11-002432F Smith Child Care Center And Sarah Smith | Smith Child Care Center And S. S. vs. Department Of Children And Families Status: Closed DOAH Final Order on Wednesday, October 12, 2011.

Summary: Petition for fees and costs under s. 57.111 is denied because Petitioners were not prevailing parties in disciplinary action; s. 57.111 petition was not so unsupported by facts or law as to warrant sanctions under s. 57.105.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SMITH CHILD CARE CENTER )

AND S. S. , )

)

Petitioners , )

)

vs. ) Case No. 11 - 2432F

)

DEPARTMENT OF CHILDEN )

AND FAMILIES , )

)

Respondent . )

)

FINAL ORDER

This matter came on for determination by Administrative Law

Judge Elizabeth W. McArthur of the Division of Administrative

Hearings, on the parties' written submissions, after the parties

waived an evidentiary hearing.

APPEARANCES

For Petiti oner: Robert H. Grizzard, II, Esquire

Robert H. Grizzard, II, P.A.

Post Office Box 992

Lakeland, Florida 33802 - 0992

For Respondent: T. Shane DeBoard, Esquire

Department of Children and Families

400 West Robinson Street, S uite S - 1129

Orlando, Florida 32801 - 1782

STATEMENT OF THE ISSUE

The issue in this case is whether Petitioners, Smith Child

Care Center and Sarah Smith (Petitioners), 1/ are entitled to an

award of attorney's fees and costs to be paid by Respondent,

Department of Children and Families (Respondent or the

Department), pursuant to section 57.111, Florida Statutes

(2009). 2/

PRELIMINARY STATEMENT

On March 11, 2011, the Department rendered a Final Order

adopting recommended Findings of Fac t and Conclusions of Law,

concluding that Petitioners violated specified child care

facility licensure rules and imposing disciplinary action based

on those violations. The underlying facts forming the basis of

the Final Order are described in the Recomme nded Order in

Department of Children and Families v. Smith Child Care Center

and S. S. , Case No. 10 - 0985 (Fla. DOAH Dec. 30, 2010) (the

underlying proceeding). The Final Order was not appealed.

On May 12, 2011, Petitioners, who were Respondents in the

und erlying proceeding, filed a petition for attorney's fees and

costs pursuant to section 57.111. The petition asserted that

Petitioners were "prevailing parties" in the underlying

proceeding. Attached was an affidavit of attorney's fees and

costs by Petiti oners' attorney.

An I nitial O rder established the framework for this

proceeding . F irst, Respondent was required to submit a written

response setting forth defenses to the petition, specifying

whether Respondent disputed the component issues to be

determi ned under section 57.111, stating the particular grounds

for any such disputes , and requesting or waiving an evidentiary

hearing. Petitioners were then given a specified time period to

respond to disputed issues raised by Respondent and to request

an evid entiary hearing.

After an unopposed extension of time, Respondent filed its

written response with exhibits. Respondent acknowledged that

the following points were not in dispute: Petitioners were

small business parties; the attorney's fees and costs enum erated

in Petitioners' affidavit were reasonable in amount; and

Respondent was not a nominal party in the underlying proceeding.

Remaining for resolution under section 57.111 were the following

disputed issues: whether Petitioners were "prevailing partie s"

in the underlying proceeding within the meaning of section

57.111; whether Respondent's actions were substantially

justified; and whether circumstances exist that would make an

award unjust. Respondent's written response expressly waived an

evidentiary hearing on these questions.

In addition to filing a written response, Respondent also

served, and later filed, its own motion for attorney's fees and

costs against Petitioners and their attorney, pursuant to

section 57.105, Florida Statutes (2010). The m otion asserted

that Petitioners' section 57.111 petition was unsupported by

facts or law and, therefore, was subject to sanctions in the

form of reasonable attorney's fees and costs paid to Respondent.

Attached to the motion was an affidavit attesting to the

attorney time spent responding to the section 57.111 petition.

After an unopposed extension of time, Petitioners submitted

a reply to Respondent's arguments regarding the section 57.111

petition. Petitioners did not take the opportunity offered in

th e Initial Order to request an evidentiary hearing in their

reply. Petitioners also filed a response to Respondent's motion

for sanctions pursuant to section 57.105, in which Petitioners

disputed the basis for and reasonableness of the claim for

attorney's fees. Petitioners did not submit an affidavit to

support their challenge to the reasonableness of Respondent's

claimed fees.

Since the parties did not timely request an evidentiary

hearing in accordance with the Initial Order, an evidentiary

hearing was deemed waived, and the undersigned has proceeded to

"decide for or against the award and the amount, if any, on the

basis of the pleadings, the supporting documents, and the file

of the Division of Administrative Hearings in the underlying

proceeding."

