94-001229 Chester Edward Zaremba vs. Division Of Finance Status: Closed Recommended Order on Wednesday, August 3, 1994.

Summary: Application for licensure as a mortgage broker after criminal convictions granted due to rehabilitation, passage of time & subsequent good character.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHESTER EDWARD ZAREMBA, )

)

Petitioner, )

)

vs. ) CASE NO. 94-1229

)

DEPARTMENT OF BANKING AND FINANCE, )

)

Respondent. )

___________________________________)

RECOMMENDED ORDER

Pursuant to Notice, this cause was heard by Linda M. Rigot, the assigned

Hearing Officer of the Division of Administrative Hearings, on June 6, 1994, in

Tallahassee, Florida.

APPEARANCES

For Petitioner: Richard C. Booth, Esquire

Booth & Associates

Post Office Box 12639

Tallahassee, Florida 32302

For Respondent: Cassandra A. Evans, Esquire

H. Richard Bisbee, Esquire

Department of Banking and Finance

Office of the Comptroller

The Capitol, Suite 1302

Tallahassee, Florida 32399-0350

STATEMENT OF THE ISSUE

The issue presented is whether Petitioner's application for licensure as a

mortgage broker should be granted.

PRELIMINARY STATEMENT

By letter dated December 14, 1993, the Department advised Petitioner that

his application for licensure as a mortgage broker was denied, and Petitioner

timely requested a formal hearing regarding that denial. This cause was

thereafter transferred to the Division of Administrative Hearings to conduct a

formal proceeding.

Petitioner testified on his own behalf and W. T. Sims testified on behalf

of the Department. Additionally, Petitioner's Exhibits numbered 1 and 2,

Petitioner's late-filed Exhibit numbered 3, and the Department's Exhibits

numbered 1-3 were admitted in evidence.

Both parties submitted post-hearing proposed findings of fact in the form

of proposed recommended orders. A specific ruling on each proposed finding of

fact can be found in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Petitioner is 54 years of age and has been a resident of the State of

Florida for eighteen years.

2. On January 28, 1983, Petitioner was convicted of six counts of mortgage

fraud in the Circuit Court of the Seventeenth Judicial Circuit in and for

Broward County, Florida, Case No. 81-3411CF. That conviction arose out of

certain conduct by Petitioner in approximately 1980. Petitioner was sentenced

to five years of confinement, with credit for time served, and twelve years of

probation. That conviction was affirmed by the District Court of Appeal on July

5, 1984, and re-hearing was denied on August 1, 1984. Zaremba v. State, 452

So.2d 1026 (Fla. 4th Dist. 1984).

3. On February 25, 1987, Petitioner entered a plea of nolo contendere to

the offense of grand theft in the Circuit Court of the Twentieth Judicial

Circuit in and for Lee County, Florida, Case No. 86-0836CF. On that same date,

he was adjudicated guilty and placed on probation for a period of five years to

run concurrently with the probation imposed by the Circuit Court of Broward

County in Case No. 81-3411CF. That charge arose out of a dispute with his

employer, and Petitioner was required to make restitution during his

probationary period in the amount of $16,082 pursuant to an order entered by the

Court on March 5, 1987.

4. Petitioner's probation was terminated in Case No. 81-3411CF on October

5, 1993, and in Case No. 86-0836CF on April 12, 1993. Petitioner timely made

restitution in the total amount ordered by the Court.

5. For the last eight years Petitioner has been employed by Atlantic Real

Estate Company in Pompano Beach, Florida, a developer of time-share properties.

As the closing officer for that company, Petitioner reviews the closing

documents, including mortgages, deeds, and contracts.

6. As the closing officer, Petitioner also handles the money and has for

the last eight years. He accepts down payments and closing costs from people

purchasing units by the week. He takes the money home at night and deposits it

in the bank the next morning. Although he handles thousands of dollars a week

in this manner, none of the money which has come into his possession has ended

up "missing," and no one has ever accused him of improperly handling any of that

money.

7. Petitioner has been licensed as a real estate salesperson by the State

of Florida since 1991. Although his application for that licensure was

initially denied as a result of his criminal history, Petitioner requested an

informal hearing before the Florida Real Estate Commission, and the Commission

granted his application for a license. That real estate salesperson's license

is current, having been renewed by the Department of Professional Regulation,

Division of Real Estate, on August 7, 1993.

8. Petitioner has also successfully handled monies belonging to others as

a member of the Board of Directors of the Silver Seas Beach Club, a time-share

resort on the Fort Lauderdale "strip." In that capacity, Petitioner has handled

money from sales and has also operated the front desk on Saturdays receiving

money from people renting units in that resort. He has so handled that money

for four years.

