05-004644F Spanish Oaks Of Central Florida, Llc vs. Lake Region Audubon Society, Inc. Status: Closed DOAH Final Order on Friday, July 7, 2006.

Summary: The grounds for sanctions under Sections 57.105, 120.569(2)(e), and 120.595(1), Florida Statutes, were not proven after the failed challenge to the Environmental Resource Permit.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SPANISH OAKS OF CENTRAL )

FLORIDA, LLC, )

)

Petitioner, )

)

vs. ) Case No. 05 - 4644F

)

LAKE REGION AUDUBON SOCIETY, )

INC., )

)

Respondent. )

)

FINAL ORDER

On April 11, 2006 , a final administrative hearing wa s held

in this case in Tallahassee , Florida, before J. Lawrence

Johnston, Administrative Law Judge, Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Martha Harrell Chumbl er, Esquire

Carlton Fields, P.A.

Post Office Drawer 190

215 South Monroe Street, Suite 500

Tallahassee, Florida 32302 - 0190

and

Benjamin W. Hardin, Jr., E squire

Hardin & Associates, P.A.

Post Office Box 3604

Lakeland, Florida 33802 - 3604

For Respondent: Jeff A. Albinson, Esquire

Marshall, Dennehey, Warner,

Coleman & Goggin

201 East Kennedy Boulevard, Suite 1100

Tampa, Flo rida 33602 - 5827

and

Jack Wolf, Esquire

Jack Wolf, P.A.

2028 Shepherd Road, Number 350

Mulberry, Florida 33860 - 8699

STATEMENT OF THE ISSUE

The issue in this case is whether sanctions, including

attorney 's fees and costs, should be assessed against

Respondent, the Lake Region Audubon Society, Inc. (LRAS) , and

awarded to Petitioner, Spanish Oaks of Central Florida, LLC

(Spanish Oaks), under Sections 57.105, 120.569(2)(e), and

120.595(1) , Florida Statutes, 1 after LRAS unsuccessfully

challenged the Southwest Florida Water Management District 's

(SWFWMD 's ) issuance of Environmental Resource Permit (ERP)

Number 44025789.001 to Spanish Oaks .

PRELIMINARY STATEMENT

On December 20, 2005 , Spanish Oaks filed with DOAH a

Petiti on for Costs and Attorneys' Fees under Sections 57.105,

12 0.569(2)(e), and 120.595(1) (Petition) . DOAH noted that the

case number was "(formerly 05 - 2606)(Closed)" and assigned a new

DOAH Case number, 05 - 4644F. Counsel appeared for LRAS and moved

for an e xtension of time to file a response to the Petition. A

telephonic pre - hearing conference was held on January 17, 2006,

after which Spanish Oaks was granted leave to amend (actually,

to substitute an exhibit) , which mooted parts of a Motion to

Strike and/o r Dismiss Petition filed by LRAS , and LRAS was given

until January 23, 2006, to file a response to the "amended"

Petition. SWFWMD indicated during the pre - hearing conference

that , while a party to Case 05 - 2606, it did not intend to

participate in further proceedings in Case 06 - 4644F .

Another telephonic pre - hearing conference was scheduled for

February 8, 2006, at which time the parties agreed to have

entitlement to costs and attorneys' fees determined on oral

argument and the evidentiary record from Case 05 - 2606, and to

have the amounts determined only if there was entitlement. A

telephonic final hearing for the oral argument was scheduled for

March 16, 2006. Spanish Oaks was required to present the

evide ntiary record from DOAH Case 05 - 2606, which had b een

transmitted to SWFWMD, for use in this case.

On March 3, 2006, additional counsel appeared for LRAS,

which moved for a continuance of the final hearing, which was

granted over objection. T he final hearing was re - scheduled for

April 11, 2006, in Tall ahassee, with an option for counsel to

participate by telephone. During the final hearing, oral

argument was presented, including an argument presented for the

first time by counsel for LRAS that Spanish Oaks waived the

right to seek sanctions by only req uesting a reservation of

jurisdiction and failing to request findings in Case 05 - 2606 on

the prerequisite s for sanctions . After the final hearing, the

parties were given until April 21, 2006, to file proposed

orders. The post - hearing submissions have bee n considered in

the preparation of this Final Order.

FINDINGS OF FACT

LRAS' Amended Petition

1 . SWFWMD issued ERP 44025789.001 to Spanish Oaks on

April 27, 2004.

2 . On May 11, 2005, Donna Stark , a member of LRAS, made a

presentation to the LRAS boar d of directors asserting that

Spanish Oaks was using one - to - three sinkholes to collect runoff

water, instead of digging retention ponds, contrary to legal

requirements and was polluting the underlying aquifer. She

asked LRAS to consider filing an administ rative challenge to the

ERP.

3 . After the presentation, the LRAS board decided that its

five - member Steering Committee -- which took the place of a

president, rotated responsibility for conducting board meetings ,

and functioned like an executive committee -- would continue to

investigate and make a decision as to what role LRAS should have

in the future. The Steering Committee reviewed the information

presented by Starks, decided to file a challenge, and invited

Starks to help draft a P etition for Administr ative Proceeding

(LRAS Petition) , which was signed by four members of the

Steering Committee between May 31 and June 2, 2005 , and was

filed with SWFWMD on June 6, 2005.

4 . Because the timeliness of the LRAS Petition could not

be ascertained from the all egations, SWFWD dismissed the

Petition without prejudice. On July 11, 2005, an Amended

Petition was filed, clarifying that LRAS was orally informed

about the Spanish Oaks ERP by one of its members, later

identified as Donna Stark, on May 10, 2005. The Am ended

Petition was signed by LRAS Steering Committee/Acting President

Carrie Plair on July 6, 2005 , and filed with SWFWMD, which

determined that the Amended Petition was timely filed and

substantially complied with the requirements for a petition and

refer red it to DOAH , where it was given DOAH case number 05 - 2606

and scheduled for a final hearing on September 22 - 23, 2005 .

5 . The Amended Petition alleged in ¶5 :

The following evidence of the karst nature

of the site is submitted:

i) On February 3, 20 05, in a meeting of

Donna Stark, a member of [LRAS], with

Sherry Windsor and biologist Jeff Whealton,

the District personnel called in their

geologist Tom Jackson for his professional

opinion on this issue. Based on his

training in karst geology and years of field

observation at this site (prior to current

ownership), Mr. Jackson referred to this

structure as a fracture (an elongate

sinkhole).

ii) Another individual who has graduate

training in karst topography and who has

studied this site for several years also has

informed [LRAS] that this sinkhole has a

vertical pipe and was an active "surface - to -

ground water system" (Affidavit of

Charles Cook - Ex. 8)

iii) Petitioners have consulted

professionals who specialize in geological

and geotechnical en gineering and who are

well recognized for their work in the state.

Based on the available information they have

expressed concern and have indicated that a

thorough and detailed investigation

consisting of geophysical and geotechnical

methods should be p erformed to address the

concerns of this Petition.

iv) Donna Stark, a member of [LRAS],

observed first - hand the sinkhole in the

southeast portion of Spanish Oaks collapsed

during construction of the retention pond

(perhaps due to heavy equipment or due t o

heavy rains of the fall 2004 hurricanes).

Refer to Affidavit - Ex. 9.

