Findings Of Fact On July 5, 1987, Petitioner, Harold Seligman, filed with the Respondent Office of the Comptroller an application for registration as an associated person of Huberman, Margaretten, and Strauss, a securities firm. By Letter of Denial of September 17, 1987, Respondent denied Petitioner's application. Thereafter, pursuant to Motion and Order, Respondent filed an amended denial letter. The grounds alleged for denial were: The entry of a Temporary Restraining Order dated March 30, 1982, and an Injunction dated July 9, 1982 against the Petitioner, enjoining him from the sale of securities, constituting trima facie evidence of unworthiness under Rule 3E-600.011(2), Florida Administrative Code; and An alleged material misrepresentation In Petitioner's U-4 Application since he had represented therein that the July 9, 1982 Order of Preliminary Injunction was null and void and attached a certified signed copy of the July 2, 1982, Stipulation for Preliminary Injunction and a certified copy of the July 9, 1982 Order of Preliminary Injunction which was not executed by the Circuit Judge. On March 30, 1982, a Temporary Restraining Order (TRO) was entered in State of Florida ex rel. v. First Fidelity Financial Services, et al., Case No. 82-556CT in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida, ex parte and without notice, to Petitioner and his corporation, Franklin Capital Corp., among other defendants. Petitioner was operating as a mortgage broker. The TRO contains specific preliminary findings of fraud, misrepresentation, misappropriation of funds, and false advertising by all the defendants. By the very nature of a TRO, the findings of fact therein are preliminary and subject to being revisited subsequent to its entry, at a time and place when the party or parties restrained will have an opportunity to rebut the allegations of the verified Complaint for Injunctive Relief upon which the TRO is initially issued. The pertinent language of decretal paragraph 10 of that TRO reads: This Order shall expire within ten (10) days from the date and time set forth below unless otherwise ordered by this Court. Hearing on this is . . . set before the Court in Chambers on April 6, 1982 at 2:00 p.m. The TRO was, however, not dissolved on April 6, 1982. On July 2, 1982, a Stipulation of Preliminary Injunction was entered into between the Office of the Comptroller and Franklin Capital Corp. and Respondent Seligman. That Stipulation provided that it was entered into upon certain grounds and representations, in pertinent part: Without prejudice to the aforementioned appeal, and without this Stipulation constituting any evidence or admission by the Defendants with respect to any issue of law or fact arising from the allegations of the Plaintiff's Complaint and/or any other papers filed by the Plaintiff herein, FRANKLIN CAPITAL CORP. and HAROLD SELIGMAN, their agents, servants, employees and other persons in concert with them are hereby preliminarily enjoined until further order of this Court . . . The foregoing Stipulation was also conditioned upon entry by the Circuit Court of an Order approving and adopting it. This was thereafter accomplished on July 9, 1982, when Circuit Court Judge Tedder entered an Order of Preliminary Injunction prohibiting Petitioner from: Selling or offering for sale securities, specifically notes, evidence of indebtedness or investment contracts in the form of whole or fractionalized interests in promissory notes or any other securities within the State of Florida which have not been registered with the Plaintiff pursuant to Chapter 517, Florida Statutes; Selling or offering for sale securities in or from offices in this State or selling securities in this State to persons thereof from offices outside the state, by mail or otherwise, through a dealer, associated person or issuer of securities who have not been registered with Plaintiff pursuant to Section 517.12, Florida Statutes; In connection with the offer, sale or purchase of a security, violating the provisions of Section 517.301, Florida Statutes, or any other provision of Chapter 517, Florida Statutes; and, In any practice, transaction or course of business relating to the sale, purchase, negotiation, promotion, advertisement or hypothecation or mortgage transactions, violating the provisions of Section 494.093, Florida Statutes, or any other provision of Chapter 494, Florida Statutes. On January 31, 1983, Franklin Capital Corporation and Seligman appealed to the Fourth District Court of Appeal a January 5, 1983 Circuit Court Order denying their Motion requesting that the Preliminary Injunction be dissolved for lack of subject matter jurisdiction. On October 12, 1983, the Fourth District Court of Appeal in Franklin Capital Corporation, Harold Seligman v. State of Florida ex rel. Gerald Lewis, 441 So.2d 659 (Fla. 4th DCA 1983), held that subject matter jurisdiction under Chapter 517, existed to prosecute Seligman and others for violations of securities laws and per curiam affirmed the Circuit Court order denying dissolution of the Preliminary Injunction. (See Conclusions of Law). At formal hearing, Petitioner testified that he understood that final resolution of the foregoing appeal regarding the Order of Preliminary Injunction was that, "a 'mortgage' was a 'security' and you needed a securities license. On his licensure application Seligman disclosed that he had previously been enjoined by a Court from the sale of securities and that an Order had been entered against him in connection with investment related activity. However, Petitioner also submitted a copy of the July 2, 1982 Stipulation for Preliminary Injunction, and a copy of the July 9, 1982 Order of Preliminary Injunction. The latter copy of the July 9, 1982 Circuit Court Order of Preliminary Injunction submitted by Seligman was, however, an unsigned copy. Each copy submitted by Seligman bears a certification of May 2, 1987 by a Broward County Circuit Court Deputy Clerk that each is a "true and correct copy of the original as it appears on record." Seligman, in reliance on that certification, represented on his application to Respondent that "The Preliminary Injunction was not signed by the Judge as he ordered me released" and was "null and void." The