STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FINANCIAL FUNDING MORTGAGE )

CORPORATION, )

)

Petitioner, )

)

vs. ) CASE NO. 92-3339

)

DEPARTMENT OF BANKING )

AND FINANCE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to written notice a formal hearing was held in this case before Larry J. Sartin, a duly designated Hearing Officer of the Division of Administrative Hearings, on October 29, 1992, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Harold F. X. Purnell, Esquire

Rutledge, Ecenia, Underwood & Purnell, P.A.

Barnett Bank Building, Suite 500

315 South Calhoun Street Tallahassee, Florida 32301

For Respondent: J. Ashley Peacock

Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302

Tallahassee, Florida 32399-0350 STATEMENT OF THE ISSUES

Whether the Petitioner, Financial Funding Mortgage Corporation, is entitled to licensure by the Respondent, the Department of Banking and Finance, as a mortgage brokerage business.

PRELIMINARY STATEMENT

By letter served April 24, 1992, the Respondent, the Department of Banking and Finance (hereinafter referred to as the "Department"), informed the Petitioner, Financial Funding Mortgage Corporation (hereinafter referred to as the "Financial Funding"), that it's application for licensure as a mortgage brokerage business was denied. On May 14, 1992, Financial Funding filed a Petition for Formal Hearing with the Department contesting the Department's decision.

On June 1, 1992, the Department filed a letter requesting that the final hearing of this matter be conducted by a hearing officer of the Division of Administrative Hearings. The matter was assigned to the undersigned and was scheduled for final hearing on October 29, 1992, in Miami, Florida, by Notice of Hearing entered June 22, 1992. The location of the hearing was subsequently moved to Tallahassee upon the request of Financial Funding and without objection of the Department.

Prior to the final hearing, official recognition was requested, and taken, of Chapter 494, Florida Statutes (1991).

At the final hearing Financial Funding presented the testimony of Eric Schwartz. Financial Funding also offered two exhibits which were accepted in evidence.

The Department presented the testimony of Rex Pearce. The Department offered five exhibits which were accepted into evidence.

One exhibit was offered and accepted into evidence as a joint exhibit.

At the conclusion of the final hearing it was agreed that no transcript of the hearing would be filed. The parties also agreed to file proposed recommended orders on or before November 24, 1992. Financial Funding subsequently informed the undersigned that it intended to file a transcript of the final hearing of this case. Consequently, by Order entered November 23, 1992, the time for filing proposed recommended orders was extended, at the request of Financial Funding and without objection of the Department, until December 21, 1992.

The parties have filed proposed recommended orders containing proposed findings of fact. A ruling on each proposed finding of fact has been made either directly or indirectly in this Recommended Order or the proposed finding of fact has been accepted or rejected in the Appendix which is attached hereto.

FINDINGS OF FACT

1. The Parties.

   
   

   1. The Department is a state agency charged with the administration and enforcement of Chapter 494, Florida Statutes, the Florida Mortgage Brokerage Act, and the rules promulgated thereunder.

      
      

   2. Financial Funding is a corporation.

      
      

   3. Eric Schwartz is the sole director, officer and shareholder of Financial Funding.

      
      

   4. Mr. Schwartz has been licensed by the Department as a mortgage broker continuously since 1983. Between 1983 and 1988 Mr. Schwartz acted as broker for a wholly-owned mortgage brokerage business. From 1988 until October 1, 1991, Mr. Schwartz was licensed as a self-employed mortgage broker. Mr. Schwartz has also held a real estate broker's license since approximately 1978.

      
      

   5. Financial Funding was created by Mr. Schwartz in order to comply with newly enacted requirements of Chapter 494, Florida Statutes. Effective October 1, 1991, licensed mortgage brokers in Florida were required to be employed by a mortgage brokerage business. Mr. Schwartz was, therefore, required to create a

      business entity or work for someone else's mortgage brokerage business in order to continue as a mortgage broker.

      
      

2. Financial Funding's Application.

   
   

   1. On or about December 12, 1991, Financial Funding filed an application with the Department for licensure as a mortgage brokerage business (hereinafter referred to as the "Application").

      
      

   2. It was revealed in the Application that Mr. Schwartz was the President of Financial Funding.

      
      

   3. By letter dated April 24, 1992, the Department denied Financial Funding's Application. The Department denied the Application because of its conclusion that Mr. Schwartz, an officer of Financial Funding, had violated Chapter 494, Florida Statutes and had a disciplinary history.

      
      

   4. Financial Funding timely challenged the denial of its Application.

      
      

3. The Eason Complaint.

   
   

   1. Between approximately 1984 and 1987, Mr. Schwartz was the sole owner and president of Paramount Finance Corporation (hereinafter referred to as "Paramount").

      
      

   2. Mr. Schwartz was the principal mortgage broker for Paramount and utilized Paramount as the vehicle for his practice as a mortgage broker.

      
      

   3. On or about November 5, 1985, Agnes Eason filed a complaint against Mr. Schwartz and Paramount (hereinafter referred to as the "Eason Complaint"), in the Circuit Court of the Eleventh Judicial Circuit, In and For Dade County, Florida.

      
      

   4. A Final Judgment was entered on the Eason Complaint on or about February 17, 1987.

      
      

   5. The court found that Mr. Schwartz had initiated contact with the Plaintiff, Agnes Eason. The court also found that Mr. Schwartz had represented to Ms. Eason that the Small Business Administration (hereinafter referred to as the "SBA"), was about to foreclose a lien on her home.

      
      

   6. The court also found that "[t]he Small Business Administration, in fact, was not foreclosing on Plaintiff's property [and had no plans to institute foreclosure proceedings in the near future.]" The language in brackets was struck from the Final Judgment. Therefore, no determination was made as to whether foreclosure proceedings might have been instituted in the future. The striking of this language, however, does not prove that the SBA was considering possible foreclosure proceedings on Ms. Eason's property. Nor was Mr. Schwartz's testimony persuasive enough to reject the findings of the court on the Eason Complaint.

      
      

   7. The court concluded that Mr. Schwartz told Ms. Eason that "the only way to save her home from foreclosure" would be to execute notes and mortgages in favor of Paramount. Ms. Eason executed the suggested notes and mortgages and they were recorded.

   8. Although the notes and mortgages were executed on terms which Ms. Eason accepted, the court concluded that "no consideration" passed from Paramount to Ms. Eason for the notes or mortgages. The court also concluded that Ms. Eason executed the notes and mortgages because of the misrepresentation concerning the SBA by Mr. Schwartz.

