The Issue Whether Respondent's action to reject all bids submitted in response to ITB DOH 11-004, relating to a multi-year contract to provide laboratory services to state and local government agencies in the State of Florida, is illegal or arbitrary, as alleged in the Petition.
Findings Of Fact Respondent Department of Health is an agency of the State of Florida that requires a broad range of clinical laboratory testing services for the diagnosis, treatment, or monitoring of diseases, illnesses, and hazards to human health. Petitioner LabCorp is a for-profit corporation providing nationwide laboratory testing services. It is authorized to conduct business and operates in the State of Florida. On December 20, 2011, Respondent advertised an Invitation to Bid (ITB) to solicit competitive bids for the award of a three-year statewide contract to provide clinical laboratory services to the Department of Health, primarily through its county health departments. Petitioner is the incumbent contractor, and has been providing Respondent with services substantially similar to those solicited in the ITB since 2005. In the ITB, the contract was estimated to require approximately 861,000 tests annually and to produce approximately $9,300,000 in annual sales. In fiscal year (FY) 2010-11, the total amount received under the existing contract was $9,320,522. A Special Condition of the ITB, Section 6.10, entitled "Basis of Award," provided: The Department anticipates making a single or multiple Contractor awards based on services provided. Any award shall be based on the rates for service requested herein. The determination shall be based on a comparative analysis of submitted bids and existing pricing. The Department reserves the right to award to either a single or multiple Contractors to meet the needs and to serve the State of Florida's best interest. Bids shall be evaluated on the price submitted and whether the requirements of the bid are met the multiple awards may be allowed if the bids are within 10% of the lowest bid for the services. The Department reserves the right to make awards as determined to be in the best interest of the State of Florida, and to accept or reject any and all offers, or separable portions, and to waive any minor irregularity, technicality, or omission if the Department determines that doing so will serve the State of Florida's best interest. Bid price shall include all necessary supplies and equipment to allow proper collection, preparation, and transportation of specimens and meet all specifications and conditions. All cost for transportation for pick-up/delivery must be included in the unit cost per test. Attachment I to the ITB, entitled "Specifications of Clinical Laboratory Services" included at page 21: Staffing Levels Each prospective offeror shall include their proposed staffing for technical, administrative, and clerical support. A Contract Representative, Quality Control Manager, Staff Pathologist, Project Manager, Technical Support Manager, Technical Support Staff and statewide field representatives shall be required. The offeror is encouraged to provide on an as needed basis, as an option to the contract, an on-site Phlebotomist. The successful offeror shall maintain an adequate administrative organizational structure and support staff sufficient to discharge its contractual responsibilities. In the event the Department determines that the successful offeror's staffing levels do not conform to those promised in the proposal, it shall advise the successful offeror in writing and the successful offeror shall have 30 days to remedy the identified staffing deficiencies. The successful offeror shall replace any employee whose continued presence would be detrimental to the success of the project as determined by the Department with an employee of equal or superior qualifications. The Department's contract manager will exercise exclusive judgment in this matter. Attachment III, entitled the "Bid Price Page," consisted of five pages. Following a certification page, it contained three and one-half pages listing 119 "core tests" in a table format. The table contained columns filled with information as to the "CPT Codes," the laboratory test name, and the estimated quantity of that test, as well as two columns labeled "Price per Test" and "Extended Price" which contained no information, only blank squares. The blank columns allowed a bidder to fill in the price of the test, and then multiply that value times the estimated quantity of that test that had been provided by the Department to determine the Extended Price. On the bottom half of the final page was a notation of "Grand Total" with an empty square underneath the Extended Price column, to allow a bidder to compute the Grand Total by adding together all of the Extended Prices. Below the term Grand Total were additional notations. There was the phrase "Balance of Line Tests" followed by "Minimum fixed volume discount off current published price list for balance of tests/non-core tests:" In the same row as this phrase, in the empty square of the Extended Price column, was a percentage sign, allowing a bidder to enter a percentage in that space. Below this, there was a phrase, "Phlebotomy Services:" followed by "$ HOURLY RATE" in the same row in the empty square of the Extended Price column. The price of a particular test as entered in the Price per Test column only applied to instances in which the Department itself would pay for the test, if a third-party payer was involved, they would pay their customary rate. The Basis of Award as published omitted a sentence from the second paragraph which the Department had intended to include. The sentence "Single award will be made to the responsive, responsible bidder offering the lowest grand total for the core tests on attachment III" was supposed to be inserted, but was not. Neither Quest nor any other bidder filed a notice of protest to the terms, conditions, or specifications contained in the solicitation, including the Basis of Award provision or the Bid Price Page, within 72 hours of the posting of the solicitation. As provided in the ITB, on January 3, 2012, Quest submitted questions to the Department to be answered prior to bidding, which the Department answered in writing on January 6, 2012. Relevant questions and answers read as follows: Q1) The third party payer bill mix percentages for major payer groups (Medicare, Medicaid, Private Insurance, Capitation, Patient, Client bill and other) so contractor can confirm and evaluate the payers with whom we will need to process claims. A: STATEWIDE PERCENTAGES UNKNOWN SINCE IT IS HANDLED BY CURRENT VENDOR. HOWEVER, THE MAJOR PAYER GROUPS ARE MEDICARE AND MEDICAID. Q2) A list of Private Insurance payers so contractor can verify certification with those payers. A: VARIOUS INSURANCE PAYERS, WILL NEED TO DETERMINE AFTER THE BID IS AWARDED. * * * Q4) The Department's annual spend on send- out testing for the each of the past five years. A: FISCAL YEAR DEPARTMENT DEPARTMENT/THIRD PARTY FY 10/11 $4,680,833.00 $9,320,522.00 FY 0910 $4,401,298.00 $9,471,529.00 FY 08/09 $3,897,406.00 NOT AVAILABLE FY 07/08 $5,376,868.00 NOT AVAILABLE FY 06/07 $5,565,934.00 NOT AVAILABLE As the manager for the laboratory services contract, Ms. Cheryl Robinson prepared or gave the responses to both the written pre-bid questions and subsequent verbal questions posed at the pre-bid conference on behalf of the Department. The Department's written answer to question 1 was not completely responsive. Quest had asked for bill mix percentages for the major third-party payers. The Department stated that statewide percentages were unknown. As it turned out later, the Department did have historical information as to percentages from fiscal year 2009-2010, information that was a bit dated, but Ms. Robinson did not realize this when she responded. However, the Department did note in its response that the major payer groups were Medicare and Medicaid, which, based on historical data, the Department anticipated would continue to be the major third-party payers. While this response did not indicate what percentage either of these two third-party payers constituted, it did indicate that these were the two largest. The Department's answer to question 2 was, in one sense, a technically accurate response to an ambiguous question. The question asks for a list of Private Insurance payers. As the answer noted, until after the contract was awarded, and individuals began utilizing laboratory services under it, it would be impossible to know what private insurance providers would be involved prospectively. This answer provided no useful information. The question did not explicitly ask for a list of historic private insurance payers under the existing contract, though it this was the information actually sought by Quest, which the Department should have realized. The Department's answer to question 3 was completely responsive. It provided exact figures for the amounts of money spent by the Department under the contract for the previous 5 years. In fact, it also provided additional information not actually requested –- specifically, the total amount of money spent by the Department and third parties combined for each of the previous two fiscal years. At the pre-bid conference for the ITB, conducted on January 6, 2012, vendors verbally posed questions to the Department, to which the Department verbally responded. Quest asked, in essence, "Is it possible to get a breakdown of the third-party payers from LabCorp?" The Department responded, in substance, "No, it is not possible at this time, but the answer to Q&A #4 should help you determine what the Department and third-party spend is under the contract." Since Quest was asking for information from LabCorp, it again was requesting historical information, not future projections, as the Department understood. The question posed by Quest at the pre-bid conference was similar to its earlier question regarding bill mix percentages for the major third-party payers. Again, the Department did actually have some historical information responsive to the question at the time it was asked, but Ms. Robinson was not aware of that. The Bureau of Laboratories of the Department of Health was the program office and was responsible for making the determination as to which bidder would be awarded the contract. Dr. Max Salfinger is the Bureau Chief of the Bureau of Laboratories, Florida Department of Health. Neither Quest nor LabCorp had any information as to the pricing methodology that the Department would apply in assessing bids submitted in response to the ITB that was different from, or in addition to, that set forth in the Basis of Award and the Bid Price Page of the ITB. On January 18, 2012, both Quest and LabCorp submitted bids that the Department accepted as responsive to the ITB. LabCorp's bid package did not include the required staffing plan. The Department applied the same pricing methodology when assessing both Quest and LabCorp's bids. After reviewing both Quest and LabCorp's bids, the Department determined that LabCorp was the low bidder. The bid tabulation sheet dated January 20, 2012, only shows the "Grand Total" values submitted by the bidders. It lists three bidders, one of whom, CentreWell, has a notation indicating that it was "non-responsive – did not attend pre-bid conference." The bid tabulation sheet does not indicate any figures for volume discount pricing for the Balance of Line tests. It does not contain any reference to an hourly rate for phlebotomy services. The bid tabulation compared only the "Grand Total" amounts, reflecting the total of the bids to provide the 119 core tests. The Grand Total of LabCorp's bid was $6,235,265.99. The Grand Total of Quest's bid was $7,922,533.36. On January 20, 2012, the Department announced its intent to award the contract subject to the ITB to LabCorp. On January 25, 2012, Quest served the Department with a notice of intent to protest the Department's decision to award the contract to LabCorp. On January 26, 2012, Quest served the Department with a public records request seeking 19 categories of information relating to the ITB and the then-existing laboratory services contract between the Department and LabCorp. Quest's January 26, 2012 public records request sought more information from the Department than the pre-bid questions that it had asked the Department. Between approximately January 26, 2012, and February 2, 2012, the Department provided documents to Quest that were responsive to Quest's public records request. One of the documents the Department provided to Quest in response to its public records request was LabCorp's complete bid submitted in response to the ITB, which included the test- specific pricing that LabCorp had offered to the Department. Another document the Department provided to Quest in response to its public records request was a lengthy electronic Excel spreadsheet document. Ms. Robinson located the Excel document in an archive folder, using the computer system to which she has routine access, only after looking for more than a day. The Excel document was not a regular utilization report received from LabCorp, but had been received by the Department on August 10, 2010, as part of a submission from LabCorp in support of a proposed price increase. It contained detailed records of specific payments from various third-party payers under the contract for FY 2009-2010 and consisted of some 698 pages when printed out. It also contained a summary of these individual payments, both in actual dollar amounts paid and as percentages, for major payer groups (Medicare, Medicaid, and Private Insurance, for example) on a month-by-month basis. The payers identified in the Excel Document did not necessarily reflect all the same payers that would be responsible for the reimbursement of tests ordered pursuant to the contract that would be awarded under the ITB. It was only historical data, and not even the most recent historical data. However, the historic information it contained was responsive to Quest's first written pre-bid question and its first question at the pre-bid conference. Ms. Robinson immediately turned the Excel document over to the Office of the General Counsel because she had not recalled having it, and was concerned that the information should have been given to Quest in response to its pre-bid questions. The Excel document was the only document or written record in the Department's possession, custody, or control at the time Quest submitted its pre-bid questions which the Department believes should have been, but was not, produced in response to those requests. Ms. Robinson testified that she would have given it to Quest when the questions were asked if she had been aware of it at that time. Any failure of the Department to provide Quest with public records responsive to its pre-bid questions was unintentional. All public records provided to Quest were simultaneously provided, as requested, to LabCorp. On February 6, 2012, Quest served the Department with a formal Bid Protest claiming, among other things: that LabCorp's bid was non-responsive because it did not include a staffing plan; that the Department violated the public records law by failing to produce certain documents, including the Excel Document, in response to its pre-bid questions; and that the Department's pricing evaluation was inconsistent with the terms of the ITB. LabCorp sought and was granted permission to intervene in Quest's Bid Protest proceeding. On or about February 10, 2012, the Department held a meeting to consider the options available to it in responding to the Quest bid protest. This was the only meeting at which it discussed whether to reject all bids submitted in response to the ITB. Dr. Max Salfinger, Ms. Jodi Bailey, Ms. Renee Gregory, as well as Ms. Jan Myrick and some staff from the Office of the General Counsel attended the meeting. Prior to the meeting, Dr. Salfinger reviewed Quest's bid protest, and reviewed some documents relating to the drafts of the ITB before it was posted. In addition, Dr. Salfinger was generally familiar with the utilization data under the current contract. As Ms. Gregory later testified, the problems that had been raised by Quest in its Bid Protest were discussed at the meeting. The Department considered: LabCorp's failure to include a staffing plan; core pricing v. balance of line, and failure to comply with a public records request. At hearing, there was no testimony regarding LabCorp's failure to submit a staffing plan and it is clear that this issue played little, if any, role in the Department's decision to reject all bids. The failure of the Department to provide the Excel document in response to Quest's pre-bid requests for third-party payer bill mix percentages for the major payer groups was also discussed. The fact that the Department might have violated the public records law was of great concern. The Department concluded that there may have been a violation of the public records law, and that the Department failed to provide all of the information Quest had asked for in its pre-bid questions. Dr. Salfinger did not personally review the Excel document. Dr. Salfinger did not personally consider whether or not the Excel Document should have been given to Quest in response to its pre-bid request, and there was no discussion about whether or not the Department's failure to provide it made the competition more difficult for Quest. Prior to rejecting all bids, the Department made no effort to determine whether the information provided in response to Quest's public records request dated January 26, 2012, would have had any impact on Quest's ability to submit a competitive bid in response to the ITB had that information been provided earlier, in response to the pre-bid questions. A failure, or perceived failure, to comply with the public records law is a collateral issue. A violation of the public records law, or concern that the Department might suffer legal consequences for that violation, could only provide a rational basis to support a decision regarding the solicitation to the extent it was relevant to the solicitation. Documents that were not provided in response to pre-bid questions might be relevant to the solicitation whether or not there was a violation of the public records law. A failure to provide documents to Quest could be rationally related to the solicitation only if the failure was rationally related to Quest's ability to submit a competitive bid. A failure to even consider whether there is any rational connection between facts that are found and the choice that is then made is illogical and arbitrary. Had Respondent considered no other factors relevant to the solicitation, but decided to reject all bids solely because of its failure to provide documents to Quest, without even considering if that failure was rationally connected to the solicitation, the decision would have been arbitrary. The "quality" of the ITB, specifically including the missing sentence in the Basis of Award and the ambiguity in the Bid Price Page, was another topic discussed at the meeting. The Department made no effort to determine whether, or to what degree, the Balance of Line testing prices that Quest and LabCorp offered in their respective bids would have affected the total cost of their respective bids. Analysis of legal counsel indicated that the Department had failed to post a high quality bid document that clearly explained the criteria that would be used in awarding the contract. Prior to the meeting, Dr. Salfinger had reviewed documents relating to the drafts of the ITB before it was published, and he also relied upon legal counsel's analysis. Dr. Salfinger was aware that what he considered to be the "major sentence" in the Basis of Award provision had been inadvertently omitted. He had concern with "the overall message we [were] sending" in the solicitation. The language in the Basis of Award and the structure of the Bid Price Page made it unclear that the Department intended to award a single contract solely on the basis of the grand total bid for providing the core tests and would not be awarding separate contracts for individual core tests. While there was language in other portions of the ITB that suggested that only a single contract would be awarded, taken as a whole the ITB was not entirely clear on this point because of the omitted sentence. The ITB similarly was unclear as to how the percentage discount for Balance of Line tests or the hourly rate for phlebotomy services would be considered in the award of the contract, if at all. There was no discussion as to whether the alleged flaws in the ITB had actually harmed Quest's ability to provide a competitive bid. However, a reasonable person could conclude that the language in the Basis of Award and the structure of the Bid Price Page could have been a source of confusion to potential bidders even if it did not affect the bids of either LabCorp or Quest. Potential bidders may not have bid due to these uncertainties, which could have affected the solicitation. Petitioner did not prove that these factors were not considered by the Department. During the meeting, there was some discussion about whether the Department should reject all bids. There was no discussion regarding whether LabCorp would be harmed in any re- solicitation if all bids were rejected. There was no discussion as to what the impact on competition generally would be in any re-solicitation. Dr. Salfinger made the decision to reject all bids. The Department did not act arbitrarily in its decision to reject all bids. As stipulated, Respondent did not act dishonestly or fraudulently in rejecting all bids in response to the ITB. Aside from its contentions that Respondent acted arbitrarily, Petitioner did not allege that the Department's action in rejecting all bids was otherwise illegal, and Petitioner provided no evidence indicating that it was. LabCorp would likely be harmed in any re-solicitation of bids relative to its position in the first ITB, because potential competitors would have detailed information about LabCorp's earlier bid that was unavailable to them during the first ITB. The State of Florida would likely benefit in any re- solicitation of bids, because all new bidders would be aware of the bids that were submitted in response to the first ITB, and would probably try to lower their bids from these levels to improve their chances of being awarded the contract. On February 13, 2012, the Department, as required by section 120.57(3)(d), Florida Statutes, convened a meeting of the parties to the Quest Bid Protest proceeding. At the beginning of the meeting of the parties, Department counsel announced the Department intended to reject all bids unless Quest and LabCorp could reach a voluntary, amicable resolution of the issues raised by Quest. At the meeting of the parties, counsel for LabCorp expressed concerns over the possibility of the Department rejecting all bids due to the unduly prejudicial effect of the disclosure of LabCorp's pricing on its ability to compete in any future re-solicitation of bids for the contract. At the same meeting, LabCorp's counsel also expressed concern that Quest's Bid Protest had raised non-meritorious arguments hoping that the Department would reject LabCorp's bid or would reject all bids. In the absence of an agreed-upon resolution of Quest's bid protest between Quest and LabCorp, on February 14, 2012, the Department noticed its intent to reject all bids and to re-solicit bids for the relevant contract at a later date. Quest's protest, which remained pending, had not been referred to DOAH for a formal hearing. As the bidder initially notified that it would be awarded the contract, Petitioner's substantial interests were affected by the Department's subsequent decision to reject all bids. On February 16, 2012, LabCorp filed a Notice of Protest of the Department's decision to reject all bids, and filed its formal Bid Protest on February 24, 2012.
