Findings Of Fact At all times pertinent to the allegations contained herein, Respondent was a licensed Mortgage Broker and the principal broker for Mortgage Associates of Countryside, located at 2623 Enterprise Rd., Clearwater, Florida. The Department was and is the state agency charged with regulating the activities of mortgage brokers in this state. In September, 1987, Andrew Grosmaire and Kevin Gonzalez, compliance officer and financial examiner, respectively, for the Department, pursuant to a complaint from Mark Snyder, conducted an examination of Respondent's affairs as they pertained to his operation as a mortgage broker. During the survey, which covered the period from August, 1986 through August, 1987, Mr. Grosmaire and Mr. Gonzalez examined between 50 and 60 loan files which had culminated in loan closings. In addition, they examined loan files which did not result in closings, bank account records, and other of Respondent's miscellaneous records. In order for an appropriate audit of a closed loan file to be conducted, it is imperative that the loan closing statement be included. Without it, the examiner cannot accurately determine what, if any, closing costs the borrower actually paid and if closing costs paid were consistent with those disclosed by the broker on the Good Faith Estimate Form at the initial interview. Of the closed loan files reviewed, these closing statements were missing from seven files. Respondent admits that several closed loan files did not have the required closing costs statement form enclosed. He attributes this, however, to the failure of his processor, an assistant, to place the closing statement in the file. They were not presented at hearing or thereafter. The investigators examined the Good Faith Estimate Forms in those files which culminated in loans and found that the form utilized by the Respondent failed to contain language, required by statute, which summarized the limits and conditions of recovery from the Mortgage Brokerage Guaranty Fund. Respondent contends that the pertinent statutory section was not in existence at the time he was engaged in mortgage brokerage activities. This was found to be not true. The Act became effective July 1, 1986 and the files surveyed were from the period August, 1986 through August, 1987. Examination of the Good Faith Estimate Forms used by the Respondent in each of the cases which culminated in loan closing revealed that Respondent consistently underestimated closing costs. This resulted in the borrowers generally paying higher closing costs than was initially disclosed to them. On -loans applied for by Mr. and Mrs. Snyder, Mr. Iyer, and Mr. Toland. Respondent redistributed loan points to himself in an amount higher than that which was agreed to by the parties. In the Toland case, Mr. Toland agreed to pay a 1% loan origination fee in the amount of $996.00. The settlement statement dated approximately 2 months later reflected that Toland paid Respondent a loan origination fee of $1,128.00 in addition to a 1% ($664.00) loan discount fee to the lender. This latter mentioned discount fee was not disclosed in advance to Mr. Toland on the estimate form nor was the excess loan origination fee charged. It should be noted here that a second Good Faith Estimate Form, dated nine days after the original, reflecting a 3% loan origination fee, was found in the file. Though signed by Respondent, this second form was not signed by the borrower as required. It cannot, therefore, serve to support Respondent's claim that he advised the Tolands of the higher cost by this second form. There is no showing that the Tolands were aware of it. In the Iyer case, the estimate form dated September 19, 1986 reflected a points and origination charge of $1,332.50 which is 1% of the mortgage loan amount of $133,250.00. The Iyers were subsequently approved for a mortgage in the amount of $145,600.00. The closing statement dated March 6, 1987, almost six months later, reflects that the Iyers paid a 2% loan origination fee of $2,740.00 to Mortgage Associates and a load discount fee of $685.00 to the lender. Here again the Respondent claims that a second cost estimate form reflecting a 2% point and origination fee of $2,912.00 was subsequently executed by the Iyers. However, this second form, found in Respondent's files, is undated and fails to reflect the signature of either Respondent or the Iyers. It cannot, therefore, serve as proof that the Iyers were made aware of the change. It does appear, as Respondent claims, that the bottom of the second form, (here, a copy) , was excluded from the copy when made, but there is no evidence either in the form of a signed copy or through the testimony of the Iyers, that they were aware of the change. Consequently, it is found that the Iyers had not been made aware of the second estimate and had not agreed to pay as much as they did, in advance. As to the Snyder closing, both Mr. Snyder and Respondent agree that it was their understanding at the time the loan was applied for, that Respondent would attempt to obtain a lower interest rate for them than that which was agreed upon in the application and in the event a lower rate was obtained, Respondent's commission points would remain the same as agreed upon in the brokerage agreement. In that case, as Respondent points out, his commission is based on the mortgage amount, not the interest rate, and he would be entitled to the agreed upon percentage of the loan face amount regardless of the interest rate charged by the lender on the loan. The Snyders had agreed to a 1% commission to Respondent plus a 1% loan origination fee to the lender. When the lender agreed to lend at par, without an origination fee, Respondent appropriated that 1% to himself, thereby collecting the entire 2% called for in the application. This was improper. Respondent's claim that it is an accepted practice in the trade is rejected. The Snyders initially made demand upon the Respondent for reimbursement of that additional 1% and ultimately had to hire an attorney to pursue their interests. Respondent subsequently made a $400 partial reimbursement payment of the amount owed but nothing further notwithstanding the fact that the Snyders ultimately secured a Judgement in Pinellas County Court against him for $1,082.52 plus interest, attorney's fees and costs. As a result, the Florida Mortgage Brokerage Guarantee Fund will reimburse the Snyders for their loss. According to the investigators, the Snyders Toland, and Iyer files, in addition to the problems described, also reflected that Respondent received payments for other items which should have gone into an escrow account. These included such things as credit reports and appraisal fees. The Department requires that any money received by a broker other than as commission, be placed in the broker's escrow account pending proper disbursement. Respondent did not have an escrow account. Mr. Gonzalez looked at Respondent's overall operation, including closed files, in an attempt to correlate between income and outgo to insure that Respondent's operation was in compliance with the statute. In addition to his search for an escrow account, Mr. Gonzalez also examined Respondent's "Loan Journal" which by statute is required to contain an entry for each transaction in each loan. The purpose of this journal is to provide a continuing record to show when each item in the loan processing was accomplished. In Mr. Gonzalez' opinion, the Respondent's journal was inadequate. It contained repeat and conflicting entries for specific items which hindered the investigators' ability to determine an audit trail. In addition, all required information was not put in the journal in complete form in each account. In the opinion of the investigators, the Respondent's violations were significant in that they made it impossible for the Department to determine compliance with statutes and Department rules and inhibited the compliance examination. All in all, Respondent's way of handling his accounts, his failure to maintain an escrow account, and his unauthorized increase in commission income, all indicated his actions were not in the best interest of his clients. The investigators concluded that clients funds were not being handled properly and that the purpose of Chapter 494, Florida Statutes, to protect the consumer, was not being met. In Mr. Gonzalez' opinion, Respondent's method of business constituted incompetence as a mortgage broker and "possibly" fraudulent practice. It is so found. Both Mr. Gonzalez and Mr. Grosmaire indicated they had extreme difficulty in attempting to locate Respondent after the complaint was filed by Mr. Snyder, in order to conduct their examination. They finally located him at a site different from that which appeared in the records of the Department. Respondent contends that the Department had been notified in writing within the required time, of his change of location when he filed a notice of fictitious name. He contends that after filing his notice of name change, he received no response from the state but took no action to inquire whether the change had been made. In any case, his current address was in the phone book and had the agents chose to look there, they would have found him. Respondent contends that the good faith estimates required by the statute are just that, an estimate, and that actual figures may vary from and exceed these estimates. This is true, but there is a procedure provided whereby