STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA HOME FINDERS REALTY, INC., )

)

Petitioner, )

)

vs. ) Case No. 97-4708F

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, a final hearing was conducted in this case on June 15, 1998, at Tallahassee, Florida, before Judge Michael M. Parrish, an Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Benjamin Schiff, Esquire

490 Southwest 101st Terrace Plantation, Florida 33324

For Respondent: Steven D. Fieldman, Esquire

Department of Business and Professional Regulation

Division of Real Estate Post Office Box 1900

Orlando, Florida 32802-1900 STATEMENT OF THE ISSUES

This is a proceeding pursuant to Section 57.111, Florida Statutes, in which the Petitioner, Florida Home Finders Realty, Inc. ("Realty, Inc."), seeks an award of costs and attorney's fees incurred in its successful defense of an administrative

disciplinary proceeding. The disputed issues in this case are whether the case is moot, whether the person acting on behalf of the Petitioner is authorized to do so, and whether circumstances exist that would make an award of costs and attorney's fees unjust.

PRELIMINARY STATEMENT

The Petition that initiated this case was filed with the Division of Administrative Hearings on October 13, 1997, and served by mail that same day on the Respondent. The Petition was filed by the same attorneys who had defended Realty, Inc., in the underlying administrative disciplinary proceeding. On

November 7, 1997, the attorneys who filed the Petition in this case withdrew from further representation of Realty, Inc., in this case, and Benjamin Schiff, Esquire, was substituted as counsel for Realty, Inc.

At the time the Petition was filed in this case, Rule 60Q- 2.035(4) and (5), Florida Administrative Code, read as follows:

(4) The state agency shall either admit to the reasonableness of the fees and costs claimed or file a counter affidavit along with its response. The counter affidavit shall specify each item of cost and fee in dispute.

(5)(a) A state agency against which a petition for costs and fees has been filed shall file a response within twenty (20) days of filing of the petition, which shall state whether the state agency seeks an evidentiary hearing and shall specify whether the state agency asserts:

1. That costs and attorney's fees claimed in the affidavit are unreasonable;

2. That the petitioner is not a prevailing

   small business party;

3. That the agency's actions were substantially justified;

4. That circumstances exist which would make the award unjust; or

5. That the agency was a nominal party only.

(b) When a state agency relies upon any of the grounds listed in (a), it shall state the facts supporting its position with particularity.

The Respondent did not file a timely response to the Petition. On December 3, 1997, an Order to Show Cause was issued, which included the following:

1. That by no later than December 22, 1997, each party shall file a written statement showing cause, if there is any, as to why the Respondent should not be deemed to have waived all defenses to the petition and as to why this case should not be resolved on the basis of the petition and its attachments without an evidentiary hearing.

2. That in the absence of a timely and sufficient response to this order, the Respondent will be deemed to have waived all defenses to the petition and this case will be resolved without an evidentiary hearing.

On December 8, 1997, the Respondent filed a response to the Order to Show Cause. In its response, the Respondent explained that it had not filed a timely response to the Petitioner because it thought the Petition was moot. The response also raised the following issues:

1. Schiff has no authorization from Realty to request the payment of attorney's fees.

2. If the Petition for Attorney's Fees is not found to be moot, DBPR requests an evidentiary hearing and asserts that circumstances exist that would make the award of attorney's fees unjust in that Realty has never incurred any attorney's fee in this matter.

   On December 12, 1997, an Order Requiring Response was issued, which required Realty, Inc., to file a reply to the Respondent's response of December 8, 1997. That order required

   Realty, Inc., to set forth with specificity its position with regard to the following matters:

   1. Whether this proceeding is or is not moot.

   2. Whether either Benjamin Schiff, Esquire, or the law firm of Akerman, Senterfitt & Eidson is authorized to request the payment of attorney's fees on behalf of Florida Home Finders Realty, Inc.

   3. Whether Florida Home Finders Realty, Inc., ever incurred any attorney's fees in the underlying matter which forms the basis for the claim in this case.

On December 31, 1997, Realty, Inc., filed a timely nine-page reply with numerous attachments. The essence of the reply was that this proceeding was not moot; that Benjamin Schiff and the law firm of Akerman, Senterfitt & Eidson were authorized to request the payment of attorney's fees on behalf of Realty, Inc.; and that Realty, Inc., had incurred attorney's fees in the underlying matter which forms the basis for the claim in this case.

The case was thereafter scheduled for final hearing and, following a continuance, the hearing was held on June 15, 1998. At the final hearing, the Petitioner presented the testimony of three witnesses and offered three exhibits, all of which were received in evidence. The Respondent did not call any witnesses, but did offer twelve exhibits, of which ten were received.1

At the conclusion of the hearing the parties requested, and were granted, 15 days from the filing of the transcript within which to file their proposed final orders. The transcript was

filed with the Division of Administrative Hearings on July 14, 1998. Thereafter, both parties filed proposed final orders containing proposed findings of fact and conclusions of law.2

The proposals of the parties have been carefully considered during the preparation of this Final Order.

