The Issue The issue presented is whether Petitioner is entitled to be reimbursed for his attorney's fees and costs incurred in defending the underlying proceeding.
Findings Of Fact On July 2, 1992, the Department of Professional Regulation filed an Administrative Complaint against Petitioner, alleging that Petitioner had used the letters "D.D.S." following his name on letterhead and had testified as an expert in the field of dentistry in a case involving a Florida licensed dentist. The Administrative Complaint alleged that such conduct by Petitioner constituted the unlicensed practice of dentistry. Petitioner requested a formal hearing regarding those allegations. That cause was thereafter transferred to the Division of Administrative Hearings to conduct the formal proceeding and was assigned DOAH Case No. 92-4570. On January 27, 1993, a Recommended Order was entered in DOAH Case No. 92-4570, holding that Petitioner's use of the letters "D.D.S." did not represent that he was licensed to practice dentistry in the State of Florida, but merely reflected Petitioner's educational background, and that Petitioner was not required by the Florida Evidence Code or any other law to be licensed in the State of Florida in order to testify as an expert in an administrative or judicial proceeding. The Recommended Order concluded that Petitioner should be found not guilty of the allegations in the Administrative Complaint. The Department of Professional Regulation entered a Final Order rejecting findings of fact and conclusions of law in that Recommended Order and found Petitioner guilty of the unauthorized practice of dentistry. Petitioner appealed that Final Order to the District Court of Appeal of Florida, Third District. The appellate court reversed the Department's Final Order and remanded the cause for entry of an order consistent with the Recommended Order. The attorney for the Department who prosecuted the underlying proceeding reviewed the investigative file and then discussed his recommendation with his supervisor. He recommended that Petitioner be prosecuted criminally, not administratively, because he believed that Petitioner was committing a criminal offense and not an administrative violation by holding himself out to be a dentist licensed in the State of Florida. No evidence was offered to show who made the decision to initiate the underlying proceeding on behalf of the Department, and, therefore, no evidence was offered to show what was considered by that person or persons when the decision was made to initiate the underlying proceeding against Petitioner. There is, accordingly, no evidence to show the factual basis for the Department's determination to issue an Administrative Complaint against Petitioner. No evidence was offered to show that anyone on behalf of the Department determined that there was a legal basis for initiating a proceeding against Petitioner for disclosing his educational credentials on letterhead or testifying as an expert witness without being licensed in the state where that testimony was given. In 1990 (the year during which Petitioner testified as an expert witness) and in 1991 (the year during which Petitioner wrote an opinion on the letterhead which concerned the Department), Petitioner performed his services as a legal-dental consultant as a sole proprietor of an unincorporated business, under his own name, although some other services were performed through Dental-Legal Advisors, Inc. Petitioner's principal office was located in Florida, he was domiciled in Florida, he had no employees, and Petitioner's net worth was less than $2,000,000, including both personal and business investments. The Department was not substantially justified in initiating the underlying proceeding against Petitioner. Petitioner qualified as a small business party when the underlying proceeding was brought against him. Petitioner is entitled to recover $15,000 from the Department for his costs and attorney's fees in defending the underlying proceeding.
The Issue The factual issue to be determined is the amount of attorney fees and costs due and owing to the Petitioner.
