The Issue The issue is the amount of attorney's fees and costs to which Petitioner is entitled by Order of the appellate court pursuant to Subsection 120.595(5), Florida Statutes (2007).1
Findings Of Fact On February 9, 2005, the Commissioner of Education (the Commissioner) filed an Administrative Complaint against Ms. Stacy Stinson, now Ms. Stacy Lewis. Ms. Stinson requested an administrative hearing pursuant to Subsection 120.57(1) (a 120.57 proceeding). The Commissioner referred the matter to DOAH to conduct the 120.57 proceeding. DOAH opened the 120.57 proceeding as Jim Horne, as Commissioner of Education v. Stacy Stinson, Case No. 05-0504PL (DOAH August 11, 2005) (the underlying proceeding). The Recommended Order in the underlying proceeding recommended the entry of a final order finding the respondent in the underlying proceeding not guilty of the charges against her and imposing no penalty against her teaching certificate. On January 5, 2006, the Educational Practices Commission (EPC) entered a Final Order rejecting or modifying some findings of fact in the Recommended Order, reprimanding the respondent, imposing a two-week suspension of her teaching certificate, and placing her on probation for three years. On January 5, 2006, the respondent in the underlying proceeding filed a notice of administrative appeal to the First District Court of Appeal. The initial brief was filed on March 16, 2006. The answer was filed on May 1, 2006. On May 15, 2006, the respondent filed a reply brief, motion for attorney's fees, and request for oral argument. On August 22, 2006, the appellate court issued its order in Stinson v. Winn, 938 So. 2d 554 (Fla. 1st DCA 2006). The appellate court concluded that the EPC improperly rejected or modified factual findings and legal conclusions of the ALJ and remanded the matter for entry of a final order dismissing the Administrative Complaint and finding the respondent in the underlying proceeding not guilty of the allegations, consistent with the Recommended Order. The appellate court also granted the motion for attorney's fees, pursuant to Subsection 120.595(5), and remanded the case to DOAH to determine the amount of fees. The instant proceeding ensued. Respondent does not contest the reasonableness of costs in the amount of $3,484.95. Petitioner seeks an award of costs in the amount of $3,954.95. Petitioner is entitled to costs in the amount of $3,484.95. Petitioner seeks attorney's fees for the underlying proceeding and the appellate proceeding in the amount of $94,104.45, plus interest. The amount of fees is based on 360.6 hours at an hourly rate of $250.00. Respondent claims the correct amount of attorney's fees is $22,680.00. The amount of fees is based on 252 hours at an hourly rate of $90.00. An hourly rate of $90.00 is reasonable. The $90.00- rate is the rate established in the fee agreement reached between Petitioner and her attorney. Judicial decisions discussed in the Conclusions of Law hold that in no case should the court-awarded fee exceed the fee agreement reached by the attorney and her client. The number of hours reasonably expended is 283.15 hours. The hours claimed by Petitioner in the amount of 360.6 should be reduced by 62.8 hours based on credible and persuasive testimony of Respondent's expert. The subtotal of 297.8 hours includes 34.9 hours billed, from June 6 through July 5, 2005, to prepare the PRO in the underlying proceeding. The total time billed for preparing the PRO includes 19.2 hours for what is labeled, in part, as research undertaken to prepare the PRO. The 2.7 hours for research pertaining to penalties, bearing an entry date of June 27, 2005, is reasonable because the research is reflected in the PRO. The remaining legal research undertaken to prepare the PRO is not reflected in the PRO. The amount billed for preparation of the PRO is reduced from 34.9 hours to 20.25 hours, a reduction of 14.65 hours. The Conclusions of Law in the PRO consist of 33 paragraphs numbered 17 through 49. Apart from administrative proceedings pertaining to penalties, the 33 paragraphs cite three appellate decisions, one of which may be fairly characterized as a "boiler-plate" citation for the burden of proof. The remainder of the 33 paragraphs consists of naked argument. A principal purpose of a PRO is to inform the ALJ of relevant judicial decisions, to distinguish between supporting and contradicting decisions, and to explain why, in the context of the facts at issue, the supporting decisions seize the day for the client. That is the proper role of an attorney in the adversarial process at the trial level. The PRO does not reflect that effort.3 Economic reality is not lost on the fact-finder. It may be that the fee-sensitivity of a client in a particular case precludes an attorney from fully researching and discussing a relevant legal issue. In the instant case, however, the attorney billed 34.9 hours for a PRO with two citations to appellate decisions beyond the burden of proof. Novel and difficult questions of fact and law were present in the underlying proceeding. The factual issues involved a so-called trial by deposition in a penal proceeding. The legal issues involved a literal conflict between a so-called adopted rule and a statute in a 120.57 proceeding. However, the PRO filed in the underlying proceeding provided no legal research concerning either novel question. Judicial decisions discussed in the Conclusions of Law hold that reasonable attorney's fees are determined by multiplying the number of hours reasonably expended by a reasonable hourly rate. The mathematical product is the lodestar. The lodestar in this proceeding is $25,483.50, determined by multiplying 283.15 hours by an hourly rate of $90.00. The lodestar is not increased or decreased by the results obtained or risk factor. There is no evidence of a "risk factor" attributable to contingency or other factors. There is no increase for the results obtained. Although the results were favorable, the favorable results turned principally on issues of fact and law for which relevant judicial decisions exist and were found through independent research by the ALJ without any assistance from legal research evidenced in the PRO.
Conclusions For Petitioner: Anthony D. Demma, Esquire Meyer and Brooks, P.A. Post Office Box 1547 Tallahassee, Florida 32302 For Respondent: Todd Resavage, Esquire Brooks, LeBoef, Bennett, Foster & Gwartney, P.A. 909 East Park Avenue Tallahassee, Florida 32301
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review pursuant to Section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing the original Notice of Appeal with the agency clerk of the Division of Administrative Hearings and a copy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or with the District Court of Appeal in the Appellate District where the party resides. The notice of appeal must be filed within 30 days of rendition of the order to be reviewed.
The Issue The issue presented in this case is whether the Respondent Department of Transportation's proposed award of District Contract Nos. E6548 and E6551 to the Intervenor, Florida Sweeping, Inc. ("Florida Sweeping,") should be upheld.
