STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF AGRICULTURE )

AND CONSUMER SERVICES, )

)

Petitioner, )

)

vs. ) Case No. 98-2978

) EAU GALLIE PAWN & LOAN, INC., ) d/b/a EAU GALLIE PAWN, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

A formal hearing was held by the Division of Administrative Hearings, before Daniel M. Kilbride, Administrative Law Judge on February 5, 1999, in Viera, Florida.

APPEARANCES

For Petitioner: Lawrence Davis, Esquire

Department of Agriculture and Consumer Services

Mayo Building, Room 515 Tallahassee, Florida 32399-0800

For Respondent: J. Scott Lanford, Esquire

J. Scott Lanford, P.A.

3125 West New Haven Avenue, Suite 200 West Melbourne, Florida 32904-3533

STATEMENT OF THE ISSUE

Whether Respondent, a licensed pawn broker, had engaged in title loan transactions at, within, or adjoining a licensed pawnshop location, in violation of Section 539.001(12)(j), Florida Statutes (1997).

PRELIMINARY STATEMENT

On June 3, 1998, Petitioner filed an Administrative Complaint. The Respondent timely denied the allegations, filed an answer and requested a formal hearing. On July 8, 1998, Petitioner sent the request for a formal hearing to the Division of Administrative Hearings and contemporaneously filed an Amended Administrative Complaint alleging that the violation occurred on January 8, 1998. The final hearing was scheduled for October 28, 1998. Petitioner filed a Request to Allow Telephonic Testimony for one of the witnesses, Investigator Robert Lastinger, and on September 24, 1998, filed a Notice of Intent to Use Similar Fact Evidence of Other Violations, Wrongs or Acts. On October 2, 1998, the Request to Allow Telephonic Testimony was denied, but the Administrative Law Judge ordered that a deposition of Investigator Lastinger may be taken by telephone. On October 16, 1998, a telephonic deposition was conducted of Investigator Lastinger. Petitioner's attorney attended in person and Respondent's attorney participated by phone. The deposition was filed with the Division of Administrative Hearings and a copy provided to Respondent's counsel. On October 22, 1998, Petitioner's attorney filed a Motion for Continuance due to the sickness of Petitioner's primary witness, Investigator Robert Sonnenfeld. Respondent's attorney did not object to the continuance. A continuance was granted and on December 1, 1998, Petitioner's attorney filed a Notice of Witness Availability for Hearing. A telephone conference was conducted at which time

counsel for the parties agreed to a formal hearing being rescheduled for February 5, 1999. A Notice of Hearing for that date was entered on December 4, 1998.

At the final hearing, the Petitioner presented the testimony of Investigator Robert Sonnenfeld. Petitioner's Exhibits 1 through 3 were admitted into evidence without objection.

Petitioner's Exhibit 4 was admitted over the objection of Respondent. The deposition of Robert Lastinger was admitted without objection as Petitioner's Exhibit 5. Respondent presented the testimony of Dana Ferrell, president of Respondent's company. Respondent's Exhibits 1 and 2 were admitted into evidence without objection. Official notice was taken of Chapter 96-242, Laws of Florida (1996), and

Chapter 97-304, Laws of Florida (1997).

A transcript of the hearing was filed February 16, 1999. Proposed Recommended Orders were timely filed by the parties. Each has been given careful consideration in the preparation of this order.

FINDINGS OF FACT

Having considered the evidence of record, the candor and demeanor of the witnesses, the following findings of fact are determined:

1. Eau Gallie Pawn & Loan, Inc., d/b/a Eau Gallie Pawn, Inc. (hereinafter "Respondent"), is located at 2768 Sarno Road, Melbourne, Florida.

2. Respondent is currently registered with the Department of Agriculture and Consumer Services as a pawnbroker.

3. The president of Respondent is Dana D. Ferrell.

   
   

4. Dana D. Ferrell is also the president of Eau Gallie Title Loan, Inc., and is doing business as a car title loan agent.

5. In 1997, both businesses were operated out of the same building at 2768 Sarno Road, Melbourne, Florida, but there were separate entrances for both.

6. In 1997, a change in the law required that pawnbrokers and car title loan agents could not operate together. When the law changed, Dana Ferrell leased space from a Hess Station at 2740 Sarno Road in a back office for the title loan business. The space was leased sometime in August or September 1997. A valid city and county occupational license was obtained for Eau Gallie Title Loan, Inc., at 2740 Sarno Road, Melbourne, Florida.

7. The Hess Station is to the right of the pawnshop and is approximately 27-28 feet away from the pawnshop location at

   2768 Sarno Road. They are neither adjacent, nor adjoining each other.

8. In part, both the pawnshop and Hess Station share a common fence. One can go through a cut in the fence to get to the Hess Station. There is no other business between the pawnshop location and the Hess Station.

