STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CITIFIRST MORTGAGE CORP., )

)

Petitioner, )

)

vs. ) CASE NO. 92-7496RU

)

DEPARTMENT OF BANKING )

AND FINANCE, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, a formal hearing was conducted in this case on February 11, 1993, in Tallahassee, Florida, before Stuart M. Lerner, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Gerald J. Houlihan, Esquire

David T. Azrin, Esquire Greenberg, Traurig, Hoffman,

Lipoff, Rosen & Quentel, P.A.

1221 Brickell Avenue

Miami, Florida 33131

For Respondent: Margaret S. Karniewicz, Esquire

Assistant General Counsel Department of Banking and Finance 1302 The Capitol

Tallahassee, Florida 32399-0350 STATEMENT OF THE ISSUES

1. Whether the text of the Department of Banking and Finance's October 28, 1992, letter informing Petitioner of the Department's proposed denial of Petitioner's application for licensure as a mortgage lender constitutes a "rule," within the meaning of Section 120.52(16), Florida Statutes?

   
   

2. If so, whether such "rule" violates the provisions of Section 120.535, Florida Statutes?

PRELIMINARY STATEMENT

On December 24, 1992, Petitioner filed a petition seeking an administrative determination that the text of the Department of Banking and Finance's October 28, 1992, letter informing Petitioner of the Department's proposed denial of Petitioner's application for licensure as a mortgage lender is a "rule," within the meaning of Section 120.52(16), Florida Statutes, that was not adopted by the rulemaking procedures specified in Section 120.54, Florida Statutes, contrary to

the provisions of Section 120.535, Florida Statutes. The case was assigned to the undersigned Hearing Officer on December 30, 1992. The Order of Assignment contained the following directive:

This matter shall be scheduled for hearing within 30 days of the date of this ORDER unless a stipulation from the parties to this proceeding requests that the final hearing be set at a later date.

In accordance with this directive, the final hearing in this cause was scheduled to commence on January 15, 1993.

On January 12, 1993, Petitioner filed an Agreed Motion to Continue Hearing Date. By order issued January 13, 1993, the Hearing Officer granted the motion and rescheduled the final hearing for February 11, 1993.

The final hearing was held on February 11, 1993, as scheduled. A total of four witnesses testified at the hearing: Peter Garcia, a mortgage broker employed by Petitioner; James Rimes, Chief of the Bureau of Examinations of the Department's Division of Finance; and William Sims and David Taylor, both of whom occupy Financial Examiner/Analyst Supervisor positions with the Department. In addition to the testimony of these four witnesses, a total of 18 exhibits (Petitioner's Exhibits 2, 3, 5, 6, 8, 12, 13, 18, 22-28 and 31-33) were offered and received into evidence.

At the close of the evidentiary portion of the hearing on February 11, 1993, the Hearing Officer advised the parties on the record that their post- hearing submittals had to be filed no later than ten days following the Hearing Officer's receipt of the hearing transcript. The hearing transcript was received by the Hearing Officer on February 24, 1993. On March 5, 1993, and March 8, 1993, respectively, the Department and Petitioner filed their proposed final orders. These proposed final orders contain what are labelled as "findings of fact." These "findings of fact" have been carefully considered and are specifically addressed in the Appendix to this Final Order.

FINDINGS OF FACT

Based upon the parties' factual stipulations, the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made:

1. On August 28, 1992, Petitioner submitted to the Department its application for licensure as a mortgage lender. 1/

   
   

2. On October 28, 1992, the Department sent Petitioner a letter announcing its intent to deny Petitioner's application for licensure as a mortgage lender. The text of the letter read as follows:

   
   

   This is to inform you that your Application for Licensure as a Mortgage Lender for Citifirst Mortgage Corp. is hereby denied.

   
   

   The denial is based on Section 494.0072(2)(k), Florida Statutes. Section 494.0072(2), Florida Statutes, "Each of the following acts constitutes a ground for which the disciplinary actions specified in subsection

   1. may be taken: . . . (k) Acting as a mortgage lender or correspondent mortgage lender without a current active license issued under ss. 494.006-494.0077." The Department's investigation revealed Citifirst Mortgage Corp. has acted as a mortgage lender without a current, active license.