Recommendation Upon consideration of the above findings of fact and conclusions of law, it is RECOMMENDED: That the Department of Health enter a final order finding that the rejection of all bids submitted in response to ITB DOH 11-004 was not illegal, arbitrary, dishonest, or fraudulent, and dismissing LabCorp's protest. DONE AND ENTERED this 7th day of May, 2012, in Tallahassee, Leon County, Florida. S F. SCOTT BOYD 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 7th day of May, 2012.
The Issue The issues in this case are the amount of attorney’s fees and costs to be awarded to Petitioners pursuant to Section 120.595, Florida Statutes (2007);1 whether Petitioners are entitled to fees and costs pursuant to Subsections 57.105(5), 120.569(2)(e), and 120.595(4), Florida Statutes; and, if so, what amount should be awarded.
Findings Of Fact Each of the 14 Petitioners filed separate rule challenges, challenging the validity of Florida Administrative Code Rule 64B16-26.2031 and challenging eight statements of policy of the Board of Pharmacy, which statements had not been adopted as rules. Prior to the filing of his or her rule challenge, each Petitioner had graduated from a pharmacy school located outside the United States and had taken and passed the Foreign Pharmacy Graduate Equivalency Examination, the Test of Spoken English, and the Test of English as a Foreign Language. Petitioners had been issued Intern Registrations by the Board of Pharmacy. All but two of the Petitioners had submitted an application to be admitted to the professional licensure examination. Those applications had been denied. All Petitioners, including the two Petitioners who had not submitted an application, had applied to the Board of Pharmacy for a variance or waiver to allow them to sit for the professional licensure examination. The Board of Pharmacy denied each Petitioner’s application for a variance or waiver. Each Petitioner had been represented by The Health Law Firm in their applications for a variance or waiver and wanted The Health Law Firm to continue to represent them in the rule challenge. When asked why the Petitioners had contacted The Health Law Firm to represent them, an attorney for The Health Law Firm stated: I think they have a network where word just gets around. And they-–I believe they even had some sort of list serve or Web site where they had all noted that they were being treated unfairly, and so they knew each other. And maybe our name got out on that or something. But they-–they all seemed to know each other-–seemed to know each other. Additionally, The Health Law Firm had sent out letters soliciting the foreign pharmacy graduates to join the rule challenge. An attorney for The Health Law Firm was not sure whether the letter had been posted on the web site for the foreign pharmacy graduates. In several of the invoices submitted by The Health Law Firm, there was a charge of $20.00 for a “[t]elephone conference with client’s colleagues who are in the same situation and interested in filing petitions for waivers and joining the rule challenge.”2 Thus, the circumstances surrounding the representation of Petitioners by The Health Law Firm do not demonstrate that it was a coincidence that Petitioners just happened to pick The Health Law Firm to represent them in the rule challenges. The Health Law Firm decided to file 14 separate petitions instead of one petition with 14 petitioners. The reason for the filing of the separate petitions was to increase the amount of attorney’s fees which could be awarded. Given the inexperience of attorneys at The Health Law Firm with rule challenges and the difficulty in understanding the speech of Petitioners, who received their pharmacy training in countries other than the United States, The Health Law Firm felt that it was not economically feasible to pursue the rule challenge for $15,000.00. Petitioners had a common goal, i.e. to be allowed to sit for the professional licensure examination. The wording of each of the petitions was essentially the same except for the names of the individual Petitioners. Because the issues were the same for all the rule challenges, the rule challenges were consolidated for final hearing. No final hearing was held in the consolidated cases. The parties agreed that, based on the parties’ Joint Pre-hearing Stipulation, there were no disputed issues of material fact and agreed to file proposed final orders addressing each party’s position regarding the application of the law to the stipulated facts. The Board of Pharmacy conceded that Florida Administrative Code Rule 64B16-26.2031 was an invalid exercise of delegated legislative authority, and Petitioners were determined to prevail on the issue of the invalidity of the existing rule. On the challenge to the Board of Pharmacy’s policy statements, four statements were determined to meet the definition of a rule. The Board of Pharmacy conceded in the parties’ pre-hearing stipulation that the instructions in the Foreign Pharmacy Graduate Application for Licensure by Examination, directing applicants not to apply prior to obtaining all the required internship hours, constituted a non-rule policy. On August 1, 2008, in response to its concession that some of the statements or policies at issue were invalid non-rule policies, the Board of Pharmacy had published, in the Florida Administrative Law Weekly, a Notice of Rule Development for Florida Administrative Code Rule 64B16-26.2031. On August 21, 2008, the Board of Pharmacy approved changes to Florida Administrative Code Rule 64B16- 26.2031, eliminating the Foreign Pharmacy Graduate Examination Committee (FPGEC) requirement, incorporating by reference the Foreign Graduate Examination Application, and stating the time frames for the application of Florida Administrative Code Rule 64B16-26.2031. Pursuant to Subsection 120.56(4)(e), Florida Statutes, the portion of the petitions dealing with the statements on which the Board of Pharmacy did not prevail was abated pending the rulemaking process. Petitioners did not prevail on four of the policy statements they challenged. These were the policy statements which the Board of Pharmacy contested. Based on the invoices submitted, the parties attempted to settle the case. Essentially, the Board of Pharmacy had started rule development which eliminated the requirement in the existing rule which caused it to be invalid and which dealt with the unpromulgated rule issues that the Board of Pharmacy had conceded in the Joint Pre-hearing Stipulation. Petitioners wanted to be able to sit for the National Association of Pharmacy Licensure Examination (NAPLEX) and the Multistate Pharmacy Jurisprudence Examination (MPJE). All Petitioners who had a Foreign Pharmacy Graduate Application for Licensure by Examination pending on August 21, 2008, were approved by the Board of Pharmacy to sit for the NAPLEX and the Florida version of the MPJE. Thus, by August 21, 2008, those Petitioners had reached their goal. The impediment to settling the cases was the amount of attorney’s fees that should be awarded to Petitioners. There was no undue delay by the Board of Pharmacy or anything which could be attributed to the Board of Pharmacy as needlessly increasing the cost of litigation. The Board of Pharmacy correctly contended that the amount of fees requested by Petitioners was unreasonable. The Partial Final Order entered in the underlying rule challenges held that Petitioners are entitled to an award of attorney’s fees and costs pursuant to Subsection 120.595(3), Florida Statutes. The Board of Pharmacy was not substantially justified in promulgating the challenged rule in the underlying case and did not demonstrate that special circumstances existed to warrant the promulgation of the challenged rule. The Board of Pharmacy did not demonstrate that the statements which constituted unpromulgated rules are required by the Federal Government to implement or retain a delegated or approved program or to meet a condition to receipt of federal funds. Each Petitioner entered into a contingency fee contract3 with The Health Law Firm to represent him or her in a rule challenge. The parties have agreed that the hourly rate of $350.00 per hour for the services of George F. Indest, III, Esquire, is reasonable and fair under the circumstances. The parties have agreed that some of the hourly rates being claimed for the other attorneys and employees of The Health Law Firm are reasonable and fair under the circumstances. Those fees are $200.00 and $150.00 per hour for the associate attorneys, $80.00 per hour for the paralegals, and $70.00 per hour for the legal assistants. There were a few entries in the invoices made by senior attorneys for whom the rate charged is $300.00 per hour. Based on the rates charged for the senior partner and the associate attorneys, an hourly rate of $300.00 for a senior attorney is reasonable. The names of the attorneys and staff and the respective hourly rate amount for each are listed below. In discussing the reasonableness of the fees claimed in the various invoices, the attorneys and staff will be referred to by their initials as listed in the invoices. Initials Name Hourly Rate GFI George F. Indest, III, Senior Partner $350.00 MLS Michael L. Smith, Senior Attorney $300.00 JK Joanne Kenna, Senior Attorney $300.00 TJJ Teresa J. James, Attorney $200.00 MRG Matthew R. Gross, Attorney $150.00 JP Justin Patrou, Law Clerk $100.00 GJ Gail Joshua, Senior Paralegal $80.00 PD Pamela Dumas, Litigation Clerk $80.00 SF Sandra Faiella, Paralegal $80.00 RS Rebecca Simmons, Paralegal $80.00 AE Alexa Eastwood, Legal Assistant $70.00 SE Shelly Estes, Legal Assistant $70.00 The amount of fees claimed by each Petitioner for representation by The Health Law Firm for the rule challenge is listed below. These amounts are based on the individual invoices and the first consolidated invoice:4 Name Amount Vipul Patel $15,212.36 Miriam Hernandez $15,683.36 Mirley Aleman-Alejo $11,469.36 Valliammai Natarajan $5,074.36 John H. Neamatalla $11,215.36 Samad Mridha $13,650.36 Se Young Yoon $12,292.36 Saurin Modi $10,093.36 Deepakkumar Shah, M.Ph. $11,764.36 Mijeong Chang $12,528.36 Nabil Khalil $10,272.36 Hadya Alameddine $5,313.36 Balaji Lakshminarayanan $4,585.36 Anand Narayanan $4,218.36 Total $143,372.04 Sandra Ambrose testified as an expert witness on behalf of Petitioners. Her opinion is that the amounts claimed are based on a reasonable number of hours expended in the litigation of the rule challenge. However, Ms. Ambrose has never represented a client in a rule challenge. It was Ms. Ambrose’s opinion that the difficulty in the cases was a result of the number of Petitioners not the issues to be litigated. Having reviewed all the invoices submitted in these cases, the undersigned cannot credit Ms. Ambrose’s testimony that the fees are reasonable. The Board of Pharmacy argues that the amount of fees and costs should be limited to the amount expended in the petition brought by the first Petitioner, Vipul Patel. The expert who testified for the Board of Pharmacy did not give a definite amount that he considered to be a reasonable fee in these cases. Prior to the final consolidation of all 14 rule challenges, The Health Law Firm invoiced for its services and costs by individual Petitioner. After all 14 rule challenges were consolidated, The Health Law Firm invoiced for its time and costs via a consolidated invoice. The undersigned has painstakingly reviewed all the invoices that were submitted to support Petitioners’ claims for fees and costs in the rule challenges and finds the fees requested are not reasonable. On May 15, 2008, the invoices for Case Nos. 08-2733RX contained the following entry for MRG. “Review/analyze final order. Strategize regarding final order.” The final order appears to be related to a petition5 for a waiver or variance before the Board of Pharmacy, and the entry is deleted. This conclusion is supported by the entry in the invoice dated May 29, 2008, relating to a telephone conference with the client relating to a re-petition for waiver. In Case No. 08-2730RX, there is an entry on May 27, 2008, for .10 hours for MRG, but no service is listed. That entry is deleted. On June 6, 2008, MRG entered .50 hours each in Case Nos. 08-2728RX, 08-2729RX, 08-2732RX, 08-2733RX, 08-2734RX, 08-2821RX, 08-2823RX, 08-2824RX, and 08-3298RX. The entry stated: “Continue preparing rule challenge and waiver.” The Health Law Firm represented the Petitioners in four of these cases before the Board of Pharmacy on June 10, 2008, on their petitions for a wavier or variance. The invoice does not delineate the amount of time that was spent on the rule challenge and the amount of time that was spent on the waiver cases. Therefore, the time is divided equally and .25 hours in each case is charged toward the rule challenge. 