STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RECOMMENDED ORDER

Administrative Law Judge (ALJ) Daniel Manry conducted the final hearing of this case for the Division of Administrative Hearings (DOAH) on September 10, 2009, by video teleconference in Tallahassee and Orlando, Florida.

APPEARANCES

For Petitioner: Diane E. Leeds, Esquire

Office of Financial Regulation

3111 South Dixie Highway, Suite 302 West Palm Beach, Florida 33405

For Respondents: Adam Sudbury, Esquire

Dorough Calzada Soto & Sudbury LLP

419 North Magnolia Avenue Orlando, Florida 32801

STATEMENT OF THE ISSUES

The issues are whether the respondents violated Subsection 494.004(1), Florida Statutes (2001),1 by failing to file a written report with Petitioner that Bill Negron’s

(Mr. Negron) real estate license had been permanently revoked for fraud and dishonest dealing, and, if so, what penalties, if any, should be imposed against the mortgage broker licenses of Mr. Negron and First American Mortgage & Financial Center, Inc.

(First American).

PRELIMINARY STATEMENT

On October 20, 2008, Petitioner filed an Administrative Complaint against the respondents. Petitioner was unable to obtain personal service on the respondents, eventually served the respondents by publication, and a Default Final Order and Notice of Rights was entered on December 23, 2008.

On February 2, 2009, the respondents filed a Motion to Set Aside Final Default Order. Petitioner granted the motion on April 6, 2009, and the Administrative Complaint was reinstated. On May 18, 2009, an Answer to Administrative Complaint and Request for Evidentiary Hearing was filed. On June 4, 2009, Petitioner referred the matter to DOAH. On July 7, 2009, Petitioner filed an Amended Administrative Complaint for Imposition of Sanctions and Notice of Rights (Amended Administrative Complaint) that is the subject of the final hearing.

At the hearing, Petitioner submitted four exhibits for admission into evidence and presented the testimony of one

witness. The respondents submitted one exhibit and presented the testimony of two witnesses.

The identity of the exhibits and witnesses and the rulings regarding each are reported in the Transcript of the hearing filed with DOAH on October 14, 2009. Petitioner filed its Proposed Recommended Order (PRO) on October 23, 2009. Neither of the respondents filed a proposed recommended order.

FINDINGS OF FACT

1. Petitioner is the state agency charged with the responsibility for enforcing and administering the provisions of Chapter 494. Mr. Negron is licensed as a mortgage broker in the state. First American was licensed as a mortgage brokerage business in the state, but First American terminated its license on April 29, 2008.

2. Mr. Negron is president, principal broker, and

   
   

   100 percent owner of First American. First American is subject to disciplinary action for any statutory violations committed by Mr. Negron.

3. On April 17, 2002, the Florida Real Estate Commission (FREC) found Mr. Negron guilty of fraud; dishonest dealing by trick, scheme or device; culpable negligence; or breach of trust in any business transaction in Final Order BPR-2002-01624. The Final Order found the licensee had failed to account or deliver

   funds and failed to maintain trust funds in the real estate brokerage escrow account.

4. The FREC Final Order permanently revoked Mr. Negron’s real estate license. The Final Order found that the licensee was guilty of a course of conduct or practices that show the money, property, transactions, and rights of investors may not be safely entrusted to the licensee.

5. Each of the respondents had a statutory duty to notify Petitioner of the revocation order issued by FREC. The duty ensures that Petitioner will have an opportunity to make an independent determination of whether a licensee is continuously qualified for licensure as a mortgage broker.

6. Neither of the respondents notified Petitioner of the revocation order by FREC. Mr. Negron had been licensed as a mortgage broker from December 22, 2003. Professional training included specific training pertaining to the requirement to report regulatory actions for fraud, dishonest dealing, and moral turpitude to Petitioner. The licensee knew, or should have known, from pre-licensing and continuing education courses, of the requirement to notify Petitioner of the revocation of his real estate license.

7. Petitioner did not have actual knowledge of the disciplinary action against Mr. Negron from other public records. Petitioner does not share databases with FREC.

   Testimony from Petitioner’s witness that it would have been virtually impossible for Petitioner’s employees to unilaterally uncover the existence of the revocation order was credible and persuasive to the trier of fact.

