The Issue The issue in this case is whether there is a conflict between the corporate names of Travel Unlimited, Inc. and Travel Unlimited of Harbor Beach, Inc.
Findings Of Fact The Petitioner, Travel Unlimited, Inc., is a travel agency doing business in the northern part of Dade County and southern part of Broward County, State of Florida. The corporation, which was chartered in 1973, is physically located in North Miami Beach, Florida. Petitioner has extensively advertised its travel business for several years in the "Miami Herald," a newspaper of wide circulation in Dade and Broward Counties. It also has circulation in Palm Beach County, Florida. The Respondent, Travel Unlimited of Harbor Beach, Inc., was chartered in December of 1980, and is located approximately 15 to 20 miles from Petitioner in a heavily populated metropolitan area. Telephone calls are toll free between the Hollywood area of Broward County and northern Dade County. In addition to its northern Dade County telephone numbers, Petitioner has maintained for years at additional expense an additional telephone line into Fort Lauderdale. This telephone line provides toll free service between northern Broward County and northern Dade County. A great deal of confusion has been created by the Respondent travel agency's use of the name Travel Unlimited of Harbor Beach, Inc. Numerous telephone calls have been received by Petitioner which were intended for that Respondent. Mail from various airlines has been received by Petitioner which was intended for that Respondent. An employee of Petitioner was almost denied the right to special agent discounts because an airline confused the Petitioner with the Respondent travel agency despite their different IATA numbers. It appears that in spite of their IATA numbers being different, confusion occurs even with professionals in the industry. The parties submitted proposed findings of fact, memoranda of law and proposed recommended orders which were considered in the writing of this order. To the extent the proposed findings of fact have not been adopted in, or are inconsistent with, factual findings in this order they have been specifically rejected as being irrelevant or not having been supported by the evidence.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that the Department of State revoke the reservation for the corporate name Travel Unlimited of Harbor Beach, Inc. DONE and ORDERED this 25th day of November, 1981, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-967 Filed with the Clerk of the Division of Administrative Hearings this 25th day of November, 1981. COPIES FURNISHED: Maurice Rosen, Esquire Suite 112, Interama Professional Building 16666 NE 19th Avenue North Miami Beach, Florida 33162 Robert Kupchak, Vice President Travel Unlimited of Harbor Beach, Inc. 2198 SE 17th Street Fort Lauderdale, Florida 33316 Stephen Nall, Esquire Office of the General Counsel Department of State The Capitol Tallahassee, Florida 32301 George Firestone, Secretary Department of State The Capitol Tallahassee, Florida 32301
Findings Of Fact In December of 1973, petitioner Greenblatt and another registered the fictitious name "International Vacations" with the clerk of the Circuit Court of Dade County, Florida. Since that time, petitioner has been engaged in business as a travel agent in Miami, under the name of "International Vacations." In the spring of 1977, before May 1, respondent Fitterman, who has herself been active in the travel business, filed an application with respondent Department of State to reserve the corporate name "International Vacations, Inc." At the time, Mrs. Fitterman was unaware that there was a travel agency in Miami with the name "International Vacations." When she learned that there was, she telephoned petitioner. In conversations with petitioner she related that she had incurred certain expenses, and there was some discussion of petitioner's arranging a trip for her and two of her grandchildren. In the course of the conversation, Mrs. Fitterman agreed not to use the corporate name "International Vacations, Inc." On May 23, 1978, respondent Fitterman wrote petitioner offering to "relinquish our hold on" the name in exchange for the trip, Petitioner's exhibit No. 1, but negotiations subsequently fell through. After agreeing not to use "International Vacations, Inc.," respondent Fitterman organized a corporation which she named "Miami Tours, Inc.," but she came to feel that this name was less satisfactory than "International Vacations, Inc." Since 1977, she has been doing business in Miami under the name of American International Travel Club. On or about December 4, 1977, petitioner Greenblatt applied to the Department of State on behalf of a California corporation, International Vacations, Inc., for authorization to transact business in Florida. A check in the amount of one hundred four dollars ($104.00) drawn in favor of the Secretary of State accompanied this application; and the check has been negotiated. Petitioner's exhibit No. 2.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That respondent Department of State refuse Petitioner's request that it revoke respondent Fitterman's reservation of the exclusive right to use the corporate name "International Vacations, Inc." DONE and ENTERED this 12th day of June, 1979, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Nathan Greenblatt 311 Lincoln Road Miami Beach, Florida 33139 Mrs. Blanche Fitterman American International Travel Club, Inc. 17070 Collins Avenue, Suite 219 Miami Beach, Florida 33160 William J. Gladwin, Esquire Department of State The Capitol Tallahassee, Florida 32301
Findings Of Fact The Joanne Gamache is a white, American female, and she owns 51 percent of the stock of Sun World Travel, Inc., (hereafter Sun). She submitted an application for MBE Certification in behalf of Sun to the Department of Management Services, (hereafter DMS). (R.E. 1, p. 24-31) Gillies Gamache, Joanne's husband, owns 49 percent of Sun World Travel. (Tr. 19-20) The major business purpose of this business is the sale of travel. (Tr. 35) Sun is a corporation domiciled in Florida with less than 25 employees, and a net worth of less than $1 million dollars. DMS, through its Certification Officer Morris, reviewed the file, completed an on site visit to Petitioner's business, and Sun's application for MBE Certification was tentatively denied. (Tr. 97-100) Sun was duly notified of DMS's decision, and filed a timely request for formal hearing on the intended agency action. In 1978, Gilles Gamache bought a travel agency in Broward County called Transit Travel using the joint savings of Gilles and Joanne Gamache. (Tr. 11- 12) All of the stock of this travel agency was issued to Gilles Gamache. (Tr. 19) He was both travel agent and the manager of Transit Travel. (Tr. 11) Joanne Gamache also worked in the agency making resevations, delivering tickets and doing the bookkeeping. (Tr. 15-16) Both Gamaches were also employed full time as teachers in the Broward County school system. (Tr. 12-13, 15-16) In 1981, the Gamaches moved to Tallahassee selling both their home and the business in South Florida. (Tr.14) Gilles Gamache opened another travel agency in Tallahassee called Sun World Travel using the proceeds of the sale of Transit Travel and other jointly held property. (Tr. 14 and 31) He was initially the 100 percent owner of the agency. (Tr. 19) Gilles Gamache initially worked in the travel agency full time and Joanne Gamache continued to teach school full time, and deliver tickets and work on business' books. (Tr. 16-19) She occasionally made some reservations. (Tr. 16-19) In 1989, Gilles Gamache transferred 51 percent ownership of Sun to Joanne Gamache. (Tr. 19-20) This shift resulted when Gilles Gamache became involved in additional business ventures, Joanne Gamache had more time to devote to the business because their daughter had entered school, and the transfer reflected the ownership interest which Joanne Gamache had possessed in Sun and its predeccessor, Transit Travel. It is incorrect to state that Joanne Gamache did not pay anything for her share of the business because she would have been entitled to a share of the business equal to her contribution to the joint funds used to purchase Transit Travel and jointly held property from which the money came to start Sun. (Tr. 31) The uncontroverted evidence is that Joanne's contributions to those savings was greater than Gilles' because she had always maintained her full time employment as a teacher. (Tr. 43 and HO's notes p. 6, 14, 27) The bylaws of the corporation provide that no transfer of stock which would dilute the 51 percent ownership of this corporation by minorites shall be permitted. (Tr. 21, Pet. Exh. 2, Article IV, Section 5) Concurrent with the shift in ownership and responsibilities, Sun hired an office manager because of a technical requirement that the manager of such an agency must be a certified reservationist, and Joanne Gamache is not certified. Initially, one of the existing employees, who was certified, was employed as the manager. Thereafter, Cindy Cimbora was hired as the manager; however, she is under the direction and control of Joanne Gamache. Gilles Gamache continues to be employed as a reservationist with Sun, as well has being the