DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FOURTH DISTRICT

July Term 2014

JEANNE EMIDDIO,

Appellant,

v.

FLORIDA OFFICE OF FINANCIAL REGULATION,

Appellee.

No. 4D13-723

[September 3, 2014]

Appeal from the State of Florida, Office of Financial Regulation; L.T. 

Case No. 1219-FR-5/11.

H. Richard Bisbee and Dannie L. Hart of H. Richard Bisbee P.A., 

Tallahassee, for appellant.

Pamela Jo Bondi, Attorney General, Allen Winsor, Solicitor General, 

and Diane G. DeWolf, Deputy Solicitor General, Tallahassee, for appellee.

FORST, J.

Appellant Jeanne Emiddio appeals the administrative order of Appellee 

Florida Office of Financial Regulation (“OFR”), denying her application for 

a loan originator license because she had been convicted of felonies 

involving crimes of fraud. Appellant maintains that, under the doctrines 

of res judicata and collateral estoppel, OFR cannot now deny her a loan 

originator license because of her prior convictions where it previously 

determined that the convictions did not warrant the revocation of her 

previous mortgage broker’s license. We disagree and affirm.

Background

Appellant had been a licensed mortgage broker since 1993. In 2002, 

she entered a plea of nolo contendere and was adjudicated guilty of one 

count of organized fraud less than $20,000, one count of false statement 

for public aid, and four counts of Medicaid provider fraud. These 

convictions were not related to Appellant’s practice as a mortgage broker, 

and Appellant has never been the subject of a customer complaint or 
2

disciplinary action in regards to her practice.

As a result of her convictions, OFR sought to revoke her mortgage 

broker’s license. At the time, section 494.0041(2)(a), Florida Statutes 

(2004), provided for discretionary disciplinary action against any mortgage 

broker who pled nolo contendere to a crime involving fraud. The 

disciplinary actions that could be taken included revocation of a license, 

suspension of a license, and placement on probation. § 494.0041(1), Fla. 

Stat. (2004).

An informal evidentiary hearing was held on the sole issue of whether 

Appellant’s license should be revoked because of her convictions for crimes

involving fraud. Appellant had multiple clients and friends testify on her 

behalf about her reputation for being an ethical professional. The hearing 

officer recommended that Appellant be permitted to retain her license and 

only be put on probation because she had demonstrated remorse for her 

actions and had shown that her dishonest actions in her personal life did 

not affect her honesty with her professional actions. The recommendation 

was adopted in a final order by OFR in 2004.

Appellant successfully renewed her license each biennium period since 

the date of the 2004 final order. In 2009, the Governor restored all of 

Appellant’s civil rights, except the right to possess or own a firearm.

Changes in the Law for Mortgage Broker Licensing

The federal government responded to the 2008 mortgage crisis by 

enacting the Secure and Fair Enforcement for Mortgage Licensing Act 

(“SAFE Act”) to establish a Nationwide Mortgage Licensing System and 

Registry for the residential mortgage industry. 12 U.S.C. § 5101 (2008). 

The law created the term “loan originator” to encompass mortgage brokers 

and mortgage lenders, and it required all loan originators to apply through 

and be registered with the national system. 12 U.S.C. § 5102(4), (6). It 

also required each state to implement the SAFE Act’s minimum standards 

or face federal intervention. 12 U.S.C. § 5107. The minimum standards 

for issuing a loan originator license included that an applicant “has not 

been convicted of, or pled guilty or nolo contendere to, a felony in a 

domestic, foreign, or military court—at any time preceding such date of 

application, if such felony involved an act of fraud, dishonesty, or a breach 

of trust, or money laundering.” 12 U.S.C. § 5104(b)(2)(B) (emphasis 

added).

In 2009, the State of Florida amended Chapter 494, regarding 

regulation of the mortgage broker trade, to come in compliance with the 
3

SAFE Act. § 494.001, Fla. Stat. (2009). The new provisions require all 

mortgage brokers to file new applications for licensure as “loan 

originators” through the national system since the previous mortgage 

broker licenses ceased to be valid licenses. § 494.001(14), Fla. Stat. 

(2010).

Section 494.0011, Florida Statutes (2010), empowers OFR to adopt 

rules for loan originator licensure in accordance with Chapter 494 and the 

SAFE Act. Section 494.0011(2)(c) states that the office may adopt rules:

Establishing time periods during which a loan originator . . . 

or mortgage broker license applicant . . . is barred from 

licensure due to prior criminal convictions of, or guilty or nolo 

contendere pleas . . . regardless of adjudication. 