      
      

   9. The court found that when Ms. Eason notified Mr. Schwartz that her payments on the note she had executed to Paramount were more than she could afford, the notes and mortgages were cancelled and a satisfaction was recorded.

      
      

   10. The court also found that after cancelling the notes and mortgages, Mr. Schwartz incorrectly told Ms. Eason that "the only way left to save her home from imminent foreclosure by the Small Business Administration" would be to execute a Warranty Deed conveying the fee simple interest in Ms. Eason's home to him. Mr. Schwartz also told Ms. Eason that, pursuant to a document titled a "Disclosure", he would grant Ms. Eason and her mother a life estate in the property. Mr. Schwartz was also to pay Ms. Eason $1,000.00 and to pay real estate taxes on the property pursuant to the Disclosure.

       
       

   11. Ms. Eason executed a Warranty Deed and the Disclosure on June 18, 1985. The Warranty Deed was recorded June 19, 1985. The Disclosure was recorded, but not until September 13, 1985.

       
       

   12. Although the transaction was explained by Mr. Schwartz to Ms. Eason and she accepted it, the court concluded that Mr. Schwartz's representation that foreclosure by the SBA was imminent was incorrect and that Mr. Schwartz failed to tender the sum of $1,000.00 agreed to in the Disclosure. Although Mr. Schwartz testified that he did attempt to tender the $1,000.00 (less $175.00 in recording fees), he did so after the Eason Complaint had been filed and it was rejected because of the litigation. Therefore, although the Disclosure agreement was executed June 18, 1985, Mr. Schwartz did not attempt to tender the

       $1,000.00 until some time after the Eason Complaint was filed on November 5, 1985.

       
       

   13. The court also found that Mr. Schwartz had not paid real estate taxes on the property as promised in the Disclosure. Mr. Schwartz explained, however, that the taxes had not been paid because the first real estate taxes due on the property had not become due until after the litigation had been instituted.

       
       

   14. The court concluded as a matter of law, among other things, the following:

       
       

       1. That the Defendant, ERIC SCHWARTZ, on behalf of Defendant PARAMOUNT FINANCE CORPORATION [fraudulently] misrepresented a material fact to the Plaintiff, AGNES EASON, for the purpose of inducing Plaintiff to execute the aforementioned notes and mortgages.

          
          

       2. That the Defendant, ERIC SCHWARTZ [fraudulently] misrepresented a material fact to the Plaintiff, AGNES EASON,

          for the purpose of inducing Plaintiff to execute the aforementioned Warranty Deed and "Disclosure."

       3. That the Warranty Deed executed by Plaintiff in favor of Defendant was procured by Defendant SCHWARTZ through the exercise of coercion and duress upon Plaintiff.

          
          

       4. That no consideration passed from Defendant SCHWARTZ to Plaintiff for any of the instruments executed by Plaintiff.

          
          

       5. That the purported promises made by Defendant SCHWARTZ in the "Disclosure", to the effect that certain debts of the Plaintiff will be paid by SCHWARTZ "if necessary", are illusory promises and impose no obligation upon the Defendant SCHWARTZ. Such promises are therefore unenforceable and do not constitute consideration in support of the subject conveyance.

          
          

   15. The court ordered the promissory notes, Warranty Deed and the Disclosure cancelled and declared them null and void.

       
       

4. The Department's Awareness of the Eason Complaint.

   
   

   1. There were employees of the Department that were aware of the Eason matter at the time that an administrative action against Mr. Schwartz, which is discussed, infra, was being investigated by the Department.

      
      

   2. Prior to the action of the Department in this case, the Department has not taken disciplinary action against Mr. Schwartz's individual mortgage broker license as the result of the judgment on the Eason Complaint.

      
      

   3. The weight of the evidence failed to prove why the Department did not take action against Mr. Schwartz as a result of the judgment on the Eason Complaint until this case arose. The evidence also failed to prove, however, that the Department ever represented to Mr. Schwartz that it would not take any action against his license as a result of the Eason matter.

      
      

5. 1990 Administrative Action.

1. At some point during 1987, Mr. Schwartz decided to begin business as a mortgage broker with Mr. Stephen Hertz. Mr. Schwartz intended to discontinue operating through Paramount. Mr. Schwartz and Mr. Hertz intended to operate their business as Dollar Mortgage Company (hereinafter referred to as "Dollar").

   
   

2. In June of 1987 Mr. Schwartz prepared an application to register Dollar as the mortgage broker. Mr. Schwartz also prepared an endorsement transferring his individual license as principal mortgage broker to Dollar. These documents (hereinafter referred to as the "Dollar Applications"), were provided to Mr. Hertz to file with the Department.

   
   

3. Mr. Schwartz, having been advised by Mr. Hertz that the Dollar Applications had been filed, believed that the Dollar Applications had been filed with the Department.

   
   

4. Before being informed by the Department that the Dollar Applications had been approved or that his individual license had been renewed, Mr. Schwartz

   engaged in several mortgage brokerage transactions in the name of Dollar. Engaging in the transactions in the name of Dollar, therefore, constituted acting as a mortgage brokerage business without a license.

   
   

5. At some point after the Dollar Applications were filed, Mr. Schwartz contacted Mr. Paul Richman of the Department's Miami office to determine what the status of the applications was. Mr. Schwartz was informed that the Department was in the process of changing the manner in which applications were processed and the process was causing a delay. Mr. Richman advised Mr. Schwartz to check with the Department's Tallahassee office in November, 1987, if the Department had not acted on the Dollar Applications by then.

   
   

6. In November, 1987, Mr. Schwartz contacted the Department's Tallahassee office and was informed that the Dollar Applications had never been received. Mr. Schwartz submitted new applications at that time.

   
   

7. As a result of the fact that Mr. Schwartz had transacted business before his license had been renewed and had acted in the name of Dollar before receiving approval of Dollar to transact such business, the Department filed an Administrative Complaint, Number 1154-F-5/88 (hereinafter referred to as the "Complaint"), against Mr. Schwartz. The Complaint was entered August 29, 1988.

   
   

8. On or about January 23, 1990, the Department and Mr. Schwartz entered into a Stipulation and Consent Agreement (hereinafter referred to as the "Stipulation"), settling the Complaint.

   
   

9. Mr. Schwartz admitted in the Stipulation to the following:

   
   

   3. Eric S. Schwartz admits that he acted as a mortgage broker with an inactive

   license, and that Dollar acted as a mortgage brokerage business without a valid registration but denies intentional wrongdoing as more fully set forth in Mr.