23. On June 9, 2008, in Case Nos. 08-2733RX, 08-2730RX, 08-2731RX, 08-2734RX, 08-2729RX, and 08-2732RX, the senior partner of The Health Law Firm entered .30 hours for each case, which stated: “Prepare letter to Division of Administrative Hearings forwarding Petition for Rule Challenge to be filed.” The letter which accompanied the petitions in these cases stated: Dear Clerk: Attached for filing, please find a separate Petition to Determine the Invalidity of an Existing Agency Rule and the Invalidity of Agency Policy and Statements defined as Rules, for each of the individuals listed below: Miriam L. Hernandez Mirley Aleman-Alejo Se Young Yoon John H. Neamatalla Valliammai Natarajan Md. A. Samad Mridha Thank you for your assistance in this matter. For this letter, Petitioners are claiming 1.8 hours or $630.00. This is not reasonable. On the same date, GFI prepared a similar transmittal letter in Case No. 08-2728RX and listed .3 hours, which is a reasonable amount for the preparation of such a letter. Thus, the preparation of the transmittal letter on June 9th for Case Nos. 08-2733RX, 08-2730RX, 08-2731RX, 08-2734RX, 08-2729RX, and 08-2732RX is reduced to .3 hours, which is prorated to .05 hours for those cases. The senior partner in The Health Law Firm claims 23.6 hours during June 3 through 5, 2008, for the following service which was entered on the invoices for Case Nos. 08-2730RX, 08-2729RX, 08-2731RX, 08-2823RX, 08-3298RX, 08-2821RX, 08-2728RX, 08-2734RX, 08-2733RX, and 08-2824RX. Conduct legal research, review statutes, cases (approximately 28 cases reviewed and analyzed) and two (2) different Florida Administrative Law legal treatises regarding rule challenges and challenging agency statements not adopted as rules, in order to properly prepare Petition for Formal Rule Challenge in case. Research legal issues including administrative agency rules exceeding authority granted in statutes, retroactive applications of agency rules, adding requirements to licensure requirements through administrative rules when those requirements are not contained in the statute. Review Rules of Procedure and Chapter 120 to determine contents of Rule Challenge Petition. Begin reviewing and revising draft for Rule Challenge in case. (Note: Only pro-rata portion of this time charged to each case.) The total amount of fees claimed for this research is $8,260.00. GFI testified that he had never done a rule challenge prior to filing the petitions in the instant cases. His fees for research due to his lack of knowledge of the basics of a rule challenge should not be assessed against the Board of Pharmacy. A reasonable amount of time for his research is four hours. Thus, the amount for this legal research prorated among the ten cases for which it was listed is .4 hours. On July 19, 2008, the senior partner of The Health Law Firm entered .60 hours in ten of the rule challenges for reviewing the Transcripts of the Board of Pharmacy meetings for February 8 and April 5, 2008, and preparing a notice of filing the Transcripts with the Division of Administrative Hearings. Six hours to review the Transcripts and prepare a notice of filing is not reasonable. Three hours is determined to be a reasonable amount of time for this task, and that amount is prorated among the ten cases in which the charge was made. On June 10, 2008, members of The Health Law Firm attended a Board of Pharmacy meeting at which they represented foreign pharmacy graduates who had petitioned the Board of Pharmacy for a waiver or variance. In Case Nos. 08-2821RX, 08-3298RX, and 08-2733RX, the senior partner listed .90 hours for each case for preparation for the June 10th Board of Pharmacy meeting. The preparation related to the petitions for variances or waivers and should not be assessed for the instant cases. For June 10, 2008, JP listed .70 hours each in Case Nos. 08-2823RX, 08-2732RX, 08-2821RX, and 08-2733RX for attendance at the Board of Pharmacy meeting. For June 10, 2008, GFI entered 1.4 hours for attendance at the Board of Pharmacy meeting. The entries for attending the Board of Pharmacy meeting related to the petitions for waivers and should not be assessed in the instant cases. For June 19, 2008, the senior partner made the following entry in the invoices for Case Nos. 08-2728RX, 08-2729RX, 08-2732RX, 08-2733RX, 08-2734RX, 08-2821RX, 08-2823RX, and 08-2824RX: Travel to Boca Raton to meet with other health care lawyers and discuss issues in common on these cases and others. Discuss legal strategies that worked in the past and legal strategies to be avoided. Return from Boca Raton. Each entry was for one hour, for a total of eight hours claimed for a trip to Boca Raton, which equates to $2,880.00. Based on the entry, it seems that the trip included discussions of other cases that The Health Law Firm was handling or that other attorneys were handling. Additionally, there was no rationale for having to travel to Boca Raton to discuss the issues, and fees for such travel should not be awarded. A reasonable amount of time for discussion of the case with other attorneys by telephone would be .80 hours. The prorated amount of time for each case listed is .10 hours. On May 27, 2008, SF made a .30-hour entry in Case No. 08-2824RX for reviewing the agenda of the June 10th Board of Pharmacy meeting as it related to the client in Case No. 08-2824RX. The entry related to the client’s petition for a waiver, which was heard at the June 10th meeting and should be deleted. On May 30, 2008, in Case No. 08-2824RX, SF made a .40-hour entry for drafting a letter to client with retainer agreement. The entry is clerical and should be deleted. On June 18, 2008, an entry was made in the invoice in Case No. 08-2731RX, which stated: “Telephone call from husband of our client indicating that they want us to close this matter and that they do not wish to pursue it any further; follow-up memorandum to Mr. Indest regarding this.” Charges continued to be made to the client through July 16, 2008. Based on the entry to the invoice on June 18, 2008, no further charges should have been made to the client except for the filing of a voluntary dismissal of the rule challenge for the client. However, no voluntary dismissal was filed. Based on the absence of any further charges to the client after July 18, 2008, it is concluded that the client did wish not to proceed with her rule challenge. Any charges by The Health Law Firm after June 18, 2008, in Case No. 08-2731RX will not be assessed against the Board of Pharmacy as it relates to the rule challenge. On June 19, 2008, TJJ made the following .10-hour entry in ten of the cases: “Review June 10, 2008, Board of Pharmacy Agenda. Telephone conference with Court Reporter, Ms. Green, ordering transcript of the June 10, 2008, meeting.” An hour for reviewing an agenda and ordering a transcript is not reasonable. A reasonable amount of time is .40 hours, and such time is prorated to the ten cases in which it is charged. 33. On June 20, 2008, in Case Nos. 08-2823RX and 08-2824RX, TJJ made a .80-hour entry which stated: “Prepare draft motion for consolidation.” No motion was ever filed and would not have been necessary since the parties had agreed at the pre-hearing conference that the rule challenges would be consolidated. The time for this service should be deleted. 34. On July 10, 2008, TJJ made the following .10-hour entry in several of the cases: “Review prehearing instruction orders and amended orders to determine respondent’s deadline to serve discovery responses.” The entry is duplicative of services provided by MRG on July 8, 2008, and should be deleted. 35. On July 15, 2008, in Case Nos. 08-2729RX, 08-2728RX, 08-2730RX, 08-2732RX, 08-2733RX, 08-2734RX, 08-2821RX, 08-2823RX, 08-2824RX, and 08-3298RX, TJJ had .40 hours for a total of 4.00 hours for the following entry: Prepare Petitioners’ Motion to Compel Discovery and assemble and copy documents to be attached to Motion. Prepare facsimile coversheets and transmit the Motion to the attorney for the Board of Pharmacy, Ms. Loucks, and to the clerk for the Division of Administrative Hearings. The copying, preparing facsimile coversheets, and transmitting the motion are clerical tasks. The entries are reduced to .20 hours due to the clerical nature of the tasks, which leaves a total of two hours for preparing a simple motion to compel. The time for the preparation of the motion to compel is not reasonable and is reduced to .10-hour for each entry. On July 22, 2008, the last Order consolidating all the cases was filed. The Order consisted of four paragraphs. On July 29, 2008, TJJ entered .10 hours in Case Nos. 08-2733RX, 08- 2730RX, 08-2734RX, 08-2728RX, 08-2729RX, 08-2732RX, 08-2824RX, 08-3510RX, 08-3488RX, 08-3347RX, 08-2823RX, 08-3298RX, and 08- 2821RX, and each entry stated: “Review order of consolidation filed on July 22, 2008, for common information needed for all cases.” Thus, Petitioners are claiming a total of 1.3 hours or $260.00 to review a four-paragraph Order of Consolidation. This claim is not reasonable. A reasonable amount of time to review the Order was .10 hours, and the time shall be prorated among the cases for which it was claimed at .08 hours each. On July 24, 2008, TJJ made an entry of .10 hours in ten of the cases which stated: Telephone conference with the clerk of the District Court of Appeal, First District to find out the start time of oral arguments on Custom Mobility (rule challenge case). Request information from clerk regarding how to listen to oral arguments online. Observing this oral argument will allow us to better prepare our case for possible appeal. First, a one-hour telephone conversation with the Clerk of District Court of Appeal to ascertain the time for an oral argument and to learn how to listen to oral arguments online is not reasonable. Second, it is not reasonable to charge the Board of Pharmacy with a call to the District Court of Appeal in the instant cases, even if the amount of time for the call had been reasonable. The one-hour charge for $200.00 for a telephone call is deleted. On July 30, 2008, TJJ made an entry of .10 hours in 13 of the rule challenges. The entry stated: “Listen to oral arguments presented before District Court of Appeals, First District, in Custom Mobility case (rule challenge case).” The oral argument was not related to the instant rule challenges and should not be charged to the Board of Pharmacy. The 1.3 hours or $260.00 claim for listening to an oral argument is deleted. On August 4, 2008, TJJ made the following .10-hour entry in 13 of the cases: “Review Joint Motion for Abeyance and Order Canceling Hearing and Placing Cases in Abeyance. Calendar deadlines regarding same.” The time of 1.3 hours for reviewing the simple motion and Order is not reasonable. Calendaring is a clerical task. The time for this service is reduced to .01 hours for each entry. On August 5, 2008, TJJ made the following .10-hour entry in 13 of the cases: “Review Respondent’s Objections and Responses to Petitioners’ Second Set of Interrogatories and Respondent’s Objections to Petitioners’ Second Set of Requests for Admissions.” The objections were that the interrogatories and requests for admissions exceeded 30. The time of 1.3 hours for reviewing the pleadings is not reasonable. The time for this service is reduced to .04 for each entry. Petitioners had scheduled the depositions of Rebecca Poston and Daisy King for July 18, 2008. On July 17, 2008, Petitioners filed notices canceling the depositions. On July 17, 2008, PD entered .10 hours in ten of the rule challenges for the following entry: Telephone conference with Accurate Stenotype Reporters regarding cancellation of depositions of Daisy King and Rebecca Poston on July 18, 2008 and delay transcription of depositions of Erika Lilja and Elizabeth Ranne due to potential settlement. It is not reasonable to charge an hour to cancel depositions with the court reporter. A reasonable amount of time would be .10 hours, which is prorated to the ten cases to which it is charged. PD prepared the notice of the canceling of the deposition of Ms. Poston and the notice of the canceling of the deposition of Ms. King. Entries were made in ten of the cases for time for preparing the notices. The total time for preparing the two notices by PD was 1.45 hours. The time is not reasonable. A reasonable time to prepare two notices of canceling depositions would be .40 hours, which is prorated among the ten cases in which it was charged. One of the issues on which Petitioners did not prevail in the rule challenges was the issue of retroactive application of the rule. There are entries totaling 3.4 hours for JP for preparation of a memorandum dealing with the retroactive application of a rule issue. GFI entered .30 hours for the same issue. The time relating to the retroactive application issue is deleted. On April 19, 2008, MRG entered .20 hours each in several cases, which related to the rule challenge and retroactive application issue. That time is reduced by half. On May 6, 2008, MRG made .60-hour entries in Case Nos. 08-2728RX, 08-2729RX, 08-2730RX, 08-2732RX, 08-2733RX, 08-2734RX, 08-2821RX, 08-2823RX, 08-2824RX, and 08-3298RX, which showed the preparation of three sections of the petition. One of the sections dealt with the retroactive application issue, and the entries are reduced by .20 hours for that issue. The invoices demonstrated that a considerable amount of time was charged for legal assistants and paralegals. Much of this time was for clerical tasks. SE is identified in Petitioners’ exhibits as a legal assistant. The majority of the entries by SE dealt with the photocopying, labeling, organizing, indexing, and filing documents. These services performed by SE are clerical and, as such, cannot be included in an award of attorney’s fees. RS is identified in Petitioners’ exhibits as a paralegal/legal assistant. The majority of the entries in the invoices for RS deal with receiving, reviewing, labeling, indexing, scanning, summarizing, and calendaring pleadings and orders that were received in the cases. These services are clerical and, as such, cannot be included in an award of attorney’s fees. Petitioners in Case Nos. 08-2728RX, 08-2732RX, and 08-2733RX each claimed .30 hours for RS for the following service on April 30, 2008: Received and reviewed letter from Department of Health regarding our Public Records Request dated April 28, 2008 relating to client’s case. Index document for filing and scanning for use of attorneys at hearing. However, .90 hours for reviewing and indexing a letter is not reasonable and is clerical in nature. On June 17, 2008, in Case No. 08-2730RX, RS entered .60 hours for preparing, copying, and sending a letter to the client forwarding a copy of the Order of Assignment. That entry is reduced to .30 hours, since at least half of the time appeared to be for clerical tasks. AE, who is identified as a legal assistant in Petitioners’ exhibits, has numerous entries in the invoices for receiving, indexing, filing, calendaring, and providing pleadings and orders to clients. Those services are clerical and, as such, cannot be included in an award of attorney’s fees. In Case No. 08-2728RX, PD, identified in Petitioners’ exhibits as a paralegal, made entries on June 16 and June 25, 2008, for .30 hours each. These entries were to update the litigation schedule with the hearing date. The entry is clerical and, as such, cannot be included in an award of attorney’s fees. SF, who is identified in Petitioners’ exhibits as a paralegal/legal assistant, made an entry for .30 hours in Case No. 08-2728RX on June 26, 2008, and in Case No. 08-2732RX on June 11, 2008, for forwarding orders to the client. An entry was made on July 10, 2008, in Case No. 08-2728RX and on June 18, 2008, in Case No. 08-2730RX for .30 hours for processing the retainer package. Additionally, SF had entries for organizing and filing transcripts and orders. Such services are clerical and, as such, cannot be included in an award of attorney’s fees. In Case No. 08-3488RX, SF made a .30-hour entry on June 30, 2008, for updating the parties list and document file and a .50-hour entry on June 26, 2008, for completing opening procedures. In the same case, SF made two entries on July 7, 2008, for a total of 1.5 hours for preparing a retainer package and sending it to the client. These tasks are clerical. On June 24, 2008, SF made the following .30-hour entry in 11 of the cases: “Finalize and forward Joint Motion for Continuance of Final Hearing to client in this matter.” These entries are deleted; as they represent clerical tasks and an unreasonable amount of time to finalize a motion for continuance for which GFI had charged 1.1 hours for preparing the motion. In several cases JP, identified as a law clerk, made entries on July 15, 2008, for .30-hour for creating, numbering, and copying exhibits. Such service is clerical. On July 30, 2008, PD made the following .20-hour entry in 13 of the cases: Prepare Petitioners’ Notice of Service of Second Set of Interrogatories and Certificate of Filing and Service. Prepare correspondence to Debra Loucks, attorney for Board of Pharmacy regarding filing and Service of Petitioners’ Fourth Set of Request to Produce and Second Set of Interrogatories. However, 2.6 hours is not a reasonable amount of time to prepare a notice of service of discovery and a transmittal letter to opposing counsel. A reasonable amount of time to prepare such documents is .50 hours, and the time is prorated among the 13 cases. On July 28, 2008, PD made the following .10-hour entry in 13 of the cases: Prepare Notice of Filing Videotaped Depositions of Elizabeth Ranne and Erika Lilja. Prepare draft of Notice of Filing Deposition Transcript of Elizabeth Ranne. However, 1.3 hours is an unreasonable amount of time to prepare two notices of filing depositions. A reasonable amount of time is .40 hours, and that amount is prorated among the 13 cases. On June 17, 2008, PD made the following .20-hour entry in each of the 11 cases: Prepare Petitioners’ Notice of Service of First Set of Interrogatories to Respondent and Certificate of Filing and Service. Prepare correspondence to Debra Loucks, attorney for Board of Pharmacy, regarding filing and service of Petitioners’ First Set of Request to Produce, Petitioners’ First Set of Request for Admissions and Petitioners’ First Set of Interrogatories. However, 2.2 hours is an unreasonable amount of time to prepare a notice of service of discovery and a transmittal letter to opposing counsel. A reasonable amount of time is .50, which is prorated among the 11 cases. 