author: BOYER, Chief Judge.

text:
    The SCHOOL BOARD OF LEON COUNTY, Florida, Appellant, v. Ruth S. MITCHELL, Appellee.
    No. EE-64.
    District Court of Appeal of Florida, First District.
    May 4, 1977.
    Rehearing Denied June 22, 1977.
    C. Graham Carothers and Michael Pearce Dodson of Ausley, McMullen, McGehee, Carothers & Proctor, Tallahassee, for appellant.
    Joseph C. Jacobs and Brian S. Duffy of Ervin, Varn, Jacobs, Odom & Kitchen, Tallahassee, for appellee.
   BOYER, Chief Judge.

By this interlocutory appeal, appellant challenges the trial court’s denial of its motion to dismiss appellee’s complaint and further claims that appellee has failed to exhaust her administrative remedies and that, in any event, her declaratory judgment suit was improperly instituted.

Appellee, employed by appellant on a continuing contract basis as supervisor of guidance and testing, appeared at an April 1, 1975 meeting of appellant and presented argument against the county-wide reorganization plan then being considered to reduce administrative costs. The proposed plan abolished her position and allocated the functions associated therewith to two new positions, coordinator of career guidance and counseling and coordinator of research and evaluation services. Appellant rejected appellee’s argument and adopted the proposed reorganization plan by a vote of three to two.

Appellee, pursuant to Section 120.68, Florida Statutes (1975), commenced two actions: By the first, she sought review in this court of an administrative agency rule. That action has been stayed pending the outcome of the second action, which is the subject of this appeal. By the second action, appellee sought in Circuit Court a declaratory judgment as to her rights under Chapter 231, Florida Statutes (1975) and under her continuing contract with appellant, a temporary and permanent injunction to prevent appellant from implementing the reorganization plan, and money damages for breach of contract. The complaint alleged that appellee had exhausted her administrative remedies. Appellant moved to dismiss the declaratory judgment for lack of subject matter jurisdiction. The trial court denied the motion without comment.

Essentially, the motion to dismiss raises two issues: Whether appellee has exhausted her administrative remedies, and, assuming arguendo that administrative remedies have been exhausted, whether the Circuit Court may properly entertain a declaratory judgment action challenging final agency action.

In this opinion, we consider the unanswered question posed in a recent opinion of this court, State ex rel. Department of General Services v. Willis, viz: “the extent to which the ‘undivested’ statutory jurisdiction of Circuit Courts to render declaratory judgments under Chapter 86 is nevertheless to be judicially restricted when coercive relief, not a declaration of some doubtful right or status, is plaintiff’s real objective, or when uninvoked administrative remedies are available.” Put another way, the central issue in this case is whether, in recognition of the saving clause contained in Section 120.73, Florida Statutes (1975), a plaintiff in this type of proceeding will be permitted to maintain a declaratory judgment action, or whether he (or she) will be limited to his (or her) remedies under the Administrative Procedures Act.

Our task sub judice has been materially facilitated by the Willis opinion which is particularly helpful in its analysis of the evolution of the APA. From that opinion, we learn that the APA in its original form limited declaratory relief to questions of the validity, meaning, or application of any rule (see Section 120.30, Florida Statutes (1973)), that the 1974 version of the APA repealed Section 120.30, and that no section of the 1975 version of the APA, in particular Section 120.73, Florida Statutes (1975), revived Section 120.30. Thus, because there is no existing section within the APA nor the declaratory judgment act detailing the instances in which a rule or order of a state agency may be challenged in a declaratory judgment action, we must resolve that issue by analyzing the nature of the declaratory judgment remedy and by examining the cases construing Chapter 86 in an administrative context (particularly those decided prior to the adoption of the now repealed Section 120.30) in light of the substantial changes which administrative procedure has undergone in Florida.

The primary characteristics of the declaratory judgment action may be gleaned from an examination of Chapter 86 and the cases interpreting that statute. By statute, the Circuit Court is empowered to render declaratory judgments on the existence or non-existence of any immunity, power, privilege, or right, or of any fact concerning said existence or non-existence. In a declaratory judgment action other forms of relief may be requested and, if appropriate, granted. Section 86.011, Florida Statutes (1975). Although not intended to be an exclusive enumeration (see Section 86.051, Florida Statutes (1975)), some of the more common situations in which a declaratory judgment action is proper involve persons who may be in doubt about their rights under a deed, will, contract or other written instrument or are in doubt whether certain rights are affected by statute, regulation made under statutory authority, or by a municipal ordinance, contract, deed, will, franchise, or other written instrument. Section 86.021, Florida Statutes (1975). Chapter 86 is both substantive and remedial, and is to be liberally construed. Section 86.101, Florida Statutes (1975). A declaratory judgment action will not be dismissed on the ground that there is another adequate remedy. Section 86.111, Florida Statutes (1975).

Consistent with the statutory scheme, the courts have variously described the purpose of the act as: To establish a means whereby one might obtain a judicial declaration of rights never before determined (deMarigny v. deMarigny, 43 So.2d 442 (Fla.1959)), to extend procedural remedies to comprehend relief in cases where technical or social advances have tended to obscure or place in doubt one’s rights, immunities, status or privileges (Watson v. Centro Espanol De Tampa, 158 Fla. 796, 30 So.2d 288 (1947)), to relieve litigants of the common-law rule that no declaration of rights may be judicially adjudged unless a right has been violated and to render practical help in ending controversies which have not reached the stage where other legal relief is immediately available (Bell v. Associated Independents, Inc., 143 So.2d 904 (Fla. 2nd DCA 1962)), and to settle and afford relief from insecurity and uncertainty with respect to rights, status and other equitable or legal relations. (Hialeah Race Course, Inc. v. Gulf Stream Park Racing Ass’n., 210 So.2d 750 (Fla. 4th DCA 1968)).

Notwithstanding the above, the courts soon recognized that the scope of the declaratory judgment action was not infinite and that certain restrictions would be imposed upon its use. In fact, the Supreme Court, in a seminal opinion authored by the late Justice Terrell which upheld the constitutionality of Florida’s initial declaratory judgment act, recognized the types of situations to which the declaratory judgment act was generally found to be inapposite:

“(1) Where it would serve no useful purpose; (2) where special tribunals have been provided to handle specified controversies ; (3) where the facts sought to be litigated were hypothetical, presented a ‘made case,’ or were uncertain of occurrence; (4) the question raised must be real and not theoretical, and the person raising it must have a bona fide interest in it; and (5) there must be a defender with a bona fide right to defend.” (Sheldon v. Powell, 128 So. at page 262 (emphasis supplied).

Not long after the Sheldon opinion was authored, actual, as opposed to abstract, limitations on declaratory judgment actions were developed and promulgated by the courts. For example, academic or. moot questions will not be decided in a declaratory judgment suit (Ready v. Safeway Rock Co., 157 Fla. 27, 24 So.2d 808 (1946)), nor will a court ordinarily entertain an action for declaratory judgment when a proceeding is already pending between the same parties involving the same issues. (Taylor v. Cooper, 60 So.2d 534 (Fla.1952)). It has also been held that where the only material issue in a dispute is of a factual nature, an action for declaratory judgment will not lie. (Travelers Indemnity Co. v. Johnson, 201 So.2d 705 (Fla.1967)).

In the field of administrative law, the battle lines were quickly drawn between those seeking to challenge agency action in reliance upon the generally accepted principle that the declaratory judgment act was to be liberally construed, and those attempting to narrow the declaratory judgment remedy by reference to the doctrines of primary jurisdiction and exhaustion of administrative remedies. As noted by this Court in the Willis opinion a plethora of Florida cases have required judicial deference to administrative remedies. (See State ex rel. Department of General Services v. Willis, supra, at 589, 590) In their consideration of declaratory judgment actions vis a vis the doctrines of primary jurisdiction and exhaustion of administrative remedies, the courts developed a method for determining whether a declaratory judgment action was appropriate in an administrative law context which turned on the characterization of administrative action in any particular case as either quasi-judicial on the one hand or quasi-executive (or quasi-legislative or “purely administrative”) on the other hand. In one of the first eases to employ that distinction, albeit in a case involving a different issue (the reviewability of an administrative order), the Florida Supreme Court noted the primary characteristic of a judicial or quasi-judicial agency decision: “. . . when notice and a hearing are required and the judgment of the board is contingent on the showing made at the hearing, then its judgment becomes judicial or quasi-judicial as distinguished from being purely executive.”

Courts soon began prohibiting aggrieved parties from maintaining a declaratory judgment action where the challenged order had been issued as a result of quasi-judicial proceedings. For example, in Frix v. Beck, 104 So.2d 81 (Fla. 3rd DCA 1958), the court initially cited the general rule that where provision is made by law for the decision of a court or tribunal to be reviewed on appeal, and the procedure thus afforded is not availed of, a party adversely affected by such an order may not seek to have it altered or reversed by a suit for declaratory decree. The court concluded, “We see no reason why this rule should not be applied with equal force to orders of an administrative board made in the exercise of its authorized quasi-judicial powers, for which appellate review is provided but not pursued.”

The Supreme Court finally considered the propriety of a declaratory judgment action to review an administrative order in Teston v. City of Tampa, 143 So.2d 473 (Fla.1962), and outlined the procedure to be followed in challenging administrative action. First, if a valid method of review is prescribed in the statute under which the agency operates, then that procedure should be followed. In the absence of a specific statutory method of review, the order must be examined for the determination of whether it is quasi-judicial or quasi-legislative. Referring to DeGroot v. Sheffield, supra, the court defined a “quasi-judicial order” as one which “has been entered pursuant to statutory notice and hearing involving quasi-ju-dieial determinations.” If quasi-judicial, the order is reviewable by certiorari. If quasi-legislative, the appropriate remedy would be equity suit and injunction. In the Teston case, the order was found to be quasi-legislative; therefore, the declaratory judgment action was permitted. The court found that there was no other established appellate procedure which plaintiffs could have followed to obtain the determination that they were seeking.

