STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BANKING AND )

FINANCE, )

)

Petitioner, )

)

vs. ) Case No. 97-2555

)

FREDERICK L. ROBERTS, )

)

Respondent. )

)

RECOMMENDED ORDER

On August 12, 1997, a formal administrative hearing in this case was held by video conference in Tampa and Tallahassee, Florida, before William F. Quattlebaum, Administrative Law Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Clyde C. Caillouet, Esquire

Department of Banking and Finance 4900 Bayou Boulevard, Suite 103

Pensacola, Florida 32503

For Respondent: Michael W. Carlson, Esquire

Carlton Fields Ward Emmanuel Smith & Cutler, P.A.

215 South Monroe Street, Suite 500 Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

The issue in the case is whether the allegations of the Administrative Complaint are correct and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

On January 8, 1996, the Department of Banking and Finance filed an Administrative Complaint alleging that Frederick L. Roberts acted as a mortgage broker in violation of Florida law. Mr. Roberts requested a formal hearing. The request was forwarded to the Division of Administrative Hearings, which scheduled the formal proceeding.

At the hearing, the Department presented the testimony of two witnesses and had four exhibits admitted. Mr. Roberts testified on his own behalf and had two exhibits admitted.

A hearing transcript was filed. Both parties filed proposed recommended orders, which have been utilized in the preparation of this Order.

FINDINGS OF FACT

1. At all times material to this case, Frederick L. Roberts (Respondent) was a licensed Florida mortgage broker, holding license number MB 316324569.

2. In November 1993, a friend of the Respondent, Alan Petzold, introduced Tami Aaronson to him.

3. Ms. Aaronson owned property in Maryland and was interested in securing a mortgage on the Maryland property to provide funding for a Florida home for herself and her son, Jarrett.

4. According to Ms. Aaronson, Mr. Petzold is the father of a minor son, Jarrett Aaronson. The Respondent believed that such

   was the case at the time he met the family.

   
   

5. The Respondent met several times with Ms. Aaronson.

   
   

6. The Respondent gave a “Flagship Mortgage Company” business car to Ms. Aaronson. The business card had the Respondent’s name printed on it.

7. The Respondent had been briefly employed by Flagship Mortgage Company, but apparently was not so employed at the time he met Ms. Aaronson.

8. Frederick L. Roberts (Respondent) received check number 0170, dated November 22, 1993, from Tami Aaronson as

   “Custodian for Jarrett Aaronson” in the amount of three thousand dollars. The notation on the check states that it is for “refinancing.”

9. Ms. Aaronson believed the check was payment for services the Respondent would render in obtaining refinancing of the Maryland property.

10. There was no written agreement between the Respondent and Ms. Aaronson, or between the Respondent and Mr. Petzold. The Respondent completed no written documentation related to the Aaronson transaction.

11. The Respondent did not place the Aaronson deposit into a segregated escrow account.

12. The Respondent did not record the Aaronson deposit into an escrow transaction journal.

13. During the period he held the Aaronson funds, the

    Respondent worked on unrelated business, and traveled to China for about thirty days.

14. The Respondent performed no work on behalf of

    
    

    Ms. Aaronson, Mr. Petzold, or Jarrett Aaronson. There is no evidence that the Respondent intended to perform any work on behalf of Aaronson/Petzold.

15. The Respondent asserted that he asked for a three thousand dollar “deposit” as a means of discouraging the couple from asking for his assistance. The assertion is not credible.

16. The Respondent asserts that the three thousand dollars he received from Ms. Aaronson was a deposit against travel expenses he would incur during his examination of the property in Maryland. The assertion is not supported by credible evidence.

17. In the spring of 1994, the Respondent received a telephone call from Ms. Aaronson.

18. The Respondent asserts that he believed Ms. Aaronson to have called him from a mental hospital. For whatever reason, at that time he determined that he no longer wanted to be involved in the Aaronson/Petzold situation.

19. Shortly after receiving the Aaronson phone call in spring 1994, the Respondent also received a call from a Department of Banking and Finance investigator, apparently looking into a complaint received from Ms. Aaronson.

20. The Respondent thereafter contacted Mr. Petzold and made arrangements to return the funds to him.

21. According to a notarized statement dated May 9, 1994, the Respondent returned the three thousand dollars to Jarrett R.

    Aaronson and Alan C. Petzold.

22. The Respondent testified that the money had been returned on May 8, 1994 to Mr. Petzold. The Respondent offered into evidence a document dated May 8, 1994, purporting to be a receipt received from Mr. Petzold for return of the funds. The signature is not notarized.