Paragraph 5. iv) of the Amended Petition continued and asserted

that “[o]n November 13, 2004, LRAS member Donna Stark was

informed by a man who had worked on the Spanish Oaks site [later

identified as George Wilt] that the retention ponds were 30 feet

deep.” It also asserted that LRAS member Donna Stark observed

firsthand a sinkhole collapse that allegedly occurred in the

southeast portion of Spanish Oaks site during construction o f

Retention Pond A. The Amended Petition alleged that on

January 25, 2005, Donna Stark, along with a state employee

( later identified as Timothy King), observed a "very large cone -

shaped depression with smooth steeply - sloping sides – so steep

that Donna S tark was nervous that the front - end loader driving

up and down the slopes could end up in the aquifer if he lost

traction in the loose unconsolidated sands. In the center of

the depression was a lake perhaps 50 feet in diameter." The

Amended Petition fur ther alleged that “Donna Stark judged the

distance from the top of the ground surface to the water surface

to be about 15 feet.” It also asserted: "On February 4, 2005,

Donna Stark went to the District office in Bartow to discuss

this issue with the engi neer in charge of the project,

Sherry Windsor, biologist Jeff Whealton and geologist Tom

Jackson. The engineering worksheet in the file shows a required

depth of 6.5 feet from pond bottom elevation (136.5') to top of

bank elevation (143.0')[.] It was sug gested by one of the

District scientists that the retention pond had collapsed during

construction to create the observed depth. This is the only

logical explanation in the opinion of Petitioner since [that

would be a violation and grounds for revocation, as well very

expensive, and would serve no useful purpose]." It also alleged

that, "[w]hen Donna Stark returned on February 10, 2005, the

area had been filled with sand to the required elevation and was

flat - bottomed."

6 . On the clay core issue, parag raph 5. iv) of the Amended

Petition alleged: "When Donna Stark spoke to William Hartmann,

[SWFWMD] Surface Waters Regulation Manager, on April 21, 2005 he

indicated that he had received no phone call from Permittee and

that District staff had not inspecte d the clay core

construction. At that time, the 'As - Built' inspection had been

requested." The "Concise Statement of Ultimate Facts Alleged"

included the statement: "Permittee also did not inform the

District, as required, when (and if) a clay core was constructed

in the berms. Serious impacts on adjacent property may be

expected if the clay cores were not properly constructed."

7 . The Amended Petition in ¶6 alleged the following as

disputed issues of material fact: the Permit allows

construction of a retention pond in a sinkhole in the southeast

portion of the site; construction of a retention pond in a

sinkhole creates a danger to public health and safety; Spanish

Oaks failed to notify SWFWMD that it was beginning construction

of the clay cores of certain berms surrounding the retention

ponds, as required by a permit condition so that SWFWMD could

inspect during the construction ; and Spanish Oaks failed to

follow SWFWMD rules by neglecting to provide for permanent

erosion control measures.

8 . LRA S’ Amended Petition asserted in ¶7. ii) that the

Spanish Oaks development violated Florida Administrative Code

Rule 62 - 522.300(1) and (3), 2 which provided in pertinent part:

(1) . . . [N]o installation shall directly

or indirectly discharge into ground w ater

any contaminant that causes a violation in

the . . . criteria for receiving ground

water as established in Chapter 62 - 520,

F.A.C., except within a zone of discharge

established by permit or rule pursuant to

this chapter.

* * *

(3) Other disch arges through wells or

sinkholes that allow direct contact with

Class G - I, Class F - I, or Class G - II ground

water shall not be allowed a zone of

discharge.

It was alleged that this violation required reversal or

modificatio n of the proposed agency action .

9 . It was later revealed that the profession als referred

to in paragraph 5. iii) of the Amended Petition included three

engineers, one named Larry Madrid , and "many, many professionals

of different government agencies." The attached " affidavit "

(actu ally, an unsworn statement) of Charles Cook set out the

basis of his knowledge of karst geology in general, and the

Spanish Oaks site in particular, and his "conclusion that three

depressional features existed on the subject parcel and I

personally explore d a subterrani an [sic] void in a depressional

sinkhole located in the southern part of the parcel in question,

and believe it was an active recharge conduit connecting with

subsurface aquifers." The attached "affidavit" (actually, an

unsworn statement) of Donna Stark included the statement: "I

hereby certify that the information submitted to [LRAS]

concerning Spanish Oaks is true and accurate to the best of my

knowledge." It also repeated some of the allegations in the

Amended Petition and gave her "qual ifying credentials for the

above observations and interpretations" including :

Ph.D. in Ecology from the University of

Minnesota - 1971 with thesis title

"Paleolimnology of Elk Lake, Itasca State

Park, Northwestern Minnesota"

Post - doctoral Research at L imnological

Research Center, University of Minnesota

1972 - 1973 - published 1976

Science teaching at Southeastern College in

Lakeland 1973 - 1974. Full Professor.

The Amended Petition also was buttressed with citations cited to

several scientific public ations about karst geology, sinkholes ,

and stormwater retention ponds .

1 0 . It is clear that LRAS relied heavily on Donna Stark

and her educational background and scientific knowledge, her

alleged personal knowledge, and her alleged discussions with

vari ous professionals, including District personnel. Starks

actually drafted almost all of the Petition and Amended Petition

for the LRAS Steering Committee .

Proceedings in Case 05 - 2606

1 1 . LRAS was represented in Case 05 - 2606 by Paul Anderson,

a mem ber of LRAS' Steering Committee .

1 2 . By letter filed July 27, 2005, LRAS requested that the

ALJ enter an order requiring a halt to all work on Spanish Oaks.

1 3 . On August 1, 2005, Spanish Oaks filed a Motion to

Dismiss, or in the Alternative, Motion to St rike. The grounds

were that there was no jurisdiction to enforce compliance with

permit conditions, which the prayer for relief in the Amended

Petition seemed to seek , and that allegations of non - compliance

with ERP conditions should be stricken as irrele vant to issuance

of the ERP .

1 4 . Discover y was initiated in Case 05 - 2606 . In addition,

in response to concerns expressed in the Amended Petition,

Spanish Oaks hired Sonny Gulati , a professional engineer and

expert in the field, to undertake a sinkhole investigation on

the Spanish Oaks property using ground penetrating radar (GPR)

and standard penetration testing (SPT) . Mr. Gulati concluded

that there were no active sinkholes on the site and prepared a

report to that effect. Spanish Oaks presented the report to

LRAS in August 2005; Spanish Oaks also served LRAS with a Motion

for Attorney's Fees under Sections 57.105, 120.569(2)(e), and

120.595(1)(a - e), Florida St atutes (Motion) , and informed LRAS

th at Spanish Oaks would file the M otion within 21 days if LRAS

did not drop its opposition to the ERP. The Motion specifically

alleged the impropriety of the sinkhole and clay core issues

raised in the Amended Petition but did not mention the erosion

control issue.

1 5 . LRAS' first attempt at discovery was defective in that

its interrogatories and requests for production were directed to

witness Tom Jackson instead of SWFWMD. SWFWMD moved for a

protective order, which was granted on August 17, 2005. LRAS

promptly served interrogatories and requests for pro duction on

SWFWMD and Spanish Oaks.

