98-004143 Florida Land Sales, Condominiums, And Mobile Homes vs. Ronald Demarco Status: Closed Recommended Order on Thursday, July 22, 1999.

Summary: Applicant for yacht and ship broker`s license failed to present evidence of rehabilitation and good moral character following felony conviction.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, DIVISION )

OF FLORIDA LAND SALES, )

CONDOMINIUMS AND MOBILE HOMES, )

)

Petitioner, )

)

vs. ) Case No. 98-4143

)

RONALD DeMARCO, )

)

Respondent. )

__________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

on January 27, 1999, via video teleconference with sites in

Tallahassee and Fort Lauderdale, before Eleanor M. Hunter, a

designated Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: William Oglo, Attorney

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

For Respondent: Fred C. Bamman, III, Attorney

Law Offices of Bamman and Guinta

Post Office Box 399

Pompano Beach, Florida 33061

STATEMENT OF THE ISSUE

The issue is whether the Respondent is entitled to the

issuance of a state license as a yacht and ship broker.

PRELIMINARY STATEMENT

The Respondent, Ronald DeMarco, was a licensed yacht and

ship broker in Florida. On April 29, 1996, Mr. DeMarco entered a

guilty plea to conspiracy for stealing, altering identification

numbers, and then selling certain boats. As a result,

Mr. DeMarco's license was revoked on December 18, 1996. Having

had his probation terminated early, Mr. DeMarco is again an

applicant for a yacht and ship broker's license. On August 4,

1998, the Department of Business and Professional Regulation,

Division of Florida Land Sales, Condominiums and Mobile Homes

(Department) issued a notice of intent to deny license

application, which Mr. DeMarco challenged in this proceeding.

At the hearing, the Department presented the testimony of

Peter Butler, Sr., Senior Management Analyst II, the head of the

Section of General Regulation which administers the Y acht and

S hip B rokers' Act of 1988. Without objection, the Department's

Exhibits numbered 1-7 and 9-11 were received into evidence.

Based on objections, the Department's Exhibits numbered 12 and 13

were not received into evidence. Respondent presented the

testimony of Ronald DeMarco and offered no exhibits.

At the conclusion of the final hearing, counsel for the

parties agreed to file proposed recommended orders on or before

45 days after the transcript of the final hearing was filed. The

Transcript was filed at the Division of Administrative Hearings

(DOAH) on March 5, 1999, followed by a Proposed Recommended Order

and Closing Statement received from the Department on April 19,

1999. On May 24, 1999, the Respondent, Mr. DeMarco's Proposed

Recommended Order and Closing Argument were received, but were

challenged as untimely in the Department's June 1, 1999, Motion

to Strike. In a Response to the Motion to Strike, the Respondent

asserted that he has never received a copy of the Transcript. In

fact, the Transcript demonstrates that only the Department's

counsel answered in the affirmative when asked about ordering a

Transcript. (Attached to Motion to Strike, T.6.) From a careful

reading of the Transcript, however, it is apparent that the

parties never stated explicitly that the time for filing proposed

recommended orders began when the transcript was filed at DOAH.

Based on the ambiguity in the record, the Motion to Strike is

denied.

FINDINGS OF FACT

1. Ronald DeMarco is 52 years old, and a resident of Coral

Springs, Florida. He is a co-owner of International Yacht

Brokers, Inc., in Miami Beach. The company which was opened

approximately six or seven years ago, is owned by Mr. DeMarco and

a co-owner, Angela Chiarello.

2. Mr. DeMarco moved to South Florida from New York in 1986

and, in May 1991, became a licensed ship and yacht broker. The

Department of Business and Professional Regulation, Division of

Florida Land Sales, Condominiums and Mobile Homes (Department) is

the state agency which administers the Yacht and Ship Brokers'

Act, Sections 326.001-326.006, Florida Statutes.

