STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MUSCLE THERAPY CLINIC, )

)

Petitioner, )

)

vs. ) Case No. 99-2694F

)

DEPARTMENT OF HEALTH, )

BOARD OF MASSAGE, )

)

Respondent. )

)

FINAL ORDER

In accordance with due notice this cause came on for formal proceeding before P. Michael Ruff, duly-designated Administrative Law Judge of the Division of Administrative Hearings. The hearing in this matter was held on September 6, 2000, in Tallahassee, Florida. The appearances were as follows:

APPEARANCES

For Petitioner: E. Renee Alsobrook, Esquire

Laura P. Gaffney, Esquire Post Office Box 37094

Tallahassee, Florida 32315-7094

For Respondent: R. Lynn Lovejoy, Esquire

Agency for Health Care Administration Post Office Box 14229, Mail Stop 39 Tallahassee, Florida 32317-4229

STATEMENT OF THE ISSUE

The issue to be resolved in this proceeding concerns whether the Petitioner is entitled to an award of attorney's fees

pursuant to Section 57.111, Florida Statutes, and, if that be the case what amount of attorney's fees as well as costs is appropriate.

PRELIMINARY STATEMENT

This cause arose on December 3, 1997, when an Administrative Complaint in the underlying case was filed against Muscle Therapy Clinic alleging two counts: Count I charged violation of Section 480.043(7), Florida Statutes, which states that no license for operation of a massage establishment may be transferred from one person, corporation, name or location to another and Count II, which alleged a violation of Section 480.047(1)(c), Florida Statutes, which renders it unlawful for any person to permit an employed person to practice massage unless duly licensed.

The complaint arose upon a finding of probable cause by the Respondent's probable cause panel, based upon an investigation by an investigator of the Agency for Health Care Administration.

The matter arose when an agency inspector made a routine inspection of the Muscle Therapy Clinic establishment. His inspection revealed that Donna Anderson-Twitchell was the establishment owner and that Roger Twitchell, her son, was employed there. It was then discovered that Roger Twitchell's license had expired and that he was the only employee.

Ms. Anderson-Twitchell related that she no longer held the license for the Muscle Therapy Clinic and that her step-son was the new owner.

During the pre-trial phase of the case, while discovery was on-going, settlement discussions were had between the parties.

The Agency thereupon relied upon the representation of the Respondent's attorney that there would not be an action for attorney's fees if the Petitioner, the Department of Health, were to dismiss the case. In fact, the Petitioner agency took the case back to the probable cause panel to obtain closure and it was closed by closing order entered May 21, 1999, and filed with the Department of Health Clerk's office on September 15, 1999.

The Petitioner Department of Health requested the Division of Administrative Hearings to relinquish jurisdiction in the matter since the case was to be closed on April 14, 1999. By order of April 19, 1999, the Division dismissed and closed the case before it.

The Petitioner herein filed an action for attorney's fees on June 17, 1999. The Respondent Agency contested the allegations and after a number of procedural delays agreed-to by the parties the final hearing was held on September 6, 2000.

The Respondent had filed a counter-petition for attorney's fees and costs on July of 1999. The Respondent has elected to withdraw that counter-petition for fees and costs, as represented

in its Proposed Recommended Order. Earlier in the pre-hearing phase of the case the Respondent had filed a motion to strike the petition for attorney's fees and costs for alleged lack of timeliness and lack of jurisdiction. An Order to Show Cause was thereupon issued and each party filed a response. On March 22, 2000, an Order was issued which denied the motion to strike finding that the petition for attorney's fees and costs was timely and that DOAH had jurisdiction. Additionally, the Respondent's ore tenus motion to dismiss for lack of jurisdiction

was denied for the reasons delineated on pages 6 through 8 of the Transcript. The Petitioner's Motion for Summary Final Order was denied because the Respondent's late-filed admissions were deemed to be in substantial compliance with the relevant requirements of the Florida Rules of Civil Procedure.

The cause came on for hearing as noticed at which the Petitioner presented her own testimony and called witnesses Jon Pellett and Roger Twitchell. The Petitioner's introduced five exhibits into evidence. The Respondent called five witnesses: Edward W. Vollerston; Susan Bodell; E. Renee Alsobrook, as an adverse witness; Gloria Rosello; and Jim Spalla. The Petitioner introduced seven exhibits into evidence. The Petitioner's Exhibits one through five were admitted into evidence and attached to the Petitioner's Proposed Final Order is her Final Affidavit of Fees and Costs in compliance with Section 57.111,

Florida Statutes (1997). The Respondent's seven exhibits were admitted into evidence and official recognition was taken of Chapters 120 and 480, Florida Statutes, Section 57.111, Florida Statutes (1997), as well as DOAH Case No. 98-1206.

Upon conclusion of the proceeding the parties requested the opportunity to submit Proposed Final Orders. A deadline was set for those to be filed for ten days after the filing of the transcript herein with the Division. The parties later, however, agreed to an extension of the proposed filing date so that Proposed Final Orders were timely filed on October 31, 2000. The two-volume Transcript was filed on October 5, 2000. Those Proposed Final Orders have been considered in the rendition of this final order.