FI NDINGS OF FACT

1. As fully described in the underlying proceeding, the

disciplinary action against Petitioners arose primarily from an

incident occurring on September 4, 2009, involving two licensed

child care facilities owned and operated by Petitioner Sarah

Smith -- Petitioner Smith Child Care Center and another facility

called Heaven's Little Angels. Events at the two facilities

were inexorably intertwined, with Ms. Smith serving as the

common denominator. As an abbreviated summary of the

September 4, 2009 , incident, Ms. Smith had been found to be out

of compliance with square footage requirements for the number of

children at Smith Child Care Center. To rectify that problem,

she caused many more problems by having a young child

transported from Smith Child Care Center, where the child was

registered and where his file remained, to Ms. Smith's other

facility, Heaven's Little Angels. The child was sick and became

unresponsive while at Heaven's Little Angels, but the other

facility did not have his file and did not even know his name.

Emergency responders were called and had to deal with the sick

child without his file and without any information about his

medical history. Ms. Smith was called at Smith Child Care

Center to come to Heaven's Little Angel s with the file, but she

brought the wrong file and had to go back for the correct file.

The child ultimately recovered after being taken to the

hospital, but the situation led to investigations at both

facilities and to the disciplinary action litigated in the

underlying proceeding.

2. At the time of the September 4, 2009, incident,

Ms. Smith's license to operate Smith Child Care Center was

approaching its expiration, requiring an application by

Ms. Smith for license renewal. On January 22, 2010, the

Department issued a notice of intent to deny Ms. Smith's

application for renewal of the license to operate Smith Child

Care Center. As set forth in the notice, the proposed denial

was predicated on charges of alleged violations of licensure

rules, most of which stemmed from the Department's investigation

of the September 4, 2009, incident. The notice was self -

described as an Administrative Complaint, because the denial of

the renewal application was a disciplinary action.

3. On February 11, 2010, Petit ioners filed a request for

an administrative hearing to challenge the proposed agency

action.

4. On May 28, 2010, the Department moved to amend its

notice of denial, which served as the charging document, and

that motion was granted. The amended notice o f denial was

similar to the initial notice, except that it revised a charge

of failure to respond to the emergency needs of a child, which

was factually directed to Heaven's Little Angels. Instead, the

charge predicated on the same incident was recast as a failure

to adequately supervise a child in the care of Smith Child Care

Center by transporting the child to the other facility (Heaven's

Little Angels) without parental permission or knowledge and

without the child's file. 3/

5. Both the original chargin g document and the revised

charging document included other charges arising from the same

September 4, 2009, incident, the most serious of which was the

alleged failure to transport the child in an appropriate child

safety seat, a Class I violation present ing a serious risk of

imminent harm to the child. Petitioners were also charged with

violating the licensure rule requirements for maintaining

transportation logs. Among other alleged deficiencies, the

charging documents alleged that the transportation l ogs failed

to reflect the transport of the child involved in the

September 4, 2009, incident from Smith Child Care Center to

Ms. Smith's other child care facility. In addition, both

charging documents alleged a violation of the square footage

requirements at Smith Child Care Center.

6. The information on which the Department predicated its

charges in both the original and the amended charging document

is found in reports of inspections and investigations

contemporaneously prepared by the Department staff who conducted

the inspections and investigations.

7. For the violations alleged, both the original and

amended charging document proposed denial of the Smith Child

Care Center renewal license.

8. At some point before the final hearing in the

underlying p roceeding, Ms. Smith's other child care facility,

Heaven's Little Angels, was closed. The circumstances of the

closure were not established in the record. However,

Petitioners acknowledged in their reply to the Department's

response 4/ that the former dir ector of Heaven's Little Angels was

disciplined for her role in the September 4, 2009, incident.

9. The final hearing in the underlying proceeding was

initially scheduled in early July 2010, but Petitioners sought

and obtained an unopposed continuance, and the hearing was

ultimately held on October 21 and 22, 2010. In the interim,

Ms. Smith was allowed to continue to operate Smith Child Care

Center, subject to frequent inspection monitoring by the

Department. In an inspection conducted in December 2009 , the

Department inspector found only one noncompliance issue on a

minor item. In two subsequent inspections conducted in 2010, no

violations were found.

