STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF BANKING AND ) FINANCE, DIVISION OF ) SECURITIES AND INVESTOR ) PROTECTION, )
)
Petitioner, )
)
vs. ) CASE NO. 92-1992
)
DOUGLAS A. LEMLEY, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, the above matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Donald R. Alexander, on May 19, 1992, in Tallahassee, Florida.
APPEARANCES
For Petitioner: Susan E. Steinberg, Esquire
1313 Tampa Street, Suite 615
Tampa, Florida 33602-3394
For Respondent: Douglas A. Lemley, pro se
1121 Mitchell Avenue
Tallahassee, Florida 32303 STATEMENT OF THE ISSUES
The issues are whether respondent should cease and desist certain activities and whether a fine should be imposed on him for the reasons stated in the administrative complaint.
PRELIMINARY STATEMENT
By an administrative complaint filed on August 26, 1991, petitioner, Department of Banking and Finance, Division of Securities and Investor Protection (Division), charged that respondent, Douglas A. Lemley, registered with the Division to sell securities, had violated certain agency rules and statutes. 1/ More specifically, the complaint alleged that while registered as an associated person of the Jacksonville branch office of National Securities Corporation, respondent sold unregistered securities on six occasions to four individuals during the period from October 14, 1986, until October 3, 1987, in violation of state law. Thereafter, respondent requested a formal hearing to contest the agency's action. The matter was referred by petitioner to the Division of Administrative Hearings on March 27, 1992, with a request that a
hearing officer be assigned to conduct a hearing. By notice of hearing dated April 14, 1992, a final hearing was scheduled on May 19, 1992, in Tallahassee, Florida.
At final hearing, petitioner presented the testimony of Joanne M. Kraynek, a Division financial examiner analyst II, Denise Hair, a Division secretary, and Wayne C. Sarells and Patsy Burnell, both former customers of respondent. Also, it offered petitioner's exhibits 1-3. All exhibits were received into evidence. Respondent testified on his own behalf and presented the testimony of Harry Radciffe, a former customer, and Michael White, a Division employee. He also offered respondent's exhibits 1-4. All exhibits were received into evidence, except exhibits 3 and 4, upon which a ruling was reserved. Finally, the undersigned took official notice of Chapter 517, Florida Statutes, and Chapter 3E-600, Florida Administrative Code.
A transcript of hearing was filed on June 3, 1992. Proposed findings of fact and conclusions of law were filed by petitioner on June 17, 1992. A ruling on each proposed finding of fact has been made in the Appendix attached to this Recommended Order.
FINDINGS OF FACT
Based upon all of the evidence, the following findings of fact are determined:
At all times relevant hereto, respondent, Douglas A. Lemley, was registered as an associated person of National Securities Corporation (NSC) with petitioner, Department of Banking and Finance, Division of Securities and Investor Protection (Division). During the period from October 14, 1986, until October 3, 1987, Lemley conducted securities business for NSC and was branch manager of its Jacksonville, Florida office. He was also registered as a principal of NSC with the National Association of Securities Dealers. Lemley is currently not registered with the Division.
During the period between July 2, 1987, and September 11, 1987, Lemley admits that he sold and offered for sale to four individuals in the State of Florida at least 7,400 shares of a security known as Island Mining and Exploration, Limited (Island Mining). That security is not registered with the Division.
An unregistered security cannot be sold to a Florida resident unless it is an exempt security or an exempted transaction. In this case, respondent has contended that the transactions are exempt by virtue of two statutory exemptions. The first provides that the sale of an unregistered security is exempt from Division regulation whenever the sale is unsolicited, the sale occurs on an agency basis, and the dealer (as opposed to the salesperson) has claimed an exemption. The second provides that the transaction is exempt if certain financial information concerning the security is published in a "recognized manual of securities for a period of not less than 90 days prior to the transaction." Under the first exemption, the customer must solicit the broker to make a purchase, the sale must be done by the agency itself, and the firm must evidence the fact that the transaction is exempt. This latter evidence consists of a disclosure of the nature of the transaction on the trade ticket or confirmation. To qualify for the second exemption, there must be a publication in a recognized securities manual of the security's most recent
balance sheet and the two most recent profit and loss statements. For the reasons cited in the following findings, it is found that these exemptions do not apply.
