STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF BANKING AND )
FINANCE, OFFICE OF THE ) COMPTROLLER, DIVISION OF FINANCE, )
)
Petitioner, )
)
vs. ) CASE NO. 92-5620
)
BARAT COMPANY, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Michael M. Parrish, conducted a formal hearing in this case on December 16, 1992, at Miami, Florida. Appearances for the parties at the hearing were as follows:
APPEARANCES
For Petitioner: Ron Brenner, Esquire
Office of the Comptroller
401 Northwest 2nd Avenue Suite 708-N Miami, Florida 33128
For Respondent: Louis J. Terminello, Esquire
950 South Miami Avenue Miami, Florida 33130 and
Michael H. Tarkoff, Esquire
2601 South Bayshore Drive Suite 1400 Coconut Grove, Florida 33133
STATEMENT OF THE ISSUES
The issue in this case concerns whether the Petitioner should issue a cease and desist order and/or impose sanctions against the Respondent on the basis of allegations that the Respondent, by failing to have its books, accounts, and documents available for examination and by refusing to permit an inspection of its books and records in an investigation and examination, has violated Sections 520.995(1)(a), (f), and (g), Florida Statutes.
PRELIMINARY STATEMENT
At the formal hearing in this case the Petitioner presented the testimony of three witnesses and offered one exhibit, which was received in evidence. The Respondent presented the testimony of one witness, but did not offer any exhibits. At the conclusion of the formal hearing the parties were allowed until January 29, 1993, within which to file their proposed recommended orders.
The Petitioner filed a timely proposed recommended order on January 29, 1993. The transcript of the formal hearing was also filed on January 29, 1993. The Respondent filed a tardy proposed recommended order on February 2, 1993.
On February 4, 1993, the Petitioner filed a motion to strike the Respondent's proposed recommended order on the grounds that it fails to comply with the requirements of Rule 60Q-2.031, Florida Administrative Code, by failing to cite to the record. The motion to strike is denied.
The proposed recommended orders filed by the parties have been carefully considered during the formulation of this Recommended Order. The proposed findings of fact submitted by the parties are addressed in the Appendix to this Recommended Order.
FINDINGS OF FACT
Sometime during the month of February of 1991, Ms. Jennifer Chirolis, a Financial Investigator from the Department of Banking and Finance, visited the offices of the Barat Company. She spoke with Mr. Roque Barat and determined that the Barat Company was conducting retail installment sales without being licensed to do so under Chapter 520, Florida Statutes. Mr. Chirolis advised Mr. Roque Barat that he needed a license and asked him to cease operations until he obtained the necessary license. The Barat Company thereafter obtained the necessary license and was still licensed as of the time of the formal hearing.
Thereafter, the Department received a complaint about the Barat Company from a customer. The customer's complaint was to the effect that the Barat Company had made misrepresentations concerning the fee paid by the customer.
The Department initiated an "investigation" of the customer's complaint and also decided to conduct an "examination" of the Barat Company.
On April 22, 1992, a Department Examiner, Mr. Lee Winters, went to the office of the Barat Company to conduct the "examination" and "investigation". The Barat Company is operated out of a small office with two employees and a few filing cabinets. When Mr. Winters arrived, employees of the Barat Company were conducting business with two customers. Mr. Winters identified himself to the employees and informed them that he had been assigned to conduct an "examination" and "investigation" of the Barat Company. A Barat Company employee, Mr. Fred Vivar, said that he could not produce the company's records without express authorization from Mr. Roque Barat, that Mr. Roque Barat was out of the country, that he could not get in touch with Mr. Roque Barat at that moment, but that when he did get in touch with him, he would advise Mr. Roque Barat of Mr. Winter's desire to examine the company's books and records.
Following a number of telephone calls over a period of several days, on May 1, 1992, Mr. Vivar advised Mr. Winters that he had received authorization from Mr. Roque Barat for the Department to inspect the books and records of the Barat Company. An appointment was made for the Department to inspect the books and records on May 6, 1992, beginning at 10:00 a.m.