10. The Department took into account the frequent

inspections in the interim leading up to the fina l hearing in

the underlying proceeding. Department witnesses attested to the

increasing comfort they had with Ms. Smith operating Smith Child

Care Center because of the recent track record of improved

performance over time. In part, the improvement was a ttributed

to the closure of Heaven's Little Angels, allowing Ms. Smith to

focus her time and attention on ensuring regulatory compliance

at a single facility. As a result, the Department announced at

the beginning of the final hearing that it was changing the

proposed penalty it would advocate for the alleged violations

from denial of license renewal to granting the renewal

application, but imposing conditions and other discipline as

penalties.

11. As detailed in the Recommended and Final Orders in the

un derlying proceeding, the Department proved by clear and

convincing evidence the factual predicate for substantially all

of its charges. The inspection reports in evidence were largely

corroborated by the Department staff who conducted the

inspections and who testified at the final hearing. The

material allegations regarding the September 4, 2009, incident

were established as charged; the serious Class I violation of

failure to transport a child in an appropriate child safety seat

was established as charge d; the failure to adequately supervise

the child who was inappropriately sent to Ms. Smith's other

facility without his file and without his parent's permission or

knowledge was established as charged; and the numerous defects

in Smith Child Care Center's transportation logs were

established as charged.

12. Although the Department chose to remove from its

charging document the charges directed at Ms. Smith's other

child care facility, the record evidence showed the factual and

legal support for those charg es against Ms. Smith as the owner

and operator of the other facility, the now - closed Heaven's

Little Angels. Rather than drop those charges outright, the

Department could have sought to amend the charging document to

name Heaven's Little Angels as an addi tional Respondent, or the

Department could have issued a second administrative complaint

against Ms. Smith and Heaven's Little Angels, and then moved to

consolidate the two related proceedings. There can be no doubt

from the evidence in the underlying pro ceeding that the two

facilities, linked by the common owner and licensee, were

inexorably intertwined, particularly with respect to the

September 4, 2009, incident. The record in the underlying

proceeding does not support an inference that the Department did

not pursue additional charges against Ms. Smith and the now -

closed Heaven's Little Angels based on any perceived infirmity

in the merits of such charges.

13. The Department also chose to not pursue the charges

against Smith Child Care Center for vio lating square footage

requirements. However, Ms. Smith essentially admitted that this

violation occurred and , indeed, it was the impetus for her

decision to have a child transported (improperly, without child

safety seat and without his file) to her other facility,

Heaven's Little Angels. Ms. Smith had to reduce the number of

children at Smith Child Care Center so that facility would

comply with the square footage rule, which requires a certain

number of square feet per child. Fla. Admin. Code R.

65C - 22. 02(3)(a). Given Ms. Smith's admission, it cannot be

inferred that the Department chose to not pursue this charge

based on a perceived lack of merits.

14. One alleged violation that was actually litigated to

final resolution and that was found not proven by clear and

convincing evidence was the charge that Petitioners were

transporting too many children at once, exceeding the maximum

capacity of Petitioners' van. However, the failure of proof on

this charge was due to another violation that was proven.

P etitioners' transportation logs were in such disarray that they

provided both reasonable cause to believe that the van's

capacity was regularly exceeded and doubt to clearly establish

that that was , in fact , the case.

15. The only other charge that was ac tually litigated and

that was not proven by clear and convincing evidence was the

allegation that Petitioners twice violated the rule requiring

that cleaning supplies be kept inaccessible to children. The

Department established the first violation of the cleaning

supply rule, but was unable to prove the second alleged

violation, which was cited in the September 4, 2009, inspection

report. The Department staff person who conducted the

September 4, 2009, inspection testified that she prepared the

inspection report contemporaneously with conducting the

inspection and that she made the finding that cleaning supplies

were accessible to children; however, more than one year later,

she was unable to specifically recall what cleaning suppl ies she

discovered or whe re exactly they were . At the final hearing,

Ms. Smith denied that there was any such violation on

September 4, 2009. The inspection report prepared by the

inspector during her inspection on September 4, 2009, was

adequate to provide a reasonable basis fo r this alleged

violation, although it was not sufficiently specific and

detailed to meet the exacting standard of clear and convincing

proof, when coupled with Ms. Smith's contrary testimony.

16. The section 57.111 petition seeks attorney's fees and

costs for having to defend against the denial of Ms. Smith's

license renewal for Smith Child Care Center. Petitioners

acknowledge they did not prevail on all issues, but claim they

prevailed on "significant issues." According to Petitioners,

they prevailed be cause Ms. Smith was able to keep her license,

and because the Department abandoned its charge of child abuse

and neglect when it amended the charging document in May 2010.

(See footnote 3 for a discussion of the child abuse and neglect

reference in the ch arging documents, which was not dropped.)

17. The affidavit of Petitioners' counsel includes time

entries back to October 8, 2009, predating the initiation of the

underlying proceeding by three and one - half months.

