STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
JAGER INDUSTRIES, INC. )
)
Petitioner, )
)
vs. ) CASE NO. 87-3101
)
OFFICE OF THE COMPTROLLER, )
)
Respondent. )
)
RECOMMENDED ORDER
By Notice of stipulated Waiver of Administrative Hearing dated September 8, 1988, the parties in the above-styled case, by and through their attorneys, waived formal hearing in this case and stipulated that a Recommended Order be entered based upon briefs and documents submitted by the parties in Second Preliminary Stipulation signed by both parties August 1, 1988.
The issue here presented is whether Jager Industries, Inc., formerly known as Castle Realty Ltd., is entitled to recovery from the Mortgage Brokerage Guaranty Fund the losses sustained by Castle Realty, Inc. when 1st Federated Realty Mortgage, Inc. defaulted in 1980 on a Master Loan Commitment to provide some $4,000,000 in financing to purchasers of condominiums developed for sale by Castle Realty Ltd. Castle Realty had paid $50,000 for this loan commitment.
Based solely on the documents and briefs submitted by the parties and a telephone conference call with their attorneys on September 29, 1988, the following is submitted.
FINDINGS OF FACT
For the purposes of these proceedings, Jager Industries, Inc. and Castle Realty Ltd. are synonymous as Petitioner. Through name changes, Castle Realty Ltd. became Jager Industries, Inc.
Under the provisions of the Mortgage Brokerage Act, Chapter 494, Florida Statutes, the Office of the Comptroller, Department of Banking and Finance (Department), is charged with the responsibility and duty of administering the Mortgage Brokerage Guaranty Fund (Fund) which includes the duty to approve or deny applications for payment from the Fund, as set forth in Section 494.042, Florida Statutes.
At all times material hereto, 1st Federated Realty Mortgage, Inc. (1st Federated) was licensed as a mortgage broker in this state pursuant to Chapter 494, Florida Statutes, having license number HE 7896. On or about January 8, 1981, 1st Federated filed for bankruptcy in the United States Bankruptcy Court for the Middle District of Florida, Tampa, Division. Thereafter, on or about December 16, 1981, 1st Federated was dissolved.
On January 29, 1985, the Department received a letter dated January 25, 1985, by regular mail, requesting payment from the Fund on behalf of Castle Realty Ltd. Attached to the letter was a final judgment entered on April 21, 1982, in the Circuit Court for Pinellas County against 1st Federated in the principal amount of $50,000 based upon a violation of Section 494.042(2)(d), Florida Statutes, a Writ of Execution returned unsatisfied and an Affidavit of Reasonable Search.
Thereafter on May 17, 1987, the Department received by certified mail a copy of the Complaint filed against 1st Federated and supporting documents including a copy of the Master Loan Commitment, Affidavit and Acceptance of Service.
Pursuant to the Master Loan Commitment, Castle Realty paid $50,000 to 1st Federated as a Master Commitment Fee in exchange for a promise by 1st Federated to fund up to $4,000,000 for individual condominium loans. The individual commitments and closing of loans were subject to the lender approving the borrower's credit; however, approvals could not be unreasonable withheld.
Timely notice of the institution of the action by Petitioner against 1st Federated as required by s. 494.043(5), Florida Statutes (1985), was waived by Respondent.
No evidence was submitted regarding the number of claims involving 1st Federated and the amount of those claims that have been paid by Respondent from the Fund. Accordingly, no recommendation is made regarding the amount of Petitioner's claim that may be paid from the Fund pursuant to the limitations contained in s. 494.044, Florida Statutes (1985).
By Notice of Intent to Deny Payment from the Mortgage Brokerage Guaranty Fund dated May 22, 1987, Respondent entered findings of fact, conclusions of law and denied Petitioner's claim. As grounds therefor, Respondent concluded that the 1985 and 1986 amendments to Chapter 494 were applicable in this case as those amendments were remedial or procedural in nature and should be given retrospective application. Thereafter, Petitioner requested formal proceedings by petition filed June 16, 1987, and this request was forwarded to the Division of Administrative Hearings by the Comptroller's letter dated July 23, 1987.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of these proceedings.
