05-003990F Babu Jain vs. Florida Agricultural And Mechanical University Status: Closed DOAH Final Order on Wednesday, March 1, 2006.

Summary: Petitioner`s Motion for Attorney`s Fees pursuant to Section 57.105, Florida Statutes, is denied.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BABU JAIN, )

)

Petitioner, )

)

vs. ) Case No. 05 - 3990F

)

FLORIDA AGRICULTURAL AND )

MECHANICAL UNIVERSITY, )

)

Respondent. )

)

FINAL ORDER

STATEMENT OF THE ISSUE

Whether Petitioner is entitled to an award of attorney’s

fees pursuant to Section 57.105(5), Florida Statutes, and, if

so, what amount?

PRELIMINARY STATEMENT

Pursuant to notice, the undersigned conducted a hearing o n

January 14 and 15, 2004, in the underlying case of Babu Jain v.

Florida Agricultural and Mechanical University , DOAH Case

No. 03 - 3838. A Recommended Order was entered on May 17, 2004,

in favor of Petitioner, Dr. Babu Jain. Petitioner in his

Propos ed Recommended Order requested to be reimbursed for

attorney’s fees but did not cite to the authority under which he

made his request.

On June 1, 2004, Petitioner filed Exceptions to Recommended

Order and Motion to Administrative Law Judge for Award of

Att orney’s Fees Pursuant to Section 57.105(5),Florida Statutes. 1/

Respondent also filed Exceptions to Hearing Officer’s Proposed

Recommended Order on the same date. Petitioner filed a Reply to

Respondent’s Exceptions to Recommended Order and Petitioner’s

Re ply to Respondent’s Opposition to Awarding of Attorneys’ Fees

to Petitioner.

On August 19, 2004, the Florida Agricultural and Mechanical

University (hereinafter FAMU) issued a Final Order which

included rulings on the exceptions filed by each party and whi ch

did not award attorney’s fees.

An appeal ensued before the First District Court of Appeal

in Case No. 1D04 - 4167 , which resulted in an Opinion issued on

October 20, 2005, remanding the case to the undersigned for a

determination of Dr. Jain ’s entitleme nt to attorney’s fees under

Section 57.105(5), Florida Statutes.

Accordingly, the instant case was opened at the Division of

Administrative Hearings. The undersigned issued a Notice of

Hearing scheduling the final hearing for December 13, 2005.

Petitione r filed a letter with the Division on December 2, 2005,

requesting clarification with respect to the Notice of Hearing.

A telephone conference call was held on December 7, 2005, which

resulted in a continuance of the hearing date and a briefing

schedule b eing established. The hearing was rescheduled for

January 6, 2006.

Petitioner filed a Petition of Dr. Babu Jain for a

Determination as to His Entitlement to Attorney’s Fees and Costs

Pursuant to Section 57.105, Florida Statutes, with accompanying

affidav its and a Memorandum of Law and Facts in Support of the

motion. FAMU filed a Response to Petition of Dr. Babu Jain for

a Determination as to his Entitlement to Attorney’s Fees and

Costs Pursuant to Section 57.105, Florida Statutes, with an

accompanying af fidavit.

Another telephone conference call took place on January 5,

2006, during which it was decided that the case would proceed on

the pleadings and that there would be no live hearing. The

parties were permitted to file reply memoranda on or before

J anuary 23, 2006. Petitioner filed a Reply of Petitioner to

FAMU’s Responsive Memorandum. FAMU did not file a reply.

The parties requested that Official Recognition be taken of

all pleadings filed in DOAH Case No. 03 - 3838, including the

Recommended Order and Final Order and of the following pleadings

and Orders from the appeal in First District Court of Appeal

Case No. 1D04 - 4167: the October 20, 2005, Opinion of the First

District Court of Appeal remanding the case to the undersigned

and Mandate issued o n December 16, 2005; the Index to Record on

Appeal; Dr. Jain ’s Initial and Reply Briefs; and Dr. Jain ’s

Motion for Rehearing and Clarification and the November 30,

2005, Order denying same. The parties’ request for Official

Recognition of the enumerated d ocuments is granted. References

to the Florida Statutes is to Florida Statutes, 2005 unless

otherwise indicated.