the broker is to notify the client of a change in advance and if the change exceeds a certain amount, it may constitute grounds for voiding the contract. In paragraph 7 of the complaint, Petitioner alleges that Respondent used a form for the estimates which failed to contain a statement defining the maximum estimated closing costs. Review of the statement offered herein reflect this to be a fair analysis. However, Respondent claims that certain items cannot be predicted accurately in that some companies charge more than others for the same item and it was his practice to insert in the estimate portion of the form a "worst case scenario." However, at no time did he address in his form what could be the maximum a prospective purchaser might be expected to pay. Respondent "doesn't like" the total picture painted by the investigators concerning his operation. He claims it is cot a fair and accurate representation. In many cases, he claims, he expended funds on behalf of clients in excess of that he received in either commission or reimbursement and even though he may have received more than entitled in some cases, it "evens out over a period of time." Though this may be so, it is no way to do business. The state requires the keeping of accurate records and, just as the broker should not be required to assume responsibility for other than his own misconduct, neither should the client be required to pay more than is his legal obligation. Respondent professes to know the mortgage business and he resents having his qualifications as a mortgage broker questioned. In his opinion, he has trained himself well and has acted in good faith on the basis of the information available to him at the time. He ignores the impact of the Judgement of the court in the Snyder matter because he feels it was "unilateral." He believes the law is designed to protect the client and he wants to know who protects the broker. It is for that very reason, he contends, that fees paid in advance are not refundable. Mr. Sample feels the Department should be more informative to the brokers and get the governing regulations updated more quickly. Respondent cherishes his license and claims he needs it to make a living. He went out of business once before, several years ago, because of bad business conditions, (the reason he uses for not complying with the court order), but did not declare bankruptcy because he wanted to go back into business and pay off the judgements against him. Though he has been back in business for several years, he has failed to make any effort to pay off any of his former creditors even though in his former operation, he improperly tapped his escrow account for other business expenses.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that the Respondent, Howard E. Sample's license as a mortgage broker in Florida be revoked. RECOMMENDED this 15th day of September, 1988 at Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this day of September, 1988. APPENDIX TO RECOMMENDED ORDER IN CASE NUMBER 88-2858 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. Insofar as Petitioner's submission refers to testimony of a witness, that is considered as a proposed finding of fact. FOR THE PETITIONER; Accepted and incorporated herein & 3. Accepted and incorporated herein 4. & 5. Accepted and incorporated herein Accepted and incorporated herein & 8. Accepted and incorporated herein Rejected as contra to the evidence A conclusion of law and not a finding of fact & 11a Accepted and incorporated herein Accepted Accepted and incorporated herein Accepted Accepted and incorporated herein - 18. Accepted 19. - 21. Accepted and incorporated herein Accepted & 24. Accepted and incorporated herein 25. & 26. Accepted and incorporated herein Accepted &-29. Accepted 30. - 34. Accepted and incorporated herein FOR THE RESPONDENT: Nothing Submitted by way of Findings of Fact COPIES FURNISHED: Elise M. Greenbaum, Esquire Office of the Comptroller 400 West Robinson St. Suite 501 Orlando, Florida 32801 Howard E. Sample 2465 Northside Drive Apartment 505 Clearwater, Florida 34621 Honorable Gerald Lewis Ccmptroller, State of Florida The Capitol Tallahassee, FL 32399-0350 Charles L. Stutts, Esquire General Counsel Department of Banking and Finance Plaza Level, The Capitol Tallahassee, FL 3 2399-0350
The Issue The issue for determination is whether DOE properly evaluated the proposals in Bid No. 87-0123 and, if not, what corrective action should be taken. CAB contends that a proper evaluation of the bids would have resulted in a contract award to it. More specifically, CAB claims that it should have received a higher evaluation score in bid items #1 and #4. It also questions the scores received by two other competing firms. DOE contends that its evaluation was proper, the results should be upheld and the contracts be awarded as proposed.
Findings Of Fact The Invitation to Bid and Evaluation Process The purpose for Invitation to Bid No. 87-0123 is stated in the Introduction to that document:
Findings Of Fact At no time pertinent to the issues herein was Rebecca Love Henderson licensed by the State of Florida, Department of Banking and Finance as a mortgage broker under the provisions of Chapter 494, Florida Statutes. The Department of Banking and Finance is the state agency responsible for licensing and supervising mortgage brokers and associated persons in this state. In early January, 1987, Ms. Henderson began working for MAC, a mortgage banking concern, at its office located at 4045 Tamiami Trail, Pt. Charlotte, Florida. In March, 1987, Carol May Wilson went to MAC's office to see about getting the adjustable rate mortgage then currently existing on her residence changed to a fixed rate mortgage, because her research indicated that MAC had the best mortgage rates available at the time. Ms. Wilson entered the office without an appointment and spoke to the receptionist who called Ms. Henderson to speak with her. On that visit, Ms. Henderson gave Ms. Wilson a pamphlet which contained the then existing mortgage rates and discussed with her the terms and rates, the amount of payment required both as a down payment and as monthly payments, and similar matters. After that discussion, Ms. Wilson left with the pamphlet without making application. After discussing what she had been told by Ms. Henderson with her husband, Ms. Wilson and her husband went back to MAC's office where they again spoke with Ms. Henderson. In this latter conversation, they again discussed the applicable rates and filled out an application for a mortgage. At that time they also paid a $300.00 fee to cover the cost of an appraisal on their property, and several other costs and fees. At this time, Ms. Henderson helped the Wilsons fill out the form and, in addition, prepared and delivered to them a "Good Faith Estimate", and discussed the appraisal costs, points, and the need for a termite inspection. On this second visit, Ms. Henderson gave the Wilsons a rate option form which they and she signed, which locked in the interest rate at 8 1/2 percent. She also gave them a receipt for the appraisal fee they had paid. Both forms reflect Ms. Henderson as a "loan officer." The Wilsons went to MAC on their own. They had not been solicited by Ms. Henderson or any other employee of the firm but came in on the basis of the firm's advertisements. While in the facility, they noticed a display board which indicated the current rates and points being charged and the rate and points reflected on that board were those charged by Ms. Henderson on behalf of MAC. She did not negotiate, or attempt to negotiate any change to either the rates or the points. During her conversation, Ms. Henderson explained the various types of loans available and the various options available but did not urge one over the other. At least one of the forms, the Good Faith Estimate form, was mailed to the Wilsons sometime after their visit and was sent with a cover letter from another employee of the firm. Neither Mr. nor Mrs. Wilson asked to speak with anyone else during either of their visits to MAC. Consequently, they do not know whether they could have done so had they desired. The documentation they received from Ms. Henderson appeared complete and they were satisfied with the service on their mortgage. At some time in early 1987, Donald R. Mullin, accompanied by his wife, went to MAC to refinance his mortgage and on that visit, spoke with Ms. Henderson. Mr. Mullin had previously filled out a loan application form which he had received from Floyd Henderson, also of MAC. Mr. Mullin was referred to MAC by a friend at work. He was not solicited by Respondent. During this meeting, the Mullins presented the forms they had filled out and paid the various appraisal and other fees required. The receipt given them by Ms. Henderson for these fees reflects her as a loan officer. At this meeting, Ms. Henderson did not indicate whether the loan would be approved or not. The only point for negotiation during the Mullin interview was with regard to the appraisal fee. Mr. Mullin had just had an appraisal done for his newly acquired mortgage and did not feel it necessary to have another one. During their conversation, Ms. Henderson agreed to see if the prior appraisal could be used and if so, the fee would be refunded. In fact it was refunded. The loan did not close because Mr. Mullin was not considered to have sufficient income to support the payments. However, at no time during their discussions, did