STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

COURTYARD CENTER, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 95-4784F

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, ) DIVISION OF ADMINISTRATION, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly assigned hearing officer, Stephen F. Dean, held a formal hearing in the above- styled case on December 15, 1995, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Mary C. Sorrell, Esquire

2275 Atlantic Boulevard Neptune Beach, Florida 32266

For Respondent: R. Beth Atchison, Esquire

Department of Business and Professional Regulation

1940 North Monroe Street Tallahassee, Florida 32399-0750

STATEMENT OF THE ISSUES

Whether the Petitioner, Courtyard Center, Inc., was a prevailing small business party in Case Number 95-1970BID as defined by Section 57.111(3)(d)G, Florida Statutes, and, if so, whether the actions of the Department were substantially justified and whether special circumstances exist which would make the award unjust.

PRELIMINARY STATEMENT

On July 7, 1995, a Recommended Order was entered in Case Number 95-1970BID. The Recommended Order recommended that Respondent not award the contract and re- initiate the evaluation process in accordance with the criteria stated in the RFP based upon findings that the Respondent had substantially departed from those criteria contrary to law. The Respondent entered its Final Order on September 5, 1995 adopting the recommendations to re-initiate the evaluation process.

On September 25, 1995, the Petitioner in Case Number 95-1970BID filed a Petition for the award of Attorney's Fees and costs in that case, which was

assigned a new case number, 95-4784F, and is the case at bar. The Petitioner's Petition for Attorney's Fees and Costs included Petitioner's Fee Affidavit.

On October 17, 1995, the Respondent, Department of Business and Professional Regulation, filed a Counter Affidavit, an Answer, and a Motion for Summary Final Order. On October 31, 1995, the Petitioner filed a Motion to Strike and a Motion for Protective Order.

On November 16, 1995, a telephonic conference call was held to consider the pending motions. On November 21, 1995, the Hearing Officer denied the Respondent's Motion for Summary Order referred to by the Hearing Officer as the Motion to Dismiss. The Petitioner's Motion for a Protective Order was denied in part with direction to Petitioner to submit for in-camera inspection those portions of the lease between Petitioner and Florida Coastal School of Law, Ltd., necessary to establish the identity of the property subject to the lease, the identity of the lessor and lessee, and the lease date. Based upon the materials provided and inspected in-camera, the Hearing Officer found that the lease between Petitioner and Florida Coastal Law School was entered into on July 11, 1995, and that the property leased included the property previously the subject of case number 95-1970BID.

The parties stipulated to the reasonableness of the fees, and the hearing was scheduled for December 15, 1995 in Tallahassee, Florida in accordance with the previous agreement of the parties.

The hearing was held as scheduled, and Petitioner introduced the testimony of Chris Hionides to establish the small business status of Petitioner. The Respondent introduced the testimony of Brad Engleman and Randall Baker, and introduced Respondent's Exhibits A, B, and C. In addition, notice was given of official notice being taken of Petitioner's Fee Affidavit, and all the pleadings and evidentiary materials previously received in Case Number 95-1970BID. The transcript was prepared and filed on January 4, 1996. The Petitioner and Respondent filed proposed findings in the form of proposed orders on January 12 and January 16, 1996, respectively. The proposed findings were read and considered. The appendix to this order states which of those findings were adopted, and which were rejected and why.

FINDINGS OF FACT

1. BACKGROUND

   
   

   1. The Petitioner is Courtyard Center, Inc. which is the owner of Courtyard Centre.

      
      

   2. The Respondent is the Department of Business and Professional Regulation which is a state agency.

      
      

   3. The Respondent issued a Request for Proposals, RFP Number 790:0056 (the RFP).

      
      

   4. The RFP requested proposals for lease space in Jacksonville, Florida.

      
      

   5. The Petitioner and Three Oaks Plaza responded to the RFP.

      
      

   6. The Respondent evaluated the proposals and determined Three Oaks was the bidder receiving the highest total points on the evaluation. The Respondent gave notice to the participants of its intent to award the lease to Three Oaks.

   7. Petitioner protested the intent to award the lease to Three Oaks.

      
      

   8. A final hearing was conducted on the matter, and on July 7, 1995, a Recommended Order was entered which found that the factors considered by the evaluators were not consistent with the criteria set forth in the RFP. The Recommended Order concluded that the Department's decision to award the bid to Three Oaks was arbitrary and capricious.

      
      

   9. On July 11, 1995, the Petitioner leased all of its property in Courtyard Centre, including that presented in its proposal in response to the RFP, to Florida Coastal Law School, Ltd.

