STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
In re: The revocation or ) suspension of the license )
or registration of ) CASE NO. 75-1586 RICHARD V. ZALOUDEK, ) License No. 1717
Mortgage Broker, )
)
RECOMMENDED ORDER
Pursuant to notice, the Division of Administrative Hearings, by its duly designated hearing officer, K. N. Ayers, held a public hearing in the above styled cause on February 13, 1975 at Ft. Myers, Florida.
APPEARANCES
For Petitioner: Richard M. Goldstein, Esquire
For the Division of Finance Office of the Attorney General The Capitol
Tallahassee, Florida
For Respondent, William H. Shields, Esquire Richard V. PAVESE, SHIELDS, GARNER,
Zaloudek: HAVERFIELD & KLUTTZ Post Office Drawer 1507 Ft. Myers, Florida 33903
By Administrative Charge and Complaint filed August 20, 1975, the Division of Finance, Department of Banking and Finance, seeks to revoke or suspend the mortgage broker's license of Richard V. Zaloudek, Respondent herein, on grounds that he received money from one Connor for obtaining a corporate promissory note secured by a mortgage and that he failed to deliver such promissory note, in violation of Sec. 494.05(1)(c) and (e) Florida Statutes, 1973; that he communicated to a prospective purchaser of a promissory note secured by a mortgage that if the promisee failed to make interest payments, Respondent would purchase the mortgage and thus secure purchaser against the loss, in violation of Sec.
494.05(1)(g), 494.08(1), Florida Statutes; that Respondent charged fees in excess of maximum allowed by statutes in violation of Sec. 494.05(1)(g), 494.08(4), Florida Statutes, and Rule 3-3.08(3) and
(4) FAC; and that Respondent failed to keep monies received from investors in an escrow account as set forth in Sec. 494.05(1)(f), Florida Statutes .until disbursement was properly authorized. Respondent filed a general denial to the Administrative Charge and three specific defenses which were argued at the hearing.
At the beginning of the hearing Respondent moved to dismiss the charges on several grounds. One, that the Securities Act of 1933 and Securities and Exchange Act of 1934 have preempted the Department from the regulation of sale, etc. of mortgage loans, was not seriously argued, and no legal authority for this defense was presented. The Motion to Dismiss on this ground was denied. The motion based upon a second defense, that Florida Statutes Sec.
is unenforceable because it attempts to fix prices in violation of the Federal Anti Trust Act, was also denied. A third ground for the Motion to Dismiss was that the Comptroller had "revoked" Respondent's license in a press release without benefit of a hearing as provided by Chapter 120 Florida Statutes, and that the Comptroller should be punished for these wrongful acts by dismissal of these proceedings. The parties stipulated that the Petitioner had refused to renew Respondent's license upon expiration although Respondent had tendered his fee (which was accepted) and had satisfied the statutory bonding requirement. Respondent argues that this failure to renew was tantamount to a revocation and that Respondent had been wrongfully denied his right to operate as a mortgage broker. The Motion to Dismiss upon these grounds was also denied. The Division of Finance dismissed charges contained in paragraphs 4, 5 and 6 of the Administrative Charges and Complaint, thereby leaving only the charges of accepting commissions in excess of those authorized by Sec. 494.05(1)(g), Sec. 494.08(4), Florida Statutes and Rule 3-3.08(3) and (4) F.A.C. and failing to keep monies received in an escrow account until disbursement was properly authorized.
FINDINGS OF FACT
Petitioner presented one witness that had audited the books and records of Respondent. This audit revealed that Respondent had handled some 350 transactions involving mortgages and that on approximately 50 of those transactions the Respondent had withheld a commission more than authorized by statute or department rule. The witness testified to only a few of those transactions shown on his work sheet attached to a deposition admitted into evidence. Thereafter Respondent stipulated that if asked about all of the other transactions shown on the work sheet, this witness, and the auditor who performed the balance of the audit, would testify the same for those other transactions, viz.
that the worksheet figures were extracted from the records of Respondent and the authorized commissions shown thereon were computed using either the statutory method or the rule method and that both methods would give the same results.
These figures show that the Respondent overcharged the borrower on approximately 50 transactions as alleged. On approximately 2/3 of the transactions the funds were remitted to a master broker, and on the other 1/3 the funds were remitted to the borrower. Further, that the notes and mortgages were received by Respondent for delivery to his client some 4 to 6 weeks after he had disbursed the money from his trust account.
Upon expiration of Petitioner's case Respondent renewed his motions for dismissal and further moved for dismissal on the grounds that the funds for a majority of the transactions involved were remitted to another broker, and for those remitted directly to the borrower (developer) the charges were not excessive but those actually proposed by the borrower-developer. This motion was denied and Respondent then testified in his own behalf.