date of certification by the Circuit Court Deputy Clerk and the hand- lettered page numbering on these copies submitted by Seligman with his application strongly militate against any suggestion of manipulation or alteration of these documents by Mr. Seligman and concomitantly suggest clerical error has occurred in the Office of the Circuit Court Clerk. Petitioner Seligman presented the testimony of the Receiver, Hugh Hawes Bowers, Jr., who had been appointed by Circuit Court Judge Tedder under the initial TRO. Bowers affirmatively testified that throughout his administration of the receivership, he had found no irregularities with the business of either Seligman or his corporation and that all of the findings of fact of improper, illegal, or nefarious dealings set forth in the March 30, 1982 TRO were false with regard to Petitioner and his corporation, although the allegations/facts found in the TRO had proved to be true with regard to other unconnected defendants named in the same lawsuit. Bowers opined that all funds and mortgages handled by Franklin Capital Corp. and by Petitioner had been properly administered. During the course of his receivership, which involved an accounting, Bowers discovered no misrepresentations attributable to Petitioner. His testimony, however, could best be described as "guarded" and not revelatory of what may have occurred before he assumed the receivership. Bowers' receivership was terminated and control of the corporation was returned to Petitioner without any objection by Bowers, but it is not clear exactly when the corporation was returned to Seligman's control or under what conditions, if any. Petitioner holds a real estate brokerage license active since 1964 and an inactive mortgage brokerage license. Petitioner has never had disciplinary action taken with regard to either license. Petitioner's application is for a certificate of registration as an associated person with Huberman, Margaretten and Strauss, with whom he has had a securities account for approximately four years. Michael Huberman, president of that firm, testified by deposition as to his high opinion of Petitioner with regard to honesty and Petitioner's personal dealings with Mr. Huberman. However, Mr. Huberman did not personally handle Petitioner's account, was unknowledgable about Petitioner's pending application, and had no real knowledge of Petitioner's reputation among others in the community but outside his firm for truth and veracity or honest dealing. Basically, Mr. Huberman's testimony could be summarized that Petitioner and his present wife are valued customers. Huberman's testimony is therefore neutral, and detailed discussion of the many discrepancies in his testimony, which either evidence a remarkably poor memory or lack of credibility, is unnecessary.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Comptroller enter a final order denying Petitioner's application for a certificate as an associated person. DONE and RECOMMENDED this 28th day of July, 1988, at Tallahassee, Florida. ELLA JANE P. DAVIS, 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 28th day of July, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-4623 The following constitutes specific rulings upon Petitioner's Proposed Findings of Fact (PFOF) pursuant to Section 120.59(2), Florida Statutes. Petitioner's PFOF 1-5 Accepted, although it is noted none have the mandatory references to exhibits or transcript citations and some are not adopted as either not FOF or because they are subordinate and" unnecessary. 6 Accepted in FOF 3. 7-10 Accepted in FOF 10. 11-13 Except as not supported by the record or as a mere characterization of counsel, covered in FOF 4-5. 14 Accepted in FOF 9. 15-16 Except as conclusions of law contained therein, accepted in FOF 9. 17-18 Accepted in FOF 11. 19-21 Rejected as not PFOF but PCOL. See COL. 1-3 Are deemed to be proposed decretal paragraphs and as such require no ruling as would a PFOF. Respondent's PFOF 1-4 Accepted. 5-9 Rejected as not representative either of the exhibits, the testimony, or the state of the law re TROs or the burden of proof in the instant case. See FOF 3, COL. 10-11 Accepted in FOF 4. 12-13 Accepted in FOF 5. 14-16 Accepted in FOF 6-7. Accepted in FOF 8. Accepted in FOF 9. Except as subordinate and unnecessary, accepted in FOF 12. COPIES FURNISHED: Gerald Lewis, Comptroller Department of Banking and Finance The Capitol Tallahassee, FL 32399-0810 Kenneth S. Sandler, Esquire 4700 B Sheridan Street Hollywood, FL 33021 Charles E Scarlett, Esquire Office of the Comptroller Department of Banking and Finance The Capitol Tallahassee, FL 32399-0350 =================================================================
Findings Of Fact 2. On April 16, 2008, the Department conducted an investigation and found Respondent conducting business at 1301 Seminole Blvd., Building C, Ste. 126, Largo, FL 33770. 3. At the time of the investigation Sal Cannatella was the general manager of the Respondent responsible for the operations at the foregoing business location. 4. Sixteen of Respondent’s employees at the above location made commercial telephone solicitations on behalf of Respondent. 5. At the time of the investigation Respondent was not registered with the Department. Respondent also was not licensed by the Office of Financial Regulation under Chapters 516 or 520, Part II, Florida Statutes, nor was Respondent a consumer finance lender supervised by any other governmental entity. 1 Filed May 29, 2009 1:42 PM Division of Administrative Hearings. 6. During the investigation Respondent produced a consumer finance license (#510102) and a retail installment seller license (#510522), both in the name of Interface Management, Inc. (“Interface”), and claimed to be an affiliate of Interface. Both licenses were issued by the Office of Financial Regulation. Respondent also produced a purported contract with an entity known as “Beginning Again, Inc.” 7. Respondent was a not a subsidiary of nor controlled Interface or Beginning Again. Conclusions of Law 8. The Department has authority to enforce Chapter 501, Part IV, Florida Statutes, the Florida Telemarketing Act (“Act”) and to enter this Settlement Agreement. §§120.57(4) and 501.612, Fla. Stat. (2007). 