The Issue The issue is whether Respondent's otherwise-untimely filing of a request for a hearing on a proposed penalty for failing to secure workers' compensation coverage is timely due to the doctrine of equitable tolling.
Findings Of Fact The parties do not dispute that an Amended Order of Penalty Assessment dated February 21, 2018 (APO), assesses a penalty of $63,202.87 for Respondent's failure to secure workers' compensation coverage; Petitioner served the APO on Respondent on March 2, 2018; the APO provides Respondent with 21 "calendar" days from receipt within which to file a request for a hearing; Respondent filed the Petition on March 29; and March 29 is 29 calendar days and 19 business days after March 2. Respondent engages in the business of digging ditches and installing conduit and pipes. On October 26, 2017, Jean Carlos Hernandez, Petitioner's investigator, visited a worksite of Respondent. Determining that Respondent had failed to secure workers' compensation coverage, as required by law, Mr. Hernandez served the SWO, a Request for the Production of Business Records (RPBR), and an unrelated document upon Jorge Clark, Respondent's president and sole shareholder. Complicating this case, from the investigator's perspective, Mr. Hernandez also issued orders stopping work to three other corporations that were involved in the same work as Respondent. The RPBR orders Respondent to email relevant business documents within ten "business" days of receipt of the request. The RPBR warns that a failure to email timely the requested business records will result in Petitioner's imputing Respondent's payroll for the purpose of calculating the penalty for failing to secure workers' compensation coverage. In addition to "hereby" ordering Respondent to stop work, the SWO also states: "A penalty against the Employer is hereby ordered in an amount" equal to double the amount that the employer would have paid in premiums, but not less than $1000, as based on a statutory formula that is summarized in the SWO. Despite the use of "hereby" for the penalty, the SWO imposes no penalty because Petitioner's calculation of the penalty takes place after the service of the SWO; this part of the SWO operates more as notice to the employer that Petitioner will assess a penalty and the formula for its calculation. When he gave Mr. Clark the three completed forms, Mr. Hernandez explained that Mr. Clark could obtain relief from the order stopping work by paying $1000 to Petitioner. Mr. Hernandez also told Mr. Clark that he had ten business days to provide the requested business records. The next day, Mr. Clark delivered $1000 to Petitioner and obtained a conditional release of the order stopping work. Mr. Clark demonstrated compliance with workers' compensation coverage by providing a letter confirming that Respondent had terminated the subcontractors who had been found on the worksite. During a brief conversation, Mr. Hernandez reminded Mr. Clark to submit the requested business records within ten business days, as reflected by the notes of Mr. Hernandez. On the sixth business day after October 26, as is his practice, Mr. Hernandez called Mr. Clark and reminded him that this was the sixth business day of the ten business days that he had to produce the requested business records. On the tenth business day, Mr. Clark produced the requested business records, on which Petitioner relied, almost entirely, to calculate the penalty that it later assessed. After Petitioner completed the calculation of the penalty, Mr. Hernandez called Mr. Clark and asked him to come into the office to pick up the APO. On March 2, 2018, Mr. Clark visited Petitioner's office and obtained the APO from Mr. Hernandez. The APO acknowledges the assessable penalty described in the SWO and assesses the above-described penalty. The APO incorporates a Penalty Calculation Worksheet, which reveals that $239.12 of the assessed penalty is derived from imputed wages. Mr. Hernandez and Mr. Clark spoke briefly in Petitioner's office on March 2. Mr. Hernandez testified that he advised Mr. Clark, as stated in the APO, that he had 21 "calendar" days to file a request for hearing and 20 business days to produce additional business records. Mr. Clark testified that Mr. Hernandez told him that he had 21 "business" days to file a request for hearing. Mr. Clark's testimony is credited. During the hearing, Petitioner's counsel repeatedly asked Mr. Clark if he had read the provision of the APO that gave Respondent 21 calendar days within which to file a request for a hearing. The purpose of this questioning appears to have been to show that, given the straightforward nature of this filing deadline, Mr. Clark could not possibly have been misled or lulled by anything that Mr. Hernandez could say, even if he had misstated the filing deadline in business, rather than calendar, days. The simpler the requirement, the harder it should be to prove that the subject of the requirement has been misled or lulled into action or inaction resulting in noncompliance. In other words, as a practical matter, Respondent would have a much harder time proving that Mr. Clark had been misled or lulled if the APO consisted of nothing more than Respondent's name, the assessed penalty, and a boldfaced warning in large font: "YOU HAVE 21 CALENDAR DAYS FROM RECEIPT OF THIS ORDER TO FILE A REQUEST FOR A HEARING. NO AGENCY EMPLOYEE MAY EXTEND OR CHANGE THE DEADLINE. IF YOU MISS THE DEADLINE, YOU DO NOT GET A HEARING. NO EXCEPTIONS." Implying that, if Mr. Clark had read the APO, he would have drawn a firm understanding the he had 21 calendar days to file a request for hearing, Petitioner implies that the APO is no less clear than the hypothetical document. But the forms that Mr. Hernandez gave Mr. Clark are not so clear in terms of filing deadlines. For a nonlawyer like Mr. Clark, the APO is complicated by the business- and calendar-day deadlines set forth in the SWO and APO, as well as the business-day deadline set forth in the RPBR, and contingencies attached to calendar-day deadlines that might confuse an attorney. These confusing features of the forms that Mr. Hernandez gave Mr. Clark make it harder to understand the forms, including the APO, and likelier that Mr. Clark would instead rely on what Mr. Hernandez told him about the applicable deadline, so as lay the foundation for Mr. Clark to be misled or lulled by inaccurate information. As Petitioner insists, the SWO provides a clear point of entry of 21 calendar days to file a request for hearing on the order stopping work, but it is not so clear whether the employer may also challenge, at that time, the yet-to-be-calculated penalty or, if it does not, whether the employer may challenge the penalty when it is later calculated. At this point, three things probably were evident to Mr. Clark: Respondent could not continue to work on the subject worksite; based