SC Administrative Law Court Decisions

STATEMENT OF THE CASE

This matter is before the Administrative Law Court (“ALC”) for a final order and decision following a contested case hearing pursuant to S.C. Code Ann. § 40-58-55(A) (Supp. 2005). Petitioner Richard C. Ivey (“Ivey”) challenges the decision of Respondent South Carolina Department of Consumer Affairs (“Department”) denying his application for a mortgage loan originator’s license pursuant to § 40-58-55 (Supp. 2005). The Department denied Ivey’s application because Ivey has had three criminal convictions within the past ten years. After notice to the parties, the court held a hearing on this matter on October 18, 2006. After carefully weighing all of the evidence, the court finds that Ivey’s application for a mortgage loan originator’s license should be denied.

ISSUE

Does Richard Ivey possess the requisite financial responsibility, character, and general fitness to command the confidence of the community and to warrant the belief that his business will be operated honestly, fairly, and efficiently such that he should be granted a mortgage originator’s license?

FINDINGS OF FACT

Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, and taking into consideration the burden of persuasion by the parties, the court makes the following Findings of Fact by a preponderance of the evidence.

Richard Ivey is a twenty-seven year old combat veteran of the war in Iraq. Following the completion of his tour of duty, Ivey suffered from Post Traumatic Stress Disorder, experiencing flashbacks, depression, and difficulty sleeping. He was at that time unemployed. Ivey began associating with “the wrong crowd” and became involved in trafficking illegal drugs. He also began using illegal drugs recreationally as well as to help him sleep. In November of 2004, he pled guilty to one count of trafficking cocaine and one count of trafficking gamma hydroxyl butyric acid (“GHB”).^[1] Ivey’s role was to “hold” the drugs for others who ultimately sold them to end users. He served approximately eighteen months of his three-year sentence, reducing his prison term by earning good time credits for good behavior. Ivey’s criminal record also shows a 1999 conviction for writing a fraudulent check. The unrefuted testimony reveals that this conviction occurred as a result of a check returned for insufficient funds after Ivey had closed his bank account in reliance on the bank clerk’s incorrect assurance that all checks had cleared.

Prior to being activated from reserve status with the United States Marine Corps and deployed to Iraq in February 2003, Ivey worked as a computer technician and sales person, simultaneously pursuing a degree from Trident Technical College on a part-time basis. Following his arrest in February of 2004 on the drug trafficking charges, Ivey began receiving psychological treatment and therapy through the veteran’s administration hospital in Charleston. He also secured employment as a mortgage originator with The Mortgage Team.^[2] He worked successfully with The Mortgage Team for approximately nine months until his sentencing and incarceration in November of 2004.

In support of his application, Ivey submitted letters of reference from two of his co-workers at The Mortgage Team, Mickey Godfrey and Reese Earley. Additionally, Mr. Richard Allen Willis, a local realtor who has worked in the past with Ivey in his capacity as a mortgage originator, testified at the hearing on behalf of Ivey. Mr. Willis spoke enthusiastically of Ivey’s competence and honesty in that role.

Ivey also submitted the written report of L. Randolph Waid, Ph.D., a licensed clinical psychologist. Dr. Waid saw Ivey for assessment, but not for treatment.^[3] Dr. Waid conducted a thorough evaluation, meeting with Ivey three times and conducting various tests, including but not limited to the Shipley Scale and Minnesota Multiphasic Personality Inventory-2. He also evaluated Ivey for personality disorders and substance abuse. Additionally, Dr. Waid interviewed Ivey’s parents and two of his friends.

Dr. Waid’s report indicates that Ivey is not currently using illegal drugs and had no prior history of illegal drug use other than during the period following his return from Iraq. Essentially, Dr. Waid’s report indicates that Ivey’s past criminal conduct was “inconsistent with his social history” and that he is successfully moving past his previous problems and functioning well. Dr. Waid further concluded that Ivey is not an individual who “lacks integrity” and that he is not at significant risk of recidivism.

Ivey was released from prison in May of 2006. He is currently operating his own computer repair business and continuing to work toward earning a degree through on-line courses from Limestone College. He seeks a mortgage originator’s license so he can return to employment with The Mortgage Team.

LAW

Based upon the foregoing Findings of Fact, the court concludes the following as a matter of law.

