STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

OFFICE OF COMPTROLLER, ) DEPARTMENT OF BANKING AND FINANCE, )

)

Petitioner, )

)

vs. ) CASE NO. 90-2040

)

JAMES W. McKIBBON, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above- styled case on June 19, 1990, at Tampa, Florida.

APPEARANCES

For Petitioner: Stephen M. Christian, Esquire

1313 Tampa Street, Suite 615

Tampa, Florida 33602

For Respondent: James W. McKibbon, pro se

5770 Dartmouth Avenue

St. Petersburg, Florida 33710 STATEMENT OF THE ISSUES

Whether Respondent held himself out as a mortgage broker and acted as a mortgage broker without having a license to so act.

PRELIMINARY STATEMENT

By Administrative Complaint dated January 5, 1990, the Office of the Comptroller, Department of Banking and Finance, seeks to levy a fine and/or enter a cease and desist order against James W. McKibbon, Respondent. As grounds therefor, it is alleged that Respondent held himself out as a mortgage broker and acted as a mortgage broker without being licensed to do so. The Administrative Complaint charged two other individuals, James Hazen and Gwen Morehead, both licensed mortgage brokers, with working for and arranging loans through an unlicensed corporate mortgage broker. Neither Hazen nor Morehead requested formal proceedings, and the charges against them were resolved at an informal proceeding.

At the hearing, Petitioner called one witness, Respondent testified in his own behalf and four exhibits were identified. Through oversight Exhibit 4 was not offered into evidence, but all parties assumed it had been. All exhibits are now admitted into evidence. Proposed findings submitted by Respondent are accepted, except as noted in the Appendix attached hereto and made a part hereof.

FINDINGS OF FACT

1. At all times relevant hereto, James W. McKibbon was not licensed as a mortgage broker in Florida (Exhibit 1).

   
   

2. MorBanc Financial Corporation was initially registered as a mortgage broker in Florida on February 27, 1989, and remained registered through June 15, 1990 (Exhibit 1).

   
   

3. In August 1988, Respondent was employed by Sovereign Savings Bank to procure qualified home purchases needing mortgage money to be lent by Sovereign.

   
   

4. MorBanc Financial Corporation was incorporated circa 1988 to become a mortgage brokerage firm. It opened a bank account and an office from funds contributed by its organizers.

   
   

5. Respondent was offered shares in MorBanc and was elected president of the company. No evidence was submitted that Respondent was an investor in MorBanc.

   
   

6. Thomas Pollak moved to Florida in 1988 and contracted to purchase a residence. The real estate agent with whom he was working recommended he seek a loan through MorBanc which was located in the same building with the real estate agent. Pollak assumed that MorBanc was a licensed mortgage broker in Florida. McKibbon's business card shows him as President of MorBanc Financial Corporation and lists FHA-VA-Conventional -- presumably loans that can be brokered by MorBanc.

   
   

7. Respondent never told Pollak that he or MorBanc were mortgage brokers, and no applications for a mortgage loan completed by Pollak contained the name MorBanc. Instead, all of the application forms used were those used by Sovereign Savings Bank, and the loan application was submitted to Sovereign Savings Bank. The bank paid Respondent for procuring loans.

   
   

8. MorBanc, prior to becoming registered as a mortgage broker, processed no loans from clients procured by Respondent McKibbon and paid McKibbon no commission or other compensation.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

   
   

10. Section 492.02, Florida Statutes, provides in pertinent part:

    
    

    1. "Mortgage broker" means any person not exempt under s. 494.03 who for compensation or gain, either directly or indirectly makes, negotiates, acquires, sells or arranges for, or offers to make, negotiate, acquire, sell,

       arrange for, a mortgage loan or mortgage loan commitment. This subsection shall not apply to transactions involving the sale or purchase

       of notes or bonds secured by mortgages which are subject to registration by the department.

    2. "Mortgage brokerage business" means any person which employs a mortgage broker or mortgage brokers, or which, either

       directly or indirectly, makes, negotiates, acquires, sells, or arranges for, or offers to make, negotiate, acquire, sell, or arrange for, a mortgage loan or mortgage loan commitment for compensation or gain, or in the expectation of compensation or gain.

       
       

11. Section 494.093(1)(l), Florida Statutes, provides the Department may take disciplinary action against one acting as a mortgage broker without a mortgage broker license issued by the Department. Such disciplinary action may include the imposition of a fine and/or denial of a license or registration.

    
    

12. Since these proceedings are similar to a license disciplinary proceeding, the Department has to prove the allegations by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

13. Although Respondent appeared to hold himself out as a mortgage broker and MorBanc as a mortgage brokerage business, no clear and convincing evidence was submitted that Respondent acted as a mortgage broker in processing the loan application of Pollak. At the time this loan was processed, Respondent was working for Sovereign Savings Bank processing loans for the bank. He was paid for this by the bank. He received no compensation from MorBanc. No evidence was presented that Respondent brokered or attempted to broker any loan.

