16-007171 Sentrix Pharmacy And Discount, Llc vs. Department Of Financial Services, Division Of Workers' Compensation Status: Closed Settled and/or Dismissed prior to entry of RO/FO on Monday, December 10, 2018.

Summary: No attorneys' fees against attorney for party. Under 57.105, no compliance with safe-harbor provision of 57.105(4). Under 120.569(2)(e), no improper purpose or frivolousness. 413.32 inapplicable to reimbursement dispute under chapter 120.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SENTRIX PHARMACY AND DISCOUNT,

LLC, AND KENNETH ZIELINSKI,

Petitioners,

vs. Case Nos. 16 - 7158 through

16 - 7173, 16 - 7175, 16 - 7176,

DEPARTMENT OF FINANCIAL 16 - 7178 through 16 - 7183,

SERVICES, DIVISION OF WORKERS' 16 - 7199, 16 - 7200, 16 - 7233

COMPENSATION; WAL - MART STORES, 16 - 7238 thro ugh 16 - 7247

INC.; SEDGWICK CMS; BRIDGEFIEL D

EMPLOYERS INSURANCE COMPANY;

PUBLIX SUPER MARKETS, INC.;

LIBERTY INSURANCE COMPANY;

EMPLOYERS INSURANCE COMPANY OF

WAUSAU; FLORIDA CITRUS BUSINESS

& INDUSTRIES; ASSOCIATED

INDUSTRIES INSURANCE COMPANY,

INC.; BROADSPIRE SERVICES,

NEW HAMPSHIRE INSURANCE C OMPANY,

INC.; ILLINOIS NATIONAL

INSURANCE COMPANY ; and XL

INSURANCE AMERICA, INC. ,

Respondents.

_______________________________/

FINAL ORDER DENYING REQUEST BY WAL - MART AND PUBLIX FOR

ATTORNEYS' FEES, COSTS, AND INTEREST

By Order issued on May 11, 2018, the Administrative Law

Judge relinquished jurisdiction as to Petitioner Zielinski

(Zielinski) , but reserved juris diction over any claims filed by

a carrier or employer (collectively, carrier) or the Depart ment

of Financial Services (DFS) for attorneys' fees, costs , or other

relief against Zielinski or any other person besides Petitioner

Sentrix (Sentrix) , provided su ch claims were filed with the

Division of Administrative Hearings ( DOAH ) by June 11, 2018. A

bankruptcy court had stayed claims against Sentrix, as a debtor

in bankruptcy, but had permitted claims against Zielinski to

proceed.

Two motions were timely fil ed. Respondents Wal - Mart and

Publix (collectively, Wal - mart) filed a verified claim on

June 8, 2018, seeking relief against Zielinski and former

opposing counsel, Andrea M. Franklin (Counsel), and Respond ent

Illinois National filed a motion on June 11, 20 18 , seeking

relief against Zielinski .

On November 7, 2018, Wal - mart filed a Notice of Settlement

of Claim for Attorney's Fees, Costs and Pre - Judgment Interest

Filed by Wal - mart . . . Against . . . Zielinski Only. According

to the notice, the parties ha d disputed whether an injunction

contained in Sentrix's plan of reorganization applies to

Zielinski, but Sentrix and Wal - mart settled Wal - mart's claims

for attorneys' fees, costs, and other relief against Zielinski,

and the bankruptcy court recently approv ed the settlement. The

notice states that Wal - mart is dismissing its claims against

Zielinski, but not Counsel. By an Order t o Show Cause to be

issued after this Order, the Administrative Law Judge will

determine whether he may relinquish jurisdiction: ( 1) of

Zielinski as to the claims of Illinois National and ( 2) of

Sentrix as to all matters, so as to be able to close the above -

styled DOAH files.

It is clear from Wal - mart's notice of settlement that the

Administrative Law Judge may now relinquish juris diction of

Zielinski as to the claims of Wal - mart. Addressing only the

claims of Wal - mart against Counsel, this Order determines that

Wal - mart has not stated a claim on which relief may be granted.

In making this determination, t his Order treats as true Wal -

mart's factual allegations other than any conclusory allegations

as to improper purpose or frivolousness.

