01-000833F Ronald A. Grimaldi vs. Florida State Boxing Commission Status: Closed DOAH Final Order on Thursday, May 17, 2001.

Summary: Respondent not substantially justified in promulgating and defending rule; Petitioner entitled to reasonable attorney`s fees and costs.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RONALD A. GRIMALDI , )

)

Petitioner , )

)

vs. ) Case No. 01-0833F

)

FLORIDA STATE BOXING )

COMMISSION , )

)

Respondent. )

______________________________)

FINAL ORDER

A formal hearing was conducted in this case on April 12,

2001, in Tallahassee, Florida, before the Division of

Administrative Hearings, by its Administrative Law Judge,

Suzanne F. Hood.

APPEARANCES

For Petitioner: William M. Powell, Esquire

Powell & Steinberg, P.A.

3515 Del Prado Boulevard, South

Waterside Plaza, Suite 101

Cape Coral, Florida 33904

For Respondent: Thomas G. Thomas, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-2202

STATEMENT OF THE ISSUES

The issues are whether Petitioner is entitled to attorney

fees and costs pursuant to Section 120.595(3), Florida Statutes,

and if so, in what amount.

PRELIMINARY STATEMENT

The undersigned entered a final order in Ronald A. Grimaldi

v. Florida State Boxing Commission and Danny Santiago ,

DOAH 00-1600RX (Final Order, February 15, 2001). In that order,

the undersigned retained jurisdiction to determine Petitioner

Ronald A. Grimaldi's (Petitioner) entitlement to attorney's fees

and costs pursuant to Section 120.595(3), Florida Statutes,

after an evidentiary hearing.

On February 28, 2001, Petitioner filed a Motion for

Attorney Fees and Costs pursuant to Section 120.595(3), Florida

Statutes.

A Notice of Hearing dated March 16, 2001, scheduled the

case for hearing on April 12, 2001.

Petitioner filed a Notice of Filing and Affidavit of Fees

and Costs on March 19, 2001. That same day, Respondent Florida

State Boxing Commission (Respondent) filed a Statement of

Defenses to Petition for Attorney Fees.

On March 27, 2001, Petitioner filed a Request for

Evidentiary Hearing.

On April 11, 2001, Petitioner filed a Response to Initial

Order.

During the hearing, Petitioner presented testimony of one

expert witness. Petitioner's Affidavit of Attorney Fees and

Cost was examined by the parties during the hearing and is

accepted in the record.

Respondent presented no witnesses and offered no exhibits

during the hearing. Respondent was granted permission to file

two depositions in lieu of testimony on or before May 2, 2001.

As of the date of this order, Respondent had not filed any

depositions.

The parties agreed to file a stipulation as to any fees and

costs that should be deducted from the total amount reflected in

the attachment to Petitioner's Affidavit of Fees and Costs.

That stipulation, which was due to be filed on or before

April 27, 2001, has not been filled.

The undersigned takes official recognition of the pleadings

and record on file in DOAH Case No. 00-1600RX.

The Transcript of the proceeding was filed on April 17,

2001. Respondent filed a Proposed Final Order on May 11, 2001.

Petitioner filed a proposed Order on May 14, 2001.

FINDINGS OF FACT

1. Petitioner was the prevailing party in DOAH Case

No. 00-1600RX on one of two challenged rule provisions. In that

case, the challenge to Rule 61K1-1.0011(3)(c), Florida

Administrative Code, which required all contracts between a

manager and a boxer to be filed with Respondent within seven

days of execution, was dismissed on its merits. Rule 61K1-

1.0011(3)(g), Florida Administrative Code, and Form BPR-0009451

incorporated therein, were found to be invalid exercises of

delegated legislative authority to the following extent :

(a) that Rule 61K1-1.0011(3)(c), Florida Administrative Code,

deemed contacts between managers and boxers to contain all

provisions set forth in Form BPR-0009451; and (b) that Form BRP-

0009451 deemed contracts between managers and boxers to be void

if the managers were unlicensed on the date their contracts were

executed or if the managers failed to file the contracts with

Respondent within seven days of execution.

2. Respondent presented no evidence, testimonial or

documentary, in DOAH Case No. 00-1600RX or the instant case,

showing that it had a reasonable basis in fact to promulgate

Rule 61K1-1.0011(3)(g), Florida Administrative Code, and Form

BPR-0009451 incorporated therein, in 1985 or thereafter to

amend, enforce, or defend said rule and form. Respondent admits

that it has not maintained the pertinent rulemaking record

required by Section 120.54(8), Florida Statutes.