FINDINGS OF FACT AND

CONCLUSIONS OF LAW

1. The Division of Administrative Hearings has

jurisdiction over the parties and subject m atter of this

proceeding. § 57.105(5), Fla . Stat . ; and Order and Mandate in

Case No. 1D04 - 4167, First District Court of Appeal.

2. Section 57.105(5), Florida Statutes, reads as follows:

(5) In administrative proceedings under

chapter 120, an admi nistrative law judge

shall award a reasonable attorney's fee and

damages to be paid to the prevailing party

in equal amounts by the losing party and a

losing party's attorney or qualified

representative in the same manner and upon

the same basis as provide d in subsections

(1) - (4). Such award shall be a final order

subject to judicial review pursuant to s.

120.68. If the losing party i s an agency as

defined in s. 120.52 (1), the award to the

prevailing party shall be against and paid

by the agency. A voluntary dismi ssal by a

nonprevailing party does not divest the

administrative law judge of jurisdiction to

make the award described in this subsection.

3. Subsection (5) of Section 57.105, Florida Statutes,

directs the undersigned to the preceding subsections which set

forth standards to be applied in the analysis of entitlement to

attorney’s fees. Subsection (1) provides that reasonable

attorney’s fees shall be awarded to the prevailing party to be

paid by the losing party where the losing party or the losing

part y’s attorney knew or should have known that a claim or

defense, when initially presented to the administrative tribunal

or at any time before the administrative hearing, “[w]as not

supported by the material facts necessary to establish the claim

or defense or [w]ould not be supported by the application of

then - existing law to those material facts.”

4. The standards set forth in Subsection (1) and

incorporated by reference in Subsection (5) were the result of

an amendment to Section 57.105 , Florida Statute s , in 1999.

s. 4, Ch. 99 - 225, Laws of Florida. Prior to that amendment, the

statute provided for the award of attorney’s fees when “there

was a complete absence of justiciable issue of either law or

fact raised by the complaint or defense of the losin g party.”

These new standards became applicable to administrative hearings

in 2003 by s. 9, Ch. 2003 - 94, Laws of Florida, with an effective

date of June 4, 2003. Petitioner filed his Petit ion for

Administrative Hearing in September 2003. Accordingly, th e

newer standards of Section 57.105, Florida Statutes, apply to

this case.

5. In the case of Wendy’s v. Vandergriff , 865 So. 2d 520,

(Fla. 1st DCA 2003), the court discussed the legislative changes

to Section 57.105:

[T]his statute was amended in 1999 as part

of the 1999 Tort Reform Act in an effort to

reduce frivolous litigation and thereby to

decrease the cost imposed on the civil

justice system by broadening the remedies

that were previously available. See Ch. 99 -

225, s. 4, Laws of Florida. Unlike its

predecessor, the 1999 version of the statute

no longer requires a party to show a

complete absence of a justiciable issue of

fact or law, but instead allows recovery of

fees for any claims or defenses that are

unsupported. (Citations omitted) However ,

this Court cautioned that section 57.105

must be applied carefully to ensure that it

serves the purpose for which it was

intended, which was to deter frivolous

pleadings. (Citations omitted)

In determining whether a party is entitled

to statutory at torney's fees under section

57.105, Florida Statutes, frivolousness is

determined when the claim or defense was

initially filed; if the claim or defense is

not initially frivolous, the court must then

determine whether the claim or defense

became frivolous after the suit was filed.

(Citation omitted) In so doing, the court

determines if the party or its counsel knew

or should have known that the claim or

defense asserted was not supported by the

facts or an application of existing

law.(Citation omitted) An award of fees is

not always appropriate under section 57.105,

even when the party seeking fees was

successful in obtaining the dismissal of the

action or summary judgment in an action.

(Citation omitted)

Wendy's v. Vandergriff , 865 So. 2d 520, 523 .

6. The court in Wendy’s recognized that the new standard

is difficult to define and must be applied on a case - by - case

basis:

While the revised statute incorporates the

‘not supported by the material facts or

would not be supported by application of

then - existing law to those material facts’

standard instead of the ‘frivolous’ standard

of the earlier statute, an all encompassing

definition of the new standard defies us.

It is clear that the bar for imposition of

sanctions has been lowered, but just h ow far

it has been lowered is an open question

requiring a case by case analysis.