At hearing, Lemley contended that the sales were unsolicited and were therefore exempt. To support this contention, he produced copies of documents entitled "Unsolicited Transaction" signed by the four customers and which carried the printed notation "I acknowledge that these securities were unsolicited." He further contended that the documents were generated from information contained in a log of securities transactions kept in his office. However, the evidence showed that these documents were signed long after the transactions occurred, and at least three of them were signed at Lemley's request in early 1992 in preparation for this hearing. Moreover, the underlying log was not introduced into evidence, testimony by three of the customers at hearing established that respondent had solicited the sales by recommending the stock, and there was no notation on the trade tickets or confirmations indicating that NSC had claimed an exemption. Finally, the record shows that it was not a prevailing practice in 1987 to have a customer sign a statement, and the practice itself did not begin in Florida until 1990 in response to a rule promulgated by the Securities and Exchange Commission. Therefore, respondent's claim for transactional exemption on this ground is found to be without merit.
Lemley also contended that because Island Mining was listed in the 1985 Standard and Poor's or Moody's International manuals, the securities were exempt from registration. To claim this exemption, however, Lemley would have to show that the required financial information was published in a recognized manual of securities in 1987, the year in which the transactions occurred. He failed to do this, and although he has the burden of proving entitlement to an exemption, independent research by a Division financial analyst also failed to uncover this information. Therefore, it is found that the sale of Island Mining was not exempt under this statutory provision.
In mitigation, it must be noted that none of the four customers who participated in the transactions filed a complaint against respondent. Rather, this proceeding began after another NSC customer filed a complaint against an NSC broker concerning the purchase of a substantial amount of unregistered stocks. During the course of the Division's investigation of that complaint, Lemley's unregistered sales were uncovered. The evidence also shows that Lemley was an extremely knowledgeable securities dealer in mining stocks and was praised by one customer as doing "everything he could to do the right thing and make you happy". He is no longer in the business of selling securities, is now unemployed, and besides claiming innocence, has asked for leniency on the ground he is without funds to pay a monetary fine.
Respondent, who is not represented by counsel, was noticed to have his deposition taken by petitioner at 10:30 a.m. on May 13, 1992, at Suite 1302, The Capitol, Tallahassee, Florida. It is undisputed that respondent received a copy of that notice. The parties agree that respondent appeared at the DeSoto Building, 1230 Apalachee Parkway, Tallahassee, Florida, where the Division of Administrative Hearings (DOAH) is located, just prior to the scheduled time of the deposition and was told that the deposition was to be taken at The Capitol and that he should promptly contact petitioner's counsel regarding the deposition. Respondent thereafter telephoned the office where the deposition was to be taken (Suite 1302, The Capitol) and advised a secretary that he had dropped off "the papers" desired by petitioner's counsel at the DeSoto Building but would not speak to her under any circumstances. It may be inferred that the papers filed with DOAH were exhibits to be offered by respondent at final
hearing and were to be furnished to counsel at the deposition. No mention of the deposition was made by Lemley or the secretary during the conversation, and he failed to advise the secretary that he would not be attending the deposition. Because Lemley did not attend the deposition, petitioner's counsel, who is based in the agency's Tampa district office, has requested $1,424.86 in attorney's fees and costs. This amount consists of eight hours of attorney's fees at $135 per hour, or $1,080, while the remainder is made up of travel expenses and a court reporter attendance fee. Lemley did not file a response to petitioner's affidavit of fees and costs and gave no viable reason for not attending the deposition. At hearing he contended that a Tallahassee attorney could have attended the deposition in lieu of Tampa counsel and, in any event, Tampa counsel could have performed other work duties while in the Tallahassee office that day. However, the agency practice is for the lead attorney on a case to attend all scheduled depositions, and Tampa counsel did not bring any other work to Tallahassee.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the subject matter and the parties hereto pursuant to Subsection 120.57(1), Florida Statutes (1991).
