15-002426F Children&Apos;S Hour Day School vs. Department Of Children And Families Status: Closed DOAH Final Order on Monday, December 21, 2015.

Summary: As a prevailing small business party, Petitioner was awarded attorney's fees and costs because Respondent's decision to prosecute Petitioner for alleged disciplinable offenses was not substantially justified.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHILDREN'S HOUR DAY SCHOOL ,

Petitioner,

vs. Case No. 1 5 - 2426 F

DEPARTMENT OF CHILDREN AND

FAMILIES ,

Respondent.

/

FINAL ORDER

This case came before Administrative Law Judge John G.

Van Laningham for final hearing by video teleconference on

November 9, 2015, at sites in Tallahassee and Miami, Florida.

APPEARANCES

For Petitioner: Howard J. Hochman , Esquire

Law Offices of Howard Hochman

7695 Southwest 104th Street , Suite 210

Miami , Florida 331 56

For Respondent: Javier A. Ley - Soto , Esquire

Karen Milia Annunziato, Esquire

Department of Children and Families

40 1 Northwes t 2nd Avenue, Suite N - 1014

Miami , Florida 33 1 2 8

STATEMENT OF THE ISSUES

The issue s in this case , which arise s from Petitioner's

application for an award of attorney's fees and costs pursuant

to section 57.111, Florida Statutes , are whether Petit ioner was

a prevailing small business party in a disciplinary proceeding

that Respondent initiated , and, if so, whether Respondent's

decision to prosecute Petitioner was substantially justified or

whether special circumstances exist that would make a n award

unjust .

PRELIMINARY STATEMENT

On April 21, 2015, Petitioner filed with the Division of

Administrative Hearings ("DOAH") a Motion (Action) for

Attorney's Fees pursuant to section 57.111(4), Florida Statutes.

On June 18, 2015, Respondent filed De partment of Children and

Families ['] Response to Petition for Attorney's Fees and Costs

and Initial Order ("Response to Petition"). In its Response to

Petition, Respondent waived the right to a formal hearing.

Petitioner requested one, however, i n its Re ply to Department of

Children and Families ['] Response to Petition for Attorney's

Fees and Costs and Initial Order, which was filed on June 29,

2015, and so the undersigned scheduled a hearing .

The final hearing was held on November 9 , 2015, with both

p arties present. Petitioner called Kevin Lennon as its witness

and offered Petitioner ' s Exhibits 2 through 4 and 7 , which were

received in evidence. Respondent 's witness was Michaelyn

Radcliff. Respondent's Exhibits 1 through 3, 5, 8 through 13,

and 15 were admitted as well .

The final hearing transcript was filed on December 2 , 2015.

Each party timely filed a proposed final order.

Unless otherwise indicated, citations to the official

statute law of the state of Florida refer to Florida Statutes

2015.

FINDINGS OF FACT

1. On August 15, 2014, Respondent Department of

Children and Families ("DCF") issued an Administrative Complaint

against Petitioner Children's Hour Day School (the "School"), a

licensed child care facility, charging the School with two

disciplinable offenses, namely denial of food as form of

punishment (Violation 1) and misrepresentation (Violation 2).

2. The all egations of material fact in support of

Violation 1 were as follows:

During a complaint inspection on 8/6/14, the

child care facility was cited for a Class I

violation of Standard #12, Child Discipline,

[because] a child, to wit, S.B., was denied

a snack a s a form of punishment when the

child allegedly hit her sister, L.B. who is

also enrolled at the child care facility.

3. The allegations of material fact in support of

Violation 2 were as follows:

During a complaint inspection on 8/6/14,

the child care facility was cited for a

Class I violation of Standard #63,

Misrepresentation, when it came to the

Family Safety Counselor's attention that

child care personnel, K.L. misrepresented

and forged information, related to the child

care facility when he utilize d a notary

stamp belonging to a former employee, namely

I. Albarran and submitted the 2014

application for licensure to the Department

with the forged notarization.

