The Issue Whether the Respondent committed the violations alleged in the Amended Administrative Complaint and Notice of Rights dated June 16, 2009, and, if so, the penalty that should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The OFR is the state agency responsible for regulating mortgage brokerage and mortgage lending in the State of Florida and for licensing and regulating mortgage brokers. §§ 494.0011(1); 494.0033(2), Fla. Stat. At the time of the final hearing, Mr. Razor held an inactive mortgage broker's license. The license was inactive because Mr. Razor did not apply for a renewal of his license when it expired on August 31, 2009. His license could be reactivated should he submit an application for renewal. Mr. Razor was a member of the Florida Bar and a practicing attorney in Florida until, in an opinion issued September 11, 2007, the Florida Supreme Court ordered Mr. Razor suspended from the practice of law for a period of 18 months. See Florida Bar v. Razor, 973 So. 2d 1125 (Fla. 2007). In its opinion, the court approved the findings of fact contained in the Report of the Referee; approved the Referee's findings that Mr. Razor had violated Rules Regulating the Florida Bar 3-4.2, 3-4.3, 4-5.3(b), and 4-8.4(a); and approved the Referee's recommendation that Mr. Razor's license to practice law be suspended for a period of 18 months. Pertinent to this proceeding, Rules Regulating the Florida Bar 3.4-3 provides: The standards of professional conduct to be observed by members of the bar are not limited to the observance of rules and avoidance of prohibited acts, and the enumeration herein of certain categories of misconduct as constituting grounds for discipline shall not be deemed to be all- inclusive nor shall the failure to specify any particular act of misconduct be construed as tolerance thereof. The commission by a lawyer of any act that is unlawful or contrary to honesty and justice, whether the act is committed in the course of the attorney's relations as an attorney or otherwise, whether committed within or outside the state of Florida, and whether or not the act is a felony or misdemeanor, may constitute a cause for discipline. The Referee based his recommendation that Mr. Razor's license to practice law be suspended for 18 months on "Respondent's [Mr. Razor's] conduct in allowing his collaborator (a suspended attorney) to practice law in an attempt to extort money; his ratification of the misconduct by failing to take immediate remedial action; his attempts to cover for the suspended attorney by defending the letter during the Bar investigation; and his inconsistent defense (lack of knowledge) at the live and final hearings." These acts constitute dishonest dealing. Mr. Razor's license to practice law was suspended 30 days after September 11, 2007, or on October 11, 2007. Mr. Razor did not report the suspension to the OFR because he did not believe it to be a reportable offense.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Office of Financial Regulation enter a final order finding that Arthur Nathan Razor violated Section 494.0041(2)(i) and (p), Florida Statutes, and revoking his Florida mortgage broker's license. DONE AND ENTERED this 9th day of June, 2010, in Tallahassee, Leon County, Florida. PATRICIA M. HART Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 9th day of June, 2010.
Findings Of Fact Respondent holds Florida Teaching Certificate No. 474395 covering the areas of Vocational Home Economics and Health Education. Respondent's certificate is valid through June 30, 1985. Respondent has a Master's degree in nutrition, dietetics, education and management. On July 29, 1980, Respondent completed and signed an application for food stamps and submitted it to Darlene Ryavec, the food stamp eligibility worker, who then interviewed Respondent. Page three of that application form includes a section entitled "Income from Work" and required Respondent to "Fill in all blanks for each household member with a full or part-time job." Page five of the application contains a section entitled "Florida Fraud Law Information" and advises that an applicant who knowingly fails to disclose a change in circumstances in order to obtain or to continue to receive benefits is guilty of a crime. The next section is entitled "Penalty Warning" and warns an applicant to "not give false information, or hide information, to get or continue to get food stamps." Just above the applicant's signature line, there appears yet another warning and a statement that "My answers are correct and complete to the best of my knowledge." Ryavec reviewed Respondent's application with her. She then presented Respondent with a Rights and Responsibilities form during her personal interview of Respondent. Ryavec specifically referred Respondent to the responsibilities section of the form and marked that with her