11-001722FC Fort Myers Real Estate Holdings, Llc vs. Department Of Business And Professional Regulation, Division Of Pari-Mutuel Wagering Status: Closed DOAH Final Order on Thursday, December 8, 2011.

Summary: Reasonable attorneys' fees assessed against Respondent, per First DCA order granting Petitioner's motion for attorneys' fees. Contingency risk multiplier was not warranted. Fees and costs for litigating amount of attorneys' fees are not allowed.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FORT MYERS REAL ESTATE )

HOLDINGS, LLC , )

)

Petitioner , )

)

vs. ) Case No. 11 - 1722FC

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF PARI - MUTUEL )

WAGERING , )

)

Respondent . )

)

FINAL ORDER

A final hearing was held in the above - styled case on

September 15, 2011, in Tallahassee, Florida, before

Administrative Law Judge Elizabeth W. McArthur of the Division

of Administrative Hearings (DOAH).

APPEARANCES

For Petitioner: Brian A. Newman, Esquire

Pennington, Moore, Wilkinson,

Bell & Dunbar, P.A.

215 South Monroe Street, Second Floor

Post Office Box 10095

Tallahassee, Florida 3230 2 - 2095

For Respondent: Reginald D. Dixon, Esquire

Department of Business and

Professional R egulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

STATEMENT OF THE ISSUE S

The first issue in this c ase is the amount of attorneys'

fees to assess against Respondent, Department of Business and

Professional Regulation, Division of Pari - Mutuel Wagering

(Respondent or Division), pursuant to an O rder of the First

District Court of Appeal (First DCA) grantin g a motion by

Petitioner, F t. Myers Real Estate Holdings, LLC (Petitioner or

Ft. Myers REH) , for attorneys' fees pursuant to section

120.595(5), Florida Statutes (2010), 1/ and remanding the case to

DOAH to assess the amount.

The second issue is whether Pe titioner is entitled to

recover attorneys' fees and costs incurred in this proceeding,

and , if so, in what amount.

PRELIMINARY STATEMENT

The background proceedings leading up to the First DCA's

O rder granting Petitioner's motion for attorneys' fees pursu ant

to section 120.595(5) are described in the court 's opinion in

Ft. Myers Real Estate Holdings, LLC v. Department of Business

and Professional Regulation, Division of Pari - Mutuel Wagering ,

53 So. 3d 1158 (Fla. 1st DCA 2011). In summary, Ft. Myers REH

su bmitted an application, and later an amended application, to

the Division for a quarter horse racing permit. The Division

denied the amended application, and Ft. Myers REH requested an

administrative hearing to contest the denial. The Division

dismissed the request for hearing, initially with leave to

amend. Ft. Myers REH amended its petition for administrative

hearing, which was again dismissed by the Division. Ft. Myers

REH appealed. The First DCA reversed the Division's F inal O rder

of D ismissal (Fin al Order) and remanded the case for an

administrative hearing in which Ft. Myers REH would be allowed

to contest the denial of its permit application.

The First DCA determined that the agency action which

precipitated the appeal was a gross abuse of the a gency's

discretion, thus , meeting the standard for an award of

reasonable attorney's fees and reasonable costs to the

prevailing party in the appeal, pursuant to section 120.595(5).

Accordingly, the court granted Petitioner's motion for section

120.595(5) attorneys' fees and directed DOAH to assess the

amount of fees. A separate case was opened at DOAH for the

purpose of assessing section 120.595(5) fees.

In accordance with the I nitial O rder entered, Petitioner

filed itemized time records of the four att orneys who performed

services in the appeal, with affidavits attesting to their

accuracy. In addition, Petitioner filed an affidavit from

Lawrence Sellers, Jr., an experienced, board - certified

administrative law practitioner and partner in Holland and

Kni ght, LLP's, Tallahassee office, offering his expert opinion

that the time record entries and the total fees reflected in the

time records of $144,332.50 were reasonable. Petitioner also

filed an affidavit of Gary M. Farmer, Sr., recently retired

j udge fro m the Fourth District Court of Appeal, offering his

expert opinion that a contingency fee multiplier of 2.5 is

appropriate and should be applied in this case. Application of

the multiplier Judge Farmer advocated would yield a total fee

award for the appea l of $360 , 831.25. No records were submitted

by Petitioner to document any costs incurred in the appeal that

Petitioner was seeking to recover.

Respondent did not agree to the reasonableness of the

amount of fees sought, but , instead, filed a counter - affi davit

of Wendy S. Loquasto, an experienced appellate attorney who

previously was employed for 15 years as a law clerk at the First

DCA. Ms. Loquasto offered her expert opinions that reasonable

attorneys' fees for the appeal ranged between $36,962.50 and

$ 41,195.00; that the hourly rates claimed by Petitioner's

attorneys exceeded the prevailing rates in the locale; that the

time entries by the four attorneys reflected duplication and

excessive time; and that no contingency fee multiplier was

appropriate in this case. Respondent requested an evidentiary

hearing, which was granted.

The parties filed a joint pre - hearing stipulation before

the hearing, and their stipulations have been incorporated into

this Final Order to the extent relevant.

At the hearing, the parties submitted Joint Exhibits 1

through 5, which were admitted in evidence. Petitioner

presented the testimony of Judge Gary M. Farmer, Sr. , and

Marc W. Dunbar, and Petitioner's Exhibits 1 through 10 were

admitted in evidence. Included as an exhib it was the Sellers

affidavit attesting to the reasonableness of the time - based fees

sought. Respondent consented to admission of this affidavit in

lieu of Mr. Sellers' testimony at the hearing. Respondent

presented the testimony of Wendy S. Loquasto , and Respondent's

Exhibits 1 and 2 were admitted in evidence.