1. The rules must provide:

a. Permanent bars for felonies involving fraud, dishonesty, 

breach of trust, or money laundering[.]

(emphasis added).

OFR established Florida Administrative Code rule 69V-40.00112 to 

implement section 494.0011, Florida Statutes. Subsection (1) of the rule 

states, “As part of the application review process, the Office is required to 

consider a relevant person’s law enforcement record when deciding 

whether to approve an application for licensure as a loan originator.” Fla. 

Admin. Code R. 69V-40.00112(1). The rule provides that an applicant is 

not eligible for licensure if the applicant has ever committed a Class A 

crime. Fla. Admin. Code R. 69V-40.00112(3). “Class ‘A’ crimes include all 

felonies involving an act of fraud, dishonesty, or a breach of trust, or 

money laundering.” Fla. Admin. Code R. 69V-40.00112(13).

OFR’s Application of New Laws to Appellant

Appellant timely filed her loan originator application through the 

national registry in December 2010 pursuant to the applicable statute 

because her last renewal was issued in 2009. In 2011, OFR served 

Appellant with a Notice of Intent to Deny Application for Loan Originator 

License, primarily because of her 2002 felony convictions involving fraud. 

Appellant petitioned for a formal hearing on the matter, but was granted 

only an informal hearing by OFR because the office found it was unclear 

whether disputed issues of fact existed. OFR issued an amended notice of 
4

intent to deny Appellant’s application, limiting the grounds solely to

Appellant’s 2002 convictions.

After some delay, an informal hearing was held. Both parties submitted 

various exhibits and Appellant testified on her own behalf. During the 

proceedings, Appellant maintained that the issue of whether her 2002 

convictions should be grounds for revoking her license was the subject of 

the proceedings in 2004 and, therefore, res judicata and collateral estoppel 

would operate to preclude that issue from being litigated at the present 

hearing.

The hearing officer issued a detailed order, noting that Appellant’s 

convictions were a result of a vulnerable time in her life and they did not 

affect or harm her clients. However, the officer recommended that 

Appellant’s application for licensure be denied because the officer was 

“constrained by the law as it currently exists,” which mandates that an 

applicant who has pled nolo contendere to a felony involving fraud is not 

eligible for a license. This recommended order was adopted in full in a 

final order by OFR.

Neither Res Judicata nor Collateral Estoppel is Applicable

Although we affirm the final administrative order denying Appellant’s 

application, we write to address two issues raised. “Our standard of 

review, where the facts are not in dispute and the administrative agency 

is interpreting the law, is to determine if the agency ‘has erroneously 

interpreted a provision of law.’” Fanizza v. State, Comm’n on Ethics, 927 

So. 2d 23, 26 (Fla. 4th DCA 2006) (quoting § 120.68(7)(d), Fla. Stat. 

(2002)).

Our Supreme Court has recognized that “the principles of res judicata 

do not always neatly fit within the scope of administrative proceedings” 

and should be applied with great caution. Thomson v. Dep’t of Envtl. 

Regulation, 511 So. 2d 989, 991 (Fla. 1987). In Thomson, the Court held, 

“The proper rule in a case where a previous permit application has been 

denied is that res judicata will apply only if the second application is not 

supported by new facts, changed conditions, or additional submissions by 

the applicant.” Id. Likewise, with collateral estoppel, the doctrine will not 

be applied if there is a change in circumstances creating a new issue to be 

litigated. See Haskin v. Haskin, 781 So. 2d 431, 432 (Fla. 4th DCA 2001); 

Krug v. Meros, 468 So. 2d 299, 303 (Fla. 2d DCA 1985) (“[W]e note that the 

doctrine of estoppel by judgment does not apply where unanticipated 

subsequent events create a new legal situation.”). “[T]he determination of 

whether a significant change in circumstances has occurred lies primarily 
5

within the discretion of the administrative agency.” Delray Med. Ctr., Inc. 

v. State Agency for Health Care Admin., 5 So. 3d 26, 29 (Fla. 4th DCA 

2009).