sole employee of two other companies which he owns. One of these companies is an importing company and the other involves text books. Gilles Gamache works 20 to 30 hours per week for Sun World Travel and 16 hours in his other businesses. (Tr. 80, 29-30) One of the major purchasing decisions made by Sun in the last five years was the purchase of the current business site. Joanne Gamache suggested the purchase of the building as a business location for Sun, and was the prime mover in its purchase, although both Gamaches participated in the negotiations for the purchase. The Gamaches own the building personally and rent the building to their businesses. The office of Gilles Gamache's companies are also in this building, but separate from those of Sun. None of the travel agency's business is transacted in the area used by his other businesses, and visa versa. (Tr. 76) Joanne Gamahe designed, selected and purchased the business' sign, entrance, and doors. She contracted for the security system for Sun. Rent paid by Sun on the building is less than $20,000 a year. Joanne Gamache earns $32,000 a year as a teacher and $7,000 a year from Sun World Travel. (Tr.46-47) Joanne Gamache goes to the business before and after school to deal with day to day business decisions providing direction to Cimbora in writing, directly, and by telepone. Joanne Gamache does a portion of her bookkeeping work at home at night and on the weekends. (Tr. 49) She estimates that she works 15-20 hours per week for Sun World Travel during the school year. Currently, Cindy Cimbora directs the other agents during business hours from 8:00 a.m. to 6:00 p.m. (Tr. 76-94) The Gamaches, as teachers, originally decided to engage in the travel business because its peak busy periods coincide with traditional school breaks. Sun employs Joanne Gamache, Gilles Gamache, Cindy Cimbora, Mary Waltman and John Moseley. Joanne Gamache makes personnel decisions, although most of the current employees were employed prior to the transfer of business ownership, and prepares and signs all payroll checks. She did interview and hire Cindy Cimbora, a white, American female in January 1992, on an employment contract which provides that Cimbora has first right of refusal if the agency is put up for sale. Cindy Cimbora is an experienced travel agent, and certified reservationist. (Tr. 50-51) Gilles Gamache signed the latest contract for the business' reservation computer system; however, Joanne Gamach negotiated the contract, and did not sign in behalf of the business because she was out of town because of an illness in her family. (Tr. 36) Joanne Gamache negotiated and signed the previous contract for reservation computer services. (Pet. Exh. 4 & 5, and Tr. 37) Joanne Gamache currently pays payroll, purchases supplies, handles accounts receivable, deals with the accountant about taxes, and gives direction to Cindy Cimbora on business to pursue. Joanne Gamache controls the finances of the business. Sun has a line of credit with First Florida Bank for which both Gamaches are jointly and severally liable. The business regularly uses credit card accounts for which both Gamaches are jointly and severally liable. Sun is unable to procure credit without the personal guarantee of both Gamaches. Cimbora and Gilles are additional authorized signatories on the business' checking account to facilitate transactions, such as making refunds to customers. Joanne Gamache writes the majority of the checks to suppliers and service providers. The company supplied a list of daily business activities for each owner at the request of the Certification Officer. (R.E. 1, p. 33-36) Gilles Gamache listed the following duties: disseminate information on new travel deals, coordinate ticket deliveries, organize travel literature files, look out for the best insurance values, monitor sales, solicit new business and make travel arrangements for clients. (R.E. 1 p. 34) Joanne Gamache listed her activities as the following: purchase goods and services, sign checks, do payroll, monitor profitability, monitor overhead costs, monitor collection of commissions, monitor stock of documents, issue refunds and process weekly airline report. (R.E. 1 p. 35) All of Joanne Gamache's functions related to management and the setting of policy, not day to day arrangements for travel; however, her duties are essential to the success of the business. In order to establish and maintain a travel agency the Airline Reporting Corporation requires that a travel agent with two years experience must run the business. (Tr. 123) To become a travel agent, a person must take a four hundred hour course covering topics including the opening and closing of a sale, learning airports, the destination of airlines and scheduling. (Tr. 88) There is a separate course requirement for the COVIA reservation system. (Tr. 88) COVIA is a system for making computerized airline reservations. Joanne Gamache has not attended these courses and is not a certified travel agent. (Tr. 75) This is the reason Sun employs Cindy Cimbora. The department's determination was based upon its conclusions regarding control of the business. To determine who has control of a family- owned business the agency looks at the contributions of each family member, the history of involvement with the business of each spouse, who sets policy, the resumes of the owners, the relative involvement of each owner in the business, and the length of time each had been active in the travel business. The agency initially concluded that Gilles Gamache's experience in the business was more extensive than his wife's, and that Joanne Gamache does not control Sun World Travel. (Tr 123-125)
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that a final order be entered granting the Petitioner's request for certification of the minority business enterprise. RECOMMENDED this 12th day of October, 1993, at Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The De Soto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of October, 1993.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: At all relevant times, respondent, Passport Internationale, Inc. (Passport or respondent), was a seller of travel registered with the Department of Agriculture and Consumer Services (Department). As such, it was required to post a performance bond with the Department conditioned on the performance of contracted services. In this case, petitioner, Ananta M. Dasgupta, has filed a claim against the bond in the amount of $531.00 alleging that Passport failed to perform on certain contracted services. In response to a mail offer, in March 1987 petitioner purchased a travel certificate from VIP Vacations (VIP), a Miami Beach telemarketeer that was reselling travel certificates previously obtained from Passport. As such, VIP was acting as an agent on Passport's behalf. The holder of the certificate was entitled to a vacation package for two persons to Hawaii for a cost of $488.00. The travel certificate carried the name, address and logo of Passport and provided that all transportation authorized by the certificate would be fulfilled by Passport. The certificate expired in one year, or at the end of March 1988. After receiving the certificate, petitioner filled out the reservation request form with three requested travel dates (the fourth week of December 1987, 1988 or 1989) and returned it to VIP in November 1987 along with a $50.00 deposit. The form and deposit were forwarded by VIP to Passport. When petitioner could not secure travel on his first selected date, and he was told the certificate expired at the end of March 1988, he requested a refund of his money. Passport then agreed to extend the certificate to December 1988 but advised petitioner it could not confirm his reservations for the second requested travel date during the fourth week of December 1988. When petitioner continued to pursue his demand for a refund, Passport declined to refund anything other than the $50.00 deposit saying the trip was solicited by VIP, and not Passport, and in any event, the certificate had by then expired. Finding Passport's response to his demand for a refund to be unacceptable, petitioner filed an action against Passport in a Wisconsin circuit court, and on April 6, 1990, he obtained a judgment in the amount of $531.00. It is undisputed that the judgment resulted from a cause of action involving Passport's activities as a seller of travel. The judgment forms the basis for petitioner's claim.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the claim of petitioner against the bond of respondent be granted, and he be paid $531.00 from the bond. DONE AND ENTERED this 9th day of December, 1994, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of December, 1994. COPIES FURNISHED: Ananta M. Dasgupta 1009 East Hamilton Avenue Eau Claire, Wisconsin 54701 Michael J. Panaggio 2441 Bellevue Avenue Daytona Beach, Florida 32114 Robert G. Worley, Esquire 515 Mayo Building Tallahassee, Florida 32399-0800 Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810 Richard D. Tritschler, Esquire The Capitol, PL-10 Tallahassee, FL 32399-0810
The Issue Whether Respondent, a “seller of travel,” owes Petitioners a refund for misrepresentation of travel services offered pursuant to an agreement between the parties.
