately return to work on the project. With credit for twenty-four (24) rain days, the contract performance time increased to 108 calendar days. Taking the rain days and intervening holidays into consideration, FDOT determined that the contract term expired on December 20, 1994. Mitchell did not return to work at the project site until December 23, 1994.

       
       

   15. By letter dated December 29, 1994, FDOT gave Mitchell notice of the agency's intent to declare Mitchell delinquent on the project and to suspend its Certificate of Qualification and that of all its subsidiaries. This letter states that Mitchell was making unsatisfactory progress on the contract because the contract time had expired and the work was not complete. The letter refers to section 8-8.2 of FDOT's Standard Specifications and Rule 14- 23, Florida Administrative Code.

       
       

   16. On January 12, 1995, Mitchell filed a Request for Formal Hearing without making an additional request for extension of contract time. This petition states:

       
       

       Mitchell Brothers has filed timely requests for extension of contract time due to the

       delays resulting from the lack of constructability

       and differing site conditions of the project. Therefore, the Department's issuance of the notice of delinquency is invalid.

       
       

   17. After receiving Mitchell's request for hearing, FDOT designated Tom Kinsella, Esquire, as counsel for the agency. By letter dated January 23, 1995, Mr. Kinsella referred Mitchell's request for a hearing to DOAH.

       
       

   18. The Hearing Officer issued a Notice of Hearing on January 27, 1995, setting this matter for hearing in DOAH Case No. 95-289 on February 8, 1995. In order to allow the parties sufficient time for discovery, the Hearing Officer subsequently rescheduled the case for hearing on February 15 and 16, 1995.

       
       

   19. The parties took depositions every day from February 2, 1995, to February 13, 1995. Bill Carpenter, FDOT's Project Engineer on the project at issue here, was the first deponent. Prior to Mr. Carpenter's deposition, Mr. Kinsella inquired as to whether there were any outstanding time requests. Mr. Carpenter assured Mr. Kinsella that FDOT had addressed and denied all outstanding time requests in FDOT's letter dated November 14, 1995.

       
       

   20. At the formal hearing in DOAH Case No. 95-289 on February 15, 1995, Mr. Benak testified on FDOT's behalf. On direct examination, Mr. Benak testified that Mitchell made no "proper" requests for contract time extensions. During cross-examination, Mitchell questioned Mr. Benak concerning Mitchell's letters written between October 25, 1994, and November 7, 1994. Initially, Mr. Benak testified that Mitchell's letters were not "formal" requests for extension of contract time. The Hearing Officer ruled that two of these letters contained preliminary requests for extension of contract time.

       
       

   21. Mr. Benak subsequently questioned whether Mitchell's letters were timely pursuant to section 8-7.3.2, Standard Specifications. Without resolving the issue of timeliness, Mr. Benak conceded that the delay was on-going and that the agency had never written to Mitchell requesting more specific information about the delay, i.e. all documentation of the delay and a request for the exact number of days justified to be added to the contract time. Therefore Mitchell was never required to submit a more formal request for contract time extensions. However, Mr. Benak never conceded that Mitchell's preliminary requests were pending at the time the agency issued its notice of intent to declare Mitchell delinquent or that the agency failed to follow its own procedures before issuing that notice.

       
       

   22. Mr. Benak maintained that the contract did not provide for extensions of contract time for delays due to the fault or negligence of the contractor. He testified that FDOT's letter dated November 14, 1994, effectively denied Mitchell's pending preliminary requests for time extensions and informed Mitchell that the delay was due to the contractor's fault or negligence. Accordingly, FDOT was not required to solicit further information from Mitchell before issuing the December 29, 1994, delinquency letter.

       
       

   23. As the hearing on February 15, 1995, progressed, it became apparent that the parties disputed a variety issues involving mixed question of fact and law. In ruling on an objection which is not at issue here, the Hearing Officer stated:

       
       

       • * * It seems to me the more pertinent, you know, a much more pertinent area -- and we

         haven't addressed this in terms of the Department's

         procedures, that would start a request for extension of time, and it appears that the Department has never acted on that.

         
         

         And you've raised a very interesting matter, and that is under the rules, apparently if that process has been initiated, you can't go to delinquency, which means that this activity, this that they've tried to initiate, lacks the appropriate legal predicate. That's a good point.