18. The substantial majority of time entries and the

subs tantial majority of fees sought were incurred after May 28,

2010, which was when the Department moved to amend the charging

document to delete the count against Ms. Smith that was

factually related to her other child care facility.

1 9. Petitioners did not attempt to allocate the total fees

and costs claimed to apportion the total between issues on which

Petitioners argue they prevailed and issues on which Petitioners

admit they did not prevail. Instead, Petitioners' request for

attor ney's fees and costs was expressly for the entire amount,

including those incurred before the underlying proceeding was

even initiated and those incurred in litigating issues as to

which Petitioners admittedly did not prevail. 5/

CONCLUSIONS OF LAW

20. The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of this

proceeding. §§ 120.569 and 120.57(1), Fla. Stat. (2010).

Petitioners' Section 57.111 Petition

21. Petitioners initiated this action by filing a petition

for attorney's fees and costs pursuant to section 57.111,

claiming that in the underlying proceeding, Petitioners were

prevailing small business parties entitled to recover the full

amount of attorney's fees and costs set forth in their

supporting affidav it.

22. The disputed issues with regard to Petitioners'

section 57.111 petition are : (1) whether Petitioners were

"prevailing parties" in the underlying proceeding; (2) whether

Respondent's disciplinary action was "substantially justified"

when initiated ; and (3) whether "special circumstances exist

which would make the award unjust." § 57.111(4)(a).

23. Petitioners have the burden of proving by a

preponderance of the evidence that they were prevailing parties

in the underlying proceeding within the mea ning of

section 57.111. If Petitioners meet their burden, then

Respondent has the burden of proving by a preponderance of the

evidence that its disciplinary action was substantially

justified when initiated or that circumstances exist that would

make an a ward unjust. Dep't of Prof ' l Reg., Div. of Real Estate

v. Toledo Realty, Inc. , 549 So. 2d 715, 717 (Fla. 1st DCA 1989).

"Prevailing Small Business Party"

24. Petitioners claim to be prevailing small business

parties without analyzing whether or how the y might fit within

the statutory definition of this critical phrase which is

codified in section 57.111. The Legislature crafted the

following definition of "prevailing small business party" for

the specific purpose of applying section 57.111:

A small bus iness party is a "prevailing

small business party" when:

1. A final judgment or order has been

entered in favor of the small business party

and such judgment or order has not been

reversed on appeal or the time for seeking

judicial review of the judgme nt 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; or

3. The state agency ha s sought a

voluntary dismissal of its complaint.

§ 57.111(3)(c).

2 5 . The underlying proceeding was resolved by final order

for which the time to appeal has expired, and , thus, the first

test for prevailing party status applies. The underlying

proceeding was not resolved by settlement, or by Respondent's

voluntary dismissal of its complaint, and , thus, neither the

second , nor the third test for prevailing party status applies.

2 6 . Petitioners' argument for prevailing party status is

based on a blend of b its and pieces from each of the distinct

statutory tests for "prevailing small business party." In

essence, Petitioners claim prevailing party status if a final

order is entered in favor of a party (from subparagraph

(3)(c)1.) on a majority of issues (fro m subparagraph (3)(c)2.),

counting as issues in a party's favor those subparts of a

complaint that are voluntarily dismissed as if the entire

complaint were dismissed (from subparagraph (3)(c)3.).

2 7 . Instead, adhering to the statute as written, the tes t

is whether a final order was entered in favor of Petitioners,

not whether the final order was substantially in favor of

Petitioners and not whether the final order was in favor of

Petitioners on a majority of issues. Moreover, by its terms,

the statutor y test focuses on issues actually decided in the

final order , as opposed to those issues that are not addressed

in the final order , because the issues pertain to charges in the

original administrative complaint that were voluntarily

dismissed.

2 8 . Judge d by the plain meaning of the applicable

statutory test, Petitioners were not prevailing small business

parties in the underlying proceeding. The Final Order was not

entered in Petitioners' favor; instead, the Final Order was

adverse to Petitioners becaus e it determined that Petitioners

violated several licensure rules and imposed disciplinary action

accordingly.

2 9 . Petitioners argue that the standard for prevailing

party status is whether they were "substantially" prevailing

parties. The statute uses no such language. Petitioners offer

as supporting authority cases that interpret different statutes

that use, but do not define, the phrase "prevailing party."

Petitioners have offered no legal authority under section 57.111

to support their position.

30 . Thomas E. Kehoe d/b/a Kehoe o n t he Bay v. Dep artment

of Health & Rehab il it ative Serv ices , Case No. 90 - 3236F (Fla.