9. Petitioner was considered to be "an exemplary probationer" by his

probation officer. Petitioner also enjoys a reputation for being competent,

honest, reliable, and trustworthy in his handling of money belonging to other

persons and in his business dealings, as evidenced by letters from his employer,

from the management at Silver Seas, and from a local practicing attorney who was

formerly employed by the State of Florida as a prosecutor.

10. Petitioner has rehabilitated himself since the time of his activities

which resulted in his two convictions. Petitioner has shown himself to be

trustworthy and of good character.

11. On July 29, 1993, Petitioner submitted to the Department his

application for licensure as a mortgage broker. In that application he

disclosed his two convictions and has provided to the Department all information

requested relative thereto. That application reveals that Petitioner has

complied with all procedures prerequisite to licensure, including filing the

application, paying the appropriate application fee, providing fingerprints,

attending the required mortgage broker education courses, and successfully

passing the examination for licensure. By letter dated December 14, 1993, the

Department denied Petitioner's application for licensure based solely on

Petitioner's convictions.

12. In denying Petitioner's application, the Department did not conduct

any investigation as to Petitioner's rehabilitation or good character. Rather,

the Department relied on its "policy" that no application for licensure as a

mortgage broker will be granted if the applicant has ever been convicted of a

crime involving fraud, dishonest dealing, or acts involving moral turpitude.

CONCLUSIONS OF LAW

13. The Division of Administrative Hearings has jurisdiction over the

parties hereto and the subject matter hereof. Section 120.57(1), Florida

Statutes.

14. The Department's letter of denial recites that Petitioner's

application for licensure is denied based on Section 494.0041(2)(a), Florida

Statutes. Section 494.0041 provides, in part, as follows:

(1) Whenever the department finds a person

in violation of an act specified in

subsection (2), it may enter an order

imposing one or more of the following

penalties against the person:

(a) Revocation of a license or registration.

(b) Suspension of a license or registration

subject to reinstatement upon satisfying all

reasonable conditions that the department

specifies.

(c) Placement of the licensee, registrant,

or applicant on probation for a period of

time and subject to all reasonable conditions

that the department specifies.

(d) Issuance of a reprimand.

(e) Imposition of a fine in an amount not

exceeding $5,000 for each count or separate

offense.

(f) Denial of a license or registration.

(2) Each of the following acts constitutes

a ground for which the disciplinary actions

specified in subsection (1) may be taken:

(a) Being convicted or found guilty,

regardless of adjudication, of a crime in

any jurisdiction which involves fraud,

dishonest dealing, or any other act of moral

turpitude.

15. Accordingly, the Department is authorized to deny a license to a

person who had been convicted of a crime involving fraud, dishonest dealing, or

any other act of moral turpitude. Petitioner has offered no evidence or

argument that his convictions were not for crimes of that nature. Petitioner's

position in this proceeding is that he is entitled to licensure due to the lapse

of time since his wrongful conduct and his subsequent rehabilitation and good

character.

16. The statutory language provides that the Department may deny a

license. That language is not mandatory; rather, it authorizes the Department

to exercise its discretion on a case-by-case basis. The Department has not done

so in this case. Instead, the Department has relied on its "policy" which

automatically makes the presence of such a conviction a bar to licensure. There

is no such statutory bar in that statute.

17. No evidence was offered as to the dates of the activities which formed

the basis for the criminal charges. The appellate court opinion in the case

involving mortgage fraud does recite one count from the Information filed in

that case, which alleges Petitioner's wrongful conduct as occurring on February

29, 1980. All of the activities complained of in that case necessarily occurred

prior to early 1981, as reflected by the case number 81-3411CF. Similarly, the

date of the conduct complained of in the case in which Petitioner pled nolo

contendere to the offense of grand theft necessarily occurred prior to early

1986 as reflected by that case number 86-0836CF. Accordingly, the most recent

criminal activity engaged in by Petitioner occurred at least eight years, and

maybe more, prior to the final hearing in this cause.

18. The evidence is uncontroverted that Petitioner served his sentence of

confinement, successfully completed his probationary periods and made full

restitution as required by the courts which determined the appropriate

punishment by which Petitioner would pay his debt to society for his criminal

conduct. Petitioner has done so. Further, over the last eight years Petitioner

has repeatedly been entrusted with substantial sums of money belonging to other

persons, with no resulting allegations of wrongdoing. He has also achieved for

himself a reputation for being a person who is honest, reliable, trustworthy,

and of good character. Petitioner's evidence that he has rehabilitated himself

is uncontroverted. The Department offered no evidence to contradict

Petitioner's evidence; the Department simply relied on its "policy" that such a

conviction prevents a person from ever becoming licensed as a mortgage broker.

The Department's position is not reasonable, nor is it supported by the facts in

this case.