FINDINGS OF FACT3

1. Realty, Inc., the Petitioner in this proceeding, was one of numerous Respondents in a multi-count Administrative Complaint filed by the Florida Department of Business and Professional Regulation in September of 1995. Two of the other Respondents named in the same Administrative Complaint were Ian R. Law and Benjamin Schiff. Most, if not all, of the other Respondents in that multi-count Administrative Complaint resolved the charges against them without resort to proceedings before the Division of Administrative Hearings.

2. Ian R. Law and Benjamin Schiff both disputed the charges in the Administrative Complaint and requested an evidentiary hearing before the Division of Administrative Hearings. Ian R. Law and Benjamin Schiff retained the services of the law firm of Akerman, Senterfitt & Eidson, P.A., to represent them in their defense against the charges in the Administrative Complaint. Messrs. Law and Schiff were represented by Mark Herron, Esquire, and Chris Haughee, Esquire, of the previously mentioned law firm.

3. Simultaneous with the filing of the Administrative Complaint described above, the Florida Department of Business and Professional Regulation issued an emergency suspension order.

   The effect of the emergency suspension order was to suspend the real estate broker licenses of Messrs. Law and Schiff and to

   suspend the corporate real estate broker registration of Realty, Inc.

4. Immediately following the filing of the Administrative Complaint and the emergency suspension order, the Florida Department of Business and Professional Regulation filed a petition in circuit court seeking to place Realty, Inc., and a related corporation into receivership. The petition was granted, and Realty, Inc., and the related corporation were placed in receivership. Receivers were appointed to operate Realty, Inc., and the related corporation, and to take possession of the assets of Realty, Inc., and the related corporation. As of the date of the final hearing in this case, the receivership was still in effect, although the assets of Realty, Inc., and the assets of the related corporation had been sold.

5. The receivers were able to conduct the business affairs of both Realty, Inc., and the related corporation without either corporation being registered as a real estate broker. Accordingly, it was of no importance to the receivers that Realty, Inc.'s, real estate broker registration had been suspended by emergency order or that such registration might be revoked as a result of the Administrative Complaint.4 Therefore, the receivers took no action to challenge the emergency suspension order or to defend Realty, Inc., against the charges in the Administrative Complaint. Specifically, the receivers did not file any response to the Administrative Complaint and did not

   request an evidentiary hearing on the charges against Realty, Inc.

6. In June of 1996, counsel for the Florida Department of Business and Professional Regulation filed a motion with the Florida Real Estate Commission seeking entry of a final order against Realty, Inc., on the charges in the Administrative Complaint. Grounds for the motion were that there were no disputed issues of material fact, because Realty, Inc., had failed to respond to the service of the Administrative Complaint and had failed to request a hearing on the charges in the Administrative Complaint. The receivers of Realty, Inc., did not oppose the motion, because they were not concerned about the disposition of the charges in the Administrative Complaint.

7. The Department's motion was, however, opposed by Ian Law and Benjamin Schiff. Messrs. Law and Schiff, through their legal counsel, Mark Herron, Esquire, filed a response in which they argued that the motion should be denied on the grounds that a final order revoking the registration of Realty, Inc., would have an adverse impact on the substantial interests of Messrs. Law and Schiff. In this regard they directed attention to Section 475.31(1), Florida Statutes, which reads as follows:

   An order revoking or suspending the license of a broker shall automatically cancel the licenses of all sales persons registered with the broker, and, if a partnership or corporation, of all members, officers, and directors thereof, while the license of the broker is inoperative or until new employment or connection is secured.

   Based on the above-quoted statutory provision, Messrs. Law and Schiff argued that, in order to protect their own interests, they were entitled to litigate the issue of whether Realty, Inc., was guilty of the violations alleged in the Administrative Complaint. Messrs. Law and Schiff also argued that it would be a violation of their personal due process rights if they were deprived of an evidentiary hearing on the issue of whether Realty, Inc., was guilty of the violations charged in the Administrative Complaint. By order dated June 18, 1996, the Florida Real Estate Commission denied the relief requested in the Department's motion and directed that the charges against Realty, Inc., be referred to the Division of Administrative Hearings for an evidentiary hearing.5

8. Since the issuance of the order placing Realty, Inc., in receivership (the order was issued October 6, 1995, nunc pro tunc to September 28, 1995), Messrs. Law and Schiff have not had any authority to take any action on behalf of Realty, Inc. That authority has been, and continues to be, vested solely in the receivers appointed to manage the affairs of Realty, Inc., and in the circuit judge who entered the receivership order. Neither the circuit judge nor the receivers ever retained legal counsel to represent Realty, Inc., in the underlying administrative proceedings from which this case arises. Neither the circuit judge nor the receivers ever authorized anyone else to retain legal counsel to represent Realty, Inc., in the underlying

   administrative proceedings from which this case arises. Specifically, neither the circuit judge nor the receivers ever retained or authorized anyone else to retain the law firm of Akerman, Senterfitt & Eidson, P.A., to represent Realty, Inc., in the underlying administrative proceedings.