3. There is no competent evidence that Respondent in fact

conducted the mandatory rule reviews required by Section 9 of

Chapter 96-159, Laws of Florida, or Section 3 of Chapter 99-379,

Laws of Florida. Respondent did not file post-hearing

depositions showing that it ever conducted these rule reviews.

Respondent admitted during the hearing of the instant case that

it had no written documentation confirming that the rule reviews

took place.

4. There is no factual evidence showing the existence of

special conditions that would make an award of attorney's fees

and costs unjust in this case.

5. There is no evidence showing how to allocate

Petitioner's requested attorney's fees and costs between the two

challenged rule provisions.

6. The record in DOAH Case No. 00-1600RX does not indicate

that the Intervenor Danny Santiago created duplicitous and

unnecessary work for Petitioner and Respondent. Two of the

depositions taken on December 5, 2000, at the instance of

Intervenor Danny Santiago and over Respondent's objections, were

filed in DOAH Case No. 00-1600RX, becoming part of the record in

that case. Moreover, there is no evidence showing how to

allocate a portion of Petitioner's requested attorney's fees and

costs to work created exclusively by Intervenor Danny Santiago.

7. Petitioner filed an Affidavit of Attorney Fees and

Costs on March 19, 2001. Petitioner seeks to recover $13,235 in

fees and costs. Petitioner presented competent evidence that

the requested attorney's fees were reasonable based on the

number of hours expended (66.175) and the rate charged per hour

($200). Petitioner also presented competent evidence that an

expert witness fee in the amount of $1,000 is reasonable in this

case.

8. Respondent objected to Petitioner's requested

attorney's fees as they relate to the following specific

charges: (a) charges pertaining to an unrelated case in which

Respondent sought to discipline Petitioner for violating

Respondent's rules; (b) charges relating to Petitioner's Motion

to Compel Discovery after Petitioner improperly served the

original discovery requests and was required to serve the

discovery requests a second time; and (c) charges relating to

the preparation of the instant motion for fees and costs.

9. Petitioner agreed to reduce his claim for fees and

costs by the amount of the disputed charges if Respondent could

provide the total amount. After much discussion, the parties

agreed to file a post-hearing stipulation as to the amount to be

deducted from Petitioner's claim. The parties never filed that

stipulation.

10. The undersigned has compared the record in DOAH Case

No. 00-1600RX with the list of charges for fees and costs

attached to Petitioner's Affidavit of Attorney Fees and Costs.

The undersigned has also taken into consideration Respondent's

objections to certain charges and Petitioner's acquiescence to

those objections. The record reveals that Petitioner is not

entitled to recover the following: (a) charges on April 13 and

27, 2000, in the amount of $100 that pertain to a request for

and granting of oral argument that did not occur in the

underlying case; (b) charges on July 6, 2000, and July 31, 2000,

in the amount of $100, relating to review of an unidentified

motion to compel and review of an order granting that motion,

which did not occur in the underlying case; (c) charges on

July 17 and 27, 2000, and August 14, 2000, in the total amount

of $320, relating to Petitioner's improper motion to compel

discovery after Petitioner incorrectly served the original

discovery requests on the Attorney General and was required to

serve the discovery requests a second time; (d) a charge on

August 24, 2000, in the amount of $200 for attendance at court,

which did not occur in the underlying case; (e) a charge on

September 11, 2000, in the amount of $50 for review of an order

dismissing with prejudice, which did not occur in the underlying

case; (f) charges on February 23, 2001, in the amount of $80,

relating to the preparation of the instant motion for fees and

costs; and (g) charges on October 26, 2000, in the amount of

$500 for travel to a deposition.

11. The reduction amount for attorney's fee charges totals

$1,350. There are no other identifiable disputes over amounts

claimed by Petitioner as recoverable expenses or costs.

Therefore, Petitioner is entitled to recover $11,885 in

attorney's fees and costs incurred in DOAH Case No. 00-1600RX

and an additional $1,000 for expert witness fees in the instant

case, for a total recovery in the amount of $12,885. This

amount is reasonable under the facts of this case.