Wal - mart 's verified claim for attorneys' fees, costs, and

prejudgment interest against Counsel relies upon sections

120.569, 57.105, and 440.32, Florida Statutes , and Florida Rule

of Civil Procedure 1.380 . On July 5, 2018, Counsel filed a

Motion to Strike Wal - mart's verified claim on the ground that

Wal - mart had failed to comply with section 57.105(4), which is

discussed below, and requested attor neys' fees and costs . O n

July 24, 2018 , Counsel filed a response to the motion that

addresses all grounds stated in the verified claim and requests

the Administrative Law Judge to retain jurisdiction to award

attorneys' fees and costs incurred by Counsel in defending

charges that allegedly were unsupported by the facts and law.

Applied to administrative proceedings by section 57.105(5),

s ection 57.105(1) authorizes an award of reasonable attorney s '

fee s plus interest if the losing party has filed a c laim or

defen se that is unsupported by the facts or law. However, as a

precondition to recover y, section 57.105(4) requires the party

seeking fees to serve the losing party with the motion, which

may be filed only if, within 21 days after service, the losing

p arty fails to withdraw or correct the challenged claim or

defense. Courts require strict compliance with this safe - harbor

provision. See, e.g. , Anchor Towing, Inc. v. Dep't of Transp. ,

10 So. 2d 670 (Fla. 3d DCA 2009) (written warning that motion

for att orney's fees would be filed is insufficient). Wal - mart's

claim fails to allege compliance with the safe - harbor provision

of section 57.105(4) -- presumably because Wal - mart has not

complied with section 57.105(4) -- so it is not entitled to relief

under secti on 57.105 .

Section 440.32 (1) authorizes a judge of compensation claims

or "any court having jurisdiction of proceedings in respect of

any claim or compensation order" to award "the cost of such

proceedings" against the party, if the judge or court determi nes

that the proceeding was "instituted or continued without

reasonable ground." Section 440.32(2) authorizes the above -

described judge or court to award "the cost of the proceedings,

including reasonable attorney's fees," against the offending

attorney, but not the party, if the judge or court determines

that the proceeding was "maintained or continued frivolously."

Section 440.32(3) authorizes the above - described judge or court

to award "reasonable expenses," including a "reasonable

attorney's fee," aga inst the person signing a pleading, motion,

or other filed paper that is not "well grounded in fact" and

"warranted by existing law" or that is interposed for any

"improper purpose, such as to harass or to cause unnecessary

delay or needless increase in th e cost of litigation."

A n Administrative Law Judge is not a judge of compensation

claims, but, by some statute s , DOAH or an Administrative Law

Judge may be treated as a " court ," so the initial question is

whether, in a reimbursement - dispute proceeding, an

Administrative Law Judge has jurisdi ction over a " claim o r

compensation order." C learly, the reimbursement - dispute

proceeding does not involve a "compensation order," so the

dispositive question is whether a reimbursement - dispute

proceeding involves a "c laim," which is not defined in

chapter 440.

A reimbursement - dispute proceeding involves a dispute

between a carrier and a health care provider under

section 440.13(7). A health care provider submits to the

carrier a "claim" for reimbursement for services that

the provider has supplied to an injured employee. See

§ 440.13(3)(i), (4)(a), and (6) , Fla. Stat . If the carrier

disallows or " adjusts " -- i.e., "reduces" -- the claim, the health

care provider may file with DFS a " petition " for resolution of

reimburse ment dispute. Although an allegedly unpaid or

underpaid "claim" underlies each reimbursement dispute , DFS and

DOAH acquire jurisdiction over a reimbursement dispute only upon

the filing of a "petition , " so as to suggest that section 440.32

is not applicab le to a reimbursement - dispute proceeding.

Reinforcing this conclusion is the availability of several other

attorneys' fees provisions applicable to administrative

proceedings under chapter 120 -- and thus a reimbursement - dispute

proceeding -- and likely inap plicable to proceedings subject to

section 440.32 . See Lane v. Workforce Bus. Servs. , 151 So. 3d

537, 539 - 40 (Fla. 1st DCA 2014) (section 57.105 inapplicable to

proceedings under chapter 440). Wal - mart is not entitled to

relief under section 440.32.