9. Similarly, neither the circuit judge nor the receivers have authorized either the law firm of Akerman, Senterfitt &

   Eidson, P.A., or Benjamin Schiff, Esquire, to file the instant proceeding on behalf of Realty, Inc.

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Section 57.111, Florida Statutes, and Chapter 120, Florida Statutes.

11. In the normal course of events, the only issues in a case of this nature are those raised in the Respondent's response to the petition seeking attorney's fees and costs. Issues not raised are waived.

12. The Respondent's response in this case raised only the following three issues: (1) whether the proceeding is moot;

    (2) whether Mr. Schiff is authorized to file or maintain this proceeding on behalf of Realty, Inc., and (3) whether circumstances exist that would make an award of attorney's fees and costs unjust. The specific circumstances asserted in the Respondent's response were that Realty, Inc., never incurred any attorney's fees related to the underlying administrative proceeding.

13. As the applicant, the burden rests on the Petitioner to demonstrate, by a preponderance of the evidence, entitlement to the requested award. See Department of Transportation v. J.W.C., Co., 396 So. 2d 778 (Fla. 1st DCA 1981); Balino v. Department of Health and Rehabilitative Services, 348 So. 2d 349 (Fla. 1st DCA

    1977).

14. Pertinent to this case, the "Florida Equal Access to Justice Act," Section 57.111, Florida Statutes, provides:

    (4)(a) 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.

15. On the facts presented in this case, the relief sought by the Petitioner must be denied for all three of the reasons raised in the Respondent's response to the Petition. The first two issues are intertwined. It is clear from the facts in this case that no one authorized to act on behalf of Realty, Inc., has authorized the filing of the Petition in this case. Accordingly, inasmuch as no one authorized to act on behalf of Realty, Inc., has filed a petition seeking attorney's fees and costs pursuant to Section 57.111, Florida Statutes, this proceeding is moot.

16. Even if this proceeding had been filed by someone authorized to do so, it should be dismissed, because "special circumstances exist which would make the award unjust." Those special circumstances are that the facts in this case are insufficient to show that Realty, Inc., ever incurred any attorney's fees. Specifically, there is no showing that anyone authorized to act on behalf of Realty, Inc., ever retained legal counsel to represent Realty, Inc., in the underlying administrative proceeding, or ever authorized anyone else to do

so. To the contrary, the facts show that the receivers authorized to act on behalf of Realty, Inc., were indifferent to the outcome of the underlying administrative proceedings against Realty, Inc.

CONCLUSION

Based on all of the foregoing, it is ORDERED:

That the Petition in this case is hereby dismissed and all relief requested in the Petition is hereby denied.

DONE AND ORDERED this 23rd day of September, 1998, in Tallahassee, Leon County, Florida.

MICHAEL M. PARRISH

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 23rd day of September, 1998.

ENDNOTES

1/ Respondent's Exhibit 4 was withdrawn. An objection to Respondent's Exhibit 7 was sustained. The remaining exhibits offered by the Respondent were received in evidence.

2/ The Respondent filed a timely proposal on July 29, 1998. Due to miscommunication about when the transcript was filed, the Petitioner requested, and was granted, until August 12, 1998, to file its proposal.

3/ The findings of fact in this Final Order omit many of the findings of fact proposed by the parties. The findings of fact in this Final Order contain many findings not proposed by either

party. This is because both parties addressed a great deal of attention in their proposals to matters that are not at issue in this case. The findings of fact and conclusions of law in this Final Order are limited to matters relevant to the three issues raised by the Respondent.

4/ From the point of view of the receivers, the Petitioner's registration as a brokerage corporation had no value, because the receivers could conduct the business affairs of the Petitioner without a license. Further, inasmuch as such a registration cannot be transferred to a buyer, it was not an asset that was valuable to the Petitioner once the Petitioner was placed in receivership.

5/ At the Division of Administrative Hearings, the charges against Realty, Inc., were ultimately consolidated with the charges against Messrs. Law and Schiff and a single final hearing was conducted on the charges against all three Respondents.

COPIES FURNISHED:

Benjamin Schiff, Esquire

490 Southwest 101st Terrace Plantation, Florida 33324

Steven D. Fieldman, Esquire Department of Business and

Professional Regulation Division of Real Estate Post Office Box 1900

Orlando, Florida 32802-1900

Lynda L. Goodgame, General Counsel Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

Bradly Roger Bettin, Sr., Esquire Amari, Theriac & Eisenmenger

Post Office Box 1807 Cocoa, Florida 32923-1807

Henry M. Solares, Director Division of Real Estate Department of Business and

Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900

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.

Docket for Case No: 97-004708F

Orders for Case No: 97-004708F