STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

)

DEPARTMENT OF BANKING AND ) FINANCE, DIVISION OF FINANCE, )

)

Petitioner, )

)

vs. ) CASE NO. 88-4380

)

MICHAEL J. JAMES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, final hearing in the above-styled case was held on March 6, 1989, in Orlando, Florida, before Robert E Meale, Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

The parties were represented as follows:

Petitioner: Elise M. Greenbaum.

Assistant General Counsel Office of the Comptroller

400 West Robinson Street, Suite 501 Orlando, FL 32801-1799

Respondent: Michael J. James, pro se

258 East Altamonte Drive Altamonte Springs, FL 32701

STATEMENT OF THE ISSUES

The issues in the case are whether Respondent's real estate broker's license had been revoked when he applied for a mortgage broker's license and whether Respondent falsely answered certain questions on his application for a mortgage broker's license.

PRELIMINARY STATEMENT

By Notice of Intention to Impose Administrative Penalties and Administrative Charges and Complaint served May 8, 1988, Petitioner alleged that Respondent's real estate broker's license had been revoked when he applied for a mortgage broker's license and that Respondent, on the two applications that he submitted in March and July, 1986, had falsely answered numerous questions.

Petitioner charged that Respondent had thereby violated Sections 494.05(1) (g) and (k) , 494.05(2), and 494.093(2), Florida Statutes (1985), for which Respondent may be disciplined under Section 494.05(1) and (2), Florida Statutes (1985)

By Request for Hearing and Formal Proceeding dated July 25, 1988, Respondent requested a formal hearing on the charges.

By Motion to Amend Notice of Intention to Impose Administrative Penalties and Administrative Charges and Complaint filed October 31, 1988, Petitioner requested leave to amend the notice to allege that Respondent had violated Section 494.055(1)(i), Florida Statutes. The motion was granted by Order entered December 1, 1988.

At the hearing, Petitioner called one witness and offered into evidence seven exhibits. Respondent called three witnesses and offered into evidence five exhibits. All exhibits were admitted into evidence except Respondent's Exhibit 1.

The transcript was filed on May 22, 1989. Each party filed a proposed recommended order. Treatment accorded the proposed findings of fact is detailed in the appendix.

FINDINGS OF FACT

1. Respondent is currently licensed as a mortgage broker in the State of Florida. He holds license number HA 056265422-5P. He had been licensed continuously since August 5, 1986.

   
   

2. Respondent previously has been licensed as a real estate salesman in the State of Florida. By Administrative Complaint filed March 1, 1985, the Department of Professional Regulation, Division of Real Estate, alleged, among other things, that Respondent was guilty of fraud, misrepresentation, concealment, and breach of trust, among other things, in connection with an improper disbursement from an escrow account. Following a hearing on January 17, 1986, a Recommended Order entered April 18, 1986, found that Respondent was, as to the above-described allegations, guilty "at least of culpable negligence and breach of trust" and recommended that Respondent's license be suspended for one year.

   
   

3. After a hearing on June 17, 1986, the Division of Real Estate entered a Final Order June 30, 1986, effective 30 days thereafter, adopting the findings of fact and conclusions of law of the Recommended Order, but revoking rather than suspending Respondent's license.

   
   

4. By Application for Registration as a Mortgage Broker signed by Respondent on March 22, 1986, Respondent applied for a mortgage broker's license (March Application). The application was filed on March 25, 1986.

   
   

5. Question 19 of the March Application asks:

   
   

   Has any judgement or decree of a court or other judicial, administrative or quasi-judicial tribunal been entered against you, or is any such case pending in this or any other state, province, district, territory, possession or nation, in which you were charged in the petition, complaint, declaration, answer, counterclaim

   or other pleading with any fraudulent or dishonest dealing?

   (If your answer is in the affirmative, attach complete signed notarized statement of the charges and facts, together with the name and location of the court in which the proceedings were had or are pending.)

   
   

6. Respondent answered this question, "no."

   
   

7. By Application for Registration as a Mortgage Broker signed by Respondent on July 1, 1986, Respondent applied for a mortgage solicitor's license (July Application). The application was filed on July 9, 1986, and approved by Petitioner on July 31, 1986.

   
   

8. Question 16 on the July Application asks whether the applicant is currently licensed in any state as a real estate broker or salesman. Respondent answered this question, "no."

   
   

9. Question 17 on the July Application asks: "Has your license of any kind ever been denied, suspended or revoked?" The question then asks for a complete signed statement of the charges and facts in full detail.