In the instant case, the hearing officer correctly concluded that neither 

res judicata nor collateral estoppel bar OFR from deciding the issue before 

the court in 2012: whether Appellant’s 2002 convictions make her 

ineligible for a loan originator license under the 2010 amendments to 

Chapter 494. Between 2009 and 2011, the Florida statutes and 

administrative rules regarding mortgage broker licensure underwent 

significant change in the wake of the 2008 mortgage crisis. Many of the 

previous statutes governing Appellant’s mortgage broker license were 

amended or repealed and replaced with provisions in compliance with the 

federal SAFE Act. The hearing officer properly acted in her discretion to 

find that this was a significant change in circumstances, as well as an 

unanticipated subsequent event that created a new legal situation, to 

prevent the application of res judicata and collateral estoppel in Appellant’s 

case. Thomson, 511 So. 2d at 991; Delray Med. Ctr., 5 So. 3d at 29; Krug, 

468 So. 2d at 303.

Appellant’s Reliance on Kauk v. Department 

of Financial Services was not Preserved

In support of her arguments, Appellant filed the recent opinion of one 

of our sister courts as supplemental authority. In Kauk v. Department of 

Financial Services, 131 So. 3d 805 (Fla. 1st DCA 2014), the First District 

was faced with the issue of whether OFR could impose a per se bar to 

licensure as an insurance agent in Florida for an applicant who was 

previously convicted of a felony involving a crime of fraud where OFR found 

that the applicant was fully rehabilitated and his civil rights had been 

restored. Id. at 806-08. The law that was applied to deny the applicant 

an insurance agent license operated the same as the law applied to deny 

Appellant’s license in the instant case: “to permanently preclude the 

licensure of any applicant who commits a felony involving fraud.” Id. at 

807.

The First District relied on Sandlin v. Criminal Justice Standards & 

Training Commission, 531 So. 2d 1344 (Fla. 1988), to avoid finding the 

statute unconstitutionally overbroad:

[T]he statute at issue in Sandlin barred from certification as a 

law enforcement officer any person who had been convicted of 

any felony or a misdemeanor involving perjury or a false 

statement. The Sandlin court refused to construe this statute 
6

as imposing a per se bar against certification of a pardoned 

felon, reasoning that such a construction would render the 

statute an unconstitutional infringement on the executive’s 

clemency power by diminishing the effect of a pardon. The 

court held that, because the Legislature is presumed to have 

intended a constitutional result when drafting any statute, the 

statute could not be read as imposing an absolute bar against 

certification of a pardoned felon. . . . 

. . . .

. . . The Sandlin court recognized that persons seeking to 

practice certain professions or employments can be required 

to demonstrate their good moral character, even though they 

may have been fully pardoned for previous crimes. . . . The 

court emphasized that a licensing agency is permitted to deny 

a license to a pardoned felon when the serious character of 

the criminal conduct underlying his conviction justifies the 

decision. Ultimately, the court held that a licensing agency 

may take into account and rely on the facts underlying 

pardoned convictions and may give weight to the general 

policy expressed in a statute precluding licensure due to 

criminal convictions.

Id. at 808-09 (internal quotations and citations omitted). The First District 

further explained that it was constrained, by that court’s prior precedent, 

to extend the rule in Sandlin to prevent a statute from imposing a per se

bar against licensure of a felon whose civil rights have been restored, in 

addition to those who have received a full pardon. Id. at 809. The court’s 

opinion notes that while “there may be wisdom in the distinction between 

one who has been pardoned and one who has had his civil rights restored 

. . . we are not at liberty to embrace such a distinction.” Id. (citing G.W. 

Liquors of Collier, Inc. v. Dep’t of Bus. Regulation, 556 So. 2d 464, 465 (Fla. 

1st DCA 1990) (extending Sandlin to bar an automatic licensure rejection 

of convicted felons even without a full pardon)).

