The Issue In this proceeding pursuant to Section 120.56(4), Florida Statutes, Petitioner Dave Taylor (“Taylor) alleges that various purported “statements” which he attributes to Respondent Department of Banking and Finance (the “Department”) constitute rules-by-definition that were not adopted under, and therefore violate, Section 120.54(1)(a), Florida Statutes.
Findings Of Fact The evidence adduced at final hearing established the facts that follow. The Department of Banking and Finance is the state agency charged with the administration of Chapter 494, Florida Statutes, titled “Mortgage Brokerage and Mortgage Lending.” As such, it is responsible for regulating all persons, including mortgage brokers and lenders, licensed under that chapter. Taylor is licensed under Chapter 494 as a mortgage broker and as a “continuing education school.” His firm, Florida Compliance Specialists, Inc., provides consulting services to Chapter 494 licensees. The present dispute stems from amendments to Chapter 494 that the legislature enacted during the 2001 regular session. See Ch. 2001-228, Laws of Florida. These amendments were contained in a bill (CS/HB 455) approved by the governor on June 13, 2001, and became effective on October 1, 2001; they created a new position called “principal representative.” As defined by the legislature, the term “principal representative” means “an individual who operates the business operations of a licensee under part III.” Section 494.001(29), Florida Statutes (2001) (emphasis added).4 This statutory definition is amplified in a mandate that requires all licensees (and applicants) to designate a “principal representative who exercises control of the licensee’s business[.]” Sections 494.0061(8) and 494.0062(11), Florida Statutes. (Emphasis added). Notably, the terms “operates” and “exercises control of” are not defined. As mentioned, the statute requires all licensees and applicants to designate a PR. Although PRs do not engage in a licensed occupation (i.e. there is no PR license), an individual appointed to the post of PR after October 1, 2001, must satisfy certain educational and testing requirements (the details of which are not important here), and the designating lender must submit documents showing that its PRD has complied with those requirements.5 After the governor signed CS/HB 455 into law but before the amended statutes took effect, the Department began making rules to implement the new provisions. Before long, proposed rules were published in the August 31, 2001, issue of Florida Administrative Weekly. One provision of these proposed rules instructed that “[a]n individual can only be a principal representative for one [lender].” This “one lender to a PR” proposal did not implement an explicit statutory directive but arose from the Department’s then-prevailing interpretation of the statutory description of a PR as one who “operates” and “exercises control of” the lender’s business. Further illuminating the Department’s understanding of these terms were the Designation forms that it proposed to adopt, wherein the PRD was required to acknowledge that he or she would be “in full charge, control, and supervision of the [lender’s] business.” A person, the Department reasoned, could be “in full charge,” etc., of but one company at a time. In the course of rulemaking, however, the Department receded from its original interpretation. As a result, revised proposed rules——from which the bright line, “one lender to a PR” directive had been deleted——were published in the October 5, 2001, Florida Administrative Weekly.6 An amended Designation, which unlike earlier versions lacked language requiring a PRD to confirm (with his or her signature) having “full charge, control, and supervision” of the applicant’s or licensee’s business, was proposed as well.7 By the end of January 2002, the Department’s proposed rules relating to PRs had been adopted and, at the time of this Final Order, were among the agency’s duly promulgated, existing rules. See Rule 3D-40.242, Florida Administrative Code. Although the Department does not presently have a bright line rule or policy that flatly forbids an individual from serving simultaneously as PR to more than one licensee, the Department continues to be skeptical that a dual designee can effectively perform, for more than one lender at a time, the responsibilities that it believes inhere in the office of PR. Accordingly, whenever a lender or applicant nominates an XPR for PR, the Department without exception subjects that lender’s Designation to stricter scrutiny than would be given if its PRD were not an XPR. (Indeed, if the PRD is not an XPR, then the Department presumes that he or she will be able to carry out the duties of a PR and hence makes no inquiry as to how the PRD will function as PR.) The first outward manifestations of the Department’s internal decision to scrutinize any Designation in which an applicant’s PRD is an XPR emerged in late November 2001 after the agency had received four separate applications naming Taylor as PR.8 As the Department had discovered upon review of these four applications, Taylor was already serving as PR to an existing licensee. This situation had given rise to a dilemma for which the Department was not fully prepared, as evidenced by a November 26, 2001, e-mail message from an agency attorney to the responsible policy makers in which she (the attorney) had advised that: There are two pending applications in which there are no deficiencies and we need to decide how will [sic] we will proceed since we took out the language in the rule that specifically stated an individual could only be a PR for one company at a time. Let me know what times you would be available [for a meeting to decide what to do]. The Department quickly decided what to do. Between November 27 and November 29, 2001, the Department issued four nearly identical letters, one sent by certified mail to each applicant who had chosen Taylor as its PR, which provided, in pertinent part: We are in receipt of your company’s application to become licensed as a mortgage lender in the State of Florida. A review of the application materials indicates that [applicant’s name] has designated Dave Taylor at [address] as the company’s Principal Representative. [The next four paragraphs quote Sections 494.001(29); 494.0062(11); 494.0062(1)(f); and 494.0062(12), Florida Statutes, which pertain to PRs.] Sections 494.0072(1) and (2)(c), Florida Statutes, provide as follows: Whenever the department finds a person in violation of an act specified in subsection (2), it may enter an order imposing one or more of the following penalties against that person: Revocation of a license or registration. Suspension of a license or registration, subject to reinstatement upon satisfying all reasonable conditions that the department specifies. Placement of the licensee or applicant on probation for a period of time and subject to all reasonable conditions that the department specifies. Issuance of a reprimand. Imposition of a fine in an amount not exceeding $5,000 for each count or separate offense. Denial of a license or registration. Each of the following acts constitutes a ground for which the disciplinary actions specified in subsection (1) may be taken: (c) A material misstatement of fact on an initial or renewal application.[9] Dave Taylor has already been designated as a principal representative for another licensed lender under part III of Chapter 494, Florida Statutes. Please advise in detail how Mr. Taylor will operate and exercise control over your business.[10] We request that your response be submitted to the Department within 10 days of the date of this letter. If you have any questions regarding this matter, please call me at [phone number]. On or about November 30, 2001, the Department created a new deficiency code, DF 416, the description of which is “principal representative is designated to more than one entity.” This is an active deficiency code and is used consistently as a “red flag” on all applications to which it applies. When an application is tagged with a DF 416, the applicant is sent a letter in the form of the letters quoted in the preceding paragraph. This letter will hereafter be referred to as the “DF 416 Inquiry Letter.”11 It is important to emphasize that all applicants whose PRD is an XPR are sent the DF 416 Inquiry Letter, without exception.12 It is undisputed that Taylor has met all of the educational and testing requirements necessary to serve as a PR, and that the Department has no objection, based on facts and circumstances unique to Taylor, to Taylor’s being a lender’s PR. (In fact, he is presently a PR to one lender,13 under a designation to which the Department, consistent with its policy and practice of making no inquiry concerning PRDs who are not XPRs, raised no objection.) The Department’s concern about Taylor’s having been designated a PR by more than one company is indistinguishable from the concern that it expresses regarding all dual designees. This is why, although the contents of the DF 416 Inquiry Letter were developed to resolve a problem that specifically involved Taylor and his clients, the Department decided (and was able) to implement its Taylor-made solution on a generally applicable basis by sending the DF 416 Inquiry Letter to all applicants whose PRD is a dual designee. Each of the four applicants that had designated Taylor as its PR declined the Department’s November 2001 invitation to submit detailed information regarding the manner in which Taylor would operate and control the licensed business. Each applicant chose, instead, to designate someone else as PR. Thus, whatever advantages or considerations Taylor expected to receive in exchange for serving as these lenders’ PR were lost; the Department’s letters (the letters that became the form for the DF 416 Inquiry Letter) were the proximate cause of that loss, in that but for the letters, the lenders would not summarily have severed their respective business relationships with Taylor. After deciding how to deal with applicants whose PRDs are XPRs, the Department turned its attention to the dual designees of existing licensees. This was, in a sense, a bigger problem because, in their respective Designations, more than 50 licensees had selected an individual for PR who was a dual designee. Beginning around December 12, 2001, the Department sent all these lenders a letter similar to the DF 416 Inquiry Letter. This letter stated: We are in receipt of the principal representative designation forms for the following companies: [lender’s names]. A review of the principal representative forms indicates that [PRD’s name and address] has been designated the Principal Representative for both companies. [The next two paragraphs quote statutory provisions pertaining to PRs.] Sections 494.0072(1) and (2)(p) state as follows: Whenever the department finds a person in violation of an act specified in subsection (2), it may enter an order imposing one or more of the following penalties against that person: Revocation of a license or registration. Suspension of a license or registration, subject to reinstatement upon satisfying all reasonable conditions that the department specifies. Placement of the licensee or applicant on probation for a period of time and subject to all reasonable conditions that the department specifies. Issuance of a reprimand. Imposition of a fine in an amount not exceeding $5,000 for each count or separate offense. Denial of a license or registration. Each of the following acts constitutes a ground for which the disciplinary actions specified in subsection (1) may be taken: (p) Failure to comply with, or violations of, any other provision of ss. 494.001-494.0077. Please advise in detail how you will operate and exercise control over both of the above- mentioned businesses. We request that your response be submitted to the Department within 14 days of the date of this letter. If you have any questions regarding this matter, please call me at [phone number]. This form letter will be referred to as the “Compliance Inquiry Letter.” The evidence is unequivocal that the Department has sent, and plans to send, the Compliance Inquiry Letter to all licensees whose Designation names a person determined to be a dual designee, without exception.14 Taylor’s Description of the Alleged Rules-by-Definition In his petition, as required by Section 120.56(4)(a), Florida Statutes, Taylor described the alleged rules-by- definition. Here, in his words, are the Department’s alleged statements: Only one person can realistically “operate the business operations” of a licensee and “exercise control over the licensee’s business.” Therefore, only one individual shall prima facie be designated as principal representative for only one mortgage lender. The above rule shall not apply, however, to mortgage lenders which the Department deems to be “grand-fathered” i.e., such companies who designated their principal representative on or prior to October 1, 2001, the effective date of the statutory amendments. In such instances, an individual will be permitted multiple designations without further departmental scrutiny or inquiry as to how that individual will “operate” or “exercise control over each business.”