01-000087F John Sampson And Annette Sampson vs. Department Of Children And Family Services Status: Closed DOAH Final Order on Monday, June 4, 2001.

Summary: Petitioner does not meet criteria for "small business party," where claim is premised on her status as a licensed foster parent.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JOHN SAMPSON AND ANNETTE )

SAMPSON, )

)

Petitioners, )

)

vs. ) Case No. 01-0087F

)

DEPARTMENT OF CHILDREN AND )

FAMILY SERVICES, )

)

Respondent. )

_______________________________________)

FINAL ORDER

Pursuant to notice, a formal hearing was held in this case

on April 27, 2001, before Lawrence P. Stevenson, a duly-

designated Administrative Law Judge of the Division of

Administrative Hearings, in Tampa, Florida.

APPEARANCES

For Petitioners : Leenetta Blanton, Esquire

3407 West Morrison Avenue

Tampa, Florida 33629-5233

For Respondent : Raymond R. Deckert, Esquire

Jennifer Lima, Esquire

Department of Children and

Family Services

9393 North Florida Avenue, Suite 900

Tampa, Florida 33612

STATEMENT OF THE ISSUE

Whether the Petitioner is entitled to an award of

attorney's fees and costs pursuant to Section 57.111, Florida

Statutes.

PRELIMINARY STATEMENT

On January 8, 2001, Petitioner Annette Sampson 1 filed with

the Division of Administrative Hearings an Application for

Attorney's Fees and Costs. The Application requests an award of

attorney's fees and costs incurred by Mrs. Sampson in litigating

the consolidated cases styled Department of Children and Family

Services v. John Sampson and Annette Sampson , DOAH Case Nos. 98-

1928 and 99-5240. On January 26, 2001, the Department of

Children and Family Services (the "Department") filed a Motion

to Dismiss, contending in relevant part that Mrs. Sampson was

not a "small business party" as defined in Section 57.111,

Florida Statutes. By order dated April 2, 2001, the Motion to

Dismiss was denied until evidence could be heard on the issue.

The case was set for hearing on April 27, 2001.

On April 13, 2001, the Department filed a Motion to

Bifurcate, requesting that the issue of Mrs. Sampson's status as

a "small business party" be litigated separately, prior to a

full hearing on the issue of whether the Department's agency

action was "substantially justified" under Section 57.111,

Florida Statutes. By order dated April 20, 2001, the Motion to

Bifurcate was denied. At the final hearing, the Department

renewed its Motion to Bifurcate. After hearing argument, the

undersigned granted the motion. Thus, the sole issue at the

April 27, 2001, hearing concerned Mrs. Sampson's status as a

"small business party."

At the hearing, Mrs. Sampson testified in her own behalf

and presented the deposition testimony of Michael J. Leding,

Jr., proferred as an expert in "business." Mrs. Sampson's

Composite Exhibits A and B, and Exhibits C through G were

offered and received into evidence. The Department presented

the testimony of David Beaven, programs specialist for the

Department; Laura Lazzara, assistant manager of tax and license

services for the Hillsborough County Tax Collector; Lisa Fowler,

foster care licensing specialist for the Department; and Mike

Katz, a family services specialist for the Department. The

Department's Exhibit 1, subpart 1, and Exhibits 4, 5, 8, 9, and

10 were offered and received into evidence.

No transcript of the proceedings was ordered. The parties

stipulated that their proposed final orders would be submitted

on May 9, 2001. Both parties filed their proposed final orders

on the agreed date.

FINDINGS OF FACT

Based on the oral and documentary evidence presented at the

final hearing and on the entire record of this proceeding, the

following findings of fact are made:

1. The Department is the state agency responsible for

licensing and regulating foster homes.

2. Mrs. Sampson operated a Childrens' Medical Services

("CMS") medical foster home for children with special medical,

emotional and physical needs, and was licensed by the Department

as either a CMS medical foster home or as a regular foster home

from 1990 until November 1997.