The Kauk opinion concluded that “Sandlin does not allow the denial of 

a license to a restored felon due to prior convictions when the licensing 

agency has made findings of complete rehabilitation and fitness to hold a 

license.” Id. at 810. As such, the First District reversed the denial of the

applicant’s licensure and remanded for OFR to properly consider his

application in light of its holdings. Id.
7

Based on the First District’s analysis in Kauk, Appellant in the instant 

case attempts to raise the issue of whether the denial of her application 

constitutes an unconstitutional infringement on the executive’s clemency 

power under article IV, section 8(a) of the Florida Constitution. However, 

Appellant raises this argument for the first time by filing Kauk as 

supplemental authority on appeal, and Appellant failed to raise any 

constitutional challenge in her initial brief. See Stanton v. Fla. Dep’t of 

Health, 129 So. 3d 1083, 1085 (Fla. 1st DCA 2013) (“It is a well-established 

maxim of appellate practice that ‘[c]laims for which an appellant has not 

presented any argument . . . are insufficiently presented for review and are 

waived.’” (quoting Hammond v. State, 34 So. 3d 58, 59 (Fla. 4th DCA 

2010))); J.A.B. Enters. v. Gibbons, 596 So. 2d 1247, 1250 (Fla. 4th DCA 

1992) (“[A]n issue not raised in an initial brief is deemed abandoned and 

may not be raised for the first time in a reply brief.”). Furthermore, a 

constitutional challenge based on an infringement on the executive’s 

clemency power was never raised in Appellant’s pleadings before the OFR 

hearing officer or at the informal hearing.1

As such, this argument has not been preserved for review and, 

accordingly, we may only review the issue for fundamental error. Aills v. 

Boemi, 29 So. 3d 1105, 1108-09 (Fla. 2010). The “application of an 

unconstitutional statute constitutes fundamental error, whereas 

unconstitutional application of an otherwise constitutional statute does 

not.” B.C. v. Dep’t of Children & Families, 864 So. 2d 486, 491 (Fla. 5th 

DCA 2004) (citing Alexander v. State, 450 So. 2d 1212, 1216 (Fla. 4th DCA 

1984)).

No Fundamental Error exists with OFR’s 

Denial of Appellant’s Application for Licensure

The First District’s decision in Kauk avoided declaring a statute’s per 

se bar against insurance agent licensure for felons convicted of crimes 

involving fraud as unconstitutional by presuming, in reliance on Sandlin, 

1 In Appellant’s Petition for Formal Hearing as to OFR’s Amended Notice of Denial, 

she challenged Chapter 2009-241, Laws of Florida (the amendments to Chapter 

494, Florida Statutes), as “unconstitutional on its face and its effect to the extent 

it detrimentally affects [Appellant’s] protected property interest in her 

professional employment” and asked the hearing officer to take official 

recognition of Wilson v. Pest Control Commission of Florida, 199 So. 2d 777 (Fla. 

4th DCA 1967), and Dubin v. Department of Business Regulation, 262 So. 2d 273 

(Fla. 1st DCA 1972), in support of that challenge. However, the hearing officer 

declined to address the constitutional argument, stating that it lacked authority 

as an executive agency officer to declare a statute or rule unconstitutional, and 

Appellant did not challenge that finding on appeal.
8

that the legislature intended that licensure could be granted for felons who 

have demonstrated rehabilitation and fitness to hold a license and whose 

civil rights have been restored under the governor’s clemency power. 

Because the licensure statute in Kauk is substantially the same as the 

statute and administrative rule in the instance case, the holding in Kauk

can be applied to find that the legislature did not intend for section 

494.0011, Florida Statutes, or administrative rule 69V-40.00112 to have 

an unconstitutional result; thus, a per se bar against licensure for felons 

convicted of crimes involving fraud will be construed as to not apply to 

felons whose civil rights have been restored. These applicants will then be 

evaluated for their rehabilitation and fitness for licensure in light of the 

past conviction(s).

This constitutional construction of the statute and rule precludes a 

finding that the statute and rule are facially unconstitutional, and so 

fundamental error cannot be applied. B.C., 864 So. 2d at 491. Thus, to 

the extent that OFR’s application of the loan originator licensure statute, 

section 494.0011, is unconstitutional,2 this would not constitute 

fundamental error. Alexander, 450 So. 2d at 1216; see also Fitchner v. 

Lifesouth Cmty. Blood Ctrs., Inc., 88 So. 3d 269, 285 (Fla. 1st DCA 2012) 

(Schwartz, Senior Judge, dissenting), review denied, 108 So. 3d 655 (Fla. 

2012) (“In common with all appellate contentions, a claim relating to 

unconstitutionality is waived unless it is timely and appropriately 

advanced and preserved below.”).

Agreeing with OFR that collateral estoppel and/or res judicata are not 

applicable, and further finding no fundamental error, we must affirm the 

administrative order below.

Affirmed.

GROSS and GERBER, JJ., concur.

* * *

Not final until disposition of timely filed motion for rehearing.

2 We note that we have not determined that OFR’s application of the loan 

originator licensure statute was done in an unconstitutional manner, inasmuch 

as Appellant had not received a pardon and, unlike the First District Court of 

Appeal, we are not constrained by G.W. Liquors to extend the Sandlin holding.