The Third District Court of Appeal utilized the same terminology in holding that a declaratory judgment action was no substitute for established procedure for appeal or review of decisions of judicial tribunals, boards, or administrative officials exercising judicial or quasi-judicial powers.

Even as the courts began taking cognizance of Section 120.30, the quasi-judicial/quasi-legislative distinction was retained. In Meiklejohn v. American Distributors, Inc., 210 So.2d 259 (Fla. 1st DCA 1968), this Court held that Section 120.30 had “no application whatever to an order rendered by the agency in its conduct of a quasi-judicial proceeding which applies only to the issues in that proceeding, and affects only the parties thereto.” (See also Pest Control Com’n. of Fla. v. Ace Pest Control, Inc., 214 So.2d 892 (Fla. 1st DCA 1968) and Bay National Bank and Trust Company v. Dickinson, 229 So.2d 302 (Fla. 1st DCA 1969))

We now arrive at the 1974 revision of the APA which, inter alia, repealed Section 120.30. What was the intended effect of the 1974 revision upon the quasi-judicial/quasi-legislative rubric? According to one source:

“This definition [of ‘agency action’] provides a convenient shorthand expression for all the things which agencies do, whether in adjudication, rule-making or otherwise (for example, in part fact-finding and in part policy-making). It is intended, along with other provisions of the act, to focus attention on rights determined or affected by the activities of agencies, rather than the manner in which the action or inaction can most conveniently be characterized. To this end the provisions of the proposed act will make possible the abolition of all forms of judicial distinction which have been developed relative to agency actions, such as ‘quasi-executive’, ‘quasi-judicial’, ‘quasi-legislative’, and, more recently, ‘more judicial than quasi-judicial’. * * The new act would save courts * * * the tortuous development and application of terms such as ‘quasi-executive’ and ‘quasi-judicial’.”

At a different juncture, the same source emphasizes:

“As stated, this section [concerning decisions which affect substantial interests] applies whether the matter is adjudicatory in nature or a rule-making proceeding, thus broadening considerably the scope of administrative fairness. For example, the discretionary determinations of many governmental agencies and officers which have been characterized as ‘quasi-judicial’, ‘quasi-legislative’ or ‘quasi-executive’, or have otherwise been exempted from the operation of administrative procedure laws, are now brought under the minimum fairness provisions of the proposed act. To this extent the act is intended to overrule cases making the distinction, such as Bay National Bank and Dickinson v. Judges of the District Court of Appeal, 282 So.2d 168 (Fla. Sup.Ct. 1973).”

This Court acknowledged the thrust of the 1974 revision as applied to review of agency action in Broward County v. Administration Commission, 321 So.2d 605 (Fla. 1st DCA 1975), wherein we, after reviewing the historical background of the quasi-judicial/quasi-legislative labels, stated, “Inasmuch as the new Administrative Procedure Act provides that all proceedings for review of an administrative agency action (except those going to the Supreme Court) shall be instituted by filing a petition in the District Court of Appeal, it appears that such is the method now to be followed regardless of the nature of the administrative action.”

The remaining vitality, if any, of the quasi-judicial/quasi-legislative characterizations must be measured against the intricate procedures and guarantees of the latest version of the APA. As noted in the Willis opinion, “The act’s impressive arsenal of varied and abundant remedies for administrative error requires judicial freshening of the doctrines of primary jurisdiction and exhaustion of remedies, and greater judicial deference to the legislative scheme. It is not that the power of Circuit Courts has been lessened, nor that their historic writs have been surrendered. Rather, the occasions for their intervention have lessened.”

In recognition of the above, we take a fresh look at the terms “quasi-judicial”, “quasi-legislative”, and “quasi-executive”. It is appellee’s contention that the reorganization plan adopted by appellant which eliminated her position was a “rule” and was “quasi-executive” because it was adopted without a formal hearing. Therefore, appellee claims that she was entitled to institute a declaratory judgment action to challenge the validity of appellant’s reorganization plan. As was previously discussed, however, the distinction between quasi-judicial and quasi-legislative agency action has blurred almost to the point of unintelli-gibility. That phenomenon was foreseen long before the extensive revisions of the APA which caused it. In Bloomfield v. Mayo, 119 So.2d 417, 421 (Fla. 1st DCA 1960), this Court stated:

“It seems clear from the decision of the Supreme Court [DeGroot v. Sheffield, supra] that the test of a quasi-judicial function turns on whether or not the statutory tribunal had exercised a statutory power given it to make a decision having a judicial character or attribute, and consequent upon some notice or hearing to be had before it as a condition for the rendition of a particular decision made. Where an order of an administrative board or commission is purely administrative or quasi-legislative or quasi-executive in character and quality, such an order is not capable of being reached or affected by the writ of certiorari unless, as an incident to the arriving at or making of such order by the promulgating authority, a notice and hearing, judicial in nature, is required by law to be observed as a condition precedent to the commission’s or board’s exercise of the administrative, quasi-legislative or quasi-executive power comprehended in the terms of the order it attempts to enunciate. Even so, an administrative, quasi-legislative or quasi-executive order, after it has already been entered, may have a quasi-judicial attribute if capable of being arrived at and provided by law to be declared by the administrative agency after express statutory notice, hearing and consideration of the evidence to be adduced as a basis for the making thereof.” (Emphasis added)

And so it has come to pass. The judicial-type hearing applicable to otherwise administrative, quasi-legislative or quasi-executive orders has become a reality by virtue of Section 120.57, Florida Statutes (1975) and its brethren, Section 120.54(3), Florida Statutes (1975) and Section 120.-56, Florida Statutes (1975). Those statutes become operative when “the substantial interest of a party are determined by an agency.” Examination of the cited statutes indicate that the hearings described therein satisfy the criteria for quasi-judicial agency action. Consequently, agency action, at least insofar as it affects the substantial interests of a party, is, to use the old terminology, quasi-judicial. Under the old line of cases, cited herein, where agency action was found to be quasi-judicial, certiorari was the sole remedy. Applying that rationale and with a view toward the comprehensiveness of the revised APA, we hold that, in the vast majority of cases, the sole method of challenging agency action, whether formally recognized as an “order” or a “rule”, as it affects the substantial interests of a party is by petition for review to the appropriate District Court of Appeal.

We are left with the question of the impact of Section 120.73, Florida Statutes (1975), i. e., the savings clause which declared that nothing in Chapter 120 should be construed to divest the Circuit Courts of jurisdiction to render declaratory judgments. In that respect, we are guided by the following words of the Supreme Court:

“Administrative boards and bureaus . are now permanent fixtures in our government. Such boards and bureaus have been the source of great controversy in recent years and there have undoubtedly been abuses from time to time of the powers which are necessarily vested in them. On the other hand, all modern students of government recognize the fact that, in the complex society in which we live, the orderly administration of the affairs of the people requires such agencies. In those instances where there have been gross or flagrant abuses of power, or where such agencies have attempted to act beyond the powers delegated to them, the courts have unhesitatingly intervened. On the other hand, these agencies have been vested with powers and responsibilities in their field of operation by the legislative branch of the government. The courts have been extremely reluctant to interfere with the actions of such bodies in the proper performance of their duties and responsibilities in the absence of a clear and unmistakably flagrant violation of a constitutional or statutory right of the affected party. Promiscuous intervention by the courts in the affairs of these administrative agencies except for most urgent reasons would inevitably result in the dethronement of the commissions and the substitution of the courts in their place and stead.” (Odham v. Foremost Dairies, Inc., 128 So.2d 586, 592-593 (Fla.1961))

This Court in the Willis decision has also observed “that some agency errors may be so egregious or devastating that the promised administrative remedy is too little or too late”, and “that the Administrative Procedure Act does not and cannot displace Circuit Court jurisdiction to enjoin enforcement of facially unconstitutional agency rules.” (State ex rel. Department of General Services v. Willis, supra, at 590) Thus, we are not prepared to say that a frustrated litigant involved in the midst of administrative proceedings may never, under any circumstances, obtain a declaratory decree from the Circuit Court, but that the declaratory judgment remedy may be resorted to only in the type of extraordinary cases generally described above.

Sub judice, the rule challenge initiated by appellee based upon the record in this case is not of such character as would justify the intervention of the Circuit Court by a declaratory judgment proceeding. The gravamen of appellee’s complaint is that “the Circuit Court declare the subject rule invalid because it violates Subsection 231.-36(3)(g), Florida Statutes (1973, as amended 1974).” Appellee, as a party whose interests were “substantially affected”, could have had that issue decided (as well as the numerous factual issues which appellee claims are pertinent) by hearing held pursuant to Section 120.57(1), Florida Statutes (1975). Under such circumstances a declaratory judgment action will not lie.

Accordingly, holding that petition for review to the District Court of Appeal is the sole method by which review of such agency action may be obtained sub judice, we determine that the Circuit Court should have granted the motion to dismiss.

REVERSED.

RAWLS and SMITH, JJ., concur.

      . Assigned Case No. Y-303 in this court.

      . 344 So.2d 580 (Fla. 1st DCA 1977).

      . § 120.73 provides, in pertinent part: “Nothing in this chapter shall be construed to divest the circuit courts of jurisdiction to render declaratory judgments under the provisions of chapter 86 . .

      . Sheldon v. Powell, 99 Fla. 782, 128 So. 258 (1930).

      . DeGroot v. Sheffield, 95 So.2d 912, 915 (Fla.1957).

      . Frix v. Beck, supra, at 83.

      . Although § 120.30, Fla.Stat. (1973) providing for a declaratory judgment action to challenge the validity, meaning or application of any rule, had been adopted by the legislature in 1961, the litigation in the Teston case began prior to the passage of § 120.30 which section was never discussed by the court.