   Schwartz's affidavit dated May 30, 1989 which is referenced as if fully set forth at length herein.

   
   

10. Pursuant to the Stipulation, Mr. Schwartz was required to pay an administrative fine of $2,500.00 for his violation of Chapter 494, Florida Statutes. It was also agreed that the Dollar application would be withdrawn and it was. Mr. Schwartz's individual license was, however, renewed.

    
    

11. The Stipulation also provided that the Department would make at least one examination of Mr. Schwartz's mortgage brokerage activities during each six month period during the next twenty-four months from the date of the Stipulation. Audits were in fact conducted by the Department. No further charges were brought against Mr. Schwartz as a result of these audits.

    
    

12. Additionally, the following agreement was contained in the Stipulation:

    
    

    13. The Department agrees that, upon execution of this Stipulation, payment of the administrative fine, payment of the restitution ordered, and faithful compliance hereafter by Eric S. Schwartz with all of

    the terms and conditions of this Stipulation, the Department will take no further action against Eric S. Schwartz for violations of the Act and the rules of the Department as set forth in the Complaint.

    However, should the Department, in its exercise of its discretion, deem it necessary to take action against Eric S. Schwartz for violations of the Act and rules of

    Department occurring after the time period set forth in the Complaint, then, in that event, all such allegations and charges may be used against Eric S. Schwartz in any such subsequent proceeding, if relevant. Eric S. Schwartz understands that there is no order, administrative or judicial, sealing these proceedings in the event of a future administrative complaint regarding activities alleged to occur subsequent to the final date of the timeframe of the investigation of the affairs of Eric S. Schwartz' activities as set forth in the Complaint.

    
    

    See the second paragraph number "13" on page 4-5 of the Stipulation.

    
    

13. In March of 1990, the Department entered a Consent Final Order incorporating the Stipulation.

    
    

14. The Department has not brought any charges against Mr. Schwartz subsequent to the execution of the Stipulation. The Department has continued to renew Mr. Schwartz's mortgage broker's license.

    
    

    CONCLUSIONS OF LAW

    
    

    1. General.

       
       

15. The Division of Administrative Hearings has jurisdiction of the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes (1991).

    
    

16. Section 494.0041(1), Florida Statutes, authorizes the Department to take certain actions against applicants for mortgage broker business licenses if the applicant has violated the acts specified in Section 494.0041(2), Florida Statutes.

    
    

17. Section 494.0041(3), Florida Statutes, further provides:

    
    

    1. A mortgage brokerage business is subject to the disciplinary actions specified in subsection (1) for a violation of subsection (2) by any officer, director, joint venturer, partner, ultimate equitable owner of a 10-percent or greater interest in

       the mortgage brokerage business, or associate mortgage broker of the licensee.

18. In this case, the Department has determined that Financial Funding is responsible, pursuant to Section 494.0041(3), Florida Statutes, for violations of Section 494.0041(2), Florida Statutes, committed by Mr. Schwartz, the sole director, officer and shareholder of Financial Funding. The specific violations are discussed, infra.

    
    

    1. The Eason Complaint.

       
       

19. The Department has taken the position that Mr. Schwartz, and therefore, Financial Funding, is guilty of violating the following provisions of Section 494.0041(2), Florida Statutes, as a result of the judgment on the Eason Complaint:

    
    

    . . . .

    1. Fraud, misrepresentation, deceit, negligence, or incompetence, in any mortgage financing transaction.

       . . . .

       (g) Failure to disburse funds in accordance with agreements.

       . . . .

       1. Failure to comply with, or violation of, any other provision of ss.

          494.001-494.0077.

       2. Commission of fraud, misrepresentation, concealment, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction in any state, nation, or territory; or aiding, assisting, or conspiring with any other person engaged in any such misconduct and in furtherance thereof.

       
       

20. With regard to the alleged violation of Section 494.0041(2)(p), Florida Statutes, the Department has alleged that Mr. Schwartz, and therefore, Financial Funding, is guilty of violating the following provisions of "ss. 494.001-494.0077":

    
    

    494.0025 Prohibited practices.--It is unlawful for any person:

    . . . .

    1. In any practice or transaction or course of business relating to the sale, purchase, negotiation, promotion, advertisement, or hypothecation of mortgage transactions, directly or indirectly:

       1. To knowingly or willingly employ any device, scheme, or artifice to defraud;

       2. To engage in any transaction, practice, or course of business which operates as a fraud upon any person in connection with the purchase or sale of any mortgage loan; or

       3. To obtain property by fraud, willful misrepresentation of a future act, or false promise.

    2. In any matter within the jurisdiction of the department, to knowingly and willfully falsify, conceal, or cover up by a trick, scheme, or device a material fact, 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.

    
    

21. With regard to the violations of Section 494.0041(2)(b) and (q), Florida Statutes, Mr. Schwartz has suggested that the deletion by the court in the judgment entered on the Eason Complaint of the terms "and had no plans to institute foreclosure proceedings in the near future" suggests "that the issue of foreclosure of the Eason property was a matter of uncertainty." Mr. Schwartz has further suggested that, when the foregoing action of the court is considered along with Mr. Schwartz's explanation of the Eason matter during the hearing of this matter, the evidence supports a conclusion that Mr. Schwartz has not violated Sections 494.0041(2)(b) or (q), Florida Statutes. These arguments are rejected.

    
    

22. Regardless of why the court struck the proposed language "and had no plans to institute foreclosure proceedings in the near future", the fact remains that the court concluded that Mr. Schwartz had misrepresented material facts to Ms. Eason. Therefore, Mr. Schwartz is guilty of misrepresentation in a mortgage financing transaction in violation of Sections 494.0041(2)(b) and (q), Florida Statutes.

    
    

23. With regard to Section 494.0041(2)(g), Florida Statutes, Mr. Schwartz has argued that he adequately explained that he attempted to disperse the

    $1,000.00 called for in the Disclosure and that the real estate taxes on the Eason property had not yet come due. Although this argument is correct with regard to the real estate taxes, Mr. Schwartz's testimony failed to adequately explain why he waited until after the Eason Complaint had been filed to tender the $1,000.00 to Ms. Eason. It is therefore concluded that Mr. Schwartz has violated Section 494.0041(2)(g), Florida Statutes.