3. Mr. DeMarco was hired, by Anthony Galgano, as an

employee of Hidden Harbour Marina. Mr. Galgano was Mr. DeMarco's

wife's cousin's brother.

4. After Hidden Harbour Marina was sold, Mr. DeMarco

continued to work for the new owner. Mr. Galgano moved to

another office at the end of the same yard.

5. Mr. DeMarco entered into a plea agreement signed by a

United States District Judge for the Northern District of Ohio,

dated April 29, 1996. In the agreement, which was received as

Petitioner's Exhibit number 3, Mr. DeMarco acknowledged that the

government could prove, beyond a reasonable doubt, that he

conspired with Anthony Galgano and Lauren Freidman to steal and

obtain by fraud, alter the hull identification number, and sell a

28' Regal boat. In June 1990 Mr. DeMarco notarized false

documents purporting to transfer title to the 28' boat.

6. In the plea agreement, Mr. DeMarco also acknowledged his

involvement, with Angela Chiarello, Anthony Galgano, and others,

in a conspiracy to steal, alter the identity of, and sell in

interstate and foreign commerce a 36' Regal Commodore boat.

According to the affidavit, Mr. DeMarco directed his co-

defendant, Ms. Chiarello, to notarize documents related to the

transfer of the 36' boat, in June 1991.

7. Mr. DeMarco testified that he was 45 years old when he

notarized the document at issue. Despite the description of his

activities in the plea agreement, Mr. DeMarco also testified that

he was only charged with one count of notarizing a fraudulent

document, that related to the 28' Regal, and that he only pleaded

to that one count. (T. 192.)

8. As a result of the plea agreement, in 1996, Mr. DeMarco

was placed on probation for three years and fined $2,000. The

Judgment, dated April 29, 1996, was received in evidence as

Petitioner's Exhibit number 2. On June 24, 1998, Mr. DeMarco's

probation was terminated early.

9. According to Mr. DeMarco, he accepted the plea agreement

because he did not have money for an attorney, although he did

have a public defender. He also testified that he spoke to

Peter Butler, the head of the section of the Department which

regulates ship brokers, while he was considering accepting the

offer of a plea. Mr. Butler told Mr. DeMarco that his license

would be the subject of a N otice of Intent to Revoke as a result

of a plea. According to Mr. DeMarco, Mr. Butler also told him

that he would get his license back " . . . as soon as all my

commitments were done, probation and community service and stuff

like that . . . ." (T. 188.)

10. Mr. Butler testified, refreshing his memory with

contemporaneously taken notes of their telephone conversation on

June 29, 1998, that he told Mr. DeMarco that anyone could apply

but he should review applicable rules and statutes, and that the

Department would review his application. He denied telling

Mr. DeMarco that he would be eligible to get his license back

when his probation was terminated.

11. Mr. Butler testified that some convicted felons are

licensed by the state as yacht and ship brokers. Of

approximately 3,800 licenses issued, with 1,700 currently active,

Mr. Butler would guess that fewer than 100 of those licenses are

issued to persons with felony convictions. By error, Mr. Butler

issued a license to a convicted felon who was living in a halfway

house at the time. After Mr. DeMarco brought that matter to

Mr. Butler's attention, the Department issued a Notice of Intent

to Revoke the license. (T.62-6 and 95.)

12. Under the Yacht and Ship Brokers' Act, the Department

does not regulate the selling and buying of new boats of any size

or used boats equal to or smaller than 32 feet or in excess of

300 gross tons. The buying or selling of one of the vessels

described in Mr. DeMarco's plea agreement would not be regulated

under the Act.

13. In his cross-examination of Peter Butler, the

Respondent's counsel also established that Mr. Butler did not

check Mr. DeMarco's letters of reference, and could not refute

their representations concerning Mr. DeMarco's good moral

character and integrity. Five of the eight letters of reference

submitted to the Department by Mr. DeMarco were dated prior to

the date of his conviction.

