vs.
Case No. 15-2703
Respondent.
The final hearing in this case came before Administrative Law Judge J. Bruce Culpepper of the Division of Administrative Hearings on June 4, 2015, by video teleconference at sites in Tallahassee and Orlando, Florida.
The issues in this matter are whether Respondent poses an immediate, serious danger to the public health, safety, or welfare, and, if so, whether Petitioner has cause to immediately suspend Respondent's loan originator license.
On April 8, 2015, Petitioner, Office of Financial Regulation ("Office"), issued an Emergency Order to Cease and Desist and Suspending License ("Emergency Order") against Respondent, Frankie Damiano ("Respondent"). The Office issued the Emergency Order pursuant to sections 120.60(6) and 494.00255(8), Florida Statutes (2014).1/
Respondent timely exercised her right to be heard in a formal administrative proceeding pursuant to chapter 120. On May 14, 2015, the Office referred the matter to the Division of Administrative Hearings. The matter was assigned to the undersigned Administrative Law Judge.
The final hearing took place on June 4, 2015. The Office called Respondent to testify. The Office's Exhibits 1 through 4 were received in evidence. Respondent called one witness, Eileen Keim. Respondent also testified on her own behalf. Respondent offered Exhibits 12/ and 2, which are admitted into evidence.
The final hearing Transcript was filed on June 19, 2015. Following that date, each party submitted proposed recommended orders and post-hearing submittals in accordance with the deadline established at the conclusion of the final hearing.
At all times relevant to this case, Respondent was licensed with the Office to conduct business as a loan originator
in the State of Florida. Respondent holds certificate of licensure NMLS No. LO19773.
As a loan originator in Florida, Respondent is governed by chapter 494.
The Office is the state agency charged with licensing, regulating, and supervising loan originators in Florida pursuant to chapter 494.
On March 24, 2015, Respondent was arrested for the following crimes by the Sarasota County Sheriff's Office:
Occupied Burglary--pursuant to section 810.02(2)(a), Florida Statutes,3/ a first-degree felony;
Battery on a person 65 years or older-- pursuant to section 784.08(2)(c), Florida Statutes,4/ a third-degree felony; and
Simple Battery (two counts)--pursuant to section 784.03(1)(a)1.,5/ first-degree misdemeanors.
On May 12, 2015, Respondent was charged with these crimes in Sarasota County, Florida, in Case
No. 2015-CF-004817-NC. Respondent's criminal case is currently pending disposition in Sarasota County.
At the final hearing, Respondent described her actions which led to her arrest on March 24, 2015.6/ The incident began with a dispute over money. According to Respondent, an
individual allegedly stole $258.00 from Respondent's friend who was staying at her house. Respondent, together with the friend and three other individuals, drove to the suspected thief's house to demand the money's return.
Upon arrival at the house, Respondent walked up to and knocked on the front door. Two individuals, the suspected thief and the suspected thief's mother, answered. The confrontation quickly became physical. Respondent claims that the suspected thief's mother started the fight by jumping on her from out of the front door. Rapidly, upwards of five individuals were involved in hitting, pushing, tackling, and wrestling. The scrum ranged from the front door to the house's garage. Respondent recounted that she was battered, punched, slammed to the ground, and beaten with a cane. (The cane-wielder was the suspected thief's grandfather, who is over 65 years old, which apparently led to Respondent's felony charge of battery on a person 65 years or older.) Respondent claimed she suffered injuries to her chin, neck, heart, and scalp.
At the final hearing, Respondent testified that she did not enter the suspected thief's home. However, Respondent did admit that at some point during the encounter, she entered the open garage with the intent to access the house through the side door. (This action evidently led to Respondent's felony charge of burglary.)
Eventually, the Sarasota County Sheriff's Office was called and responded. The fight broke up. No serious injuries were reported. No information was presented regarding the fate of the $258.00.
Respondent testified that she did not start the fight.
She claimed that because of her small frame, she was never a serious danger to anyone. Nevertheless, the Sarasota County Sheriff indisputably arrested Respondent for her alleged role in the altercation.
As of the date of the final hearing, Respondent understood that she will have a court date in August 2015 for the pending criminal case.
Based on Respondent's arrest, on April 8, 2015, the Office issued the Emergency Order. The Office issued the Emergency Order pursuant to sections 120.60(6) and 494.00255(8). The Emergency Order states that the Office found Respondent's activities posed an immediate and serious danger to the public welfare. The Emergency Order ordered Respondent to immediately cease and desist from engaging in the business of loans and any activities in violation of chapter 494 and Office rules.