[Footnote omitted]. Except for “grand-fathered” companies, if an individual once designated principal representative by a mortgage lender is similarly designated principal representative by a separate mortgage lender, the Department based upon the agency statement recited in (a) above, will require the subsequent mortgage lender(s) (i.e., the lender(s) other than the one first designating that individual) to provide in writing a detailed explanation to the Department, subject to potential sanctions, describing how that individual will operate and exercise control over that second mortgage lender. The Department considers as a “licensing deficiency” any mortgage lender application or principal representative designation submitted to the Department where the individual designated as the mortgage lender’s principal representative has previously been and continues to be designated principal representative by another mortgage lender. The Department, based upon this “deficiency,” shall not deem the application(s) “complete” for purposes of section 120.60, Florida Statutes. Such application(s) shall be subjected to the licensing procedures set forth in paragraphs (e) and (f) hereafter. In conformity with the agency statement set forth in (a) above, the Department will not undertake an inquiry of the principal representative designation submitted by the mortgage lender who first designated the individual as its’ principal representative. The Department will require mortgage lenders to provide the information referred to in section c above, through the use of a form, [i.e., the form letters attached as EXHIBITS “14”, “15”, & “16”, to this Petition]. Further, this form created for the purpose of soliciting information [not specifically required by statute or an existing rule] will require mortgage lenders to provide a response, specifically subject to announced sanctions, of details not otherwise required under the applicable statutes or rules. The Department, though requiring mortgage lenders to comply with the agency statements through the threat of announced sanctions, shall not provide to mortgage lenders or their designated principal representatives any clarifying or defining circumstances or criteria the Department will deem as acceptable——contractual or otherwise——for a person to be designated as principal representative for more than one mortgage lender. Any responses provided by such mortgage lenders in response to the Department’s written form shall be submitted by the applicant “at their peril.” Ultimate Factual Determinations In his just-quoted statements “a,” “c,” “d,” and “e,” Taylor described, with reasonable particularity, the essence of policies that, in fact, fall within the statutory definition of the term “rule.” Statement “a” describes (albeit somewhat imprecisely) a Departmental mindset, the view that a person is likely to have difficulty simultaneously serving more than one master as a PR; the last sentence of statement “d” accurately describes the Department’s related policy of not inquiring as to how a PRD who is not a dual designee will operate and control the lender’s business (because the agency presumes that a person will probably have no difficulty serving as PR to one lender at a time). Taken together, these views, in fact, constitute the Department’s interpretation of the PR statutes.15 Taylor’s statement “c” and the third sentence of “d” (all of which, of course, he attributes to the Department) correctly describe, for the most part,16 the Department’s policy of requiring additional information from all licensees and applicants whose Designations nominate an XPR for the position of PR. This policy is plainly driven by the Department’s interpretation of the PR statutes, and it leads, in turn, directly to statement “e.” Restated to conform to the evidence, statement “e” holds that the Department will send either the DF 416 Inquiry Letter or the Compliance Inquiry Letter, whichever is applicable, to any lender whose PRD is an XPR. It is the form letters——the DF 416 Inquiry Letter and the Compliance Inquiry Letter——that have emerged as the most visible, most readily identifiable unadopted rules of the Department, for they solicit information not specifically required by statute or by an existing rule. By the end of December 2001 at the latest, rulemaking was both feasible and practicable with regard to the above- described statements, but no effort was made to adopt them as rules. Thus, the Department failed timely to commence rulemaking with regard to these statements in accordance with Section 120.54(1)(a), Florida Statutes.17
Conclusions For Petitioner: H. Richard Bisbee, Esquire Law Office of H. Richard Bisbee 124 Salem Court, Suite A Tallahassee, Florida 32301-2810 For Respondent: Cynthia K. Maynard, Esquire James H. Harris, Esquire Department of Banking and Finance Fletcher Building, Suite 526 101 East Gaines Street Tallahassee, Florida 32399-0350
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review pursuant to Section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing the original notice of appeal with the Clerk of the Division of Administrative Hearings and a copy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or with the District Court of Appeal in the Appellate District where the party resides. The notice of appeal must be filed within 30 days of rendition of the order to be reviewed.