        . City of Miami v. Eldredge, 126 So.2d 169 (Fla. 3rd DCA 1961); Carol City Utilities, Inc. v. Dade County, 143 So.2d 828 (Fla. 3rd DCA 1962), cert. disch., 152 So.2d 462 (Fla.1963). In the latter case, the Third District noted that certiorari was the sole remedy available, and there was no question of the exhaustion of administrative remedies. Accord, School Board of Flagler County v. Hauser, 293 So.2d 681 (Fla.1974).

      . Reporter’s Comments on Proposed Administrative Procedure Act for the State of Florida, p. 10 (3/9/74).

      . Ibid., at 18.

        . Broward County v. Administration Commission, at 609. Accord, City of Titusville v. Florida Pub. Emp. Rail. Com’n, 330 So.2d 733 (Fla. 1st DCA 1976). Lest we be accused of overstating the holdings in the Broward County and City of Titusville cases, we feel constrained to agree with the appellee that those cases did not pass upon the issue of whether the petition for review was the sole method for challenging agency action.

      . Citing Jezek v. Vordemaier, 227 So.2d 69 (Fla. 4th DCA 1969).

      . Now renumbered as § 120.54(16), Fla.Stat. (1976 Supp.).

      . The hearings envisioned by §§ 120.54 and 120.56 are to be conducted in the manner prescribed in § 120.57 which provides for two types of hearings. Subsection 1 provides for the more extensive hearing where there is a disputed issue of material fact whereas Subsection 2, applied in the absence of a disputed issue of material fact, describes a less elaborate scheme. Nevertheless, even the Subsection 2 hearing requires reasonable notice, an opportunity to present written or oral evidence, and a written explanation by the agency if the objection of the complaining parties are overruled.

      . This court has recently noted in two cases involving the power of a hearing officer to declare rules invalid that the officer has the authority to declare a proposed rule unconstitutional (Dept. of Environmental Regulation v. Leon County, 344 So.2d 297 (Fla. 1st DCA 1977, Opinion filed April 7, 1977), but has no such power with respect to rules already enacted. Dept. of Adm. v. Stevens, 344 So.2d 290 (Fla. 1st DCA 1977), Case Nos. CC-101 and CC-156, Opinion filed April 6, 1977.

      . See also, for example, Dept. of Rev. v. University Square, 336 So.2d 371 (Fla. 1st DCA 1976) and Fla. Dept. of Rev. v. Estero Bay Development Corp., 336 So.2d 479 (Fla. 1st DCA 1976), both holding that a taxpayer may petition for declaratory judgment to test the validity of a tax assessment. Note however that the constitution and statutes specifically vest in Circuit Courts jurisdiction in such cases.

      . That subsection provides as follows: “Any person who has previously earned continuing contract status as a supervisor or principal in the school district shall be continued in that status until such time as the position is discontinued, the person resigns, or his contractual status is changed by mutual agreement or as prescribed below.”

      . We assume for purposes of this opinion that appellee is a “substantially affected party”. That determination was never made in the administrative proceedings because appellee did not request a hearing as a “substantially affected party”. It would seem that appellee would qualify as a “substantially affected party”, given the fact that the proposed agency action (the reorganization plan) eliminated her position which she held under a continuing contract.


source: Caselaw Access Project

author: SMITH, Judge.

license: Public Domain

text:
    Raymond O. McDONALD, Jr., et al., Petitioners, v. DEPARTMENT OF BANKING AND FINANCE, State of Florida, Respondent.
    No. DD-375.
    District Court of Appeal of Florida, First District.
    May 10, 1977.
    Rehearing Denied May 31, 1977.

      J. Riley Davis, Wilbur E. Brewton, and Clyde M. Taylor, Jr., of Taylor, Brion, Buker & Greene, Tallahassee, for petitioners.
    Edward E. Kuhnel, Gen. Counsel, and William B. Corbett, Jr., Asst. Gen. Counsel, Tallahassee, for respondent.
   SMITH, Judge.

Petitioners unsuccessfully applied to the Department of Banking and Finance, Division of Banking, for authority to organize and operate First Bank of Port Richey. Here they seek judicial review of the Department’s final order which denied their application after formal proceedings were conducted under the Administrative Procedure Act (APA), Section 120.57, by a hearing officer of the Division of Administrative Hearings.

ISSUES

We are required to reconcile the competing purposes of two statutes, one substantive, one procedural, which now affect awards of State banking authority. On the one hand, discretionary power to grant or deny banking authority is committed by Section 659.03 to the Department, which by rule has concentrated that power in the Comptroller as agency head. Sections 20.-12, 20.05(5), Fla.Admin.Code Rule 3C-10. Section 659.03 restricts the Department’s discretion only by requiring, in subsection (1), that “the department shall make an investigation” of the applicants’ qualifications and by directing, in subsection (2), that the Department “not approve such application until, in its opinion”:

“(a) Public convenience and advantage will be promoted by the establishment of the proposed bank or trust company.
“(b) Local conditions assure reasonable promise of successful operation for the proposed bank or the principal office of the proposed trust company and those banks or trust companies already established in the community.
“(c) The proposed capital structure is adequate.
“(d) The proposed officers and directors have sufficient banking or trust experience, ability and standing to assure reasonable promise of successful operation.
“(e) The name of the proposed bank or trust company is not so similar as to cause confusion with the name of an existing bank.
“(f) Provision has been made for suitable banking house quarters in the area specified in the application.” Section 659.03(2).

In counterpoise to that broad grant by Section 659.03, the APA tends to confine the Comptroller’s discretion by requiring he accept and act on facts as found by the hearing officer on competent substantial evidence. Here the hearing officer made detailed findings of fact tending to show that petitioners satisfy Section 659.03 standards, concluded that petitioners do satisfy those standards, and accordingly recommended they be granted authority to organize First Bank of Port Richey. The Comptroller’s order discarded the hearing officer’s findings of fact as not based on competent substantial evidence, substituted other and contrary findings, explained in some measure the Comptroller’s policies militating against petitioners’ application, and finally denied the application.

The applicants’ petition for review asserts the Comptroller erroneously discarded the hearing officer’s findings of fact which are supported by competent substantial evidence and erroneously based his decision on improperly substituted findings of fact. The Department urges both that its substituted findings are proper and that a reviewing court must “not substitute its judgment for that of the agency as to the weight of the evidence on any disputed findings of fact.” Section 120.68(10). The Department also declares the hearing officer’s findings are of little consequence even if accurate, because the Comptroller’s discretion must ultimately govern, and a reviewing court “shall not substitute its judgment for that of the agency on an issue of discretion.” Section 120.68(12).

AGENCY PROCEEDINGS

In August 1973, applicants' McDonald, Blackwood (since replaced by Prentice), Clark, Boyce and Scheer petitioned the Department for authority to organize and operate First Bank of Port Richey near a shopping center on a major highway in Port Richey, Pasco County, Florida. Six banks in the vicinity protested the application on various grounds. On April 24, 1974, State banking examiner Hieronymus, after a joint investigation with a Federal Deposit Insurance Corporation examiner, reported unfavorably to Comptroller Dickinson. Notwithstanding other internal recommendations of disapproval, Comptroller Dickinson on December 20, 1974, entered an order approving petitioners’ application on stated conditions. When Comptroller Lewis took office in January 1975, the Department adopted an emergency rule authorizing revocation of conditional approval orders, and Comptroller Lewis revoked the conditional approval granted petitioners. On March 22, 1975, after a further investigation, examiner Hieronymus submitted an updated report reciting need for additional field examination time but recommending Comptroller disapproval of the application on grounds “the opportunity for return on investment of an amount to meet the criteria of the Division of Banking is less than probable,” proposed management is inadequate and, because of unfavorable economic conditions, local convenience and needs would not be served by the new bank.

In April 1975, in accordance with Department rules, a “Comptroller’s conference” was held where applicants, protestants and others presented evidence and argument. In October 1975, the Comptroller entered an order denying the application on the ground local conditions did not assure reasonable promise of successful operation for the proposed bank, as required by Section 659.-03(2)(b). The Comptroller found “the establishment of the proposed bank would promote, to some degree, the public convenience in the area,” as required by subsection 2(a), but expressed no conclusion concerning petitioners’ satisfaction of subsections 659.03(2)(c) through (f).

Petitioners thereupon requested that formal proceedings be conducted as required by the APA when a party’s substantial interests are to be determined and there is a disputed issue of material fact. Section 120.57(1). Litigation ensued in the Leon County circuit court, as a result of which, on January 6, 1976, the court found Comptroller Lewis had agreed to process bank charter applications in accordance with the newly effective APA and ordered formal proceedings under Section 120.57(1).

Comptroller Lewis, though authorized as agency head to conduct formal proceedings under Section 120.57(1), referred the matter to the Division of Administrative Hearings, whose assigned hearing officer, Diane D. Tremor, conducted hearings in April 1976 and entered a recommended order in June. That order made “findings of fact” which we summarize here in the same order that Section 659.03(2) lists the essential standards for granting banking authority:

(a) Public convenience and advantage. The proposed bank is to be located on a busy corner of Ridge Road and U. S. Highway 19 at the Port Richey Shopping Village, near large residential areas and a junior college site. Though the owners of the shopping center are experiencing financial difficulty, the center is 93 percent occupied. Three savings and loan institutions are nearby, but the nearest banks are 2.3 and 3.5 miles from the proposed location. Most of the seven existing banks in the area are closer to each other than the proposed bank would be to them.