   
   

10. Respondent answered Question 17, "no."

    
    

11. On July 28, 1986, Respondent sent a notarized letter to Petitioner concerning the July Application. In the letter, he elaborated upon the circumstances surrounding the answer to an unrelated question, but did not elaborate upon the above-described answers

    
    

12. Respondent did not answer accurately Question 19 on the March Application. Over a year earlier, Respondent had been charged with fraudulent dealing. Respondent had no basis for omitting this item from the application because, even though he had not received the recommended order, the case obviously was still pending at the time of submitting the March Application. Respondent's incorrect answer was an intentional attempt to conceal from Petitioner the license-revocation proceeding.

    
    

13. Although Respondent's answer to Question 16 on the July Application may have been accurate because he had relinquished his license, his answer to Question 17 was inaccurate. Respondent testified that he understood that the Final Order, which had just been issued, had not yet taken effect, so that his license had not yet been revoked. However, without further elaboration, the answer to Question 17 was incomplete and misleading, regardless of Respondent's understanding of the technical status of his license. Respondent knew that his answer was incomplete and would mislead Petitioner.

    
    

    CONCLUSIONS OF LAW

    
    

14. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter. Section 120.57(1), Florida Statutes.

    
    

15. Numerous changes were made to Chapter 494, Florida Statutes, by Chapter 86-68, Florida Laws. However, these changes did not take effect until September 1, 1986. Id. at Section 30. The law in effect at the time of the

    above-described applications is codified in the 1985 edition of Florida Statutes.

    
    

16. Petitioner may suspend the license of any mortgage brokers who has been found guilty of "[f]ailure to comply with any of the provisions of [Chapter 494] . . ." or:

    
    

    Having currently been under suspension or revocation a license as a real estate broker or salesman which suspension or

    revocation is based on fraud, misrepresentation or deceit.

    
    

    Section 494.05(1)(g) and (k), Florida Statutes (1985).

    
    

17. Petitioner may revoke the license of any mortgage broker whose "application for the license is found to contain a material misstatement "

    Section 494.05(2), Florida Statutes (1985).

    
    

18. It is a violation of the provisions of Chapter 494, Florida Statutes, for any person in any matter within the jurisdiction of Petitioner to

    
    

    knowingly and willfully falsify, conceal, or cover up, by any trick, scheme, or device, a material fact or make any false or fraudulent statement or representation, or make or use any false writing or document, knowing the same to contain any false or fraudulent statement or entry.

    
    

    Section 494.093(2), Florida Statutes (1985).

    
    

19. Petitioner must prove the material allegations by clear and convincing evidence. Ferris V. Turlington, 510 So.2d 292 (Fla. 1987)

    
    

20. The incorrect answers on the applications, especially as to Question

19 on the March Application, constituted material misstatements. Respondent intended for these misrepresentations and omissions to conceal from Petitioner the proceedings that ultimately resulted in the revocation of Respondent's real estate salesman's license. Under the circumstances, the material misstatements were also fraudulent.

RECOMMENDATION

Based on the foregoing, it is hereby

RECOMMENDED that the Department of Banking and Finance, Division of Finance, enter a Final Order revoking the mortgage broker's license of Respondent.

DONE and ENTERED this 26th day of June, 1989, in Tallahassee, Florida.

ROBERT E. MEALE

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 26th day of June, 1989.

APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 88-4380

Treatment Accorded Petitioner's Proposed Findings 1-7 Adopted or adopted in substance.

8 Rejected as irrelevant.

9-29 Adopted or adopted in substance.

30-32 Rejected as subordinate and recitation of testimony. 33-34 Rejected as legal argument.

35-36 Adopted.

37-38 and 40 Rejected as legal argument.

39 and 41-42 Adopted or adopted in substance.

1. Rejected as legal argument.

2. Rejected as irrelevant.

45-50 Rejected as recitation of testimony.

Treatment Accorded Respondent's Proposed Findings 1-7 Adopted or adopted in substance.

8 Rejected as irrelevant. 9-13 Adopted.

14 Rejected as against the greater weight of the evidence. 15-21 Adopted or adopted in substance.

22-23 Rejected as against the greater weight of the evidence. 24-29 Adopted or adopted in substance.

30-31 Rejected as recitation of testimony.

1. Adopted in substance.

2. Rejected as against the greater weight of the evidence. 34-38 Rejected as irrelevant.

39 Rejected as against the greater weight of the evidence.

COPIES FURNISHED:

Michael J. James

258 East Altamonte Drive Altamonte Springs, FL 32701

Elise M. Greenbaum Assistant General Counsel Office of the Comptroller

400 West Robinson Street, Suite 501 Orlando, FL 32801

Hon. Gerald Lewis Comptroller

The Capitol

Tallahassee, FL 32399-0350

Charles L. Stutts General Counsel

The Capitol, Plaza Level Tallahassee, FL 32399-0350

Docket for Case No: 88-004380

Orders for Case No: 88-004380