         
         

   24. After the hearing in DOAH Case No. 95-289 recessed on February 15, 1995, Mr. Kinsella advised Mitchell's counsel that FDOT would withdraw the delinquency. Mr. Kinsella wanted to alert Mitchell that it was unnecessary for witnesses to attend the hearing the next day.

       
       

   25. When the hearing resumed on February 16, 1995, FDOT filed its Notice of Withdrawal of Notice of Delinquency and Motion for Relinquishment and Remand of Jurisdiction. The motion states, "The Department is now withdrawing it (sic) notice of intent to declare delinquincy without prejudice, it appearing that all of Mitchell Brothers, Inc., requests for additional time may not have been addressed by the Department." However, competent persuasive record evidence indicates that FDOT made this determination based on the Hearing Officer's prior rulings and statements during the hearing on February 15, 1995.

       
       

   26. Mr. Kinsella stated on the record:

       
       

       • * * After the conclusion of the hearing yesterday on the basis of the matters that came up in terms of whether the preliminary requests for time extensions have been properly met by the Department and evaluated and addressed in the correspondence as pointed out by the Court, we went back and evaluated, and determined that we don't believe those have been fairly met and addressed by the Department, and that this delinquency was premature for that reason.

         
         

   27. Counsel for Mitchell did not object to the motion to relinquish jurisdiction but requested an opportunity to submit a proposed order. The Hearing Officer stated that Mitchell could file a motion to submit a proposed order and that FDOT would have an opportunity to respond to that motion. The Hearing Officer did not set a date certain for the filing of the posthearing motion but Mitchell's counsel stated that the motion would be filed in a very brief time, within a day or two.

       
       

   28. February 16, 1995, was a Thursday. The following Monday, February 20, 1995, Mitchell filed a Motion to Permit Submittal of Proposed Findings and for Entry of a Recommended Order, a proposed recommended order for the Hearing Officer's signature, and a Motion for Attorney's Fees. DOAH's Clerk docketed Mitchell's motion to submit proposed findings and the proposed recommended order in DOAH Case No. 95-289. The Clerk docketed Mitchell's motion for attorney's fees under DOAH Case No. 95-1096F. That same day, the Hearing Officer entered an Order Closing File which did not retain jurisdiction over any issue in DOAH Case No. 95-289. Subsequent relevant pleadings and procedures arising in the instant case between February 20, 1995, and June 14, 1995, are set forth above in the Preliminary Statement and incorporated herein.

   29. The record indicates that the parties were at an impasse when Mitchell suspended work on the project on or about November 11, 1994. After FDOT's November 14, 1994, letter and the meeting on December 12, 1994, the parties certainly were aware of each other's positions, and were deadlocked as to the reason for the delay in stabilizing the subgrade. The dispute between them involved multiple questions of fact and law which are not at issue here.

       
       

   30. FDOT's December 29, 1994, delinquency letter gave Mitchell what it was entitled to, i.e., a point-of-entry to challenge, in an administrative proceeding, FDOT's position that Mitchell created the conditions causing the delay in stabilizing the subgrade. FDOT had a reasonably clear legal justification for issuing that letter based on sections 8-7.3.2 and 8-8.2 of FDOT's Standard Specifications and Rule 14-23, Florida Administrative Code. The delinquency letter was not issued and subsequently filed with DOAH for an improper or frivolous purpose.

       
       

   31. As of February 15, 1995, the 165th calendar day of the project, Mitchell continued to work on the project which was only 36 percent complete and which FDOT had not conditionally accepted.

       
       

   32. Mitchell has incurred $44,408.50 in attorney's fees and $18,071.13 in cost in litigating DOAH Case No. 95-289 and DOAH Case No. 95-1096F. Mitchell is also obligated to pay $1,045.00 to Carolyn Raepple, Esquire, who testified concerning the reasonableness of the fees and costs that Mitchell incurred in DOAH Case Nos. 95-289 and 95-1096F. FDOT has presented no evidence to rebut the reasonableness of these fees and costs.

       
       

       CONCLUSIONS OF LAW

       
       

   33. DOAH has jurisdiction of this matter and over the parties to this proceeding pursuant to Section 120.57(1)(b)(5), Florida Statutes, which states as follows:

       
       

       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 inter- posed for any improper purposes, such as to harass or to cause unnecessary delay or for frivolous purpose or needless increase in the cost of liti- gation. 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.

