05-004200F Hilda Bell And Sharmic Realty Properties, Inc. vs. Department Of Business And Professional Regulation, Division Of Real Estate Status: Closed DOAH Final Order on Friday, December 22, 2006.

Summary: Petitioners failed to show that either of them was a small business party. Furthermore, Respondent showed that its administrative action was substantially justified. Attorney`s fees and costs is denied.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HILDA BELL AND SHARMIC REALTY )

PROPERTIES, INC., )

)

Petitioner s, )

)

vs. ) Case No. 05 - 4200F

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Respondent. )

___________________________________)

FINAL ORDER

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

on April 21 and November 6, 2006, by video teleconference with

connecting sites in Miami, Lauderdale Lakes, and Tallahassee,

Florida, befo re Errol H. Powell, a designated Administrative Law

Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: George G. Lewis, Esquire

George G. Lewis, P.A.

950 South Pine Island Road, Suite 150

Plantation, Florida 33324

For Respondent: James P. Harwood, Esquire

Department of Business and

Professional Regulation

Hurston Building North Tower

400 West Robinson Street , Suite 801N

Orlando, Florida 32801

STATEMENT OF THE ISSUE

The issue for determination is whether Petitioner should be

awarded attorney's fees and costs, pursuant to Section 5 7.111,

Florida Statutes (2005) , and, if so, in what amount.

P RELIMINARY STATEMENT

On November 18, 2005, a Motion for Entry of Final Order and

For Attorney's Fees and Costs, hereinafter Motion, was filed on

behalf of Hilda Bell and Sharmic Realty Properties, Inc.,

hereinafter Ms. Bell and Sharmic Realty, by their cou nsel, Imani

Shele, Esquire, together with an affidavit of fees and costs by

Attorney Shele and a detailed account of costs incurred and of

fee for legal services rendered. The Motion was filed pursuant

to Section 57.111, Florida Statutes (2005), and reque sted

$30,961.35 in attorney's fees and $617.07 in costs, totaling

$31,578.42. The Department of Business and Professional

Regulation, Division of Real Estate, hereinafter, Division of

Real Estate, filed a motion for extension of time in which to

respond, which was granted. The Division of Real Estate filed a

response, among other things, admitting that Ms. Bell and

Sharmic Realty were the prevailing parties and that the Division

of Real Estate was not a nominal party; denying that Sharmic

Realty was a sma ll business entity; stating that the actions of

the Division of Real Estate were substantially justified, that

an essential witness was not available for the final hearing,

and that, therefore, an award of attorney's fees and costs would

be unjust; and req uesting an evidentiary hearing. 1 Subsequently,

Ms. Bell and Sharmic Realty filed a correction of costs

incurred.

The final hearing in this matter was scheduled for

April 21, 2006. At the hearing, Attorney Shele failed to

appear. Ms. Bell, who appeared a t the h earing, had no knowledge

of Attorney Shele’s whereabouts and, even though Ms. Bell had

attempted to contact Attorney Shele prior to the hearing, had

had no contact with her. The Division of Real Estate also had

had no contact with Attorney Shele , e ven though it had attempted

to contact her. The undersigned continued the hearing and , by

order, provided an opportunity for Attorney Shele to explain the

circumstances surrounding her non - appearance at the final

hearing. Attorney Shele failed to respond . However, a notice

of appearance was filed by George G. Lewis, Esquire, George G.

Lewis, P.A., on behalf of Ms. Bell and Sharmic Realty, and

Attorney Lewis requested that he be permitted to represent

Ms. Bell and Sharmic Realty in these proceedings; his request

was granted by the undersigned.

The final hearing was re - scheduled for August 24, 2006.

The Division of Real Estate requested a continuance, which was

granted. After receiving suggested dates from the parties, the

final hearing was re - scheduled f or November 6, 2006.

At hearing, neither party called any witnesses to testify,

instead relying upon the exhibits entered into evidence.

Ms. Bell and Sharmic Realty entered 16 exhibits (Petitioner's

Exhibits marked A through P) into evidence; and the Divi sion of

Real Estate entered two exhibits (Respondent's Exhibits numbered

1 and 2, which have been re - marked A and B) into evidence. 2

Further, both parties chose to make argument at hearing, which

included referencing their respective exhibits.