Because respondent's security registration is at risk, petitioner is obliged to prove the allegations in the administrative complaint by clear and convincing evidence. See, e. g., Newberry v. Florida Department of Law Enforcement, 585 So.2d 500, 501 (Fla. 3d DCA 1991).
A number of statutes and rules are relevant to this controversy. First, Section 517.07, Florida Statutes (1991), provides the following registration requirements for securities to be sold in this state:
No securities except of a class exempt under any of the provisions of s. 517.051 or unless sold in any transaction exempt under any of the provisions of s. 517.061 shall be sold or offered for sale within this state unless such
securities have been registered, as hereinafter defined, and unless prior to each sale the purchaser is furnished with a prospectus meeting the requirements of rules adopted by the department. The department shall issue a permit when such registration has been granted by the department.
If an unregistered security is sold and a transactional exemption is claimed by the registrant, Section 517.171, Florida Statutes (1991) provides that the burden of establishing an exemption rests upon the party claiming the benefit of such exemption. Subsections 517.161(1)(a), (c) and (h), Florida Statutes (1991), go on to provide that disciplinary action may be taken against a registrant under the following circumstances:
Registration under s. 517.12 may be denied or any registration granted may be revoked, restricted, or suspended by the department if the department determines that such applicant or registrant:
(a) Has violated any provision of this
chapter or any rule or order made under this chapter; . . .
* * *
(c) Has been guilty of a fraudulent act in connection with any sale of securities, has been or is engaged or is about to engage in making fictitious or pretended sales or purchases of any such securities, or has been or is engaged or is about to engage in any practice or sale of securities which is fraudulent or in violation of the law; . . .
* * *
Has demonstrated his unworthiness to transact the business of dealer, investment advisor, or associated person.
Finally, Rule 3E-600.013(1)(n) and (2)(g), Florida Administrative Code, provides that the following conduct shall be deemed to constitute unworthiness on the part of a registrant:
The following are deemed demonstrations of unworthiness by a dealer under Section 517.161(1)(h), Florida Statutes, without limiting that term to the practices specified herein:. . .
* * *
(n) Executing orders for the purchase by a customer of securities not registered under Sections 517.081 or 517.082, Florida Statutes, unless the securities are exempted under Section 517.051, Florida Statutes, or the transaction is exempted under Section 517.061, Florida Statutes.
* * *
The following are deemed demonstrations of unworthiness by an agent under Section 517.161(1)(h), Florida Statutes, without limiting that term to the practices specified herein:. . .
* * *
(g) Engaging in any of the practices specified in subsections (1)(b), (c), (d), (e), (f), (g), (n), (o), (p), (q), (s), or (t).
By clear and convincing evidence, petitioner has established that Lemley engaged in the sale of an unregistered security on six occasions in violation of section 517.07, which prohibits the sale of an unregistered security, and subsections 517.161(1)(a) and (c), which make it unlawful for a registrant to violate any provision within chapter 517 and engage in the sale of a security which is in violation of the law. The evidence also shows clearly and convincingly that respondent has demonstrated his unworthiness to transact the business of an associated person within the meaning of subsection 517.161(1)(h) and rule 3E-600.013(2). Collectively, these violations warrant the imposition of an administrative fine and the entry of an order requiring respondent to cease and desist all unlawful activities.
In its proposed order petitioner has suggested the imposition of a
$5,000 fine and the entry of an order requiring Lemley to cease and desist all further violations of chapter 517. Given the fact that no customer filed a complaint against respondent or requested a refund of his money, and Lemley has an otherwise unblemished record since first entering the securities business in 1977, an administrative fine in the amount of $1,000 is appropriate.
Petitioner's objection to the admission of respondent's exhibits 3 and
4 is sustained on the ground the proffered materials are irrelevant.
Finally, Lemley failed to attend a scheduled deposition on May 13, 1992, despite having been given reasonable notice of the same. At hearing he offered no viable excuse for his failure to attend. In view of this, Lemley should be required to reimburse petitioner $344.86 in travel expenses incurred by its counsel and court reporter fees. Subsection 120.58(1)(b), F. S. The request for attorney's fees is hereby denied.
Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered finding respondent guilty as
charged in the administrative complaint, directing respondent to cease and desist all unlawful activities, and imposing an administrative fine upon respondent in the amount of $1,000. Respondent should also reimburse petitioner
$344.86 for costs incurred by its counsel in attending the deposition scheduled on May 13, 1992.
DONE and ENTERED this 26th day of June, 1992, in Tallahassee, Florida.
DONALD R. ALEXANDER
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, FL 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 26th day of June, 1992.
ENDNOTES
1/ The complaint also named four other individuals and a corporation as respondents. Those persons have subsequently entered into settlement agreements with the agency leaving Lemley as the sole respondent in this cause.
APPENDIX TO RECOMMENDED ORDER
Petitioner:
Covered in the conclusions of law.
Accepted in finding of fact 1. 3-4. Accepted in finding of fact 2.
5. Rejected as being unnecessary. 6-11. Accepted in finding of fact 4.
Accepted in finding of fact 3.
Accepted in finding of fact 4.
Accepted in finding of fact 3. 15-16. Accepted in finding of fact 5.
17. Rejected as being unnecessary.
COPIES FURNISHED:
Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, FL 32399-0350
William G. Reeves, Esquire The Capitol, Room 1302 Tallahassee, FL 32399-0350
Susan E. Steinberg, Esquire 1313 Tampa St., Ste. 615
Tampa, FL 33602-3394
Mr. Douglas A. Lemley 1121 Mitchell Avenue
Tallahassee, FL 32303
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions to the Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should consult with the agency that will issue the final order in this case concerning their rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE
DIVISION OF SECURITIES AND INVESTOR PROTECTION
DEPARTMENT OF BANKING AND FINANCE, DIVISION OF SECURITIES AND INVESTOR PROTECTION,
Petitioner,
ADMINISTRATIVE PROCEEDING
vs. NO. 1388-S-10/90
DOAH CASE NO. 92-1992
DOUGLAS A. LEMLEY,
Respondent.
/
FINAL ORDER AND NOTICE OF RIGHTS
This matter has come before the undersigned as head of the Department of Banking and Finance, Division of Securities and Investor Protection ("Department"), for the entry of a Final Order in this proceeding. On June 26, 1992, a Hearing Officer from the Division of Administrative Hearings submitted his Recommended Order in this proceeding, a copy of which is attached hereto as Exhibit "A". On or about July 16, 1992, the Respondent Douglas A. Lemley (the "Respondent"), filed his exceptions to the Recommended Order, a copy of which is attached hereto as Exhibit
This matter arose when the Department filed on August 26, 1991 an administrative complaint charging the Respondent with violating Chapter 517, Florida Statutes and the rules duly promulgated thereunder.
The Department timely received the Respondent's petition for hearing. The matter was referred to the Division of Administrative Hearings on March 27, 1992, for the assignment of a hearing officer to conduct a formal administrative hearing. Thereafter, the parties responded to the Initial Order entered by the Hearing Officer. By Notice of Hearing dated April 14, 1992, a final hearing was scheduled for May 19, 1992, in Tallahassee, Florida. On May 19, 1992, the formal hearing in this matter was held in Tallahassee before Hearing Officer Donald R. Alexander.
The Hearing Officer's June 26, 1992, Recommended Order recommends that the Department issue a Final Order finding the Respondent guilty as charged in the Administrative Complaint, directing the Respondent to cease and desist from all unlawful activities, and impose an administrative fine in the amount of One Thousand Dollars and Zero Cents ($1,000.00). Furthermore, the Respondent should reimburse the Department Three Hundred- Forty Four Dollars and Eighty-Six Cents ($344.86).
RULING ON EXCEPTIONS BY RESPONDENT
First Exception: The Respondent takes exception to the footnote on page 2 of the Recommended Order wherein the Hearing Officer states that the Administrative Complaint also named four other individuals and the corporation but those persons had settled with the Department leaving Lemley as the only
Respondent in this matter. This exception is without merit since any matters concerning these other individuals is not at issue in this instant hearing which involved Lemley. Therefore, this exception is rejected as irrelevant.