(b) Reasonable promise of success. Pasco County is one of Florida’s faster growing areas. More than 16,000 persons reside in the 14 square miles constituting the proposed bank’s trade area, as compared with the average of 12,000 residents in a typical trade area. Although existing Pasco County banks suffered substantially from the effects of inflation and recession for two years before the April 1975 hearing, economic conditions are “now beginning to pick up” and area banks gained substantial deposits in 1975. Pasco County banks increased deposits 8.1 percent in 1975, as contrasted to substantially poorer performances by banks in Duval, Polk and Hillsbor-ough counties, where the Department nevertheless granted banking authority in 1975. While the proposed bank might operate at a loss in its first year, as is the common experience, projections of both deposits and profits for the second and third years indicate, as former examiner Hieronymus stated on petitioners’ cross-examination, a reasonable promise of a profitable operation. No existing bank apprehended adverse effects other than normal competition.

(c) Capitalization. $1,500,000 is adequate, as found by examiner Hieronymus in his reports and testimony.

(d) Management. The proposed officers and directors represent a cross section of the community. Each has prior business experience and three have banking experience with new and established banks. Mr. McDonald, the proposed president and chief executive officer, was executive vice president of a Tampa bank and director of a Lakeland bank and thus was not without experience, as erroneously reported in the Department’s original and updated examiner’s reports.

(e) Name confusion. Although numerous banks in Florida use the word “First” in their names, the proposed name of First Bank of Port Richey should cause no conflict or confusion with any existing bank.

(f) Facilities. The applicants propose a 14,000 square foot building as a permanent banking facility, built at a reasonable cost, and temporary facilities in a modular unit adjacent to the construction site. “The temporary unit will be leased and will comply with federal security and bonding requirements.”

In stating the above “findings of fact,” the recommended order also recorded the hearing officer’s reason for overruling the Department’s objection to admission of petitioners’ evidence of improved banking and economic conditions after October 1975, when the Comptroller acted unfavorably on the application:

“This [is] a fact-finding adversary hearing ... to determine the issue of whether petitioners] should be granted authority to organize and operate a general banking business at the proposed location; and considering the long delay between the Comptroller’s conference, the Comptroller’s order of denial and the date of the present hearing, as well as the fact that the Comptroller declined to reach any conclusion as to four of the six criteria required to be met for a charter, the parties were permitted to present all relevant evidence to date concerning the issues in dispute.”

On these findings, the hearing officer entered “conclusions of law” stating: (a) the proposed bank would promote public convenience and advantage; (b) local conditions assure reasonable promise of a successful operation and would not adversely affect any existing bank; (c) the proposed capital structure is adequate; (d) the proposed officers and directors have sufficient banking experience and ability to assure reasonable promise of a successful operation; (e) the proposed name would not be confusing and (f) suitable banking house quarters are provided for.

In September 1976 Comptroller Lewis entered a final order rejecting many of the hearing officer’s findings of fact as not based on competent substantial evidence, rejecting several of the hearing officer’s conclusions of law, and holding (a) the proposed bank would promote to some degree the public convenience in the area; (b) local conditions do not assure reasonable promise of a successful operation; (c) the proposed capital structure is adequate; (d) the proposed officers and directors are not shown to be qualified; (e) petitioners failed to show there would be no confusion between the proposed name of the bank and other existing banks; and (f) there is no substantial competent evidence that the proposed banking quarters would be adequate.

While the Comptroller’s order stated that in his opinion the hearing officer erred in considering economic and other circumstances since “the original application or its up-date,” the Comptroller’s findings did not ignore the improvement in economic conditions between October 1975, when the Comptroller initially acted on the application, and April 1976, when the hearing was conducted.

DISCUSSION

The legislature has committed to the Department and Comptroller wide discretion in determining applications for banking authority. Judicial decisions under pri- or administrative law recognized the breadth of that discretion. Bay Nat’l Bank & Trust Co. v. Dickinson, 229 So.2d 302, 304 (Fla. 1st DCA 1969); National Bank of Tampa v. Green, 175 So.2d 545 (Fla. 1st DCA 1965). Under prior law the Comptroller’s responsibility was to conduct some investigation in the several areas of statutory concern for an applicant’s qualifications and then to decide the matter “with discretion.” Unless the Comptroller “wholly fail[ed]” to investigate or could be shown by suit for injunction to have acted “capriciously, arbitrarily, fraudulently or in such manner as to amount to a gross abuse of discretion,” there was no administrative or judicial remedy either for the applicant whose application was denied or for any protestant. Bay Nat’l, 229 So.2d at 304; National Bank of Tampa, 175 So.2d at 550-51; Dickinson v. Judges of District Court of Appeal, 282 So.2d 168 (Fla.1973).

The APA does not compromise the Department’s ultimate authority over banking applications. Nor does it strip the Comptroller, a constitutional officer who is head of the Department, of the discretion in such matters which is finally his. In three important respects, however, the APA affects the scope and manner of exercise of agency discretion: (1) the APA prescribes the process by which disputed facts are found; (2) it requires that the agency adopt as rules its policy statements of general applicability, requires agency proof of incipient policy not expressed in rules and permits countervailing evidence and argument; and (3) it requires an agency to explain the exercise of its discretion and subjects that explanation to judicial review.

1. When the facts are disputed, Section 120.57(1) prescribes a trial type proceeding to find the facts on which the agency’s discretion is permitted to operate.

We recently held that every agency action is “a recognizable rule or an order” under the APA or is “incipiently a rule or order.” State ex rel. Dep’t of Gen. Serv. v. Willis, 344 So.2d 580, 584 (Fla. 1st DCA 1977). Except when an agency acts by formal rulemaking (Section 120.54) or by declaratory statement concerning the applicability of a statute, rule or order (Section 120.565), all agency action, on appropriate challenge, will mature into an order impressed with characteristics of the APA’s Section 120.57.

A party whose substantial interests are or will be affected by agency action is entitled to a Section 120.57 hearing. If there is a “disputed issue of material fact,” the agency must provide a trial type hearing upon request “[u]nless waived by all parties.” The time and manner of requesting formal proceedings may be governed by agency rules not inconsistent with model rules promulgated by the Administration Commission. Section 120.53(l)(b), 120.-54(10); Fla.Admin.Code Rule 28-5.15 (model rule). Formal proceedings must be conducted either by the agency head or, at the agency’s election, by a hearing officer of the Division of Administrative Hearings. In this case the Department, no doubt mindful of administrative burdens that would fall on the Comptroller should he personally conduct all formal proceedings on bank applications, requested assignment of a hearing officer.

In consequence, the Department was required to honor the hearing officer’s findings of fact unless “not based upon competent substantial evidence.” Section 120.-57(l)(b)9; Venetian Shores Home & Prop. Own. v. Ruzakawski, 336 So.2d 399 (Fla. 3d DCA 1976). Yet we as the reviewing court are required to sustain the Department’s findings of fact — those which petitioners urge were wrongfully substituted — if they are supported by competent substantial evidence. Section 120.68(10). The result is a conundrum: bound as we are to honor agency findings of fact supported by competent substantial evidence, how shall we determine whether the agency, as required, accorded similar respect to the hearing officer’s findings?

Judges Learned Hand, Swann and Frank of the Second Circuit addressed the same question in NLRB v. Universal Camera Corp., 179 F.2d 749 (2d Cir. 1950). Confronted with NLRB findings rejecting those of an examiner, the court was required by federal law both to respect the Board’s substituted findings and to enforce Board respect for the examiner’s findings. The court chose to honor the Board’s findings, without regard for the examiner’s. Judge Hand’s opinion measured the imbroglio:

“We hold that, although the Board would be wrong in totally disregarding his findings, it is practically impossible for a court, upon review of those findings which the Board itself substitutes, to consider the Board’s reversal as a factor in the court’s own decision. This we say, because we cannot find any middle ground between doing that and treating such a reversal as error, whenever it would be such, if done by a judge to a master in equity.” 179 F.2d at 753.

Reversing, the Supreme Court held that reviewing courts should not become “pinioned between the horns of his [Hand’s] dilemma,” that they need not choose exclusively between the examiner’s findings and the Board’s substituted findings. Universal Camera Corp. v. NLRB, 340 U.S. 474, 493, 71 S.Ct. 456, 467, 95 L.Ed. 456, 470 (1951). Justice Frankfurter’s opinion for the Court conceded the difficulty of completely reconciling the competing principles, but held it is possible and desirable for a reviewing court to give weight to the examiner’s discarded findings while determining whether “substantial evidence” supports the Board’s decision. Finding “substantial evidence,” the Court held, is not done by mechanically combing the transcript for words and phrases of testimony that corroborate the Board’s questioned finding, but rather by considering the whole record, including the examiner’s findings. “The substantiality of evidence,” Frankfurter stated, “must take into account whatever in the record fairly detracts from its weight.” 340 U.S. at 488, 71 S.Ct. at 464, 95 L.Ed. at 467.

Florida’s APA does not require that the reviewing court ignore the hearing officer’s findings to the extent they are displaced by agency findings. We are therefore free to reconcile the potentially conflicting statutory demands by adopting Universal Camera’s standard of judicial review. The Florida APA, like the federal, makes the hearing officer’s recommended order part of the record in the reviewing court. Section 120.57(l)(b); 120.68(5)(a). The hearing officer’s findings are indisputably part of “the record” in which the APA requires competent substantial evidence to support findings of fact on which agency action depends. Section 120.68(10). There is nothing in our APA, as there was nothing in the federal Act, which “suggests that reviewing courts should not give to the [hearing officer’s] report such probative force as it intrinsically commands,” notwithstanding that the agency has substituted contrary findings. 340 U.S. at 495, 71 S.Ct. at 468, 95 L.Ed. at 471.

In determining whether substantial evidence supports the agency’s substituted findings of fact, a reviewing court will naturally accord greater probative force to the hearing officer’s contrary findings when the question is simply the weight or credibility of testimony by witnesses, or when the factual issues are otherwise susceptible of ordinary methods of proof, or when concerning those facts the agency may not rightfully claim special insight. Within Section 659.03(2), the hearing officer’s findings respecting the standards in subsections (a) and (f) — the “public convenience and advantage” of the bank and the suitability of its proposed banking house— would carry relatively greater probative force in determining the substantiality of evidence supporting contrary findings by the agency.