3. At some point in 1996 or 1997, Mrs. Sampson voluntarily

ceased operating as a CMS medical foster home, but continued to

operate as a regular foster home. There was conflicting

evidence as to the precise date of this change, but the date is

not relevant to this phase of the bifurcated proceeding.

4. On March 2, 1998, the Department filed an

Administrative Complaint that sought to revoke Mrs. Sampson's

foster care license. On October 6, 1999, the Department filed

an Amended Administrative Complaint. The Department also denied

Mrs. Sampson's application to adopt one of the foster children

in her care.

5. Mrs. Sampson requested a formal administrative hearing

on both the revocation of her foster care license and the denial

of her adoption application. The cases were consolidated, and a

formal administrative hearing was held over several dates in

April, May, and June 2000.

6. Mrs. Sampson prevailed on all issues in the

consolidated cases. A Recommended Order in her favor was

entered on August 11, 2000. A Final Order adopting the findings

of fact and conclusions of law in the Recommended Order was

entered on October 2, 2000.

7. Mrs. Sampson contends that she is a "small business

party" as defined in Subsection 57.111(3)(d )1.a, Florida

Statutes, which provides that the term "small business party"

includes:

A sole proprietor of an unincorporated

business, including a professional practice,

whose principal office is in this state, who

is domiciled in this state, and whose

business or professional practice has, at

the time that action is initiated by a state

agency, not more than 25 full-time employees

or a net worth of not more than $2 million,

including both personal and business

investments. . . .

8. At all times relevant to this case, Mrs. Sampson was

domiciled in the State of Florida. At all times relevant to

this case, Mrs. Sampson was licensed as a Licensed Practical

Nurse (" LPN").

9. The determinative issue is whether Mrs. Sampson's

operation of a foster home establishes her as the sole

proprietor of an unincorporated business or professional

practice.

10. Mrs. Sampson initially operated her medical foster

home for the benefit of one child, who was admitted to Tampa

General Hospital while Mrs. Sampson worked there as a contract

nurse. The child was born prematurely and was not expected to

live longer than six weeks. Mrs. Sampson became a licensed

foster parent to take this child home and care for him. Under

her care, the child thrived.

11. Though he survived the initial crisis, the child

continued to require full-time nursing care. Mrs. Sampson was

not able to return to full-time employment as a contract nurse

outside the home. Mrs. Sampson testified that she advised the

Department's case workers that she would need to take in

additional medical foster children to supplement her income

while she worked at home caring for the children.

12. Over a period of eight years, the Department placed at

least 14 medically needy foster children in Mrs. Sampson's home.

13. The Department establishes foster home care board

rates, which are standard reimbursements to foster parents for

the expenses incurred for the foster children, such as food,

clothing, medical care, and transportation. The board rates are

minimums that can be increased by the Department if the needs of

the foster child cannot otherwise be met. Mrs. Sampson received

an enhanced board rate for at least some of the children in her

care.

14. The Department conducts orientation meetings for and

training of prospective foster parents. The Department

emphasizes that the purpose of foster parenting is to provide

temporary surrogate parenting for the foster children. The

prospective parents are informed that they are considered

volunteers and will not be paid for their services. The parents

are told that the board payments are for the childrens'

expenses. Foster parents sign an agreement acknowledging that

the board payments are "on behalf of the child."

15. Rule 65C-13.011(4), Florida Administrative Code,

expressly provides that substitute care parents must have

sufficient income to assure the stability and security of their

own families without reliance on the board payments, and that

the substitute family must have sufficient income to absorb four

to six weeks of a foster child's care before receiving a board

payment.

16. If the Department removes a child from a foster home,

the board payment to the foster payment ceases. If the child is

placed with a new foster parent, then the board payment goes to

the new foster parent.

17. In addition to the regular and enhanced board

payments, a CMS medical foster parent may receive payments from

Medicaid as reimbursement for medically necessary services

rendered to the foster children. Mrs. Sampson was a designated

Medicaid provider from April 1992 through March 1997.