Second Exception: 1/ a) Although confusing, it appears that the Respondent is making a general exception to the Recommended Order's Findings of Fact that in order to claim the unsolicited exemption the Respondent was responsible for ensuring that the proper notations and record was kept. The Respondent's argument appears to be that he had no clerical printing duties and that each office had the responsibility of having clients sign the unsolicited letters. Thus, the Respondent argues, it was the broker's responsibility of keeping the records necessary to claim the exemption. In Heifetz v. Department of Business Regulations, 475 So. 2d 1277, 1281 (Fla. 1st DCA 1985), the district court of appeal explained the respective roles of hearing officers and state agencies in deciding factual issues as follows:
Factual issues susceptible of ordinary methods of proof that are not infused with policy considerations are the prerogative of the hearing officer as the finder of fact. McDonald v. Department of Banking and Finance,
346 So.2d 569 (Fla. 1st DCA 1977). It is the hearing officer's function to consider all the evidence presented, resolve conflicts, judge credibility of witnesses, draw permissible inferences from the evidence, and reach ultimate findings of fact based on competent, substantial evidence. State Beverage Department v. Ernal, Inc., 115 So.2d 566 (Fla. 3d DCA 1959). If, as is often the case, the evidence presented supports two inconsistent findings , it is the hearing officer's role to decide the issue one way or the other. The agency may not reject the hearing officer's finding unless there is no competent, substantial evidence from which the finding could reasonably be inferred. The agency is not authorized to weigh the evidence presented, judge credibility of witnesses, or otherwise interpret the evidence to fit its desired ultimate conclusion.
The Department concurs with the Hearing Officer's Finding of Fact since it was based on competent, substantial evidence. See Heifetz, supra.
b) Next it appears that the Respondent is making an exception concerning the statute of limitations. This exception is also without merit. First, the Respondent failed to make this argument at the formal hearing and as a result, he has waived this argument.
Second, the cases cited by the Respondent, are not applicable. These statutes of limitation cases concern bringing an action in either the civil or criminal law forums. Since this is an administrative law forum, these cases are inapplicable. In fact, statute of limitations have been held inapplicable to administrative actions. See Winkleman v. Department of Banking and Finance, 537 So.2d 591 (Fla. 3rd DCA 1988). Therefore, this exception is rejected.
Third Exception: On page 15, paragraph 2, of the Respondent's Exceptions, the Respondent takes exception to the Recommended Order's Finding of Fact paragraph 2 wherein the Hearing Officer found that between July 2, 1987 and September 11, 1987, the Respondent admittedly sold and offered for sale in the
State of Florida at least 7,400 shares of Island Mining and Exploration, Limited ("Island Mining"), an unregistered security. The Respondent argues that since there was an exemption Island Mining need not be registered.
The Department may not overrule a Hearing Officer's finding of fact when it was supported by competent, substantial evidence. See Heifetz, supra.
As a result, the Department concurs with the Hearing Officer's Finding of Fact since it was based upon competent, substantial evidence. Therefore, the Respondent's Third Exception is rejected.
Fourth Exception: The Respondent takes exception to various sentences contained in the Hearing Officer's Findings of Fact, Paragraph 3. These exceptions shall be broken down into subparagraphs. a) The Respondent takes exception to the second sentence in which the Hearing Officer states that the Respondent contends that Island Mining has two exemptions from registration in the State of Florida. The Respondent argues that he has claimed the first exemption and is holding a claim for the second.
The Department may not overrule a Hearing Officer's finding of fact when supported by competent, substantial evidence See Heifetz, supra.
The Respondent takes exception to the third sentence in which the Hearing Officer contends that an exemption for registering a security occurs when, the sale is unsolicited, the sale occurs on an agency basis, and the dealer (as opposed to the salesperson) has claimed an exemption. The Respondent appears to agree with the first two points but takes exception by stating the broker claims the exemption. Additionally, the Respondent argues that the exemption may be recorded at the branch office with the principal of the firm or in some other way and the unsolicited letter may evidence this.
As will be seen in subparagraph (d), the Hearing Officer found that evidence of unsolicited trades was disclosure of such on the trade ticket or the confirmation slip and not the unsolicited letters.
The Department may not overrule a Hearing Officer's finding of fact when supported by competent, substantial evidence. See Heifetz, supra.