DOAH April 5, 1991), was a section 57.111 proceeding similar to

the case at bar. The underlying proceeding in Kehoe was a

disciplinary ac tion against an assisted living facility based on

four allegations of deficiencies in an inspection of the

facility. The agency dismissed one of the allegations at the

outset of the final hearing and proceeded to hearing on the

remaining three alleged vio lations, for which fines were sought.

Of the three charges litigated, the agency proved two and failed

to prove one. However, in the Final Order , the agency declined

to impose any fines for the two violations based on mitigating

circumstances proven at t he hearing. Even though the agency

prevailed on only two of the original four allegations and

imposed no fines against the facility when fines had previously

been advocated, the petition for attorney's fees and costs under

section 57.111 was denied becaus e the petitioner did not prove

prevailing party status. Petitioner could not claim prevailing

party status based on the voluntary dismissal of one of the four

charges, because section 57.111(3)(c) does not define a

prevailing party as one against whom the state agency

voluntarily dismissed one of four counts in its complaint.

3 1 . Briggs, et al. v. Dep artment of Prof essional

Reg ulation , Florida Real Estate Comm ission , Case No. 86 - 0583F

(Fla. DOAH May 9, 1986), was another such case. The petitioners

sought an award of attorney's fees and costs pursuant to section

57.111 for having to defend a four - count A dministrative

C omplaint. By Final Order , petitioners were found to have

committed a violation charged in one of the four counts and a

civil penalty of $1, 000 was imposed for that violation. Under

these circumstances, the attorney's fees petition was denied

because the final order was not entered in petitioners'

favor -- the determination of a violation and imposition of a

penalty was not a result in Briggs' favor. As stated in the

Final Order denying the section 57.111 petition:

Apparently, Petitioners conclude that if one

is not found guilty of 3 of 4 alleged

statutory violations, the order is

"favorable." While this may seem a moral

victory for a responde nt and substantial

mitigation may result in a reduced penalty

being assessed . . ., neither the

Recommended Order or Final Order reflects

any "approval" of Respondent's conduct as

reflected by the penalty assessed.

Briggs , supra , Final Order ¶ 16.

3 2 . L ikewise, in Hilgeman v. State, Dep artmen t of Bus iness

Reg ulation , Div ision of Florida Land Sales, Condo minium s and

Mobile Homes , Case No. 90 - 6664F (Fla. DOAH Apr. 26, 1991),

aff'd , 595 So. 2d 52 (Fla. 1st DCA 1992), a petition for section

57.111 fees and c osts was denied, because the petitioner failed

to prove that a final order was entered in his favor by the

prosecuting agency. As the hearing officer explained:

In spite of the prosecuting agency's

decision to not exact a penalty against the

present Pet itioner in the final order . . .,

it found him in violation of the substantive

provision [of a regulatory statute]. That

was a conclusion of law which was adverse to

his position. . . . [T]he decision which

the prosecuting agency reached when it held

tha t the present Petitioner had violated [a

regulatory statute] does not favor the

present Petitioner and the willingness to

dismiss the case without imposing a penalty

based upon the prosecuting agency's

assessment of mitigating circumstances does

not promot e a different result.

Hilgeman , supra , at ¶ 14. As these cases instruct, a final

order in one's favor is something different than a final order

that is less adverse than it otherwise could have been.

3 3 . Ruffin v. Department of Prof essional Reg ulation ,

Div ision of Real Estate , Case No. 85 - 4465F, 1986 Fla. Div. Adm.

Hear. LEXIS 4004 (Fla. DOAH Feb. 7, 1986), squarely considered

and rejected the argument, similar to that made by Petitioners

here, that prevailing small business party status is achieved by

l itigating to final order and prevailing on a majority of

issues. In Ruffin , the petitioner sought section 57.111 fees

and costs for defending a four - count administrative complaint.

After a hearing in the disciplinary action, the final order

found the pet itioner guilty of two of three allegations in

Count I; guilty of the charges in Count II; and not guilty of

the charges in Counts III and IV. A fine and a 90 - day license

suspension were imposed as discipline for the violations found,

and Counts III and IV were dismissed. Under these

circumstances, the petitioner contended that she was a

prevailing small business party as defined in section 57.111,

because the final order found in her favor on a majority of

issues. However, the section 57.111 petition was denied , and

the standard argued by petitioner was rejected because

"prevailing on a majority of the issues" is a criterion that

only applies to cases resolved by settlement; there is no

"majority of the issues" standard in section 57.111(3)(c)1.,

which se ts the standard for cases that are litigated to final

order. Ruffin , supra , 1986 Fla. Div. Adm. Hear. LEXIS 4004

at *6 - *7.