Findings Of Fact Axis is a “seller of travel” and at all times material to this matter, was located in St. Augustine, Florida. On or about October 8, 2017, Petitioners attended a presentation that was conducted by Axis. Petitioners were enthusiastic about the travel service and were impressed by the presentation. Petitioners frequently traveled to trade shows and believed the services would help reduce travel costs. They were particularly interested in vacation packages because they intended to travel to Cancun, Mexico. During the presentation, they were told of the bonus week fee of $97.00. Ms. Page asked specific questions about the costs for a vacation package for Cancun and whether there would be any hidden or additional fees. The presenter assured Petitioners there would be no hidden or additional fees. After the presentation, Petitioners jointly executed a Reservation Services Agreement (Agreement) for a non-exclusive license to access the travel network for a fee of $4,394.00. The fee was paid in two installments of $2,000.00 and one installment of $394.00. The agreement provides, in pertinent part, as follows: Customer desires to enter into this Agreement reservation services applicable to vacation packages, nightly stays, bonus weeks, fantasy getaways, activities and excursions, cruises, car rentals, golf discounts, dining discounts, hotels and luxury condominium and villa rentals (“Network Benefits”). The Customer acknowledges that the Network Benefits may be changed from time to time. * * * 8. Discount Variation All benefits and discounts conferred through this Agreement vary greatly based on the characteristics of the vacation unit or type, the time of year, space availability, and/or the rates charged by those parties listing the accommodations for rent through the Network. Customer acknowledges that he/she has been advised that while some discounts may be significant, these same accommodations may not enjoy deep discounts at other times and that deep discounts are not available for some vacation units or types at any time. Customer acknowledges that the value in this License is expected to be realized over time contingent on the frequency of the use and that the Purchase Price is not guaranteed to be recovered on a single vacation, the first year, if Customer does not take vacations, or if the vacation choices are not tailored offerings. * * * 17. Member Best Price Guarantee Customer shall receive the Best Price Guarantee if Customer finds lower prices on Equal Arrangements through a competing vendor. To access the guarantee, Customer must secure a confirmed reservation through the Network that displays the Member Price Guarantee checkmark, pay for the reservation in full and receive a valid confirmation number. The sections on the website included in the Best Price Guarantee are vacations (i.e. Accommodations, Cruises, Vacation Packages, and Worldwide Tours) and vacation add-ons (i.e. Car Rentals, Activities and Golf). Airfare not included. Eligible claims must be submitted within 24 hours from the time the original fully paid reservation is made and meet all the Terms and conditions listed in full on the Website, must be in US dollars, must be an identical comparison to what was purchased and must be publicly viewable via the internet (i.e. the general public must be able to view the rate on a website, as it does not apply to consolidator fares, fares that have been acquired through auction or bid, or any Internet fares that cannot be independently verified as to the price and exact itinerary) and available and bookable (i.e. the rate is currently available and can be reserved online). Equal Travel Arrangements shall be defined as the exact same arrival and departure dates, the exact same property, the exact same room or cabin classification, the exact same room or cabin size, the exact same cruise line, and the exact same itinerary. Reservations excluded from the Best Price Guarantee include Non- Refundable reservations, Airfare and reservations made or purchased with Reward Credits in full or in part. If the claim is found to be valid, Customer will be credited with 110% of the difference to (sic) in the form of Reward Credits. * * * 25. Entire Agreement This instrument contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements, written or oral, with respect to such subject matter. It may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. * * * By signing below, the parties to hereby execute this Agreement on the Execution Date of this Agreement as identified herein. The Licensee acknowledges and agrees that this Agreement is subject to all terms and conditions set forth herein. The Licensee further acknowledges having read the entire Agreement and agreed to each of its provisions prior to signing below. * * * YOU HAVE THE RIGHT TO CANCEL THIS CONTRACT AT ANY TIME PRIOR TO MIDNIGHT OF THE THIRD (3) CALENDAR DAY AFTER THE DATE OF THIS CONTRACT. UPON CANCELLATION, YOU WILL RECEIVE A FULL REFUND, WITHOUT ANY CHARGES OR PENALTY, WITHIN TEN (10) DAYS UNLES SOONER REQUIRED BY APPLICABLE LAW. THIS RIGHT IS NONWAIVABLE. TO EXERCISE YOUR RIGHT TO CANCEL, YOU MUST SEND A WRITTEN NOTICE STATING THAT YOU DO NOT WISH TO BE BOUND BY THIS CONTRACT. THE NOTICE MAY BE SENT BY EMAIL, FACSIMILE: 713-535-9239, OR BY DEPOSIT FIRST-CLASS POSTAGE PREPAID, INTO THE UNITED STATES MAIL: 13416 SOUTHSHORE DR. CONROE, TX 77304. In November 2017, Petitioners used the network software for the first time. Petitioners searched for accommodations in Cancun, Mexico at an all-inclusive resort. The resort had a price of $129.00 instead of $97.00 and a mandatory resort fee in the amount of $135.00 to $185 per person per day. Petitioners found accommodations at three different all-inclusive resorts, which also required an additional mandatory resort fee. While rooms were available for the price offered by using the software, Petitioners were dissatisfied because the resorts required a resort fee. At an unknown time after using the software, Petitioners called Respondent but did not receive a return call. On December 14, 2017, Petitioners sent text messages to Jonicar Cruz seeking a refund because the service was not what was represented to them at the presentation. Ms. Cruz offered to assist Petitioners with the software program. Ms. Cruz also directed Petitioners to contact another staff member, as she was no longer an employee of the company at that time. Petitioners’ calls and emails to the other Axis staff member were left unanswered. On February 7, 2018, Petitioners filed a complaint with the Better Business Bureau, and on February 13, 2018, Petitioners filed a complaint with the Office of Citizen Services, Florida Attorney General’s Office, and the Better Business Bureau. In April 2018, Petitioners filed a complaint with the Department. Petitioners admitted that they did not submit a written letter of cancellation of the agreement during the three-day cancellation period. Ms. Cruz testified that she did not receive any written request to cancel the agreement during the cancellation period. Ms. Cruz also testified that while she could not affirm certain representations made by the presenter, she explained to Petitioners the process for the price match guarantee, and that a resort fee may be associated with all-inclusive resorts.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioners, John Elkins and Mary Page’s, claim against Axis and the surety bond be DENIED. DONE AND ENTERED this 4th day of September, 2018, in Tallahassee, Leon County, Florida. S YOLONDA Y. GREEN 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 4th day of September, 2018. COPIES FURNISHED: W. Alan Parkinson, Bureau Chief Department of Agriculture and Consumer Services Rhodes Building, R-3 2005 Apalachee Parkway Tallahassee, Florida 32399-6500 (eServed) John E. Elkins Mary Page Apartment 1605 7507 Beach Boulevard Jacksonville, Florida 32216-3053 (eServed) Michael Borish Axis Getaways Systems, LLC 965 North Griffin Shores Drive St. Augustine, Florida 32080-7726 Axis Getaways Systems, LLC Suite B 108 Seagrove Main Street St. Augustine, Florida 32080 Travelers Casualty Surety Company of America One Tower Square Hartford, Connecticut 06183 Bryan Greiner Axis Getaway Systems, LLC 912 Ocean Palm Way St. Augustine, Florida 32020 Tom A. Steckler, Director Division of Consumer Services Department of Agriculture and Consumer Services Mayo Building, Room 520 407 South Calhoun Street Tallahassee, Florida 32399-0800 Stephen Donelan, Agency Clerk Division of Administration Department of Agriculture and Consumer Services 407 South Calhoun Street, Room 509 Tallahassee, Florida 32399-0800 (eServed)