Findings Of Fact The Petitioner incurred the following costs related to the proceedings in Case No. 87-0605: Copying Charges for Office Copies of Pleadings and Papers $173.25 Court Reporter Fees for Transcript of Evidentiary Hearing held 9/9/90 510.30 Miscellaneous Postage 26.75 Copying Charges 9.80 Typing Charges 100.00 TOTAL COSTS: $820.10 The parties stipulated that a reasonable hourly rate for Mr. Traynham's services was $150.00 per hour. At the time of the final hearing in Case No. 90- 5301F, Mr. Traynham had expended 25 hours in Case No. 90-5301F. A reasonable fee for counsel for Petitioner's services in the aforementioned case is $3,750.00. The parties also stipulated that work in presentation of this case to the Commission must be considered separately. The parties did not agree to an hourly rate or number of hours for the services provided by Mr. Stafman. Based upon the records presented and the testimony of Mr. Stafman, the reasonable number of hours required to review the file and for testimony at the hearing is seven hours. The reasonable rate for Mr. Stafman's professional services based upon the value of his services in relationship to the value of the services provided by Mr. Traynham is $150.00 per hour. A reasonable total fee for Mr. Stafman's professional services was $1,050.00. Curley Doltie, Esq. was retained by the Petitioner to represent him in this proceeding on a contingency fee basis. A contingency fee basis means that Mr. Doltie would be compensated for representing the Petitioner only if the Petitioner prevailed in the litigation. The amount of the contingency fee was to be determined and awarded by the Commission. The rule regulating the Bar requires contingency fee contracts to be reduced to writing. The Petitioner was a casual client of Mr. Doltie, and their contingency fee contract was not reduced to writing and executed. Mr. Doltie is a 1979 graduate of the Law School at Florida State University and was admitted to the Bar in that year. Between May 1980 and May 1982, Mr. Doltie served as an armored officer in the United States Army. Mr. Doltie's legal experience includes working as a staff attorney for the Legal Aid Society of Orange County from October 1979 until May 1980; assistant public defender in Sanford, Florida, from May 1982 until April 1983; private practice from April 1983 until October 1984; associate general counsel with the Public Service Commission from October 1984 until January 1987; Legal Services of North Florida from January 1987 until opening a private practice in Tallahassee in September 1987. The Petitioner was one of Mr. Doltie's first clients after he opened his private practice in 1987. Mr. Doltie currently handles both contingency fee cases and cases for which he regularly bills his clients. Mr. Doltie's current billing rate is $150.00 per hour. Mr. Doltie's practice involves, primarily, administrative litigation. Mr. Doltie regularly keeps time records, which reflect the activities in which he is engaged on behalf of his client, and the time expended in pursuit of these activities. Mr. Doltie maintained time records for the activities which he performed in providing professional services to the Petitioner. In addition, Mr. Doltie expended 4.5 hours preparing for the attorney fee hearing, 1.0 hour for a prehearing conference, and 8.0 hours testifying or being available to testify at the final hearing on the matter of attorneys fees and costs. The total number of hours expended by Mr. Doltie in the fee case was 13.5 hours. Mr. Doltie's summary of professional services rendered by date, description, and time expended on the administrative proceedings before the Commission, the Division of Administrative Hearings, and the appeal of the original case to the District Court of Appeals and the Florida Supreme Court is presented in the Petitioner's Exhibit 2. Mr. Doltie withdrew his claim for the appeal. Mr. Doltie recorded his time carefully and conservatively and claimed only that time which contributed significantly to the work product. The Respondent would reduce the time allowed for the services rendered on the following dates because the explanation is insufficient or the amount of time is excessive or the activity was unnecessary: 1/5/88 C/Weaver 3/23/88 C/Weaver 5/11/88 C/Weaver; R/Case 6/7/88 C/Weaver 9/27/88 L/Carothers 4/17/90 R/Case; P/Motion for Evidentiary Hearing 4/17/90 L/Carothers 5/1/90 P/Motion To Strike Respondent's Motion To Tax Costs; R/Case; C/Weaver 5/4/90 P/Petitioner's Reply To Respondent's Response To Petitioner's Motion For Evidentiary Hearing 5/23/90 R/Case 5/24/90 R/Case; P/Notice Of Failure To Settle; Motion For Rehearing And Motion For Clarification; Memorandum of Law; Motion To Strike 6/13/90 P/Petitioner's Motion Requesting FCHR To Become A Deferral Agency For The Federal Government; R/Case; P/Motion For Seniority Pay Steps; P/Motion Requesting An Expedited Hearing On Damages 6/14/90 R/Case; P/Motion Requesting FCHR To Appeal DCA Order 6/22/90 RV/FCHR Order; C/Weaver Based upon review of the time records and consideration of the services performed, the following adjustments are made with regard to the times recorded by Mr. Doltie: 1/5/88 C/Weaver .5 2/23/88 C/Weaver .2 6/3/88 1/ R/Case; RV/DOAH Order 1.2 6/7/88 C/Weaver 1.0 The total number of hours accepted from Mr. Doltie for his services rendered before the Division of Administrative Hearings and the Commission is 121.9 hours through the initiation of the appeal to the District Court of Appeals. The total number of hours of professional services rendered provided by Mr. Doltie after this case was returned to the Commission is also itemized in the Petitioner's Exhibit 2, commencing with the services provided on 4/17/90. Of those items to which the Respondent takes exception, only the services provided on 6/13/90 and 6/14/90 were adjusted. In both instances, it was determined that the motions were