15-006961 Office Of Financial Regulation vs. Sohail Enterprises, Inc., D/B/A Sam's Car Status: Closed Recommended Order on Monday, May 16, 2016.

Summary: The Office of Financial Regulation proved by clear and convincing evidence that Respondent violated provisions governing motor vehicle retail installment sellers.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

OFFICE OF FINANCIAL REGULATION ,

Petitioner ,

vs. Case No. 15 - 6961

SOHAIL ENTERPRISES, INC. , d/b/a

SAMÓS CAR,

Respondent .

/

RECOMMENDED ORDER

Pursu ant to notice, a final hearing was held in this case

on March 11, 2016, via video teleconference in Pensacola and

Tallahassee, Florida, before Garnett W. Chisenhall, a duly -

designated Administrative Law Judge of the Division of

Administrative Hearings (ÐDO AHÑ).

APPEARANCES

For Petitioner: Scott Anthony Tavolieri, Esquire

Office of Financial Regulation

Suite S - 225

400 West Robinson Street

Orlando, Florida 32801

Michael Glenn Lawrence, Esquire

Office of Financial Regulation

Suite 604

200 East Gaines Street

Tallahassee, Florida 32399 - 0372

William Michael Oglo, Esquire

Office of Financial Regulation

Fletcher Building, Suite 550

200 East Gaines Street

Tallahassee, Florida 32399 - 0376

For Respondent: Mirza A. Ahman , pro se

Sohail Enterprises, Inc.

3415 Maxwell Street

Pensacola, Florida 32505

STATEMENT OF THE ISSUE

Whether Respondent violated certain provisions within

c hapter 520, Florida Statutes (20 10 ), 1/ as alleged in

PetitionerÓs Administrative Complaint; and , if s o, what penalty

should be imposed .

PRELIMINARY STATEMENT

On September 8, 2015, the Office of Financial Regulation

(ÐOFRÑ) issued a four - count Administrative Complaint alleging

that Sohail Enterprises , Inc. , d/b/a SamÓs Car (ÐS amÓs Car Ñ or

ÐRespondentÑ) , violated certain provisions within c hapter 520

by: ( 1) failing to have all statutorily - required items in its

motor vehicle retail installment contracts; (2) collecting late

fees in excess of the maximum amount allowed; (3) failing to

maintain documentatio n of refunds due to customers for surplus

tag and title charges; and (4) selling motor vehicles on

installment payments without having a motor vehicle retail

installment license.

Mirza A. Ahmad, the p resident of SamÓs Car , responded to

OFRÓs Administrati ve Complaint by disputing the allegations

therein and requesting a formal administrative hearing.

The case was referred to DOAH, and the undersigned

scheduled a final hearing for February 16, 2016. However, on

January 27, 2016, OFR filed an unopposed Mo tion for Continuance

asking that the final hearing be continued because two of its

key witnesses were unavailable to testify on February 16, 2016.

The undersigned granted the aforemention ed Motion and re -

scheduled the final h earing to occur on March 11, 2 016.

SamÓs Car filed a Motion for Summary Judgment on March 4,

2016 , and OFR responded on March 8, 2016.

The final h earing took place as scheduled on March 11,

2016. The undersigned addressed SamÓs CarÓs Motion for Summary

Judgment at the outset and noted that a M otion for Summary

J udgment was an unauthorized pleading in cases conducted

pursuant to Florida Administrative Code C hapter 28 - 106 . In

addition, even if SamÓs CarÓs Motion for Summary Judg ment were

to be construed as a motion to relinquish j urisdi ction, the

undersigned was unable to definit ively ascertain at the outset

of the final h earing whether there were no material facts in

dispute. Accordingly, the undersigned deferred ruling on SamÓs

CarÓs Motion for Summary Judgment, and the Final Hearing

proceeded.

During the final h earing, OFR presented testimony from six

witnesses, and OFRÓs Exhibits 1 through 35 were accepted into

evidence. SamÓs Car presented test imony from three witnesses,

and S amÓs CarÓs E xhibits A through P were accepted into

evide nce.

The proceedings were recorded and a one - volume T ranscript

was filed with DOAH on April 14, 2016. The Parties filed

Proposed Recommended Orders that were carefully considered in

the prepar ation of this Recommended Order.

FINDING S OF FACT

1. S amÓs Car is a motor vehicle retail installment seller

based in Pensacola, Florida , and is governed by c hapter 520.

