STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

K.B., J.B., M.B., T.B., and S.B., )

)

Petitioners, )

)

vs. ) CASE NO. 95-4672F

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

FINAL ORDER OF DISMISSAL

This matter came before the undersigned on Respondent Department of Health and Rehabilitative Services' Motion to Dismiss Petitioners' Amended Petition for Attorney's Fees filed with the Division of Administrative Hearings (Division) on December 15, 1995. Petitioners filed a Memorandum of Law in Opposition to Respondent's Motion to Dismiss Petitioners' Motion for Attorney's Fees on January 2, 1996. Oral argument was heard on the motion by telephonic hearing on February 2, 1996. At the close of the telephonic hearing, the parties were granted leave to file additional written argument. The Department filed its Proposed Final Order with the Division on February 12, 1996. Petitioners elected not to file any additional written argument.

APPEARANCES

For Petitioners: J. Allen Bobo, Esquire

LUTZ, WEBB, PARTRIDGE, and BOBO

One Sarasota Tower, Suite 500 Two North Tamiami Trail Sarasota, Florida 34236

V. William Kaklis, Esquire KAKLIS, VENABLE and WITT 1400 Fourth Avenue West Bradenton, Florida 34205

For Respondent: Raymond R. Deckert, Esquire

Department of Health and Rehabilitative Services

4000 West Drive Martin Luther King Boulevard, Room 500

Tampa, Florida 33614 STATEMENT OF THE ISSUE

Are Petitioners a "small business party" as that term is defined in Section 57.111(3)(d)1.b., Florida Statutes?

PRELIMINARY STATEMENT

As a result of an earlier investigation conducted by the Department concerning allegations of abuse at Palmetto Guest Home, Inc., an adult congregate living facility, the Petitioners' names were placed in the abuse registry as proposed confirmed perpetrators. Requests made by the Petitioners to expunge or amend the report were denied by the Department. Subsequently, each Petitioner requested a formal hearing. However, before these matters came to hearing, the Department downgraded the report to "closed without classification" which resulted in the orders closing the files. Subsequently, Petitioners filed a Motion For Attorneys' Fees and Costs with the Division which the Department moved to dismiss on the grounds of, among others, Petitioners' failure to come within the definition of "small business party" as that term is defined in Section 57.111(3)(d)1.b., Florida Statutes. Petitioners were granted leave to file an amended petition. The amended petition filed November 20, 1995, set forth more factual information concerning the Petitioners' role with the Palmetto Guest Home, Inc. Again, the Department filed a motion to dismiss on the grounds of, among others, Petitioners' failure to come within the definition of "small business party". A telephonic hearing was held on February 2, 1996, to hear arguments on the sole issue of Petitioners' failure to come within the definition of "small business party" as defined in Section 57.111(3)(d)1.b., Florida Statutes.

FINDINGS OF FACT

For the purposes of the motion, the parties stipulated to the following facts:

1. The Department's action giving rise to Petitioners' petition for attorney's fees under Section 57.111, Florida Statutes, was to propose confirm a report of abuse/neglect against each of the five Petitioners in their individual capacity.

   
   

2. Each Petitioner requested a formal hearing under Section 120.57(1), Florida Statutes, which resulted in five separate cases, none of which named Palmetto Guest Home, Inc. as a party.

   
   

3. The five cases were consolidated but were subsequently dismissed as a result of the Department downgrading each case to "closed without classification".

   
   

4. All five of the Petitioners worked at the Palmetto Guest Home, Inc. and are related to each other.

   
   

5. The Palmetto Guest Home, Inc., is a Florida corporation in good standing and registered with the State of Florida as an adult congregate living facility.

   
   

6. James E. Biggins is the president and a director of Palmetto Guest Home, Inc., and is the corporation's sole shareholder.

   
   

7. Palmetto Guest Home, Inc., was not named as a party in the underlying administrative action and is not one of the Petitioners in this case.

   
   

8. James E. Biggins was not named as an alleged perpetrator in the underlying administrative action and is not one of the Petitioners in this case.

9. James E. Biggins is the father of Petitioners, K.B., J.J.B. and M.B., who are vice presidents of the corporation.

   
   

10. James E. Biggins is the husband of Petitioner S.B., who is a director and the secretary/treasurer of the corporation.

    
    

11. James E. Biggins is the father-in-law of Petitioner T.B., who is the administrator of Palmetto Guest Home, Inc.

    
    

12. Palmetto Guest Home, Inc. has net a worth of less than two million dollars.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Division has jurisdiction over the parties to, and the subject matter of, this proceeding pursuant to Section 120.57(1), Florida Statutes and Section 57.111, Florida Statutes.