unnecessary, without precedent, and the time expended thereon should be disallowed. The total number of hours of professional services rendered from 4/17/90 through 8/16/90 were 32.2 hours. The total number of hours expended by Mr. Doltie and allowed to be charged after review is 154.1 hours. Based upon a consideration of Mr. Doltie's background and experience, in comparison with the fees for professional services charged by other attorneys in the Tallahassee, a reasonable rate for his services at the time would have been $110.00 per hour. Having originally heard the case presented by Mr. Doltie and being familiar with the litigation, Mr. Doltie's professional services undoubtedly resulted in the Petitioner vindicating his civil rights and the Respondent being directed to employ the Petitioner. Although the Petitioner's initial claim was for broader relief, the Petitioner did not present evidence on many of these issues and thereby abandoned them at hearing. Based upon the results achieved, a contingency fee of one-half again the billed rate would have been reasonable; however, as stated above, the contingency fee agreement between the Petitioner and Mr. Doltie was not reduced to writing. Recovery on a contingency fee in the absence of a written contract would be precluded by the Rules Regulating the Bar. Therefore, the recovery in this matter is on a quantum meruit basis. The value of the job and benefits of employment to the Petitioner were equal to the actual dollar value of the allowable hours times $110.00 per hour for 154.1 hours and $150.00 per hour for 13.5 hours.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is therefore, RECOMMENDED that the Petitioner be awarded the following attorney's fees and costs: Costs: $ 820.10 Mr. Stafman: 1,050.00 Mr. Doltie: 18,976.00 Mr. Traynham: 3,750.00 Further, Mr. Traynham should receive an added fee for his presentation before the Commission to be determined by the Commission in its Final Order. DONE AND ENTERED this 21st day of February, 1991, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of February, 1991.
Findings Of Fact Bernard M. Tully, M.D. served by mail his Motion to Tax Attorney's Fees and Costs pursuant to Chapter 57, Florida Statutes, on May 19, 1987; same was filed with the Division of Administrative Hearings on May 21, 1987 and was assigned DOAH Case No. 87-2265F. This instant cause is a fee and costs case pursuant to Chapter 57, Florida Statutes, arising out of Department of Professional Regulation, Board of Medical Examiners v. Bernard M. Tully, M.D.; DOAH Case No. 85-3175. The Department of Professional Regulation has moved to dismiss Tully's Motion to Tax Attorney's and Costs, (hereafter, "Fees and Costs Petition") upon allegations that the claim was not filed in a timely manner pursuant to Section 57.111(4)(b)2, Florida Statutes, and upon allegations that the Fees and Costs Petition did not comply with the requirements of Section 57.111(4)(b), Florida Statutes, in that the claimant had not submitted an itemized affidavit of the nature and extent of the services rendered as well as the costs incurred. A Voluntary Dismissal was served by mail by Petitioner Department of Professional Regulation in DOAH Case No. 85-3175 on March 6, 1987, and filed with the Division of Administrative Hearings on March 10, 1987. The Order closing the Division file in that case was entered March 18, 1987, but is largely superfluous since a Voluntary Dismissal by the party bearing the burden of proof dismisses a cause by operation of law as of the date of filing of the Voluntary Dismissal. Tully's Fees and Costs Petition was served (May 19, 1987) and filed (May 21, 1987) well beyond the 60 day timeframe (May 11, 1987) provided in Section 57.111(4)(b)2, Florida Statutes, for the filing of such claims. Tully's Fees and Costs Petition attached schedules itemizing costs incurred and pleadings filed in DOAH Case No. 85-3175. The Petition was not verified and no affidavits are attached. In these respects, the Fees and Costs Petition failed to comply with Section 57.111(4)(b)1, Florida Statutes, and Rule 22I-6.35, Florida Administrative Code. Neither does the Fees and Costs Petition or any accompanying affidavit allege whether or not Tully requests an evidentiary hearing; that he is a small business party; where his domicile and principal office are located; how many employees he has; whether or not he is a sole proprietor of an unincorporated business, and, if so, whether or not his net worth exceeds $2,000,000; whether or not he operates as a partnership or corporation i.e. professional practice, and, if so, whether or not the net worth exceeds $2,000,000; whether the agency's actions were substantially unjustified; and whether or not circumstances exist that would make the award unjust; or whether or not the agency was a nominal party only. There were also no documents upon which the claim was predicated attached to the Fees and Costs Petition. in these respects, the Petition failed to comply with virtually all of Section 57.111(4)(b), Florida Statutes, and Rule 22I-6.035(1)(2), and (3), Florida Administrative Code. Tully timely filed a Response to Order to Show Cause wherein he acknowledged as true and accurate the dates as found in Finding of Fact 4, supra. Moreover, his Response concedes that pursuant to Section 57.111(4)(b)2, Florida Statutes, the application for an award of attorney's fees must be made within 60 days after the date that a small business party becomes a prevailing small business party, but his Response asserts that nothing in the applicable statute provides that an application for costs must be made within 60 days, and therefore at least his application for costs must be deemed timely. The Response further sets out an itemization of costs incurred and is sworn to by Tully's attorney of record. No leave to amend the Petition was granted by the Order to Show Cause.