The initial issue for determination in this case is which statute controls the proceedings. This is important because of changes in Chapter 494 which became effective September 1, 1986. Prior to that date, Section 494.043, Florida Statutes (1985), provided:
Conditions for Recovery.--Any person shall be eligible to seek recovery from the Mortgage Brokerage Guaranty Fund if:
Such person has received final judgment in a court of competent juris-
diction in this state in any action wherein the cause of action was based on s.
Such person has caused to be issued
a writ of execution upon such judgment and the officer executing the same has made a return showing that no personal or real property of the judgment debtor liable to be levied upon in satisfaction of the judgment can be found or that the amount realized on the sale of the judgment debtor's property pursuant to such execu- tion was insufficient to satisfy the judgment;
Such person has made all reasonable searches and inquiries to ascertain whether the judgment debtor possesses real or personal property or other assets subject to being sold or applied in satisfaction of the judgment, and by his search he has discovered no property or assets or he has discovered property and assets and has taken all necessary action and proceedings for the application thereof to the judgment, but the amount thereby realized was insufficient to satisfy the judgment;
Such person has applied any amounts recovered from the judgment debtor, or from any other source, to the damages awarded by the court;
Such person, at the time the action was instituted, gave notice thereof to the Division of Finance of the department
by certified mail; however, the requirement of a timely giving of notice may be waived by the department upon a showing of good cause; and
The act for which recovery is sought occurred on or after September 1, 1977. Recovery of the increased benefits allowable pursuant to the amendments to s. 494.044 which are effective October 1, 1985, shall be based on a cause of action which arose
on or after that date.
The requirements of subsections (2) and (3) are not applicable if the licensee upon
which the claim is sought has filed for bankruptcy or has been adjudicated bankrupt; however, in such event the claimant shall file a claim in the bankruptcy proceedings.
Section 494.044, Florida Statutes (1985), provided any person who meets all the conditions prescribed in s. 494.043 may apply to the Department for payment to be made to such person from the Fund.
494.02 and changes to s. 494.043. The former section defines "mortgage financing transaction" to mean the negotiation, acquisition, sale, or arrangement for, or the offer to negotiate, acquire, sell, or arrange for, a
mortgage loan or mortgage loan commitment. "Party to a mortgage financing transaction1, is defined to mean a borrower or lender in a mortgage financing transaction.
Section 494.043, Florida Statutes (1987), in establishing eligibility to see recovery under the Fund, names only "any person who was a party to a mortgage financing transaction" who meets the requirements of s. 494.043, essentially the same as above-quoted.
Finally, Section 494.12, Florida Statutes (1987) provides:
No judicial or administrative proceeding pending on September 1, 1986, shall be abated as a result of any amendment,
repeal, or addition to Chapter 494 by Chapter 86-68, Laws of Florida.
Petitioner also contends that it qualifies for reimbursement under the 1986 amendments to Chapter 494. This argument is not persuasive. While Petitioner was involved in a mortgage financing transaction as defined in s. 494.02(12), Florida Statutes (1987) , it was not a lender or borrower and, hence, not a "party" as defined in s. 494.02(17). Without belaboring the issue or referring to the numerous judicial decisions submitted by the parties in support of their respective positions, but applying the cardinal rule of statutory conduction that, absent a clearly expressed legislative intent to the contrary, the starting point for interpreting a statute is the language of the statute itself, Consumer Products Safety Commission v. G.T.E. Sylvania, 447 U.S. 102, 100 S.Ct. 2051, 64 L.Ed. 2d 766 (1980); and the rule that the legislature must know the meanings of the words and to have expressed its intent by the use of the words found in the statute, Thayer v. State, 335 So.2d So.2d 815 (Fla. 1976), under the clear meaning of the words Petitioner was neither a lender nor a borrower in a mortgage financing transaction. Accordingly, if the 1986 amendments to Chapter 494 control this case, Petitioner's claim for reimbursement was properly denied by the Respondent.
