STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DR. RICHARD FRIDAY, )

)

Petitioner, )

)

vs. ) Case No. 09-4814

) STEVEN A. WALKER, TRUSTEE, ) AND DEPARTMENT OF ENVIRONMENTAL ) PROTECTION, )

)

Respondents. )

)

FINAL ORDER

Pursuant to notice, this matter was conducted by video teleconferencing before the Division of Administrative Hearings by its assigned Administrative Law Judge, D. R. Alexander, on October 15, 2010, in Sarasota and Tallahassee, Florida.

APPEARANCES

For Petitioner: Harry W. Haskins, Esquire

Harry W. Haskins, P.A.

3400 South Tamiami Trail, Suite 201

Sarasota, Florida 34239-6093

For Respondent: Charles F. Johnson, Esquire

(Walker) Blalock, Walters, Held & Johnson, P.A.

802 11th Street, West Bradenton, Florida 34205-7734

STATEMENT OF THE ISSUE

The issue is whether Steven A. Walker's Motion for Sanctions (Motion) under Section 120.569(2)(e), Florida Statutes (2009),1 should be granted, and if so, to determine the

appropriate sanction. The "paper" that is the subject of the Motion is the parties' Joint Pre-Hearing Stipulation (Stipulation) filed on March 9, 2010.

PRELIMINARY STATEMENT

On June 26, 2009, Respondent, Department of Environmental Protection (Department), issued proposed agency action approving an application by Steven A. Walker for a permit to construct a three-story, single-family dwelling with a landward attached guest house seaward of the coastal construction control line at

100 Park Avenue, Anna Maria, Florida. By letter (Petition) dated July 22, 2009, Petitioner, who owns adjacent property, requested a formal administrative hearing to contest the proposed agency action on the grounds the applicant failed to provide reasonable assurance that all environmental permitting requirements had been satisfied and that the proposed project was in violation of the City of Anna Maria (City) Comprehensive Plan (Plan) and zoning ordinances. The matter was referred by the Department to the Division of Administrative Hearings on September 4, 2009, with a request that an administrative law judge conduct a formal hearing.

A final hearing on the merits of the application was conducted on March 16, 2010. On April 30, 2010, Mr. Walker filed his Motion pursuant to Sections 120.569(2)(e) and 120.595(1), Florida Statutes. A Response in opposition to the

Motion was filed by Dr. Friday on May 10, 2010. On May 24, 2010, a Recommended Order in favor of Mr. Walker was issued. Jurisdiction was also retained for the purpose of resolving the Motion by separate final order. On July 1, 2010, the Department entered a Final Order approving that recommendation and issuing a permit. See Dr. Richard Friday v. Stephen A. Walker, et al., Case No. 09-4814, 2010 Fla. ENV LEXIS 83 (DOAH May 24, 2010; DEP

July 1, 2010). No appeal of the Final Order was taken. By Notice of Hearing dated August 27, 2010, a hearing on the Motion was scheduled by video teleconferencing, with the parties located in Sarasota and Tallahassee, Florida. On September 17, 2010, two additional Affidavits in support of the Motion were filed by Mr. Walker. By Order dated September 20, 2010, the hearing was limited to Mr. Walker's request for sanctions under Section 120.569(2)(e), Florida Statutes. A Memorandum of Law in Support of the Motion, with attachments, was filed by Mr. Walker on October 14, 2010, while an Affidavit and Memorandum of Law in Opposition to the Motion was filed by Dr. Friday on October 15, 2010.

At the hearing, the movant (Mr. Walker) presented the testimony of Brynna J. Ross, Esquire, counsel for the Department in the underlying proceeding. Counsel for both parties presented argument in support of their respective positions. In resolving the merits of the Motion, the undersigned has

considered the entire record in the underlying proceeding, as well as the papers filed by both parties with respect to the Motion.

There is no transcript of the hearing. Proposed Findings of Fact and Conclusions of Law were filed by the parties on November 1, 2010, and they have been considered in the preparation of this Final Order. In addition, although a transcript was not ordered in the underlying proceeding, the movant has attached to his filing a copy of the Transcript of the final hearing held on March 16, 2010.