Findings Of Fact Petitioner is a small business party within the meaning of Subsection 57.111(3)(d), Florida Statutes (1987). Petitioner was required to relocate its business in 1986 as the result of a public taking of the property where the business was situated. Petitioner sought relocation benefits from Respondent's relocation assistance program. The program is operated by Respondent in accordance with authority contained in Sections 339.09(4) and 421.55(3), Florida Statutes. Various requests by Petitioner for payment of relocation benefits in accordance with the Uniform Relocation Act were denied by Respondent. In DOAH Case No. 88-0778T, Petitioner sought a formal administrative hearing pursuant to Section 120.57, Florida Statutes concerning Respondent's denial of the requested reimbursements. At the final hearing in DOAH Case No. 88-0778T, evidence was presented regarding Respondent's denial of benefit payments of $1,324 for advertisement expense in a telephone directory; $1,370 for installation of an exhaust fan at the new facility; $2,405 for fees for consultative services from an attorney; $1,200 for the alleged loss of employee time spent in conferences with Respondent personnel regarding relocation; $1,500 for expense of a second search for a suitable relocation site; and $1,035 for consultation fees associated with design of a product display area in the new facility. With the exception of Respondent's denial of the claim for $1,035 for consultant fees, Respondent's denials were found to be appropriate in DOAH Case No. 88-0778T. Such a finding of appropriateness also equates to a finding of substantial justification for denial for purposes of this proceeding. A recommended order was issued in DOAH Case No. 88-0778T, finding denials of all requested reimbursements to be appropriate with the exception of Respondent's denial of the request for $1,035 for consultation fees associated with design of a product display area. Payment of this latter amount was recommended as constituting an authorized reimbursement under legal provisions governing the relocation program. On December 26, 1988, Respondent entered a final order awarding Petitioner $1,035 for this consultation fee expense. Other claims for reimbursement by Petitioner in the amount of $10,414.17 were paid by Respondent, prior to the final hearing in DOAH Case No. 88-0778T, in the course of proceedings in the Circuit Court for Broward County, Florida. That court adopted a settlement stipulation of the parties regarding those claims which expressly reserved attorney fees in regard to those issues for later determination by that court. Petitioner presented no evidence with regard to those claims at the final hearing in DOAH Case No. 88-0778T. At the final hearing in the present proceeding, Respondent offered testimony that confusion concerning payment of those claims resulted from the death of the attorney handling the case for Respondent. Respondent initially denied the claims in the absence of the deceased attorney's records in the mistaken belief that the matter had been resolved earlier in the circuit court condemnation proceeding. Upon learning such was not the case, payment of the claim and effectuation of settlement of the issue was made in the circuit court case and occurred shortly after Petitioner's request for hearing in DOAH Case No. 88- 0778T. The circumstances surrounding the initial denial of payment of this benefit by Respondent substantially justify Respondent's denial and constitute a sufficient basis to deny Petitioner's recovery of fees or costs related to this payment recovery in this administrative proceeding. The proof submitted at the final hearing in this cause establishes that Petitioner's counsel expended between 55 and 70 hours of time in his representation of Petitioner's attempts to recover all denied benefits in DOAH Case No. 88-0778T. Counsel's average hourly rate was $125. However, the fee arrangement between client and counsel was a "modified or combined contingency fee" permitting any recoverable attorney fees to serve as the primary source of payment of counsel's fees. Petitioner was not bound by the agreement to pay counsel's fees beyond amounts determined to be appropriate by the hearing officer in the administrative case or the judge in the circuit court matter. To that extent, attorney fees in this cause that have been incurred by Petitioner may be considered "contingent." Documentation submitted by Petitioner includes an affidavit from its president which simply recites the status of Petitioner as a small business party, but sets forth no specifics of a fee arrangement with counsel. The affidavit of Petitioner's counsel establishes a minimum number of hours (55) and dates of work performed by counsel, and states that his hourly rate is $125. Calculating the number of hours by the hourly rate, one reaches a total fee amount of $6,875. Counsel's affidavit does not address which of the various benefits sought to be recovered was the subject of any particular expenditure of time. Although the relocation benefits sought to be recovered were separable subjects, allocation of time expended with regard to a particular benefit