Findings Of Fact Petitioner was born in 1936. While on active duty in the United States Navy in 1955, he suffered an injury which subsequently led to the amputation of his left foot. When discharged from the Navy, his disability was rated by the Veterans Administration (VA) at 40 percent. Subsequent problems with the stump of the left leg, arthritis, and a spinal fusion led to VA disability increases, which disability rating at time of hearing was 100 percent. Petitioner applied for work with Delta Air Lines, Respondent, in 1966 and was employed as a reservations agent in Chicago. At this time his VA disability rating was 70 percent. In 1967 Petitioner, at his own request, was transferred by Respondent to Tampa, Florida. At this time Petitioner was able to move around the bay in which he worked with and without his crutches. In September 1979 Petitioner was hospitalized for stump revision and remained in an off-duty status until June 1980 when he returned to his position with Delta. At this time Petitioner carried out his duties as a reservation agent in a wheelchair. Following his return to work in 1981 Petitioner's performance of duty was marginal. Petitioner takes prescribed medication for pain. On one occasion the medication adversely affected his ability to perform his duties satisfactorily and he was told by his supervisor not to take medication at work. The doctor changed this prescription from 1-100 mg. daily to 4-25 mg. daily and Petitioner continued his medication as prescribed without further problems. On October 28, 1981, Petitioner was examined by Dr. Frazier, one of the physicians used by Delta for its employees. The purpose of this examination was to evaluate Petitioner's physical condition for continued employment. Report of this examination is contained in Exhibit 5 wherein Dr. Frazier concluded that Petitioner "has several progressive disabilitating diseases, that combined with his psychological state make him unemployable for Delta Air Lines. I would recommend because of his depression, amputation, hypertension, osteo-arthritis and spinal fusion problems that he be retired on disability." Respondent does not have a retirement for physical disability status. In lieu thereof it has short-term disability benefits and long-term disability benefits. Long-term disability benefits are calculated as a percentage of the employee's basic monthly salary less social security benefits the employee receives. Petitioner was in a long-term benefit status while recovering from stump revision in 1979-1980. Following Delta's receipt of the report of Dr. Frazier, Petitioner was sent home in a short-term disability status while the report was evaluated. Respondent subsequently advised Petitioner that he was qualified for sedentary work and directed him to return to his position with Delta Air Lines. Petitioner returned to work around June 1982 as a reservations agent. Fifteen or twenty reservation agents work in a "bay" where each has access to a telephone and computer terminal. These agents handle all reservation requests via telephone with no visual contact with the customers. They work an eight-hour shift with two 10 minute breaks and one-half hour off for lunch. While operating from his wheelchair, Petitioner usually took a station near the entrance to the bay which provided easier access for the wheelchair than a station farther down into the bay. He made no complaints about access to his station to Delta supervisory personnel. Reservation agents' telephone communications are monitored by supervisors on an intermittent basis to ensure the agent is carrying out his duties in a satisfactory manner and is providing proper information to the customers. In June 1972 Petitioner was placed on three months' probation. In September 1972 this probationary period was extended an additional three months. In July 1974 Petitioner was again placed on probation and given a "final chance" letter. In October 1977 he was given a letter for poor performance. Petitioner acknowledged that several times before 1982 he had been disciplined by Respondent but not fired. In December 1982 Charles Cortright, a retired architect, called the Tampa office of Delta Air Lines to get information on a flight to and from the West Coast interrupted with cruises while on the West Coast. Specifically, Cortright wanted to fly to Seattle, take a ferry trip to Alaska, perhaps two more sea cruises from West Coast ports, take a train from Seattle to San Francisco, and fly back to Tampa from San Francisco. He was referred to Petitioner, who quoted him a price of $278.00 on the air portion of this trip, but, since Petitioner did not think the cruises could be arranged by Delta, referred Cortright to a travel agency. Petitioner testified that he referred Cortright to three travel agencies located in the vicinity of Cortright's residence and did not specify the agency at which Petitioner's wife worked. Although Cortright testified that he was not referred to any one by name and did not know that Petitioner's wife worked at Tri-Cities Travel Agency, he went to Tri-Cities and his reservations were made by Malinda, who, in fact, was Petitioner's wife. It is likely that Cortright did not know that Malinda was Petitioner's wife, but it is believed that Cortright was told by Petitioner to ask for Malinda and he did so. When the airline tickets arrived at the travel agency, Cortright was advised by the agency the price of the air fare was $302.00. Cortright then, on December 14, 1982, called Delta and asked to speak to Petitioner to inquire about the difference in the fares quoted by Petitioner and the cost of the tickets at the travel agency, and to get the fare guaranteed that was quoted by Petitioner. At the time this call was received by another agent, Jennings King, King was being monitored by his supervisor, Carolyn Corvette. In this phone conversation Cortright said he had spoken to Petitioner two times before, that he went to the agency to which he had been directed by Petitioner, that he spoke to Malinda as directed by Petitioner, and that he was charged a higher fare than was quoted by Petitioner. Corvette had the call transferred to the customer service desk and authorized guarantee of the lower fare quoted. She promptly prepared a memo of the incident to Arthur Arden, Chief Reservation Supervisor (Exhibit 7). Arden called Cortright, who confirmed that Petitioner had directed him to Tri-Cities Travel Agency. Arden extracted from Delta's computer the reservation made for Cortright which disclosed the reservation was made by Malinda at Tri-Cities (Exhibit 8). Knowing that Malinda was Petitioner's wife, Arden, on December 15, told Petitioner that he was suspended from work and would be recommended for dismissal. On December 15, 1982, Arden signed a memo to Harry Dean, Delta's Regional Manager at Tampa, recommending that Petitioner be terminated (Exhibit 6). Dean concurred, sent the memo to Delta's Atlanta office, and Petitioner was fired. All reservation agent trainees are told that they should make every effort to arrange all of the transportation needs of the customers through Delta Air Lines, including tours requiring other modes of transport than air; and that they should never refer a customer to a specific travel agency. If a travel agency's services are needed by the customer, the customer should be referred to the yellow pages of the phone book to select a travel agency. This same information is contained in the Standard Practices Manual, which is available to all reservation agents. The reason for this rule is to eliminate, insofar as possible, conflicts of interest and to refrain from alienating some travel agents by appearing to favor other travel agents. This could create a serious problem for the air lines and is taken very seriously by air line company management. Petitioner's testimony that he did not refer Cortright to Tri-Cities Travel Agency and that he never referred a customer to a specific travel agency was rebutted by Betty Maseda, a fellow reservations agent who frequently sat alongside Petitioner at work and on several occasions overheard Petitioner giving specific instructions to customers on exactly how to get to Tri-Cities Travel Agency and to ask for Malinda. Ms. Maseda considers herself a good friend of Petitioner and did not volunteer this information to Respondent until after Petitioner had been fired.
The Issue Whether or not existing rule 59A-12.006(3)(d) F.A.C., the Health Maintenance Organization (HMO) rule, constitutes a valid agency exercise of delegated legislative authority.
Findings Of Fact Existing Rule 59A-12.006(3)(d) F.A.C. provides: 59A-12.006 Quality of Care. Each HMO or PHC shall: Ensure that the health care services it provides or arranges for are accessible to the subscriber with reasonable promptness. Such services shall include, at a minimum: (d) Average travel time from the HMO geographic services area boundary to the nearest primary care delivery site and to the nearest general hospital under arrangement with the HMO to provide health care services of no longer than 30 minutes under normal circumstances. Average travel time from the HMO geographic services area boundary to the nearest provider of specialty physician services, ancillary services, specialty inpatient hospital services and all other health services of no longer than 60 minutes under normal circumstances. The AHCA shall waive this requirement if the HMO provides sufficient justification as to why the average travel time requirement is not feasible or necessary in a particular geographic service area; The existing rule in final form, supra, was adopted in February 1992 following extensive "workshopping" and other public hearing procedures. There is no suggestion herein that there are any enacting defects with regard to this rule. Validity of the rule is challenged solely under Sections 120.52(8)(c), (d), and (e) F.S. [1992 Supp.]. The grounds of invalidity alleged are that: The rule enlarges, modifies, or contravenes the specific provisions of the law implemented, i.e., Section 641.49, Section 641.495(3) and Section 641.56, F.S.; The rule is vague, fails to establish adequate standards for agency decisions, or vests unbridled discretion in the agency; or The rule is arbitrary and capricious. Petitioner, Healthplan Southeast, Inc., (Healthplan), is a Florida corporation based in Tallahassee, Florida, and is a health maintenance organization (HMO) which provides comprehensive health care services to its subscribers. Petitioner has requested a waiver under the challenged rule. The agency's denial of that request for a waiver is the subject of DOAH Case No. 93- 2606, and involves disputed issues of material fact. Respondent, Agency for Health Care Administration (AHCA), is the state agency charged with the responsibility of implementing, interpreting, and enforcing the rules adopted pursuant to the authority set forth in Section 641.56, F.S. The Department of Health and Rehabilitative Services, (HRS), adopted Rule 10D-100.006(2)(a), the predecessor to Rule 59A-12.006(3)(d) as an agency rule in 1988. At the time of adoption of Rule 10D-100 in 1988, Ralph Gray was Unit Manager of the Managed Care Unit at HRS and was responsible for promulgating and implementing the rule. At the time Mr. Gray inherited the responsibility of promulgating Rule 10D-100, some preliminary work had already been performed and a draft rule existed which already included a requirement