pen. The responsibilities section of the form notified Respondent that she was to report immediately any changes in the amount of gross monthly income if more than $25. Respondent signed and dated the form, and Ryavec then signed the form. Ryavec then gave Respondent the original, signed Rights and Responsibilities form and retained a copy in the official case file of the Department of Health and Rehabilitative Services. On September 26, 1980, Respondent reapplied for receipt of food stamps. She completed and signed a new application and submitted it to Lillian Jones. On this application, Respondent indicated that there were no members of her household employed in either full or part-time work. Additionally, on page one of the application in response to the question, "Does anyone in your household expect to receive income later this month?" Respondent answered "No." Jones conducted a personal interview of Respondent concerning her employment status. Respondent advised Jones that her husband was going to real estate school and that she had joined him in that school and, specifically, that she was not employed. Respondent was again presented with a Rights and Responsibilities form during the interview with Jones. Respondent signed and dated the form and received the original. Jones then also signed the original and retained a copy of the form in the official file. In addition to the Rights and Responsibilities form, Jones furnished Respondent with a Change Report form, which is a form designed to be completed by a food stamp recipient in the event of a change in status, including employment status. On December 31, 1980, Respondent again reapplied for food stamps. She completed and signed another application which she submitted to Rosa Ware, and Ware conducted a personal interview of Respondent. Respondent again indicated that she was not employed and that no household member was employed. Additionally, Respondent answered "No" to the following questions on page one of the application. Has anyone in your household received any income so far this month? Did your household's only income recently stop? At the close of the interview, Ware gave to Respondent another Rights and Responsibilities form advising Respondent of her responsibility to report changes in gross monthly income if more than $25. Respondent was gainfully employed as an instructor of dietetics and nutrition in the School of Technology at Florida International University from September 22, 1980, through December 16, 1980. She received a gross biweekly salary of $806.92, or a total of $5,245.40 in gross wages from her employment at Florida International University. Respondent received food stamp allotments of $209 each on October 7, 1980, November 7, 1980, and December 5, 1980, making a total of $627 in food stamps received during the period of time she was employed at Florida International University. On each occasion that Respondent received her food stamps, she signed a food stamp receipt on which she certified that there had been no changes in income, expenses or household size which would affect her allotment of food stamps. Respondent never reported her employment at Florida International University or the income earned from that employment to the Department of Health and Rehabilitative Services as required. As a result, Respondent received $627 in food stamps during the months of October, November and December, 1980, to which she was not legally entitled. Ryavec, Jones and Ware each advised Respondent during the personal interview that she was required to report changes in income within ten days. None of those case workers advised Respondent that she only had to report if she obtained permanent full-time employment.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding the Respondent guilty of the allegations contained within the Administrative Complaint and suspending Respondent's Florida Teaching Certificate No. 474395 for a period of 18 months. DONE and RECOMMENDED this 24th of February, 1983, in Tallahassee, Leon County, Florida. LINDA M. RIGOT, 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 24th day of February, 1983. COPIES FURNISHED: J. David Holder, Esquire 128 Salem Court Post Office Box 1694 Tallahassee, Florida 32302 Mary Anne Robertson, Esquire Legal Aid Services of Broward County, Inc. 609 South Andrews Avenue Fort Lauderdale, Florida 33301 Donald L. Griesheimer, Director Education Practices Commission Department of Education The Knott Building, Room 125 Tallahassee, Florida 32301 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA EDUCATION PRACTICES COMMISSION RALPH D. TURLINGTON, as Commissioner of Education, Petitioner, vs. CASE NO. 82-2317 JOYCE FLORES PAPPACHRISTOU, Respondent. /
The Issue Whether Respondent Five Brothers Produce Inc. is indebted to Petitioner for agricultural products and, if so, in what amount?