On May 5, 1992, a letter from an attorney representing the Barat Company was hand delivered to Mr. Winters. The letter included the following paragraph:
It is my understanding that you have requested the opportunity to view the records of the above-referenced company, said inspection to
take place on May 6, 1992. Please be advised that if this "inspection" is purportedly being done by your agency's authority, pursuant to
F.S. 520.996, that no records will be produced absent compliance by your department with F.S. 520.994 including, but not limited to, the Barat Company exercising its right to challenge said subpoena.
The Department concluded from the letter of May 5, 1992, that the Barat Company not only refused to produce records without a subpoena, but that, even if served with a subpoena, the Barat Company would resist compliance with the subpoena unless and until ordered to comply by a court. For that reason the Department did not pursue the issuance of a subpoena.
Mr. Winters has been involved in over one hundred "examinations" under Chapter 520, Florida Statutes. In the course of those "examinations" there have been only two licensees that did not produce their records. Those two licensees were the Barat Company and another company known as Phase One Credit. Mr. Roque Barat is an officer and director of both Phase One Credit and the Barat Company. The license of Phase One Credit was revoked for its failure to produce its books and records.
The refusal to produce the books and records of the Barat Company was occasioned by an effort on the part of Mr. Roque Barat to avoid payment of "examination" fees authorized by Section 520.996, Florida Statutes.
In the summer of 1992, the Barat Company filed for bankruptcy, closed down its business operations, and is currently winding up the business.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. See Section 120.57(1), Florida Statutes.
The Department of Banking and Finance is charged with the responsibility and duty of administering and enforcing the provisions of the Florida Retail Installment Sales Act, Chapter 520, Florida Statutes.
Section 520.995, Florida Statutes, reads as follows, in pertinent part:
The following acts are violations of this chapter and constitute grounds for the disciplinary actions specified in subsection (2):
Failure to comply with any provision of this chapter, any rule or order adopted pursuant to this chapter, or any written agreement entered into with the department;
* * *
Failure to maintain, preserve, and keep available for examination, all books, accounts, or other documents required by this chapter, by any rule or order adopted pursuant to this chapter, or by any agreement entered
into with the department;
Refusal to permit inspection of books and records in an investigation or examination by the department or refusal to comply with a subpoena issued by the department; or
* * *
Upon a finding by the department that any person has committed any of the acts set forth in subsection (1), the department may enter an order taking one or more of the following actions:
Denying an application for a license pursuant to this chapter;
Revoking or suspending a license previously granted pursuant to this chapter;
Placing a licensee or an applicant for a license on probation for a period of time and subject to such conditions as the department may specify;
Placing permanent restrictions or conditions upon issuance or maintenance of a license pursuant to this chapter;
Issuing a reprimand; or
Imposing an administrative fine not to exceed $1,000 for each such act.
Section 520.996, Florida Statutes, reads as follows, in pertinent part:
The department or its agent may, at intermittent periods, make such investigations and examinations of any licensee or other person as it deems necessary to determine compliance with this chapter. For such purposes, it may examine the books, accounts, records, and other documents or matters of any licensee or other
person. It shall have the power to compel the production of all relevant books, records, and other documents and materials relative to an examination or investigation. Such investigations and examinations shall not be made more often than once during any 12-month period unless the department has good and sufficient reason to believe the licensee is not complying with the provisions of this chapter. The expenses of the department incurred in each such examination may be established by department rule but shall not exceed $250 per 8-hour day for each examiner. Such examination fee shall be calculated on an hourly basis and shall be rounded to the nearest hour. The licensee shall also pay the travel expense and per diem subsistence allowance provided for state employees in s.
112.061. The licensee shall not be required to pay a per diem fee and expenses of an
examination which shall consume more than 30 worker-days in any one year unless such examination or investigation is due to fraudulent practices of the licensee, in which case such licensee shall be required to pay the entire cost regardless of time consumed.
