STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WILLIAM VELEZ AND JESSICA GUERRERO,

Petitioners,

vs.

CENTERSTATE BANKS, INC., AND HAZEL GREENE, LOAN OFFICER,

Respondents.

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) Case No. 10-3182

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RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case on October 20, 2010, in Dade City, Florida, before Susan B. Harrell, a designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioners: William Velez, pro se

Jessica Guerrero, pro se 32044 Northridge Drive

Wesley Chapel, Florida 33545

For Respondents: Christi R. Adams, Esquire

Foley & Lardner, LLP

111 North Orange Avenue, Suite 1800 Orlando, Florida 32801

STATEMENT OF THE ISSUE

The issue in this case is whether Respondents have discriminated against Petitioners based on Petitioners' national origin.

PRELIMINARY STATEMENT

Petitioners, William Velez (Mr. Velez) and Jessica Guerrero (Ms. Guerrero), filed a discrimination complaint with the Department of Housing and Urban Development (HUD) on February 8, 2010, alleging that Respondents, CenterState Banks, Inc., and Hazel Greene (Ms. Greene),1 discriminated against them in financing real property based on their national origin in violation of "Section 805 of Title VIII of the Civil Rights Act of 1968 as amended by the Fair Housing Act of 1988. HUD transferred the case to the Florida Commission on Human Relations (Commission)."

On May 11, 2010, the Commission issued a Notice of Determination of No Cause to believe that a discriminatory housing practice had occurred. Respondents filed a Petition for Relief, and the case was forwarded to the Division of Administrative Hearings on June 11, 2010, for assignment to an Administrative Law Judge to conduct the final hearing.

The case was originally assigned to Administrative Law Judge Daniel M. Kilbride, but was transferred to Administrative Law Judge Susan B. Harrell to conduct the final hearing.

On October 19, 2010, Respondents filed Objections to and Motion to Quash Subpoena Duces Tecum served on CenterState Banks, Inc. The motion was heard and granted at the final hearing.

At the final hearing, Petitioners testified in their own behalf and called Julie Ludovico and Dinorah Rivera as their witnesses. Petitioners' Exhibits 1 through 10, 12, and 13 were admitted in evidence. Petitioners' Exhibit 11 was not admitted in evidence.

At the final hearing, Respondents called Lori Pelinski, and Ms. Greene testified on her own behalf. Respondents' Exhibits 15, 31, 32, and 382 were admitted in evidence.

The Transcript of the final hearing was filed on November 8, 2010. The parties agreed to file their proposed recommended orders within ten days of the filing of the Transcript. On November 10, 2010, Petitioners filed a Motion Requesting Extension of Time to file proposed recommended orders. The motion was granted, and the parties' time for

filing proposed recommended orders was extended to November 29, 2010. The parties timely filed their Proposed Recommended Orders, which have been considered in preparation of this

Recommended Order.

FINDINGS OF FACT

1. On August 28, 2009, Ms. Greene was a loan officer employed by CenterState Home Loans, LLC. The office where Ms. Greene worked was located inside CenterState Bank, N.A., located at 6930 Gall Boulevard in Zephyrhills, Florida. The office is separate from CenterState Banks, Inc. There is

   
   

   signage on a glass wall of her office stating, "CenterState Home Loans, LLC."

2. Ms. Greene is paid by CenterState Home Loans, LLC. She is paid by commission. Thus, there is no incentive not to complete loan applications.

3. CenterState Home Loans, LLC, is a separate corporation from CenterState Banks, Inc., and CenterState Bank, N.A. Both CenterState Banks, Inc., and CenterState Bank, N.A. are interest holders in CenterState Home Loans, LLC, but are not the managing members of CenterState Home Loans, LLC. Platinum Home Mortgage Corporation is the managing member of CenterState Home Loans, LLC. As the managing member, Platinum Home Mortgage manages the quality control and integrity of CenterState Home Loans, LLC.

4. CenterState Home Loans, LLC, is not authorized to do Federal Housing Association (FHA) loans. Any FHA loans originated by CenterState Home Loans, LLC, are assigned to Platinum Home Mortgage.

