06-004565F Sara French And Gail French vs. Agency For Persons With Disabilities Status: Closed Settled and/or Dismissed prior to entry of RO/FO on Monday, July 14, 2008.

Summary: Petitioners did not prevail in the remand proceeding and are not entitled to attorney`s fees.The Division has no authority to award interest on or as part of corrective payments ordered on remand. Neither party is entitled to attorney`s fees in this case.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SARA FRENCH AND GAIL FRENCH, )

)

Petitioner s , )

)

vs. ) Case No. 06 - 4565F

)

AGENCY FOR PERSONS WITH )

DISABILITIES, )

)

Respondent. )

)

FINAL ORDER

A telephonic hearing was held in this case on January 10,

2007, b y Administrative Law Judge T. Kent Wetherell, II .

APPEARANCES

For Petitioner s : George F. Indest, III, Esquire

The Health Law Firm

220 East Central Parkway, Suite 2030

Altamonte Sp rings, Florida 32701

For Respondent: Gail Scott Hill, Esquire

Agency for Persons with Disabilities

4030 Esplanade Way, Suite 380

Tallahassee, Florida 32399 - 0950

STATEMENT OF THE ISSUE

The issue is whether Petitioner s are entitled to an awa rd

of attorney’s fees, costs , and/or interest related to the

hearing officer’s award of corrective payments on remand after

the decision in French v. Department of Children and Families ,

920 So. 2d 671 (Fla. 5th DCA 2006).

PRELIMINARY STATEMENT

In French , the court quashed a Final Order entered by a

Department of Children and Families (DCF) hearing officer and

remanded the case to the hearing officer to make an award of

corrective payments to Petitioner Sarah French (Sarah) for the

per iod that she was wrong fully dis enrolled from the Consumer

Directed Care Plus (CDC ) p rogram. The hearing officer accepted

the remand in an Order dated April 7, 2006, and conducted

further proceedings (hereafter “ the Remand Proceedings”). On

September 27, 2006, the hearing off icer entered an Order re

Retroactive Payment (hereafter “the Remand Order”), which

awarded Sarah corrective payments in the amount of $105,420 and

denied the request of Petitioner Gail French (Ms. French ) for

inte rest on the corrective payments.

On October 27, 2006, Petitioner s filed with the Agency for

Persons with Disabilities (Agency) a Petition for Attorney’s

Fees and Interest Relat ing to Hearing of July 16 [sic] , 2006

(Petition). The Agency referred the Petition to the Division of

Administrative Heari ngs (DOAH) on November 10, 2006, because

according to the referral letter, “the Agency is without

authority to determine or award attorney’s fees available under

Chapter 120, Florida Statutes.”

A telephonic case management conference was held on

November 2 0, 2006 . An Initial Scheduling Order memorializing

the discussions at the case management conference was entered on

November 21, 2006.

On Decem ber 4, 2006, the Agency filed its response to the

Petition. The response included a motion for attorney’s fees

related to this DOAH proceeding . Petitioners filed a reply to

the Agency’s response on December 28, 2006 . Petitioners ' motion

to strike portions of the Agency’s response was denied in an

Order entered January 11, 2007.

A telephonic hearing on the issues framed by the parties’

filin gs was held on January 10, 2007, at which t he p arties

agreed that an evidentiary hearing is not necessary , and that

this case can be resolved based upon the parties’ legal argument

and a stipulated record consisting of the 24 ex hibits attached

to the Petition; the first three exhibits attached to Agency’s

response to the Petition; and the complete record in DOAH Case

N o. 06 - 1557F, which includes the record on appeal in French .

See Order entered January 11, 2007.

The parties furt her agreed th at a Final Order should be

entered in this case even though it was referred to DOAH based

upon a petition for administrative hearing filed with the Agency

“pursuant to Sections 120.569 and 120.57, Florida Statutes, and

Rule 28 - 106.201, Florida Administrative Code.” On this issue,

it is noted that a Final Order was entered in the r elated DOAH

Case No. 06 - 1557F, and that Section 120.574, Florida Statutes,

authorizes the parties to agree to a summary hearing in which a

Final Order is entered rath er than a Recommended Order.

The transcript of the telephonic hearing was filed on

February 5, 2007. The parties requested and were given an

opportunity to file proposed orders. The Agency timely filed a

Proposed Final Order (PFO) on March 14, 2007. Pet itioners filed

a PFO on March 15 , 2007 . The PFOs have been given due

consideration.

FINDINGS OF FACT

A. Parties

1. Sarah is almost 23 years old , and s he is severely

disabled. H er disabilities include quadriplegic cerebral palsy,

developmental delay, se vere osteoporosis, severe muscle spasms,

scoliosis, incontinence, kidney stones , and frequent urinary

tract infections. S arah requires 24 - hour assistance with all

daily living functions, including bathing, feeding, dressing,

brushing her teeth, and changi ng her diapers.

2. Ms. French is Sarah’s mother. She is approved by the

Agency to provide personal care assistance (PCA) services to

Sarah under the CDC program.