The Respondent takes exception to the fifth sentence in which the Hearing Officer finds that in order to have an unsolicited trade exemption the customer must solicit the broker, the sale must be done by the agency, and the firm must evidence the fact that the transaction is exempt. The Respondent argues that the sale must be an agency transaction not done by the agency itself.
The Department may not overrule a Hearing Officer's finding of fact when supported by competent, substantial evidence. See Heifetz, supra.
The Respondent takes exception to the sixth sentence wherein the Hearing Officer found that the evidence of unsolicited sales exemption is the disclosure on the trade ticket or the confirmation slip. The Respondent argues that since the broker does not control what is typed on the confirmation slip or the trade ticket he cannot be held responsible.
The Department may not overrule a Hearing Officer's finding of fact when such a finding is based upon competent, substantial evidence. See Heifetz, supra.
The Respondent takes exception to the eighth sentence wherein the Hearing Officer found that based upon the other findings in Paragraph 3, the exemptions did not apply in this case. The Respondent argues that both exemptions should apply.
The Department may not overrule a Hearing Officer's finding of fact when such a finding is based upon competent, substantial evidence. See Heifetz, supra.
Furthermore, for all subparagraphs (a)-(e), the Respondent had the burden of establishing an exemption as he was the one claiming the exemption. Section 517.171, Florida Statutes. The Hearing Officer found that the Respondent failed to meet this burden.
Since there is competent, substantial evidence with which the Hearing Officer reached his Findings of Fact, which are contained in subparagraphs (a)-
and since the Respondent failed to meet his burden, the Department concurs with the Hearing Officer's Finding of Fact, Paragraph 3, and the Respondent's Fourth Exception is rejected in toto.
Fifth Exception: The Respondent takes exception to Paragraph 4, of the Hearing Officer's Finding of Fact. The Respondent states that, "(t)he writer does not comprehend the unsolicited transaction exemption." This exception is ambiguous as to the writer's identify.
If the writer is the Respondent then there is no exception since the Respondent does not understand the exemption then he cannot take exception to it. However, the Department will assume that the identity of the writer is the Hearing Officer.
In this case, the Respondent presented evidence at the hearing concerning the unsolicited exception, which the Hearing Officer weighed in reaching his decision.
As stated above, Heifetz provides that it is the hearing officer's function to evaluate the evidence in reaching ultimate findings of fact based upon the evidence presented, if such evidence is substantial and competent. The Hearing Officer observed the credibility and demeanor of the Respondent when he testified at the hearing, as well as that of the other witnesses. Therefore, the Department rejects the Respondent's fifth exception. See Heifetz, supra.
Sixth Exception: The Respondent takes exception to the Hearing Officer's Finding of Fact, Paragraph 5, wherein the Hearing Officer finds that the Respondent failed to prove his entitlement to the manual exemption. The Respondent argues that the writer does not understand that it was impossible to use such a manual exemption due to publishing and delivery constraints.
Again, assuming the identity of the writer is the Hearing Officer, this evidence was presented at the hearing which the Hearing Officer weighed before making this finding. As such, the Hearing Officer's function is to evaluate all of the evidence presented, if such evidence is substantial and competent. The Hearing Officer's weighed the Respondent's and the Department's evidence presented at the hearing and made appropriate Findings of Fact. Therefore, the Department rejects the Respondent's sixth exception. See Heifetz, supra.
Seventh Exception: The Respondent takes exception to the Hearing Officer's Findings of Fact, Paragraph 6 in which the Respondent believes that the Hearing Officer implied that the Respondent only traded mining stocks. He also takes exception that he is unemployed. The Respondent argues that his unemployment is due to this action.
This exception is irrelevant to this matter. Both reasons, i.e., exclusive selling of mining stocks and unemployment were never at issue in this proceeding.
Therefore, the Respondent's seventh exception is rejected and the Department concurs with the Hearing Officer's Recommended Order.
