05-003802F Michael A. Crane, D/B/A Accent Builders Of Florida, Inc. vs. Department Of Business And Professional Regulation, Construction Industry Licensing Board Status: Closed DOAH Final Order on Monday, February 13, 2006.

Summary: Since Petitioner does not meet the definition of a "small business party," and since Respondent`s actions were "substantially justified," Petitioner is not entitled to attorney`s fees pursuant to Section 57.111, Florida Statutes.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MICHAEL A. CRANE, d/b/a ACCENT )

BUILDERS OF FLORIDA, INC., )

)

Petitioner, )

)

vs. ) Case No. 05 - 3802F

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

CONSTRUCTION INDUSTRY LICENSING )

BOARD, )

)

Respondent. )

)

FINAL ORDER

On October 14, 2005, Petitioner , Michael A. Crane, d/b/a

Accent Builders of Florida, Inc., filed a Motion for

Reimbursement of Attorney's Fees and Costs. Respondent' s

Response in Opposition to Petitioner's Motion for Reimbursement

of Attorney's Fees and Costs and Memorandum of Law was filed on

November 3, 2005, waiving an evidentiary hearing. A final

hearing was conducted in th e underlying case , DOAH Case

No. 04 - 404 0PL, on Ma rch 1 - 3 , 2005, in New Smyrna Beach, Florida,

before Robert S. Cohen , Administrative Law Judge with the

Division of Administrative Hearings.

APPEARANCES

For Petitioner: Daniel J. Webster, Esquire

Daniel J. Webster, P.A.

149 South Rid gewood Avenue, Suite 500

Daytona Beach, Florida 3211 4 - 4365

For Respondent: Charles J. Pellegrini, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399 - 2202

STATEMENT OF THE ISSUE

The issue is whether Petitioner Michael A. Crane, d/b/a

Accent Builders of Florida, Inc., is entitled to an award of

attorney's fees against Respondent, Department of Business and

Professional Regulation, pursuant to Section 5 7.111, Florida

Statutes.

PRELIMINARY STATEMENT

This matter was initiated by a Motion for Reimbursement of

Attorney's Fees and Costs (Motion) filed by Petitioner on

October 14, 2005. Pursuant to the Initial Order , Respondent

filed a statement settin g forth its defenses to Petitioner's

Motion. In its Response in Opposition to Petitioner's Motion

for Attorney's F ees and Costs, Respondent admitted that

Petitioner was the prevailing party in the underlying action ,

DOAH C ase No. 04 - 4040PL , and that Respo ndent was not a nominal

party in the underlying action. Respondent disputes the

requested reimbursement of attorney's fees and costs and the

assertion by Petitioner that he is a small business party.

Respondent further maintains that its actions in bring ing the

underlying action were substantially justified, and that,

accordingly, the issue of whether special circumstances exist

that would make the award of fees unjust is a moot point.

Respondent waived its right to an evidentiary hearing in this

matter. Petitioner did not request an evidentiary hearing

within ten days of the filing of Respondent's response.

All references are to Florida Statutes (2005), unless otherwise

noted.

FINDINGS OF FACT

1. On October 14, 2005, Petitioner filed a Motion for

Rei mbursement of Attorney's Fees and Costs.

2. Petitioner seeks reimbursement of attorney's fees and

costs incurred in DOAH Case No. 04 - 4040PL, pursuant to Section

57.111, Florida Statutes.

3. Petitioner is the prevailing party in the underlying

p roceeding, DOAH Case No. 04 - 4040PL. On September 23, 2005, the

Construction Industry Licensing Board entered its Final Order in

the underlying case, in which it adopted the Recommended Order

entered in the DOAH proceeding, thereby dismissing the charges

t hat Petitioner had violated certain provisions of Chapter 489,

Florida Statutes.

4. In the underlying proceeding, Respondent charged

Michael A. Crane with violations of Chapter 489, Florida

Statutes, in his capacity as a certified general contractor

ho lding Florida license N o. CGC8644. Petitioner had entered

into the contract which gave rise to the underlying proceeding

as Accent Builders of Florida, Inc. (Accent). Respondent's

disciplinary action was not directed at Accent Builders of

Florida, Inc., but at Petitioner as the qualifying agent for the

company.

5 . Petitioner is not a sole proprietor of an

unincorporated business.

6 . Petitioner is neither a partnership nor a corporation.

7 . Petitioner does business in Florida as Accent, but at

the t ime the underlying proceeding was initiated, Petitioner had

not applied for and been granted a certificate of authority for

Accent through himself as the qualifying agent. In September

2004, while the underlying proceeding was pending, Petitioner

applied for and was granted a certificate of authority for

Accent with Michael A. Crane as the qualifying agent.

8 . Despite the fact that Petitioner was granted a

certificate of authority for Accent, the underlying proceeding

was brought against the certified ge neral contractor, Michael A.

Crane, not against Accent as a corporate entity.

9 . In order to determine whether the underlying action

brought by Respondent against Petitioner was substantially

justified at th e time it was initiated by the A gency, the

info rmation that was before the probable cause panel that

directed the filing of the A dministrative C omplaint must be

examined.