9. Respondent claimed it was exempt from the Act under §501.604(7), Florida Statutes, which states: 501.604 Exemptions.--The provisions of this part, except ss. 501.608 and 501.616(6) and (7), do not apply to: (7) Any supervised financial institution or parent, subsidiary, or affiliate thereof. As used in this section, "supervised financial institution” means any commercial bank, trust company, savings and loan association, mutual savings bank, credit union, industrial loan company, consumer finance lender, commercial finance lender, or insurer, provided that the institution is subject to supervision by an official or agency of this state, of any state, or of the United States. For the purposes of this exemption, "affiliate’ means a person who directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, a supervised financial institution. 10. Chapter 516, Florida Statutes, states in pertinent part: 516.02 Loans; lines of credit; rate of interest; license.-- (1) A person must not engage in the business of making consumer finance loans unless she or he is authorized to do so under this chapter or other statutes and unless the person first obtains a license from the office. $16.05 License.— (3) Only one place of business for the purpose of making loans under this chapter may be maintained under one license, but the office may issue additional licenses to a licensee upon compliance with all the provisions of this chapter governing issuance of a single license. 11. Chapter 520, Part II, Florida Statutes, states in pertinent part: §20.32 Licenses,-- (1) A person may not engage in or transact the business of a retail seller engaging in retail installment transactions as defined in this part or operate a branch of such business without a license, except that a license is not required for a retail seller whose retail installment transactions are limited to the honoring of credit cards issued by dealers in oil and petroleum products licensed to do business in this state. 12. | Whether Respondent claimed to be a “supervised financial institution” or an affiliate of Interface or Beginning Again, Respondent was required to have a separate license for its business location under Chapters 516 or 520, Part II, Florida Statutes. By failing to do so, Respondent was not exempt from the Act and was required to be licensed. §§501.604(7), 501.605(1), Fla. Stat. (2007). Settlement Terms 13. To resolve these matters without further legal proceedings, the Department and Respondent expressly agree as follows: a. Respondent shall pay a total of Two Thousand Five Hundred and No/100 Dollars ($2,500.00). Payment is due upon Respondent’s execution and return of this Settlement Agreement. b. Respondent shall not engage in commercial telephone solicitation without first being properly exempt or licensed under the Act. c. If Respondent is found engaging in commercial telephone solicitation without being properly licensed or exempt under the Act, Respondent admits such conduct constitutes an immediate threat to the safety and welfare of Florida consumers and consents to the immediate entry and service of an order by the Department requiring Respondent to cease and desist all activities in violation of the Act. Respondent waives all contested issues of material fact under §120.57(1), Florida Statutes, and consents to proceedings only under §120.57(2), Florida Statutes. In such proceedings, if Respondent is found in violation of the Act, Respondent consents to the entry of a final order imposing administrative fines of $10,000.00 per violation. 14. This Settlement Agreement shall be construed in accordance with Florida law. 15. Each party shall bear their own costs and fees. 16. Venue for any action arising from this Settlement Agreement shall be in Leon County, Florida. 17. This Settlement Agreement constitutes the entire agreement between the Department and Respondent, including anyone acting for, associated with, or employed by either of them, concerning only the matters specified above and supersedes any prior discussions, agreements, or understandings; there are no promises, representatioris, or agreements between the parties other than as set forth herein. No modification or waiver of any provision shall be valid unless a written amendment to the Settlement Agreement is completed and properly executed by the parties. 18. This is an agreement of settlement and compromise, recognizing the parties may have different or incorrect, information, understandings, or contentions as to facts and law, with each party compromising and settling all such information, understandings, and contentions as to fact and law, so that no misunderstanding or misinformation shall be grounds for rescission of this Settlement Agreement. 19. Respondent expressly waives in this matter its rights to any hearing under Chapter 120, Florida Statutes, the making of findings of fact and conclusions of law by the Department, and all other proceedings, including appeals, to which Respondent may be entitled regarding any and all issues raised in this case. 20. This Settlement Agreement is and shall be deemed jointly drafted and written by all parties to it and shall not be construed or interpreted against any party. 21. To the extent any provision of this Settlement Agreement is prohibited by law for any reason such prohibition shall not affect any other provision of this Settlement Agreement. 22. — This Settlement Agreement shall inure to the benefit of and be binding on each party’s successors, assigns, heirs, administrators, representatives, and trustees. 23. All times stated herein are of the essence of this Settlement Agreement. 24. Approval Authority: This Settlement Agreement shall be valid and binding on the Department only upon acceptance and approval of its terms as shown through the execution below by the Department’s authorized representative. Florida Department of Agriculture and Consumer Services LW Il Eric H. Miller, Senior Attorney 2005 Apalachee Parkway Tallahassee, FL 32301 (850) 410-3775 (850) 410-3797 (facsimile) Date: [iw reeg National Consumer Services, Inc. SS _ La Print Name: SAL Te ANNATELLA Off Date: Yor © a
The Issue The issue presented is whether Florida Administrative Code Rule 69O-170.105(1)(d), is an invalid exercise of delegated legislative authority.