   34. Throughout this proceeding, FDOT has consistently argued that DOAH has no jurisdiction to consider Mitchell's Motion for Attorney's Fees because the Hearing Officer entered an Order Closing File with no reservation of jurisdiction to consider an award of fees and costs. FDOT initially relied on Patin v. Popino, 459 So. 2d 435, 436 (Fla. 3rd DCA 1984), for the proposition that a court loses jurisdiction to award fees when it enters a final judgment and the time allotted for altering, modifying or vacating the judgment expires.

       
       

   35. In Ganz v. HZJ, Inc., 605 So. 2d 871, 872 (Fla. 1992), the Florida Supreme Court reversed the trial court's denial of a postjudgment motion for attorney's fees where the trial judge found the underlying suit baseless. The Ganz court stated, "It is extremely difficult, if not impossible, for a party to plead in good faith its entitlement to attorney's fees under Section 57.105, Florida Statutes before the case is ended." Ganz, at 871.

       
       

       It is only after the case has been terminated that a sensible judgment can be made by a party as to whether the adverse party raised nothing but frivolous issues in the cause, and, if so, to file an appropriate motion, as here, seeking an entitlement to said attorney's fees under Section 57.105, Florida Statutes (1979).

       
       

       Ganz, at 871, quoting Autorico, Inc. v. Government Employees Insurance Co., 398 So. 2d 485, 487-88 (Fla. 3rd DCA 1981).

       
       

   36. In Tampa Letter Carriers, Inc. v. Carrie Mack, 649 So. 2d 890 (Fla. 2nd DCA 1995), the plaintiff filed a notice of voluntary dismissal without prejudice. The trial judge in Tampa Letter Carriers, Inc. summarily denied a motion for attorney's fees pursuant to Sections 57.105 and 768.79, Florida Statutes, because the motion was not filed until the case was dismissed. The District Court reversed concluding that a defendant's right to fees is not terminated by a voluntary dismissal, with or without prejudice. Tampa Letter Carriers, Inc., at 891.

       
       

   37. The instant case involves entitlement to fees pursuant to Section 120.57(1)(b)(5), Florida Statutes, instead of Sections 57.105 and 768.79, Florida Statues. Nevertheless, like the movants in Ganz and Tampa Letter Carriers, Inc., Mitchell was unable to make a sensible judgment as to whether a motion for attorney's fees was appropriate until the agency withdrew the delinquency on February 16, 1995. After making that determination, Mitchell filed its Motion for Attorney's Fees within a reasonable time (on the second business day) after the Hearing Officer granted Mitchell's ore tenus motion to file a posthearing motion.

       
       

   38. In the instant case, there was no Final Order when Mitchell filed the subject motion on February 20, 1995. The Hearing Officer entered the Order Closing File that same day. DOAH's Clerk administratively docketed Mitchell's motion as an ancillary proceeding and issued an Initial Order on March 3, 1995. Under these circumstances, I agree with the former Hearing Officer that DOAH never relinquished jurisdiction over the attorney's fee issue.

       
       

   39. The undersigned cannot conclude that DOAH's Clerk could deprive Mitchell of a hearing on its motion by administratively docketing Mitchell's motion under a new case number. Likewise, Mitchell should not be faulted for failing to request, pursuant to Rule 60Q-2.032, Florida Administrative Code, an

       order correcting the obviously premature Order Closing File entered on the same day that Mitchell filed its motion for fees.

       
       

   40. Mitchell's right to attorney's fees is clearly a disputed issue of material fact entitling it to a formal hearing. See Krueger v. School District of Hernando County, 544 So. 2d 331 (Fla. 5th DCA 1989) and cases cited therein. If Mitchell had filed a motion with FDOT for remand to DOAH to determine attorney's fees, FDOT would have been obligated to grant the remand. Id., at 331- 32; Dept. of Health & Rehab. Serv. v. S.G., 613 So. 2d 1380, 1384 (Fla. 1st DCA 1993)(fundamentally unfair to allow agency to have final say on the issue of sanctions imposed against it).