Wendy’s v. Vandergriff , 865 So. 2d 520, 52 4 cit ing Mullins v.

Kennelly , 847 So. 2d at 1155, n.4. (Fla. 5 th DCA 2003).

7. More recently, the First District Court of Appeal

further described the legislative change:

The 1999 version lowered the bar a party

must overcome before becoming entitled to

attorney’s fees pursuant to section 57.105,

Florida Statutes . . . Significantly, the

1999 version of 57.105 ‘applies to any cla im

or defense, and does not require that the

entire action be frivolous.’

Albritton v. Ferrera , 913 So. 2d 5 , 6 (Fla. 1st DCA 2005),

quoting Mullins v. Kennelly , supra .

8. The Florida Supreme Court has noted that the 1999

amendments to Section 57.105, Florida Statutes, “greatly expand

the statute’s potential use.” Boca Burger, Inc. v. Richard

Forum , 912 So. 2d 561, 570, (Fla. 2005).

9. The phrase “supported by the material facts” found in

Section 57.105(1)(a), Florida Statutes, was defined by the c ourt

in Albritton to mean that the “party possesses admissible

evidence sufficient to establish the fact if accepted by the

finder of fact.” Albritton , 913 So. 2d 5, at 7 , n.1.

10. Therefore, the first question is whether FAMU or its

attorneys knew or s hould have known that its defense of

Dr. Jain ’s claim was not supported by the material facts

necessary to establish the defense when the case was initially

filed or at any time before trial. That is, did FAMU possess

admissible evidence sufficient to est ablish its defense.

11. The parties filed a Pretrial Stipulation the day

before the hearing. The Pretrial Stipulation characterized

FAMU’s position as follows:

It is the position of the University that

Dr. Babu Jain retired at the close of

business on May 30, 2003, pursuant to the

provision of the DROP retirement program.

Dr. Jain did not have the right, nor the

authority, to unilaterally rescind his

resignation and retirement date.

In a letter dated May 5, 2003, the Division

of Retirement informed Dr. Jain that it was

providing him with the “DROP VOID” form that

had to be signed by himself and the

University, for his participation in DROP to

be rescinded. No University official signed

that form nor agreed to rescind his

retirement. On May 30, 2003 , Dr. Babu Jain

knew that his retirement through DROP had

not been voided and that he had in - fact

retired.

The University included the position that

Dr. Jain occupied in its vacancy

announcement in the ‘Chronicle of Higher

Educat ion.’ The University, th rough

Dr. Larry Robinson notified Dr. Jain that

his retirement rescission was not accepted.

Dr. Jain did not work past May 30, 2003.

Finally, there was never a ‘meeting of the

minds’, nor any other agreement between the

University and Dr. Jain to void his

retirement commitment. It [is] the

University’s position that Dr. Babu Jain

retired from Florida Agricultural and

M echanical University effective at the close

of business on May 30, 2003.

Pretrial Stipulation at 14 - 15 . (emphasis in original)

12. The material facts known by FAMU necessary to

establish its defense against Petitioner's claim at the time the

case was filed included: Petitioner’s initial Notice of

Election to Participate in DROP and Resignation of Employment in

which Dr. Jain re signed effective the date he terminated from

DROP (designated as May 30, 2003); Dr. Robinson’s letter dated

May 27, 2003, which asserted that the University was not in

agreement with Dr. Jain 's decision and that the decision to

terminate from DROP is a mut ual one; Dr. Robinson's letter of

May 30, 2003, which informed Dr. Jain that the two summer

semester employment contracts were issued to him in error and

informing Dr. Jain that he would be paid through May 30, 2003,

his designated DROP date; the refusal o f anyone from FAMU to

sign the DROP - VOID form provided to Dr. Jain by the Division of

Retirement; the reassignment of another instructor to take over

Dr. Jain ’s classes the first Monday following the designated

DROP termination date; and the Refund of Over payment of Salary

Form and resulting salary deduction from Dr. Jain ’s sick leave

payout.

13. It is difficult to determine what, if any, additional

facts FAMU learned through discovery. That is, whether

deposition testimony of FAMU officials enlightened FAMU or its

attorneys as to material facts not known at the time the case

was filed by Dr. Jain , is not readily apparent.

