The Issue The issue presented is whether Petitioner is entitled to recover from Respondent his attorney's fees and costs, pursuant to the Florida Equal Access to Justice Act, Section 57.111, Florida Statutes.
Findings Of Fact On October 24, 2007, Respondent Department of Business and Professional Regulation, Division of Real Estate, received a complaint against Petitioner Elbert Cecil Wright, III, a certified residential appraiser holding license numbered 219. The complaint was assigned to an investigator, Judy S. Smith, who has some level of training regarding real estate appraisals but no personal experience or licensure in the field. The complaint letter was written by Kathleen Tesi, who lives in Virginia and represents herself to have no expertise in real estate appraisal. At the urging of a personal friend in 2005, she purchased a vacant lot, sight unseen, in Bella Collina West, Montverde, Florida, for $655,900. Tesi understood that she would be buying the lot with her friend with the expectation that they would hold title for some time period and then sell it for a profit. The two of them had done this together in the past. The entire transaction, including the closing, was done by mail, and multiple documents and multiple versions of those documents were exchanged. It appears that Tesi and her friend are both named on the mortgage, although Tesi questions her friend's signature. The mortgage note, however, was executed only by Tesi. The contract for purchase of the lot, however, was in the name of her friend and a third party, whom Tesi does not know, and Tesi is not reflected as a purchaser of the lot. Respondent's investigative file does not contain a copy of the deed to the lot, so it is unknown whether Tesi has an ownership interest in the lot or just the financial obligation to pay for it. Tesi's potential mortgage company, SunTrust Mortgage, Inc., contracted with Petitioner to prepare an appraisal of the property for SunTrust. Petitioner prepared and submitted an appraisal to SunTrust, his client, which reflected that the property was valued at the purchase price. In 2007, when property values fell sharply and Tesi's friend advised her that she would no longer help Tesi with the mortgage payments, Tesi began seeking and gathering copies of the purchase agreement and closing documents from the title company and SunTrust. She then filed a complaint with the Georgia Banking Commission against SunTrust for, essentially, loaning her more money than she could pay back; against the title company for, essentially, inconsistent names throughout the paperwork involved in the closing and transfer of title; and the complaint with Respondent against Petitioner for producing an inferior appraisal. Her complaint regarding Petitioner's appraisal of the property raises three concerns: Petitioner did not use appropriate comparables, Petitioner overvalued her property, and Petitioner misrepresented the size of the lot. In her complaint to the Georgia Banking Commission, she suggests that the incorrect lot size on Petitioner's appraisal should invalidate the appraisal and, therefore, invalidate the loan she obtained from SunTrust. Smith forwarded Tesi's complaint to Petitioner, who responded by letter dated November 30, 2007. He explained that at the time of his appraisal, Lake County had not yet uploaded records on the new subdivision Bella Collina West concerning plats or sales. He, therefore, obtained such information from the on-site sales staff and named the sales manager who advised him that there were not yet any closed sales in the subdivision and who gave Petitioner the dimensions of Tesi's lot. The letter explained in detail why Petitioner chose comparables in the earlier-developed phase of Bella Collina and how he made adjustments in value for those recent closed sales of much- larger lot sizes because they were not on the golf course as was Tesi's lot. Investigator Smith interviewed Petitioner on January 31, 2008. He explained to her again why he chose the comparables that he chose, how he computed the value of the lot in question, and that he obtained the lot dimensions from the on-site sales staff for the subdivision. Smith also interviewed a sales person at the developer's sales office at the subdivision. He explained to her that the lots in the subdivision were in such high demand in 2005 that the developer resorted to a lottery system to determine who would even be able to buy a lot. Smith did not speak to the sales person Petitioner said he had obtained information from when he prepared his appraisal of Tesi's lot. Smith went to Bella Collina West and Bella Collina, an earlier phase of the development. She saw that the comparables utilized by Petitioner were much-larger lots than Tesi's but that Tesi's was on the golf course. She did no further investigation. Specifically, she did nothing to verify the information Petitioner gave her relating to the issues raised by Tesi. For example, she did not verify Petitioner's statements to her that there were 14 sales of vacant lots the same size as Tesi's lot that sold for the same price as Tesi's at the same time. She did not consult with an expert to determine if there were any statutory violations committed by Petitioner regarding that appraisal or if there were professional standards violated. Smith completed her investigative report which, basically, included Tesi's complaint and Petitioner's response. That report was forwarded to the Florida Real Estate Appraisal Board, along with a draft administrative complaint. The report contains no explanation concerning the professional standards or statutes Petitioner allegedly violated. The report simply recites what each of the three individuals Smith interviewed said to her. The Probable Cause Panel of the Board considered the investigative report on April 9, 2008. The Transcript of the meeting reflects the presence of 12 persons, only two of whom were members of the probable cause panel. The remainder of those present were attorneys or staff members for the Board or the Department. Of the two probable cause panel members, Michael Rogers was physically present, and Clay Ketcham attended the meeting by telephone. No evidence was offered in this proceeding as to whether they were licensees of the Board or lay persons, although Respondent's attorney asserted during argument in this proceeding that both gentlemen are state certified general appraisers. The entire consideration of the charges against Petitioner is less than three transcript pages long. First, the prosecutor erroneously described the size of Tesi's vacant lot, the date of the appraisal, and the county in which the lot was located. She then mentioned that the comparables Petitioner used were larger, and he made adjustments for size, location, and view. She then advised that Petitioner had two prior disciplinary actions and recommended the Board approve the draft six-count administrative complaint. Panel member Ketcham asked whether prior disciplinary action could constitute a charge in an administrative complaint. His question was answered, and the two panel members then found probable cause to file the administrative complaint. There was no discussion regarding any of Tesi's allegations, the explanations Petitioner had given, why Petitioner's choice of comparables or the offset he used were incorrect, the alleged statutory violations Petitioner was charged with committing, or the professional standards Petitioner was charged with violating. It is clear that the two panel members simply "rubber-stamped" the prosecutor's recommendation. After the administrative complaint was issued, Petitioner requested an administrative hearing, and the matter was referred to the Division of Administrative Hearings and assigned DOAH Case No. 08-4720PL. The final hearing in that case, the underlying proceeding, was conducted on January 22, 2009. At the final hearing, the Department's only expert to testify agreed with Petitioner that the erroneous lot size Petitioner used in his appraisal had no impact on the value of the lot. Although the Department's expert disagreed with the comparables used and the adjustments in value Petitioner made, there was no suggestion as to what the "correct" appraised value of the lot should have been. On April 1, 2009, the undersigned entered a Recommended Order finding that the Department of Business and Professional Regulation, Division of Real Estate, had failed to prove any of the six counts contained in the administrative complaint and recommending that a final order be entered finding Petitioner not guilty and dismissing the administrative complaint. On September 18, 2009, the Florida Real Estate Appraisal Board entered a Final Order adopting that Recommended Order and dismissing the administrative complaint against Petitioner. On November 16, 2009, Petitioner filed his motion for attorney's fees and costs, seeking to be reimbursed for those amounts expended in defending the underlying action. His motion was assigned DOAH Case No. 09-6338F. That motion seeks an award of attorney's fees in the amount of $9,720.00 and costs in the amount of $1,206.95, for a total of $10,926.95. Petitioner prevailed in the underlying proceeding and is a small business party. His net worth, including both personal and business investments, is less than $2,000,000. Respondent was not substantially justified in initiating the underlying proceeding against Petitioner.