FINDINGS OF FACT

1. For reasons that the First DCA found to be a "gross

abuse of agency discretion," the Division rendered a Final Order

dismissing Ft. Myers REH's petition for a formal administr ative

hearing to contest the Division's denial of Ft. Myers REH's

amended application for a quarter horse racing permit. The

premise of the Division's Final Order was that Petitioner could

not prove that it meets the requirements for a permit, hence its

c laimed injury was not "redressable."

2. Ft. Myers REH appealed the Final Order . The N otice of

A ppeal to the First DCA was filed on April 5, 2010, signed by

Cynthia Tunnicliff for Pennington, Moore, Wilkinson, Bell and

Dunbar, P.A. (the Pennington fi rm).

3. After two motions to extend the deadline for filing the

initial brief, Ft. Myers REH filed its I nitial B rief on July 26,

2010. With the I nitial B rief, Ft. Myers REH filed a motion for

an award of attorneys' fees under section 120.595(5), asser ting

that the agency action which precipitated the appeal was a gross

abuse of the agency's discretion. The motion's prayer for

relief asked for "entry of an order awarding the Appellant the

attorneys' fees it has incurred prosecuting this appeal,

pursuan t to . . . Section 120.595(5)."

4. As stated in the opinion, the First DCA found that the

Division's Final Order was "contrary to the basic, settled

principle of administrative law that a person whose substantial

interests are determined by an agency is entitled to some kind

of hearing . . . to challenge the agency's decision[.]" The

court determined that the dismissal of Ft. Myers REH's petition

was "so contrary to the fundamental principles of administrative

law" that Petitioner was entitled to an awar d of attorneys' fees

under section 120.595(5).

5. To assess reasonable attorneys' fees, a starting place

is necessarily the time records of Petitioner's appellate legal

team. Although Judge Farmer offered his opinion that the time

records had little t o no significance in this case, nonetheless ,

even Judge Farmer accepted the time - based attorneys' fees shown

on those time records as the base amount to which a multiplier

should be applied. Therefore, the undersigned examined the time

records in the cont ext of the appellate record and considered

the conflicting opinions of the parties' experts to assess

whether the time incurred by Petitioner's legal team was

reasonable in light of the steps needed to successfully

prosecute the appeal.

6. There was exte nsive motion practice in the appeal,

which significantly increased the amount of time that might

otherwise be considered reasonable for an appeal of an order

summarily dismissing a petition for administrative hearing, with

no record to speak of from procee dings below , such as would be

developed in a trial or administrative hearing. Several motions

were filed by the Division, including a motion to dismiss the

appeal, which resulted in an Order to Show Cause directing

Ft. Myers REH to demonstrate why the app eal should not be

dismissed. The Division also filed two different motions to

strike, one directed to Ft. Myers REH's response to the Order to

Show Cause why the appeal should not be dismissed, and the other

directed to the reply brief; both of these moti ons were denied.

7. Ft. Myers REH filed even more motions than the

Division. In addition to the motion for attorneys' fees

pursuant to section 120.595(5) and two perfunctory motions for

enlargement of time to file the initial brief, Ft. Myers REH

also f iled a motion for substitution of counsel, making the

mid - stream decision that David Romanik, whose expertise was in

gaming law, should be counsel of record instead of Cynthia

Tunnicliff, whose expertise was in administrative and appellate

law, even though both attorneys remained involved before and

after the substitution. More substantively, in reaction to the

Division's motion to dismiss, Ft. Myers REH filed a motion to

supplement the record and a motion for judicial notice, which

were denied; a motion t o consolidate the appeal with a separate

mandamus action it had filed, which was denied; and a motion to

strike the Division's response to the motion to supplement the

record, or, in the alternative, a motion for leave to respond to

new legal issues raised in the Division's response, both of

which were denied.

8. The basis for the Division's motion to dismiss was that

a newly enacted law rendered the appeal moot, because under the

new law, Ft. Myers REH could no longer qualify for the quarter

horse racing permit for which it had applied. The Division

sought to invoke the general rule that the law in effect at the

time of a final decision applies to determine whether to grant

or deny an application for a permit or other form of license.

See Lavernia v. De p't of Prof'l. Reg. , 616 So. 2d 53, 54 (Fla.

1st DCA 1993). Ft. Myers REH's motion flurry, even though

unsuccessful, was a reasonable response to the Division's

position in that Ft. Myers REH sought to demonstrate that one of

the exceptions to the general rule, as recognized in Lavernia ,

was applicable. See , e.g. , Dep't of H RS v. Petty - Eifert , 443

So. 2d 266, 267 - 268 (Fla. 1st DCA 1983)(under the circumstances

of that case, applicants were entitled to have the law applied

as it existed when they filed the ir applications).

9. In its opinion, the First DCA acknowledged both the

Division's mootness argument and Ft. Myers REH's contention that

there were circumstances that would preclude the Division from

applying the statutory changes to the permit applicat ion. The

court deemed these issues more suitable for fleshing out in the

administrative hearing on remand. See Ft. Myers , 53 So. 3d at

1162 - 1163.

10. In addition to the other motions, Ft. Myers REH also

filed a motion for an award of attorneys' fees and costs

pursuant to section 57.105, in which Ft. Myers REH asserted that

the Division's motion to dismiss the appeal was unsupported by

material facts and then - existing law. The court considered and

denied the section 57.105 motion.