Respondent takes the position that s. 494.043 requires the claim for payment from the Fund be submitted to the Department by certified mail and that the first request for payment by certified mail was not submitted by Petitioner until May 11, 1987, long after the effective date of the 1986 changes to Chapter
494. This position is not supported by Chapter 494.
The requirement of notice to the Department by certified mail from a claimant is contained in Section 494.043(5), Florida Statutes (1985), above- quoted. The 1987 version of this section is similar to the 1985 version. The 1986 amendment contained in Section 494.043(1) (e) includes the requirement that a copy of the complaint be included with the notice. That subsection requires the person who initiated action against a licensed mortgage broker, as a condition to recovery from the Fund under s. 494.042, to give notice to the Department by certified mail with a copy of the complaint at the time the action was instituted. This can only refer to the action instituted against the mortgage broker in circuit court. The latter part of both Sections 494.043(1)(e), Florida Statutes (1987), and 494.043(5), Florida Statutes (1985), provides the Department may waive this requirement. By failure to raise this issue at any time, Respondent is deemed to have waived the requirement. Furthermore, there is no dispute regarding Respondent receiving notice in January 1985, and any error in failure to provide the notice in 1981 or 1982 is harmless.
Section 494.044 which controls payments from the Fund, provides that any person who meets all of the conditions prescribed in s. 494.043 may apply to the Department for payment to be made to such person from the Fund.
On January 29, 1985, the Department received a request from Respondent for payment from the Fund. Respondent, according to the stipulated facts, has never contended Petitioner'S claim is invalid because Petitioner failed to provide the Department notice by certified mail of the action and a copy of the complaint filed against 1st Federated at the time the complaint was filed.
Section 494.044 contains no requirement that the request for payment from the Fund be submitted by certified mail to the Department. Accordingly, Respondent's position that Petitioner did not file, by certified mail, a request for refund prior to September 1, 1986, is without merit since the statute (s. 494.044) contains no such requirement.
In its letter dated January 25, 1985 and received by Respondent on January 29, 1985, Petitioner requested payment from the Fund as the result of its loss resulting from the Master Loan Commitment entered into with 1st Federated. That letter, with accompanying documents, established Petitioner's eligibility for recovery pursuant to s. 494.043, Florida Statutes (1985). This was the first step in the administrative process which resulted in Petitioner's request for formal proceedings after Respondent denied its claim.
Section 494.12, Florida Statutes (1987), above-quoted, is a clear expression of legislative intent that any proceeding begin before September 1, 1986, is controlled by the statute in effect before that date. The word "abate" as defined in Webster's New Collegiate Dictionary (1977) to mean (1): to put an end to: nullify (2): to become defaulted or become null and void.
Thus, no administrative proceeding pending on September 1, 1986, shall be nullified or become null and void as a result of any amendment or addition to Chapter 494 by Chapter 86-68, Laws of Florida. The fact that Respondent took no action on Petitioner's request for payment from the Fund, which was received by Respondent on January 29, 1985, until May 22, 1987 when it submitted its notice of intent to deny payment from the Fund to Petitioner, did not serve to move the date this administrative proceeding was pending from January 18, 1985, until May 1987. Until such time as Respondent took action on Petitioner's request for payment from the fund, Petitioner had no point of entry to request a hearing since its request had not been denied. Clearly the law in effect at the time Petitioner instituted proceedings to obtain payment from the Fund is the law controlling these proceedings. That was the statute in effect prior to September 1, 1986.
Both parties have submitted cogent and extensive arguments on whether the changes introduced to Chapter 494 by Chapter 86-68, Laws of Florida, should be prospective only or be given retrospective application. Numerous cases are cited to support the position of each party. In view of the clear language of Section 494.12, it is not necessary to determine if these changes are remedial or procedural in nature and hence given retroactive application, City of Orlando
v. Desjardins, 493 So.2d 1027 (Fla. 1986) or are substantive in nature and given only prospective application, Klase v. Wendy's Old Fashioned Hamburgers, 466 So.2d 441 (Fla. 1st DCA 1985). Since administrative procedures to recover Petitioner'S loss due to 1st Federated's bankruptcy were underway, the law in effect when these procedures were instigated is controlling as provided in
Section 494.12. Under the law in effect prior to September 1, 1986, Petitioner was a person eligible for payment from the Mortgage Brokerage Guaranty Fund and complied with all conditions precedent for recovery.
From the foregoing, it is concluded that Jager Industries, Inc. was a person eligible for recovery from the Mortgage Guaranty Fund as provided in Chapter 494, Florida Statutes (1985), and is entitled to recover from the Fund such monies as are available in the account established for 1st Federated creditors as limited by the applicable provisions of the statute as it existed prior to September 1, 1986. It is
RECOMMENDED that the claim of Jager Industries, Inc. for such losses as are reimbursable resulting from the bankruptcy of 1st Federated Realty Mortgage be approved.