Findings Of Fact On May 20, 1993, PRUPAC filed an application, under the Department's emergency rule 4ER93-18(4), to be excluded from rule's moratorium on cancellations and non-renewals of personal lines residential property insurance on the basis of risk of hurricane claims. On June 4, 1993, the Department promulgated emergency rule 4ER93-20 (ER 20). This action was taken with the knowledge that the Legislature had enacted a 180-day statutory moratorium, and it established detailed procedures for applying for what it calls an "exemption" from the rule and statutory moratoria. In addition, ER 20(2) also sets out the following substantive rule criteria for granting exemptions: (b) A risk of insolvency is not sufficient grounds to obtain an exemption from the moratorium. There must be an "unreasonable" risk of insolvency, which is interpreted by the Department to mean that insolvency is not just a possible outcome, but is in fact the probable outcome, of a denial of exemption. Loss scenarios that depend for their fulfillment upon the occurrence of statistically unlikely events, will not constitute an unreasonable risk of insolvency. Insurers seeking exemptions must present expert opinion as to all assumptions made in the insurers' predictions. On August 10, 1993, the Department sent PRUPAC a letter denying PRUPAC's application. The denial letter invited PRUPAC to resubmit a proposal in which the planned cancellations and nonrenewals are designed to reduce your exposure to that amount which, after calculating the effects of reinsurance, would reduce Prupac's probable maximum loss to an amount not in excess of its total surplus. The denial letter also notified PRUPAC of its right to request either informal or formal administrative proceedings under Chapter 120 of the Florida Statutes. It gave PRUPAC 21 days to make such a request. On September 2, 1993, ER 20 expired. On the same day, the Department promulgated 4ER93-28 (ER 28). ER 28 is an essentially verbatim repromulgation of ER 20. If valid, ER 28 would be effective for another 90 days, until December 2, 1993. See Section 120.54(9)(c), Fla. Stat. (Supp. 1992). On or about September 3, 1993, PRUPAC filed a Petition for Formal Administrative Hearing on the August 10, 1993, denial letter. The Department referred PRUPAC's petition to the Division of Administrative Hearings, and final hearing on the petition was held on October 25 through 27, 1993. On October 25, 1993, the court entered an opinion in Prudential Property & Casualty Ins. Co. of Indiana v. Dept. of Insurance, 18 Fla. L. W. D2312 (Fla. 1st DCA Oct. 25, 1993). On petition for review of the August 10, 1993, denial letter, the court "reverse[d] the department's decision and remand[ed] . . . with directions that the department reconsider PRUPAC's application and consider granting it an exemption from the moratorium 'in part' on terms that are consistent with this opinion." 18 Fla. L.W. at D2315. At the same time, the court stated: Whether PRUPAC is entitled to the exemption sought in its application 'in whole' can be determined after receipt of the hearing officer's recommended order, which we anticipate will be entered as soon as possible. 18 Fla. L.W. at D2315. The Department responded to the court's opinion by entering a "Final Order Granting Partial Exemption," Dept. of Ins. Case No. 93-L-713NJA, on October 26, 1993, which authorized PRUPAC to cancel at least $500 million of policies in Dade and Broward counties on the condition that PRUPAC ask for cancellation volunteers and offer to pay the first year's premium on a replacement policy. On November 1, 1993, PRUPAC filed a copy of this agency action in this case and advised "that PRUPAC regards the partial exemption issue as now controlled by the First District's opinion, and will seek any relief needed as to the DOI order in DOI case no. 93-L-713NJA by way of appeal to the First District Court of Appeal." In the pending Section 120.57(1) proceeding, both parties have contended that the Section 120.57(1) proceeding is not moot, and the parties have submitted proposed recommended orders. In accordance with the court's instruction, a recommended order will be entered in that proceeding "as soon as possible." 18 Fla. L.W. at D2315.