Findings Of Fact Petitioner grows tomatoes on its farm in Dade County. Jack Wishart is in charge of the farm's operations. Five Brothers Produce, Inc., is a dealer in agricultural products. At all times material hereto, Pete Johnson was responsible for buying and selling produce for Five Brothers. He was assisted by Robert Barbare. On Friday, January 19, 1990, Johnson met with Wishart at Petitioner's farm. During their meeting, they discussed the possibility of Five Brothers purchasing all of Petitioner's 6x7 tomatoes. They ultimately entered into a verbal agreement concerning the matter. Under the terms of the agreement, Five Brothers agreed to purchase from Petitioner, and Petitioner agreed to sell to Five Brothers, Petitioner's supply of 6x7 tomatoes, which consisted of 293 packages, for $26.00 a package. At the time, tomatoes were in scarce supply because of the damage that had been done to the South Florida tomato crop by the freeze of the prior month. As a result, the market price for U.S.#1 grade 6x7 tomatoes was $32.00 a package. Wishhart agreed to a lower price for Petitioner's 6x7 tomatoes because they were U.S.#2 grade. The 293 packages of tomatoes were delivered to Five Brothers on the following day, Saturday, January 20, 1990. Johnson had purchased the tomatoes for Five Brothers to resell to a customer in Atlanta, Georgia. Upon inspecting the tomatoes after their arrival at Five Brothers' loading dock in Florida City, Johnson determined that they did not meet the needs of this particular customer because, in Johnson's opinion, they were too ripe to be shipped out of state. Johnson thereupon telephoned Wishart to tell him that the tomatoes were not suitable for his Atlanta customer. Later that same day, January 20, 1990, pursuant to Johnson's instructions, Barbare, Five Brothers' "late night clerk," contacted Wishart and advised him that Five Brothers wanted to return the tomatoes to Petitioner. The gates of Petitioner's farm were closed, and Wishart so informed Barbare. He then asked Barbare to store the tomatoes in Five Brothers' cooler until they could be returned to Petitioner's farm. Barbare agreed to do so. Approximately a day or two later, Barbare again telephoned Wishart. He told Wishart that Five Brothers had found a customer to whom it could sell the tomatoes, which were still in Five Brothers' cooler. Wishart, in response, stated that Petitioner would lower its sale price and "take $20.00," instead of $26.00 as previously agreed, for the tomatoes. 1/ On Monday, January 22, 1990, Five Brothers consummated a deal with Leo Genecco & Sons, Inc., (Genecco) of Rochester, New York, which agreed to purchase the tomatoes from Five Brothers. 2/ The tomatoes were priced "open," that is, the price of the tomatoes was to be established after the sale. Five Brothers ultimately received $3,149.75 ($10.75 a package) for the 293 packages of 6x7 tomatoes it had sold to Genecco. It thereupon sent a check in that amount to Petitioner as payment for these tomatoes. In the transaction at issue in the instant case, Five Brothers was not acting as a broker or agent for Petitioner. It purchased the tomatoes from Petitioner. The sales price was initially $26.00 a package and was later reduced to $20.00 a package. Accordingly, for the 293 packages of tomatoes Petitioner sold Five Brothers, it should have received from Five Bothers $5,860.00, $2,710.25 more than it was paid.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby recommended that the Department of Agriculture and Consumer Services enter a final order (1) finding that Five Brothers is indebted to Petitioner in the amount of $2,710.25, (2) directing Five Brothers to make payment to Petitioner in the amount of $2,710.25 within 15 days following the issuance of the order, and (3) announcing that, if such payment is not timely made, the Department will seek recovery from the Florida Farm Bureau Mutual Insurance Co., Five Brother's surety. RECOMMENDED in Tallahassee, Leon County, Florida, this 18th day of March, 1991. STUART M. LERNER 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 18th day of March, 1991. COPIES FURNISHED: Jack Wishart Pine Islands Farms, Inc. Post Office Box 247 Goulds, Florida 33170 Pete Johnson Five Brothers Produce, Inc. Post Office Box 3592 Florida City, Florida 33034 Florida Farm Bureau Mutual Insurance Co. 5700 Southwest 34th Street Gainesville, Florida 32608 Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Richard Tritschler, Esquire General Counsel Department of Agriculture and Consumer Services 515 Mayo Building Tallahassee, Florida 32399-0800 Brenda Hyatt, Chief Bureau of Licensing and Bond Department of Agriculture and Consumer Services 508 Mayo Building Tallahassee, Florida 32399-0800