FINDINGS OF FACT

Based upon all of the evidence, the following findings of fact are determined:

1. After Dr. Friday received notice of the Department's intent to issue a permit to Mr. Walker, he filed his Petition with the Department on July 22, 2009. The Petition (drafted by different counsel) contested the proposed agency action on two broad grounds: that the applicant had failed to meet all environmental permitting criteria in Florida Administrative Code Chapter 62-33, and that the proposed project would violate both the City's Plan and Zoning District Regulations. The environmental issues raised were extensive, and pages 3 and 4 of the letter stated that the following "environmental" facts were in dispute:

   The applicant was required to demonstrate that the construction would not result in removal or destruction of native vegetation which would either destabilize a frontal, primary, or significant dune or cause a significant adverse impact to the beach and dune system due to increased erosion by wind or water. The applicant was also required to demonstrate that the construction would not result in removal or disturbance of in situ sandy soils of the beach and dune system to such a degree that a significant adverse impact to the beach and dune system would result from either reducing the existing ability of the system to resist erosion during a storm or lowering existing levels of storm protection to upland properties and structures. Additionally, the applicant had to show the construction would not direct discharges of water or other fluids in a seaward direction and in a manner that would result in significant adverse impacts, would not cause an increase in structure-induced scour of such magnitude during a storm that structure-induced scour would result in a significant adverse impact, would not interfere with public beach access, and would not cause a significant adverse impact to marine turtles, or the coastal system.

   
   

2. In answers to requests for admissions dated November 5, 2009, Dr. Friday affirmatively denied that no environmental issues were in dispute. At his deposition taken on January 27, 2010, Dr. Friday continued to maintain that he had environmental concerns with the project.

3. On March 4, 2010, or less than two weeks before the final hearing, the Department, supported by Mr. Walker, filed a Motion in Limine and Alternative Motion for Notice to Interested Party. The first Motion sought to exclude evidence regarding land use issues as being irrelevant. Alternatively, the second

   Motion requested that if these issues were not excluded, the City be given notice of the proceeding.

4. The parties were required to file a joint prehearing stipulation by March 9, 2010. On March 9, 2010, or before a ruling on the Department's Motion in Limine was entered, the parties executed a Stipulation which, among other things, identified the issues still in dispute. This "paper" is the subject of Mr. Walker's Motion. On page 2 of the Stipulation, Dr. Friday indicated that his position in the case was as follows: "[P]lease see the Petition for Administrative Hearing filed on July 22, 2009." Also, he identified more than ten potential witnesses that might be called to testify at hearing, including a Department Permit Manager. Except for the Department witness, all other potential witnesses appeared to relate to the land use issues. As of that date, then, it was reasonable for the applicant's counsel to assume that both environmental and land use issues were still in play.

5. Counsel for the Department testified that when the parties collaborated on the preparation of the Stipulation, she and Mr. Johnson (applicant's counsel) inquired of Dr. Friday's counsel (Mr. Haskins) whether the environmental issues would be litigated at hearing. Dr. Friday's counsel declined to narrow the issues, and they remained in the Stipulation.

6. In response to the Department's Motion in Limine, on Thursday, March 11, 2010, Dr. Friday's counsel filed a Motion to Stay Administrative Proceeding, and in the Alternative, Request to Join Indispensible Party. In that filing, he indicated that an action in circuit court had just been filed against the City seeking declaratory and injunctive relief on the premise that the proposed activity was not allowed under the City's Plan and Zoning Districts. That action is still pending. See Friday v. City of Anna Maria, Case No. 2010-CA2369 (12th Cir., Manatee Cty Fla.) In addition, he requested that the administrative proceeding be stayed pending the outcome of that litigation, or in the alternative, that the City be joined as an indispensible party. A Response in opposition to those filings was made by Mr. Walker on March 12, 2010.

7. On Friday, March 12, 2010, the undersigned entered an Order granting the Department's Motion in Limine and excluding all evidence relating to the land use issues. The Order also indicated that notice to the City was unnecessary. An oral ruling denying the Motion to Stay Administrative Proceeding was given to the parties the same day. An Order confirming that ruling was issued on Monday, March 15, 2010.

8. After the Order granting the Motion in Limine was issued, the following day, Saturday, March 13, counsel for the two parties spoke with each other by telephone. This was in

   response to an email sent by Mr. Johnson to Mr. Haskins that morning, which read as follows:

   If you have a chance, please call my cell phone 720-

   xxxx. My clients are planning to get on a plane early Monday in Oregon to be here for the hearing [on March 16]. Absent some written communication from you that you will not be proceeding on the petition, I have told my clients to get on the plane and be here.

   
   

9. Although neither counsel testified at final hearing, both submitted affidavits reflecting their versions of the telephone conversation. According to Mr. Haskins' affidavit, he told Mr. Johnson "that [he] did not plan on putting on any witnesses in light of the Administrative Law Judge's ruling, and it was not necessary for him to prepare for the hearing and call witnesses." According to Mr. Johnson's affidavit, Mr. Haskins "advised that he intended to 'make a record.' [Mr. Johnson] asked what make a record meant and was advised by Mr. Haskins that Mr. Haskins intended to attend the hearing." Mr. Johnson further averred that he advised Mr. Haskins that unless he received written dismissal of the petition, or written confirmation that Dr. Friday would stipulate to the issuance of the permit, Mr. Walker intended to go forward with his proof.