2. Mirz a Ahmad is the president and 50 - percent owner of

SamÓs Car.

3. Between January 7, 2009 , and December 31, 2010, SamÓs

Car held licens e number MV0902721 enabl ing it to conduct

business as a motor vehicle retail installment seller. In other

words, SamÓs Car could offer financing so that its c ustomers

c ould purchase vehicles through installment payments .

4. At some point in 2010 , Mr. A hmad decided to convert the

s ole proprietorship named Mirza Aftab Ahmad , d/b/a SamÓs C ar ,

in to a corporation named Sohail Enterprises, Inc. , d/b/a SamÓs

Car.

5. If a sole proprietorship licensed as a motor vehicle

retail installment seller wishes to con vert to a corporation,

the new corporation must file a new application to be licensed

as a motor vehicle retail installment seller. Accordingly,

Mr. Ahmad filed an application in December of 2010 for a motor

vehicle retail installment sellerÓs license on behalf of Sohail

Enterprises, Inc. , d/b/a SamÓs Car.

6. Mr. Ahmad did not renew license number MV0902721, and

the license went into inactive status on D ecember 31, 2010.

7. SamÓs C ar could not enter into retail installment

contracts with an inactive license.

8. OFR ultimately issued license number MV9905731 to

Sohail Enterprises, Inc. , d/b/a SamÓs Car , and that license

became ef fective on March 16, 2011.

9. SamÓs Car never moved to re - activate license number

MV0902721 , and OFR deemed that licens e to have retroactively

expired on De cember 31, 2010.

10. SamÓs Car was not license d to enter retail installment

sales contracts between January 1, 2011, and March 15, 2011.

11. OFR licens es motor vehicle retail installment sellers

such as SamÓs Car an d is responsible for ensur ing that licensees

comply with c hapter 520. OFR may conduct examinations and

investigations to determine whether any provision of c hapter 520

has been violated.

12. In March of 2014, OFR contacted Mr. Ahmad and notified

him th at OFR would soon be conducting an on - site examination of

SamÓs Car.

13. During an on - site examination, OFR examiners visit a

motor vehicle retail installment sellerÓs office , ide ntify

themselves , and examine various records in order to verify that

the licensee compli ed with c hapter 520 during the time p eriod in

question .

14. OFR examiners arrived at SamÓs Car on March 19, 2014,

and spent approximately six hours examining and scanning

particular records of SamÓs Car.

15. The examiners began by reque sting that the office

manager of SamÓs Car provide them with all the motor vehicle

installment contracts that SamÓs Car had entered into in 2011

and 2012 (Ðthe examination periodÑ) .

16. Some of the requested r ecords were at Mr. AhmadÓs ho me

rather than a t SamÓs Car. Accordingly, one of the examiners

return ed to SamÓs Car on April 9, 2014 , to scan those documents

after they had been retrieved from Mr. AhmadÓs home .

17. The examiners reviewed 20 to 25 records from SamÓs Car

and determined that several o f the sales contract s utilized by

SamÓs Car w ere not the form contract that had been approved as

an industry standard by the Florida Independent Aut o Dealer

Association.

18. There wa s a period of time during the examination

period when SamÓs Car was uti lizing a sales contract that it had

essentially created from scratch.

19. The examiners determined that the sales contracts in

question did not have se veral of the items required by c hapter

520.

20. On September 5, 2015, OFR issued an Administrative

Complaint alleging that SamÓs Car v iolated four provisions

within c hapter 520. In Count I, OFR alleged that SamÓs Car

violated section 520.07, Florida Statutes, by failing to ensure

that all motor vehicle retail installment contracts executed by

SamÓs Car during the examination period satisfied all of the

requirements of section 520.07. T he contracts reviewed by OFR

allegedly failed to contain the ÐNotice to Buyer,Ñ the Ðtotal

amount of payments,Ñ and a specific statement that liability

coverage is not in cluded. OFR further alleged in Count I that

several of the contracts failed to ensure that the contract had

been signed by the buyer and the seller. Finally, OFR also

alleged in Count I that there were two instances in which S amÓs

Car failed to ensure th at the contract was completed before it

was signed.

21. OFR alleged i n Count II that several of the reviewed

contracts violated section 520.07(6) by enabling SamÓs Car to

collect delinquency/collection charges or late fees in excess of

five percent of t he installment payment due.