The Issue The issue is whether respondent acted as a mortgage lender within the meaning of Section 494.001(3), Florida Statutes, and thus is subject to Division licensure requirements.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Petitioner, Department of Banking and Finance, Division of Finance (Division), is a state agency charged with the responsibility of administering and enforcing the Florida Mortgage Brokerage and Lending Act which is codified in Chapter 494, Florida Statutes. Among other things, the Division regulates mortgage lenders and requires such persons or entities to secure a license. Respondent, White Pine Resouces, Inc. (WPR), is a Florida corporation formed in March 1986. Its sole shareholder is John R. Grass, a Pensacola attorney. Although the corporation was originally formed for a number of purposes, its primary activity is the real estate investment business. It holds no licenses issued by, or registrations with, the Division. WPR's current business address is 358-C West Nine Mile Road, Pensacola, Florida. WPR's principal source of money is Grass, or his professional association, who loan money to the corporation. In some cases, the money is used to acquire parcels of property for resale, make necessary repairs or improvements, and then provide owner financing to the buyer. In other cases, WPR loans money to persons needing to make improvements to their homes or rental property and takes back a second mortgage from the borrower. These types of transactions, which occurred during the years 1992-95, are found in documents offered in evidence as petitioner's exhibits 1-5. Respondent has also stipulated that several other transactions of this nature occurred during that same period of time. In every case, WPR was investing its own money or that of its principal. In 1992, a Division examiner analyst noted the following listing in the Yellow Pages section of the Pensacola telephone directory under the heading of "Mortgages": White Pine Resources Having Trouble With Financing Residential & Land Fast Service on 1st Mortgages The advertisement also contained respondent's street address and telephone number. In the 1993-94 telephone directory, WPR carried the following advertisement under the "Mortgages" section of the Yellow Pages: White Pine Resources Specialists! Bad Credit - We Can Help Vacant Land Loans In the 1995-96 telephone directory, WPR placed the following advertisement in the "Mortgages" section of the Yellow Pages: White Pines Resources A Private Investor Not a Mortgage Broker Specialists! We Can Help Vacant Land Loans Although the Division first noted one of WPR's Yellow Page advertisements in 1992, for some reason it did not conduct a formal investigation of respondent's activities until February 28, 1994. On that day, an examiner analyst made an unannounced visit to respondent's office for the purpose of inspecting its records to determine if WPR was acting as a mortgage lender. However, WPR's principal, John R. Grass, was not in the office, and the analyst simply left his business card and a message for Grass to contact him. The next morning, Grass telephoned the analyst's supervisor and advised him that since WPR was merely a private investor, and not a mortgage lender, it was not subject to the Division's regulation, and hence it would not provide copies of its records. A subpoena duces tecum was then issued by the Division, records were produced pursuant to the subpoena, and this controversy ensued. The parties agree, however, that this action was not prompted by complaints from consumers or other persons having dealings with WPR. The record indicates that a mortgage lender differs from a private investor in several material respects. An important distinction is that a private investor uses its own funds rather than those of another party. Also, a private investor does not buy or sell paper, does not escrow taxes, does not split or broker commissions, and does not close its own loans. In all of these respects, WPR had the attributes of a private investor. When mortgage brokerage firms are involved in transactions with private investors, they must supply the private investor with certain documents that are not provided to an institutional investor. Among others, they include a disclosure agreement, receipt of recorded instruments, an appraisal or waiver of the same, and title insurance. In addition, Division rules require that a mortgage brokerage firm record its transactions with private investors in a log journal known as DBF-MB-888. The evidence shows that for transactions between WPR and at least two mortgage brokerage firms during the years in question, the two firms recorded those transactions on DBF-MB-888. They also provided WPR with documents typically given to private investors. The Division has adopted Rule 3D-40.290(2), Florida Administrative Code, which