STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JAMES HASSELBACK, )

)

Petitioner, )

)

vs. ) Case No. 07-5216

) DEPARTMENT OF ENVIRONMENTAL ) PROTECTION AND DANIEL G. AND ) DORIS WENTZ, )

)

Respondents. )

)

FINAL ORDER

This Order concerns Petitioner's Motion for Attorney's Fees, Costs and Expenses Pursuant to Sections 120.595(1) and 120.569(2)(e), Florida Statutes, filed on November 30, 2009; Motion for Attorney's Fees Pursuant to Section 57.105, Florida Statutes, filed on December 22, 2009; and Motion to Tax Costs pursuant to Florida Rule of Appellate Procedure 9.400(a) filed with the Department of Environmental Protection (Department) on March 30, 2011. The motions are directed against the Department and relate to an agency decision dismissing Petitioner's challenge to the issuance of a coastal construction control line permit on the ground it was untimely. See Hasselback v. Dep't of Envtl. Prot., Case No. 07-5216, 2010 Fla. ENV LEXIS 22 (Fla. DOAH Jan. 28, 2010), adopted, 2010 Fla. ENV LEXIS 21 (Fla. DEP

Mar. 12, 2010). This decision was later reversed. See Hasselback v. Dep't of Envtl. Prot., 54 So. 3d 637 (Fla. 1st DCA 2011). Jurisdiction to consider the first two motions was retained by the undersigned in the event Petitioner prevailed in this action. After a Mandate was issued by the Court, on May 2, 2011, the Department referred the three motions to the Division of Administrative Hearings (DOAH) for disposition.

Petitioner has the burden to prove his entitlement to an award of fees, costs, and sanctions under each statute and rule. See, e.g., Friends of Nassau Cnty., Inc. v. Nassau Cnty., 752 So. 2d 42, 52 (Fla. 1st DCA 2000)(Padovano, J., dissenting).

The parties have agreed that the record in the underlying case, consisting of the transcript and exhibits in the final hearing

conducted on November 4 and 5, 2009, and the other pleadings and papers filed in this cause, is sufficient to resolve the pending motions. The record was returned to DOAH on June 3, 2011.

Although requested by one party, oral argument is unnecessary.

The Wentzes (applicants) own two adjoining beachfront parcels (A and B) at Cape San Blas, Gulf County, Florida. Petitioner owns one of five townhouse units which are located landward of, and adjacent to, the applicants' property. The history of the long-running dispute between these property owners that began in 2000 is detailed in the Recommended Order entered on January 28, 2010. The agency action which triggered this phase of the dispute is the Department's notice of intent to issue Permit GU-409 on September 8, 2004, which authorized the applicants to construct a single-family residence on Parcel

1. Personal written notice of this action was served on two of the five townhouse owners, but not Petitioner. One of the owners who received notice requested, and was granted, eight extensions of time in which to file a petition. The last extension expired on February 14, 2006, but no petition was ever timely filed by either of the two owners.

   
   

   After the notice of intent was issued in September 2004, several events occurred. First, in August 2005, the applicants filed an inverse condemnation suit against the Department for denying an earlier permit application for Parcel B. Based upon new information and beachfront erosion caused by a storm, in April 2006 the Department changed its position regarding the decision to grant a permit for Parcel A and determined that Permit GU-409 should be revoked. Besides contesting the proposed revocation, the applicants filed a rule challenge against the Department. The revocation action was later dismissed by DOAH and referred back to the Department on the ground the proposed agency action lacked a rule or statutory basis to support revocation of the permit. See DOAH Case No.

   06-2381. In July 2007, the Department and applicants executed a Settlement Agreement and Release, which required the applicants to dismiss all pending court and administrative actions and to record a conservation easement as to Parcel B. In return for these considerations, on August 17, 2007, the Department issued a Notice to Proceed (NTP) with construction on Parcel A. After construction commenced, on October 26, 2007, Petitioner filed his Petition with the Department challenging the September 2004 agency decision to issue Permit GU-409. He asserted that he had no actual or constructive notice of that decision until around October 23, 2007, when he was contacted by another townhouse owner. At the commencement of the final hearing, the applicants

   stipulated that the proposed structure would not qualify for a permit under section 161.053(6), Florida Statutes. Tr. at 10. Thus, the only issue decided at hearing was whether the Petition filed by Mr. Hasselback was timely. The appellate court later concluded that it was.

   
   

   1. Fees and Costs Under Section 120.595(1)

      
      

      Attorney's fees are not recoverable against an agency under section 120.595(1) when the agency is the initiator of the action. See, e.g., Palacios v. Dep't of Bus. & Prof'l Serv., Case Nos. 99-4163F and 99-4164F, 2000 Fla. Div. Adm. Hear. LEXIS 5101 at *21-22 (Fla. DOAH Nov. 20, 2000). This is because by definition the agency cannot be a nonprevailing adverse party since it is proposing to take action, and not trying to change the proposed action. See § 120.595(1)(e)3., Fla. Stat. Here, the Department is defending its proposed agency action to issue a permit. Therefore, relief under this statute is unavailable. Even if it were, the facts establish that the Department did not participate in this proceeding "primarily" to harass Petitioner, cause him unnecessary delay, increase his cost of litigation, or for a frivolous purpose. See § 120.595(1)(e)1., Fla. Stat.