At the other end of the scale, where the ultimate facts are increasingly matters of opinion and opinions are increasingly infused by policy considerations for which the agency has special responsibility, a reviewing court will give correspondingly less weight to the hearing officer’s findings in determining the substantiality of evidence supporting the agency’s substituted findings. The issues framed by subsection (b) and (d) of Section 659.03(2) — “reasonable promise of successful operation” and the skill of proposed management — are, compared to the others, of that character.

Thus, the substantiality of evidence supporting an agency’s substituted finding of fact depends on a number of variables: how susceptible is the factual issue to resolution by credible witnesses and other evidence, how substantially the hearing officer’s discarded findings are supported by such evidence, how far the factual issue tends to be one of opinion, how completely agency policy occupies a field otherwise open to different opinion. Judicial review of the Department’s substituted findings of fact is therefore inseparable from review of agency “determinations of . policy within the agency’s exercise of delegated discretion.” Section 120.68(7).

2. Sections 120.52(14) and .54 require that agency policy statements of general applicability be adopted as rules and Section 120.57 requires proof of incipient agency policy not expressed in rules and subjects it to countervailing evidence and argument.

“No agency has inherent rulemaking authority,” Section 120.54(4), but the Department has explicit power to implement by rule any provision of the banking code. Section 658.05(1).

As required by the APA’s Section 120.-53(1), the Department has adopted rules of procedure describing its organization, the general course and method of its operations, the nature and requirements of its formal and informal procedures on applications for banking authority, and procedures for presentation of evidence and arguments on disputed facts, law and policy. Fla.Admin. Code Rules 3-3, 3C-10. Proceedings on petitioners’ application for banking authority followed the Department’s prescribed informal procedures through investigation, hearing, and “final” decision, all before petitioners requested formal proceedings under Section 120.57(1). Without objection, the hearing officer conducted the formal proceedings in accordance with the model rules adopted by the Department of Administration. Fla.Admin.Code Rule 28-5.22 et seq.

The APA’s rulemaking provisions affect the substance of agency policy as well as agency procedures. For the term “rule” is defined by Section 120.52(14) to include

“ . . . each agency statement of general applicability that implements, interprets, or prescribes law or policy...."

So defining “rule,” Florida’s APA has the purpose, uniformly endorsed by students of the modern administrative process, of encouraging agencies by rulemaking “to close the gap between what the agency and its staff know about the agency’s law and policy and what an outsider can know.” K. Davis, Discretionary Justice 102 (1969). The APA does not in terms require agencies to make rules of their policy statements of general applicability, nor does it explicitly invalidate action taken to effectuate policy statements of that character which have not been legitimated by the rulemaking process. But that is the necessary effect of the APA if the prescribed rulemaking procedures are not to be atrophied by nonuse. See Straughn v. O’Riordan, 338 So.2d 832, 834 (Fla.1976). Compare NLRB v. Wyman-Gordon Co., 394 U.S. 759, 764, 89 S.Ct. 1426, 1429, 22 L.Ed.2d 709, 714 (1969). Therefore we have recognized the availability of an administrative remedy against any agency policy statement of general applicability which has not been adopted through rule-making. Section 120.56; Dep’t of Administration v. Stevens, 344 So.2d 290 (Fla. 1st DCA, 1977). A remedy is available also in Section 120.57 proceedings affecting a party’s. substantial interests. State ex rel. Dep’t of Gen. Serv. v. Willis, 344 So.2d 580, 591-92 (Fla. 1st DCA 1977). The APA thus impels agencies to “confine their own discretion” by “moving from vague standards to definite standards to broad principles to rules.” K. Davis, supra, at 55. The six standards for banking authority prescribed by Section 659.03(2) are susceptible to implementation and interpretation by Department rules, but as yet the Department has none.

The APA does not chill the open development of policy by forbidding all utterance of it except within the strict rule-making process of Section 120.54. Agencies will hardly be encouraged to structure their discretion progressively by vague standards, then definite standards, then broad principles, then rules if they cannot record and communicate emerging policy in those forms without offending Section 120.54. The folly of imposing rulemaking procedures on all statements of incipient policy is evident. In the final order, for example, the comptroller expressed a fragment of policy in this way:

“To insure a reasonable promise of successful operation, the total state banking picture must be taken into consideration in considering a bank application. Consideration of a charter for a new state bank cannot exclude the economic health of the state-wide banking system because once chartered the new bank becomes a part of that system and assumes some of the characteristics of the larger body.”

In a pedantic sense, the Comptroller’s statement is a “rule” — and therefore an illicit one — because it has the appearance of an

“agency statement of general applicability that implements, interprets, or prescribes law or policy . . . .” Section 120.52(14).

It would immediately stifle Department policymaking and ultimately destroy the APA to label the Comptroller’s statement a “rule” concerning which Section 120.54 requires notice of its intended utterance, an estimate of its economic impact, publication in Florida Administrative Weekly, public debate, review by the Administrative Procedures Committee and finally publication in the Florida Administrative Code. Given such strictures on policy utterance, public information concerning agency purpose would vanish. Agency orders under Section 120.57 and agency declaratory statements of the applicability of its rules, Section 120.565, would tend to become arid, unreasoning edicts because explanation and interpretation, without rulemaking, would be held fatal to the intended action.

Florida’s APA does not have those bizarre effects. For the Section 120.54 rulemaking procedures are imposed only on policy statements of general applicability, i. e., those statements which are intended by their own effect to create rights, or to require compliance, or otherwise to have the direct and consistent effect of law. E. g., Stevens, 344 So.2d at 296. That is the meaning of the essentially identical “rule” definition in the federal Administrative Procedure Act, which “obviously could be read literally to encompass virtually any utterance by an agency . . . .” Pacific Gas & Elec. Co. v. FPC, 164 U.S.App.D.C. 371, 506 F.2d 33, 37 (1974) (guidelines order held not a rule because the agency did not intend it to operate of its own effect, but subject to modification by adjudications). See also Lewis-Mota v. Sec’y of Labor, 469 F.2d 478, 482 (2d Cir. 1972) (policy statement held a rule because it “changed existing rights and obligations”); Texaco, Inc. v. FPC, 412 F.2d 740 (3d Cir. 1969) (order similarly held invalid rulemaking); Airport Comm’n of Forsyth Co. v. CAB, 300 F.2d 185, 188 (4th Cir. 1962) (public statement of policy held guide to future planning, not a “rule which the public is required to obey or with which it is to avoid conflict”).

While the Florida APA thus requires rulemaking for policy statements of general applicability, it also recognizes the inevitability and desirability of refining incipient agency policy through adjudication of individual cases. There are quantitative limits to the detail of policy that can effectively be promulgated as rules, or assimilated; and even the agency that knows its policy may wisely sharpen its purposes through adjudication before casting rules. Shapiro, The Choice of Rulemaking or Adjudication in the Development of Administrative Policy, 78 Harv.L.Rev. 921, 927 (1965). The Law Revision Council, sponsor of the proposed 1974 APA, had no intention of building an impenetrable wall between policymaking and adjudication. On the contrary, the APA reflects the Council’s conviction that:

“In fact, agency proceedings frequently affect individual rights and create general policy at the same time, so that they partake of adjudication and rule-making at the same time.”

Section 120.53(l)(c) requires, independently of 120.54 rulemaking provisions, agency procedures for argument of policy issues before the agency. In informal proceedings affecting a party’s substantial interests, the agency is required to state and entertain challenges to the “policy grounds” for its intended action. Section 120.-57(2)(a)l, 2. The agency’s final order in 120.57 proceedings must describe its “policy within the agency’s exercise of delegated discretion” sufficiently for judicial review. Section 120.68(7). By requiring agency explanation of any deviation from “an agency rule, an officially stated policy, or a prior agency practice,” Section 120.68(12)(b) recognizes there may be “officially stated agency policy” otherwise than in “an agency rule”; and, since all agency action tends under the APA to become either a rule or an order, such other “officially stated agency policy” is necessarily recorded in agency orders. All such rules and orders, cata-logued by a subject-matter index, must be made available for inspection and copying by the public in an ever-expanding library of precedents to which the agency must adhere or explain its deviation. Sections 120.53(2), 120.68(12)(b).

The APA’s provision for agency policymaking by adjudication has significant effect on Section 120.57(1) proceedings, such as those before us now, in which a party’s substantial interests are determined and there are disputed issues of material fact. Because the agency’s final order in such proceedings must explicate nonrule policy, the hearing officer’s recommended order must do the same:

“The hearing officer shall complete and submit ... a recommended order consisting of his findings of fact, conclusions of law, interpretation of administrative rules . . . and any other infor-ination required by law or agency rule to be contained in the final order." Section 120.57(l)(b)8 (emphasis added).

It follows that both the agency’s final order and the hearing officer's recommended order must in all respects—in dealing with emerging agency policy as well as in finding the facts—have a predicate in the record, namely, the “short and plain statement of the matters asserted by the agency and by all parties,” the evidence, the argument, the “proposed findings of facts and orders” and the exceptions thereto. Section 120.57(l)(b) 2 d, 4, 5. See Tamiami Trail Tours, Inc. v. Bevis, 316 So.2d 257, 260 (Fla.1975).

In the case before us, the Department properly adduced testimony of the Director of its Division of Banking evaluating the petition and to a limited extent expressing Department rationale for disapproving it. To the extent the agency may intend in its final order to rely on or refer to emerging policy not recorded in rules or discoverable precedents, Section 120.53(2), that policy must be established and may be challenged by proof. We recently approved, in another case, a hearing officer’s order authorizing prehearing discovery of any Department nonrule criteria for determining statutory qualifications for authority to establish a savings and loan institution. Lewis v. Life Sav. and Loan Ass’n, 342 So.2d 1031 (Fla. 1st DCA 1977).