provides that a person is deemed to be holding himself out to the public as being in the mortgage lending business if he advertises in a manner "which would lead the reader to believe the person was in the business of buying, making or selling mortgage loans." The rule has not been challenged and, for purposes of resolving this controversy, is presumed to be valid. In view of the representations that WPR provided "Fast Service on 1st Mortgages" and "Vacant Land Loans," it is fair to infer that the Yellow Page advertisements made by WPR would reasonably lead the reader to believe that WPR was in the business of buying, making or selling mortgage loans. Therefore, by virtue of advertising in the Yellow Pages, WPR is deemed to be holding itself out to the public as being in the mortgage lending business. During the years 1993-95, the Division routinely sent WPR questionnaires regarding various WPR transactions with licensed lenders. The transmittal letter accompanying the questionnaire noted that the Division was conducting "a routine examination" of the licensed lender (and not WPR), and WPR's comments would "be of material assistance to (the Division) in determining compliance with the Florida Mortgage Brokerage Act." By way of an estoppel defense, WPR has essentially contended that the questionnaires constituted a representation by the Division that WPR was merely a private lender. It further contends that, to its detriment, it relied upon that representation. But there is nothing in the documents that states that the Division considered WPR to be a private lender. Nor is there any evidence that the Division made any other oral or written representations to WPR that it did not need to secure a license. Finally, assuming arguendo that such a representation occurred, there was no showing that WPR relied to its detriment on such an alleged "misstatement of fact." WPR also raises the defense of laches arguing that it was severely prejudiced by the Division's delay in prosecuting this action. Except for testimony that respondent was forced to secure the services of an attorney to defend against this action, and its principal was required to attend a hearing, there was no showing of prejudice on the part of WPR.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Banking and Finance enter a final order requiring respondent to cease and desist from engaging in the mortgage lending business without a license. DONE AND ENTERED this 17th day of June, 1996, in Tallahassee, Florida. DONALD R. ALEXANDER, 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 17th day of June, 1996. APPENDIX TO RECOMMENDED ORDER CASE NO. 95-0290 Petitioner: Because petitioner's post-hearing filing is more in the nature of a memorandum of law containing argument rather than proposed findings of fact, specific rulings have not been made. Respondent: Because respondent's post-hearing filing is more in the nature of a memorandum of law containing argument rather than proposed findings of fact, specific rulings have not been made. COPIES FURNISHED: Honorable Bob Milligan Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 Harry L. Hooper, III, Esquire Department of Banking and Finance Room 1302, The Capitol Tallahassee, Florida 32399-0350 Clyde C. Caillouet, Jr., Esquire 4900 Bayou Boulevard, Suite 103 Pensacola, Florida 32503 John T. Reading, Jr., Esquire 358-C West Nine Mile Road Pensacola, Florida 32534-1818
The Issue Whether Respondent is indebted to Petitioners for agricultural products and, if so, in what amount?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: The Parties Petitioners are producers and sellers of tomatoes. They own and operate Sunfresh Farms in Florida City, Florida. Respondent is a dealer in agricultural products. The Controversy The instant case involves two separate transactions involving the sale of tomatoes pursuant to verbal agreements between Petitioners (as the sellers) and Respondent (as the buyer). Both transactions occurred in January of 1995. The First Transaction (Petitioners' Invoice Number 5270) Under the terms of the first of these two verbal agreements (First Agreement), Respondent agreed to purchase from Petitioners, and Petitioners agreed to sell to Respondent (FOB), 96 boxes of cherry tomatoes for $12.65 a box (which was the market price at the time). In accordance with the terms of the First Agreement, Petitioners delivered 96 boxes of cherry tomatoes to Respondent (at Petitioners' loading dock) on January 23, 1995. Respondent accepted the delivery. Respondent sold these 96 boxes of cherry tomatoes to a local produce house, which subsequently sold the tomatoes to another local produce house. The tomatoes were eventually sold to a company in Grand Rapids, Michigan. On January 28, 1995, five days after Petitioners had delivered the 