9. There are no signs on either the outside or inside of the Hess Station to indicate there is a title loan business

   located inside the Hess Station in the back office.

   
   

10. Investigator Bob Sonnenfeld went inside the Hess Station and only observed items common to a service station. He did not, however, inquire of anyone in the station if there was a title loan business there.

11. During the morning of January 8, 1998, Investigator Bob Sonnenfeld, with the Department of Agriculture and Consumer Services, went to the pawnshop located at 2768 Sarno Road. At that location there were two persons working at the time.

12. Investigator Sonnenfeld spoke to Ferrell and said he wanted to get a title loan on his wife's 1989 Honda Civic LX and was looking for a $500.00 loan. Ferrell gave Sonnenfeld two forms and explained how to fill one of them out. Ferrell told him to fill it out and bring it back. He was also told to bring his wife's car with him. At no time during the conversation was there any mention that the car title loan business was conducted at another location.

13. Ferrell gave him a business card with the phone number and address of the pawnshop. However, the paper work that was given to Sonnenfeld bore the name "Eau Gallie Title Loan, Inc.," and had the address of the Hess Station and a phone number of (407) 259-9116.

14. One of the forms explains title loans and has a line for a signature and the date. The form Sonnenfeld was asked to fill-out requires detailed information about the individual applying for a title loan.

15. Investigator Sonnenfeld called (407) 259-9116 on various occasions and received no answer.

16. On May 29, 1998, at 11:05 a.m., Investigator Robert Lastinger called (407) 259-9116 and spoke to "Dana" who answered the phone "Eau Gallie Title Loans." Investigator Lastinger asked about title loans and Dana told him to bring his title and car to 2768 Sarno Road. Dana gave directions to that location. The Hess Station location was never mentioned.

    
    

17. No one employed by Ferrell works at the Hess Station. Only Ferrell and one employee work at the pawnshop location.

    Ferrell stays primarily at the pawnshop location. When

    
    

    (407) 259-9116 is called, it can be answered at the pawnshop as well as at the Hess Station or on Ferrell's cellular phone. Paperwork on title loans can only be done at the Hess Station by locking the pawnshop location, or if two people are working, one can walk over to the Hess Station.

18. There is no locked fence area by the Hess Station. The pawnshop location does have a locked fenced area. On occasion a repossessed vehicle from a title loan transaction will be stored there. A repossessed vehicle was reported stolen from the locked fenced area in September 1997.

19. When a person does not pay on the title loan, the vehicle can be repossessed and eventually sold.

20. Ferrell will not process a title loan without the

    information that was on the paperwork given to Sonnenfeld. This paperwork is available at the pawnshop location. The paperwork for the title loans are completed at the Hess Station, but title loans are discussed at the pawnshop and potential customers are given the necessary documents there. The only matters to be completed are to write the loans and issue payment schedules.

21. Neither investigator for Petitioner completed an auto title loan with either Respondent or Eau Gallie Title, Inc.

    CONCLUSIONS OF LAW

    
    

22. The Division of Administrative Hearings has jurisdiction of this case, pursuant to Section 120.569, and 120.57(1), Florida Statutes.

    
    

23. The Department of Agriculture and Consumer Services is an agency of the State of Florida with the authority to enforce the provisions of Sections 539.001 - 539.003, Florida Statutes, cited as the "Florida Pawnbroking Act."

24. The burden of establishing a violation of the Florida Pawnbroking Act is on Petitioner. The standard of proof required in this matter is that relevant and material findings of fact must be supported by clear and convincing evidence of record. Hal Heifetz, d/b/a Key Western Inn v. Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco, 475 So. 2d 1277 (Fla. 1st DCA 1988); Department of Banking and Finance v. Osborne Stern & Co., 670 So. 2d 932

    (Fla. 1996).

    
    

25. Eau Gallie Pawn and Loan, Inc. (Respondent) is a registered pawnbroker subject to the provisions of Sections

    539.001 - 539.003, Florida Statutes.

    
    

26. On June 4, 1997, Chapter 97-305, Laws of Florida became effective law without the Governor's approval. Chapter 97-305, Laws of Florida amended Section 539.001(12)(j) Florida Statutes, as follows:

    (12) PROHIBITED ACTS - A pawnbroker, or an employee or agent of a pawnbroker, may not:

    
    

    (j) Engage in title loan transactions at, within, or adjoining a licensed pawnshop location.

    
    

27. Pertinent to this case, Section 539.001(7), Florida Statutes, provides:

    (7) ORDERS IMPOSING PENALTIES:

    
    

    1. The agency may enter an order imposing one or more of the penalties set forth in paragraph (b) if the agency finds that a pawnbroker:

       
       

       1. Violated or is operating in violation of any of the provisions of this section or of the rules adopted or issued thereunder;

          * * *

    2. Upon a finding as set forth in paragraph the agency may enter an order doing one or more of the following:

    * * *

    1. Imposing an administrative fine not to exceed $5,000.00 for each act which constitutes a violation of this section or a rule or an order.