11. There were four at torneys who worked on the appeal on

behalf of Ft. Myers REH: David S. Romanik from Oxford, Florida;

and Cynthia Tunnicliff, Marc Dunbar, and Ashley Mayer, all of

the Pennington firm in Tallahassee, Florida. The first three of

these attorneys are long - time practitioners with substantial

experience and particular areas of expertise.

12. Mr. Romanik, who became the counsel of record in the

middle of the appeal, is an attorney with 35 years' experience,

gained in private practice and in executive, legal, and

consulting positions in the racing/gaming industry. He was

described as the "general counsel, sort of," for the Florida

interests of Green Bridge Company, which is the parent company

of, and primary investor in, Ft. Myers REH. While Mr. Romanik

has some experience in administrative litigation and appellate

practice, his primary area of expertise is in gaming law.

13. Ms. Tunnicliff is a shareholder of the Pennington

firm, with vast experience and a well - established excellent

reputation for her expertise in administrative law and

administrative litigation under the Administrative Procedure Act

(APA), c hapter 120, as well as in appellate practice.

Ms. Tunnicliff's appellate experience is documented in well over

100 appeals in which she has appeared as cou nsel of record,

spanning the last 25 years.

14. Marc W. Dunbar has been practicing law for 17 years,

and he also is a shareholder of the Pennington firm. Like

Mr. Romanik, Mr. Dunbar's recognized area of legal expertise is

in gaming law. For the las t 13 years, he has been head of the

firm's gaming law practice group, and he has substantial

experience in gaming law and in providing consulting services to

the pari - mutuel industry. Mr. Dunbar's testimony was that this

has been the focus of his practice and has grown over the years

such that it is now virtually all he does.

15. Ashley Mayer was the lone associate who worked on the

appeal. Ms. Mayer graduated in 2009 with high honors from

Florida State University College of Law, where she was a member

o f the moot court team. Those who worked with her regularly at

the Pennington firm, including Ms. Tunnicliff and Mr. Dunbar,

thought very highly of her work as a one - year associate.

16. Based on the expert opinions offered for and against

the reasonabl eness of the time records for these four attorneys,

including the hourly rates applied to the time entries, the

undersigned finds as follows: there are some obvious flaws and

less obvious insufficiencies in the time records that require

adjustment; there is a large amount of duplication, which is

tolerable to some extent given the stakes, but which exceeds a

tolerable degree and requires some adjustment; the hourly rates

for the two gaming law experts are too high for the non - gaming

law legal services they each provided, requiring adjustment; and

that the hourly rate for the one - year associate is too high,

requiring adjustment.

17. The time records of each of the four timekeepers will

be addressed in turn, starting with the one - year associate,

Ms. Mayer. As an example of an obvious flaw in the time

records, the very first time entry is for researching and

analyzing case law regarding bringing a civil rights lawsuit

under 42 U.S.C. section 1983, for 2.8 hours. Another time entry

described work related to a separate mandamus action, which

Petitioner sought unsuccessfully to consolidate with the appeal.

These entries are unrelated to the appeal. In addition,

Ms. Mayer performed research regarding the process for assessing

appellate attorneys' fees by rema nd to the lower tribunal.

These entries do not relate to the appeal or to litigating over

the entitlement to attorneys' fees. Several of Ms. Mayer's

entries do not reflect legal work, but , rather, administrative

or secretarial work, such as retrieving a law review article

from the law library, conferring with a secretary regarding

formatting briefs, and revising documents to conform to others'

edits. Other than these entries, Ms. Mayer's time records seem

generally appropriate, in that she performed a la rge amount of

research before the initial brief, she performed drafting, and

she continued to carry out research assignments throughout the

appeal. Of the total 66.7 hours claimed, a reduction of 6.4

hours is warranted to account for the inappropriate ent ries.

60.3 hours are reasonable for Ms. Mayer.

18. An hourly rate of $225 was applied to Ms. Mayer's

time. Petitioner's expert attested, in general and in the

aggregate, to the reasonableness of the hourly rates in

Petitioner's time records for att orneys with comparable

experience and skill, but gave no specific information regarding

the basis for his opinions. Respondent's expert disagreed and

testified that in her opinion, an hourly rate of $225 .00 for a

one - year associate was excessive. She bas ed her opinion on The

Florida Bar's 2010 Economics and Law Office Management Survey,

which reported that for the north region of Florida, 47 percent

of all attorneys at any experience level charge an hourly rate

of $200 .00 or less. In the opinion of Respo ndent's expert, a

reasonable hourly rate for Ms. Mayer would be $150 .00 , instead

of $225. 00. While Respondent's expert's information was also

somewhat generalized, the undersigned finds that based on the

limited information provided, a reasonable rate for a highly

skilled , but not very experienced attorney one year out of law

school , would be $185 .00 per hour. A reasonable attorney's fee

for Ms. Mayer's legal work on the appeal is $11,155.50 .

19. Turning to Ms. Tunnicliff's time records, the hourly

rate for Ms. Tunnicliff of $400.00, though high, is accepted as

appropriately so. The rate is comparable to the rates charged

by other attorneys of comparable skill and experience in the

same locale, as ultimately agreed to by both parties' experts.

20. Ms. T unnicliff's time entries show that in general,

she limited her hours appropriately to a high level of

supervision, direction, and review, while allowing others,

particularly Ms. Mayer, to conduct the more time - intensive

research and drafting efforts.

21. Based on the expert testimony and a review of the time

record entries, a few adjustments to Ms. Tunnicliff's records

are necessary. One - half hour is subtracted for an entry related

to mandamus, because the mandamus action was separate and

unrelated to wor k done to prosecute the appeal at issue.