1 6 . Also on August 17, 2005 , an Order was entered

explaining to LRAS the procedure for obtaining qualified non -

attorney representation, and an Order on Motion to Dismiss or

Strike and Request for Stop - Work Order was e ntered . The latter

Order recognized that the peculiar procedural posture of the

case ( namely, that LRAS' Amended Petition was timely even though

it challenged an ERP purportedly issued in April 2004)

contributed to the incorrect wording of LRAS' prayer fo r relief;

placed a gloss on LRAS' prayer for relief as seeking denial, not

revocation , of the ERP ; and declined to strike allegations of

non - compliance with the ERP, as they could be relevant to LRAS'

challenge to the provision of reasonable assurance by S panish

Oaks. The stop - work request was denied for lack of jurisdiction

to give injunctive relief in an enforcement matter .

( U nbeknownst to the ALJ, o n July 22, 2005, SWFWMD approved the

transfer of the ERP to the operation phase, with responsibility

for future operation and maintenance transferred to the Spanish

Oaks of Central Florida Homeowners Association (HOA) ,

notwithstanding the requirement of Section 120.569(2)(a),

Florida Statutes, that SWFWMD take no further action on the ERP

except as a party li tigant.)

1 7 . By letter dated August 26, 2005, LRAS requested that

Spanish Oaks allow its retained engineer to enter, inspect, and

conduct investigations on the Spanish Oaks site. Spanish Oaks

denied this request .

1 8 . At the end of August and in earl y September 2005, the

parties exchanged hearing exhibit s and witness lists in

accordance with the Order of Pre - Hearing Instructions.

19 . When LRAS followed the procedure for obtaining

approval of qualified, non - attorney representation by

Mr. Anderson, S panish Oaks objected to Mr. Anderson's

qualifications. On September 7, 2005, an Order Authorizing

Qualified Representation was entered. It recognized the short -

comings in Mr. Anderson's qualifications, and the possibility

that representation by a Florida attorney would benefit LRAS and

make the proceeding fairer to all (including LRAS) . Also o n

September 7, 2005, Spanish Oaks filed its Motion for Attorney's

Fees under Sections 57.105, 120.569(2)(e), and 120.595(1)(a - e),

Florida Statutes. Cf. Finding 14 , supra .

20 . On September 12, 2005, LRAS filed a request for

permission to add Mr. Madrid to its witness list. On

September 14, 2005, an Order Denying, without Prejudice, Request

to Add Witness was entered because the request did not indicate

whether L RAS had conferred with the other parties.

2 1 . On September 15, 2005, Spanish Oaks filed a Response

in Opposition to Request for Entry upon Land for Inspection and

Other Purposes and Motion for Protective Order. Spanish Oaks

asserted that it no longer h ad control over the retention ponds,

which were controlled by the HOA, and that home construction was

in progress, making timing and coordination of the request

problematic, if not impossible. Spanish Oaks also asserted

that, if the inspections were allow ed, multiple issues would

have to be addressed, including potential liability and

insurance issues, and that more detail would be required to

ensure that LRAS' inspection, which could include drilling

sample borings in the retention ponds, would not compro mise the

integrity of the stormwater system and retention ponds.

2 2 . By letter dated September 19, 2005, LRAS requested

that Spanish Oaks agree to the addition of Mr. Madrid as a

witness. By another letter dated September 19, 2005, LRAS

requested that Spanish Oaks produce back - up documentation

supporting Mr. Gulati's sinkhole investigation report , including

site maps of GPR test locations, the uninterpreted GPR raw data,

the GPR strip charts, as well as the actual SPT soil borings,

because LRAS' retaine d expert geologist , Marc Hurst, had advised

LRAS that the information was necessary for him to determine the

reliability of Mr. Gulati's report and conclusions.

2 3 . A telephone hearing was held on September 20, 2005, on

LRAS' request s to add Mr. Madrid to its witness list, for

Mr. Hurst to be allowed entry on the Spanish Oaks site to

inspect and investigate, and for Mr. Hurst to be allowed to

review the back - up documentation and SPT borings supporting

Mr. Gulati's report. No party ever requested a conti nuance of

the final hearing (set to begin in just two days), and t he

request to add Mr. Madrid as a witness was denied as too late .

It is not known what Mr. Madrid's testimony would have been.

LRAS dropped its request for entry on land in the face of t he

opposing arguments from Spanish Oaks . As to the back - up

documentation supporting Mr. Gulati's report, Mr. Gulati was

required to bring the documents to the final hearing but Spanish

Oaks was not required to produce the SPT borings, which were

represented to be numerous and a large quantity of soil.

2 4 . Immediately before the start of the final hearing,

Spanish Oaks filed both a Motion in Limine, which was denied,

and a Motion for Summary Recommended Order. Ruling on the

pending motions was deferred . Spanish Oaks' Motion for Summary

Recommended Order Motion was based on arguments that LRAS'

filing of the Amended Petition was "ultra vires" and that LRAS

had no standing. These issues (which ultimately were resolved

in favor of LRAS and against Spanish O aks) were the focus of

much of the effort of Spanish Oaks in discovery and in the final

hearing , as reflected in the Recommended Order in the case .

Recommended and Final Orders in Case 05 - 2606

2 5 . After the final hearing, Spanish Oaks filed a proposed

r ecommended order suggesting that jurisdiction to rule on its

Motion for Attorney's Fees under Sections 57.105, 120.569(2)(e),

and 120.595(1)(a - e), Florida Statutes, should be retained.

2 6 . A Recommended Order that ERP 44025789.001 be issued to

Spanish O aks was entered in Case 05 - 2606 on November 10, 2005.

Jurisdiction wa s retained to consider Spanish Oaks’ Motion for

Attorney's Fees under Sections 57.105, 120.569(2)(e), and

120.595(1)(a - e), if renewed within 30 days after issuance of the

final order. O n November 30, 2006, SWFWMD entered a Final Order

adopting the Recommended Order in its entirety and issuing ERP

44025789.001 to Spanish Oak s.

2 7 . As to the ERP criteria, t he Recommend ed Order found in

pertinent part :

Alleged Sinkholes

* * *

59. Marc Hurst, a geologist who

testified for LRAS, opined that Mr. Gulati’s

sinkhole investigation was insufficient to

demonstrate whether or not the Spanish Oaks

retention ponds were constructed over

sinkholes. 11 However, Mr. Hurst offered no

opini on as to whether the retention ponds

are located over active sinkholes. Nor did

Mr. Hurst specifically disagree with

Mr. Gulati’s conclusion that the Spanish

Oaks retention ponds have not been impacted

by active sinkholes. 12 To the contrary, Mr.

Hurst ad mitted that the retention ponds were

holding water on the day that he observed

them -- indicating that to him that the ponds

were not acting as a strong conduit to the

aquifer. Mr. Gulati also noted the

significance of the presence of water in the

ponds, st ating that, if there were active

sinkholes in the ponds, they would not hold

water. 13

EN. 11 - Notably, Mr. Hurst has

only participated in four sinkhole

investigations and reviewed the

reports of approximately six other

such investigations, while Mr.

Gu lati has conducted between 700

and 800 during the past ten years.

EN. 12 - The anecdotal testimony

of Charles Cook and Tom Jackson

regarding their observations of

depressions and “cracks” at the

site several years earlier did not

support a finding that there is an

active sinkhole. Mr. Jackson, a

geologist for SWFWMD, was not

willing to draw such a conclusion.

EN. 13 - Mr. Gulati acknowledged

that, in areas where the aquifer

is under artesian pressure, an

active sinkhole will hold water.

However, that aquifer condition

does not exist in the vicinity of

Spanish Oaks. T. 358.