Findings Of Fact Respondent Office of Insurance Regulation (formerly the Florida Department of Insurance) regulates the insurance industry in Florida. Petitioner Service Insurance Company is an insurance company duly licensed and regulated by Respondent Office. During its regular session, the 1996 Florida Legislature added Subsection (6) to Section 627.062, Florida Statutes, effective January 1, 1997. That Subsection provided as follows: (6)(a) After any action with respect to a rate filing that constitutes agency action for purposes of the Administrative Procedure Act, an insurer may, in lieu of demanding a hearing under s. 120.57, require arbitration of the rate filing. Costs of arbitration shall be paid by the insurer. (b) Arbitration under this subsection shall be conducted pursuant to the procedures specified in ss. 682.06-682.10. Either party may apply to the circuit court to vacate or modify the decision pursuant to s. 682.13 or s. 682.14. The department shall adopt rules for arbitration under this subsection, which rules may not be inconsistent with the arbitration rules of the American Arbitration Association as of January 1, 1996. [Emphasis added.] Assumedly in anticipation of the effective date of the new arbitration option, on November 8, 1996, the Department of Insurance published in the Florida Administrative Weekly its notice of development of proposed rules for rate filing arbitration pursuant to Section 627.062(6), Florida Statutes. On February 28, 1997, the Department published its proposed rules. Proposed Rule 4-170.105 was entitled "Costs, Expenses and Fees of the Arbitration" and read as follows: Notwithstanding anything to the contrary in the Florida Arbitration Code or in the AAA Rules, all costs, expenses and fees of a rate filing arbitration shall be paid by the initiating party. For purposes of these rules, costs, expenses and fees of a rate filing arbitration include, but are not limited to, the following items: Filing fees payable to the American Arbitration Association pursuant to the AAA Rules incidental to the rate filing arbitration. Service, processing, hearing, postponement/cancellation, travel, hearing room rental and/or any other administrative fee, charge or expense referred to in the Florida Arbitration Code, in the AAA Rules, or elsewhere. Court reporter costs, expenses and fees for an expedited transcript of all arbitration hearings, and all costs associated with the taking by any party of a deposition of any expert or non-expert witnesses. Expert witness fees, costs and expenses, for any expert or experts retained by any party or by the arbitration panel, including all costs, expenses and fees related to the taking by any party of a deposition of any such expert witness(es), and all costs, expenses and fees related to the appearance and testimony of such expert or experts during the arbitration hearing. Payments to, for, or on behalf of each of the members of the arbitration panel in compensation for their services and in reimbursement of all reasonable and necessary expenses incurred by each in connection with the arbitration proceeding. Any other cost or expense incurred by any party to the arbitration and deemed by such incurring party to be necessary for an effective and proper presentation of such party’s case to the arbitration panel, except that each party shall bear its own attorneys’ fees. [Emphasis added.] Following a rule development workshop conducted by the Department of Insurance on December 4, 1996, Attorney David A. Yon sent a letter dated December 10 to the Bureau Chief of the Department's Bureau of P & C Forms and Rates regarding his concerns with several provisions of the proposed rules. As relevant to this proceeding, Yon advised the Department that: Section 627.062(6)(a) states that the "[c]ost of arbitration shall be paid by the insurer." Presumably, this provision would require the insurer to pay arbitration fees and perhaps the costs of the hearing room. However, rule 4-150.05 [sic], as drafted, provides that the insurer shall pay "all costs, expenses and fees of a rate filing arbitration" and describe [sic] in detail the type of costs that insurers will have to bear. These costs include the Department's expert witness fees and any other expenses deemed by the Department to be reasonably necessary in preparing its case. We strongly object to this provision and believe it exceeds the Department's statutory authority. As a result of Attorney Yon's concerns, a Department attorney directed a Memorandum dated January 22, 1997, to the Director of Insurer Services regarding the Department's authority to interpret the word "costs" to mean "all costs." While acknowledging that the Department's expansion of the word "costs" to include "costs, expenses, and fees" conflicted specifically with AAA Rule 49, which required that the expenses of any witnesses shall be paid by the party producing the witness, he concluded that the AAA Rule was "eclipsed" by the rate filing arbitration enabling statute. No citation is provided for that conclusion, nor is the concept of "eclipsed" explained. The Memorandum further acknowledges that the section in the Florida Arbitration Code relating to the payment of costs was specifically made inapplicable to rate filing arbitration by the Legislature. After concluding that AAA Rule 49 was "eclipsed" and that the costs rule in the Florida Arbitration Code did not apply, the attorney concluded that the enabling statute must mean "all costs." The attorney explained that the Department's interpretation would be reasonable because if the rate filing arbitration were a civil action instead, the trial judge would have discretion to consider the reasonableness of the amount and the necessity of the expense in determining the taxation of costs. The attorney concluded that the Department's interpretation of costs to mean "all costs" and to mean "costs, expenses, and fees" was reasonable. Since the Department's interpretation was reasonable, the proposed rule on costs, expenses, and fees, therefore, did not exceed powers delegated to the Department by the Legislature, in the opinion of the author of the Memorandum. Following a public hearing on the proposed rules conducted by the Department on March 28, 1997, Attorney Yon, on behalf of the American Insurance Association and the Florida Insurance Council, sent a letter to the Bureau Chief of the Department's Bureau of P & C Forms and Rates on April 8, 1997. As relevant to this proceeding, Yon advised the Department that: As addressed at the workshop, all interested parties are concerned with proposed rule 4- 170.105, which requires insurers to bear all costs, other than attorneys' fees, associated with arbitrations. The breadth of the proposed rule contravenes the intent of section 627.062, Florida