recovery effort is not established by the evidence. Testimony of William Robert Leonard was also offered by Petitioner to support the reasonableness of a legal fee amount of $10,000 for Petitioner's counsel. While Mr. Leonard opined that he normally would not support a $10,000 attorney fee as reasonable for a $1,000 recovery, the circumstances of this case were different because "[y]ou are arguing with the state." Petitioner attempted to establish through further testimony of Leonard that the enormity of the resources of the government of the State of Florida justify such a fee because cost considerations prevent private litigants from engaging in costly and protracted proceedings in matters of limited recovery. Leonard did not address allocation of the requested attorney fee among the various benefits for which recovery was sought, choosing instead to premise his opinion regarding reasonableness of a $10,000 attorney fee upon "the amount of time counsel was required to respond to a state agency." Leonard's testimony is not credited with regard to reasonableness of a $10,000 fee for recovery of the $1,035 relocation benefit due to his professed lack of knowledge of certain administrative law procedures; the failure of his testimony to address the nature or difficulty of tasks performed by counsel for Petitioner; and his concurrence with the assertion that his opinion of such a fee was based in part upon a "gut reaction." No evidence was submitted to support the reasonableness of the cost amount of $250 requested as a witness fee for Mr. Leonard's participation in the proceeding. Petitioner seeks recovery of $448.50 in costs associated with the transcript of final hearing had in DOAH Case No. 88-0778T and a $480 expert witness fee in conjunction with testimony of E. Scott Golden, an attorney, at that final hearing. The testimony of Mr. Golden in that proceeding related to his provision of relocation site advice to Petitioner and drafting of legal documents for Petitioner. Petitioner did not prevail with regard to recovery of relocation benefits related to the expense of Mr. Golden's services.
The Issue The issue for determination in this proceeding is whether Petitioner is entitled to reasonable attorney fees and costs in accordance with Section 57.111, Florida Statutes.
Findings Of Fact Petitioner filed an application for a real estate sales license on January 22, 1991. Respondent denied Petitioner's application on April 25, 1991, thereby initiating agency action. The sole basis for the denial of Petitioner's application was the fact that Petitioner was named as a defendant in multiple civil lawsuits filed in United States District Court. The law suits arose from the failure of Centrust Savings Bank ("Centrust"). Petitioner was President of Centrust from February, 1988, to sometime in July, 1989. He served on the Board of Directors of Centrust from August, 1987, until sometime in July, 1989. Prevailing Party Petitioner was the prevailing party in the underlying proceeding. A Recommended Order was entered on January 23, 1992, recommending that Respondent grant Petitioner's application. Shealy v. Florida Real Estate Commission, DOAH Case No. 91-3147. Respondent entered a Final Order on February 21, 1992, adopting ". . . all Findings of Fact, Conclusions of Law and Recommendation . . ." Respondent granted Petitioner's application for license upon successful completion of the written examination. Petitioner successfully completed the written examination and was licensed as a real estate sales agent on March 27, 1992. Since October 7, 1992, Petitioner has been employed as an independent real estate agent with the firm of Real Estate Transactions, Inc., in Miami, Florida ("RET"). Small Business Party Petitioner became self-employed as a financial consultant in January, 1991. From January 17, 1991, through October 6, 1992, Petitioner conducted his financial consulting business in corporate form through WDS Investment, Inc. ("WDS"). WDS was a small business corporation wholly owned by Petitioner and his wife. 1/ Petitioner intended to utilize his real estate license, and a mortgage broker's license he obtained in the Summer of 1991, as an integral part of the financial consulting business he conducted through WDS. In response to a question asking Petitioner to explain his use of the term "self employed," Petitioner stated: I had started WDS Investments. . . . I was unemployed in the tradition[al] sense having been employed for years more as a professional in the financial services field In essence, I was going to try to build a consulting practice. I wanted to get my real estate license and my mortgage brokers license. Transcript at 20. Petitioner and WDS were one and the same entity. Petitioner was the sole managing shareholder and officer in WDS. Petitioner was the only person active in WDS and had exclusive management control of the corporation. Petitioner regarded WDS as his corporation, regarded himself as self employed, and operated WDS as his corporation. Petitioner is the party claiming fees and costs and the prevailing party in the underlying proceeding. After Respondent initiated agency action on April 25, 1991, Petitioner