07-005209F Willis Wittmer, Jr., And Jr Wittmer`s Remodeling, Inc. vs. Department Of Business And Professional Regulation Status: Closed DOAH Final Order on Wednesday, April 16, 2008.

Summary: Petitioner proved he was a "prevailing small business entity" but could not recover fees because the agency proved that the administrative complaint and prosecution was "substantially justified."

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WILLIS WITTMER, JR., AND JR. )

WITTMER'S REMODELING, INC., )

)

Petitioner, )

)

vs. ) Case No. 07-5209F

) 57.111

DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION, )

)

) )

Respondent. )

FINAL ORDER

Pursuant to notice this matter came on for formal proceeding

before P. Michael Ruff, a duly-designated Administrative Law

Judge of the Division of Administrative Hearings. The parties in

this case waived an evidentiary hearing and the matter was

submitted to the undersigned for Final Order based upon the

record in the underlying case of Department of Business and

Professional Regulation v. Wittmer , DOAH Case No. 07-0074, as

well as affidavits and memoranda submitted by the Petitioner and

the Respondent.

STATEMENT OF THE ISSUES :

The issues remaining to be resolved in this proceeding

concern whether the above-named Petitioner is a "small business

party" as described in Section 57.111(3)(d)1.a. b. and c.,

Florida Statutes (2007); whether the action of the above-named

Agency in the underlying case was substantially justified in law

and fact and whether an award of attorney's fees and costs would

be unjust.

PRELIMINARY STATEMENT

This cause arose when the above-named Petitioner filed a

Petition for Award of Attorney's Fees and Costs pursuant to

Section 57.111, Florida Statutes. The Petition was based upon

the dismissal of an Administrative Complaint by Final Order of

the above Agency, which had charged the Petitioner with violating

by allegedly engaging in the unlicensed practice of contracting

and electrical contracting, in DOAH Case No. 07-0074.

DOAH Case No. 07-0074 came on for formal hearing before the

undersigned on June 12, 2007. After conclusion of the hearing

and upon consideration of the record evidence the Administrative

Law Judge issued a Recommended Order, which recommended that the

Department dismiss the Administrative Complaint against Willis

Wittmer Jr., and JR Wittmer's Remodeling, Inc. (Wittmer), finding

and concluding, in essence, that the project for which Wittmer

contracted with the complaining witness was not a project that

constituted the illegal practice of contracting, since it was a

cooperative project designed to be constructed by the Petitioner

in conjunction with family members, future family members and

friends. The Administrative Complaint was thus recommended to be

dismissed. Thereafter, the Department adopted the Recommended

Order in great part, adopting the Findings of Fact and the

penalty recommendation of dismissal of the charges although

several Conclusions of Law were "modified."

The Department entered its Final Order on September 12,

2007, dismissing the action. No appeal was filed by either

party. Thereafter, as stated above, the Petition for Attorney's

Fees and Costs on the basis of Wittmer being a "prevailing small

business party" was initiated and the present proceeding ensued.

FINDINGS OF FACT

1. In the instant case the Respondent Agency (Department)

does not dispute the amount of attorney's fees and costs sought

in this proceeding and does not contest that the Petitioner is a

prevailing party. Moreover, the Department admits that it was a

real party in interest in the underlying proceeding involving the

Administrative Complaint and was not merely a nominal party. The

parties also waived an evidentiary hearing in this attorney fee

proceeding. The parties, rather, submitted memoranda and

affidavits in support of their respective positions.

2. The present Petition for Attorney's Fees and Costs is

based upon the above-referenced Administrative Complaint action

brought against Wittmer and JR. Wittmer's Remodeling, Inc., by

the Department, which came before the Division of Administrative

Hearings by a request for formal hearing filed by Wittmer.

3. Prior to filing that Administrative Complaint the

Department performed an investigation related to the Complaint

which had been filed by Kenneth Hatin of Palm Coast, Florida,

against Wittmer. The Complaint by Hatin alleged that on

August 10, 2005, he and Wittmer had entered into a contract for

the building of an addition to the complainant's home in Palm

Coast, Florida. Hatin had alleged and testified at hearing that

Wittmer was unlicensed to perform the work under the contract and

had been paid in excess of $30,000.00 for the project. Hatin

maintained that Wittmer had abandoned the job before completion

and that he had to hire another person or entity to complete the

work, at further expense.

4. The Department considered the results of its

investigation, in the form of an investigative report, and

considered the investigative file it had developed concerning

Hatin's complaint. This included the original contract on JR.