Thus the APA infuses Section 120.-57(1) proceedings with concern for agency policy as well as for facts and law. The hearing officer, called to preside because the agency head is unavailable and factual issues must be resolved, is also charged to record, recommend and critique agency policy as it is revealed in the record. While concerning policy matters the hearing officer’s recommended order does not carry the authority attending its findings of fact, the hearing officer’s duty to respond to the evidence in that way cannot fail to promote responsible agency policymaking. The hearing officer’s function creates agency incentives for rulemaking, which as far as it goes displaces proof and debate of policy in 120.57 proceedings; encourages an agency to fully and skillfully expound its non-rule policies by conventional proof methods; and, in appropriate cases, subjects agency policymakers to the sobering realization their policies lack convincing wisdom, and requires them to cope with the hearing officer’s adverse commentary. Thus in Section 120.57(1) proceedings the hearing officer does not merely find the facts and supply the law, as would a court. The hearing officer “independently serves the public interest by providing a forum to expose, inform and challenge agency policy and discretion.” Willis, 344 So.2d at 591. See also Gifford, Decisions, Decisional Referents, and Administrative Justice, 37 Law and Contemp.Prob. 3, 29 (1972). In this respect, perhaps more than in any other, “the Florida legislature has drawn upon the legal thinking and experience of the 1970’s, rather than the 1940’s when the last administrative procedure acts were conceived.” Kennedy, A National Perspective of Administrative Law and the Florida Administrative Procedure Act, 3 Fla.St.U.L.Rev. 65 (1975).

3. Section 120.57 requires agency explanation of its discretionary action affecting a party’s substantial interests, and Section 120.68 subjects that explanation to judicial review.

Section 120.57 proceedings, in which the agency’s nonrule policy is fair game for a party’s challenge both in the public and in his private interest, concludes by a final agency order which explicates “policy within the agency’s exercise of delegated discretion,” explains any deviation from “an agency rule, an officially stated policy, or a prior agency practice,” and, in a “licensing” proceeding such as this one, “state[s] with particularity the grounds or basis for the issuance or denial” of the license. Sections 120.57(l)(b)9, 120.57(2)(a) 1 and 2, 120.60(2), 120.68.,

Judicial review proceedings under Section 120.68 similarly press for crystalization of agency discretion. The court’s responsibility is to allow the agency full statutory range for its putative expertise and specialized experience. But, to the extent that agency action depends on nonrule policy, Section 120.68 requires its exposition as a credential of that expertise and experience. The displaced findings of hearing officer Tremor lessen in probative force as the “facts” blur into opinions and opinions into policies, and the Department’s power to substitute findings based on record evidence correspondingly increases. But the Department’s duty of exposition also increases. The final order must display the agency’s rationale. It must address countervailing arguments developed in the record and urged by a hearing officer’s recommended findings and conclusions or by a party’s written challenge of agency rationale in informal proceedings, or by proposed findings submitted to the agency by a party. Sections 120.57(l)(b)4, .57(l)(b)9, .57(2)(a)2, .59(2), Stuckey’s of Eastman, Ga. v. Dep’t of Transportation, 340 So.2d 119 (Fla. 1st DCA 1976); Automotive Parts and Acc. Ass’n v. Boyd, 132 U.S.App.D.C. 200, 407 F.2d 330, 338 (1968); Int’l Harv. Co. v. Ruckelshaus, 155 U.S.App.D.C. 411, 478 F.2d 615, 651 (1973) (concurring opinion); Assoc. Indus, of N.Y.S., Inc. v. U. S. Dep’t of Lab., 487 F.2d 342, 354 (2d Cir. 1973); L. Jaffe, Judicial Control of Administrative Action 613 et seq. (1965); K. Davis, Discretionary Justice 103-06; K. Davis, Administrative Law Treatise 579 et seq. (1970 Supp.); Gifford, supra, 37 Law & Contemp.Prob. at 21 et seq. See also Reporter’s Comments on Proposed Administrative Procedure Act, p. 20 (3/9/74):

“Three due process checks to prevent arbitrary agency action are the requirements that reasons be stated for all action taken or omitted, that reasons be supported by ‘the record’, and that specific judicial review procedures allow the courts to remedy defects of substance.”

Failure by the agency to expose and elucidate its reasons for discretionary action will, on judicial review, result in the relief authorized by Section 120.68(13): an order requiring or setting aside agency action, remanding the case for further proceedings or deciding the case, otherwise redressing the effects of official action wrongfully taken or withheld, or providing interlocutory relief.

Having in mind the APA’s purposes concerning findings of fact, rulemaking and evidentiary exposure of agency policy, and judicial review of the exposition of agency discretion, we turn to the Department order at hand.

The hearing officer’s decision to permit evidence of circumstances as they existed at the time of the hearing was correct. The agency may appropriately control the number and frequency of amendments to licensing applications and may by rule prevent substantial amendment of the application in midproceeding. But the hearing officer or agency head conducting Section 120.57 proceedings should freely consider relevant evidence of changing economic conditions and other current circumstances external to the application. Section 120.57 proceedings are intended to formulate final agency action, not to review action taken earlier and preliminarily.

Public convenience and advantage. The Department did not contest, either before the Section 120.57 proceedings or in its final order, that the proposed First Bank of Port Richey would promote public convenience and advantage to the locale. Section 659.-03(2)(a).

Reasonable promise of success. The final order states that local conditions do not assure reasonable promise of a successful operation for First Bank of Port Richey. Because the matter in issue is less one of fact than of opinion which is highly charged with policy considerations for which the Department is responsible, the hearing officer’s discarded findings of fact have comparatively little weight in our determination whether substantial competent evidence supports the Department’s substituted findings. The Department’s order emphasizes marginal economic conditions in western Pasco County, unemployment rates, delinquent loan rates and other economic factors. The record contains substantial testimony supporting those findings of the Department concerning “reasonable promise of successful operation.” Yet in two respects the Department’s final order is insufficient. The order does not explain the apparent inconsistency in the Department’s 1975 decisions on banking applications in counties having less favorable deposit rates than Pasco, as recorded in the hearing officer’s recommended order:

“The February, 1976, Comparative Figures Report published by the Florida Bankers Association, which is relied upon in part by respondent in determining whether to grant banking charters, shows Pasco County to have an 8.1 percent increase in deposits from 1974 to 1975 year ends. Since January of 1975, respondent has granted bank charters to banks located in Duval County with a deposit growth of minus .1%; in Polk County with a deposit growth of 1.5%; and in Hillsbor-ough County with a deposit growth of minus 1.5%.”

And, after brushing aside the testimony of former bank examiner Hieronymus that Pasco County conditions in 1975 would produce a reasonable promise of profit for the proposed bank, the Department’s final order stated simply and without elucidation:

“. . . It does not follow that the proposed bank would be assured a reasonable promise of successful operation ” (emphasis added).

In these respects the Department’s final order does not sufficiently explicate “policy within the agency’s exercise of delegated discretion” and explain its deviation from prior agency practice. Sections 120.68, 659.-03(2)(b).

Capitalization. Here the recommended and final orders do not conflict, and the Department does not contend that the proposed capitalization of First Bank of Port Richey is inadequate. Section 659.03(2)(c).

Management. Although the competence of proposed management is an issue concerning which the Department’s putative expertise and experience should carry great weight, neither the Department nor any protestant adduced substantial evidence on this issue contrary to the hearing officer’s finding of fact, which was supported by competent substantial evidence. One significant statement in the Department’s final order, to the effect that a proposed officer has “not done a satisfactory job in running” another bank, was based entirely on hearsay testimony which standing alone is incompetent to support the Department’s finding. Section 120.58(1) (a). The Department has no rules implementing the statutory standard and it has set forth no nonrule policy indicating, on this record, the inadequacy of petitioners’ proposed management and directors. Section 659.03(2)(d).

Name confusion. Some testimony by the Director of the Division of Banking tends to suggest confusion in use of the word “First” in a banking name. But there is no competent substantial evidence in the record tending to show that the name “First Bank of Port Richey” would produce perceptibly more or different confusion than already exists. The conflict between the hearing officer’s recommended order and the Department’s final order is not essentially one of fact, but one of policy. If the Comptroller’s purpose is to establish as policy that no bank shall be now authorized to use “First” in its name because of likely confusion, that is a policy statement of general applicability which must be subjected to rulemaking under Section 120.54. The Department’s order states:

“. . .1 am unable to agree with the hearing officer’s conclusion that the applicants carried their burden of proof relating to the lack of confusion between the name of the proposed bank and any existing bank for the reason that the hearing officer’s conclusion on this point is not supported by competent substantial evidence.”

The Department’s observations concerning the proposed name are insufficient to justify rejecting the hearing officer’s recommended order and denying the petition. Section 659.03(2)(e).

Facilities. There is competent substantial evidence supporting the hearing officer’s findings concerning the adequacy of the proposed banking quarters. The testimony and reports of examiner Hieronymus found no objection to the proposed quarters. Yet the Department’s final order discarded the hearing officer’s findings of fact and concluded they were unsupported by competent substantial evidence. The Department was again in error. Again, the Department has offered no evidence, rule or reason which overcomes the natural probative effect of the uncontradicted proof accepted by the hearing officer. Section 659.03(2)(f).

The stated deficiencies in the Department’s final order require it be vacated. Yet it does not follow that petitioners must in all events be granted the banking authority they seek. Section 659.03(2) forbids the Department to approve a banking application if in its opinion even one of the six criteria is not met. Further consideration of the factors prescribed by subsections (a), (c), (d) and (f) is foreclosed by the absence of record evidence which might justify the Department in discarding the hearing officer’s recommended findings. Further consideration in this proceeding of the subsection (e) factor — name confusion — is foreclosed by the absence of a Department rule. On this record the only potential ground for denying the petition is subsection (b), which requires that local conditions assure reasonable promise of successful operation for the proposed bank and those already established. On the existing record, the case will be remanded to the Department “for further examination and action within the agency’s responsibility.” Section 120.68(11), Florida Statutes (Supp.1976).