    
    

24. With regard to the violation of Sections 494.0025(4)(a)-(c) and (5), Florida Statutes, and, consequently, the violation of Section 494.0041(2)(p), Florida Statutes, Mr. Schwartz has argued that the Department has failed to prove that he acted fraudulently and that fraud is a necessary element of the offenses contained in Sections 494.0025(4)(a)-(c) and (5), Florida Statutes. Although fraud must be shown to support a violation of Section 494.0025(4)(b), Florida Statutes, it is not a prerequisite for the other violations of Section 494.0025, Florida Statutes. Therefore, even if the Petitioner did not commit fraud in his dealings with Ms. Eason, his knowing and willful misrepresentations are sufficient to support a conclusion that he violated Sections 494.0025(4)(a) and (c) and 494.0025(5), Florida Statutes.

    
    

25. The evidence in this is insufficient to conclude that Mr. Schwartz acted fraudulently in his dealings with Ms. Eason. Therefore, it is concluded that the evidence failed to prove that Mr. Schwartz violated Section 494.0025(4)(b), Florida Statutes.

26. In summary, the evidence proved that Mr. Schwartz has violated Section 494.0041(2)(b), (g) and (q), Florida Statutes. The evidence also proved that Mr. Schwartz violated Section 494.0041(2)(p), Florida Statutes, by virtue of his violation of Sections 494.0025(4)(a) and (c) and 494.0025(5), Florida Statutes.

    
    

    1. The 1990 Administrative Action.

       
       

27. The Department has taken the position that Mr. Schwartz, and therefore, Financial Funding, is guilty of violating the following provisions of Section 494.0041(2), Florida Statutes, as a result of the 1990 Administrative Action:

    
    

    . . . .

    (i) Having a license, or the equivalent, to practice any profession or occupation revoked, suspended, or otherwise acted against, including the denial of licensure by a licensing authority of this state or another state, territory, or country for fraud, dishonest dealing, or any other act

    of moral turpitude.

    . . . .

    (k) Acting as a mortgage broker or mortgage brokerage business without a current, active license issued under ss. 494.003-494.0043.

    . . . .

    (p) Failure to comply with, or violation of, any other provision of ss.

    494.001-494.0077.

    
    

28. With regard to the alleged violation of Section 494.0041(2)(p), Florida Statutes, the Department has alleged that Mr. Schwartz, and therefore, Financial Funding, is guilty of violating the following provisions of "ss. 494.001-494.0077":

    
    

    494.0025 Prohibited practices.--It is unlawful for any person:

    (1) To act as a Mortgage lender in this state without a license issued by the department pursuant to ss. 494.006-494.0077.

    
    

29. With regard to Section 494.0041(2)(i), Florida Statutes, Mr. Schwartz has argued that the violation involved in the 1990 Administrative Action did not in "any manner involve 'fraud, dishonest dealing or any other act of moral turpitude.'" Whether this argument is correct need not be decided. Section 494.0041(2)(i), Florida Statutes, does not require that there be "fraud, dishonest dealing or any other act of moral turpitude." While such acts would constitute a violation of Section 494.0041(2)(i), Florida Statutes, they are only part of the prohibited conduct and not an essential element of the offense described in Section 494.0041(2)(i), Florida Statutes. Section 494.0041(2)(i), Florida Statutes, prohibits all acts involving the revocation, suspension or other action against a license, "including" acts of "fraud, dishonest dealing or any other act of moral turpitude." The evidence in this case proved that Mr. Schwartz's license was in fact acted against in the 1990 Administrative Action, a violation of Section 494.0041(2)(i), Florida Statutes.

30. With regard to Section 494.0041(2)(k), Florida Statutes, Mr. Schwartz has argued that he has never had a "license issued under ss. 494.003-494.0043." Mr. Schwartz is correct. The Department has offered no explanation of why Mr. Schwartz has violated Section 494.0041(2)(k), Florida Statutes.

    
    

31. With regard to the violation of Sections 494.0025(1) Florida Statutes, and, consequently, the violation of Section 494.0041(2)(p), Florida Statutes, Mr. Schwartz has argued that he has never been licensed as a "mortgage lender". The evidence proved that Mr. Schwartz was not licensed, nor did he act as, a mortgage lender in regard to the 1990 Administrative Action. Mr. Schwartz has not, therefore, violated Section 494.0041(2)(p), Florida Statutes, because of a violation of Section 494.0025(1), Florida Statutes.

    
    

32. In summary, the evidence proved that Mr. Schwartz has violated Section 494.0041(2)(i), Florida Statutes. The evidence failed to prove, however, that Mr. Schwartz violated Section 494.0041(2)(k) or (p), Florida Statutes.

    
    

    1. Penalty.

    
    

33. Section 494.0041(1), Florida Statutes, provides, in pertinent part, the following:

    
    

    (1) Whenever the department finds a person in violation of an act specified in subsection (2), it may enter an order imposing one or more of the following penalties against the person:

    . . . .

    1. Placement of the . . . applicant on probation for a period of time and subject to all reasonable conditions that the department specifies.

    2. Issuance of a reprimand.

    3. Imposition of a fine in an amount not exceeding $5,000 for each count or separate offense.

    4. Denial of a license or registration.

    
    

34. There are several other actions which the Department is authorized to take pursuant to Section 494.0041(1), Florida Statutes, but those actions pertain to "persons" who already have been licensed. The actions quoted, supra, are the actions which appear to apply where an application for initial licensure is being considered, such as in this case.

    
    

35. Mr. Schwartz has raised a number of pertinent arguments, partly in support of the argument that he has not committed any violation and, partly in mitigation against denial of Financial Funding's license, which must be addressed.

    
    

36. First, concerning the Eason matter, Mr. Schwartz has argued that the Department's failure to take action in the past for his conduct in the Eason matter, despite its prior knowledge, should preclude the Department from taking any action at this time. In support of this argument, Mr. Schwartz has suggested that "[t]he Department apparently found the matter not an appropriate basis for taking action in 1985, again in 1988, or at any time during the 24 month period of intensive audit scrutiny." There are two problems with this argument. First, the evidence failed to support a finding that the Department

    was aware of the Eason matter at all of these times. Secondly, and more importantly, Mr. Schwartz's argument requires a finding of fact not supported by the evidence--that the Department "found the matter not an appropriate basis for taking action . . . ." More reasonably, the lack of evidence as to why the Department did not act in the past supports a conclusion that Mr. Schwartz is fortunate that the Department did not act sooner. Based upon the record in this case, the Department's failure to act earlier does not preclude the Department's action in this case.