    
    

14. Accordingly, Petitioner has failed to prove, by clear and convincing evidence, that Respondent, for compensation or gain, made, negotiated, acquired, sold or arranged for mortgage loans, except for Sovereign Savings Bank by whom he as employed for this purpose.

RECOMMENDATION

It is recommended that the charges against James W. McKibbon that he acted as a mortgage broker without being licensed to do so in Florida be dismissed.

ENTERED this 20th day of July, 1990, in Tallahassee, Florida.

K. N. AYERS Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 20th day of July, 1990.

APPENDIX

Petitioner's Proposed Findings Not Accepted.

2. Respondent helped set up the furniture in the office that was provided by one of the financial founders of MorBanc. Not accurate to call Respondent "instrumental" in this task.

1. Teresa Tyler was the real estate agent procuring the contract with Pollak. No evidence was submitted that she was Respondent's real estate salesperson.

   
   

2. While Pollak testified that Respondent mentioned he (Respondent) could work with more than one lender, the only lender mentioned by Respondent was Sovereign, and the loan was processed through Sovereign.

COPIES FURNISHED:

Stephen M. Christian, Esquire Office of Comptroller

1313 Tampa Street, Suite 615

Tampa, FL 33602-3394

William G. Reeves General Counsel

Department of Banking and Finance The Capitol

Plaza Level, Room 1302 Tallahassee, Florida 32399-0350

James W. McKibbon 5770 Dartmouth Avenue

St. Petersburg, FL 33710

Honorable Gerald Lewis Comptroller

State of Florida The Capitol

Tallahassee, FL 32399-0350

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AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE

DIVISION OF FINANCE

OFFICE OF THE COMPTROLLER,

DEPARTMENT OF BANKING AND Administrative Proceeding FINANCE, No. 1547-F-10/89

DOAH NO. 90-2040

Petitioner,

vs.

JAMES W. MCKIBBON,

Respondent.

/

FINAL ORDER AND NOTICE OF RIGHTS

This cause came before the Office of the Comptroller Department of Banking and Finance, Division of Finance for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (DOAH #90-2040) submitted a recommended order to the Department on or about July 20,1990, a copy of which is attached hereto as Exhibit A, and incorporated by reference.

FINDINGS OF FACT

The Department hereby adopts and incorporates by reference the findings of fact set forth in the recommended order.

CONCLUSIONS OF LAW

The Department hereby adopts and incorporates by reference the conclusions of law set forth in the recommended order, except to the extent modified hereafter.

The Department herein modifies and rejects the following quoted conclusion of law:

Since these proceedings are similar to a licensed disciplinary proceeding, the Department has to prove the allegations by clear and convinc- ing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987)

The Department rejects the aforesaid conclusion of law as not being supported by the aforesaid stated case, which specifically involved a license revocation. The present state of the law in Florida is not settled as to whether or not the Department, in an action for entry of a cease and desist order, must prove its allegations by clear and con- vincing evidence. The Department opines that such a action must be proved by a proponderance of the evidence. An administrative cease and desist action is similar to a circuit court injunction action (i.e. an attempt to order a person to stop doing something prohibited or take correc- tive action). Courts in other jurisdictions have found such circuit court injunctive actions to require proof based upon a preponderance of the evidence. See State v. Reed, 375 p. 2d 588 (Kan. 1962); Baton Rouge Cigarette Service v. Bloomer- steil, 88 So.2d 742 (La. 1st Cir. 1956). Nevertheless, regardless of the Burden of Proof, the Department does not disagree with the ultimate recommendation of the Hearing Officer based upon the evidence introduced at the final hearing.

FINAL ORDER

Based upon the foregoing findings of fact and conclusions of law, as modified, the recommendation of the Hearing Officer that the complaint against James W. McKibbon of acting as a mortgage broker without being licensed to do so in Florida be dismissed shall be and is hereby granted and the complaint is hereby dismissed.

DONE and ORDERED this 18th day in Tallahassee, Florida.

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 PROCEED- INGS 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.

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true copy of the foregoing was served by U.S. Mail Post prepaid to James W. McKibbon, 5770 Dartsmouth Avenue, St. Petersburg, Florida 33710 and Steven M. Christian, Esquire, Office of the Comptroller, 1313 Tampa Street, Suite 615, Tampa, Florida 32602-3394, this 18th day of September 1990.

H. RICHARD BISBEE

Office of the Comptroller The Capitol, Suite 1302 Tallahassee, FL 32399-0350

(904) 488-9896

Copies furnished to:

Randy Holland, Director Division of Finance

Ken Ayers, Hearing Officer

Division of Administrative Hearings

Docket for Case No: 90-002040

Orders for Case No: 90-002040