16-003242 Department Of Financial Services vs. Michelango Mortellaro, Gina Sinadinos And Mortellaro And Sinadinos, Pllc Status: Closed Recommended Order on Monday, November 21, 2016.

Summary: The Dept. proved Respondents received unclaimed property to which they were not entitled. The Dept. did not prove violation was willfully with reckless disregard, or deliberate ignorance of the truth and therefore a one-month suspension is appropriate.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL

SERVICES,

Petitioner,

vs. Case No. 16 - 3242

MICHELANGELO MORTELLARO, GINA

SINADINOS , AND MORTELLARO AND

SINADINOS, PLLC,

Respondents.

_______________________________/

RECOMMENDED ORDER

Pursuant to notice, a final hearing in this cause was held

in Tallahassee, Florida, on August 30, 2016 , before

Linzie F. Bogan, Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner : Josephine A. Schultz, Esquire

Department of Financial Services

Office of the General Counsel

200 E ast Gaines Street, R oo m 645E - 5

Tallahassee, Florida 32399

For Res pondent: Jenay E. Iurato, Esquire

Iurato Law Firm, PL

Suite 203

10012 North Dale Mabry Highway

Tampa, Florida 33618

STATEMENT OF THE ISSUE S

Whether Respondents assi sted their client in receiving

unclaimed property to which the client was not entitled, and , if

so, what discipline should be imposed against RespondentsÓ

locator registration with the Florida Department of Financial

Services.

Whether Respondents receive d and refused to return unclaimed

property to which they were not entitled, and , if so, what

discipline should be imposed against RespondentsÓ locator

registration with the Florida Department of Financial Services .

PRELIMINARY STATEMENT

On May 4, 2016, t he State of Florida, Department of

Financial Services (Department), issued against Michelangelo

Montellaro, Esquire; Gina M. Sinadinos , Esquire; a nd Mortellaro &

Sinadinos, PLLC ( collectively referred to as Respondents ) , an

Administrative Complaint to Revoke Registration and Notice of

Rights (Administrative Complaint) . In response to the

Administrative Complaint, Respondents t imely filed a Petition for

Formal Administrative Hearing. By correspondence dated

June 13, 2016, the matter was forwarded to the Div ision of

Administrative Hearings (DOAH) for a disputed - fact hearing.

Petitioner offered the testimony of Ms. Tawana McClellan, a

f inancial a dministrator with the DepartmentÓs D ivision of

Unclaimed Property. Ms. Sinadinos testified on behalf of

Respondents , and Respondents called no other witnesses. Joint

Exhibits 1 and 2 were admitted into evidence. PetitionerÓs

E xhibits 2, 5, and 7 through 14 were admitted into evidence.

Respondents Ó E xhibits 16 - A, 16 - C, 30, 38, 50 (Bates 00084

t hrough 00086 and Bates 000150 t hrough 000152 ) , 69 (Bates 00069

found at Exhibit 50) , 71, 78, 95 through 97 and 100 were also

admitted into evidence.

A Transcript of the disputed - fact hearing was filed with

DOAH on September 20, 2016. The parties timely filed proposed

recommende d orders, which have been considered by the undersigned

in the preparation of this Recommended Order.

FINDING S OF FACT

On November 26, 2014, United States Magistrate Judge

Thomas B. McCoun, III, Middle District of Florida, in response to

a Motion to Stay filed in a related case by Mortellaro &

Sinadinos, PLLC, entered an Order denying the motion. Magistrate

McCounÓs Order provides an excellent overview of the facts

underlying the instant dispute. The Ðba ckground factsÑ set forth

below are, in part, taken from Magistrate McCounÓs Order.

