11-002224F Department Of Management Services, Division Of Retirement vs. City Of Wilton Manors Status: Closed DOAH Final Order on Monday, July 11, 2011.

Summary: DOAH lacks jurisdiction to entertain a motion for attorney's fees pursaunt to section 185.05(5), where the motion was filed with DOAH approximately 2 and one-half years after the final order in the administrative proceeding for which the award is sought.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF MANAGEMENT )

SERVICES, DIVISION OF )

RETIREMENT , )

)

Petitioner, )

)

vs. )

) Case No. 11 - 222 4F

CITY OF WILTON MANORS , )

)

Respondent. )

_ )

FINAL ORDE R OF DISMISSAL

This case is before Administrative Law Judge John G.

Van Laningham on a Motion for Attorney Fees and Costs

("Motion"), which Petitioner Department of Management Services

("Department") f iled with the Division of Adminis trative

Hearings ("DOAH") on May 2, 2011 . Since then, t he Department

and Respondent City of Wilton Manors ("City") have responded to

an Order to Show Cause, which was issued on June 16, 2011,

taking opposing positions on the question of whether this case

should be dismissed for lack of jurisdiction. For the reasons

that follow, the undersigned now concludes, as a matter of law,

that DOAH is without jurisdiction to entertain the Motion.

APPEARANCES

For Petitioner: Thomas E. Wright, Esquire

Department of Management Services

Division of Retirement

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399

For Respondent: Robert D. Klausner, Esquire

Adam P. Levinson, Esquire

Shaun H. Malvin

Klausner & Kaufman, P.A.

10059 Northwest 1st Court

Plantation, Florida 33324

Kerry L. Ezrol, Esquire

Goren, Cherof, Doody & Ezrol, P.A.

3099 East Commercial Boulevard

Suite 200

Fort Lauderdale, Florida 33308

STATEMENT OF THE ISSUE

The issue for determination is whether DOAH has

ju risdiction to entertain a n agency's motion for attorney's fees

brought pursuant to section 185.05(5), Florida Statutes, where

the motion was filed with DOAH approximately two and one - half

years after the agency's entry of a final order in the

administrativ e proceeding for which the agency seeks an award of

a ttorney's fees and costs.

PRELIMINARY STATEMENT

In its Motion, the Department urges that the City be

ordered, pursuant to section 185.05(5), Florida Statutes, to

reimburse the Department for the costs and attorney's fees it

incurred in a previous administrative proceeding styled City of

Wilton Manors v. Department of Management Services , Consolidated

DOAH Case Nos. 08 - 4766, 09 - 0933, 09 - 0934, 09 - 0934, 09 - 0936, 09 -

0937, and 09 - 0938 (the "Previous Proceed ing"). The Previous

Proceeding arose from a dispute between the parties regarding

premium tax revenue collected on the 1999 tax year , a portion of

which revenue was to have been provided to the City for the

benefit of the City's local pension plan . Th e d ispute had begun

in November 2000, when the Department notified the City that

premium tax revenue would no t be distributed to the City as in

previous years because ( the Department alleged) the City's

pension plan was no longer in compliance with c hapter 18 5 of the

Florida Statutes. Petitioner timely had requested a formal

hearing to contest the withholding of such funds.

T he dispute regarding the distribution of the 1999 premium

taxes remained pending before the Department for many years , as

the parties sought to resolve the matter amicably . During that

time , the Department notified the City, on an annual basis, that

revenue associated with tax years 2000 through 2005,

respectively, would not be distributed to the City, and each

year the City timely requ ested a hearing . Eventually, the

parties gave up on reaching a settlement , and the Department

sent all seven of the City's requests for hearing to DOAH, where

the matters were consolidated , becoming the litigation referred

to herein as the Previous Procee ding.

The undersigned conducted a final hearing in the Previous

Proceeding on April 16, 2009. Thereafter, the undersigned

issued a Recommended Order, which suggested that the Department

enter a final order declaring the City eligible to receive

premium ta x revenue. In addition, the undersigned recommended as

follows:

Finally, because the prevailing party in

this proceeding is entitled to recover

litigation costs and reasonable attorney's

fees pursuant to Section 185.05(5), Florida

Statutes, it is recommen ded that the

Division of Retirement, in its Final Order,

make an appropriate award thereof, unless a

genuine dispute of material fact arises

concerning the amount of such award, in

which event the matter should be referred to

the Division of Administrative Hearings for

a formal hearing.

On October 15, 2009, the Department rendered its Final

Order, which largely rejected the Recommended Order and,

accordingly, denied the City recovery of any premium tax revenue

for the tax years 1999 through 2005. The Depa rtment declined, as

well, to make an award of costs and attorney's fees in its Final

Order, or to remand the case to DOAH for a determination of the

amount of such award prior to the entry of a final order, as the

undersigned had recommended. The Final Or der was simply silent

as to the recovery of costs and attorney's fees pursuant to

section 185.05(5).