23. The Respondent did not return the Aaronson deposit to Tami Aaronson.

24. There is no evidence that Ms. Aaronson authorized the return of the three thousand dollars to Mr. Petzold.

25. There is no evidence that Ms. Aaronson authorized the return of funds to Jarrett.

26. Ms. Aaronson has not received any part of the three thousand dollars allegedly refunded.

27. There is no evidence that the funds have been redeposited into the minor child’s custodial account.

28. The Respondent asserts that he was not acting as a mortgage broker and was merely investigating the property to determine whether the Aaronson property could be used as a source of funds for the purchase of Florida property. The Respondent asserts that had a refinancing situation arisen, he would have referred Ms. Aaronson to another licensed person who would assist in the actual refinancing. The assertion is not supported by credible evidence.

29. The Respondent asserts that in the spring of 1994 he had reason to believe that Ms. Aaronson had been hospitalized in

    a mental facility, and therefore he returned the funds to

    Mr. Petzold. The rationale for the failure to return the funds to the appropriate party is not persuasive.

    CONCLUSIONS OF LAW

    
    

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

31. The Department of Banking and Finance is charged with responsibility for administering Chapter 494, Florida Statutes.

32. The Petitioner has the burden of proving, by clear and convincing evidence, the allegations of the Administrative Complaint. Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987). The burden has been met.

33. In relevant part, Section 494.001(2), Florida Statutes, provides as follows:

    "Act as a mortgage broker" means, for compensation or gain, or in the expectation of compensation or gain, either directly or indirectly, accepting or offering to accept an application for a mortgage loan, soliciting or offering to solicit a mortgage loan on behalf of a borrower, negotiating or offering to negotiate the terms or conditions of a mortgage loan on behalf of a lender, or negotiating or offering to negotiate the sale of an existing mortgage loan to a noninstitutional investor.

34. The Respondent asserts that in this case, he was not acting as a mortgage broker and therefore is not subject to the jurisdiction of the Department in this transaction. In this case, the evidence clearly and convincingly establishes that the Respondent accepted a payment of $3,000 from Ms. Aaronson for

    services to be rendered related to the refinancing of her Maryland home.

35. Section 494.0041(1), Florida Statutes, sets forth the Department’s authority to revoke, suspend, or otherwise discipline the license of a person found to have violated the provisions of Section 494.0041(2), Florida Statutes.

36. Section 494.0041, Florida Statutes, identifies activities for which a licensee is subject to discipline.

37. Section 494.0041(2)(p), Florida Statutes, provides that a licensee may be subject to discipline for failure to comply with applicable statutes set forth in Sections 494.001 - 494.0077, Florida Statutes.

38. The Respondent’s failure to place the funds into a segregated account or to otherwise appropriately identify the source of the funds in a combined escrow account is a violation of Sections 494.0041(2)(e) and 494.0038(5), Florida Statutes.

39. The Respondent’s failure to return the funds to

    
    

    Ms. Aaronson is a violation of Section 494.0041(2)(f), Florida Statutes.

40. The receipt of a fee for mortgage brokerage services without a written agreement is a violation of Section 494.0038(1)(a), Florida Statutes, which states that “[a] person may not receive a fee for acting as a mortgage brokerage business except pursuant to a written agreement between the mortgage brokerage business and the borrower. The agreement must describe

    the services to be provided by the mortgage brokerage business and specify the amount and terms of the mortgage brokerage fee that the mortgage brokerage business is to receive.”

41. The Respondent violated Section 494.0033(1) by acting as a mortgage broker while not associated with a mortgage brokerage business.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Insurance enter a Final Order suspending the mortgage broker license held by Frederick L. Roberts until the following conditions are met:

1. Payment to Tami Aaronson of $3,000 plus appropriate interest calculated from November 22, 1993.

2. Payment of an administrative fine in the amount of

$5,000.

After compliance with the above conditions, the license suspension shall be lifted, and a two-year probationary period shall begin

RECOMMENDED this 22nd day of October, 1997, in Tallahassee, Leon County, Florida.

WILLIAM F. QUATTLEBAUM

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 22nd day of October, 1997.

COPIES FURNISHED:

Clyde C. Caillouet, Esquire Department of Banking and Finance 4900 Bayou Boulevard, Suite 103

Pensacola, Florida 32503

Michael W. Carlson, Esquire Carlton Fields Ward Emmanuel

Smith & Cutler, P.A.

215 South Monroe Street, Suite 500 Tallahassee, Florida 32301

Harry Hooper, General Counsel Department of Banking and Finance The Capitol, Room 1302 Tallahassee, Florida 32399-0350

Hon. Robert F. Milligan Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of this recommended order. Any exceptions to this recommended order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 97-002555

Orders for Case No: 97-002555