on what Mr. Hernandez told him, Mr. Clark could obtain relief from the order stopping work by paying $1000; and Respondent had not yet been fined. It is doubtful that Mr. Clark thought much about the calendar-day deadline in the SWO because of the absence of an actual consequence at the moment. As noted above, Mr. Clark promptly paid the $1000, and Petitioner lifted the order stopping work, so Mr. Clark found that he could rely on Mr. Hernandez and his description of Respondent's rights and responsibilities. Also, a few days later, when Mr. Hernandez called him, Mr. Clark likely understood that the deadline in the RPBR ran in business days. In March 2018, Mr. Clark learned of the amount of the penalty. According to his testimony, which is credited, Mr. Clark knew immediately that he could not accept such a large penalty without exercising his right to a hearing. After Mr. Hernandez told Mr. Clark that he had 21 business days to file a request for hearing on the penalty, Mr. Clark calendared the deadline and visited his lawyer's office shortly prior to the expiration of a 21-business-day deadline-- but after the expiration of a 21-calendar-day deadline--to have him prepare and file a request for hearing. As noted above, Mr. Clark had promptly attended to his responsibilities in connection with this matter on two prior occasions when he immediately delivered $1000 to obtain relief from the order stopping work and when he timely submitted business records: Mr. Clark met every deadline about which Mr. Hernandez told him. There are several reasons that Mr. Hernandez's testimony is not credited as to what he told Mr. Clark on March 2, but these findings about the March 2 conversation are not intended to suggest that Mr. Hernandez is lying about what he told Mr. Clark. It appears merely that Mr. Hernandez's memory and notes of what was a routine transaction for him are mistaken. Mr. Hernandez's deposition was taken on November 15, 2018, which was less than three weeks prior to the hearing. The notice did not require him to produce any documents, and he had none with him. Although Mr. Hernandez mentioned several times that he had taken notes, he had not brought them to the deposition and seemingly had not reviewed them prior to the deposition, so his deposition testimony is a good reflection of his independent memory of the March 2 conversation. In three respects, the brief deposition undermines Mr. Hernandez's credibility as a witness. First, early in the deposition, Mr. Hernandez refused to answer routine questions about past employment and a routine question about the hours of a present part-time job.1/ It is unclear whether he was attempting to prevent any inquiry into his other employment or whether he was attempting to discourage a robust inquiry into the matter at issue in this case. Either way, his lack of cooperation struck an unsettling note. Second, at the time of the deposition, Mr. Hernandez's recollection of the events was so vague as to establish that he has no present recollection of any encounter with Mr. Clark. Mr. Hernandez did not seem entirely sure that Mr. Clark had paid the $1000 and Respondent had released the order stopping work. Dep. Tr., p. 23.2/ Three times, Mr. Hernandez did not recall that Mr. Clark had submitted requested business records. Dep. Tr., pp. 24, 27-28. Mr. Hernandez did not seem to recall that he called Mr. Clark on the sixth business day to remind him of the deadline to produce business records within ten business days, Dep. Tr., pp. 27-28, even though Mr. Hernandez's notes state that he made the call. Mr. Hernandez did not recall whether his meeting on March 2 with Mr. Clark occurred in Mr. Hernandez's office or in the field. Dep. Tr., pp. 28-29. Third, Mr. Clark had no independent recollection of the March 2 conversation during his deposition. When asked if he had any recollection of talking to Mr. Clark on that day, Mr. Hernandez answered, "I can't recall off the top of my head right now." Dep. Tr., p. 32. When asked, "so you don't know what he said to you, or what you said to him; correct?" Mr. Hernandez answered, "Off the top of my head, no." Dep. Tr., p. 32. Later, Mr. Hernandez added that he remembered giving Mr. Clark the APO and explaining it, but this seems to have been a statement of customary practice than a present recollection. Dep. Tr., pp. 34-35. At the time of the March 2 meeting, Mr. Hernandez had been employed as an investigator for Petitioner a little over one year and had been working on his own for a little less than one year. Understandably, he is still acquiring knowledge that he requires to perform his job. For instance, during his deposition, Mr. Hernandez seemed confused when asked to define calendar days. He stated, "Calendar days include Mondays through Fridays, all days, including holidays." When asked about the deadline if the 21st day is a holiday, Mr. Hernandez testified that the holiday counted, so the required act had to be done by the deadline, even if it were a holiday or a weekend, even though he had seemed earlier to exclude weekends from calendar days. Dep. Tr., pp. 37-38. It is difficult to understand why Mr. Hernandez would have mentioned during the March 2 meeting the business-day deadline for producing business records, as he testified. As noted above, more business records could reduce the assessed penalty by only about $200. The modest amount of implied wages seems to suggest that Petitioner had found the already-produced business records to be nearly complete. There was thus no practical reason for Mr. Hernandez to mention the business-day deadline for producing more business records. Clearly, the focus of both men on March 2 was on the deadline for filing a request for a hearing on the assessed penalty. If, as Mr. Clark recalls, Mr. Hernandez only addressed this deadline, which makes sense, and Mr. Clark only heard "business" days, the most likely explanation is that Mr. Hernandez misspoke. Mr. Hernandez made a note stating that he told Mr. Clark that he had 20 business days to produce more records and 21 calendar days to file a request for a hearing. Mr. Hernandez testified at the hearing that he routinely takes handwritten notes, at the time of the events described in the notes and later enters them into Petitioner's computer system, but he did not identify exactly when he made or entered the notes at issue in this case, except that that he departed from his normal practice because he did not first make the crucial March 2 note in handwriting. In any event, the above-noted problems with Mr. Hernandez's testimony establish that this note, regardless of when prepared, is inaccurate. Based on the foregoing, Mr. Hernandez inadvertently misled or lulled Mr. Clark into filing the Petition after the deadline set forth in the APO. Extending the deadline in accordance with equitable tolling, the otherwise-late filing is timely.
