STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

TERRY E. CHRISTENSEN, )

)

Petitioner, )

vs. ) CASE No. 86-2498

) DEPARTMENT OF BANKING AND FINANCE, )

)

Respondent. )

)

RECOMMENDED ORDER

Final hearing in the above-styled action was held in Orlando, Florida, on October 10, 1986, before Mary Clark, Hearing Officer of the Division of Administrative Hearings.

The parties were represented as follows:

For Petitioner: Gorham Rutter, Jr., Esquire

338 North Magnolia Avenue, Suite D Orlando, Florida 32801

For Respondent: Robert Good, Esquire

400 West Robinson Street, Suite 501 Orlando, Florida 32801

BACKGROUND AND PROCEDURAL MATERIAL

By letter dated June 6, 1986, Petitioner requested a formal hearing in response to notice by the Department of Banking and Finance that his mortgage broker's application was being rejected. Basis for the rejection was that his real estate license had been suspended for a five year period, starting June 21, 1983.

At the final hearing, Petitioner testified on his own behalf and submitted eight exhibits, all admitted without objection. Respondent presented no testimony but submitted four exhibits, all of which were received into evidence. Petitioner objected to the admissibility of Respondent's Exhibit #3, a stipulation before the Department of Professional Regulation, as there was no evidence to show that the two administrative complaints attached to that document were properly part of the stipulation. Respondent's Request for Judicial Notice filed in advance of the hearing was granted. Notice was taken of the Stipulation, Final Order and Administrative Complaints in Department of Professional Regulation cases numbers 0021931 and 0024293.

After hearing both parties submitted proposed recommended orders and Respondent submitted a memorandum of law. These have been carefully considered in the preparation of this order and specific rulings on the proposed findings of fact are found in the attached appendix.

STATEMENT OF ISSUE

The issue in this proceeding is whether Petitioner's loss of a real estate broker's license by a stipulated disciplinary suspension in 1983 is a proper bar to his mortgage broker application as principal broker for Center State Mortgage Company.

FINDINGS OF FACT

1. Terry E Christensen ("Christensen") was first licensed as a mortgage solicitor in 1983, under Chapter 494, Florida Statutes. In 1984, he obtained his mortgage broker's license. The licenses were renewed in 1984 and 1985. His employer was Cenflorida Mortgage Corporation in Altamonte Springs, Florida, where he served as principal broker and vice president. (Testimony of Christensen, Petitioner's Exhibit #1.)

   
   

2. Christensen left Cenflorida Mortgage Corporation in April 1986, and started his own company, Center State Mortgage Corporation in Longwood, Florida. He immediately filed his application with the Department of Banking and Finance ("Department") for registration as principal mortgage broker with the new company. That application was denied by letter dated May 13, 1986, for violations of Section 494.05(1)(h) and (k), Florida Statutes. The letter provides, in pertinent part:

   
   

   The application is denied by the determi- nation of the Division of Finance that Section 494.05(1)(h) and (k is [sic] being violated.

   
   

   Section 494.05(1)(h) of the Mortgage Brokerage Act states that conduct of an applicant would be cause for denial of a license. Section 494.05(1)(k) states that a licensee may be denied a license if they currently have a real estate broker or salesman license under suspension. In your particular case, our records indicate that your real estate license has been suspended for a five year period, starting June 21, 1983.

   
   

   (Testimony of Christensen, Petitioner's Exhibits #1 and #2.)

   
   

3. On June 29, 1983, the Florida Real Estate Commission suspended Christensen's real estate broker's license for a period of five years. Christensen first told the Department about his real estate broker's license suspension when he applied for license as a mortgage solicitor in 1983. (Testimony of Christensen.) Subsection 494.05(1)(k), Florida Statutes, was added to the statutes effective October 1, 1985. (Chapter 85-271, Laws of Florida.)

   
   

4. Around the same time the new law took effect, the Department commenced revocation proceedings against Christensen. By its notice docketed on September 27, 1985, and its amended notice dated March 4, 1986, the Department informed Christensen that it intended to suspend or revoke his mortgage broker's license under Chapter 494 on the basis of his prior activities as a real estate broker.