A transcrip t of the hearing was ordered. At the request of

the parties, the time for filing post - hearing submissions was

set for more than ten days following the filing of the

transcript. The Transcript, consisting of one volume, was filed

on November 16, 2006. Bo th parties timely filed post - hearing

submissions, which were considered in the preparation of this

Final Order.

FINDINGS OF FACT

1. By Final Order filed November 18, 2005, in Department

of Business and Professional Regulation, Division of Real Estate

vs. Hilda Bell and Sharmic Realty Properties, Inc. , Case Nos.

2001 - 80091 and 2001 - 80092, DOAH Case No. 04 - 4470, the Florida

Real Estate Commission, hereinafter Commission, approved and

adopted the recommended findings of fact and conclusions of law

issued by t he undersigned as its own and ordered that the ruling

of the undersigned was accepted as the ruling of the Commission. 3

By Recommended Order issued August 9, 2005, the undersigned

recommended to the Commission that a final order be entered

finding that Ms . Bell and Sharmic Realty did not commit the

violations alleged in the Administrative Complaint and

dismissing the Administrative Complaint. 4 Hence, the ruling of

the Commission was the dismissal of the Administrative Complaint

filed against Ms. Bell and Sharmic Realty.

2. No dispute exists that the Division of Real Estate was

the state agency that initiated the administrative action

against Ms. Bell and Sharmic Realty conducted in a Chapter 120,

Florida Statutes, proceeding.

3 . The administrative action against Ms. Bell and Sharmic

Realty was initiated by the Division of Real Estate for alleged

violations of Section 475.25, Florida Statutes (2000). 5

4. No dispute exists that the Division of Real Estate was

not a nominal party in the administrative actio n .

5. No dispute exists that Ms. Bell and Sharmic Realty were

prevailing parties in the administrative action .

6. Sharmic Realty is incorporated in the State of Florida.

7. Ms. Bell is the sole officer and director of Sharmic

Realty.

8. The domicile of Ms. Bell is the State of Florida.

9. The principal office of Sharmic Realty is in the State

of Florida, being located in Lauderhill, Florida.

10 . At the initiation of the administrative action, the

evidence demonstrates that Sharmic Realty employed thre e agents,

which included Ms. Bell.

11. However, the evidence was insufficient to demonstrate

the total number of employees of Sharmic Realty at the time of

the initiation of the administrative action .

12 . No evidenc e was presented to demonstrate the net worth

of Sharmic Realty at the time of the initiation of the

administrative action .

13 . The attorney, who represented Ms. Bell and Sharmic

Realty in the administrative action, filed an affidavit of

attorney's fees and costs incurred, with an itemized acco unt of

such at torney's fees and costs . The attorney's fees incurred

total $30,961.53 , and the costs incurred total $617.07.

14 . At no time did the Division of Real Estate contest or

dispute the attorney's fees or costs incurred by Ms. Bell and

Sharmic Re alty or the reasonableness thereof.

15 . Prior to filing an administrative com plaint against

Ms. Bell and Sha r m ic Realty, an investigation was performed by

the Division of Real Estate, which was reduced to writing. 6

Among other things, the investigative f ile contained the

following: (a) documents from the file of Sha r m ic Realty,

showing deposit monies paid by t he Buyer of realty for whom

Sha r m ic Realty was the agent; (b) copies of letters, provided by

the Complainants, from the agent of the Sellers of the realty t o

Sha r m ic Realty making a deman d for the deposit monies on the

ground that the Buyer failed to comply with the terms of the

contract for the sell of the realty; (c) a letter from the

Complainants that indicated that the Seller’s agent provided the

letters in (b) above to them; (d ) a summary statement from the

investigator that Ms. Bell admitted to him, during his interview

of her, that she had not notified the Division of Real Estate of

conflicting demands on the deposit monies and a good faith doub t

as to who should re ceive the deposit monies; and (e ) a document

showing , and a confirmation from Ms. Bell , that Sha r m ic Realty

had returned the Buyer's deposit to him.

16. The investigative file was submitted to a Probable

Cause Panel of the Division of Real Estate. The Probable Cause

Panel r eviewed the “complete file” in the ma tter involving

Ms. Bell and Sha r m ic Realty and heard from counsel of the

Division of Real Estate. 7 The investigative file supported a

commission of the alleged violations by Ms. Bell and Sharmic

Realty. The Probable Cause Panel found that probable cause

existed to file an administrative com plaint against Ms. Bell and

Sha r m ic Realty.