96 boxes of cherry tomatoes to Respondent, the tomatoes were inspected in Grand Rapids, Michigan. According to the inspection certificate, the inspection revealed: "Decay (3 to 28 percent)(mostly early, some advanced stages);" "Checksum;" and "Average approximately 85 percent light red to red." Petitioners have yet to be paid any of $1,214.40 Respondent owes them (under the terms of the First Agreement) for the 96 boxes of cherry tomatoes they delivered to Respondent in accordance with the terms of the agreement. The Second Transaction (Petitioners' Invoice Number 5299) Under the terms of the second verbal agreement at issue in the instant case (Second Agreement), Respondent agreed to purchase from Petitioners, and Petitioners agreed to sell to Respondent (FOB), 132 boxes of ("no grade") cherry tomatoes for $12.65 a box. In accordance with the terms of the Second Agreement, Petitioners delivered 132 boxes of cherry tomatoes to Respondent (at Petitioners' loading dock) on January 27, 1995. Respondent accepted the delivery. Respondent sold 84 of these 132 boxes of cherry tomatoes to a Florida produce house, which subsequently sold the tomatoes to a company in Houston, Texas. These 84 boxes of cherry tomatoes were inspected in Houston, Texas, on January 31, 1995, four days after Petitioners had delivered them to Respondent. The defects found during the inspection were noted on the inspection certificate. Petitioners have yet to be paid in full for the 132 boxes of cherry tomatoes they delivered to Respondent in accordance with the terms of the Second Agreement. Respondent tendered payment (in the form of a check) in the amount of $811.20, but Petitioners refused to accept such payment because it did not represent the full amount ($1,669.80) Respondent owed them (under the terms of the Second Agreement) for these cherry tomatoes. (Although they have not endorsed or cashed the check, Petitioners are still holding it in their possession.)
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department enter a final order (1) finding that Respondent is indebted to Petitioners in the amount of $2,884.20, (2) directing Respondent to make payment to Petitioners in the amount of $2,884.20 within 15 days following the issuance of the order, (3) indicating that the $811.20 check that was previously tendered to Petitioners by Respondent (and is still in Petitioners' possession) will be considered partial payment of this $2,884.20 indebtedness, if Respondent advises Petitioners, in writing, that it desires the check to be used for such purpose and if it provides Petitioners written assurance that the check is still a valid negotiable instrument; and (4) announcing that if payment in full of this $2,884.20 indebtedness is not timely made, the Department will seek recovery from the Farm Bureau, Respondent's surety. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of February, 1996. STUART M. LERNER, 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 2nd day of February, 1996.
Findings Of Fact Based upon the foregoing and in consideration of Pitts' failure to timely respond to Requests for Admissions, the following Findings of Fact are made in this matter: On or about December 12, 2007, J2J filed a form entitled, "Appointment of Campaign Treasurer and Designation of Campaign Depository for Political Committees and Electioneering Communication Organizations" with the Florida Division of Elections (the "Division"). The form designated Pitts as the chairman and treasurer of J2J. The Division then sent Pitts a letter dated December 14, 2007, providing directions concerning the filing of a Committee Campaign Treasurer's Report ("Report") by J2J in accordance with the campaign financing requirements set forth in chapter 106, Florida Statutes (2007). Pitts received the letter from the Division. By letter dated April 13, 2009, the Division notified Pitts that J2J had failed to file the Report which had been due on April 10, 2009. Pitts received the letter from the Division concerning the overdue Report. The Division sent a follow-up letter to Pitts dated April 27, 2009, concerning the delinquent Report. Pitts received the letter from the Division. As of the date of its Motion for Summary Final Order, the Division had not received the Report from Pitts. J2J is in violation of the campaign financing requirements for political committees in Florida. The Division deems Pitts' failure to file the Report for J2J to be a willful violation of the Florida campaign financing laws.
The Issue Whether Petitioner has defaulted on student loans and, if so, the principal amounts of the loans, any accrued interest, and any collection costs. Whether Petitioner's employer should be required to withhold payments from Petitioner's pay pursuant to Section 112.175, Florida Statutes.