      
      

      Please be advised that you may request a hearing concerning this denial to be conducted in accordance with the provisions of Section 120.57, Florida Statutes. Requests for such a hearing must comply with the provisions of Rule 3-7.002, Florida Administrative Code (attached hereto) and must be filed in duplicate with:

      
      

      Clerk

      Division of Finance

      Department of Banking and Finance The Capitol

      Tallahassee, Florida 32399-0350

      (904) 487-2583

      
      

      within twenty-one (21) days after receipt of this notice. Failure to respond within twenty-one days of receipt of this notice shall be deemed to be a waiver of all rights to a hearing. Should you request such a hearing, you are further advised that at such a hearing, you will have the right to be represented by counsel or other qualified representative; to offer testimony, either oral or written; to call and cross examine witnesses; and to have subpoenas and subpoenas duces tecum issued on your behalf.

      
      

3. Petitioner timely requested a formal hearing on the proposed denial of its application.

   
   

4. The matter was referred to the Division of Administrative Hearings, where it is still pending.

   
   

   CONCLUSIONS OF LAW

   
   

5. Petitioner is seeking an administrative determination that the text of the Department's October 28, 1992, letter (set forth in Finding of Fact 2 of this Final Order) is an agency statement that violates subsection (1) of Section 120.535, Florida Statutes, which provides as follows:

   
   

   Rulemaking is not a matter of agency discretion. Each agency statement defined as a rule under s. 120.52(16) shall be adopted by the rulemaking procedure provided by s. 120.54 as soon as feasible and practicable.

   Rulemaking shall be presumed feasible and practicable to the extent provided by this

   subsection unless one of the factors provided by this subsection is applicable.

   1. Rulemaking shall be presumed feasible unless the agency proves that:

      1. The agency has not had sufficient time to acquire the knowledge and experience reasonably necessary to address a statement by rulemaking; or

      2. Related matters are not sufficiently resolved to enable the agency to address a statement by rulemaking; or

      3. The agency is currently using the rulemaking procedure expeditiously and in good faith to adopt rules which address the statement.

   2. Rulemaking shall be presumed practicable to the extent necessary to provide fair notice to affected persons of relevant agency procedures and applicable principles, criteria, or standards for agency decisions unless the agency proves that:

   1. Detail or precision in the establishment of principles, criteria, or standards for agency decisions is not reasonable under the circumstances; or

   2. The particular questions addressed are of such a narrow scope that more specific resolution of the matter is impractical outside of an adjudication to determine the substantial interests of a party based on individual circumstances.

   
   

6. To prevail in this matter, Petitioner must establish, as a threshold requirement, that the text of the October 28, 1992, letter constitutes a "rule," as defined in Section 120.52(16), Florida Statutes.

   
   

7. Section 120.52(16), Florida Statutes, defines the term "rule," in pertinent part, as "each agency statement of general applicability that implements, interprets, or prescribes law or policy or describes the organization, procedures, or practice requirements of an agency[,] . . . includ[ing] any form which imposes any requirement or solicits any information not specifically required by statute or an existing rule."

   
   

8. Statements of "general applicability," as that term is used in Section 120.52(16), Florida Statutes, are "statements which are intended by their own effect to create rights, or to require compliance, or otherwise to have the direct and consistent effect of law." McDonald v. Department of Banking and Finance, 346 So.2d 569, 581 (Fla. 1st DCA 1977).

   
   

9. The text of the Department's October 28, 1992, letter to Petitioner is not such a statement of "general applicability."

   
   

10. The letter is directed to Petitioner and Petitioner alone and purports to address only Petitioner's individual circumstances. No other entity or person is affected in any way by anything that is stated in the text of the letter. It therefore cannot be said that the text of the letter is of "general applicability." See Home Builders and Contractors Association of Brevard, Inc.,

    v. Department of Community Affairs, 585 So.2d 965, 969-70 (Fla. 1st DCA 1991); Imperial Industries, Inc., v. Florida Compensation Rating Bureau, 387 So.2d 1030, 1034 (Fla. 1st DCA 1980); Department of Commerce, Division of Labor, v. Mathews Corporation, 358 So.2d 256, 258-59 (Fla. 1st DCA 1978).