4. The School, which requested a hearing, was found not

guilty of the charges. See Dep 't of Child. & Fams. v. Child . 's

Hour Day Sch. , Case No. 14 - 4539, 2015 Fla. Div. Adm. Hear. LEXIS

8 (Fla. DOAH Jan. 9 , 201 5 ; Fla. DCF Feb . 18 , 201 5 ).

5. The Administrative Law Judge made the following

findings of material fact with respect to Violation 1:

S.B. and L.B. are young sisters who

stayed at Respondent's day - care center in

July 2014. On July 9, 2014, one of

Respondent's employees gave S.B. and L.B. a

small cup of Cheez - Its as a snack. [Kevin]

Lennon was present when the two girls were

sharing the cup of Cheez - Its. After S.B.,

who is the older and bigger child, finished

her share of the Cheez - Its, S.B. began to

hit her sister to take her sister's share of

the Cheez - Its. Mr. Lennon separated the two

girls and permitted L.B. to eat her share of

the Cheez - Its. Mr. Lennon testified,

credibly, that he did not take the Cheez - Its

from S.B. to punish S.B.

Id. at 3 - 4 (paragraph number omitted).

6. The Administrative Law Judge made the following

findings of material fact with respect to Violation 2:

On March 25, 2014, Petitioner received

from Respondent an "Application for a

License to Operate a Child Care Facility"

(the application). Mr. Lennon completed the

application on behalf of Respondent. The

application contained an attestation section

that required Mr. Lennon's signature to be

notarized. On March 25, 2014, Petitioner

received an attestation section (first

attestation section) signed by Kevin Lennon

on February 28, 2014. The first attestation

section contains Ivanne Albarran's notary

seal and a signature dated February 28,

2014. Mr. Lennon testified, credibly, that

he signed the first attestation section as

Kevin Lennon. Mr. Albarran testified,

credibly, that he signed the first

attestation section as the notary

public.

The application package contains a

second attestation section that was received

by Petitioner on March 28, 2014. The second

attestation section contains Mr. Lennon's

signature and a date of March 26, 2014.

The second attestation section contains

Mr. Albarran's notary sea l and a signature

dated March 28, 2014. Mr. Lennon testified,

credibly, that he signed the second

attestation section as "Kevin Lennon."

Mr. Albarran testified, credibly, that he

signed the second attestation section as

the notary public.

Id. at 4 - 5 (paragraph numbers omitted).

7 . The School's owner is a corporation, Hamilton - Smith,

Inc. ("HSI"), whose principal office is located in the state of

Florida. 1 / Kevin Lennon, who was referred to as "K.L." in the

Administrative Complaint and is mentioned in the findings of

fact quoted above, is HSI 's sole shareholder. HSI employed

fewer than 25 persons at the time DCF initiated the underlying

disciplinary proceeding , a nd at all relevant times thereafter.

Thus , HSI is a "small business party" as that term is defined in

section 57.111(3)(d)1.b., Florida Statutes. 2 /

8 . DCF agrees that HSI is a "prevailing " party as that

term is defined in section 57.111(3)(c)1. , inasmu ch as a final

order dismissing the charges against the School was entered in

DOAH Case No. 14 - 4539. It is determined, as a matter of

ultimate fact, that HSI is a "prevailing small business party"

entitled to recover its reasonable attorney's fees and cost s

from DCF "unless the actions of the agency were substantially

justified or special circumstances exist which would make the

award unjust." § 57.111(4)(a), Fla. Stat.

9 . In defending against the administrative charges, HSI

incurred attorney's fees in the amount of $4,515.00 and costs

totaling $ 434.50 , for which it now seeks to be reimbursed . DCF

does not contest the amount or reasonableness of either sum.

10. DCF contends , however, that an award of attorney's

fees and costs is unwarranted because its actions were

substantially justified. It is therefore necessary to examine

the grounds upon which DCF made its decision to charge the

School with the offenses alleged in the Administrative

Complaint.