A. Background F acts

1. During all times relevant hereto, t he Department was

responsible for examining and approving all claims for unclaimed

property under chapter 717, Florida Laws (2013). Section

717.1400, Florida Stat utes, provides that State of Florida

licensed private investigators, certified pu blic accountants, and

attorneys must register with the Department if they desire to

file claims on behalf of claimants seeking unclaimed property

from the Department. Upon su ccessfully completing the

registration process, a claimantÓs representative is assigned a

locator identification number.

2. During times relevant hereto, Michelangelo Mortellaro

and Gina M. Sinadinos were members in good standing of The

Florida Bar. Mr. Mortellaro and Ms. Sinadinos are shareholders

in the law firm of Mortellaro & Sinadinos, PLLC .

3. Attorneys Mortellaro and Sinadinos registered with the

Department as representatives authorized to assist claimants and

were jointly issued locator identif ication number 103423042. In

the instant dispute, Respondents were retained by the Estate of

Darlene Swaim to file with the Department a claim for unclaimed

property.

4. Diann Capwell and Darlene Swaim had a joint checking

account at Wachovia Bank, N.A . (Wachovia). Ms. Capwell, who

received social security benefits, passed away on April 23, 1989.

From April 1989 through March 2010, the Social Security

Administration (SSA) deposited approximately $247,619.00 in

benefits for Ms. Capwell into the joint c hecking account that she

held with Ms. Swaim. On March 17, 2004, Ms. Swaim passed away.

5. According to the Department, on April 30, 2010, Wachovia

reported to the Department that it held $182,248.61 in unclaimed

property in the account titled in the na mes of Ms. Capwell and

Ms. Swaim. Wachovia remitted the funds to the Department, which ,

in turn , held the $182,248.61 in an unclaimed property account.

6. On November 2, 2012, a Petition for Administration of

the Estate of Ms. Swaim was filed in the pro bate division of the

Circuit Court for Broward County, Florida. Mack A. Swaim served

as the personal representative of the estate.

7. On February 14, 2013, A ttorneys Mortellaro and

Sinadinos, pursuant to their registered locator status, filed a

claim w ith the Department on behalf of the Estate of Darlene

Swaim for the $182,284.61 (Swaim claim) . Upon approval of the

claim, A ttorneys Mortellaro and Sinadinos would receive 50

percent of the funds as its locator fee.

8. On July 24, 2013, the Department a pproved the Swaim

claim and issued a paper warrant payable to the Estate of Darlene

Swaim, c/o Mack A. Swaim, in the amount of $91,142.31 (purported

estate funds). The paper warrant for the purported estate funds

was delivered to the Mortellaro & Sinadino s law firm .

9. On July 26, 2013, the Department disbursed, via

electronic funds transfer, the remaining $91,142.30 to the

Mortellaro & Sinadinos law firm as payment of its locator fee.

B. The Social Security Administration

10. On August 1, 2013, SS A notified the Department that the

purported estate funds should not have been deposited into the

Wachovia joint checking account following Ms. CapwellÓs death.

SSA did not file a formal claim with the Department until

August 14, 2013.

C. The Purported E state F unds

11. On August 2, 2013, the following email exchange

occurred between the Department and Respondents.

From the Department (8/2/13 at

2:26 p.m.):

I received notification from the Soc. Sec.

Admin. that there was a $200,000 overpayment

into the account that was reported to this

office. As such, the Soc. Sec. Admin. is

entitled to these funds, not the estate or

your office. I am currently in the process

of cancelling the warrant that was issued to

the PR and I advise you to return your fee t o

this office within 15 days.

From Respondent (8/2/13 at 3:20 p.m.):

Please be advised that the checks, including

the estate check, have been negotiated. With

that said, we have not disbursed any of the

funds; nor will we, until this matter is

resolved. Please be further advised that

since the estate is still open, the probate

court has exclusive jurisdiction over the

estate assets. This position is clearly in

line with the unclaimed property statute

717.1242, F.S., - Restatement of jurisdiction

of the circuit court sitting in probate and

the department. Since this law firm has a

fiduciary responsibility to the Personal

Representative and the beneficiaries of the

estate, it will not release estate funds

without the probate court entering an order

direc ting same.