5. On August 28, 2009, Petitioners, Mr. Velez's mother, and Petitioners' young daughter came to Ms. Greene's office to discuss the possibility of obtaining a loan through CenterState Home Loans, LLC, and a loan through the Pasco County Home Buyers Program. The purpose of the Pasco County Home Buyers Program is to aid qualified home buyers in purchasing their primary

   
   

   residences. Initially, Petitioners were interesting in applying for an FHA loan.

6. Prior to the meeting, Mr. Velez had telephoned

   
   

   Ms. Greene and asked what types of information would need to be submitted. Ms. Greene stated that he would need W-2 forms, paystubs, bank statements, and anything that showed proof of any assets or debts. Petitioners brought some of the documentation to the meeting.

7. At the meeting, Petitioners supplied information to Ms. Greene, who typed the information into her computer using loan software entitled "Loan Soft." The information was placed on a Uniform Residential Application, which is called a

   Form 1003.

   
   

8. No property was identified on the Form 1003 because Petitioners did not have a sales contract for a specific piece of property. They indicated that the property they wanted to purchase would be approximately $140,000. Mr. Velez told

   Ms. Greene that he was anticipating a 50 percent loan from Pasco County Home Buyers Program, which would leave approximately

   $70,000 to be financed plus closing costs. When Ms. Greene input the information into the computer program, it automatically calculated the approximate closing costs. The interest used to do the calculations was based on the interest rate on August 28, 2009, and was not a guaranteed rate.

   
   

9. With Petitioners' permission, Ms. Greene pulled a credit report on each of them during the meeting on August 28, 2009. The credit report showed that there were some debts in collection and that there was an outstanding judgment against Ms. Guerrero. Additionally, based on CenterState Home Loan, LLC, guidelines, the credit scores did not qualify Petitioners for a second mortgage, which included a Pasco County Home Buyers Program loan.

10. On August 28, 2009, Ms. Greene needed additional asset information from the Petitioners and requested that they provide her with information concerning checking, savings, or money market accounts for at least a two-month period. Mr. Velez did present a bank statement at the meeting, which showed a current balance of less than $200.

11. Ms. Greene told Petitioners that the debts in collection and the outstanding judgment needed to be resolved. Additionally, Ms. Guerrero was an authorized signer on some of her mother's credit cards, and a statement would have to be provided that Ms. Guerrero was not responsible for the debts associated with those credit cards.

12. The software program that Ms. Greene used automatically completes a page in the application titled, "Pre- Approval Cover Sheet and Check List." The program put "completed" by a number of items which had not been completed,

    
    

    such as the Form 1003 and current asset statements. Petitioners had supplied some pay stubs and some bank statements at the August 28, 2009, meeting. The Form 1003 did not indicate that Petitioners had been pre-approved for a loan.

13. The meeting ran near to the time CenterState Home Loans, LLC, was closing and could not be completed before closing time. Ms. Greene printed out a copy of the Form 1003, with the information that had been completed, and gave it to Petitioners. Petitioners were to complete, sign, and return the Form 1003 to Ms. Greene. Additionally, Petitioners were to provide evidence that the debts had been paid and the judgment satisfied, along with evidence of current assets. Because the application was not completed and additional information was needed, Ms. Greene could not fully analyze the application.

14. Sometime after the August 28, 2009, meeting,

    
    

    Ms. Greene reviewed the information that had been supplied to her by Petitioners and discussed the information with Mr. Velez on the telephone. Mr. Velez wanted to schedule a meeting to discuss the application. She advised him that, based on the credit scores and the limited funds in his bank account, he could not qualify for a loan with a second lien by the Pasco County Home Buyers Program. Thus, there would be no need to meet. Mr. Velez told her that he wanted to continue with the process.

    
    

15. Petitioners set about paying off the debts in collection and satisfying the judgment against Ms. Guerrero. Mr. Velez had received a disability settlement and placed some money in a bank account. Petitioners did not supply updated information to Ms. Greene.