had other business activities in addition to his financial consulting business. Petitioner obtained his mortgage broker license in the Summer of 1991. From that time through October 6, 1992, Petitioner worked as an independent mortgage broker and loan consultant with Financial Monitors, Inc. ("Monitors"). Petitioner was an independent contractor and not an employee of Monitors. Petitioner had no ownership interest in Monitors. Petitioner was employed by Securnet Financial Corporation ("Securnet") from August 1, 1991, to the end of 1991. Petitioner was employed as a manager and had no ownership interest in Securnet. Petitioner's employment with Securnet did not begin until after Respondent initiated agency action on April 25, 1991. His employment with Securnet terminated prior to the commencement of this proceeding on May 26, 1992. Petitioner became employed as an independent sales agent with RET on October 7, 1992. Petitioner's status as an employee with RET began after agency action was initiated on April 25, 1991, and after this proceeding was initiated on May 26, 1992. Petitioner is a small business party within the meaning of Section 57.111(3)(d)1., Florida Statutes. Petitioner is domiciled in Florida and has been so domiciled since before this proceeding began on May 26, 1992. The principal office of WDS has been located in the state since January 17, 1991. Petitioner conducted his financial consulting business in corporate form on April 25, 1991. Since January, 1991, Petitioner has had no more than 25 employees and a net worth of no more than $2 million, including both personal and business investments, either directly or by attribution from his wife, WDS, and his other business activities. Not Substantially Justified Respondent was not substantially justified in denying Petitioner's license application. Respondent had no reasonable basis in law or fact to deny Petitioner's application. Respondent cited no legal authority to support its denial of Petitioner's application solely on the basis of Petitioner's status as a defendant in civil litigation. Respondent presented no evidence that it undertook an independent determination of the truthfulness or credibility of the allegations in the litigation, no independent evidence to support such allegations, and no evidence to support any other factual basis for Respondent's denial of Petitioner's application. Respondent presented no evidence of Petitioner's lack of qualification to be licensed as a real estate sales agent. Petitioner made a full and timely disclosure on his application that he was a defendant in civil litigation. Respondent presented no evidence that the allegations in the civil lawsuits were anything other than allegations against numerous officers and directors of Centrust. Respondent presented no evidence of an adjudication of Petitioner's guilt. Respondent presented no evidence to rebut or refute Petitioner's showing that Petitioner is honest, truthful, trustworthy, of good moral character, and has an impeccable reputation for honesty and fair dealing in the business community. Fees And Costs The attorney fees and costs claimed by Petitioner are reasonable and necessary. Petitioner presented credible and persuasive expert evidence that the attorney fees and costs are reasonable and necessary.
Findings Of Fact On January 16, 1987, Department of Health and Rehabilitative Services notified J. S. By letter that it had received a report of neglect regarding him and advised him of his right to request the report be amended or expunged. J. S. did so but on February 26, 1987, the Department advised him his request for expungement had been denied. Thereafter, J. S. requested a formal hearing which was held by the undersigned on October 27, 1987. After a full, formal hearing on the merits, at which both testimony and documentary exhibits were presented by both parties, the undersigned, on December 1, 1987, entered a Recommended Order in which it was found, as a matter of fact, that while the alleged victim of the neglect was incapable of totally caring for himself, the evidence presented was insufficient to establish that the relationship between the victim and J. S. was a care-giving one or that J. S. had the responsibility to look out for the victim so as to bring him within the purview of the statute. The Department thereafter entered a Final Order consistent with the Recommended Order, amending the classification of the report to "unfounded" and expunging it from the Department records. Evidence introduced at the original formal hearing held herein established that J. S. was an employee, (resident manager) at the Royal Palm Retirement Home in Ft. Myers, Florida. He was not the owner of the facility nor was any evidence introduced to indicate he had any financial interest, other than as an employee, in the facility. Further, he was not engaging in the professional practice of a licensed profession. His relationship with the alleged victim was found to be no more than that of landlord-tenant. The Department's investigation of the alleged neglect, while not completely comprehensive, nonetheless was sufficiently thorough to meet the test of reasonableness.