    
    

37. Secondly, Mr. Schwartz has suggested that he "satisfactorily explained the Eason matter . . . ." This suggestion is incorrect. Mr. Schwartz's testimony failed to explain why he misrepresented material facts in his dealings with Ms. Eason. To the extent that Mr. Schwartz attempted to explain away the findings in the judgement on the Eason Complaint to this effect, his testimony has been rejected.

    
    

38. Finally, Mr. Schwartz has raised the propriety of the Department denying Financial Funding's license application based upon the 1990 Administrative Action because of the second paragraph 13 on page 4 of the Stipulation disposing of that matter. Although the Department technically agreed not to take action against Mr. Schwartz for the acts involved in the 1990 Administrative Action and this case is a license application of Financial Funding, the practical effect of the Department's proposed action in this case should not be ignored. Financial Funding is a corporation owned solely by Mr. Schwartz and formed only so that Mr. Schwartz can continue to operate in a mortgage brokerage business in Florida. If the Department denies Financial Funding's license application, it will be denying Mr. Schwartz's attempt to continue to work for his own business entity based, at least in part, on actions of Mr. Schwartz which the Department promised not to use against him again. To do so, as argued by Mr. Schwartz, would be arbitrary and capricious. Therefore, it is concluded that the 1990 Administrative Action should not be taken into account in determining whether Financial Funding's license application should be approved.

    
    

39. Despite the foregoing conclusion concerning the 1990 Administrative Action, Mr. Schwartz's violations of Chapter 494, Florida Statutes, in his dealing with Ms. Eason are of such consequence that it cannot be concluded that the Department's denial of the application in this case is arbitrary or capricious.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a Final Order denying Financial

Funding's application for licensure as a mortgage brokerage business.

DONE AND ENTERED this 21st day of January, 1993, in Tallahassee, Florida.

LARRY J. SARTIN

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 21st day of January, 1993.

APPENDIX

The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.

Financial Funding's Proposed Findings of Fact

1. Accepted in 6 and 8.

2. Accepted in 9.

3. Accepted in 3.

4. Accepted in 4.

5. Accepted in 5.

6. Although the Department offered no such evidence, the weight of the evidence failed to prove that there is "no difference."

7. Hereby accepted. See 8.

8. Accepted in 34.

9. Accepted in 10-11 and 28-29.

10. Accepted in 30, 32-33 and 37.

11. Accepted in 31 and 34. Whether Mr. Hertz advised Mr. Schwartz to start doing business in the name of Dollar is not relevant. The evidence failed to prove that Mr. Schwartz "had no reason to operate improperly."

12. What Mr. Hertz noted in his letter of May 18, 1988 is hearsay. The evidence failed to prove when the documents "had been previously provided . . . ." The weight of the evidence also failed to prove that Mr. Schwartz "was not at fault."

13. Hereby accepted.

14. See 37 and 38. The weight of the evidence failed to prove that Mr. Schwartz had "nothing to hide." The evidence also failed to prove that the Department's audits were "extremely thorough. What the Department did during their audits of Mr. Schwartz is based upon hearsay.

15. Accepted in 37.

16. Accepted in 39.

17. Not relevant.

18. Hereby accepted.

19. Accepted in 12 and 25. See also 17-19 and 21. The weight of the evidence failed to prove the second sentence. The fifth sentence through the end of this proposed paragraph is not relevant. The evidence also failed to prove that Ms. Eason was "initially pleased."

20 See 14-15, 19, 21 and 22.

21 See 25-27. The weight of the evidence failed to prove that the Department was aware of the Eason matter for "seven years." The weight of the evidence also failed to prove the third sentence..

The Department's Proposed Findings of Fact

1. Accepted in 1.

2. Accepted in 12.

3. Hereby accepted.

4. Accepted in 13, 21 and 23 and hereby accepted.

5. Accepted in 34.

6. Accepted in 35. The Stipulation was executed in January, not December.

7. Accepted in 36.

8. Accepted in 37.

9. Accepted in 38.

10. Accepted in 40.

11. Accepted in 6.

12. Accepted in 3 and 7.

13. Accepted in 8.

COPIES FURNISHED:

Harold F. X. Purnell, Esquire Highpoint Center, Suite 1200

106 East College Avenue Tallahassee, Florida 32301

J. Ashley Peacock Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302

Tallahassee, Florida 32399-0350

Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, FL 32399-0350

William G. Reeves General Counsel Room 1302

The Capitol

Tallahassee, FL 32399-0350

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this 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 contact the agency that will issue the final order in this case concerning agency 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.

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AGENCY FINAL ORDER

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STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE

DIVISION OF FINANCE

FINANCIAL FUNDING MORTGAGE CORPORATION,

vs.

Petitioner, Administrative Proceeding No.: 2474-F-5/92

DOAH Case No. 92-3339

DEPARTMENT OF BANKING AND FINANCE,

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 January 21, 1993, 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 February 5, 1993, the Petitioner, Financial Funding Mortgage Corporation ("Petitioner") filed its Exceptions to the Recommended Order, a copy of which is attached hereto as Exhibit "B". On or about February 5, 1993, the Department filed Respondent's Exceptions to Recommended Order, a copy of which is attached hereto as Exhibit "C".

This matter arose when the Department, by letter dated April 24, 1992, advised the Petitioner that its application for Licensure as a mortgage brokerage business was denied on grounds more particularly stated in this letter.

The Department timely received the Petitioner's Petition for Formal Proceedings. By letter dated June 1, 1992, the matter was transferred to the Division of Administrative Hearings ("DOAH") for the assignment of a hearing

officer to conduct an administrative hearing. Thereafter, the parties responded on June 12, 1992, to the Initial Order entered by DOAH. By Notice of Hearing dated June 22, 1992, Hearing Officer Larry J. Sartin set the case for hearing in Miami on October 29, 1992. The location of the hearing was subsequently moved to Tallahassee upon the request of the Petitioner and without objection by the Department. On October 29, 1992, the formal hearing was held in Tallahassee before Hearing Officer Larry J. Sartin.

The Hearing Officer's January 21, 1992, Recommended Order recommended that the Department enter a Final Order denying the Petitioner's application for licensure as a mortgage brokerage business.

RULINGS ON EXCEPTIONS BY PETITIONER

First Exception 1/ The Petitioner takes exception to the Recommended Order's Finding of Fact Paragraph 15 wherein the Hearing Officer stated:

The court also found that "[t]he Small Business Administration, in fact, was not foreclosing on Plaintiff's property [and had no plans to institute foreclosure proceedings in the near future.]" The language in brackets was struck from the Final Judgment.