Statutes, and is not consistent with general arbitration practices, including the American Arbitration Association Rules. The statute provides at paragraph (6)(a) that, "Costs of arbitration shall be paid by the insurer." The "cost [sic] of arbitration" refers to those costs associated with conducting arbitration proceedings, not the costs of the parties in presenting their case at such proceedings. The first draft of the statute provided that the department and the insurer would each appoint an employee to the arbitration panel. There was concern that this would not make for the most effective arbitration and the language was modified to provide for nonemployees [sic]. As a result, it was agreed that the insurer would bear the costs of arbitration, with the clear implication being that cost referred to the cost of using nonemployed [sic] arbitrators. This language never contemplated that the insurer would have to pay for the department's costs of putting on its own case, including hiring expert witnesses. Finally, this provision of the rule is clearly contrary to Rule 49 of AAA's Commercial Arbitration Rules. That provisions [sic] states: The expenses of witnesses for either side shall be paid by the party producing such witnesses. All other expenses of the arbitration, including required travel and other expenses of the arbitrator, AAA representatives, and any witness and the cost of any proof produced at the direct request of the arbitrator, shall be borne equally by the parties, unless they agree otherwise or unless the arbitrator in the award assesses such expenses or any part thereof against any specified party or parties. We therefore request that the department revise the rule to eliminate the requirement that insurers pay all costs related to arbitrations and clarify that the rules do not require insurers to fund preparation of the department's arbitration cases. On April 9, 1997, the Regional Manager for the Southern Region of the Alliance of American Insurers sent a letter to an attorney for the Department noting certain concerns with the Department's proposed rate filing arbitration rules. Among the concerns raised was the following: Our reading of Chapter 627.062(6)(a), FS[,] shows that an insurer pay only arbitration costs rather than all costs. We note that a requirement to pay all costs without consent by either party is inconsistent with commercial arbitration rules (see AAA Rule 49, specifically page 18 and 21 relative to administrative fees and hearing fees and page 22 relative to postponement/cancellation and processing fees). By letter dated April 16, 1997, a Staff Attorney for the Joint Administrative Procedures Committee (JAPC) requested the Department's Division of Legal Service to explain a number of concerns the Committee had with the proposed rules. As to the rule under challenge in this proceeding, JAPC questioned the Department's statutory authority to include the American Arbitration Association in the arbitration process contemplated by Section 627.062(6), Florida Statutes. The May 16, 1997, reply states that: "Since the statute mandates conformity to the AAA rules, we wrote the rule to be consistent with the AAA rules." The Department filed for adoption its proposed rate filing arbitration rules on August 11, 1997, and the rules became effective August 31, 1997. No changes were made to Rule 4-170.105 in its substance or language from the version published in February except for internal changes to the subsection numbers within the Rule. Under that re-numbering, Subsection (4) of the proposed Rule became Subsection (1)(d). The 2008 Legislature amended Section 627.062(6), Florida Statutes, by deleting the rate filing arbitration option and requiring that any administrative proceeding arising from the denial of a rate filing be expedited. § 10, ch. 2008-66, Laws of Fla. The amendment, effective July 1, 2008, was approved by the Governor on May 28, 2008. Admitted as joint exhibits in this proceeding were the awards from two rate filing arbitrations involving Petitioner and the Office of Insurance Regulation. In American Arbitration Association Case No. 33 195 Y 00356 07, Petitioner's demand for arbitration was filed August 20, 2007, but the arbitration hearing did not take place until February 4-6, 2009. Prior to the arbitration hearing, on November 5, 2008, Petitioner filed with the arbitrators a motion relating to the allocation of costs of the Office's proposed outside expert witness. The motion challenged the validity of the same rule at issue in this proceeding requiring that Petitioner pay all costs, including those of the Office's experts. The arbitrators ruled that AAA Rule 49, which provides that the expenses of witnesses be paid by the party producing the witness, controlled. The Office filed a motion a few days prior to the arbitration hearing seeking to have Petitioner pay the Office's expert witness costs incurred prior to the time Petitioner challenged in the arbitration the applicability of Rule 69O- 170.105 [formerly Rule 4-170.105 under the Department of Insurance]. In the Award entered April 24, 2009, the Chief Arbitrator ordered Petitioner to pay the fees, costs, and expenses of the Office's outside expert witness incurred prior to September [sic] 5, 2008. One arbitrator dissented from that requirement, and one arbitrator dissented from the entire Decision and Award. The Award required Petitioner to pay the costs allocated to it within 30 days of receipt of invoices. No evidence was offered as to when Petitioner received an invoice from or for the Office's outside expert witness. In American Arbitration Association Case No. 33 195 Y 00357 07, the arbitration hearing occurred on February 6-8, 2008. The Award was signed by two arbitrators, one of whom dissented, on June 2, 2008, and by the third arbitrator on June 4, 2008. The Award does not specifically address the payment of the costs, fees, and expenses of expert witnesses. The Award addressed in the arbitration described in Paragraphs numbered 12-14 of this Final Order, however, refers to the Award described in this Paragraph and notes that Petitioner by letter dated July 23, 2008, advised the Office that it was refusing to pay the fees and costs of the Office's expert in that related arbitration. The letter itself refers to the arbitration described in this Paragraph. On August 5, 2008, Respondent Office filed with the Division of Administrative Hearings an Order to Show Cause against Petitioner, seeking to suspend or revoke Petitioner's Certificate of Authority to transact insurance for violating Rule 69O-170.105. Service requested an administrative hearing, and the matter is currently pending before DOAH in Case No. 08- 005961. That case has been placed in abeyance pending the outcome of this rule challenge.