Ms. Henderson make any commitments on behalf of MAC, nor did she offer to change points or rates. Herbert Roshkind and his wife were referred to MAC by their real estate broker and dealt exclusively with Ms. Henderson in all their dealings with the company. She gave them all the specifics relating to their potential loan, including interest rates. She explained that the rates varied weekly and that they could either lock in or not, as they chose. She also discussed the relevant fees for appraisal, credit report, etc., which she made clear were not refundable, and discussed the difference between a fixed rate and a variable rate mortgage. She also advised them of the various terms a loan could be taken for Their loan was complicated to the extent that Mr. Roshkind was retired. His income came from real estate and other investments which could not easily be verified. As a result, Mr. Roshkind was contacted frequently by Ms. Henderson in the course of preparation of the loan documents, requesting additional information. On one occasion, she came to his home to get additional information and to get his signature on a document just prior to closing. Ms. Henderson did not help the Roshkinds fill out their application. She gave them a package which they took home and filled out themselves. In the package was a list of 19 items which would be required to support the application, and her repeated requests for information related to these items. Mr. Roshkind at no time asked to speak with anyone else. He feels, however, that had he desired to do so, he could have. The rates for mortgages were posted on a board in the office and at no time did Ms. Henderson offer to negotiate either rates or points. Further, from the time the Roshkinds first came in to pick up the application package until they returned it to the MAC office filled in, they received no solicitation or any contact at all from Ms. Henderson or MAC. When the loan was finally approved, in May, 1987, they received a commitment form that was signed by George Emery on behalf of MAC but which was delivered by Ms. Henderson. Kimberly Lynn Johnson worked for MAC from May, 1986 to August, 1986 and during that period became familiar with Ms. Henderson and her father, Floyd D. Henderson, one of the principals in the company. During the period she worked there, the office was run by C. F. Cline and Mr. Henderson. Ms. Johnson started work as a secretary-receptionist and progressed up through clerking duties until she was trained to act as a loan processor. At that point, though she was not licensed as a mortgage broker, she began accepting loan applications and dealing with prospective clients just as did Ms. Henderson. When she took loan applications, she would receive the form from the prospective borrower, get the information required, and turn it over to a processor who would send out requests for the verifications required, do or order the credit report, and order an appraisal. At no time during this period was she a licensed mortgage broker nor did she know she had to be such to legally do what she was doing. She found this out only when she began studying for the broker's test approximately a year later. During the period Ms. Johnson worked at MAC, Ms. Henderson was a loan officer and also worked for Monroe Title Company. It was during this period of time, Ms. Johnson observed Ms. Henderson doing much the same type of thing she was doing involving the interviewing of applicants, and discussing with them the application forms, rates, points, fees, and the like, as well. This same type of activity was also done by other loan officers who, as she understood it, were licensed, and who, in addition to their in-office work, also visited builders, realtors, and other possible sources of business for the firm. Ms. Johnson recalls quite clearly that Ms. Henderson was engaged in this outside activity as well. On numerous occasions as she left the office, Ms. Henderson would advise Ms. Johnson where she was going, or her name would appear on the list of builders to be seen by herself and other loan officers. When Ms. Johnson first started with the company, walk-in clients would be referred to a loan officer on a rotating basis. Ms. Henderson and other, licensed, loan officers were on that list for rotation. When she served as a loan officer, Ms. Johnson would stay with her client all the way from application through closing and on almost every occasion, once trained, she would complete the process without any help from a licensed loan officer. The same applied to Ms. Henderson. Ms. Johnson was told by Mr. Cline that it was all right for her to act as a loan officer without a license as a mortgage broker as long as she didn't take a bonus or commission or did not solicit outside the office. Ms. Johnson was paid an hourly wage only. She does not know how Ms. Henderson was paid nor was any evidence admitted to define that. However, considering the fact that Mr. Moulin and Mr. Stillweaa both complained because their income was reduced as a result of Ms. Henderson's grabbing clients and her sharing of Moulin's builder clients, it can be inferred she was, at least in part, paid by commission. Based on representations made by Mr. Cline, Ms. Johnson continued working without question until an inspector from the Department came in for an audit. At this point, she figured that something was wrong and subsequently found that only a loan officer in a commercial bank can take loan applications without being licensed as a mortgage broker. MAC was listed on it's business cards as a mortgage banker. Though Ms. Henderson indicated from time to time she was going out to visit with builders, Ms. Johnson never saw her in negotiations with either builders or realtors. At the time in issue, Ms. Henderson's mother was terminally ill and had to be taken to the hospital and doctor's office on a regular basis. Ms. Johnson agrees it is possible Ms. Henderson could have been performing that service when ostensibly out on a call, but specifically recalls her saying she was, from time to time, going to visit a builder or realtor. She cannot say with certainty what Ms. Henderson did; only what she said she was going to do. Considering the state of the evidence, it is clear that Ms. Henderson did visit builders, and notwithstanding her assertion she may have gone there merely to drop off advertising materials, the likelihood is, and it is so found, she went for the purpose of soliciting business. It also is clear that with the exception of Ms. Henderson and Ms. Johnson, the individuals who processed applications and met with clients were properly licensed as mortgage brokers and were identified as loan officers. Both Mr. Cline and Mr. Henderson were licensed mortgage brokers and supervised, on a routine basis, the files of the other loan officers including Ms. Henderson and Ms. Johnson. In addition, either Mr. Cline or Mr. Henderson was available for consultation if necessary at all times, as was Mr. Gerber, the underwriter. All loans written by the loan officers, licensed or otherwise, had to conform to the same standards. Subsequent to leaving MAC, Ms. Johnson applied for and was, after testing, issued a license as a mortgage broker in Florida by the Department. This occurred after she was identified as operating as an unlicensed broker similar to Ms. Henderson. She, however, was never cited with a Cease and Desist Order. Mr. Kenneth Moulin worked for MAC from December, 1985 through April, 1987 and, along with his family, owned a 20% interest in the stock of the company. He worked in the Pt. Charlotte office along with Ms. Henderson. His primary job as a licensed loan officer and mortgage broker, was to solicit builders and realtors to refer potential customers. Mr. Moulin was licensed as a mortgage broker in February, 1986. Prior to getting his license, he was not allowed to negotiate with clients or to solicit business from builders or realtors. Because he had been previously engaged in the construction business, the majority of his contacts were in the building industry and he had a list of builders he regularly visited. Shortly after Ms. Henderson came to work at MAC, Mr. Cline gave half of the builders on Mr. Moulin's list to her as her source list. This had a negative impact on Moulin's income since at about the same time, his salary was discontinued and his compensation was based solely on commission, doubled in rate at that time. 24 Once half of Moulin's builders list was given to Ms. Henderson, she began calling on them, and he was told by many friends in the building industry, that she was soliciting them for referrals. In March, 1987, Mr. Moulin and Mr. Stillwell, another loan officer, requested of Mr. Cline a different split of the walk-in traffic because Ms. Henderson, whose office was right near the entrance, was pulling in as many of the walk-ins as she could to the exclusion of the other loan officers. After this complaint, Cline arranged a rotating schedule for walk-ins so that each loan officer would get a proportionate share of opportunity. In Mr. Moulin's opinion, based on his observations of Ms. Henderson and her activities, she, though unlicensed, did much the same type of work he did under his license. She solicited business from builders and realtors outside the office and handled walk-in clients from application through closing. He was not allowed to do any of this prior to being licensed, and he stands by this assertion