FINDINGS OF FACT

1. The Petitioner was charged by the Administrative Complaint in the underlying case with violating the Florida Statutes referenced below by transferring its business license without informing the Board and for employing a massage therapist who was unlicensed. These charges arose because of an inspection made by an Agency investigator Edward W. Vollerston, in March of 1997. Mr. Vollerston discovered that the license for the establishment had been renewed but the only therapist working at the establishment was Roger Twitchell, the Petitioner's son.

   Mr. Twitchell was discovered to have had an expired personal license.

2. Roger Twitchell admitted working as a massage therapist at the establishment and that he was currently taking appointments. He admitted to the investigator that he was the only licensee working on the premises. The Petitioner's owner, Donna Anderson-Twitchell admitted that she left the establishment and allowed Roger Twitchell to see patients at the Muscle Therapy Clinic. Roger Twitchell was the only massage therapist practicing on the premises known as the Muscle Therapy Clinic.

3. Mr. Vollerston believed as a result of his investigation that the owner was Donna Anderson-Twitchell and that Roger Twitchell did not own the establishment. The establishment license appears to have been renewed without any indication of a change in ownership. The microfilm copy of the check and the renewal slip showed no indication of changes of ownership on either document, although the check for the renewal was written by Roger Twitchell. It is impossible to determine whether he wrote the check as a new owner or whether he wrote the check on behalf of Donna Anderson-Twitchell as the owner.

4. The fact that the establishment license was renewed showed an intention to Mr. Vollerston that the establishment was to be continued under the name of Donna Anderson-Twitchell and raised no question in his mind as to a change of ownership.

   There is no indication that Ms. Anderson-Twitchell let her license lapse. Indeed the licensure computer screen maintained by the Department during the investigation indicated that Donna Anderson-Twitchell was still the owner of the establishment.

   Even after the investigation began there was no indication that an establishment license in the name of Roger Twitchell as owner had been applied for. Later Donna Anderson-Twitchell stated that she no longer owned the establishment and that Roger Twitchell her son owned it.

5. In any event, the documentation available to him led the investigator to believe that Ms. Anderson-Twitchell was still the owner of the Muscle Therapy Clinic. He believed that Roger Twitchell was working there as an unlicensed therapist and was the only therapist working there.

6. The case was later transferred from the investigation office to the legal department. Susan Bodell, Esquire, reviewed the case and observed that there had been a closing order drafted by Laura Gaffney, Esquire, her predecessor, to be presented to the probable cause panel. Ms. Bodell differed with that position, however, and believed a violation had occurred and therefore caused an administrative complaint to be drafted.

   Ms. Bodell found, based partly on the investigative file, that it appeared that ownership had been transferred to another person without the Board of Massage being notified in purported

   violation of Section 480.043(7), Florida Statutes, as well as that the establishment appeared to be employing a person as a massage therapist who had no active license, in purported violation of Section 480.047(1)(c), Florida Statutes.

7. Ms. Bodell took that case and facts as she knew them to the probable cause panel and explained the situation. The probable cause panel agreed with her and adopted the proposed administrative complaint rather than the previously prepared closing order prepared by Ms. Gaffney. The probable cause panel chairman signed a memorandum which indicated that probable cause had been found for both counts in the Administrative Complaint.

8. After the finding of probable cause an Administrative Complaint was served on the Muscle Therapy Clinic. During the process of the that litigation, counsel for the Agency offered to settle the case. Ms. Alsobrook, the Petitioner's counsel wrote a letter dated September 4, 1998, offering to waive any claim to attorney's fees and costs if the case was dismissed by the Board of Massage Therapy and from the Division of Administrative Hearings. The Agency indeed closed the case as a result of those settlement discussions. The Petitioner now claims that because the final order of dismissal was not obtained within a two-week period, that there was no agreement to waive attorney's fees and therefore the Petitioner is now able to claim attorney's fees and costs in this proceeding.

9. Be that as it may, after the case against Muscle Therapy Clinic, the underlying case was dismissed, the Petitioner filed the subject attorney's fee petition. Mr. Jim Spalla, the Respondent's expert on attorney's fees is qualified to testify to attorney's fees matters. He opines that Ms. Alsobrook's hourly rate of $150 an hour is reasonable. He assumed that she charged that rate per hour and not something lower because he had no retainer agreement to evaluate. He did opine that her fees were excessive in billing for research to litigate a motion filed by the Respondent in September of 1999. The Petitioner's counsel almost billed more for that motion in the month of September 1999, than she did for the total underlying case. The Petitioner's counsel did not allow Mr. Spalla to review her file to see if it corresponded to her billing and thus he used the Agency's file to determine what pleadings had been filed in the case.