Findings Of Fact This cause originated in a disciplinary action resulting from an administrative complaint filed by the Department of Professional Regulation, Division of Real Estate against the Petitioners herein, Malcolm Lewis Hardy and Aquatic Realty, Inc. The Petitioners herein were the Respondents in the licensure disciplinary proceeding. That proceeding was resolved in their favor by the Recommended Order of the Hearing Officer and by the Final Order filed April 15, 1988 by the Department of Professional Regulation. They have accordingly filed a request for attorney's fees and costs on the ground that the prosecution involved in the underlying case was not "substantially justified." The cause came on for a brief hearing. The parties elected to dispense with calling witnesses at the hearing because they entered into a factual stipulation whereby all germane facts were placed of record. It was thus established that Petitioners Malcolm Lewis Hardy and Aquatic Realty, Inc. (hereafter Hardy) were the Respondents in a licensure disciplinary action brought against them by the above-named Respondent. That disciplinary action was resolved by Final Order filed April 15, 1988 by the Department of Professional Regulation. The Respondents in that case, the Petitioners herein, were totally absolved of any wrongdoing with regard to the charges in the administrative complaint in that proceeding. A copy of that Final Order was mailed by the agency to "Diane Cleavinger, Esquire, 300 East 15th Street, Panama City, Florida 32405." Ms. Jan Nelson, a secretary at that address, and employed by Ms. Cleavinger's former law firm, received a copy of that order and executed the return receipt appearing on the envelope on April 18, 1988. Ms. Nelson was not Ms. Cleavinger's secretary, but rather the secretary of Ms. Fitzpatrick, one of Ms. Cleavinger's former law partners. In any event, Ms. Nelson executed the return receipt on April 18, 1988, but Ms. Cleavinger never received the Final Order nor notification of its filing or receipt by Ms. Nelson. Mr. Hardy never became aware of or received a copy of the Final Order either, until the agency sent another copy to him on September 12, 1988. The affidavit and request for attorney's fees was filed within sixty days of that date. Ms. Cleavinger had left her law firm on January 1, 1988 to become a Hearing Officer with the Division of Administrative Hearings. Mr. Hardy only learned of the Order when he made a direct contact with the Department of Professional Regulation and they learned that he had not received the Final Order. It was thus mailed to him on September 12, 1988 and received on September 14, 1988. That Order dismissed all claims against Hardy and Aquatic Realty, Inc. and thus those parties are in fact "prevailing, small business parties," within the meaning of Section 57.111, Florida Statutes. It was stipulated at hearing, as well, that these Petitioners are small business, prevailing parties and that they incurred attorney's fees in the amount of $1,642.04 for services rendered by Ms. Cleavinger when she represented them in the underlying case-in-chief and that costs amount to $333.71. Additionally, Mr. Hardy further incurred attorney's fees and costs in the amount of $500 in connection with the pursuit of this fee claim by attorney Whitton. It was stipulated that that amount is reasonable. Additionally, the Department accepted its burden of establishing that its action was "substantially justified," within the meaning of Section 57.111, Florida Statutes, and have stipulated that they have not done so. Thus the only issue for resolution concerns whether the claim of Hardy was time-barred.
The Issue The issue is whether petitioner is entitled to an award of attorney's fees and costs under Section 57.111, Florida Statutes.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Background This case involves a claim by petitioner, John E. Phillips, Jr., that he is entitled to an award of attorney's fees and costs because of an administrative action improvidently brought against him by respondent, Department of Banking and Finance (DBF). When the complaint was filed, Phillips was registered with DBF as an associated person with Aragon Financial Services, Inc. DBF contends the claim is without merit because Phillips is not a small business party within the meaning of the law, there is substantial justification to support the agency's decision to file a complaint, and special circumstances are present which would make an award of fees and costs unjust. The action which underlies this claim involved an administrative complaint filed against Phillips on February 4, 1994, charging him with violating various provisions within Chapter 517, Florida Statutes. That complaint was assigned Case No. 94-1266. The complaint also denied an application by Phillips to register as an associated person with a new firm. In addition, the complaint named Bruce M. Walker as a co-respondent, and as to that registrant, the complaint was assigned Case No. 94-1358. Both cases were consolidated for hearing and, after an evidentiary hearing was conducted on June 27, 1994, a Recommended Order was issued on September 13, 1994, recommending that all charges against Phillips be dismissed and that his application for registration be approved. The Recommended Order was adopted by DBF without change, and Phillips is accordingly deemed to be a prevailing party in that action. Phillips has requested fees and costs in the amount of $15,000.00, the maximum allowed by law. Respondent does not