STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DAVID AND CYNTHIA COPE, )

)

Petitioners, )

)

vs. ) Case No. 10-8893

) DEPARTMENT OF ENVIRONMENTAL ) PROTECTION AND CITY OF GULF ) BREEZE, )

)

Respondents, )

)

and )

)

PAUL TAMBURRO, )

)

Intervenor. )

)

FINAL ORDER

This Order concerns the City of Gulf Breeze's (City's) Motion for Sanctions (Motion) filed on June 3, 2011, under section 120.569(2)(e), Florida Statutes, which authorizes the "presiding officer," the administrative law judge in this case, to sanction a party who files pleadings, motions, or other papers for an improper purpose. On the same day, the Department of Environmental Protection (Department) and Intervenor Paul Tamburro (Intervenor) filed papers joining in and adopting the Motion. On July 13 and August 8, 2011, the City filed Supplements to its Motion. The Motion is directed against Petitioners, who unsuccessfully challenged the City's application for a Consolidated Wetland Resource Permit (Permit) and Sovereign Submerged Lands Authorization (Authorization).

See Cope v. City of Gulf Breeze and Dep't of Envtl. Prot., Case No. 10-8893, 2011 Fla. ENV LEXIS 83 (Fla. DOAH April 20, 2011), adopted, OGC Case No. 10-2342, 2011 Fla. ENV LEXIS 82 (Fla. DEP

June 6, 2011). Petitioners did not appeal the final order. By agreement of the parties, the record in the underlying proceeding, as supplemented by Petitioners and the City on September 23, 2011, is being used to adjudicate the claim.1 Proposed final orders were filed by Petitioners and the City on

October 13, 2011. (Intervenor, but not the Department, filed a joinder in the City's proposed final order.) The parties have indicated that a hearing on the entitlement issue is unnecessary. The moving parties have the burden to prove their entitlement to an award of sanctions under the statute. See Friends of Nassau Cnty., Inc. v. Nassau Cnty., 752 So. 2d 42, 52 (Fla. 1st DCA 2000)(Padovano, J., dissenting).

Prior to the City's filing the Motion, the following relevant events occurred. On August 10, 2010, the Department issued a notice of intent to issue a Permit and Authorization to the City, which would allow the City to place fill and vegetation on sovereign submerged lands adjacent to Deadman's Island in Pensacola Bay as the last part of a three-phase restoration project. On September 1, 2010, Petitioners, who reside near the project, filed a Petition for Formal Administrative Hearing (Petition) challenging the proposed action on numerous grounds.2 After the City filed a motion to dismiss, or in the alternative, motion for more definite statement and motion to strike on September 15, 2010, an Order was entered framing the issues to be tried as follows: whether the City possessed sufficient upland interest for the proposed activities on submerged lands; whether the proposed activities constituted a restoration project; whether the drawings and plans were incomplete or inaccurate; whether the activities were set back a minimum of 25 feet inside the City's riparian rights line; and whether the project would unreasonably infringe on Petitioners' riparian rights. See Order on Motions, Oct. 1, 2010. Notably, all of the allegations were related to the Authorization, and not the Permit.

Prior to the hearing, discovery was conducted by the parties.3 At the parties' prehearing conference on February 16, 2011, Petitioners' counsel identified only two matters at issue: whether the City had sufficient upland proprietary interest in Deadman's Island and whether the project complied with Florida Administrative Code Rule 18-21.005(1)(c)16., which authorizes the issuance of a letter of consent for management activities associated with the protection of a historic site. On

February 24, 2011, separate pre-hearing stipulations (statements) were filed by Petitioners and the moving parties. Although not a model of clarity, Petitioners' pre-hearing statement indicated that they were still contesting the Authorization in the following respects: whether the drawings attached to the application demonstrated that the filling and vegetation would actually expand Deadman's Island [and interfere with Petitioners' view]; whether the proposed activities

complied with rule 18-21.005(1)(c)16.; and whether the activities would unreasonably infringe on their riparian rights. (The statement is unclear as to whether Petitioners intended to pursue their claim that the City lacked sufficient upland interest to engage in the activities; regardless, proof on this issue was submitted by the City at final hearing.) The final hearing was conducted on March 1 and 2, 2011; a Recommended Order in favor of the City was issued on April 20, 2011; and a Final Order approving the Permit and Authorization was rendered by the Department on June 6, 2011.