       
       

   41. FDOT objects to Mitchell having an evidentiary hearing on the merits of its motion because the Final Order entered on March 10, 1995 is res judicata as to Mitchell's entitlement to fees. The undersigned does not agree. FDOT cannot insulate itself from an award by issuing a Final Order in the underlying case. Department of Health & Rehab. Serv. v. S.G., at 1384-85 (Fla. 1st DCA 1993). This is especially true here where FDOT proceeded to issue the Final Order on March 10, 1995, seven days after the issuance of the Initial Order in the instant case, and with knowledge that Mitchell had filed its motion. Moreover, FDOT waited until April 10, 1995, after it had issued its Final Order, to file its first objection to the motion. Section 120.57(1)(b)(5), Florida Statutes, gives hearing officers authority to administer sanctions which an agency cannot countermand in a final order of the original or ancillary proceeding. S.G., at 1385.

       
       

   42. FDOT argues that DOAH lacks jurisdiction because: (1) Mitchell did not achieve service of process in the instant case; (2) Mitchell did not notice the subject motion for hearing in DOAH Case No. 95-289; and (3) Mitchell did not file a petition for relief in DOAH Case No. 95-1096F. These arguments are without merit. Mitchell filed its motion in DOAH Case No. 95-289. DOAH's Clerk docketed the motion under a new case number according to DOAH's routine procedure. As an ancillary proceeding, DOAH Case No. 95-1096F did not require service of process. Mitchell was not required to notice the motion for hearing once DOAH issued the Initial Order. Mitchell's motion contained a prayer for relief.

       
       

   43. FDOT asserts that Mitchell's motion is facially defective because it fails to identify a particular "pleading, motion, or other paper" filed by FDOT for an improper purpose. However, FDOT's December 29, 1994, delinquency letter was signed by Florida's Secretary of the Department of Transportation, Ben G. Watts, and was the trigger that gave Mitchell a point-of-entry to request a formal hearing. Pursuant to Rule 14-23.001, Florida Administrative Code, this letter, like an administrative complaint or any other formal notice of intent to deny a permit or application, or to revoke a license, expressly gave Mitchell the right to request formal proceedings. It was subsequently filed in the underlying proceeding and the instant ancillary proceeding and qualifies as an "other paper" as contemplated in Section 120.57(1)(b)(5), Florida Statutes.

       
       

   44. Finally, the undersigned denies FDOT's Motion to Abate pending resolution of the appeal of the Final Order. The Motion to Abate provides no authority for arguing that the appeal raises further questions as to DOAH's jurisdiction in this case. There is no support for FDOT's argument that, depending on the decision in the case on appeal, the issue of attorney's fees could be moot.

   45. For the reasons set forth above, FDOT's motion entitled Department's Objection, Motion to Dismiss or, in the alternative, Motion to Abate and FDOT's Motion for Involuntary Dismissal are denied.

       
       

   46. Turning to the question of Mitchell's entitlement to attorney's fees, the undersigned must determine whether FDOT had a reasonably clear legal justification for issuing the December 29, 1994, delinquency letter. Mercedes Lighting and Elec. Supply Inc. v. Dept. of Gen. Services, 560 So. 2d 272, 278 (Fla. 1st DCA 1991). The inescapable conclusion is that FDOT did not issue that letter for an improper or frivolous purpose. The undersigned has not found it necessary to examine the subjective intent of FDOT or its counsel or to make a good faith-bad faith analysis in reaching this decision.

       
       

   47. The contract provision at issue is section 8-7.3.2 of FDOT's Standard Specifications which states in pertinent part:

       
       

       Contract Time Extensions: The Department may grant an extension of contract time when a controlling item of work is delayed by factors not reasonably anticipated or foreseeable at the time of bid. Such extension of time may be allowable only for delays occurring during the contract time period or authorized extensions of the contract time period. When failure by the Department to fulfill an obligation under the contract results in delays in the controlling construction operations, such delays will be considered as a basis for granting credit to the contract time. Extensions of contract time will not be granted for delays due to the fault or negligence of the Contractor. (Emphasis added)

       * * *

       A preliminary request for an extension of contract time shall be made in writing to the Engineer within ten calendar days after commencement of a delay to a controlling item of work or the Contractor shall waive any rights to an extension of the contract time for that delay. In the case

       of a continuing delay only one request is necessary. Each request for extension of time shall include a description of the dates and cause of the items or work affected by the delay. Within 30 days after elimination of the delay, or receipt of a written request from the Engineer, the Contractor shall submit all documentation of the delay and a request for the exact number of days justified to be added to the contract time. (Emphasis added).

       
       

   48. Section 8-8.1, Standard Specifications, puts a contractor on notice that Sectin 337.16, Florida Statutes, and Rule 14-23, Florida Administrative Code, "establish certain requirements pertainint to the suspension of revocation of a Contractor's certificate of qualificatins because of deliquency on a previously awarded contract."