3. The Agency has administered the CDC program since

October 1, 2004. Prior to that, the program was administered by

DCF.

B. Background

4. Sarah applied for the CDC program in July 2002 , and

w as enrolled in the program in October 2002. Prior to that ,

Sarah was enrolled in the Home and Community Based Developmental

Services (HCBS) p rogram pursuant to which she received PCA

services from outside providers, rather than her mother.

5. Sarah’s initial support plan under the CDC program

funded only six hours per day of PCA services. The plan was

increased to 12 hours per day of PCA services in August 2003

after Sarah successfully appealed her initial support plan to a

DCF hearing officer.

6. On October 31, 2003, DCF unilaterally disenrolled Sarah

from the CDC program based upon its determination that

Ms. French had a back condition that pre vented her from

providing PCA services to Sarah. Thereafter, Sarah was

reenrolled in the HCBS program, which required her to hire

someone other than her mother to provide her PCA services .

7. Ms. French was paid for the period of November 1 - 15,

2003, ev en though Sarah was no longer enrolled in the CDC

program at the time. For that period, however, Ms. French was

paid for only six hours per day of PCA services (at $17.50 per

hour) rather than the 12 hours per day required by Sarah’s

support plan.

8. M s. French stopped receiving payment under the CDC

program on November 16, 2003. She began receiving payment again

on April 1, 2005, when, a s discussed below, Sarah was re enrolled

in the CDC program. Ms. French has been paid for 12 hours per

day of PCA services (at $17.50 per hour) since April 1, 2005.

9. Sarah timely filed an appeal of DCF’s decision to

disenroll her from the CDC program, but the appeal was not

docketed and referred to a DCF hearing officer until

January 2004.

10. The hearing office r held a hearing on the appeal over

a period of eight days between March 22 and August 5, 2004. The

length of the hearing was attributable, at least in part, to the

fact that the hearing officer was not a lawyer , and she allowed

both parties to present ex tensive testimony and evidence on

matters seemingly unrelated to the central issue in the appeal,

i.e. , whether Ms. French had a back condition that prevented her

from providing PCA services to Sarah.

11. The hearing officer’s Final Order, dated November 22,

2004, concluded that Sarah should not have been disenrolled from

the CDC p rogram because DCF failed to prove that Ms. French had

a back condition that prevented her from providing PCA services

to Sarah. The Final Order did not award retroactive corr ective

payments to Sarah for the period that she was wrongfully

disenrolled from the CDC p rogram, and it denied Sarah’s request

for an award of attorney’s fees and costs.

12. Sarah appealed the Final Order to the Fifth District

Court of Appeal. DCF did not cross - appeal.

13. Sarah was reenrolled in the CDC p rogram on April 1,

2005, while the appeal was pending. The record do es not reflect

why Sarah was re enrolled on that date, which is more than four

months after the hearing officer’s Final Order.

14 . The appellate court issued its opinion on January 6,

2006, and held that Sarah was entitled to corrective payments

from DCF 1 retroactive to the date that she was disenrolled from

the CDC program. The court remanded the case to the DCF

hearing officer to determine the amount of corrective payments

due to Sarah.

15. The court was clear as to the scope of the remand; it

held:

In summary, both [federal and state law]

require remand for the hearing officer to

order corrective payments retroactive to

Octob er 31, 2003 . We believe the amount of

corrective payments can be determined based

upon the evidence provided at the original

hearing, but the hearing officer may take

additional evidence on the issue, if

necessary. (Emphasis supplied)

16. The court al so awarded attorney’s fees against DCF for

the appeal. The court remanded the issue of the amount of

appellate fees, and the issue of Sarah’s entitleme nt to

attorney’s fees for the underlying DCF hearing, to DOAH for

determination because, according to th e court, the hearing

officer did not have jurisdiction over those issues since the

applicable attorney's fee statute refer s only to Administrative

Law Judges.

17. DCF filed a motion for rehearing, which was denied by

the court on February 10, 2006. The mandate was issued by the

court on March 1, 2006.

18. Sarah was the prevailing party in the proceedings that

culminated in the appeal.

19. The Agency paid Sarah $129,595 in attorney’s fees and

costs related to the proceedings that culminated in the ap peal. 2

C. Remand Proceeding

20. On April 7, 2006, over a month after the mandate was

issued by the appellate court, the DCF hearing officer entered

an Order accepting the remand and directing the parties to

advise her if the retroactive payments mandate d by the court had

been made.

21. The Order required Sarah to provide invoices to the

Agency reflecting the monthly timesheets for the “retroactive

periods , ” and required the Agency to respond to the invoices and

identify any disputes. The Order stated that a hearing would be

set if necessary to resolve any dispute regarding the amount of

the retroactive payment.

22. On April 19, 2006, in compliance with the hearing

officer’s Order, Sarah filed monthly invoice s and a demand for

payment totaling $211,3 12.50, “exclusive of interest and

attorney’s fees.”