60. The only suggestion of any sinkhole -

related damage to the retention ponds came

from Donna Stark, who testified that George

Wilt -- a heavy equipment operator at the site

inco rrectly identified by Ms. Stark as “an

employee of Spanish Oaks” -- told her that

there had been a sinkhole collapse during

the excavation of Pond A. This hearsay

testimony was directly contradicted by Mr.

Wilt himself, who testified that he made no

such st atement.

61. Despite the allegation in LRAS’

petition regarding observations of collapse

of sinkhole by Donna Stark, Ms. Stark

herself admitted at hearing that she did not

witness any actual collapse. Rather, she

testified that, on January 25, 2005 , she saw

what she believed to be the aftermath of a

sinkhole collapse.

62. Stark may have been confused by the

amount of excavated material being stored on

the ground surface around the pond. 43,906

cubic yards of dirt was excavated from Pond

A al one and was stacked to a height of 8 - 10

feet higher than the natural ground

elevation.

63. Others who observed the site on

January 25, 2005, saw no evidence of a

sinkhole collapse. Tim King, a Florida Fish

and Wildlife Conservation Commission

emplo yee who was with Ms. Stark on

January 25, 2005, merely reported seeing

pond excavation in process. Laura Howe, a

SWFWMD employee who inspected the site on

that date, observed that “[i]t appears depth

of ponds are [p]robably close to permitted

depth.”

64. Moreover, Ms. Stark admits that, on

February 10, 2005, she observed the ponds to

be “[s]even and a half feet, or six and a

half, whatever it should be.” Ms. Stark’s

suggestion that the collapse was filled in

between January 25 and February 10, 2005 , is

belied by testimony that repairing a

sinkhole collapse of the size suggested by

Ms. Stark would have required much more

material than was available. (No dirt was

imported onto the site.) The evidence

admitted at hearing requires a finding that

there was no sinkhole collapse onsite.

65. Spanish Oaks provided reasonable

assurance that the System was designed and

constructed to include sufficient separation

between the pond bottoms and the Floridan

Aquifer to prevent groundwater

contamination.

Construction of Berms

66. LRAS contended in its Amended

Petition that Spanish Oaks failed to give

notice prior to constructing clay cores in

some of the berms onsite, as required as a

condition of the ERP, and that this failure

constituted failure to provide reasonable

assurances. 14

EN. 14 - The Amended Petition

actually alleged that this was a

permit condition violation

requiring revocation of the ERP.

However, it was ruled prehearing

that "the Petitioner's request for

revocation actually is a re quest

for a final order denying Spanish

Oaks' application for a permit"

and that "the allegations of non -

compliance with permit conditions

should not be stricken but instead

should be considered only as they

might relate to Spanish Oaks'

provision of requi red reasonable

assurances for issuance of a

permit." See Order on Motion to

Dismiss or Strike and Request for

Stop - Work Order, entered

August 17, 2005.

67. The interconnection of the three

ponds that are part of the System will allow

them to functi on as one pond, while a

perimeter berm around the entire Spanish

Oaks project will ensure that surface water

runoff is retained onsite and directed

toward the ponds. Ponds A and C are

located, respectively, at the southeast and

northeast corners of Spanis h Oaks. 15 The

design plans submitted with the ERP

application indicated that the berms

alongside the eastern side of Ponds A and C

are to include clay cores, a design feature

that was included as a specific condition in

the ERP. The purpose of the clay c ores was

to prevent offsite impacts caused by lateral

movement of water.

EN. 15 - Pond B is centrally

located in the Spanish Oaks’

interior.

68. The specific conditions of the ERP

also required that Spanish Oaks notify

SWFWMD's "Surface Water Regul ation Manager,

Bartow Permitting Department [William

Hartmann], at least 48 hours prior to

commencement of construction of the clay

core, so that District staff may observe

this construction activity."

69. LRAS proved that Mr. Hartmann did

not perso nally receive a phone call prior to

the construction of the clay cores, as

required by the ERP, and that SWFWMD staff

did not observe the construction. Mr.

Hartmann explained that this constituted a

permit condition compliance issue which

would prevent th e ERP from being transferred

to the operation phase until SWFWMD was

assured that the clay core was, in fact,

constructed as required.

70. To confirm proper construction of

the clay core, Spanish Oaks undertook soil

borings. SWFWMD staff engineer S herry

Windsor was onsite to observe the soil

borings. Spanish Oaks also submitted a

report from its engineering consultant

certifying that the clay cores had been

properly constructed in accordance with the

ERP.

71. SWFWMD typically relies on a pro ject

engineer’s signed and sealed certifications

of compliance matters. SWFWMD staff

observations and the certification provided

by the Spanish Oaks engineer satisfactorily

resolved the issue of proper clay core

construction. Failure to notify

Mr. Hartma nn prior to construction, as

required by the ERP, does not undermine

Spanish Oaks' provision of the necessary

reasonable assurance for issuance of the

ERP.

28 . Endnote 3 at Finding of Fact 4 in the Recommended

Order in Case 05 - 2606 stated: " The Amende d Petition also

alleged that Spanish Oaks failed to follow SWFWMD rules by

neglecting to provide for permanent erosion control measures,

but no evidence was presented by LRAS on this issue, which

appears to have been abandoned. "

29 . As to the ERP criter ia, the Recommended Order

concluded in pertinent part:

87. The applicable criteria for the

issuance of a standard general ERP for the

Spanish Oaks project are set forth in Rules

40D - 4.301 and 40D - 4.302, as well as SWFWMD's

Basis of Review (BOR), whic h is made

applicable pursuant to Rule 40D - 4.301(3).

88. LRAS’ challenge to the ERP alleges

the presence of a sinkhole or a sinkhole

collapse in one or more of the retention

ponds for the Spanish Oaks subdivision, and

the impact that such alleged sinkh ole or

sinkhole collapse would have on conditions

for issuance relating to groundwater

quality.

89. LRAS’ case reflects a basic

misperception of the permitting criteria

applicable to surface water management

system retention ponds. Section 6.4.1.b. of

the BOR, which establishes specific design

criteria for retention areas, requires as

follows:

Depth – The detention or retention

area shall not be excavated to a

depth that breaches an aquitard

such that it would allow for

lesser quality water to pass,

either way, between the two

systems. In those geographical

areas of the District, where there

is not an aquitard present, the

depth of the pond shall not be

excavated to within two (2) feet

of the underlying limestone which

is part of a drinking water

aq uifer.

As found, the Spanish Oaks retention ponds

comply with this criterion.

90. LRAS also contends that the Spanish

Oaks retention ponds violate Rule 62 -

522.300, a rule which, in LRAS’ view,

prohibits the location of a stormwater

retention pond i n or over a sinkhole. LRAS’

reading of the rule is incorrect. Rule 62 -

522.300(1), with certain exceptions not

relevant here, provides that

no installation shall directly or

indirectly discharge into ground

water any contaminant that causes

a violation i n the . . . criteria

for receiving ground water as

established in Chapter 62 - 520,

F.A.C., except within a zone of

discharge established by permit or

rule pursuant to this chapter.

The purpose of a zone of discharge is to

provide a mixing zone “extending to the base

of the designated aquifer or aquifers,

within which an opportunity for the

treatment, mixture or dispersion of wastes

into receiving ground water is afforded.”