18. Mrs. Sampson contended that these Medicaid payments

were for the nursing services she provided to the children, just

as physicians receive Medicaid payments for treatment of

eligible patients. However, medical foster parents are not

required to be licensed medical professionals. Mrs. Sampson

offered no evidence that the Medicaid payments were for her

services as an LPN, or that private, residential LPN services

even qualify for Medicaid reimbursement absent prior

authorization. CMS-administered medical foster care services

are authorized for Medicaid reimbursement, and the best evidence

is that Mrs. Sampson was reimbursed as a medical foster care

provider, not as an LPN.

19. The Department established that Mrs. Sampson did not

hold herself out as running a business, nor did she report as

income on her federal tax return the payments received in

connection with providing foster care. Mrs. Sampson testified

that she hired part-time employees to assist her in caring for

the children, but she did not withhold federal income tax or

Social Security taxes from their pay and did not file W-2 wage

statements for them.

20. Mrs. Sampson explained her failure to report her board

payments as income by reference to 26 U.S.C. s. 131, which

excludes foster care payments from reportable gross income.

This citation justifies her failure to report, but also supports

the Department's contention that foster care payments should not

be considered business income.

21. Mrs. Sampson implicitly conceded that her foster home

did not possess any of the common indicia of a business. Her

chief contention was that from 1970 to 1990, she worked as an

LPN through nursing agencies, caring for sick children in

hospitals or in their homes, and that from 1990 to 1997, she

worked as an LPN caring for medical foster children in her own

home. In other words, Mrs. Sampson contended that by operating

the foster home, she was continuing to practice her profession

in a different setting. She gave up the income from her

practice as an LPN through nursing agencies in favor of the

income she received as an LPN acting as a medical foster parent.

CONCLUSIONS OF LAW

22. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

the parties thereto pursuant to Section 120.569 and

Subsection 120.57(1), Florida Statutes.

23. Section 57.111, Florida Statutes (2000), the Flori da

Equal Access to Justice Act, provides in pertinent part as

follows:

(4)(a ) Unless otherwise provided by law,

an award of attorney's fees and costs shall

be made to a prevailing small business party

in any adjudicatory proceeding or

administrative proceeding pursuant to

chapter 120 initiated by a state agency,

unless the actions of the agency were

substantially justified or special

circumstances exist which would make the

award unjust.

24. In proceedings to establish entitlement to an award of

attorney's fees and costs pursuant to Section 57.111, Florida

Statutes, the initial burden of proof is on the party requesting

the award to establish by a preponderance of the evidence that

it prevailed in the underlying disciplinary action and that it

was a small business party at the time the disciplinary action

was initiated. Once the party requesting the award has met this

burden, the burden of proof shifts to the agency to establish

that it was substantially justified in initiating the

disciplinary action. See Helmy v. Department of Business and

Professional Regulation , 707 So. 2d 366, 368 (Fla. 1st DCA

1998); Department of Professional Regulation, Division of Real

Estate v. Toledo Realty, Inc. and Ramiro Alfert , 549 So. 2d 715,

717 (Fla. 1st DCA 1989).

25. The Department conceded at the hearing that

Mrs. Sampson prevailed in the underlying proceeding.

Subsection 57.111(3)(c )3, Florida Statutes.

26. The issue for decision in this phase of the bifurcated

proceeding is whether Mrs. Sampson was a "small business party"

as contemplated by Subsection 57.111(3)(d), Florida Statutes,

which provides in relevant part as follows:

(d ) The term "small business party"

means:

1.a. A sole proprietor of an

unincorporated business, including a

professional practice, whose principal

office is in this state, who is domiciled in

this state, and whose business or

professional practice has, at the time that

action is initiated by a state agency, not

more than 25 full-time employees or a net

worth of not more than $2 million, including

both personal and business investments; or

b. A partnership or corporation,

including a professional practice, which has

its principal office in this state and has

at the time the action is initiated by a

state agency not more than 25 full-time

employees or a net worth of not more than

$2 million. . . .

27. Mrs. Sampson contended that, as a provider of medical

foster home services, she was the sole proprietor of an

unincorporated business. Mrs. Sampson also contended that she

was engaged in professional practice as an LPN by providing

medical foster home services.