Findings Of Fact On October 12, 1981, Petitioner pleaded guilty to the felony charge of unemployment compensation fraud, adjudication of guilt was withheld, and Petitioner was placed on probation for one year (Exhibit 2). The probation was terminated by Order Dismissing Warrant entered October 27, 1982 (Exhibit 3). The unemployment compensation fraud resulted from Petitioner's continuing to receive unemployment compensation following his discharge from the armed services after he had obtained full-time employment. The Information charged Petitioner with failure to disclose a material fact, to wit: he reported that he was unemployed while he was in fact working and receiving wages from Pacific Packing Company (Exhibit 2). In Application For Filing for Examination as an Ordinary Life, Including Health, agent dated March 16, 1984, Petitioner, in response to question 11(a) on this application asking if he had ever been charged with a felony, answered, "no." He gave the same answer to question 11(b) which asked if he had ever been convicted of a felony. Petitioner testified that he discussed the completion of this application with a fellow employee of an insurance agency at which he was working; and, since he had, on a earlier application for temporary employment, furnished the information regarding his unemployment compensation fraud conviction to the Department of Insurance, he did not deem it necessary to again report this offense. The fellow employee confirmed that he had discussed this answer with Petitioner and had suggested Petitioner answer the question as he did. Neither petitioner nor this witness satisfactorily answered the Hearing Officer's question how Petitioner could answer no to question 11 and then swear that all answers given on the application are true and correct. Petitioner's minister testified that Petitioner is a deacon in his church and he has found Petitioner to be truthful, honest, and capable of making mistakes and admitting them. As a temporary employee of A. L. Williams Company, a distributor of insurance products, Petitioner was deemed to be truthful, honest, and upright.
The Issue Whether Respondent's sales and use Certificate of Registration should be revoked for failure to abide by the repayment terms agreed to in a Compliance Agreement entered into with Petitioner on August 29, 2013, as alleged in the Amended Administrative Complaint for Revocation of Certificate of Registration.
Findings Of Fact The Department is the state agency charged with administering and enforcing Florida's revenue laws, including the laws related to the imposition and collection of sales and use tax pursuant to chapter 212, Florida Statutes (2014). Respondent is a Florida Profit Corporation doing business at 90791 Old Highway, Unit 1, Tavernier, Florida 33037. Respondent is a "dealer" as defined in section 212.06(2) and is required to comply with chapter 212. Respondent holds Certificate of Registration number 54- 8013269710-0 issued by the Department. A certificate of registration is required in order to do business in the state of Florida and authorizes its holder to collect and remit sales tax pursuant to chapter 212. The Department is authorized to revoke a dealer's certificate of registration for failure to comply with state tax laws. Prior to such revocation, the Department is required by statute to schedule a conference with the dealer. The dealer is required to attend the informal conference and may either present evidence to refute the Department's allegations of noncompliance or to enter into a compliance agreement with the Department to resolve the dealer's failure to comply with chapter 212. The Department issued and recorded warrants in the public records of Monroe County to secure collection of delinquent sales and use tax, plus penalties, filing fees, and interest from Respondent.1/ The Department initiated the process of revoking Respondent's Certificate of Registration by sending Respondent a Notice of Conference on Revocation of Certificate of Registration (Notice of Conference). The Notice of Conference advised that the informal conference would be held on August 29, 2013, and that the Department had initiated the process to revoke Respondent's Certificate of Registration for failure to remit sales and use tax and pay the reemployment tax that was determined to be due. The notice also informed Respondent that it would have the opportunity to make payment or present evidence to demonstrate why the Department should not revoke Respondent's Certificate of Registration. Respondent's President and Registered Agent, Spencer Slate, attended the informal conference on behalf of Respondent and entered into a Compliance Agreement with the Department. During the informal conference, Mr. Slate admitted to using the collected tax to pay for Respondent's payroll, fuel, and other business expenses instead of remitting the tax to the State. The Compliance Agreement states that due to Respondent's failure to timely file returns and pay all taxes due, Respondent admits to a past due sales and use tax liability of $51,506.55, consisting of tax, penalty, interest, and fees. The Compliance Agreement requires Respondent to make a down payment of $16,349.14 by August 29, 2013, and to make 12 monthly payments. The Compliance Agreement also provides that: IN CONSIDERATION for the Department refraining from pursuing revocation proceedings at this time, the taxpayer agrees: * * * To accurately complete and timely file all required returns and reports for the next 12 months, beginning with the first return/report due for 08/31/2013, payable on or before 09/20/2013. To timely remit all taxes due for the next 12 months, following the date of this agreement. Respondent made the down payment of $16,349.14, as required by the Compliance Agreement, and the first four scheduled payments, but defaulted on the terms of the Compliance Agreement as follows: Failed to make the monthly payments due, beginning with the fifth payment. Failed to timely remit taxes due for September 2013, October 2013, and November 2013. In addition, the payment for sales tax due September 2013 was returned due to insufficient funds. Failed to timely file sales and use tax returns and remit the taxes due for the tax periods May 2014, June 2014, and July 2014. The Compliance Agreement provides that "[i]f the taxpayer fails to comply with any obligation under this agreement, the Department has the right to pursue revocation of the taxpayer's certificate of registration." As provided by the Department's revocation worksheet dated December 5, 2014, Respondent currently has an outstanding sales and use tax liability in the amount of $67,501.98 and reemployment tax liability of $667.08, including tax, penalty, interest, and fees.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Revenue revoking the Certificate of Registration issued to and held by Respondent. DONE AND ENTERED this 30th day of January, 2015, in Tallahassee, Leon County, Florida. S MARY LI CREASY 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 30th day of January, 2015.