Findings Of Fact Petitioner, J. R. Brooks and Sons, Inc. (Brooks), is in the business of selling agricultural products. Its offices are located in Homestead, Florida. Respondent, Fair Chester Tomato Packers, Inc. (Fair Chester), is a licensed agriculture dealer under Chapter 604, Florida Statutes. Its offices are in Mamaroneck, New York. As a licensed agriculture dealer, respondent is required to file a surety bond with the Department of Agriculture and Consumer Services (Department) to insure payment of any indebtedness to persons selling agricultural products to Fair Chester. In this regard, it has filed a $50,000 surety bond underwritten by respondent, Hartford Accident and Indemnity Company (Hartford). Between February and April, 1984, Brooks sold six shipments of `Pony Limes" to Fair Chester for a price of $25,039. Shortly thereafter, Fair Chester experienced financial problems and was unable to pay Brooks and other trade creditors. Because of this the creditors formed a committee in an effort to secure payment of their claims. A composition agreement was eventually drawn whereby the unsecured trade creditors agreed to settle, release and discharge in full their claims against Fair Chester on condition that each creditor signing the agreement be paid one-third of its claim "in full payment and settlement thereof, and provided further that 95 percent or more in dollar amount of all the debtor's unsecured trade creditors accepted the terms and provisions in writing on or before November 13, 1984. On or about September 2, 1984, Brooks filed a complaint against respondents with the Department which was pending when the offer to participate in the composition agreement was made. Brooks initially refused to accept the composition agreement. Because Brooks' acquiescence was necessary in order to achieve the 95 percent participation, Fair Chester, through its counsel advised Brooks by letter dated November 1, 1984 that its "acceptance of the Composition Agreement . . . shall be without prejudice to the complaint against (respondents) before the Department of Agriculture and Consumer Services of the State of Florida." After receiving this letters Brooks agreed to execute the agreement and did so on November 7, 1984. Accordingly, it is found that it was the intention of the parties to allow Brooks to maintain the action herein. Thereafter, in accordance with the agreement, Fair Chester issued a check in the amount of $7,449.66 to Brooks on November 9, 1984, which represented one-third of its total claim. 1/ The check was endorsed by Brooks and deposited in its bank account. It has never rescinded that agreement. The letter of November 1, 1984, was not disclosed by Fair Chester to Hartford or any other trade creditor who executed the agreement. However, there was no effort on the part of Brooks to have the letter remain secret.
Recommendation Based on the foregoing findings of fact and conclusions of lawn, it is RECOMMENDED that the complaint of J. R. Brooks and Sons, Inc. a against respondents be DISMISSED with prejudice, and its claim against them DENIED. DONE and ORDERED this 3rd day of June, 1985, in Tallahassee, Florida. DONALD R. ALEXANDER 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 3rd day of June, 1985.
Findings Of Fact On November 20, 1985, petitioners, Richard Schulze and Constable Atlantic, Inc., made application with respondent, Department of Banking and Finance, Division of Securities (Divi- sion), for licensure as a principal and broker-dealer, respec- tively. In response to a Division request, petitioners submitted amended applications containing additional information on January 31, 1986. After conducting an investigation of petitioners' backgrounds, the agency issued a proposed final order on February 18, 1986, denying the application on the grounds (a) Schulze had violated the federal Commodity Exchange Act and had been the subject of a final administrative order in the State of Minnesota involving a violation of that state's security laws, and (b) an officer or director of Constable Atlantic, Inc. (Schulze) had been guilty of an act which would be cause for denying or revoking the registration of an individual dealer. The agency action prompted the instant proceeding. Schulze is president of Wyndwood Merchantile Corporation (Wyndwood) and various affiliated organizations. Wyndwood is involved in the sale of precious metals and is currently doing business in the State of Florida and other states. Constable Atlantic, Inc. is a Delaware corporation authorized to do business in the State of Florida. Schulze is Constable's president, his wife Theodora treasurer, and his son Otto secretary. The three are also the directors and shareholders of the corporation. Constable is now registered as a broker and dealer with the federal Securities and Exchange Commission. Just recently, Schulze was licensed as an associated person and a commodity pool operator by the National Futures Association, which is the licensing arm of the Commodities Futures Trading Commission (CFTC), a federal agency in Washington, D.C. Schulze has been involved in selling securities for the last six or seven years. At one time he was also a principal with Atlantic Futures, Inc. (AFI), which was then licensed as a commodity pool operator and trading advisor with the CFTC. AFI and Schulze were both under the regulatory jurisdiction of that agency. On October 2, 1984 the CFTC issued a complaint and notice of hearing alleging that AFI and Schulze had violated various provisions of the federal Commodity Exchange Act and CFTC regulations. More specifically, it alleged that: ...AFI and Schulze, aided and abetted by each other,...cheated and defrauded or attempted to cheat and defraud AFI's pool participants in violation of Section 46(A) of the Commodity Exchange Act, as amended...; that AFI, aided and abetted by Schulze, violated Section 40(1) of the Act and Sections 4.41(a) and 166.3 of the Commission's regulations; and that AFI violated Sections 4.21(a) and 4.21(a)(3) of the Commission's regulations. Thereafter, Schulze