09-001611F Aaron Cox, D/B/A Cox Construction, Inc. vs. Department Of Business And Professional Regulation Status: Closed DOAH Final Order on Wednesday, September 2, 2009.

Summary: Petitioner did npt demonstrate that it was a prevailing small business party pursuant to Section 57.111, Florida Statutes, because it did not demonstrate that it prevailed or that agency action was initiated as defined by the statute.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AARON COX, d/b/a COX )

CONSTRUCTION, INC., )

)

Petitioner, )

)

vs. ) Case No. 09-1611F

)

DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION, )

)

)

Respondent. )

)

FINAL ORDER

This cause came before Lisa Shearer Nelson, a duly-appointed

Administrative Law Judge of the Division of Administrative

Hearings, for consideration of Petitioner's Application for Award

of Attorney's Fees pursuant to Section 57.111, Florida Statutes.

The parties have waived an evidentiary hearing in this matter,

agreeing that the issue of entitlement to attorney's fees and

costs would be decided on the basis of legal memoranda submitted

by the parties.

APPEARANCES

For Petitioner: Kenneth C. Steel, III, Esquire

Volpe, Bajalia, Wickes,

Rogerson & Wachs

501 Riverside Avenue, Seventh Floor

Jacksonville, Florida 32202

For Respondent: Maura M. Bolivar, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 42

Tallahassee, Florida 32399-2202

STATEMENT OF THE ISSUE

The issue to be determined in this proceeding is whether the

Petitioner is entitled to attorney’s fees and costs pursuant to

Section 57.111, Florida Statutes.

PRELIMINARY STATEMENT

On March 27, 2009, Petitioner Aaron Cox filed a Petition for

Attorney’s Fees and Costs Under 57.111, Florida Statutes, with

the Division of Administrative Hearings. On May 7, 2009,

Petitioner filed a Request for Evidentiary Hearing pursuant to

the Initial Order dated March 27, 2009.

The case was assigned to the undersigned and scheduled for

hearing to be held June 18, 2009. At the request of Respondent,

the hearing was continued and rescheduled for July 22, 2009. On

July 9, 2009, Petitioner filed a Withdrawal of Request for

Evidentiary Hearing and Motion for Leave to File Response to

Respondent’s Response to Petition for Attorney’s Fees and Costs.

On July 14, 2009, the Order Canceling Hearing, Bifurcating

Proceedings and Providing Deadline for Proposed Orders was filed.

The Order determined that the issues of entitlement to fees and

the amount of any fees would be bifurcated, with the initial

determination of entitlement decided based on the written

submissions of the parties. The Proposed Final Orders were to be

submitted by August 3, 2009.

At the request of the Respondent, the deadline for Proposed

Final Orders was extended to August 10, 2009. Both parties filed

Proposed Final Orders on August 10, 2009, and both submissions

have been carefully considered in the preparation of this Final

Order. All references to Florida Statutes are to the

codification in effect events alleged in the Petition for

Attorney’s Fees and Costs, unless otherwise specified.

FINDINGS OF FACT

1. Petitioner, Aaron Cox d/b/a Cox Construction, Inc., is a

Florida corporation organized for profit. It is owned by

Petitioner, Aaron Cox. Petitioner constitutes a “small business

party” within the meaning of Section 57.111, Florida Statutes.

2. On April 22, 2008, Jason Brown, a Department of Business

and Professional Regulation (Department or DBPR) investigator,

observed Cox and workers for Cox performing work on a roof that

appeared to require a roofing contractor's license.

3. Petitioner was doing framing work which did not require

a license and removed some of the roof related to the framing

work. Petitioner did not have a roofing contractor’s license.

4. On June 20, 2008, Robert Marnick, another DBPR

investigator taking over the case, issued Cox a “Uniform

Disciplinary Citation – Unlicensed” pursuant to Florida

Administrative Code Rule 61-32.003. The citation stated that

Marnick had probable cause to believe that Cox had violated

Section 489.127(1)(f), Florida Statutes, and sought a penalty of

$2,500.00.

5. Section 489.127(1)(f), Florida Statutes, provides that

no person shall “engage in the business or act in the capacity of

a contractor or advertise himself or herself or a business

organization . . . without being duly registered or certified or

having a certificate of authority.”

6. Florida Administrative Code Rule 61-32.003, provides

that citations imposing designated fines may be issued to

unlicensed persons for violations under the following conditions:

“1) there has been no prior citation, final order or Notice and

Order to Cease and Desist to the subject; 2) there is no evidence

of consumer harm in the current case; and 3) the subject has not

previously held a license to practice the activity at issue.”