       
       

   49. Section 8-8.2, Standard Specifications, refers generally to the rules and regulations governing suspension for delinquency. A contractor is delinquent when he or she makes unsatisfactory progress, i.e. the contract time for

       performing the work has expired and the contract work is not complete. Section 8-8.2(a), Standard Specifications. This section goes on to outline the duties of the agency and the rights of the contractor which follow the procedures set forth in Rules 14-23.001 and 14-23.013, Florida Administrative Code. Section 8- 8.2(b), Florida Administrative Code, requires FDOT to give the contractor notice of the agency's intent to suspend a Certificate of Qualification giving the contractor ten (10) days in which to request an administrative hearing. FDOT may grant extensions of time during the prosecution of the work regardless of the contractor's delinquency status. Section 8-8.2(f), Standard Specifications.

       
       

   50. Rule 14-23.001, Florida Administrative Code, sets forth FDOT's policy when a contractor is delinquent in the progress of work. This rule also states that a contractor is delinquent due to unsatisfactory progress when the contract time for performing the work has expired and the contract work is not complete. Rule 14-23.001(b)(1), Florida Administrative Code. Pursuant to Rule 14- 23.001(3)(c), Florida Administrative Code, within ten (10) days of receiving a preliminary notice of delinquency, a contractor may request an extension of contract time. In evaluating this request, one of the factors FDOT may consider is whether the contractor was delayed in the performance of the job by factors beyond his control. Rule 14-23.001(3)(c)(2), Florida Administrative Code. If the ten (10) day period expires, and FDOT determines that an extension of contract time is not proper, FDOT declares the contractor delinquent and informs him or her of the right to a hearing pursuant to Section 120.57, Florida Statutes. Rule 14- 23.001(4), Florida Administrative Code.

       
       

   51. Rule 14-23.013, Florida Administrative Code, requires FDOT to send a contractor notice of intent to suspend a Certificate of Qualification when it initially determines that a contractor is delinquent. The rule also states that "[n]otice of intent to suspend may not be given if a timely filed request for time extension is pending." Rule 14-23.013(1), Florida Administrative Code (Emphasis added). The notice must set forth the contractor's right to request an administrative hearing within ten (10) days. Rule 14-23.013(a), Florida Administrative Code.

       
       

   52. Reading these provisions together, FDOT had a reasonably clear legal justification in issuing the December 29, 1994, delinquency letter after giving Mitchell written notice, in the letter dated November 14, 1994, that any delay on the project was due to the contractor's fault. On December 29, 1994, notice of intent letter after giving Mitchell written notice, in the letter dated November 14, 1994, that any delay on the project was due to the contractor's fault. On December 29, 1994, FDOT could reasonably conclude that: (1) The November 14, 1994, letter adequately addressed Mitchell's preliminary requests for time; and (2) FDOT did not have to solicit more specific information concerning a delay which, under the first paragraph of secton 8- 7.3.2, Standard Specifications, could not be granted. FDOT was justified in maintaining this position until February 15, 1995, when the former Hearing Officer indicated that the did not agree with FDOT's interpretation of agency procedures required by sectionn 8-7.3.2, Standard Specifications.

       
       

   53. The December 29, 1994, letter appropriately informed Mitchell of its right to request a hearing or to request additional time where it was obvious, after adequate investigation and communication between the parties, were deadlocked as to the cause of the delay. Mitchell opted to request a hearing and not to request an extension of contract time.

       
       

   54. The instant case is distinguishable from Good Samaritan Hosp. v. DHRS,

       582 So. 2d 722 (Fla. 4th DCA 1991). In that case, the Court determined that the

       agency's action was not frivolous but was brought for an "improper purpose" within the meaning of Section 120.57(1)(b)(5), Florida Statues, because the agency implemented non-rule policy contrary to the recommendations of its own investigators. Id., at 723-724. In the case at bar, FDOT had a reasonably clear legal justification for concluding that it had followed the procedures required by section 8-7.3.2, 8-8.1, and 8- 8.2, Standard Specifications, and Rules 14-23.001 and 14-23.013, Florida Administrative Code.