58. On June 21, 2008, in Case Nos. 08-2821RX, 08-2823RX, and 08-2824RX, there is a .30-hour entry for SF for finalizing and forwarding a petition for formal hearing to the Department of Health for filing. This entry does not appear to be related to the rule challenges and is deleted. In Case No. 08-3298RX, MRG made an entry of .50 hours for a telephone conference regarding the date of rule challenge and petition for rehearing. The petition for rehearing dealt with the client’s petition for waiver and should not be included. Thus, the entry is reduced to .25 hours. After all the cases were consolidated The Health Law Firm began to make entries for all cases in the first consolidated invoice. On July 28, 2008, GFI made an entry of 2.8 hours, which related exclusively to the issue of retroactive application of the rule. This entry is deleted. RS made entries in the first consolidated invoice for August 12, 14, 28, and 29, 2008, and September 2, 5, 10, and 18, 2008, relating to filing, indexing, copying, and forwarding documents. There are similar entries for SF on August 26, 2008, and September 4 and 9, 2008, and for AE on September 8, 2008. Those entries are for clerical tasks. PD had entries for reviewing, organizing, and indexing documents on September 4, 8, 11, and 17, 2008, and October 8, 2008. Those entries are for clerical tasks. There were numerous entries in August 2008 relating to a Board of Pharmacy meeting on August 21, 2008, in which the Board of Pharmacy heard motions for reconsideration of orders denying Petitioners’ petitions for waivers. Those entries are related to the petitions for waiver and not to the rule challenges. Although, The Health Law Firm makes reference to a settlement agreement in which the Board of Pharmacy agreed to grant the waivers, there was no settlement agreement of the rule challenges because the parties proceeded to litigate the issues by summary disposition. Thus, the references to attending and preparing for the August 21, 2008, Board of Pharmacy meeting as well as advising the clients of the outcome of the meeting on August 20 and 21, 2008, are deleted. Additionally, an entry by MRG on August 20, 2008, which included reviewing the August 21st agenda is reduced to .75 hours. On August 25, 2008, MRG made an entry which included a telephone conference with Mr. Bui and a telephone conference with Ms. Ranne regarding Mr. Bui. Mr. Bui is not a Petitioner, and the entry is reduced to .55 hours. Based on the invoices, it appears that Mr. Bui and Ms. Ranne were also foreign pharmacy graduates seeking waivers from the Board of Pharmacy. On August 29, 2008, MRG made another entry which included the preparation of an e-mail to Mr. Bui. The entry is reduced to two hours. On August 6, 2008, MRG made a 1.80-hour entry which included preparing e-mail to Mr. Bui and a telephone conference with Mr. Sokkan regarding the rule challenge and settlement negotiations. Neither of these persons is a Petitioner; thus, the entry is reduced to .60 hours. On August 28, 2008, TJJ made a 3.60-hour entry for researching and preparing Petitioners’ second motion to compel discovery. No such motion was filed. Thus, the entry is deleted. Another entry was made on September 2, 2008, which included, among other things, the revision of the motion to compel. That entry is reduced to .80 hours. On August 8, 2008, MRG made a 1.00-hour entry which included a telephone conference with Ms. Alameddine regarding her passing the MPJE and being licensed in Michigan. Those issues relate to the petition for reconsideration of the waiver. The entry is reduced to .50 hours. On September 4, 2008, TJJ made a .80-hour entry for preparing a letter to Mr. Modi regarding his approval to take the examination, a 1.00-hour entry dealing with Mr. Lakshminarary’s application, a .90-hour entry dealing with Petitioner Narayanan’s application, a .70-hour entry dealing with Mr. Shah’s application, and a .60-hour entry dealing with Ms. Hernandez’s application. The entries deal with the petitions for a waiver and are deleted. On September 4, 2008, MRG made an entry which included, among other tasks, time for determining if the Board of Pharmacy had sufficient funds to pay Petitioners’ attorney’s fees. This entry is reduced to two hours. On October 10, 2008, MRG made a 1.20-hour entry which included, among other things, analyzing pleadings to determine if persons who were not Petitioners should file petitions for attorney’s fees. The entry is reduced to .60 hours. On July 16, 2008, MRG and JP made entries in ten of the cases for traveling to Tallahassee and attending the depositions of Elizabeth Ranne and Erika Lilja. The total hours for MRG was 16.9 hours and for JP the total was 17 hours. These total hours are reduced by ten hours each for travel time. On August 12 and 13, 2008, MRG made entries which included travel time to attend Board of Pharmacy meetings.6 Those entries are reduced each by one hour to account for travel time. The following is a listing of the amount of hours and dollar amount for fees, which are considered to be reasonable for the rule challenges. Individual and First Consolidated Invoice Hours Rate Amount GFI 146.10 $350.00 $51,135.00 MLS 3.70 $300.00 $1,110.00 JK 1.40 $300.00 $420.00 TJJ 80.13 $200.00 $16,026.00 MRG 210.16 $150.00 $31,824.00 JP 37.80 $100.00 $3,780.00 PD 39.053 $80.00 $3,124.24 SF 16.80 $80.00 $1,344.00 GJ .40 $80.00 $32.00 RS 1.3 $80.00 $104.00 $108,899.24 The Partial Final Order found that Petitioners were entitled to an award of attorney’s fees pursuant to Subsection 120.595(3), Florida Statutes. Thus, the issue of entitlement to fees and costs pursuant to Subsection 120.595(3), Florida Statutes, was not an issue that was litigated in the instant fee cases. The issue of whether Petitioners were entitled to fees and costs pursuant to Subsections 57.105(5), 120.569(2)(e), and 120.595(4), Florida Statutes, were entitlement issues which were litigated in the instant fee cases.7 Most of the charges dealing with the petitions for fees and costs are related to the amount of fees that are to be awarded and not to the entitlement to fees. In Petitioners’ second consolidated invoice (Petitioners’ Exhibit 4), there is a two-hour entry by MLS on November 3, 2008, for research of entitlement to fees pursuant to Subsection 120.595(3), Florida Statutes. This entry is deleted since the issue of entitlement to fees pursuant to Subsection 120.595(3), Florida Statutes, had already been determined. The following entries in the second consolidated invoice relate to the litigation of the amount of fees to be awarded and are deleted: 11-5-08 GFI 6.90 hours 11-6-08 SF 7.00 hours 11-6-08 GFI 7.40 hours 11-7-08 SF 7.00 hours 11-7-08 MLS 1.00 hour 11-7-08 JCP 7.00 hours 11-8-08 JCP 1.00 hours 11-8-08 GFI 7.10 hours 1-26-09 GFI 1.00 hour 2-9-09 GFI .60 hours 2-10-09 GFI .30 hours 2-12-09 GFI .60 hours 2-17-09 GFI .30 hours 2-17-09 GFI .60 hours 2-19-09 GFI .60 hours The following entries were made in the second consolidated invoice for clerical tasks performed by paralegals and legal assistants: 11-3-08 RAS .30 hours 2-9-09 RAS .30 hours 2-10-09 RAS .30 hours 2-12-09 ACE .40 hours The issue of entitlement to fees pursuant to statutes other than Subsection 120.595(3), Florida Statutes, was a small portion of the litigation relating to attorney’s fees and costs. The major areas of litigation dealt with the amount of fees and costs that should be awarded. The invoices do not specifically set forth the amount of time that was spent on the issue of entitlement to fees on statutes other than Subsection 120.595(3), Florida Statutes. Based on a review of the pleadings in these fee cases and a review of the invoices submitted for litigation of attorney’s fees and costs, it is concluded that ten percent of the time should be allocated to the issue of entitlement to fees. The percentage is applied to the fees after the fees listed in paragraphs 76, 77, and 78, above, have been deleted. Thus, the following entries in the second consolidated invoice are reduced to the following amount of hours: 11-1-08 JCP .26 hours 11-3-08 MLS .10 hours 11-4-08 MLS .40 hours 11-8-08 JCP .32 hours 12-22-08 GFI .04 hours 12-30-08 MLS .03 hours 1-7-09 GFI .02 hours 1-14-09 GFI .04 hours 1-15-09 GFI .07 hours In the third consolidated invoice (Petitioners’ Exhibit 5), the following entries relate to the amount of fees to be awarded and are deleted: 3-4-09 SME 4.80 hours 3-4-09 GFI 1.20 hours 4-3-09 GFI 3.20 hours 4-7-09 GFI .50 hours 4-7-09 GFI .60 hours 4-7-09 GFI .30 hours 4-8-09 GFI 4.20 hours 4-8-09 GFI 1.00 hour 4-9-09 MRG 1.50 hours 4-9-09 GFI 3.20 hours 4-11-09 GFI .60 hours 4-15-09 GFI 4.40 hours On April 14, 2009, GFI made an entry which included time for travel to the expert witness’ office. The entry is reduced by .75 hours for travel time. Ten percent of the time not excluded or reduced above related to the issue of entitlement of fees pursuant to statutes other than Subsection 120.595(3), Florida Statutes. The following entries are reduced to that percentage: 3-31-09 GFI .05 hours 4-1-09 GFI .20 hours 4-6-09 GFI .19 hours 4-6-09 GFI .03 hours 4-7-09 MRG .05 hours 4-7-09 GFI .07 hours 4-7-09 GFI .19 hours 4-7-09 GFI .27 hours 4-9-09 GFI .10 hours 4-13-09 GFI .50 hours 4-14-09 GFI .48 hours 4-14-09 GFI .275 hours The following is a list of the fees in the second and third consolidated invoices which are related to entitlement of fees pursuant to Florida Statutes other than Subsection 120.595(3), Florida Statutes. Second and Third Consolidated Invoice Hours Rate Amount GFI 2.525 $350.00 $883.75 MLS .43 $300.00 $129.00 MRG .05 $150.00 $7.50 JCP .32 $100.00 $32.00 $1,052.25 With the exception of the costs related to the Transcripts of the Board of Pharmacy meetings of April 8 and 9, 2008, and June 10, 2008, Respondent, as stipulated in the parties’ Joint Pre-hearing Stipulation, does not dispute that the amounts of costs set forth in the invoices submitted by Petitioners are fair and reasonable.8 The cost of the Transcripts of the Board of Pharmacy meetings on April 8 and 9, 2008, was $1,476.00. The cost of the Transcript of the Board of Pharmacy meeting on June 10, 2008, was $524.00. At the final hearing, the Board of Pharmacy’s objection appeared to be based on the timing of the payment of the court reporter’s fees related to the transcribing of those meetings. The Transcripts were filed with the Division of Administrative Hearings prior to the issuance of the Partial Final Order. Thus, the costs of the transcribing of the Board of Pharmacy meetings are properly included in the amount of costs to be awarded to Petitioners. The amounts of the costs claimed for the rule challenges in the individual and first consolidated invoice are reasonable. The costs incurred by Petitioners for the rule challenges as set forth in the individual and first consolidated invoices are listed below: Name Amount Vipul Patel $1,773.62 Miriam Hernandez $1,801.41 Mirley Aleman-Alejo $1,213.80 Valliammai Natarajan $321.17[9] John H. Neamatalla $1,118.72 Samad Mridha $975.12 Se Young Yoon $1,097.07 Saurin Modi $1,168.75 Deepakkumar Shah, M.Ph. $1,119.24 Mijeong Chang $1,213.16 Nabil Khalil $961.32 Hadya Alameddine $464.60 Balaji Lakshminarayanan $509.71 Anand Narayanan $461.87 The total amount of costs to be awarded for the challenge to the existing rule and to the policy statements is $14,199.56. The parties stipulated to the reasonableness of the costs contained in the second consolidated invoice. The second consolidated invoice lists the total costs as $2,096.12. Therefore, the costs for the second consolidated invoice are reduced to $209.61,10 which represents the amount attributable to litigation of entitlement of fees, ten percent of the total costs. The parties stipulated to the reasonableness of the costs contained in the third consolidated invoice. The third consolidated invoice lists the total costs as $580.62. Therefore, the costs for the third consolidated invoice are reduced to $58.06,11 which represents the amount attributable to litigating the entitlement of fees, ten percent of the total costs. Petitioners incurred costs in the litigation of the amount of attorney’s fees to be awarded. Petitioners retained an expert witness, Sandra Ambrose, Esquire. Ms. Ambrose’s fee relating to the issue of attorney’s fees is $5,200.00. Her fee is reasonable; however, Ms. Ambrose’s testimony was related to the amount of the fees not to the entitlement to fees and are, therefore, not awarded as part of the costs. The total costs to be awarded for the litigation of the fees is $267.67.
The Issue Whether Respondent Corporation, Southern Insight, Inc., failed to secure payment of workers' compensation coverage as required by Chapter 440, Florida Statutes, and the Florida Insurance Code, and if so, whether the Department of Financial Services, Division of Workers' Compensation (Department) has lawfully assessed the penalty against Respondent in the amount of $27,805.11.