23. The invoices sought payment for an additional six

hours per day of PCA services from July 2002 (when Sarah applied

for the CDC program) to November 15, 2003 (when Ms. French

stopped receiving paymen t for six hours per day of services);

payment for 12 hours per day of PCA services from November 16,

2003, to March 3 1, 2005 (the period during which Ms. French

received no payment); and payment of half of th os e hours at the

overtime rate of $26.25 per hou r instead of the standard rate of

$17.50 per hour.

24. The Agency responded to the demand for payment in a

status report filed with the DCF hearing officer on May 26,

2006. In the status report, the Agency took the position that,

consistent with the app ellate court’s decision, the amount of

corrective payments owed to Sarah is limited to the period of

disenrollment -- October 31, 2003 through March 31 , 2005 -- and

that the amount should be calculated based upon the approved

hourly rate of $17.50 with no overtime pay. The Agency,

therefore, requested the DCF hearing officer to “enter an order

finding $97,230 as the appropriate amount of compensation due as

the corrective action ordered by the Fifth District Court of

Appeal.”

25. Sarah filed a reply to t he Agency’s filing on June 26,

2006, in which she continued to assert that the corrective

payments were not limited to the disenrollment period and that

overtime pay was due. The reply also claimed that the Agency

“is proving itself to be the scofflaw tha t the general public

believes it to be,” and it requested imposition of attorney’s

fees against the Agency because of its “continued delays and its

attempts to starve out Ms. French .”

26. The hearing officer set the matter for hearing because

the parties were not in agreement regarding the amount of

corrective payments owed. The hearing was scheduled for and

held on July 17, 2006.

27. The transcript of the July 17, 2006, hearing is not

part of the record of this DOAH proceeding. Therefore, the

record does not reflect the substance of the testimony presented

or the nature of the evidence received at that hearing.

28. The hearing officer entered the Remand Order on

September 29, 2006. The Remand Order rejected the argument that

Sarah is entitled to co rrective payments for periods prior to

October 31, 2003; rejected the argument that Ms. French is

entitled to overtime pay; implicitly rejected the argument that

“prejudgment interest” is to be included as part of the

corrective payments to Sarah; conclude d that DOAH (and not the

DCF hearing officer) has jurisdiction to consider Ms. French ’s

request for interest based upon “the failure of [ DCF ] to process

payment in a timely manner”; a nd awarded $105,420 in corrective

payments to Sarah.

29. The Remand Ord er was not appealed by either party.

30. It was not until entry of the Remand Order that the

amount of corrective payments due to Sarah was established with

certainty.

31. The Agency worked diligently after entry of the Remand

Order to process the paymen t due to Sarah. The payment was made

through a check dated November 8, 2006, which is 40 days after

the date of the Remand Order.

32. Petitioners did not prevail in the Remand Proceeding

because t he hearing officer rejected each of the substantive

argum ents they presented in the Remand Proceeding.

33. The fact that the hearing officer awarded Sarah

approximately $8,000 more than the Agency calculated that she

was due in its pre - hearing status report does not make Sarah the

prevailing party in the Rema nd Proceeding. The award was

approximately half of what Sarah claimed she was due, and the

difference in the amount calculated by the Agency ($97,230 ) and

the amount awarded in the Remand Order ($105,420 ) was not the

result of the hearing officer using th e calculation method ology

advocated by Sarah . Instead, the difference resulted from the

hearing officer using the actual number of calendar days that

Sarah was disenrolled, rather than calculating the number of

days by multiplying the number of months Sar ah that was

disenrolled by the 28 days of service per month that w ere

approved in Sarah’s support plan .

34. There is no persuasive evidence that the Agency

participated in the Remand Proceeding for an improper purpose,

as alleged by Petitioners. Indeed, the evidence establishes

that the primary reason that it was necessary for an evidentiary

hearing to be held in the Remand Proceeding was the excessive

and unreasonable demand made by Sarah in her initial response to

the hearing officer’s Order accepting the remand from the

appellate court. The Agency’s refusal to pay that amount was

clearly reasonable and appropriate under the circumstances.

35. To the extent that Petitioners are complaining about

having to go through additional proceedings on remand at all

when the appellate court observed that the amount of corrective

payments could likely be determined based upon the evidence

provided at the original heari ng, that complaint focuses on the

conduct of the DCF hearing officer, not the Agency. It is

note d, however, that the appellate court stated that “the

hearing officer may take additional evidence on the issue, if

necessary.”

D. This DOAH Proceeding

36. Petitioners initiated this proceeding by filing the

Petition with the Agency. The Agency referred the Petition to

DOAH because according to the referral letter, “the Agency is

without authority to determine or award attorney’s fees

available under Chapter 120, Florida Statutes.”

37. The Petition requests an award of attorney’s fees and

costs, both fo r the Remand Proceeding and for this DOAH

proceeding. The Petition also requests an award of prejudgment

interest as part of the corrective payments as well as post -

judgment interest on the corrective payments ordered in the

Remand Order.

38. The Agency disputes Petitioners’ entitlement to

attorney’s fees and costs for this proceeding or the Remand

Proceeding. The Agency also disputes Petitioners’ entitlement

to interest, either as part of or on the corrective payments.