notwithstanding the fact that numerous forms introduced by Ms. Henderson reflect that prior to the date of his license, he was referred to as loan officer. He explains this as occurring when Cline put his name on forms prepared for other people's loans so that he could get credit for them. Considering the nature of the operation as it appears from the general line of testimony, it is found that this did happen. Mr. Moulin initiated the investigation which culminated in this hearing because he felt he was being unfairly treated when cases were taken from him and he did not receive the commissions to which he felt he was entitled. In his letter to the Department, he identified Ms. Henderson as an "unlicensed mortgage solicitor." This appears to be an accurate description. Marcus Combs, testifying for Ms. Henderson, was sent to MAC by a real estate salesman whose broker was reportedly a major owner of the company. As did the others, Mr. Combs observed the rates and points posted on a board in the office lobby and was referred to Ms. Henderson, who he did not previously know, by the receptionist. During their initial interview, Ms. Henderson discussed the items required for the application and gave him a forms package. At this time, Ms. Henderson was in training and there was a man present throughout the meeting as an observer. At no time during their relationship, did Ms. Henderson attempt to negotiate rates or points, nor did she attempt to sell a particular type of loan. At no time did she solicit Mr. Combs to apply for a mortgage and, because he was having difficulty qualifying for a loan, suggested he look elsewhere for the mortgage. She actually referred him to another lending institution from which he ultimately got his mortgage.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be issued by the Department sustaining the Cease and Desist Order entered herein and the denial of Ms. Henderson's application for registration as an associated person with Triple Check Financial Services, Inc. RECOMMENDED this 24th day of October, 1989, in Tallahassee, Florida. ARNOLD H. POLLOCK 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 24th day of October. 1989. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 89-3203 and 89-3769 The following constitutes my specific rulings pursuant to S 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the partiesto this case. For the Department: Accepted and incorporated herein. & 3. Accepted and incorporated herein. 4. - 8. Accepted. Accepted and incorporated herein. - 12. Accepted. Accepted and incorporated herein. - 17. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. - 23. Accepted and incorporated herein. Either hearsay evidence or not supported by the record. Accepted. & 27. Accepted and incorporated herein. 28. - 30. Accepted. 31. - 34. Accepted and incorporated herein. 35. - 43. Accepted and incorporated herein. 44. - 52. Accepted and incorporated herein. For Ms. Henderson: Not a Finding of Fact but a statement of legal authority. Not a Finding of Fact, (except as to dates of alleged infractions), but a Conclusion of Law. Not a Finding of Fact. Not a Finding of Fact but a comment on the Department's legal basis for filing. Not a Finding of Fact. 5a. - 5e. Not Findings of Fact but comments on the sufficiency of the evidence. & 7. Not a Finding of Fact but a comment on the sufficiency of the evidence. Accepted and incorporated herein. Not a Finding of Fact but a comment on the state of the Department's evidence. - 12. Accepted and incorporated herein, except to the second sentence of 12 which is unsupported. First and second sentences accepted. Third sentence is rejected as contra to the weight of the evidence. Accepted as to the issue of signing of statements but rejected as to the allegation of inaccuracy. COPIES FURNISHED: Robert K. Good, Esquire Office of the Comptroller 400 W. Robinson Street, Suite 501 Orlando, Florida 32801 Elise M. Greenbaum, Esquire Office of the Comptroller 400 W. Robinson Street, Suite 501 Orlando, Florida 32801 Rebecca Love Henderson 5635 Bryner Drive Jacksonville, Florida 32244 Hon. Gerald Lewis Comptroller State of Florida The Capitol Tallahassee, Florida 32399-0350 Charles L. Stutts, Esquire General Counsel Department of Banking and Finance The Capitol Plaza Level, Room 1302 Tallahassee, Florida 32399 =================================================================
Findings Of Fact Abraham Scott, Jr., is a registered general contractor with the FCILB and holds general contractor's license no. RG0008305. Pursuant to an agreement entered during April, 1975, Respondent and Mrs. Ruth Jenkins of Lake Butler entered into a contract for construction of a home at a cost of $37,000. To finance the project, Mrs. Jenkins secured a loan from Guaranty Federal Savings & Loan Association of Starke, Florida in the amount of $30,600 and she additionally paid Respondent approximately $5,913.57. Guaranty Federal Savings & Loan had disbursed approximately 90 percent of the construction loan to Respondent when Mrs. Jenkins received liens filed against her property in the amount of approximately $9,579.53. The lienors included Lake City Industries, North Florida Concrete, Mayo Electric, Roy Ward Wholesale Distributors, Sawyer Slade Gas Company and a local carpet distributor. At that juncture, Mrs. Jenkins complained to Respondent regarding the liens filed against her property and the fact that the house was not completed as per their agreement to no avail. Thereafter, Mrs. Jenkins contacted Mr. Harold K. Davis, Branch Manager of Guaranty Federal Savings & Loan Association, who terminated all further disbursements of the construction loan. At that point, approximately $28,436.50 had been disbursed to Respondent. Mr. Hermon Cherry, investigator with FCILB investigated the Jenkins' complaint and discussed the matter with Respondent. Mr. Cherry testified that Respondent advised him that he had used part of the money from the Jenkins' project to complete a job in Hamilton County and that when the proceeds from that job were received, those receipts would be used to satisfy liens placed against the Jenkins property. Petitioner's Exhibit #3, is a statement given to investigator Cherry on March 22, 1976, by Respondent. The statement is somewhat corroborative of Cherry's testimony that Respondent used portions of the construction loan monies received from the Jenkins project to complete another job. Respondent acknowledged that he was having financial problems in another county "in which I have money from this job tied in the amount of $2,500. As soon as I can collect this money from these jobs, I will clear this matter up". (See Petitioner's Exhibit #3). Respondent acknowledged that he had monies due him from a project he had completed in Jasper, Florida and that this job was completed prior to the commencement of the Jenkins project. However, he failed to state that all obligations due and owing on that job in Jasper had been satisfied or that all unpaid subcontractors, materialmen, etc., who furnished materials, supplies or labor, in connection with the Jasper project had been paid. Based on that statement and Respondent's acknowledgement that the liens had been placed on the Jenkins project based on his financial difficulties with another project in which he clearly stated in Petitioner's Exhibit #3 that money from the Jenkins project had been tied up on another project, I find that the two matters, when coupled together provides proof positive that the Respondent diverted funds received for completion or the Jenkins project to another project and as a result thereof, he was unable to fulfill the terms of his obligation and contract with Mrs. Jenkins, in violation of Chapter 468.112(2)(e). During the course of the hearing, Respondent introduced evidence indicating that a settlement agreement was being worked out to resolve the differences with Mrs. Jenkins property and to satisfy all lien claimants who had filed liens against Mrs. Jenkins' property. Mrs. Jenkins acknowledged the settlement agreement and indicated her willingness to accept the terms thereof as full satisfaction of Respondent's obligations to her pursuant to the construction of her home. (See Respondent's Exhibit #1.) Respondent testified further that he intends to fulfill all of the remaining deficiencies that may exist with respect to the Jenkins property and that he at all times intended to fulfill his obligations to her. For these reasons, I shall recommend that the Respondent's registered general contractor's license be suspended rather than revoked.
Recommendation Based on the foregoing findings of fact and conclusions of law, I recommend that the Respondent's registered general contractor's license be suspended for a period of 90 days in accord with the authority contained in Chapter 468.112(3)(a), F.S. DONE AND ENTERED this 21st day of February, 1977, in Tallahassee, Florida. COPIES FURNISHED: Barry Sinoff, Esquire 1010 Blackstone Building Jacksonville, Florida 32202 J. K. Linnan Executive Director Florida Construction Industry Licensing Board Post Office Box 8621 Jacksonville, Florida 32211 Mr. Abraham Scott, Jr. Route 1, Box 503 Lake City, Florida JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675
The Issue Whether Respondent discriminated against Petitioner on the basis of his age and handicap in violation of the Florida Human Rights Act of 1977 and the Florida Civil Rights Act of 1992, Chapter 760, Florida Statutes.