Findings Of Fact The Department is the state agency responsible for enforcing Section 440.107, Florida Statutes, which requires that employers secure the payment of workers' compensation coverage for their employees and otherwise comply with the workers' compensation coverage requirements under Chapter 440, Florida Statutes. Respondent has been a Florida corporation, actively involved in the construction industry providing framing services, during the period of February 16, 2006, through August 17, 2007 (assessed penalty period). At all times material, Respondent has been an "employer," as defined by Chapter 440, Florida Statutes. At all times material, John Cauley has been Respondent's president and sole employee. At no time material did Respondent obtain workers' compensation insurance coverage for John Cauley. On August 17, 2007, Department Investigator Lynise Beckstrom conducted a random workers' compensation compliance check of a new home construction site in Palm Coast, Florida. At that time, Ms. Beckstrom observed four men, including John Cauley, framing a new home. Utilizing the Department's Compliance and Coverage Automated System (CCAS) database, which contains all workers' compensation insurance policy information from the carrier to an insured and which further lists all the workers' compensation exemptions in the State of Florida, Ms. Beckstrom determined that for the assessed penalty period, Respondent did not have in effect either a State of Florida workers' compensation insurance policy or a valid, current exemption for its employee, John Cauley. During the assessed penalty period, Respondent paid remuneration to its employee, John Cauley. John Cauley admitted that during the assessed penalty period he was not an independent contractor, as that term is defined in Section 440.02(15)(d)(1), Florida Statutes. Section 440.05, Florida Statutes, allows a corporate officer to apply for a construction certificate of exemption from workers' compensation benefits. Only the named individual on the application is exempt from workers' compensation insurance coverage. On or about April 15, 2006, John Cauley, as Respondent's President, applied for such an exemption. That application was denied. Mr. Cauley received neither an exemption card nor a denial of exemption from the Department. During the assessed penalty period, Respondent was a subcontractor of the contractor, Mass Builders, Inc. 9. Sections 440.107(3) and 440.107(7)(a), Florida Statutes, authorize the Department to issue stop-work orders to employers unable to provide proof of workers' compensation coverage, including proof of a current, valid workers' compensation exemption. Based on the lack of workers' compensation coverage and lack of a current, valid workers' compensation exemption for Respondent corporation's employee, John Cauley, the Department served on Respondent a stop-work order on August 17, 2007. The stop-work order ordered Respondent to cease all business operation for all worksites in the State of Florida. Immediately upon notification by Investigator Beckstrom of his lack of valid exemption, Mr. Cauley submitted a new exemption application, which was granted, bringing Respondent corporation into compliance. However, in order to have the stop-work order lifted so that he can work as a corporation again, Mr. Cauley must pay a percentage of the penalty assessment and enter into a payment plan with the Agency. In the meantime, Mr. Cauley cannot pay the percentage required by the Department if he cannot find work as someone else's employee, which he had been unable to do as of the date of the hearing. Herein, it is not disputed that Respondent was inadvertently out of compliance. Mr. Cauley seeks merely to reduce the amount of the penalty assessment so that removal of the stop-work order against Respondent corporation can be negotiated. On the day the stop-work order was issued, Investigator Beckstrom also served Respondent with a "Request for Production of Business Records for Penalty Assessment Calculation," in order to determine a penalty under Section 440.107(7), Florida Statutes. Pursuant to Florida Administrative Code Rule 69L-6.015, the Department may request business records for the three years preceding the date of the stop-work order. Logically, however, Ms. Beckstrom only requested business records dating back to February 14, 2006, Respondent's date of incorporation in Florida. The requested records included payroll, bank records, check stubs, invoices, and other related business records. Ms. Beckworth testified that, "Business records requests usually consist of payroll, bank records, taxes, check stubs, invoices, anything relating to that business." This is a fair summation of a much more detailed listing of records required to be kept pursuant to Rule 69L-6.015, Florida Administrative Code, which was in effect at all times material. In response to the Request for Production, Respondent provided Southern Insight Inc.'s corporate bank statements for the assessed penalty period, detailing corporate income and expenses through deposits and bank/debit card purchases. However, Investigator Beckworth did not deem the corporate bank statements produced by Respondent to be an adequate response, and she did not base her calculations for penalty purposes thereon. Mr. Cauley expected that the Department would, and has argued herein that the Department should, have subtracted from the total deposits to Respondent's corporate account (the minuend) the total corporate business expenses (the subtrahend) in order to determine the Respondent's payroll to Mr. Cauley (the difference), upon which difference the Department should have calculated his workers' compensation penalty. In fact, the Department, through its investigator, did not utilize the total amount deposited to Respondent's corporate account, because some deposits "could" have come from a family member of Mr.Cauley. That said, there are no individual names on the account; the account is clearly in the name of the Respondent corporation; and there is no proof herein that any deposits to Respondent's corporate bank account were derived from anyone other than Mr. Cauley, as Respondent's President. Ms. Beckstrom testified that if the Agency had accepted the total of the deposits to this corporate account for the assessed penalty period as Respondent's payroll, the result would have been more than the total amount actually determined by her to constitute Mr. Cauley's payroll, but that statement was not demonstrated with any specificity. The Department also did not use any of the subtracted amounts shown on the corporate bank statements, even though the bank statements listed the same information as would normally be found on a corporate check, including the transaction number, recipient of the money, the date, and the amount for each bank/debit card transaction. All that might be missing is the self-serving declaration of the check writer on the check stub as to what object or service was purchased from the recipient named on the bank statement. Ms. Beckstrom testified that if Mr. Cauley had provided separate receipts for the transactions recorded on the bank statements as bank/debit card entries, she could have deducted those amounts for business expenses from the corporation's income, to arrive at a lesser payroll for Mr. Cauley. In other words, if Mr. Cauley had provided separate receipts as back-up for the transactions memorialized on the corporate bank statements, the Department might have utilized the bank/debit card transactions itemized on Respondent's corporate bank statements as the amount deducted for Respondent corporation's business expenses, so as to obtain the payroll (difference) paid to Mr. Cauley. It is the amount paid to Mr. Cauley as payroll, upon which the Department must calculate the workers' compensation penalty. The reason Ms. Beckworth gave for not using Respondent's bank statements was that without more, the transactions thereon might not be business expenses of the corporation. However, she also suggested that if, instead of submitting bank/debit card statements, Mr. Cauley had submitted checks payable to third parties and if those corporate checks showed an expenditure for a deductible business expense, like motor vehicle fuel, she might have accepted the same expenditures in check form (rather than the statements) in calculating Respondent's payroll. Ultimately, Ms. Beckworth's only reasons for not accepting the bank statements showing recipients, such as fuel companies like Amoco, was "agency policy," and her speculation that Amoco gas could have been put into a non-company truck or car. She also speculated that a prohibition against using bank statements showing deductions might possibly be found in the basic manual of the National Council on Compensation Insurance (NCCI) or in a rule on payrolls (Rule 69L-6.035) which became effective October 10, 2007, after the assessed penalty period. However, the NCCI manual was not offered in evidence; a rule in effect after all times material cannot be utilized here; and no non-rule policy to this effect was proven-up. In addition to not using Respondent's bank statements to calculate a penalty, the Department also did not "impute" the statewide average weekly wage to Respondent for Mr. Cauley. Ms. Beckworth testified that to impute the statewide average weekly wage would have resulted in a higher penalty to Respondent. As to the amount of the statewide average weekly wage, she could only say she thought the statewide average weekly wage was "about $1,000.00". Instead of using Respondent's corporate bank statements or imputing the statewide average weekly wage, Investigator Beckstrom determined that Mass Builders, Inc., was the prime contractor on the jobsite being worked by Respondent, and that Mass Builders, Inc., had not produced proof of securing workers' compensation coverage for Respondent, its sub- contractor. Therefore, she sought, and received, Mass Builders, Inc.'s "payroll records" of amounts paid by the prime contractor, Mass Builders, Inc., to Respondent Southern Insight, Inc., via a separate site-specific stop-work order and business records request directed to Mass Builders, Inc. The only "payroll records" that Mass Builders, Inc., offered in evidence were Mass Builders, Inc.'s check stubs, which Ms. Beckstrom utilized to come up with an income/payroll amount for Respondent Southern Insight, Inc. Mr. Cauley did not know until the hearing that Mass Builders, Inc.'s check stubs had been utilized in this fashion by the Department. However, he ultimately did not dispute the accuracy of the check stubs and did not object to their admission in evidence. In calculating Respondent's total payroll for the assessed penalty period, Investigator Beckstrom considered only the total of the check stubs from Mass Builders, Inc. It is unclear whether or not she reviewed Mass Builders, Inc.'s actual cancelled checks. No one from Mass Builders, Inc., appeared to testify that the stubs represented actual cancelled checks to Respondent or Mr. Cauley. The Department also did not deduct from the total of Mass Builders, Inc.'s check stubs any of the bankcard deductions made by John Cauley from Respondent's corporate bank account, for the same reasons set out above. Mr. Cauley testified, without refutation, that some of the expenses noted on Respondent's bank statements, paid by bank/debit card, most notably expenses for gasoline for his truck, constituted legitimate business expenses of Respondent corporation, which should have been deducted from either the bank statement's total income figure or from the amounts paid by Mass Builders, Inc., to Respondent corporation, before any attempt was made by the Department to calculate the amount paid by Respondent corporation to Mr. Cauley as payroll. Utilizing the SCOPES Manual, which has been adopted by Department rule, Ms. Beckstrom assigned the appropriate class code, 5645, to the type of work (framing) performed by Respondent. In completing the penalty calculation, Ms. Beckstrom multiplied the class code's assigned approved manual rate by the payroll (as she determined it) per one hundred dollars, and then multiplied all by 1.5, arriving at an Amended Order of Penalty Assessment of $27,805.11, served on Respondent on August 22, 2007. Subsequent to the filing of its request for a disputed-fact hearing, in an effort to have the penalty reduced, Respondent provided the Department with additional business records in the form of portions of Southern Insight, Inc.'s 2006 and 2007 U.S. Income Tax Returns for an S Corporation (2006 and 2007 income tax returns). However, neither itemized deductions nor original receipts for Respondent's business expenses were provided to Ms. Beckworth at the same time, and she determined that without itemized deductions, there was no way to calculate Respondent's legitimate business deductions so that they could be deducted from the total of Mass Builders, Inc.'s, check stubs to determine a lesser payroll applicable to Mr. Cauley. Investigator Beckstrom testified that the tax returns, as she received them, did not justify reducing Respondent's payroll used in calculating the penalty. The vague basis for this refusal was to the effect that, "The Internal Revenue Service permits different business deductions than does the Department." Itemization pages (schedules) of Respondent's income tax returns were not provided until the de novo disputed-fact hearing. Confronted with these items at hearing, Ms. Beckworth testified that ordinary business income is not used by the Department to determine payroll, but that automobile and truck expense and legitimate business expenses could be deducted, and that she would probably accept some of the deductions on Respondent's 1020-S returns. Also, if Respondent's bank statement corresponded to the amount on the tax form, she could possibly deduct some items on the bank statements as business expenses before reaching a payroll amount. However, she made no such calculations at hearing. Ms. Beckworth testified that if she had Respondent's checks or "something more" she could possibly deduct the motor fuel amounts. Although Respondent's 2006, and 2007, income tax returns reflected Respondent corporation's income minus several types of business deductions, Ms. Beckstrom testified that the tax deductions were not conclusive of the workers' compensation deductions, because the Internal Revenue Service allows certain deductions not permissible for workers' compensation purposes, but she did not further elaborate upon which tax deductions were, or were not, allowable under any Department rule. She did not "prove up" which deductions were not valid for workers' compensation purposes. Respondent's 2006, tax deductions for "automobile and truck expense" were $2,898.00, and for 2007, were $4,010.00. There was no further itemization by Respondent within these categories for fuel. Other business deductions on the tax returns were also listed in categories, but without any further itemization. The only supporting documentation for the tax returns admitted in evidence was Respondent's bank statements. Respondent believed that the tax returns and possibly other documentation had been submitted before hearing by his accountant. It had not been submitted. The Department never credibly explained why it considered a third party's check stubs (not even the third party's cancelled checks) more reliable than Respondent's bank statements or federal tax returns. Even so, at hearing, the Department declined to utilize the business deductions itemized on Respondent's tax forms or any bank/debit card deductions on its bank statements so as to diminish the amount arrived-at via the Mass Builders, Inc.'s check stubs, and ultimately to arrive at a difference which would show a lesser payroll to Mr. Cauley. Although Mr. Cauley's questions to Ms. Beckstrom suggested that he would like at least all of the fuel company deductions on his bank statements to be considered as business deductions of Respondent Southern Insight, Inc., and for those fuel company expenditures to be subtracted from either the total deposits to the corporate bank account or deducted from the payroll total as calculated by Ms. Beckstrom from Mass Builders, Inc.'s check stub total, he did not testify with clarity as to which particular debits/charges on the bank statements fell in this category. Nor did he relate, with any accuracy, the debits/charges on the bank statements to the corporate tax returns. Upon review by the undersigned of Respondent's bank statements admitted in evidence, it is found that the bulk of Respondent's bank/debit card deductions during the assessed penalty period were cash withdrawals or ATM debits which cannot be identified as being paid to fuel companies or purveyors of construction material. As Investigator Beckstrom legitimately observed, "Big Al's Bait" is not a likely source of motor fuel. "Publix" and "Outback Steak House" are likewise unlikely sources of fuel or construction material, and cannot stand alone, without some other receipt to support them, as a legitimate corporate business entertainment expense. Other debits/charges on the bank statements are similarly non-complying, ambiguous, or defy categorization. However, the undersigned has been able to isolate on the corporate bank statements purchases from the known fuel distributors "Amoco" and "Chevron" on the following dates: 7/09/07, 7/10/07, 6/04/07, 6/04/07, 6/11/07, 5/03/07/ 4/09/07, 4/10/07, 4/13/07, 4/16/07, 3/02/07, 3/05/07, 3/13/07, 3/15/07, 3/20/07, 1/29/07, 5/01/06, 6/02/06, 8/02/06, 11/03/06, totaling $556.98.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Financial Services, Division of Workers' Compensation, that affirms the stop-work order and concludes that a penalty is owed; that provides for a recalculation of penalty to be completed, on the basis set out herein, within 30 days of the final order; and that guarantees the Respondent Southern Insight, Inc., a window of opportunity to request a Section 120.57 (1) disputed-fact hearing solely upon the recalculation. DONE AND ENTERED this 1st day of July, 2008, in Tallahassee, Leon County, Florida. S ELLA JANE P. DAVIS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of July, 2008. COPIES FURNISHED: Anthony B. Miller, Esquire Department of Financial Services Division of Workers' Compensation 200 East Gaines Street Tallahassee, Florida 32399-4229 John Cauley, President Southern Insight, Inc. Post Office Box 2592 Bunnell, Florida 32110 Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Daniel Sumner, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue The amount of attorneys' fees and costs to be awarded to Jerry Ann Winters (Petitioner) based on the Order of the Second District Court of Appeals dated November 8, 2002, and pursuant to Subsection 120.595(5), Florida Statutes (2003).