22. In Count III, OFR alleged that SamÓs Car violated

section 520.07(3), and Florida Administrative Code Rules 69V -

50.001 and 69V - 50.002 because there were instances in which

SamÓs Car had failed to document that it refunded or credited

title charges collected from the buyer that exceeded the actual

charges .

23. Finally, OFR alleged in Count IV that SamÓs Car

violated section 520.03(1) by selling motor vehicles on

installment payments between January 1, 2011, and March 16,

2 011, without an active license.

24. The following findings are based on the documentary

evidence and testimony received at the final h earing conducted

on March 11, 2016.

25. OFR proved by clear and convincing evidence that the

retail installment sales contracts in OFR Exhibits 1

through 20 d o not have the notice to buyer required by section

520.07( 1)( b).

26. OFR proved by clear and convincing evidence that the

retail installment sales contracts in OFR Exhibits 1

through 20 do not have the specific st atement about liability

insurance coverage required by section 520.07(1)(b).

27. OFR proved by clear and convincing evidence that the

retail installment sales contracts in OFR Exhibits 1

throu gh 20 d o not set forth the Ðtotal of paymentsÑ as required

by s ection 520.07(2)(c).

28. OFR proved by clear and convincing evidence that the

retail installment sales contracts in OFR Exhibits 6 through 8 ,

11, and 14 through 18 were not signed by the seller as required

by section 520.07(1)(a).

29. OFR proved by cle ar and convincing evidence that the

retail installment sales contracts in OFR Exhibits 18

and 20 were not complete prior to being signed as required by

section 520.07(1)(a).

30. In sum, OFR proved all of the allegations in Count I

of its Administrative Complaint by clear and convincing

evidence.

31. With regard to Count II, OFR proved by the clear and

convincing evidence set forth in OFR Exhibits 6, 7, and 21 that

SamÓs Car violated sec tion 520.07(6) by collecting a

delinquency/collection charge in exc ess of five percent of each

installment.

32. As for Count III, OFR proved by the clear and

convincing evidence set forth in OFR Exhibits 1 and 14 that

there were two occasions during the examination period when

SamÓs Car did not refund the overcharges o n the estimated title,

tag, and registration fees. Accordingly, OFR proved that SamÓs

Car violated r ule 69V - 50 .

33. With regard to Count IV, OFR proved by the clear and

convincing evidence set forth in OFR Exhibits 22,

through 25 that SamÓs Car violated section 520.03(1), by

entering into retail installment contracts with four separate

buyers during the period when SamÓs Car did not have a motor

vehicle retail installment sellerÓs license ( i.e., January 1,

2011 , through March 15, 2011).

34. Even though OFR proved the allegations in its

Administrative Complaint by clear and convincing evidence, there

was no indication that those responsible for SamÓs CarÓs

operations i ntentionally committed the aforementioned

violations.

35. Instead, the testimony pre sented at the final h earing

demonstrate d that the violations resulted from inadvertence

and/or an incomplete understanding of c hapter 520Ós

requirements.

CONCLUSIONS OF LAW

36. DOAH has jurisdiction over the subject matter and the

parties to this action in accordance with sections 120.569 and

120.57(1), Florida Statutes (2015).

37. In this case, OFR is seeking to impose a fine.

Accordingly, OFR bears the burden of proof and must establish its

case by clear and convincing evidence.

Dep't of Banking & Fin. v. Osborne Stern & Co. , 670 So. 2d 932,

935 (Fla. 1996); Ferris v. Turlington , 510 So. 2d 291 (Fla.

1987).

38. Clear and convincing evidence Ðrequires more proof than

a Òpreponderance of the evidenceÓ but less than Òbeyond and to

the exclusion of a reasonable doubt.ÓÑ In re Graziano , 696 So.

2d 744, 753 (Fla. 1997). As stated by the Florida Supreme Court :

Clear and convincing evidence requires that

the evidence must be found to be credible;

the facts to which the witnesses testify must

be distinc tly remembered; the testimony must

be precise and lacking in confusion as to the

facts in issue. The evidence must be of such

a weight that it produces in the mind of the

trier of fact a firm belief or conviction,

without hesitancy, as to the truth of the

allegations sought to be established.

In re Henson , 913 So. 2d 579, 590 (Fla. 2005)(quoting Slomowitz

v. Walker , 429 So. 2d 797, 800 (Fla. 4th DCA 1983)). ÐAlthough

this standard of proof may be met where the evidence is in

conflict, it seems to preclud e evidence that is ambiguous.Ñ

Westinghouse Elec tric Corp. v. Shuler Bros. , 590 So. 2d 986,

989 (Fla. 1991).