Wittmer's Remodeling, Inc.'s, stationary, signed by Wittmer, as

well as copies of original checks amounting to approximately

$30,000.00 written to Wittmer and/or his company or business. It

also considered a copy of the local licensing records concerning

Wittmer, revealing an expired occupational license, as well as

records of the Department showing that Wittmer was unlicensed as

any sort of contractor in the State of Florida. The Department

also considered various invoices and receipts regarding the work

contracted by complainant Hatin with another person or entity, to

finish the job purportedly abandoned by Wittmer.

5. During the investigation, the complainant and the

complainant's fiancée were interviewed and made no mention of any

familial relationship or friendship relationship between Wittmer

and the complainant and his family members at the time of the

investigation. Wittmer himself was interviewed by the

investigator and did not mention any familial or personal

relationship he had with the complainant or the complainant's

family.

6. The familial or friendship relationship between Wittmer

and the complainant and the complainant's family only arose

through the evidence adduced at the hearing. That evidence

became a significant portion of the reason for the Findings of

Fact and Conclusions which resulted in the Complaint against

Wittmer being ultimately dismissed.

7. JR. Wittmer's Remodeling, Inc., was dissolved by the

State of Florida, Department of State, Division of Corporations

on September 16, 2005, for failure to file required annual

reports or Uniform Business Report. This fact was confirmed by

Wittmer's affidavit submitted on January 18, 2008, in this

proceeding, attesting that his corporation was dissolved and that

it ceased business due to "financial hardship of the business."

8. As a result of the hearing it was determined in the

Recommended Order (with Findings of Fact adopted in the Final

Order) that Wittmer performed work on the subject construction

project without making any profit. It was performed, in essence,

as a cooperative project between family and friends of Wittmer,

in the sense that Wittmer's fiancée was related to the

complaining witness's family and/or they were close friends. The

circumstances established by preponderant evidence did not show

that Wittmer was actually performing contracting, as defined in

the above-referenced statutory authority underlying the charges

in the Administrative Complaint. It was also determined, based

upon the preponderant evidence at that hearing, that Wittmer made

no profit on the project after paying all the subcontractors.

9. The Department, in essence, adopted the Recommended

Order of the Administrative Law Judge (with non-dispositive

modifications of several Conclusions of Law) and entered a Final

Order dismissing the charges in the Administrative Complaint.

The subject Petition for Attorney's Fees and Costs was thereafter

filed and this case ensued.

10. The Department proceeded against Wittmer by naming as

Respondents, in the underlying, case JR Wittmer's Remodeling,

Inc., which corporation had actually already been dissolved at

the time of the filing of the Administrative Complaint. It also

named in that Complaint, and proceeded against, Willis Wittmer,

Jr., personally. The Petitioners herein have established that

Wittmer never had more than 25 full-time employees or a net worth

in excess of two million dollars, whether functioning as JR

Wittmer, Jr., an individual or as JR Wittmer's Remodeling, Inc.

The Petitioner has also established that the construction

contract at issue in the underlying case was entered into by the

Petitioner herein under the name "JR Wittmer's Remodeling" and

not "JR Wittmer's Remodeling, Inc." Moreover, that contact was

not signed by Mr. Wittmer as president of JR Wittmer Remodeling,

Inc.

11. Aside from the fact that the Department filed the

original Administrative Complaint against JR Wittmer Remodeling,

Inc., it also named JR Wittmer individually as a Respondent in

that Administrative Complaint, so he had defend against the

action personally, regardless of the question of whether the

corporation was in legal existence at the time of the filing of

the Administrative Complaint. The evidence, as referenced above,

shows that he met the requirements of having less than 25 full-

time employees and a net worth of less than two million dollars.

Thus, the totality of the evidence shows that Mr. Wittmer has

standing, as the sole proprietor of an unincorporated business,

to pursue the subject attorney's fee claim as a sole proprietor,

even if not as a corporation or the president of the originally

named, but now dissolved corporation.

12. The Petitioner contends that the Department should have

recognized the lack of a factual basis for the Administrative

Complaint and, before finding probable cause, should have been

able to determine that the construction arrangement between

Wittmer and Hatin did not meet the legal definition of

contracting or contracting services based upon the

familial/friendship relationship of the protagonists. The

Department, however, conducted a reasonable investigation and has

been shown to have had a reasonable basis to determine, before

hearing, that contracting and contracting services had been, in

a legal sense, performed by Wittmer, based upon the results of

its investigation (interviews, etc.). This is especially the

case since Wittmer himself, when interviewed, had not revealed

such exculpatory facts to the Department.