11. The disciplinary action had its genesis in a n

anonymous complaint that , on August 6, 2014, was phoned in to

the local DCF licensing office in the School's vicinity. DCF

c ounselor Michaelyn Radcliff went out that same day to

investigate, and she met Tajah Brown at the School. Ms. Brown,

an employee of the School, revealed to Ms. Radcliff that she had

made the complaint, which involved the ratio of staff to

children. Mr. Lennon, who was Ms. Brown's boss, happened to be

out of town at the time and hence was not present for

Ms. Radcliff's inspection.

12. For the next six hours or so, Ms. Brown described for

Ms. Radcliff every regulatory violation or offense she could

think of , which she believed the School might have committed .

O ne such offense was the alleged withholding of S.B.'s snack.

Ms. Brown had not witnessed th is incident, but she knew the

child's mother, E.B., a nd offered to ask the mother to give a

statement about it , which Ms. Radcliff agreed was a good idea.

13. E.B. met Ms. Radcliff at the School , accompanied by

her daughter S.B. , who was then two years old. E.B. did not

have personal knowledge of the a lleged denial - of - snack incident,

but she had been told about the event by her sister (S.B.'s

aunt) who had picked S.B. and L.B. up from day care th e evening

of its alleged occurren ce . The aunt did not have personal

knowledge of the matter either, having arrived afterward .

Rather, according to E.B., the aunt had told E.B. that

Mr. Lennon had told her (the aunt) that S.B. had hit L.B. and

thrown a tantrum. Ms. Radcliff did not spea k to the aunt,

however, whose testimony about what Mr. Lennon told her actually

might have been admissible at hearing under an exception to the

hearsay rule 3 / ; instead, she accepted E.B.'s statement about the

incident, which was based on hearsay (Mr. Lennon's declaration)

within hearsay (the aunt's declaration) and had no evidential

value on its own .

14. Ms. Radcliff did question one eyewitness: two - year -

old S.B., who denied hitting her sister , complained that

Mr. Lennon would not give her a snack, and accused Mr. Lennon of

hitting her. S.B.'s statement, such as it was, was the only

independently admissible evidence Ms. Radcliff had. She never

spoke with Mr. Lennon, who was the only adult eyewitness to the

alleged denial - of - snack incident. 4 /

15. As for the alleged misrepresentation, Ms. Brown

informed Ms. Radcliff that she (Ms. Brown) had observed

Mr. Lennon using a notary stamp belonging to Ivanne Albarran , a

former employee of the School, to "notarize" signatures in

Mr. Albarran's name when he was not around . Ms. Brown did not,

however, identify any specific documents that she claimed to

have seen Mr. Lennon fraudulently notarize in this fashion. 5 /

N or, apparently, was she asked whether she was familiar with

either Mr. Albarran's or Mr. Lennon's signature or if she could

identify anyone's signature on any document.

16. Ms. Radcliff herself compared the signatures on

documents purportedly signed by Mr. A lbarran during the time

when Mr. Albarran was an emplo yee of the School with some of his

purported signatures on documents executed after his employment

had ended. She concluded that the signatures looked different.

Ms. Radcliff is not a forensic documen t examiner, however, and

she has no discernable expertise in handwriting analysis.

17. Based on her layperson's opinion about the signatures,

Ms. Radcliff determined that Mr. Albarran had not executed some

notarized documents that the School had submitted with its

recent application for renewal licensure , even though his stamp,

seal, and purported signatures appeared on them. Based on

Ms. Brown's claim to have seen Mr. Lennon use Mr. Albarran's

notary stamp, Ms. Radcliff concluded that Mr. Lennon had forged

these signatures. Ms. Radcliff never asked Mr. Albarran whether

he had signed the documents in question, nor did she speak with

Mr. Lennon about the matter.

CONCLUSIONS OF LAW

18 . The Division of Administrative Hearings has personal

and subj ect matter jurisdiction in this proceeding pursuant to

s ections 57.111(4), 120.569 , and 120.57(1), Florida Statutes .