22. Another adjustment is necessary because of an error in

the time records: The billing summary shows that

Ms. Tunnicliff's total time was 31.6 hours, which was multiplied

by the hourly rate to reach the fees s ought for Ms. Tunnicliff's

time. However, the individual time entries add up to a total of

only 24.6 hours. With the additional deduction of one - half hour

for work unrelated to the appeal, a total of 24.1 hours will be

allowed for Ms. Tunnicliff's time. Applied to the agreed

reasonable hourly rate, a reasonable attorney's fee for

Ms. Tunnicliff's work on the appeal is $9,640.00.

23. The time records for the two gaming law experts

present more difficult issues, because the legal questions

presented in th e appeal were not gaming law questions; they were

administrative law questions and , indeed, "basic, settled"

administrative law questions. While certainly gaming law was

the substantive, regulatory context in which these issues arose,

it is clear from the time entry descriptions of exhaustive,

duplicative legal research on rights to administrative hearings,

party standing, and what law applies in license application

proceedings, that at their core, the questions presented were

general administrative law pr inciples and were treated as such.

Yet not only one, but two highly specialized gaming law experts

whose experience and specialized expertise allow them to command

hourly rates of $450 when practicing gaming law, spent most of

the total attorney time pros ecuting this administrative law

appeal. Mr. Romanik's time records claim 195.5 total hours at

$450 per hour, while Mr. Dunbar's time records claim 80.6 total

hours, of which 30.2 were claimed at the rate of $450 per hour,

while 50.4 additional hours were claimed at $300 per hour. The

reduced $300 per - hour fee was an adjustment made at the urging

of Petitioner's expert to account for research time spent not

within Mr. Dunbar's area of expertise.

24. Mr. Romanik's time records require adjustment. In

gener al, many of the types of criticisms of these records by

Respondent's expert are accepted, although the undersigned does

not agree with the degree of adjustments deemed warranted by

Respondent's expert. In general, Mr. Romanik's time entries

reflect exces sive hours spent by Mr. Romanik, doing tasks that

were duplicative of tasks more appropriately performed by

Ms. Mayer, which were , in fact , performed by Ms. Mayer,

including research and initial drafting. Perhaps one reason for

the sheer number of hours i nvested by Mr. Romanik was that he

was performing research on basic, settled principles of

administrative law, such as standing, hearing rights, licensing

proceedings, what happens when the law changes while a license

application is pending, and other ques tions of administrative

procedure. Mr. Romanik's time records also reflect too many

basic drafting tasks, such as initially drafting a request for

oral argument. The time records also show excessive secretarial

or administrative tasks, such as listing an d downloading cases

and uploading briefs. Not only did Mr. Romanik's specialized

expertise in gaming law not facilitate his performing these

tasks efficiently, but he inefficiently performed these tasks

very expensively, i.e., at the claimed rate of $450 per hour.

25. Nonetheless, Mr. Romanik apparently did the lion's

share of work in redrafting the initial brief (initially drafted

by Ms. Mayer), drafting the reply brief, drafting the numerous

motions and responses to the Division's motions, and performin g

well at the oral argument. The high stakes and good outcome

cannot be denied. Yet the total time claimed would be high at

the hourly rate claimed, if Mr. Romanik were the sole attorney

working on the appeal. Given his role as the "general

contractor," it is conceivable that many of his hours were

invested, or should be considered as having been invested, as

"client" time in which Mr. Romanik was serving as the client

liaison for the prosecution of the appeal to oversee the work

done by the attorneys pr osecuting the appeal.

26. Regardless of how Mr. Romanik's hours are

characterized, they were excessive and duplicative. To adjust

for excessive time in tasks outside Mr. Romanik's area of

expertise and for duplication, the undersigned finds that

Mr. Romanik's time should be reduced by 83 hours. Reflecting

the high stakes and good outcome, as well as the aggressive

motion practice in the appeal, a reasonable -- though still very

high -- number of hours for Mr. Romanik to have spent in

prosecuting this app eal (with the substantial help of three

other attorneys) is 112.50 hours.

27. With almost all of the time Mr. Romanik spent in this

appeal falling in areas outside of his recognized legal

expertise, the undersigned finds that a high , but reasonable ,

hou rly rate to apply to Mr. Romanik's time is $325. 00.

Essentially, Mr. Romanik's legal services fell more within the

legal expertise of Ms. Tunnicliff. If $400 .00 per hour is the

acknowledged reasonable rate for someone of Ms. Tunnicliff's

experience a nd expertise, the rate to apply to Mr. Romanik's

time should be less, although not substantially so, recognizing

that Mr. Romanik's gaming law expertise was a big advantage. If

intricate issues of gaming law were involved in this appeal, as

opposed to jus t being the substantive, regulatory context in

which basic, settled principles of administrative law arose,

then perhaps Mr. Romanik could command his standard hourly rate.

Instead, with the predominant focus of Mr. Romanik's work, as

reflected in his tim e entries on administrative and appellate

law and procedure, the reasonable rate that will be applied to

the reasonable time total found above is a blended rate that is

discounted because of reduced expertise in the main area, but

increased because of expe rtise in a collateral area.

28. Applying the reasonable rate of $325 .00 per hour to

112.50 hours for Mr. Romanik yields a reasonable attorney's fee

of $36,562.50 for Mr. Romanik's prosecution of the appeal.