10. The Petitioner's attorney's fee expert, Jon Pellett, Esquire, testified that the fees were reasonable although he did not review the entire file either. He based his opinion on selected pleadings sent to him by Ms. Alsobrook. He saw no retainer agreement concerning the $150 per hour rate. He saw no copies of cancelled checks. Ms. Anderson-Twitchell was under a subpoena to bring all documentation concerning the case but did

    not bring any cancelled checks or bank statements showing payment to the hearing.

11. It is found based upon the testimony of both attorney's fee experts that the hourly rate is a reasonable one. The undersigned, however, cannot understand how the total figure for fees and costs in excess of $20,000 can be reasonable given the very simple nature of the issues presented in the underlying disciplinary case and in this attorney's fee petition case (assuming that attorney's fees may be claimed for the attorney services and costs involved in litigating the attorney's fees claim). The rather summary nature of the documentary support for the attorney's fees and costs claimed and the testimony of

    Mr. Spalla, do not provide the undersigned with a sufficient understanding of a reasonable basis for the fees and costs claimed in such simple litigation engenders substantial doubt as to the reasonableness thereof. In any event, because of the result concluded below as to the issue of "substantial justification" the resolution of the question of the reasonableness of attorney's fees and costs need not be reached.

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction of the subject matter hereof and the parties hereto. Section 120.57(1) and Section 57.111, Florida Statutes.

13. Section 57.111(3)(d), Florida Statutes, requires that the Petitioner must prove that it is a small business party as defined under that subsection. Ms. Anderson-Twitchell testified that she had no employees in 1997 and 1998, and a net worth of less than $2 million dollars. There is no basis to refute that in the record of this case and it is determined that Muscle Therapy Clinic is a "small business party" within the purview of the above-cited statute.

14. If then the Petitioner is a small business party and is a quote "prevailing party" for purposes of Section 57.111, Florida Statutes, because the case was settled and dismissed prior to hearing, then the burden of proof shifts to the Agency to come forward and show that its underlying case prosecution was "substantially justified," meaning that it had a reasonable basis in law and fact. More specifically, the investigation, at the time of Mr. Vollerston's inspection and later during the course of the agency's investigation must show that there were facts revealed that reasonably indicated a violation of the practice act had occurred. See Section 455.621(1), Florida Statutes. The Agency records show that Muscle Therapy Clinic was licensed under the ownership of Donna Anderson-Twitchell. Further investigation revealed that the Board of Massage Therapy had not received any notice of a change in ownership in that establishment. There had not been any correction concerning a change of ownership on the

    renewal notice. The only conversation the investigator had with Ms. Anderson-Twitchell was one where she asked him for documentation concerning the renewal process. Roger Twitchell admitted that he was the only massage therapist practicing on the premises and his posted license thereon showed that the license had actually expired.

15. The investigator and Ms. Bodell, the attorney, determined that facts had been ascertained which indicated that violations had occurred. Once that legal opinion had been determined the Department is required to submit the investigative results to the probable cause panel. That was done and discussion was held at the probable cause meeting concerning why there were violations of the massage practice act. The panel ultimately found probable cause for both violations alleged in the Administrative Complaint.

16. The preponderant credible testimony and evidence adduced in this proceeding shows that the underlying prosecution was substantially justified. The pivotal facts are not that the Agency ultimately decided not to go to trial and dismissed its case. Rather, what is important is what the Agency and its investigative and legal personnel believed at the time facts were being derived from the investigation and the administrative complaint, embodying the cause of the action, was being formulated. The preponderant evidence shows that the Agency had

a good faith, reasonable belief that the two violations had occurred at the time the investigation was proceeding and was concluded in the administrative complaint drafted and presented to the probable cause panel. There being shown to be a reasonable basis in law and fact for the Agency's position in the underlying case up through the discovery process after the filing of the administrative complaint and until the litigation was voluntarily settled, it must be determined that at those critical times the Agency's action was substantially justified.

Accordingly, there is no attorney's fees and costs liability to be ascribed to the agency, therefore, the reasonableness of the attorney's fees and costs claimed need not be further addressed.

ORDER

Accordingly, it is, therefore,

ORDERED that the petition requesting the award of attorney's fees and costs filed herein be and the same is hereby dismissed.

DONE AND ORDERED this 9th day of January, 2001, in

Tallahassee, Leon County, Florida.

P. MICHAEL RUFF 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 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 9th day of January, 2001.

COPIES FURNISHED:

E. Renee Alsobrook, Esquire Laura P. Gaffney, Esquire Post Office Box 37094

Tallahassee, Florida 32315-7094

R. Lynn Lovejoy, Esquire

Agency for Health Care Administration Post Office Box 14229, Mail Stop 39 Tallahassee, Florida 32317-4229

William H. Buckhalt, Executive Director Department of Health

4052 Bald Cypress Way Tallahassee, Florida 32399-1701

William W. Large, General Counsel Department of Health

4052 Bald Cypress Way, Bin A02 Tallahassee, Florida 32399-1701

Dr. Robert G. Brooks, Secretary Department of Health

4052 Bald Cypress Way, Bin A00 Tallahassee, Florida 32399-1701

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 coy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or in 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: 99-002694F

Orders for Case No: 99-002694F