Se ction 120.569(2)(e) requires all pleadings, motions, and

other filed documents to be signed by the party or party's

attorney and deems the signature to be a certificate that the

person has read the document and, "based upon reasonable

inquiry," has not fil ed it for "any improper purposes, such as

to harass or to cause unnecessary delay, or for frivolous

purpose or needless increase in the cost of litigation." If a

filing is signed in violation of these requirements, the

Administrative Law Judge "shall" imp ose upon the person signing

the document, the represented party, or both an "appropriate

sanction," which may include "reasonable expenses" incurred due

to the filing, including reasonable attorney s ' fee s .

In Mercedes Lighting & Electrical Supply, Inc. v.

Department of General Services , 560 So. 2d 272 (Fla. 1st DCA

1990), the court considered section 120.57(1)(b)5., which, with

minor differences as to the state of mind of the signer, is now

section 120.569(2)(e). In the recommended order in a bid case,

th e hearing officer -- on his own initiative, but mindful of the

mandatory duty imposed upon him by the statute -- awarded

attorneys' fees against the bid protestor and in favor of the

agency and intervenor, which the agency had selected to award

the contract. The hearing officer found that the protestor's

bid was nonresponsive and its protest was frivolous because it

"presented no justifiable question for resolution and was

without basis in fact or in law." Id. at 275.

The court noted the similarities betwee n section

120.57(1)(b)5. and Federal Rule of Civil Procedure 11, so that

case law under rule 11 wo uld be useful in applying sectio n

120.57(1)(b)5. The court characterized the prefiling inquiry

imposed upon the person signing a f iling as an "objective

stan dard , 'reasonableness under the circumstances.'" Id.

a t 276. "Willfulness" is not required to be shown, and courts

are not to use hindsight in assessing the conduct of counsel and

parties in terms of "what was reasonable to believe at the time

the pleadi ng . . . was submitted." Id. at 276. The court

added: "A reasonable inquiry may depend upon such factor s as

how much time for investigation was availa ble to the signer, and

whether the pleadin g . . . was based on a plausible view of the

law." Id. at 27 6. Rule 11 is not intended "to chill an

attorney's enthusiasm or creativity in pursuing factual or legal

theories," (citation omitted), but the prohibition as to an

improper purpose is "to discourage dilatory or abusive tactic s

and to streamline the litig ati on process." Id. at 276. Relief

under rule 11 focuses on the "nature of the conduct of counsel

and the parties, not the outcome." ( C itation omitted) . Id.

at 276.

Significantly, t he court noted the importance of a timely

remedy. The purpose of ru le 11 is to deter subsequent abuses -- a

purpose that is poorly served "if the offending pleading is

fully litigated and the offender is not punished until the trial

is at an end." ( C itations omitted) . Id. at 277.

Lastly, c omparing rule 11 and section 120 .57(1)(b)5., the

court concluded that the legislature did not intend to

incorporate within the meaning of "improper purpose" the other

prongs of rule 11 requiring factual and legal support for a

filing. Id. at 277 - 78. The wisdom of the court's refusal

ju dicially to add these prongs to section 120.57(1)(b)5. has

been confirmed by the legislature's later decision to apply

section 57.105 to administrative proceedings: if "frivolous" o r

"improper purpose" were to encompass the broad provisions of

section 57. 105( 1) concern ing a lack of factual or legal basis,

then section 120.569(2)(e) would incorporate the broad standards

of section 57.105(1) unmitigated by the 21 - day safe harbor

provision of section 57.105(4).

The Mercedes Lighting court stated that " a reas onably clear

legal just ification" for the filing precludes a finding of an

improper purpose. Id. at 278. This statement is not

inconsistent with the court's determination that an improper or

frivolous purpose does not mean a lack of factual or legal

basi s; this statement signifies that a factual or legal

justification typically precludes a finding of an improper or

frivolous purpose. The court cited with apparent approval a

commentator's suggestion that an improper purpose might be

exhibited by "excessiv e persistence in pursuing a claim or

defense in the face of repeated adverse rulings, or by obdurate

resistance out of proportion to the amounts or issues at stake."

( C itations omitted) . Id. at 278.

Turning to the issue before it, th e Mercedes Lightin g court

determined that the challenger had a reasonably clear legal

justification for bringing the bid protest, so as to negate any

improper purpose, and the award of attorneys' fees had "severely

weaken ed" the "preventative effect" of section 120.57(1)(b) 5.

because the hearing officer had not addressed the offending

filing "at the earliest stage at which a violation of the

statute can be determined." Id. at 279.