3 4 . Petitioners' argument for prevailing party status is

predicated solely on judicial interpretations of the phrase

"prevailing pa rty" when used in other statutes that do not

contain a specific definition of the phrase for purposes of such

statutes (as section 57.111 does). For example, "prevailing

party" is not generally defined in the federal Equal Access to

Justice Act, 28 U.S.C. section 2412, for purposes of applying

the statute in all cases (there is only a limited definition of

"prevailing party" applicable only to eminent domain cases). By

judicial interpretation of the undefined phrase, a prevailing

party can be one who has succeeded on a significant issue in

litigation, which achieves a benefit the parties sought in

bringing the lawsuit. But even if this were the applicable

standard here, Petitioners would have to demonstrate that the

success they achieved was accomplished in the litigation itself.

Petitioners would not be prevailing parties to the extent their

claimed success was not the result of Petitioners prevailing

through litigation, but rather, was the result of the

Department's voluntary choices to not pursue some charges in

litigation and to seek reduced penalties based on mitigating

circumstances. See , e.g. , Dionne v. Floormasters Enters. , 647

F.3d 1109, 1113 (11th Cir. 20 1 1) (defendant's voluntary change

in conduct, although perhaps accomplishing what the plaint iff

sought to achieve by the lawsuit, lacks the necessary judicial

imprimatur on the change); Morillo - Cedron v. Dist . Dir . , U.S.

Citizenship and Immigration Servs. , 452 F.3d 1254, 1257 - 1258

(11th Cir. 2006) (same); Am . Cargo Transp . , Inc. v. U .S. , 62 5

F.3d 1176, 1182 (9th Cir. 2010) (plaintiff was not a "prevailing

party" where the claimed victory was the result of government

voluntary behavior, and not judicial action). As found above,

Petitioners did not succeed on any significant issue that was

actually litigated on the merits and decided in the Final Order.

Petitioners benefited from voluntary Department actions in

reduci ng and streamlining its charges and changing the proposed

penalties it would advocate in litigation, but Petitioners did

not succeed through litigation on the significant issues.

3 5 . It would be anomalous and contrary to the purposes of

section 57.111 to accept Petitioners' position , because the

result would be to punish the Department for voluntarily

considering the most recent facts leading up to the final

hearing as new mitigating circumstances that warranted leniency

and by voluntarily reducing the proposed penalties sought in

litigation. The Department's voluntary actions in this regard

should be encouraged, not discouraged. "The [Florida Equal

Access to Justice] Act is designed to discourage unreasonable

governmental action, not to paralyze agencies doing the

necessary and beneficial work of government." State Dep't of

HRS v. South Beach Pharmacy Inc. , 635 So. 2d 117, 121 (Fla. 1st

DCA 1994), quoting Rudloe v. Dep't of Envtl. Reg. , 33

Fla. Supp. 2d 203, 211 ( DOAH 198 7) .

3 6 . Finally, even if the applicable "prevailing small

business party" standard in section 57.111 required only a

showing that Petitioners prevailed on a majorit y of the issues

or on substantial issues decided by the Final O rder, it would be

incumbent on Petitioners to establish an allocation of

attorney's fees and costs so that the only fees and costs

claimed would be those attributable to the issues resolved

thr ough litigation in Petitioners' favor. See , e.g. , Cm ty .

H eating & Plumbing Co. v. Garrett , 2 F.3d 1143, 1146 (Fed. Cir.

1993) (award warranted where plaintiff presented documentation

allocating and apportioning fees and costs to the prevailing

issues); Ke hoe , supra , Case No. 90 - 3236F, at ¶ 10 ("Assuming,

arguendo, that Petitioner prevailed in two of the original four

allegations against him, there was no evidence to support an

allocation of fees and costs among the four allegations.")

"Substantially Justif ied"

3 7 . Pursuant to section 57.111(3)(e), " [a] proceeding is

'substantially justified' if it had a reasonable basis in law

and fact at the time it was initiated by a state agency."

3 8 . In assessing the reasonableness of government action,

for the Depart ment to be "substantially justified" in initiating

disciplinary action against a licensee, it "must have a solid

though not necessarily correct basis in fact and law for the

position it took in the action." Fish v. Dep't of Health, Bd.

of Dentistry , 825 S o. 2d 421, 423 (Fla. 4th DCA 2002), quoting

McDonald v. Schweiker , 726 F.2d 311, 316 (7th Cir. 1983). For

example, when an investigation goes before a probable cause

panel prior to issuance of an administrative complaint, the

question of reasonableness of the factual and legal basis for

the action can be resolved by considering the information before

the probable cause panel at the time it found probable cause and

directed the filing of an administrative complaint. Id. While

there must be some evidence c onsidered that would reasonably

indicate that a violation had occurred, the evidence need not be

as compelling as that which must be presented at the

administrative hearing on the charges to support a finding that

a violation had occurred and to support th e imposition of

sanctions. Id.