39. There is no evidence that th e Agency participate d in

this DOAH proceeding for an improper purpose. The Agency had a

legitimate basis for its opposition to the Petition giving rise

to this proceeding, as shown by the fact that the Agency

prevailed in this proceeding.

40. The unreaso nable demands made by Petitioners at the

outset of the Remand Proceeding ( and at the outset of the prior

attorney’s fee case, see Endnote 2) did little to bring the

litigation between the parties to an just and speedy end and,

indeed, likely had the opposi te effect.

41. That said, t he evidence is not persuasive that

Petitioners participate d in this DOAH proceeding for an improper

purpose .

CONCLUSIONS OF LAW

A. Jurisdiction , Burden of Proof, and DOAH Authority

42. DOAH has jurisdiction over the parties t o and subject

matter of this proceeding pursuant to Sections 120.569,

120.57(1), and 120.595, Florida Statutes (2006) . 3 See also

French , 920 So. 2d 677 - 78.

43. Petitioners have the burden to prove their entitlement

to an award of attorney’s fees, costs, and/or interest. See

generally Dept. of Transportation v. J.W.C. Co., Inc. , 396 So.

2d 778, 788 (Fla. 1st DCA 1981) (burden of proof is on the party

asserting the affirmative of the issue).

44. Petitioners filings are somewhat difficult to follow

due t o the “shotgun approach” used to present their claim s of

entitlement to attorney’s fees and costs for the Remand

Proceeding and interest on the corrective payments ordered in

the Remand Order. For example, Petitioners make passing claim s

of entitlement to fees and interest under a myriad state and

federal statute s , the common law, and principles of equity.

See , e. g. , Petition, at ¶ 10; Petitioners’ PFO, at ¶¶ 87, 95 ,

110.

45. DOAH has no common law authority , and it is not a

court of equity. DOAH’s aut hority to award attorney’s fees,

costs and/or interest is prescribed by statute ( e.g. ,

§§ 57.105(5), 120.569(2)(e), 120.595, 215.422, Fla. Stat.) , not

the common law or principles of equity.

46. DOAH also has no authority to correct perceived errors

in th e Remand O rder entered by the DCF hearing officer ; that is

the function of the appellate court s . Accordingly , t he Remand

Order is not s ubject to collateral attack in this DOAH

proceeding.

B. Attorney’s Fees and Costs for the Remand Proceeding

47. The only statutes that could potentially authorize

DOAH to award attorney’s fees against the Agency for the Remand

Proceeding are Sections 120.569(2)(e), 120.595(1), and

57.105(5), Florida Statutes.

(1) Section 120.569(2)(e), Florida Statutes

48 . In French , the court held that DCF hearing officers do

not have authority to award attorney’s fees and costs under

Section 120.595, Florida Statutes. French , 920 So. 2d at 677 -

78. T he court specifically did not address whether DCF hearing

officers have authority t o award attorney’s fees and costs under

Section 120.569(2)(e), Florida Statutes. See id. at 676 - 77 .

49 . Unlike Section 120.595, Florida Statutes, which refers

to A dministrative L aw J udges, Section 120.569(2)(e), Florida

Statutes, authorizes the “pr esidin g officer” to sanction a party

who files pleadings , motions , or papers for an improper purpose.

See § 120.569(2)(e), Fla. Stat. (“If a pleading, motion, or

other paper is signed in violation of these requirements, the

presiding officer shall impose . . . 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.” (Emphasis supplied)).

5 0 . “Presiding officer” is defined to include “any other

person authorized by law to conduct administrative hearings or

proceedings who is qualified to resolve the legal issues and

proc edural questions that may arise.” Fla. Admin. Code R. 28 -

106.102.

51 . The DCF hearing officer was the presiding offic er in

the Remand Proceeding and, therefore, she had the authority

under Section 120.569(2)(e), Florida Statutes, to sanction

frivolous filings or other improper conduct in that proceeding.

Thus, to the exten t that Petitioners are seeking an award of

attorney's fees under Section 120.569(2)(e), Florida Statutes,

for particular filings and/or conduct of the Agency in the

Remand Proceeding, that request should have been directed to the

DCF hearing officer during the course of the Remand Proceeding .

52 . Accordingly , DOAH does not have jurisdiction to

consider Petitioners’ request for attorney’s fees for the Remand

Proceeding under Section 12 0.569(2)(e), Florida Statutes.

(2) Section 120.595(1), Florida Statutes

53 . DOAH does, however, have jurisdiction to consider

Petitioners’ request for an award of prevailing party attorney’s

fees and costs pursuant to Section 120.595(1), Florida Stat utes,

for the Remand Proceeding even though that proceeding was

conducted b y a DCF hearing officer. See French , 920 So. 2d 677 -

78 .