16. Sometime in October or November 2009, Mr. Velez called Ms. Greene and requested that she send a realtor a pre-approval letter. Ms. Greene replied that she could not do that because she did not have the supporting documents to be able to give a pre-approval letter. Mr. Velez became very angry and demanded the documents he had previously provided at the August 28, 2009, meeting. Ms. Greene had only copies of the documents that he provided, but she placed them in an envelope and left them for Mr. Velez to pick up.

17. Petitioners stated in Form 1003 that their ethnicity was Hispanic or Latino.

18. Mr. Velez stated at the final hearing:

    
    

    My basis for my racial discrimination was the fact that she [Ms. Greene] denied us the opportunity to turn in updated information when stated that she would allow us to do so.

    
    

19. Ms. Greene never stated that she would not take additional information because Petitioners were Hispanic. She has processed loans for other Hispanics which involved the Pasco

    
    

    County Home Buyers Program, and she has closed loans for other minorities.

20. Ms. Greene never discussed Petitioners national origin with them. She did not base any decision regarding their loan application on their national origin.

21. After Petitioners were advised by Ms. Greene that they would not qualify for a loan involving the Pasco County Home Buyers Program, they applied for loans at two other lending institutions and were turned down on the basis of too many inquiries or insufficient credit scores. They finally received a loan from Manhattan Mortgage.

    CONCLUSIONS OF LAW

    
    

22. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. §§ 120.569 and 120.57, Fla. Stat. (2010).

23. In Petitioners' Amended Housing Discrimination Complaint, upon which the Commission's Determination of No Cause was based, Petitioners allege Respondents violated "Section 805 of Title VIII of the Civil Rights Act as amended by the Fair Housing Act of 1988." In Petitioners' Petition for Relief, Petitioners seek to expand their cause to include also violations of the "Equal Credit Act of 1989 Amended, Home Mortgage Disclosure Act, and E.C.O.A [Equal Credit Opportunity Act]." These newly-alleged violations were not investigated by

    
    

    the Commission and are not part of the Determination of No Cause. The Division of Administrative Hearings does not have jurisdiction to consider these alleged violations.

24. Because HUD transferred the case to the Commission, the issue is whether Respondents violated the Florida Fair Housing Act, which is substantially similar to the federal Fair Housing Act. Section 760.25, Florida Statutes (2009),3 provides:

    1. It is unlawful for any bank, building and loan association, insurance company, or other corporation, association, firm, or enterprise the business of which consists in whole or in part of the making of commercial real estate loans to deny a loan or other financial assistance to a person applying for the loan for the purpose of purchasing, constructing, improving, repairing, or maintaining a dwelling, or to discriminate against him or her in the fixing of the amount, interest rate, duration, or other term or condition of such loan or other financial assistance, because of the race, color, national origin, sex, handicap, familial status, or religion of such person or of any person associated with him or her in connection with such loan or other financial assistance or the purposes of such loan or other financial assistance, or because of the race, color, national origin, sex, handicap, familial status, or religion of the present or prospective owners, lessees, tenants, or occupants of the dwelling or dwellings in relation to which such loan or other financial assistance is to be made or given.

       (2)(a) It is unlawful for any person or entity whose business includes engaging in residential real estate transactions to discriminate against any person in making available such a transaction, or in the

       
       

       terms or conditions of such a transaction, because of race, color, national origin, sex, handicap, familial status, or religion.

       (b) As used in this subsection, the term "residential real estate transaction" means any of the following:

       1. The making or purchasing of loans or providing other financial assistance:

          1. For purchasing, constructing, improving, repairing, or maintaining a dwelling; or

          2. Secured by residential real estate.

       2. The selling, brokering, or appraising of residential real property.

       
       

25. Because the Florida Fair Housing Act, Sections 760.20 through 760.37, Florida Statutes, is patterned after the federal Fair Housing Act, 45 U.S.C. Sections 3601 through 3631,4 federal case law dealing with the federal Fair Housing Act is applicable. See Florida Department of Community Affairs v. Bryant, 586 So. 2d 1205 (Fla. 1st DCA 1991).

26. Petitioners bear the burden of proof in this cause to establish by a preponderance of the evidence that Respondents committed the violation alleged. See § 760.34(5), Fla. Stat. More specifically, Petitioners must establish a prima facie case that Respondents committed an unlawful act constituting a violation of Section 760.25, Florida Statutes.