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: In the spring of 1993, FDOT's District Six office solicited bids for district contracts E6548 and E6551 (the "Contracts"). The Contracts call for the mechanical sweeping of certain segments of Interstate 95 in District Six. At a mandatory pre-bid conference, the bidders for the Contracts were provided with a packet which included a Notice to Contractors and Standard Specifications. The Notice to Contractors sets forth the procedures for submitting and opening the bids. The Standard Specifications are the same for all district construction and maintenance contracts. An addendum to the Standard Specifications (the "Special Provisions") was included in the bid package for all sweeping contracts. The Notice to Contractors for both of the Contracts required bidders to "provide with [their] bid, a copy of [their] occupational license issued in [the] company's name by the State of Florida." The Notice also provided that a [C]ontractor must possess a minimum of two [2] years' [sic] experience in providing the services specified. As proof, letters of reference must be included with the bid package indicating the contact person and the phone number of which [sic] the company has performed similar services in a satisfactorily [sic] manner. A contractor's bid may be rejected [emphasis in the original] if the reference letter(s) is not included in the bid package and/or does not specify that the contractor has the minimum experience required. The Special Provisions which were an addendum to the Standard Specifications included the following provision: M110-31-5 Equipment The Contractor must have proof of ownership, or a signed lease for the duration of the contract for equipment suitable for meeting the requirements of this contract. A list of equipment to be used must be enclosed with the Contractor's bid. Where new equipment will be purchased, the Contractor shall provide a signed quotation from an equipment dealer, with a guaranteed delivery date, in order to insure that work can begin on time . . . . On May 18, 1993, prior to the bid opening, the president of CSI contacted the FDOT personnel responsible for the bidding to inquire regarding the letters of reference. The president of CSI was told that anything that was a requirement of the bid package should be complied with. As a result, the president of CSI contacted the FDOT representatives that he had worked with in the past and obtained letters of reference. The reference letters from FDOT were submitted by CSI as part its bid proposals. The bids for the Contracts were opened on May 20, 1993 in Fort Lauderdale, Florida. Bids were received on each contract from at least three bidders including CSI and Florida Sweeping, Inc. The submitted bids were reviewed by the District Six Contractual Services Office. The bids submitted by Florida Sweeping were the lowest for each of the two contracts. At issue in this case is Florida Sweeping's bid for Contract No. E6548 which was $116,178.33. Its bid for Contract No. E6551 was $126,975.81. CSI's bids for the Contracts were $124,073.95 and $143,746.20, respectively. There were several other sweeping contracts that were bid at the same time as the contracts at issue in this proceeding. On one of those other contracts, Contract E6550, CSI and Florida Sweeping submitted the exact same bid. The bid proposals submitted by Florida Sweeping failed to include letters of reference and copies of the applicable occupational licenses. CSI's proposals included these items. The evidence established that Florida Sweeping had successfully completed similar contracts for FDOT in the past and, therefore, FDOT was familiar with Florida Sweeping's work and knew that it had the necessary experience and equipment to perform the work required by the contracts. While it is not clear whether Florida Sweeping currently has the occupational licenses required to perform the work under the contracts, the evidence established that the licenses can be obtained simply by applying and paying for them. The cost to obtain the licenses necessary to complete the work on these Contracts would not cost in excess of $178.00. Petitioner contends that Florida Sweeping's bid proposals also failed to include an equipment list. However, the evidence established that such a list was included in the proposals submitted by Florida Sweeping. Florida Sweeping's proposals also included a list of current and previous contracts completed by the company for FDOT. Florida Sweeping has obtained letters of reference from FDOT in the past and could have obtained such letters for the Contracts at issue in this case. Section 2.1 of the General Specifications in the bid package provides as follows: The Department will consider award of the contract to the lowest responsive and responsible bid which complies with all the requirements set forth in these specifications, and respective contract documents, and advertisement of bid. The Department reserves the right to award the work as determined to be in the best interest of the Department. The Department reserves the right to reject any or all bids or any single items of the bid, or waive any minor irregularity or technicality in proposals received. In reviewing the bid proposals submitted, FDOT deemed Florida Sweeping's failure to include occupational licenses and letters of reference to be minor technicalities that could be waived in evaluating the responsiveness of the bids pursuant to Section 2.1 of the General Specifications cited above. This decision was consistent with prior agency determinations to waive the failure to include these documents in awarding similar contracts in the past. It does not appear that Florida Sweeping has obtained any competitive advantage as a result of its failure to include occupational licenses and letters of reference in its bid proposals. With respect to Contract E6550, FDOT decided to award that contract to CSI even though Florida Sweeping submitted a bid for an identical contract amount. FDOT's decision was based in part upon FDOT's conclusion that Florida Sweeping's proposal was not complete due to the failure to include an occupational license and letters of reference. FDOT's decision to award that contract to the more complete of two equal bidders does not mandate the award of the Contracts at issue in this case to CSI when the bid amounts were not equal. The failure to include an occupational license and letters of reference rendered Florida Sweeping's bid proposals incomplete, but not necessarily nonresponsive. FDOT had the right under the bid documents to waive these minor omissions in order to receive a lower contract price. In the fall of 1991, the predecessor of CSI was the low bidder for two FDOT sweeping contracts in this district. Another bidder protested the award of those contracts on the grounds that the proposals submitted by CSI's predecessor were nonresponsive due to the failure to include proof of the ability to acquire a performance and payment bond. A hearing was conducted by the undersigned hearing officer on January 16, 1992 and, in a Recommended Order issued on March 24, 1992, the undersigned Hearing Officer recommended that the proposals submitted by CSI's predecessor be rejected as nonresponsive. The result reached in that case is not contrary to the result reached herein because the bid documents in that earlier case required proof that the bidder could acquire a performance and payment bond upon award of the contract. Such proof was not provided. The failure to include that proof did not qualify as a technical omission.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding the bids submitted by Florida Sweeping to be responsive and dismissing the challenges filed by Certified Sweeping. DONE and ENTERED this 29th day of September 1993, at Tallahassee, Florida. J. STEPHEN MENTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of September 1993.
The Issue Is the practice of the Respondent, Agency for Health Care Administration (Agency), to decline Medicaid-funded compensation for emergency medical services provided to undocumented aliens once the patients have reached a point of stabilization an unpromulgated rule? The Petitioners' Proposed Final Order identifies the Agency's use of limited InterQual criteria to determine medical necessity as an issue in this proceeding. But the Petition for Determination of Invalidity of Non-Rule Policy does not raise this issue. Neither party's pre-hearing statement identifies it as an issue. Consequently, this Order does not consider or determine whether the Agency's limitation on the use of InterQual criteria is an "unpromulgated rule."
Findings Of Fact Proceedings Before the Division of Administrative Hearings and the First District Court of Appeal In the beginning this was an action by the Hospitals aimed at stopping Agency efforts to recoup reimbursement of Medicaid payments to the Hospitals for emergency services provided to undocumented aliens once the patients have reached a point of “stabilization.” The issue of whether the Agency could apply the “stabilization” standard to the Hospital claims for Medicaid payment for services provided indigent aliens recurred in Agency claims against hospitals throughout the state to recoup Medicaid payments. Hospitals challenged Agency claims in individual proceedings under section 120.569, which the Agency referred to the Division for disputed fact hearings. Duane Morris, LLP (Duane Morris), led by Joanne Erde, represented the hospitals in the individual proceedings. The Hospitals collectively engaged Duane Morris to represent them in this proceeding challenging the Agency’s stabilization standard as an unpromulgated rule. Joanne B. Erde, Donna Stinson, and Harry Silver were the Hospital’s lawyers in this proceeding. Ms. Erde is an experienced lawyer who has focused her practice in health care. Ms. Stinson is an experienced lawyer who concentrated her practice in health care and administrative law litigation before the Division. The Agency does not question their expertise. Mr. Silver is an experienced lawyer with no Florida administrative law experience. His role in the case was minimal. Depositions taken in one of the individual reimbursement cases were significant evidence in this proceeding. Those