Recommendation It is RECOMMENDED that the Department of Financial Services, Division of Workers’ Compensation, enter a final order determining that the Petition was filed timely under the doctrine of equitable tolling. DONE AND ENTERED this 15th day of January, 2019, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE 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 15th day of January, 2019.
Findings Of Fact On June 19, 1991, the Petitioner, Lemuel L. Cole, filed a Petition for Administrative Hearing. The Petitioner challenged a proposed amendment to Rule 33-3.004, Florida Administrative Code. The Petitioner's challenge was instituted pursuant to Section 120.54, Florida Statutes. The notice of the proposed amendment to Rule 33-3.004, Florida Administrative Code, was published in the Florida Administrative Weekly, Volume 17, Number 21, page 2318, on May 24, 1991. The Petitioner's Petition challenging proposed amendment to Rule 33- 3.004, Florida Administrative Code, was filed twenty-six days after notice of the proposed amendment to the challenged rule was filed.
Findings Of Fact Both parties filed proposed findings of fact. Except as noted below, I have incorporated the substance of these proposed findings into my findings of fact. Rejected DOT Proposed Findings of Fact The following proposed findings are rejected because they are not facts but only recitations of testimony: Rule 22I-6.006 - proposed finding 1 - second and third sentence. Rule 22I-6.037 - proposed finding 1 - second sentence. proposed finding 2 - first and second sentence. The following proposed findings are irrelevant to the resolution of this case: Rule 22I-6.006 - proposed finding 4 and 5 because the proposed rule applies to other agencies than DOT. proposed finding 6 because whether another method of notifying all bidders is more efficient is not the standard to determine validity of the rule. Rule 22I-6.037 - proposed finding 3, 5, and 7. Rejected DOAH Proposed Finding of Fact The following proposed finding of fact are rejected because these are more in the nature of legal argument or conclusions of law rather than findings of fact: Proposed finding 5 - sentences 5 and 6. Proposed finding 6 - second paragraph, sentences 1 and 2; third paragraph, sentence 4 and 5; and fourth paragraph Proposed finding 7 - second paragraph; third paragraph; and fourth paragraph, fifth sentence Proposed finding 8 - fourth paragraph; fifth paragraph; and sixth paragraph The follow proposed findings are rejected as being irrelevant to the resolution of the issues presented in this case. Proposed finding 1 - fourth sentence Proposed finding 6 - second paragraph, sentence 5 and 6 Proposed finding 7 - fourth paragraph, sentence 1 through 4 The following proposed finding is rejected as not supported by the record evidence: Proposed finding 6 - fourth paragraph, sentence 4 fifth paragraph, sentence 4 ANALYSIS Standing The first issue that must be addressed is DOT's standing. DOAH asserts that Dot lacks standing to challenge Proposed Rules 22I-6.035 and 22I-6.037. DOT has the burden to establish that it would be substantially affected by the proposed rules should they be adopted by DOAH. Section 120.54(5)(b), Fla. Stat. (1985); Department of Health and Rehabilitative Services v. Alice P., 367 So.2d 1045, 1052 (Fla. 1st DCA 1979). In order to resolve whether DOT has met its burden, a review of the pertinent decisions on standing is appropriate. 5/ The case cited most often on standing is the First District Court of Appeal's decision in Florida Department of Corrections v. Jerry, 353 So.2d 1230 (Fla. 1st DCA 1978), cert. denied, 359 So.2d 1215 (Fla. 1978). The court held that an inmate who had been confined for committing an assault while in prison lacked standing to challenge an existing rule concerning disciplinary confinement and forfeiture of gain-time. Because the inmate was no longer confined under the rule and had not lost any gain-time when he filed the rule challenge, the court reasoned that the inmate had not suffered an injury in fact at the time of the challenge, end therefore, was not substantially affected by the existing rule. Whether the inmate would be subject to the rule again depended on the likelihood he would commit another infraction. The court deemed this too speculative and subject to conjecture to grant standing. 353 So.2d at 1236. In a later case, the Florida Supreme Court overruled Jerry to the extent it required associations to demonstrate a specific injury to the organization itself rather then to some of its members. Florida Home Builders' Association v. Department of Labor and Employment Security, 412 So.2d 351 (Fla. 1982). In reaching its decision, the court warned against an overly restrictive application of the concept of standing in the rule challenge cases by noting: "Expansion of public access to activities of governmentally agencies was one of the major legislative purposes of the new Administrative Procedure Act." 412 So.2d at 352-53. Standing to challenge proposed agency rules was addressed in Department of Health and Rehabilitative Services v. Alice P., 367 So.2d 1045 (Fla. 1st DCA 1979). There, the court held that all women of child bearing age who received medicaid benefits were not substantially affected by a proposed rule denying medicaid payments for abortions except under limited circumstances. In denying standing to a woman who was not pregnant at the time of the rule challenge, the court specifically rejected the argument that standing to challenge a proposed rule under Section 120.54(4), Florida Statutes (1985), is less restrictive than standing to challenge an existing rule under Section 120.56, Florida Statutes (1985), by stating: There is no difference between the immediacy and reality necessary to confer standing whether the proceeding is to challenge an existing rule or a proposed rule. 367 So.2d at 1052. In Professional Fire Fighters of Florida v. Department of Health and Rehabilitative Services, 396 So.2d 1194 (Fla. 1st DCA 1981), the court held that a group of paramedics had standing to challenge rules establishing additional requirements for renewal of a paramedical certification. There was no showing on any of the individual paramedics had attempted to comply with the new rules or that anything in the new rules would disqualify them from retaining their certification. In rejecting