   Those prior activities were the subject of a civil consent judgement against Christensen and his realty company and resulted in the stipulated suspension of his real estate broker's license addressed above.

   
   

5. The Department's administrative proceeding #85-28-DOF was referred to the Division of Administrative Hearings and was assigned DOAH Case No. 86-0328. (Petitioner's Exhibits #3 and #4.) The parties stipulated to the facts, and on June 10, 1986, DOAH Hearing Officer, J. Lawrence Johnston, issued his Recommended Order recommending dismissal of the complaint.

   
   

   The Recommended Order provides:

   * * *

   3. In this case, Petitioner, Department of Banking and Finance (Department), has not established in the evidentiary record or anywhere else in the official record of this case that the real estate broker license of Respondent, Terry E. Christensen (Christensen), was suspended based on fraud, misrepresentation, or deceit. As seen in the Procedural Background, Christensen sufficiently generally placed in issue whether suspension of his real estate broker's license was based on fraud, misrepresentation, or deceit. The Department did not succeed in pre-hearing procedures to specifically eliminate the issue. The facts stipulated by the parties are not sufficient to prove that the suspension of Christensen's real estate broker license was based on fraud, misrepresentation, or deceit.

   Although a copy of the Administrative Complaint in the Florida Real Estate commission case was referred to in the copy of the Florida Real Estate Commission Stipulation that was filed in this case, it was not attached to the Stipulation or otherwise made part of the evidentiary or official record in this case. This Hearing Officer is therefore given no choice but to conclude that the Department has not proven its case.

   * * * (Petitioner's Exhibit #5.)

6. The Department adopted the Recommended Order in its entirety and dismissed the case. (Petitioner's Exhibit #7.)

   
   

7. From 1983 until mid-1986, Christensen processed approximately five hundred mortgage loan applications with an approximate value of $50,000,000.00. To his knowledge, no complaints have ever been made to the Department regarding Christensen's activities as a mortgage solicitor or broker. (Testimony of Christensen, Petitioner's Exhibit #6.)

   CONCLUSIONS OF LAW

   
   

8. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding.

   
   

9. Section 120.60(2), Florida Statutes, requires that an agency denying a license must state with particularity the grounds or basis for denial. The Department's letter of denial cites two violations of Chapter 494, Florida Statutes, as its basis for denial of Christensen's application. Those are:

   
   

   (h) Conduct which would be the cause for denial of a license.

   * * *

   (k) Having currently under suspension or revocation a license as a real estate broker or salesman, securities dealer or salesman, or insurance agent or having currently under suspension or revocation any other license which is required for any other profession or occupation which is regulated by this state, other states, or the government

   of the United States for the protection of the public, which suspension or revocation is based on fraud, misrepresentation, or deceit.

   * * *

   
   

   (Subsections 494.05(1)(h) and (k), F.S.)

   
   

10. The only "conduct" which is specified is that of having the real estate broker's license suspended.

    
    

11. Therefore, the ultimate issue in this proceeding is whether Petitioner had his real estate broker's license suspended for fraud, misrepresentation or deceit. That is the same issue litigated by the same parties in DOAH Case No. 86-0328. (See Finding of Fact, paragraph 4, above.)

    
    