Fla. Admin. Code R. 62 - 520.200(23). No

evidence introduced at hearing suggests tha t

the surface water runoff that infiltrates

through the bottom surfaces of the Spanish

Oaks retention ponds, and then travels

approximately 70 feet through soil before

reaching the Floridan aquifer, will exceed

applicable ground water criteria when it

reac hes the aquifer. For that reason, the

Spanish Oaks retention ponds do not need a

zone of discharge. Rule 62 - 522.300(3)

provides that

Other discharges through wells or

sinkholes that allow direct

contact with Class G - I, Class F - I,

or Class G - II ground w ater shall

not be allowed a zone of

discharge.

(Emphasis supplied). Classes F - 1, G - 1, and

G - II groundwaters are designated for potable

use and are located within an aquifer. Fla.

Admin. Code R. 62 - 520.410. “Aquifer” is

specifically defined as “a geol ogic

formation, group of formations, or part of a

formation capable of yielding a significant

amount of ground water to wells, springs or

surface water." Fla. Admin. Code R. 62 -

520.200(2). Unless the alleged sinkholes

allowed "direct contact" with the Fl oridan

Aquifer, a zone of discharge would be

permitted, assuming one were needed.

91. No evidence introduced at hearing

suggests that discharges from the retention

ponds will come into direct contact with

Class G - 1, Class F - 1, or Class G - II

groundwa ters. Instead, the discharges from

the Spanish Oaks ponds only indirectly

contact a drinking water aquifer, after

infiltrating through tens of feet of

separating soil layers. LRAS has not

identified any applicable rule that

prohibits the location of a re tention pond

in or over a relic sinkhole. Indeed, the

record establishes that the presence of a

sinkhole in or under a retention pond is

problematic only if sinkhole activity

affects the approved design of the retention

pond. See Findings 47 and 49, supr a .

92. LRAS’s assertion of a sinkhole

collapse at Spanish Oaks during the time

frame alleged is contrary to the greater

weight of the evidence, which established

that the ponds have been constructed and are

operating as designed and that there is no

active sinkhole on the Spanish Oaks site

that adversely affects the quality of

receiving waters such that state water

quality standards would be violated, or that

otherwise affects Spanish Oaks’ ability to

provide reasonable assurance of meeting

applicabl e permitting conditions.

93. LRAS offered no evidence to

establish that water percolating through the

Spanish Oaks retention ponds will come into

direct contact with a drinking water aquifer

or that a state water quality standard would

be violated b y the project. The greater

weight of the evidence established that the

Spanish Oaks retention ponds comply with the

applicable construction requirement as

stated in BOR Section 6.4.1.b. There is

more than sufficient soil underlying the

Spanish Oaks reten tion ponds to assure

compliance with this requirement.

94. As found, Spanish Oaks' failure to

notify Mr. Hartmann before beginning

construction of the clay core berm does not

prevent Spanish Oaks from providing

reasonable assurance that permit crite ria

will be met. As a result, Spanish Oaks has

met its burden of proof and persuasion that

all conditions for issuance of the permit

have been satisfied and that it is entitled

to the requested ERP.

3 0 . As suggested in the proposed recommended order fil ed

by Spanish Oaks in Case 05 - 2606, the Recommended Order retained

jurisdiction to consider Spanish Oaks’ Motion for Attorney's

Fees under Sections 57.105, 120.569(2)(e), and 120.595(1)(a - e),

if renewed within 30 days after issuance of the final order.

Sp anish Oaks "renewed" the motion by filing its Petition in this

case. SWFWMD's Final Order adopted the Recommended Order in its

entirety.

Petition in Case 05 - 4644F

3 1 . The Petition in this case asserts essentially that

LRAS had no competent substantial evidence : that there was a n

active sinkhole under the retention ponds on the Spanish Oaks

site ; that the required clay core was not installed; or that

erosion control measures were not used . As to the sinkhole

allegations, Spanish Oaks asserts that, even if there were a

reasonable basis for filing the Amended Petition in Case 05 -

2606, it should have been withdrawn upon receipt of Mr. Gulati's

report and Spanish Oaks' Motion for Attorney's Fees under

Sections 57.105, 120.569(2)(e), and 120.595(1)(a - e), Flo rida

St atutes.

3 2 . As indicated in the findings of fact and conclusions

of law in Case 05 - 2606, Donna Stark and Charles Cook did not

testify precisely as LRAS had been led to believe from their

"affidavits" in the Amended Petition that they would. Like wise,

the testimony of Timothy King and George Wilt was not supportive

of Donna Stark's "affidavit" as to a sinkhole collapse during

construction on the site, or her testimony as to Mr. Wilt's

statements to her. T he testimony of Tom Jackson and

Charles Co ok also did not completely support Donna Stark's

"affidavit" as to the existence of sinkholes on the site . But

while the use of "discovery" to establish the testimony of those

individuals before the hearing certainly might have alerted LRAS

to problems wi th the "affidavits" it was relying on, it was not

incumbent on LRAS to undertake such "discovery" in order to

avoid sanctions. I t is not found that LRAS's prosecution of its

Amended Petition in reliance on those "affidavits" was

frivolous , for an improper purpose, or to needlessly increase

the costs to Spanish Oaks of having its ERP approved.

3 3 . LRAS' prosecution of the Amended Petition after

receiving Mr. Gulati's report and notice of Spanish Oaks'

intention to file its Motion for Attorney's Fees unde r Sections

57.105, 120.569(2)(e), and 120.595(1)(a - e), Florida St atutes ,

also was not proved to be frivolous, for an improper purpose, or

to needlessly increase the costs to Spanish Oaks of having its

ERP approved. LRAS attempted to follow up on Mr. Gulat i's

report so as to enable its retained expert, Mr. Hurst, to verify

whether it should be accepted as conclusive proof of the

hydrogeology of the site, and perhaps assure LRAS that its

Amended Petition could be withdrawn, but LRAS' attempts were

unsuccessf ul . As a result, LRAS was left to presentation of

Mr. Hurst's testi mony based on the information he had .

34. Mr. Hurst testified to the likely existence of at

least three sinkholes at the site . He based this testimony on

his knowledge of the area's st ratigraphy, a erial photographs and

topographical maps showing unexplained surface depressions, and

evidence reported in Mr. Gulati's report. In addition, there

are two documented sinkholes in the "immediate vicinity" of the

site an d about a dozen more wit hin two - to - three miles. Based

upon his review of all of the pertinent data, Mr. Hurst

testified that the surface depressions on the site probably are

part of a " lineament " -- i.e. , a fracture in the limestone

formation below the earth's surface along which sinkholes tend

to form . While he was unable to testify that an active sinkhole

existed at the site, he maintained that the information

presented to him was insufficient to disprove the existence of

an active sinkhole at the site. He also testified to his

opinion that relic sinkholes probably existed under the

retention ponds. As found in the Recommended Order in Case 05 -

2606:

A relic sinkhole, as contrasted to an active

sinkhole, has either been sealed or has

self - sealed, so that there is no connectio n

between the sinkhole and the underlying

aquifer. An active sinkhole provides a

direct connection -- referred to by both LRAS’

and Spanish Oaks' experts as a “good

communication” -- between the surface and the

aquifer.

Mr. Hurst testified that, even if no a ctive sinkhole existed at

the site, the likely relic sinkholes made it more likely that

active sinkholes would open there and create a direct conduit to

the aquifer.