the hearing officer's ruling that these individuals could not claim an injury because they had not yet applied for certification under the new rules, the court stated: The order below would preclude a challenge by anyone who had not first complied with a rule and suffered injury, no matter how clear the rule's applicability to, or substantial its effect on, the challengers... The APA permits prospective challenges to agency rulemaking and does not require that an affected party comply with the rule at his peril in order to obtain standing to chal- lenge the rule. A party may demonstrate standing by showing that a rule has a real and immediate effect upon his case as well as by proving injury in fact. 396 So.2d at 1195-96 (citations omitted) see also 4245 Corp., Mother's Lounge Inc. v. Department of Beverage, 345 So.2d 934 (Fla. 1st DCA 1977). The court distinguished Jerry and Alice P. on the grounds that the petitioners in the case before it were immediately subject to the rule which rendered their continued employment as paramedics unlawful without compliance with the rule. The individuals were presently affected by the rule because they worked in the area to be regulated. 396 So.2d at 1196. In Village Park Mobile Home Association v. Department of Business Regulation, 506 So.2d 426, 412 (Fla. 1st DCA 1987), the court on rehearing emphasized under the test for standing set forth in Fire Fighters that a party may show "that a rule has a real and immediate effect upon his case, as well as injury in fact." Standing was not found in Village Park for certain mobile home owners to challenge agency approval of the prospectus for a mobile home park because the prospectus only disclosed the method for raising rents and reducing services in the future. It was up to the landlord to implement the prospectus at some unspecified date in the future. 6/ Thus, no standing was found because the alleged injury was contingent upon the future actions of a third party. 506 So.2d at 433-34; see also Boca Raton Mausoleum v. Department of Banking, 511 So.2d 1060 (Fla. 1st DCA 1987). In this case, DOT has not alleged that it has suffered an injury in fact by Proposed Rules 22I-6.035 and 22I-6.037. That is not surprising with respect to Proposed Rule 22I-6.037 since it is a new rule that has not been implemented. However, with respect to the proposed amendments to Rule 22I-6.035, dealing with attorney's fees and costs, most of DOT's challenges concern portions of the rule that were not substantially changed in the proposed rule. For example, DOT objects to the provisions requiring an agency to file a response or affidavit and the provisions which allow for a waiver of the right to an evidentiary hearing when one is not affirmatively requested by either party. Rule 22I-6.035 presently contains such provisions. Therefore, the injury in fact test would be applicable. However, DOT has not presented any facts indicating that a prevailing small business party has ever filed a petition seeking costs and attorney's fees from DOT under Florida Equal Access to Justice Act. Consequently, no injury exists. The alternative test for standing is whether the proposed rules would have a "real and immediate effect" upon DOT. With respect to Proposed Rule 22I- 6.035, DOT has not met this test merely by demonstrating that it is a party to pending cases involving small business parties. In order for DOT to be affected by Proposed Rule 22I-6.035, a small business party would first have to prevail against DOT and then file a petition for costs and attorney's fees based upon its belief that DOT was not "substantially justified" in bringing the administrative action. Whether these contingencies, which are controlled by a third party, will occur in the future is open to conjecture and speculation. The type of immediacy envisioned by the court in the Fire Fighters case does not appear to be present with respect to Proposed Rule 22I-6.035. Therefore, DOT does not have standing to challenge this proposed rule. On the other hand, I conclude that DOT has standing to challenge Proposed Rule 22I-6.037. DOT presently has at least nine pending cases involving administrative complaints. The proposed rule on voluntary dismissals would be immediately applicable to DOT's ability to take a voluntary dismissal on those cases without being contingent upon the acts of a third party. Such a real and immediate effect on pending cases involving DOT is sufficient to provide DOT with the requisite standing. DOT does not have to invoke the rule by seeking a voluntary dismissal in order to have standing to challenge the rule as suggested by DOAH. See Professional Fire Fighters of Florida, 396 So.2d at 1195. Invalidity of Proposed Rules 22I-6.006 and 22I-6.037 The Florida Legislature has recently defined what constitutes an invalid exercise of Legislative authority. Section 120.52(8), Florida Statutes, as amended by Chapter 87-385, Section 2, Laws of Florida, provides: (8) "Invalid exercise of delegated legisla- tive authority" means action which goes beyond the powers, functions, duties delegated by the Legislature. A proposed existing rule is an invalid exercise of delegated legislative authority if any one or more of the following apply: (a ) The agency has materially failed to follow the applicable rulemaking procedure set forth in s. 120.54; The agency has exceeded its grant of rulemaking authority, citation to which is required by s. 120.54(7); The rule enlarges, modifies, or con- travenes the specific provisions of law implemented, citation to which is required by s. 120.54(7); The rule is vague, fails to establish adequate standards for agency decisions, or vests unbridled discretion in the agency; or The rule is arbitrary or capricious. These standards are similar to those used by the courts in Florida to test the validity of agency rules. See e.g., Agrico Chemical Co. v. Department of Environmental Regulation, 365 So.2d 759 (Fla. 1st DCA 1978), cert. denied, 376 So.2d 74 (Fla. 1979); Humana Inc. v. Department of Health and Rehabilitative Services, 469 So.2d 889 (Fla. 1st DCA 1985). In Agrico Chemical Co., the First District Court of Appeal stated: [I]n a 120.54 hearing, the hearing officer must look to the legislative authority for the rule and determine whether or not the proposed rule is encompassed within that grant. The burden is upon one who attacks