       
       

   55. In Dept. of Health & Rehab. Serv. v. S.G., 613 So. 2d 1380 (Fla. 1st DCA 1993) the Court reversed an award of fees pursuant to Section 120.57(1)(b)(5), Florida Statutes, because the agency's initial investigation justified the filing of a bill of particulars even though the agency was unable to carry its burden of proof during the formal hearing. In the instant case, FDOT's investigation justified the issuance of the December 29, 1994, delinquency letter. The agency subsequently presented a prima facie case of delinquency at the hearing on February 15, 1995. Prior to othe hearing, FDOT had no reason to anticipate that the former Hearing Officer would construe section 807.3.2, Standard Specifications, as requiring FDOT to solicit a "formal" request for extensin of contract time before FDOT could issue a notice of intent to declare Mitchell delinquent despite FDOT's determination that the delay was due to the contractor's fault.

       
       

   56. Mitchell is not entitled to attorney's fees on grounds that, although the issuance of the December 29, 1994, letter was justified, FDOT continued the action for a frivolous purpose after receiving Mitchell's request for hearing. FDOT's counsel was justified in concluding, after reviewing the record and conferring with agency personal, that the agency had addressed Mitchell's preliminary requests for extension of contract time.

       
       

       No litigant whose case is non-frivolous at its inception should be burdened with second

       guessing the court as to the exact point during the course of the litigation where there remain

       no justiciable issues of law or fact to be resolved, at the risk of being penalized through an attorney's fee award for failure to recognize that point when it is reached.

       * * *

       In other words, the frivolousness of a claim (or, for that matter, of a defense) is to be judged and determined as of the time it is initially presented

       . . . .

       
       

       Klein v. Layne, Inc. of Florida, 453 So. 2d 203, 204-05 (Fla. 4th DCA 1984).

       See also, Marexcelso Compania Naviera v. Fla. Nat. BK., 533 So. 2d 805 (Fla. 4th DCA 1988).

       
       

   57. The former Hearing Officer ruled that Mitchell's letters were preliminary requests for time pursuant to section 8-7.3.2 of FDOT's Standard Specifications. He indicated that FDOT failed to follow its procedures in responding to Mitchell's requests and that the action was premature. FDOT's decision to seek a voluntary dismissal was due to the Hearing Officer's ruling and statements. Because the Hearing Officer chose to adopt Mitchell's position over that of FDOT should not be the basis "for harsh punitive action." See Dept. of Health & Rehab. Serv. v. S.G., at 1385. Moreover, FDOT might have faced a

       motion for fees if it had proceeded with the hearing in the face of the Hearing Officer's initial adverse ruling and subsequent statements. Mercedes Lighting, at 278.

       
       

   58. It is well established that the purpose of a proceeding under Section 120.57, Florida Statutes, is "to allow persons affected by intended decisions of state agencies to change the agency's mind." Mercedes Lighting, at 278. FDOT changed its mind here as soon as it became apparent that Mitchell was likely to prevail under the Hearing Officer's reading of section 8-7.3.2, Standard Specifications. However, FDOT had a reasonably clear legal justification for issuing the delinquency letter and did not issue the letter and proceed to formal hearing for an improper or frivolous purpose. The undersigned concludes that FDOT's procedures, leading to the issuance of the delinquency letter in this case, gave Mitchell the due process protectin to which it was entitled pursuant to Seciton 120.57, Florida Statutes.

ORDER

Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby ORDERED: Mitchell's Motion for Attorney's Fees pursuant to Section 120.57(1)(b)(5), Florida Statutes, is denied.

DONE AND ORDERED this 26th day of July, 1995, in Tallahassee, Leon County, Florida.

SUZANNE F. HOOD, Hearing Officer 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 26th day of July, 1995.

APPENDIX

The following constitutes the undersigned's specific rulings on the parties' proposed findings of fact pursuant to Section 120.59(2), Florida Statutes.

Petitioner's Proposed Findings of Fact

1. Accepted in Findings of Fact 3.

2. Accepted in Findings of Fact 4.

3. Accepted as modified in Findings of Fact 5 through 8.

4. Accepted as modified in Findings of Fact 9 and 20.

5. Not a Finding of Fact; paraphrases contract provision.

6. Accepted as modified in Findings of Fact 21.

7. Accepted as modified in Findings of Fact 15.

8. Not a Finding of Fact; paraphrases agency rule.

9. Accepted in Findings of Fact 16.

10. Accepted in Findings of Fact 16.

11. Accepted in Findings of Fact 17.

12. Accepted in Findings of Fact 18.

13. Accepted as modified in Findings of Fact 19.

14. Accepted but unnecessary for resolution of case.

15. Accepted in part as modified in Findings of Fact 20 and 21 but reject that the "Department had not properly addressed all of Mitchell Brothers outstanding time requests in accord with its own standard specifications." The latter statement presents a mixed question of fact and law which was not specifically ruled on by the former Hearing Officer and which is not supported by competent persuasive evidence in the instant case.