Through the Emergency Order, the Office suspended Respondent's loan originator's license, effective April 13, 2015. Respondent's loan originator license is suspended "until such time as [Respondent] complies with the terms of this order."
As described in the Emergency Order, the Office determined that Respondent's actions that led to her arrest posed an immediate, serious danger to the public based on several factors. The Emergency Order declares that the Office found that an emergency suspension and a cease and desist order was necessary to protect Florida consumers from Respondent's "apparent unpredictable and irrational behavior." Furthermore, Respondent's "apparent volatility, unpredictability, and lack of impulse control" calls into question her "trustworthiness and character." The Emergency Order also states that "[c]ommitting felony battery over a financial matter demonstrates that Respondent lacks the character or general fitness necessary to command the confidence of the community." To emphasize the seriousness of the alleged crimes, the Office points to the fact that the felony burglary charge carries a possible maximum penalty of life in prison.
The Office included provisions and terms in the Emergency Order to meet the fairness requirement of section 120.60(6). The Emergency Order contained detailed factual findings in order to adequately notify Respondent of the basis for the Office's intended action. The Emergency Order included a Notice of Rights which provided Respondent the point of entry to request an expedited administrative hearing pursuant to
chapter 120 to contest the Emergency Order (which Respondent
pursued in the present matter). The Emergency Order also informed Respondent of her opportunity to seek to stay the Office's action through an appellate proceeding under section 120.68. Further, the Emergency Order stated that Respondent's loan originator's license is subject to
reinstatement, if the criminal charges are ultimately dismissed or not prosecuted.
At the final hearing, Respondent conceded that she made the wrong decision to confront the suspected thief. She expressed that she was not thinking clearly at the time. Nevertheless, Respondent asserts that she is falsely accused and has done nothing wrong. She pleads to keep her license during the time it takes Sarasota County to process her criminal case. Respondent proclaims that she should be considered and treated as innocent of all charges up to and until such time as the allegations against her are proven. Respondent asserts that her loan origination business is her sole source of financial support.
Based on the facts produced at the final hearing and further discussed below, the undersigned finds that the Office has not met its burden of demonstrating by clear and convincing evidence that immediately suspending Respondent's license to conduct business as a loan originator is an action "necessary to
protect the public interest," as required by section
120.60(6)(b).
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding pursuant to sections 120.569, 120.57(1), and 120.60(6)(c).
"Loan originator" means an individual who, directly or indirectly, solicits or offers to solicit a mortgage loan, accepts or offers to accept an application for a mortgage loan, negotiates or offers to negotiate the terms or conditions of a new or existing mortgage loan on behalf of a borrower or lender, or negotiates or offers to negotiate the sale of an existing mortgage loan to a non-institutional investor for compensation or gain pursuant to section 494.001(17).
A proceeding, such as this one, to suspend, revoke, or impose other discipline upon a license, is penal in nature. State ex rel. Vining v. Fla. Real Estate Comm'n, 281 So. 2d 487,
491 (Fla. 1973). Accordingly, to impose the immediate suspension and cease and desist order in this matter, the Office must prove the charges against Respondent by clear and convincing evidence. Dep't of Banking & Fin., Div. of Sec. & Investor Prot. v. Osborne Stern & Co., 670 So. 2d 932, 933-34 (Fla. 1996) (citing Ferris v.
Turlington, 510 So. 2d 292, 294-95 (Fla. 1987)); Nair v. Dep't of
Bus. & Prof'l Reg., Bd. of Med., 654 So. 2d 205, 207 (Fla. 1st
DCA 1995).
In Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th
DCA 1983), the court developed a "workable definition of clear and convincing evidence" and found that of necessity, such a definition would need to contain "both qualitative and quantitative standards." The court held that:
[C]lear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the testimony must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established.
Id. The Florida Supreme Court later adopted the Slomowitz
court's description of clear and convincing evidence. See In re Davey, 645 So. 2d 398, 404 (Fla. 1994). The First District Court
of Appeal also has followed the Slomowitz test, adding the interpretive comment that "[a]lthough this standard of proof may be met where the evidence is in conflict, . . . it seems to preclude evidence that is ambiguous." Westinghouse Elec. Corp.
v. Shuler Bros., Inc., 590 So. 2d 986, 988 (Fla. 1st DCA 1991), rev. denied, 599 So. 2d 1279 (Fla. 1992) (citation omitted).