    
    

14. To make out a prima facie case under Section 57.111, Florida Statutes, the Petitioners must show that they prevailed in the underlying administrative action, and that they are a small business party within the meaning of the law. Unless these critical elements can be established, their claim must necessarily fail without regard to whether the Department was substantially justified in placing the Petitioners' names in the abuse registry as proposed confirmed perpetrators. Although the motion addresses several issues, this order addresses only one narrow but dispositive issue: Are Petitioners a small business party within the meaning of Section 57.111(3)(d)1.b., Florida Statutes? That provision defines a small business party as "A partnership or corporation, including a professional practice. "

    
    

15. Petitioners contend that while they may be employed by Palmetto Guest Home, Inc., they are not "mere employees" but are "one and the same entity" as the corporation, based on their connection with the corporation and its sole shareholder, and they are thereby a "small business party" entitled to attorney's fees, citing Ann & Jan Retirement Villa v. Department of Health and Rehabilitative Services, 580 So.2d 278 (Fla. 4th DCA 1991) as authority for that position. Petitioners also cite the case of Department of Health and Rehabilitative Services v. S.G. , 613 So.2d 1380 (Fla. 1st DCA 1993) for the proposition that attorney's fees may be awarded to an individual who is "one and the same entity" as the corporation even where the corporation is not a party to the underlying administrative action or the petition for attorney's fees.

    
    

16. The case of Florida Real Estate Commission v. Shealy, 647 So.2d 151 (Fla.1st DCA 1994) is dispositive of this issue. In that case, Shealy had been denied a real estate license which he intended to use in a corporation owned by him and his wife. After eventually prevailing in an administrative action, Shealy sought to recover his attorney's fees and costs expended in obtaining his license. In denying his request, the court held as follows:

    
    

    Section 57.111 authorizes an attorney's fee for a qualifying small business party, which must be a corporation, a partnership, or a sole proprietor of an unincorporated business. See Section 57.111(3)(d)1.a and b. Fla.Stat. This does not encompass individual employees. Department of Professional Regulation v. Toledo Realty, 549 So.2d (Fla. 1st DCA 1989); Thompson v. Department

    of Health and Rehabilitative Services, 533 So.2d 840 (Fla. 1st DCA 1988). Although the appellee and the corporation were found to be "one and the same entity" based on the appellee's control of the business, the statute does not permit such disregard of the corporate form. The appellee was

    not a small business party as defined by the statute, and thus should not have been awarded a section

    57.111 attorney's fees.

    
    

17. The court distinguishes the Shealy case from the Ann & Jan case by the following footnote:

    
    

    This case is unlike Jan & Ann Retirement Villa v. Department of Health and Rehabilitative Services,

    580 So.2d 278 (Fla. 4th DCA 1991), where a corpor- ation and its sole owner were described as "one

    and the same entity." In Ann & Jan the corporation, rather than the individual, was awarded the attorney's fee.

    
    

18. In the S.G. case, the issue of S.G. being a small business party was not before the court because the Department of Health and Rehabilitative Services did not challenge the hearing officer's determination that S.G. was a prevailing small business party. However, it should be noted that in S. G. vs. Department of Health and Rehabilitative Services, (Division of Administrative Hearings, Final Order entered February 12, 1992) the determination by the hearing officer that S.G. was a small business party was premised on the decision in the Ann & Jan case prior to the decision in the Shealy case.

Based on the foregoing Findings of Fact and Conclusions of Law. it is, accordingly,

ORDERED that Respondent's motion to dismiss the Petitioners' petition for attorney's fees is GRANTED and Petitioners' petition for attorney's fees and costs is DENIED.

DONE and ORDERED this 28th day of February, 1996 in Tallahassee, Leon County, Florida.

WILLIAM R. CAVE, 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 28th day of February, 1996

COPIES FURNISHED:

J. Allen Bobo, Esquire

One Sarasota Tower, Suite 500

2 North Tamiami Trail Sarasota, Florida 34326

V. William Kaklis, Esquire 1440 Fourth Avenue West Bradenton, Florida 34205

Raymond R. Deckert, Esquire Department of Health and

Rehabilitative Services

4000 W. Dr. Martin Luther King Jr. Blvd. Tampa, Florida 33614

Sandy Coulter, Acting Agency Clerk Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Kim Tucker, 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 of dismissal 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 in the appellate district where the party resides. The notice of appeal must be filed within 30 days of rendition of the order to be reviewed.

Docket for Case No: 95-004672F

Orders for Case No: 95-004672F