Findings Of Fact Petitioner, Harold Asher (Asher), was born on January 13, 1929, and as of April 1, 1992, he was 63 years old. Respondent, Barnett Banks, Inc. (BBI), is a holding company that owns and controls numerous banks in Florida and Georgia. The banks in Florida owned by BBI are located in three geographical regions: the north region, the central region, and the south region. In the south region there are nine banks: Barnett Bank of Key West, Barnett Bank of South Florida (Miami), Barnett Bank of Broward (Fort Lauderdale), Barnett Bank of Palm Beach County, Barnett Bank of Martin County, Barnett Bank of Treasure Coast, Barnett Bank of Lake Okeechobee, Barnett Bank of Naples, and Barnett Bank of Lee County (Fort Myers). Each bank has branches. Barnett Banks, Inc. is an employer subject to Section 760.10, Florida Statutes. Harold Asher was hired by Barnett Bank of Palm Beach County in 1983, at the age of 54 as a loan review officer and was later promoted to Vice President/Loan Review. His job responsibility was to review loans which had been granted by Barnett Bank of Palm Beach County. A loan review is an evaluation of the portfolio after a loan is made to insure that the loan was properly approved, that the analysis done to support the sources of repayment was adequate, that the loan is collectible, that the risk factors associated with the loan is in line with policy and regulatory standards, and that the loan is properly underwritten. The loan review is memorialized on a line or summary sheet. While employed by Barnett Bank of Palm Beach County, Asher had several supervisors, including Ken Parrish, Art Kite, James Kammert, Noel Coan, and Martin Streischek. Barnett Bank of Palm Beach County used a rating system of one to five in evaluating its employees, which equated as follows: 1.0 to 1.49 means fails to meet minimum position accountabilities; 1.5 to 2.49 means with few exceptions, meets position accountabilities; 2.5 to 3.49 means meets position accountabilities; 3.5 to 4.49 means exceeds position accountabilities; and 4.5 to 5.0 means significantly exceeds position accountabilities. In March, 1988, James Kammert rated Asher's performance as 3.0. On January 1, 1989, Art Kite rated Asher's performance for 1988 as 3.70. In June, 1989, Art Kite rated Asher as meeting or exceeding in the key result areas (KRAs) of Asher's position. On January 1, 1990, Art Kite performed an evaluation of Asher's performance for 1989 and rated him 3.45. On January 18, 1991, Neal Coan rated Asher's performance for 1990 as 3.0. While working for Barnett Bank of Palm Beach County, Asher was never disciplined. Prior to 1991, BBI and its banks had a dual system for loan reviews. Some of the banks such as Barnett Bank of Palm Beach County, had set up loan review sections which operated at the bank level only. The staff of these sections would report directly to the bank. BBI had a loan review section for each of its regions. The BBI regional loan review sections would review loans in each of the banks located in that particular region. In January, 1991 a decision was made by BBI to consolidate the loan reviews at the holding company level. On-site teams were established in Miami, Fort Lauderdale, and Palm Beach. A travel team reviewed loans at all the banks including the banks which had on-site teams. As a result of the consolidation, the local banks eliminated their loan review departments and the staff comprising those particular departments were terminated from their positions. At the time of the decision to consolidate, Barnett Bank of Palm Beach County's loan review section consisted of one secretary and three loan officers, one of whom was Asher. The three loan officers interviewed for positions with BBI. Asher and Steven Clapp were hired by BBI. Asher was 61 years of age when he was hired by BBI on January 1, 1991, as the on-site manager for Credit Quality Review at the Barnett Bank of Palm Beach County. His office was located on Datura Street in West Palm Beach. Part of Asher's duties included supervising Mr. Clapp. The BBI on-site manager for Credit Quality Review at Barnett Bank of South Florida (Miami) was Barry Goldberg, who was born on September 24, 1962. The BBI on-site manager for Credit Quality Review at the Barnett Bank of Broward County was Mark Tavoletti, who was born on December 19, 1961. Although the same methods were used to review loans for BBI as were used to review loans for Barnett Bank of Palm Beach County, there were some changes. Computers were used more at BBI. Instead of traveling to the 45 branches of Barnett Bank of Palm Beach to review loans, Asher received the files through the interoffice mail. BBI loan reviews focused more on a loan instead of the work of the loan officer. Monthly reports were required by BBI. BBI report formats differed from those of Barnett Bank of Palm Beach County. Asher no longer selected the loans to be reviewed. BBI selected the loans using specific criteria established by BBI. Asher reported to Scott Bechtle. While working with Mr. Bechtle, Asher did not receive any criticism or disciplinary action. In July, 1991, Edward Angulo (Angulo) took over Mr. Bechtle's position as the Regional Credit Review Director for the south region. Asher, Mr. Goldberg, and Mr. Tavoletti began reporting to Angulo. Angulo's primary duty was to review the line sheets that were generated by the on-site groups and the travel team. From July, 1991 to the end of December, 1991, Angulo met with Asher approximately three to five times and talked with Asher numerous times on the telephone. Angulo reviewed all the line sheets that were generated by Asher and Clapp during that six-month period. In reviewing the work done by the Palm Beach on-site group, Angulo noted that generally the line sheets did not have sufficient quantifiable information, did not contain information supported by an independent evaluation, and contained deficiencies regarding underwriting. He would make comments concerning these problems and call Asher to discuss them. Some times Asher would not provide additional information requested by Angulo or would provide it in an unsatisfactory manner. During the last six months in 1991, Angulo spent more time in connection with the Palm Beach loan reviews than he did with the other loan review teams because of the problems the Palm Beach team was having. Angulo sat in with Asher during an exit meeting with bank management wherein Asher appeared indecisive and unprepared, forcing Angulo to take over and conduct the meeting in its entirety. Angulo completed a performance evaluation on Asher for the period 1/91 to 12/91. Asher was evaluated on nine KRAs: 1) supervise staff, 2) analyze specific loans, 3) determine quality of credit analyses, 4) evaluate underwriting standards, 5) insure accuracy of CSS, 6) evaluate overall credit administration, 7) evaluate loan approval process, 8) prepare reports and exit meetings, and 9) train junior officers. Each KRA was weighted and rated on a scale of one to five, with one being the lowest rating and five being the highest. For KRAs 1, 5, and 9, Asher was rated as 3, which meant that his performance met expectations. For KRAs 2, 3, 7, and 8, Asher received a rating of 2, which stood for approaches expectations. In the KRA concerning evaluating underwriting standards, Asher received a rating of 1, which meant that Asher's performance failed to meet expectations. Angulo noted on the evaluation that Asher needed to improve his performance in the following areas: technical/analytical, independent/inquisitive attitudes, and judgement/decisiveness. Asher's total weighted rating was 2.25, which equates to an overall rating of 2. At the time of the evaluation, Asher and Angulo understood that Asher's position was a Review Officer III. Asher had been performing the work of a Review Officer III. Accordingly, Angulo evaluated his work using the standards for Review Officer III, and evaluated the work actually performed by Asher. However, at the hearing it was revealed that Asher had been a Review Officer II at the time of his employment with BBI and held that position until his termination. On or about April 1, 1992, Angulo met with Asher and discussed Asher's performance since January, 1992. Angulo cited a problem that had occurred concerning a review of Southside Investors which had been done by Asher's subordinate, Steven Clapp. Angulo had discussed with Asher several inconsistencies or omissions in the report relating to potential underwriting problems and asked Asher to have the deficiencies cleared up. As of April 1, 1992, the deficiencies had not been resolved. Angulo also discussed with Asher problems dealing with the adequacy of supervision of report preparation and the conduct of exit meetings with bank management. Deficiencies in these areas had been pointed out in Asher's 1991 annual performance evaluation. Since that evaluation, a monthly report by Steven Clapp had to be amended because of his erroneous conclusion that the bank's overall underwriting and lending practices were inadequate. The incorrect finding was not corrected until a draft of the report was reviewed by the regional office. As the on-site manager, Asher should have reviewed Mr. Clapp's report and caught the error before it was sent to the regional office. Angulo also pointed out to Asher that his performance at exit meetings with bank management still lacked decisiveness, resulting in the need for frequent changes in reports. As a result of the continued deficiencies in Asher's performance since his 1991 performance evaluation, Angulo felt that Asher needed technical training, improvement in supervisory skills, and familiarization with BBI policies and procedures. To assist Asher in reaching an acceptable level of performance, Asher was moved from his on-site manager position to Barnett Banks, Inc.'s Credit Review Office travel team on or about April 1, 1992. There was no decrease in salary, benefits, or pay grade. Additionally, Asher was placed on a 90-day