3 9 . Based on these standards, even if Petitioners had

proven they were "prevailing small business parties," Respondent

has met its burden of proving that the Department was

substantially justified in initiating the underlyi ng proceeding.

The information available to the Department from its

investigations and inspection reports was sufficient to

reasonably indicate that violations had indeed occurred. The

"reasonable cause" standard does not require that Respondent be

fully prepared to present its case and prove all charged

violations by clear and convincing evidence at the time it

decides to file an administrative complaint; that would be an

impossible standard that has been flatly rejected in Fish and

other cases. Such a s tandard would defeat the intended purpose

of section 57.111, by paralyzing agencies trying to do the

necessary and beneficial work of government.

40 . As explained in Irby , et al. v. Fla. Eng. Mgmt. Corp. ,

Case No. 07 - 0427F (Fla. DOAH Apr. 18, 2007), the t wo standards --

reasonable cause required to initiate a disciplinary action

versus clear and convincing evidence required to prove charges

at the final hearing -- plainly cannot be equated:

That the evidence presented at hearing was

not sufficient to ultimat ely sustain the

charges does not mean that it was

insufficient to initiate the proceedings.

Moreover, it cannot be said that the

[agency] had all of the same information

presented at formal hearing. . . .

Moreover, all witnesses who testified at

formal h earing were subjected to cross -

examination. The [agency] does not have the

opportunity or the responsibility to weigh

the strengths and weaknesses of each party's

position, but rather simply to determine if

some evidence exists to support the

conclusion t hat a violation has occurred.

Irby , supra , at ¶¶ 19, 20.

4 1 . Judged from the proper perspective, as found above,

Respondent's action in initiating the disciplinary proceedings

against Petitioners was not unreasonable governmental action,

but , rather, was more than substantially justified by the

information gathered from investigating the September 4, 2009,

incident, which was the primary factual predicate for the

underlying proceeding. Respondent's initiation of the

underlying proceeding was a very r easonable, appropriate

governmental action based on the information available to

Respondent indicating that serious violations had indeed

occurred. Indeed, unlike in Irby , the indications of serious

violations were proven to be largely well - founded, after an

adversarial evidentiary hearing in which the evidence was judged

by the more exacting clear and convincing evidence standard.

4 2 . Because Respondent has established that its actions

were substantially justified, it is unnecessary to address

Respondent 's alternative contention that special circumstances

exist that would make an award unjust.

Respondent's Motion for S ection 57.105 Sanctions

4 3 . Respondent contends that Petitioners' section 57.111

petition is unsupported by facts or law, and thus, sancti ons

should be imposed against Petitioners and their attorney

pursuant to section 57.105 for filing and pursuing the petition

and causing Respondent to devote resources to responding to the

petition.

4 4 . Frankly, Respondent's section 57.105 motion presen ts a

substantially closer question than did Petitioners' section

57.111 petition. Nonetheless, the undersigned does not find

Petitioners' action here to warrant sanctions.

4 5 . As to Petitioners' arguable factual support for the

petition, it is factually true that Respondent abandoned at

least some of the original charges; it is factually true that

Respondent was unable to prove by clear and convincing evidence

certain parts of the charges actually litigated; and it is

factually true that between the time when Petitioners requested

a hearing and the hearing was held, Respondent reduced the

proposed penalty it advocated at the hearing.

4 6 . As to Petitioners' arguable legal support for the

petition, there is not an abundance of appellate decisional

guidance interpreting the "prevailing small business party"

standard in section 57.111(3)(c), while there are certainly a

plethora of decisions interpreting similar phrases used in other

statutes, such as in the federal Equal Access to Justice Act.

While the statu tory definition in section 57.111 itself seems

clear enough, especially when coupled with the administrative

final orders reviewed above, one could argue that the variation

in the factual contexts presented by each case is a distinction

that renders the le gal question presented not so plainly and

conclusively settled by other administrative final orders, even

when affirmed without opinion by an appellate court. In other

words, at least arguably , Petitioners' reliance on cases

interpreting different statute s is an implicit argument for the

adoption of new standards to be applied to the material facts,

as a case of first impression. This argument was not actually

articulated by Petitioners, but being most generous, one could

infer such an argument as implici t from Petitioners' reliance on

other decisions interpreting different statutes. While this

unarticulated implicit argument is unconvincing, the undersigned

concludes that it is barely sufficient support for the legal

positions of the section 57.111 petit ion, making them slightly

better than "unsupported" and sanctionable under section 57.105.