* * *
(4) Any retail buyer or owner having reason to believe that the provisions of this chapter have been violated may file with the department a written complaint setting forth the details of such alleged violations and the department upon receipt of such complaint, may inspect the pertinent books, records, letters, and contracts of the licensee and of the seller involved, relating to such specific written complaint.
Section 520.997, Florida Statutes, reads as follows, in pertinent part:
Every licensee shall maintain, at the principal place of business, such books, accounts, and records of the business conducted under the license issued for such place of business as will enable the department to determine whether the business of the licensee contemplated by this chapter is being operated in accordance with the provisions of this chapter. The licensee shall make all such books, accounts, and records of business conducted under the license available at a convenient location in this state upon request of the department.
Section 520.997(1), Florida Statutes, requires the Barat Company to maintain certain specified books and records and to make those records available upon request of the Department. The Barat Company has violated Section 520.995(1)(f), Florida Statutes, by failing to maintain and keep available for examination the statutorily required books, accounts, and records. Further, the Barat Company has violated Section 520.995(1)(g), Florida Statutes, by refusing to permit inspection of books and records in an investigation or examination by the Department.
The Department argues that the Barat Company has also violated Section 520.995(1)(a), Florida Statutes, by reason of the same conduct which constitutes a violation of Section 520.995(1)(g), Florida Statutes. The Department's argument is literally correct, but such a literal interpretation of Section 520.995(1)(a) would permit the Department to impose two penalties each time there was a violation of any other provision of Section 520.995(1), Florida Statutes. It is most unlikely that such a result was intended by the Legislature. Therefore, the Depart-ment's argument regarding a violation of Section 520.995(1)(a), Florida Statutes, is rejected.
The Barat Company argues that there was no violation in this case because the Department was acting pursuant to the authority of Section 520.996(1), Florida Statutes, rather than pursuant to its authority under
Section 520.997(1), Florida Statutes. The argument fails because the Department is statutorily authorized to inspect a licensee's books and records upon request, and a licensee is statutorily required to make its books and records available upon request, regardless of whether the Department is making an "investigation" or "examination" pursuant to Section 520.996(1), an "inspection" pursuant to Section 520.996(4), or a "request" pursuant to Section 520.997(1).
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Banking and Finance issue a Final Order in this case to the following effect:
Dismissing the charge that the Barat Company has violated Section 520.995(1)(a), Florida Statutes;
Concluding that the Barat Company has violated Sections 520.995(1)(f) and (g), Florida Statutes, as charged in the Administrative Complaint;
Imposing a penalty consisting of: (a) an administra-tive fine in the amount of one thousand dollars, and (b) revocation of the Barat Company's license; and
Ordering the Barat Company to cease and desist from any further violations of Chapter 520, Florida Statutes.
DONE AND ENTERED this 23rd day of February, 1993, in Tallahassee, Leon County, Florida.
MICHAEL M. PARRISH
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 23rd day of February, 1993.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-5620
The following are my specific rulings on the proposed findings of fact submitted by the parties.
Proposed findings submitted by Petitioner:
Paragraph 1: Rejected as constituting a conclusion of law, rather than a proposed finding of fact.
Paragraphs 2, 3 and 4: Accepted in substance.
Paragraph 5: Accepted in substance, with the exception of the last five words. The last five words are rejected as irrelevant to the issues in this case and as, in any event, not supported by clear and convincing evidence.
Paragraph 6: Accepted in substance.
Paragraph 7: First sentence accepted in substance. Second sentence rejected as irrelevant to the issues in this case.
Paragraph 8: First sentence accepted. Second sentence rejected as inaccurate description of letter. (The relevant text of the letter is included in the findings of fact.) Last sentence rejected as subordinate and unnecessary evidentiary details.
Paragraph 9: Rejected as irrelevant to the issues in this case.
Paragraph 10: First two sentences rejected as irrelevant to the issues in this case. Last two sentences accepted in substance.
Paragraph 11: Accepted in substance.
Paragraph 12: First sentence accepted in substance. Second sentence rejected as irrelevant to the issues in this case.
Paragraph 13: Accepted.