The City filed a Notice of Administrative Appeal on

November 3, 2009. About one year later, the Court of Appeal,

Fourth District, affirmed the Final Ord er. City of Wilton

Manors v. Dep't of Mgmt. Servs. , 48 So. 3d 962 (Fla. 4th DCA

2010). There was no remand.

The City sought review of the fourth district's decision.

T he Florida Supreme Court , however, refused to accept

jurisdiction of the City's peti tion for review, which brought an

end t o t he judicial proceedings. City of Wilton Manors v. Fla.

Dep't of Mgmt. Servs. , 2011 Fla. LEXIS 798 (Fla., Apr. 5, 2011).

At the same time, t he Court granted the Department's motion for

costs and attorney's fees pu rsuant to section 185.05(5) and

" ordered that [the Department] shall recover from [the City] the

amount of $2,500.00 for the services of [the Department's]

attorney in this Court." Id.

CONCLUSIONS OF LAW

1. Section 185.05(5) provides as follows:

In any judicial proceeding or administrative

proceeding under chapter 120 brought under

or pursuant to the provisions of this

chapter, the prevailing party shall be

entitled to recover the costs thereof ,

together with reasonable attorney's fees.

(Emphasis added) .

2. As relevant, t he plain language of this statute entitles

the prevailing party to recover the costs and attorney's fees of

an administrative proceeding in that administrative proceeding.

The statute does not prescribe the procedure by which the

pre vailing party in an administrative proceeding is to recover

its costs and fees. Neither, however, does section 185.05(5)

enlarge the jurisdiction of DOAH or any other administrative

agency to adjudicate disputes, other than to authorize the making

of an a ward of costs and fees.

3. DOAH is a " creature of statute " whose jurisdiction

extends only so far as the legislature specifically provides.

Grove Isle, Ltd. v. Dep't of Env tl. Reg. , 454 So. 2d 571, 573

(Fla. 1st DCA 1984); see also S.T. v. Sch. Bd. , 783 So. 2d 1231,

1233 (Fla. 5th DCA 2001)( DOAH " has no common law powers, and has

only such powers as the legislature chooses to confer upon it by

statute."). Thus, a person cannot initiate a proceeding at DOAH

by filing a petition or complaint, unless the l aw provides a

particular administrative remedy and requires those who would

avail themselves of it to petition DOAH for relief. See, e.g., §

120.56, Fla. Stat. (challenges to rules). Most cases that come

before DOAH are not filed directly with DOAH , as t his one was,

but begin with an agency's intended decision to determine a

person's substantial interests. Such preliminary agency action

triggers an obligation to give the affected person a clear point

of entry into the administrative adjudicative process. 1 If the

person whose interests are being determined timely requests a

hearing, and if there are disputed issues of material fact, then

the agency generally must refer the matter to DOAH for a formal

hearing. See §§ 120.569 and 120.57. At DOAH, an admin istrative

law judge ("ALJ") conducts the formal hearing and, after that,

submits a recommended order ("RO") to the agency. The agency

then renders a final order, which constitutes final agency action

and is appealable as a matter of right. See, e.g., O'D onnell's

Corp. v. Am b roise , 858 So. 2d 1138 (Fla. 5th DCA 2003)("Final

agency action is that which brings the administrative

adjudicatory process to a close."); § 120.68(1), Fla. Stat.

(judicial review of agency action).

4. Once the ALJ issues an RO, DOA H's power to act in the

matter ends, a s jurisdiction is returned to the referring agency

for the purpose of taking final agency action . Unlike the courts

of the judicial branch, which can entertain various types of

post - judgment motions, DOAH is not autho rized generally to hear

and decide post - RO motions. 2 To the extent such authority

exists, it must be specifically granted by law. The same is true

of other administrative agencies , whose jurisdiction in a

matter ÏÏ absent specific authorization by statute or rule ÏÏ ends

upon the rendition of a final order. (Agencies do possess the

limited, inherent power to correct, within a reasonable time

after rendition, clerical errors and inadvertent mistakes in

their final orders. See Taylor v. Dep't of Prof'l Reg. , 520 So.

2d 557, 560 (Fla. 1988)).

5. From the foregoing basic principles of administrative

law, it can be deduced that, for the prevailing party to recover

the costs and attorney's fees of an administrative proceeding in

that administrative proceeding pursuant to section 185.05(5), the

award must be made ÏÏ or , at a minimum, the entitlement thereto

determined ÏÏ before the administrative proceeding ends with the

rendition of the final order, while the agency still has the

power to act. There are two ways the Department could have

accomplished this.