The first filings in the present cases were Sentrix's

petitions for resolution of reimburseme nt dispute s , which were

signed by Z i elinski, not Counsel , and filed with DFS in the

latter half of 2016. An exam ple of a petition is in Case

No. 16 - 7158, where Zielinski stated that the carrier should have

paid $14,940.91 because :

A carrier who fails to respond to a written

request for authorization by the close of

the third business day after receipt of the

request, consents to the medical necessity

of such treatment. Upon closure of the

third business day after Sentrix received

confirmation that the re quest for prior

authorization was received by the carrier,

Sentrix relied upon Florida's presumption of

authorization as set forth in Section

440.13(3)(d) and rendered medical services

to the insured pursuant to an open workers'

compensation claim.

DFS di smissed the petitions on the ground that a health

care provider seeking reimbursement for services to an injured

employee must receive authorization from the carrier prior to

providing nonemergency services . Late in 2016, Counsel appeared

by signing and f iling a request for hearing on the dismissal in

each of approximately 45 cases . An example of a request for

hearing is in Case No. 16 - 7158, where Zielinski , as petitioner,

and Sentrix, "acting on behalf of petitioner," stated that

section 440.13(3)(d) giv es a carrier three business days to

respond to a request for authorization from an authorized health

care provider -- failing which, the carrier is deemed to have

consented to the medical necessity of such treatment. The

petition alleged that Sentrix provid ed the carrier with a

written request for prior authorization and implied that Sentrix

provided the services to the injured employee thereafter. The

petition added that, prior to filling a prescription, in the

ordinary cour se of business, Sentrix contacte d the prescribing

physician to verify that the physician wa s authorized to treat

the injured employee pursuant to an open workers' compensation

claim. As reflected on the request for hearing, Counsel's

address wa s at Sentrix, a lthough the signature block did not

indicate any relationship to Sentrix.

After DFS transmitted the files to DOAH -- and retained

hundreds more, pending the resolution of these cases -- t he

Administrative Law Judge consolidated the cases and set them for

hearing in February 2017. On De cember 16, 2016, DFS filed a

Motion to Dismiss for a failure to allege preauthorization . On

December 22, 2016, DFS moved for a continuance due to the

impossibility of completing discovery in the large number of

pending cases. On the following day, the Ad ministrative Law

Judge granted the motion for a continuance and reset the

hearings for March 2017. On December 28, 2016, DFS filed

notices to carriers advising them of the pending proceedings

involving reimbursement claims that they had disallowed.

Numer ous petitions to intervene were filed in early 2017, and

all petitions were granted. By this time, the style of each

case had dropped Zielinski and showed Sentrix as the petitioner.

On January 10, 2017, the Administrative Law Judge denied the

December 16 motion to dismiss on the ground that the allegation

of evidence of preauthorization satisfied the requirement to

plead this condition precedent, but warning that the alleged

evidence may not suffice as proof of preauthorization.

O n January 17, 2017, Sent r ix filed notice s of voluntary

dismissal, signed by Counsel, in two cases. As would be the

case with subsequent notices of voluntary dismissal, t he notices

reveal ed no reason for dismissing these cases, and the

Administrative Law Judge relinquished jurisd iction of each

proceeding without objection. In these filings, Counsel used

the same address as Sentrix, but now described herself as

general counsel of "Vividus LLC."

On January 18, 2017, counsel for Wal - mart entered a notice

of appearance. Also on Jan uary 18, 2017, Counsel initiated

discovery by filing notices of taking depositions, and carriers

initiated discovery by filing notices of taking the deposition

of Zielinski, the corporate representative of Sentrix, the

pharmacist with the longest tenure wi th Sentrix , Dr. Samuel

Gerson, and Nicholas Spagnuolo . Dr. Gerson was the physician

who signed many of the prescriptions at issue.