that the average travel time to the nearest primary care delivery site or the nearest institutional service site be thirty minutes or less. Mr. Gray accepted the draft that he inherited and moved forward with the rule adoption process without doing any independent investigation to determine the origin or validity of the thirty minute average time requirement. The rule as it was originally adopted in 1988, provided that HMOs should ensure that health care provided for subscribers was accessible with reasonable promptness by ensuring that the average travel time from an HMO geographic service area boundary to the nearest primary care delivery site or to the nearest institutional service site would be no longer than thirty minutes under normal circumstances. The specific language of the rule, as it existed from 1988 until February 1992, simply required an HMO to ensure that a subscriber had access to either a primary care delivery site or an institutional service site within an average travel time of thirty minutes. The rule as it was applied by the agency from 1988 until February 1992 did not require that an HMO provide a subscriber access to both a primary care delivery site and an institutional service site within thirty minutes. Neither did the rule as applied from 1988 to 1992 require that the institutional service site be under contract with the HMO. Amendments to Rule 10D-100 were proposed in 1991 in response to amendments to Chapter 641, Part IV, F.S. enacted by the 1991 Legislature and to establish additional quality of care standards for HMOs and Prepaid Health Clinics (PHCs). In 1991-1992, Ralph Gray was again the person in charge of implementing amendments to Rule 10D-100 that were necessary in order to comply with the statutory changes in 1991. Mr. Gray assembled a team to assist him in the rule adoption process. In addition to Mr. Gray, the team consisted of Linda Enfinger, Registered Nurse Specialist with the agency's HMO Unit and Dr. James Conn, M.D., Consultant to the Agency Office of Licensure and Certification. The rule amendments at issue herein included a change from "or" to "and" in the language of the rule which resulted in the thirty minute average travel time requirement being applicable to both primary care delivery sites and general hospitals under arrangement with the HMO to provide health care services. This change was not specifically mandated by the changes to Chapter 641 F.S. adopted by the Legislature in 1991. The change from "or" to "and" came about because of concern informally expressed to team members about HMO subscribers in northern Dade County and in Broward County having to travel long distances over considerable periods of time in congested traffic situations to obtain hospital services, and focused upon the Miami--Ft. Lauderdale population concentration corridor which is complex in roadways and traffic patterns and in its number of people and motor vehicles. There were no formal written complaints espousing the foregoing concept of traffic congestion and excessive distance to HMO provider hospitals in Dade and Broward counties, and the agency neither conducted nor commissioned any specific formal review or study to verify the presence or absence of such a problem either in Dade--Broward or in any other geographic area of the state. However, Mr. Gray reviewed listings of their providers supplied to the agency by HMOs and determined for himself that there were accessibility problems in the Dade--Broward area. No issue or concern clearly in opposition to the thirty minute average travel time restriction was raised in any workshop or public hearing during the 1991-1992 rule amendment process. Petitioner did not appear at the December 19, 1991 public hearing. Letters from the public in response to that public hearing did not contain adverse comments regarding the thirty minute travel requirement. Letters from the public during this process generally supported the time requirement upon accessibility grounds. A concomitant thrust of the public comment letters was to the effect that the agency should encourage HMOs to sign- up licensed local general hospitals in rural areas such as Madison County because of the need for such services from the HMOs. Opinion testimony offered at formal hearing herein that the thirty minute average travel time requirement as included in the predecessor rule was probably originally based on federal regulation 42 CFR 5 was speculative and unpersuasive. However, it is clear that the time limit, at least, was carried over from the 1988 HRS rule. No witness knew with certainty that the 1983 version of 42 CFR 5, dealing with the federal criteria for designating geographic areas having shortages of primary medical care professionals, was taken into consideration at the time the state's 1988 HMO rule was drafted. The 1992 version of 42 CFR 5 apparently applies to correctional institution populations who must usually have care providers travel to them, and became effective in October 1992, eight months after the new rule amendments were finally promulgated. On the other hand, the use of the thirty minute average travel time figure in CFR from 1983 to date is indicative of a continuing industry standard. Mr. Gray and Dr. Conn each had the "sense" or "impression" that thirty minutes average travel time was an industry standard. Mr. Gray's opinion in this regard was based on an absence of any serious question or challenge to this provision at any of the public meetings during the 1991-1992 rule amendment process. Dr. Conn's opinion was partly based on the same factor. However, his opinion is more persuasive because it is based, in part, upon his personal experience in the private health industry sector as Medical Director of the Capital Health Plan HMO from 1981 through 1982. During the amendment process, the agency did not conduct any formal studies to determine whether the thirty minute average travel time requirement had any validity or in any way satisfied the statutory mandate to ensure access to health care services with reasonable promptness. However, at formal hearing, the consistent and unrefuted expert medical and nursing testimony was to the effect that excessive travel time can exacerbate bone fracture, shock, and hemorrhaging. Dr. Conn specifically testified that there are many medical conditions that need to be evaluated capably within thirty minutes of the onset of symptoms. Medical physician Conn and nurse administrator Enfinger, as experts in their fields, recited factual examples from their own professional experience of emergency room protocols and general hospital "on-call" physician rosters which require response time ranging from 15 minutes to 45 minutes of notification of the occurrence of trauma. Dr. Conn testified as an acknowledged expert in managed health care that the rule's thirty minutes average travel time provision is a good and adequate interpretation of the statutory mandate of the enabling legislation at Section 641.495(3) F.S., to ensure that HMOs provide health care services to their subscribers with reasonable promptness with respect to geographic location. According to Mr. Gray, the 1991-1992 rule amendment changing the words "institutional service site" to "general hospital under arrangement with the HMO" occurred because the term "general hospital" was thought by agency personnel to be synonymous with "institutional service site" and because "general hospital" was thought to be less confusing due to generally understood industry perceptions of the term. There is no evidence in this record to the contrary. The change of terms within the rule from "institutional service site" to "general hospital under arrangement with the HMO," did not draw comments or raise concern during the rule amendment process, and Dr. Conn testified convincingly at formal hearing that a primary care physician's office would probably not have the technical equipment or personnel capabilities of treating severe emergencies, capabilities that would be present at a general hospital. HMO subscribers are in the nature of a captive audience in that they are not free to select from any provider if they wish to continue to enjoy the reduced cost benefits of the HMO provider contract. Emergency-type treatment for a subscriber must be paid for by his HMO even if that treatment was rendered in a health care facility not signed up with the HMO. Roberta Agner, administrator of Madison County Memorial Hospital, testified that the rule as amended acts to protect those subscribers receiving HMO services and the HMO itself by insuring adequate health care through the HMO. Ms. Agner's foregoing opinion is colored by the fact that without the new rule in effect, the Petitioner's HMO subscribers in Madison County may come to Ms. Agner's hospital, which is currently not signed up with Petitioner's HMO, only for life and death situations if they are to remain assured of payment of their fees by their HMO. Nonetheless, Ms. Agner's testimony is credible that HMO subscribers sometimes perceive symptoms such as acute chest pain as an emergency situation and utilize a local non-HMO facility only to discover after diagnosis and treatment that the HMO does not acknowledge the situation as a compensable emergency (life or death situation) because upon medical hindsight, the precipitating symptom is not, in fact, a heart attack. She gave several similar medical conditions that routinely result in such disputes. The greater weight of all the evidence is that prudent patients and hospital emergency rooms must treat these symptoms initially as emergencies. From this, the undersigned reasonably infers that the absence of the thirty mile rule could have a life- threatening "chilling effect" on HMO subscribers promptly seeking truly necessary emergency health care for fear of making an expensive wrong self- diagnosis. Without the challenged rule provision, a subscriber to Petitioner's HMO living in Madison County, Florida could have to travel from as far away as the Suwannee River (the eastern boundary) to