    
    

11. Moreover, even insofar as Petitioner is concerned, the text of the letter does not, by its own effect, create rights, require compliance, or otherwise have the direct and consistent effect of law, because it describes action that the Department merely proposes to take and which Petitioner has the opportunity to challenge pursuant to Section 120.57, Florida Statutes, before it becomes final agency action. For this additional reason, the text of the letter is not a statement of "general applicability." See Florida Public Service Commission v. Indiantown Telephone System, Inc., 435 So.2d 892, 895 (Fla. 1st DCA 1983).

    
    

12. Because the text of the letter is not a statement of "general applicability" and therefore not a "rule," as defined in Section 120.52 (16), Florida Statutes, it is not subject to challenge pursuant to Section 120.535, Florida Statutes.

Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby

ORDERED that Petitioner's petition challenging, pursuant to Section 120.535, Florida Statutes, the text of the Department's October 28, 1992, letter is dismissed.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 1st day of April, 1993.

STUART M. LERNER

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 1st day of April, 1993.

ENDNOTE

1/ Petitioner was at the time, as it still is, registered with the Department as a mortgage brokerage business.

APPENDIX TO FINAL ORDER IN CASE NO. 92-7496RU

The following are the Hearing Officer's specific rulings on the "findings of fact" set forth in the parties' proposed final orders:

Petitioner's Proposed "Findings of Fact"

1-2. Accepted and incorporated in substance, although not necessarily repeated verbatim, in this Final Order.

1. Rejected because it would add only unnecessary detail to the factual findings made by the Hearing Officer.

   
   

2. Accepted and incorporated in substance.

   
   

3. Rejected as a finding of fact because it is more in the nature of a statement of the law.

   
   

4. First through third sentences: Rejected as findings of fact because they are more in the nature of statements of the law; Fourth sentence: Rejected because it would add only unnecessary detail to the factual findings made by the Hearing Officer.

7-8. Rejected because they would add only unnecessary detail to the factual findings made by the Hearing Officer.

1. Accepted and incorporated in substance.

   
   

2. Rejected because, even if true, it would have no bearing on the outcome of the instant case, particularly inasmuch as the "rule" or "requirement" referred to in this proposed finding is not referenced in the Department's October 28, 1992, letter.

11-12. Rejected as findings of fact because they are more in the nature of legal argument.

13-19. Rejected because they address matters not germane to the outcome of the instant case.

20-21. Rejected as findings of fact because they are more in the nature of legal argument.

The Department's Proposed "Findings of Facts"

1. First sentence: Accepted and incorporated in substance; Second and third sentences: Rejected because they would add only unnecessary detail to the factual findings made by the Hearing Officer.

   
   

2. Accepted and incorporated in substance.

   
   

3. Rejected because it would add only unnecessary detail to the factual findings made by the Hearing Officer.

4-6. Rejected as findings of fact because they are more in the nature of statements of the law.

7-11. Rejected because they would add only unnecessary detail to the factual findings made by the Hearing Officer.

COPIES FURNISHED:

Gerald J. Houlihan, Esquire David T. Azrin, Esquire Greenberg, Traurig, Hoffman,

Lipoff, Rosen & Quentel, P.A.

1221 Brickell Avenue

Miami, Florida 33131

Margaret S. Karniewicz, Esquire Assistant General Counsel Department of Banking and Finance 1302 The Capitol

Tallahassee, Florida 32399-0350

Liz Cloud, Chief

Bureau of Administrative Code The Capitol, Room 1802 Tallahassee, Florida 32399-0250

Carroll Webb, Executive Director Administrative Procedures Committee Holland Building, Room 120 Tallahassee, Florida 32399-1300

NOTICE OF RIGHT TO JUDICIAL REVIE

A 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.

Docket for Case No: 92-007496RU

Orders for Case No: 92-007496RU