12. On or about August 2, 2013, the paper treasury warrant

representing payment to the estate was initially deposited into a

checking account opened for the Estat e of Darlene Swaim at

SunTrust B ank. SunTrust is the same bank where Respondent s

maintain multiple accounts, including the firmÓs IOTA trust

account. At the time of presentation of the paper warrant to the

bank, SunTrust provisionally made the funds available to the

estate for withdrawal. Respondents, after being contacted by the

D epartment on August 2, 2013, regarding SSAÓs claim, immediately

transferred the estate funds into the firmsÓ IOTA trust account

for safekeeping.

13. The Department, after receiving RespondentsÓ email

reply of August 2, 2013, immediately contacted SunTrus t and

informed the bank that the paper warrant presented to the bank

for payment to the Estate of Darlene Swaim was void. SunTrust

reversed the provisional credit to the estate checking account

which resulted in the estate account being overdrawn by

appro ximately $91,000. Because SunTrust had only issued a

provisional credit for the deposit of the estate funds, this

meant that SunTrust needed to reconcile the estate checking

account. Accordingly, SunTrust, soon after Respondents

transferred the estate fu nds into their trust account, debited

RespondentsÓ trust account in the amount of $91,142.31.

14. The evidence shows that the estate funds were

provisionally made available to both the Estate of Darlene Swaim

and Respondents. The evidence also conclusiv ely establishes that

monies from the State treasury were never released by the

Department to SunTrust, the Estate of Darlene Swaim, or

Respondents.

15. On or about August 27, 2013, Respondents filed with the

probate division of the Circuit Court for Bro ward County,

Florida, an Emergency Motion to Return Estate Funds.

RespondentsÓ emergency motion argued, in part, that the

Department lost jurisdiction of the monies at issue once it

approved the estateÓs claim, and that the circuit court, sitting

in proba te, possessed exclusive jurisdiction to resolve any

dispute regarding the estate funds.

16. On September 6, 2013, the circuit court held a hearing

on RespondentsÓ emergency motion. The Department did not attend

the hearing, and claims that it never rece ived notice of the

same. Respondents assert that the Department received proper

notice of the hearing on the emergency motion but, for whatever

reason, elected not to attend. Nevertheless, the circuit court,

after hearing argument from Respondents on the emergency motion,

verbally granted the motion and directed Respondents to provide

the court with a written order outlining the courtÓs ruling.

17. By correspondence dated September 9, 2013, the

Department advised Respondents that they should Ðimmediately

return the $91,142.31 (locator fee) to which the firm is not

entitled [and] [i]f [they] fail to return these funds within ten

days, the Bureau will pursue appropriate remedies for conversion

of the funds.Ñ 1/ The letter makes no mention of the emergency

m otion that was then pending before the circuit court.

Furthermore, the September 9, 2013, letter to Respondents does

not contain a Notice of Rights statement or any other language

which provided Respondents with a clear point of entry to

challenge the Dep artmentÓs contention that Respondents possessed

funds (i.e. , the locator fee) to which they were not entitled.

18. On September 23, 2013, the Department responded in

writing to the emergency motion and argued to the circuit court

that the Department has exclusive jurisdiction to determine the

merits of claims for unclaimed property held in the State

treasury. The circuit court was not persuaded by the

DepartmentÓs assertions, and on October 30, 2013, entered a

written Order granting RespondentsÓ motion a nd directed therein

that the Department return the $91,142.31 to the Estate of

Darlene Swaim on or before November 19, 2013.

19. The Department neither appealed nor complied with the

Order of the circuit court, but instead, on November 15, 2013,

issued a Notice of Intent to Approve Claim (Notice of Intent) in

favor of the SSA in the amount of $182,284.61. A Notice of

Rights statement, for the first time, was included with the

Notice of Intent. Despite the fact that Respondents were now

provided with a p oint of entry to challenge the DepartmentÓs

actions, they elected not to challenge the intended action, in

part, because they had an Order from the circuit court directing

the Department to return the purported estate funds.