ORDER

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is hereby:

ORDERED as follows:

1. The Petition for Attorney's Fees and Costs file d by

Petitioners, Smith Child Care Center and Sarah Smith, is denied.

2. The Motion for Attorney's Fees and Costs filed by

Respondent, Department of Children and Families, is denied.

DONE AND ORDERED this 12th day of October , 2011 , in

Tallahassee, Leon C ounty, Florida.

S

ELIZABETH W. MCARTHUR

Administrative Law Judge

Division of Administrative 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 12th day of October , 2011 .

ENDNOTES

1/ In the caption of their petition that initiated this

proceeding, Petitioners continued the use of initials to

identify Petit ioner Sarah Smith, following the practice of the

Department in the underlying proceeding. As indicated in the

underlying proceeding, upon inquiry , the Department was unable

to identify any basis for protecting the identity of an owner of

a licensed child care facility and agreed that the owner's name

is a matter of public record. Thus, while the caption in the

underlying proceeding was not changed, it was deemed unnecessary

to protect Ms. Smith's identity in the record of the underlying

proceeding. The s ame approach is followed here.

2/ Unless otherwise indicated, all references to the Florida

Statutes are to the 2009 codification in effect at the time the

Department initiated the underlying disciplinary action against

Petitioners.

3/ Petitioners clai m that the original complaint charged them

with "child abuse and neglect" and that this "most serious"

charge was dropped in the amended complaint. Petitioners

misread the complaints, neither of which directly charge

Petitioners with "child abuse and negl ect," but both of which

refer indirectly to an investigation of the September 4, 2009,

incident for child abuse and neglect pursuant to chapter 39,

Florida Statutes, which resulted in a verified finding of

"inadequate supervision." Thus, the reference to "child abuse

and neglect" was to a child abuse and neglect investigation into

the child care facility's inadequate supervision of a child in

its care as a form of child neglect under chapter 39. While the

child care licensure rules have their own definiti ons of

inadequate supervision, they also incorporate by reference

chapter 39, such that a violation of chapter 39 is also a

violation of the child care licensure law. The charge of

inadequate supervision was not dropped, and Petitioners were

found to have violated this provision of the licensure rules.

4/ The pleadings in this proceeding are confusing because

Petitioners kept reverting to their denomination as Respondents

in the underlying proceeding; Petitioners further confused the

references by often just referring to the single Respondent Ms.

Smit h. Thus, for example, on July 15, 2011, Petitioners filed

their reply to the Department's response to their section 57.111

petition. Petitioners named this pleading, "Respondent's Reply

to Petitioner's Resp onse to Her [Ms. Smith's] Motion for

Attorney's Fees." More accurately, the pleading was

Petitioners ' reply to Respondent's response to P etitioners'

petition for attorney's fees.

5/ Petitioners inaccurately assert that several violations found

in the un derlying proceeding were not litigated because they

"were admitted," such as the charge of inadequate supervision,

which included the components of failure to send the child's

file with him when he was transported from Smith Child Care

Center to Ms. Smith' s other facility. Petitioners' Reply, filed

July 15, 2011, ¶¶ 3 - 4. These charges were not admitted by

Petitioners before the final hearing; Petitioners did not

stipulate to any issues of fact or law so as to remove certain

charges from the scope of the f inal hearing.

COPIES FURNISHED :

David Wilkins, Secretary

Department of Children and Families

Building 2, Room 202

1317 Winewood Boulevard

Tallahassee, Florida 32399 - 0700

Drew Parker, General Counsel

Department of Children and Families

Building 2, Ro om 204

1317 Winewood Boulevard

Tallahassee, Florida 32399 - 0700

Gregory Venz, Agency Clerk

Department of Children and Families

Building 2, Room 204B

1317 Winewood Boulevard

Tallahassee, Florida 32399 - 0700

Robert H. Grizzard, II, Esquire

Robert H. Grizza rd, II, P.A.

Post Office Box 992

Lakeland, Florida 33802 - 0992

T. Shane DeBoard, Esquire

Department of Children and Families

400 West Robinson Street, Suite S - 1129

Orlando, Florida 32801 - 1782

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversel y 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 Admi nistrative Appeal with the

agency clerk of the Division of Administrative Hearings and a

second 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 dis trict where the

party resides. The Notice of Administrative Appeal must be

filed within 30 days of rendition of the order to be reviewed.