Therefore, no determination was made as to whether foreclosure proceedings might have been instituted in the future. The striking of this language, however, does not prove that the SBA was considering possible foreclosure proceedings on Ms. Eason's property. Nor was Mr. Schwartz's testimony persuasive enough to reject the findings of the court on the Eason Complaint.

The Petitioner argues that the Hearing Officer was erroneous in finding that no determination was made as to whether foreclosure proceedings might be instituted in the future.

In Heifetz v. Department of Business Regulation, 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 consideration 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). If 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 reasonable be inferred. The agency is not authorized to weigh the evidence presented, judge credibility of witness, or otherwise interpret the evidence to fit its desired ultimate conclusion.

Since the Hearing Officer's Finding of Fact was based on competent substantial evidence, the Department concurs with the Hearing Officer. See Heifetz, supra.

Furthermore, the Petitioner's exception relies upon the uncorroborated hearsay testimony of Eric Schwartz. While hearsay evidence is admissible for limited purposes in an administrative hearing, it may not be used to support a finding of fact which is not otherwise supported by competent, substantial evidence. MacPherson v. School Board of Monroe County, 505 So.2d 682 (Fla. 3d DCA 1987) and Pasco County School Board v. Florida Public Relations Commission,

353 So.2d 108 (Fla. 1st DCA 1977). Therefore, Petitioner's first exception is rejected.

Second Exception: The Petitioner takes exception to the Hearing Officer's Finding of Fact, Paragraph 21, which states:

...Mr. Schwartz failed to tender the sum of

$1,000 agreed to in the disclosure. Although Mr. Schwartz testified that he did attempt to tender the $1,000 (less $175.00 in recording fees), he did so after the Eason complaint had been filed and it was rejected because of the litigation. Therefore, although the disclosure agreement was executed June 18, 1985, Mr. Schwartz did not attempt to tender the $1,000 until sometime after the Eason complaint was filed on November 5, 1985.

The Petitioner argues that the record does not support the finding that the money was tendered after initiation of the Eason litigation.

The Department may not overrule a Hearing Officer's finding of fact when supported by competent, substantial evidence. See Heifetz, supra. As to this finding of fact, the competent, substantial evidence appear to be the Final Judgment entered in the Eason case, which states in Paragraph 8, "Defendant SCHWARTZ failed to tender the sum of $1,000.00 to Ms. Eason as promised in the 'Disclosure'".

As a result, the Department concurs with the Hearing Officer's Finding of Fact since it was based upon competent, substantial evidence. See Heifetz, supra. Therefore, the Petitioner's second exception is rejected.

Third Exception: The Petitioner takes exception to the Hearing Officer's Finding of Fact, Paragraph 23, wherein the Hearing Officer quoted Paragraphs 11-

15 of the Eason Final Judgment. The Petitioner argues that the Hearing Officer erred by; including in the quote bracketed words which "were in fact stricken by the court and were not part of the court's judgment."

While it is the Hearing Officer's and neither the agency's nor the Petitioner's function to evaluate the evidence in reaching ultimate findings of fact, the inclusion of bracketed words which, while not explained in this Finding of Fact, denote stricken words, is consistent with the Hearing Officer's use in Paragraph 15 of his Findings of Fact. Therefore, the use of bracket words should be read in light of their use in Paragraph 15.

As a result, since there is competent, substantial evidence with which the Hearing Officer based this Finding of Fact, the Department concurs with the Hearing Officer and the Petitioner's third exception is rejected. See Heifetz, supra.

Fourth Exception: The Petitioner takes exception to the Hearing Officer's Finding of Fact Paragraph 27 which states in pertinent part:

The evidence also failed to prove, however, that the Department ever represented to Mr. Schwartz the it would not take any action against his license as a result of the Eason matter.

The Petitioner argues the Paragraph 13 of the Stipulation and Consent Agreement, entered as Petitioner's Exhibit 1, prohibits the Department from taking any action against Mr. Schwartz's license as a result of the Eason matter.

As stated previously, the Department may not overrule a Hearing Officer's Finding of Fact when supported by competent, substantial evidence. See Heifetz, supra. Here, the competent, substantial evidence appears to be the Stipulation and Consent Agreement which only addresses the 1990 Administrative Complaint and not the Eason matter. Furthermore, the instant action taken by the Department was an action which only concerned the Petitioner's application for registration as a mortgage brokerage business. Mr. Schwartz's license with the Department is unaffected by this action.

As a result, the Department concurs with the Hearing Officer's Finding of Fact since it was based on competent, substantial evidence. Therefore, the Petitioner's fourth exception is rejected.

Fifth Exception: The Petitioner takes exception to the Hearing Officer's Finding of Fact Paragraph 41, which states:

The Department has not brought any charges against Mr. Schwartz subsequent to the execution of the Stipulation.

The Petitioner argues that this finding should be that Mr. Schwartz has not violated any provisions of Chapter 494, Florida Statutes, subsequent to the execution of the Stipulation.

As the Hearing Officer's Finding of Fact was supported by competent, substantial evidence the Department may not overrule the finding of fact. See Heifetz, supra. As a result, the Department concurs with the Hearing Officer's Finding of Fact. Therefore, the Petitioner's fifth exception is rejected.

Sixth Exception: The Petitioner takes exception to the Hearing Officer's Conclusion of Law Paragraph 50 which states:

With regard to Section 494.0041 (2)(g), Florida Statutes, Mr. Schwartz has argued that he adequately explained that he attempted to disperse the $1,000.00 called for in the Disclosure and that the real estate taxes on the Eason property had not yet come due.

Although this argument is correct with regard to the real estate taxes, Mr. Schwartz's testimony failed to adequately explain why he waited until after the Eason Complaint had been filed to tender the $ 1,000.00 to Ms.

Eason. It is therefore concluded that Mr. Schwartz has violated Section 494.0041(2)(g), Florida Statutes.

The Petitioner argues here, as he did in his second exception that the record does not support the conclusion that the $1000.00 was tendered after the commencement of the Eason action.

As stated previously, the Hearing Officer weighed the evidence and made this conclusion based upon competent, substantial evidence. See Heifetz and MacPherson, supra. For this reason, and as more particularly stated in the second exception, the Department concurs with the Hearing Officer's conclusion and rejects the Petitioner's sixth exception.