7. Rule 61-32.003(4) also provides that citations for

unlicensed practice of a profession shall include a statement

that, in lieu of the citation, the subject may choose the

administrative procedures in Section 455.225, Florida Statutes.

The citation issued to Petitioner, however, contained the

following statement:

SUBJECT MUST CHOOSE ONE OF THE FOLLOWING:

____ I choose to PAY the

penalty/investigative costs (if any) on the

citation.

____ I choose to DISPUTE the citation and

wish to have this case PROSECUTED under s.

455.225, Florida Statutes.

8. The Citation had attached to it a form entitled "Legal

Rights and Mailing Instructions." The form included the

following information with respect to disputing the basis for the

citation:

The legal options available to you after you

have been issued a citation are as follows:

(A) You may DISPUTE the facts alleged in the

citation and elect to have the case formally

prosecuted. In that case, you must check the

appropriate box and return the original or a

copy of the citation within 30 days of the

date you were served. An Administrative

Complaint will be filed thereafter and served

upon you. If the Department prevails at the

hearing, you may be required to pay a fine

and any additional investigative or

administrative costs associated with

prosecution. Prosecution will be in

accordance with Chapters 455 and 120, Florida

Statutes, and the practice act governing the

profession. . . .

9. Petitioner disputed the citation on July 17, 2008, and

Respondent began an investigation into the matter as required by

Section 455.225(1)(a), Florida Statutes. Petitioner was notified

of the investigation by letter dated August 28, 2008.

10. Pursuant to Section 455.225(4), Florida Statutes, a

determination of probable cause shall be made by a majority of

the probable cause panel, or by the Department, as appropriate.

For unlicensed activity the probable cause determination is made

by the Department. If probable cause exists, the statute directs

that the Department will file a formal complaint against the

licensee.

11. Section 455.225(5), Florida Statutes, provides that a

formal hearing will then be held before an administrative law

judge from the Division of Administrative Hearings pursuant to

Chapter 120 if disputed issues of material fact arise after the

Department files an administrative complaint.

12. The Department attorney assigned to review the case

determined that there was no probable cause to find a violation

based on insufficient evidence. The case was closed and the

Petitioner was notified. However, the notification letter sent

to Petitioner does not specifically make any reference to the

term "probable cause."

13. Once notified, the Petitioner served his Request for

Award of Attorney’s Fees and Costs Pursuant to Section 57.111,

Florida Statutes.

14. No administrative complaint was ever filed by the

Department.

15. No complaint was ever filed in circuit court.

16. No notice of voluntary dismissal was filed.

17. No settlement took place between the parties.

CONCLUSIONS OF LAW

18. The Division of Administrative Hearings has

jurisdiction over the subject matter and the parties to this

action in accordance with Sections 120.569 and 120.57(1), Florida

Statutes (2009).

19. In this case, Petitioner seeks an award of attorney’s

fees and costs pursuant to Section 57.111, Florida Statutes

(2009), the Florida Equal Access to Justice Act (FEAJA). The

Legislature enacted Section 57.111 “to diminish the deterrent

effect of seeking review of, or defending against, governmental

action by providing in certain situations an award of attorney’s

fees and costs against the state.” § 57.111(2), Fla. Stat.

(2009). Section 57.111(4)(a) provides:

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

award of attorney’s fees and costs shall be

made to a prevailing small business party in

any adjudicatory proceeding or administrative

proceeding pursuant to chapter 120 initiated

by a state agency, unless the actions of the

agency were substantially justified or

special circumstances exist which would make

the award unjust. (Emphasis supplied.)

20. The burden of proof in these proceedings is a shifting

one. The general rule is that the party asserting the

affirmative of an issue bears the burden as to that issue.

Florida Department of Transportation v. J.W.C. Company , 396

So. 2d 778 (Fla. 1st DCA 1981). Petitioner is required to show

that it is a small business, as defined by Section 57.111; that

it is the prevailing party; and that the underlying adjudicatory

process was initiated by the state agency. Once this threshold

is met, the burden is then shifted to the agency to show that its

action in initiating the agency proceeding was “substantially

justified.” Helmy v. Department of Business and Professional

Regulation , 707 So. 2d 366, 368 (Fla. 1st DCA 1998); Gentele v.

Department of Professional Regulation , 513 So. 2d 672 (Fla. 1st

DCA 1987); Pinellas Rebos Club, Inc. v. Department of Revenue ,

DOAH Case No. 96-3150F, 97 ER FALR 1009 (DOAH 1997); Lauren, Inc.

v. Department of Revenue , Case No. 93-0256F, 94 TAX FALR 430

(DOAH 1993).