Tallahassee in Leon County to receive hospital services. Without the rule, such a subscriber would have to travel sixty minutes average travel time (distance divided by legal speed limit equals time) from downtown Madison, which is not at the eastern boundary, to either provider hospital in Tallahassee. This trip's average travel time in unusual circumstances could be more than sixty minutes. As found supra, many conditions routinely require medical attention in a general hospital within 15 to 45 minutes. The rule as currently written has demonstrable impact on subscribers living in rural areas receiving health care services from their HMO promptly. Petitioner presented no evidence specifically attacking the portion of the rule providing for the sixty minute average travel time for specialty physician services, specialty inpatient hospital services, and all other health services. Petitioner complained that the agency has no uniform interpretation or guidelines for interpreting the rule's terms, "average travel time" and "normal circumstances." Despite such assertion, the rule is clear on its face. Each witness who was asked to apply the rule used standard dictionary definitions and elementary school mathematical formulas. Each witness uniformly started with the premise that distance calculated by existing roadways, divided by legal speed limits, would equal "average travel time" under "normal circumstances." All witnesses were able to list numerous hypothetical factual situations, including but not limited to weather and traffic conditions, which might render a travel time "not normal," but which would have to be weighed and considered on a case by case basis. The rule provides that the agency shall waive the average travel time requirement if an HMO provides "sufficient justification" as to why the requirement is not "feasible" or "necessary" in a particular geographic service area. Thus, an HMO which cannot meet the average travel time requirement of the rule still has the opportunity to prove the requirement ought not to apply to it, bearing the burden to go forward and the burden of proof. This is clearly a flexible standard designed to accommodate a variety of "not normal" circumstances. Petitioner's assertion that the rule is invalid because it does not establish a uniform interpretation or guidelines to supplement or explain "feasible" or "necessary," is not persuasive since, as used in the rule, these terms are clearly susceptible of interpretation by dictionary and of being applied on a case by case factual basis. Some types of evidence which agency personnel or the HRS consultant, Dr. Conn, advanced as probably going to prove "sufficient justification" were improved medical techniques, modes of transportation such as rescue flights, and unavailability of any accredited or licensed general hospitals in a given geographic service area. In such situations, the rule's waiver provision provides balance to the rule's initial thirty minute travel requirement.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law recited herein, it is ORDERED that Existing Rule 59A-12.006(3)(d) F.A.C. constitutes a valid exercise of delegated legislative authority. DONE AND ORDERED this 19th day of November, 1993, at Tallahassee, Florida. ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The De Soto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of November, 1993. APPENDIX TO FINAL ORDER 93-2721RX The following constitute specific rulings, pursuant to S120.59(2), F.S., upon the parties' respective proposed findings of fact (PFOF). Petitioner's PFOF: 1-15 Accepted, but material unnecessary, subordinate or cumulative to the facts as found has not been adopted. 16 Rejected as not supported by the record and as unpersuasive legal argument 17-21 Accepted in part and rejected in part upon the record evidence as a whole and as covered in FOF 32-34. What is rejected is not dispositive or controlling for the reasons set out in the FOF and COL. 22 Accepted in FOF 20. Respondent's PFOF: 1-5 Accepted, but material unnecessary, subordinate or cumulative to the facts as found has not been adopted. More specifically, the excessive wordiness of the proposals as to who examined the witness or whether oral testimony was given upon direct or cross examination or upon redirect examination has been excluded as irrelevant. 6-18 These proposals amount to identification of various exhibits by a witness. The exhibits are in evidence and were considered. Immaterial matters have not been adopted. The material substance of those exhibits and the oral evidence and stipulations concerning them are covered in FOF 3, 18-21. 19-20 Rejected as stated because misleading as stated. However, official recognition was taken of 42 CFR 5 in both its forms. Its significance is covered in FOF 19- 21. Accepted, but material unnecessary, subordinate or cumulative to the facts as found has not been adopted. Rejected as stated because not comprehensive of all testimony as stated. Covered in FOF 5, 32, and 34 as supported by the record as a whole. 23-30 Accepted, but material unnecessary, subordinate or cumulative to the facts as found has not been adopted. More specifically, the excessive wordiness of the proposals as to who examined the witness or whether oral testimony was given upon direct or cross examination or upon redirect examination has been excluded as irrelevant. Additionally, proposals which amounted to no more than identification of exhibits were excluded as subordinate. The exhibits themselves together with relevant testimony have been considered and facts found accordingly. 31-32 Rejected as stated because misleading as stated. However, official recognition was taken of 42 CFR 5 in both its forms. Its significance is covered in FOF 19- 21. 33-35 Accepted, but material unnecessary, subordinate or cumulative to the facts as found has not been adopted. More specifically, the excessive wordiness of the proposals as to who examined the witness or whether oral testimony was given upon direct or cross examination or upon redirect examination has been excluded as irrelevant. COPIES FURNISHED: Michael O. Mathis, Esquire Agency for Health Care Administration 325 John Knox Road, Suite 301 The Atrium Building Tallahassee, Florida 32303 John C. Pelham, Esquire Pennington, Haben, Wilkinson, Culpepper, Dunlap, Dunbar, Richmond, and French, P.A. Post Office Box 13527 Tallahassee, Florida 32317-3527 Carroll Webb, Executive Director Administrative Procedures Committee Holland Building, Room 120 Tallahassee, Florida 32399-1300 Sam Power, Agency Clerk Agency for Health Care Administration The Atrium Building, Suite 301 Tallahassee, Florida 32303
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: At all relevant times, respondent, Passport Internationale, Inc. (Passport or respondent), was a seller of travel registered with the Department of Agriculture and Consumer Services (Department). As such, it was required to post a performance bond with the Department conditioned on the performance of contracted services. In this case, petitioner, Cecile M. Haake, has filed a claim against the bond in the amount of $398.00 alleging that Passport failed to perform on certain contracted services. On December 24, 1990, petitioner responded to a newspaper advertisement promoting a five-day, four-night cruise to the Bahamas for $199.00 per person. The advertisement was run by Travel Partners International (TPI), a telemarketeer selling travel certificates on behalf of Passport. Petitioner purchased a certificate authorizing two persons to take the cruise. For this, she paid $398.00. Shortly thereafter, petitioner received a package with a reservation request form. The form carried the name, address and telephone number of Passport. It should have contained an issue date and the name of the sponsor, but TPI erroneously left that information blank. Ordinarily, a certificate would expire one year after the issue date. Petitioner was not told this when she agreed to purchase the package. Around February 20, 1992, petitioner returned the reservation request form to Passport with a requested travel date of May 1, 1992. On February 26, 1992, Passport returned the form and advised petitioner that "your reservation form was not completed by your sponsor." She was told to have TPI complete the form, and resubmit it with her requested travel dates. By now, however, TPI had gone out of business. Petitioner accordingly filled in TPI's name in the space for the sponsor, and she inserted an issue date of March 15, 1991. This meant her certificate would expire on March 15, 1992, or less than a month later. She again returned the form to Passport. Since her requested travel dates were more than a year after the issue date, Passport declined to accept the reservation. Although in some cases Passport offered to extend certificates for an additional year for a $50.00 fee, there is no evidence that Passport did so in this case. When petitioner requested a refund of her money, Passport's successor corporation, Incentive International Travel, Inc. (Incentive), declined to issue a refund on the ground the package was purchased from TPI and not Passport, and Passport had never received any money from the telemarketeer. To date, petitioner has never received a refund of her money.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the claim of petitioner against the bond of respondent be granted in the amount of $398.00. DONE AND ENTERED this 9th day of January, 1995, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of January, 1995. COPIES FURNISHED: Cecile M. Haake 7254 Quail Meadow Road Charlotte, North Carolina 28210 Julie Johnson McCollum 2441 Bellevue Avenue Daytona Beach, Florida 32114 Robert G. Worley, Esquire 515 Mayo Building Tallahassee, Florida 32399-0800 Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, Esquire The Capitol, PL-10 Tallahassee, Florida 32399-0810
The Issue At issue is the amount owing for reasonable expenses incurred in connection with the filing of the claim, including reasonable attorney's fees.