Eighth Exception: The Respondent takes exception to the Hearing Officer's Findings of Fact Paragraph 7, in which the Hearing Officer found that the Respondent failed to attend a deposition scheduled and gave no viable reason for his failure to attend the deposition. The Respondent argues that this is not pertinent to the case and that the Respondent has no responsibility for the Department's expenses. Additionally, the Respondent states that he did respond to his failure to appear for the deposition.
First, Section 120.58(1)(b), allows a hearing officer to impose sanctions, except contempt, in order to effect discovery, pursuant to the Florida Rules of Civil Procedure. Rule 1.380, Florida Rules of Civil Procedure, allows for the reasonable expenses caused by the failure of a Respondent to appear for a deposition.
Second, the Respondent was afforded the opportunity to present an explanation why he failed to appear for the deposition, which the Hearing Officer weighed in reaching his conclusion.
As stated above, Heifetz provides that it is the hearing officer's function to evaluate the evidence in reaching ultimate findings of fact based upon the evidence presented, if such evidence is substantial and competent. The Hearing Officer observed the credibility and demeanor of the Respondent when he testified at the hearing. Additionally, the Florida Rules of Civil Procedure allow for such a sanction. Therefore, the Department rejects the Respondent's seventh exception. See Heifetz, supra.
Ninth Exception: On Page 21 of the Respondent's Exceptions, the Respondent takes exception, without specific explanation, to all seven of the Hearing Officer's Conclusions of Law. Since the Respondent has failed to specifically articulate the reasons for this exception the Department is unable to rule on the exceptions. As a result, the Department concurs with the Hearing Officer's Recommended Order and the Respondent's ninth exception is rejected.
Additional filings by Respondent: On August 20, 1992, and September 3, 1992, the Respondent filed what will be referred to as additional exceptions and exhibits respectively. The Department rejects the additional materials based upon their untimely filing since they were filed after the extension to file granted on July 13, 1992. Also, the Department is unable to accept exhibits which were not part of the record for the hearing. To that extent, said exhibits are also rejected.
FINAL ORDER
Having ruled on all of the exceptions filed by the Respondent to the Recommended Order, it is hereby ORDERED:
The Hearing Officer's Findings of Fact and Conclusions of Law in the Recommended Order attached hereto as Exhibit A are hereby adopted and incorporated by reference herein as Findings of Fact and Conclusions of Law of this Final Order.
The Respondent Lemley CEASE AND DESIST from all unlawful violations of Chapter 517, Florida Statutes and the rules duly promulgated thereunder.
The Respondent Lemley shall pay an administrative fine of One Thousand Dollars and Zero Cents ($1,000.00). This administrative fine shall be paid by cashier's check or money order and made payable to: The Anti-Fraud Trust Fund, C/O Don B. Saxon, Director, Division of Securities and Investor Protection. This payment is to be mailed to:
Anti-Fraud Trust Fund
C/O Don B. Saxon, Director Division of Securities and Investor Protection
LL-22, The Capitol Tallahassee, Florida 3399-0350
Furthermore, this payment is to be received within thirty (30) days of the date of this Final Order.
In addition to the foregoing fine, the Respondent Lemley shall also pay to the Department the amount of Three Hundred Forty-Four Dollars and Eighty Six cents ($344.86) for costs the Department incurred in attending Mr. Lemley's deposition scheduled for May 13, 1992. This reimbursement is to be paid by cashier's check or money order and made payable to: Office of the Comptroller. This payment is to be mailed to:
Anthony F. DiMarco Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302
Tallahassee, Florida 32399-0350 Furthermore, this payment is to be received within thirty (30) days of the date of this Final Order.
DONE and ORDERED this 22nd day of September, 1992, in Tallahassee, Florida.
GERALD LEWIS as Comptroller of the State of Florida and Head of the Department of Banking and Finance
COPIES FURNISHED:
Donald R. Alexander, Hearing Officer Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
Don B. Saxon, Director Division of Securities and Investor Protection
Susan Steinberg
Assistant General Counsel Office of the Comptroller 1313 Tampa Street, Suite 615
Tampa, Florida 33602-3394
Anthony F. DiMarco Assistant General Counsel Office of the Comptroller Suite 1302, The Capitol
Tallahassee, Florida 32399-0350
NOTICE OF RIGHT TO JUDICIAL REVIEW
PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing was sent by
U. S. Regular Mail to Douglas A. Lemley, 1121 Mitchell Avenue, Tallahassee, Florida 32303, this 22nd day of September, 1992.