contest the reasonableness of that amount. Prima Facie Requirements for an Award of Fees and Costs In order to show entitlement to an award of fees and costs, petitioner must demonstrate that he is a "prevailing small business party" within the meaning of the law. Since he has filed the petition on his own behalf, he must show he is a sole proprietor of an unincorporated business, including a professional practice, whose principal office is in this state, who is domiciled in this state, and whose business or professional practice has, at the time the action is initiated by the state agency, not more than 25 full-time employees or a net worth of not more than $2 million. At the time the administrative complaint was filed, Phillips was domiciled in Pensacola, Florida, and had a net worth of less than $2 million. According to an uncontroverted allegation in his petition, Phillips had no "employees relating to business that formed the basis for the Agency's charges." Petitioner was also a 50 percent shareholder in a subchapter S corporation known as Phillips, Walker & Associates, Inc. (PWA), a Pensacola firm engaged in the sale of insurance products. Although Phillips was registered with DBF as an associated person with Aragon Financial Services, Inc., that firm was not the subject of the complaint nor is it otherwise relevant to this dispute. Petitioner's principal source of income was through the sale of insurance products sold through PWA although he occasionally sold a few securities during that same period of time. The administrative complaint was not filed against PWA, which held no licenses from the state, but rather was filed against the registration of Phillips as an individual. Although he was an officer, employee and shareholder of PWA, Phillips was not a sole proprietor of an unincorporated business, including a professional practice. Therefore, he does not qualify as a small business party. Was There Substantial Justification? The consumer complaint which eventually led to the filing of the charges in Case No. 94-1266 was made by Jane Hubbard, a Gulf Breeze realtor who had loaned a substantial amount of money ($50,000.00) to PWA in May 1988 and was never repaid. The loan was secured by a promissory note personally signed by Phillips and Walker, as the owners of the corporation. After PWA ceased doing business in May 1990, and both Phillips and Walker had filed for bankruptcy, Hubbard, or her attorney, contacted DBF in an effort to seek DBF's aid in collecting her money from Phillips and Walker. Since petitioner was registered with DBF as an associated person, and thus was subject to DBF's regulatory jurisdiction, Hubbard apparently assumed that Phillips may have violated the law in some respect, and the agency might be able to assist her in recovering all or a part of her money. A similar complaint filed with the Department of Insurance was not pursued by that agency. Hubbard's complaint was eventually referred to a DBF financial examiner, Robert R. Kynoch, who, among other things, interviewed Phillips, Walker, Hubbard, and three other persons who had made loans to Walker (but not Phillips). Although Kynoch did not place the persons interviewed under oath during the investigative stage, there was no requirement that he do so. Based on a representation by Hubbard that Phillips and Walker had failed to disclose to her all relevant information regarding PWA's financial status at the time the loan was made, Kynoch concluded that a reasonable basis existed to bring charges against the two if the loan was actually an investment, and thus subject to DBF's jurisdiction under Chapter 517, Florida Statutes. Accordingly, Kynoch prepared a written investigative report, received in evidence as respondent's exhibit 3, which recommended that the report "be further reviewed for appropriate disposition." The report was first reviewed by Michael D. Blaker, a DBF area financial manager, who approved the recommendation and forwarded it to his supervisor, Richard White. It was then reviewed and approved by a bureau chief, William Reilly, and finally by the division director, Don Saxon. After Saxon signed off on the report, it was sent to the general counsel's office for a legal determination as to whether the loan was an investment. Margaret S. Karniewicz, an assistant general counsel, concluded that it was, and recommended the issuance of an administrative complaint. After an evidentiary hearing was conducted, a determination was made that the loan constituted an investment. This determination in the Recommended and Final Orders was not contested by any party, including Phillips. There was, however, insufficient evidence to establish that misrepresentations were made by Phillips during the sale of the investment. For this reason, the charges against Phillips were dismissed and his application for registration with a new firm was approved. Because DBF had statements, which it assessed to be credible, from a complaining witness (Hubbard) that misrepresentations or material omissions were made by Phillips and Walker during the transaction, and DBF properly construed the transaction as an investment, it had a reasonable basis in fact and law to file the complaint. Since there was no showing that the agency's credibility assessment was unreasonable, DBF was substantially justified in bringing the charges in Case No. 94-1266. Special Circumstances There was no evidence presented by respondent to show that special circumstances exist that would make an award of attorney's fees and costs unjust.
