87-004007F Union Trucking, Inc. vs. Department Of Transportation Status: Closed DOAH Final Order on Wednesday, October 5, 1988.

Summary: DOT previously denied Pet MBE status. Rule later changed whereby Pet would qualify for MBE status. Pet then sought attorney's fees. Fees denied.

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Previous Case Number 87-4007

was dismissed without a hearing on 01/12/88

and is not a part of this ACCESS database

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STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

UNION TRUCKING, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 87-4007F

)

STATE OF FLORIDA, DEPARTMENT )

OF TRANSPORTATION, )

)

Respondent. )

_______________________________)

FINAL ORDER

This action arose after Petitioner, Union Trucking, Inc., received a Final

Order dismissing Case NO. 87-4007 instituted by Petitioner upon its request for

a hearing regarding the denial of its certification as a minority business

enterprise (MBE) by Respondent, Department of Transportation. That proceeding

was styled Union Trucking, Inc., vs. State of Florida, Department of

Transportation, DOAH Case NO. 87-4007 (Final Order April 18, 1988). The

application herein is filed pursuant to Section 57.111, Florida Statutes, and

Rule 22I-6.035, Florida Administrative Code, which authorize a "small business

party" to seek an award of attorney's fees and costs against the state agency

which initiates an administrative action. A hearing was held on Petitioner's

application on August 15, 1988, in Tallahassee, Florida, before Hearing Officer,

Diane Cleavinger, for the Division of Administrative Hearings.

APPEARANCES

FOR PETITIONER: Frank M. Gafford, Esquire

34 North Marion Street

Lake City, Florida 32056-1789

FOR RESPONDENT: Marlene Adhearn, Esquire

Department of Transportation

Haydon Burns Building

Tallahassee, Florida 32399-0450

Rule 22I-6.035 specifically requires the state agency against which a

petition for costs and fees is filed to file a response or counter affidavit

within 20 days of the filing of the petition. The Division belatedly filed a

response to Petitioner's application alleging the Petitioner was not entitled to

an award of attorney's fees for the following reasons:

1. Petitioner failed to submit its application for attorneys fees and costs

within the requisite 60 days after Petitioner became a prevailing party as

defined in Section 57.111, Florida Statutes, and Rule 22I-6.035, Florida

Administrative Code.

2. Petitioner's application fails to assert the necessary allegations upon

which an application for attorneys fees and costs may be granted.

3. Respondent was substantially justified in denying Petitioner's

certification as a minority business enterprise.

The pleadings and supporting documents that comprise the record herein are

Petitioner's application, the affidavit of Frank M. Gafford, the Final Order and

Order of Dismissal in DOAH Case NO. 87-4007, and the Request for hearing and the

MBE application which formed the basis for DOAH Case NO. 87-4007.

Based on the record and arguments of counsel, the following facts are

determined:

FINDINGS OF FACT

1. Union Trucking is a Florida corporation engaged in the business of

trucking. Its net worth is less than $2,000,000.00

2. In DOAH Case NO. 87-4007, the Department sent Petitioner a letter dated

August 6, 1987, denying Petitioner's request for certification as a minority

business enterprise pursuant to the Department's Rule 14-78.005, Florida

Administrative Code. The reason stated in the letter was that Petitioner was

not actually under the control of a minority person.

3. On August 25, 1987, Petitioner timely requested a hearing and the case

was sent to the Division Of Administrative Hearings on September 11, 1987. By

Notice of Hearing dated September 23, 1987, hearing was scheduled for November

16, 1987 and later continued until February 10, 1988.

4. Rule 14-78.002, Florida Administrative Code, was amended on September

21, 1987. The amendment effectively removed DOT's reason-for denial of

Petitioner's certification. However, on February 11, 1988, well after the rule

change came into effect, DOT formally decided to certify Petitioner. Petitioner

was therefore forced to proceed for several months in preparation for an action

which Respondent admits it had no basis for after the rule change took effect.