ANTHONY DiMARCO
Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302
| Issue Date | Proceedings |
|---|---|
| Nov. 12, 1992 | CC Letter to Michelle Subia from Douglas A. Lemley (re: errors and questions in transcript) filed. |
| Sep. 22, 1992 | Final Order and Notice of Rights filed. |
| Aug. 06, 1992 | Final Order filed. |
| Jul. 14, 1992 | Order sent out. (Request to reopen case denied) |
| Jul. 14, 1992 | Letter to DRA from Douglas A. Lemley (re: Extension to file ERO) filed. |
| Jul. 14, 1992 | (Respondent) Documents filed. |
| Jul. 13, 1992 | Request for reopen a DOAH hearing (ltr form from Lemley) filed. |
| Jun. 26, 1992 | Recommended Order sent out. CASE CLOSED. Hearing held 5-19-92. |
| Jun. 18, 1992 | Letter to DRA from Michelle Subia (re: errors in Transcript) filed. |
| Jun. 17, 1992 | Petitioner`s Proposed Recommended Order filed. |
| Jun. 03, 1992 | Transcript filed. |
| May 29, 1992 | (Petitioner) Notice of Filing Affidavit w/Affidavit & attachment filed. |
| May 19, 1992 | CASE STATUS: Hearing Held. |
| May 19, 1992 | Letter to DRA from Douglas A. Lemley (re: Deposition conducted by Susan Steinberg) filed. |
| May 18, 1992 | Respondent`s Motion to Compel Entry of Evidence filed. |
| May 18, 1992 | Pleading filed by Respondent re: 5-13-92 Deposition filed. |
| May 18, 1992 | Petitioner`s Motion to Exclude Documentary Evidence filed. |
| May 18, 1992 | (Petitioner) Notice of Filing w/Transcript (telephonic prehearing conference); Petitioner`s First Request for Official Recognition filed. |
| May 18, 1992 | (Respondent) Evidence filed. |
| May 15, 1992 | Order sent out. (hearing scheduled for 5/19/92; 9:00am; Talla) |
| May 15, 1992 | (Respondent) Exhibit filed. |
| May 15, 1992 | Petitioner`s Motion to Compel Discovery and for Sanctions Pursuant to Rule 1.380 filed. |
| May 14, 1992 | Order sent out. (ruling on Motions) |
| May 13, 1992 | (Respondent) Materials filed. |
| May 08, 1992 | (Petitioner) Notice of Taking Deposition Duces Tecum filed. |
| May 08, 1992 | (Petitioner) Notice of Hearing filed. |
| Apr. 28, 1992 | Letter from Douglas A. Lemley Regarding Motion to Dismiss filed w/Office of Comptroller w/supporting ltr to DRA from Douglas A. Lemley & Attachments filed. |
| Apr. 14, 1992 | Notice of Hearing sent out. (hearing set for 5-19-92; 9:00am; Tallahassee) |
| Apr. 14, 1992 | (Petitioner) Response to Initial Order and Motion to Strike filed. |
| Apr. 03, 1992 | Ltr. to DRA from Douglas A. Lemley re: Reply to Initial Order filed. |
| Apr. 01, 1992 | Initial Order issued. |
| Mar. 27, 1992 | Department`s Response to Lemley`s Motion to Dismiss Complaint and Motion To Strike Affirmative Defense(s); Department`s Response to Lemley`s Motion for More Definitive Statement and To Require Separate Statement of Commingled Causes of Action filed. |
| Mar. 27, 1992 | Agency Referral letter; Request for Administrative hearing, letter form; Notice of Intent to Enter Order to Cease and Desist and Administrative Complaint Imposing Sanctions, Ordering Rescission, and Notice of Rights; Motion to Dismiss Complaint Containing |
| Issue Date | Document | Summary |
|---|---|---|
| Sep. 22, 1992 | Agency Final Order | |
| Jun. 26, 1992 | Recommended Order | Dealer found in violation of cited rules and statutes. |