10 . In the underlying matter giving rise to Petitioner's

request for attorney's fees, the Probable Cause Panel had before

it a 188 - page Investigative Report, as well as three

supplemental Investigative Reports related to the alleged

defects in the construction performed by Petitioner.

1 1 . The Probable Cause Panel convened on April 27, 2004,

at which time it made a finding of probab le cause that

P etitioner had violated S ubsections 489.129(1)(g)1., (i), (k),

and (m), Florida Statutes. The panel members reported that they

had reviewed the investigative reports and draft complaints, and

were advised by a member of the Attorney General' s staff

regarding their responsibilities in determining whether probable

cause existed to file an Administrative Complaint against

Petitioner.

1 2 . The consumer complaint accompanying the Investigative

Report alleged that the contractor did not properly supervise

the project; that the construction has resulted in numerous

leaks; that the steam shower was not installed as required by

the manufacturer; that the decking was not installed according

to the manufacturer's instructions; and that most of the punc h

list items had been left unaddressed.

1 3 . The Investigative Report also contained Petitioner's

response , which stated that Petitioner was precluded from

correcting the deficiencies by the consumer, and that, although

responsive to the consumer regardi ng the leaks, Petitioner saw

no damage as a result of the leaks.

1 4 . The Investigative Report contain ed numerous documents

describing the efforts of contractors hired by the consumer to

remedy the leaks and alleged defects in construction. The

report a lso included documentation of payments made by the

consumer to the various contractors called in to eliminate the

problems the consumer was experiencing.

1 5 . The Probable Cause Panel's review of the materials

before it resulted in a determination that a reasonable

investigation had been conducted, and that a reasonable person

could conclude that sufficient evidence existed to charge

Petitioner with violations of Chapter 489, Florida Statutes.

1 6 . At the time the Probable Cause Panel reviewed the

Invest igative Report, it appeared that Petitioner's work had

resulted in water damage, and that a valid subcontractor's lien

had been placed against the consumer's property resulting in

financial harm.

17 . The Probable Cause Panel's determination to direct

Res pondent to file an Administrative Complaint had a reasonable

basis in law and fact at the time it was made.

18 . Respondent was not a "nominal party" to the underlying

proceeding according to the meaning of that term in S ubsection

57.111(4)(d)1., Florida Statutes.

CONCLUSIONS OF LAW

19 . The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of this

proceeding pursuant to Section s 120.569 , 120.57(1) , and

57.111(4), Florida Statutes.

2 0 . Section 57.111, Florida Sta tutes, the Florida Equal

Access to Justice Act (the 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 procee ding 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.

2 1 . In proceedings to establish entitle ment 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 ac tion 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,

71 7 (Fla. 1st DCA 1989).

2 2 . Michael A. Crane , d/b/a Accent Builders of Florida,

Inc., prevailed in the underlying proceeding. § 57.111(3)(c)3.,

Fla. Stat.

2 3 . Michael A. Crane is not 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 . . . .

2 4 . The underlying action was initiated and maintained

against Michael A. Crane, a Florida - certified general

contractor, not against Accent. Moreover, Accent was not

registered with Respondent until September 2004, after a count

in the Administ rative Complaint charged Mr. Crane with not

seeking a certificate of authority with himself as the

qualifying agent. At no time did Respondent seek to impose

sanctions against Accent as a corporation for violations of

Chapter 489, Florida Statutes. All o f the issues maintained at

the final hearing in the underlying matter (once the certificate

of authority issue had been withdrawn) concerned Mr. Crane's

alleged failure to perform his duties as a certified general

contractor properly under Chapter 489, Flo rida Statu t es.

2 5 . This conclusion is supported by the case of Daniels v.

Florida Department of Health , 898 So. 2d 61 (Fla. 2005), in

which the Florida Supreme Court, in a review of a decision

certified for conflict, held that the owner of a partnership o r

corporation who prevails in an administrative proceeding

initiated by a state agency is not entitled to fees under the

Act when the complaint is filed against the owner in his or her

individual capacity. Id . at 63. In that case, the Department

of Healt h charged Daniels with unprofessional conduct in the

practice of midwifery. In her petition for attorney's fees

under the Act, Daniels stated that she is the sole shareholder

of a subchapter - S corporation, through which she treats patients

and, therefore, is a small business party. Id . at 64 - 65. In

addressing the issue of whether Daniels qualifies as a "small

business party" as defined in Section 57.111, Florida Statutes,

when the administrative action was brought against her

individually, rather than ag ainst her corporation, the c ourt

stated:

[ T ] he administrative complaint in this

instance was brought against the individual

owner as an employee of the corporation and

not against the corporation itself.

Although Daniels and South Beach Maternity

are one and the same entity in that Daniels

controls South Beach Maternity and owns 100%

of its stock, strict adherence to the

language of section 57.111(3)(d) compels us

to reach the conclusion that Daniels is not

a small business party, because she is not a

sole proprietor of an unincorporated

business and because South Beach Maternity

was not a party to any of these proceedings.