depositions make it clear that the Hospitals’ counsel was tuned into the unpromulgated rule issue and using discovery in that case to gather and identify the evidence that they would need in this case. Representation of the Hospitals in individual reimbursement actions provided Hospitals’ counsel the advantage of preparing with level of detail before filing the petition. The engagement letters recognize this stating: “We have an understanding of the facts underlying this matter and have substantial knowledge concerning the law governing the issues in this case.” This well-developed understanding of the facts should have minimized the need for discovery and preparation in this proceeding. Counsel were well positioned to prosecute this matter efficiently. Likewise, counsel’s “substantial knowledge concerning the law governing the issues in this case” should have minimized the need for time spent in research. This is not what happened. The pre-existing representation in the reimbursement cases provided another obvious and significant benefit to the Hospitals and their counsel. Since counsel represented the individual hospital in the separate reimbursement matters, the Hospitals could band together to jointly finance one case that would resolve the troublesome point of “stabilization” issue more consistently and more cheaply than if they litigated it in each and every case. As the basically identical engagement agreements between each hospital and counsel state: “Because many hospitals’ interests in [sic] are similar or identical as it relates to the Alien Issue and in order to keep legal costs to a minimum, each of the participants in the [hospital] Group will [sic] have agreed that it wishes this firm to represent them in a Group.” Because of counsel’s pre-existing relationships with the Hospitals, litigating this matter should have continued or enhanced the client relationships. The time required for this matter could not result in lost business opportunities. In fact, by consolidating the issues common to all the clients and their cases, counsel freed up time to work on other matters. Presentation of the issue for resolution in a single case also saved the Hospitals the greater cost of disputing the issue in each case where the Agency sought reimbursement. The Hospitals and counsel dealt with the only possible downside of the representation by including disclosures about joint representation and a waiver of conflict claims in the engagement letters. This was not a contingent fee case. The agreement provided for monthly billing and payment from counsel’s trust account. Each group member made an initial payment of $10,000 to the trust account. Any time the trust account balance dipped below $15,000, each group member agreed to contribute another $10,000 to the trust account. For counsel, this representation was about as risk free as a legal engagement can be. The Hospitals and their counsel knew from the outset that they would have to prove their reasonableness of their fees and costs if they prevailed and wanted to recover fees. The Petition for Determination of Invalidity of Non-Rule Policy seeks an award of fees and costs. They could have adjusted their billing practices to provide more detail in preparation for a fees dispute. An "unpromulgated rule challenge" presents a narrow and limited issue. That issue is whether an agency has by declaration or action established a statement of general applicability that is a "rule," as defined in section 120.52(16), without going through the required public rulemaking process required by section 120.54. The validity of the agency's statement is not an issue decided in an "unpromulgated rule challenge." Courts have articulated the legal standards for unpromulgated rule challenges frequently. See, e.g., Coventry First, LLC v. Off. of Ins. Reg., 38 So. 3d 200, 203 (Fla. 1st DCA 2010); Dep’t of Rev. v. Vanjaria Enters., 675 So. 2d 252 (Fla. 5th DCA 1996); and the cases those opinions cite. The facts proving the “stabilization” standard were easy to establish. Many Agency documents stated the shift to the “stabilization” standard. Documents of Agency contractors did also. Two examples of how clear it was that the Agency was applying a new standard were the Agency’s statements in its 2009-2010 and 2010-2011 reports to the Governor on efforts to control Medicaid fraud and abuse. The reports describe the “stabilization” standard as “more stringent” and certain to recover millions of dollars for the Agency. As the Agency’s reports to the Governor indicate, the stakes were high in this matter. For the Hospitals and other hospitals collectively affected by the Agency’s effort to recoup past payments by applying the “stabilization” standard, $400,000,000 was at stake. This matter did not present complex or difficult issues, legally or factually. The Order of Pre-Hearing Instructions requiring parties to disclose documents and witnesses and update the disclosures alleviated the discovery demands present in other litigation. The Agency’s failure to fully comply with the pre- hearing instructions and unfounded Motion in Limine added some additional time demands for the Hospital’s counsel. Nonetheless the issues were narrow, and the facts were essentially undisputed, if not undisputable. This matter did not require extraordinary amounts of time for discovery or preparation. Ordinarily challenges to rules or unpromulgated rules impose time pressures on the attorneys because of the requirement in section 120.56 that the hearing commence within 30 days of assignment to the Administrative Law Judge. The time constraint was not a factor in this case. The Hospitals requested waiver of the time requirement to permit more time for discovery. The Agency agreed, and the undersigned granted the request. Thus the Hospitals had the time their counsel said they needed to prepare for the hearing. The appeal imposed no time constraints. Both parties received extensions of time for their filings. Seventeen months passed between filing the notice of appeal and oral argument. Time for the Administrative Proceeding The total number of hours claimed for the services of the three lawyers, their claimed hourly rate, and the total fees claimed appear below. Joanne B. Erde 458.20 hours $550.00 rate $252,010.00 Donna Stinson 136.20 hours $455.00 rate $61,971.00 Harry Silver 93.40 hours $550.00 rate $51,370.00 Total 687.80 hours $365,351.00 The Hospitals’ counsel’s billing records are voluminous. For the proceeding before the Division, the Hospitals’ counsel’s invoices list 180 billing entries for the work of three lawyers. A substantial number of the entries are block billing. In block billing, all of a lawyer’s activities for a period of time, usually a day, are clumped together with one time total for the entire day’s service. It is an acceptable form of billing. But block billing presents difficulties determining the reasonableness of fees because a single block of time accounts for several different activities and the invoice does not establish which activity took how much time. Here are representative examples of the block billing entries from the Division level invoices: August 20, 2012 (Erde) – Conference call with ALJ; telephone conference with AHCA attorney; telephone conference with newspaper reporters – 2.0 hours September 16, 2012 (Erde) – Review depositions; prepare opening remarks; develop impeachment testimony – 5.50 September 27, 2012 (Erde) – Intra-office conference; finalize interrogatories; work on direct – 8.50 October 2, 2012 (Stinson) – Review and revise Motion in Limine; Telephone conferences with Joanne Erde and Harry Silver; review emails regarding discovery issues - `2.60 October 19, 2012 (Erde) – Intra-office conference to discuss proposed order; Research Re: other OIG audits; research on validity of agency rules – 2.10 hours November 9, 2012 (Erde) – Conference with ALJ; Intra-Office conference to discuss status; further drafting of proposed order – 7.70 hours. November 19, 2012 (Stinson) – Final Review and Revisions to Proposed Final order; Telephone conferences with Joanne Erde to Review final Changes and comments; Review AHCA’s proposed order and revised proposed order – 3.20 hours. Many of the entries, block or individual, do not provide sufficient detail to judge the reasonableness of the time reported. “Prepare for deposition and hearing,” “review depositions,” “review new documents,” “review draft documents,” “intra-office conference” and “attention to discovery” are recurrent examples. Senior lawyers with more expertise and higher billing rates are expected to be more efficient. This, the fact that the matter was not complicated, the relative simplicity of the issue, and the fact that the Hospitals’ counsel already had a great deal of familiarity with the facts and law involved, all require reducing the number of hours compensated in order for them to be reasonable. For this matter, in these circumstances, the claimed number of hours is quite high. The claimed 687.80 hours amounts to working eight hours a day for 86 days, two of which were the hearing. This is not reasonable. A reasonable number of hours for the proceedings before the Division is 180. That is the equivalent of 22.5 eight-hour days. That is sufficient to handle the matter before the Division from start to finish. The number includes consideration of the worked caused by the needless difficulties presented by the Agency in discovery and with its Motion in Limine. Time for the Appellate Proceeding The fees that the Hospitals seek for the appeal are broken down by hours and rates as follows: Joanne B. Erde 255.10 hours $560.00 $142,856.00 Joanne B. Erde 202.80 hours $580.00 $117,624.00 Donna Stinson 88.50 hours $460.00 $40,710.00 Donna Stinson 67.10 hours $500.00 $33,550.00 W.D. Zaffuto 48.30 hours $435.00 $21,010.50 Rob Peccola 10.90 hours $275.00 $2,997.50 Rob Peccola 17.50 hours $300.00 $5,250.00 L. Rodriguez- Taseff 6.20 hours $520.00 $3,224.00 L. Rodriguez- Taseff 19.50 hours $545.00 $10,627.50 Rachel Pontikes 38.20 hours $515.00 $19,673.00 Total 754.10 hours $397,522.50 For the appellate proceeding, the invoices present 341 entries, a substantial number of which are block billing for work by six lawyers. Here are representative examples from the appellate level invoices: May 16, 2013 (Erde) – Reviewed AHCA’s initial brief; intra- office conference to discuss; preliminary review of record – 2.90 May 24, 2013 (Erde) – Intra-office conference to discuss response to brief; preparation to respond to brief – 2.50 May 30, 2013 (Erde) – Attention to Appeal issues; finalize request for extension; brief research re jurisdictional issues – 1.60 June 18, 2013 (Peccola) – Strategy with J. Erde regarding research needs; review/analyze case law cited in answer brief; conduct legal research regarding documentary evidence and exhibits on appellate review; write email memo to J. Erde regarding same – 2.00 July 19, 2013 (Zaffuto) – Revise/draft Answer Brief; discuss extension of time with H. Gurland; research appellate rules regarding extension of time and staying proceedings pending ruling on motion; review appendix to answer brief; instructions to assistant regarding edits and filing of answer brief and appendix prepare answer brief for filing; call to clerk regarding extension of time review initial brief by AHCA and final order by ALJ – 5.50 August 14, 2013 (Erde) – Intra-office conference to discuss brief; further revised brief – 5.80 August 15, 2013 (Stinson) Reviewed appellees' answer brief; discussed language in answer brief with Joanne Erde – 2.50 October 9, 2013 (Stinson) – Review draft motion to relinquish regarding admission of exhibit; exchange e-mails with Joanne Erde; telephone conference with Joanne Erde – 1.60 October 10, 2013 (Erde) – Attention to new motion re relinquishing jurisdiction; review of revisions; further revisions – 6.00 October 30, 2013 (Erde) – Research re: AHCA’s current behavior; intra-office conference to discuss status of action at DOAH - .70 November 7, 2013 (Peccola) – Strategy with J. Erde regarding Appellees’ response in opposition to Appellant’s motion for supplemental briefing; conduct research regarding same; draft same; look up 1st DCA local rule on appellate motions and email same to J. Erde – 3.60 December 5, 2013 (Erde) – Research Re: supplemental briefing issues; research to find old emails from AHCA re: inability to produce witnesses -.90 January 21, 2014 (Rodriguez-Taseff) – Working on Supplemental Answer Brief – legal argument re authentication and cases distinguishing marchines [sic]; editing facts – 6.70 February 3, 2014 (Erde) – Review and revise response to motion for further briefing; intra-office conference to discuss same – 2.20 May 2, 2014 (Pontikes) – Continue to review relevant case law regarding the definition of an unpromulgated rule; continue to analyze the briefs and the arguments; continue to draft an outline of the argument discussed – 5.00 June 5, 2014 (Erde) – draft email to group regarding AHCA’s settlement offer; reviewed supplemental settlement offer from AHCA; draft email to group re same – 1.70 June 11, 2014 (Erde) – Attention to finalizing response to AHCA’s notice of dismissal and filing of fee petition; memo to members of group – 8.00 July 21, 2014 (Erde) – completed motion for rehearing re: fees as sanctions; drafted status report for DOAH regarding status of DCA opinion; drafted status report in companion case; emails with AHCA re: withdrawing pending audits – 6.90 July 21, 2014 (Peccola) – Strategy with D. Stinson and J. Erde regarding motion for rehearing; revise/edit same; review/revise edit notices in trial court 1.20. The descriptive entries in the invoices for the appellate representation also lack sufficient detail. Examples are: “begin preparation to respond to AHCA”s brief,” “attention to appeal issues,” “preparation to draft answer brief,” and “research and draft answer brief.” For the appellate proceedings, Duane Morris added four lawyers, none with experience in Florida administrative or appellate matters. W.D. Zaffuto, L. Rodriguez-Taseff, and Rachel Pontikes are senior level lawyers in Duane Morris offices outside of Florida. Rob Peccola is a junior level lawyer from a Duane Morris office outside of Florida. The apparent result is those lawyers spending more time on issues than the more experienced Ms. Erde and Ms. Stinson would. One example of this is a July 19, 2013, billing entry where a lawyer spent time researching “appellate rules regarding extension of time and staying proceedings pending ruling on motion.” The two lawyers primarily responsible for this matter, both laying claim to Florida appellate expertise, would only need to quickly check the Florida Rules of Appellate Procedure to confirm their recollection of the rules, something that would probably take less time than it took to make the time entry and review the draft bill. Hospitals’ also filed a puzzling motion that presents a discreet example of needless attorney time billed in this matter. The Hospitals expended 21.8 hours on a Motion for Rehearing of the court’s order awarding them fees and costs. The court’s opinion and the Final Order stated that fees and costs were awarded under section 120.595(4)(a), Florida Statutes. Yet the Hospitals’ motion fretted that fees might be assessed under section 120.595(4)(b), which caps fees at $50,000. The court denied the motion. Two things stand out when reviewing the invoices for the appellate proceeding. The first is that the appeal took more hours than the trial proceeding. A trial proceeding is generally more time-consuming because of discovery, a hearing much longer than an oral argument, witness preparation, document review, and preparing a proposed order. The second is the sheer number of hours. Hospitals’ counsel seeks payment for 754.10 hours in the appellate proceeding. This is 66.3 more than for the Division proceeding. It included a two day hearing, trial preparation, research, and preparing a 37 page proposed final order. In eight-hour days the claimed hours amount to a staggering 94.26 days. That amounts to one lawyer working on the appeal for eight hours a day for three months. Of this time, 613.5 hours were spent by Ms. Erde and Ms. Stinson, lawyers with expertise in the subject area, who had prepared the case for hearing, who participated in the hearing, who closely reviewed the entire record for preparation of their proposed final order, who researched the issues before the hearing and for the proposed final order, and who wrote the proposed final order. With all this knowledge and experience with the record and the law, handling the appeal should have taken less time than the proceeding before the Division.2/ One factor supports the appellate proceeding taking as many hours, or a few more hours, than the administrative proceeding. It is the Agency’s disputatious conduct over a scrivener’s error in the Final Order which erroneously stated that the Agency’s Exhibit 1 had been admitted. The Agency’s conduct increased the time needed to represent the Hospitals in the appeal. The Agency relied upon the exhibit in its initial brief, although it twice cited page 359 of the transcript where the objection to the exhibit was sustained. Also the Agency’s and the Hospitals’ proposed final orders correctly stated that Agency Exhibit 1 had not been admitted. The Hospitals’ Answer Brief noted that Agency Exhibit 1 had not been admitted. The transcript of the final hearing and both parties’ proposed final orders were clear that the exhibit had not been admitted. Yet the Agency argued in its Reply Brief that it had been. This required the Hospitals to move to remand the case for correction of the error. The Agency opposed the motion. The court granted the motion. The Final Order was corrected and jurisdiction relinquished back to the court. The Agency used this as an opportunity to trigger a new round of briefing about whether Exhibit 1 should have been admitted. This has been considered in determining the reasonable number of hours for handling the appeal. A reasonable number of hours for handling the appeal is 225. Converted to eight-hour days, this would be 28.13 days. For the appeal, Duane Morris attributes 28.4 hours of the work to a junior lawyer. This is 3.8 percent of the total time claimed. Applying that percentage to 225 hours, results in 8.6 hours attributed to the junior lawyer with the remaining 216.45 hours attributed to senior lawyers. Attorneys and Fees Each party presented expert testimony on the issues of reasonable hours and reasonable fees. The Agency presented the testimony of M. Christopher Bryant, Esquire. The Hospitals presented the testimony of David Ashburn, Esquire. As is so often the case with warring experts, the testimony of the witnesses conflicts dramatically. Mr. Bryant opined that a reasonable rate for senior lawyers, such as Ms. Erde and Ms. Stinson, ranged between $350 and $450 per hour. The reasonable rate for junior lawyers was $200 per hour. Mr. Ashburn opined that the reasonable hourly rate for senior lawyers ranged between $595 and $700 and the reasonable rate for junior lawyers was between $275 and $300. The contrast was the same for the opinions on the reasonable number of hours needed to handle the two stages of this litigation. Mr. Bryant testified that the administrative proceeding should have taken 150 to 170 hours and that the appeal should have taken 175 to 195 hours. Mr. Ashburn testified that the Hospitals’ claimed 687 hours for the proceeding before the Division and 754.10 hour for the appellate proceeding were reasonable. The Hospitals argue that somehow practicing in a large national law firm, like Duane Morris justifies a higher rate. The theory is unpersuasive. A national law firm is nothing special. There is no convincing, credible evidence to support a conclusion that lawyers from a national firm in comparison to smaller state or local firms provide better representation or more skilled and efficient lawyering that justifies a higher rate. Based upon the evidence presented in this record, a reasonable rate for the senior lawyers participating in this matter is $425 per hour. A reasonable rate for the junior lawyer participating in this matter is $200.00. Fee Amounts A reasonable fee amount for representation in the proceeding before the Division of Administrative Hearings is $76,500. A reasonable fee amount for the proceeding before the First District Court of Appeal is $93,701.25. Costs Hospitals seek $6,333.63 in costs. The evidence proves these costs are reasonable. The Agency does not dispute them.