19. Petitioner has shown he is entitled to licensure. This conclusion is

buttressed by the fact that Petitioner has been licensed by another state

agency, the Department of Professional Regulation, Division of Real Estate, as a

real estate salesperson in the State of Florida after the Florida Real Estate

Commission considered Petitioner's application on its merit and Petitioner's

presentation at the informal hearing conducted by the Commission. Petitioner

has been licensed since 1991 in a profession closely related to that of mortgage

broker. There is no suggestion that the fiduciary responsibilities of mortgage

brokers handling money and documents evidencing ownership are greater than the

fiduciary responsibilities of real estate salespersons engaging in those

activities.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that a Final Order be entered granting Petitioner's application

for licensure as a mortgage broker.

DONE and ENTERED this 3rd day of August, 1994, at Tallahassee, Florida.

___________________________________

LINDA M. RIGOT

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 3rd day of August, 1994.

APPENDIX TO RECOMMENDED ORDER

DOAH CASE NO. 94-1229

1. Petitioner's proposed findings of fact numbered 9-13 have been adopted

either verbatim or in substance in this Recommended Order.

2. Respondent's proposed findings of fact numbered 1, 8 and 9 have been

adopted either verbatim or in substance in this Recommended Order.

3. Respondent's proposed findings of fact numbered 2-7 and 11 have been

rejected as being irrelevant to the issues under consideration in this cause.

4. Respondent's proposed finding of fact numbered 10 has been rejected as

being unnecessary for determination of the issues involved herein.

5. Respondent's proposed findings of fact numbered 12 and 13 have been

rejected as not constituting findings of fact but rather as constituting

argument of counsel.

COPIES FURNISHED:

Richard C. Booth, Esquire

Booth & Associates

Post Office Box 12639

Tallahassee, Florida 32302

Cassandra A. Evans, Esquire

H. Richard Bisbee, Esquire

Department of Banking

and Finance

Office of the Comptroller

The Capitol, Suite 1302

Tallahassee, Florida 32399-0350

William G. Reeves, General Counsel

Department of Banking and

Finance

The Capitol, Suite 1302

Tallahassee, Florida 32399-0350

Honorable Gerald Lewis

Department of Banking and

Finance

Comptroller, State of Florida

The Capitol, Plaza Level

Tallahassee, Florida 32399-0350

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended

Order. All agencies allow each party at least 10 days in which to submit

written exceptions. Some agencies allow a larger period within which to submit

written exceptions. You should contact the agency that will issue the final

order in this case concerning agency rules on the deadline for filing exceptions

to this Recommended Order. Any exceptions to this Recommended Order should be

filed with the agency that will issue the final order in this case.

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHESTER EDWARD ZAREMBA,

Petitioner,

vs. DOAH Case No: 94-001229

Administrative Proceeding

DEPARTMENT OF BANKING No. 3244-F-1/94

AND FINANCE,

Respondent.

_________________________/

FINAL ORDER AND NOTICE OF RIGHTS

This matter has come before the undersigned as Head of the Department of

Banking and Finance, Division of Finance ("Department") for the entry of a Final

Order in the above- referenced proceeding. Upon a review of the entire record

of this proceeding and due consideration thereof, the Recommended Order by the

Hearing Officer is adopted in part and rejected in part, as more particularly

set forth hereinafter.

BACKGROUND

This matter arose when the Department issued its Denial of Application for

Licensure as a Mortgage Broker on December 14, 1993. Petitioner Chester Edward

Zaremba ("Zaremba") filed his Petition for Formal Proceeding dated December 23,

1993. Petitioner Zaremba's Petition for Formal Proceeding was granted, and this

matter was transferred by the Department to the Division of Administrative

Hearings for the assignment of a Hearing Officer to conduct the formal hearing.

A formal hearing was held in Tallahassee, Florida on June 6, 1994. On August 3,

1994, the Hearing Officer from the Division of Administrative Hearings submitted

her Recommended Order ("Recommended Order") in this proceeding, a copy of which

is attached hereto as Exhibit "A". Said Recommended Order recommended that the

Department enter a Final Order granting Petitioner Zaremba's request for a

mortgage broker's license.

On August 18, 1994, the Department filed its Exceptions to the Recommended

Order, a copy of which is attached hereto as Exhibit "B". No exceptions were

filed by the Petitioner.

Based on a complete review of the record presented in this proceeding, the

following rulings on exceptions, findings of fact, conclusions of law and final

agency action are entered herein.

RULINGS ON THE EXCEPTIONS OF THE DEPARTMENT

First Exception: The Department's exception to paragraph (12) of the

Findings of Fact of the Hearing Officer's Recommended Order is hereby rejected.