35 . At the final hearing and in its proposed recommended

order in Case 05 - 2606 , LRAS ar gued that the Spanish Oaks

retention ponds violat ed Rule 62 - 522.300 , even if they were no t

constructed over active sinkholes but rather only over relic

sinkholes. As concluded in the Recommended Order and Final

Order in Case 05 - 2606, such an interpretatio n of the Rule would

be "incorrect" and a "misperception." But LRAS' primary

argument was that Spanish Oaks did not provide reasonable

assurance that there were not active sinkholes at the site , and

the "fall - back" argument was not unreasonable to make bas ed

primarily on Mr. Hurst's testimony .

3 6 . The Petition also asserted that LRAS had no evidence

in support of its allegation that the required clay core was not

in stalled , or that required erosion control measures were not

provided. But facts supported a finding that Spanish Oaks did

not notify SWFWMD, as required, which was ruled to be relevant

to the provision of reasonable assurance in general, and the

erosion control issue was a minor feature of the Amended

Petition, and the Motion for Attorney's Fe es under Sections

57.105, 120.569(2)(e), and 120.595(1)(a - e), Florida St atutes,

filed in Case 05 - 2606 did not mention it.

37 . Evidence was presented during the final hearing in

Case 05 - 2606 that t he challenge in LRAS' Petition and Amended

Petition wa s v irtually identical to a challenge to Spanish Oaks'

ERP that was filed by Donna Starks on behalf of her not - for -

profit corporation, Central Florida EcoTours, in early May 2005

but was time - barred and dismissed because Starks and Ecotours

received mailed not ice of the issuance of the ERP to Spanish

Oaks on April 27, 2004. Spanish Oaks implied during the final

hearing in Case No. 05 - 2606 that Donna Starks told LRAS about

the fate of the EcoTours challenge and asked LRAS to file its

Petition and Amended Petiti on at her behest to block the Spanish

Oaks development for leverage to accomplish her ulterior motive -

- namely, purchase of the property by EcoTours . But those

allegations were denied by LRAS and were not proven during the

hearing in Case 05 - 2606 .

CONCL USIONS OF LAW

Burdens of Proof

38 . Spanish Oaks had the burden to prove in this case that

sanctions, including fees and costs, should be awarded under

Sections 57.105, 120.569(2)(e), and 120.595(1), Florida

Statutes. LRAS had the burden to prove its arg ument that

Spanish Oaks waived, and should be estopped from seeking,

sanctions in this case

LRAS' Waiver/Estoppel Argument

39 . LRAS argues in this case that Spanish Oaks waived, and

should be estopped from seeking, sanctions in this case because

it did n ot request or obtain findings in Case 05 - 2606 either

that LRAS raised no j usticiable issue of law or fact or that

LRAS brought Case 05 - 2606 for an improper purpose, but instead

only asked for and received a retention of jurisdiction to

consider those issue s.

4 0 . Spanish Oaks in its Proposed Final O rder in this case

concedes that, to be applicable, Section 120.595(1)(a), Florida

Statutes, could be read to require a finding (or at least a

request for a finding) that LRAS participated in the hearing for

an improper purpose. However, it is concluded that the

procedure of retaining jurisdiction in a recommended order to

consider sanctions requested in a pending motion is sufficient

to preserve jurisdiction over the Motion for Attorney's Fees

under Sections 57 .105, 120.569(2)(e), and 120.595(1)(a - e),

Florida St atutes , filed in Case 05 - 2606, especially where the

final order also reserves jurisdiction, which occurred in this

case by adoption of the Recommended Order "in its entirety."

See G.E.L. Corp. v. Dept. o f Environmental Protection, et al. ,

875 So. 2d 1257 (Fla. 5th DCA 2004).

Section 57.105

4 1 . Section 57.105, Florida Statutes, provides in

pertinent part:

(1) Upon the court's initiative or motion

of any party, the court shall award a

reasonable attor ney's fee to be paid to the

prevailing party in equal amounts by the

losing party and the losing party's attorney

on any claim or defense at any time during a

civil proceeding or action in which the

court finds that the losing party or the

losing party's a ttorney knew or should have

known that a claim or defense when initially

presented to the court or at any time before

trial:

(a) Was not supported by the material facts

necessary to establi sh the claim or defense;

or

(b) Would not be supported by the

ap plication of then - existing law to those

material facts.

However, the losing party's attorney is not

personally responsible if he or she has

acted in good faith, based on the

representations of his or her client as to

the existence of those material facts. If

the court awards attorney's fees to a

claimant pursuant to this subsection, the

court shall al so award prejudgment interest.

(2) Paragraph (1)(b) does not apply if the

court determines that the claim or defense

was initially presented to the court a s a

good faith argument for the extension,

modification, or reversal of existing law or

the establishment of new law, as it applied

to the material facts, with a reas onable

expectation of success.

(3) At any time in any civil proceeding or

action in whic h the moving party proves by a

preponderance of the evidence that any

action taken by the opposing party,

including, but not limited to, the filing of

any pleading or part thereof, the assertion

of or response to any discovery demand, the

assertion of any claim or defense, or the

response to any request by any other party,

was taken primarily for the purpose of

unreasonable delay, the court shall award

damages to the moving party for its

reasonable expenses incurred in obtaining

the order, which may include attorney's

fees, and other loss resulting from the

improper delay.

(4) A motion by a party seeking sanctions

under this section must be served but may

not be filed with or presented to the court

unless, within 21 days after service of the

motion, the ch allenged paper, claim,

defense, contention, allegation, or denial

is not withdrawn or appropriately corrected.

(5) In administrative proceedings under

chapter 120, an administrative 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 provided in subsections

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

subject to judicial re view pursuant to s.

120.68. If the losing party is 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 dismissal by a

nonprevailing party does not divest the

administrative law judg e of jurisdiction to

make the award described in this subsection.

(6) The provisions of this section are

supplemental to other sanctions or remedies

available under law or under court rules.

4 2 . The standards set forth in Subsection (1) , and

incorpora ted by reference in Subsection (5) , were the result of

an amendment to Section 57.105, Florida Statutes, in 1999. See

§ 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 compl ete absence of a justiciable issue of either law or

fact raised by the complaint or defense of the losing party ."

4 3 . In the case of Wendy's v. Vandergriff , 865 So. 2d 520,

523 (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. Se e

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 a re

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

entitl ed to statutory attorney'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 w hether 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 appl ication 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]

T he 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 - existi ng 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 how far

it h as been lowered is an open question

requiring a case by case analysis.

Id. at 524 , citing Mullins v. Kennelly , 847 So. 2d at 1155, n.4.

(Fla. 5th DCA 2003).

4 4 . 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 [Citations omitted.]

Significant ly, the 1999 version of 57.105

" applies to any claim or defense, and does

no t require that the entire action be

frivolous."

Albritton v. Ferrera , 913 So. 2d 5, 8 (Fla. 1st DCA 2005),

quoting Mullins v. Kennelly , supra . The Florida Supreme Court

has noted that the 1999 amendments to Section 57.105, Florida

Statutes, "greatly expa nd the statute's potential use." Boca

Burger, Inc. v. Richard Forum , 912 So. 2d 561, 570 (Fla. 2005).

4 5 . The phrase "supported by the material facts" found in

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

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.