the proposed rule to show that the agency, if it adopts the rule, would exceed its author- ity; that the requirements of the rule are not appropriate to the ends specified in the legislative act; that the requirements contained in the rule are not reasonably related to the purpose of the enabling legislation or that the proposed rule or the requirements thereof are arbitrary or capricious. A capricious action is one which is taken without though or reason or irration- ally. An arbitrary decision is one not supported by facts or logic, or is despotic. Administrative discretion must be reasoned and based upon competent substantial evi- dence. Competent substantial evidence has been described as such evidence as a reason- able person would accept as adequate to support a conclusion. The requirement that a challenger has the burden of demonstrating agency action to be arbitrary or capricious or an abuse of administrative discretion is a stringent one. 365 So.2d at 763. In this case DOT has the burden to demonstrate that adoption of Proposed Rules 22I-6.006 and 22I-6.037 would constitute an invalid exercise of legislative authority. Proposed Rule 22I-6.006 DOAH is statutorily authorized "to adopt reasonable rules to carry out the provisions of this act [Chapter 120]." Section 120.65(7), Fla. Stat. (1985). Regarding bid protests, an agency is required to forward a protest to DOAH for an evidentiary hearing in accordance with Section 120.57(1), Florida Statutes (1985), whenever there is a disputed issue a material fact. Section 120.53(5)(d)2, Fla. Stat. (1985). Section 120.57(1) sets forth certain procedures for conducting evidentiary hearings and proceedings where the substantial interests of a party are determined. In light of these statutory provisions, DOAH proposes to amend Rule 6.006 by requiring that an agency send a copy of the notice of hearing to all bidders, other than the protesting bidder, and attempt to telephonically notify these bidders of the date, time, and place the hearing. The purpose of this requirement is to give notice of the deadline to file a motion to intervene in the protest proceeding to the successful bidder, as well as all other bidders who had not filed a timely protest. Motions to intervene must be filed within five days prior to start of an evidentiary hearing. Fla. Admin. Code Rule 6.010. DOT persuasively argues that this portion of Proposed Rule 22I-6.006 requires an agency to do a useless act because any bidder that has not flied a timely protest is precluded from gaining party status in a bid protest proceeding by filing a motion to intervene. I agree. Section 120.53(5), Florida Statutes (1985), requires an agency to provide notice of its decision, or intended decision, concerning a bid solicitation. The notice must contain the following statement: "Failure to file a protest within the time prescribed in s. 120.53(5), Florida Statutes, shall constitute a waiver of proceedings under chapter 120, Florida Statutes." Paragraph (b) of Section 120.53(5), provides: Any person who is affected adversely by the agency decision or intended decision shall file with the agency a notice of protest in writing within 72 hours after the posting of the bid tabulation or after receipt of the notice of the agency decision or intended decision and shall file a formal written protest within 10 days after the date he filed the notice of protest. Failure to file a notice of protest or failure to file a formal written protest shall constitute a waiver of proceedings under chapter 120. The formal written protest shall state with particularity the facts and law upon which the protest is based. These statutory provisions are clear and unequivocal. An unsuccessful bidder must file a protest within the 72 hour limitations period in order to participate in further Chapter 120 proceedings. Xerox Corp. v. Florida Department of Professional Regulation, 489 So.2d 1230 (Fla. 1st DCA 1986); see also Capelletti Brothers v. Department of Transportation, 499 So.2d 555 (Fla. 1st DCA 1986)(72 hour deadline applies to protest challenging bid specifications). An adversely affected bidder cannot, and should not be allowed to, gain a back door point of entry to obtain party status in a bid protest proceeding by filing a motion to intervene when the bidder has already waived its right to participate in the proceeding. The only substantially effected entity that would be entitled to intervene in a bid protest proceeding is the successful bidder. Therefore, there would be a valid purpose in adopting a rule that required the successful bidder to receive the notice of hearing so that it would be aware of the deadline for filing a motion to intervene. However, as to all other non-protesting bidders, there is no statutory basis for providing the notice of hearing to them in light of what appears to be a clear prohibition against allowing those bidders to obtain party status after failing to file a timely protest pursuant to Section 120.53(5)(b), Florida Statutes (1985). DOAH argues that the need for subsection (2) of Proposed Rule 22I-6.006 is dramatized by the case of Spillis Candella and Partners, Inc. v. School Board of Dade County, No. 86-3002 Bid. There, the hearing officer determined that the agency never complied with the notice requirements triggering the 72 hour limitations period. Therefore, the protest filed in that case was determined to be timely since the 72 hour time limit had not expired. This single case does not provide justification for requiring agencies to give notice of the evidentiary hearing to all unsuccessful bidders in all bid protest cases. No evidence was adduced indicating that the failure to provide the requisite statutory notice issue raised in the Spillis Candella case had ever occurred in any other bid protest proceeding that had come before a DOAH hearing officer. Even if this had been a recurring problem, subsection (b) of the Proposed Rule 22I-6.006 could have been more closely tailored to remedy issues similar to that raised in Spillis Candella. The rule should have limited an agency's responsibility to provide a notice of hearing to all unsuccessful bidders if the agency had not previously complied with the notice requirements of Section 120.53(5), Florida Statutes (1985). 