The Administrative Law Judge has final order authority in this

matter. § 55.111(4)(d), Fla. Stat.

19 . Section 57.111 , Florida Statutes, also known as the

Florida Equal Access to Justice Act ("FEAJA"), directs that

unless otherwise provided by law, a reasonable sum for

"attorney's fees and costs" 6 / shall be awarded to a private

litigant when all five of the following predicate findings are

made:

1. An adversarial proceeding was "initiated by a

state agency." 7 /

2. The private litigant against whom such proceeding

was brought was a "small business party." 8 /

3. The small business party "prevail[ed]" in the

proceeding initiated by a state agency. 9 /

4. The agency's actions were not substantially

justified.

5. No special circumstances exist that would make the

award unjust.

See § 57.111(4), Fla. Stat . 1 0 /

20 . The party seeking an award under section 57.111 bears

the burden of proving elements 1 through 3 (as enumerated

above). If it succeeds, the burden then shifts to the state

agency to disprove either element 4 or element 5 by

affirmatively demonstrating that its actions were substantially

justified or th at an award of fees would be unjust under the

circumstances. See Helmy v. Dep ' t of Bus . & Prof ' l Reg . , 707

So. 2d 366, 368 (Fla. 3d DCA 1998).

21 . As found above, the School carried its burden with

regard to elements 1, 2, and 3 . No special circumstances were

shown to exist that would make an award of attorney's fees and

costs unjust. The remaining question, therefore, is whether

DCF's actions were substantially justified. "A proceeding is

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

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

§ 57.111(3)(e), Fla. Stat.

22 . According to the courts , " the ' substantially

justified ' standard falls somewhere between the no justiciable

issue standard . . . and an automatic award of fees to a

prevailing party. " Helmy , 707 So. 2d at 368 ; see also Dep ' t of

H RS v. S.G. , 613 So. 2d 1380, 1386 (Fla. 1st DCA 1993)(citing

with approval a fede ral court ' s equating " substantial

justification " with " solid though n ot necessarily correct basis

in fact and law " ). Thus, while an agency need not have been

certain of success to be found substantially justified in its

litigating position, its grounds fo r action, to avoid liability

for attorney's fees under FEAJA, must have been, not merely

nonfrivolous, but reasonably meritorious.

23 . Practically speaking, however, in evaluating an

agency's action under section 57.111, the dispositive question ,

ultimately, is whether a reasonable person , viewing the facts

known to the agency at the time of the decision in the light

most favorable to the agency, might believe that the agency

acted properly . Scheinberg v. Dep't of Health , Case No. 11 -

4118F, 2011 F la. Div. Adm. Hear. LEXIS 1046, 10 - 11 (Fla. DOAH

Dec. 22, 2011), per curiam aff'd, 144 So. 3d 551 (Fla. 4th DCA

2013). In other words, the standard of review for an agency's

decision for purposes of section 57.111 is extremely

deferential ÏÏ akin to a deter mination of whether the agency

abused its discretion in acting as it did . Id. at 11.

24 . Moreover, in evaluating whether the agency's decision

to proceed was substantially justified, facts coming to light

after the decision was made cannot be used to second - guess the

action. See Dep't of Health, Bd. of Phys . Therapy Pract . v.

Cralle , 852 S o. 2d 930, 933 (Fla. 1st DCA 2003)(subsequent

discoveries do not vitiate reasonableness of agency's actions).

Thus, the "reviewing body ÏÏ whether DOAH or a court ÏÏ may not

consider any new evidence which arose at a fees hearing, but

must focus exclusively u pon the information available to the

agency at the time that it acted." Ag. for Health Care Admin.

v. MVP Health, Inc. , 74 So. 3d 1141, 1144 (Fla. 1st DCA 2011) .