20. On January 9, 2014, the D epartment entered a Final

Order Approving Claim (Final Order) in favor of the SSA in the

amount of $182,284.61. In addition to the Final Order, the

Department also issued a separate Notice of Intent to Offset and

Notice of Rights , wherein the Department a dvised that it was

seeking to collect the $91,142.30 locator fee that Respondents

still possessed with respect to the Estate of Darlene Swaim from

other claims where Res pondents were owed locator fees.

21. On February 7, 2014, Respondents appealed the Final

Order approving SSAÓs claim to the First District Court of

Appeal, State of Florida (DCA). Among other things, Respondents

requested the DCA Ðto reverse the final order, and order the

Depar tment to return the funds it ha [ d ] taken from the estate in

accordance with its July 24, 201[3], approval of the estateÓs

claim as well as the probate courtÓs order directing the return

of the [estate] funds.Ñ On March 14, 2014, while RespondentsÓ

appeal to the DCA was pending, the Federal Bureau of

Investigation (FBI) seized the $91,142.30 locator fee from

RespondentsÓ bank account.

22. On August 19, 2014, Respondents filed a Verified Claim

with the United States District Court seeking return of the

seized locator fee. The Department was not a party to the

seiz ure action, and the Estate of Darlene Swaim elected not to

participate in the same. After some additional legal wrangling,

and recognizing that recovery of its locator fee was contingent

upon a successful recovery of the unclaimed monies by the estate

(wi th the claim of the estate having been abandoned by

Mr. Swaim), Respondents, on January 20, 2015, withdrew their

Verified Claim with respect to the seized locator funds.

D. Respondents Ð R eceivedÑ the L ocator F ee

23. As noted above, Respondents, in the ir August 2, 2013,

email to the Department, advised that Ðwe have not disbursed any

of the funds; nor will we, until this matter is resolved.Ñ

RespondentsÓ representation to the Department that none of the

funds would be disbursed reasonably implies that all funds,

including the locator fee, would be deposited in RespondentsÓ

trust account.

24. Rule 5 - 1.1(f), of The Florida Bar Rules Regulating

Trust Accounts, provides as follows:

Disputed Ownership of Trust Funds. When in

the course of representation a lawyer is in

possession of property in which 2 or more

persons (1 of whom may be the lawyer) claim

interests, the property shall be treated by

the lawyer as trust property, but the portion

belonging to the lawyer or law firm shall be

withdrawn within a r easonable time after it

becomes due unless the right of the lawyer or

law firm to receive it is disputed, in which

event the portion in dispute shall be kept

separate by the lawyer until the dispute is

resolved. The lawyer shall promptly

distribute all po rtions of the property as to

which the interests are not in dispute.

Rule 5 - 1.1(f) makes clear that when a lawyer is in possession of

disputed property and the lawyer claims an interest in the same,

the property sha ll be treated as trust property and , the refore ,

kept separate until such time as the dispute is resolved. If

Respondents had maintained the locator fee in the firmsÓ trust

account during the pendency of the dispute, Respondents would be

in a better position to assert that the firm never actuall y

received the locator fee because of the special character of

property held in trust.

25. In her Verified C laim filed with respect to the seized

locator fee, Respondent Sinadinos attests to the following:

On July 26, 2014, the Department issued a

warran t in favor of [Respondents] in the

amount of $91,142.30, effectuated by

electronic funds transfer, to a bank account

of Claimant at SunTrust Bank.

Shortly thereafter, [Respondents] transferred

the $91,142.31 into [RespondentsÓ] savings

account at SunTrust Bank.