39. Section 520. 996 provides that OFR may ,

a t intermittent periods, make such

investigations and examinations of any

license e or other person as it deems

necessary to determine compliance with this

chapter. For such purposes, i t may examine

the books, accounts, records, and other

documents or matters of any licensee or other

person. It shall have the power to compel

the production of all relevant books,

records, and other documents and materials

relative to an examination or investigation.

40. Sectio n 520.02(17) defines Ðretail installment

contractÑ or ÐcontractÑ to mean:

an agreement , entered into in this state,

pursuant to which the title to, or a lien

upon the motor vehicle, which is the subject

matter of a retail installment transaction,

is retained or taken by a seller from a

retail buyer as security, in whole or in

part, for the buyerÓs obligation.

41. Section 520.995(1)(a) provides that failure t o comply

with any provision of c hapter 520 constitutes grounds for

disciplinary action. Such action includes (but is not limited

to) licensure suspension , licensure revocation, or an

administrative fine not to exceed $1,000 per violation.

42. With regard to t he instant case, section 520.07

provides in pertinent part that:

(1)(a) A retail installment contract shall

be in writing, shall be signed by both the

buyer and the seller, and shall be completed

as to all essential provisions prior to t he

signing of the contract by the buyer.

(b) The printed portion of the contract,

other than instructions for completion, shall

be in at least 6 - point type. The contract

shall contain:

1. A specific statement that liability

insurance coverage for bodi ly injury and

property damage caused to others is not

included, if that is the case; and

2. The following notice in substantially

this form:

Notice to the Buyer

a. Do not sign this contract before you read

it or if it contains any blank spaces.

b. Yo u are entitled to an exact copy of the

contract you sign. Keep it to protect your

legal rights.

* * *

(2) The contract shall contain the

following:

* * *

(c) Total of payments. Î The Ðtotal of

payments,Ñ using that term, and a descriptive

explanatio n such as Ðthe amount you will have

paid when you have made all scheduled

payments.Ñ

* * *

(7) No retail installment contract shall be

signed by any party thereto when it contains

blank spaces to be filled in after it has

been signed.

43. OFR proved t he allegations under Count I by clear and

convincing evidence.

44. With regard to Count II, section 520.07(6) provides

that the holder of a retail installment contract Ðmay, if the

contract or refinancing agreement so provides, collect a

delinquency and collection charge on each installment in default

for a period not less than 10 days in an amount not in excess of

5 percent of each installment.Ñ

45. OFR proved by clear and convincing evidence that SamÓs

Car violated section 520.07(6) .

46. With regard to Count III, r ule 69V - 50.001 provides

that:

Other than the items and charges properly

included as part of the cash price as defined

in Section 520.02(2), F.S., the following are

the only charges permitted to be made by the

retail installment seller. All authorized

charges are permitted only to the extent they

are actually paid, used, or disbursed for the

purposes stated.

(1) Charges for taxes, prescribed by law,

to the extent same are not included as part

of the cash price.

(2) Charges for official f ees as defined in

Section 520.02(9), F.S., and charges for

licenses and other fees prescribed by law.

47. OFR proved by clear and convincing ev idence that SamÓs

Car violated r ule 69V - 50.001.

48. As f or Count IV, section 520.03(1) provides that Ð[a]

pe rson may not engage in the business of a motor vehicle retail

installment seller or operate a branch of such business without a

license as provided in this section . . . . Ñ

49. OFR proved by clear and convincing evidence that SamÓs

Car violated section 52 0.03(1).

50. SamÓs Car raised various arguments in the course of its

defen se , and those arguments will be addressed below.

51. For e xample, with regard to Count I, SamÓs Car asserts

that the pertinent records were stolen by a former employee in

Novembe r of 2014. However, this argument is meritless because

OFRÓs review occurred in March of 2014.

52. Because OFR scanned SamÓs CarÓs records during the

examination conducted in March of 2014, SamÓs Car argues that OFR

violated provisions within the federal and state constitutions

providing that people shall be secure in their papers and

protected from unreasonable searches and seizures. However,

section 520.996(1)(a) gives OFR the au thority t o examine a

licensee Ó s record s to verify compliance with c hapter 520 .