The Issue The issue is whether Petitioners' applications for reimbursement from the Securities Guaranty Fund should be approved.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: These cases involve claims by Petitioners, Clyde and Patti Gallo (Case No. 98-3765) and Richard and Belinda Morin (Case No. 98-3766), for payment from the Securities Guaranty Fund (Fund) for monetary damages suffered as a result of violations of the Florida Securities and Investor Protection Act by William Anthony McClure (McClure). When the violations occurred, McClure was a registered associated person employed by Schneider Securities, Inc. (Schneider), a Colorado corporation registered as a securities dealer in the State of Florida. The Fund is administered by Respondent, Department of Banking and Finance (Department), which must approve all applications for payment from the fund. Undisputed Facts Regarding the Gallo's Claim McClure served as manager for Schneider's branch office in Gainesville, Florida. On February 26, 1993, the Gallos deposited the sum of $213,978.10 with Schneider to open an account for investment purposes. McClure executed a Letter of Authorization dated March 18, 1993, for the transfer of $30,000.00 from the Gallo's brokerage account without the Gallo's authority. This money was then transferred to Buddy Miller, who paid McClure $5,000.00 for the delivery of the money. McClure subsequently obtained ratification of the transfer of monies from the Gallo's account by representing to Mr. Gallo that the transaction was a "factoring arrangement" and that the investment of monies would be "secure." McClure made the foregoing representations at a time when he knew that Miller was insolvent, that he was paying him a kickback, and that the money had already been transferred from the Gallo's account. McClure did not disclose this information to the Gallos. The Gallos lost the entire $30,000.00 appropriated by McClure from their account with Schneider. In February 1995, the Gallos filed a five-count complaint with the Circuit Court of the Eighth Judicial Circuit against McClure and Schneider. They also served a treble damage notice to McClure under Section 772.11, Florida Statutes. McClure did not make restitution within 30 days from receipt of notice in order to avoid liability for treble damages. In April 1996, the Gallos received the sum of $40,000.00 from Schneider in a mediated settlement. This amount covered their loss of principal. On August 19, 1996, an Amended Final Judgment awarded the Gallos the sum of $30,000.00 in compensatory damages. This amount was then trebled to $90,000.00 pursuant to Section 772.11, Florida Statutes. The Amended Final Judgment subtracted the sum of $40,000.00 received from Schneider from the $90,000.00 in trebled damages for a total of $50,000.00 plus statutory interest of $9,999.00, or a total of $59,999.00 against McClure. On December 4, 1996, a Final Judgment awarded the Gallos the sum of $20,878.50 in attorney's fees and the sum of $1,312.06 in court costs against McClure. The parties agree that these amounts are not recoverable from the Fund. On July 11, 1998, the Gallos submitted a claim to the Department seeking to recover $10,000.00 of the treble damages they were awarded pursuant to Section 772.11, Florida Statutes. This claim was denied by the Department on July 28, 1998, on the ground that a claimant cannot recover treble damages from the Fund. Undisputed Facts Regarding the Morin Claim In January 1993, Richard and Belinda Morin deposited the sum of $231,862.59 with Schneider to open an account for investment purposes. McClure was the account executive for Schneider who handled the Morin's brokerage account. In mid-March 1993, McClure contacted Mr. Morin to suggest an investment that he represented as being "secure" and "short-term." McClure described the investment to Morin as a "factoring security" of an account receivable of a major manufacturing concern that was secured by the guaranteed payment of the invoice. The investment suggested by McClure to Morin was really an unsecured loan to a small outdoor furniture manufacturer in Central Florida known as Cypress Originals (Cypress). Cypress was then in severe financial distress which fact was not disclosed to Morin by McClure. On March 5, 1993, or prior to the above discussion, McClure had forged Morin's signature on a Letter of Authorization for the transfer of $25,000.00 from the Morin's brokerage account with Schneider and forwarded the money to Cypress. In June 1993, McClure appropriated an additional $20,000.00 from the Morin's brokerage account into his own personal account or to an account owned and controlled by him. The Morins lost the entire $45,000.00 appropriated from their account. In February 1995, the Morins filed a five-count complaint in the Circuit Court of the Eighth Judicial Circuit against McClure and Schneider. They also served a treble damage notice to McClure under Section 772.11, Florida Statutes. McClure did not make any restitution within thirty days after receipt of the notice in order to avoid liability for treble damages. In February 1997, the Morins received $45,000.00 from Schneider in a mediated settlement. This amount covered their loss of principal. On July 2, 1997, the Morins were awarded the sum of $45,000.00 in compensatory damages. This amount was trebled to $135,000.00 pursuant to Section 772.11, Florida Statutes. The Final Judgment awarded the Morins the sum of $90,000 ($135,000.00 in trebled damages less $45,000.00 received from Schneider), prejudgment interest of $48,397.20, court costs of $9,001.67, and attorney's fees of $32,410.00 against McClure. The parties agree that the court costs and attorney's fees are not recoverable from the Fund. On June 11, 1998, the Morins submitted a claim with the Department seeking to recover $10,000.00 of the prejudgment interest award. On July 28, 1998, the Department issued its proposed agency action denying the claim on the ground that prejudgment interest cannot be recovered from the Fund. The Department's Interpretation and Practice The Department interprets the term "actual or compensatory damages," as used in Section 517.141(1), Florida Statutes, to mean only the principal amount of the loss by the investor. The Department has never approved a claim against the Fund for any damages other than the actual loss of principal. Under the Department's interpretation of "actual or compensatory damages," prejudgment interest and trebled damages would be excluded from being recovered from the Fund.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Banking and Finance enter a Final Order denying the applications of Clyde and Patti Gallo and Richard and Belinda Morin for reimbursement from the Securities Guaranty Fund. DONE AND ENTERED this 22nd day of February, 1999, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 22nd day of February, 1999. COPIES FURNISHED: Honorable Robert F. Milligan Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 Steven D. Spivy, Esquire 230 Northeast 25th Avenue Suite 200 Ocala, Florida 34470-7075 Margaret S. Karniewicz, Esquire Department of Banking and Finance Suite 526, Fletcher Building Tallahassee, Florida 32399-0350 Harry L. Hooper, III, General Counsel Department of Banking and Finance Room 1302, The Capitol Tallahassee, Florida 32399-0350
Findings Of Fact On or before November 27, 1976, Petitioner did file a claim for refund of Florida corporate income tax for its fiscal year ending July 31, 1973. Such claim stated that a refund of $43,517 was due based on the decision reached in Leadership Housing, Inc., Case No. 74-6878, Circuit Court, 17th Judicial Circuit. The claim referred to in paragraph 1 above was filed on or before the last day such claim could be filed. By letter dated December 6, 1976, Petitioner was notified by Respondent that it could not favorably act upon the claim as the allowability of the claim rested solely upon the validity of a position which Respondent disagreed and was litigating or intended to litigate. Respondent further stated in said letter that it was neither approving nor denying Petitioner's claim at that time. On September 1, 1978, Petitioner submitted another claim for refund for corporate income taxes for its fiscal year ending July 31, 1973. Such claim showed a lower amount of tax due to be refunded in accordance with the decision in S.R.G. Corporation v. Department of Revenue, State of Florida, 365 So.2d 687 (Fla. 1978), with the opinion entered June 30, 1978. On September 1, 1978, Petitioner also filed a claim for refund of corporate income taxes paid for its fiscal year ending February 28, 1977. The facts and circumstances supporting Petitioner's right to refund on the claim referred to in paragraph 5 above are the same as those supporting Petitioner's right to refund the claim which is the subject of this hearing. On October 10, 1978, Petitioner was notified by letter from Respondent that no action would be taken on either of the claims for refund pending review of the Florida Supreme Court of its decision in S.R.G. Corporation. In October, 1977, the Office of the Comptroller refunded the corporate income taxes per Petitioner's claim for refund relating to the fiscal year ending February 28, 1977 with certain adjustments consented to by Petitioner. On January 20, 1980, Petitioner was formally notified of Respondent's intent to deny Petitioner's claim for refund for corporate income taxes paid for fiscal year ending July 31, 1973. The sole question presented here is whether Respondent's denial of Petitioner's claim for refund based upon the grounds that "The claim for refund was not filed within the time limitations set forth in Section 214.16, Florida Statutes," is valid under the provisions of Chapter 120 and Chapter 214, Florida Statutes, as the same were in effect at the times set forth herein. Should it be determined that Petitioner's claim for refund was timely filed in accordance with the statutes herein set forth above, Respondent will not allege further or different reasons for denial of the claim and will forthwith refund to Petitioner the amounts claimed to be due. (The foregoing findings are taken directly from the Stipulation of Facts.)