54 . Section 120.595(1), Florida Statutes, provides :

(1) CHALLENGES TO AGENCY ACTION PURSUANT

TO SECTION 120.57(1). --

(a) The provisions of this subsection are

supplemental to, and do not abr ogate, 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 party 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

w hether any party participated 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 involving 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 or 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 fo r 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 attor ney'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,

licensing, 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 su bstantially

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, i t 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 pa rty" or

"prevailing party" be deemed to include any

party that has intervened in a previously

existing proceeding to support the position

of an agency.

55 . The relevant proceeding for determining whether

Petitioners are prevailing parties is the Remand P roceeding, not

the entire series of proceedings that began when the Petitioners

challenged the Agency’s decision to pay for only six hours per

day of PCA services as part of Sarah's initial support plan in

the CDC program. The Agency has already been req uired to pay

Petitioners’ attorney’s fees and costs for its actions leading

up to the Remand Proceeding. See French , 920 So. 2d at 679 .

56 . Sarah was not the prevailing party in the Remand

Proceeding. The DCF hearing officer ruled against her on all of

the issues that she raised in that proceeding, and awarded her

approximately one - half of the amount that she demanded at the

outset of that proceeding.

57 . Ms. French was not a party to the Remand Proceeding;

the only parties were Sarah and the Agency. Thus, Ms. French

could not hav e been a prevailing party in the Remand P roceeding.

58 . Even if Ms. French could somehow be considered a party

to the Remand Proceeding based upon her request for interest in

that proceeding, she was not the prevailing party on that issue.

The hearing officer did not award interest (or any other relief)

to Ms. French in the Remand Order.

59 . Even if Petitioners could somehow be considered the

prevailing parties in the Remand Proceeding, the evidence fails

to establish that the Agency participated in that proceeding for

an improper purpose . T o the contrary, as reflected in the

hearing officer’s rejection of all of Petitioners’ arguments in

the Remand Order, the Agency’s defense in that proceeding was a

reasonable and approp riate response to the excessive demand made

by Petitioners at the outset of the Remand Proceeding .

(3) Section 57.105(5), Florida Statutes

60. Section 57.105(5), Florida Statutes provides in

pertinent part:

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

a s provided in subsections (1) - (4). . . . .

61 . An award of attorney’s fees and costs under Section

57.105, Florida Statutes, is final agency action subject to

judicial review. See § 57.105(5), Fla. Stat.

62. Section 57.105(5), Florida Statutes, typica lly applies

in proceedings heard on the merits by DOAH, as compared to

proceedings such as this which was heard on the merits by a DCF

hearing officer. However, because Section 57.105(5 ), Florida

Statutes, does not refer to hearing officers, it is conclud ed

that DOAH has authority to make a fee award under the statute

even though the underlying proceeding was heard by a DCF hearing

officer. See French , 920 So. 2d at 677 - 78.

63. Section 57.105, Florida Statutes, sanct i ons the

presentation of frivolous cla ims or defenses. See generally

Wendy’s of N.E. Florida v. Vandergriff , 865 So. 2d 520 (Fla. 1st

DCA 2003).

64 . Section 57.105(1), Florida Statutes, provides:

Upon the [administrative law judge]'s

initiative or motion of any party, the

[administrative l aw judge] shall award a

reasonable attorney'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

[an administrative] proceeding or action in

which the [admi nistrative law judge] finds

that the losing party or the losing party's

attorney knew or should have known that a

claim or defense when initially presented to

the [administrative law judge] or at any

time before trial:

(a) Was not supported by the mate rial

facts necessary to establish the claim or

defense; or

(b) Would not be supported by the

application 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 f aith, based on the

representations of his or her client as to

the existence of those material facts. If

the [administrative law judge] awards

attorney's fees to a claimant pursuant to

this subsection, the [administrative law

judge] shall also award prejudg ment

interest.

65 . A motion seeking an award of attorney’s fees under

Section 57.105, Florida Statutes, must be served on the opposing

party at least 21 days before it is filed. See § 57.105(4),

Fla. Stat. The purpose of that requirement is “to give a

pleader a last clear chance to withdraw a frivolous claim or

defense . . . o r to reconsider a tactic taken primarily for the

purpose of unreasonable delay . . . .” Maxwell B uilding Corp.

v. Euro Concepts, L LC , 874 So. 2d 709. 711 (Fla. 4th DCA 2004).

66 . The record does not reflect that Petitioners served

their request for attorney’s fees on the Agency at least 21 days

before the Petition was filed with the Agency on October 27,

2006. Therefore, Petitioners’ request for attorney’s fees under

Section 57 .105(5), Florida Statutes, must be denied. See , e.g. ,

Burgos v. Burgos , 32 Fla. L. Weekly D 472 (Fla. 4th DCA Feb. 14,

2007); Dept. of Transportation v. Megan South, Inc. , DOAH Case

No. 03 - 4258F (DOAH Dec. 17, 2003).

67 . Denial of Petitioners’ request fo r attorney’s fees

d oes not necessarily preclude an award of fees against the

Agency u nder Section 57.105, Florida Statutes , because t he

statute a uthorizes an award of fees on the A dministrative L aw

J udge’s own initiative. See § 57.105(1), Fla. Stat. The so -

called “safe harbor” provision of Section 57.105(4), Florida

Statutes, does not apply to such an award. See Schmigel v.