7/ In light of the foregoing, I conclude that subsection (2) of Proposed Rule 22I-6.006 is arbitrary because it requires agencies to provide notice of a bid protest hearing to bidders who have waived their right to become parties in the proceeding. The rule also contravenes Section 120.53(5)(b), Florida Statutes (1985), which contemplates that only timely protestors may participate as parties in a bid proceeding. 8/ Subsection (3) is also invalid because it requires that an agency provide to the hearing officer proof that it has complied with subsection (2). DOT's remaining objections to Proposed Rule 22I-6.006 are without merit. The fact that all agencies involved in bid protests must adopt rules end procedures for the resolution of such protests, and that the Administration Commission shall also adopt model rules on the same subject, does not indicate a legislative intent to preempt DOAH from adopting rules pertaining to the procedures for conducting bid protest hearings. Section 120.53(5)(a) and (f), Fla. Stat. (1955). In addition, Section 120.57(1)(b), Florida Statutes (1985), does not prohibit non-parties from receiving notice of an evidentiary hearing. Proposed Rule 22I-6.037 DOT advances numerous arguments in support of its contention that subsections (2) and (3) of Proposed Rule 22I-6.037 constitute an invalid exercise of legislative authority. I am persuaded by two of these arguments that DOT's position has merit. First, with respect to subsection (2), the proposed rule provides a hearing officer with the discretion to grant a motion for voluntary dismissal "upon such terms and conditions as the hearing officer deems just and proper." This language fails to provide any guidance to a hearing officer or to the parties in an administrative complaint proceeding as to what conditions a hearing officer could impose for allowing the agency to withdraw its complaint without prejudice. Instead, the rule gives the hearing officer unlimited discretion to impose any condition the hearing officer subjectively believes is "just and proper." These words cannot be construed as words of limitation because it must always be presumed that a hearing officer will rule in a manner that he or she believes is just and proper. Thus the elimination of the "just and proper" language from the rule would not give any more discretion to a hearing officer than is presently granted by the proposed rule. The fact that Florida Rule of Civil Procedure 1.420(2) provides that a trial court may grant a voluntary dismissal filed after submission of a case to the court "upon such terms and conditions as the court deems proper," does not provide a basis for concluding that subsection (2) of Proposed Rule 22I-6.037 is valid. The Rules of Civil Procedure were adopted pursuant to the inherent power of the courts, a power that administrative agencies do not possess. Hillsborough County Hospital Authority v. Tampa Heart Institute, 472 So.2d 748, 753-54 (Fla. 2nd DCA 1985). Agency rules may not violate the standards set forth in Section 120.52(8), Florida Statutes, as amended by Chapter 57-325, Section 2, Laws of Florida. In this case, subsection (2) of Proposed Rule 22I- runs afoul of paragraph (d) of Section 120.52(8), Florida Statutes, as amended, which provides that a rule is invalid if [t]he rule is vague, fails to establish adequate standards for agency decisions, or vests unbridled discretion in the agency." Therefore, subsection (2) of Proposed Rule 22I-6.037 is invalid. Subsection (3) of the proposed rule is also invalid but for a different reason. Unlike subsection (2), nothing is left to the parties' imagination as to the consequences an agency will encounter if it files a notice of voluntary dismissal of an administrative complaint containing nonjurisdictional allegations that were previously the subject of a voluntary dismissal. Those nonjurisdictional factual allegations contained in both complaints will be deemed dismissed with prejudice. The issue with regard to this rule provision is whether DOAH has the statutory authority to adopt a rule that requires dismissal of an administrative complaint with prejudice under these circumstances. Although no cases are directed on point, two district court of appeal decisions are instructive. In Great American Bank v. Division of Administrative Hearings, 412 So.2d 373 (Fla. 1st DCA 1981), the First District Court of Appeal revised a hearing officer's order imposing sanctions for a party's failure to make discovery and for a witness' failure to give responsive testimony. The court ruled that certain portions of the model rules, which purported to give such authority to a hearing officer, were invalid because they conflicted with the discovery enforcement provisions found in the Administrative Procedure Act. Section 120.58(3), Fla. Stat. (1981). The Legislature subsequently amended Section 120.58 to specifically grant hearing officers the authority to pose sanctions to effect discovery. Ch. 84-173, Laws of Florida. In Hillsborough County Hospital Authority v. Tampa Heart Institute, 472 So.2d 748 (Fla. 2d DCA 1985), the Second District Court of Appeal declared Model Rule 28-5.211 invalid to the extent the rule authorized a hearing officer to impose sanctions, including dismissal, to enforce procedural orders. The court rejected the argument that the same general rulemaking authority relied upon by DOAH as authority for Proposed Rule 22I-6.037, Sections 120.53 and 120.65(7), Florida Statutes (1985), authorized the model rule. Rather, any rule that provides a sanction in the form of a penalty must be based upon explicit statutory authority such as that found in Section 120.58(1)(b), Florida Statutes (1985), or Section 120.57(1)(b), Florida Statutes (Supp. 1986). 9/ 472 So.2d at 747-48. Subsection (3) of Proposed Rule 22I-6.037 imposes the sanction of dismissal with prejudice. However, in contrast to the specific saction authority granted to hearing officers in Sections 120.58(1)(b) and 120.57(1)(b)5, no provision in Chapter 120 specifically authorizes DOAH to impose a sanction under the circumstances set forth in subsection (3) of Proposed Rule 22I-6.037. Therefore, while I find the purpose of adopting subsection (3) of the proposed rule, to ensure failness, is laudable, this portion of the rule is invalid because DOAH does not possess the requisite legislative authority to adopt such a rule. Section 120.52(5)(b), Fla. Stat., as amended by Ch. 87-358, Section 2, Laws of Florida.