Findings Of Fact The Petitioner retained attorneys Mark F. Kelly and Robert F. McKee to represent her in an administrative proceeding challenging the proposed termination of her employment by USF and in the appeals that followed the issuance of the Final Orders by USF. Petitioner's Exhibit 1 is an invoice dated December 18, 2002, submitted to the Petitioner by her legal counsel. The invoice contains charges billed to the Petitioner for the period between January 17, 2001, and November 22, 2002. The invoice indicates a total of 339.75 hours expended on her behalf. The invoice contains duplicated entries for November 14, 2002. Discounting the duplication reduces the total hours expended to 339.50. The practice of the Petitioner's counsel is to bill in quarter-hour increments and to round up. According to the invoice, the Petitioner was billed at a rate of $275 per hour. Mark F. Kelly graduated from Vanderbilt Law School in 1976. Since then he has practiced labor and employment law in Florida before state and federal agencies and has a substantial appellate practice. He was previously awarded fees in the range of $250 approximately four years ago. Robert F. McKee graduated from Stetson University College of Law in 1979. He received a Master of Laws degree in Labor and Employment Law from Georgetown University Law Center in 1981. Since then he has practiced labor and employment law in Tampa, Florida. He was previously awarded fees in the range of $250 approximately four years ago. At the hearing, the Petitioner presented the testimony of Steven Greg Wenzel. Mr. Wenzel has practiced law in Florida for more than 30 years and is board-certified in Labor and Employment Law. He has extensive trial experience. He has previously provided expert testimony related to the reasonableness of attorneys' fees in approximately 12 cases. Mr. Wenzel is familiar with the fees charged by attorneys representing employees in employment-related cases in central Florida. Mr. Wenzel's testimony related to the experience, reputation, and ability of Petitioner's attorneys. It also indicated that they have substantial experience in the area of labor and employment law and are well-regarded by their peers. No credible evidence to the contrary was presented during the hearing. Mr. Wenzel's testimony adequately addressed the applicable factors set forth in Rule 4-1.5(b)1 of the Florida Bar's Rules of Professional Conduct to be considered in determining the reasonableness of fees. Mr. Wenzel opined that based on their knowledge and experience, the type and complexity of the case, and the aggressive nature of the litigation; a reasonable hourly rate was $290 ranging to $310. Mr. Wenzel's testimony in this regard is credited. The invoiced rate of $275 per hour is reasonable. Mr. Wenzel also opined that the quarter-hour billing practice was reasonable and, in fact, conservative related to other practices with which he was aware. Mr. Wenzel's testimony in this regard is credited. At the same time that the Petitioner was challenging the proposed employment termination, a civil case involving the Petitioner, a number of the basketball players, and USF was proceeding. In that case, different legal counsel represented the Petitioner. Review of Petitioner's Exhibit 1 indicates that the invoice includes charges related to persons and activities involved in the civil case. Neither Mr. Kelly nor Mr. McKee had any official involvement in the civil case. Mr. Kelly participated apparently unofficially in mediation efforts to resolve the pending disputes. The invoice contains daily total charges for billed activity. On some days, activity was recorded for both the administrative case and the civil case. Charges related to the civil case are not reimbursable in this proceeding. Because the invoice precludes an accurate separation of time spent on the administrative case from the civil case, all billings for dates upon which charges were incurred related to the civil case have been excluded from consideration in this Order. The charges related to conversations with John Goldsmith, who represented the Petitioner in the civil case, are excluded. These charges occurred on March 14, 2001; April 2, 2001; April 6, 2001; September 21, 2001; October 19, 2001; and May 13, 2002, and total 8.25 hours. The charges related to conversations with Jonathon Alpert, who represented the basketball players in the civil case, are excluded. The charges occurred on April 10, 2001, and April 11, 2001, and total 6.75 hours. The charge related to a conversation with Tom Gonzalez, who represented USF in the civil case, is excluded. This charge occurred on April 23, 2002, for .50 hours. The charges related to conversations with Mary Lau, who was a mediator assigned to the civil case, are excluded. These charges occurred on April 24, 2002, and May 8, 2002, and totaled 1.25 hours. The invoice includes a charge for May 15, 2002, related to a telephone conference with "Judge Scriven" regarding settlement. Judge Scriven is otherwise unidentified. The charge, for .25 hours, is excluded. The invoice includes a charge for Mr. McKee's attendance at mediation on May 16, 2002, related to the civil case, for 2.5 hours. This charge is excluded. The sum of the excluded time set forth above is 19.50 hours. Deduction of the 19.50 hours from the properly invoiced total of 339.50 results in a total of 320 hours. Based on Mr. Wenzel's testimony that the invoiced hours were reasonable given the nature and complexity of this case, it is found that the reduced level of 320 hours set forth in the invoice and directly applicable to the administrative case is a reasonable expenditure of time. The invoice also sets forth costs that were billed to the Petitioner. The invoice includes numerous routine office expenses (postage, copying, telephone, and facsimile costs) that are not properly recoverable costs in this proceeding. Other billed costs are set forth without sufficient information to determine the relationship of the cost to the administrative proceeding. A filing fee with the District Court of Appeal was billed on January 15, 2001, preceding the administrative hearing in this case. Further the billed charges include witness fees for several witnesses, only one of which testified in the administrative hearing. The invoice also includes service fees for subpoenas that appear to have been charged subsequent to the completion of the administrative hearing. Based on review of the invoice, properly recoverable costs of $307 are found. This sum includes the following items: witness fee and mileage for Paul Griffin ($7) dated April 5, 2001; service fee for subpoena for Paul Griffin ($50) dated April 11, 2001; and filing fee-clerk, District Court of Appeal ($250) dated October 5, 2001. Petitioner's Exhibit 2 is a "Retainer and Fee Agreement" executed by the Petitioner and her counsel which provides as follows: Partial contingency fee. Client will pay for services rendered at the reduced rate of $110 per hour. To compensate attorney for this reduced rate and the risk involved in undertaking a case on these terms, in addition to the $110 hourly rate, attorney will be entitled to 25% of any settlement money or judgment. In the event attorney's fees are awarded to the client by any court or tribunal and collected, attorney will be entitled to such fee (less any amount paid by client, which will be reimbursed pro rata) or the partial contingency fee, whichever is greater. Attorney requires a retainer deposit from client in the amount of $2,500, to be replenished from time-to-time as required to cover outstanding fees and costs. The Retainer and Fee Agreement is dated December 2, 2002, and the Order of the District Court of Appeal for the Second District, which granted the Petitioner's Motion for fees and costs, is dated November 8, 2002. It is unclear whether a written agreement between the Petitioner and legal counsel existed prior to the December 2, 2002, agreement.
The Issue The issue in this case is whether Petitioner has just cause to terminate Respondent's employment.
Findings Of Fact At all times pertinent to this case, Respondent was employed by Petitioner as a food service worker in the cafeteria at Ballard Elementary School. Respondent was hired by Petitioner on November 5, 1998. Prior to the incidents giving rise to the Complaint, Respondent had a relatively good employment record, with two disciplinary matters documented in her personnel file. On September 17, 2001, Respondent was given a written reprimand for refusing to follow her supervisor's directions and giving inappropriate verbal responses. More recently, on April 16, 2012, Respondent received a verbal reprimand for not properly accounting for student meals. Just days after Respondent received a verbal reprimand related to accounting for student meals, a vehicle in which Respondent was a passenger was stopped by a police detective. As described below, this traffic stop ultimately led to Respondent's arrest and subsequent third-degree felony charge for engaging in a scheme to defraud in an amount less than $20,000, in violation of section 817.034(4)(a)3., Florida Statutes (2011).1/ On February 21, 2013, Respondent pled nolo contendere to the charge. Adjudication was withheld, pending Respondent's successful completion of a five-year term of probation with specified conditions. The circumstances giving rise to the criminal charge against Respondent were described in detail by the City of Bradenton Police Department detective who arrested Respondent. The detective testified that on April 20, 2012, he pulled over a vehicle for failing to stop at a stop sign. The detective approached the passenger side of the vehicle, where Respondent was seated. The detective observed a laptop computer on Respondent's lap, open and in use with a portable internet access device, but Respondent quickly shut the laptop as the detective approached. For reasons that are not germane to the Complaint in this case, the detective instructed Respondent to exit the vehicle, and he placed her in handcuffs. The detective asked for identification, and Respondent told him it was in her purse, which she had placed on the passenger seat when she exited the vehicle. The detective retrieved Respondent's purse and looked inside for her identification. In addition to Respondent's identification, the detective also found several Visa debit cards with different people's names on them. Also in the purse were written instructions for filing tax returns through TurboTax, along with ledgers containing names, social security numbers, dates of birth, and other personal identification information. Some of the names on the ledgers matched the names on the debit cards found in Respondent's purse. Respondent was arrested for an unrelated matter and transported back to the police station for questioning. At the police station, Respondent was given her Miranda rights and then questioned about the laptop and material found in her purse. In her post-Miranda interview, Respondent told the detective that the laptop was hers, but she had sold it to a woman she knew only as "Tiffany" for $200. Respondent told the detective that she and Tiffany entered into an arrangement whereby Respondent would assist Tiffany in a scheme to file tax returns in other people's names using TurboTax. The TurboTax filings would direct that the tax refunds, issued on debit cards, be sent to Respondent's residence. For each debit card received pursuant to this scheme, Tiffany would pay Respondent $500, with one exception: Respondent admitted to the detective that she gave her mother's personal information to Tiffany, who filed a tax return in Respondent's mother's name; for this debit card, the deal was that Respondent and Tiffany would split the amount of the tax refund 50-50. Respondent gave information to the detective regarding where "Tiffany" could be found, but there was no "Tiffany" at the place Respondent identified. The detective determined through a search of Respondent's laptop that Turbotax had been in use when he approached the vehicle and saw Respondent quickly closing the computer. However, Respondent admitted that she had already filed her own tax return, so there would be no reason for her to be using Turbotax, except in furtherance of the scheme to secure other people's tax refunds. The detective traced the individuals whose names were on the debit cards found in Respondent's purse, and he discovered that they all were residents of a nearby retirement community. He interviewed the residents, who reported to the detective that they did not know Respondent and that they had not authorized Respondent or "Tiffany" to file tax returns on their behalf. Respondent admitted to the detective that she knew what she was doing was wrong and illegal. At the hearing, Respondent provided only vague, general, and somewhat contradictory testimony regarding the circumstances giving rise to the criminal charge to which she pled no contest. On the one hand, she claimed that although she was charged, she "didn't have nothing to do with what went on[.]" She later admitted that she was wrong, but took the position that she already had been punished for her wrongdoing and deserved a second chance. The only specific fact Respondent disputed regarding her role in the debit card scheme was whether she was the one who actually filed the tax returns. Respondent did not deny that she took part in the scheme to defraud vulnerable people out of their tax refunds for her own financial gain. Respondent did not deny that she used her own mother's personal information for Respondent's financial gain. Overall, Respondent's testimony lacked credibility and did not effectively refute the detective's more credible testimony. Respondent's court appearance at which her plea was made was on February 21, 2013, at 11:00 a.m. That day was a work day for Respondent, and the hours she was supposed to work were 7:00 a.m. to 9:45 a.m., and 10:15 a.m. to 1:30 p.m. Respondent acknowledged that she left the cafeteria sometime between 10:00 a.m. and 10:30 a.m. for her court appearance and did not return to work that day. However, Respondent filled out her semi-monthly payroll sheet form to reflect that she was present and working from 7:00 a.m. to 9:45 a.m. and from 10:15 a.m. to 1:30 p.m., on February 21, 2013. Respondent signed the payroll sheet that she filled out to falsely reflect that she was working and should be paid for time that she was not actually at work. Petitioner's food services department informed its employees that it considers the accurate completion of time records on the payroll sheet to be very important. A June 2012 written policy was circulated to food service employees to emphasize that each employee must take care to ensure that the time records are accurate, including "[a]ctual start and [a]ctual end times," verified by the employee's signature. As emphasis, a text box on the written policy contained the message that "[p]utting false or incorrect information on your timesheet is Time Card Fraud and is grounds for disciplinary action up to and including recommendation for termination." Respondent acknowledged that she is aware that Petitioner expects employee time records to be accurate and truthful, and that falsification of a time sheet is considered time card fraud. Respondent also acknowledged that it was her signature on the payroll sheet that was filled out inaccurately for February 21, 2013. Respondent testified that she did "not remember" putting down the wrong hours or signing the payroll sheet, but the fact remains that the record was submitted with her signature verifying that she worked hours that she admittedly did not work on February 21, 2013. The result of Respondent's signed submission was that she was paid for hours that she knows she did not work. The credible evidence established that Respondent filled out her time records on the payroll sheet form to reflect that she worked a full day on February 21, 2013, which she knew was not true. Respondent signed the payroll sheet form, vouching for the false information that she knew would be used to pay her for hours she did not work. Respondent did not dispute Petitioner's authority to terminate her for just cause, nor did Respondent dispute most of the facts alleged as the basis for establishing just cause. Instead, Respondent's position was that despite her wrongdoing, she should be given a second chance, having worked for Petitioner for 15 years. Essentially, then, Respondent's defense was an argument for mitigation of the penalty to be imposed. In furtherance of her position, Respondent presented testimony from two character witnesses, but the witnesses knew little to nothing about the nature of the criminal charge to which Respondent pled no contest. Neither witness offered any information about Respondent for the time period at issue in this case. One witness was a neighborhood acquaintance who has only known Respondent for three months. The other witness was a former cafeteria supervisor who was terminated by Petitioner five years ago. The former supervisor testified that during the time she and Respondent worked together, Respondent was a hard worker who had her difficult moments, but who complied with and followed instructions "most of the time." When Respondent asked her former supervisor whether she believed that everyone deserves a second chance, the witness responded as follows: "I believe everyone should have a second chance. Some people need more than two chances, and [Respondent] might be that person. There's been times that maybe she hadn't followed the rules entirely, but who does?" Petitioner advocated against leniency based on the unrefuted evidence that a cafeteria worker, such as Respondent, has access to personal and financial information about students and their families. Accounts are established for students to draw on for their cafeteria purchases. Student account funds are deposited, withdrawn, and accounted for by food service workers. Family names, phone numbers, and addresses are included with the student account records. In addition, many account records reflect personal financial information of the student's family, including information on applications submitted to qualify students for free or reduced-cost lunches and information from governmental programs that provide aid to students, such as the state-federal program to provide temporary assistance for needy families (TANF).2/ It is reasonable for Petitioner to be concerned with the risk that would be presented by allowing Respondent to continue in her position where she has access to individual financial information of students and their families. It is not unreasonable for Petitioner to be unwilling to take that risk, given Respondent's very recent involvement in a scheme to defraud vulnerable people, including her own mother, for Respondent's financial gain.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Manatee County School Board enter a final order terminating the employment of Respondent, Nikki M. Brydson. DONE AND ENTERED this 5th day of December, 2013, in Tallahassee, Leon County, Florida. S ELIZABETH W. MCARTHUR 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 5th day of December, 2013.