12. The record in DOAH Case No. 00-1600RX clearly reflects

that Respondent had sufficient and timely notice of Petitioner's

intent to seek attorney's fees and costs prior to the entry of

the Final Order. In Respondent's meeting on December 6, 2000,

Respondent's counsel advised Respondent several times that it

would be liable for attorney's fees and costs if the challenged

rules or portions thereof were found to lack statutory

authority. Counsel for Petitioner and Intervenor Danny Santiago

made appearances on behalf of their respective clients at that

meeting.

13. Petitioner made his first formal demand for attorney's

fees and costs in his Proposed Final Order, which was filed in

DOAH Case No. 00-1600RX on January 22, 2001. Respondent filed

its Statement of Defenses to Petition for Attorney Fees in the

instant case on March 19, 2001. Respondent raised the issue

that Petitioner's demand for attorney's fees and cost was

untimely for the first time in Respondent's Proposed Final Order

filed in the instant case on May 11, 2001.

CONCLUSIONS OF LAW

14. The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of this

proceeding. Section 120.595(3), Florida Statutes.

15. Section 120.595(3), Florida Statutes, provides as

follows, in pertinent part:

If the court or administrative law judge

declares a rule or portion of a rule invalid

pursuant to s. 120.56(3), a judgment or

order shall be rendered against the agency

for reasonable costs and reasonable

attorney's fees, unless the agency

demonstrates that its action were

substantially justified or special

conditions exist which would make the award

unjust. An agency's action are

"substantially justified" if there was a

reasonable basis in law and fact at the time

the actions were taken by the agency.

16. Respondent first raises the issue of Petitioner's

failure to plead entitlement to attorney's fees and costs in the

initial petition in DOAH Case No. 00-1600RX. Respondent relies

on Stockman v. Downs , 573 So. 2d 835, 837-838 (Fla. 1991), where

the court held that a claim for attorney's fees, whether based

on statute or contract, must be pled prior to the final

judgment, and that failure to do so constitutes a waiver of the

claim. However, Stockman also recognized the following

exception to its ruling:

Where a party has notice that an opponent

claims entitlement to attorney's fees, and

by its conduct recognizes or acquiesces to

that claim or otherwise fails to object to

the failure to plead entitlement, that party

waives any objection to the failure to plead

a claim for attorney's fees.

Stockman , 573 So. 2d at 838.

17. In Palacios v. Department of Business and Professional

Regulation , DOAH Case Nos. 99-4163F and 99-4164F (Final Order,

November 20, 2000), the Administrative Law Judge denied claims

for attorney's fees and costs pursuant to Section 120.595(1),

Florida Statutes, because the petitioners, who were the

prevailing parties in cases initiated under Section 120.57(1),

Florida Statutes, had not requested fees and costs in the

underlying proceedings prior to the issuance of the recommended

order or subsequent final orders. Likewise, in Earnest Sellars

v. Broward County School Board , DOAH Case No. 97-3540F (Final

Order, September 25, 1997), the Administrative Law Judge denied

claims for attorney's fees and costs pursuant to Section

120.595(1), Florida Statutes, because the petitioner, who was

the prevailing party in a case initiated under Section

120.57(1), Florida Statutes, had not requested attorney's fees

and costs in the underlying proceeding prior to the issuance of

the recommended order.

18. Respondent's reliance on the above-referenced cases to

defeat Petitioner's claim for attorney's fees and costs is

misplaced. In the instant case, Petitioner seeks attorney's

fees and costs under Section 120.595(3), Florida Statutes, where

the Administrative Law Judge has authority to issue a final

order. Petitioner raised his claim formally for the first time

in his proposed final order in the underlying case before the

issuance of the Final Order. Therefore, Petitioner's claim for

attorney's fees and costs was timely pled.

19. Moreover, the record in DOAH Case No. 00-1600RX

clearly reveals that Respondent had sufficient notice of

Petitioner's potential claim and Respondent's liability for

attorney's fees and costs at least as early as December 6, 2000.

Respondent did not raise a defense to Petitioner's claim in

Respondent's proposed final order in DOAH Case No. 00-1600RX or

in its Statement of Defenses to Petition for Attorney's Fees,

which was filed on March 19, 2001, in the instant case. To the

extent that Petitioner did not timely plead entitlement to

attorney's fees and costs, Respondent has waived any objection

under the exception to the rule announced in Stockman , 573 So.

2d at 838.

20. Respondent argues that it was "substantially

justified" in promulgating Rule 61K1-1.0011(3)(g), Florida

Administrative Code, and Form BPR-0009451 incorporated therein,

and/or that there were special circumstances that make an award

of fees and costs in this case unjust.