Richard Zaloudek percent has been a licensed mortgage broker since 1960 and is also a licensed real estate broker. He has been in the mortgage brokerage business since 1948. Prior to obtaining his mortgage broker's license he dealt in FHA mortgages which were exempt. He renewed his license automatically each year until September, 1975 when he received no response from the Comptroller's Office to his application for renewal. Since a valid license is required to operate as a mortgage broker, Respondent has been unable to so act since the expiration of his license in September, 1975.
When Respondent was approached by the master broker representing Mortgage Development Corporation to sell mortgages for it, he questioned the legality of such transactions. He was presented with a copy of the opinion of the office of the Comptroller, Division of Securities, dated January 10, 1973. This indicated that the notes secured by mortgages that he was being solicited to sell complied with the statutes and rules affecting securities. Thereafter he advertised in the news media that he had these high interest paying notes secured by mortgage for sale.
When a client came into his office to invest he would take their investment, deposit same in his trust account, and then forward to the master broker or borrower the deposit less the commission the borrower and master broker had authorized him to
deduct. Thereafter the note and mortgage was mailed to Respondent who presented it to the investor.
As a result of many people losing money in investments in promissory notes secured by mortgages on land, newspaper coverage of various facets of the land development industry became widespread. In several cases the various mortgage brokers, such as Respondent herein, were named in these articles in the newspapers; and press reports were issued by the Comptroller's Office that certain licenses, including that of Respondent, had been revoked.
Because of the adverse publicity, not only did Respondent's mortgage brokerage business drop off and stop completely when his license was not renewed in September, 1975, but also his business as a real estate broker suffered. Respondent's testimony that he lost real estate listings totaling some two million dollars was not rebutted. Nor was his testimony that this represented a loss of some $70,000 in income.
CONCLUSIONS OF LAW
Although the Mortgage Brokerage Act (Chapter 464 Florida Statutes) is obviously intended to protect the borrower in mortgage transactions, Section 494.08(4) provides maximum fees that may be charged without regard to the desires of the borrower. Accordingly, when Respondent charged in excess of these fees he violated this provision of the statute.
Section 494.05(1) Florida Statutes provides in pertinent part as grounds for suspension of a license for two years:
"(f) Failure to replace immediately upon receipt, any money, fund, deposit, check or draft entrusted to him by any person dealing with him as a broker, in escrow, with an escrow agent located and doing business in Florida, pursuant to a written agreement, or to deposit said funds in a trust or escrow bank account maintained by him with some bank located and doing business in Florida, wherein said funds shall be kept until disbursement is properly authorized."
Whether or not Respondent violated this provision of the statute above quoted when he remitted funds to the master broker is not
necessary to be decided herein. When these funds were transmitted to the borrower, less the broker's commission, before the note and mortgage had even been prepared, these invested funds were wrongfully disbursed in violation of the above quoted statutory provision.
It is to be noted that although Respondent was presented with a letter from the Securities Division that the Washington Development Corporation's mortgage sales was in compliance with the Securities Law, he apparently made no attempt to verify if the mortgages complied with the provisions of the mortgage brokerage act under which he was licensed.
As an affirmative defense to these charges licensee contends that the state, by virtue of the letter from the Securities Division (Exhibit 2) is estopped from bringing these charges against licensee's mortgage broker's license. Since one state agency advised that the mortgages did not violate the securities transaction laws, licensee contends that another state agency cannot charge a violation of different laws. The argument is ingenious but inapplicable here. This would be tantamount to precluding a prosecution for obtaining money by false pretenses on the grounds that the Securities Division had found the transaction not to violate the security laws. In any event one state agency's rulings with respect to the effects of a particular statutory provision certainly does not estop another state agency from charging the same acts constitute a violation of a different statutory provision.
From the foregoing it is concluded that Respondent is guilty of the two offenses not withdrawn by the Division of Finance.
The violations of which Respondent has been found guilty are technical violations. Mr. Zaloudek has been engaged in the mortgage brokerage business for many years and is presumed to know the laws and regulations affecting a mortgage broker. On the other hand, he has been without his license since October 1, 1975 and has lost a considerable amount of revenue from his real estate business as a result of the publicity attending his mortgage brokerage business. It is therefore,
RECOMMENDED that the license of Richard V. Zaloudek be suspended for a period of six months commencing October 1, 1975, the date when his license was not renewed.
DONE and ENTERED this 18th day of March, 1976 in Tallahassee, Florida.
K. N. AYERS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304
(904) 488-9675
COPIES FURNISHED:
Richard M. Goldstein, Esquire Office of the Attorney General The Capitol
Tallahassee, Florida
William H. Shields, Esquire PAVESE, SHIELDS, GARNER,
HAVERFIELD & KLUTTZ
Post Office Drawer 1507 Ft. Myers, Florida 33903
================================================================= AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
In re: The revocation or
suspension of the license
or registration of CASE NO. 75-1586
Richard V. Zaloudek, License No. 1717 Mortgage Broker,
/
FINAL ORDER
Pursuant to notice, the Division of Administrative Hearings, by its duly designated hearing officer, K. N. Ayers, held a public hearing in the above styled cause on February 13, 1975 at Ft. Myers, Florida.