CONCLUSIONS OF LAW

13. The Division of Administrative Hearings has

jurisdiction of the subject matter of and the parties to this

14. This case arises under the "Florida Equal Access to

Justice Act." § 57.111(1), Fla. Stat. (2007). The Petitioner

seeks to recover attorney's fees and costs as defined in Section

57.111(3)(a), Florida Statutes (2007), which states:

(3) As used in this section:

(a) The term "attorney's fees and costs"

means the reasonable and necessary

attorney's fees and costs incurred in all

preparations, motions, hearings, trials, and

appeals in a proceeding.

15. A "prevailing small business party" is the only entity

that would be entitled to collect "attorney's fees and costs"

under the Florida Equal Access to Justice Act. A small business

party prevails, according to Section 57.111(3)(c), Florida

Statutes (2007):

(c) . . . When:

(1) A final judgment or order has been

entered in favor of the small business party

and such judgment or order has not been

reversed on appeal or the time for seeking

judicial review of the judgment or order has

expired; . . .

There is no dispute that the Petitioner herein has prevailed as

a party in the manner described in the above quoted statutory

section. It remains to be determined if the Petitioner is a

legally bona fide "small business party."

16. Section 57.111(3)(d), Florida Statutes (2007),

provides in pertinent part:

(d) The term "small business party" means:

1.a. A sole proprietor of an unincorporated

business, including a professional practice,

whose principal office is in this state, who

is domiciled in this state, and whose

business or professional practice has, at

the time the action is initiated by a state

agency, not more than 25 full-time employees

or a net worth of not more than two million

dollars including both personal and business

investments;

b. A partnership or corporation, including

a professional practice, which has its

principal office in this state and has at

the time the action is initiated by a state

agency not more than 25 full-time employees

or a net worth of not more than two million

dollars; or

c. An individual whose net worth did not

exceed two million dollars at the time the

action is initiated by a state agency when

the action is brought against that

individual's licenses to engage in the

practice or operation of a business,

profession, or trade; . . .

17. The Petitioner herein has the burden to show that he

is a prevailing small business party in the underlying DOAH Case

No. 07-0074. The Department must then establish by the

preponderance of evidence whether it was substantially justified

in law and fact in prosecuting the Administrative Complaint

underlying this attorney's fees proceeding or whether special

circumstances exist that would make an award of attorney's fees

and costs to the Petitioner unjust.

18. The Respondent Department maintains that, although

Wittmer was a prevailing party in the underlying case, he was

not a prevailing "small business party" within the meaning of

Section 57.111(3)(d)1., Florida Statutes (2007), because at the

time of the filing of the Complaint, Wittmer was not a sole

proprietor of an unincorporated business, as defined by Section

57.111(3)(d)1.a., and was neither a partnership nor corporation

as defined by Section 57.111(3)(d)1.b., Florida Statutes. The

Department also contends that he was not an individual against

whose licenses to engage in the practice or operation of a

business, profession, or trade the subject action was

prosecuted. See § 57.111(3)(d)1.c., Fla. Stat.

19. The evidence shows that when the Administrative

Complaint was filed in this case on November 27, 2006, that

Wittmer's corporation, named in the Administrative Complaint,

had already ceased to exist for more than a year by being

administratively dissolved by the Department of State, Division

of Corporations as of September 6, 2005. Wittmer acknowledges

in his affidavit, submitted January 18, 2008, that the

corporation had been dissolved, but also went out of business

due to "financial hardship of the business." The Department

makes the point that, if he ceased business due to financial

hardship, then he could not have been doing business either in

the form of a corporation (since legally dissolved) nor even in

the form of a sole proprietorship, since he has, in the

Department's view, admitted that his business had ceased because

of financial hardship.

20. Because the corporation was dissolved at the time the

Complaint was filed, then the Department should not have charged

the corporation with the violations. It did so apparently by

mistake. That aside, however, the Petitioner would not be able

to recover as a prevailing small business party under the banner

of the corporation, since the corporation had no legal existence

at the time the complaint was filed, nor at the time the

attorney fee petition was filed.