Seventh Exception: The Petitioner takes exception to the Hearing Officer's Conclusion of Law Paragraph 51 which states:

With regard to the violation of Sections 494.0025(4)(a)-(c)and (5), Florida Statutes, and, consequently, the violationof Section 494.0041 (2)(p), Florida Statutes, Mr.

Schwartzhas argued that the Department has failed to prove that he acted fraudulently and that fraud is a necessary element of the offense contained in Sections 494.0025(4)(a)-

1. and (5), Florida Statutes. Although fraud must be shown to support a violation of Section 494.O025(4)(b), Florida Statutes, it is not a prerequisite for the other violations of Section 494.0025, Florida Statutes. Therefore, even if the Petitioner did not commit fraud in his dealings with Mr. Eason, his knowing and willful misrepresentations are sufficient to support a conclusion that he violated Sections 494.0025(4)(a) and (c) and 494.0025(5), Florida Statutes.

The Petitioner argues that the Hearing Officer's conclusion that fraud need not be involved is incorrect. Further, the Petitioner argues that Schwartz's actions were not knowing or willful.

The Hearing Officer weighed the evidence and made this conclusion based upon competent, substantial evidence. Furthermore, the Hearing Officer observed

the credibility and demeanor of the witnesses upon testifying. Lastly, the Department concurs with the interpretation of law posited by the Hearing Officer as to the cited statutory sections.

The Department therefore concurs with the Hearing Officer's, conclusion of law and the Petitioner's seventh exception is rejected. See Heifetz, supra.

Eighth Exception: The Petitioner takes exception to the Hearing Officer's Conclusion of Law Paragraph 53 which states:

In summary, the evidence proved that Mr. Schwartz has violated Section 494.0041(2)(b),

(g) and (q), Florida Statutes. The evidence also proved that Mr. Schwartz violated Section 494.0041 (2)(p), Florida Statutes, by virtue of his violation of Sections 494.0025 (4)(a) and (c) and 494.0025(5), Florida Statutes.

The Petitioner argues that the Hearing Officer is incorrect based upon its arguments put forward in its sixth and seventh exceptions. Based upon the Department's rulings on the Petitioner's sixth and seventh exceptions, the Department concurs with the Hearing Officer and, therefore, the Petitioner's Eighth exception is rejected.

Ninth Exception: The Petitioner takes exception the Hearing Officer's Conclusion of Law Paragraph 56 which provides that for a violation of Section 494.0041(2)(i), Florida Statutes, to occur there need not be a showing of fraud, dishonest dealings, or any other act of moral turpitude. The Petitioner argues that such a showing is necessary.

The Department concurs with the Hearing Officer's interpretation. The Department's interpretation of Section 494.0041 (2)(i), Florida Statutes, is entitled to be given great weight and cannot be overturned unless clearly erroneous, unreasonable, or in conflict with the state constitution or plain intent of the statute. Shell Harbor Group Inc. v. Department of Business Regulation, 487 So.2d 1141 (Fla. 1st DCA 1986). The Department's interpretation of this statutory language as not requiring a showing of fraud, dishonest dealing, or any other act of moral turpitude is within the range of permissible interpretations. Florida League of Cities, Inc. v. Department of Insurance and Treasurer, 540 So.2d 850 (Fla. 1st DCA 1989).

The Department concurs with this conclusion and the Petitioner's ninth exception is therefore rejected.

Tenth Exception: Petitioner takes exception to the Hearing Officer's Conclusion of Law Paragraph 59 which states in pertinent part:

In summary, the evidence proved that Mr. Schwartz has violated Section 494.0041 (2)(i), Florida Statutes.

The Petitioner's argument is based upon its argument in its ninth exception. For the reasons stated in the Department's ruling on the ninth exception, the Department concurs with the Hearing Officer's Conclusion of Law and the Petitioner's tenth exception is rejected.

Eleventh Exception: The Petitioner takes exception to the Hearing Officer's Conclusion of Law Paragraph 63 which states in pertinent part:

There are two problems with this argument. First, the evidence failed to support a finding that the Department was aware of the Eason matter at all of these times. Secondly, and more importantly, Mr. Schwartz's argument requires a finding of fact not supported by the evidence--that the Department "found the matter not an appropriate basis for taking action..." More reasonably, the lack of evidence as to why the Department did not act in the past supports a conclusion that Mr.

Schwartz is fortunate that the Department did not act sooner. Based upon the record in this case, the Department's failure to act earlier does not preclude the Department's action in this case.

The Petitioner argues that the Stipulation and Consent Agreement (Petitioner's Exhibit 1) precluded the Department from using the 1990 Administrative Action and the Eason matter as a basis for denying Petitioner's application for registration as a mortgage brokerage business.

In this action, the Petitioner was afforded an opportunity to present evidence at the hearing concerning Petitioner's Exhibit 1, which the Hearing Officer weighed in reaching his conclusions. Instead, the Petitioner chose not to call any Departmental personnel to corroborate Mr. Schwartz's hearsay testimony. As stated above, uncorroborated hearsay evidence may not be used as a basis for a finding of fact. See MacPherson, supra. Additionally, Heifetz provides that it is the hearing officer's function to evaluate the evidence in reaching ultimate findings of fact based upon competent, substantial evidence. The Hearing Officer observed the credibility and demeanor of Mr. Schwartz when he testified at the hearing on behalf of the Petitioner, as will as that of the other witnesses. The Hearing Officer based this conclusion upon the finding of fact which was the basis for the Petitioner's fourth exception. Furthermore, the action the Department is taking here is the denial of the Petitioner's application for registration as a mortgage brokerage business. In no way is the Department taking an action against Mr. Schwartz's license and, to this end, Mr. Schwartz's license with the Department remains unaffected. Therefore, the Department rejects the Petitioner's eleventh exception. See Heifetz and MacPherson, supra.

Twelfth Exception: The Petitioner takes exception to the Hearing Officer's Conclusion of Law Paragraph 64 which states in pertinent part:

Secondly, Mr. Schwartz has suggested that he "satisfactorily explained the Eason matter..." This suggestion is incorrect. Mr. Schwartz's testimony failed to explain why he misrepresented material facts in his dealings with Ms. Eason. To the extent that Mr.

Schwartz attempted to explain away the findings in the judgement on the Eason Complaint to this effect, his testimony has been rejected.