6. As one option, b e fore taking final agency action in the

Previous Proceeding , the Department could have issued a nonfinal

order (a) notifying the City of its intent to render a final

order denying the City's multiple requests for the distribution

of premium tax revenue and (b) awarding the Department, as the

prevailing party, costs and attorney's fees in the amount of $X

unless within a specified period of time the City objected to the

reasonableness of the a mount, in which case the Department would

remand the case to DOAH for a determination of the sum to be

awarded. Had the Department done that, and had the City disputed

the amount, the undersigned, on remand, could have conducted

another evidentiary hearin g in the Previous Proceeding , made

additional findings of fact, and forwarded a recommendation to

the Department concerning the amount of costs and fees to be

awarded in the F inal O rder . This approach would have complied

strictly with section 185.05(5), a lbeit at the risk of litigating

an issue (the reasonable amount of the Department's costs and

attorney's fees) potentially for naught, given the prospect of an

appeal.

7. Alternatively, the Department at least could have

included in the Final Order a det ermination of its entitlement to

an award of costs and fees pursuant to section 185.05(5), while

specifying that the amount of such award would be determined in a

subsequent proceeding. Then, on the authority of the Final

Order, the Department could have notified the City of its

determination that the Department, as the prevailing party in the

Previous Proceeding, was owed costs and attorney's fees in the

amount of $X, which the City would be obligated to pay unless it

timely requested a hearing. In other words, the Department could

have notified the City of its preliminary determination

respecting the amount of the award and afforded the City a clear

point of entry into an adjudicative process if it disagreed with

the intended agency action. This approac h would have allowed the

parties to avoid potentially needless litigation over the amount

of the award (because the follow - on proceeding could have been

held in abeyance pending the conclusion of any appeal), while

still anchoring the entitlement determina tion to the

administrative proceeding for which costs and fees would be

recoverable. 3

8. Instead of pursuing either of the options described

above, the Department filed its Motion with DOAH ÏÏ as if the

Previous Proceeding were still pending here ÏÏ some two and one -

half years after the rendition of a Final Order that (a) brought

the Previous Proceeding to a close and (b) was silent as to the

Department's right of recovery under section 185.05(5). The

Department , however, has not identified any law which expressly

authoriz es DOAH to hear and decide, as part of the Previous

Proceeding, a post - RO motion for costs and fees pursuant to

section 185.05(5). Such authority is plainly not conferred in

section 185.05(5), which statute "must be strictly construed a s

it awards attorney's fees in derogation of the common law."

Anchor Towing, Inc. v. Dep't of Transp. , 10 So. 3d 670, 672 (Fla.

3d DCA 2009).

9. The Department has not identified any law , either, which

authorizes the Department to initiate a new admini strative

proceeding by directly filing with DOAH a motion to recover the

costs and fees incurred in a prior proceeding. In any event, no

such authority is granted under section 185.05(5), which does not

purport to create a freestanding administrative reme dy. Nor has

the Department cited any authority in support of its assertion

that DOAH possesses final order authority to award costs and fees

pursuant to section 185.05(5) ÏÏ a subject about which the statute,

again, says nothing .

Upon consideration, there fore, the undersigned concludes

that DOAH lacks jurisdiction to hear and decide the Motion, and

it is

ORDERED that this proceeding is dismissed. 4

DONE AND ORDERED this 11th day of Ju ly , 20 11 , in

Tallahassee, Leon County, Florida.

S

JOHN G. VAN LANINGHAM

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.s tae.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 11th day of Ju ly , 20 11 .

ENDNOTES

1 / It is a fundamental tenet of administrative law that when an

agency determines a party's substantial interests, the agency

must grant the affected party a clear point of entry into formal

or informal proceedings under c hapter 120, which point o f entry

cannot be "so remote from the agency action as to be ineffectual

as a vehicle for affording [the affected party] a prompt

opportunity to challenge" the decision. See, e.g., Gen . Dev .

Util . , Inc. v. Dep't of Envtl . Reg . , 417 So. 2d 1068, 1070 (Fla.

1st DCA 1982). Moreover, unless and until a clear point of

entry is offered, "there can be no agency action affecting the

substantial interests of a person." Fla . League of Cities, Inc.

v. State of Fla . , Admin . Com m'n , 586 So. 2d 397, 413 (Fla. 1st

DCA 1991). Indeed, absent a clear point of entry, "the agency

is without power to act." Id. at 415; see also, e.g., Capeletti

Bros . , Inc. v. Dep't of Transp. , 362 So. 2d 346, 348 - 49 (Fla.

1st DCA 1978)("Absent [an express] waiver [of the right to an

administ rative hearing], we must regard an agency's free - form

action as only preliminary irrespective of its tenor. . . .

Until proceedings are had satisfying Section 120.57, or an

opportunity for them is clearly offered and waived, [an agency]

is powerless to" determine a party's substantial interests.)