1. Jurisdiction

Jurisdiction over this case is vested with the South Carolina Administrative Law Court pursuant to S.C. Code Ann. § 37-6-414 (Supp. 2005), S.C. Code Ann. § 40-58-55(A) (Supp. 2005), and S.C. Code Ann. § 1-23-600(B) (Supp. 2005). The weight and credibility assigned to evidence presented at the hearing of a matter is within the province of the trier of fact. See S.C. Cable Television Ass’n v. S. Bell Tel. & Tel. Co., 308 S.C. 216, 222, 417 S.E.2d 586, 589 (1992). Furthermore, a trial judge who observes a witness is in the best position to judge the witness’s demeanor and veracity and to evaluate the credibility of his testimony. See, e.g., Woodall v. Woodall, 322 S.C. 7, 10, 471 S.E.2d 154, 157 (1996); Wallace v. Milliken & Co., 300 S.C. 553, 556, 389 S.E.2d 448, 450 (Ct. App. 1990).

In presiding over this contested case, the court serves as the finder of fact and makes a de novo determination regarding the licensing matters at issue. See S.C. Code Ann. § 1-23-600(B) (Supp. 2005); Marlboro Park Hosp. v. S.C. Dep’t of Health & Envtl. Control, 358 S.C. 573, 577-79, 595 S.E.2d 851, 853-54 (Ct. App. 2004); Brown v. S.C. Dep’t of Health & Envtl. Control, 348 S.C. 507, 512, 560 S.E.2d 410, 413 (2002).

2. Mortgage Loan Originator Requirements

To be licensed as a mortgage loan originator, an applicant must be at least eighteen years of age and must have at least six months’ experience in residential mortgage lending or complete eight hours of continuing education within ninety days of employment. S.C. Code Ann. § 40-58-50(D) (Supp. 2005). Further, before issuing a license to a mortgage loan originator, the Department must find that the applicant’s “financial responsibility, experience, character, and general fitness . . . are such as to command the confidence of the community and to warrant the belief that the business may be operated honestly, fairly, and efficiently according to the purposes of this chapter . . . .” S.C. Code Ann. § 40-58-60(A) (Supp. 2005). If these requirements have not been met, the Department is required to refuse the license. Id (“If the department does not so find, it shall refuse to license the applicant . . . .”) (emphasis added).

In determining whether an applicant has the requisite character and fitness to be licensed as a mortgage loan originator, the court may consider factors such as whether the applicant has “(1) violated a provision of this chapter or an order of the department; (2) withheld material information in connection with an application for a license or its renewal, or made a material misstatement in connection with the application; [or] (3) been convicted of a felony or of an offense involving breach of trust, moral turpitude, fraud, or dishonest dealing within the past ten years.” S.C. Code Ann. § 40-58-55(A) (Supp. 2005). Whether an applicant has demonstrated the requisite financial responsibility, experience, character, and fitness is within the discretion of the court. See S.C. Code Ann. § 1-23-600(B) (Supp. 2005); Marlboro Park Hosp., 358 S.C. at 577-79, 595 S.E.2d at 853-54; Brown, 348 S.C. at 512, 560 S.E.2d at 413. See also S.C. Code Ann. § 40-58-60(A) (Supp. 2005).

3. Conclusions

After carefully weighing the evidence and applying the law as discussed above, the court finds that Ivey’s application for a mortgage originator’s license should be denied.

The court is impressed with Ivey’s efforts to turn his life around following his prison sentence by attempting to obtain gainful employment and continuing his education. The court is also mindful of the support and favorable recommendations offered by his co-workers, professional colleagues, and psychologist. Nonetheless, the factors weighing in Ivey’s favor are simply insufficient at the present time to overcome the recent criminal convictions and prove to the court by a preponderance of the evidence that Ivey has the character and fitness required by the statute. Ivey has been convicted of multiple felony counts of drug trafficking within the past two years.^[4] Moreover, Ivey completed his prison sentence for these crimes only six months ago. Insufficient time has elapsed for Ivey to persuasively demonstrate a rehabilitated character and lack of recidivism that would command the confidence of the community in light of these criminal acts.^[5]

ORDER

Based upon the Findings of Fact and Conclusions of Law stated above, the court finds that the Petitioner’s application for a mortgage originator’s license should be denied. It is therefore

ORDERED that the Department shall deny Petitioner’s application for a mortgage loan originator’s license in accordance with §§ 40-58-50 et seq. (Supp. 2005).

IT IS SO ORDERED.

______________________________

PAIGE J. GOSSETT

Administrative Law Judge

November 29, 2006

Columbia, South Carolina