29. Mr. Dunbar's time records suffer from the s ame

essential problem as Mr. Romanik's -- he is a gaming law expert ,

but his expertise was hardly utilized. If it was not necessary

to tap into Mr. Romanik's gaming law expertise to any great

extent, then it was not necessary and redundant to have a second

gaming law expert substantially involved in the appeal.

30. Additional problems with Mr. Dunbar's time records

include several time entries with inadequate descriptions (e.g.,

"Research" or "Research re: key cite authority") and other

entries with descrip tions that did not seem to relate to the

appeal (e.g., several entries two months after the initial brief

was filed for "Research re: standards for appellate review of

motion denial" when there was no denied motion for which

appellate review was sought).

31. Mr. Dunbar's time records had a large number of

entries for performing basic research on questions of

administrative law or appellate practice, such as standing,

hearing rights, standards for supplementing the record on

appeal, standards for motions to strike and to consolidate

appeals, standards for reply briefs, and similar descriptions.

32. Substantial adjustments are in order to remove the

inadequately described time entries and the entries seemingly

unrelated to this appeal and to substantially r educe the

duplicative research done by Mr. Dunbar outside of his area that

was also done by Ms. Mayer and/or Mr. Romanik and/or

Ms. Tunnicliff. While some overlap is tolerable to ensure that

all bases are covered, the time entries do not sufficiently

esta blish what was added by Mr. Dunbar's substantial time -

performing tasks outside his area of expertise to the already

substantial time allowed for Mr. Romanik outside his area of

expertise.

33. Mr. Dunbar's reasonable time spent as a fourth

attorney pros ecuting this appeal is reduced by 43 hours, to 37.6

hours. A little more than half of the 37.6 hours found to be

reasonabl e were in the non - research category, such as

Mr. Dunbar's review and comment on the draft briefs and motions

and assistance in prepa ration for oral argument. The research

hours found reasonable were those that appeared to augment, but

not duplicate, work by one or more other attorneys. As with

Mr. Romanik, a blended reasonable hourly rate is applied, which

recognizes that even for th e non - research time allowed for

Mr. Dunbar, his work was primarily outside his recognized legal

expertise, although his expertise provided benefit in

understanding the context in which the issues arose. An hourly

rate of $300 .00 is reasonable for 37.6 hou rs of work done by

Mr. Dunbar in prosecuting this appeal, equaling a reasonable

attorney's fee of $11,280.00.

34. The following summarizes the number of hours, hourly

rate, and resulting fee found to be reasonable for each of the

four attorneys who aide d in prosecuting the appeal:

Attorney Hours Hourly Rate Fee

Mayer 60.3 $185 $11,155.50

Dunbar 37.6 $300 $11,280.00

Romanik 112.5 $325 $36,562.50

Tunnicliff 24.1 $400 $ 9,640.00

Total hours by all attorneys: 234.50

Total time - based fees: $ 68,638.00

35. As previously alluded to, the stakes of this appeal

were very high, in that without success in the appeal,

Petitioner would have no chance of obtaining the quarter horse

racing permit for which it had applied. While success in the

appeal w ould not assure Petitioner that it would ultimately

prevail in its effort to secure a permit, winning the appeal was

a necessary step to keep the permit application alive and allow

Petitioner to take the next step in the process. If, at the end

of the lon g road ahead, Petitioner secures the sought - after

permit, the value of that permit could be in the neighborhood of

$70 million. Given the stakes, a higher amount of hours and

greater degree of duplication were allowed than might normally

be considered rea sonable.

36. The undersigned finds that there was not a huge risk

factor with regard to the outcome of the appeal. While in a

general sense and statistically speaking, odds always may be

greatly against success in an appeal , those across - the - board

statis tics are mitigated in this case by such a clear violation

of a "basic, settled" and "fundamental" principle of

administrative law and due process.

37. The complexity and novelty of the issues on appeal are

reflected, as one would expect, in the number o f hours found to

be reasonable for Petitioner's team of attorneys to have spent

in prosecuting this appeal. Even as reduced, the total hours

found reasonable for this appeal are nearly three times the

amount of time Respondent's expert would expect in the typical

appeal. Thus, the hours found to have been reasonably invested

were substantially higher than typical for an appeal, when one

might have expected less hours than typical since this appeal

did not follow a trial or administrative hearing.

38. No evidence was presented to show that any of the four

attorneys on Petitioner's appeal team were precluded from taking

other work because of their role in the appeal or that there

were any time constraints placed on the attorneys, either by the

client or the circumstances.

39 . The evidence was not entirely clear regarding the

nature of the arrangements with Ft. Myers REH for payment of

attorneys' fees for the appeal. Two separate contingency fee

agreements were admitted in evidence. One agreement, "[a]s of

August 15, 2010[,]" was between Ft. Myers REH and Mr. Romanik

(and his firm, David S. Romanik, P.A.). The operative term of

the agreement provided that "[u]pon and after the execution of

this fee agreement, the [Romanik] Firm shall handle this matter

a nd all aspects of it on a contingent fee basis." The "matter"

covered by the agreement was broadly described as "the pursuit

of the issuance by the Division of Pari - Mutuel Wagering of a

quarter horse racing and wagering permit . . . . " Therefore,

from Au gust 15, 2010, forward, Mr. Romanik and his firm agreed

to be compensated on a contingent fee basis for not only the

appeal, but also, any subsequent administrative hearings if the

appeal was successful and any other administrative or judicial

litigation r equired to secure the permit. Services would be

considered successfully completed upon commencement of Ft. Myers

REH's gaming operation pursuant to the permit. For such

successful services, the Romanik firm would receive $5 million.