The statutes under which the agency seeks to act "must be construed strictly in favor of the one against whom the
penalty would be imposed." Munch v. Dep't of Prof'l Reg., Div.
of Real Estate, 592 So. 2d 1136, 1143 (Fla. 1st DCA 1992); see also Camejo v. Dep't of Bus. & Prof'l Reg., 812 So. 2d 583,
583-84 (Fla. 3d DCA 2002); and McClung v. Crim. Just. Stds. & Training Comm'n, 458 So. 2d 887, 888 (Fla. 5th DCA 1984)
("[W]here a statute provides for revocation of a license the grounds must be strictly construed because the statute is penal in nature.").
Pursuant to section 120.60 and chapter 494, the Office may take action to suspend a loan originator's license, if the Office has reason to believe that a licensee poses an immediate, serious danger to the public health, safety, or welfare.
Section 120.60 sets forth the conditions under which an agency may issue an emergency suspension of a license. Section 120.60(6) states:
If the agency finds that immediate serious danger to the public health, safety, or welfare requires emergency suspension, restriction, or limitation of a license, the agency may take such action by any procedure that is fair under the circumstances if:
The procedure provides at least the same procedural protection as is given by other statutes, the State Constitution, or the United States Constitution;
The agency takes only that action necessary to protect the public interest under the emergency procedure; and
The agency states in writing at the time of, or prior to, its action the specific facts and reasons for finding an immediate danger to the public health, safety, or welfare and its reasons for concluding that the procedure used is fair under the circumstances. The agency's findings of immediate danger, necessity, and procedural fairness are judicially reviewable. Summary suspension, restriction, or limitation may be ordered, but a suspension or revocation proceeding pursuant to ss. 120.569 and 120.57 shall also be promptly instituted and acted upon.
Section 494.00255 sets forth the Office's powers and duties regarding persons licensed under chapter 494. Section 494.00255(8) specifically addresses the Office's ability to suspend a license and states:
(8) Pursuant to s. 120.60(6), the office may summarily suspend the license of a loan originator, mortgage broker, or mortgage lender if the office has reason to believe that a licensee poses an immediate, serious danger to the public's health, safety, or welfare. The arrest of the licensee, or the mortgage broker or the mortgage lender's control person, for any felony or any crime involving fraud, dishonesty, breach of trust, money laundering, or any other act of moral turpitude is deemed sufficient to constitute an immediate danger to the public's health, safety, or welfare. Any proceeding for the summary suspension of a license must be conducted by the commissioner of the office, or designee, who shall issue the final summary order.
The Office issued the Emergency Order to summarily suspend Respondent's loan originator's license and order her to immediately cease and desist from the business of originating
loans under its authority in section 494.00255(8). The Office's action under section 494.00255(8) must comply with the terms in section 120.60(6).
According to section 120.60(6), in order to suspend Respondent's license, the Office must first find that "immediate serious danger to the public health, safety, or welfare requires emergency suspension, restriction, or limitation of a license." The Office clearly made such a finding regarding Respondent's license. Pursuant to section 494.00255(8), "[t]he arrest of the licensee . . . for any felony or any crime involving fraud, dishonesty, breach of trust, money laundering, or any other act of moral turpitude is deemed sufficient to constitute an immediate danger to the public's health, safety, or welfare." Respondent was indisputably arrested for the felonies of occupied burglary under section 810.02(2)(a) and battery on a person
65 years or older under section 784.08(2)(c). Accordingly, section 494.00255(8) specifically authorizes the Office to find that Respondent's arrest constitutes an immediate serious danger to the public health, safety, or welfare.
Upon finding an immediate serious danger to the public health, safety, or welfare, section 120.60(6) authorizes the Office to take such action "that is fair under the circumstances," if that action meets the requirements under sections 120.60(6)(a), (b), and (c).
Section 120.60(6)(a) requires the Office to follow a process that provides the "same procedural protection as given by other statutes, the State Constitution, or the United States Constitution." Section 120.60(6) does not elucidate what specific procedural protections the agency's action must provide. However, in seeking to immediately suspend Respondent's license, the Office did include in the Emergency Order sufficient procedural protections to ensure that Respondent was afforded adequate opportunity to contest the Office's determination. See e.g., Premier Travel Int'l, Inc. v. State Dep't of Agric.