and AFI submitted an offer of settlement to the CFTC which was accepted and formalized in a consent decree entered by the CFTC on April 23, 1985. The consent decree made no adjudication of law or fact, or an adjudication on the merits of the case. Rather, it was entered solely for the purposes of accepting the offer of settlement and terminating the proceeding. Under the terms of that decree, which has been received in evidence as respondent's exhibit 2, Schulze and Atlantic paid a $100,000 fine and agreed to cease and desist from any violations. In addition, AFI agreed to a suspension of its registrations for six months and to never apply for any other registrations with the CFTC. Finally, for purposes of the settlement only, the CFTC found Schulze had violated certain portions of the Act and regulations and noted that "these findings may be used only in any other proceedings brought by the Commission." Schulze later made application with the CFTC for licensure as a dealer, and this application was approved on September 11, 1986. On or about July 26, 1984 the State of Minnesota issued an ex parte cease and desist order against Wyndwood, Schulze and others requiring them to stop selling securities in that state without being registered. The order, which has been received in evidence as respondent's exhibit 1, required Schulze to request a hearing within a prescribed time, or the order would become final. Schulze did not timely request a hearing. However, after the prescribed time to request a hearing had expired, he filed a request with the State Commissioner and the order of July 26 was subsequently vacated on September 18, 1986. The outcome of the proceeding is not known. Constable Atlantic, Inc. is a member firm of the National Association of Security Dealers (NASD) and is registered as a broker and dealer with the Securities and Exchange Commission (SEC). In obtaining their registrations, Constable and Schulze furnished the SEC and NASD the same information that was submitted to respondent.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the applications of Constable Atlantic, Inc. and Richard Schulze for registration as a broker- dealer and principal, respectively, be APPROVED. DONE and ORDERED this 26th day of November, 1986, in Tallahassee, Florida. DONALD R. ALEXANDER 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 26th day of November, 1986. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-1065 Petitioners: 1. Covered in finding of fact 4. 2. Covered in finding of fact 4. 3. Covered in finding of fact 4. 4. Covered in finding of fact 3. 5. Covered in finding of fact 3. 6. Covered in finding of fact 3. 7. Covered in finding of fact 3. 8. Covered in finding of fact 3. 9. Covered in finding of fact 3. Covered in finding of fact 3. Covered in finding of fact 2. Covered in finding of fact 2. Rejected as being irrelevant. Covered in finding of fact 5. Respondent: Covered in finding of fact 1. Covered in finding of fact 1. Covered in finding of fact 1. Covered in finding of fact 4. Covered in finding of fact 4. Covered in finding of fact 3. Rejected as being irrelevant. Rejected as being irrelevant. COPIES FURNISHED: Edward Brodsky, Esquire Sarah S. Gold, Esquire SPENGLER, CARSON, OUBAR, BRODSKY and FRISCHLING 280 Park Avenue New York, New York 10017 Calianne P. Lantz, Esquire Office of the Comptroller 401 Northwest 2nd Avenue Suite 870 Miami, Florida 33128 Honorable Gerald Lewis, Comptroller The Capitol Tallahassee, Florida 32301-8054 Charles E. Scarlett, Esquire Room 1302, The Capitol Tallahassee, Florida 32301-8054
Conclusions THIS CAUSE came before the BOARD OF MEDICINE (Board) pursuant to Sections 120.569 and 120.57(4), Florida Statutes, on August 5, 2011, in Jacksonville, Florida, for the purpose of considering a Settlement Agreement (attached hereto as Exhibit A) entered into between the parties in this cause. Upon consideration of the Settlement Agreement, the documents submitted in support thereof, the arguments of the parties, and being otherwise full advised in the premises, the Board rejected the Settlement Agreement and offered a Counter Settlement Agreement which was accepted on the record by the parties. The Counter Settlement Agreement incorporates the original Settlement Agreement with the following amendments: 1. The costs set forth in Paragraph 3 of the Stipulated Disposition shall be set at $6,697.92. 2. The requirement for community service set forth in Paragraph 7 of the Stipulated Disposition shall be deleted. 3. The requirement for the continuing medical education (CME) in Paragraph 8 of the Stipulated Disposition shall be deleted. 4. Respondent’s license is permanently restricted as follows: Respondent is prohibited from engaging in telemedicine to treat citizens of the United States. IT IS HEREBY ORDERED AND ADJUDGED that the Settlement Agreement as submitted be and is hereby approved and adopted in toto and incorporated by reference with the amendments set forth above. Accordingly, the parties shall adhere to and abide by all the terms and conditions of the Settlement Agreement as amended. This Final Order shall take effect upon being filed with the Clerk of the Department of Health. DONE AND ORDERED this | yh day of _( gus’ F BOARD OF MEDICINE 2011. Executive Director For GEORGE MAS, M.D., Chair CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Final Order has been provided by U.S. Mail to FRANK C. PIERRE, M.D., 10175 Collins Avenue, Suite 808, Bal Harbour, Florida 33154; to Anthony C. Vitale, Esquire, Law Center at Brickell Bay, 2333 Brickell Avenue, Suite A-1, Miami, Florida 33129; to Allen R. Grossman, Esquire, Grossman, Furlow & Bayo, LLC, 2022-2 Raymond Diehl Road, Tallahassee, Florida 32308; and by interoffice delivery to Veronica Donnelly, Department of Health, 4052 Bald Cypress Way, Bin #C-65, Tallahassee, Florida 32399-3253 this | aay of wot 2011. Mabie I abatio, Deputy Agency Clerk
The Issue The issue for determination is whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, what penalty should be imposed.