In addition, the agr eement provided that the firm would be

entitled to "any and all fees that may be awarded" by any court

or administrative tribunal. No evidence was presented regarding

the prior fee arrangement that was in place until August 15,

2010, when the contingent f ee arrangement took effect.

40. Mr. Romanik and his firm entered into a separate

contingency fee agreement with the Pennington firm to secure the

Pennington firm's assistance, as a subcontractor, in prosecuting

the appeal of the Division's dismissal of Ft . Myers REH's

request for an administrative hearing to contest the denial of

its quarter horse permit application. The agreement, dated

September 1, 2010, was called "a revised representation

agreement," which superseded "all prior agreements related to

t his matter." Payment for services under the agreement was

contingent on success in the appeal and was set at "the greater

of $100,000 or any fee award from the court, if any."

41. No prior representation agreement for services

provided by the Pennington firm in the appeal before

September 1, 2010, either with Mr. Romanik and his firm or with

Ft. Myers REH, was offered into evidence. However, Mr. Dunbar

testified that before the Pennington firm entered into a

contingency fee arrangement with Mr. Romanik a nd his firm, the

Pennington firm provided services to Ft. Myers REH under a

standard fee agreement by which the Pennington firm attorneys

provided legal services for which they billed and were paid at

their standard hourly rates.

42. As of August 16, 2010 , the standard fee agreement

between Ft. Myers REH and the Pennington firm was apparently

still in place, because in the motion for section 57.105

sanctions served on Respondent on August 16, 2010, and

subsequently filed with the First DCA on September 20, 2010,

Mr. Dunbar represented that Ft. Myers REH "had retained the

[Pennington law firm] to represent it in this matter and has

agreed to pay its attorneys a reasonable fee for their

services." This statement was not qualified by any contingency,

such as that Ft. Myers REH only agreed to pay a reasonable fee

to the Pennington firm if the appeal was successful. Thus,

although Mr. Dunbar seemed to indicate in his testimony that the

September 1, 2010, contingent fee agreement was intended to

apply retroactiv ely, that testimony is inconsistent with the

representation in the section 57.105 motion signed by

Mr. Dunbar.

43. The evidence establishes that contingency fee

agreements were entered into midway through the appeal. The

greater weight of the credible evidence was insufficient to

prove that before August 15, 2010, the attorneys providing

services in the Ft. Myers REH appeal would only be paid if the

appeal was successful. Thus, the undersigned finds that the fee

arrangements for the appeal were partial ly contingent.

44. The contingent fee agreements were reached as an

accommodation to Ft. Myers REH's desire for such arrangements,

rather than as an enticement that had to be offered by Ft. Myers

REH in order to secure competent counsel to represent it in the

appeal.

45. No evidence was presented detailing the nature and

length of Petitioner's relationship with its team of attorneys.

As noted, Mr. Romanik has a relationship with Petitioner and its

parent that is akin to general counsel over the parent's Florida

interests, though it is unknown how long this relationship has

existed. The Pennington firm, likewise, has done work for

Petitioner and its parent before and has sent invoices for legal

services to Mr. Romanik for his review, approval, and

transmi ttal to the parent for payment. It is unknown how

extensive or over what period of time this relationship existed.

46. Petitioner established that it incurred an additional

$28,087.00 in attorneys' fees charged for litigating the

reasonable amount of att orney ' s fees in this proceeding, plus

$44,016.00 in expert witness fees. In addition, Petitioner

incurred $1,094.43 for expense items, of which $409.50

represents the cost of the final hearing transcript, and the

balance represents costs for copying, cour ier service, and

postage. Respondent did not dispute the reasonableness of those

attorneys' fees, expert witness fees, and costs.

CONCLUSIONS OF LAW

47. The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of t his

proceeding. §§ 120.569, 120.57(1), and 120.595(5), Fla. Stat.

(2011); First DCA Order of Remand in Case No. 1D10 - 1766 (Feb. 7,

2011).

48. By O rder of the First DCA on February 7, 2011, the

court granted Ft. Myers REH's Motion for an Award of Attorney s'

Fees U nder Section 120.595(5) and remanded the matter to DOAH to

assess the amount, without any instructions apart from the

specific terms of the statute.

49. The specific statute pursuant to which Petitioner's

attorneys' fees motion was granted by the court states as

follows:

Appeals. -- When there is an appeal, the court

in its discretion may award reasonable

attorney's fees and reasonable costs to the

prevailing party if the court finds that the

appeal was frivolous, meritless, or an abuse

of the appel late process, or that the agency

action which precipitated the appeal was a

gross abuse of the agency's discretion .

Upon review of agency action that

precipitates an appeal, if the court finds

that the agency improperly rejected or

modified findings of fa ct in a recommended

order, the court shall award reasonable

attorney's fees and reasonable costs to a

prevailing appellant for the administrative

proceeding and the appellate proceeding.

( e mphasis added).

50. Thus, the statutory standard is "reasonable attorney's

fees . . . to the prevailing party" in an appeal. As the party

asserting the affirmative of the issue, Petitioner has the

burden of proof in this proceeding. See Dep't of Transp. v.

J.W.C. , Inc. , 396 So. 2d 778, 788 (Fla. 1st DCA 1981).

Petit ioner must prove by a preponderance of the evidence the

reasonableness of the attorneys' fees sought. § 120.57(1)(j).