At the conclusion of the final hearing on March 2, 2011, the Department announced that it would "likely . . . file a motion for attorney's fees in this case based on the evidence [it] heard" but was "not sure" under which statute the motion would be filed. Tr., Vol. III, p. 413. The City also indicated that it "intend[ed] to do the same[,]" while the Intervenor expressed the same intention. Id. In their proposed recommended orders, both the City and Department requested that jurisdiction be retained in the case "for the purpose of considering the anticipated request for attorney's fees, costs, or sanctions against the Petitioners under any provisions applicable at that time." (Intervenor did not file a proposed recommended order.) Because no motion was pending when the Recommended Order was issued, the matter was not substantively addressed by that order except for noting that no request had yet been filed. On April 25, 2011, the day the City says it received a copy of the Recommended Order, it filed a motion to confirm the existence of jurisdiction to consider a request for attorney's fees, costs, and sanctions. This motion was opposed by Petitioners. By Order dated May 6, 2011, the undersigned allowed the moving parties to file a request for sanctions under section 120.569(2)(e), but denied as being untimely their request to seek fees and costs under section 120.595(1). This ruling was reconfirmed by Order dated July 18, 2011, but with a strong and explicit reminder to the City that while the undersigned still had jurisdiction to consider such a request, an unwarranted delay in seeking sanctions, as Petitioners argue is the case here, militates, in and of itself, against granting the requested relief. Petitioners continue to maintain that the undersigned has no jurisdiction to entertain the Motion.

Several broad tenets govern a sanctions request. First, an essential element of a claim for sanctions is for the moving parties to identify a specific pleading, motion, or other paper 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 Child. & Fams., 920 So. 2d 671, 676-77 (Fla. 5th DCA 2006). To determine whether a paper is filed for an improper purpose, it is necessary to determine whether the filing is reasonable under the circumstances. Mercedes Lighting & Elec. Supply Co. v. Dep't of Gen. Servs., 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 papers were filed. See Friends of Nassau Cnty., 752 So. 2d at 57. (Unlike claims under sections 57.111 and 57.105(5), liability under section 120.569(2)(e) is determined only based on the circumstances as of the time of the filing of the offending document, not subsequently.) The issue is not whether the non-moving party would ultimately prevail on the merits.

Rather, the question is whether a party or attorney made a reasonable inquiry of the facts and law prior to signing and filing a pleading, motion, or other paper. Id. at 52. Finally, and especially relevant here, if an obvious offending paper is filed, a party is obligated to promptly take action to mitigate the amount of resources expended in defending against the offending paper. See Mercedes, 560 So. 2d at 276-77. A delay in seeking sanctions undermines the mitigation principle that applies to the imposition of sanctions. Id. The purpose of the statute is to deter subsequent abuses, a purpose not well-served if an offending pleading is fully litigated and the offender is not punished until the end of the trial. Id.

Here the moving parties contend that virtually every paper filed by Petitioners was interposed for an improper purpose, beginning with the initial Petition, and ending with three papers filed by Petitioners in response to the Motion.4 Except for the latter three papers, all papers to which the Motion is directed were filed before the final hearing and entry of the Recommended Order. To demonstrate that the delay in filing the Motion was not unwarranted, in part the City explained in its filing to confirm jurisdiction that "it might be a waste of time, expense, and effort to file such a motion before a Recommended Order is entered." See Motion to Confirm the Existence of or to Accept Jurisdiction for Purposes of Considering Motions for Sanctions, Attorney's Fees and Costs or, in the Alternative, to Reconsider and/or Modify the Recommended Order, April 25, 2011, ¶ 15. The City later explained that it waited to file its Motion until after the proceeding had essentially ended because (1) the moving parties decided against taking any "appreciable discovery" prior to hearing in an effort to minimize legal expenses; therefore, they could not have known "until after the Petitioners' presentation of all of their

evidence that their participation in the case (or certain portions thereof) or filing papers in connection therewith was done for an improper purpose"; and (2) the moving parties desired the entry of the Recommended Order, which "essentially confirmed" their conclusions regarding Petitioners' improper intentions. See City Supplement to, and Reply to Petitioners' Response to, Motion to Confirm the Existence of or to Accept Jurisdiction for Purposes of Considering Motions for Sanctions, Attorney's Fees and Costs or, in the Alternative, to Reconsider and/or Modify the Recommended Order, May 3, 2011, ¶¶ 7-8.