Subsequently, for accounting purposes,

[Respondents] opened a money market account

at SunTrust Bank, account number xxx0890,

wherein it deposited the $91,142.31 warrant

in favor of [Respondents] issued by the

Department in connection with claim

no. C5047499.

The $91,142.30 was seized pursuant to a

seizure warrant . . . from SunTrust account

number xxx0890 .

While the Verified Claim references two different amounts, it is

clear that the locator fees are the same monies that were seized

by the FBI fr om RespondentsÓ money market account.

CONCLUSIONS OF LAW

26 . The Division of Administrative Hearings has jurisdiction

over the parties and subject matter of this proceeding.

§§ 120.569 and 120.57(1) , Fla. Stat. (2016) . 2/

27. The Department, pursuant to section s 717.1322 and

717.1341, Florida Statutes , seeks to revoke locator license

number 103423042 issued by the Department to A ttorneys Mortellaro

and Sinadinos. Accordingly, the Department has the burden of

establishing by clear and convincing evidence the facts necessary

to support revocation. See , e.g. , Ferris v. Turlington , 510 So.

2d 292, 294 (Fla. 1987). Clear and convincing evidence has been

described by the courts as follows:

[C]lear and convincing evidence requires that

the evidence must be fo und to be credible;

the facts to which the witnesses testify must

be distinctly remembered; the testimony must

be precise and explicit and the witnesses

must be lacking in confusion as to the facts

in issue. The evidence must be of such

weight that it pro duces in the mind of the

trier of fact the 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) (citing Slomowitz

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

28. Section 717.1341(1)(a) provides in part as follows:

No person shall receive unclaimed property

that the person is not entitled to receive.

Any person who receives, or assists another

person to receive, unclaimed property that

the person is not entitled to receive is

strictly, jointly, personally, and severally

liable for the unclaimed property and shall

immediately return the property.

29. Neither chapter 717 nor the DepartmentÓs rules

pertaining to the same, define what it means to Ðr eceiveÑ

property within the meaning of the statute. According to BlackÓs

Law Dictionary , ÐreceiveÑ means Ðto take into possession and

control.Ñ BlackÓs Law Dictionary 1140 (5th ed. 1979).

30. The evidence shows that the Estate of Darlene Swaim

never took possession and control of the purported estate funds

because these funds were never disbursed from the State treasury.

Accordingly, the Estate of Darlene Swaim did not ÐreceiveÑ

unclaimed property from the Department. Therefore, the

Department has f ailed to prove that Respondents assisted the

estate in receiving unclaimed property that the estate was not

entitled to receive.

31. As for the locator fee, Respondents clearly had

possession of the fee as evidenced by the fact that the

Department, by way of electronic transfer, deposited the monies

into one of the firmÓs accounts at SunTrust Bank. The evidence

also clearly establishes that Respondents had control of the

locator fee as evidenced by the fact that Respondents moved the

monies between sev eral of the firmÓs bank accounts. Simply

stated, Respondents, by placing the locator fee in multiple

business accounts, none of which were the firmÓs trust account,

exercised both possession and control over these funds for the

period July 26, 2013, throu gh March 14, 2014. The locator fee

was ÐreceivedÑ property within the meaning of section 717.1341.

32. For there to be liability under section 717.1341(1)(a),

the evidence, in addition to showing that Respondents received

unclaimed property, must also c learly and convincingly establish

that Respondents were not entitled to the unclaimed property.

The evidence establishes that on July 26, 2013, Respondents were

entitled to the locator fee because the Department had, at that

time, approved the estateÓs cl aim for the unclaimed property at

issue.

33. The Department argues that Respondents ceased being

entitled to the locator fee commencing August 2, 2013, when the

Department notified Respondents via email that the purported

estate funds belonged to the SSA . Contrary to the DepartmentÓs

assertion, the August 2, 2013, email amounted to nothing more

than a Ðheads - up,Ñ and consequently of little , if any , legal

significance, because the facts underlying the email (i.e. the

claim of SSA) had not yet been establi shed as a matter of final

agency action. 3/ Similarly, the DepartmentÓs letter of

September 9, 2013, to Respondents was also of no legal

significance as to RespondentsÓ entitlement to the locator fee

because the letter suffered from the same shortcomings as the

email of August 2, 2013.