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Office of the Comptroller enter a final order approving a refund to the Petitioner of that portion of its corporate income tax overpaid for the fiscal year ending in 1973. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 21st day of January, 1981. MICHAEL PEARCE DODSON Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of January, 1981.
The Issue Whether Respondents failed to maintain and deposit payment instruments into their own commercial account in a federally- insured financial institution, in violation of section 560.309(3), Florida Statutes (2013).1/
Findings Of Fact The Parties Petitioner, Office of Financial Regulation, is the state agency charged with administering and enforcing chapter 560, Florida Statutes, including part III of that statute, related to money services businesses. Respondent, Moctezuma Envios, Inc. ("Moctezuma Envios"), is a Florida corporation operating as a money services business, cashing checks and acting as a money transmitter, as authorized by License No. FT30800203 issued by Petitioner. Its address of record is 19784 Southwest 177th Street, Miami, Florida 33187. Respondent Liliana Carrascal has a 100 percent controlling interest in, and is the sole officer of, Moctezuma Envios.3/ The Events Giving Rise to this Proceeding Respondents have been in the money services business, and Moctezuma Envios has been licensed to conduct this business, since 2001. Respondents were doing business with Intermex Wire Transfer LLC ("Intermex"), a money transfer services business, before the events giving rise to this proceeding. Sometime prior to January 2013, Carrascal was approached by representatives of Intermex about opening an account in the name of Moctezuma Envios at U.S. Bank.4/ Intermex representatives told Carrascal that the account could be used for depositing the checks that Moctezuma Envios cashed and also for paying Intermex for money transfers. According to Carrascal, this offer was attractive to Respondents because U.S. Bank accepted third-party checks, and opening a check-cashing account that accepts such checks is difficult. Additionally, having the account would streamline the process by which Moctezuma Envios paid Intermex to serve as its money transmitting agent, and would enable Carrascal to avoid driving across town carrying large sums of money to deposit cash into Intermex's account. Carrascal testified, credibly, that Intermex representatives told her she would be the owner of the account, that she could deposit payment instruments into and withdraw funds from the account, and that the account would be compliant with the law. On the basis of these representations, Carrascal authorized Intermex representatives to open an account in the name of Moctezuma Envios at U.S. Bank. The account number was XX3503. The persuasive evidence shows that Account No. XX3503 was established as an agent account, with Moctezuma Envios acting as a money transmitter agent for Intermex. As such, Moctezuma Envios was authorized to deposit funds and payment instruments into the account. Robert Lisy and Darryl J. Ebbert, both employees of Intermex, were signatories on Account No. XX3503, and, as such, were the owners of the account. They were authorized to deposit funds into, withdraw funds from the account, and otherwise control the account. The persuasive evidence further shows that Respondents were not signatories to Account No. XX3503.5/ Accordingly, they were not authorized to withdraw funds from the account. During the period spanning from January 2013 to late 2014, Respondents deposited payment instruments received through their check-cashing business into Account No. XX3503. The persuasive evidence shows that once Respondents deposited the payment instruments into Account No. XX3503, they lost access to and control of those funds. This is because, as noted above, only Intermex representatives were authorized signatories on the account. When Respondents deposited payment instruments into Account No. XX3503, those funds were thereafter "swept" into Account No. XX7788, which was Intermex's main operating account at U.S. Bank. This means that the funds were removed from Account No. XX3503 and deposited in Account No. XX7788. Respondents were not signatories to Account No. XX7788, so did not have access to the funds in that account. As a result of Respondents not being signatories on either Account No. XX3503 or Account No. XX7788, once they deposited payment instruments into Account No. XX3503, they lost access to and control of the funds paid under those payment instruments. The persuasive evidence establishes that Respondents deposited approximately ten percent of the payment instruments that they received from their check cashing business into Account No. XX3503 during the timeframe pertinent to this proceeding. The other payment instruments were deposited into other accounts that Respondents held at other banks. Carrascal credibly testified that when Intermex first approached her about opening an account at U.S. Bank, she was concerned because she knew that the law required payment instruments to be deposited into the business's own commercial account. Thus, she declined to open such account. When Intermex representatives approached her a second time, they told her that the account would be in the name of Moctezuma Envios and assured her that Moctezuma Envios would be in compliance with the law. She believed them, so authorized them to open Account No. XX3503. Carrascal further testified, credibly and persuasively, that as soon as she received notice that Petitioner believed that Account No. XX3503 did not comply with the law, she closed the account and ceased doing business with Intermex and U.S. Bank. The credible, persuasive evidence establishes that Respondents did not attempt to conceal any information or mislead Petitioner regarding Account No. XX3503. Carrascal credibly and persuasively testified that she had intended to fully comply with the law. She had received training in order to serve as Moctezuma Envios' compliance officer, and Moctezuma Envios has a legal compliance manual in place to help ensure that it complies with applicable laws. The evidence establishes that Moctezuma Envios has been disciplined twice for previous violations of applicable laws. Specifically, some time prior to December 2008, Moctezuma Envios failed to file currency transaction reports concerning cash received from another chapter 560 licensee and failed to timely file at least two quarterly reports, as required by statute and rule. In 2011, Moctezuma Envios failed to timely file a required quarterly report. Both violations were resolved pursuant to Stipulation and Consent Agreement between Petitioner and Moctezuma Envios, under which Moctezuma Envios paid