Given the record in this case, had a request for sanctions (or fees and costs under sections 120.595(1) or 57.105(5)) been timely filed, a different result might be reached. Here, however, because the Motion was not filed until after the entry of the Recommended Order, this in itself warrants denial of the request for sanctions as to all pleadings, motions, or other papers filed by Petitioners prior to that time. This is consistent with judicial and administrative rulings that a party is required to promptly notify the offending party and tribunal that an obvious offending paper has been filed. The City contends, however, that it timely filed a motion to dismiss the initial pleading; that on at least three occasions in October and November 2010 the moving parties advised opposing counsel by oral communication and emails that sanctions would be sought in the event they were successful at the final hearing; that the moving parties sought to dismiss the initial pleading, as amended, at the beginning of the final hearing; that an evidentiary hearing, followed by favorable findings in a recommended order, was necessary to confirm that Petitioners' allegations were unsubstantiated and frivolous; and that post- hearing depositions revealed that Petitioners and their counsel made no reasonable inquiry with experts or other informed persons prior to signing the initial complaint. But the motion to dismiss simply tested the legal sufficiency of the pleading, not whether the allegations could be proven or were based upon a reasonable inquiry prior to the Petition being signed.

Likewise, verbal communications and emails to opposing counsel warning that fees, costs, and sanctions might be sought at the conclusion of the proceeding do not trigger the statute or allow the offending party to be promptly punished, if warranted, so as to deter the filing of other papers for an improper purpose.

Similarly, depositions conducted long after the hearing to verify whether Petitioners investigated the bases for their allegations in the initial pleading or other papers are too late. Finally, a party cannot rely on favorable findings in a recommended order to justify sanctions, since sanctions must be

based on the circumstances existing when the papers are filed. See, e.g., Beverly Health & Rehab. Serv.-Palm Bay v. Agency for Health Care Admin., Case No. 02-1297F, 2003 Fla. Div. Adm. Hear. LEXIS 227 at *6 (Fla. DOAH April 25, 2003) (reliance on findings in the recommended order that non-moving party's allegations were not meritorious is not an adequate basis for imposition of sanctions).

Accepting the City's invitation to rule otherwise would encourage a party to sit back and fully litigate a case, and depending on the final outcome, to then seek sanctions under section 120.569(2)(e); clearly, this process is not contemplated by the statute. See, e.g., Spanish Oaks of Cent. Fla., LLC v.

Lake Region Audubon Soc'y, Inc., Case No. 05-4644F, 2006 Fla. Div. Adm. Hear. LEXIS 294 at *48 (Fla. DOAH July 7, 2006)(where moving party did not file request for sanctions until "just prior to the final hearing," delay warranted denial of request); Rustic Hills Phase III Prop. Owners Ass'n v. Olson, Case No. 00- 4792, Order Denying Sanctions Under Section 120.569(2)(e), (Fla. DOAH July 31, 2001)(where moving parties waited until final hearing to seek sanctions, and the basis for sanctions was the weakness of the evidentiary presentation, sanctions not awarded); Hasselback v. Dep't of Envtl. Prot., Case No. 07-5216, 2011 Fla. ENV. LEXIS 63 (Fla. DOAH June 14, 2011)(failure to timely take action to mitigate the amount of resources expended in litigating the permit criteria warranted denial of request for sanctions); Still v. New River Solid Waste Ass'n, Case No.

01-1033, 2001 Fla. Div. Adm. Hear. LEXIS 2720 (Fla. DOAH Aug. 7,

2001)(request denied where moving party waited until final hearing to seek sanctions directed to non-moving party's amended petition for hearing); Alfonso v. Constr. Indus. Licensing Bd., Case No. 05-4711, Order Denying Motion for Attorney's Fees, (Fla. DOAH July 26, 2006)(sanctions denied as being untimely where request was filed two weeks after proposed recommended orders were submitted by parties). The moving parties have cited no contrary authority on this issue. Accordingly, as to all papers filed prior to the filing of the Motion, the request for sanctions is denied.

The remaining papers for which sanctions are sought are three filed by Petitioners' counsel in response to the Motion:

(a) Petitioners' Response in Opposition to City's Motion for Imposition of Florida Statute 120.569(2)(e) Sanctions and DEP's and Intervenor's Adoption and Joinder Therein filed on June 13, 2011; (b) Petitioners' Motion to Stay Pending Discovery Proceedings Related to Pending Fla. Stat. 120.569(2(E) [sic] Sanctions Motions filed on July 8, 2011; and (c) Petitioners'

Motion to Dismiss City's, DEP's and Intervenor's Motions for Imposition of Fla. Stat. 120.569(2)(e) Sanctions for Lack of Jurisdiction filed on July 29, 2011. The first paper argued that the undersigned lacks subject matter jurisdiction to consider the Motion and that the challenged pleadings, motions, and papers were not filed for an improper purpose.5 The second filing requested a stay of the City's pending discovery requests until the jurisdictional issue was resolved. The purpose of the third paper was "to insure proper preservation of the jurisdiction issue in this case in the event of a subsequent appellate proceeding that includes the jurisdictional issue." While the three papers are redundant in certain respects, given the totality of the circumstances, it is concluded that none was interposed for an improper purpose, that each was reasonable under the circumstances existing at that time, and that each was filed in good faith to assert (a) that no paper was filed in this case for an improper purpose, and (b) that the Motion is untimely and therefore the undersigned lacks jurisdiction to consider the same. Because it has not been established that the three papers were interposed in this matter for an improper purpose, entitlement to sanctions has not been shown. As to these papers, the Motion is also denied.