probationary period. In mid-April, 1992, Asher wrote Ken Veniard, a Senior Vice President, stating that he disagreed with Angulo's evaluation and felt that the negative comments were "based on factors totally unrelated to performance, such as age, personality, or simply the lack of complete information." Asher requested to be considered for a transfer. Veniard received the memorandum on April 29, 1992. On or about April 1, 1992, Jack Shoben, a credit review officer with BBI since 1989, was moved into the position of on-site manager for Credit Quality Review at the Barnett Bank of Palm Beach County at the Datura Street location. Jack Shoben was born on October 1, 1947, and as of April 1, 1992, he was 44 years old. Angulo chose Shoben as the on-site manager because of Mr. Shoben's qualifications and experience. After Mr. Shoben became on-site manager, the work product from the on-site team at Barnett Bank of Palm Beach County began to improve; thus Angulo did not have to spend as much time on the Palm Beach site as he had when Asher was on-site manager. William Westland, who was born on October 26, 1927, was Asher's supervisor on the travel team. During Asher's first two weeks on the travel team, he worked in Broward County. His performance was satisfactory. The third week on the travel team was spent in Miami, where Asher was required to review real estate loans. Mr. Westland noted that Asher needed some training in the real estate loan area. On May 10, 1992, shortly after Asher returned from Miami, he suffered a brain seizure and was hospitalized for two days. Six weeks after his seizure, Asher returned to work. As a result of Asher's seizure, his doctors prohibited Asher from driving for at least six months and possibly longer and required his work-related travel to be kept to an absolute minimum, which included avoiding long travel trips of any type. An essential requirement for the position that Asher held on the travel team was that he be able to travel to the different banks in the south region to conduct loan reviews. Asher was aware that extensive travel was a requirement of his job and so advised his doctor by letter dated July 3, 1992. When Asher returned to work, he was temporarily placed on the on-site review team at Palm Beach under the supervision of Jack Shoben. Steven Clapp who had been at Palm Beach on the on-site review team was transferred to the travel team. Asher's probationary period was extended to August 7, 1992. The temporary placement was to accommodate Asher's non-travel status until December 31, 1992, and after such time Asher's continued employment was contingent upon his satisfactory completion of the probationary period and his ability to meet the requirements of all credit review officers of his level, which included travel. During June 1992 until Mr. Asher's termination, Jeff Asher, his son, often drove Asher to Barnett Bank's offices on Datura Street in West Palm Beach. He also drove him home from that location during the same time. Jeff Asher also drove Asher to and from branch locations within Palm Beach County during the same period. A memorandum dated July 28, 1992, was sent from Ken Veniard, Angulo's supervisor, to BBI Credit Quality Staff, stating that although BBI was committed to maintain the on-site loan review teams, that all on-site staff would be required to travel and assist the travel team as necessary. On August 7, 1992, Asher's probationary period lapsed. There was no evaluation of Asher's performance at that time. In August, 1992, Steven Clapp was transferred to the BBI office in Jacksonville to fill a position for which he had posted. The position on the travel team that Mr. Clapp had filled in Asher's absence was held open for Asher in the event that his travel restrictions would be lifted in January, 1993, thereby enabling him to return to his position on the travel. In November, 1992, Asher, Sarah Ketchum, Jack Shoben, and Angulo participated in a teleconference, at which time Angulo advised Asher that if Asher's doctor did not approve a full time travel schedule in January, 1993, Asher's employment with BBI would be terminated effective as of December 31, 1992. On December 28, 1992, Asher visited his doctor, who continued the travel restrictions. On December 30, 1992, Asher, Jack Shoben, Joan Slaughenhaupt, and Angulo participated in a teleconference. Asher stated that his travel restrictions had not changed. Angulo advised Asher that his employment would be terminated effective December 31 due to his inability to travel. Mr. Asher's employment ended on December 31, 1992. On January 1, 1992, the on-site teams in Miami and Fort Lauderdale were each reduced from three to two on-site personnel. The Palm Beach on-site team was reduced to one one-site person, Jack Shoben, who was the only loan review officer there from January 1, 1993 to December 31, 1993. In January, 1994, all on-site positions were eliminated. Mr. Asher's salary at the time of his termination was $47,339.96 annually. In the spring of 1993, Asher and his wife went to Huntsville, Alabama, traveling by automobile two days each way. In June, 1993, all Asher's travel restrictions were lifted. Prior to his driving restrictions being lifted, Asher began driving short distances in his neighborhood. In January, 1994, BBI made an offer of reinstatement to Asher, whereby he would have been reinstated as a Credit Review Officer II on the regional travel team with the same salary, same seniority, and same salary grade level as when he was terminated on December 31, 1992. In addition, a procedure was implemented whereby Asher could report directly to Janice Gurny, Director of Human Resources for BBI in the Jacksonville office, any complaints regarding harassment on the part of his supervisors. Asher received the offer but did not contact anyone at BBI regarding the offer of reinstatement. Asher did not take the offer because it was a Credit Review Officer II position (he was under the impression he was a Credit Review Officer III at the time of his termination); he felt the environment was hostile; and he had his house on the market to sell.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a Final Order denying the Petition for Relief. DONE AND ENTERED this 8th day of June, 1994, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 8th day of June, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-5815 To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact Paragraph 1: Accepted in substance. Paragraph 2: Accepted. Paragraphs 3: The first sentence is accepted in substance. The second sentence is rejected as constituting argument. The third sentence is accepted to the extent that Petitioner received two letters which advised him of his increase in salary and thanked him for his hard work and professionalism and advised him that the bank was glad that he was on the team. Paragraph 4: Accepted in substance. Paragraph 5: The first three sentences are accepted in substance. The last sentence is accepted to the extent that the methods to review loans were basically the same but rejected to the extent that the only changes were in the format of the loan review reporting process. Paragraphs 6-7: Accepted in substance. Paragraph 8: The third, fourth, and fifth sentences are rejected as constituting argument. The remainder of the paragraph is accepted in substance. Paragraph 9: Rejected as subordinate to the facts actually found. Paragraphs 10-11: Accepted in substance. Paragraph 12: The last sentence is rejected to the extent that it implies that Asher was rated on work for which he was not performing. He was doing the job of a level III but his personnel file reflected that he officially was placed in a level II position. The remainder of the paragraph is accepted in substance. Paragraph 13: Rejected as constituting argument. Paragraphs 14-16: Accepted in substance. Paragraph 17: The first sentence is rejected as recitation of testimony. The remainder of the paragraph is rejected as constituting argument. Paragraph 18: The first, second, sixth, and tenth sentences are rejected as not supported by the greater weight of the evidence. The third, fourth, fifth, eighth and ninth sentences are accepted in substance except as to the reference to the placement on the travel team as a demotion. The seventh sentence is rejected as unnecessary. Paragraph 19: The first sentence is rejected as not supported by the greater weight of the evidence. The second sentence is accepted. The last sentence is rejected as recitation of testimony. Paragraphs 20-23: Rejected as recitation of testimony and constituting argument. Paragraph 24: Rejected as constituting argument. Paragraph 25: The first, second, third, and fourth sentences are accepted in substance. The fifth, sixth, and seventh sentences are rejected as not supported by the greater weight of the evidence. The eight sentence is rejected as constituting argument. The ninth sentence is rejected as not supported by the greater weight of the evidence in that the charge against Asher was his failure to catch Mr. Clapp's errors before the report left the Palm Beach office. The last sentence is rejected as irrelevant. Paragraph 26: The first sentence is rejected as subordinate to the facts actually found. The second sentence is rejected as not supported by any evidence. The remainder of the paragraph is accepted in substance. Paragraph 27: Accepted in substance. Paragraph 28: The first, third, and fourth sentences are accepted in substance. The second and fifth sentences are rejected as subordinate to the facts actually found. Paragraph 29: The first sentence is accepted. The remainder of the paragraph is rejected as subordinate to the facts actually found. Paragraph 30: The first sentence is accepted in substance. The remainder of the paragraph is rejected as subordinate to the facts actually found. Paragraph 31: Rejected as mere recitation of testimony. Paragraph 32: Rejected as mere recitation of testimony. Paragraph 33: Rejected as subordinate to