       
       

    2. Directing that the pawnbroker cease and desist specified activities.

    
    

28. The Florida Pawnbroking Act, Sections 539.001-539.003, does not define what the word "engage" or the words "transactions," "at," "within," or "adjoining" means. When words are not defined, statutory language is to be given its plain and ordinary meaning. Powell v. State, 508 So. 2d 1307 (1st D.C.A. Fla. 1987).

29. For the plain and ordinary meanings of critical words a dictionary definition will suffice. Gardiner v. Johnson, 451 So. 2d 477 (Fla. 1984).

30. Black's Dictionary defines "transaction" as:

    
    

    act of transacting or conducting any business; negotiation; management; proceeding; that which is done; an affair. It may involve selling, leasing, borrowing, mortgaging or lending. Something which has taken place, whereby a cause of action has arisen. It must therefore consist of an act or agreement, or several acts or agreements having some connection with each other, in which more than one person is concerned, and by which the legal relations of such persons between themselves are altered.

31. The word "engage" is a key word in Section 539.001(12)(j), Florida Statutes. One of the definitions for "engage" in Merriam Webster's Collegiate Dictionary Tenth Edition (1993) is "begin and carry on an enterprise or activity; to take part."

32. The word "adjoining" is used as an adjective in Section 539.001(12)(j) Florida Statutes.

33. "Adjoining" is defined in Merriam Webster's Collegiate Dictionary Tenth Edition (1993) as: "touching or bounding at a point or line syn see adjacent." Syn ADJACENT, ADJOINING, CONTIGUOUS, JUXTAPOSED mean being in close proximity. ADJACENT may or may not imply contact but always implies the absence of anything of the same kind in between.

34. By his own testimony Ferrell gives out the paperwork at his pawnshop location and the completed initial paperwork is to be brought back to Ferrell at the pawnshop location.

35. Part of a title loan transaction involves a person agreeing to repossession upon default. Behind the pawnshop location is a lot where, on occasion, repossessed vehicles from loan transactions are stored.

36. It is reasonable to assume that most contact for title loans takes place at the pawnshop, because that is where Ferrell spends most of his time.

37. The Hess Station has absolutely no visible signs or anything else to lead persons to believe that a title loan business is operating in the rear of a back office. A person going into the Hess Station would see employees of Hess, not employees of the pawnshop. Even the phone number for the title loan business will ring in the pawnshop location.

38. Ferrell is president of both the pawn business and the title loan business. By walking out the door and going 20 to 30 feet away to the Hess Station with a potential customer, he is arguing that he has suddenly changed from conducting the pawn business to conducting the title loan business.

39. There was no testimony from any Hess employee that such an office was in the Hess Station. No customers who had done a title loan transaction at the Hess Station testified on behalf of Respondent.

40. The burden of proof, which is clear and convincing, is on Petitioner, but, having testified, Ferrell's credibility is an issue and a lack of corroboration can be considered. At no time did Ferrell even mention the Hess Station to the Investigators. With its being only a few feet away, it wasn't even pointed out to Sonnenfeld. Ferrell does not have a business card with the Hess location written on it. The only papers with the Hess address, were the very ones he gave Sonnenfeld while inside the pawnshop, and he didn't even point out the location.

41. Respondent engaged in title loan transactions at, within, or adjoining a licensed pawnshop location.

RECOMMENDATION

It is, therefore,

RECOMMENDED that the Department of Agriculture and Consumer Services enter a Final Order finding that Respondent, Eau Gallie Pawn & Loan, Inc., violated Section 539.001(12)(j), Florida Statutes. It is further RECOMMENDED that Eau Gallie Pawn & Loan, Inc., be assessed an administrative fine of $2,000.00 and that it cease and desist from engaging in title loan transactions at, within, or adjoining its location.

DONE AND ENTERED this 29th day of March, 1999, in Tallahassee, Leon County, Florida.

DANIEL M. KILBRIDE

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 29th day of March, 1999.

COPIES FURNISHED:

Lawrence Davis, Esquire Department of Agriculture and

Consumer Services Mayo Building, Room 515

Tallahassee, Florida 32399-0800

J. Scott Lanford, Esquire

J. Scott Lanford, P.A.

3125 West New Haven Avenue, Suite 200 West Melbourne, Florida 32904-3533

Honorable Bob Crawford Commissioner of Agriculture Department of Agriculture and

Consumer Services

The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810

Richard Tritschler, General Counsel Department of Agriculture and

Consumer Services

The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

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.

Docket for Case No: 98-002978

Orders for Case No: 98-002978