On January 18, 2017, Counsel filed a Motion for Protective

Order as to the deposition of Zielinski. The motion contended

that opposing counsel did not coordinate the taking of

Zielinski's deposition, Z i elinski's deposition was not

reasonably calculated to lead to the discovery of admissible

evidence , and each proceeding wa s being prosecuted by Sentrix,

not Zielinski, so a c arrier could not notice Zielinski's

deposition as though he were a party. The coordination argument

wa s not frivolous, so it is unnecessary to assess the other

arguments, which, at minimum, were unpersuasive . However, this

discovery had been initiated by parties other than Wal - mart.

On January 18, 2017, DFS filed a response to the Motion for

Protective Order. I nterestingly, the response warned Counsel of

her ethical duty not to make a false statement to the

Administrative Law Judge, but the warning seem ed to apply to

Counsel's inadvertent reference to a carrier as "Respondent"

when, at the time, the sole respondent was DFS.

On January 19, 2017, a carrier filed a Motion to Quash the

depositions of various corporate representatives on the ground

that Co unsel had not coordinated the depositions with the

carrier's counsel. On January 20, 2017, Counsel served various

discovery requests on DFS.

On January 19, 2017, the Administrative Law Judge conducted

a telephone conference call of nearly two hours' du ration and

memorialized the rulings by Order issued on the next day. The

Order noted that counsel for Wal - mart did not participate in the

conference call , likely because counsel had appeared in the case

on the preceding day. The Order denied Sentrix's Mo tion for

Protective Order and granted the carrier's Motion to Quash. The

Order redesignated the carriers as respondents rather than

intervenors and a ddressed a notice that had been issued by DFS,

after the transmittal of the files to DOAH, ostensibly givi ng

carriers a deadline by which to file requests to intervene . The

Order provided each carrier with an opportunity , by the end of

January 2017, to detail the grounds on which it relied in

disallowing the claim of Sentrix for reimbursement, even if the

car rier had failed to identify such grounds at the time of

disallowing the claim. The Order also continue d the hearing to

early May 2017.

On January 23, 2017, Wal - mart timely filed a statement of

issues and motion to amend prior pleadings. The statement

id entified several carrier defenses: ( 1) whether the

prescribing physician -- typically, Dr. Gerson -- had been

authorized by the carrier by way of section 440.13(3)(d)

(referral care) or 440.13(2)(f) (one - time change of physician

exercised by injured employee) ; ( 2) if the prescribing physician

had not been authorized, whether Sentrix could have been

entitled to reimbursement; ( 3) whether the medication had been

prescribed fraudulently by, among others, an attorney "knowingly

assist[ing], conspir[ing] with, or u rg[ing] any person to

fraudulently violate any of the provisions of [chapter 440]," in

violation of section 440.104(4) (e); ( 4) whether the prescription

constituted overutilization or was medically necessary; and

( 5) whether the prescri p tion violated practi ce parameters of

treatment set forth in chapter 440. The statement reserved the

right to add additional issues, but did not claim a right to

attorneys' fees.

During this time period, several other carriers filed

statements of the issues. On January 24, 2017, Counsel

vol untarily dismissed another case .

On January 26, 2017, a carrier filed a motion for summary

disposition on legal grounds. The carrier cited the statute

limiting reimbursement to authorized health care providers and

observed that the statu te that implies medical necessity when

the carrier fails to respond to the provider within three

business days does not render the provider "authorized"; in

other words, the three - day statute applies only to already -

authorized health care providers. The c arrier also noted th at

Sentrix wa s not a health care provider.

On January 27, 2017, DFS filed a Motion to Identify the

Issues, which restated its defense of a lack of authorization.

DFS stated that it did not object to the carrier s' raising other

defense s, but warned, "the sheer number of cases, co - Respondents

[i.e., carriers], and viable issues to be raised should be

balanced with the just, speedy, and inexpensive determination of

all aspects of the case." Likewise, a t vario us times, Sentrix

objected to allowing the carriers, pursuant to the scope of a de

novo hearing, to state grounds for disallowance not stated by

DFS or by the carriers themselves prior to DFS's dismissal of

the petitions. Sentrix's objection was more easily dismissed

than DFS's warni ng, but the Administrative Law Judge ruled that

the carriers must be allowed to raise all defenses to

reimbursement, so as to avoid the result of requiring them to

reimburse Sentrix for claims against which good defenses

existed.