14. Mr. Butler noted, in his testimony during cross-

examination, that Rule 61B-60.003(3)(a)7., Florida Administrative

Code, provides in pertinent part:

c. Except as provided in sub-sub-paragraph

6.d. of this rule, no information relating to

criminal, administrative or civil actions

shall be considered if more than 5 years has

elapsed from the satisfaction of the terms of

any order, judgment, restitution agreement,

or termination of any administrative or

judicially-imposed confinement or supervision

of the applicant, whichever is more recent.

d. Any action, proceeding, or grievance

filed against the applicant, individually or

otherwise, which relates to the applicant's

prospective duties, responsibilities, and

obligations of licensure under chapter 326,

Florida Statutes, may be considered with no

limitation as to time.

15. In reviewing Mr. DeMarco's application, Mr. Butler

determined that the application failed to demonstrate that the

applicant is of good moral character. He also determined that

not more than five years have elapsed subsequent to the

completion of his "penalty phase" and that his crime was

"industry-related". (T. 66.) Following a review by a staff

investigator, Mr. Butler's recommendation to deny a license is

reviewed in the Department by someone on the legal staff, the

bureau chief, and ultimately signed by the Division Director.

(T. 52, 53 and 93.)

CONCLUSIONS OF LAW

16. The Division of Administrative Hearings has

jurisdiction over the parties and subject matter of this

proceeding, pursuant to Sections 120.57 and 120.60, Florida

Statutes.

17. The Department of Business and Professional Regulation,

Division of Florida Land Sales, Condominiums and Mobile Homes

(Department) is the agency of the State of Florida authorized to

administer the Yacht and Ship Brokers' Act, Chapter 326, Florida

Statutes.

18. Ronald DeMarco, as an applicant for licensure whose

license was preliminarily denied by the Department, bears the

ultimate burden of demonstrating, at hearing, by a preponderance

of the evidence, his entitlement to a license. See Pershing

Industries, Inc. v. Department of Banking and Finance , 591 So. 2d

991, 994 (Fla. 1st DCA 1991); Cordes v. Department of

Environmental Regulation , 582 So. 2d 652, 654 (Fla. 1st DCA

1991); Department of Transportation v. J.W.C., Co. , 396 So. 2d

778, 787 (Fla. 1st DCA 1981); Department of Health and

Rehabilitative Services v. Career Service Commission , 289 So. 2d

412, 414-15 (Fla. 4th DCA 1974).

19. The Department issued a Notice of Intent to Deny

License Application to Mr. DeMarco based on his failure to

certify that he has never been convicted of a felony.

Subsection 326.004(6)(b), Florida Statute. Rule 61B-

60.003(3)(a), Florida Administrative Code, lists factors for

consideration of good moral character, and is as follows:

(3) Review for Good Moral Character.

(a) When the application has been determined

to be in acceptable form, the division shall

evaluate the application and make appropriate

inquiry to determine the applicant's moral

character. For the purposes of this rule,

the following factors bear upon good moral

character:

1. The completion of a criminal history

check by the Florida Department of Law

Enforcement that reveals no convictions of a

felony, no convictions of a misdemeanor

involving moral turpitude, and no pleas of

nolo contendere, pleas of guilty, or verdicts

of guilty to a felony charge or of any non-

felonious offense involving moral turpitude,

fraud, theft, dishonesty, assault and

battery, or false statement; and

2. Civil lawsuits and administrative actions

bearing upon moral character (e.g., fraud,

misrepresentation, theft, assault and

battery); and

3. Applicant's prior history of unlicensed

brokering or sales activity in the State of

Florida subject to the provisions of chapter

326, Florida Statutes; and

4. Tendering to the division a bank or other

depository check for payment of any fee,

which check lacks sufficient funds on deposit

in or credit with such bank or depository

with which to pay the same on presentation,

where the applicant, upon notification of

same by the bank or division, fails to redeem

the check or otherwise pay the fee within 21

days of such notification; and

5. Other relevant information generated in

the course of the application process which

bears upon the applicant's moral character,

including but not limited to those acts

described by section 326.006(3), (4), Florida

Statutes; and

6. Failure of the applicant to provide full

and complete disclosure, or to provide

accurate information, on the application for

licensure.