Cumbie Concrete , 915 So. 2d 776 (Fla. 1st DCA 2005).

68. That said, t h ere is no basis for such an award

because, as discussed abov e, Pet itioners did not prevail in the

Remand Proceeding and the Agency’s defense in that proceeding

was not frivolous.

C . Interest on the Corrective Payments

6 9. In the Remand Order, the DCF hearing officer cited

Section 215.422, Florida Statutes, for t he proposition that she

lacked jurisdiction to consider Ms. French ’s request for

interest on the corrective payments. On that issue, t he hearing

office r stated :

The above - cited statutes establish that any

disputes regarding payments should be

resolved by an administrative law judge of

the Division of Administrative Hearings . .

. . Therefore, the vendor [ Ms. French ] is

referred to that court [sic] for a decision

regarding interest on the corrective

payments. (Emphasis supplied).

70 . The DCF hearing off icer suggested that DOAH has

jurisdiction under Section 215.422 (3)(b) , Florida Statu t es, to

award interest to Ms. French for the Agency’s alleged delay in

paying the invoices that she submitted for the PCA services that

she provided to Sarah. Interestingl y, Petitioners make only

passing reference to that statute in their PFO. See

Petitioners’ PFO, at ¶ ¶ 62, 81.

7 1. Section 215.422(3)(b), Florida Statutes, provides in

pertinent part:

If a warrant in payment of an invoice is not

issued within 40 days after receipt of the

invoice . . ., the agency . . . shall pay to

the vendor, in addition to the amount of the

invoice, interest at a rate as established

pursuant to s. 55.03(1) on the unpaid

balance from the expiration of such 40 - day

period until such time as the warrant is

issued to the vendor. Such interest shall

be added to the invoice at the time of

submission to the Chief Financial Officer

for payment whenever possible. If addition

of the interest penalty is not possible, the

agency or judicial branch sh all pay the

interest penalty payment within 15 days

after issuing the warrant. The provisions

of this paragraph apply only to undisputed

amounts for which payment has been

authorized. Disputes shall be resolved in

accordance with rules . . . adopted by t he

Department of Financial Services or in a

formal administrative proceeding before an

administrative law judge of the Division of

Administrative Hearings for state agencies,

provided that, for the purposes of ss.

120.569 and 120.57(1), no party to a dispu te

involving less than $1,000 in interest

penalties shall be deemed to be

substantially affected by the dispute or to

have a substantial interest in the decision

resolving the dispute . . . .

7 2. The rule adopted by the Department of Financial

Services ( DFS) to implement Section 215.422(3)(b), Florida

Statutes, is Florida Admi nistrative Code Rule 69I - 24.004, which

is entitled “Interest Penalty Payments.”

7 3. In essence, t he statute and rule require an agency to

pay interest as a penalty when it fails to pay a vendor’s

undisputed invoi ces within 40 days of receipt.

7 4. A claim for payment of an interest penalty may be made

with DFS or the purchasing agency, which in this case is the

Agenc y. See Fla . Ad min. Code R. 69I - 24.004(7)(a). However,

e ven if the claim is made with the purchasing a gency, the rule

c ontemp late s the referral of the dispute t o DFS for

determination in the first instance . See id. (“ The vendor . . .

making the claim and the agency against which the claim is made

shall provide the Depart ment sufficient information to identify

the situation and the basis of the claim. ”).

7 5. It is th e determination of the dispute by DFS that is

the preliminary agency that is subject to review under Chapter

120, Florida Statutes. Specifically, the rule p rovides:

(b) The Department shall review the

representations of the vendor . . . which is

making the claim and the agency against

which the claim is made. If all parties

agree to the relevant facts, then

appropriate action will be taken to pay the

inte rest penalty if any is due. If there is

a disagreement between the parties and the

amount of the interest penalty in dispute is

less than $1000, the Department shall

designate an employee to serve as the

arbitrator for the purpose of resolving the

dispute in a manner which affords the

parties the Constitutional right of due

process.

(c) In the event that the interest

penalty in dispute is $1000 or more, the

Department shall send notice of its intended

action to the parties. Such notice shall

conform w ith the requirements of Chapter

120, F.S.

Fla. Admin. Code R. 69I - 24.004(7)(b), (c).

7 6. Thus, i t is premature for DOAH to consider

Ms. French ’s entitlement of an award of interest on the

corrective payments under Section 215.422(3)(b), Florida

Statutes, because the procedure for formulating preliminary

agency action on that issue has not been followed. See Fla.

Admin. Code R. 69I - 24.004. Ms. French ’s demand for interest on

the corrective payment made by the Agency should have been

referred to DFS for r esolution in the first instance.

7 7. T o the extent that t he issue i s properly before DOAH

by virtue of the Petition filed by Ms. French with the Agency,

the evidence fails to establish that any interest is due under

Section 215.422(3)(b), Florida Statute s . I nterest under that

statute does not begin to accrue until the undisputed invoice is

40 days overdue , and the Agency paid Ms. French 40 days after

the date of the Remand Order, which is the date that her

invoices became undisputed for purposes of Secti on

215.422(3)(b), Florida Statutes.