34. The circuit courtÓs Order Granting Emergency Motion to

Return Estate Funds had the practical effect of bolstering

RespondentsÓ claim to the locator fee because as of th e date of

the Order (October 30, 2013) , there was now a judicial

determination indicating that the E state of Darlene Swaim was

entitled to the funds being held by the Department. The

DepartmentÓs July 26, 2013, approval of the estate Ós claim

co upled with the circuit courtÓs O rder of October 30, 2013,

est ablishes that Respondents had a t least a colorable claim of

entitlement to the locator fee. Alternatively stated, the

evidence does not clearly and convincingly establish that

Respondents were not entitled to the locator fee during this

period of time.

35 . Section 717.1241(3), provides that Ð[a] claim is

complete when entitlement to the unclaimed property has been

established.Ñ Consistent with this section, SSAÓs claim to the

monies at issue was not complete until January 9, 2014, when the

Department iss ued its Final Order Approving Claim filed on behalf

of SSA. On January 9, 2014, Respondents were postured such that

on the one hand , there was an un - appealed Order from the circuit

court saying that the estate was entitled to the purported estate

funds, w hich meant that Respondents w ere entitled to the locator

fee; and on the other hand , there was a Final Order from the

Department saying that the estate was not entitled to the funds

because all of the money, including RespondentsÓ locator fee,

belonged to SSA. 4/

36. The Department relies heavily on Atwater v. City of

Cape Coral , 120 So. 3d 595 (Fla. 2 d DCA 2013), in support of its

contention that the circuit courtÓs Order in the instant case was

wrong and therefore offers Respondents no safe haven in the

instant revocation action. In Atwater , the claimant attempted to

bypass the DepartmentÓs process for claiming unclaimed property

by going directly to circuit court. In ruling for the

Department, the appellate court noted that ÐArticle 4,

section 4(c) of the Florida Constitution vests the CFO with

exclusive authority to examine and approve all claims for

unclaimed funds under chapter 717 . . . [and that] [once]

entitlement to the surplus funds as unclaimed property has been

determined, the funds are then payable to the beneficiary by

state warrant drawn by the CFO.Ñ Id . at 599.

37. The instant case is distinguishable from Atwater

because Respondents filed their claim directly with the

Department and ultimately received approval of the claim from the

D epartment. The Department does not cite, nor has the

undersigned found, any case where a court has squarely addressed

the issue of whether the Department retains jurisdiction once it

has approved a claim for unclaimed property.

38. It is certainly reaso nable for the Department to opine

that section 717.1341(1)(a), to the extent that it directs a

person to immediately return property to which the person is not

entitled, contemplates the Department retaining jurisdiction to

address erroneously approved cla ims once the property has been

released by the Department, but this is a position that was

rejected by the circuit court when it granted RespondentsÓ

Emergency Motion to Return Estate Property. Similarly, it was

also reasonable for Respondents to challeng e the Department Ó s

actions given the unique circumstances present in the instant

case.

39. As previously noted, the federal government, on

March 14, 2014, seized the locator fee from RespondentsÓ money

market account. As part of the process associated with seizing

the locator fee, notice of the property seizure, and the right to

challenge the same, was provided to the Estate of Darlene Swaim.

The Estate of Darlene Swaim did not file a claim regarding the

seized fee and on February 5, 2015, the United S tate District

Court entered an Order directing that a clerkÓs default be

entered against the estate with respect to the locator fee.

40. RespondentsÓ locator fee was contingent upon the estate

prevailing in its claim for the unclaimed property, and onc e the

estate, with the advice of other counsel, elected not to

challenge the seizure action , it became evident at this precise

moment that Respondents were not entitled to the locator fee.