Id . at 67.

2 6 . The Daniels c ourt would have considered an award of

attorney's fees proper under S ection 57.111, Florida Statutes

(ass uming the other requirements of the statute had been met) if

the A dministrative C omplaint had been filed against the

corporation rather than the individual licensed professional.

Similarly, in the underlying proceeding concerning Mr. Crane,

Respondent bro ught the action against him individually and not

his corporation. The present case is so similar to the Daniels

case that the holding in that case leaves no doubt as to how

Petitioner should be treated in the present matter. Based on

Daniels , Mr. Crane i s clearly not a "sma ll business party"

pursuant to S ubsection 57.111(3)(d), Florida Statutes.

27 . Moreover, e ven had Mr. Crane qualified as a "small

business party" under S ubsection 57.111(3)(d), Florida Statutes,

Respondent's actions were "substantially justified." Subsection

57.111(3)(e), Florida Statutes , provides that a proceeding is

"substantially justified" if it had a "reasonable basis in law

and fact at the time it was initiated by a state agency ."

(Emphasis added.) The "substantially justified " standard falls

somewhere between the "no justiciable issue" standard of Section

57.105, Florida Statutes, and an automatic award of fees to a

prevailing party. Helmy , 707 So. 2d at 368.

28 . In Department of Health v. Cralle , 852 So. 2d 930, 932

(Fla. 1 st DCA 2003), the court set forth the following temporal

limitation on the required analysis, quoting from Fish v.

Department of Health , 825 So. 2d 421, 423 (Fla. 4th DCA 2002):

In resolving whether there was substantial

justification or a reasonable basis in law

and fact for filing an administrative

complaint, "one need only examine the

information before the probable cause panel

at the time it found probable cause and

directed the filing of an administrative

complaint."

See also Agency for Health Care Ad ministration v. Gonzalez , 657

So. 2d 56 (Fla. 1st DCA 1995)(proper inquiry is whether evidence

before probable cause panel was sufficient for institution of

disciplinary action).

29 . The evidence established that Respondent had a

reasonable basis in law a nd fact to find cause to believe that

Petitioner had violated certain provisions of Chapter 489,

Florida Statutes , relating to his ability to perform general

contracting with skill and competence . While the Probable Cause

Panel did not itself interview th e consumer complainant or

Petitioner, it had before it an extensive Investigative Report,

including statements from the consumer, its investigators who

interviewed the consumer and many of the contractors and

subcontractors who were hired by the consumer t o remedy the

complained - of issues ; and it had the response submitted by

Petitioner. It does not matter, for purposes of determining

substantial justification, that the Probable Cause Panel

determined the consumer's complaint to be more credible when it

de cided to prosecute Petitioner. Department of Health v.

Thomas , 890 So. 2d 400, 401 (Fla. 1st DCA 2004)(a decision to

prosecute that turns on a credibility assessment has a

reasonable basis in fact and law); Gentele v. Department of

Professional Regulatio n , 513 So. 2d 672, 673 (Fla. 1st DCA

1987).

3 0 . Even though Petitioner prevailed at hearing on the

charges levied against him by Respondent, clearly, Respondent

acted in good faith, based upon an extensive investigatory

record, when deciding to prosecute Petitioner. Petitioner has

failed to demonstrate otherwise, or to prove that Respondent was

not substantially justified in bringing an action against him

for violations of Chapter 489, Florida Statutes.

3 1 . Since Petitioner is not a "small business party " as

contemplated by Section 57.111, Florida Statutes, and since,

even if Petitioner were deemed to be a small business party,

Respondent's prosecution of the matter against Petitioner, at

the time it was initiated, was substantially justifi ed , the

remaini ng issues raised by Petitioner are moot. The

reasonableness of the fees and costs claimed need not be

determined since Petitioner is not entitled to attorney's fees

and costs under Section 57.111, Florida Statutes. Further, the

issue of special circumsta nces need not be addressed since

Respondent's actions were substantially justified. Finally,

Respondent asserted that it was not a nominal party to the

underlying proceeding within the meaning of S ubsection

57.111(4)(d)1., Florida Statutes, rendering moot the need to

make findings under this provision.

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is ORDERED that Michael A. Crane's Motion for Attorney 's

Fees and Costs is denied.

DONE AND ORDERED this 13th day of February , 2006 , in

Tallahassee, Leon County, Florida.

S

ROBERT S. COHEN

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

ww w.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 13th day of February , 2006 .

COPIES FURNISHED :

Charles J. Pellegrini, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahass ee, Florida 32399 - 2202

Daniel J. Webster, Esquire

Daniel J. Webster, P.A.

149 South Ridgewood Avenue, Suite 500

Daytona Beach, Florida 32114 - 4365

Tim Vaccaro, Director

Construction Industry Licensing Board

Department of Business

and Professional Reg ulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 1039

Josefina Tamayo , General Counsel

Department of Business

and Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

Simone M arstiller, Secretary

Department of Business

and Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

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 the original notice of appeal with the Clerk of the

Division of Administr ative 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 3 0 days of rendition of the order to

be reviewed.