Findings Of Fact The award provisions of the Plan 1. When it has been resolved that a claim is compensable, the administrative law judge is required to make a determination of how much compensation should be awarded. § 766.31(1), Fla. Stat. Pertinent to this case, Section 766.31(1)(c), Florida Statutes, provides for an award of the following expenses: (c) Reasonable expenses incurred in connection with the filing of a claim under ss. 766.301-766.316, including reasonable attorney's fees, which shall be subject to the approval and award of the administrative law judge. In determining an award for attorney's fees, the administrative law judge shall consider the following factors: The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal services properly. The fee customarily charged in the locality for similar legal services. The time limitations imposed by the claimant or the circumstances. The nature and length of the professional relationship with the claimant. The experience, reputation, and ability of the lawyer or lawyers performing services. The contingency or certainty of a fee. Here, Mr. Gustafson's Affidavit as to Reasonable Attorney's Fees, Paralegal Fees and Expenses Incurred in Connection with the NICA claim (Petitioners' Exhibit 1) described the claim for expenses, as follows: I am seeking an award for my attorney's fees totaling $85,680.00, reflecting my reasonable time necessarily expended in pursuit of NICA benefits (285.60 hours) at the reasonable rate of $300.00 per hour. I am also seeking an award of paralegal fees totaling $10,780.00 reflecting my paralegal's reasonable time necessarily expended in pursuit of NICA benefits (107.8 hours) at the reasonable and uncontested rate of $100.00 per hour. The reasonable hourly rate reflects the complexity of the case, the contingent nature of the fee, the substantial risk of non-recovery, and the other factors set forth in section 766.31(1)(c)(1-6), Florida Statutes. The time reasonably expended in pursuit of this NICA claim is set forth supra in this Affidavit [by date and activity], as well as in Exhibit 2.[2] I am also seeking an award for expenses reasonably and necessarily incurred in connection with the filing of Petitioners' claim and pursuing NICA benefits under sections 766.301 - 766.316, Florida Statutes. The total of the expenses reasonably incurred in pursuit of NICA benefits is $22,102.16. The itemized expenses incurred in pursuit of NICA benefits are attached and made a part of Exhibit 2 to this Affidavit. The expenses set forth in Exhibit 2 are an accurate accounting of the expenses reasonably and necessarily incurred in pursuit of NICA benefits for Petitioners. Proof of these expenses are attached as Exhibit 3 to this Affidavit.[3] In response to Petitioners' claim, Respondent, through its expert (Respondent's Exhibit 1), initially accepted 198.8 hours of attorney time and 97.1 hours of paralegal time, as reasonably expended, and specifically identified those hours that should be deducted.4 Centex-Roony Construction Co., Inc. v. Martin County, 725 So. 2d 1255, 1259 (Fla. 4th DCA 1999)("Although the fee applicant has the burden of establishing its entitlement to an award of attorney's fees, . . . the opponent of the fee award has the burden of pointing out with specificity which hours should be deducted."). However, the parties further agreed that, if appropriate, any time or expense identified at hearing as associated with the notice issue should be deducted.5 Here, it should not be subject to serious debate that any time or expense associated with the notice issue should be deducted. Florida Birth-Related Neurological Injury Compensation Association v. Carreras, 633 So. 2d 1103, 1109 (Fla. 3d DCA 1994)("Plainly, the exploration of the possibility of opting out of NICA through the 'bad faith' exception or otherwise is not, as the statute requires, work performed 'in connection with the filing of a claim . . . .'"). See also Braniff v. Galen of Florida, Inc., 669 So. 2d 1051, 1053 (Fla. 1st DCA 1995)("The presence or absence of notice will neither advance nor defeat the claim of an eligible NICA claimant who has decided to invoke the NICA remedy . . .; thus, there is no reason to inquire whether proper notice was given to an individual who has decided to proceed under NICA. Notice is only relevant to the defendants' assertion of NICA exclusivity where the individual attempts to invoke a civil remedy."). Accord, O'Leary v. Florida Birth-Related Neurological Injury Compensation Plan, 757 So. 2d 624, 627 (Fla. 5th DCA 2000)("We recognize that lack of notice does not affect a claimant's ability to obtain compensation from the Plan."). The claim for attorney's fees The initial step in deriving a reasonable attorney's fee is to determine the number of hours reasonably expended to pursue the claim. Here, Petitioners claim 285.60 hours6 were dedicated to the claim, which they chose to identify in three phases: 18.7 hours claimed to investigate the claim (assemble the necessary records, consult with experts, legal research) and prepare the petition for NICA benefits (July 12, 2002 - June 17, 2005); 252.6 hours claimed following the filing of the petition through the entry of the Order on Compensability and Notice (July 28, 2006), and discussions related to that Order (June 22, 2005 - August 4, 2006); and 14.3 hours claimed identifying, calculating, and substantiating the nature and amount owing for expenses previously incurred (August 8, 2006 - September 25, 2006) Addressing first the 18.7 hours claimed for the period of July 12, 2002 - June 17, 2005, it is apparent, as noted by NICA, that the time which preceded the abatement of the civil action (5.8 hours, through "8/ /03") was dedicated to the civil lawsuit and not the NICA claim.7 However, the time was related to acquiring the medical records related to Lily's birth, which were required to file a NICA claim, and should be compensated. The hours claimed from December 2, 2003, through April 21, 2005 (3.9 hours) were, with the exception of .6 hours claimed for December 6, 2003 (.3 hours) and January 6, 2004 (.3 hours), relevant to the investigation of the claim, including the assembly of medical records and expert consultation. Finally, the hours claimed from June 9, 2005, through June 17, 2005 (9.0 hours) for research and drafting the NICA petition are reasonable and related to pursuing the claim, with the exception of time researching the notice issue and drafting that portion of the petition which raised the notice issue. Therefore, the hours claimed are reduced by 1.2 hours (.6 hours for June 9, 2005, and .6 hours for June 10, 2005) to eliminate any time associated with the notice issue.)8 Overall, 16.9 hours were reasonably attributable to pursuing the NICA claim from July 12, 2002, through June 17, 2005. Regarding the 252.6 hours of attorney time claimed for the period of June 22, 2005, through August 4, 2006, it must be resolved that the hours claimed are in many cases excessive, and do not reflect the time and labor reasonably and necessarily incurred to pursue the claim. In so concluding, it should be noted that in drafting the Order on Compensability and Notice, entered July 28, 2006, all the evidence of record was reviewed a number of times, and that in preparation of this Order the file of the Division of Administrative Hearings (all documents that were docketed) was reviewed, and the evidence offered at the hearing on compensability and notice (including depositions) re- reviewed, as necessary. Moreover, the testimony of Mr. Gustafson has been carefully weighed, and compared with the record, as were the affidavits of Mr. Hinkle and Mr. Pierce. Having done so, it is apparent that Mr. Pierce spent considerable time analyzing the hours claimed for reasonableness, and Mr. Hinkle did not. It is further apparent that when one critically evaluates the hours claimed, they are excessive, and that for the period of June 22, 2005, through August 4, 2006, no more than 188.25 hours of attorney time was reasonably and necessarily expended in pursing the claim.9 The 14.3 hours of attorney time claimed for the period of August 8, 2006, through September 25, 2006, was reasonable and necessary.10 Therefore, the total time and labor reasonably expended to pursue the claim was 219.45 hours. The next consideration in establishing a reasonable fee is the determination of the fee customarily charged in the locality for similar legal services, when the fee basis is hourly billing for time worked. Carreras, 633 So. 2d at 1108. Here, Petitioners' expert, Mr. Hinkle, opined that "the customary charge in this community for an attorney of Mr. Gustafson's ability is no less than $300 per hour." However, in Mr. Gustafson's Affidavit as to Reasonable Attorney's Fees, Paralegal Fees and Expenses Incurred in Connection with the NICA Claim (Petitioners' Exhibit 1), he describes his claim to a rate of $300.00 per hour as an enhanced rate, which "reflects the complexity of the case, the contingent nature of the fee, the substantial risk of non-recovery, and the other factors set forth in section 766.31(1)(c)(1-6), Florida Statutes." The parties' Pre-Hearing Stipulation and Mr. Gustafson's testimony at hearing were of a similar nature. (Transcript, pages 78-81, and 96) Stated otherwise, absent enhancement, Mr. Gustafson was of the opinion that a reasonable fee for his services was less than $300.00 per hour.11 In contrast, Respondent's expert, Mr. Pierce, described "a range of hourly rates for this type of work between $75.00 an hour and $190.00 an hour," and that, given "the level of experience of Petitioners" counsel and his education," "$150.00 an hour was a reasonable rate for Mr. Gustafson's time.12 Here, given the nature of the expertise and legal skills required, for what may be described as a