Findings Of Fact At all times material hereto, Respondent was licensed by the State of Florida as a real estate broker, having been issued license number 0521991. Respondent's last license issued was as a broker c/o Stellings Realty, Inc., 2368 Saratoga Bay Drive, West Palm Beach, Florida. Beginning on or about March 1, 1998, until August 31, 1998, Respondent had an Exclusive Right of Sale Listing Agreement (Agreement) with Judy Cominse (Seller) for real property, owned by the Seller, located at 4397-B Woodstock Drive, West Palm Beach, Florida. Respondent represented the Seller as a transaction broker and owed her certain duties pursuant thereto. A Brokerage Relationship Disclosure statement was provided to the Seller by Respondent. Another broker, Robert Berman, was the referring agent and was personally known by the Seller. Respondent was of the opinion that Berman was to receive a referral fee of 25 per cent in the event of a sale. The listing was problematic for Respondent. Respondent encountered problems due to restrictions placed on the showing of the property by the Seller and her tenants, who were the Seller's son and daughter-in-law. Respondent contemplated not continuing with the listing. He even mentioned discontinuing the listing with the Seller, but he did not discontinue it. A contract for sale of the Seller's property was entered into by the Seller and Evelyn Swinton (Buyer Swinton). Buyer Swinton signed the contract on June 1, 1998, and the Seller signed it on June 3, 1998. The contract provided, among other things, for an escrow deposit of $1,500 to be held by Sun Title, located in Lake Worth, Florida. The $1,500 was paid and held in escrow by Sun Title. The transaction for the sale of Seller's property failed to close. By a Release and Cancellation of Contract for Sale and Purchase form (Release and Cancellation) dated July 28, 1998,1 both the Seller and Buyer Swinton agreed, among other things, that the $1,500 escrow deposit would be disbursed to the Seller. On July 30, 1998, Sun Title prepared an escrow check in the amount of $1,500, made payable solely to the Seller. The check was forwarded to Respondent sometime after July 30, 1998; the evidence presented was insufficient to show when Sun Title forwarded the check to Respondent.2 On August 6, 1998, Respondent prepared an addendum (Respondent's Addendum) to the Agreement that he had with the Seller. Respondent's Addendum was dated and signed by Respondent on this same date. Respondent's Addendum provided, among other things, the following: This contract [Agreement] will be extended from August 31, 1998 until March 1, 1999; if necessary.3 * * * Stellings Realty, Inc. will receive 7% of the total purchase price. In addition 25% commission of the listing side will be given to Berman Realty as a referral fee. If the Seller should cancel this listing the cancelation fee would be $1000.00. Judy Cominse [Seller] will receive $1500.00 by mail upon acceptance. Paragraph numbered 5 of Respondent's Addendum indicates that, upon the Seller accepting Respondent's Addendum, the Seller will receive $1,500, which was the escrow deposit, by mail. The Seller did not accept Respondent's Addendum although the Seller was of the opinion that the only way for her to obtain the $1,500 was to agree to an addendum to the contract that she had with Respondent. With the assistance of her sister, who was a licensee, licensed by Petitioner,4 the Seller negotiated a change of terms to Respondent's Addendum. The seller prepared and executed an addendum (Seller's Addendum) on August 6, 1998, and forwarded it to Respondent. The Seller's Addendum provided, among other things, the following: This listing agreement [Agreement] will be extended six months (i.e., from August 31, 1998 until February 28, 1999). * * * Stellings Realty, Inc. will receive 7% of the total selling price (if sold at full listing price), otherwise negotiable; however, no lower than 6%. Additionally, $533.75 to the listing agency (Stellings Realty), which amount will not be subject to the referral fee due and payable to Robert A. Berman Real Estate, the referring broker to the listing agency. If the seller should cancel this listing, the cancellation fee would be $788.75 ($250.00 cancellation fee, plus $533.75). Judy Cominse [Seller] will receive $1,500.00 (100% of the escrow deposit relinquished by the buyer [Buyer Swinton]) by mail upon acceptance. Paragraph 5 of Seller's Addendum indicates that, upon Respondent's accepting the Seller's Addendum, the Seller will receive $1,500, which was the escrow deposit, by mail. Respondent executed the Seller's Addendum on August 11, 1998, and faxed it to her on this same date. Respondent accepted the Seller's Addendum on August 11, 1998. Prior to August 11, 1998, Berman had contacted Respondent on behalf of the Seller. Berman was requested by the Seller to make an attempt to obtain the escrow deposit of $1,500 for her. Berman contacted Respondent who indicated to Berman that, as soon as the escrow check was received, he would contact Berman. Sometime after July 30, 1998, Berman contacted Sun Title and was informed that the escrow check had been prepared and forwarded to Respondent. On or about August 11, 1998, Respondent contacted the Seller and informed her that the escrow check had been received by him. On or about August 11, 1998, Respondent also contacted Berman regarding the receipt of the escrow check. At the request of the Seller, Berman went to Respondent's office, obtained the escrow check, and forwarded it to the Seller via express delivery. Based upon the required proof, the evidence fails to demonstrate that Respondent refused to relinquish the $1,500 escrow deposit to the Seller in order to force or pressure the Seller to agree to an addendum to their Agreement. Respondent continued to represent the Seller. The Seller's property was sold on November 3, 1998. Subsequently, Respondent sued the Seller in the County Court of West Palm Beach, Florida for $533.75, based on the Seller's Addendum. The Seller had refused to pay Respondent the $533.75, pursuant to the Seller's Addendum, and Respondent sued the Seller to recoup the monies. On or about January 4, 1999, the court suit was settled. Before the end of 1998, Respondent paid Berman the referral fee.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate enter a final order and therein dismiss the Administrative Complaint filed against Leon Stellings. DONE AND ENTERED this 31st day of July, 2000, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 31st day of July, 2000.