the facts actually found. Paragraph 34: Accepted in substance. Paragraph 35: Rejected as subordinate to the facts actually found. Paragraph 36: The first and second sentences are accepted in substance. The remainder of the paragraph is rejected as subordinate to the facts actually found. Paragraph 37: Rejected as constituting argument. Paragraph 38: Rejected as subordinate to the facts actually found. Paragraph 39: Rejected as constituting argument. Paragraph 40: Rejected as subordinate to the facts actually found. Paragraph 41: Accepted. Paragraphs 42: Rejected as subordinate to the facts actually found. Paragraph 43: The first sentence is rejected as not supported by the greater weight of the evidence as it applies to the time period from June, 1992 to June, 1993. The second sentence is accepted. The remainder of the paragraph is accepted in substance. Paragraph 44: Rejected as subordinate to the facts actually found. Respondent's Proposed Findings of Fact Paragraph 1: Accepted. Paragraphs 2-13: Accepted in substance. Paragraph 13: Accepted in substance. Paragraph 14: The first sentence is rejected as constituting argument. The remainder of the paragraph is accepted in substance. Paragraph 15: Accepted in substance. Paragraph 16: The first two sentences are accepted in substance. The remainder of the paragraph is rejected as constituting argument. Paragraphs 17-18: Accepted in substance. Paragraph 19: The first sentence is accepted. The remainder of the paragraph is accepted in substance. Paragraph 20: The first sentence is accepted. The remainder of the paragraph is rejected as unnecessary. Paragraphs 21: The sixth sentence is rejected as constituting argument. The remainder of the paragraph is accepted in substance. Paragraphs 22-24: Accepted in substance. Paragraph 25: The first sentence is accepted in substance. The third sentence is rejected as not supported by the greater weight of the evidence. The remainder of the paragraph is rejected as subordinate to the facts actually found. Paragraphs 26-27: Accepted in substance. Paragraph 28: The first sentence is accepted in substance. The remainder of the sentence is rejected as subordinate to the facts actually found. Paragraph 29: Accepted in substance. Paragraphs 30-34: Rejected as subordinate to the facts actually found. Paragraph 35-39: Accepted in substance. COPIES FURNISHED: James E. Moye, Esquire Patrick J. Kennedy, Esquire 201 East Pine Street, Suite 710 Orlando, Florida 32801 Richard Tannenbaum, Esquire Shea & Tannenbaum 204 Brazilian Avenue, Suite 210 Palm Beach, Florida 33480 Sharon Moultry, Clerk Commission on Human Relations 325 John Knox Road, Building F, Suite 240 Tallahassee, Florida 32303-4149 Dana Baird General Counsel Commission on Human Relations 325 John Knox Road, Building F, Suite 240 Tallahassee, Florida 32303-4149
Findings Of Fact The facts which the Department asked Respondents to admit by Petitioner's Second Request for Admissions (Pet. Ex. 3) and Paragraphs 1-32 and each odd-numbered paragraph from 33-117, inclusive, of Petitioner's First Request for Admissions (Pet. Ex. 2) are conclusively established. Rather than recite all of those undisputed facts as findings, this Recommended Order will summarize those facts as necessary and make additional findings on the relatively few disputed issues of fact which were raised during the final hearing. The Financial Transactions Between February 1, 1980, and October 31, 1982, Davide, Inc., brokered 43 real estate mortgage loans which consisted of a wraparound second mortgage securing a promissory note in an amount equal to (1) the amount of "new money actually advanced to the borrower out of the wraparound mortgagee's pocket, plus the amount of the principal balance remaining on the first mortgage. There was no evidence how the interest rate on any of the 43 wraparound mortgage loans compared to the interest rate on the corresponding first mortgage loan. All 43 loans included, as an addendum to the wrap- around mortgage, the following agreements between the wrap- around mortgagee and the borrower: Mortgagor shall pay the taxes and insurance deposits required by Senior Mortgagee. The Mortgagor shall comply with all of the terms and provisions of the Senior Mortgage other than with respect to the payments of the principal and interest due. If the Mortgagor shall fail to so comply with all of the terms, provisions and conditions of the Senior Mortgage so as to result in a default under it (other than with respect to pay ments due upon the note secured by the Senior Mortgage) that failure on the part of the Mortgagor shall constitute a default under this mortgage and shall entitle the Mortgagee, at its option, to exercise any and all rights and remedies given the Mortgagee in the event of a default under this Mortgage. The Mortgagee agrees to pay to the holder of the Senior Mortgage the unpaid principal balance of the mortgage together with all interest accruing under it as and when required by the terms of the Senior Mortgage; therefore, by paying the constant monthly installments each provided to be paid from the date of funding this mortgage to and including the date the Note secured hereby becomes due at which time the Mortgagee's payment obligation shall terminate. At such time of termina tlon of the Mortgagee's obligation, the balloon balance due upon [sic] the Note secured hereby shall be credited for an amount aggregating the principal then owing upon the Senior Mortgage plus all sums which were paid as principal to the Senior Mortgage by the Mortgagee. All those payments provided to be paid by the Mortgagee pursuant to the provisions of paragraph 3 above shall be made by the Mortgagee before the expira tion of the applicable grace periods provided for those payments as contained in the Senior Mortgage. The Mortgagee does not assume any of the obligations of the Mortgagor under the Senior Mortgage except as provided above with respect to principal and interest payments due after this mortgage has been funded. If the Mortgagee shall default in making any required payment of principal or interest under the Senior Mortgage, the Mortgagor shall have the right to advance the funds necessary to cure that default and all funds so advanced by the Mortgagor, together with interest at the rate of 18 percent per annum shall be credited against the next installment(s) of interest and prin cipal due under the Note secured by the mortgage. The Mortgagor and the Mortgagee covenant and agree not to enter into any agreement with the holder of the Senior Mortgage modifying or amending any of the provisions dealing with payment of princi pal or interest under the Senior Mortgage without the prior written consent of the other. All 43 loans are short-term loans which are designed, by their terms, to become due before the first mortgages were, by their payment terms, to be paid in full. The loan application statements and closing statements related to each of the 43 wraparound mortgage loans show the first mortgage balance as, respectively, part of the amount of the loan and part of the disbursements to the borrowers. But both make clear that those items which refer to the amount of the balance on the first mortgage which the wraparound mortgagee agreed, in the addendum, to pay during the life of the wraparound mortgage. The first mortgage balances were not paid off by the wraparound mortgagee, nor was cash in the amount of the first mortgage balance disbursed to the borrower out of the wraparound mortgagee s pocket. In each of the 43 wraparound mortgage loans, the mortgage brokerage fee or commission would exceed the maximum allowable by law if computed only on the "new money," but would not exceed the maximum allowable by law if computed on the total face amount of the promissory note secured by the wraparound mortgage. If they were excessive fees, the total amount of the excess would be $22,508.29, and the Department's report of examination (Pet. Ex. 1) would identify the amount of the excess that should be refunded to each borrower. Finally, the mortgage brokerage fee actually charged on each of the 43 loans much more closely approximates what would be the maximum fee if computed on "new money" than what would be the maximum fee if computed on the face amount of the promissory note secured by the wraparound mortgage. B. The Department's Actions The Department apparently has not had the occasion to apply the law, which is now codified as Section 494.08(3), Florida Statutes (1983), and the Department's rules promulgated under it, to precisely the financial transactions shown by the evidence in this case. But since at least 1973, the Department consistently has interpreted the law and rules in various cases involving wraparound mortgages as requiring the maximum mortgage brokerage commission or fee to be computed on the new money" rather than on the total amount of the promissory note secured by the wraparound mortgage. In 1979, the Department considered two similar financial transactions: One was a specific refinancing wraparound second mortgage in which the wraparound mortgagee was obligated to make payments due on the first mortgage "out of sums paid hereunder"; the other was the generic purchase money wraparound second mortgage transaction in which the seller/wraparound mortgagee remains liable on the first mortgage. The Department concluded that, in both cases, the maximum fee should be computed on the "new money." The conclusion in the latter case was based upon the complete absence of any assumption by the wraparound mortgagee of a preexisting indebtedness of the borrower on the first mortgage. In the case of a purchase money wrap- round second mortgage, the wraparound mortgagee always was and simply remains liable on the first mortgage. The conclusion in the former case is based upon a determination: (1) that the wraparound mortgagee's assumption of the obligation to pay the first mortgage was not unconditional, but rather was conditioned upon the wrap- around mortgagee's