10. Having received no written confirmation by Monday, March 15, Mr. Johnson again emailed Mr. Haskins and requested that he "give me a call on my cell phone." The two spoke a second time by telephone. According to the affidavit of

    Mr. Haskins, he advised Mr. Johnson "that Petitioner did not intend on presenting any evidence at hearing." On the other hand, Mr. Walker averred that essentially the same conversation that took place on Saturday occurred again and that Mr. Haskins "provided no assurance that he would not pursue the relief in the petition."

11. The affidavits differ in some respects and create a conflict that would ordinarily have to be resolved with sworn testimony. (Counsel have represented that the deposition of Mr. Johnson was taken just prior to the hearing on October 15, 2010. However, that deposition was not made a part of the record. At the Motion hearing, counsel represented that

    Mr. Johnson testified to the same facts reflected in his affidavit.) Despite the conflict, it is unnecessary to reconcile the two affidavits since the first email on March 13, which is a part of the record, provided written notice to

    Mr. Haskins that if he did not provide written assurance that he would not contest the permit, Mr. Johnson's clients would fly in from Oregon. It can also be reasonably inferred that this email provided Mr. Haskins with notice that, absent him providing such written notice, the applicant intended to put on its case.

12. Also on March 15, 2010, Dr. Friday filed a Petition to Review Non-Final Agency Action and an Emergency Motion to Stay Administrative Proceeding with the Second District Court of

    Appeal. The Petition sought a review of the Order granting the Department's Motion in Limine, while the Emergency Motion to Stay sought to stay the administrative proceeding pending a ruling by the appellate court on the Order granting the Department's Motion in Limine. Both the Petition and Emergency Motion were denied by the Court on March 16, 2010, or the day of the final hearing.

13. At the final hearing on March 16, 2010, Mr. Haskins reargued the merits of the Motion in Limine and request for a stay. The earlier rulings were reaffirmed. He also indicated that he would "not . . . present any evidence as to any environmental matters" since he was "basically relying upon the criterion" in Rule 62-33.008(3)(d) that required the applicant to submit written evidence from the local government verifying that the proposed activity did not contravene local setback requirements or zoning codes. After a rather lengthy discussion on the record, he agreed to the admission of the applicant's exhibits which constituted a prima facie case of demonstrating that all environmental permitting criteria had been satisfied. He did so with the understanding that this would not prejudice his right to pursue the circuit court action, and that if he prevailed in that matter, the applicant would not be able to proceed with the proposed activity authorized by the permit. No

    witnesses testified at the hearing, the applicant's exhibits were received, and the hearing was then adjourned.

14. Affidavits in support of the Motion, which are not contradicted by counter-affidavits, reflect that after the Stipulation was filed on March 9, 2010, Mr. Johnson incurred attorney's fees in the amount of $4,095.00 to prepare for the hearing with his witnesses. The applicant also incurred costs in the amount of $2,340.00 for an expert witness who was expected to present testimony at hearing on the contested environmental issues raised in the Petition and readopted in the Stipulation. It is undisputed that the expert attended the final hearing on March 16, 2010, but was not called to testify. (A Department witness was also present in Tallahassee ready to address the contested environmental issues.)

15. Mr. Johnson argued that he had the burden of proof in showing entitlement to a permit. Absent written notice from Mr. Haskins that the permit would not be opposed because of the issues raised in the Stipulation, Mr. Johnson asserted that he was obligated to prepare for final hearing and present proof to

    contravene those allegations, even if Mr. Haskins did not intend to offer any witnesses.

16. At oral argument, Mr. Haskins acknowledged that the environmental issues were secondary in nature, with minimal potential for success. He indicated that his strongest argument

    was always that the project would contravene local zoning and Plan requirements. This is confirmed by the fact that most, if not all, of his discovery was devoted to that issue; that if the Motion in Limine had not been denied, his primary witness intended to address that issue; and that he has continued to pursue that issue in a separate circuit court action. Moreover, in his Response to the Motion dated May 17, 2010, he concedes that "[o]nce the motion in limine was granted, and [his] expert was not permitted to testify about his opinion, the hearing became moot."

17. Counsel for Dr. Friday points out that because the Motion in Limine was not granted until March 12, 2010, and an appeal was still pending before the Second District Court of Appeal on the day of the final hearing, it would have been imprudent for him to withdraw his request for a hearing. However, if the challenged Orders were later reversed by the appellate court, the case would be remanded for further proceedings. Also, even though the Motion in Limine was not granted until March 12, 2010, counsel was twice given an opportunity to withdraw the environmental allegations after that ruling was made. Finally, there is no merit to a concern that if the environmental issues were withdrawn, and a permit issued, it would prejudice Dr. Friday's right to pursue the land use issues in circuit court. In short, no persuasive reason was

    given as to why counsel would not confirm in writing that he no longer intended to pursue the environmental claims.