The Issue Did the Florida Real Estate Commission (the Commission) engage in an invalid exercise of delegated legislative authority when promulgating proposed rule 61J2-10.039 (the proposed rule)? See Section 120.52(8), Florida Statutes.
Findings Of Fact A substantial number of the Association's members would be substantially affected by the proposed rule because property management is a fundamental business activity performed by the Association's members. As a percentage, 14.9 percent of the Association's members, in an in-house survey, responded that property management is one of their top three functions. The proposed rule substantially affects a substantial number of the Association's members because it would have a direct and immediate effect on the Association's members' right to earn a living in property management. The subject matter of the proposed rule is within the Association's general scope of interest and activity because of the Association's stated purpose "to serve the Realtor community by providing, promoting and delivering programs, products and services that will enhance members' skills and ability to operate their business profitably and ethically; to advance the real estate industry; and to preserve and extend the right to own, use, and transfer real property." The Association directed its rules challenge to the proposed rule which was noticed by publication in the Florida Administrative Weekly at Volume 24, Number 46, November 13, 1998. As announced in the published notice, the specific statements of authority for promulgating the proposed rule were Sections 475.05 and 475.25(1)(k), Florida Statutes. The notice referred to the law implemented by the proposed rule as Sections 455.224 and 475.25(1)(k), Florida Statutes. As noticed in the Florida Administrative Weekly, the purpose and effect of the proposed rule was as follows: The purpose and effect of the new rule is to require disclosure by a real estate broker to a landlord and tenant if the funds being delivered to the broker are to be held by a business entity or firm that is not a registered real estate broker. The disclosure would not apply to funds being held by an attorney or a title insurance company. In addition, the disclosure applies only to residential real property. The disclosure will then enable the landlord and tenant to make an informed choice about where the funds are being held in the event the funds are to be maintained by an unregulated entity. The notice in the Florida Administrative Weekly summarized the proposed rule as follows: Rule 61J2-10.039 will be a new rule. The rule will require disclosure in the event residential rental funds are to be maintained by an entity not registered as a real estate broker. The disclosure requirement would not apply if the funds are to be held by an attorney or title insurance company. The "summary of statement of estimated regulatory cost" as noticed in the Florida Administrative Weekly referred to costs as "none." That reference was followed by the following instruction: "Any person who wishes to provide information regarding the statement of estimated regulatory costs, or to provide a proposal for a lower cost singular regulatory alternative must do so in writing within 21 days of this notice." As noticed in the Florida Administrative Weekly, the full text of the proposed rule is: 61J2-10.039 Property Management Disclosure. A broker, when entrusted with funds in connection with the rental of residential real property, who is directed by the terms of a written agreement or document or by oral instructions of the parties to deposit the funds in an account maintained by a business entity or firm not registered or licensed with the Commission as a real estate broker shall inform the parties in writing of the following: that the business entity or firm is not registered or licensed with the Commission as a real estate broker and, therefore, is not subject to the escrow account requirements of Chapter 475, Part I, Florida Statutes, and is not within the jurisdiction of the Commission; and that the parties may choose to have the funds held only by a registered or licensed real estate broker. The disclosure requirements of paragraph (1) of this rule also apply to a licensed salesperson or broker-salesperson who is registered with the real estate broker and is involved in any aspect of the rental transaction. (3) The disclosure requirements of paragraph (1) of this rule shall not apply when the funds are to be deposited in an attorney's trust account or with a title insurance company. The text of the proposed rule as noticed in the Florida Administrative Weekly formed the basis for the challenge considered through the final hearing and the opportunity for post-hearing argument through proposed final orders by the parties. The proposed rule was offered for adoption in recognition that some real estate brokers engaged in the related activity of rental property management through the establishment of management companies that are separate from the brokerage activities. In particular, the Commission discovered that following brokerage activity in association with the rental of real property, through a licensed real estate company, by signing contracts between the affected parties, monies collected are placed with the management companies for future administration by those companies. The management companies are not licensed by the Commission and are outside the Commission's jurisdiction. As a consequence of the placement of the monies collected with the management company and not the brokerage firm, when the Commission's auditors went to brokers offices to audit trust accounts involved with rental property, the brokers would refuse to allow audits to be performed. The basis of refusal was premised upon the transfer of the money to the management company from the real estate brokerage company, outside the Commission's jurisdiction. In association with this practice, the Commission has received consumer complaints in which it was revealed that the consumers were unaware that they were dealing with two separate firms in the transactions related to the rental properties, the one firm being the brokerage firm and the other the management company. This transpired in a setting in which the consumers were not aware that the funds deposited were being held in the unregulated management company account. The realization of these developments led the Commission to propose the subject rule for adoption, with the expectation that consumers would be able to make an informed choice concerning the placement of the monies collected in relation to the rental properties. As proven by the Commission, audits by its investigators of the records of realtors would not increase the amount of time necessary to perform the audit function if the proposed rule was imposed on the regulated community. Instead, the time necessary to perform the audit function would be diminished. Following the presentation of the Commission's case, the Association failed to refute this proof concerning the costs to the Commission to enforce the terms of the proposed rule or to offer proof concerning costs to members of the Association to comply with the proposed rule.
Findings Of Fact The Findings of Fact set forth in the Final Order entered in DOAH Case Nos. 15-7010 through 15-7016 and 15-7022 are hereby adopted in this Final Order. The PFO is hereby adopted and incorporated in this Final Order as though set forth in full. During the course of the rulemaking proceedings regarding “designated player” card games, Petitioners submitted a good-faith proposal for a lower cost regulatory alternative (LCRA) indicating that the proposed rules would have a significant monetary impact on Petitioners, which required Respondent to prepare a statement of estimated regulatory costs (SERC) pursuant to sections 120.54(3)(b) and 120.541, Florida Statutes. Respondent did not prepare a SERC. That failure was determined to be a material failure to follow applicable rulemaking procedures and became a basis for the invalidation of the proposed rules.
The Issue Whether the Petitioner is entitled to an award for attorney's fees for litigating the attorney's fees issue where the appellate court has determined the Petitioner is entitled to attorney's fees and costs under the provisions of Section 120.57(1)(b)10., Florida Statutes. Whether the Petitioner is entitled to a multiplier enhancement to the lodestar in an award of attorney's fees and costs under Section 120.57(1)(b)10., Florida Statutes.