The Issue The issue is whether Petitioners, Judith C. Cleary and Charles B. Houck (Petitioners or Ms. Cleary and Mr. Houck), are entitled to an award of attorney's fees against Respondent, Department of Financial Services (Respondent or the Department), pursuant to section 57.111, Florida Statutes (2009).1/
Findings Of Fact The underlying proceedings were initiated by Respondent on February 22, 2010, by the issuance of substantively identical Administrative Complaints against Petitioners. Petitioners timely requested administrative hearings to contest the charges against them, and the cases were forwarded to the Division of Administrative Hearings where they were consolidated for hearing. Count 1 of each Administrative Complaint charged Petitioners with willfully misrepresenting and or omitting material information in order to induce Mr. and Mrs. Nagle to cash in another annuity they held in order to purchase an annuity sold by Petitioners. Included in the alleged misrepresentations or material omissions were: misrepresenting that there would be no surrender charges to withdraw the entire amount of the new annuity after one year, when in fact there would be a 15 percent surrender charge; falsely representing that the annuity would earn the Nagles ten to 20 percent returns; and (3) misrepresenting the suitability of the Nagles to purchase the annuity by misrepresenting the Nagles' net worth and by misrepresenting the Nagles' investment objective as long-term, in a form Petitioners submitted to the insurance company issuing the annuity. Count 2 of each Administrative Complaint charged Petitioners with similar conduct in order to induce the Nagles' son, Robert, to purchase an annuity. Included in the alleged misrepresentations or material omissions were: misrepresenting that there would be no surrender charges to withdraw the entire amount of the new annuity after one year, when, in fact, there would be a 15 percent surrender charge; and falsely representing that the annuity would earn Robert Nagle ten to 20 percent annual returns. Petitioners do not dispute that if the allegations charged in the Administrative Complaint had been proven by clear and convincing evidence, then Respondent would have established the statutory violations alleged as the predicate for taking disciplinary action against Petitioners' insurance agent licenses. Petitioners also acknowledge that Respondent initiated the disciplinary actions against them on the basis of two complaint letters received by Mrs. Phyllis Nagle, the attestation of Mrs. Nagle to the material allegations in an affidavit, and a corroborating complaint letter by Mrs. Nagle's son, Robert Nagle. After a full evidentiary hearing, a Recommended Order issued in the underlying disciplinary actions determined that the more credible evidence failed to establish the allegations in the Administrative Complaints. In particular, the undersigned weighed the credibility of testimony by Robert Nagle and by Petitioners at the final hearing, as well as deposition testimony by both Mr. and Mrs. Nagle. The question posed in this case, however, is not whether credibility judgments caused the Department to ultimately not prevail in its charges against Petitioners. Instead, the question here is whether Respondent had a reasonable basis, in law and in fact, at the time it initiated the underlying disciplinary actions. In this regard, Petitioners contend that the Department's investigation file contained documents from the insurance company issuing the annuities that contradict the allegations in the Administrative Complaints. Petitioners point to three documents in particular. The first document was a customer survey response submitted by Mrs. Nagle to the insurance company after she purchased the annuity from Petitioners. Her completion of the survey form indicated that she knew that "[s]urrender charges are imposed on premature full withdrawal"; that she considered the "annuity to be a long-term investment"; that she did "not intend to use these funds to meet current expenses"; and that Petitioners reviewed her "financial status . . . and other pertinent information to determine whether this annuity purchase" was suitable to her. The other document claimed to contradict the allegations in the Administrative Complaints was the Nagles' annual statement showing a yield of 5.66 percent, which was different than the 2.6 percent yield claimed by Mrs. Nagle in her complaint letters or affidavit. Finally, Petitioners point to statements of understanding signed by the Nagles, showing the surrender charges that would be imposed for early withdrawals. None of these documents conclusively refute the charges in the Administrative Complaint. For example, with respect to surrender charges, the Nagles' complaints assert that Petitioners represented that there would be no surrender charges for a withdrawal after one year. Mrs. Nagle's survey form only acknowledged that there would be surrender charges for "premature" withdrawal. It certainly would have been possible to reconcile these two concepts in that Mrs. Nagle may have been thinking that "premature" withdrawal, as used in the survey form, was a withdrawal in less than one year. The response in the survey form to the "surrender charge" question does not conclusively contradict Mrs. Nagle's complaint and affidavit, nor does it conclusively contradict the allegations in the Administrative Complaint. Similarly, the responses in the survey form about suitability do not conclusively contradict the allegations in the Administrative Complaint. The annual statement likewise does not conclusively contradict the allegations in the Administrative Complaint, even though the yield shown is somewhat different from the yield Mrs. Nagle referred to in her complaint. Whether the yield was actually 2.6 percent or 5.66 percent, the material allegations in the Administrative Complaint were that Petitioners misrepresented that the yield would be 10 to 20 percent per year. These allegations and the complaints on which they were based, were not so plainly lacking in credibility that no reasonable agency would have proceeded with charges. Finally, the signed statements of understanding showing that surrender charges would be imposed for early withdrawals do not contradict the Nagles' complaints or the allegations in the Administrative Complaint. Although the undersigned ultimately found against the credibility of the Nagles' complaints, those complaints were that Petitioners made oral representations assuring the Nagles that there would be no surrender charges after one year, even though the policy forms themselves said otherwise. The ultimate lack of credibility of the complaining witnesses' testimony was not so clear that no reasonable agency would have prosecuted the claims. In short, Respondent had a reasonable basis in law and in fact, following a reasonable investigation, to make the allegations and to charge the statutory violations it did in the Administrative Complaints. The documentation gathered in the investigation did not conclusively contradict the factual allegations, and the credibility of the complainants was not so obviously lacking that no reasonable agency would have made the allegations in the Administrative Complaints. And it is beyond dispute that if those factual allegations had been proven, the charged statutory violations would have been established. Thus, it cannot be said that Respondent's action in initiating the disciplinary proceedings against Petitioners was unreasonable governmental action.