16. Accepted in part as modified in Findings of Fact 24. Rejected in part due to a lack of competent persuasive evidence as to the specific content of the statement by FDOT's counsel to Mitchell's counsel on the evening of February 15, 1995, after the hearing recessed.

17. Accepted in Findings of Fact 26.

18. Accepted in Findings of Fact 28.

19. Accepted. See Preliminary Statement.

20. Accepted. See Preliminary Statement.

21. Accepted. See Preliminary Statement.

22. Accepted. See Preliminary Statement.

23. Accepted as modified in Preliminary Statement.

24. Accepted but unnecessary for resolution of case.

25. Accepted in Findings of Fact 32.

Respondent's Proposed Findings of Fact.

1. Accepted in Findings of Fact 1.

2. Accepted in Findings of Fact 2.

3. Accepted in Findings of Fact 3.

4. Accepted in Findings of Fact 4.

5. Accepted in Findings of Fact 14.

6. Accepted in Findings of Fact 14.

7. Accepted as modified in Findings of Fact 20.

8. Accepted in Findings of Fact 10.

9. Accepted in Findings of Fact 15.

10. Accepted in Findings of Fact 16.

11. Accepted in Findings of Fact 31.

12. Accepted in Findings of Fact 31.

13. Accepted as modified in Findings of Fact 9 and 20.

14. Accepted as modified in Findings of Fact 11 and 22.

15. Accepted in Findings of Fact 30.

COPIES FURNISHED:

Mike Piscitelli, Esquire Christopher T. McRae, Esquire Cumings, Lawrence & Vezine, P.A. 1004 DeSoto Park Drive Tallahassee, Florida 32301

Thomas R. Kinsella, Esquire Jack R. Leonard, Esquire Florida Dept. of Transportation Haydon Burns Building

605 Suwannee Street, MS-58 Tallahassee, Florida 32399-0458

Ben G. Watts, Secretary Haydon Burns Building 605 Suwannee Street

Tallahassee, Florida 32399-0450

Thornton J. Williams, General Counsel

562 Haydon Burns Building Tallahassee, Florida 32399-0450

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 THE NOTICE OF ADMINISTRATIVE 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 DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA

MITCHELL BROTHERS, INC., NOT FINAL UNTIL TIME EXPIRES TO

FILE MOTION FOR REHEARING AND

Appellant, DISPOSITION THEREOF IF FILED.

vs. CASE NO. 95-3037

DOAH CASE NO. 95-1096F

STATE OF FLORIDA, DEPARTMENT OF TRANSPORTATION,

Appellee.

/ Opinion filed June 17, 1996.

An appeal from an order of the Division of Administrative Hearings.

Mike Piscitelli, Mary M. Piccard, and Christopher T. McRae of Cummings, Lawrence & Vezina, P.A., Tallahassee, for appellant.

Thornton J. Williams, General Counsel; Marianne A. Trussell, Assistant General Counsel, Department of Transportation, Tallahassee, for appellee.

PER CURIAM.

AFFIRMED

BARFIELD, C.J., KAHN AND DAVIS, JJ., CONCUR.

MANDATE

From

DISTRICT COURT OF APPEAL OF FLORIDA FIRST DISTRICT

To the Honorable Suzanne F. Hood, Hearing Officer

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

MITCHELL BROTHERS, INC.,

vs. CASE NO. 95-3037

DOAH CASE NO. 95-1096F

STATE OF FLORIDA, DEPARTMENT OF TRANSPORTATION,

The attached opinion was rendered on June 17, 1996.

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 Edward T. Barfield

Chief Judge of the District Court of Appeal of Florida, First District and the Seal of said court at Tallahassee, the Capitol, on this 3rd day of July, 1996.

(seal) Jon S. Wheeler

Clerk, District Court of Appeal of Florida, First District

Docket for Case No: 95-001096F

Orders for Case No: 95-001096F