See £ 520.996(1)(a), Fla. Stat. (providing that Ð[t]he office or

its agent may, at intermittent periods, make such investigations

and examinations of any licensee or other person as it deems

necessary to determine compliance with this chapter. For such

purposes, it may examine the books, accounts, records, and other

documents or matters of any licensee or other person. It shall

have the power to compel the production of all relevant books,

records, and other documents and materials relative to an

e x amination or investigation.Ñ).

53. Also, to the extent that SamÓs Car is arguing that

section 520.996 is unconstitutional; the undersigned lacks the

authority to declare a statute unconstitutional. See generally

Key Haven Associated Enters. v . Bd. of Trs. , 427 So. 2d 153 , 157

(Fla. 1982)( noting that the facial constitutionality of a statute

may not be decided in an administrative proceeding).

54. With regard to Count s II and III , SamÓs Car asserted

that it never retained any late fees that it collec ted, any title

transfer charges, or registration charges. Rather than absolving

SamÓs Car of the violations at issue, those assertions pertain to

mitigating any disciplinary action based on those violations.

55. As for Count IV, SamÓs Car asserts t hat motor vehicle

retail installment seller license number MV0902721 held by Mirza

Aftab Ahmad , d/b/a SamÓs Car , b etwe en January 7, 2009 , and

December 31, 2010, never expired because a timely application was

made for a new license. In support of this argument , SamÓs Car

cites 5 U . S . C . S . § 558. However, that federal statute is

inapplicable to this proceeding which involv es the enforcement of

state law.

56. Finally, SamÓs Car argue s that the charges should be

dismissed because OFR offers no training (or inad equate training)

as to how licensees can c omply with the requirements of c hapter

520. However, the statutory requirements at issue in this

proceeding are clear, and it is well - established that ignorance

of the law is no excuse. See generally Hall v. Huma n Hosp.

Daytona Beach , 686 So. 2d 653 , 657 (Fla. 5 th DCA 1996)( noting

that Ð[e]very man is supposed to know the law, and if he

voluntarily makes a payment which the law would not compel him to

make, he cannot afterwards assign his ignorance of the law as a

reason why the state should furnish him with legal remedies to

recover it.Ñ).

57. With regard to the penalty to be impos ed for SamÓs

CarÓs violations, r ule 69V - 85.111 is the relevant disciplinary

guidelines rule and provides that the minimum penalty for

viola ting various provisions within c hapter 520 Ðis a reprimand

and/or a fine up to $1,000 per act or separate offense.Ñ

58. OFR is seeking to impose a $3,500 fine which is far

below the maximum fine that could be imposed . Nevertheless,

certain fact ors justify a lower fine. Those factors include the

lack of any intent on the part of SamÓs Car to commit the

violations at issue, the lack of any evidence of consumer harm,

and the lack of any evidence that SamÓs Car has a prior

disciplinary history .

RECOMM ENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Office of Financial Regulatio n

enter a final order imposing a $1,000 administrative fine on

Sohail Enterprises, Inc. , d/b/a SamÓs Car.

DONE AND ENTERED th is 1 6 th day of May , 2016 , in

Tallahassee, Leon County, Florida.

S

G. W. CHISENHALL

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 1 6 th day of May , 2016.

ENDNOTE

1/ Unless indicated otherwise, all s tatutory references are to

the 20 10 version of the Flo rida Statutes.

COPIES FURNISHED:

Mirza A. Ahmad

Sohail Enterprises, Inc.

3415 Maxwell Street

Pensacola, Florida 32505

(eServed)

Scott Anthony Tavolieri, Esquire

Office of Financial Regulation

Suite S - 225

400 West Robinson Street

Orlando, Florida 32 801

(eServed)

Michael Glenn Lawrence, Esquire

Office of Financial Regulation

Suite 604

200 East Gaines Street

Tallahassee, Florida 32399 - 0372

(eServed)

William Michael Oglo, Esquire

Office of Financial Regulation

Fletcher Building, Suite 550

200 Eas t Gaines Street

Tallahassee, Florida 32399 - 0376

(eServed)

Drew J. Breakspear, Commissioner

Office of Financial Regulation

200 E ast Gaines Street

Tallahassee, Florida 32399 - 0350

(eServed)

Colin M. Roopnarine, General Counsel

Office of Financial Regulati on

The Fletcher Building, Suite 118

200 East Gaines Street

Tallahassee, Florida 32399 - 0370

(eServed)

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.