21. The parties have stipulated that Petitioner is a small

business party within the meaning of Section 57.111(3)(d).

22. Petitioner must also prove that it is a prevailing

small business party as defined in Section 57.111(3)(c). To do

so, Petitioner must demonstrate one of the following:

1. That 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;

2. A settlement has been obtained by the

small business party which is favorable to

the small business party on the majority of

issues which such party raised during the

course of the proceeding;

3. The State agency has sought a voluntary

dismissal of its complaint.

23. In this case, Petitioner has not demonstrated that it

is a prevailing party as contemplated by Section 57.111.

24. Determination of whether Petitioner is a prevailing

party requires an examination of the process related to issuance

of citations by the Department, as well as the alternatives to

issuing citations. Section 455.224, Florida Statutes, provides

the procedures for issuing citations as follows:

(1) Notwithstanding, s. 455.225, the board or

department shall adopt rules to permit the

issuance of citations. . . . The citation

must clearly state that the subject may

choose, in lieu of accepting the citation, to

follow the procedure under s. 455.225. If

the subject disputes the matter in the

citation, the procedures set forth in s.

455.225 must be followed . (Emphasis

supplied.)

25. Similarly, Section 455.228, Florida Statutes,

authorizes citations as one available remedy for cases involving

unlicensed practice of a profession regulated by DBPR. Section

455.228 authorizes the issuance of notices to cease and desist;

petitions seeking issuance of an injunction or writ of mandamus

to enforce orders to cease and desist; or the institution of

administrative proceedings pursuant to Chapter 120. § 455.228

(1), Fla. Stat. Issuance of a citation is clearly an alternative

to the other remedies provided for unlicensed activity listed in

Section 455.228, Florida Statutes. Section 455.228(3), Florida

Statutes, provides:

(3)(a) Notwithstanding the provisions of s.

455.225, the department shall adopt rules to

permit the issuance of citations for

unlicensed practice of a profession. . . .

The citation must clearly state that the

subject may choose, in lieu of accepting the

citation, to follow the procedure under

s.455.225. If the subject disputes the

matter in the citation, the procedures set

forth in s.455.225 must be followed.

However, if the subject does not dispute the

matter in the citation with the department

within 30 days after the citation is served,

the citation shall become a final order of

the department. . . .

26. Florida Administrative Code Rules 61-32.001 (Issuance

of Citations) and 61-32.003 (Guidelines for Issuing Citations for

Unlicensed Practice of a Profession) require the same

notification regarding election of the procedures in Section

455.225, Florida Statutes.

27. Section 455.225, Florida Statutes, outlines the

procedure for the processing of complaints in disciplinary

proceedings. The section covers the process from start to

finish, beginning with the receipt of consumer complaints,

through investigations, the determination of whether to file an

administrative complaint and ending with the right to judicial

review.

28. Pursuant to Section 455.225(4), a determination as to

whether probable cause exists for a violation of the relevant

statutes or rules is made after a case has followed an

investigative procedure described in subsections (1)and (2).

Subsection 455.225(4), Florida Statutes, provides in pertinent

part:

(4) The determination as to whether probable

cause exists shall be made by majority vote

of a probable cause panel of the board, or by

the department, as appropriate. . . . If

directed to do so, the department shall file

a formal complaint against the subject of the

investigation and prosecute that complaint

pursuant to chapter 120. . . .

29. If there is a dispute as to a material issue of fact

after an investigation under Section 455.225(4), Florida

Statutes, a formal hearing is conducted following Section

455.225(5), Florida Statutes:

(5) A formal hearing before an administrative

law judge from Division of Administrative

Hearings shall be held pursuant to chapter

120 if there are any disputed issues of

material fact. The administrative law judge

shall issue a recommended order pursuant to

chapter 120. If any party raises an issue of

disputed fact during an informal hearing, the

hearing shall be terminated and a formal

hearing pursuant to chapter 120 shall be

held.

30. The citation by DBPR was not a final judgment or order.

As Section 455.228(3), Florida Statutes, clearly indicates, only

citations that are not disputed become final orders of the

Department. Florida Administrative Code Rule 61-32.001(4) only

provides for those citations that become final orders to be

"filed in accordance with the procedures established for the

filing of final orders." In this case, there is no indication

that an order was docketed with the Agency Clerk, as required in

the definition of a final order in Section 120.52(7).

31. No settlement has been obtained between the parties.

The record is clear that Petitioner disputed the allegations in

the citation and requested prosecution. The Department chose not

to prosecute based upon insufficient evidence.