The order of which review is sought is vacated and the proceeding REMANDED.

RAWLS, Acting C. J., and McCORD, J., concur.

      . Florida statutory citations are to Florida Statutes (1975) and to APA amendments in Florida Statutes (Supp.1976).

      . “(a) The character, reputation, financial standing and motives of the organizers, in-corporators and subscribers in organizing the proposed bank or trust company.
      “(b) The need for banking or trust facilities or additional banking or trust facilities, as the case may be, in the community where the proposed bank or the principal office of the proposed trust company is to be located, giving particular consideration to the adequacy of existing banking or trust facilities and the need for further banking or trust facilities in the locality.
      “(c) The present and future ability of the community to support the proposed bank or the principal office of the proposed trust company and all other existing banking or trust facilities in the community.
      “(d) The character, financial responsibility, banking experience, and business qualifications of the proposed officers.
      “(e) The character, financial responsibility, business experience, and standing of the proposed stockholders and directors.” Sec. 659.03(1).

      .Sec. 120.57(l)(b)9: “The agency in its final order may reject or modify the conclusions of law and interpretation of administrative rules in the recommended order, but may not reject or modify the findings of fact unless the agency first determines from a review of the complete record, and states with particularity in the order, that the findings of fact were not based upon competent substantial evidence . . . . ”

      . While we are not entirely informed concerning the circuit court litigation, it apparently foreclosed reliance by the Comptroller on the 1961 APA, which continued to govern disposition of adjudicative proceedings pending before January 1, 1975, absent “the consent of all parties and the agency” to 1974 APA procedures. Section 120.72(2), Fla.Stat. (1975); Lewis v. Judges of District Court of Appeal, 322 So.2d 16 (Fla. 1975). Comptroller Lewis’ letter to petitioners on January 17, 1975, revoking the conditional approval granted by Comptroller Dickinson, stated: “Future activity of the Department of Banking and Finance, and more particularly the Division of Banking will be handled to comply with the new Florida Administrative Procedure Act, Chapter 120, Florida Statutes.”

      . The Department’s rules concerning formal and informal proceedings do not prescribe the time and manner of requests for or waiver of formal § 120.57(1) proceedings. As in many other cases under the relatively new APA, the request here for § 120.57(1) formal proceedings came after the agency’s informal decision-making process ran its course and a “final” decision was deliberated and announced by the Comptroller. As a result, the ensuing § 120.-57(1) proceedings took on the misleading appearance of reviewing rather than formulating agency action. While the APA permits an agency so to plow the same ground twice, once before and again after § 120.57(1) proceedings, neither the APA nor the model rules requires it. We do not decide the point here, but no reason appears why agency rules could not require parties to request or waive formal § 120.57(1) proceedings before the agency has acted informally, when it becomes evident that substantial interests will be affected and there are factual issues. In the normal course of a banking application proceeding those circumstances will appear at or before the Comptroller’s conference.

      . “The rule-making provisions of that [federal] Act, which the Board would avoid, were designed to assure fairness and mature consideration of rules of general application. They may not be avoided by the process of making rules in the course of adjudicatory proceedings. There is no warrant in law for the Board to replace the statutory scheme with a rule-making procedure of its own invention.”

      . 5 U.S.C, § 551(4) (1970): “‘rule’ means the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy . . The federal APA excepts an agency’s “general statements of policy” from rulemaking requirements and requires only their publication in the Federal Register or other public availability. 5 U.S.C. §§ 552(a), 553(b)(A) (1970). The Florida APA contains no separate category so labeled, but simply disregards as legally insignificant, however helpful it may be as public notice, an agency statement of purpose or policy which is neither rule nor order. The Comptroller’s recent public declaration of a moratorium on new grants of banking authority, pending action on certain legislation affecting the Comptroller’s duties, was such a statement. The Florida Times-Union, Mar. 23, 1977, p. B-l, Mar. 24, 1977, p. B-l (Florida edition). See Parker, The Administrative Procedure Act: A Study in Overestimation, 60 Yale L.J. 581, 598 (1951).

      . The APA requires Department of State efforts to reduce the “number and bulk” of rules and to remove “redundancies and unnecessary repetitions.” Section 120.55(l)(a).

        . Reporter’s Comments on Proposed Administrative Procedure Act, p. 6 (3/9/74). See also Lewis v. Judges of District Court of Appeal, 332 So.2d 16, 19 (Fla.1975).

      . Willis, supra, 344 So.2d at 584. In Pacific Gas, supra, the court regarded the FPC’s public statement of a “policy” as “merely announcing] the general policy which the Commission hopes to establish in subsequent proceedings.” 506 F.2d at 41.

      . See Price Wise Buying Group, Bay Area Co-op. v. Nuzum, 343 So.2d 115 (Fla. 1st DCA 1977), holding that an agency cannot, except by Section 120.54 proceedings, discard and effectively repeal a rule regularly adopted.

      . “[T]he exposure of an official’s decisional referents to the critical scrutiny of others may disclose the inadequacy of those referents and create pressures to bring about their change. This type of constraint upon agency action will not tend to be limited — as is judicial review— to overseeing the good faith of agency policy choices. Rather, exposure of the agency’s deci-sional referents to the critical scrutiny of others possesses a potential ... for improving the degree of objective rationality of agency decisions.”

      . Judicial review thus aims not at displacing agency discretion but at requiring, as a condition of its exercise, a reasoned explanation of it. “Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” L. Bran-déis, Other People’s Money 92 (1914).

      . The Department’s Rule 3C-10.02(5) authorizes one amendment to an application for banking authority “at any time prior to 10 days before the meeting of the general public is held” and otherwise only by leave of the department. The need for other material changes, including changes in the board of directors, location and fixed asset proposals, may require a new application. Fla.Admin.Code Rule 3C-10.02(5).

      . “Hearsay evidence may be used for the purpose of supplementing or explaining other evidence, but it shall not be sufficient in itself to support a finding unless it would be admissible over objection in civil actions. This paragraph applies only to proceedings under s. 120.57.”


author: PER CURIAM. MASON, ERNEST E., (Retired) Associate Judge,

text:
    Robert Gene GILLMAN, Appellant, v. STATE of Florida, Appellee.
    No. CC-304.
    District Court of Appeal of Florida, First District.
    May 11, 1977.
    Rehearing Denied June 22, 1977.

      Richard W. Ervin, III, Public Defender, and Theodore E. Mack, Asst. Public Defender, for appellant.
    Robert L. Shevin, Atty. Gen., and Charles W. Musgrove, Asst. Atty. Gen., for appellee.
   PER CURIAM.

The appellant was found guilty of three separate attempts to commit the crime of aggravated assault having in his possession at the time of each offense a firearm, viz: a shotgun, and of the crime of possession of a short-barreled shotgun which was or could readily be made operable. The attempt convictions were under counts charging appellant with an aggravated assault in each instance. The trial court on the attempt convictions sentenced appellant to three years each in the custody of the State Correctional System, such sentences to run concurrently, with jail time credit of forty-one days awarded him. Appellant was adjudged guilty of the unlawful possession of a short-barreled shotgun under count four of the information but was not sentenced under this count.

The sentences imposed upon appellant were imposed under the provisions of Section 775.087(2), Florida Statutes (1975), which provided that “any person who is convicted of any murder, sexual battery, robbery, burglary, arson, aggravated assault, aggravated battery, kidnapping, escape, breaking and entering with intent to commit a felony, or aircraft piracy, or any attempt to commit the aforementioned crimes, and who had in his possession a ‘firearm’, as defined in subsection 790.-001(6), or ‘destructive device’, as defined in subsection 790.001(4), shall be sentenced to a minimum term of imprisonment of three years. . . . ” (emphasis supplied).

Appellant for the first time raises in this court the constitutionality of the above statute. He did not raise this question at the trial level and therefore cannot be heard to raise it on this appeal. Scenic Hills Utility Company, Inc., a Florida Corporation v. City of Pensacola, 156 So.2d 874 (Fla.1st DCA 1963). Furthermore, the assignment of error raising this point was not argued in appellant’s brief and under Florida Appellant Rule 3.7(i) is considered abandoned. Appellant’s suggestion in his brief that this court withhold its decision herein because he alleges that the statute’s constitutionality is now being challenged in cases pending in this court and in the Supreme Court, and that in his judgment the decisions in such pending cases will be controlling, does not constitute such argument as to relieve him of the effect of the last cited rule.

The first point presented by the appellant to be considered by us is his contention that the offense of an attempt to commit aggravated assault is a first degree misdemeanor and that, therefore, he is punishable under the provisions of Section 777.-04(4)(d) Florida Statutes to a term of not more than one year, and that the terms of three years imprisonment imposed upon him for such offenses are invalid. This point is not well taken. In relying upon the provisions of Section 777.04(4)(d) to support his position, appellant overlooks subsection (1) of Section 777.04 which specifically provides that the provisions for the punishment of a criminal attempt set forth in Section 777.04(4) are applicable. “ . when no express provision is made by law for the punishment of such attempt.” Since Section 775.087(2) expressly provides for the punishment of an attempted aggravated assault while in possession of a firearm such latter named section, which deals with specifically named criminal attempts, prevails over the general sentencing statute, Section 777.04, Florida Statutes (30 Fla. Jur., Statutes, Sections 119 and 121). We hold that the two statutes (Section 775.-082(4)(a) and Section 775.087(2)) are not in conflict because the first named section is a general expression of the penalty for first degree misdemeanors while the latter named section specifically deals with and fixes the punishment for the crime of an attempt to commit certain designated offenses. By upholding the trial court’s sentences on these criminal attempts we give force and effect to both statutes, and hold that each has a legislative intended field of operation. We affirm as to the sentences imposed under counts 1-3 of the information.