receipt of payments on the wraparound mortgage; and (2) that the first mortgagee acquired no cause of action against the wraparound mortgagee. The Department acknowledged at the time that its interpretation was based upon the two sets of facts under consideration and that the Department was not foreclosing the possibility of reaching the opposite conclusion on other sets of facts. In recent years, Department personnel consistently have advised mortgage brokers of its position regarding computation of maximum fees on wraparound mortgage loans, as summarized above. Department personnel have on occasion attended meetings of Florida mortgage brokers in Miami and elsewhere in which the subject has been discussed and the Department's position publicly stated. There is no evidence whether Davide or any representative of Davide, Inc., attended any of those meetings or became aware of the Department's position before June, 1982. Although Davide attended the final hearing, he did not testify. In June, 1982, the Department and Respondents began communications regarding the maximum brokerage commission or fee on wraparound mortgage loans. The Department advised Respondents that it believed the maximum fee should be computed on the "new money." C. Respondents' Response Since approximately May 5, 1981, Respondent had relied on advice of counsel that the maximum mortgage brokerage commission or fee should be computed on the entire face amount of a wraparound mortgage. Counsel qualified his opinion, acknowledging that there was no judicial construction of the statute and that his interpretation could be wrong. Counsel's opinion did not mention, and apparently did not even consider, any Department rule interpreting the statute. Rather, the opinion was based primarily upon counsel's assessment that any other interpretation of the statute would render it unconstitutionally vague and ambiguous. On or about September 27, 1982, Respondents' counsel wrote a letter to the Department and seemed to agree that Respondents would conduct an audit and refund any excess fees charged on the wraparound mortgages. The Department completed its audit on December 3, 1982, and sent Respondents a copy on December 13, 1982. The audit specified alleged excess fees charged on the 43 wrap- around mortgages and on seven straight" mortgages. (Pet. Ex. 1) Respondents' counsel responded by January 10, 1983, letter, again seeming to indicate that Respondents agreed to refund excess fees "as applicable." But by January 20, 1983, letter, Respondents' counsel again wrote the Department to advise that Respondents would refund excess fees on the seven "straight" mortgages, but not on the 43 wraparound mortgages. Based on the above facts, I find that the Department did not mislead Respondents concerning the Department's position. Specifically, Respondents were not misled by the erroneous reference in Rule 3D-40.00(3), Florida Administrative Code, to Section 494.08(4), instead of Section 484.08(3), Florida Statutes.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED THAT: Petitioner, Department of Banking and Finance, enter a final order requiring Respondents, Davide & Associates, Inc., and Salvatore G. Davide, to refund to each of the first 43 borrowers identified in the report of examination (Pet. Ex. 1) as "Mortgagor(s)" the amounts identified therein as "Overcharge" to the borrower. RECOMMENDED this 5th day of March, 1984, in Tallahassee, Florida. COPIES FURNISHED: Walter W. Wood, Esquire Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32301 Herman T. Isis, Esquire Post Office Box 144567 Coral Gables, Florida 33114 The Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32301 J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of March, 1984.
Findings Of Fact The Respondent, Robert E. Hough, holds Florida Teacher's Certificate Number 313219, which is a Rank III certificate covering the area of substitute teaching. From September, 1975, until his dismissal on May 20, 1982, the Respondent had been employed with the Duval County School System as a substitute teacher. He was never employed in a full-time position. During the times relevant to this proceeding, the Respondent was employed with First Federal Savings and Loan Association of Jacksonville, as a manager of the Mandarin Branch, until his termination on May 29, 1981. While the Respondent was employed with First Federal Savings and Loan, one of his associates was Mr. Frazier Dughi. Mr. Dughi was employed with First Federal Savings and Loan as an officer in the Real Estate Department until he left that employment in August, 1980. On or about October 29, 1981, Mr. Dughi secured a loan in the amount of $4,500 from First Federal Savings and Loan, and assigned a certificate of deposit he held with First Federal Savings and Loan as collateral. This loan was obtained for the purpose of purchasing an automobile which Mr. Dughi had negotiated to buy from a private individual. After Mr. Dughi had inspected the automobile and decided that it was not to his liking, he met the Respondent on his way home. He had known the Respondent through their employment and had developed a friendship with him. The Respondent went to Mr. Dughi's home where Mr. Dughi informed him what had occurred regarding the automobile purchase. In an effort to avoid any interest expense on the loan, Mr. Dughi gave to the Respondent the $4,500 check from First Federal Savings and Loan, which represented the loan proceeds, and asked the Respondent to deposit it as repayment of the loan through the Respondent's Mandarin Branch office. Mr. Dughi first became aware that his loan had not been repaid approximately 18 months later when he received a notice from First Federal Savings and Loan that he must pay $1,000 in interest in order to renew the loan. In response to this notice, Mr. Dughi contacted Don Perry, a vice-president of First Federal Savings and Loan, and requested the matter be investigated. Mr. Perry testified and produced the original documents involving the transaction between Mr. Dughi and First Federal Savings and Loan. The check initially payable to Mr. Dughi in the amount of $4,500 shows that part of the initial endorsement was removed from the check and subsequently signed and endorsed by the Respondent, as follows: "Pay to the Order of Robert E. Hough". The check was deposited at the Respondent's Mandarin Branch office, into the Respondent's personal account. Subsequently, a check was drawn on the Respondent's account in the amount of $4,200 and deposited in an account with the American National Bank which was owned by the Respondent. At no time did Mr. Dughi authorize the Respondent to deposit his funds or to convert the funds to his personal use. Hazel M. Smith is an individual who maintained a savings account with the Mandarin Branch of the First Federal Savings and Loan Association. On or about November 15, 1979, the Respondent entered into a transaction with Mrs. Smith in which he obtained $10,000 from her account on his representation to her that a special program was being offered to certain preferred customers of First Federal Savings and Loan. However, the money from Mrs. Smith's account was immediately deposited into the personal account of the Respondent. He then obtained a loan in the amount of $10,000 from First Federal Savings and Loan, using the deposit from Mrs. Smith's account as collateral. Thereafter, monthly payments in the amount of $132.16 drawn on the Respondent's account at the American National Bank were deposited in Mrs. Smith's account at First Federal Savings and Loan, in keeping with the terms of the agreement in which Mrs. Smith was to receive repayment over a ten-year period at a ten percent interest rate. As a result of this transaction between the Respondent and Hazel Smith, the Respondent was arrested, and by information filed on October 29, 1981, he was charged with grand theft in violation of Section 812.014, Florida Statutes. On May 3, 1982, the Respondent pled guilty to this criminal charge. Thereafter, the Respondent was adjudicated guilty and sentenced to Florida State Prison for a period of 30 months. Mr. Perry testified regarding the investigation that had been conducted by First Federal Savings and Loan concerning a check "kiting" scheme involving the Respondent, going back to April 25, 1978. This scheme continued until the Respondent resigned from First Federal Savings and Loan in May, 1981, by which time it was determined that the Respondent had secured the sum of $20,100. The Respondent had "kited" checks through three financial institutions, First Federal Savings and Loan, Atlantic National Bank, and the American National Bank. The scheme was uncovered on May 27, 1981, when a check for $20,100 was returned because of insufficient funds. As a result of these transactions, the Respondent was arrested and an Information was filed by the Office of the State Attorney on October 29, 1981, charging the Respondent with grand theft in violation of Section 812.014, Florida Statutes. On May 3, 1982, the Respondent pled guilty to these offenses; subsequently he was adjudicated guilty and sentenced to a five- year period of probation to be served consecutive to the prior 30-month sentence in the Florida State Prison. The Respondent's employment with the Duval County School System was terminated on May 20, 1982.
Recommendation From the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Teaching Certificate Number 313219 held by the Respondent, Robert Edwin Hough, be REVOKED permanently. THIS RECOMMENDED ORDER entered this 25th day of July, 1983, in Tallahassee, Florida. WILLIAM B. THOMAS Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 904/488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of July, 1983. COPIES FURNISHED: L. Haldane Taylor, Esquire 1902 Independence Square Jacksonville, Florida 32202 Mr. Robert E. Hough Post Office Box 229 Lawtey, Florida Donald L. Greisheimer Director Education Practices Commission 125 Knott Building Tallahassee, Florida 32301