moderately complex case, the proof supports the conclusion that the "market rate" (a rate actually being charged to paying clients) is $170.00 an hour. A reasonable fee under the methodology established by Florida Patient's Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985) and Florida Birth-Related Neurological Injury Compensation Association v. Carreras, supra, is determined by multiplying the hours reasonable expended by the reasonable hourly rate. The results produce the "lodestar figure" which, if appropriate, may be adjusted because of the remaining factors contained in Section 766.31(1)(c), Florida Statutes. Applying such methodology to the facts of this case produces a "lodestar figure of $37,306.50 (219.45 hours x $170.00 per hour). Upon consideration of the facts of this case, and the remaining criteria established at Section 766.31(1)(c), Florida Statutes, there is reason, based on the contingency nature of Mr. Gustafson's fee arrangement with Petitioners, to adjust the "lodestar figure."13 Given the nature of the claim, the risk of non-recovery was significant and warrants an adjustment of the fee award to $48,498.45 (an enhancement of thirty percent). The claim for paralegal fees Pertinent to the claim for paralegal fees, the affidavit of Mr. Gustafson (Petitioners' Exhibit 1) seeks compensation for 107.80 hours of paralegal time expended by Bonnie Stark between October 24, 2005, and September 25, 2006. Respondent disputed only 10.7 hours of Ms. Stark's time, and the parties stipulated that an hourly rate of $100.00 was reasonable for paralegal time. The affidavit of Mr. Pierce (Respondent's Exhibit 1) identified the following time entries which he resolved should be excluded as a matter of law because they included a conference between Mr. Gustafson and Ms. Stark, which Mr. Pierce felt was "duplicate time" and not recoverable under Florida Birth-Related Neurological Injury Compensation Association v. Carreras, 633 So. 2d at 1110: 2/5/06 -4.0 (block billing with an unreimbursible conference - see Carreras) 5/12/06 -.3 (Unreimbursible conference - see Carreras) 5/17/06 -5.1 (block billing with an unreimbursible conference - see Carreras) 8/23/06 -.5 (Unreimbursible conference - see Carreras) 8/31/06 -.3 (Unreimbursible conference - see Carreras) 9/20/06 -.5 (Unreimbursible conference - see Carreras) However, communication between counsel and paralegal, regarding her duties, is not comparable to "duplicate time involved in communications between co-counsel," as proscribed by Carreras. Moreover, the discussions in this case were not excessive. Accordingly, it is resolved that 107.8 hours of paralegal time was reasonably expended, which at the agreed rate of $100.00 per hour produces an award of $10,780.00. The claim for other expenses Finally, Petitioners' counsel incurred certain expenses in his representation of Petitioners for which he seeks recovery. Such costs total $22,352.19,14 and NICA disputed $11,310.59 of those expenses.15 The disputed expenses were identified as follows: DISCOVERY DOCUMENTS AND OTHER NICA PETITION EXPENSES: Research Book: "Maternal-Fetal $51.60 Medicine: Principles and Practice Westlaw charges-legal research on NICA issues of compensability, notice, elements of claim, elements of damage, service, filing 197.14 Postage charges since 6/16/05, date of filing Petition for Benefits 75.96 Federal Express charges since 6/16/05 date of filing of Petition for Benefits 246.56 Facsimile transmittal charges since 6/16/05, date of filing of Petition for Benefits 214.00 Postage charges incurred in preparing NICA award and obtaining NICA award support documentation 7.59[16] Phone charges incurred in preparing NICA award and obtaining NICA award support documentation 179.88[17] Fax charges incurred in preparing NICA award and obtaining NICA award support documentation 62.56[18] AT&T Teleconference charge 127.52 Total $1,162.81 EXPERT WITNESS EXPENSES AND FEES Dr. Andrea Morrison's Expert Witness Fees[19] 12/17/02 Initial Fee $2,000.00 4/25/05 Review of records in preparation of expert opinions 600.00 (2 hours @ $300/hour) 3/27/06 Review medical records in preparation of expert opinions 900.00 (3 hours @ $300/hour) 5/2/06 Preparation for deposition including review of medical records (6 hours @ $500/hour) 3,000.00 Total $6,500.00 Dr. Mary Edwards-Brown's Expert Witness Fees[20] 1/13/03 Review of records and conference (1 hour) $350.00 4/26/06 File review in preparation of expert opinions (1 hour @ $400/hour) 400.00 4/13/06 File review and pre-depo conference in preparation of expert 1,000.00 opinions for deposition (2.5 hours @ $400/hour) Total $1,750.00 DEPOSITION COSTS Robin Batdorf taken on 5/23/06 (original and 1 copy of transcript) 32 pages @ 4.50/page $ 144.00 Exhibits: 6 pages at .50/page 3.00 Court Reporter's per diem 55.00 Total $ 202.00 TRAVEL AND RELATED EXPENSES FOR COUNSEL (JWG) 2/1/06 Attorney expenses for trip to $233.72 Daytona Beach for deposition of Tammy Linton(meals and mileage) 2/2/06-2/3/06 Attorney expenses for 490.45 travel from Daytona Beach to Jacksonville for deposition of Michael Linton, and return to Tallahassee (meals, mileage and lodging) 4/11/06 Attorney expenses for travel from Houston to Los Angeles for meeting with Dr. Morrison 750.83 Total $1,475.00 TRAVEL EXPENSES FOR PETITIONERS 5/30/06 Lodging expense for Tammy Linton (one night stay in Tallahassee for attendance at Final Hearing 5/30/06) $110.39 5/30/06 Lodging expense for Michael Linton (one night stay in Tallahassee for attendance at Final Hearing 5/30/06) 110.39 Total $220.78 In the parties' Pre-Hearing Stipulation, NICA addressed its dispute regarding such expenses, as follows: As to the expenses incurred with respect to their NICA claim, the Petitioners must offer proof substantiating such expenses. Absent such proof, it would be speculative to concede they were reasonable in amount or necessarily incurred in pursing this claim. Moreover, the cost of postage (or Federal Express), research and copying (generally considered as part of office overhead) and the cost of travel (including "air, hotel, meals") are generally not taxable. Finally, with respect to expert witnesses, only a reasonable fee for deposition testimony and costs of preparation of any court ordered report are taxable. See Florida Rules of Civil Procedure, Statewide Uniform Guidelines for Taxation of Costs in Civil Actions. Notably, while issues were raised about the necessity and reasonableness of the experts' fees, Petitioners failed to offer expert testimony regarding the services performed and the reasonable value of those services, as required to support an award for expert witness fees. Pertinent to an award of expenses, the Statewide Uniform Guidelines for Taxation of Costs in Civil Actions, effective January 1, 2006, provide: Purpose and Application. These guidelines are advisory only. The taxation of costs in any particular proceeding is within the broad discretion of the trial court. The trial court should exercise that discretion in a manner that is consistent with the policy of reducing the overall costs of litigation and of keeping such costs as low as justice will permit . . . . Litigation Costs That Should Be Taxed. * * * Expert Witnesses A reasonable fee for deposition and/or trial testimony, and the costs of preparation of any court ordered report. Litigation Costs That May Be Taxed as Costs. * * * B. Reasonable Travel Expenses * * * Reasonable travel expenses of witnesses. Litigation Costs That Should Not Be Taxed as Costs. A. The Cost of Long distance Telephone Calls with Witnesses, both Expert and Non- Expert (including conferences concerning scheduling of depositions or requesting witnesses to attend trial). * * * Travel Time Travel time of attorney(s). Travel time of expert(s). Travel Expenses of Attorney(s) Also pertinent to an award of expenses are the following decisions: Miller v. Hayman, 766 So. 2d 1116 (Fla. 4th DCA 2000)(recognizing that in the absence of exceptional circumstances, travel expenses for attorney to attend depositions should not be taxed as costs); Department of Transportation v. Skidmore, 720 So. 2d 1125 (Fla. 4th DCA 1998)(recognizing that postage, long distance calls, fax transmissions, delivery service, and computer research are overhead and not properly taxable as costs); Lafferty v. Lafferty, 413 So. 2d 170, 171 (Fla. 2d DCA 1982)("[U]pon specific objection to the setting of an expert witness fee without an evidentiary hearing, the prevailing party will have to present testimony concerning the necessity and reasonableness of the fee."); Gray v. Bradbury, 668 So. 2d 296, 298 (Fla. 1st DCA 1996)("The prevailing party's burden, at an evidentiary cost hearing, to recover an expert witness fee is 'to present testimony concerning the necessity and reasonableness of the fee.'"); Powell v. Lorenza, 629 So. 2d 185 (Fla. 5th DCA 1993)(recognizing that evidence to support an award for expert witness fees must come from witnesses qualified in the areas concerned); Gray v. Bradbury, supra, page 298 (Testimony of "a trial attorney and an insurance casualty claim manager, who were not shown to have proficiency in the various fields of expertise at issue (ranging from accident reconstruction to neurosurgery)," was not competent to support an award for expert witness fees.); Florida Birth-Related Neurological Injury Compensation Association v. Carreras, 633 So. 2d 1103, 1109 (Fla. 3d DCA 1994)("[T]he exploration of the possibility of opting out of NICA through the 'bad faith' exception or otherwise is not, as the statute requires, work performed 'in connection with the filing of a claim. '"). Here, it must be resolved that Petitioners failed to establish their entitlement to the disputed expenses. Consequently, Petitioners' recovery is limited to $11,041.60 ($22,352.19 - 11,310.59).