APPEARANCES
For the Division of Finance:
Richard M. Goldstein, Esquire Office of the Attorney General The Capitol
Tallahassee, Florida
For Respondent, Richard V. Zaloudek:
William H. Shields, Esquire PAVESE, SHIELDS, GARNER, HAVERFIELD & KLUTTZ
Post Office Drawer 1507 Ft. Myers, Florida 33903,
By Administrative Charge and Complaint filed August 20, 1975, the Division of Finance, Department of Banking and Finance, seeks to revoke or suspend the mortgage broker's license of Richard V. Zaloudek, Respondent herein, on grounds that he received money from one Connor for obtaining a corporate promissory note secured by a mortgage and that he failed to deliver such promissory note,
in violation of Sec. 494.05(1)(c) and (e) Florida Statutes, 1973; that he communicated to a prospective purchaser of a promissory note secured by a mortgage that if the promisee failed to make interest payments, Respondent would purchase the mortgage and thus secure purchaser against the loss, in violation of Sec.
494.05(1)(g), 494.08(1), Florida Statutes; that Respondent charged fees in excess of maximum allowed by statutes in violation of Sec. 494.05(1)(g), 494.08(4), Florida Statutes, and Rule 3-3.08(3) and
(4) FAC; and that Respondent failed to keep monies received from investors in an escrow account as set forth in Sec. 494.05(1)(f), Florida Statutes .until disbursement was properly authorized. Respondent filed a general denial to the Administrative Charge and three specific defenses which were argued at the hearing.
At the beginning of the hearing Respondent moved to dismiss the charges on several grounds. One, that the Securities Act of 1933 and Securities and Exchange Act of 1934 have preempted the Department from the regulation of sale, etc. of mortgage loans, was not seriously argued, and no legal authority for this defense was presented. The Motion to Dismiss on this ground was denied. The motion based upon a second defense, that Florida Statutes Sec.
is unenforceable because it attempts to fix prices in violation of the Federal Anti Trust Act, was also denied. A third ground for the Motion to Dismiss was that the Comptroller had "revoked" Respondent's license in a press release without benefit of a hearing as provided by Chapter 120 Florida Statutes, and that the Comptroller should be punished for these wrongful acts by dismissal of these proceedings. The parties stipulated that the Petitioner had refused to renew Respondent's license upon expiration although Respondent had tendered his fee (which was accepted) and had satisfied the statutory bonding requirement. Respondent argues that this failure to renew was tantamount to a revocation and that Respondent had been wrongfully denied his right to operate as a mortgage broker. The Motion to Dismiss upon these grounds was also denied. The Division of Finance dismissed charges contained in paragraphs 4, 5 and 6 of the Administrative Charges and Complaint, thereby leaving only the charges of accepting commissions in excess of those authorized by Sec. 494.05(1)(g), Sec. 494.08(4), Florida Statutes and Rule 3-3.08(3) and (4) F.A.C. and failing to keep monies received in an escrow account until disbursement was properly authorized.
FINDINGS OF FACT
Petitioner presented one witness that had audited the books and records of Respondent. This audit revealed that Respondent had handled some 350 transactions involving mortgages
and that on approximately 50 of those transactions the Respondent had withheld a commission more than authorized by statute or department rule. The witness testified to only a few of those transactions shown on his work sheet attached to a deposition admitted into evidence. Thereafter Respondent stipulated that if asked about all of the other transactions shown on the work sheet, this witness, and the auditor who performed the balance of the audit, would testify the same for those other transactions, viz. that the worksheet figures were extracted from the records of Respondent and the authorized commissions shown thereon were computed using either the statutory method or the rule method and that both methods would give the same results.
These figures show that the Respondent overcharged the borrower on approximately 50 transactions as alleged. On approximately 2/3 of the transactions the funds were remitted to a master broker, and on the other 1/3 the funds were remitted to the borrower. Further, that the notes and mortgages were received by Respondent for delivery to his client some 4 to 6 weeks after he had disbursed the money from his trust account.
Upon expiration of Petitioner's case Respondent renewed his motions for dismissal and further moved for dismissal on the grounds that the funds for a majority of the transactions involved were remitted to another broker, and for those remitted directly to the borrower (developer) the charges were not excessive but those actually proposed by the borrower-developer. This motion was denied and Respondent then testified in his own behalf.
