09-003036 Office Of Financial Regulation vs. First American Mortgage &Amp; Financial Center, Inc. And Bill Negron Status: Closed Recommended Order on Friday, October 30, 2009.

Summary: Mortgage broker who failed to report permanent revocation of real estate license to the Office of Financial Regulation should have mortgage broker's license permanently revoked, but the proposed fine of $10,000 should not be imposed.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

OFFICE OF FINANCIAL REGULATION, )

)

Petitioner, )

)

vs. ) Case No. 09-3036

)

FIRST AMERICAN MORTGAGE & )

FINANCIAL CENTER, INC., AND )

BILL NEGRON, )

)

Respondents. )

)

RECOMMENDED ORDER

Administrative Law Judge (ALJ) Daniel Manry conducted the

final hearing of this case for the Division of Administrative

Hearings (DOAH) on September 10, 2009, by video teleconference

in Tallahassee and Orlando, Florida.

APPEARANCES

For Petitioner: Diane E. Leeds, Esquire

Office of Financial Regulation

3111 South Dixie Highway, Suite 302

West Palm Beach, Florida 33405

For Respondents: Adam Sudbury, Esquire

Dorough Calzada Soto & Sudbury LLP

419 North Magnolia Avenue

Orlando, Florida 32801

STATEMENT OF THE ISSUES

The issues are whether the respondents violated

Subsection 494.004(1), Florida Statutes (2001), 1 by failing to

file a written report with Petitioner that Bill Negron’s

(Mr. Negron) real estate license had been permanently revoked

for fraud and dishonest dealing, and, if so, what penalties, if

any, should be imposed against the mortgage broker licenses of

Mr. Negron and First American Mortgage & Financial Center, Inc.

(First American).

PRELIMINARY STATEMENT

On October 20, 2008, Petitioner filed an Administrative

Complaint against the respondents. Petitioner was unable to

obtain personal service on the respondents, eventually served

the respondents by publication, and a Default Final Order and

Notice of Rights was entered on December 23, 2008.

On February 2, 2009, the respondents filed a Motion to Set

Aside Final Default Order. Petitioner granted the motion on

April 6, 2009, and the Administrative Complaint was reinstated.

On May 18, 2009, an Answer to Administrative Complaint and

Request for Evidentiary Hearing was filed. On June 4, 2009,

Petitioner referred the matter to DOAH. On July 7, 2009,

Petitioner filed an Amended Administrative Complaint for

Imposition of Sanctions and Notice of Rights (Amended

Administrative Complaint) that is the subject of the final

hearing.

At the hearing, Petitioner submitted four exhibits for

admission into evidence and presented the testimony of one

witness. The respondents submitted one exhibit and presented

the testimony of two witnesses.

The identity of the exhibits and witnesses and the rulings

regarding each are reported in the Transcript of the hearing

filed with DOAH on October 14, 2009. Petitioner filed its

Proposed Recommended Order (PRO) on October 23, 2009. Neither

of the respondents filed a proposed recommended order.

FINDINGS OF FACT

1. Petitioner is the state agency charged with the

responsibility for enforcing and administering the provisions of

Chapter 494. Mr. Negron is licensed as a mortgage broker in the

state. First American was licensed as a mortgage brokerage

business in the state, but First American terminated its license

on April 29, 2008.

2. Mr. Negron is president, principal broker, and

100 percent owner of First American. First American is subject

to disciplinary action for any statutory violations committed by

Mr. Negron.

3. On April 17, 2002, the Florida Real Estate Commission

(FREC) found Mr. Negron guilty of fraud; dishonest dealing by

trick, scheme or device; culpable negligence; or breach of trust

in any business transaction in Final Order BPR-2002-01624. The

Final Order found the licensee had failed to account or deliver

funds and failed to maintain trust funds in the real estate

brokerage escrow account.

4. The FREC Final Order permanently revoked Mr. Negron’s

real estate license. The Final Order found that the licensee

was guilty of a course of conduct or practices that show the

money, property, transactions, and rights of investors may not

be safely entrusted to the licensee.

5. Each of the respondents had a statutory duty to notify

Petitioner of the revocation order issued by FREC. The duty

ensures that Petitioner will have an opportunity to make an

independent determination of whether a licensee is continuously

qualified for licensure as a mortgage broker.

6. Neither of the respondents notified Petitioner of the

revocation order by FREC. Mr. Negron had been licensed as a

mortgage broker from December 22, 2003. Professional training

included specific training pertaining to the requirement to

report regulatory actions for fraud, dishonest dealing, and

moral turpitude to Petitioner. The licensee knew, or should

have known, from pre-licensing and continuing education courses,

of the requirement to notify Petitioner of the revocation of his

real estate license.