Heifetz v. Department of Business Regulation, 475 So.2d 1277, (Fla. 1st DCA

1985).

Second Exception: The Department's exception to paragraph (17) of the

Conclusions of Law of the Hearing Officer's Recommended Order is hereby

accepted. Sections 494.0041(1)(f) and (2)(a), Florida Statutes provide that the

Department may deny a license request where an applicant has been "convicted or

found guilty, regardless of adjudication, of a crime in any jurisdiction which

involves fraud, dishonest dealing, or any other act of moral turpitude." The

Hearing Officer's conclusion that no evidence was offered as to the dates of the

activities which formed the basis for the criminal charges is irrelevant with

respect to the statutory grounds for denial. The agency's interpretation of the

statute must be upheld if it is not unreasonable or outside the range of

possible interpretations. Pershing Industries v. Department of Banking and

Finance, 591 So.2d 991 (Fla. 1st DCA 1991); Motel 6, Operating L. P. v.

Department of Business Regulation, 560 So.2d 1322 (Fla. 1st DCA 1990)

Third Exception: The Department's exception to paragraph (18) of the

Conclusions of Law of the Hearing Officer's Recommended Order is hereby

accepted. The denial was authorized pursuant to Sections 494.0041(1)(f) and

(2)(a), Florida Statutes. Further, the Petitioner stipulated within the

Prehearing Stipulation Agreement that he had been convicted of six counts of

mortgage fraud and the offense of grand theft. Therefore, in accordance with

Sections 494.0041(1)(f) and (2)(a), Florida Statutes, the Department's initial

denial of Petitioner's Application for Licensure as a Mortgage Broker was

statutorily authorized, was reasonable, and was supported by the case facts.

Fourth Exception: The Department's exception to paragraph (19) of the

Conclusions of Law of the Hearing Officer's Recommended Order is hereby

accepted. The nature of the review process engaged in by the Department of

Professional Regulation, Division of Real Estate ("DPR") with respect to

Petitioner's real estate sales person license application, and the fact that

Petitioner was subsequently licensed by DPR has no relevance whatsoever with

respect to the Department's evaluation of whether Petitioner should be granted

the requested mortgage broker's license. The Department is charged with the

responsibility of regulating mortgage brokers for the welfare of the general

public. Petitioner was previously convicted of six counts of mortgage fraud,

directly related to the area of the Department's licensure provisions. Whether

the DPR deems it appropriate to license Petitioner has no bearing on whether the

Department should make the same determination. Further, Petitioner's

presentation at the DPR hearing has no relevance with respect to this case.

Accordingly, the Department's exception to paragraph (19) of the Conclusions of

Law of the Hearing Officer's Recommended Order is hereby accepted.

FINDINGS OF FACT

The Hearing Officer's Findings of Fact as contained within the Recommended

Order, paragraphs (1) - (12) are accepted as true and correct and are adopted as

the Findings of Fact of this Final Order and Notice of Rights.

CONCLUSIONS OF LAW

The Hearing Officer's Conclusions of Law, paragraphs (13) - (16) of the

Recommended Order are adopted herein as the Conclusions of Law of this Final

Order and Notice of Rights.

Paragraph (18) of the Hearing Officer's Conclusions of Law of the

Recommended Order is hereby adopted in part and rejected in part as set forth

within the third exception, infra.

Paragraphs (17) and (19) of the Hearing Officer's Conclusions of Law are

rejected, as set forth in the second and fourth exceptions, infra.

STATEMENT OF FINAL AGENCY ACTION

Having ruled on all of the exceptions filed by the Department, and having

reviewed the complete record, including the proposed Recommended Orders filed by

the parties, it is accordingly ORDERED:

Petitioner's Application for Licensure as a Mortgage Broker is hereby

GRANTED.

DONE and ORDERED this 16th day of September, 1994, in Tallahassee, Leon

County, Florida.

________________________________

GERALD LEWIS, as Comptroller

and Head of the Department of

Banking and Finance, Division

of Finance

COPIES FURNISHED:

Linda G. Dilworth, Director

Division of Finance

H. Richard Bisbee

Deputy General Counsel

NOTICE OF RIGHT TO JUDICIAL REVIEW

PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO

JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW

PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH

PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE

AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY,

ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL,

FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT

WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF

RENDITION OF THE ORDER TO BE REVIEWED.

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that true and correct copies of the foregoing Final Order

with Notice of Rights was furnished by Regular U.S. Mail to Richard C. Booth,

Esquire, Booth & Associates, Post Office Box 12639, Tallahassee, Florida 32308,

this 16th day of September, 1994.

________________________________

ELISE M. GREENBAUM

Assistant General Counsel

Office of the Comptroller

The Capitol, Suite 1302

Tallahassee, Florida 32399-0350

[phone]