14. However, a review of the pre - trial depositions reveals

material facts which supported FAMU’s defense that the summer

contracts w ere issued in error and that there was no meeting of

the minds between the parties regarding voiding Dr. Jain ’s DROP

participation. In particular, Dr. Robinson, Provost and Vice -

President for Academic Affairs, testified in deposition that

when he signed D r. Jain ’s summer employment contracts on May 20,

2003, he had no knowledge of Dr. Jain ’s participation in the

DROP program; that he first became aware that Dr. Jain was in

DROP with a DROP termination date of May 30, 2003, upon

receiving a May 21, 2003, me morandum from Nellie Woodruff,

Director of the FAMU Personnel Office; and that Dean Larry

Rivers did not have the authority to issue work assignments for

any of his faculty beyond their DROP dates.

15. Additionally, Dr. Henry Williams, Assistant Dean for

Science and Technology, testified in deposition that when he

signed the Recommendation for Summer Employment on May 5, 2003,

which recommended Dr. Jain for teaching summer courses beginning

May 12, 2003, he was unaware that there was a 30 - day window

during which a DROP participant could not be employed.

16. Obviously, when the undersigned weighed all of the

evidence, including evidence presented at hearing which is not

part of this analysis, it was determined that the preponderance

of the evidence was in favor of Dr. Jain ’s position. However,

that is not the standard to be applied here. The undersigned

concludes that at the time the case was filed and prior to the

commencement of the hearing, FAMU possessed admissible evidence

sufficient to establish the fact that it did not give written

agreement to his decision to abandon DROP and resume employment

if accepted by the finder of fact. While the finder of fact

ultimately did not agree with FAMU, FAMU possessed the material

facts necessary to establish the defense, i.e. , admissible

evidence sufficient to establish the fact if accepted by the

trier of fact, when the case was filed and prior to the final

hearing.

17. The second question is whether FAMU’s defense would

not be supported by the application of then existing law to

those material facts, when the case was initially filed or at

any time before the final hearing.

18. In the Pretrial Stipulation, the parties referenced

Sections 121.091(13) and 121.021(39), Florida Statutes, as

provisions of law relevant to the determination of the issues in

the case. 2/ These statutory provisions were also referenced by

the undersigned in the Recommended Order as “two competing

statutory provisions.” Recommended Order at 15.

19. Subsection 121.091(13), Florid a Statutes, establish ing

the DROP program, was created by s. 8, Ch. 97 - 180, Laws of

Florida, with an effective date of January 1, 1999. 3/

20. Section 121.091(13), Florida Statutes (2003) , read as

follows:

DEFERRED RETIREMENT OPTION PROGRAM. -- In

general , and subject to the provisions of

this section, the Deferred Retirement Option

Program, hereinafter referred to as the

DROP, is a program under which an eligible

member of the Florida Retirement System may

elect to participate, deferring receipt of

retire ment benefits while continuing

employment with his or her Florida

Retirement System employer. The deferred

monthly benefits shall accrue in the System

Trust Fund on behalf of the participant,

plus interest compounded monthly, for the

specified period of t he DROP participation,

as provided in paragraph (c). Upon

termination of employment, the participant

shall receive the total DROP benefits and

begin to receive the previously determined

normal retirement benefits. Participation

in the DROP does not guara ntee employment

for the specified period of DROP.

Participation in the DROP by an eligible

member beyond the initial 60 - month period as

authorized in this subsection shall be on an

annual contractual basis for all

participants.

21. Section 121.021(3 9)(b), Florida Statutes (2003) , read

as follows :

' Termination' for a member electing to

participate under the Deferred Retirement

Option Program occurs when the Deferred

Retirement Option Program participant ceases

all employment relationships with emplo yers

under this sy stem in accordance with s.

121.091 (13), but in the event the Deferred

Retirement Option Program participant should

be employed by any such employer within the

next calendar month, termination will be

deemed not to have occurred, except as

provided in s. 121.091 (13)(b)4.c. A leave

of absence shall constitute a continuation

of the employment relationship.

22. Unlike the situation in Albritton , supra , the DROP

program was relatively new and the statutes creating the same

were not well establ ished provisions of law. Dr. Jain was in

the first “class” of DROP for FAMU. FAMU and its lawyers did

not have the benefit of established case law that discussed DROP

and its provisions when this case was filed or at any time

before the hearing. While g eneral contract law also came into

play, it h a d to be considered in the context of the DROP

program , which had no precedent of case law.