On January 30, 2017, Coun sel, on behalf of Sentrix, filed

its Statement of the Issues. Much of the statement outlined the

procedures governing reimbursement claims and reimbursement

disputes. But the statement added statutory citations for the

claim that a pharmacist i s a health care provider and the right

of an injured employee to choose his or her pharmacy or

pharmacist . The statement conceded that Sentrix bore the burden

of proof. Adding to the level of detail previously provided,

t he statement claimed that a carrier must re spond within three

business days to a "request for treatment by a pharmacy." It

appeared that possibly the dispute arose from Sentrix's

treatment of a pharmacy, rather than a pharmacist, as a health

care provider, although that distinction appeared correc table.

More ominous was the reference to treatment by a pharmacist as

opposed to a prescribing, treating physician; although a

pharmacist, like a physician is a health care provider under

chapter 440, the statutes do not as clearly differentiate

between t heir respective roles when the pharmacist is merely

filling a prescription issued by a treating physician.

It also appeared from its Statement of the Issues that

Sentrix may have been misapplying the statute that implied

consent to medical necessity, poss ibly to imply authorization of

a health care provider, even though the statute applies only to

an authorized health care provider. In general, DFS identified

these issues in its reply filed on February 8, 2017.

Also on January 30, DFS filed a Motion to C ompel, which

revealed a discordant approach to discovery taken by Sentrix and

Counsel personally, whose reported comment as to the scope of

discovery available to DFS and the carriers betrayed either a

fundamental ignorance as to the scope of the proceedin gs that

Sentrix had initiated or the scope of proper discovery within

such proceedings. Mo tion to Compel, p. 8. Again, though, the

lack of cooperation in discovery displayed by Sentrix and

Counsel was not directed toward Wal - mart .

In the meantime, the c arriers continued to serve discovery

requests, including requests to take the depositions of the

above - described affiliates of Sentrix. On February 9, 2017,

Counsel, on behalf of Sentrix, volun tarily dismissed two more

cases . On the next day, counsel Cra ig M. Ober weg er entered an

appearance for three of the Sentrix affiliates whom carriers

were trying to depose . In mid - February, carriers served

additional discovery requests on Sentrix. Four days after

entering an appearance, Mr. Oberweger filed notices that he

would be unavailable from March 5 through April 1, 2017.

On February 15, 2017, the Administrative Law Judge issued

an Order on the carrier's January 26 motion seeking a summary

disposition of the cases . The Order concluded that a pharmacist

is a health care provider, but that Sentrix had misread the key

statute, section 440.13(3)(d). In particular, the first

sentence of the statute restricts its scope to an authorized

health care provider, and the second sentence, which does not

restate that the health care provider must be authorized , sets

forth the consequence of a failure of a carrier timely to

respond to a request for authorization: i.e., deemed consent to

the medical necessity of treatment. The Order concluded that

the second sentence obvio usly applied only to an authorized

health care provider. As the Order stated, Sentrix's

interpretation made "no sense," was "illogical," and produced

unnecessary conflict with other provisions of chapter 440, such

as the key provision of section 440.13(3) (a) that predicates

reimbursement for nonemergency services upon a health care

provider's prior authorization by the carrier. However, n oting

the case law discouraging a premature dismissal of a case, the

Order allowed Sentrix until February 22, 2017, to file amended

allegations on the issue of authorization.

On February 20 , 2017, Counsel, on behalf of Sentrix, filed

a Motion to Enlarge Time. The motion noted that a dozen

carriers involved in over 30 reimbursement claims had filed

myriad theories on whi ch the claims must be denied. Counsel

stated that she needed time to research each n ew issue raised by

each carrier; "conduct due diligence in surmising the facts

underlying each issue," including whether the prescribing

physicians were authorized to trea t the injured employee; appl y

the law to the facts; and "formulate a cogent and legally sound

argument." The motion asked for a 20 - day extension.

On February 21, 2017, two carriers objected to the length

of the extension sought on the ground that, by now , Sentrix

should have already had a clear understanding of its

authorization argument. By Order issued the same date, the

Administrative Law Judge fou nd merit in the opposing content ions

of Counsel and the carriers and extended the filing deadline by

12 d ays to March 6, 2017.

On March 2, 2017, DFS filed a Motion for Sanctions based on

Sentrix's supplemental response to discovery following an Order

compelling it to file responsive answers. DFS noted that the

supplemental responses were substantially the s ame as the

initial responses, which had been deemed insufficient.