fines and agreed to comply with the law in the future. Carrascal acknowledged that the violations had occurred, but testified, credibly, that in both instances, Respondents had not intended to violate the law, and that Respondents had cooperated with Petitioner to rectify the circumstances that had resulted in noncompliance. Petitioner has adopted rule 69V-560.1000, which codifies a penalty matrix that authorizes and enables Petitioner to impose a fine for a specific statutory or rule violation, based on the level of fine adopted in rule 69V-560.1000(150) and the number of times a licensee has violated that particular statute or rule. Rule 69V-560.1000(150) establishes a range of $1,000 to $3,500 for a Level A fine; $3,500 to $7,500 for a Level B fine; and $7,500 to $10,000 for a Level C fine. Here, Respondents are charged with having violated section 560.309(3) for the first time. Pursuant to rule 69V-560.1000(85), Respondents are subject to a Level B fine, which ranges from $3,500 to $7,500. Rule 69V-560.1000(148) sets forth the factors, which Petitioner characterizes as "aggravating" or "mitigating," that must be considered in determining the specific amount of the fine within the ranges established in rule 69V-560.1000(150). 29. Rule 69V-560.1000(148) states: In accordance with Sections 560.1141(2) and (3), F.S., the Office shall consider the following circumstances in determining an appropriate penalty within the range of penalties prescribed in this rule for each violation as based upon the citation number. The Office also shall consider these circumstances in determining a penalty that deviates from the range of penalties prescribed for each violation and citation number as a result of such circumstances: Whether the violation rate is less than 5% when compared to the overall sample size reviewed; The degree of harm to the customers or the public; The disciplinary history of the licensee; Whether the licensee detected and voluntarily instituted corrective responses or measures to avoid the recurrence of a violation prior to detection and intervention by the Office; Whether the licensee’s violation was the result of willful misconduct or recklessness; Whether at the time of the violation, the licensee had developed and implemented reasonable supervisory, operational or technical procedures, or controls to avoid the violation; Where the violation is attributable to an individual officer, director, responsible person, or authorized vendor, whether the licensee removed or otherwise disciplined the individual prior to detection and intervention by the Office; Whether the licensee attempted to conceal the violation or mislead or deceive the Office; The length of time over which the licensee engaged in the violations; Whether the licensee engaged in numerous violations or a pattern of misconduct; The number, size and character of the transactions in question; Whether the licensee provided substantial assistance to the Office in its examination or investigation of the underlying misconduct; Other relevant, case-specific circumstances. Andrew Grosmaire, Chief for Petitioner's Bureau of Enforcement, testified that Petitioner proposes to impose a $7,500 fine on Respondents, and explained the basis for that amount. Grosmaire testified that Petitioner did not have any information regarding several of the factors listed in rule 69V-560.1000, so did not "use" those factors in determining the fine to be imposed on Moctezuma Envios.6/ Specifically, Petitioner did not use the factors in subsections (a), (b), (d), (e), (f), (g), (h), (i), (j), (l), and (m) in determining the fine. Petitioner did consider subsection (c), regarding the licensee's disciplinary history, in determining the fine. As discussed above, Petitioner presented evidence showing that Moctezuma Envios had been disciplined twice for violations of provisions of chapter 560 and implementing rules, albeit not for the same violation that is the subject of this proceeding.7/ Grosmaire noted that it was "unusual" for a licensee to have two previous violations. Petitioner thus considered Moctezuma Envios' disciplinary history an aggravating factor in determining the applicable fine. Petitioner also considered subsection (k), which addresses the number, size, and character of the transactions in question. According to Grosmaire, "100 percent of the checks were deposited into this account during the period in question," so Petitioner considered this an aggravating factor in determining the appropriate fine. As noted above, pursuant to rules 69V-560.1000(85), (147), and (148), Petitioner proposes to fine Respondents $7,500. Findings of Ultimate Fact Regarding Alleged Violation Florida case law holds that the determination of whether alleged conduct violates a statute or rule is a question of ultimate fact. Gross v. Dep't of Health, 819. So. 2d 997, 2002 (Fla. 5th DCA 2002); Langston v. Jamerson, 653 So. 2d 489, 491 (Fla. 1st SCA 1995). For the reasons discussed above, the undersigned finds that the evidence clearly and convincingly establishes that Respondents did not own Account No. XX3503, into which payment instruments from Moctezuma Envios' check-cashing business were deposited. Although Respondents were able to deposit payment instruments into Account No. XX3503, they were not signatories on the account so could not withdraw funds from that account. Further, Respondents were not signatories to, and therefore did not have access to funds in, Account No. XX7788, into which Intermex swept the funds from the deposited instruments in Account No. XX3503 on a routine basis. On this basis, it is determined that Petitioner demonstrated, by clear and convincing evidence, that Moctezuma Envios and Liliana Carrascal, by virtue of being an affiliated party pursuant to section 560.103(1), violated section 560.309(3) by failing to maintain and deposit payment instruments into their own commercial account at a federally- insured financial institution. As discussed above, Petitioner proposes to fine Respondents $7,500, the maximum amount that can be imposed for a Level B fine. Petitioner reached this amount taking into account the factors set forth in rules 69V-560.1000(148)(c) and (k), which it considered to be aggravating factors that militated imposition of a higher fine within the Level B range. As discussed above, Carrascal presented evidence regarding several of the factors in rule 69V-560.1000(148) considered in determining the appropriate fine. Specifically, Carrascal testified, persuasively, that no harm to her customers or the public resulted from Respondents' violation of section 560.309(3); that Respondents' violation of the statute was inadvertent and was the result of misrepresentation by Intermex, so that the violation was not the result of Respondents' willful conduct or