21. Because the term "substantially justified" was

apparently borrowed from the Florida Equal Access to Justice Act

(FEAJA) codified in Section 57.111, Florida Statutes (1999), the

same standards developed in case law under the FEAJA are useful

here. In Helmy v. Dep't of Bus. and Prof. Reg. , 707 So. 2d 366,

370 (Fla. 1st DCA 1998), the court followed the test for

"substantially justified" set forth by the United States Supreme

Court in Pierce v. Underwood under the analogous federal Equal

Access to Justice Act. There, the court found "substantially

justified" to mean:

" justified in substance or in the main" -

that is, justified to a degree that could

satisfy a reasonable person. That is no

differen[t] [than] the "reasonable basis

both in law and fact" formulation adopted by

. . . the vast majority of other Courts of

Appeals that have addressed this issue

. . . . To be "substantially justified"

means, of course, more than merely

undeserving of sanctions for frivolousness;

that is assuredly not the standard for

Government litigation of which a reasonable

person would approve.

Helmy , 707 So. 2d at 368, quoting Pierce v. Underwood , 487 U.S.

552, 565 (1988). Thus, under Florida law, "the 'substantially

justified' standard falls somewhere between the no justiciable

issue standard of Section 57.105 . . . and an automatic award of

fees to a prevailing party." Helmy at 368. At the same time,

an agency must have a solid, but not necessarily correct, basis

in law and fact for the position that it took when it initiated

the action. Dep't of Health and Rehab. Services v. S.G. , 613

So. 2d 1380, 1386 (Fla. 1st DCA 1993). In order to be

substantially justified, "an agency must, at the very least,

have a working knowledge of the applicable statutes under which

it is proceeding." Helmy at 370.

22. Although the underlying rule challenge was primarily

based on an issue of law, the determination of whether or not

attorney's fees and costs should be awarded turns on the factual

determination of whether or not Respondent was substantially

justified in law and fact or had some special circumstances

which would make the award unjust.

23. Here, the evidence shows that there was no substantial

justification for Respondent's actions. Additionally, there

were no special circumstances present, which would make an award

of attorney's fees and costs unjust.

24. In reaching this conclusion, the undersigned has

considered Respondent's contention that it was substantially

justified because it relied on the advice of counsel who

performed rule reviews mandated by Section 9 of Chapter 96-159,

Laws of Florida, and Section 3 of Chapter 99-379, Laws of

Florida, for the good faith belief that Respondent's rules had

the requisite statutory authority. Respondent's argument is

without merit in law or fact. First, as a matter of law,

reliance on the advice of counsel cannot protect an agency from

liability because an agency that relies on legal advice could

never be held responsible for a decision that lacked substantial

justification. Anderson Columbia Company, Inc., et al. v. Board

of Trustees of the Internal Improvement Trust Fund , DOAH Case

Nos. 00-0754F, 00-0755F, 00-0756F, 00-0757F, and 00-0828F (Final

Order, July 18, 2000). Second, Respondent never provided

evidence that the rule review in fact took place.

25. Respondent also argues that it was "substantially

justified" in promulgating and defending the subject rule and

form because the exact standard to be used by agencies in the

promulgation of rules under Chapter 120, Florida Statutes, is in

a state of confusion. To support its argument in this regard,

Respondent cites the rulings in the following cases : St. Johns

River Water Management District v. Consolidated-Tomoka Land Co. ,

717 So. 2d 72 (Fla. 1st DCA 1998) ; Department of Business and

Professional Regulation v. Calder Race Course, Inc. , 724 So. 2d

100 (Fla. 1st DCA 1998) ; Southwest Fla. Water Management

District v. Save the Manatee Club, Inc. , 773 So. 2d 594 (Fla.

1st DCA 2000) ; and Southwest Florid Water Management District v.

Charlotte County , 774 So. 2d 903 (Fla. 2nd DCA 2000).

26. Respondent's argument that it was "substantially

justified" because the existing case law was in "a state of

flux" was rejected in Anderson Columbia Company, Inc., et al. v.

Board of Trustees of the Internal Improvement Trust Fund , DOAH

Case Nos. 00-0754F, 00-0755F, 00-0756F, 00-0757F, and 00-0828F

(Final Order, July 18, 2000).