Also on March 2, an attorney from the "Office of General

Counsel" of Vividus, LLC, filed a Motion to Withdraw Counsel --

i.e., Counse l -- that included no explanation the action .

Counsel's fin al communication, prior to her response to Wal -

mart's verified claim, occurred on March 31, 2017, when she

filed a letter advising the Administrative Law Judge that, on

March 1, 2017, Sentrix had filed answers to interrogatories

under Counsel's efiling num ber without Counsel's approval ; these

are the responses addressed in DFS's March 2 motion for

sanctions . The letter noted that, on the following day,

Sentrix's general counsel had filed a document withdrawing

Counsel from representation. The letter concl uded by noting

that Counsel wished to notify the Administrative Law Judge of

this "deception ."

The issue raised by Wal - mart 's verified claim is whether ,

as to Wal - mart, Counsel filed one or more documents in violation

of the above - described prohibitions a gainst improper purpose or

frivolousness during the six weeks between Wal - mart's appearance

and Counsel's departure. She did not.

The petitions for resolution of reimbursement disputes,

which do not bear Counsel's signature, were over - simplified

demands for reimbursement of claims that Zielinski or Sentrix

had submitted to carriers. The first filings by Counsel

revealed a clear misreading of a key statute . Although the

statutory scheme is not without ambiguity in addressing the

reimbursement of pharmaci sts' reimbursement claims, Counsel's

petitions did not reach these more nuanced issues. Certainly,

it is impossible to insulate Counsel from a finding of improper

purpose or frivolousness on the basis of a finding that her

initial filings were supported b y the law and facts. On the

other hand, as noted by Mercedes Lighting , a lack of factual and

legal support does not dictate a finding of improper purpose or

frivolousness. In hindsight, it now appears that Sentrix and

Zielinski never could have stated a claim on which relief could

be granted, but, judging the matter at the time, such a

conclusion would have been premature and, if appealed, would

likely have yielded a remand from an appellate court.

Counsel's progress in refining her claims was not

unr easonably slow. In the early stages of the litigation, d ue

to the number of cases and carriers, over two dozen filings

might be docketed in a single day. Coordinating depositions,

obtaining the positions of opposing counsel, and other routine

prehearing activities took Counsel much longer than normal , so

as to leave Counsel with correspondingly little time for

thinking and rethinking the theory of the case .

To her credit, in requesting an extension of time, Counsel

seems to have given serious thought t o the task that the

Administrative Law Judge had assigned her in restating the

claims for relief . Although it appears that her withdrawal from

the cases may have been involuntary, Counsel voluntarily

disclosed the deception that, it seems, Sentrix had per petrated

on the Administrative Law Judge and DOAH , as well as the

opposing parties, when filing nonresponsive answers to

interrogatories under Counsel's efiling number. On balance, it

is impossible to characterize Counsel's filings during the

relevant six weeks as reflective of an improper purpose or

frivolousness. Additionally, Wal - mart's claim for attorneys'

fees is untimely. Wal - mart is not entitled to relief under

section 120.569(2)(e).

Rule 1.380(a)(4) authorizes an order requiring counsel to

pay a movant's reasonable expenses, including attorneys' fees,

in obtaining an order compelling discovery unless the movant

fails to certify in the motion that it made a good faith effort

to resolve the matter without court action, opposition to the

motion was justified, or other circumstances render such an

award as unjust. Undoubtedly, Wal - mart's verified claim

describes some discovery abuses, but it is impossible to discern

the perpetrator, given Counsel's brief representation of

Sentrix, her apparently invo luntary termination, and Wal - mart's

failure to distinguish the acts and omissions of Counsel from

those of the attorneys who later represented Sentrix.

Certainly, for the early , brief period during which Counsel

participated in these cases, the request fo r sanctions is also

untimely. Wal - mart is not entitled to relief under r ule 1.380.

Based on the foregoing, it is

ORDERED THAT:

1. The verified claim for attorneys' fees, costs, and

interest filed by Wal - mart and Publix against Andrea M.

Franklin, Esqu ire, is denied.