recklessness; that Moctezuma Envios has in place a professionally-prepared compliance manual to help Respondents avoid future violations, including the type of violation at issue in this proceeding; that once Carrascal became aware that Petitioner believed Account No. XX3503 was noncompliant with section 560.309(3), she cooperated fully with Petitioner's investigation and did not attempt to conceal, mislead, or deceive Petitioner; that as soon as Carrascal became aware of the noncompliance issues with Account No. XX3503, she closed the account and Respondents terminated all business dealings with U.S. Bank and Intermex, the latter with which Respondents had a business relationship that predated the matters giving rise to this proceeding; and that the deposits into Account No. XX3503 constituted only approximately ten percent of the total deposits Respondents made during the timeframe pertinent to this proceeding, with the other 90 percent being deposited in other accounts at other financial institutions. As discussed above, the undersigned found Respondents' evidence of mitigation regarding the factors set forth in rules 69V-560.1000(148)(b), (e), (f), (h), (k), and (l) credible and persuasive. Further, the undersigned considers relevant that in this case, Respondents affirmatively were misled into violating the law by Intermex.8/ Petitioners did not present persuasive countervailing evidence rebutting the evidence of mitigation presented by Respondents with respect to the amount of the fine. As noted above, Grosmaire testified that Petitioner considered subsections (c) and (k) as aggravating factors in determining that Respondents should be fined $7,500. Rule 69V- 560.1000(148) does not specifically address how much weight each factor should be assigned in determining the specific fine within the authorized range, and Grosmaire did not explain how the factors Petitioner "used" were weighed in arriving at the $7,500 fine. Considering the "aggravating" and "mitigating" factors on which the parties presented evidence, the undersigned determines that a $4,500 fine should be imposed on Respondents in this proceeding.9/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Office of Financial Regulation enter a final order finding that Respondents, Moctezuma Envios, Inc., and Liliana Carrascal, violated section 560.309(3), Florida Statutes, and imposing a fine of $4,250. DONE AND ENTERED this 22nd day of June, 2016, in Tallahassee, Leon County, Florida. S CATHY M. SELLERS 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 22nd day of June, 2016.
The Issue Whether petitioner should take disciplinary action against respondent for the reasons alleged in the administrative complaint?
Findings Of Fact The parties stipulated that respondent Richard B. Watson holds a license issued by petitioner and has since 1976. He holds license No. 0163723, and has, at all pertinent times, worked as a broker-salesman for Liz Caldwell Realty, Inc., 126- 128 Eglin Parkway Southeast in Fort Walton Beach, Florida. Petitioner's Exhibit No. 1. On June 13, 1983, Lloyd H. Waldorff executed an employment contract under which Liz Caldwell Realty, Inc. was to have the exclusive right to sell the 25 units Waldorff Properties of Ft. Walton proposed to build as "phase two" of its La Mar West Townhouse Project in Mary Ester, Florida. Petitioner's Exhibit No. 6. Nobody signed the written agreement on behalf of the broker, but Mr. Waldorff's testimony that Ms. Caldwell or somebody in the agency "accepted" it was uncontradicted, and fully consonant with the other evidence adduced. Mr. Waldorff or his organization needed agreements from prospective buyers to purchase units when built, in order to induce a lender to lend money for construction of phase two. One Saturday, probably in mid-July of 1983, Ms. Caldwell presented him with 18 such agreements. It seemed peculiar to Mr. Waldorff, getting 18 purchase agreements at once; and he was also struck by the number of Californians and other non- Floridians among the putative purchasers. But he had nevertheless signed the agreements himself before Ms. Caldwell gave them to Mr. Watson for attestation; and he later furnished all of the purchase agreements to Security Federal Savings and Loan Association of Panama City in support of an eventually successful application for a $1,100,000.00 construction loan. (T.90) Mr. Waldorff signed the purchase agreements in a back room within the Liz Caldwell Realty, Inc. offices. At hearing he remembered that a woman was present. He did not recall respondent's being there. Seventeen of the 18 agreements furnished the lender were purportedly signed by persons to whose signatures, except in one instance, respondent Watson attested. Petitioner's Exhibit No. 4. On 16 of the 17 purchase agreements on which he signed as a witness to putative purchasers' signatures, respondent also signed as a witness to Mr. Waldorff's signature in a blank provided under the heading "signed in the presence of:". Petitioner's Exhibit No. 4. Respondent was aware at the time that Mr. Waldorff, whom he considers a friend, needed such agreements in order to obtain financing. As time for closing on the purchase agreements approached, Mr. Waldorff testified, he became suspicious, and asked Ms. Caldwell to see her escrow account statements, but she put him off. Eventually he asked her if the purchase agreements were "bogus," and she answered by nodding affirmatively. It was at this point, Mr. Waldorff said, that he notified the lending institution of their falsity, and asked for an extension of time in which to repay the construction loan. But the weight of the evidence established that the purchase agreements were shams from their inception and that Mr. Waldorff knew it before he obtained the loans. On September 9, 1985, Paul R. Bratton, III, an investigator for DPR, asked Mr. Watson about the purchase, agreements on which he had witnessed purported parties' signatures. In this interview, Mr. Watson said, with respect to some of the contracts which he had signed as a witness, "that he did not see the buyers or the sellers sign the contract." (T.63) In a deposition he gave in the course of related civil litigation, respondent Watson testified that it was "(p)retty much," Petitioner's Exhibit No. 5, p.10, "standard procedure" for him to witness signatures which he had not seen being affixed. In response to the question, "Does that mean also you wouldn't know whether these people exist in real life or not?", Mr. Watson answered, "It could be. ..." Id. as 15. Mr. Waldorff told Mr. Watson he was going to use the 18 purchase agreements, all but one of which respondent had signed as a witness, to secure a construction loan even though they were "bogus." Petitioner's Exhibit No. 5. This conversation antedated the loan closing. Id.