The Issue The issue in this case is whether the Petitioner’s application for licensure as a mortgage broker should be granted.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED: A Final Order be entered denying Petitioner's application for licensure as a mortgage broker. DONE AND ENTERED this 6th day of January, 2009, in Tallahassee, Leon County, Florida. S DIANE CLEAVINGER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 6th day of January, 2009. COPIES FURNISHED: David L. Fleming 1653 Bass Avenue Seville, Florida 32191 Robert H. Schott, Esquire Office of Financial Regulation Post Office Box 8050 Tallahassee, Florida 32314-8050 Alex Hager, Acting Commissioner Office of Financial Regulation 200 East Gaines Street Tallahassee, Florida 32399-0350 Robert Beitler, General Counsel Department of Financial Services 200 East Gaines Street, Suite 526 Tallahassee, Florida 32399-0350
The Issue Whether Respondent's selection of Squire, Sanders and Dempsey, L.L.P., jointly with Hicks and Peisner, P.A., as one of four offerors to provide services as bond counsel is contrary to applicable law, is clearly erroneous, is arbitrary, is capricious, or is contrary to competition. Whether an offeror engaged in a prohibited business solicitation communication. Whether an offeror violated the anti-collusion certificate of the Request for Qualifications.
Findings Of Fact Part V of Chapter 420, Florida Statutes, consisting of Sections 420.501 - 420.517, Florida Statutes, is the Florida Housing Finance Corporation Act (Act). FHFC, created by the provisions of Section 420.504, Florida Statutes, is a public corporation. Pursuant to Section 420.504(2), Florida Statutes, FHFC is an agency of the State of Florida for the purposes of Chapter 120, Florida Statutes. At all times pertinent to this proceeding, Mark Kaplan served as the Executive Director of FHFC. As provided by the Act, a Board of Directors governs FHFC. The Board consists of eight members appointed by the Governor from specifically designated industries and backgrounds plus the Secretary of the Department of Community Affairs, who is an ex-officio and voting member of the Board. Pursuant to Section 420.507, Florida Statutes, FHFC has all powers necessary or convenient to carry out and effectuate the purposes and provisions of the Act. FHFC has the authority to issue bonds and hire bond counsel. On February 2, 2001, FHFC issued the RFQ at issue in this proceeding. Through the RFQ, FHFC solicited competitive, sealed responses from qualified law firms to act as bond counsel on behalf of FHFC. The RFQ defined the term "offeror" to mean a law firm that submits a response to the RFQ or two or more law firms that submit a joint response to the RFQ. The RFQ defined the term "response" to mean a written submission by an offeror that responds to the RFQ. The RFQ required written responses to be filed no later than 5:00 p.m. on March 2, 2001. By subparagraph B.3. of Section Three of the RFQ, FHFC reserved the right to obtain any information concerning any or all offerors from all sources. By subparagraph B.4. of Section Three of the RFQ, FHFC reserved the right to request an oral interview from any or all offerors. FHFC received ten responses to the RFQ, including a joint response from Petitioners, a response from Squire Sanders, and a joint response from AMCER and Hicks. Stephen J. Mitchell and David L. Lapides submitted the response on behalf of AMCER. Reginald Hicks submitted the Hicks response jointly with the AMCER response. The submission letter for AMCER, signed by Mr. Lapides, stated, in part, as follows: Stephen J. Mitchell and David L. Lapides, on behalf of [AMCER] are pleased to join with Reginald D. Hicks to respond to [FHFC's] request for proposals [sic] in its efforts to select a law firm to serve as its bond counsel in multi-family and single-family bond issuances. AMERC, which served as [FHFC's] bond counsel since 1996, may merge with another firm. The attorneys who have served [FHFC] intend to continue to practice together. We want to assure [FHFC] that, regardless of the name we may practice under, the individuals who have worked with [FHFC] look forward to continuing our relationship with you. The submission letter for Hicks, signed by Mr. Hicks, stated, in part, as follows: Reginald D. Hicks, on behalf of [Hicks] is pleased to join with Stephen J. Mitchell and David L. Lapides to respond to [FHFC's] request for proposals [sic] in its effort to select a law firm to serve as its bond counsel in multi-family and single-family bond issuances. The AMCER and Hicks response stated, in part, as follows: Stephen J. Mitchell, David L. Lapides, Michael J. Nolan, Joseph D. Edwards, Fred B. Karl and Hillary M. Black are continuing the municipal bond practice of [AMCER]. As of the date of the RFQ response, AMCER continues its legal existence as a Florida professional services corporation. It is anticipated that, if selected to continue as [FHFC's] bond counsel, the contract will be accepted in the name of a successor firm. As required by the RFQ, the response filed jointly on behalf of AMCER and Hicks described their municipal bond practice group, their tax group, and set forth the qualifications and experience of each member of the groups that would be providing services to FHFC. That response responded to all other items in the RFQ, including information as to minority involvement. The response filed by Squire Sanders responded to all items in the RFQ. The joint response filed by Petitioners responded to all items in the RFQ. The responses consisted of objective items that could be scored and other items that were for the Board's information.1 Each member of an evaluation committee separately evaluated