25 . In this case, the only nonhearsay evidence that DCF

had in support of the allegations comprising Violation 1, at the

time it issued the Administrative Complaint, was the statement

of a two - year - old infant , S.B . Her mother E.B.'s statement,

while that of an adult, was plainly inadmissible, except perhaps

as corroborative evidence to supplem ent or explain S.B.'s

testimony. See § 120.57(1)(c), Fla. Stat. The undersigned

rej ects the idea that, without unusual or extraordinary

circumstances not present here, an agency may properly take

disciplinary action against a licensee on the strength of a two -

year - old's testimony bolstered, if at all, only by otherwise

inadmissible hearsay.

26. The allegations forming the basis of Violation 2 were

based on (i) Ms. Brown's statement ÏÏ which accused Mr. Lennon of

misusing Mr. Albarran's notary seal gener ally but not

specifically in connection with the application for licensure

the School submitted to DCF ÏÏ and (ii) Ms. R adcliff's lay opinion

concerning the apparent dissimilarity of various signatures

purporting to be those of Mr. Albarran. All of this amo unted,

at best, to circumstantial evidence, which was, the undersigned

concludes, insufficient under the circumstances to support a

reasonable inference that Mr. Lennon had forged Mr. Albarran's

signature and fraudulently used the latter's notary stamp in

preparing documents for submission to DCF with the School's

application for a renewal license.

2 7 . In sum, DCF's prosecution of the Administrative

Complaint against the School was not substantially justified.

Accordingly, the School's application for attorney's fees and

costs is granted .

It is ORDERED that, as the prevailing party in DOAH Case

No. 14 - 4539, the School is hereby awarded the sum of $ 4,949.50

for attorney's fees and costs, which the undersigned finds and

concludes is a re asonable amount.

DONE AND ORDERED this 21st day of December , 20 1 5 , 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.sta te. fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 21st day of December , 20 1 5 .

ENDNOTES

1 / The underlying disciplinary action was brought against

"Children's Hour Day School," which is a fictitious name, not a

jural entity. In actuality, HSI is the real party, and the

Administrative Complaint probably should have named "Hamilton -

Smith, Inc., d/b/a Children's Hour Day School," as Respondent.

This technicality has not caused any genuine confusion, however,

nor prejudiced either party, and therefore the undersigned, like

the parties, intends that references to the School be understood

to mean either the facility or the licensee, as the context

requires.

2 / HSI's net worth did not exceed $2 million, either, which

provides an alternative basis for designating the corporation a

"small business party." Id. DCF argues strenuously that HSI

failed to pro ve that its net worth fell below the $2 million

mark. While the School's evidence regarding this fact was

perhaps less than definitive, it was sufficient to establish

that, more likely than not, HSI is not worth more than $2

million. The dispute about HS I's net worth is not especially

meaningful, however, because the School convincingly proved that

it never has had more than 25 full - time employees ÏÏ a fact that

DCF seems to accept. Under the statutory definition, a

corporation is a small business party if it has either (i) a net

worth less than or equal to $2 million, or (ii) 25 or fewer

full - time employees; it need not have both . Id.

3 / See § 90.803(18), Fla. Stat.

4 / In its Response to Petition, DCF asserted that Ms. Brown had

personally observed Mr . Lennon withhold food from S.B. as

alleged in the Administrative Complaint. If that were true, DCF

would have had a substantial justification for charging the

School with Violation 1. The evidence at hearing, however,

established unequivocally, as found above, that Ms. Brown was

not an eyewitness to the alleged denial - of - snack incident.

(T. 193 - 94).

5 / In its Response to Petition, DCF asserted that Ms. Brown

told Ms. Radcliff that Mr. Lennon used Mr. Albarran's notary

stamp to notarize documents subm itted to DCF. The evidence at

hearing, however, did not bear this out. Ms. Radcliff's

testimony about Ms. Brown's accusations proved, at most, that

DCF had a basis for suspecting that Mr. Lennon had generally

misused the notary stamp (if Ms. Brown were b elieved) ÏÏ but this

was not the offense charged as Violation 2. Rather, DCF alleged

in the Administrative Complaint that Mr. Lennon had forged

Mr. Albarran's signature on the School's 2014 application for

licensure ÏÏ a specific document. At hearing, Ms. Ra dcliff

emphasized that Ms. Brown had not named any particular documents

that Mr. Lennon had allegedly "notarized" with a forged

signature. (T. 195 - 97).