Findings Of Fact As will be set forth in more detail, there are three loans at issue in this proceeding. For ease of reference, these loans will be referred to as Loans One, Two, and Three.2 Loans One and Three were issued as Florida Guarantee Student Loans, which are popularly known as Stafford Loans. Loans Two and Four were supplemental loans issued by the Student Loan Services program, which are referred to SLS loans. Loans One, Two, and Three were funded and are at issue in this proceeding. THE STAFFORD LOANS, LOANS ONE AND THREE On September 22, 1986, Petitioner executed an Application and Promissory Note for a Guaranteed Student Loan, number 545967. This Stafford Loan, referred to as Loan One, was in the amount of $5,000. Loan One was disbursed in two equal installments of $2,500 (less appropriate fees). The first installment was disbursed on or about December 4, 1986, and the second installment was disbursed on or about December 11, 1986. On June 1, 1987, Petitioner executed an Application and Promissory Note for a Guaranteed Student Loan, number 586917. This Stafford Loan, referred to as Loan Three, was in the amount of $2,261.00. Loan Three was disbursed in one installment of $2,261.00 (less appropriate fees) on June 25, 1987. The promissory notes and other paper work documenting Loan One and Loan Three provided that interest at the rate of 8% per annum would begin to accrue on these loans six months after Petitioner ceased to attend school on at least a half-time basis. Because a Stafford Loan is guaranteed by the federal government, the obligor may be eligible to receive periods of deferment and periods of forbearance during which the federal government may or may not make interest payments. If the federal government made interest payments during a particular period, Petitioner is not obligated for interest during that period. If the federal government did not pay interest during a particular period, Petitioner is obligated to pay interest for that period. Respondent is not claiming any interest on Loans One and Three for any period while interest was paid by the federal government. While Petitioner was attending school on at least a half-time basis and for six months thereafter (the grace period), Loans One and Three were in periods of forbearance, and the federal government paid the interest for both loans. Petitioner ceased attending school on at least a half-time basis on March 18, 1988. The six month grace period on Loans One and Three ended on September 18, 1988, which is the date interest began to accrue on Loans One and Three. As of that date, the principal balance due on Loan One ($5,000.00) and on Loan Three ($2,261.00) totaled $7,261.00. Between September 18, 1988, and January 23, 1997, interest accrued on Loans One and Three in the total amount of $4,744.75, as follows: Between September 18, 1988, and June 15, 1993, interest accrued on these two loans in the total amount of $2,754.80. Between June 16, 1993, and October 6, 1993, interest accrued on these two loans in the total amount of $245.87. Both loans were in a period of administrative forbearance, but the federal government did not pay the interest. Between October 7, 1993, and January 7, 1994, both loans were in a period of deferment due to Petitioner's unemployment, and the interest was paid by the federal government. Between January 8, 1994 and January 31, 1994, interest accrued on these two loans in the total amount of $51.73. Both loans were in a period of administrative forbearance, but the federal government did not pay the interest. Between February 1, 1994, and April 30, 1994, both loans were in a period of deferment due to Petitioner's unemployment, and the interest was paid by the federal government. Between May 1, 1994, and July 24, 1994, interest accrued on these two loans in the total amount of $189.88. Both loans were in a period of administrative forbearance, but the federal government did not pay the interest. Between July 25, 1994, and April 30, 1995, both loans were in a period of deferment due to Petitioner's unemployment, and the interest was paid by the federal government. Between May 1, 1995, and December 1, 1995, interest accrued on these two loans in the total amount of $492.65. Both loans were in a period of forbearance, but the federal government did not pay the interest. Between December 2, 1995, and January 23, 1997, interest accrued on these two loans in the total amount of $1,009.82. Petitioner defaulted on the repayment of Loan One. Petitioner has not made any principal or interest payment since the loan was disbursed. Petitioner defaulted on the repayment of Loan Three. Petitioner has not made any principal or interest payment since the loan was disbursed. On January 23, 1997, Respondent purchased Loan One and Loan Three.3 As January 23, 1997, the principal and the accrued interest for Loan One, plus the principal and the accrued interest for Loan Three, totaled $12,005.75. THE SLS LOAN: LOAN TWO On January 31, 1987, Petitioner