46 . In this case, Spanish Oaks did not prove that LRAS

knew or should have known at the time it filed its Am ended

Petition, or at any time through the final hearing, that its

position was not supported by the material facts necessary to

its challenge to the ERP. As late as two days before the final

hearing, LRAS was attempting to add Larry Madrid, an engineer,

as a witness and was attempting to get access to information its

expert geologist, Marc Hurst, said was necessary for him to

verify the reliability of Mr. Gulati's report and conclusion

that there was no active sinkhole beneath the Spanish Oak

retention po nds. It is not known what Mr. Madrid's testimony

would have been, and without access to the information he

requested, Mr. Hurst testified that he would not rely on Mr.

Gulati's report and conclusion. If accepted, Mr. Hurst's

testimony could have supporte d a finding that Spanish Oaks di d

not meet its burden in Case 05 - 2606 of proving that there was no

active sinkhole on the site. For these reason s , it is concluded

that Spanish Oaks did not prove entitlement to sanctions under

Section 57.105(1).

47 . As to the clay core required in the berm, while no

evidence was presented that the clay core was not present, the

facts supported a finding that Spanish Oaks did not notify

SWFWMD, as required, which was ruled to be relevant to the

provision of reasonable ass urance in general. U nder those

circumstances, it was not incumbent on LRAS to drop the part of

the clay core allegation that serious harm would be possible if

the clay core were not constructed as required .

48 . No evidence was presented on the issue of erosion

control. But that was a minor feature of the Amended Petition,

and the Motion for Attorney's Fees under Sections 57.105,

120.569(2)(e), and 120.595(1)(a - e), Florida St atutes, filed in

Case 05 - 2606 did not mention the erosion control issue. Under

those circumstances, it was not incumbent on LRAS to file a

paper drop ping that part of the Amended Petition instead of just

abandoning it , as apparently was done .

Section 120.569(2)(e)

49 . Section 120.569(2)(e), Florida Statutes, provides:

(e) All pleadings, motions, or other papers

filed in the proceeding must be signed by

the party, the party's attorney, or the

party's qualified representative. The

signature constitutes a certificate that the

person has read the pleading, motion, or

other paper a nd that, based upon reasonable

inquiry, it is not interposed for any

improper purposes, such as to harass or to

cause unnecessary delay, or for frivolous

purpose or needless increase in the cost of

litigation. If a pleading, motion, or other

paper is sign ed in violation of these

requirements, the presiding officer shall

impose upon the person who signed it, the

represented party, or both, an appropriate

sanction, which may include an order to pay

the other party or parties the amount of

reasonable expenses incurred because of the

filing of the pleading, motion, or other

paper, including a reasonable attorney's

fee.

5 0 . Case law holds that an objective standard is used to

determine improper purpose for the purpose of imposing sanctions

on a party or attorn ey under Section 120.569(2)(e) and

predecessor statutes. As stated in Friends of Nassau County,

Inc. v. Nassau County , 752 So. 2d 42, 49 - 51 (Fla. 1st DCA 2000):

In the same vein, we stated in Procaccci

Commerical Realty, Inc. v. Department of

Health and R ehabilitative Services , 690 So.

2d 603 (Fla. 1st DCA 1997): The use of an

objective standard creates a requirement to

make reasonable inquiry regarding pertinent

facts and applicable law. In the absence of

"direct evidence of the party's and

counsel's st ated of mind, we must examine

the circumstantial evidence at hand and ask,

standing in the party's or counsel's shoes

would have prosecuted the claim." Id. at

608 n. 9 (quoting Pelletier v. Zweifel , 921

F. 2d 1465 , 1515 (11th Cir. 1991)). See In

re Sargen t , 136 F. 3d 349, 352 (4th Cir.

1998) ("Put differently a legal position

violates Rule 11 if it 'has "absolutely no

chance of success under the existing

precedent." ') Brubaker v. City of Richmond ,

943 F. 2d 1363, 1373 (4th Cir. 1991)(quoting

Cleveland Demol ition Co. v. Azcon Scrap

Corp. , 827 F. 2d 984, 988 (4th Cir. 1987))."

* * *

Whether [predecessor to Section 120.595(1)]

section 120.57(1)(b)5., Florida Statutes

(1995), authorizes sanctions for an initial

petition in an environmental case

turns . . . on the question whether the

signer could reasonably have concluded that

a justiciable controversy existed under

pertinent statutes and regulations. If,

after reasonable inquiry, a person who

reads, then signs, a pleading had

"reasonably clear legal justification" to

proceed, sanctions are inappropriate.

Procacci , 690 So. 2d at 608 n. 9; Mercedes ,

560 So. 2d at 278.

5 1 . In addition, it was held in Mercedes Lighting and

Electric Supply, Inc. v. Dept. of General Services , 560 So. 2d

272, 276 (Fla. 1st DCA 1990), that the case law construing Rule

11 of the Federal Rules of Civil Procedure was useful in

applying a predecessor statute to Section 120.569(2)(e). The

court went on to state:

The rule's proscription of filing papers for

an improper purpo se is designed to

discourage dilatory or abusive tactics and

to streamline the litigation process. The

rule is aimed at deterrence, not fee

shifting or compensating the prevailing

party. In short, the key to invoking rule

11 is the nature of the conduct of counsel

and the parties, not the outcome.

Schwarzer, "Sanctions Under the New Federal

Rule 11 -- A Closer Look," 104 F.R.D, 181, 185

(1985). A party seeking sanctions under

rule 11 should give notice to the court and

the offending party promptly upon

di scovering a basis to do so. Advisory

Committee Note to Rule 11. If it may be

fairly accomplished, the court should then

promptly punish the transgression. In re

Yagman , 796 F. 2d 1165, 1183 (9th Cir. 1986).

See also , Ortho Pharmaceutical v. Sona

Distrib utors, Inc. , 117 F.R.D. 170, 173

(S.D. Fla. 1986). If an obvious and

recognizable offending pleading is filed,

the court at the very least should provide

notice to the attorney or party that rule 11

sanctions will be as sessed at the end of the

trial i f ap propriate. The purpose of the

rule -- deterring subsequent abuses -- is not

well served if an offending pleading is

fully litigated an d the offender is not

punished until the trial is at an end. See

In re Yagman , 796 F. 2d at 1184 - 6; and Ortho

Pharmaceutical , 117 F.R.D. at 173. One of

the basic tenets of rule 11 enforcement

appears to be, not surprisingly, that a

party is required to take action to mitigate

the amount of resources expended in defense

of the offending pleading or motion. In his

article, Schw arzer comments: " Normally,

although not necessarily always, a claim or

defense so meritless as to warrant

sanctions, should have been susceptible to

summary disposition either in the process of

narrowing issues under Rule 16 or by motion.

Only in the rar e case will the offending

party succeed in delaying exposure of the

baseless character of its claim or defense

until trial. Permitting or encouraging the

opposing party to litigate a baseless action

or defense past the point at which it could

have been di sposed of tends to perpetuate

the waste and delay which the rule is

intended to eliminate. It also undermines

the mitigation principle which should apply

in the imposition of sanctions, limiting

recovery to those expenses and fees that

were reasonably nec essary to resist the

offending paper. " Schwarzer, 104 F.R.D. at

198.

Id. at 276 - 277. In this case , Spanish Oaks waited until just

prior to the final hearing in Case 05 - 2606 to seek sanctions

under Section 120.569(2)(e) . The delay in seeking sanctions

also militates, in an d of itself, against granting the request

for sanctions.