17. The evidence demonstrates and a finding is made that

the decision made by the Probable Cause Panel was reasonably

based on fact and law and that, therefore, the Division of Real

Estate ha d a reasonable basis in law and fact to proceed with an

administrative action against Ms. Bell and Shamric Realty.

CONCLUSIONS OF LAW

18 . The Division of Admini strative Hearings has

jurisdiction of these proceedings and the parties thereto

pursuant to Section 57.111, Florida Statutes (2006).

19 . Section 57.111, Florida Statutes (2005), provides in

pertinent part:

(1) This section may be cited as the

"Florida E qual Access to Justice Act."

(2) The Legislature finds that certain

persons may be deterred from seeking review

of, or defending against, unreasonable

governmental action because of the expense

of civil actions and administrative

proceedings. Because of the greater

resources of the state, the standard for an

award of attorney's fees and costs against

the state should be different from the

standard for an award against a private

litigant. The purpose of this section is to

diminish the deterrent effect of seeking

review of, or defending against,

governmental action by providing in certain

situations an award of attorney's fees and

costs against the state.

(3) As used in this section:

* * *

(c) A small business party is a “prevailing

small business party” when:

1. A final judgment or order has been

entered in favor of the small business party

and such judgment or order has not been

reversed on appeal or the time for seeking

judicial review of the judgment or order has

expired;

* * *

(d) The t erm “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 tim e of 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, 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;

or

2. Either small business party as defined

in subparagraph 1., without regard to the

number of its employees or its net worth, in

any action under s. 72.011 or in any

administrative proceeding under that section

to contest the legality of any assessment of

tax imposed for the sale or use of services

as provided in chapter 21 2, or interest

thereon , or penalty therefor.

(e) 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.

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

an award of attorney's fee s 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

circums tances exist which would make the

award unjust.

(b) 1. To apply for an award under this

section, the attorney for the prevailing

small business party must submit an itemized

affidavit to the court which first conducted

the adversarial proceeding in the u nderlying

action, or to the Division of Administrative

Hearings which shall assign an

administrative law judge, in the case of a

proceeding pursuant to chapter 120, which

affidavit shall reveal the nature and extent

of the services rendered by the attorney as

well as the costs incurred in preparations,

motions, hearings, and appeals in the

proceeding.

* * *

(d) The court, or the administrative law

judge in the case of a proceeding under

chapter 120, shall promptly conduct an

evidentiary hearing on th e application for

an award of attorney's fees and shall issue

a judgment, or a final order in the case of

an administrative law judge. The final

order of an administrative law judge is

reviewable in accordance with the provisions

of s. 120.68. If the cou rt affirms the

award of attorney's fees and costs in whole

or in part, it may, in its discretion, award

additional attorney's fees and costs for the

appeal.

1. No award of attorney's fees and costs

shall be made in any case in which the state

agency was a nominal party.

2. No award of attorney's fees and costs

for an action initiated by a state agency

shall exceed $ 50,000.

20. The pleading filed by the attorney for Ms. Bell and

Sharmic Realty complied with the requirements of applying for an

award of a ttorney’s fees and costs under Section 57.111, Florida

Statutes. 8 The Division of Real Estate did not contest or

dispute the attorney’s fees and costs or the reasonableness

thereof.

21 . No dispute exists that the Division of Real Estate was

the initiat ing state agency.

22 . In the case at hand, a s to the burden of proof,

Ms. Bell and Sharmic Realty must prove that they fall within the

definition of a small business party and are prevailing parties;

then the burden shifts to the Division of Real Estate t o show

that its action in initiating the administrative action was

substantially justified. Gentele v. Department of Professional

Regulation, Board of Optometry , 513 So. 2d 672 (Fla. 1st DCA

1987); Helmy v. Department of Business and Professional

Regulati on , 707 So. 2d 366, 368 (Fla. 4th DCA 1998) ; Albert v.

Department of Health, Board of Dentistry , 763 So. 2d 1130 (Fla.

4th DCA 1999), on motion for rehearing, 763 So. 2d 1130 (Fla.

4th DCA 2000) .

23 . No dispute exists regarding prevailing parties.