Findings Of Fact In March, 1989, the Respondent, Department of Health and Rehabilitative Services sought bids for 17,500 square feet of office space in central Orlando, for a period of seven years beginning in December, 1989, with two three-year option extensions. Petitioner and two others submitted bids. After committee review, the bid was awarded to another bidder on or about June 26, 1989. Petitioner timely filed his informal and formal bid protests, and the matter was heard at length before the Division of Administrative Hearings in August, 1989. The Hearing Officer found that Petitioner had sustained the burden of proof and demonstrated that the Department had acted arbitrarily and capriciously in the bid process, and recommended that the lease be re-bid. The Secretary for the Department adopted the Recommended Order but also added an additional condition that the lease be re-bid only if necessary. Petitioner appealed to the Fifth District Court of Appeal which sustained the position of the Petitioner and, although disputed by the Department, granted attorney's fees and costs for all stages of the proceedings. This matter was remanded to the Department for re-bidding and to the Division for the determination of the amount of fees and costs to be awarded. Courtenay v. Department of Health and Rehabilitative Services, 581 So.2d 621 (Fla. 5th DCA 1991). The Law Office of Terrence William Ackert represented Petitioner through all stages of the administrative bid protest and appeal pertaining to the Invitation to Bid for 17,500 square feet of professional office space in the central Orlando, Florida area. Petitioner, a long time client of counsel of record, agreed to pay counsel at the rate of one hundred twenty-five Dollars, and later at one hundred thirty-five Dollars, per hour and for legal assistant charges ranging from twenty-five Dollars an hour to sixty Dollars an hour, and for costs. The Petition for Costs and Attorneys' Fees was timely filed on July 19, 1991. The parties were unable to reach a stipulation regarding the amount of reasonable attorney's fees to be awarded. A fair and reasonable fee for attorney and legal assistant time is as follows: For the period: 6/27/89-2/27/90 Trial attorney time...141.9hrs at $125.00hr =$17,737.50 Legal assistant time...66.0hrs at $45/50hr = $2,990.00 Total. $20,736.50 For the period: 2/27/90-6/30/91 Post-hearing appellate attorney time...92.4hrs at $125.00 =$11,550.00 Post-hearing appellate attorney time...50.6hrs at $135.00 = $6,871.50 Total. $18,421.50 Post-hearing appellate time for various legal assistants at $25/35/50/60hr. =$4,980 Total. $23,401.50 For the period: 7/1/91-to present Post-remand attorney time...48.2hrs at $135.00 = $6,489 Post-remand legal assistant time...50.1hrs at $25/35/60hr =$2,013.00 Total. $8,502 Costs expended for hearing, appeal and remand hearing Total. $8,548.10 Total due for reasonable attorneys' fee and costs. $61,188.10 During the administrative appeal, the Respondent vacated space previously leased from Petitioner and the consequent loss of income rendered Petitioner unable to make payments to counsel. Total payments to counsel of record have been limited to $5,785. Petitioner remains liable for all fees and costs, and has been billed regularly for the total due and owing. Challenge of a proposed award of bid by an agency is complicated, difficult and time consuming process because the litigation is focused primarily in the administrative arena, where few attorneys are willing to accept cases of this type. In order to attain a successful result, it required considerable skill by counsel to properly perform the service. Acceptance by counsel of this matter precluded the acceptance of other litigation because of the three stage administrative process in order to secure relief for his client.
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 is whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, what penalty should be imposed.
Findings Of Fact At all times material hereto, Respondent was licensed by the State of Florida as a real estate broker, having been issued license number 0521991. Respondent's last license issued was as a broker c/o Stellings Realty, Inc., 2368 Saratoga Bay Drive, West Palm Beach, Florida. Beginning on or about March 1, 1998, until August 31, 1998, Respondent had an Exclusive Right of Sale Listing Agreement (Agreement) with Judy Cominse (Seller) for real property, owned by the Seller, located at 4397-B Woodstock Drive, West Palm Beach, Florida. Respondent represented the Seller as a transaction broker and owed her certain duties pursuant thereto. A Brokerage Relationship Disclosure statement was provided to the Seller by Respondent. Another broker, Robert Berman, was the referring agent and was personally known by the Seller. Respondent was of the opinion that Berman was to receive a referral fee of 25 per cent in the event of a sale. The listing was problematic for Respondent. Respondent encountered problems due to restrictions placed on the showing of the property by the Seller and her tenants, who were the Seller's son and daughter-in-law. Respondent contemplated not continuing with the listing. He even mentioned discontinuing the listing with the Seller, but he did not discontinue it. A contract for sale of the Seller's property was entered into by the Seller and Evelyn Swinton (Buyer Swinton). Buyer Swinton signed the contract on June 1, 1998, and the Seller signed it on June 3, 1998. The contract provided, among other things, for an escrow deposit of $1,500 to be held by Sun Title, located in Lake Worth, Florida. The $1,500 was paid and held in escrow by Sun Title. The transaction for the sale of Seller's property failed to close. By a Release and Cancellation of Contract for Sale and Purchase form (Release and Cancellation) dated July 28, 1998,1 both the Seller and Buyer Swinton agreed, among other things, that the $1,500 escrow deposit would be disbursed to the Seller. On July 30, 1998, Sun Title prepared an escrow check in the amount of $1,500, made payable solely to the Seller. The check was forwarded to Respondent sometime after July 30, 1998; the evidence presented was insufficient to show when Sun Title forwarded the check to Respondent.2 On August 6, 1998, Respondent prepared an addendum (Respondent's Addendum) to the Agreement that he had with the Seller. Respondent's Addendum was dated and signed by Respondent on this same date. Respondent's Addendum provided, among other things, the following: This contract [Agreement] will be extended from August 31, 1998 until March 1, 1999; if necessary.3 * * * Stellings Realty, Inc. will receive 7% of the total purchase price. In addition 25% commission of the listing side will be given to Berman Realty as a referral fee. If the Seller should cancel this listing the cancelation fee would be $1000.00. Judy Cominse [Seller] will receive $1500.00 by mail upon acceptance. Paragraph numbered 5 of Respondent's Addendum indicates that, upon the Seller accepting Respondent's Addendum, the Seller will receive $1,500, which was the escrow deposit, by mail. The Seller did not accept Respondent's Addendum although the Seller was of the opinion that the only way for her to obtain the $1,500 was to agree to an addendum to the contract that she had with Respondent. With the assistance of her sister, who was a licensee, licensed by Petitioner,4 the Seller negotiated a change of terms to Respondent's Addendum. The seller prepared and executed an addendum (Seller's Addendum) on August 6, 1998, and forwarded it to Respondent. The Seller's Addendum provided, among other things, the following: This listing agreement [Agreement] will be extended six months (i.e., from August 31, 1998 until February 28, 1999). * * * Stellings Realty, Inc. will receive 7% of the total selling price (if sold at full listing price), otherwise negotiable; however, no lower than 6%. Additionally, $533.75 to the listing agency (Stellings Realty), which amount will not be subject to the referral fee due and payable to Robert A. Berman Real Estate, the referring broker to the listing agency. If the seller should cancel this listing, the cancellation fee would be $788.75 ($250.00 cancellation fee, plus $533.75). Judy Cominse [Seller] will receive $1,500.00 (100% of the escrow deposit relinquished by the buyer [Buyer Swinton]) by mail upon acceptance. Paragraph 5 of Seller's Addendum indicates that, upon Respondent's accepting the Seller's Addendum, the Seller will receive $1,500, which was the escrow deposit, by mail. Respondent executed the Seller's Addendum on August 11, 1998, and faxed it to her on this same date. Respondent accepted the Seller's Addendum on August 11, 1998. Prior to August 11, 1998, Berman had contacted Respondent on behalf of the Seller. Berman was requested by the Seller to make an attempt to obtain the escrow deposit of $1,500 for her. Berman contacted Respondent who indicated to Berman that, as soon as the escrow check was received, he would contact Berman. Sometime after July 30, 1998, Berman contacted Sun Title and was informed that the escrow check had been prepared and forwarded to Respondent. On or about August 11, 1998, Respondent contacted the Seller and informed her that the escrow check had been received by him. On or about August 11, 1998, Respondent also contacted Berman regarding the receipt of the escrow check. At the request of the Seller, Berman went to Respondent's office, obtained the escrow check, and forwarded it to the Seller via express delivery. Based upon the required proof, the evidence fails to demonstrate that Respondent refused to relinquish the $1,500 escrow deposit to the Seller in order to force or pressure the Seller to agree to an addendum to their Agreement. Respondent continued to represent the Seller. The Seller's property was sold on November 3, 1998. Subsequently, Respondent sued the Seller in the County Court of West Palm Beach, Florida for $533.75, based on the Seller's Addendum. The Seller had refused to pay Respondent the $533.75, pursuant to the Seller's Addendum, and Respondent sued the Seller to recoup the monies. On or about January 4, 1999, the court suit was settled. Before the end of 1998, Respondent paid Berman the referral fee.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate enter a final order and therein dismiss the Administrative Complaint filed against Leon Stellings. DONE AND ENTERED this 31st day of July, 2000, in Tallahassee, Leon County, Florida. ERROL H. POWELL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 31st day of July, 2000.