7 8. Petitioners also contend that Sarah is entitled to

“ prejudgme nt interest ” as part of the award of corrective

payments because prejudgment interest is a mandatory component

of damages . The cases and statutes cited b y Petitioners for

that proposition involve circuit court actions, not

administrative proceedings such as this. Thus, the cases are

distinguishable .

7 9. That said, there is some appeal to Petitioners’

argument that the purpose of the corrective payments i s to “make

whole” the person wrongfully denied services and that an award

of the equivalent of prejudgment interest as part of the

corrective payments is necessary to make Petitioner s whole.

8 0. The inclusion of “ prejudgment interest ” as part of the

cor rective payments is an issue that was before the DCF hearing

officer in the Remand Proceeding. The Remand Order, which

refused to award interest of any kind as part of the corrective

payments was not appealed, and cannot be collaterall y attacked

in this p roceeding.

8 1. An appeal of the Remand Order (not a separate DOAH

proceeding) was the proper venue to correct any error in the

hearing officer’s implicit decision not to include “prejudgment

interest” as part of the corrective payments due to Sarah for

th e period that she was wrongfully disenrolled from the CDC

p rogram.

8 2. The fact that Ms. French was not a party t o the Remand

Proceeding is immaterial. Her right to “prejudgment interest ”

as part of the corrective payments is derivative of Sarah’s

right to interest, and as such, her claim that “prejudgment

interest” should have been paid as a component of the corrective

payments is essentially a collateral attack on the Remand Order.

8 3. Even if this issue was properly before DOAH by virtue

of the Petit ion filed by Ms. French with the Agency , there is no

authorit y for the proposition that “pre judgment interest " is due

as part of the corrective payments. Petitioners did not cite

any relevant authority to support their argument on th is issue,

and the fede ral and state rules governing corrective payments

are silent on th e issue. See 42 CFR § 431.246; Fla. Admin. Code

R. 65 - 2.066(6) .

8 4. Ms. French also claims that she is entitled to

interest on the corrective payments pursuant to the federal Fair

Labor St andards Act (FLSA). T his argument is rejected because

it is e ssentially a collateral attack on the Remand Order, which

refused to award any interest on or as part of the corrective

payments ; because neither the Agency nor DOAH has authority to

enforce the FLSA; and because Ms. French ’s claim that she is

entitled to interest on the corrective payments under the FLSA

because she is an employee of the Agency and the corrective

payments are essentially back wages was not persuasive.

8 5. In sum, to the extent that the issue is properly

before DOAH, there is no legal basis for an award of interest t o

Sarah or Ms. French as part of the corrective payments ordered

by the hearing o fficer in the Remand Order.

8 6. Petitioners also make a claim for post - judgment

inte rest on the corrective payments from the date of the

appellate court’s decision. See Petitioner’s PFO, at ¶¶ 99 - 102

(citing Section 55.03, Florida Statutes). That claim is without

merit because the appellate court’s decision was not a

“judgment” and, ass uming the Remand Order could b e considered a

judgment for purposes of Section 55.03, Florida Statutes, it was

timely paid by the Agency for purposes of avoiding interest.

See § 215.422 (3)(b) , Fla. Stat .

D . Attorney’s Fees and Costs for this DOAH Proceedi ng

8 7. Both parties requested an award of attorney’s fees for

this DOAH proceeding. Petitioners argue that they are entitled

to attorney’s fees for this proceeding to prove their

entitlement to fees for the Remand Proceeding , and that they are

entitled to attorney’s fees for this proceeding because the

Agency’s defenses are frivolous and/or interposed for an

improper purpose. The Agency argues that it is entitled to

attorney’s fees for this proceeding because Petitioner’s claims

are frivolous and/or int erposed for an improper purpose.

8 8. A party may recover attorney’s fees and costs for

proving entitlement to attorney’s fees, but not for proving the

amount of attorney’s fees. See generally State Farm Fire &

Casualty Co. v. Palma , 629 So. 2d 830 (Fla. 1993). However,

because Petitioners failed to prove that they are entitled to an

award of attorney’s fees for the Remand Proceeding, they are not

entitled to an award of the attorney’s fees and costs i ncurred

in this DOAH proceeding.

8 9. S imilarly, Petit ioners are not entitled to an award of

prevailing party attorney’s fees and costs for this DOAH

proceeding under Section s 57.105 or 120.595(1), Florida

Statutes, because they did not prevail in this proceeding.

9 0. The Agency requested an award of prevail ing party

attorney’s fees for this DOAH proceeding under Section

120.595(1), Florida Statute s, based upon the argument that

Petitioners participated in this pro ce eding for an improper

purpose.