      
      

   2. Sanctions Under Section 120.569(2)(e)

      
      

      An essential element of a claim for sanctions under this statute is that a specific pleading, motion, or other paper has been interposed for an improper purpose, "such as to harass or to cause unnecessary delay, or for frivolous purpose or needless increase in the cost of litigation." § 120.569(2)(e), Fla.

      Stat.; French v. Dep't of Children & Families, 920 So. 2d 671, 676-77 (Fla. 5th DCA 2006). The Department contends that the motion fails to identify a specific paper or pleading and should be denied on this ground alone. While not spelled out with clarity, this requirement is minimally satisfied since the motion makes reference to the NTP issued on August 17, 2007, after the Department and the applicants executed a settlement agreement, and the Prehearing Stipulation filed on November 2, 2009, in which the Department asserted (as its only defense) that the Petition was untimely filed. Petitioner contends that he is entitled to sanctions because even after the Department concluded that the application did not satisfy permit rule and statutory criteria, and learned that it had no credible evidence that the Petition was untimely filed, it continued to support the application by first issuing a NTP, and later executing the stipulation, which resulted in him having to unfairly expend resources to contest the permit.

      To determine whether these two papers were filed for an improper purpose, it is necessary to determine whether the filings were reasonable under the circumstances. Mercedes Lighting & Elec. Supply Co. v. Dep't of Gen. Serv., 560 So. 2d 272, 276 (Fla. 1st DCA 1990). The determination must be based on an objective evaluation of the circumstances existing at the time the two papers were filed. Friends of Nassau Cnty., 752 So. 2d at 57. In other words, did the Department make a reasonable inquiry of the facts and law prior to signing and filing the NTP and pre-hearing stipulation. Id. at 52.

      Finally, if an obvious offending paper is filed, as Petitioner argues is the case here, a party is obligated to promptly take action to mitigate the amount of resources expended in defending against the offending paper. Mercedes, 560 So. 2d at 276-77.

      
      

      The motion contends that through extensive discovery conducted by the parties prior to hearing, "the Department was aware long before this case went to hearing that it was in possession of no credible evidence which would support the proposition that Hasselback did not possess standing." Motion,

      ¶7. Assuming arguendo that this is true, as a participant in the discovery process, Petitioner should have been aware of this evidentiary shortcoming, and the delay in seeking sanctions on this issue until after the hearing militates, in and of itself, against granting the request.

      
      

      Similarly, Petitioner asserts that the Department "was aware for several years that this application [for Permit GU- 409] did not justify approval," that it issued the NTP only for the purpose of avoiding liability in the inverse condemnation suit, but it could have changed its mind at any time prior to hearing. Motion, ¶¶ 4, 5, and 9. In his initial pleading filed with the Department in October 2007, Petitioner described at length the history of the parties' long-running dispute, including the Department's denial of the application for a permit on Parcel B, which he alleged made clear that the applicants could not satisfy the permit criteria on either parcel. See DOAH Case No. 02-3252. The pleading went on to describe in detail the reasons why the Department had no factual or legal basis to issue Permit GU-409 or the NTP. From the very beginning, then, Petitioner believed that the NTP was filed for an improper purpose. With this clear understanding of the permit issue, and minimal discovery, Petitioner should have been able to file a request for sanctions on that issue early in the process. By not filing his request until after the hearing was concluded, and the issue was already stipulated away by the applicants, Petitioner failed to timely take action to mitigate

      the amount of resources expended in litigating the permit criteria.

      
      

      Even if there were no delay in filing his request, Petitioner has failed to prove entitlement to relief. The issuance of the NTP in 2007 was the result of a negotiated settlement between the applicants and Department; it allowed the Department to avoid potential liability in an inverse condemnation case on Parcel B; it required the dismissal of all pending civil and administrative actions filed against the Department; and it required the applicants to record a conservation easement on Parcel B, ostensibly for the purpose of allowing the applicants to meet the requirements of

      section 161.053(6). The totality of the circumstances supports a conclusion that the Department's decision to enter into the agreement and issue the NTP was a reasonable one made after an inquiry of the facts and law, and it had reasonably clear justification to take that course of discretionary action.

      Likewise, when the stipulation was executed on November 2, 2009, the Department was armed with evidence that a reasonable person would rely upon to support its position that Petitioner had notice (through counsel) of the Department's decision in September 2004 to issue Permit GU-409. It has not been established that either paper was objectively meritless or interposed in this matter for an improper purpose.