51. Generally, in determining reasonable attorney ' s fees,

courts use the lodestar method, which requires consideration of

the following factors: (1) the time and labor required, the

novelty and difficulty of the issues, and the legal skill

required; (2) the likelihood that the representation will

preclude other employment by the attorney ; (3) the fee

customarily charged in the locality fo r similar legal services;

(4) the stakes involved and results obtained; (5) the time

limitations imposed by the client or circumstances; (6) the

nature and length of the professional relationship with the

client; (7) the experience, reputation, and ability of the

attorneys ; and (8) whether the fee is fixed or contingent.

Florida Patient's Compensation Fund v. Rowe , 472 So. 2d 1145,

1150 (Fla. 1985); Rule 4 - 1.5(b) of the Rules Regulating The

Florida Bar.

52. All enumerated factors should be considered and may be

applied with the appropriate weight called for by the facts of

the particular case. Thus, the fee suggested by multiplying the

reasonable time devoted to a case by the reasonable fee rate for

the locality need not be given exclusive or controlling weight.

Consideration of all of the factors may justify a fee higher or

lower than that called for by the time and rate factors. Rule

4 - 1.5(c).

53. By the same token, consideration of factors other than

time and rate , do not necessarily require increa sing or

decreasing the reasonable time - based fee. For example, the fact

that there is a contingency fee agreement is something to be

considered, but application of a contingency risk factor to

adjust a fee award upward because of the risk of non - payment i s

not mandatory. Standard Guaranty Ins. Co. v. Quanstrom , 555

So. 2d 828, 831 (Fla. 1990)(emphasizing that the words "must

consider" do not mean "must apply," but mean "must consider

whether or not to apply" the contingency fee multiplier); Weaver

v. Scho ol Bd. of Leon Cnty. , 624 So. 2d 761, 763 (Fla. 1st DCA

1993) (recognizing non - mandatory nature of contingency risk

multiplier where there is a contingent fee agreement).

54. Based on the Findings of Fact above, consideration of

the first and third factor s of the lodestar approach yields a

reasonable time - based fee of $68,638.00. The adjustments to the

time records of Petitioner's attorney team are in keeping with

several principles recognized in Rowe , supra , and other

attorney's fees cases. One key prin ciple emphasized by the

court in Rowe is the importance of keeping accurate, detailed

records of the work performed to allow an accurate assessment of

the attorney time records for reasonableness of the hours

claimed. "Inadequate documentation may result in a reduction in

the number of hours claimed, as will a claim for hours that the

court finds to be excessive or unnecessary." Rowe, supra , 472

So. 2d at 1150.

55. Another principle applied by courts in assessing

attorney time records, which was applied here, is that when

there are multiple attorneys working on a matter, care must be

taken to avoid duplication of labor. A sometimes - related

principle is that when one of the attorneys is acting in a dual

capacity as attorney and as a representative of the client, fees

should not be awarded for time expended in his capacity as a

client. 2/ Transflorida Bank v. Zedek , 576 So. 2d 752, 753 - 754

(Fla. 4th DCA 1991).

56. Petitioner's expert argued that a contingency risk

multiplier was appropriate in this case for different reasons.

One reason urged for applying the multiplier was that the stakes

were so high. However, the undersigned considered the high

stakes and allowed that factor to justify a higher number of

hours invested in the appeal, with more duplic ation than might

otherwise be appropriate. The appellate team was accorded some

leeway in claiming duplicative time to cross - check each other's

research and to have multiple attorneys involved in reviewing

and commenting on drafts of significant filings. It would be

double - counting to allow the high stakes to dictate a greater

number of hours and then allow that same factor to justify

multiplying the already - higher time - based fee.

57. Petitioner's expert also argued for a contingency risk

mul tiplier because of the risk of loss due to the contingency

fee agreements. As found above, however, the compensation

arrangement for the attorneys was only partially contingent.

58. Petitioner's expert opined that the risk of loss was

very high because of the low statistical chance of winning

appeals. However, as found above, general statistics must give

way here, where the appeal is from a final order of dismissal

that flies in the face of "basic, settled" principles of

administrative law and due proc ess. Cf . Transflorida Bank ,

supra , 576 So. 2d at 753 (trial court erred by applying a

contingency risk multiplier in computing the 57.105(1)

attorney's fees; a case that is so patently frivolous cannot

reasonably be treated as involving a risk that would support a

multiplier).

59. Petitioner's expert pointed to the novelty and

complexity of the issues as a factor warranting a higher fee.

However, under Rowe , supra , the "'novelty and difficulty of the

question involved' should normally be reflected by th e number of

hours reasonably expended on the litigation." 472 So. 2d at

1150.

60. Petitioner's expert most forcefully advocated for a

multiplier as a way to make the Division "pay dearly , " i.e., as

punishment, not only for having entered the Final Order , but

also, for engaging in what was described as abusive litigation

tactics by its aggressive motion practice in the appeal. Judge

Farmer believed that this sort of punishment multiplier was

supported by cases such as State Farm Fire & Cas. Co. v. Palma ,

629 So. 2d 830 (Fla. 1993), where a contingency risk multiplier

was applied in awarding statutory attorney's fees to a

prevailing party, where the other party not only lost, but also,

engaged in abusive litigation tactics.

61. Even if Palma would support imposing a multiplier as a

punishment in certain cases, the different context of this case

dictates against any such multiplier. Unlike in Palma , the

"gross abuse" of the Division in issuing the Final Order

appealed is the actual threshold standard for aw arding

reasonable attorney's fees under the statute. And with regard

to what was characterized as abusive appellate motion practice

by filing a motion to dismiss and other motions, the appellate

court was in the best position to judge, and it considered a nd

rejected Petitioner's motion for section 57.105 fees and costs

as a sanction for the Division's motion to dismiss the appeal.