Conclusions This cause has come on for final agency action after the filing of a Notice of Voluntary Dismissal With Prejudice (Notice) by Suntree Pharmacy, inc. (Suntree) at the Division Of Administrative Hearings in Case No. 13-4637 on December 27, 2013 and that Division's entry of an Order Closing File And Relinquishing Jurisdiction (Order) on January 9, 2014. Having considered the Notice and the Order and the Order of Conditional Release From Stop Work Order (Release) and the Payment Agreement Schedule For Periodic Payment of Penalty (Payment Agreement) and associated documents (Attachment A hereto), IT IS HEREBY ORDERED that the Notice Of Assignment And Order issued herein on January 30, 2014 is hereby withdrawn as improvidently issued. IT IS HEREBY FURTHER ORDERED that the Order of Conditional Release From Stop Work Order and the Payment Agreement Schedule For Periodic Payment of Penalty are affirmed and remain in full force and effect until all terms and conditions thereof are satisfied. Should any term or condition therein be defaulted on by Suntree, the Release shall be immediately lifted and a bar against further work immediately re- ss igsyerneeminyeevnerttaneimm mee imposed and the Payment Agreement shall be accelerated and the full amount due thereunder shall become immediately due and payable. March THE DONE AND ORDERED this _@rel_day of February, 2014. Robert C. Kneip, Chief of Sta
The Issue The issues in this matter are whether Respondent violated section 112.313(6), Florida Statutes (2013),1/ by obtaining funds from Orange County in the form of a severance payment while remaining employed as General Counsel for the Orange County Clerk of Courts; and, if so, the appropriate penalty.
Findings Of Fact Respondent, Stephan Carter, served as General Counsel for the Orange County Clerk of Courts (the “Clerk’s Office”) from June 2003 through April 1, 2014. Respondent was a public employee at all times material to this action. Respondent was personally hired by Lydia Gardner, the Orange County Clerk of Courts. In January 2005, Respondent and Ms. Gardner executed an employment contract (the “Employment Agreement”). The Employment Agreement was signed by Respondent and Ms. Gardner, in her capacity as the Clerk of Courts, on January 10, 2005, and January 13, 2005, respectively. The Employment Agreement, paragraph 6, entitled “Termination of Employment,” established that the Clerk would pay Respondent a fee should the Clerk terminate the Employment Agreement prior to its expiration date (the “Severance Payment”). Paragraph 6 specifically provided: The Clerk may declare this agreement terminated at any time. . . . The Clerk shall promptly pay to the General Counsel a sum equal to i) the salary and deferred compensation that is accrued but unpaid as of the date of the termination, plus ii) an amount equal to the pro rata portion of his salary for all accrued but unused leave time, plus, iii) an amount equal to the salary and deferred compensation that the General Counsel would have received during the 180 days immediately following the date such termination takes effect, as if this agreement had not been terminated. At the final hearing, Respondent explained that when he accepted the position of General Counsel (then titled “Legal Counsel”) with the Clerk’s Office in June 2003, he informed Ms. Gardner that he would only agree to work for the Clerk’s Office if he could be protected from losing his position. Therefore, Respondent sought and obtained the Severance Payment provision should he be terminated for any reason other than his voluntary resignation. The Employment Agreement provided that Respondent’s term of employment continued until January 6, 2009. On January 7, 2009, Respondent and Ms. Gardner entered a signed agreement wherein the Employment Agreement was “extended indefinitely.” On February 5, 2013, Respondent and Ms. Gardner signed a second amendment to the Employment Agreement.2/ This “clarification of terms” stated: [A]s to the definition of termination in paragraph 6, for the purposes of the contract, termination by the Clerk includes the ending of the employment relationship for any reason other than General Counsel’s voluntary resignation. The amendment also provided that an $11,000 annual payment into Respondent’s deferred compensation plan contained in the original Employment Agreement be considered compensation under Florida Administrative Code Rule 60S-6.001(15)(relating to pensions) and not a fringe benefit. In February 2013, Ms. Gardner became gravely ill. Ms. Gardner’s illness caused her to be absent from the Clerk’s Office. In Ms. Gardner’s absence, Colleen Reilly, the Chief Administrative Officer for the Clerk’s Office, assumed Ms. Gardner’s responsibilities. Ms. Reilly was hired in 2009. At that time, Respondent prepared an employment contract for Ms. Reilly modelled on his own Employment Agreement. In April 2013, Ms. Reilly approached Respondent to talk about their future employment with the Clerk’s Office. Ms. Gardner’s health was deteriorating. Respondent and Ms. Reilly discussed the impact of Ms. Gardner’s death on their positions. Ms. Reilly was also concerned whether the new Clerk of Courts would honor their Employment Agreements. Respondent and Ms. Reilly’s conversation led to a discussion regarding how they could protect the Severance Payments under their respective Employment Agreements. Respondent and Ms. Reilly considered several possibilities. One position was that their Employment Agreements would remain in effect upon Ms. Gardner's death, and they could ask the new Clerk of Courts to honor the payout terms. Respondent, however, determined that the Employment Agreements were not clear on whether he and Ms. Reilly were entitled to the Severance Payments following a change of administration. Therefore, they became concerned whether the new Clerk of Courts would be legally bound to honor the Severance Payments should he or she decide not to retain their services. Respondent, without seeking legal guidance or consulting with outside counsel for the Clerk’s Office, concluded that the Employment Agreements would terminate upon Ms. Gardner’s death. At the final hearing, Respondent explained that he considered his employment to be tied specifically to Ms. Gardner and not the Clerk's Office. Therefore, Respondent reasoned that because both he and Ms. Reilly were hired by and worked directly for Ms. Gardner, her death would terminate their contracts. This termination, of course, would also entitle Respondent (and Ms. Reilly) to the Severance Payment because his employment would have ended for a reason other than his voluntary resignation. Respondent and Ms. Reilly also discussed their plans once their Employment Agreements were terminated. Respondent informed Ms. Reilly that he believed that after the Employment Agreement was terminated, they could continue to work for the Clerk’s Office as “at-will” employees without employment contracts. Respondent encouraged Ms. Reilly to take her Severance Payment then stay in her position with the Clerk’s Office. He intended to do the same. Late in April 2013, Ms. Reilly informed Respondent that she was planning to visit Ms. Gardner, who was on convalescent leave at her home, to ask her to formally terminate the Employment Agreements and make them at-will employees of the Clerk’s Office. Respondent encouraged Ms. Reilly’s endeavor. Respondent then drafted two versions of a memorandum Ms. Gardner could sign to effectuate the termination of their contracts. Ms. Gardner, however, did not agree to terminate the Employment Agreements or sign the paperwork Respondent had prepared. Consequently, the Employment Agreements remained in effect. When Ms. Reilly was not able to obtain Ms. Gardner’s consent to terminate the Employment Agreements, Respondent began to consider Ms. Reilly’s authority to terminate his Employment Agreement. Respondent determined that Ms. Reilly could terminate his contract under section 28.09, Florida Statutes, and they could still receive the Severance Payments. Section 28.09 describes the appointment of a clerk ad interim in the case of a vacancy occurring in the office of a clerk by death. Section 28.09 states that the clerk ad interim “shall assume all the responsibilities [and] perform all the duties” of the clerk. Therefore, because Ms. Reilly would assume all the powers of Ms. Gardner, she would be authorized the terminate his Employment Agreement. Ms. Gardner passed away on May 8, 2013. On May 9, 2013, Ms. Reilly was officially appointed as Clerk Ad Interim for the Clerk’s Office. Also on May 9, 2013, Respondent and Ms. Reilly immediately took steps to obtain their respective Severance Payments. To effectuate their plan, Ms. Reilly promptly terminated both their Employment Agreements using her newfound authority as the interim Clerk. Respondent hoped that this step would remove any questions of their entitlement to the Severance Payment that might be raised by the new Clerk of Courts. Respondent then went directly to the Clerk’s Payroll office. There, he approached Tracy Gasinski, the payroll administrator for the Clerk’s Office. Respondent informed her that Ms. Reilly had approved him to receive a payout. Respondent declared that his payout was authorized because his Employment Agreement was terminated. Respondent also instructed Ms. Gasinski to pay Ms. Reilly’s payout under her Employment Agreement. Respondent stressed that he wanted both payouts processed immediately. Finally, Respondent advised Ms. Gasinski that nobody needed to know about the payout. Ms. Gasinski felt pressured by Respondent. However, based on his representation that Ms. Reilly had approved the payout, she immediately processed a final paycheck for Respondent (and Ms. Reilly), which included the Severance Payment provided in his Employment Agreement. Ms. Gasinski calculated a payout for Respondent in the gross amount of $110,290.61. This figure included a Severance Payment of $76,844.00. In addition, per his request, Respondent was also paid $27,822.10 for all his unused vacation leave (405.57 hours times a rate of $68.60), as well as $5,624.51 for his unused sick leave (327.96 hours times a rate of $17.15). Ms. Gasinski paid 25 percent of Respondent’s sick leave per Clerk’s Office policy. The next day, on May 10, 2013, Ms. Gasinski issued Respondent a check in the amount of $58,400.00 which was deposited directly into Respondent's personal bank account. Ms. Gasinski also deposited a final paycheck into Ms. Reilly's bank account. On or about May 20, 2013, however, Respondent returned to see Ms. Gasinski. He was not happy with his payout. Respondent told Ms. Gasinski that the amount she deposited was incorrect, and he was due more money. Respondent demanded several adjustments which would maximize his Severance Payment. First, referencing the February 5, 2013, amendment to his Employment Agreement, Respondent wanted the $11,000 he received as deferred compensation to be incorporated into his base salary thereby increasing his rate of pay. Second, Ms. Gasinski, in calculating Respondent’s Severance Payment, computed the final payout based on six month’s salary in accordance with the standard practice of the Clerk's Office. Respondent, however, insisted that his Severance Payment be calculated based on “180 days” as specifically stated in his Employment Agreement at paragraph 6. This mathematical adjustment increased Respondent's payout by including payment for all Saturdays and Sundays.3/ Third, Respondent demanded that he receive 100 percent payout for his remaining sick leave instead of just 25 percent as was the Clerk’s Office policy. Fourth, Respondent requested that 56 hours (7 days) be reserved in his vacation leave account and not paid out.4/ Following their meeting, Ms. Gasinski voided the initial payout check. However, she was not comfortable with Respondent’s request based on her understanding of employment contracts. Respondent's and Ms. Reilly's transactions were out of the ordinary course of business for the Clerk's Office. In her experience, final paychecks to Clerk’s Office employees were always accompanied by paperwork from the Clerk’s Office’s Talent Management division. This paperwork came in the form of an Employee Change Notice (“ECN”). However, Respondent did not produce, nor had Ms. Gasinski received, an ECN supporting Respondent’s payout. In Clerk’s Office accounting practices, Talent Management and the Payroll office act as a check and balance for each other. Typically, Talent Management initiates the paperwork, and then Payroll issues the checks. The normal process for a payout when a Clerk's Office employee leaves employment is for Talent Management to notify Ms. Gasinski who then processes the final payout. Respondent did not have the authority to direct Ms. Gasinski to issue the checks. Similarly, Ms. Gasinski did not have the authority to write checks to either Respondent or Ms. Reilly. Furthermore, a final payout upon termination is always via a paper check. Direct deposit to a personal bank account is never an option. The terminated employee picks up the paper check from Talent Management who verifies that the employee's garage pass and badge have been returned. Because of her discomfort with issuing Respondent’s payout check, Ms. Gasinski sought advice from her supervisor, Mike Murphy, the Chief Financial Officer for the Clerk’s Office. Mr. Murphy suggested that Ms. Gasinski contact Talent Management. On May 21, 2013, Ms. Gasinski spoke to Joann Gammichia, the Director of Talent Management, about Respondent’s request for a payout. When Ms. Gammichia learned of the situation, she had immediate concerns. First, Ms. Gammichia wondered why Payroll was issuing a check without any documentation from Talent Management such as an ECN. Ms. Gammichia testified that each employment activity requires completion of an ECN which acts as a recordkeeping system for the Clerk's Office. Because Respondent approached Ms. Gasinski in the Payroll office directly, no ECN or other written record was generated explaining why the Clerk’s Office was issuing the payout to Respondent. Ms. Gammichia explained that the policy of the Clerk’s Office is that payouts, severance checks, termination, or any kind of position change should only occur with an ECN in order to maintain and track the complete history of an employee's tenure with the Clerk's office. Ms. Gammichia also wondered why Respondent went directly to Ms. Gasinski with his demands. The normal starting point for employee changes begins with Talent Management, and the end of the line is financial services and Payroll. The fact that Respondent was attempting to verbally change his employment status in the Payroll office was “highly irregular.” Ms. Gammichia was also puzzled why the Clerk’s Office was issuing a severance payout on an employment contract when the employment was not ending. Consequently, Ms. Gammichia told Ms. Gasinski not to issue the adjusted payout check. Ms. Gasinski then notified Respondent via e-mail dated May 21, 2013, that she could not process the final payout until she received the proper documentation from Ms. Gammichia in Talent Management. Shortly thereafter, Respondent visited Ms. Gammichia’s office to inquire why she was involved in his payout matter. According to Ms. Gammichia, Respondent became “pretty aggressive.” Respondent told Ms. Gammichia that she had no authority or business being involved. It was a personal matter. Respondent warned Ms. Gammichia that she was directly violating an order from Ms. Reilly to make the Severance Payments. Ms. Gammichia informed Respondent that not only was she involved, but she was not authorizing the payout check to go through. Ms. Gammichia further advised Respondent not to contact Ms. Gasinski regarding the payout. Later that day, Ms. Gammichia contacted her supervisor, Cathi Balboa, the Director of Administrative Services for the Clerk’s Office, to discuss Respondent’s payout request. Ms. Gammichia relayed to Ms. Balboa that Ms. Gasinski was upset because she was being asked to prepare a large payout based only on verbal instructions without any supporting paperwork. At the final hearing, Ms. Balboa recalled that Respondent’s urgent request for a payout was highly irregular. Ms. Balboa relayed that the Clerk’s Office should not issue a final payout unless an employee was truly terminated from his or her position. Based on their concerns, Ms. Gammichia and Ms. Balboa called Ms. Reilly, who was sick at home, to confirm whether Ms. Reilly was aware of the payouts that Respondent said she had authorized. Ms. Gammichia also wanted to report the fact that Ms. Gasinski felt that she was being coerced and harassed by Respondent. Ms. Gammichia described Ms. Reilly’s reaction as hostile and negative. Ms. Reilly did not seem happy that others were involved. Ms. Reilly asked Ms. Balboa, “How did you get involved in this?" The next morning, on May 22, 2013, Ms. Reilly returned to the Clerk’s Office and called a meeting with Mr. Murphy, Ms. Balboa, and Respondent. Ms. Reilly opened the meeting by asking Mr. Murphy and Ms. Balboa "what do you think your role is in this organization," and "where do your loyalties lay?" Ms. Reilly then announced that “it was a private matter, it was their personal business, [and] to stay out of it." Ms. Balboa testified at the final hearing that Ms. Reilly intimidated her in their meeting. Mr. Murphy conveyed that he understood that they were not to get involved in the severance payout matter. After the meeting, Ms. Gasinski was told to proceed with the payouts for Respondent and Ms. Reilly. On May 23, 2013, Ms. Gasinski processed a second severance payout check for Respondent and Ms. Reilly. Ms. Gasinski prepared for Respondent a revised final paycheck in the total amount of $156,443.11. This amount included a Severance Payment of $106,387.20. Respondent was also paid $25,826.23 for his vacation leave (349.57 hours times a rate of $73.88), as well as $24,229.68 for all his unused sick leave (327.96 hours times a rate of $73.88). A check in the net amount of $99,125.45 was deposited in Respondent’s personal bank account. On May 23, 2013, Respondent repaid the initial payout of $58,400.00 to the Clerk’s Office by personal check. After Ms. Reilly terminated his Employment Agreement on May 9, 2013, Respondent never left his position with the Clerk’s Office. Respondent considered himself an at-will employee and continued to report to work as General Counsel. There was never any break in his employment. At no time did Respondent (or the Clerk’s Office) initiate or complete any paperwork to rehire Respondent after either Ms. Gardner’s death or Ms. Reilly terminated his Employment Agreement. No documentation was prepared transitioning Respondent from a contract employee to an at-will employee. Respondent continued to perform the same duties under the same terms, conditions, and compensation contained in the Employment Agreement as if he never left office.5/ At the final hearing, Respondent testified why his interpretation of his Employment Agreement justified his actions and motives. Respondent first remarked that his Employment Agreement was not typical for a Clerk’s Office employee. It contained certain provisions which were not to be “exposed generally,” such as the termination clause and the contact termination fee. Therefore, he desired to keep his employment terms quiet. Respondent further disclosed that he did not initiate an ECN because his Severance Payment was not a human resources issue, it was a matter of contract. Respondent also explained that at the end of 2008, when his Employment Agreement was nearing its initial termination date, Respondent became concerned with his future at the Clerk’s Office. He began to wonder what would happen if Ms. Gardner left her position as Clerk. Therefore, he prepared, then executed, the 2009 amendment to the Employment Agreement extending it “indefinitely.” In 2013, Respondent prepared, then executed, the second amendment clarifying the term “termination.” Regarding collecting his Severance Payment without leaving his position with the Clerk’s Office, Respondent contended that just because his Employment Agreement was terminated (thus, entitling him to the Severance Payment) did not mean he had to leave employment with the Clerk’s Office. Respondent characterized the payment as a “contract termination fee.” Therefore, he asserted that the Clerk could terminate his Employment Agreement without actually terminating him from his position as General Counsel. Consequently, nothing prevented him from becoming an at-will employee. Accordingly, when Ms. Reilly terminated the Employment Agreements on May 9, 2013, by exercising her prerogative as the interim Clerk, she also decided that both Respondent and she would stay on with the Clerk’s Office as at-will employees until the new Clerk of Courts determined what to do with them. In February 2014, the new Clerk of Courts, Eddie Fernandez, determined to initiate an investigation to review the propriety of the 2013 Severance Payments to Respondent and Ms. Reilly. On March 28, 2014, Respondent was placed on administrative leave with pay. On April 1, 2014, after the investigation recommended that Respondent’s employment be terminated, Respondent resigned from his position with the Clerk’s Office. As a condition of his resignation, Respondent was not eligible for rehire by the Clerk’s Office. Respondent reimbursed the full amount of the money that he received as the Severance Payment from the Clerk’s Office. Commenting on the circumstances of his resignation and restitution, at the final hearing, Respondent urged that he did not act dishonestly, but, maybe he exercised bad judgment. Respondent also proclaimed that he received his Severance Payment because the interim Clerk ordered it, not by reason of his actions or conduct. Therefore, he personally never violated any duty of his office. Based on the evidence and testimony presented during the final hearing, the competent substantial evidence in the record establishes, by clear and convincing evidence, that Respondent acted corruptly, with a wrongful intent, in seeking and obtaining the Severance Payment when he never intended to leave his public employment with the Clerk’s Office. Accordingly, the Advocate proved that Respondent violated section 112.313(6).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a final order finding that Respondent, Steven Carter, violated section 112.313(6), Florida Statutes; and that Respondent be subject to public censure and reprimand. DONE AND ENTERED this 3rd day of January, 2017, in Tallahassee, Leon County, Florida. S J. BRUCE CULPEPPER 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 3rd day of January, 2017.