21. The Department claims that it did not charge in its

Administrative Complaint, violations against Wittmer as a sole

proprietorship, and that Wittmer cannot now seek to recover

attorney's fees, and have standing to do so, as a sole

proprietorship business. It argues that if the corporation had

dissolved due to "financial hardship of the business" then it

cannot be established that Wittmer was "doing business" as a

sole proprietorship at the time the Complaint was filed.

22. This argument is somewhat specious, however, since, at

least, in the de novo context of a proceeding such as this or,

more pointedly, the proceeding in the underlying case, how

Wittmer personally was charged in the Administrative Complaint

is not determinative of his standing to bring this petition, so

long as he was personally charged with the violations, that is,

in his non-corporate capacity. He was personally named in the

Complaint, and the fact that the charges against him did not

include the description "sole proprietor" is of no consequence.

23. The facts developed showed that regardless of whether

he was doing business before the Administrative Complaint was

filed, he was doing business, at least with regard to the

project at issue, and signed the contract under the title of JR

Wittmer Remodeling (not as a corporate entity).

24. In fact, the evidence shows that Mr. Wittmer can

properly be considered the sole proprietor of an unincorporated

business. He never had more than 25 full-time employees or a

net worth in excess of two million dollars. The construction

contract did not show the corporate name referenced above, but

rather "JR Wittmer's Remodeling" and the underlying construction

contract was signed by Wittmer personally, not as president of

the then-dissolved corporation. The facts show that he was

operating a business as a sole proprietor because, obviously,

his corporation was dissolved at the time he entered into the

agreement with the complaining witness, Mr. Hatin. He was named

individually as a Respondent in the underlying Administrative

Complaint and had to defend himself personally in that

disciplinary action. According to the totality of the

preponderant evidence, he meets the definition of "small

business party" under Section 57.111(d)(1)(a), Florida Statutes,

and has standing as the sole proprietor of an unincorporated

business to pursue the attorney's fees and costs petition.

25. The Department has the burden to show that its action

in prosecuting the underlying case was substantially justified,

in order to defeat the claim for attorney's fees and costs. See

Helmy v. Department of Business and Professional Regulation , 707

So. 2d 366 (Fla. 1st DCA 1998). The Respondent must establish

that, at the time the action was initiated, it had a reasonable

basis in law and fact to prosecute the underlying Administrative

Complaint proceeding against Wittmer and his dissolved

corporation. In deciding whether its action is "substantially

justified" an agency "must have solid though not necessarily

correct, basis in fact and law for position it took in action."

Fish v. Department of Health, Board of Dentistry , 825 So. 2d 421

(Fla. 4th DCA 2002). See also Department of Health, Board of

Physical Therapy Practice v. Cralle , 852 So. 2d 930 (Fla. 1st

DCA 2003) (question for determination is whether the

Department's finding of probable cause and the filing of an

Administrative Complaint "had a reasonable basis in law and

fact.")

26. The Florida Equal Access to Justice Act has been held

to be a statute designed to discourage governmental action

against small business parties, but not to totally paralyze

agencies who are doing necessary and beneficial work on behalf

of the public. See Department of Health and Rehabilitative

Services v. South Beach Pharmacy, Inc. , 635 So. 2d 117, 121

(Fla. 1st DCA 1994) (quoting Rudloe v. Department of

Environmental Protection , 33 F. Supp. 203 (DOAH 1987).

27. Before finding probable cause in the instant

proceeding the Department conducted an investigation and

considered the resulting investigative report and its

comprehensive investigative file. This file included the

original complaint against the Petitioner by Mr. Hatin, the

original contract on JR Wittmer's Remodeling, Inc., letterhead,

which appeared to be signed by the Petitioner, as well as copies

of original checks in a total amount of approximately $30,000.00

dollars, written to the Petitioner and his company by Mr. Hatin.

It also considered the state of the licensing records indicating

an expired occupational license, as well as records of the

Department which showed that the Petitioner was unlicensed by

the State of Florida for any form of contracting. It also

considered various invoices and receipts concerning the work

contracted for by the complainant with another entity or persons

to finish the job allegedly abandoned by the Petitioner.

28. The Department's investigator interviewed Mr. Wittmer

as well as the complainant and the complainant's fiancée. There

was no mention in those interviews of any personal or familial

relationship between the Petitioner, his fiancée and the

complainant or any of either of their family members at the time

the investigation was being conducted. Any information

regarding those relationships, which had a substantial effect on

the findings, which determined that no illegal contracting had

occurred, did not become known to the Department until the

evidence was taken at the hearing. Prior to that time the

Department had no reason or opportunity to suspect or consider

the particular circumstances of any personal relationships

between Wittmer, his fiancée and the complainant and his

fiancée, or any of their friends or family members who became

involved in the dispute or in the project itself.