The Petitioner bases its argument upon the arguments in its first and seventh exceptions. As stated in the Department's ruling on Petitioner's eleventh exception, it is the Hearing Officer's function to evaluate the evidence in reaching ultimate findings of fact. See Heifetz, supra. The Hearing Officer observed the credibility of the Petitioner's witness when he testified at the hearing, as well as the other witness. Therefore based upon this and the Department's rulings on the Petitioner's first and seventh exceptions, the Department concurs with the Hearing Officer and the Petitioner's twelfth exception is rejected.

Thirteenth Exception: The Petitioner takes exception to the Hearing Officer's Conclusion of Law Paragraph 66 which states:

Despite the foregoing conclusion concerning the 1990Administrative Action, Mr. Schwartz's violations of Chapter494, Florida Statutes, in his dealing with Ms. Eason are of such consequence that it cannot be concluded that the Department's denial of the application in this case is arbitrary or capricious.

The Petition bases its argument upon the reasons set forth in its first, second, fourth, sixth, seventh, eighth, eleventh and twelfth exceptions. The Department concurs with the Hearing Officer based upon its rulings on the Petitioner's first, second, fourth, sixth, seventh, eight, eleventh and twelfth exceptions. Therefore, the Department rejects the Petitioner's thirteenth exception.

Fourteenth Exception: The Petitioner takes exception to the Hearing Officer's recommendation that the application of Financial Funding Mortgage Corporation be denied. The Petitioner argues that the Department should approve the application and impose a probationary period upon the Petitioner. Further, the Petitioner argues that the Department should take into consideration the probationary period of 24 months already served by Schwartz, and, as a result, no further probation would be necessary.

As stated previously, Heifetz precludes the Department from overturning the Hearing Officer's ultimate findings of fact when based upon competent, substantial evidence. Since the Hearing Officer based his recommendation upon competent, substantial evidence, the Department concurs with the Hearing Officer. See Heifetz, supra. As has been stated previously, the action here is the denial of the Petitioner's application for registration as a mortgage brokerage business. Any probation served by Mr. Schwartz, is irrelevant to this matter. As a result, the Petitioner's fourteen exception is rejected.

RULINGS ON EXCEPTIONS BY THE DEPARTMENT

First Exception: The Department takes exception to the Hearing Officer's Conclusion of Law, Paragraph 61, second sentence which states that "action quoted, supra, are the actions which appear to apply where an application for initial Licensure is being considered, such as this case." The Department argues that actions which it is authorized to take pursuant to Section 494.0041 (1), Florida Statutes, apply to both applicants for licensure and those licensed by the Department.

The actions contained in Section 494.0041(1), Florida Statutes, which are the basis of this exception are the following:

(1) Whenever the department finds a person in violation of an act specified in subsection (2), it may enter an order imposing one or more of the following penalties against the person:

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1. Placement of the . . . applicant on probation for a period of time and subject to all reasonable conditions that the department specifies.

2. Issuance of a reprimand.

3. Imposition of a fine in an amount not exceeding $5,000 for each count or separate offense.

4. Denial of a license or registration.

While subsection (f) by its plain meaning may only be applied to an applicant of licensure or registration, the other subsections cited above may also be applied by the Department to applicants as well as those already licensed by the Department.

To the extent Section 494.0041(1 )(c)(d) and (e) apply to both applicants and those licensed by the Department and not just solely to applicants, the Department concurs with the first exception and the Hearing Officer's conclusion of law Paragraph 61 is overruled.

Second Exception: The Department takes exception to the Hearing Officer's Conclusion of Law, Paragraph 65 wherein the Hearing Officer concluded that the Department could not deny the Petitioner's corporate application based upon the 1990 Administrative Action which the Department and Schwartz resolved the Stipulation and Consent Agreement (Petitioners Exhibit 1).

The Department accepts the second exception to the limited extent that it did have the discretion to deny the corporate application as indicated in its denial letter. Since the Hearing Officer has recommended denial of this corporate license on other substantial grounds however, the Department concurs with the Hearing Officer's choice not to rely upon the particular allegations set forth in Paragraph 65 of the Recommended Order as a basis for denial in this case.

FINAL ORDER

Having rules on the exceptions filed by the Petitioner and the Department to the Recommended Order, it is hereby ORDERED:

1. Except to the extent such are modified herein, the Hearing Officer's Findings of Fact and Conclusions of Law in the Recommended Order, attached hereto, are hereby adopted and incorporated by reference herein as the Findings of Fact and Conclusions of Law of this Final Order.

   
   

2. Petitioner's application for registration as a mortgage brokerage business is hereby DENIED.

DONE and ORDERED this 5th day of March, 1993, in Tallahassee, Leon County, Florida.

GERALD LEWIS as Comptroller of the State of Florida and Head of the Department of Banking and Finance

ENDNOTE

1/ The Petitioner's first numbered exception deals with the Department's approval that the Petitioner need not file a copy of the transcript (since a transcript had previously been prepared and filed) with its exceptions. This not being an exception to the Hearing Officer's Recommended Order all exceptions listed herein are one less than listed in the Petitioner's Exceptions to Recommended Order, e.g. First exception herein is actually listed by Petitioner as Exception 2.

COPIES FURNISHED:

Larry J. Sartin, Hearing Officer Division of Administrative Hearings The DeSoto Building

1 230 Apalachee Parkway Tallahassee, Florida 32399-1550

Randall A. Holland, Director Division of Finance

The Capitol

Tallahassee, Florida 32399-0350

Anthony F. DiMarco, Esquire Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302

Tallahassee, Florida 32399-0350

J. Ashley Peacock, Esquire Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302

Tallahassee, Florida 32399-0350

CERTIFICATE OF SERVICE

HEREBY CERTIFY that a true and correct copy of the foregoing was sent U.S. Mail to Harold F.X. Purnell, Esquire, Attorney for Petitioner, Highpoint Center, Suite 1200, 106 East College Avenue, Tallahassee, Florida 32301 this 5th of March 3, 1993.

ANTHONY F. DiMARCO

Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302

Tallahassee, Florida 32399-0350

(904) 488-9896

NOTICE OF RIGHTS

Respondent is advised that within thirty (30) days of the date of this Final Order he may seek judicial review of this Final Order by filing a Notice of Appeal with the Clerk, Department of Banking and Finance, Legal Section, The Capitol, Tallahassee, Florida 32399-0350, and by filing a second copy of such Notice of Appeal with the appropriate filing fee with the Clerk of the District Court of Appeal, First District, 300 Martin L. King, Jr., Boulevard, Tallahassee, Florida 32399-1850, or with the Clerk of the District Court wherein the Respondent resides.

Docket for Case No: 92-003339

Orders for Case No: 92-003339