5 2 . For the reasons set out in the Findings of Fact, under

the circumstances, LRAS's participation in this proceeding was

not proven to be for an improper purpose under Secti on

120.56 9 (2)(e).

Section 120.595(1)

5 3 . Section 120.595(1), Florida Statutes, provides:

CHALLENGES TO AGENCY ACTION PURSUANT TO

SECTION 120.57(1).

(a) The provisions of this subsection

are supplemental to, and do not abrogate,

other provisions allowing the award of fees

or costs in administrative proceedings.

(b) The final order in a proceeding

pursuant to s. 120.57(1) shall award

reasonable costs and a reasonable attorney's

fee to the prevailing party only where the

nonprevailing adverse p arty has been

determined by the administrative law judge

to have participated in the proceeding for

an improper purpose.

(c) In proceedings pursuant to s.

120.57(1), and upon motion, the

administrative law judge shall determine

whether any party parti cipated in the

proceeding for an improper purpose as

defined by this subsection. In making such

determination, the administrative law judge

shall consider whether the nonprevailing

adverse party has participated in two or

more other such proceedings invol ving the

same prevailing party and the same project

as an adverse party and in which such two or

more proceedings the nonprevailing adverse

party did not establish either the factual

or legal merits of its position, and shall

consider whether the factual o r legal

position asserted in the instant proceeding

would have been cognizable in the previous

proceedings. In such event, it shall be

rebuttably presumed that the nonprevailing

adverse party participated in the pending

proceeding for an improper purpose.

(d) In any proceeding in which the

administrative law judge determines that a

party participated in the proceeding for an

improper purpose, the recommended order

shall so designate and shall determine the

award of costs and attorney's fees.

(e) For the purpose of this subsection:

1. "Improper purpose" means

participation in a proceeding pursuant to s.

120.57(1) primarily to harass or to cause

unnecessary delay or for frivolous purpose

or to needlessly increase the cost of

litigation, licen sing, or securing the

approval of an activity.

2. "Costs" has the same meaning as the

costs allowed in civil actions in this state

as provided in chapter 57.

3. "Nonprevailing adverse party" means

a party that has failed to have

substantially changed the outcome of the

proposed or final agency action which is the

subject of a proceeding. In the event that

a proceeding results in any substantial

modification or condition intended to

resolve the matters raised in a party's

petition, it shall be determined that the

party having raised the issue addressed is

not a nonprevailing adverse party. The

recommended order shall state whether the

change is substantial for purposes of this

subsection. In no event shall the term

" nonprevailing party" or "p revailing party"

be deemed to include any party that has

intervened in a previously existing

proceeding to support the position of an

agency.

5 4 . As indicated, case law holds that an objective

standard is used to determine improper purpose for the purpos e

of imposing sanctions on a party or attorney under Section

120.569(2)(e), Florida Statutes, and predecessor statutes.

Although there is no appellate decision explicitly extending the

objective standard to Section 120.595(1), there does not appear

to be any reason why the objective standard should not be used

to determine whether LRAS' participation in Case 05 - 2606 was for

an improper purpose.

5 5 . In another appellate decision, decided under a

predecessor to Section 120.595(1) before the objective stan dard

was enunciated for cases under Section 120.569(2)(e) and its

predecessor statutes, the court in Burke v. Harbor Estates

Ass'n , 591 So. 2d 1034, 1036 - 1037 (Fla. 1st DCA 1991), held:

The statute is intended to shift the cost of

participation in a Sect ion 120.57(1)

proceeding to the nonprevailing party if the

nonprevailing party participated in the

proceeding for an improper purpose. A party

participates in the proceeding for an

improper purpose if the party's primary

intent in participating is any of four

reasons, viz: to harass, to cause

unnecessary delay, for any frivolous

purpose, [FN1] or to needlessly increase the

prevailing party's cost of securing a

license or securing agency approval of an

activity.

Whether a party intended to participate in a

Section 120.57(1) proceeding for an improper

purpose is an issue of fact. See Howard

Johnson Company v. Kilpatrick , 501 So.2d 59,

61 (Fla. 1st DCA 1987) (existence of

discriminatory intent is a factual issue);

School Board of Leon County v. Hargis , 400

S o.2d 103, 107 (Fla. 1st DCA 1981)

(questions of credibility, motivation, and

purpose are ordinarily questions of fact).

The absence of direct evidence of a party's

intent does not convert the issue to a

question of law. Indeed, direct evidence of

intent may seldom be available. In

determining a party's intent, the finder of

fact is entitled to rely upon permissible

inferences from all the facts and

circumstances of the case and the

proceedings before him.

FN1. A frivolous purpose is one

which is of lit tle significance or

importance in the context of the

goal of administrative

proceedings. Mercedes Lighting &

Electrical Supply, Inc. v.

Department of General Services ,

560 So.2d 272, 278 (Fla. 1st DCA

1990).

56 . This case is distinguishable from the Fri ends of

Nassau County and Burke cases. Likewise, it is distinguishable

on the facts from the decision in Good Samaritan Hosp. v. Dept.

of Health and Rehabilitative Servs. , 582 So. 2d 722, 724 (Fla.

4th DCA 1991), also cited by Spanish Oaks in support of i ts

claim for an award under Section 120.595(1).

57 . W hile DOAH has jurisdiction to enter the final order

under Section 120.569(2)(e) , only SWFWMD has jurisdiction to do

so under Section 120.595(1), and then only if the recommended

order determines facts entit ling a party to an award. W hile the

substantive law under the two statutes also is different to some

extent, the differences are slight and of no import in this

case. Since no award is being made under Section 120.569(2)(e )

because it was not prove n that LRAS participated in Case 05 - 2606

for an improper purpose, no determination of facts entitling

Spanish Oaks to an award of fees and costs would be made under

Section 120.595(1), and there is no need to enter a supplemental

recommended order under Se ction 120.595(1) (c) .

DISPOSITION

Based on the foregoing Findings o f Fact and Conclusions of

Law, the Petition for Costs and Attorneys' Fees under Sections

57.105, 12 0.569(2)(e), and 120.595(1) is denied .

DONE AND ORDERED this 7th day of July , 2006 , in

Tallahassee, Leon County, Florida.

S

J. LAWRENCE JOHNSTON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNC OM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 7th day of July , 2006 .

ENDNOTES

1 / References to these statutes are to the 2005 codif ication of

the Florida Statutes.

2 / References to the Florida Administrative Code refer to the

codification in effect at the time of the final hearing in DOAH

Case No. 05 - 2606.

COPIES FURNISHED :

Martha Harrell Chumbler, Esquire

Carlton Fields, P. A.

Post Office Drawer 190

215 South Monroe Street, Suite 500

Tallahassee, Florida 32302 - 0190

Benjamin W. Hardin, Jr., Esquire

Hardin & Associates, P.A.

Post Office Box 3604

Lakeland, Florida 33802 - 3604

Martha A. Moore, Esquire

Southwest Florida Wate r Management District

2379 Broad Street

Brooksville, Florida 34604 - 6899

Jack Wolf, Esquire

Jack Wolf, P.A.

2028 Shepherd Road, Number 350

Mulberry, Florida 33860 - 8699

Jeff A. Albinson, Esquire

Marshall, Dennehey, Warner,

Coleman & Goggin

201 East Ken nedy Boulevard, Suite 1100

Tampa, Florida 33602 - 5827

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 b y 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 District where the party resides. The notice of

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

be reviewed.