& Consumer Servs., 849 So. 2d 1132, 1137 (Fla. 1st DCA 2003) (holding that to satisfy due process requirements, an immediate final order issued pursuant to section 120.60 prior to a hearing must contain factual allegations demonstrating: (1) the conduct complained of was likely to continue; (2) the order was necessary to stop the emergency; and (3) the order was sufficiently tailored to be fair. The court further stated that the "fairness requirement" is met if the order provides for an administrative hearing.). The Office's Emergency Order contained specific allegations of Respondent's alleged misconduct. The Emergency Order also provided Respondent the opportunity for an expedited hearing through an administrative proceeding under chapter 120.
In addition, the Emergency Order notified Respondent of her ability to seek to stay the Office's intended suspension by
applying to the Office in a proceeding for appellate review under section 120.68.
Jumping to section 120.60(6)(c), the Office also stated in writing the reasons for its finding of immediate danger, as well as its reasons for concluding that the procedure it used is fair. The Emergency Order clearly articulates the specific reasons for the Office's action (Respondent's felony arrest on March 24, 2015), the Office's reasons for finding immediate danger to the public health, safety, or welfare (the Office's statutory presumption that a felony arrest is deemed sufficient to constitute an immediate danger), and the Office's reasons for concluding that the procedure used is fair under the circumstances. The Office also represents that it will rescind the Emergency Order, if the criminal charges against Respondent are dropped.
Regarding section 120.60(6)(b), however, based on the evidence produced at the final hearing, the Office failed to demonstrate by clear and convincing evidence that suspending Respondent's loan originator's license and ordering her to cease and desist from any further loan origination business until such time as her criminal allegations are resolved, is "necessary to protect the public interests." The Office, as instructed by section 120.60(6)(c), wrote in the Emergency Order the specific
facts and reasons for finding an "immediate danger to the public health, safety, or welfare." These reasons include:
One of the felonies for which Respondent was arrested carries a maximum penalty of life in prison;
Suspension of Respondent's license is necessary to protect consumers from Respondent's "apparent, unpredictable and irrational behavior";
Respondent's "apparent volatility, unpredictability, and lack of impulse control calls into question her trustworthiness and character"; and
Committing felony battery over a financial matter "demonstrates that Respondent lacks the character or general fitness necessary to command the confidence of the community."
These stated reasons, however, even supplemented with the facts regarding the circumstances of the arrest, do not establish by clear and convincing evidence that immediately suspending Respondent's loan originator's license during the pendency of her criminal case is "action necessary to protect the public interest." The Office has not presented sufficient evidence demonstrating that because of her arrest, Respondent's continued participation in the loan origination business exposes the public to the risk of another serious altercation. Consequently, the undersigned cannot find, "without hesitancy,"
that Respondent's arrest on March 24, 2015, creates a threat that necessitates the Office immediately suspending Respondent's license to protect the public interests or the public health, safety, or welfare.
The Office essentially asserts that the March 24, 2015, confrontation that resulted in the felony arrest shows that Respondent is irrational, unpredictable, and volatile. The Office is concerned that Respondent cannot properly manage her stress and anger. Consequently, the Office fears that Respondent's arrest shows that she is a danger to her clients and the public.
However, based on the evidence presented in the final hearing, this incident appears to be a one-time conflict. The Office did not produce any evidence of the likelihood that this type of "backyard brawl" will happen again. The Office did not produce evidence of prior or subsequent violent actions involving Respondent. Respondent's alleged crime was not random. The Office did not offer evidence that Respondent maintains a dangerous or threatening mental state following this incident. More specifically, the Office did not show that Respondent has assaulted or threatened her loan origination clients or that Respondent's possession and use of her loan originator's license has actually exposed her clients to risk of bodily harm. In other words, the Office has not provided clear and convincing
evidence that Respondent will likely continue to create a pattern of violent conduct that the Office must stop in order to prevent further harm to the public. See e.g., Premier Travel, 849 So. 2d
at 1135 (wherein the court, in determining whether an immediate final order issued prior to a hearing demonstrated immediate danger, necessity, or procedural fairness, considered whether the "pattern of conduct" was likely to continue); Kodsy v. Dep't of
Fin. Serv., 972 So. 2d 999, 1002 (Fla. 4th DCA 2008) (wherein the
court expressed that an immediate final order must contain factual allegations demonstrating that the "complained of conduct was likely to continue"); and Witmer v. Dep't of Bus. & Prof'l Reg., 631 So. 2d 338, 343 (Fla. 4th DCA 1994) ("Past acts may be
sufficient to allege a danger of future misconduct if the conduct alleged is sufficiently serious and is likely to be repeated.").