2. Ms. Franklin's claims for attorneys' fees and costs

against W al - mart's counsel is denied. E ven if Wal - mart's

section 57.105 claim is unsupported by the facts and law,

Wal - mart's section 120.569(2)(e) claim, though denied, is not

entir ely without support by the facts and law , nor, on its face,

was Wal - mart's claim filed for an improper purpose or frivolous.

Also, Ms. Franklin would have been required to expend legal

fees, without possibility of reimbursement, to address the

section 120 .569(2)(e) claim. Additionally , to the extent that

Ms. Franklin's claims for attorneys' fees and costs rely on

section 57.105, they fail for an apparent lack of compliance

with the safe - harbor provision of section 57.105(4).

DONE AND ORDERED this 14 th day of November , 2018 , in

Tallahassee, Leon County, Florida.

S

ROBERT E. MEALE

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 14 th day of November , 2018.

COPIES FURNISHED :

David Davis Hershel, Esquire

Department of Financial Services

200 East Gaines St reet

Tallahassee, Florida 32399

(eServed)

Thomas Nemecek, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399

(eServed)

Tara L. Said, Esquire

Eraclides, Gelman, Hall, Indek,

Goodman, Waters, & Traverso

801 West Romana Street , Suite D

Pensacola, Florida 32502

(eServed)

Kimberly J. Fernandes, Esquire

Kelley, Kronenberg, Gilmartin, P.A.

201 South Monroe Street , Suite 5

Tallahassee, Florida 32301

(eServed)

Nicole Florentino, Esquire

Eraclides, Gelman, Hall, Indek ,

Goodman, Waters, & Traverso

1661 Sandspur Road

Maitland, Florida 32751

(eServed)

James N. McConnaughhay, Esquire

McConnaughhay, Duffy, Coonrod, Pope,

Weaver, Stern, & Thomas, P.A.

1709 Hermitage Boulevard , Suite 200

Tallahassee, Florida 32308

(eSe rved)

James T. Armstrong, Esquire

Walton, Lantaff, Schroeder, & Carson, LLP

7680 Universal Boulevard , Suite 260

Orlando, Florida 32819

(eServed)

Kip O. Lassner, Esquire

Cole, Scott, & Kissane, P.A.

600 North Pine Island Road , Suite 500

Plantation, Flori da 33324

(eServed)

Matthew J. Lavisky, Esquire

Butler, Weihmuller, Katz, & Craig, LLP

400 North Ashley Drive

Tampa, Florida 33602

(eServed)

Tabitha G. Harnage, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 3239 9 - 0333

(eServed)

Tim Jesaitis, Esquire

The Law Office of Tim Jesaitis, P.A.

Post Office Box 388

St. Petersburg, Florida 33731 - 0388

(eServed)

Craig Oberweger, Esquire

Palm Law Partners, P.A.

1801 North Military Trail , Suite 120

Boca Raton, Florida 33431

(eServed)

Brian C. Dowling, Esquire

The Workers' Compensation Group, P.A.

100 Terra Mango Loop, Suite A

Orlando, Florida 32835

(eServed)

Jordan L. Rappaport, Esquire

Rappaport Osborne & Rappaport, PLLC

1300 North Federal Highway, Suite 203

Boca Raton, Florida 33432

(eServed)

Camille J. Iurillo, Esquire

Iurillo Law Group, P.A.

5628 Central Avenue

St. Petersburg, Florida 33707

(eServed)

Kenneth Zielinski

Sentrix Pharmacy and Discount, LLC

15688 80th Drive North

Palm Beach Gardens, Florida 33418

Sent rix Pharmacy and Discount, LLC

15688 80th Drive North

Palm Beach Gardens, Florida 33418

Jeffrey A. Rubinton, Esquire

Rubinton & Associates, P.A.

3801 Hollywood Boulevard

Hollywood, Florida 33021

(eServed)

Julie Jones, CP, FRP, Agency Clerk

Division of Legal Services

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0390

(eServed)

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entitled to judicial review pursuant to sect ion 120.68, Florida

Statutes. Review proceedings are governed by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing the original notice of administrative appeal with the

agency clerk of the Division of Administrative Heari ngs within

30 days of rendition of the order to be reviewed, and a copy of

the notice, accompanied by any filing fees prescribed by law,

with the clerk of the District Court of Appeal in the appellate

district where the agency maintains its headquarters or where a

party resides or as otherwise provided by law.