9 1. Section 120.595(1)(e)1., Florida Statutes, defines

“improp er purpose” to include, among other things, harassment

and needlessly increasing the cost of litigation. A n objective

standard is to be used in evaluating improper purpose. See ,

e.g. , Mercedes Lighting & Electrical Supply, Inc. v. Dept. of

General Servic es , 560 So. 2d 272, 278 (Fla. 1st DCA 1990) .

9 2. I t is a close question as to whether Petitioners

participated in this proceeding for an improper purpose,

particularly with respect to the claim for prevailing party

attorney’ s fees for the Remand Proceedin g .

9 3. On one hand, Petitioners should have known that they

were not the prevailing parties in the Remand Proceeding because

the Remand Order, which they did not appeal , rejected all of

their arguments regarding the calculation of the corrective

payments required by the appellate court. On the other hand,

the Remand Order awarded Sarah approximately $8,000 more than

the Agency claimed that she was due , which creates at least a

colorable basis for Petitioners’ claim for p revailing party

attorney’s fees ; an d the hearing officer suggested that

Ms. French ’s claim for interest should be presented to DOAH.

9 4. On balance, it is concluded that th e claims asserted

by Petitioners in this proceeding are not objectively frivolous

or otherwise sanctionable and, there fore, t he Agency is not

entitled to an awar d of attorney’s fees and costs u nder Section

120.595(1) , Florida Statutes, even though it prevailed in this

proceeding.

95 . The Agency also requested an award of attorney’s fees

and costs for this DOAH proceedin g under Section 57.105 (5 ),

Florida Statutes.

96 . The case file does not reflect that the Agency served

its motion for attorney’s fees on Petitioners at least 21 days

before it was filed with DOAH o n December 4, 2006. Therefore,

the motion must be denied . See , e.g. , Burgos v. Burgos , 32 Fla.

L. Weekly D 472 (Fla. 4th DCA Feb. 14, 2007); Dept. of

Transportation v. Megan South, Inc. , DOAH Case No. 03 - 4258F

(DOAH Dec. 17, 2003).

97 . I t is a close question as to whether attorney’s fees

should be awarded aga inst Petitioners for this proceeding on the

undersigned’s own initiative because , as discussed above, t he

claims presented by Petitioners in this proceeding were

extremely weak. However, because it cannot be said that the

claims were completely lacking in merit or that they were

presented for an improper purpose , it would be inappropriate to

award fees against Petitioners under Section 57.105, Florida

Statutes . See , e.g. , Stagl v. Bridgers , 807 So. 2d 177 (Fla. 2d

DCA 2002) (“An award of attorney's fees p ursuant to section

57.105 is appropriate only when the action is so clearly devoid

of merit both on the facts and the law as to be completely

untenable.") (internal quotations omitted).

98 . In sum, there is no basis to award attorney’s fees to

either par ty for this DOAH proceeding.

ORDER

Based upon the foregoing findings of fact and conclusions

of law, it is

ORDERED that :

1. The Petition for Attorney’s Fees and Interest Relating

to Hearing of July 16, 2006 [sic] is denied.

2. The Agency’s motion for at torney’s fees is denied.

DONE AND ORDE RED this 28th day of March , 200 7 , in

Tallahassee, Leon County, Florida.

S

T. KENT WETHERELL, II

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 28th day of March , 2007.

ENDNOTES

1 / Apparently it was never brought to the court’s attention that

the Agency took over the administration of the CDC p rogram from

DCF on October 1, 2004, and, therefore, was the real party in

interest after that date. See Ch. 2004 - 267, § 87 (3), Laws of

Fla.

2 / See French v. Agency for Persons with Disabilities , Case No.

06 - 1557F (DOAH Nov. 27, 2006). A Final Order was entered in

that case closing DOAH’s file pursuant to Section 120.57(4),

Florida Statutes, based upon the finding that t he parties

entered into a binding settlement as to the amount of attorney’s

fees and costs due for the appeal and the underlying DCF

hearing. Id. The amount of the settlement -- $129,595 -- was

significantly less than the amount demanded by Sarah -- more

than $220,000 in attorney’s fees, to be increased by a 2.5

multiplier, and more than $20,000 in costs -- at the outset of

the case.

3 / All statutory references in this Final Order are to the 2006

version of the Florida Statutes.

COPIES FURNISHED :

Bar ney Ray, Interim Executive Director

Agency for Persons with Disabilities

4030 Esplanade Way, Suite 380

Tallahassee, Florida 32399 - 0950

John Newton, General Counsel

Agency for Persons with Disabilities

4030 Esplanade Way, Suite 380

Tallahassee, Florida 3 2399 - 0950

Gail Scott Hill, Esquire

Agency for Persons with Disabilities

4030 Esplanade Way, Suite 380

Tallahassee, Florida 32399 - 0950

George F. Indest, III, Esquire

The Health Law Firm

220 East Central Parkway, Suite 2030

Altamonte Springs, Florida 327 01

Michael McGuckin, Agency Clerk

Agency for Persons with Disabilities

4030 Esplanade Way, Suite 380

Tallahassee, Florida 32399 - 0950

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entitled to judicial rev iew 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 District where the party resides. The notice of

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

be reviewed.