Further, the Office did not produce any evidence that Respondent has misused her loan originator's license or otherwise threatened the financial or personal welfare of her clients. The March 24, 2015, arrest did not involve a dispute with a client. The arrest did not involve a dispute regarding Respondent's loan originator's business. The Office did not produce any complaints from Respondent's clients that involved violence, assault, battery, or burglary. The Office did not produce any evidence that Respondent was previously disciplined by the Office. The Office did not provide evidence of any previous abuse of
Respondent's loan originator's license, such as the misconduct listed in section 494.00255(1) involving crimes of fraud, dishonesty, breach of trust, money laundering, misrepresentation, concealment, failure to disburse funds, misappropriation of personal property, negligence, or incompetence.
The Office's allegations questioning Respondent's character, general fitness, and trustworthiness are merely conclusory concerns of harm. The Office did not produce evidence that Respondent's actions, which led to the March 24, 2015, arrest, actually created a threat to future clients or will otherwise negatively affect any other area over which the Office regulates. The Office did not present evidence that Respondent's clients or the general public is at a greater risk now than prior to the March 24, 2015, altercation. Accordingly, the evidence does not demonstrate that immediately suspending Respondent's loan originator's license is necessary to protect the public interests from future malfeasance involving Respondent.
Therefore, although the Office clearly finds unacceptable the crimes for which Respondent was arrested, the Office has not clearly and convincingly proven that immediately suspending Respondent's loan originator license, prior to the disposition of the criminal case, is necessary to protect the public interests. Similarly, an immediate suspension of
Respondent's license based solely on allegations contained in the police report does not appear "fair under the circumstances."7/
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner, Office of Financial Regulation, enter a final order rescinding the Emergency Order to Cease and Desist and Suspending License issued to Respondent, Frankie Damiano, on April 8, 2015.
DONE AND ENTERED this 21st day of July, 2015, in Tallahassee, Leon County, Florida.
J. BRUCE CULPEPPER Administrative Law Judge
Filed with the Clerk of the Division of Administrative Hearings this 21st day of July, 2015.
1/ All statutory references are to Florida Statutes (2014), unless otherwise noted.
2/ Respondent presented Exhibit 1 at the hearing from the video site in Orlando, Florida, which she represented to be an affidavit of Joanne Wieleba. The undersigned admitted
Respondent's Exhibit 1 into evidence. However, Respondent never submitted a copy of Exhibit 1 to the undersigned.
(1)(a) For offenses committed on or before July 1, 2001, "burglary" means entering or remaining in a dwelling, a structure, or a conveyance with the intent to commit an offense therein, unless the premises are at the time open to the public or the defendant is licensed or invited to enter or remain.
(2) Burglary is a felony of the first degree, punishable by imprisonment for a term of years not exceeding life imprisonment or as provided in s. 775.082, s. 775.083, or
s. 775.084, if, in the course of committing the offense, the offender:
Assault or battery on persons 65 years of age or older; reclassification of offenses; minimum sentence.--
(c) In the case of battery, from a misdemeanor of the first degree to a felony of the third degree.
1. Actually and intentionally touches or strikes another person against the will of the other; or 2. Intentionally causes bodily harm to another person.
6/ The underlying facts which led to Respondent's arrest are based primarily on Respondent's sworn testimony at the final hearing. The undersigned admitted into evidence the Sarasota County Sheriff's Office's Probable Cause Affidavit as a public record exception to the hearsay rule pursuant to section 90.803(8), Florida Statutes. The Probable Cause Affidavit conclusively establishes that Respondent was arrested on March 24, 2015. The undersigned also reviewed certain portions of the Probable Cause Affidavit to supplement and explain Respondent's testimony as authorized under section 120.57(1)(c) and Florida Administrative Code Rule 28-106.213. However, the undersigned did not consider witness statements and testimony collected within the Probable Cause Affidavit that were not corroborated by Respondent's testimony or other evidence. "Arrest affidavits are 'not admissible into evidence as a public record exception to the hearsay rule.'" Lewis v. State, 995 So. 2d 1123, 1125 (Fla. 4th DCA 2008) (quoting Burgess v. State, 831 So. 2d 137, 140 (Fla.
2002)).
7/ The undersigned notes that the Emergency Order expressly points out that should Respondent actually be convicted of the felony charges, it may pursue revised sanctions against Respondent at a subsequent administrative proceeding.
Drew J. Breakspear, Commissioner Office of Financial Regulation
Colin M. Roopnarine, General Counsel Office of Financial Regulation
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.