5. Respondent's initial decision occurred on August 6, 1987, when

Respondent notified Petitioner of its denial of minority business status. At

some point in time, Respondent had filed its proposed rule change. Petitioner

failed to demonstrate the time of the proposed change. Depending on the facts

surrounding the rule change as to its likelihood of adoption at the time

Respondent initiated this action, no findings regarding substantial

justification can be made at the time of the agency's initial action on August

6. Most certainly after September 21, 1987, the date the MBE rule was amended,

Respondent lacked any substantial justification to continue to litigate this

matter.

6. The Final Order of the Department recognized the earlier certification

of Petitioner and dismissed the action. However, the Final Order of Respondent

did not dispose of the attorney's fees issue which had also been raised during

the principal action. The order, therefore, did not dispose of substantially

all the issues raised in the principal action. Additionally, there was no

settlement of this case since a written settlement agreement was drafted and

signed by Petitioner, but refused by Respondent. Respondent's unilateral

certification is not enough to force a settlement on Petitioner, especially

since Respondent elected to enter a Final Order in this case. Petitioner,

therefore, became a prevailing party when Respondent entered its Final Order on

April 18, 1988. Section 57.111(4)(b)(2) , Florida Statutes.

7. The application and affidavit which initiated this action were filed on

May 23, 1988. The application substantially meets the requirements of Section

57.111, Florida Statutes, and Rule 22I-6.035, Florida Administrative Code, in

that it fairly put Respondent on notice of Petitioner's claim. The application

and affidavit were timely, having been filed within 60 days after the date on

which Petitioner became a prevailing small business party.

8. According to the affidavit of Frank M. Gafford, Petitioner incurred

legal fees of $3,572.86. These fees and costs are found to be reasonable. The

Department does not dispute the reasonableness of the fees in this case.

CONCLUSIONS OF LAW

9. The Division of Administrative Hearings has jurisdiction of the parties

to and subject matter of this proceeding. Section 57.111, Florida Statutes

(1987).

10. Section 57.111(4)(a) essentially authorizes the award of attorney's

fees and costs to a prevailing small business party in an administrative

proceeding initiated by a state agency "unless the actions of the agency were

substantially justified or special circumstances exist which would make the

award unjust."

11. Section 57.111(3)(d)1.a. defines a small business party to include:

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 practice 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;...

Petitioner meets this definition and is a small business party.

12. Section 57.111(D)(c)1 specifies that a small business party is a

"prevailing small business party" when:

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 judgment

or order has expired;...

13. Again, in this case it is uncontroverted that a Final Order was

entered dismissing the action on April 18, 1988, and adopting Petitioner's

certification. The Final Order was in Petitioner's favor. Petitioner is,

therefore, a prevailing small business party.

14. The attorney's fees and costs incurred by Union were reasonable and

necessary to defend against Respondent's denial.

15. Section 57.111(3)(e) specifies that:

A proceeding is substantially

justified if it had a reasonable basis

in law and in fact at the time it was

initiated by a state agency.

Respondent was unjustified in its decision (or lack of decision) to litigate

this matter once it had been filed. However, Respondent's action was initiated

at a time (August 6) when it had substantial justification in law and in fact to

deny Petitioner MBE status. Section 57.111(3)(b)(3) , Florida Statutes.

Petitioner failed to demonstrate any facts regarding the likelihood of adoption

of the rule change at the August 6 date. Respondent's unjustified acts

subsequent to that date are irrelevant under the language of the statute.

Petitioner's application for attorneys fee and costs is therefore denied.

DONE and ORDERED this 5th day of October, 1988, in Tallahassee, Florida.

___________________________________

DIANE CLEAVINGER

Hearing Officer

Division of Administrative Hearings

The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 5th day of October, 1988.

COPIES FURNISHED:

Frank M. Gafford, Esquire

34 N. Marion Street

Lake City, Florida 32056-1789

Marlene Adhearn, Esquire

Department of Transportation

Haydon Burns Building

Tallahassee, Florida 32399-0450

Atten: Eleanor F. Turner, M.S. 58

Kaye N. Henderson, P.E.

Secretary

Department of Transportation

Haydon Burns Building

Tallahassee, Florida 32399-0450