each response. The objective items were scored and ranked competitively based on that scoring. The informational items were summarized. The ranking and the summary were provided to each member of the Board. The ranking of the objective items of the written responses was a preliminary step in the evaluation process. It was not intended to be a final ranking of the offerors. Pertinent to this proceeding, the joint response of AMCER and Hicks was ranked third, the joint response of Petitioners was ranked fourth, and the response of Squire Sanders was ranked fifth. FHFC invited all ten offerors to make an oral presentation to the Board at its meeting on April 6, 2001. The Board was scheduled to select bond counsel at that meeting immediately after the oral presentations. The preliminary agenda for the April 6, 2001, meeting reflected that each of the ten offerors would be making an oral presentation and set the order for those presentations. Approximately three days before the April 6, 2001, meeting, Stephen J. Mitchell informed Mr. Kaplan by telephone that he, Mr. Lapides, and several other lawyers who had been employed by AMCER were going to join Squire Sanders. Mr. Mitchell advised that Hicks was still a part of their team. Mr. Mitchell also told Mr. Kaplan that AMCER and Hicks and Squire Sanders would not be making separate presentations at the Board meeting scheduled for April 6, 2001. There was no evidence submitted that the telephone conversation between Mr. Mitchell and Mr. Kaplan touched on the merits of any response. After this conversation, a revised agenda for the April 6, 2001, meeting was prepared reflecting that nine offerors would be making oral presentations, not ten. The following appeared on the amended agenda under Agenda Item IV of the section styled Oral Interviews (RFQ2001/01) for Bond Counsel: Squire, Sanders & Dempsey L.L. P. (formerly known as: Annis, Mitchell, Cockey, Edwards & Roehn, P.A.) Each offeror was permitted to make a ten-minute oral presentation to the Board and to present the Board a single sheet handout. The handout presented on behalf of Squire Sanders contained the following: Annis Mitchell Group now a part of Squire, Sanders Squire, Sanders & Dempsey and Steve Mitchell are pleased to announce that the Annis Mitchell group (the "Steve Mitchell Lawyers") that has served the Florida Housing Finance Corporation ("Florida Housing") as its bond counsel for the past 5 years, has now become a part of Squire Sanders. The group joining us is headed by Steve Mitchell, Joe Edwards, and David Lapides. Enhancement of our Commitment to Florida Housing The combined group brings to Florida Housing greater depth and strengths. Squire Sanders is one of the largest and best known national public finance law firms. Out of our 700 lawyers worldwide, 60 of our lawyers practice exclusively in the public finance area, comprising one of the largest public finance practice groups in the United States. Our Firm's public finance tax partners are also recognized as one of the nation's finest tax groups. Strong Presence in Florida The Squire Sanders team has an incredibly strong Florida presence in the public finance marketplace. Squire Sanders has ranked as the number one bond counsel in Florida, on a cumulative basis over the last eight years. Nationwide, Squire Sanders has consistently ranked in the top 10 bond counsel law firms in the nation over the last 12 years. Our Florida offices are in Miami, Tampa and Jacksonville and include 7 lawyers who are exclusively engaged in the public finance practice. Reginald D. Hicks is part of our Team We are pleased that Reginald Hicks will be part of our Florida Housing team. Mr. Hicks has participated in over $500 million of tax exempt bond issuances and has served as co-bond counsel to Florida Housing. Strong Housing Experience Together with the Steve Mitchell lawyers, the Squire Sanders team has been involved in over 43 housing bond issues in Florida during the last five years alone, for numerous Florida housing finance authorities. Our Steve Mitchell Lawyers have served as Florida Housing's bond counsel on 31 bond issues totaling over $618 million. Nationwide, the combined team has been involved in more than 183 housing transactions as bond counsel, underwriters counsel, credit enhancer's counsel and in other roles over the past 5 years covering the broad spectrum of housing finance. Our Continued Commitment With your confidence, we would look forward to our continued service as bond counsel for the Florida Housing Finance Corporation, which will now be greatly strengthened and enriched by the joinder of the Steve Mitchell Lawyers with Squire Sanders. Prior to the presentations, Mr. Kaplan stated the following to the Board (beginning at page 71, line 24 of Joint Exhibit 2): . . . Just by way of background, Mr. Chairman, this board authorized staff to issue an RFQ for potential bond counsel to serve the corporation. We received 10 responses to the RFQ. Those were scored by staff pursuant to the scoring matrix that was in the proposal. There was no committee meeting. Each staff member scored individually, those scores were aggregated and averaged, and preliminarily score reports were made. You have as Exhibit A (Joint Exhibit 7) to this information a detailed matrix that shows how that scoring played out. You have all 10 respondents [sic] and you have the narrative of every question that was scored, the number of potential maximum points, and the average points that each participant received, so you can see as a board where the distinctions arose between various respondents [sic]. Those scores are one factor to go into your evaluation in determining who you wish bond counsel