Proposed findings submitted by Respondent:
As noted in the Preliminary Statement portion of this Recommended Order, the Respondent's proposed recommended order was filed late. The Respondent's proposed recommended order also fails to comply with the requirements of Rule 60Q-2.031, Florida Administrative Code, in that it fails to contain citations to the portions of the record that support its proposed findings of fact. A party's statutory right to a specific ruling on each proposed finding submitted by the party is limited to those circumstances when the proposed findings are submitted within the established deadlines and in conformity with applicable rules. See Section 120.59(2), Florida Statutes, and Forrester v. Career Service Commission, 361 So.2d 220 (Fla. 1st DCA 1978), in which the court held, inter alia, that a party is not entitled to more than a reasonable period of time within which to submit its proposals. Because the Respondent submitted its proposals late and because those proposals fail to comply with the requirements of Rule 60Q-2.031, Florida Administrative Code, the Respondent is not statutorily entitled to a specific ruling on each of its proposed findings and no such specific findings have been made. (As noted in the Preliminary Statement, the Respondent's proposed recommended order has been read and considered.)
COPIES FURNISHED:
Ron Brenner, Esquire Office of the Comptroller
401 Northwest 2nd Avenue Suite 708-N
Miami, Florida 33128
Louis J. Terminello, Esquire 950 South Miami Avenue Miami, Florida 33130
Michael H. Tarkoff, Esquire 2601 South Bayshore Drive Suite 1400
Coconut Grove, Florida 33133
Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 Copies furnished continued:
William G. Reeves, General Counsel Office of the Comptroller
The Capitol, Room 1302 Tallahassee, Florida 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 ten 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.
Issue Date | Proceedings |
---|---|
Mar. 17, 1993 | Final Order filed. |
Feb. 23, 1993 | Recommended Order sent out. CASE CLOSED. Hearing held 2/16/92. |
Feb. 04, 1993 | Motion to Strike Respondent`s Proposed Recommended Order filed. |
Feb. 02, 1993 | Respondent`s Proposed Recommended Order filed. |
Jan. 29, 1993 | Petitioner`s Proposed Findings of Fact, Conclusions of Law and Recommended Order filed. |
Jan. 11, 1993 | Transcript filed. |
Dec. 16, 1992 | CASE STATUS: Hearing Held. |
Dec. 10, 1992 | (Petitioner) Motion for Official Recognition filed. |
Nov. 30, 1992 | Petitioner`s Response to Reply to Motion for Summary Final Order filed. |
Nov. 25, 1992 | Order sent out. (Motion for Summary Final Order, denied) |
Nov. 16, 1992 | (Respondent) Reply to Motion for Summary Final Order filed. |
Nov. 02, 1992 | (Petitioner) Motion for Summary Final Order w/Exhibit-1 filed. |
Oct. 19, 1992 | (Respondent) Objection to Motion for Continuance filed. |
Oct. 19, 1992 | Order Denying Continuance sent out. (motion for continuance denied) |
Oct. 15, 1992 | (Petitioner) Motion for Continuance of Final Hearing filed. |
Oct. 06, 1992 | Notice of Hearing sent out. (hearing set for 12-16-92; 9:00am; Miami) |
Oct. 05, 1992 | Petitioner`s First Request to Produce; Notice of Taking Deposition filed. |
Oct. 02, 1992 | Joint Response to Initial Order filed. |
Sep. 21, 1992 | Initial Order issued. |
Sep. 16, 1992 | Conforming Petition filed. |
Sep. 16, 1992 | Agency referral letter; Administrative Complaint for Entry of Order to Cease and Desist and Imposing Administrative Penalties and Notice of Rights; Petition to Initiate Formal Proceedings and Petition for Formal Administrative Hearing; Notice of Appearanc |
Issue Date | Document | Summary |
---|---|---|
Mar. 16, 1993 | Agency Final Order | |
Feb. 23, 1993 | Recommended Order | Licensee who violated Sec. 520.995(1)(f) & (g), F.S., by failing to maintain and make available required books and records should have license revoked. |