executed Auxiliary Loan Application and Promissory Note number 8914 for a supplemental student loan through the Student Loan Services program (Loan Two). This type loan, generally referred to as an SLS loan, was in the principal amount of $4,000.00. Loan Two was disbursed in one installment of $4,000.00 (less appropriate fees) on or about April 9, 1987. The promissory notes and other paper work documenting Loan Two provided that interest at the rate of 12% per annum would begin to accrue upon disbursement. SLS loans also provide for periods of deferment and forbearance during which no payment is due. The federal government does not make interest payments during a period of deferment or forbearance. The borrower is obligated to pay all of the interest from date of disbursement.4 Petitioner defaulted on the repayment of Loan Two. Petitioner has not made any principal or interest payment since the loan was disbursed. Respondent purchased Loan Two from the holder on September 11, 1997.5 Interest in the amount of $7,348.91 accrued on Loan Two between April 9, 1987, the date the loan was disbursed, and September 11, 1997. The total principal balance and accrued interest for Loan Two as of September 11, 1997, was $11,348.91. COLLECTION COSTS Section 682.410(b)(2) of Title 34, C.F.R., provides that Respondent shall impose collection costs, as follows: (2) Collection charges. Whether or not provided for in the borrower's promissory note and subject to any limitation on the amount of those costs in that note, the guaranty agency shall charge a borrower an amount equal to reasonable costs incurred by the agency in collecting a loan on which the agency has paid a default or bankruptcy claim. These costs may include, but are not limited to, all attorney's fees, collection agency charges, and court costs. Except as provided in §§ 682.401(b)(27) and 682.405(b)(1)(iv), the amount charged a borrower must equal the lesser of-- The amount the same borrower would be charged for the cost of collection under the formula in 34 CFR 30.60; or The amount the same borrower would be charged for the cost of collection if the loan was held by the U.S. Department of Education. Respondent established that the amount of the annual collection cost mandated by 34 C.F.R. 682.410(b)(2) for each defaulted loan at issue in this proceeding should be calculated at the rate of 25% of the outstanding principal and accrued interest. PRINCIPAL, INTEREST, AND COLLECTION COSTS AS OF JUNE 1, 1998 Respondent calculated the principal, interest, and collection costs for each loan as of June 1, 1998. For Loan One the amount of the collection costs assessed by the Respondent was $2,231.60. Interest that accrued between January 23, 1997, and June 1, 1998, totaled $895.13. As of June 1, 1998, the total principal, interest, and collection costs for Loan One totaled $11,394.01. For Loan Two the amount of the collection costs assessed by the Respondent was $2,961.20. Interest that accrued between September 11, 1997, and June 1, 1998, totaled $981.29. As of June 1, 1998, the total principal, interest, and collection costs for Loan One totaled $15,291.39. For Loan Three the amount of the collection costs assessed by the Respondent was $1,009.13. Interest that accrued between January 23, 1997, and June 1, 1998, totaled $404.78. As of June 1, 1998, the total principal, interest, and collection costs for Loan One totaled $5,152.39. The total amount due from Petitioner as of June 1, 1998, for Loans One, Two, and Three for principal, interest, and collection costs is $31,837.79. WAGE WITHHOLDING Petitioner is a social worker employed by Dade County, a political subdivision of the State of Florida. As an employee of a political subdivision of the State of Florida, Petitioner is subject to the provisions of Section 112.175, Florida Statutes, and Chapter 28-40, Florida Administrative Code. These provisions pertain to employees of the State of Florida or its subdivisions who have defaulted on an education loan made or guaranteed by the State of Florida. Respondent notified Petitioner in writing by letter dated October 1, 1997, that Loans One, Two, and Three were in default and offered him the opportunity to make voluntary payments on these loans. The letter also advised Petitioner that the Respondent would seek to make involuntary withholdings if he did not make voluntary payments. Petitioner thereafter elected to request the formal hearing that triggered this proceeding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order that adopts the findings of fact and conclusions of law contained herein, finds that Petitioner, as of June 1, 1998, owes the sum of $31,837.79, and orders the involuntary wage withholding of Petitioner's pay through his employer, Dade County, Florida, pursuant to Section 112.175, Florida Statutes, and Chapter 28-40, Florida Administrative Code. DONE AND ENTERED this 7th day of August, 1998, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 7th day of August, 1998
