Hood, Administrative Law Judge with the Division of Administrative Hearings on June 11, 1996, in Jacksonville, Florida.
Donald W. Weidner, P.A.
The issues for determination in this proceeding are: (a) whether the Petitioner was a small business party as defined in Section 57.111(3), Florida Statutes, when Respondent initiated agency action against him; and, if so, (b) whether Respondent was substantially justified in initiating disciplinary proceedings against Petitioner, a licensed physician, in DOAH Case Number 94- 2941, AHCA Case Numbers 90-8689 and 90-8804.
Respondent Agency for Health Care Administration, Board of Medicine (formerly Department of Professional Regulation and hereinafter referred to as Respondent), issued an Administrative Complaint on December 15, 1993 alleging that Petitioner Leonard E. Masters, M.D. (Petitioner), had violated Section 458.331(1)(t), Florida Statutes. Specifically, the Administrative Complaint alleged that Petitioner failed to appropriately refer four patients to a psychiatrist or addictionologist while continuing to treat the patients with narcotic medications thereby deviating from the standard of care.
On May 26, 1994, Petitioner requested a formal hearing before the Division of Administrative Hearings. The undersigned conducted said hearing on July 11,
12 and 18, 1995 in Jacksonville, Florida.
On October 30, 1995 the undersigned issued a Recommended Order recommending that Respondent dismiss the Administrative Complaint. On December 22, 1995 Respondent entered a Final Order approving and adopting said Recommended Order.
On February 26, 1996 Petitioner filed a Petition for Costs and Attorneys Fees pursuant to the Florida Equal Access to Justice Act and requested an evidentiary hearing on the issues presented therein.
Respondent filed a Motion to Dismiss, or in the alternative, Response to Petition for Attorney's Fees and Costs on March 29, 1996. Petitioner filed a response in opposition to said motion on April 8, 1996. The undersigned issued an Order Denying Motion to Dismiss and Notice of Hearing on April 11, 1996.
The undersigned convened the formal hearing on June 11, 1996 in Jacksonville, Florida. During the hearing, Petitioner offered the following exhibits which were accepted into evidence:
Composite Exhibits attached to the Petition and labeled a through o as hereafter described:
Leonard E. Masters, M.D. Curriculum Vitae
Final Investigative Report (without exhibits), Case No. 90-08689
Supplemental Investigative Report,
Case No. 90-08689
Final Investigative Report (without exhibits), Case No, 90-08804
Supplemental Investigative Report,
Case No. 90-08804
Reynold M. Stein, M.D., Curriculum Vitae
Dr. Stein's October 16, 1992, expert opinion
Dr. Stein's December 7, 1992, expert opinion
Neville Sydney Marks, M.D., Curriculum Vitae
Dr. Marks' March 2, 1993, expert opinion
Dr. Marks' October 13, 1993, expert opinion
Mitchell B. Max, M.D., Curriculum Vitae
Dr. Max's June 3, 1993, expert opinion
Final Order entered by the Board of Medicine on December 22, 1995
An itemized affidavit which sets forth the nature, extent and monetary value of the services rendered by the attorneys, as well as, the costs incurred in this proceeding.
The Respondent offered the following exhibits which were accepted into evidence: R-1 Memorandum of Finding Probable Cause
dent's First Set of Interrogatories to Petitioner.
The parties did not present any live testimony at the hearing. After the hearing, the parties submitted, with the undersigned's approval, the following additional exhibits:
Respondent timely filed a proposed final order on September 16, 1996.
Petitioner filed a Motion for Extension of Time to File a proposed final order on September 25, 1996. The undersigned issued an Order Denying Motion for Extension of Time on September 26, 1996. Accordingly, Petitioner's proposed final order filed on September 27, 1996 has not been considered in the formulation of this Final Order.
Petitioner is seeking attorney's fees and costs pursuant to Section 57.111, Florida Statutes, and Rule 60Q-2.035, Florida Administrative Code.
This matter relates to the administrative proceeding in Division of Administrative Hearings Case No. 94-2941. Respondent, a state agency, initiated the underlying cases, ACHA Case Nos. 90-08689 and 90-08804. Respondent was more than a nominal party in these cases.
The attorney's fees that Petitioner seeks are reasonable in amount. The statutory cap of $15,000.00 applies.
Petitioner did not employ more than 25 full-time employees. His net worth did not exceed $2,000,000 at the time Respondent initiated the underlying action.
Respondent initiated state action against Leonard E. Masters, M.D. in his individual capacity. Respondent did not initiate state action against Petitioner's professional corporation, L. E. Masters, M.D., P.A. Therefore, Petitioner is entitled to an award of attorney's fees and cost only if he was employed as a sole proprietor of a professional practice in 1993 when Respondent initiated the underlying action.
Petitioner is a licensed physician who has practiced as a sole proprietor of a unincorporated professional association since 1961. For tax year 1993, Petitioner filed a Schedule C, Profit or Loss from Business, with his federal joint income tax return. As reflected in that return, Petitioner earned a substantial portion of his 1993 income as a sole proprietor of a professional practice.
L. E. Masters, M.D., P.A., is an active professional corporation organized under the laws of the State of Florida on December 17, 1992. However, there is no evidence that Petitioner earned any income or business profit as an employee of his professional corporation in 1993. The mere existence of this corporation does not preclude Petitioner from practicing medicine as a sole proprietor of an unincorporated professional association.
During discovery, Respondent requested that Petitioner furnish the name and address of his alleged sole proprietorship of an unincorporated business from 1990 through the present. Petitioner answered this inquiry as follows:
L. E. Masters, M.D., P.A. since 1961 North Beaches Family Practice
100 Royal Palm Drive Atlantic Beach, Florida
Petitioner's professional corporation was not created until 1992. This answer is not persuasive evidence that Petitioner worked solely as an employee of his professional corporation in 1993.