12. The doctrines of res judicata and estoppel by judgement are applicable to administrative orders and decisions. 32, Fla. Jur. 2d, Judgements and Decrees, Subsection 99. The distinction between the two doctrines relates to whether the cause of action in the prior case is the same or different. The Department argues that the prior case, DOAH Case No. 86-0328, was a license revocation and the instant case is the denial of a new license application. Christensen argues that his application was a renewal. A license renewal is a mandatory ministerial act which cannot substitute for a revocation proceeding. Vocelle v. Riddell, 119 So.2d 809 (Fla. 2d DCA 1960), Dubin V. Department of Business Regulation, 262 So.2d 273 (Fla. 1st DCA 1972), and Sopp v. Florida Construction Industry Licensing Board, 353 So.2d 174 (Fla. 4th DCA 1977). The distinction here is immaterial. Christensen already has his mortgage broker's license. Under Subsection 494.01(7), Florida Statutes, it was not due to expire until August 31, 1986. The denial of his application involving the-new company is based on the same alleged wrongdoings as the attempted license revocation. Those allegations relate to Christensen, not to the new company. The Department is attempting to litigate the same case twice. The Department argues that the finding of "failure to prove" in Case No. 86-0328 is not a finding that the real estate license suspension of Christensen was not based upon fraud, misrepresentation or deceit. The argument is appealing but without merit. Its

    logical implication is that a party could be subjected to an endless stream of proceedings until just the right persuasive piece of evidence is found. This is precisely the situation which the doctrines of repose are intended to prevent.

    32 Fla. Jur. 2d, Judgments and Decrees, Section 100.

    
    

13. In its post-hearing Memorandum of Law, the Department cites Rule 3D- 40.03(3), Florida Administrative Code, as the procedural basis for its denial of Christensen's application. The relevant portion of that rule provides:

    
    

    (3) Previously-licensed Applicant. An applicant for a new license as a mortgage broker or solicitor will not be required to stand the examination required by rule 3D-

    40.04 if his application for licensing is filed within six months of the date upon which his previous license expired or was cancelled. Along with his application he must submit the fees prescribed by law. If, after checking the records to determine compliance with the Act during the time he was previously licensed, it is found that he has complied, the license will be issued. If the applicant has violated the Act, the license will be denied and the 3D-40.04(4) will be followed....

    
    

    (Emphasis added.)

    
    

14. The rule is inapplicable on its face. Christensen's mortgage broker's license neither expired nor was cancelled. This rule seems to create a grace period for individuals whose licenses have lapsed for a brief period and who would be eligible to avoid reexamination.

    
    

15. Based on the foregoing, it is unnecessary to address the issue of retroactive application of Subsection 494.05(1)(k), Florida Statutes. The conclusion, however, is inescapable that such application of this penal statute is ex post facto and prohibited.

RECOMMENDATION

Based on the foregoing, it is recommended that a Final Order be issued granting the mortgage broker's license to Terry Christensen.

DONE and ORDERED this 7th day of November, 1986, in Tallahassee, Florida.

MARY CLARK

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

\ Filed with the Clerk of the Division of Administrative Hearings this 7th day of November, 1987.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-2498

The following constitute my specific rulings on the proposed findings of facts submitted by the parties.

PETITIONER'S FINDINGS OF FACT

1-3. Adopted in Paragraph #1.

4-5. Adopted in Paragraph #5.

1. Rejected as irrelevant.

2. Adopted in Paragraph #3. 8-12. Adopted in Paragraph #4.

13. Rejected as unnecessary. 14-15. Adopted in Paragraph #4. 16-18. Rejected as unnecessary.

RESPONDENT'S FINDINGS OF FACT

1. Adopted in Paragraph #1. 2-4. Adopted in Paragraph #4.

5. Rejected as unnecessary. 6-8. Adopted in Paragraph #4.

9. Rejected as immaterial. 10-11. Adopted in Paragraph #2. 12-16. Rejected as immaterial.

17. Adopted, as to the first sentence, in paragraphs #3 and #4; otherwise, rejected as immaterial.

COPIES FURNISHED:

Gorham Rutter, Jr., Esquire Suite D

338 North Magnolia Avenue Orlando, Florida 32801

Robert Good, Esquire Suite 501

400 West Robinson Street Orlando, Florida 32801

Honorable Gerald Lewis, Comptroller Department of Banking and Finance The Capitol, Plaza Level Tallahassee, Florida 32301

Charles Stutts, Esquire General Counsel

Department of Banking and Finance The Capitol, Plaza Level Tallahassee, Florida 32301

Docket for Case No: 86-002498

Orders for Case No: 86-002498