Accordingly, the Department has met its burden of clearly and

conv incingly establishing that Respondents, between August 3,

2013, and March 14, 2014, possessed, in violation of section

717.1341(1)(a), unclaimed property that they were not entitled to

receive.

41. Section 717.1322(1)(a) is a catch - all provision which

st ates that a violation of any provision of chapter 717 shall

constitute grounds for an administrative enforcement action by

the Department. Because Respondents violated section

717.1341(1)(a), Respondents have also violated section

717.1322(1)(a). Florida Administra tive Code Rule 69G -

20.075(1)(a) provides, in part, that if it is found that a

registrant has violated section 717.1322(1)(a) , then the

registrant shall face Ðsuspension of 6 months to revocation if

the act is willful or with reckless disregard o r deliberate

ignorance of the truth, [or] 1 to 2 months if the act is not

willful or with reckless disregard or deliberate ignorance of the

truth.Ñ

42. Chapter 717 does not offer definitions for the terms

Ðwillful,Ñ Ðreckless disregard,Ñ and Ðdeliberate i gnorance.Ñ

Because Respondents are lawyers, and were acting as such during

the pendency of this dispute, the framework for determining

whether Respondents acted with willful, reckless disregard, or

deliberate ignorance of the truth, lies in rule 4 - 3.1 of The

Florida Bar Rules of Professional Conduct.

43. Rule 4 - 3.1 provides , in part , that Ð[a] lawyer shall

not bring or defend a proceeding, or assert or controvert an

issue therein, unless there is a basis in law and fact for doing

so that is not frivolou s, which includes a good faith argument

for an extension, modification, or reversal of existing law.Ñ

The Comment for rule 4 - 3.1 notes that Ð[t]he law, both procedural

and substantive, establishes the limits within which an advocate

may proceed. However, the law is not always clear and never is

static. Accordingly, in determining the proper scope of

advocacy, account must be taken of the lawÓs ambiguities and

potential for change.Ñ The Comment for rule 4 - 3.1 also provides

that an Ðaction is frivolous . . . if the lawyer is unable either

to make a good faith argument on the merits of the action taken

or to support the action taken by a good faith argument for an

extension, modification, or reversal of existing law.Ñ

44. The Department takes an expansive view of chapter 717

and believes that it has exclusive jurisdiction as to all issues

related to unclaimed property. In support of its position , the

Department cites Atwater , which was decided on July 10, 2013,

just 14 days prior to the DepartmentÓs appro val of the estateÓs

claim in the instant dispute. The Department relies on Atwater

for the proposition that chapter 717 vests the Department with

sole authority to make the final determination as to the

disposition of unclaimed property, including exclusi ve authority

to correct determinations that were made in error.

45. Respondents view the Department Ó s autho rity as being

not as broad, and as noted in its email to the Department on

August 2, 2013, believe that once the Department approves a claim

and d isburses funds, either correctly or incorrectly, the

Department, as it relates to open estates subject to the

jurisdiction of a circuit court sitting in probate, loses

jurisdiction to correct mistakes made during the claim approval

process.

46. In the co ntext of the instant proceeding, it is not

necessary to evaluate the merits of either position because the

circuit court, on October 30, 2013, agreed with Respondents and

directed the Department to return the funds to the estate. The

circuit courtÓs Order made it at least plausible that there was a

basis in law and fact for the legal position advanced by

Respondents with respect to the estate funds. Because it was at

least plausible that there was a basis in law and fact for the

a rgu ments advanced by Resp ondents, the Department has failed to

prove that Respondents acted with willful, reckless disregard, or

deliberate ignorance of the truth with respect to actions taken

regarding either the purported estate funds or the locator fee.