28. While Mrs. Sampson's skills as an LPN may have proven

useful in caring for her foster children, the evidence

established that Mrs. Sampson was not paid for her services as

an LPN. She was reimbursed as a foster home licensee, and the

question is whether a foster home licensee may be said to be

operating a "business."

29. In Pierce v. Department of Children and Family

Services , DOAH Case No. 98-5480 (Final Order March 15, 1999) ,

the Administrative Law Judge made the following findings:

13. Likewise, Petitioner presented no

evidence that he was a small business party.

Family foster homes are distinct from larger

operations, such as residential child-care

facilities, which might under some

circumstances be construed as businesses.

14. A foster home license is not a permit

to engage in a business activity for profit.

Instead, foster home parents act as

temporary surrogate parents. Payments to

foster care parents are reimbursements for

moneys advanced by the parents for the care

of children placed in their care. The

payments are not fees for services rendered.

They are not taxable as income.

30. These findings led the Administrative Law Judge to

conclude that possession of a foster home license did not

constitute a small business. The cited findings are consonant

with those in the instant case, and persuasively lead to the

same conclusion.

31. Section 57.111, Florida Statutes, does not explicitly

define the term "business," and the appellate decisions do not

address the definitional question. Appellate decisions dealing

with other statutes, particularly Section 48.181, Florida

Statutes, governing the process of service on nonresidents,

consistently hold that an essential element of "doing business"

in this state is activity performed for the purpose of

"pecuniary benefit" or "in anticipation of economic gain." See ,

e.g. , Dinsmore v. Martin Blumenthal Associates, Inc. , 314 So. 2d

561, 564 (Fla. 1975) ; DeVaney v. Rumsch , 228 So. 2d 904, 906-07

(Fla. 1969). While such decisions are not dispositive of an

interpretation of Section 57.111, Florida Statutes, they support

the view that the term "business" necessarily encompasses the

notion of financial gain, which is inimical to the role of a

foster parent.

32. The Department's rules and policies make clear that

payments to foster parents are intended to reimburse them for

their expenses in caring for the children placed in their homes.

To conclude that a foster parent license establishes the

licensee as a "small business party" would be to validate a

mercenary motive for undertaking what is, however temporarily, a

familial relationship. Such a conclusion would be contrary to

the sound public policy implemented by the Department's rules

and policies.

33. Because it is concluded that Mrs. Sampson was not a

"small business party" as defined in Subsection 57.111(3)(d),

Florida Statutes, there will be no need to undertake the second

phase of this bifurcated proceeding, which would have addressed

the issue of whether the Department's actions in commencing the

case against Mrs. Sampson was "substantially justified."

CONCLUSION

Based on the foregoing Findings of Fact and Conclusions of

Law, the Respondent's Motion for Attorney's Fees and Costs is

denied.

DONE AND ORDERED this 4th day of June, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

LAWRENCE P. STEVENSON

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 [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 4th day of June, 2001.

ENDNOTE

1 The style of this case reflects the style of the substantive

proceeding, Department of Children and Family Services v. John

Sampson and Annette Sampson , DOAH Case Nos. 98-1928 and 99-5240.

The fees claimed in the instant proceeding relate to counsel's

representation of Annette Sampson. John Sampson did not

participate in the instant proceeding.

COPIES FURNISHED:

Leenetta Blanton, Esquire

3407 West Morrison Avenue

Tampa, Florida 33629-5233

Raymond R. Deckert, Esquire

Jennifer Lima, Esquire

Department of Children and

Family Services

9393 North Florida Avenue, Suite 900

Tampa, Florida 33612

Virginia A. Daire, Agency Clerk

Department of Children and

Family Services

Building 2, Room 204B

1317 Winewood Boulevard

Tallahassee, Florida 32399-0700

Josie Tomayo, General Counsel

Department of Children and

Family Services

Building 2, Room 204

1317 Winewood Boulevard

Tallahassee, Florida 32399-0700

NOTICE OF RIGHT TO JUDICIAL REVIEW

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 one copy of a notice of appeal with the Agency Clerk of

the Division of Administrative Hearings and a second 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.