      
      

   10. On September 5, 1995, the Department entered a Final Order adopting the recommendation contained in the Recommended Order, and ordering a reevaluation of the proposals.

       
       

   11. On September 5, 1995, the Petitioner filed the instant petition for attorney's fees and costs.

       
       

   12. On September 18, 1995, the Respondent's counsel was notified by Petitioner's counsel that Petitioner had leased the property it had presented in its proposal to the Florida Coastal Law School.

       
       

   13. The Respondent was scheduled to reevaluate the proposals on September 19, 1995.

       
       

2. PETITIONER'S QUALIFICATIONS

1. Petitioner set forth the style of the case and case number of the case in which it prevailed in its Petition for attorneys' fees and costs. It alleged it prevailed in the underlying action. It alleged the amount of the attorney's fees and costs claimed, the Petitioner's principal location, the number of Petitioner's employees and Petitioner's net worth. The Petition alleges that the Respondent's actions were substantially unjustified, that the Respondent was more than a nominal party, and that there were no circumstances which would make an award unjust. Copies of all documents upon which the claim was predicated were attached to the Petition.

   
   

2. The Petitioner's Fee Affidavit was executed by the attorney for Petitioner, and states the nature, extent and monetary value of the services rendered in Case Number 95-1970BID, as well as the costs incurred in the preparation and litigation of that case. Those fees and costs are adopted by reference as findings based upon the stipulation of the parties.

   
   

3. The Petitioner's net worth is less than $2,000,000. The Petitioner is a Florida corporation with its principal place of business in Florida. The Petitioner's sole asset is the property in question which was purchased for

   $586,000, and has a mortgage of $450,000. The Petitioner has no employees.

   
   

4. Partial fact findings were made in order to rule upon the Respondent's Motion for Summary Order, which was treated as a motion to dismiss, and the Petitioner was determined to be the prevailing party as defined by Section 57.111, Florida Statutes. The ruling in the underlying case held that the proposals should be reconsidered because the Respondent evaluated the proposals upon factors which were not criteria in the RFP and constituted arbitrary and capricious conduct. The recommendation to reconsider the proposals is generally

   the only affirmative relief which can be recommended. The findings in the underlying case are adopted by reference.

   
   

5. The Respondent's reevaluation of the proposals was cancelled upon notification that the Petitioner had leased the property presented in its proposal.

   
   

   CONCLUSIONS OF LAW

   
   

6. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this case pursuant to Sections 120.57 and 57.111, Florida Statutes, and 60Q-2.035, Florida Administrative Code.

   
   

7. The Petitioner's petition for fees and costs and the attorney's affidavit meet the requirements of the statute and rule. Although the Respondent's answer was not filed until the twenty-third day, it is deemed timely.

   
   

8. Subparagraph 57.111(4)(a), Florida Statutes, provides as follows:

   
   

   . . . unless otherwise provided by law, an award of attorney's fees and costs shall be made to a prevailing small business party in any adjudicatory proceeding or

   administrative proceeding pursuant to Chapter

   120 initiated by a state agency, unless the actions of the agency were substantially justified or a special circumstances exists which would make the award unjust.

   
   

9. The only exceptions provided by law are proceedings involving the establishment of a rate or rule, or actions sounding in tort, neither of which is applicable to this case.

   
   

10. The Petitioner has the burden to show by a preponderance of the evidence that it prevailed in the underlying administrative proceeding and that it is a small business party. The Hearing Office held in ruling on the motion to dismiss that the Petitioner was the prevailing party. It is well settled that a prevailing party is one who obtains a favorable result. In the underlying case, the Petitioner obtained the only favorable result possible, i.e., a recommendation that the agency re-initiate the process because the agency's award of the contract was fraudulent, arbitrary, illegal or dishonest. This Hearing Officer specifically held that the agency's actions were arbitrary and capricious.

    
    

11. The Petitioner presented credible evidence that it was a corporation with its principal office in Florida, that it had less than 25 full-time employees, and that it had a net worth of less than $2,000,000. The Respondent initiated the process by issuing the request for proposal which is subject to statutes which provide a point of entry for Petitioner to challenge the agency's actions in awarding the bid.

    
    

12. The Respondent presented evidence in an attempt to show that its actions in evaluating the proposals in the underlying case were substantially justified. The findings in the underlying case, based upon the evidence presented in that case, indicated that the actions of the agency were arbitrary

    and capricious. The agency's evidence did not show that its actions were substantially justified in law or in fact.