62. Upon consideration of all of the factors, the

undersigned has considered applying a contingency risk

multiplier, but concl udes that it would be inappropriate to

apply a multiplier under the circumstances of this case.

63. Petitioner is not entitled to attorney's fees and

costs incurred in this proceeding to litigate the reasonable

amount of attorneys' fees. Generally, parti es are entitled to

recover attorney s ' fees and costs incurred in litigating

entitlement to attorneys' fees, but not in litigating the amount

of a fee award. Palma , 629 So. 2d at 833.

64. Petitioner acknowledges this general rule, but argues

that a few ca ses recognize an exception where fees are awarded

as a sanction. See , e.g. , Bennett v. Berges , 50 So. 3d 1154

(Fla. 4th DCA 2010); Condren v. Bell , 853 So. 2d 609, 610 (Fla.

4th DCA 2003). However, as recognized in Bennett , the exception

to the Palma gen eral rule was analyzed in Bates v. Islamorada ,

939 So. 2d 171, 172 (Fla. 3d DCA 2006), as follows:

A review of [cases such as Palma stating the

general rule], however, reveals that the

fees awards relied upon statutes which did

not provide for fees incurre d litigating the

amount to be awarded. The fees awarded in

the instant case were not statutorily based,

and were instead, awarded as sanctions

levied against the appellants for failing to

comply with the trial court's orders. This

court, therefore, finds statutorily based

fees awards inapplicable and distinguishable

from the fees awarded in the instant case,

and relies, as did the trial court, on

Condren v. Bell [.]

65. Where, as here, a fee award is statutorily based, the

general rule announced in Pal ma applies, and fees incurred in

litigating the amount of fees to be awarded may not be

recovered , unless the statute expressly authorizes recovery of

such fees. Section 120.595(5) does not expressly authorize

recovery of fees incurred in litigating the a mount of fees to be

awarded. Accord Ag. for Health Care Admin. v. HHCI Ltd. P 's hip ,

865 So. 2d 593, 596 (Fla. 1st DCA 2004) (construing section

120.595(4) to preclude recovery of fees expended in proving the

amount, as opposed to entitlement, of attorneys ' fees under the

general rule of Palma , where statute did not expressly authorize

recovery of such fees). See also Gaston v. Dep't of Rev . , 742

So. 2d 517, 522 - 523 (Fla. 1st DCA 1999)(disallowing fees

incurred litigating the amount of fees to be awarded u nder

statute that allowed reasonable attorney's fees to a successful

employee, where statute was silent about fees for time spent

litigating the amount of fees to be awarded; " [i] f the

legislature had intended to include in the fee to be awarded an

amount for time spent litigating the amount of that fee, one

would expect to find some indication of that intent in the

language of the statute.").

66. It appears that an award of reasonable appellate

attorneys' fees and costs is all that is contemplated by the

statute, which authorizes an award of reasonable attorneys' fees

and reasonable costs incurred by the prevailing party in an

appeal in which certain circumstances are shown, such as a gross

abuse of agency discretion. Accord Residential Plaza at Blue

Lag oon, Inc. v. Ag. for Health Care Admin. , 891 So. 2d 604, 606

(Fla. 1st DCA 2005)(granting appellate attorney's fees under

section 120.595(5)). Indeed, in its motion for an award of

section 120.595(5) fees, Petitioner relied on the Blue Lagoon

case, and Pe titioner did not ask for an award of the fees that

would be incurred in litigating the amount of fees to be awarded

pursuant to section 120.595(5). Instead, Petitioner's motion

expressly sought as relief only an award of attorneys' fees

incurred in prosec uting the appeal.

ORDER

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is hereby:

ORDERED that the amount of attorneys' fees assessed against

Respondent, Department of Business and Professional Regulation,

Division of Pari - Mut uel Wagering, pursuant to section

120.595(5), is $68,638.00.

DONE AND ORDERED this 8th day of December , 2011 , in

Tallahassee, Leon County, Florida.

S

ELIZABETH W. MCARTHUR

Administrative Law Judge

Division of Administrati ve Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 8th day of December , 2011 .

ENDNOTE S

1/ Unless otherwise indicated, all references to the Florida

Statutes are to the 2010 codification.

2/ Perhaps one explanation for the magnitude of Mr. Romanik's

hours recorded for the appeal was that he was functioning in a

dual capacity, sometimes serving as the client representative in

overseeing and coordinating the work of the other attorneys .

For example, Mr. Romanik attended the final hearing in this

proceeding as the designated representative of Ft. Myers REH.

But even if Mr. Romanik's extra ordinary number of hours were

not, in part, fairly attributable to his role as the client

representative, they were excessive and often duplicative of

work done by others.

COPIES FURNISHED :

Ken Lawson, Secretary

Department of Business and

Profession al Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399

Leon M. Biegalski, Director

Division of Pari - Mutuel Wagering

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, F lorida 32399

Layne Smith, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

David S. Romanik, Esquire

David S. Romanik, P.A.

Post Office Box 650

Oxford, Flori da 3 4484 - 0650

Brian A. Newman, Esquire

Pennington, Moore, Wilkinson,

Bell & Dunbar, P.A.

215 South Monroe Street, Second Floor

Post Office Box 10095

Tallahassee, Florida 32302 - 2095

Reginald D. Dixon, Esquire

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

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 one copy of a Notice of Administrative Appeal with the

agency clerk of the Division of Administrative Hearings and a

second copy, accom panied 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 Administrative Appeal must be

filed within 30 days of renditi on of the order to be reviewed.