contracts with. Also relevant are nonscored items from the application. You have Exhibit B (Joint Exhibit 8) that includes some of the nonscored items, such as, the amount of insurance each respondent has. You also have as part of that response to questions, "Have you ever been sued? Tell us about it." And Exhibit C (Joint Exhibit 9) is the nonscored portion of the fee proposals that each bond firm gave us. The RFP [sic] says that those proposals on fees will be used as a guideline in negotiating the ultimate fee contracts. And I believe that what it says is that from those selected we will then make a determination as to the fee that will be paid to all bond counsel. The fourth evaluation that should go into your evaluation is what's about to happen, which is the oral presentations by the bond counsel firms. All respondents were invited to make their presentations. There is one change to the printed agenda that is before you. We've broken them up, but [there is] one change, and you have information of that in front of you. We had several [sic] proposals from the Annis Mitchell firm, Reginald Hicks, and the Squire, Sanders and Demsey firm. The Annis Mitchell group of lawyers are now part of Squire, Sanders, and Demsey, so they will make a single presentation on the number four spot on your agenda. Each participant's [sic] been given 10 minutes to make their [sic] presentation. . . . Stephen Mitchell, Reginald Hicks, and Ken Meyers (a Squire Sanders partner), made the presentation under Agenda Item IV on behalf of Squire Sanders. That presentation represented that Mr. Mitchell, Mr. Lapides, Joe Edwards, and Fred Karl and others at the former AMCER firm had been approved for membership in the Squire Sanders firm. The presentation emphasized the combined strengths of the former AMCER lawyers with the resources of Squire Sanders. Following that presentation, Mr. Kaplan made the following statement to the Board (beginning at page 148, line 17 of Joint Exhibit 2): . . . Given the merger of the group that filed the Annis Mitchell application into the Squire Sanders firms, we are treating the two applications as having also been merged and become one application. Following the nine oral presentations Mr. Kaplan recommended to the Board that FHFC select four offerors to provide services as bond counsel on a rotating basis. In response to a request to do so, Mr. Kaplan recommended his top four offerors to serve as bond counsel. The four included Squire, Sanders, and Demsey, jointly with Hicks. Mr. Kaplan did not recommend Petitioners. The Board therafter adopted Mr. Kaplan's recommendations. There was no evidence that Squire Sanders, Hicks, or the former AMCER lawyers received any unfair competitive advantage by the FHFC's treating their responses as having been merged. Section Five of the RFQ contains an anti-collusion provision which requires an offeror to certify the following: The response is made without prior understanding, agreement, or connection with any person or entity submitting a response for the same service - except for any such agreement with a person or entity with whom the Response is Jointly Filed or such Joint Filing is made clear on the face of the response - and is in all respects fair and without collusion or fraud. There was insufficient evidence to establish that any party violated the foregoing anti-collusion provision. All offerors in this proceeding have the basic qualifications to perform the services required by FHFC.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a final order dismissing this bid protest. DONE AND ENTERED this 19th day of July, 2001, 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 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 19th day of July, 2001.
The Issue Whether the Petitioners are entitled to an award of attorneys' fees and costs pursuant to Section 120.595(2), Florida Statutes.
Findings Of Fact The Florida Department of Insurance is responsible for regulation of insurance transactions in the State of Florida. Beginning in January 1997, the Department of Insurance began the process of adopting rules intended to address the "parity" of insurance regulation between insurance agencies affiliated with financial institutions and agencies which are unaffiliated. The Petitioners successfully challenged parts or all of the proposed rules. As set forth in the Final Order entered June 29, 1998, Proposed Rules 4-224.002, 4-224.004, 4-224.007, 4-224.012, 4-224.013 and 4-224.014, Florida Administrative Code, were determined to be invalid exercises of delegated legislative authority. Pursuant to Section 120.595(2), Florida Statutes, the Petitioners are entitled to award of attorneys' fees and costs. The evidence fails to establish that the Department of Insurance was substantially justified in promulgating the proposed rules. The evidence offered during the rule challenge proceeding failed to establish the existence of a reasonable basis in law and fact at the time the proposed rules were drafted and published. There are no special circumstances which make an award of fees and costs unjust. Petitioner Florida Bankers Association identified attorneys' fees totaling $145,683.01, and seeks an award of $15,000, the statutory limit. Petitioner Florida Bankers Association is entitled to an award of attorneys' fees in the amount of $15,000. Petitioner Florida Bankers Association seeks an award of costs of $40,537.53, including $36,590.00 paid to Dr. Michael White, the Petitioner's expert witness during the rule challenge proceeding. The Department asserts that the payment to Dr. White is unreasonable. There is no credible evidence that the costs related to Dr. White's participation in the case are