18. There is no basis to find that the client, rather than the attorney, should be subjected to sanctions.

    CONCLUSIONS OF LAW

    
    

19. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties hereto pursuant to Sections 120.569 and 120.57(1), Florida Statutes.

20. Mr. Walker has the burden to prove by a preponderance of the evidence that sanctions should be awarded under

    Section 120.569(2)(e). See Friends of Nassau County, Inc., et al. v. Nassau County, et al., 752 So. 2d 42, 52 (Fla. 1st DCA 2000). That statute reads as follows:

    (e) All pleadings, motions, or other papers filed in the proceeding must be signed by the party, the party's attorney, or the party's qualified representative. The signature constitutes a certificate that the person has read the pleading, motion, or other paper and that, based upon reasonable inquiry, it is not interposed for any improper purposes, such as to harass or to cause unnecessary delay, or for frivolous purpose or needless increase in the cost of litigation. If a pleading, motion, or other paper is signed in violation of these requirements, the presiding officer shall impose upon the person who signed it, the represented party, or both, an appropriate sanction, which may include an order to pay the other party or parties the amount of reasonable expenses incurred because of the filing of the pleading, motion, or other

    paper, including a reasonable attorney's fees.

    
    

21. Requests for sanctions are most commonly directed against the initial pleading filed in a proceeding, rather than a subsequent paper. Here, however, the "paper" is the Stipulation executed by counsel seven days before the final hearing. To establish entitlement to sanctions, Mr. Johnson must demonstrate that the paper was filed for an improper purpose.

22. Case law holds that an objective standard is used to determine improper purpose for the purpose of imposing sanctions on a party or attorney under the foregoing statute. As stated in Friends of Nassau County at 50-51:

    In the same vein, we stated in Procacci Commercial Realty, Inc. v. Department of Health and Rehabilitative Services, 690 So. 2d 603 (Fla. 1st DCA 1997):

    The use of an objective standard creates a requirement to make reasonable inquiry regarding pertinent facts and applicable law. In the absence of "direct evidence of the party's and counsel's state of mind, we must examine the circumstantial evidence at hand and ask, objectively, whether an ordinary person standing in the party's or counsel's shoes would have prosecuted the claim." (citations omitted)

    * * *

    If, after reasonable inquiry, a person who reads, then signs, a [paper] had "reasonably clear justification" to proceed, sanctions are inappropriate.

23. Had counsel for Dr. Friday considered all of the facts and circumstances when he executed the Stipulation on March 9, 2010, he would have concluded that he did not have reasonably clear justification to proceed on the environmental issues and that his only basis for obtaining relief was by showing that the project was inconsistent with local zoning and setback regulations. Accordingly, an ordinary person standing in counsel's shoes would not have prosecuted the environmental claims. See Procacci, at 608 n. 9. By counsel failing to narrow the issues on March 9, 2010, it is concluded that the Stipulation was filed for an improper purpose.

24. In Mercedes Lighting and Electric Supply, Inc. v.

    
    

    Department of General Services, 560 So. 2d 272, 276 (Fla. 1st DCA 1990), the court, in construing a predecessor statute to Section 120.569(2)(e), stated that like Rule 11 of the Federal Rules of Civil Procedure, the statute is aimed at deterrence, not fee shifting or compensating the prevailing party. The statute is also aimed at the conduct of counsel, and not the outcome of the proceeding.

25. Having considered all of the circumstances in this matter, a reasonable sanction is $2,000.00, to be paid by counsel within thirty days from the date of this Order.

DISPOSITION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

ORDERED that Mr. Walker's Motion for Sanctions is granted, and counsel for Dr. Friday shall pay Mr. Walker $2,000.00 within thirty days of the date of this Final Order.

DONE AND ORDERED this 12th day of November, 2010, 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 12th day of November, 2010.

ENDNOTE

1/ All statutory references are to the 2009 version of the Florida Statutes.

COPIES FURNISHED:

Harry W. Haskins, Esquire Harry W. Haskins, P.A.

3400 South Tamiami Trail, Suite 201

Sarasota, Florida 34239-6093

Charles F. Johnson, Esquire

Blalock, Walters, Held & Johnson, P.A. 802 11th Street, West

Bradenton, Florida 34205-7734

Brynna J. Ross, Esquire

Department of Environmental Protection 3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399-3000

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 the original notice of appeal with the Clerk of the Division of Administrative Hearings and a 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: 09-004814

Orders for Case No: 09-004814