The Issue Whether Petitioner should be granted additional credit for one or more examination questions answered by him during the February, 1993 General Contractor Examination.
Findings Of Fact Petitioner, David W. Kradin (Kradin), took the February, 1993 General Contractor Examination and received a score of 65 on the project management portion. A minimum score of 70 is required to pass that portion of the examination. Kradin challenged questions numbered 6, 12, 19 and 30. Joint Exhibit 1 is a composite exhibit of the challenged questions. Joint Exhibit 2 is a drawing included in the examination relating to question number 6. Joint Exhibits 1 and 2 are deemed to be confidential pursuant to Section 455.229, Florida Statutes. Question number 6 required the calculation of the square feet of concrete contact surface for formwork for an elevator pit depicted in Joint Exhibit 2. Kradin challenged the question on the basis that the drawing was unclear because the elevation line appeared to drop slightly in one place. The drawing was sufficiently clear to determine the correct answer. The height of the concrete contact surface could be determined by the height shown on the drawing and the height of the expansion joint. Kradin failed to answer the question correctly because of an error in his calculations. Question number 12, an entry level question, dealt with comparing the estimated cost per cubic yard with the actual cost per cubic yard for excavation work based only on the information in the job cost ledger provided in the question. The job cost ledger contained costs and the net profit made from the sale of spoil. Kradin challenged the question as unclear and imprecise because the job cost ledger contained information on the net profit from the sale of spoil. The parties stipulated that it is improper, incorrect, an error, and a mistake to have job profit in any job cost ledger. Kradin included the net profit when he calculated the actual costs for the project. As a result his answer was incorrect because the profit should not have been included in the calculation of the actual cost for the excavation work. Question number 19 concerned the calculation of the amount of money that should be deducted from a subcontractor's application payment for the cost of worker's compensation insurance premiums. Kradin challenged the question, stating that the question was improper because he read the question to mean that the subcontractor and contractor did not have a written agreement before the work was performed and that the contractor would pay the premium and deduct the premium amount from the subcontractor's pay request. He viewed the scenario set up in the question to mean that the subcontractor was violating the law because he did not have worker's compensation coverage and the general contractor was violating the law because he hired a subcontractor without worker's compensation coverage. Additionally, he read the question to mean that the general contractor was subjecting himself to civil liability because of the lack of worker's compensation coverage. Question number 19 is not a difficult question. The contractor and subcontractor have agreed that the general contractor will provide worker's compensation coverage for the work done and will deduct the amount of the coverage from the subcontractor's application for pay. The question gives the amount of the pay request and the cost of the worker's compensation insurance per $100 worth of billing. The candidate is supposed to calculate the amount that will be deducted. The question does not deal with the legalities of the arrangement between the subcontractor and general contractor nor would a reasonable person read the question as such. Kradin's answer was not a correct calculation of the amount to be deducted. The examination is an open book examination and the candidates are allowed to bring specified reference materials with them, including the Contractor's Manual. Question number 30 deals with material found in the Contractor's Manual, relating to project schedules. Here, the question asks the candidate to pick out the entity not listed in the manual. Kradin picked out an entity which was listed in the manual.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the challenge by Petitioner requesting that he be awarded a passing grade for the Project Management portion of the February, 1993, General Contractor Examination be DENIED. DONE AND ENTERED this 23rd day of November, 1993, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 23rd day of November, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-3936 To comply with the requirements of Section 120.59(2), Florida Statutes, the following rulings are made on the Respondent's proposed findings of fact: Respondent's Proposed Findings of Fact Paragraphs 1 and 2 accepted. Paragraphs 3, 4, 5 and 6 accepted in substance. COPIES FURNISHED: David W. Kradin 1525 J Spring Harbor Drive Delray Beach, Florida 33445 Vytas J. Urba, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0792 Jack McRay Acting General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399 Richard Hickok Executive Director Construction Industry Licensing Board 7960 Arlington Expressway, Suite 300 Jacksonville, Florida 32211-7467
Findings Of Fact The parties stipulated as follows: On October 15, 1985, Petitioner filed with Respondent a Certificate of Need (CON) application to construct a 100-bed acute care hospital to be located in Brevard County. Petitioner's application was assigned CON Action Number 4302. By letter dated January 8, 1986, Petitioner received written notice from Respondent that his application was being withdrawn from consideration for his alleged failure to respond satisfactorily to the written omissions request served by Respondent on him. On March 24, 1986, Petitioner timely filed his petition for formal administrative hearing to contest the preliminary decision of Respondent to withdraw his CON application from consideration. The following findings of fact are based on the evidence presented, after considering the credibility and demeanor of the witnesses: After receiving Petitioner's application on October 15, 1985, Respondent's health planning consultant supervisor, Reid Jaffe, sent Petitioner a letter on or about November 14, 1985, advising him of omissions in his application. Jaffe's letter required a response from Petitioner by December 30, 1985. Of particular significance were Jaffe's requests that Petitioner provide evidence of interest in the project by lending institutions, and also provide a pro forma projection of income and expense for the first two years of operation. Petitioner's response to the omissions letter was timely received by Respondent. In response to the requested information about lending institution interest in the project, Petitioner wrote: There is not only interest in our project by lending institutions, attached is a letter from Hospital Corporation of America, who has been seeking a joint venture with our group. As you know, they represent the ability of our project to be well funded. Other institutions showing interest are: Sun Bank, Southeast Bank, Barnett Bank. In response to the requested pro forma, Petitioner provided a cash flow projection for the first two years of operation showing net income, depreciation and amortization, principal payments and ending balance for each quarter. In his CON application, Petitioner had indicated that the proposed cost of the project was $14,984,650 and the immediate financial feasibility of the project was to be met with fifteen physician stockholders, all with financial statements in excess of one million dollars. Further, it was indicated that the project would be financed by "debt financing" from the various financial institutions in the local area, guaranteed by the major stockholders. The application also indicated that funds were being sought from Sun Bank, Southeast Bank, First Florida and Barnett Bank. However, neither the application nor the omissions response included letters or other evidence of interest in the project from lending institutions. Reid Jaffe testified that CON applicants are not required to, and in fact do not, submit firm letters of commitment from lending institutions when they file their applications. Usually a preliminary letter of interest from such institution is included, but such letters are always conditioned on the applicant obtaining a CON before a financial commitment is given. There is no statutory or rule guidance to applicants to explain what was meant by Jaffe's omissions letter requesting "evidence of interest in the project by lending institutions". This is not an express requirement of Section 381.494(4), Florida Statutes. Applicants are expected to call Respondent if they have questions about the application or the omissions letter. In fact, Petitioner did seek assistance from his local health council in the application process. Similarly there is no statutory or rule guidance to applicants to explain what was meant by Jaffe's omissions letter requesting a pro forma projection of income and expense for the first two years of operation. Jaffe testified that in a pro forma he looks for an indication that the applicant has an idea of what will be generated in the first two years of operation from revenues, and also what expenses will be. Further, if the applicant can demonstrate cognizance of these projections in some manner other than a pro forma, he would find it acceptable. In his omissions response, Petitioner did project revenues for the first two years of operations, as well as salaries, fringe benefits, depreciation and amortization which represent 75 percent of a hospital's operating costs. Petitioner's application, as well as his response to the omissions letter, does provide a statement of financial resources available to the applicant for the proposed project, and also does provide a statement of the financial feasibility of the project, although not by way of a pro forma. Respondent withdrew Petitioners' application from Robert E. Maryanski, Administrator of Community Medical Facilities, by letter dated January 8, 1986. In his letter, Maryanski cited Petitioner's failure to provide "a statement of financial resources available to the applicant for accomplishment of the proposed project" and also his failure to provide a "pro forma projection of income and expense for the first two years of operation". These are the sole reasons for withdrawal. It is extremely rare for a CON application to be deemed incomplete and therefore withdrawn from consideration. Jaffe could only recall one other instance. Walter Eugene Nelson, Maryanski's predecessor with Respondent who was accepted as an expert in health planning, CON review and program administration, agreed that withdrawal of an application is an extraordinary action, and he further testified that Petitioner's application meets the requirements of Section 381.494, Florida Statutes, and, thus, should have been deemed complete. Evidence was received of other applications which were deemed complete, and which provided substantially the same information as Petitioner in his application. The Respondent acted unreasonably and arbitrarily in withdrawing Petitioner's application when the record indicates that other applications providing substantially the same information as Petitioner's were not withdrawn. Respondent does allow applicants to supplement the application after they are deemed complete. It is typical, according to Jeff, for applicants to revise and update financial information and their pro forma, while their applications are in the Section 120.57, Florida Statutes, hearing process.
Recommendation Based on the foregoing, it is recommended that Respondent enter a Final Order reversing its prior decision and deeming Petitioner's application for CON 4302 complete so that it can be comparatively reviewed with other applications filed in the same batching cycle. DONE AND ENTERED this 23rd day of October, 1986, in Tallahassee, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of October, 1986. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 86-1471 Rulings on Petitioner's Proposed Findings of Fact: Adopted in Finding of Fact 1. Adopted in Finding of Fact 4. Adopted in Finding of Fact 5. 4,5. Rejected as irrelevant 6-9. Adopted in part in Findings of Fact 2, 11 but otherwise rejected as irrelevant. 10,11. Rejected as cumulative and irrelevant. Adopted in Finding of Fact 8. Rejected as irrelevant. Adopted in Finding of Fact 9. Rejected as irrelevant. 16-23. Adopted in part in Findings of Fact 12, 23 but otherwise rejected as irrelevant or cumulative. Adopted in Finding of Fact 7. Adopted in Findings of Fact 7, 14. 26,27. Rejected as irrelevant and cumulative. 28. Adopted in Finding of Fact 13. 29-33. Adopted in Finding of Fact 1. 34-42. Rejected as cumulative and irrelevant. 43. Rejected as not a proper proposed Finding of Fact. 44-53. Rejected as cumulative and irrelevant. 54-58. Adopted in part in Finding of Fact 4 but otherwise rejected as irrelevant and cumulative. 59,60. Adopted in Finding of Fact 8. 61. Rejected as irrelevant. 62. Adopted in Finding of Fact 7. 63,64. Rejected as irrelevant. 65. Adopted in Finding of Fact 14. 66,67. Adopted in Finding of Fact 9. Not a proposed Finding of Fact. Rejected as cumulative and unnecessary. Rulings on Respondent's Proposed Findings of Fact. Adopted in Finding of Fact 1. Adopted in Finding of Fact 4. Adopted in Findings of Fact 2, 11. Adopted in Finding of Fact 8. COPIES FURNISHED: William Page, Jr., Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 W. David Watkins, Esquire Post Office Box 9507 Tallahassee, Florida 32314 John Rodriguez 1323 Winewood Boulevard Building One, Suite 407 Tallahassee, Florida 32301