7. Petitioner did not have actual knowledge of the

disciplinary action against Mr. Negron from other public

records. Petitioner does not share databases with FREC.

Testimony from Petitioner’s witness that it would have been

virtually impossible for Petitioner’s employees to unilaterally

uncover the existence of the revocation order was credible and

persuasive to the trier of fact.

8. Mr. Negron testified that he dictated a notification

letter to his secretary and assumed she mailed it to Petitioner.

The trier of fact finds that testimony to be neither credible

nor persuasive.

9. The record of the FREC proceeding evidences multiple

offenses over a period of time that represent prior disciplinary

history which preceded the revocation order by FREC. The prior

disciplinary history on which FREC relied is evidenced in this

record. However, no finding is made based on that evidence

because the prior disciplinary history is not alleged as a

factual basis for the proposed agency action in this proceeding

in either the Administrative Complaint or the Amended

Administrative Complaint.

10. The only relevant finding in this proceeding, based on

the prior disciplinary history in the FREC proceeding, is that

neither of the respondents notified Petitioner of the prior

disciplinary history with FREC. The failure to notify

Petitioner of the prior disciplinary action by FREC is

consistent with the failure of the respondents to notify

Petitioner of the entry of a revocation order by FREC and is

considered solely for the purpose of determining the credibility

of the testimony presented by the respondents.

CONCLUSIONS OF LAW

11. DOAH has jurisdiction over the subject matter of and

the parties to this proceeding pursuant to Section 120.569 and

Subsection 120.57(1), Florida Statutes (2009). DOAH provided

the parties with adequate notice of the final hearing.

12. Petitioner has the burden of proof in this proceeding.

Petitioner must prove by a preponderance of the evidence that

the respondents committed the acts alleged in the Amended

Administrative Complaint and the reasonableness of the proposed

penalty. Dept. of Banking & Finance v. Osborne, Stern & Co. ,

670 So. 2d 932 (Fla. 1996); Ferris v. Turlington , 510 So. 2d 292

(Fla. 1987).

13. Petitioner satisfied its burden of proof that the

respondents committed the acts alleged in the Amended

Administrative Complaint. Petitioner also showed by clear and

convincing evidence that Petitioner should permanently revoke

the licenses of the two respondents to protect the interest of

the public and the state from any future practice of the

brokerage business by either of the respondents.

14. The evidence does not support the imposition of a

$10,000.00 fine that Petitioner proposes in its PRO.

Termination of the ability to engage in the mortgage brokerage

business is sufficient protection of the public against future

harm. Past harm to the public is relegated to the real estate

industry and has already been adequately addressed by FREC.

15. The past harm already addressed by FREC is not alleged

as a basis for the proposed agency action in either the

Administrative Complaint or the Amended Administrative Complaint

that is at issue in this proceeding. An agency, including

Petitioner, cannot find a respondent guilty of grounds not

specifically alleged in the Administrative Complaint. Ghani v.

Department of Health , 714 So. 2d 1113 (Fla. 1st DCA 1998);

Cottrill v. Department of Insurance , 685 So. 2d 1371 (Fla. 1st

DCA 1996).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that Petitioner enter a final order permanently

revoking the mortgage broker’s license of the two respondents.

DONE AND ENTERED this 30th day of October, 2009, in

Tallahassee, Leon County, Florida.

S

DANIEL MANRY

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 30th day of October, 2009.

ENDNOTE

1/ References to subsections, sections, and chapters are to

Florida Statutes (2001),unless otherwise stated. The original

charges against Respondent also included a charge that

Bill Negron violated Subsection 494.0041(2)(i) because the

Florida Real Estate Commission permanently revoked that license

for the grounds already stated herein. Pursuant to the Pre-

hearing Stipulation, paragraph 2, entered into between the

parties on September 2, 2009, and filed with DOAH on October 29,

2009, that charge is uncontested and not at issue in this

proceeding.

COPIES FURNISHED :

Douglas M. Holcomb, Esquire

Office of Financial Regulation

Hurston South Tower

400 West Robinson Street, Suite S-225

Orlando, Florida 32801

Adam Sudbury, Esquire

Dorough Calzada Soto & Sudbury LLP

419 North Magnolia Avenue

Orlando, Florida 32801

Diane E. Leeds, Esquire

Office of Financial Regulation

3111 South Dixie Highway, Suite 302

West Palm Beach, Florida 33405

J. Thomas Cardwell, Commissioner

Office of Financial Regulation

200 East Gaines Street

Tallahassee, Florida 32399-0350

Robert Beitler, General Counsel

Department of Financial Services

200 East Gaines Street, Suite 526

Tallahassee, Florida 32399-0350

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.