27. To establish a prima facie case of housing discrimination, Petitioners must prove that: (1) they were members of a protected class; (2) they attempted to engage in a

    
    

    real estate transaction with Respondents and met all relevant qualifications for doing so; (3) Respondents failed to engage in the transaction despite Petitioners' qualifications; and

    (4) Respondents continued to engage in that type of transaction with similarly-qualified persons outside of Petitioners' protected class. See Alcegueire v. EMC Mortgage Corp., Case No. 03-2153, 2003 Fla. Div. Adm. Hear. LEXIS 1086, at ¶ 16 (DOAH Dec. 17, 2003) (quoting Hickson v. Home Federal of Atlanta, 805 F. Supp. 1567, 1571-72 (N.D. Ga. 1992)), adopted, Order No. 04- 001 (FCHR Feb. 26, 2004). Accord Secretary, Housing and Urban

    Development ex. Rel. Herron v. Blackwell, 908 F.2d 864, 870 (11th Cir. 1990) (applying the burden-shifting analysis from McDonnell Douglas Corporation v. Green, 411 U.S. 792 (1973), in a housing discrimination case under the federal Fair Housing Act).

28. As to their claim against Ms. Greene, Petitioners have established that they are members of a protected class. They are Hispanics. They have established that they applied for a loan or applied to be pre-approved for a loan. They have failed to establish that they met the qualifications to be approved for a loan or to be pre-approved for a loan. They have failed to establish that other Hispanics were not pre-approved for loans or were denied loan applications. They have failed to establish that any action taken by Ms. Greene regarding Petitioners' real

    
    

    estate transactions at issue were based on Petitioners' national origin.

29. The only assertion of discrimination based on national origin is Mr. Velez's statement at the final hearing that his basis for discrimination based on national origin is that he was denied an opportunity to submit updated information on his application. This is sheer speculation on his part. Proof that, in essence, amounts to no more than mere speculation and self-serving belief on the part of the complainant concerning the motives of Respondents is not sufficient, standing alone, to establish a prima facie case of intentional discrimination. See Byers v. Dallas Morning News, Inc., 209 F.3d 419, 427 (5th Cir. 2000) ("Byers has failed to produce any direct evidence of discriminatory intent by Brown or TDMN or sufficient evidence indirectly demonstrating discriminatory intent. Instead, Byers urges this Court to rely on his subjective belief that Brown discriminated against him because he was white. This Court will not do so.").

30. As to CenterState Banks, Inc., Petitioners have failed to establish that CenterState Banks, Inc., had any involvement in the real estate transactions at issue. CenterState Home Loans, LLC, was the entity to whom the application was made and was the employer of Ms. Greene. CenterState Home Loans, LLC, was not named as a party in this action.

    
    

31. Petitioners have failed to establish a prima facie

case of discrimination for their claims against each Respondent.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered dismissing Petitioners' Petition for Relief.

DONE AND ENTERED this 3rd day of December, 2010, in Tallahassee, Leon County, Florida.

S

SUSAN B. HARRELL

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

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

Filed with the Clerk of the Division of Administrative Hearings this 3rd day of December, 2010.

ENDNOTES

1/ The style of the case has been corrected to reflect the correct spelling of Ms. Greene's name.

2/ Respondents' Exhibits 15, 31, 32, and 38 were erroneously referred to at the final hearing as Petitioners' exhibits.

3/ Unless otherwise indicated, all references to the Florida Statutes are to the 2009 version.

4/ The language in Section 760.25, Florida Statutes, is identical to the language in 42 U.S.C. Section 3605.

COPIES FURNISHED:

Denise Crawford, Agency Clerk

Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100

Tallahassee, Florida 32301

William Velez Jessica Guerrero

32044 Northridge Drive

Wesley Chapel, Florida 33545

Christi R. Adams, Esquire Foley & Lardner, LLP

111 North Orange Avenue, Suite 1800 Orlando, Florida 32801

Larry Kranert, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100

Tallahassee, Florida 32301

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: 10-003182

Orders for Case No: 10-003182