ENTERED this 30th day of September, 1988, in Tallahassee, Florida.
K. N. AYERS 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 30th day of September, 1988.
COPIES FURNISHED:
Paul C. Stadler
Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, FL 32399-0350
Larry L. Dillahunty
432 Third Street North St. Petersburg, FL 33701
Honorable Gerald Lewis Comptroller
State of Florida The Capitol
Tallahassee, FL 32399-0350
Charles L. Stutts General Counsel
Department of Banking and Finance The Capitol
Tallahassee, FL 32399-0350
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE
DIVISION OF FINANCE
JAGER INDUSTRIES, INC., ) CASE No. 87-3101
) (Administrative Proceeding
Petitioner, ) No. 871-F-3/87)
)
vs. )
)
OFFICE OF THE COMPTROLLER, )
)
Respondent. )
)
FINAL ORDER GRANTING PAYMENT FROM THE MORTGAGE BROKERAGE GUARANTY FUND RE
1ST FEDERATED REALTY MORTGAGE AND NOTICE OF RIGHTS
The State of Florida Department of Banking and Finance, Division of Finance (hereinafter Department) , being authorized and directed to administer the Mortgage Brokerage Guaranty Fund (hereinafter the Fund) codified in Sections 494.042, 494.043, and 494.044 and 494.045, Florida Statutes, hereby enters this Final Order granting the following application for payment from the Fund arising from alleged violations of the provisions of Chapter 494, Florida Statutes, by 1st Federated Realty Mortgage, Inc.
FINDINGS OF FACT
Under the provisions of the Mortgage Brokerage Act, Chapter 494, Florida Statutes, the Department is charged with the responsibility and duty of administering the Fund, which includes the duty to approve or deny applications for payment from the Fund, as set forth in Section 494.042(2), Florida Statutes.
On May 22, 1987, the Department issued a Notice of Intent to Deny Payment from the Mortgage Brokerage Guaranty Fund re 1st Federated Realty Mortgage, Inc., and Notice of Rights. Thereafter, on June 16, 1987, the Department received a Petition for Hearing from Jager Industries, Inc., which was referred to the Division of Administrative Hearings. On or about August 25, 1988, K.N. Ayers was assigned as Hearing Officer in this cause. On September 30, 1988, the Hearing Officer issued a Recommended Order.
The Department has reviewed the thoughtful analysis contained in the Recommended Order and adopts and incorporates the factual findings and legal conclusions by reference insofar as the Recommended Order concludes that the claim was perfected on January 29, 1985. However, insofar as vested rights may not be destroyed, see 10 Fla. Jur. 2d, Constitutional Law 300 (1979), the Department deems it is unnecessary to adopt the Hearing Officer's analysis of
the effect of Section 494.12, Florida Statutes, in this proceeding. Based upon the foregoing, it is appropriate to grant the claim of Jager Industries, Inc., for payment from the Fund.
FINAL ORDER
IT IS THEREFORE determined and ordered that the Department shall pay Jagar Industries, Inc., $10,000 from the Fund provided that Jager Industries, Inc., provides the Department with a duly executed, recorded assignment substantially in the form of Exhibit A.
DONE and ORDERED in Tallahassee, Florida this 15th day of November 1988.
GERALD LEWIS, as Comptroller of the State of Florida and Head of the Department of Banking and Finance
NOTICE OF RIGHTS TO JUDICIAL REVIEW
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 (1) COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DEPARTMENT OF BANKING AND FINANCE 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 THIRTY (30) DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.
Copies furnished to:
K. N. Ayers, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399
Larry L. Dillahunty
Attorney for the Jagar Industries Inc., Claim
432 Third Street North
St. Petersburg, Florida 33701
Randall A. Holland, Director Division of Finance
The Fuller Warren Bldg., 2nd Floor
202 Blount Street Tallahassee, Florida 32399
Jack F. Powell Registered Agent of
1st Federated Realty Mortgage, Inc.
601 4th Street North, Suite 201
St. Petersburg, Florida 33702
Paul C. Stadler, Jr. Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399
| Issue Date | Proceedings |
|---|---|
| Sep. 30, 1988 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Nov. 15, 1988 | Agency Final Order | |
| Sep. 30, 1988 | Recommended Order | Case involves statutory interpretation and determination of which statute controlled these proceedings. |