6 / Under FEAJA, "[t]he term 'attorney's fees and costs' means

the reasonable and necessary attorney's fees and costs incurred

for all preparations, motions, hearings, trials, and appeals in

a proceeding." § 57.111(3)(a), Fla. Stat.

7 / FEAJA provides that "[t]he term 'initiated by a state agency'

means that the state agency" did (or was required to do) one of

three things: (1) "[f]iled the first pleading in any state or

federal court in this state " ; (2) "[f]iled a request for an

administrative hearing pur suant to chapter 120"; or (3) "[w]as

required by law or rule to advise a small business party of a

clear point of entry after some recognizable event in the

investigatory or other free - form proceeding of the agency."

§ 57.111(3)(b), Fla. Stat.

8 / The term "small business party" is defined as follows:

1.a. A sole proprietor of an unincorporated

business, including a professional practice,

whose principal office is in this state, who

is domiciled in this state, and whose

business or professional prac tice has, at

the time the action is initiated by a state

agency, not more than 25 full - time employees

or a net worth of not more than $2 million,

including both personal and business

investments;

b. A partnership or corporation, including

a professional practice, which has its

principal office in this state and has at

the time the action is initiated by a state

agency not more than 25 full - time employees

or a net worth of not more than $2 million;

or

c. An individual whose net worth did not

exceed $2 million at the time the action is

initiated by a state agency when the action

is brought against that individual's license

to engage in the practice or operation of a

business, profession, or trade; or

2. Any small business party as defined in

subparagra ph 1., without regard to the

number of its employees or its net worth, in

any action under s. 72.011 or in any

administrative proceeding under that section

to contest the legality of any assessment of

tax imposed for the sale or use of services

as provided in chapter 212, or interest

thereon, or penalty therefor.

§ 57.111(3)(d), Fla. Stat.

9 / Pursuant to section 57.111(3)(c), a party is a "prevailing

small business party" when:

1. A final judgment or order has been

entered in favor of the small busines s party

and such judgment or order has not been

reversed on appeal or the time for seeking

judicial review of the judgment or order has

expired;

2. A settlement has been obtained by the

small business party which is favorable to

the small business party on the majority of

issues which such party raised during the

course of the proceeding; or

3. The state agency has sought a voluntary

dismissal of its complaint.

1 0/ The purpose of FEAJA is to " diminish the deterrent effect"

exerted by the expense of legal proceedings, which discourages

"certain persons" from challenging "unreasonable governmental

action." § 57.111(2), Fla. Stat. (emphasis added). Consonant

with the legislature's modest goal, FEAJA pr ovides that "[n]o

award of attorneyÓs fees and costs for an action initiated by a

state agency shall exceed $50,000." § 57.111(4)(d)2., Fla.

Stat.

COPIES FURNISHED :

Howard J. Hochman, Esquire

Law Offices of Howard Hochman

7695 Southwest 104th Street, S uite 210

Miami, Florida 33156

(eServed)

Javier A. Ley - Soto, Esquire

Karen Milia Annunziato, Esquire

Department of Children and Families

401 Northwest 2nd Avenue, Suite N - 1014

Miami, Florida 33128

(eServed)

Paul Sexton, Agency Clerk

Department of Children and Families

Building 2, Room 204

1317 Winewood Boulevard

Tallahassee, Florida 32399 - 0700

(eServed)

Mike Carroll, Secretary

Department of Children and Families

Building 1, Room 202

1317 Winewood Boulevard

Tallahassee, Florida 32399 - 0700

( eServed)

Rebecca Kapusta, General Counsel

Department of Children and Families

Building 2, Room 204

1317 Winewood Boulevard

Tallahassee, Florida 32399 - 0700

(eServed)

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Or der 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 ag ency

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 district where the party

resides . The Notice of Administrative Appeal must be filed

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