The Issue The issue for determination is whether Intervenors are entitled to reasonable attorney fees and costs pursuant to Section 120.595, Florida Statutes (2003).1
Findings Of Fact Petitioner is an insurer and carrier within the meaning of Subsections 440.02(4) and 440.02(38), Florida Statutes (2005), and Florida Administrative Code Rule 69L-7.602(1)(w).2 Petitioner is licensed in the state as a workers' compensation insurance carrier (carrier).3 Respondent is a state agency within the meaning of Subsection 440.02(3), Florida Statutes (2005), and Florida Administrative Code Rule 69L-7.602(1)(b). In relevant part, Respondent is responsible for resolving reimbursement disputes between a carrier and a health care provider. Intervenors are health care providers within the meaning of Subsection 440.13(1)(h), Florida Statutes (2005), and Florida Administrative Code Rule 69L-7.602(1)(u). Each Intervenor is a health care facility within the meaning of Subsection 440.13(1)(g), Florida Statutes (2005). Intervenors seek an award of attorney fees and costs against Petitioner pursuant to Sections 57.105 and 120.595, Florida Statutes (2003). The proceeding involving Section 57.105, Florida Statutes (2003), is the subject of a separate Final Order entered on the same date as this Recommended Order. The scope of this Recommended Order is limited to Section 120.595, Florida Statutes (2003). Intervenors allege that Petitioner is the "non- prevailing adverse party" in an underlying proceeding and participated in the underlying proceeding for an "improper purpose" as the quoted terms are defined, respectively, in Subsections 120.595(1)(e)3. and 120.595(1)(e)1., Florida Statutes (2003). The underlying proceeding involves eight consolidated Petitions for Administrative Hearing. Petitioner filed each Petition for Administrative Hearing after Respondent determined Petitioner had improperly discounted the amount of reimbursement Petitioner paid for hospital services that Intervenors provided to eight patients from March 13, 2004, through February 11, 2005. From April 13 through May 23, 2005, Respondent issued separate orders directing Petitioner to pay the disputed amounts pursuant to Subsection 440.13(7), Florida Statutes (2005). From June 1 through June 21, 2005, Petitioner filed eight separate Petitions for Administrative Hearing. The eight petitions were subsequently consolidated into one underlying proceeding. Petitioner is the non-prevailing adverse party in the underlying proceeding. On December 8, 2005, Petitioner filed a Notice of Voluntary Dismissal in the underlying proceeding. On December 9, 2005, Intervenors filed their motion for attorney fees based on Section 120.595, Florida Statutes (2003). The formal hearing in the underlying proceeding was set for January 18, 2006. The ALJ amended the issue for the formal hearing to exclude the original reimbursement dispute and to limit the scope of the formal hearing to the fee dispute. The ALJ did so to avoid delay in the resolution of the proceeding. The fee dispute at issue in this proceeding includes only six of the original eight reimbursement disputes because Intervenors were not the medical providers in two of the original eight disputes.4 In the six reimbursement disputes involving Intervenors, Respondent ordered Petitioner to pay additional reimbursements in the aggregate amount of $54,178.52. Approximately $51,489.27 of the $54,178.52 in additional reimbursement involved inpatient hospital services provided to one patient.5 The remaining $2,689.25 in additional reimbursement involved outpatient hospital services in the emergency room.6 Subsection 440.13(12), Florida Statutes (2005), mandates that a three-member panel must determine statewide schedules for reimbursement allowances for inpatient hospital care. The statute requires hospital outpatient care to be reimbursed at 75 percent of "usual and customary" charges with certain exceptions not relevant to this proceeding. Notwithstanding the statutory mandate to schedule reimbursement rates for hospital inpatient services, the inpatient services at issue in the underlying proceeding were apparently unscheduled inpatient services. By letter dated April 13, 2005, Respondent ordered Petitioner to pay Intervenor, Holmes Regional Medical Center, Inc. (Holmes), an additional reimbursement in the amount of $51,489.27. The total reimbursement to Holmes was 75 percent of the charges that Holmes submitted to Petitioner for reimbursement.7 Respondent interprets Subsection 440.13(12), Florida Statutes (2005), to authorize reimbursement of both unscheduled inpatient hospital services and outpatient hospital services at the same rate. There is no dispute that Respondent reimburses unscheduled inpatient hospital services and outpatient hospital services at 75 percent of the "usual and customary" charges. The dispute in the underlying proceeding was over the meaning of the phrase "usual and customary" charges. Petitioner challenged the interpretation asserted by Respondent and Intervenors. Respondent and Intervenors contended that the quoted statutory phrase means Intervenors' usual and customary charges evidenced in a proprietary document identified in the record as the "charge master." Each Intervenor maintains its own charge master, and the information in each charge master is proprietary and confidential to each Intervenor. Petitioner asserted that the statutory phrase "usual and customary" charges means the usual and customary charges imposed by other hospitals in the community in which Intervenors are located. Petitioner maintains a data base that contains information sufficient to determine the usual and customary charges in each community. Petitioner did not participate in the underlying proceeding for an improper purpose within the meaning of Subsection 120.595(1)(e)1., Florida Statutes (2003). Rather, Petitioner presented a good faith claim or defense to modify or reverse the then-existing interpretation of Subsection 440.13(12), Florida Statutes (2005). Petitioner had a reasonable expectation of success. The statutory phrase "usual and customary" charges is not defined by statute. Nor has the phrase been judicially defined. Respondent bases its interpretation of the disputed phrase on two agency final orders and relevant language in the Florida Workers' Compensation Reimbursement Manual for Hospitals (2004 Second Edition) (the Manual). The Manual is developed by the Florida Department of Financial Services (DFS).8 The Manual interprets the quoted statutory phrase to mean the "hospital's charges." However, after the effective date of the Manual in 2004, DFS developed a proposed change to the Manual that, in relevant part, interprets "usual and customary" charges to mean the lesser of the charges billed by the hospital or the median charge of hospitals located within the same Medicare geographic locality.9 The trier of fact does not consider the new interpretation of the disputed statutory phrase as evidence relevant to a disputed issue of fact. As Respondent determined in an Order to Show Cause issued on February 16, 2006, and attached to Intervenors' PRO, "what constitutes 'usual and customary' charges is a question of law, not fact." The ALJ considers the new interpretation proposed by DFS for the purpose of determining the reasonableness of the interpretation asserted by Petitioner in the underlying proceeding. The ALJ also considers the new DFS interpretation to determine whether the interpretation asserted by Petitioner presented a justiciable issue of law. Intervenors assert that Petitioner's improper purpose in the underlying proceeding is evidenced, in relevant part, by Petitioner's failure to initially explain its reduced reimbursement to Intervenors with one of the codes authorized in Florida Administrative Code Rule 69L-7.602(5)(n) as an explanation of bill review (EOBR). None of the EOBR codes, however, contemplates a new interpretation of the statutory phrase "usual and customary" charges. Intervenors further assert that Petitioner's improper purpose in the underlying proceeding is evidenced, in relevant part, by Petitioner's failure to respond to discovery. However, responses to discovery would not have further elucidated Petitioner's rule-challenge. Petitioner stated eight times in each Petition for Administrative Hearing that Florida Administrative Code Rule 69L-7.501, the DFS