STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF STATE, )

DIVISION OF LICENSING, )

)

Petitioner, )

)

vs. ) CASE NO. 89-5300

) MARSHALL SELLERS d/b/a SONYA SELLERS ) COLLECTIONS and AUTO SECURITY COMPANY,)

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on March 13, 1990, in Jacksonville, Florida, before the Division of Administrative Hearings, by its designated Hearing Officer, Diane K. Kiesling.

APPEARANCES

For Petitioner: Henri C. Cawthon

Assistant General Counsel Department of State, Division

of Licensing

The Capitol, Mail Station #4 Tallahassee, FL 32399-0250

For Respondent: Bernard S. McLendon

Attorney at Law

505 North Liberty Street Jacksonville, FL 32202

STATEMENT OF ISSUES

The issue is whether the Respondent should be fined or otherwise penalized based on the acts alleged in the Amended Administrative Complaint.

PRELIMINARY STATEMENT

At the onset of the formal hearing, argument was heard on Petitioner's Motion for Sanctions for Respondent's failure to comply with the Order of January 18, 1990, wherein Respondent was ordered to comply with the discovery requests of Petitioner made by subpoena duces tecum on November 28, 1989. The Motion for Sanctions was granted and Respondent was precluded from presenting any evidence or testimony regarding his defenses which should have been furnished to Petitioner pursuant to the terms of the order compelling discovery.

The Petitioner, Department of State, Division of Licensing, presented the testimony of Edmund H. Johnson, Julia Adams, Daniel Wilson Ayers, Jr., and Louis

1. Williams. Petitioner's Exhibits 1-5 were admitted in evidence. The Respondent, Marshall Sellers, presented his own testimony and introduced no exhibits.

   
   

   The parties waived the filing of a transcript. The parties timely filed proposed findings of fact and conclusions of law. All proposed findings of fact and conclusions of law have been considered. A specific ruling on each proposed finding of fact is made in the Appendix attached hereto and made a part of this Recommended Order.

   
   

   FINDINGS OF FACT

   
   

   1. At all times pertinent to this case, Marshall Sellers was the owner and operator of Auto Security Company d/b/a Sonya Sellers Collections.

      
      

   2. Sellers d/b/a Auto Security Company performed collection and repossession services for Kings Crown Leasing, Inc., a subsidiary of Kings Crown Ford.

      
      

   3. While the agreement between Sellers and Kings Crown primarily called for Sellers to collect past due payments, he also performed two or three repossessions per month when collection efforts failed.

      
      

   4. Sellers was paid for his services by Kings Crown in the form of monthly checks made payable, in some instances to Marshall Sellers, and in other instances to Auto Security Company. Sellers' bills or invoices to Kings Crown were similarly sometimes in the name of Marshall Sellers and sometimes in the name of Auto Security Company.

      
      

   5. Sellers d/b/a Auto Security Company performed collection and repossession services for Tillman Auto Sales from 1988 to the present.

      
      

   6. While some of his services to Tillman involved collections, most of his services to Tillman were for repossessions.

      
      

   7. The repossessions for which Sellers billed both Kings Crown and Tillman included both voluntary recoveries, when the debtor voluntarily gave Sellers the keys to the vehicle, and involuntary recoveries when Sellers "stole" the vehicle from the debtor. Sellers himself characterized the involuntary repossessions to be "stealing."

      
      

   8. Sellers acknowledged to the investigator from the Division of Licensing that he did repossessions incidental to his collections work.

      
      

   9. For the first time, Sellers testified at hearing that he does not do involuntary repossessions himself, but that he hires independent contractors to perform those services for him. Sellers maintained that the involuntary repossessors were not his employees and that they were paid as contractors with their income being reported by Sellers to the IRS on Form 1099. He stated that the repossession fees paid to him by Tillman and Kings Crown were fees he paid to the independent contractors to repossess particular vehicles.

      
      

   10. Sellers' testimony in this regard is not worthy of belief. Having observed the candor and demeanor of Sellers while he testified, the undersigned determined that he was inconsistent and evasive and not worthy of belief.

       Additionally, Sellers failed to comply with valid discovery requests and failed to produce records, either through discovery or at hearing to support his otherwise uncorroborated testimony. It would have been a simple matter for him to have produced the 1099's to show that all repossessions paid for by Tillman and Kings Crown were performed by independent contractors and that those independent contractors were paid for the repossession services, not Sellers.

       
       

       CONCLUSIONS OF LAW

       
       

   11. The Division of Administrative Hearings has jurisdiction of the parties to and subject matter of these proceedings. Section 120.57(1), Florida Statutes.