47. As previously note d, rule 69G - 20.075(1)(a) directs that

Respondents shall be suspended between Ð1 to 2 months if the act

is not willful or with reckless disregard or deliberate ignorance

of the truth.Ñ Further, the rule provides that Ð[t]he penalty

imposed within the range of penalties should be based upon the

severity of the violation.Ñ

48. There is no evidence that Respondents, in any way,

misle d or otherwise contributed to the DepartmentÓs erroneous

approval of the claim filed by the Estate of Darlene Swaim.

There is no evidence that Respondents assisted the Estate of

Darlene Swaim in receiving unclaimed property that the estate was

not entitled to receive. Once the Department stopped payment on

the Treasury warrant issued to the estate, Respondents,

consistent with t heir professional obligations as attorneys, took

the objectively reasonable and appropriate step of challenging

the DepartmentÓs actions by seeking an emergency Order from the

circuit court. Furthermore, once it became clear that the Estate

of Darlene Swa im had abandoned all claims related to the

unclaimed property, Respondents, within a reasonable time

thereafter, withdrew their claim to the locator fees. In the

opinion of the undersigned, these factors weigh strongly in favor

of the minimum suspension; which is for a period of one month. 5/

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Financial Services

enter a final o rder finding that Michelangelo Mortellaro and

Gina M. Sinadinos violated section s 717.1322(1)(a) and

717.1341(1)(a), Florida Statutes. It is further recommended that

the Department suspend locator license number 103423042 for a

period of one month. 6/

DONE AND ENTERED this 21st day of November , 2016 , in

Tallahassee, Leon County, Florida.

S

LINZIE F. BOGAN

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 21st day of November , 2016 .

ENDNOTE S

1/ The amount claimed should be $91,142.30.

2/ All statutory references are to 2016 Florida Statutes, unless

otherwise indica ted.

3/ As previously noted, the SSA did not file its claim until

August 14, 2013. Furthermore, section 717.124(1)(c), Florida

Statutes, states , in part, that Ð[w]ithin 90 days after receipt

of the claim . . . the department shall determine each claim [ and

such] [d]etermination shall contain a notice of rights provided

by ss. 120.569 and 120.57.Ñ It is undisputed that the

DepartmentÓs correspondence of August 2, 2013, did not comply

with any of the requirements of chapter 717.

4/ RespondentsÓ right to the locator fee is contingent upon the

firm recovering unclaimed property on behalf of the Estate of

Darlene Swaim.

5/ Section 717.1400(3), requires, in part, that in order to file

claims as a claimantÓs representative, Ðan attorney licensed to

practice in this state . . . must provide [t]he [attorneyÓs]

Florida Bar number . . . [and] [s]ufficient information to enable

the department to disburse funds by electronic funds.Ñ The clear

import of section 717.1400(3) is that it is the attorney who is

registe ring with the Department as a claimantÓs representative.

The other requirements of the statute, such as requiring

electronic funds account information and the business name and

address of the attorneyÓs employer, are items ancillary to the

attorneyÓs regi stration with the De partment. Accordingly, the

one - month suspension applies to Mr. Mortellaro and Ms. Sinadinos

individually and not to the firm of Mortellaro & Sinadinos, PLLC.

6/ Respondents Ó Motion to Dismiss and their Motion for Summary

Judgment are , for the reasons set forth above, DENIED.

COPIES FURNISHED:

Jenay E. Iurato, Esquire

Iurato Law Firm, PL

Suite 203

10012 North Dale Mabry Highway

Tampa, Florida 33618

(eServed)

Josephine A. Schultz, Esquire

Department of Financial Services

Office of the General Counsel

200 East Gaines Street, R oom 645E - 5

Tallahassee, Florida 32399

(eServed)

Gina Marie Sinadinos, Esquire

Mortellaro & Sinadinos, PLLC

Suite 200

8401 J.R. Manor Drive

Tampa, Florida 33634

(eServed)

Julie Jones, CP, FRP, Agency Clerk

D ivision of Legal Services

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0390

(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of th is Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.