Findings Of Fact At all pertinent times, respondent Walter C. Rudinsky was employed as a teacher at the Florida School for Boys in Okeechobee. On October 9, 1978, respondent was under the supervision of Thomas V. Lunsford, for eight years an academic principal at the Florida School for Boys. During lunch break on October 9, 1978, respondent, another teacher named Terry Cooper, a teacher's aide named Patricia Morris, and possibly others were discussing grievance procedures, which had recently changed. When Mr. Cooper asked to see a grievance which respondent had prepared, so that Mr. Cooper could use it as a paradigm for a grievance that he wished to file, Mr. Cooper, Ms. Morris and respondent walked to respondent's classroom. There respondent showed Mr. Cooper a copy of a grievance form he planned to file. Attached to the grievance form were various documents, including an evaluation of Mr. Lunsford. Respondent had obtained a copy of the evaluation of Mr. Lunsford from personnel records maintained under the supervision of the personnel manager, Paul S. Timko. Respondent had examined Mr. Lunsford's personnel file on several occasions. On all such occasions, Mr. Lunsford's file, like all personnel records at the school, was available for inspection by any member of the public. Personnel records were not treated as confidential, and it was common knowledge on the campus how various teachers and principals had been evaluated. In all, respondent filed some nine grievances complaining of Mr. Lunsford's conduct over a period of approximately three years. Respondent also filed complaints with the Professional Practices Council, the Equal Employment Opportunity Commission and the Office of Civil Rights. The filing of these grievances caused additional work for the school's personnel office, and took up as much as a quarter of the personnel manager's time. Another person at the same school filed five grievances in one week, however. Many of the grievances respondent filed alleged harassment of respondent by Mr. Lunsford. Nor was respondent the only person who filed grievances complaining of Mr. Lunsford's conduct. Mr. Charles Coles filed such a grievance, and prevailed. Mr. Richard Rye resolved his complaint against Mr. Lunsford informally without filing. Ms. Elaine Beck filed a grievance protesting a suspension Mr. Lunsford recommended and the superintendent imposed. She won informally. Evaluations Mr. Lunsford had made of two employees other than respondent were expunged as a result of proceedings they instituted. Respondent prevailed on the grievance he filed alleging that Mr. Lunsford had retaliated against him for the filing of previous grievances. The Department of Health and Rehabilitative Services decided that Mr. Lunsford had retaliated against respondent on more than one occasion. Respondent lost at least one grievance. The charges filed by respondent with the Equal Employment Opportunity Commission were determined to be well founded. As a result of grievance procedures initiated by respondent, an evaluation of him by Mr. Lunsford was expunged. School policy at the Florida School for Boys permits the union steward to discuss grievances with employees during school time. This is in accordance with Art. 6, Section 1 of the contract between labor and management. Occasionally, the union steward was released to go talk to Mr. Rudinsky during feedback or planning time. Otherwise, respondent did not use his planning period for the preparation of grievances, although he often worked on grievances during his lunch hour. Whenever he left for participation in grievance proceedings, he always had leave to do so. Mr. Lunsford and respondent have not been on friendly terms during their time together at the Florida School for Boys. Respondent said a number of uncomplimentary things about Mr. Lunsford and made no secret of the fact that he hoped Mr. Lunsford would leave the school one way or another. Fortunately for the school, the friction between respondent and Mr. Lunsford ceased to be the problem it once was, when Mr. Lunsford's direct supervision of respondent came to an end. In the summer of 1978, respondent and another teacher, Mr. Hofstetter, were responsible for evaluating the work of Deborah A. Bourgault, a teacher's aide. In June of 1978, Ms. Bourgault saw an employee performance evaluation work sheet signed by respondent on which her overall performance was rated "outstanding." Even though the period for which Ms. Bourgault was to be evaluated did not end until August of 1978, this work sheet was submitted to the personnel office in June. From there, it made its way to the office of James A. Williams, educational supervisor at the Florida School for Boys. On June 29, 1978, respondent telephoned Mr. Williams and asked that the evaluation form be returned. The following morning, respondent retrieved the form. Later an evaluation, rating Ms. Bourgault's overall performance as "conditional," was submitted. At no time has respondent ever made any improper advances to Ms. Bourgault. Both parties submitted proposed recommended orders which have been considered in preparation of the foregoing findings of fact. To the extent the proposed findings of fact conflict with the findings of fact recited in this recommended order, the same are hereby rejected.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That the petition for revocation of teacher's certificate be dismissed. DONE AND ENTERED this 3rd day of January, 1980, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 904/488-9675 COPIES FURNISHED: Robert J. Vossler, Esquire 110 North Magnolia Drive Suite 224 Tallahassee, Florida 32301 Michael C. Canar, Esquire 609 South Andrews Avenue Suite 2 Ft. Lauderdale, Florida 33301
Recommendation In view of my finding that the Petitioner has engaged in a pattern of careless conduct, I recommend that the Board issue a written reprimand to her for having engaged in the conduct as found herein. in all other respects I recommend that the complaint be dismissed in its entirety. DONE and ORDERED this 29th day of July, 1976, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675
Findings Of Fact The policy being challenged provides that: The hearing may be cancelled if a petitioner or intervenor fails to timely file its prehearing statement. This provision is routinely and customarily embodied in the notices issued by Respondent to parties before it in matters arising under Florida Statutes 447.307 and 447.503. The Respondent acknowledges that it did not adopt and promulgate the policy pursuant to Florida Statutes 120.54 or any other relevant provision of Chapter 120. On 12 July 1979 Petitioner filed a petition with Respondent in which Petitioner sought to represent certain employees employed by the Collier County Board of County Commissioners. This petition was accepted by Respondent and on 30 July 1979 Respondent issued a Notice of Representation Hearing and a Prehearing Order. This Prehearing Order directed the parties to that proceeding to file with Respondent at least seven (7) days prior to the date of the hearing, and serve upon each other, a prehearing statement, identifying: Those fact disputes to be presented for resolution. Any and all legal questions to be presented for resolution. The legal authority to be relied upon by each party in presenting its arguments. Those witnesses to be called at the hearing, except rebuttal witnesses. The approximate time necessary to present the party's case. Any outstanding motions or procedural questions to be resolved. This Pre-Hearing Order then provided: The hearing may be cancelled if a petitioner or intervenor fails to timely file its prehearing statement. Petitioner did not file its prehearing statement within the prescribed 7-day period and on 21 August 1979 Petitioner was notified that the hearing scheduled to commence 23 August had been cancelled. On 22 August Petitioner was advised that a written order cancelling the 23 August hearing had been entered by the Commission. Thereafter Petitioner filed the petition here under consideration contending that the policy of Respondent to enter the cancellation-of-hearing notice in prehearing orders is a rule and invalid by reason of not being promulgated pursuant to Chapter 120. Respondent takes the position that the provision in the prehearing order is not a rule, but even if it could otherwise be considered to be a statement of general applicability, it is exempt from being so found by 447.207(6), Florida Statutes.
The Issue The ultimate issue for determination is whether the Department of Environmental Protection should award attorney's fees and costs to G.E.L. Corporation pursuant to Section 120.595, Florida Statutes (2002).