not reasonable. The fact that the Department paid less for its expert than did the Florida Bankers Association does not establish that payments to Dr. White were unreasonable. Petitioner Florida Bankers Association is entitled to an award of costs in the amount of $40,537.53. Petitioner Community Bankers Association identified attorneys' fees totaling $10,290.00, and costs of $806.23. Petitioner Community Bankers Association is entitled to an award of attorneys' fees in the amount of $10,290.00 and costs in the amount of $806.23. Petitioner Specialty Agents, Inc., did not obtain legal counsel for the rule challenge proceeding, and relied on a qualified representative to challenge the proposed rules. The qualified representative calculates that 160.1 hours were expended and suggests a valuation of $100 per hour for his time, for a total of $16,010. Petitioner Specialty Agents, Inc., seeks an award of attorneys' fees in the amount of the $15,000.00 statutory limit. The evidence fails to establish that a Petitioner's non-attorney representative is entitled to an award of attorneys' fees. Petitioner Specialty Agents, Inc., seeks an award of costs in the amount of the $249.07. Section 120.595(2), Florida Statutes, differentiates between "reasonable costs and reasonable attorney's fees", suggesting that a party may be entitled to an award of reasonable costs even if representation is provided by a non-lawyer. Without objection, Petitioner Specialty Agents, Inc., is entitled to an award of costs in the amount of the $249.07. The Department asserts that, due to "untimeliness" of the Petitions for Fees filed in these cases, an award of fees in this case is unjust. There is no issue of timeliness to be addressed in this matter. The Petitions for Fees were filed approximately 60-90 days after the time for appeal of the Final Order in the rule challenge cases had passed. The Final Order entered in the rule challenge proceeding specifically retained jurisdiction for an award of fees. There is no evidence that the Department was adversely affected by any delay in filing the Petitions for Fees.
The Issue The issue in the case is whether the allegations of the Administrative Complaint are correct and, if so, what penalty should be imposed.
Findings Of Fact At all times material to this case, Frederick L. Roberts (Respondent) was a licensed Florida mortgage broker, holding license number MB 316324569. In November 1993, a friend of the Respondent, Alan Petzold, introduced Tami Aaronson to him. Ms. Aaronson owned property in Maryland and was interested in securing a mortgage on the Maryland property to provide funding for a Florida home for herself and her son, Jarrett. According to Ms. Aaronson, Mr. Petzold is the father of a minor son, Jarrett Aaronson. The Respondent believed that such was the case at the time he met the family. The Respondent met several times with Ms. Aaronson. The Respondent gave a “Flagship Mortgage Company” business car to Ms. Aaronson. The business card had the Respondent’s name printed on it. The Respondent had been briefly employed by Flagship Mortgage Company, but apparently was not so employed at the time he met Ms. Aaronson. Frederick L. Roberts (Respondent) received check number 0170, dated November 22, 1993, from Tami Aaronson as “Custodian for Jarrett Aaronson” in the amount of three thousand dollars. The notation on the check states that it is for “refinancing.” Ms. Aaronson believed the check was payment for services the Respondent would render in obtaining refinancing of the Maryland property. There was no written agreement between the Respondent and Ms. Aaronson, or between the Respondent and Mr. Petzold. The Respondent completed no written documentation related to the Aaronson transaction. The Respondent did not place the Aaronson deposit into a segregated escrow account. The Respondent did not record the Aaronson deposit into an escrow transaction journal. During the period he held the Aaronson funds, the Respondent worked on unrelated business, and traveled to China for about thirty days. The Respondent performed no work on behalf of Ms. Aaronson, Mr. Petzold, or Jarrett Aaronson. There is no evidence that the Respondent intended to perform any work on behalf of Aaronson/Petzold. The Respondent asserted that he asked for a three thousand dollar “deposit” as a means of discouraging the couple from asking for his assistance. The assertion is not credible. The Respondent asserts that the three thousand dollars he received from Ms. Aaronson was a deposit against travel expenses he would incur during his examination of the property in Maryland. The assertion is not supported by credible evidence. In the spring of 1994, the Respondent received a telephone call from Ms. Aaronson. The Respondent asserts that he believed Ms. Aaronson to have called him from a mental hospital. For whatever reason, at that time he determined that he no longer wanted to be involved in the Aaronson/Petzold situation. Shortly after receiving the Aaronson phone call in spring 1994, the Respondent also received a call from a Department of Banking and Finance investigator, apparently looking into a complaint received from Ms. Aaronson. The Respondent thereafter contacted Mr. Petzold and made arrangements to return the funds to him. According to a notarized statement dated May 9, 1994, the Respondent returned the three thousand dollars to Jarrett R. Aaronson and Alan C. Petzold. The Respondent testified that the money had been returned on May 8, 1994 to Mr. Petzold. The Respondent offered into evidence a document dated May 8, 1994, purporting to be a receipt received from Mr. Petzold for return of the funds. The signature is not notarized. The Respondent