DONE AND ORDERED this 26th day of October, 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 26th day of October, 2011.

ENDNOTES

1/ Besides the underlying record, which consists of the three- volume Transcript and the exhibits received in evidence at the final hearing, the following items were submitted by the City: excerpts of the deposition of Petitioners' counsel taken by the City on September 13, 2011; affidavits of the City Attorney and City Director of Finance; excerpts of the depositions of the Copes taken by the City on October 4, 2009, November 5, 2009, and August 31, 2011; excerpts of Dr. Cope's responses to the City's First Set of Interrogatories dated August 1, 2011;

and the City's responses to Petitioners' First Set of Interrogatories dated October 25, 2010. Petitioners submitted the following items: various correspondence and emails between the parties; a memorandum authored by the City Manager on

June 6, 2011; an article in a local newspaper published on June 16, 2011; the City's First Set of Interrogatories to Dr. Cope served on July 1, 2011; the complete depositions (with exhibits and errata sheets) of the Copes and their attorney taken on August 31 and September 13, 2011; and the

City's responses to Petitioners' First Set of Interrogatories dated October 25, 2010. On October 4, 2011, Petitioners moved to strike the two affidavits filed by the City. The motion is now moot, given the final disposition of this matter.

2/ Petitioners also filed administrative challenges to the first two phases of the project. See Case Nos. 08-3096 and 09- 4870. The first case was settled by the parties, while Petitioners filed a voluntary dismissal in the second. One of the exhibits submitted by Petitioners to supplement the record indicates that the City spent "up to $100,000" in defending against these challenges. See Petitioners' Notice of Filing Per 8-22-2011 Order, Sept. 23, 2011, Item 4.

3/ The City's pre-hearing discovery included requests for admissions, a request for production of documents, and depositions of the Copes. In addition, the moving parties were authorized to enter Petitioners' property (residence) for the purpose of taking photographs, which were received as evidence at hearing. Petitioners served requests for admissions, requests for production of documents, and interrogatories on the City and Department, and a request for production of documents on Intervenor. The City also conducted post-hearing discovery, including depositions of the Copes and their attorney.

4/ These papers are identified on pages 9 and 10 of the Motion, as supplemented on July 13 and August 8, 2011, and include the

initial Petition; all discovery propounded by Petitioners; various responses by Petitioners to the City's discovery requests; two papers regarding the attorneys' prehearing conference; Petitioners' requests for a continuance; Petitioners' motion to amend their initial pleading; Petitioners' unilateral pre-hearing stipulation; Petitioners' exhibits sought to be utilized at final hearing; Petitioners' proposed recommended order; and three papers filed in response to the Motion.

5/ No appellate court has directly addressed the jurisdictional issue. However, Petitioners rely on several administrative decisions where requests for sanctions that were filed either after a voluntary dismissal had been filed by the non-moving party or jurisdiction had been relinquished to the agency were deemed to be untimely. These cases are distinguishable from the situation here. They also rely on Sellars v. Broward Cnty. Sch. Bd., Case No. 97-3540F, 1997 Fla. Div. Adm. Hear. LEXIS 5678

(Fla. DOAH Sept. 25, 1997), where a request for attorney's fees and costs (without identifying the statutory basis for relief) filed after the entry of a recommended order was found to be untimely. Unlike Sellars, however, here the moving parties orally requested at final hearing that jurisdiction be reserved for that purpose; they also renewed that request in their proposed recommended orders.

COPIES FURNISHED:

Thomas M. Brady, Esquire Post Office Box 12584

Pensacola, Florida 32591-1284

Brynna J. Ross, Esquire

Department of Environmental Protection 3900 Commonwealth Boulevard

Mail Stop 35

Tallahassee, Florida 32399-3000

Matt E. Dannheisser, Esquire Matt E. Dannheisser, P.A.

504 North Baylen Street Pensacola, Florida 32501-3904

Margery M. Tamburro, Esquire Margery M. Tamburro, PLLC

114 Highpoint Drive

Gulf Breeze, Florida 32561-4016

NOTICE OF RIGHT TO JUDICIAL REVIEW

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: 10-008893

Orders for Case No: 10-008893