The second point raised by the appellate involves the validity of his conviction under count four of the information. When arrested appellant had in his possession two shotguns. The State concedes that as to one of the guns it was a regular shotgun, the possession of which was not unlawful, but charged the appellant under count four with the unlawful possession of a short-barreled shotgun as to the other gun. We must decide whether this second gun was a “short-barreled shotgun” within the the prohibition of Section 790.221, Florida Statutes. The evidence at trial established that this particular shotgun had a barrel length of I6V2 inches and an overall length of 26 inches, and was in operating condition.

Section 790.221(1), Florida Statutes provides that:

“(1) It is unlawful for any person to own or have in his care, custody, possession, or control any short-barreled rifle, short-barreled shotgun, or machine gun which is, or may readily be made operable; but this section shall not apply to antique firearms.”

Section 790.001(10), Florida Statutes defines the term “short-barreled shotgun” as follows:

“(10) ‘short-barreled shotgun’ means a shotgun having one or more barrels less than 18 inches in length and any weapon made from a shotgun (whether by alteration, modification, or otherwise) if any such weapon as modified has an overall length of less than 26 inches.”

Chapter 69-306 General Laws 1969, the genesis of Sections 790.221(1) and 790.-001(10) is primarily concerned with the use of concealed weapons. It makes the use of such weapons “by persons engaged in criminal offenses” a felony. It prohibits the carrying of such a concealed weapon “on or about his person,” and defines such weapons as a weapon “carried on or about a person in such a manner as to conceal said weapon from the sight of another person.” It flatly prohibits a shotgun when the barrel or barrels are less than 18 inches regardless of the overall length of the gun. Then to prevent the cutting down of the other end of the gun, namely the stock, and thus enabling its concealment on the person, it prohibits any “modified or altered” shotgun having an overall length of less than 26 inches. We think the learned trial judge clearly understood this when he said, in replying to defense counsel’s argument that any shotgun manufactured as a shotgun with no alterations but with a barrel less than 18 inches long was not prohibited by the statute, “but when you get into modifying them and changing them around, then the statute refers to overall length of it. So, you can have a short-barreled . you can saw off a shotgun to 6 inches as long as you put a long stock on it? Its not an illegal shotgun? No way.”

We hold the evidence supports the judgment of conviction on count four of the information. See State v. Astore, 258 So.2d 33 (Fla.2d DCA 1972).

AFFIRMED.

McCORD, Acting C. J., and DREW, E. HARRIS, (Retired) Associate Judge, concur.

MASON, ERNEST E., (Retired) Associate Judge, concurs in part and dissents in part.

MASON, ERNEST E., (Retired) Associate Judge,

concurring in part, dissenting in part.

I concur in that portion of the opinion of the majority herein affirming the sentences imposed under counts one, two and three of the information, but dissent from that portion which affirms the judgment of conviction of the charge contained in count four.

Under the definition of the term “short-barreled shotgun” set forth in Section 790.-001(10), Florida Statutes, two kinds of weapons are proscribed by Section 790.-221(1), Florida Statutes, one a regularly manufactured shotgun having one or more barrels less than eighteen inches in length, and second, any weapon made from a shotgun by alteration, modification or otherwise, if such weapon as so modified has an overall length of less than twenty-six inches. To fall within that first category the gun must be a regularly manufactured shotgun with at least one barrel having a length of less than eighteen inches. The second category encompasses an altered or modified shotgun having an overall length of less than twenty-six inches regardless of barrel length.

It is evident from the record herein that the gun in question was a shotgun which had been altered or modified. In fact, the defendant in his testimony repeatedly referred to it as a “sawed-off shotgun”. Therefore, it does not come within the first category proscribed by Section 790.001(10), Florida Statutes. To be unlawful it would have to fall within the second category of an altered or modified shotgun. And to fall within such category of an altered or modified shotgun prohibited by the statute, the gun as modified must have an overall length of less than twenty-six inches. All of the evidence establishes that this gun had an overall length of from twenty-six and one-half to twenty-seven inches. Therefore, its possession is not made unlawful by the provisions of Section 790.221(1), Florida Statutes. It is for the legislature to define the elements of a criminal offense and in this instance the legislature having declared that to be prohibited by the statute the gun must have an overall length of less than twenty-six inches, it is not within the power of this Court to speculate that the legislature intended otherwise. Furthermore, the language of the statute is so clear as to the intent of the law-making body that no judicial mental gymnastics are required to determine that intent.


author: NATHAN, Judge.

text:
    Celita Lamar MORRIS, Carlos P. Lamar, III, Claude P. Lamar and Carmen P. Lamar, Appellants, v. CONNECTICUT GENERAL LIFE INSURANCE COMPANY, Appellee.
    No. 76-934.
    District Court of Appeal of Florida, Third District.
    May 17, 1977.
    Rehearing Denied June 15, 1977.

      Shaw & Segall, Miami, for appellants.
    Steel, Hector & Davis and Joseph P. Klock, Jr., Miami, for appellee.
    Before NATHAN and HUBBART, JJ., and CHARLES CARROLL (Ret.), Associate Judge.
   NATHAN, Judge.

This is an appeal by the plaintiffs, Celita Lamar Morris, Carlos P. Lamar, III, Claude P. Lamar and Carmen P. Lamar, from an adverse summary final judgment based on an order denying their (plaintiffs’) motion for costs and attorneys fees, stemming from an action to recover the proceeds of an insurance policy on the life of Dr. Carlos P. Lamar.

The record reflects that Dr. Lamar was insured under a group life insurance policy issued by the defendant, Connecticut General Life Insurance Company, to the Southern Medical Association. In November of 1970, Dr. Lamar executed beneficiary designations naming the plaintiffs contingent beneficiaries, and at the same time, executed an absolute assignment of the policy to his wife, Celia P. Lamar, who died in 1972. Dr. Lamar died in 1975. After his death, there arose a dispute between the plaintiffs and Connecticut General with respect to the proper beneficiaries under the policy. The plaintiffs maintained that the beneficiary designations took effect before the absolute assignment, thus entitling them to the proceeds of the policy, while Connecticut General originally took the position that the change of beneficiary was ineffective since the assignment took effect first, making the wife’s estate the proper beneficiary.

In September of 1975, Connecticut General offered by letter to pay the policy proceeds to the plaintiffs as contingent beneficiaries, upon the execution by them of a release which by its terms provided that in consideration for payment, the plaintiffs will “release and hold the Company harmless for issuing payment.” Again in October, the plaintiffs were advised by letter that based upon Dr. Lamar’s incongruous action in designating beneficiaries and assigning the policy, Connecticut General would pay the proceeds to them upon their execution of the release.

The plaintiffs took the position that the release contained “unwarranted and unsatisfactory recitations and conditions,” and refused to sign it. Suit was filed two months later, after which Connecticut General agreed to pay the policy proceeds to the plaintiffs without requiring the execution of the release.

The parties stipulated in writing that the trial court would determine the propriety of an award of attorneys fees and the amount of the award, if any. The parties also stipulated to the material facts involved in the dispute. The plaintiffs filed a motion for costs and attorneys fees. The trial judge examined the applicable law and concluded that Section 627.428, Florida Statutes (1975), has been consistently interpreted as allowing recovery of attorneys fees against an insurer only when the insurer has wrongfully withheld payment of the policy proceeds. In its order denying the motion for costs and attorneys fees, the court stated that the central and only question was whether the plaintiffs “were compelled to file suit to recover under the policy.” The court found that, not only did defendant not wrongfully withhold the proceeds, but to the contrary, stood ready, willing and able to pay the plaintiffs as early as three months prior to the filing of this action. The court further found that the request by Connecticut General that the plaintiffs sign the release was a reasonable one; also that the language of the release did not constitute an illegal condition upon the payment of the proceeds, and that the plaintiffs’ position that it contained “unwarranted and unsatisfactory recitations and conditions,” was not well taken. The court concluded that 'the filing of the action was unnecessary as there was no refusal to pay the proceeds, and stated, “In short, a plaintiff who through his own fault causes an action to be filed without need will not be permitted to finance his litigation at the expense of an insurance company.”

After entry of the order denying the plaintiffs’ motion for costs and attorneys fees, the trial judge entered summary final judgment in favor of the defendant, Connecticut General, and the plaintiffs took this appeal.

Initially, it should be noted that Section 627.428, supra, provides for attorneys fees for the beneficiary’s attorney only upon the rendition of a judgment or decree against the insurer and in favor of the beneficiary. The record in this case demonstrates that there was no such judgment entered against Connecticut General and in favor of the plaintiffs for the amount of the proceeds. Connecticut General did not raise this defense on appeal. Therefore, by the record and the argument of counsel in this court, this defense was waived.

The plaintiffs rely on Kurz v. New York Life Insurance Company, 181 So.2d 537 (Fla. 1st DCA 1966), which holds that generally, wrongful refusal by an insurance company to pay a beneficiary the proceeds of an insurance policy subjects the company to the payment of the beneficiary’s attorneys fees where such fees were necessarily incurred in collecting the proceeds. Kurz is distinguishable on its facts, however, in that the insurer, New York Life Insurance Company knew and did not question that the plaintiff was the only proper beneficiary under the policy, but refused to pay the proceeds to her except on the condition that she execute a release of her claim to another New York Life Insurance policy which was separate and distinct from the policy under consideration. In the instant case, there was a legitimate question as to whether the plaintiffs were, in fact, the beneficiaries. Under these circumstances, the release was requested for the purpose of holding Connecticut General harmless in the event of a subsequent claim against or on behalf of the estate of Dr. Lamar’s wife, the assignee of the policy.

Therefore, we agree with the trial court’s findings in the order denying the motion for costs and attorneys fees, on which the summary final judgment is based, and we affirm. Compare Manufacturers Life Insurance Company v. Cave, 295 So.2d 103 (Fla.1974).

Affirmed.