32. The Department closed its investigation due to a lack

of sufficient evidence to proceed. However, this does not

satisfy the requirement for voluntary dismissal of a complaint

under Section 57.111(3)(c), Florida Statutes, because the

Department never filed an administrative complaint consistent

with Chapter 120, Florida Statutes, or a complaint for injunctive

relief in circuit court.

33. Petitioner must also prove that the underlying

adjudicatory action was initiated by a state agency as defined in

Section 57.111(3)(b), Florida Statutes. The term "initiated by a

state agency" is defined as follows:

(b) The term "initiated by a state agency"

means that the state agency:

1. Filed the first pleading in any state or

federal court in this state:

2. Filed a request for an administrative

hearing pursuant to chapter 120; or

3. Was required by law or rule to advise a

small business party of a clear point of

entry after some recognizable event in the

investigatory or other free-form proceeding

of the agency . (Emphasis supplied.)

34. The Department did not file the first pleading in state

or federal court, and did not file a request for an

administrative hearing pursuant to Chapter 120. Therefore,

Section 57.111(3)(d)1. and 2. do not apply.

35. In order for Section 57.111(3)(d)3., to apply, the

Department must be required by statute or rule to advise the

small business party of a clear point of entry after some

recognizable event in the investigation. In this case, the

Department is not required, at the time of issuing the citation,

to provide a clear point of entry for Petitioner to pursue its

remedies pursuant to Chapter 120, Florida Statutes. Instead, it

was required to provide an opportunity for Petitioner to request

traditional investigatory procedures pursuant to Section 455.225,

Florida Statutes. Providing the option for a traditional

investigation is a preliminary step before any clear point of

entry be appropriate.

36. Petitioner points to the language of the notification

in the citation and the explanation of rights accompanying it,

which would lead the recipient to believe that disputing the

citation will lead to prosecution of the complaint pursuant to

Chapter 120, as opposed to invoking the procedures in Section

455.225. The language in the citation and explanation of rights

is troubling in that it does not comply with the statutory and

rule directives of Sections 455.224 and 455.228, Florida

Statutes, and Florida Administrative Code Rule 61-32.001. If the

statutes or the rule required prosecution of the underlying

complaint upon dispute of the basis for a citation, then it could

be inferred that these provisions required advising a recipient

of a clear point of entry at this point. However, both Sections

455.224 and 455.228 require notification of the procedures in

Section 455.225, Florida Statutes. Section 455.225 details the

entire disciplinary process, and the clear point of entry

contemplated by Section 57.111(3)(b)3. does not occur at the

point in time where a citation is disputed. A clear point of

entry for administrative proceedings does not occur until there

has been an administrative complaint filed, which constitutes

notice of intended agency action, after a finding of probable

cause.

37. Based on the foregoing it is found that there was no

statutory or rule requirement at this point in the process to

advise of a clear point of entry for a hearing to occur. The

Department was carrying out an investigation pursuant to its

authority provided in Section 455.225, Florida Statutes. The

citation to Petitioner and the subsequent investigation pursuant

to Section 455.225, Florida Statutes, are not considered notices

of a clear point of entry for purposes of Section 57.111, Florida

Statutes.

38. In sum, Petitioner has demonstrated that it is a small

business party; but has not demonstrated that that it is a

prevailing party by virtue of receiving a final judgment or order

in its favor, obtaining a settlement in its favor, or by the

Department seeking a voluntary dismissal of its complaint. Most

importantly, Petitioner has not demonstrated that the Department

initiated agency action against it as that term is defined in

Section 57.111(3)b), Florida Statutes. It is unnecessary to

determine whether the Department was substantially justified in

its actions, or to determine the reasonableness of the requested

fees and costs.

CONCLUSION

Based on the foregoing, Petitioner’s Petition for Attorney’s

Fees is dismissed.

DONE AND ORDERED this 2nd day of September, 2009, in

Tallahassee, Leon County, Florida.

S

LISA SHEARER NELSON

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 2nd day of September, 2009.

COPIES FURNISHED:

Kenneth Clark Steel, Esquire

Volpe, Bajalia, Wickes,

Rogerson & Wachs

501 Riverside Avenue, 7th Floor

Jacksonville, Florida 32202

Maura M. Bolivar, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 42

Tallahassee, Florida 32399

Nancy S. Terrel, Hearing Officer

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399

Ned Luczynski, General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is entitled

to judicial review pursuant to Section 120.68, Florida Statutes.

Review proceedings are governed by the Florida Rules of Appellate

Procedure. Such proceedings are commenced by filing the original

notice of appeal with the 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.