23. FAMU argues in its Response to the Motion for

Attorney's Fees that it interpreted the provision in Section

121.0 91(13), Florida Statutes, that requires written approval of

the employer to be either the DROP VOID form provided by the

Division of Retirement or a written document, executed by the

designated University official, specifically approving

Petitioner's decis ion. "The University did not believe the

employment contracts that were issued to Petitioner in error,

would constitute written approval." FAMU's Response at 5. This

argument is consistent with the position FAMU took in the

Pretrial Statement quoted abo ve, that there was never a meeting

of the minds "or any other agreement" that Dr. Jain 's retirement

rescission was accepted.

24. A critical conclusion in the Recommended Order is

found in paragraph 38: "Moreover, while the FAMU administration

did not s ign the DROP - VOID form, the contracts issued to

Dr. Jain constitute written approval of Dr. Jain 's employer

regarding modification of his termination date."

25. FAMU also took the position in the Pretrial

Stipulation that Dr. Jain did not work past May 30 , 2003, based

upon the material facts recited above. Under that reading of

the facts, Dr. Jain did not work during the next calendar month

after DROP, and, therefore terminat ed employment consistent with

the definition of "termination" in Section 121.02 1(39)(b),

Florida Statutes .

26. Again, while the undersigned did not agree with FAMU's

application of the material facts to the then - existing law,

FAMU's interpretation was not completely without merit. See

Mullins v. Kennerly , 847 So. 2d 1151, 1155. (Case completely

without merit in law and cannot be supported by reasonable

argument for extension, modification or reversal of existing law

is a guideline for determining if an action is frivolous.)

27. Accordingly, the undersigned concludes that at th e

time the case was filed and prior to the commencement of the

hearing, FAMU did not know and could not be expected to know

that its defense would not be supported by the application of

then - existing law to the material facts necessary to establish

the def ense.

Based upon the foregoing Findings of Fact and Conclusions

of Law set forth herein, it is

ORDERED:

Petitioner’s Motion for Attorney’s Fees is denied.

DONE AND ORDER ED this 1s t day of March , 2006, in

Tallahassee, Leon County, Florid a.

S

___________________________________

BARBARA J. STAROS

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Fi ling (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 1st day of March , 2006.

ENDNOTES

1/ Petitioner stated in his Initial Brief filed with the First

District Court of Appeal, Case. No . 1D04 - 4167, “presumably, the

ALJ did not act upon Appellant’s Exceptions and Motion because

she did not consider that she continued to have jurisdiction to

do so.” (Initial Brief at 19) Petitioner’s presumption is

correct. FAMU, as the agency issuing th e final order, ruled on

the exceptions pursuant to Section 120.57(1)(k), Florida

Statutes. The Motion for Attorney’s Fees was filed after the

Recommended Order was entered and before the Final Order was

issued. Accordingly, the undersigned could not have ruled on the

motion because no final order had been issued at the time the

motion was filed, and, therefore, there was no prevailing party.

No motion for fees was filed after the Final Order was issued

until the case was remanded to the Division. Becaus e the court’s

discussion of whether the motion was untimely is dispositive of

that issue (Order, p. 3), the undersigned will not address

further the issue of timeliness and will proceed to the

determination of entitlement to attorney’s fees.

2/ The parti es also referenced Florida Administrative Code

Chapter 6C3 - 10 pertaining to tenure and other personnel matters

concerning FAMU.

3/ The effective date of Subsection 121.091(13) was contingent ,

upon the Division of Retirement 's receiving favorable letters

from the Internal Revenue Service. s. 10, Ch. 97 - 180, Laws of

Florida.

COPIES FURNISHED:

Elizabeth McBride, General Counsel

Office of the General Counsel

Florida A & M University

300 Lee Hall

Tallahassee, Florida 32307 - 3100

Anto neia L. Roe, Esquire

Office of the General Counsel

Florida A & M University

300 Lee Hall

Tallahassee, Florida 32307 - 3100

Arthur Lewis Stern, III, Esquire

1904 Indianhead Drive

Tallahassee, Florida 32301

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 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 Di strict where the party resides. The notice of

appeal must be filed within 30 days of rendition of the order to

be reviewed.