rule incorporating the Manual by reference: [S]hould be read to allow recovery of 75% of the usual and customary fee prevailing in the community, and not 75% of whatever fee an individual provider elects to charge. Respondent and Intervenors were fully aware of the absence of statutory and judicial authority to resolve the issue. Petitioner did raise at least one factual issue in each Petition for Administrative Hearing. Petitioner alleged that Respondent's decision letters ordering Petitioner to pay additional reimbursement amounts had no legal effect because Respondent acted before each provider requested and received the carrier's reconsidered reimbursement decision. The absence of a formal hearing in the underlying proceeding foreclosed an evidential basis for a determination of whether each provider in fact requested and received a reconsidered reimbursement decision before the date Respondent ordered Petitioner to pay additional reimbursements. In this fee dispute, Petitioner presented some evidence to support the factual allegation and thereby established the presence of a justiciable issue of fact. It is not necessary for Petitioner to present enough evidence to show that Petitioner would have prevailed on that factual issue in the underlying proceeding. If the letters of determination issued by Respondent were without legal effect, Petitioner would not have waived its objections to further reimbursement within the meaning of Subsection 440.13(7)(b), Florida Statutes (2005). A determination that Petitioner did, or did not, submit the required information is unnecessary in this proceeding. During the formal hearing in this proceeding, Petitioner called an expert employed by a company identified in the record as Qmedtrix. The testimony showed a factual basis for the initial reimbursement paid by Petitioner. It is not necessary for Petitioner to show that this evidence was sufficient to prevail on the merits in the underlying case. The evidence is sufficient to establish justiciable issues of fact in the underlying case. In this proceeding, Petitioner submitted some evidence of justiciable issues of fact in the underlying proceeding. Petitioner need not submit enough evidence in this fee dispute to show Petitioner would have prevailed on these factual issues in the underlying proceeding. Intervenors are not entitled to a presumption that Petitioner participated in this proceeding for an improper purpose in accordance with Subsection 120.595(1)(c), Florida Statutes (2003). Although Petitioner was the non-prevailing party in two previous administrative hearings involving the same legal issue, the two proceedings were not against the same prevailing hospital provider and did not involve the same "project" as required in the relevant statute. Intervenors seek attorney fees in the amount of $36,960 and costs in the amount of $2,335.37 through the date that Petitioner voluntarily dismissed the underlying proceeding. Absent a finding that Petitioner participated in the underlying proceeding for an improper purpose, it is unnecessary to address the amount and reasonableness of the attorney fees and costs sought by Intervenors. If it were determined that Petitioner participated in the underlying proceeding for an improper purpose, the trier of fact cannot make a finding that the proposed attorney fees and costs are reasonable. Such a finding is not supported by competent and substantial evidence. The total attorney fees and costs billed in the underlying proceeding were charged by six or seven attorneys or paralegals employed by the billing law firm. However, the fees and costs at issue in this proceeding exclude any time and costs charged by paralegals and include only a portion of the total fees and costs charged by the attorneys. The total amount of time billed and costs incurred in the underlying proceeding is evidenced in business records identified in the record as Intervenors' Exhibits 20-23. However, those exhibits do not evidence the reasonableness of the fees and costs billed by the attorneys.10 Either the testimony of the billing attorneys or the actual time slips may have been sufficient to support a finding that the attorney fees and costs are reasonable. However, Intervenors pretermitted both means of proof. Intervenors asserted that the time slips contain information protected by the attorney-client privilege. However, Intervenors neither submitted redacted time slips nor offered the actual time slips for in-camera review. Nor did Intervenors allow the attorneys to testify concerning unprivileged matters. The absence of both the testimony of the attorneys and the time slips is fatal. The fact-finder has insufficient evidence to assess the reasonableness of the fees and costs, based on the novelty and difficulty of the questions involved. Intervenors' expert opined that the attorney fees and costs are reasonable. The expert based her opinion, in relevant part, on her review of the actual time slips maintained by each attorney. However, Petitioner was unable to review the time slips before cross-examining the expert. In lieu of the actual time slips, Intervenors submitted a summary of the nature of the time spent by each attorney. The summary is identified in the record as Intervenors' Exhibit 2. Petitioner objected to Intervenors' Exhibit 2, in relevant part, on the ground that it is hearsay. The ALJ reserved ruling on the objection and invited each side to brief the issue in its respective PRO. The paucity of relevant citations in the PROs demonstrates that neither side vigorously embraced the ALJ's invitation. Intervenors' Exhibit 2 is hearsay within the meaning of Subsection 90.801(1)(c), Florida Statutes (2005).11 The author of Intervenors' Exhibit 2 summarized the unsworn statements of attorneys from their time slips and submitted those statements to prove the truth of the assertion that the time billed was reasonable. Intervenors made neither the attorneys nor their time slips available for cross examination.12 Even if the summary were admissible, the summary and the testimony of its author are insufficient to show the attorney fees and costs were reasonable. The insufficiency of the summary emerged during cross-examination of its author. The author is the lone attorney from the billing law firm who testified at the hearing. Q. What other information did you look at to decide what time to actually bill . . .? A. The information I used was the information from the actual bill. Q. If we look at the first entry . . . were you the person that conducted that telephone conference? A. No, I wasn't. Transcript (TR) at 510-511. Q. In other words, [the entries] go with the date as opposed to the event [such as a motion to relinquish]? A. That's correct. Q. So if I wanted to know how much time it took you to actually work on the motion to relinquish, I would have to look at each entry and add up all the hours to find out how long it took you to do one motion. Is that how I would do that? A. It would be difficult to isolate that information from this record, we bill and explain in the narrative what work is performed each day, and unless that was the single thing worked on for several days, there would be no way to isolate the time, because we don't bill sort of by motion or topic. . . . Q. Well, if I'm trying to decide whether the time billed is reasonable, wouldn't I need to know how much time was spent on each task? A. I'm not sure how you would want to approach that. . . . Looking at this document, it does not give you that detail. It doesn't provide that breakout of information. Q. Is there a way for us to know who you spoke with on those entries? A. The entry . . . doesn't specify who participated in the conference. I don't recall what the conference entailed . . . . And many of these entries are from months ago, and I can't specifically recall on that date if I was involved in a conference and who else might have been there. . . . And so my guess is where the conference is listed on a day when lots of activity was performed on behalf of the client, most of it in this case was research. TR at 516-521.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a final order denying the motion for attorney fees and costs. DONE AND ENTERED this 27th day of April, 2006, in Tallahassee, Leon County, Florida. S DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of April, 2006.