7. The foregoing factors shall be considered

in determining whether an applicant is of

good moral character for purposes of

licensure under chapter 326, Florida

Statutes, if they comply with the following

guidelines:

a. The disposition of criminal charges shall

be considered if such constitutes a felony,

or if such constitutes a misdemeanor

involving moral turpitude, fraud, theft,

dishonesty, assault and battery, or false

statement.

b. The disposition of any administrative

action or of any civil litigation involving

fraud, misrepresentation, theft, assault and

battery, or moral turpitude shall be

considered if such results in a determination

against the interests of the applicant.

c. Except as provided in sub-sub-paragraph

7.d. of this rule, no information relating to

criminal, administrative or civil actions

shall be considered if more than 5 years has

elapsed from the satisfaction of the terms of

any order, judgment, restitution agreement,

or termination of any administrative or

judicially-imposed confinement or supervision

of the applicant, whichever is more recent.

d. Any action, proceeding, or grievance

filed against the applicant, individually or

otherwise, which relates to the applicant's

prospective duties, responsibilities, and

obligations of licensure under chapter 326,

Florida Statutes, may be considered with no

limitation as to time.

e. Other considerations such as termination

of probation, compliance with and

satisfaction of any judgment or restitution

agreement may be considered as evidence of

rehabilitation of the applicant's good moral

character.

20. The arguments presented on behalf of the Respondent are

as follows:

(a) that he was not in fact guilty of all or

some of charges included in the plea

agreement;

(b) that Mr. Butler assured him that he

would be issued a need license at the end of

his sentence;

(c) that Mr. Butler did not check his

references;

(d) that the Department has licensed other

convicted felons;

(e) that his crime was committed more than

five years and was not industry-related; and

(f) that he has been fully punished and has

traveled the road toward rehabilitation for

obtaining a yacht brokers' license.

21. In response to the attempt to dispute facts included in

the plea agreement, the Department cited McGraw v. Department of

State, Division of Licensing , 491 So. 2d 1193 (Fla. 1st DCA

1986). In McGraw , the Court held that the Department correctly

denied a request for a formal hearing in which a licensee

admitted a conviction, but sought to present an exculpatory

version of the facts. 495 So. 2d 1194.

22. By a preponderance of the evidence the Department

demonstrated that Mr. Butler's recollection of his conversation

with Mr. DeMarco is accurate and that he made no assurances about

the timing for his re-licensure.

23. In Richard E. Parker v. Department of Business and

Professional Regulation, Division of Florida Land Sales,

Condominium and Mobile Homes , DOAH Case No. 97-0809, the

Administrative Law Judge explained, in footnotes 7 and 8, to the

Recommended Order, the use of the applicant's own testimony to

establish his good moral character, as follows:.

7 Petitioner testified in his own defense

concerning his post-criminal episode

rehabilitation. His testimony was credible

and unrebutted by the Department.

Notwithstanding its self-serving nature, the

testimony of an applicant for licensure, like

that given by Petitioner in the instant case,

may be considered and relied upon as

competent substantial evidence, even if it is

uncorroborated and contrary to the evidence

adduced by the licensing agency. See Falk v.

Beard , 614 So. 2d 1086, 1089 (Fla. 1993)("It

would be an anomalous situation indeed if the

testimony of the one against whom a complaint

is lodged could never form the basis for

competent substantial evidence."); Florida

Publishing Company v. Copeland , 89 So. 2d 18,

20 (Fla. 1956)("There is no doubt that the

testimony of the plaintiff, although

uncorroborated, '. . . if reasonable on its

face, and believed and accepted by the jury

as true can carry the burden of proof.'");

Martuccio v. Department of Professional

Regulation, Board of Optometry , 622 So. 2d

607, 609-10 (Fla. 1st DCA 1993)(expert

testimony of applicant for licensure was not

incompetent and could be relied upon "as

competent substantial evidence to support

[hearing officer's] conclusions"); Raheb v.