2 / That DOAH is not a constitutional court suffices to

d istinguish Palm Beach Gardens Police Pension Fund Bd . of Tr . v.

Beers , 842 So. 2d 911 (Fla. 4th DCA 2003), as do the unusual

facts and circumstances of t hat case. In Beers , a municipal

police officer named Mamak sought a disability pension under his

employer's pension plan and was initially turned down . Id. at

912. Mamak requested a hearing before the plan's board of

trustees to appeal the adverse decis ion. Mamak retained an

attorney named Beers to represent him before the board and agreed

to pay Beers a partial contingency fee. Id. As a result of the

hearing, the board granted Mamak the disability pension he

desired. Shortly thereafter, Beers demand ed that Mamak be

awarded attorney's fees pursuant to section 185.40, Florida

Statutes (1997), which was the predecessor to section 185.05(5).

The board denied the request. Id.

Following this setback, Mamak reneged on his agreement to

pay Beers, prompti ng Beers to sue Mamak for breach of contract.

Mamak filed a counterclaim alleging that Beers was in breach of

contract for failing to seek costs and attorney's fees from the

board. The court ultimately entered a summary judgment in

Beers's favor on his c laim, awarding the attorney approximately

$60,000 in damages. Id. at 913.

After that, the board was made a party to the lawsuit, as

both Mamak and Beers contended that the board was liable for

costs and attorney's fees pursuant to section 185.40 (now section

185.05(5)). Id. The court ruled that the board was liable and

ordered it to pay approximately $28,000 of Beers's fee. Both the

board and Mamak appealed. Id.

The court of appeal defined the sole question for

determination on the board's appeal as being "whether the

proceeding before the Board [which everyone agreed had not been

an administrative proceeding under chapter 120] was a 'judicial

proceeding' which, if it were, would entitle Mamak to recover his

fees and costs." Id. (footnote omitted ). No one, however,

contended that the proceeding before the board had been a

judicial proceeding. Id. Rather, Mamak and Beers argued that

the term "judicial proceeding" as used in the statute should be

construed to include quasi - judicial proceedings su ch as the

hearing before the board. The appellate court rejected that

contention and reversed the judgment for costs and attorney's

fees against the board. Id. at 914.

The court in Beers did not address (and seems not to have

considered) the question o f whether the trial court should have

refused to entertain Mamak's and Beers's claims that the board

was liable for costs and attorney's fees under section 185.40, on

the ground that the statute requires such an award to be made in

the proceeding for which the recovery is sought. Curiously,

moreover, the court gave no explanation for the failure of Mamak

to seek judicial review of the board's refusal (which turned out

to be legally correct) to award Mamak costs and fees as the

prevailing party in the quasi - judicial proceeding. In any event,

the trial court clearly had jurisdiction over the breach of

contract actions that Beers and Mamak had brought, even if its

jurisdiction over the board was suspect. As a result, Beers

cannot reasonably be read as establ ishing the principle that

section 185.05(5) authorizes the initiation of an independent

administrative action before DOAH, which latter lacks even the

colorable basis for acting that the trial court had in Beers .

3 / In this scenario, the City could have challenged, in the

appeal of the Final Order determining the premium tax

distribution dispute , the Department's entitlement to an award of

costs and fees . Indeed, as it happens, the City argues that the

Department waived its right to recover costs and fee s by failing

timely to plead its entitlement to such an award. The

undersigned does not reach this issue because he lacks

jurisdiction to decide it.

4 / The Department filed additional motions seeking costs and

attorney's fees pursuant to sections 120.59 5 and 57.105,

respectively. These motions, however, are based on the alleged

frivolousness of the City's arguments in opposition to the

Motion. As there is no jurisdiction to hear the original Motion,

the subsequent motions cannot be heard either.

COPIES FURNISHED :

Thomas E. Wright, Esquire

Department of Management Services

Division of Retirement

4050 Esplanade Way, Suite 160

Talla hassee, Florida 32399

Robert D. Klausner, Esquire

Adam P. Levinson, Esquire

Shaun H. Malvin, Esquire

Klausner & Kaufman, P.A.

10059 Northwest 1st Court

Plantation, Florida 33324

Kerry L. Ezrol, Esquire

Goren, Cherof, Doody & Ezrol, P.A.

3099 East Com mercial Boulevard

Suite 200

Fort Lauderdale, Florida 33308

Sarabeth Snuggs, Director

Division of Retirement

Department of Management Services

Post Office Box 9000

Tallahassee, Florida 32315 - 9000

Jason Emilios Dimitris , General Counsel

Department of Management Services

4050 Esplanade Way

Tallahassee, Florida 32399 - 0950

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 proceedi ngs 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 t he 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.