24 . As to a small business party, the evidence

demonstrates that Ms. Bell was the sole owner of Sharmic Realty,

that Sharmic Realty was incorporated, and that Sharmic Realty

employed three agents, which included Ms. Bell. However, t he

evidence fails to demonstr ate that, at the time of the

initiation of the administrative a ction, Ms. Bell or Sharmic

Realty had no more than 25 full - time employees or a net worth of

not more than $2 million.

25 . Even assuming that the requirement of a small business

party was met , the Divi sion of Real Estate demonstrates that, at

the time it initiated the administrative action, the

administrative action was substantially justified. The Probable

Cause Panel of the Division of Real Estate decided to proceed

with an administrative a ction against Ms. Bell and Sharmic

Realty. In making its decision, the Probable Cause Panel

considered, among other things, the investigative file.

26 . In the case at hand, the undersigned considered the

investigative file reviewed by the Probable Cause Panel.

Department of Professional Regulation, Division of Real Estate

v. Toledo Realty, Inc. , 549 So. 2d 715 (Fla. 1st DCA 1989)

(proper for the presiding officer in a Section 57.111, Florida

Statutes, proceeding to review the investigative report to

dete rmine the issue of substantial justification in initiating

the disciplinary complaint). The evidence demonstrates that the

Probable Cause Panel’s decision to proceed with the

administrative ac tion was based on the statements of the

witnesses, including Ms . Bell, and the documents contained in

the investigative file — all supporting a commission of the

alleged violations. Further , an assumption is made that the

Probable Cause Panel made a determination that the witnesses

were credib le. A finding of fact was made that the Prob able

Cause Panel’s decision to proceed with an administrative

complaint was reasonable.

2 7. In the case at hand, the Division of Real Estate’s

decision, at the initiation of the administrative action, to

proceed with the administrative action against Ms. Bell and

Sharmic Realty had a reasonable basis in law and fact and was,

therefore, substantially justified. § 57.111(4)(a), Fla. Stat.

See Gentele v. Department of Professional Regulation, Board of

Optometry , 513 So. 2d 672, 673 (Fla. 1st DCA 1987) (in an action

for attorney’s fees and costs, pursuant to Section 57.111,

Florida Statutes, where the agency’s initiation of an

administrative action against a licensee was based on a decision

by the agency’s probable cause panel to prosecute, whose

decision essentially turned on the credibility assessment of the

witnesses, including the investigator, which was not itself

unreasonable, the agency’s decision, at the initiation, had a

reasonable basis in law and fact and was, therefore,

substanti ally justified).

CONCLUSION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

ORDERED that the motion for attorney’s fees and costs filed

by Hilda Bell and Sharmic Realty Properties, Inc. is denied.

DONE AND ORDERED this 2 2nd day of Dec ember, 2006 , in

Tallahassee, Leon County, Florida.

S

___________________________________

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 2 2nd day of December, 200 6 .

ENDNOTES

1/ The Division of Real Estate had filed, prior to its response,

a motion to dis miss. Based upon the response filed by the

Division of Real Estate, this Administrative Law Judge

considered the motion to dismiss withdrawn and, therefore, found

it unnecessary to rule upon the motion to dismiss. Furthermore,

Respondent did not advance the motion to dismiss at hearing.

2/ Both parties pre - filed their exhibits.

3/ The Final Order is a part of the record of the case at hand.

4/ The Recommended Order is a part of the record of the case at

hand.

5/ See the Recommended Order.

6 / A c ertified copy of the investigative file was admitted into

evidence.

7 / A certified copy of the transcript of the Probable Cause

Meet ing, regarding Ms. Bell and Sha r m ic Realty, was admitted

into evidence.

8/ The Division of Real Estate did not challeng e the pleading on

these grounds.

COPIES FURNISHED :

George G. Lewis, Esquire

George G. Lewis, P.A.

950 South Pine Island Road, Suite 150

Plantation, Florida 33324

James P. Harwood, Esquire

Department of Business and

Professional Regulation

Hurston Bu ilding North Tower

400 West Robinson Street, Suite 801N

Orlando, Florida 32801

Simone Marstiller, Secretary

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

Josefina Tamayo, General Counsel

D epartment of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

Michael E. Murphy, Director

Division of Real Estate

400 West Robinson Street, Suite 802 North

Orlando, Florida 32801

NOTICE OF RIGHT TO JUDIC IAL 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 A ppellate District where the party resides. The notice of

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

be reviewed.