Di Battisto , 483 So. 2d 475, 476 (Fla. 3d DCA

1986)("We are not persuaded, as urged, that

the testimony of the plaintiff . . . should

have been rejected by the trial court as

inherently incredible; it was the trial

court's function, not ours, to weigh the

testimony and evidence adduced in the cause

based on its observation of the bearing,

demeanor, and credibility of the witnesses

appearing in the cause.").

8 The purpose of this proceeding is to

determine whether Petitioner presently meets

the "good moral character" requirement for

licensure as a yacht salesperson, not to

determine whether the Department was correct,

based upon the information it then had

available to it, to preliminarily deny

Petitioner's application for licensure on the

ground that he lacked "good moral character."

See Beverly Enterprises-Florida, Inc. v.

Department of Health and Rehabilitative

Services , 573 So. 2d 19, 23 (Fla. 1st DCA

1990)("A request for a formal administrative

hearing commences a de novo proceeding

intended to formulate agency action, and not

to review action taken earlier or

preliminarily.").

24. Despite having the burden to do so, the Respondent

presented no evidence of rehabilitation or good moral character

other than the passage of time (of approximately a month before

the application and six months before the hearing), and the early

termination of his probation. The fact that the Department

failed to check references is not affirmative proof at hearing of

their accuracy, credibility, and continuing relevance. Although,

as described above, the Respondent's testimony could have formed

the basis for establishing his rehabilitation and good moral

character, his testimony about his current circumstances were as

follows:

I, basically, need a license to make a

living. It's a hardship. I don't think

Mr. Butler or the State of Florida is being

fair and judging me as an individual.

(T. 189.)

25. Although the Respondent's counsel elicited testimony

concerning a guess of the number of convicted felons with ship

and yacht brokers' licenses, he made no showing of comparable

factual situations in any of those cases either at the hearing or

in any citations within his P roposed R ecommended O rder.

26. Pursuant to Section 326.004, Florida Statutes, as

implemented by Rule 61B-60.003, Florida Administrative Code, a

convicted felon may be licensed as a yacht broker,

notwithstanding his prior felony conviction, if he presents

sufficient evidence to establish the rehabilitation of [his] good

moral character. Regardless of whether the provision relating to

5 years is applicable, the Respondent has made no such showing.

Absent an affirmative showing at hearing, of good moral character

in support of the application, the issue of whether Subsection c.

or d. of Rule 61B-60.003(3)(a)7, Florida Administrative Code is

applicable, is deemed irrelevant to the disposition of this

proceeding.

27. While demonstrating that the applicant has been

punished, counsel for the Respondent elicited testimony that

demonstrates that the purpose of the statute is consumer

protection not continued punishment. There is no evidence to the

contrary. Specifically, no evidence that the Department through

its employees acted arbitrarily, capriciously, or to further

punish the applicant.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department issue a final order

denying the Respondent's application for a yacht and ship

brokers' license.

DONE AND ENTERED this 22nd day of July, 1999, in

Tallahassee, Leon County, Florida.

___________________________________

ELEANOR M. HUNTER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 22nd day of July, 1999.

COPIES FURNISHED:

William Oglo, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

Fred C. Bamman, III, Esquire

Bamman and Guinta

Post Office Box 399

Pompano Beach, Florida 33061

Philip Nowick, Director

Florida Land Sales, Condominiums

and Mobile Homes

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

William Woodyard, General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15

days from the date of this Recommended Order. Any exceptions to

this Recommended Order should be filed with the agency that will

issue the Final Order in this case.