27. In 1985, when the subject rule and form were

promulgated, administrative rules had to be "reasonably related"

to their enabling statutes in order to withstand a challenge

that they were invalid exercises of delegated legislative

authority. Department of Professional Regulation v. Durrani ,

455 So. 2d 515, 517 (Fla. 1st DCA 1984) ; Agrico Chemical Co. v.

Department of Environmental Regulation , 365 So. 2d 759, 763

(Fla. 1st DCA 1979), cert. Denied , 376 So. 2d 74 (Fla. 1979).

28. In 1996, the Legislature amended Chapter 120, Florida

Statutes, eliminating the "reasonably related" rulemaking

standard and requiring agencies to have specific statutory

authority to adopt rules. Section 120.536(1), Florida Statutes

(Supp. 1996). In 1999, the Legislature again tightened the

rulemaking standard, making it clear that agencies did not have

authority to enact a rule without specific statutory authority.

Section 120.536(1), Florida Statutes (1999).

29. In this case, Petitioner presented no evidence showing

that it had statutory authority to promulgate the subject rule

and form in 1985 under the "reasonably related" rulemaking

standard or to defend their validity in 2000 under the new

requirement for a "specific law to be implemented." At no point

in time did Respondent have statutory authority to void a

contract between a manager and a boxer even if the contract was

not filed with Respondent within seven days of execution and

regardless whether the manager was licensed at the time of the

contract's execution.

30. In this case, there is an absence of a solid, though

not necessarily correct, basis in fact or law for such

requirement. Respondent has failed to carry its burden of

showing that it was substantially justified in promulgating the

subject rule and form or that there are special circumstances,

which would make an award unjust. Therefore, Petitioner is

entitled to an award of reasonable attorney's fees and costs.

31. In light of the foregoing conclusions, it is necessary

to determine the appropriate amount of fees and costs.

Petitioner claims that he is entitled to recover $13,235 in fees

and costs incurred in DOAH Case No. 00-1600RX, plus $1,000 for

an expert witness fee in the instant case, in the total amount

of $14,235. Neither party identified any charges for expenses

or costs that are in dispute.

32. The record indicates that Petitioner is not entitled

to recover charges in the amount of $1,350 because they were not

incurred in this case or they were incurred due to Petitioner's

improper service of discovery requests or they were incurred in

preparing the Petition for Attorney's Fees and Costs. During

the hearing, Petitioner conceded that some of the charges for

fees were improper and should be deducted from the total amount

recovered. The parties also were made aware that fees for

travel are not recoverable unless specifically authorized by

statute. State of Florida, Department of Health v. Discovery

Experimental and Development, Inc. , 767 So. 2d 1244 (Fla. 1st

DCA 2000).

33. Respondent does not argue in its Proposed Final Order

that Petitioner's entitlement to fees and cost should be reduced

for fees and costs attributable to the challenge of Rule 61K1-

1.0011(3)(c), Florida Administrative Code, on which Petitioner

did not prevail. Review of the record does not reveal how

charges for the two challenged rule provisions could be

separated. In any event, there is no evidence showing how to

allocate Petitioner's requested attorney's fees and costs

between the two challenged rule provisions.

34. Respondent also does not argue in its Proposed Final

Order that Petitioner's entitlement to fees and costs should be

reduced because Intervenor Danny Santiago created duplicitous

and unnecessary work for the other parties. The record in the

underlying case clearly refutes this argument. Additionally,

there is no evidence showing how to allocate a portion of

Petitioner's fees and costs to work created exclusively by

Intervenor Danny Santiago.

35. In conclusion, Petitioner is entitled to recover

$12,885. Under the circumstances of this case, this amount

constitutes reasonable attorney's fees and costs.

ORDER

Based on the foregoing findings of fact and conclusions of

law, it is

ORDERED:

That the Petition for Attorney's Fees and Costs is granted

and Petitioner is awarded $12,885 in attorney's fees and costs.

DONE AND ORDERED this 17th day of May, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

SUZANNE F. HOOD

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 17th day of May, 2001.

COPIES FURNISHED:

William M. Powell, Esquire

Powell & Steinberg, P.A.

3515 Del Prado Boulevard, South

Waterside Plaza, Suite 101

Cape Coral, Florida 33904

Thomas G. Thomas, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-2202

Hardy L. Roberts, III, General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-2202

Kim Binkley-Seyer, Secretary

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-2202

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 coy,

accompanied by filing fees prescribed by law, with the District

Court of Appeal, First District, or in 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.