    
    

13. The evidence does show that on July 11, 1995, just four days after entry of the Recommended Order in the underlying case, Petitioner leased to a third party the property which Petitioner had proposed to lease to the Respondent. On September 5, 1995, the Respondent entered its Final Order and set aside the award of the contract to Three Oaks. On September 18, 1995, the Petitioner notified the Respondent that it had leased the property it had proposed.

    
    

14. Section 120.53(5)(c), Florida Statutes, provides in part:

    
    

    Upon receipt of the formal written protest which has been timely filed the agency shall stop the bid solicitation process or the contract award process until the subject of the protest is resolved . . . .

    
    

15. Competitive bidding is recognized as a means to protect the public by creating a system to obtain goods and services at the lowest possible cost. The system confers upon the participants reciprocal benefits and obligations. Under this system, there is no right on the part of the bidder to withdraw a bid after bids have been opened until an award has been made. See Hotel China & Glassware Company v. Board of Public Instruction, 130 So.2d 78 (Fla. 1st DCA 1961).

    
    

16. The bid protest process envisioned by the statute freezes the process, and permits the challenger to put forth its case. However, the protest process presupposes that the challenger will keep its proposal on the table. In the absence of this supposition, the right to protest a bid is only a nuisance which is not beneficial to the people. The challenger may request permission to withdraw its bid only for mistake or error. See State Board of Control v. Clutter Construction Corp., 139 So.2d 153 (Fla. 1st DCA 1962). Inherent in the court's discussion is that the bidder seeking to withdraw the bid act in good faith, be willing to do equity, and preserve the public interest.

    
    

17. There is no evidence in the record which would indicate that Petitioner made any mistake or error in its proposal. The record shows that Petitioner initiated the bid protest; prosecuted the protest; during the deliberative process entered into negotiations with a third party regarding the property; entered into a contract with that third party immediately after the Recommended Order was entered; and did not notify the Respondent that it had committed to another lease until after the Respondent had entered its Final Order.

    
    

18. These facts show that, having concluded it would lease the property to third party, the Petitioner did not seek permission to withdraw its proposal because that would have halted the deliberations, precluded a favorable decision, and prevented any recovery of attorney's fees and costs. In doing this, Petitioner has put the Respondent to undue trouble and expense, and delayed the award of the bid in this matter. Petitioner's action is detrimental to the public interest. Petitioner has not acted fairly and with clean hands. The Petitioner should not be permitted to recover its attorney's fees and costs on these facts.

Based on the foregoing findings of fact and conclusions of law, the Petitioner's Petition for Attorney's Fees is DENIED because to award fees and costs on these facts would be unjust.

DONE and ENTERED this 29th day of January, 1996, in Tallahassee, Florida.

STEPHEN F. DEAN, 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 29th day of January, 1996.

APPENDIX

CASE NO. 95-4784F

Both parties submitted proposed findings which were read and considered.

The following states which of their findings were adopted and which were rejected and why:

COPIES FURNISHED:

Mary C. Sorrell, Esquire 2275 Atlantic Boulevard Neptune Beach, FL 32266

R. Beth Atchison, Esquire Department of Business and

Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792

Richard T. Farrell, Secretary Department of Business and

Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792

Lynda L. Goodgame, General Counsel Department of Business and

Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792

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 DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA

COURTYARD CENTER, INC., NOT FINAL UNTIL TIME EXPIRES TO

FILE MOTION FOR REHEARING AND

Appellant, DISPOSITION THEREOF IF FILED.

vs.

CASE NO. 96-718

DEPARTMENT OF BUSINESS YOUR CASE NO. 95-4784F AND PROFESSIONAL REGULATION,

Appellee.

/ Opinion filed November 18, 1996.

An appeal from an order of the Division of Administrative Hearings. Stephen F. Dean, Hearing Officer.

Mary C. Sorrell of Mary C. Sorrell, P.A., Neptune Beach, for Appellant.

R. Beth Atchinson, Assistant General Counsel, Department of Business and Professional Regulation, Tallahassee, for Appellee.

PER CURIAM.

AFFIRMED.

ERVIN, KAHN and DAVIS, JJ., CONCUR.

MANDATE

From

DISTRICT COURT OF APPEAL OF FLORIDA FIRST DISTRICT

To the Honorable Stephen F. Dean, Hearing Officer

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

COURTYARD CENTER, INC.

vs. CASE NO. 96-718

YOUR CASE NO. 95-4784F

DEPARTMENT OF BUSINESS

AND PROFESSIONAL REGULATION, DIVISION OF ADMINISTRATION

The attached opinion was rendered on November 18, 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 5th day of December, 1996.

(seal) Jon S. Wheeler

Clerk, District Court of Appeal of Florida, First District

Docket for Case No: 95-004784F

Orders for Case No: 95-004784F