29. The information available to the Department at the

time probable cause was found, and at the time the

Administrative Complaint was filed indicated that the Department

was pursuing a typical case involving unlicensed construction

contracting activity. There was nothing available to the

Department, after conducting its investigation in a reasonable

fashion, to indicate that there were any extenuating or

mitigating circumstances in favor of the Petitioner which would

demonstrate that he was not actually engaged in unlawful

contracting, nor that the filing of the Complaint would not

have a reasonable basis in law and fact.

30. The totality of the evidence in the proceeding shows

that the Department was reasonable in concluding, in the early

stages of the case, that violations of the above-referenced

portions of Chapter 489, Florida Statutes, had indeed occurred

and were perpetrated by Mr. Wittmer. The courts have

consistently held, as referenced-above, that the fact that the

ultimate determination in the underlying case was based upon an

assessment of evidence or information that could have been

developed before the finding of probable cause does not mean

that the Agency lacked a reasonable basis in fact to initiate

and prosecute the proceedings, just because it did not discover

such information or evidence after conducting a reasonable

investigation. See Cralle , supra . In summary, it has been

demonstrated that the underlying prosecution was substantially

justified in law and fact.

31. The Department alleges that an award of fees would be

unjust because Wittmer took inconsistent positions in the

underlying disciplinary action. The Department maintains that

Wittmer defended against the administrative prosecution by

contending that he was not a business entity and was not doing

business. It then argues that in the attorney's fees proceeding

that Wittmer seeks to show that he was indeed doing business at

the time of the construction project at issue and at the time of

the prosecution of the underlying Administrative Complaint

proceeding at least as a sole proprietorship. It thus argues

that he is taking an inconsistent position and that an award of

attorney's fees would be unjust.

32. The Department misses the point, however, that the

Recommended Order, and ultimately the Final Order, in dismissing

the Administrative Complaint, found that the Department had

failed to prove that Wittmer entered into an agreement to

perform unlicensed contracting services or that he actually

performed unlicensed contracting services. The finding and

determination in that case did not turn on whether Wittmer

functioned as an individual or a sole proprietorship or whether

he was doing construction business on an ongoing basis. It

simply turned on the fact that the Department failed to meet its

burden to show that he was actually engaged in unlicensed

contracting.

33. Such circumstances do not change the fact that Wittmer

incurred the expense of defending that action, prevailed in that

action and that he meets the definition of prevailing small

business party under Section 57.111, Florida Statutes (2007), at

least as a sole proprietorship. Thus, there can be no finding

that an award of attorney's fees and cost to him would be

unjust, on the basis advanced by the Department in this

proceeding. The award of attorney's fees and costs should not

be made, instead, because the Department has shown that its

prosecution of the underlying case, within the preview of the

legal authority cited above, was substantially justified in law

and fact.

Having considered the foregoing Findings of Fact,

Conclusions of Law, and the evidence of record, it is, therefore,

ORDERED that the Petition for Attorney's Fees and Costs

filed by Willis Wittmer, Jr., and JR Wittmer's Remodeling, Inc.,

by and the same is hereby dismissed.

DONE AND ORDERED this 14th day of April, 2008, in

Tallahassee, Leon County, Florida.

S

P. MICHAEL RUFF

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 14th day of April, 2008.

COPIES FURNISHED :

Garvin B. Bowden, Esquire

Gardner, Bist, Wiener, Wadsworth

& Bowden, P.A.

1300 Thomaswood Drive

Tallahassee, Florida 32308

Sorin Ardelean, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-2202

Ned Luczynski, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Nancy S. Terrel

Hearing Officer

Office of the General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO JUDICIAL REVIEW

This decision is final unless an adversely affected party:

a) brings a civil action within 30 days in

the appropriate federal district court

pursuant to Section 1415( i )(2)(A) of the

Individuals with Disabilities Education Act

(IDEA); [Federal court relief is not

available under IDEA for students whose only

exceptionality is "gifted"] or

b) brings a civil action within 30 days in

the appropriate state circuit court pursuant

to Section 1415( i )(2)(A) of the IDEA and

Section 230.23(4)(m)5, Florida Statutes; or

c) files an appeal within 30 days in the

appropriate state district court of appeal

pursuant to Sections 230.23(4)(m)5 and

120.68, Florida Statutes.