       
       

   12. Sellers is charged with violation of Section 493.319(1)(g), Florida Statutes. Section 493.319(1)(g) states:

       
       

       1. The following constitute grounds for which disciplinary action specified in subsection (2) may be taken:

          * * *

          1. Conducting business without a license or with a revoked or suspended license.

             
             

             Section 493.319(2)(c) specifies that a fine of $1000 may be imposed for each count or separate offense.

             
             

   13. Sellers maintains that he is exempt for the terms of Chapter 493, Part 1, based on Section 493.301(1)(h), which says:

       
       

       1. This part shall not apply to:

          * * *

          1. Any . . . consumer credit reporting agency regulated under 15 U.S.C. ss. 1681 et seq.; or any collection agency or to any permanent employee thereof.

          
          

   14. Additionally, Section 493.30(6) defines "repossessor" to mean "any person who, for compensation, recovers motor vehicles, as defined in s. 320.01(1), . . . as a result of default in payment for such motor vehicle." Section 493.30(16) defines repossession as follows:

       
       

       (16) "Repossession" is the legal recovery of a motor vehicle or motorboat as authorized by the legal owner, lienholder, or lessor to recover, or to collect money payment in lieu of recovery of, that which has been sold or leased under a security agreement that contains a repossession clause. . . .

       
       

   15. Sellers argues that he is a collection agency as identified in Section 493.301(1)(h) and is therefore exempt from licensure reguirements for repossessions incidental to his collection business. In support of his argument, he cites Title 15 U.S.C. ss. 1692a(6). Section 1692a(6) contains the definition of a "debt collector" pursuant to the Fair Debt Collection Practices Act.

   16. Even though Sellers may be serving as a debt collector as defined in Title 15 U.S.A. ss. 1692a(6) he has not established that he is a collection agency pursuant to Section 493.301(1)(h).

       
       

   17. Collection agencies in Florida are subject to the Consumer Collections Practices Act, Chapter 559, Part IV, Florida Statutes. Because practices by collection agencies are regulated by Chapter 559, Part IV, further regulation of them is unnecessary under Chapter 493, Part I. There is nothing in Chapter 493, Part I, that exempts Sellers' services as a repossessor from the terms of that part.

       
       

   18. The facts show that Sellers has recovered motor vehicles, by both involuntary and voluntary repossession. The voluntary recoveries also fit within the definition of repossession, in that the statute makes no distinction between voluntary and involuntary recoveries.

       
       

   19. It is concluded that Sellers is not exempt from the licensure requirements of Chapter 493, Part I, because for compensation he recovers motor vehicles as a result of default in payment for such motor vehicles. He is a repossessor. While he may also be a debt collector, he has not proven that he is exempt from the terms of Chapter 493, Part I, as a collection agency.

       
       

   20. Sellers is guilty of violating Section 493.319(1)(g) both in his repossessions for Kings Crown and in his repossessions for Tillman. These constitute two separate violations.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of State, Division of Licensing, enter a

Final Order and therein find Marshall Sellers d/b/a Auto Security Company and Soyna Sellers Collections guilty of both counts alleged in the Amended Administrative Complaint and order Marshall Sellers to pay an administrative fine of $2000.

DONE and ENTERED this 3rd day of April, 1990, in Tallahassee, Florida.

DIANE K. KIESLING

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 3rd day of April, 1990.

APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 89-5300

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case.

Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Department of State, Division of

Licensing

1. Proposed findings of fact 1, 4, 6, 7, and 8 are subordinate to the facts actually found in this Recommended Order.

   
   

2. Proposed findings of fact 2 and 5 are irrelevant.

   
   

3. Proposed finding of fact 3 is unsupported by the competent, substantial evidence.

   
   

4. Proposed finding of fact 9 is unnecessary.

Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Marshall Sellers d/b/a Auto Security

Company and Sonya Sellers Collections

1. Proposed findings of fact 1, 6-9, 11, 13, and 14 are subordinate to the facts actually found in this Recommended Order.

   
   

2. Proposed findings of fact 2, 5, 15, and 17 are irrelevant.

   
   

3. Proposed findings of fact 3, 4, 10, 12, 16, and 18-20 are unsupported by the competent, substantial evidence.

COPIES FURNISHED:

Henri C. Cawthon Assistant General Counsel Department of State Division of Licensing

The Capitol, Mail Station #4 Tallahassee, FL 32399-0250

Bernard S. McLendon Attorney at Law

505 North Liberty Street Jacksonville, FL 32202

Honorable Jim Smith Secretary Of State The Capitol

Tallahassee, FL 32399-0250

Ken Rouse General Counsel

The Capitol, LL-10 Tallahassee, FL 32399-0250

Docket for Case No: 89-005300

Orders for Case No: 89-005300