Richard Zaloudek percent has been a licensed mortgage broker since 1960 and is also a licensed real estate broker. He has been in the mortgage brokerage business since 1948. Prior to obtaining his mortgage broker's license he dealt in FHA mortgages which were exempt. He renewed his license automatically each year until September, 1975 when he received no response from the Comptroller's Office to his application for renewal. Since a valid license is required to operate as a mortgage broker, Respondent has been unable to so act since the expiration of his license in September, 1975.
When Respondent was approached by the master broker representing Mortgage Development Corporation to sell mortgages for it, he questioned the legality of such transactions. He was presented with a copy of the opinion of the office of the Comptroller, Division of Securities, dated January 10, 1973. This indicated that the notes secured by mortgages that he was being solicited to sell complied with the statutes and rules affecting
securities. Thereafter he advertised in the news media that he had these high interest paying notes secured by mortgage for sale.
When a client came into his office to invest he would take their investment, deposit same in his trust account, and then forward to the master broker or borrower the deposit less the commission the borrower and master broker had authorized him to deduct. Thereafter the note and mortgage was mailed to Respondent who presented it to the investor.
CONCLUSIONS OF LAW
Although the Mortgage Brokerage Act (Chapter 464 Florida Statutes) is obviously intended to protect the borrower in mortgage transactions, Section 494.08(4) provides maximum fees that may be charged without regard to the desires of the borrower. Accordingly, when Respondent charged in excess of these fees he violated this provision of the statute.
Section 494.05(1) Florida Statutes provides in pertinent part as grounds for suspension of a license for two years:
"(f) Failure to replace immediately upon receipt, any money, fund, deposit, check or draft entrusted to him by any person dealing with him as a broker, in escrow, with an escrow agent located and doing business in Florida, pursuant to a written agreement, or to deposit said funds in a trust or escrow bank account maintained by him with some bank located and doing business in Florida, wherein said funds shall be kept until disbursement is properly authorized."
Whether or not Respondent violated this provision of the statute above quoted when he remitted funds to the master broker is not necessary to be decided herein. When these funds were transmitted to the borrower, less the broker's commission, before the note and mortgage had even been prepared, these invested funds were wrongfully disbursed in violation of the above quoted statutory provision.
It is to be noted that although Respondent was presented with a letter from the Securities Division that the Washington Development Corporation's mortgage sales was in compliance with the Securities Law, he apparently made no attempt to verify if the
mortgages complied with the provisions of the mortgage brokerage act under which he was licensed.
As an affirmative defense to these charges licensee contends that the state, by virtue of the letter from the Securities Division (Exhibit 2) is estopped from bringing these charges against licensee's mortgage broker's license. Since one state agency advised that the mortgages did not violate the securities transaction laws, licensee contends that another state agency cannot charge a violation of different laws. The argument is ingenious but inapplicable here. This would be tantamount to precluding a prosecution for obtaining money by false pretenses on the grounds that the Securities Division had found the transaction not to violate the security laws. In any event one state agency's rulings with respect to the effects of a particular statutory provision certainly does not estop another state agency from charging the same acts constitute a violation of a different statutory provision.
From the foregoing it is concluded that Respondent is guilty of the two offenses not withdrawn by the Division of Finance.
The agency hereby rejects the findings of facts contained in the recommended order which are omitted herefrom on the grounds that they are not based on competent, substantial evidence.
The Comptoller, Gerald A. Lewis, has rejected the aforesaid findings of fact and increased the recommended penalty herein after a review of the complete record and based upon the facts therein.
It is therefore ordered that the license of Richard V. Zaloudek be and is hereby suspended for a period of two years commencing September 1, 1975.
I HEREBY CERTIFY that a true and correct copy hereof has been furnished to Earl H. Archer, Assistant General Counsel, Office of Comptroller of Florida, Legal Annex, Tallahassee, Florida 32304 and to Gordon Harrison, Post Drawer 1507, Fort Myers, Florida by mail this 1st day of June, 1976.
Done and ordered this 27th day of May in Tallahassee, Florida.
GERALD A. LEWIS
Comptroller of Florida The Capitol
Tallahassee, Florida 32304
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy hereof has been furnished to Richard V. Zaloudek, 3422 Cleveland Avenue, Post Office Box 2224, Fort Myers, Florida 33902 and William H. Shields, Post Office Drawer 1507, Fort Myers, Florida 33902 by Certified Mail, return receipt requested, this 1st day of June, 1976, in Tallahassee, Florida.
JAMES M. BARCLAY
Assistant General Counsel Office of the Comptroller Legal Annex
Tallahassee, Florida 32304
(904) 488-9896
| Issue Date | Proceedings |
|---|---|
| Feb. 07, 1977 | Final Order filed. |
| Mar. 18, 1976 | Recommended Order sent out. CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| May 27, 1976 | Agency Final Order | |
| Mar. 18, 1976 | Recommended Order | Respondent was only guilty of technical violations of the statute and should not be punished except by suspension of six months from refusal to renew date. |