8. Mr. Negron testified that he dictated a notification letter to his secretary and assumed she mailed it to Petitioner. The trier of fact finds that testimony to be neither credible nor persuasive.

9. The record of the FREC proceeding evidences multiple offenses over a period of time that represent prior disciplinary history which preceded the revocation order by FREC. The prior disciplinary history on which FREC relied is evidenced in this record. However, no finding is made based on that evidence because the prior disciplinary history is not alleged as a factual basis for the proposed agency action in this proceeding in either the Administrative Complaint or the Amended Administrative Complaint.

10. The only relevant finding in this proceeding, based on the prior disciplinary history in the FREC proceeding, is that neither of the respondents notified Petitioner of the prior disciplinary history with FREC. The failure to notify Petitioner of the prior disciplinary action by FREC is consistent with the failure of the respondents to notify Petitioner of the entry of a revocation order by FREC and is

    considered solely for the purpose of determining the credibility of the testimony presented by the respondents.

    CONCLUSIONS OF LAW

    
    

11. DOAH has jurisdiction over the subject matter of and the parties to this proceeding pursuant to Section 120.569 and Subsection 120.57(1), Florida Statutes (2009). DOAH provided the parties with adequate notice of the final hearing.

12. Petitioner has the burden of proof in this proceeding.

    
    

    Petitioner must prove by a preponderance of the evidence that the respondents committed the acts alleged in the Amended Administrative Complaint and the reasonableness of the proposed penalty. Dept. of Banking & Finance v. Osborne, Stern & Co., 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292

    (Fla. 1987).

    
    

13. Petitioner satisfied its burden of proof that the respondents committed the acts alleged in the Amended Administrative Complaint. Petitioner also showed by clear and convincing evidence that Petitioner should permanently revoke the licenses of the two respondents to protect the interest of the public and the state from any future practice of the brokerage business by either of the respondents.

14. The evidence does not support the imposition of a

    
    

    $10,000.00 fine that Petitioner proposes in its PRO. Termination of the ability to engage in the mortgage brokerage

    business is sufficient protection of the public against future harm. Past harm to the public is relegated to the real estate industry and has already been adequately addressed by FREC.

15. The past harm already addressed by FREC is not alleged as a basis for the proposed agency action in either the Administrative Complaint or the Amended Administrative Complaint that is at issue in this proceeding. An agency, including Petitioner, cannot find a respondent guilty of grounds not specifically alleged in the Administrative Complaint. Ghani v. Department of Health, 714 So. 2d 1113 (Fla. 1st DCA 1998); Cottrill v. Department of Insurance, 685 So. 2d 1371 (Fla. 1st DCA 1996).

RECOMMENDATION

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

RECOMMENDED that Petitioner enter a final order permanently revoking the mortgage broker’s license of the two respondents.

DONE AND ENTERED this 30th day of October, 2009, in Tallahassee, Leon County, Florida.

S

DANIEL MANRY

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 30th day of October, 2009.

ENDNOTE

1/ References to subsections, sections, and chapters are to Florida Statutes (2001),unless otherwise stated. The original charges against Respondent also included a charge that

Bill Negron violated Subsection 494.0041(2)(i) because the Florida Real Estate Commission permanently revoked that license for the grounds already stated herein. Pursuant to the Pre- hearing Stipulation, paragraph 2, entered into between the parties on September 2, 2009, and filed with DOAH on October 29, 2009, that charge is uncontested and not at issue in this proceeding.

COPIES FURNISHED:

Douglas M. Holcomb, Esquire Office of Financial Regulation Hurston South Tower

400 West Robinson Street, Suite S-225 Orlando, Florida 32801

Adam Sudbury, Esquire

Dorough Calzada Soto & Sudbury LLP

419 North Magnolia Avenue Orlando, Florida 32801

Diane E. Leeds, Esquire

Office of Financial Regulation

3111 South Dixie Highway, Suite 302 West Palm Beach, Florida 33405

J. Thomas Cardwell, Commissioner Office of Financial Regulation

200 East Gaines Street Tallahassee, Florida 32399-0350

Robert Beitler, General Counsel Department of Financial Services

200 East Gaines Street, Suite 526 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: 09-003036

Orders for Case No: 09-003036