      
      

   3. Motion for Fees Pursuant to Section 57.105

      
      

      On November 30, 2009, Petitioner filed with the Department a motion for attorney's fees pursuant to section 57.105.

      Subsection 57.105(5) reads in pertinent part as follows:

      
      

      (5) In administrative proceedings under chapter 120, an administrative law judge shall award a reasonable attorney's fee and damages to be paid to the prevailing party in equal amounts by the losing party and a losing party's attorney or qualified representative in the same manner and upon the same basis as provided in subsections (1)-(4). Such award shall be a final

      order subject to judicial review pursuant to

      s. 120.68. If the losing party is an agency as defined in s. 120.52(1), the award to the prevailing party shall be against and paid by the agency.

      Subsection 57.105(4) requires that a "motion by a party seeking sanctions under this section must be served but may not be filed with or presented to the [tribunal] unless, within 21 days after service of the motion, the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected." The purpose of this requirement is to give the other party "a last clear chance to withdraw a frivolous claim or defense . . . ." Maxwell Bldg. Corp. v. Euro Concepts, LLC, 874 So. 2d 709, 711 (Fla. 4th DCA 2004). To

      comply with this requirement, the moving party normally sends a notice to the other party advising that unless it withdraws or corrects a paper, claim, defense, contention, or allegation by a date certain, the other party risks liability under the statute. Here, after the final hearing, a motion was filed with the Department on November 30, 2009, alleging that Petitioner was entitled to attorney fees on the ground the Department pursued this action simply to avoid liability in the inverse condemnation suit even though it knew there was no valid basis upon which to grant the permit. The motion did not state that unless the Department withdrew or corrected a paper, claim, defense, contention, or allegation by a date certain, Petitioner intended to file a motion for attorney's fees under the statute. Twenty-two days later, or on December 22, 2009, the identical motion was filed with DOAH. While a plausible argument can be made that the motion is deficient in the above respect, the undersigned has assumed that the filing of the motion on November 30, 2009, satisfies the requirement in subsection (4) and confers jurisdiction to consider the motion.

      
      

      The only issue adjudicated at the final hearing concerned the timeliness of Mr. Hasselback's Petition. As a practical matter, once the hearing was concluded, as it was here, the only action the Department could have taken in response to the motion was to file a paper aligning itself with Petitioner on the issue of timeliness and agreeing to submit a post-hearing submission in favor of Petitioner. Whether it could rescind the NTP, which was based on the Settlement Agreement and Release previously executed in July 2007, and undo all of the requirements of that agreement, is problematic at best. In any event, for Petitioner to prevail under the statute, he must establish that the Department knew or should have known that the timeliness defense was not supported by material facts necessary to establish the defense or would not be supported by the application of then- existing law to those material facts. See § 57.105(1), Fla.

      Stat. Evidence on both sides of the issue was presented at final hearing. Although the appellate court ultimately determined that the favorable findings in the Recommended Order

      (and adopted in the Final Order) regarding this defense were not supported by competent, substantial evidence, there was clearly a reasonable basis for the Department to support that position. The motion is denied.

      
      

   4. Motion to Tax Costs

Finally, on March 30, 2011, Petitioner filed with the Department a Motion to Tax Costs under rule 9.400(a). As the prevailing party on appeal, Petitioner seeks recovery of $300.00 incurred as filing fees with the court. Relief under this rule must be granted by the lower tribunal that issued the final order, in this case the Department. However, in its response to the motion, the Department requested that Petitioner provide evidence that he incurred the requested costs. Because this raised a disputed fact, the motion was referred to DOAH. Jurisdiction is returned to the agency for the purpose of allowing Petitioner to promptly submit such evidence to the Department and to resolve the motion. In the unlikely event a factual dispute arises, the matter may be returned to DOAH for appropriate fact-finding.

DONE AND ORDERED this 14th day of June, 2011, in Tallahassee, Leon County, Florida.

S

D. R. ALEXANDER Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 14th day of June, 2011.

COPIES FURNISHED:

Kenneth G. Oertel, Esquire

Oertel, Fernandez, Cole & Bryant, P.A. Post Office Box 1110

Tallahassee, Florida 32302-1110

Kelly L. Russell, Esquire

Department of Environmental Protection 3900 Commonwealth Boulevard

Mail Stop 35

Tallahassee, Florida 32399-3000

Thomas G. Tomasello, Esquire Thomas G. Tomasello, P.A.

1107 Terrace Street

Tallahassee, Florida 32303-6458

Lea Crandall, Agency Clerk

Department of Environmental Protection 3900 Commonwealth Boulevard

Mail Stop 35

Tallahassee, Florida 32399-3000

NOTICE OF RIGHT TO APPEAL

A person 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 the original Notice of Appeal with the agency clerk of the Division of Administrative Hearings and a copy, accompanied by filing fees prescribed by law, with the District Court of Appeal in the 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: 07-005216

Orders for Case No: 07-005216