did not return the Aaronson deposit to Tami Aaronson. There is no evidence that Ms. Aaronson authorized the return of the three thousand dollars to Mr. Petzold. There is no evidence that Ms. Aaronson authorized the return of funds to Jarrett. Ms. Aaronson has not received any part of the three thousand dollars allegedly refunded. There is no evidence that the funds have been redeposited into the minor child’s custodial account. The Respondent asserts that he was not acting as a mortgage broker and was merely investigating the property to determine whether the Aaronson property could be used as a source of funds for the purchase of Florida property. The Respondent asserts that had a refinancing situation arisen, he would have referred Ms. Aaronson to another licensed person who would assist in the actual refinancing. The assertion is not supported by credible evidence. The Respondent asserts that in the spring of 1994 he had reason to believe that Ms. Aaronson had been hospitalized in a mental facility, and therefore he returned the funds to Mr. Petzold. The rationale for the failure to return the funds to the appropriate party is not persuasive.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Insurance enter a Final Order suspending the mortgage broker license held by Frederick L. Roberts until the following conditions are met: Payment to Tami Aaronson of $3,000 plus appropriate interest calculated from November 22, 1993. Payment of an administrative fine in the amount of $5,000. After compliance with the above conditions, the license suspension shall be lifted, and a two-year probationary period shall begin RECOMMENDED this 22nd day of October, 1997, in Tallahassee, Leon County, Florida. WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of October, 1997. COPIES FURNISHED: Clyde C. Caillouet, Esquire Department of Banking and Finance 4900 Bayou Boulevard, Suite 103 Pensacola, Florida 32503 Michael W. Carlson, Esquire Carlton Fields Ward Emmanuel Smith & Cutler, P.A. 215 South Monroe Street, Suite 500 Tallahassee, Florida 32301 Harry Hooper, General Counsel Department of Banking and Finance The Capitol, Room 1302 Tallahassee, Florida 32399-0350 Hon. Robert F. Milligan Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350
Findings Of Fact Petitioner, Joyce Carol Lillquist, is a 38 year old mother of a 14-year old son. Approximately ten years ago, her ex-husband abandoned her and her son, leaving her to pay the family bills. In 1978, Petitioner moved to Illinois and took a job as a loan officer in an Illinois bank. In 1980, Petitioner's mother became ill with cancer. In order to finance her return to Florida to be with her mother and father, Petitioner took an improper $7500 loan without required authorization. When she returned to Florida, Petitioner took a job as a loan officer for the Barnett Bank. She took an improper $5000 loan from the Barnett Bank to pay off the remaining debt of the Illinois bank loan. While coping with her mother's illness, which eventually terminated in death, Petitioner never paid off the Barnett Bank loan. She just kept renewing the loan when it came due. When the Barnett Bank became aware of the improper loan, the Petitioner turned herself in to the authorities. Principal and interest owed to Barnett Bank at the time Petitioner turned herself in amounted to $12,828.78. Petitioner was charged with and pled guilty to the charge of embezzlement in 1984, in Case No. 84-72-CRT-10, in the U.S. District Court, Middle District of Florida. Petitioner was convicted of the above charge and sentenced to 4 years of imprisonment (3.5 of which were suspended), and 3 years of probation. No restitution was or has been made to Barnett Bank. At the time of Petitioner's conviction, her financial condition was such that restitution was not made a condition of her probation. Petitioner now has the ability to begin making some restitution, but she has gotten the impression that the Barnett Bank is not seeking restitution. Petitioner was not prosecuted for the Illinois loan. Petitioner's probation period began August 3, 1984, and is due to terminate August 3, 1987. Petitioner submitted an application for licensure as a real estate salesman on or about October 2, 1985. The application disclosed Petitioner's embezzlement conviction. Petitioner has held responsible jobs since her conviction and considers herself of good moral character. She swears that she has not committed dishonest acts other than the two mentioned above and that she will not repeat her past offenses. However, no one else testified to Petitioner's present character and fitness.
Recommendation Based upon the foregoing Findings Of Fact and Conclusions Of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order DENYING the application of Petitioner, Joyce Carol Lillquist, for licensure as a real estate salesman. RECOMMENDED this 14th day of January, 1987, in Tallahassee, Leon County, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of January, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-2902 All of Respondent's proposed findings of fact are accepted and are incorporated in the Findings Of Fact along with additional findings. Petitioner did not submit proposed findings of fact. There rulings comply with Section 120.59(2), Florida Statutes (1985). COPIES FURNISHED: Joyce Lillquist 1073 Eden Isle Drive Northeast St. Petersburg, Florida 33704 Lawrence S. Gendzier, Esquire Assistant Attorney General Suite 212 400 West Robinson Orlando, Florida 32801 Fred Roche Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Wings S. Benton, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff Executive Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801