The Issue The question presented in this case is whether Petitioner is entitled to an award of costs and attorneys’ fees pursuant to Section 112.317(8), Florida Statutes, and Florida Administrative Code Rule 34-5.0291.
Findings Of Fact Robert Burgess (Burgess) was the Santa Rosa County Property Appraiser from 1984 until December 31, 2000. He continues to reside in Santa Rosa County. Leon Cooper (Cooper) is a former employee of Robert Burgess, and qualified as a candidate for the Property Appraiser of Santa Rosa County on April 12, 2004, to run against the incumbent, Greg Brown (Brown), the Petitioner in this case. Brown was elected and took office on January 1, 2001, and in 2004 was running for re-election for the first time. Burgess supported Cooper's candidacy and opposed Brown's re-election bid in 2004. On April 12, 2004, the day Cooper qualified to run, Burgess signed an ethics complaint to the Florida Commission on Ethics alleging that Brown had reinstated a religious tax exemption for the Spiritual Life and Healing Waters church on November 14, 2003, and deleted taxes assessed against said church for the tax years 2000 through 2003. Burgess alleged that Brown did this corruptly in return for the political support of the owner of the church, Ms. Lovie Grimes in the 2004 election. He further alleged that Brown also did this to garner the support of Grimes to have Cooper terminated as an employee of the Florida Department of Revenue. Burgess filed his complaint in concert with that of Hilton Kelly, who is the subject of a companion case considered at the same time as this case, but the subject of a separate order, involving alleged favors regarding another property owner. Both complaints were motivated by the desire to impugn Brown's character and the performance of his elected duties, i.e., to injure Browns reputation. The Burgess complaint was fully investigated by the Commission. The investigation revealed that, prior to Burgess' leaving office, a determination to eliminate the tax exemption for the Spiritual Life and Healing Waters Church was made. The investigation revealed that notice that the exemption was eliminated was not provided to the property owner, Grimes. The lack of proper notice occurred during Burgess' tenure in office. Taxes were assessed as a result of this action by Burgess and Brown, and after Brown came into office, Grimes was notified of the pending tax sale of tax liens against her property. Grimes protested, stating that she had not received notice of the assessment of taxes. Brown caused this matter to be investigated by a member of his staff, Chief Deputy Property Appraiser Lorenzo Law Drinkard (Drinkard). Drinkard looked into the matter and determined that notice had not been given, and visited the church where he found pews, religious materials, and a piano. Although services were not being conducted at the time he was there, Drinkard concluded that it was obviously being used as a church. Drinkard determined on November 14, 2003, that the exemption should be re-instated because it was being used as a church and the taxes assessed be eliminated because notice had not been provided. Burgess, as the former Property Appraiser, was uniquely aware of the legal necessities and requirements in granting and removing exemptions. His office failed to provide the required notice to the owner of the elimination of the exemption for property used for religious purposes. During his tenure as Property Appraiser, Burgess had no direct contact with the Spiritual Life and Healing Waters Church regarding the factual basis for removal of the religious tax exemption. Burgess did not examine the public records of his former office to determine the basis for re-instating the exemption. The record reflects that Brown did not write the Department of Revenue about Cooper improperly engaging in campaign activities on state time until February 13, 2004. Burgess knew that determination to re-instate the exemption in question was made on November 14, 2003, and he knew that Brown's letter of complaint to the Department of Revenue regarding Cooper's alleged improper campaigning was on February 13, 2004. Therefore, Brown's alleged motivation in granting the exemption as it might have related to any support for Grimes' support with the Cooper complaint is sequentially impossible. Burgess did make this complaint in concert with the complaint by Kelly for which he provided copies of the records of the Property Appraiser's office. It is clear from the timing that Burgess' motivation was to impugn Brown's reputation. Burgess lacked a factual predicate to assert that Brown's re-instating the religious exemption was done corruptly, was done to improperly influence Grimes and in return for her political support, or to garner her support for Brown's complaint against Cooper. Affidavits were presented in support of attorney fees and costs, and their reasonableness. The Proposed Recommended Order restated those amounts as 94.4 hours at a rate of $175 per hour. The total provided in the Proposed Order was $17,079.50; however, 94.4 times $175 equals $16,250. If one considers that the difference is attributable to law clerks, if one subtracts $16,250 from $17,079, the balance of $559.46, which divided by 8.1 hours for clerks, equals $69.06 per hour for law clerks, which is a reasonable rate. The costs incurred by the attorneys in defending the action and presenting this case were $5,366.56, which are reasonable.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is recommended that the Commission enter its final order awarding the Petitioner the amount of $17,079.50 in attorneys' fees and $5,366.56 in costs. DONE AND ENTERED this 31st day of January, 2006, in Tallahassee, Leon County, Florida. S STEPHEN F. DEAN 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 January, 2006. COPIES FURNISHED: Albert T. Gimbel, Esquire Mark Herron, Esquire Messer, Caparello & Self, P.A. 215 South Monroe Street, Suite 701 Tallahassee, Florida 32301 Joseph Hammons, Esquire Hammons, Longoria & Whittaker, P.A. 17 West Cervantes Street Pensacola, Florida 32501 Kaye Starling, Agency Clerk Commission of Ethics 3600 Macclay Boulevard, South, Suite 201 Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Philip C. Claypool, General Counsel Commission of Ethics 3600 Macclay Boulevard, South, Suite 201 Post Office Drawer 15709 Tallahassee, Florida 32317-5709