The greater weight of the evidence indicates that, at all times relevant hereto, Petitioner was a "small business party" as defined in Section 57.111, Florida Statutes.
Prior to the Probable Cause Panel meeting of December 7, 1993, Respondent forwarded to the panel members the entire investigative file, including all applicable medical records, and the written opinions of experts Neville Marks, M.D., and Reynold Stein, M.D.
Each Panel member received and reviewed the materials prior to the Probable Cause Panel meeting.
Present at the December 7, 1993 Probable Cause Panel meeting were panel members Robert Katims, M.D., Chairman of the Panel, and Martin Fenwick,
M.D. Also present were Allen Grossman, Assistant Attorney General and counsel for the Board of Medicine's Probable Cause Panel and Fred Whitson, Senior Attorney for the agency.
Prior to the consideration of any cases, Mr. Grossman advised the panel members that any questions concerning the interpretation of the law or rules, or what the panel's duties were, should be directed to him.
Mr. Grossman also advised the panel that questions about the facts of the case, or the agency's recommendation should be directed to Mr. Whitson.
Mr. Whitson proceeded to discuss the specific facts of the case. He reviewed the medical history of the four alleged victims described in the proposed Administrative Complaint.
The panel voted unanimously to find that probable cause existed to charge Petitioner with violating Section 458.331(l)(t), Florida Statutes, as set forth in the proposed Administrative Complaint.
The panel documented its finding of probable cause in a memorandum signed by the Chairman of the Panel.
During the probable cause proceeding, the panel considered the reports of two medical experts which support the allegations in the Administrative Complaint. One of those experts, like Petitioner, was a board certified family practice physician. The other was a psychiatrist. Both had experience in treating chemical dependency in adults.
Both of Respondent's medical experts opined that Petitioner's treatment of four patients for chronic pain fell below the applicable standard of care. These opinions concluded that each patient had complicated medical, psychological, and/or chemical dependancy problems. The experts were especially critical of Petitioner's attempt to diagnose, treat, and manage the chronic pain of the patients with narcotic drugs but without the benefit of consultations with a psychiatrist or a chemical dependency specialist (addictionologist).
Respondent was substantially justified in relying on the opinions of these experts, the patient's medical records and investigative reports to support the allegations in the Administrative Complaint even though they did not prove to be persuasive at hearing.
After the formal hearing in the underlying case, the greater weight of the evidence indicated that Petitioner did not violate the applicable standard of care in his treatment of the four patients. This conclusion was reached after consideration of all the testimony and evidence presented at hearing. It did not mean that Respondent lacked a reasonable basis in law and fact for alleging that Petitioner violated Section 458.331(1)(t), Florida Statutes.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and the subject of this proceeding pursuant to Section 57.111, Florida Statutes.
The purpose of Section 57.111, Florida Statutes, the Florida Equal Access to Justice Act (FEAJA), as stated in Section 57.111(2), Florida Statutes, is to diminish the deterrent effect on certain persons from seeking review of, or defending against, unreasonable governmental action because of the expense of civil actions and administrative proceedings.
Section 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 special circumstances exist which would make the award unjust.
Section 57.111(3)(d), Florida Statutes, defines a small business party, in relevant part, as:
1.a. A sole proprietor of an unincorporated business, including a professional practice, whose principal office is in this state, who is domiciled in this state, and whose business or professional practice has, at the time the action is initiated by a state agency, not more than 25 full-time employees or a net worth of not more than $2 million, including both personal and business investment; or
b. A partnership or corporation, including a professional practice, which has its principal office in this state and has at the time the action is initiated by a state agency not more than 25 full-time employees or a net worth of not more than
$2 million; . . . .
Section 57.111(3)(e), Florida Statutes, states as follows:
(e) A proceeding is 'substantially justified' if it had a reasonable basis in law and fact at the time it was initiated by a state agency.
The Petitioner bears the initial burden of proving that he was a small business party at the time the underlying adjudicatory proceeding pursuant to Chapter 120 was initiated by a state agency, and that he prevailed. Once this showing is made, the burden shifts to the Respondent to demonstrate that its actions were substantially justified or that special circumstances exist which would make the award unjust. Department of Professional Regulation, Division of Real Estate v. Toledo Realty, Inc., 549 So. 2d 715 (Fla. 1st DCA 1989).
Petitioner met his burden of proving that he was a small business party in 1993 when Respondent issued the subject Administrative Complaint by providing a copy of his 1993 federal income tax return. This return clearly indicates Petitioner earned a substantial portion of his 1993 as a sole proprietor of a professional practice. There is no persuasive evidence to the contrary.
Probable cause exist "if reasonable prudent persons in the conduct of their affairs would think that a violation had taken place." Kasha v. Department of Legal Affairs, 375 So. 2d 43, (Fla. 3d DCA 1979).
In this case, the Probable Cause Panel had evidence before it which would constitute prima facie proof of a statutory violation if credited at the final hearing.
It was reasonable for the panel to conclude that there was a violation in the instant case, as can be clearly seen from a review of the investigative reports, medical records, and expert opinions that were presented to the panel for their review.
As noted by the First District Court of Appeals in Department of Professional Regulation, Division of Real Estate v. Toledo Realty, Inc., 549 So. 2d 715, (Fla. 1st DCA 1989) "Section 455.225, Florida Statutes, suggests that .
. . an investigative report may be the most substantial and relevant evidence necessary to assist the panel in rendering a decision of whether probable cause exists for the issuance of a formal complaint against licensee." Toledo Realty,
549 So. 2d at 719.
At the time this action was initiated, there was reasonable basis in law and fact for the agency's actions, and the proceedings were substantially justified.
