1ST ALLIANCE LENDING, LLC v. DEPARTMENT OF BANKING ET AL.
AC 46493
Appellate Court of Connecticut
December 17, 2024
Bright, C. J., and Westbrook and Eveleigh, Js.
Argued September 12
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Syllabus
The plaintiff appealed from the judgment of the trial court dismissing its administrative appeal from the decision of the defendant Commissioner of Banking revoking the plaintiff‘s license to do business as a mortgage lender in this state and imposing a civil penalty for multiple violations of stаte and federal law. The plaintiff claimed, inter alia, that the commissioner did not have authority to revoke the plaintiff‘s license because it had already been revoked in a separate administrative action. Held:
The trial court did not err in failing to modify or vacate the commissioner‘s revocation order because the commissioner had the authority to revoke the plaintiff‘s mortgage lender license in the present matter after the compelled revocation of the plaintiff‘s license in a separate administrative action.
The trial court did not improperly defer to the defendant Department of Banking‘s statutory interpretation of the term mortgage loan originator as defined in the Connecticut SAFE Act (
The commissioner did not improperly apply a provision (
The trial court properly concluded that substantial evidence in the record supported the commissioner‘s finding that the plaintiff failed to cooperate with the department‘s subpoena in violation of the governing statute (
There was no merit to the plaintiff‘s claim that it was deprived of due process, as the department‘s hearing procedures complied with the Uniform Administrative Procedure Act (
This court declined to review the plaintiff‘s inadequately briefed claim that the penalties ordered by the commissioner were unconstitutionally excessive.
Argued September 12—officially released December 17, 2024
Appeal from the decision of the defendant Commissioner of Banking revoking the plaintiff‘s license to serve as a mortgage lender in Connecticut and imposing a civil penalty, brought to the Superior Court in the judicial district of New Britain and tried to the court, Cordani, J.; judgment dismissing the plaintiff‘s appeal, from which the plaintiff appealed to this court. Affirmed.
Ross H. Garber, with whom, on the brief, were Mitchel H. Kider, pro hac vice, and Michael Y. Kieval, pro hac vice, for the appellant (plaintiff).
Patrick T. Ring, assistant attorney general, with whom were John Langmaid, assistant attorney general, and, on the brief, William Tong, attorney general, for the appellees (defendants).
Opinion
WESTBROOK, J. The plaintiff, 1st Alliance Lending, LLC, appeals from the judgment of the trial court dismissing the plaintiff‘s administrative appeal from the decision of the defendant Commissioner of Banking (commissioner) revoking the plaintiff‘s license to do business as a mortgage lender and ordering the plaintiff to pay a civil penalty. The plaintiff claims that (1) the commissioner did not have authority to revoke the plaintiff‘s license that already had been revoked in a separate administrative action, (2) the court improperly deferred to the incorrect interpretation of
The record reveals the following relevant facts and procedural history. This dispute arises from the plaintiff‘s policies and procedures regarding its unlicensed employees. The plaintiff is a Connecticut limited liability company that was licensed by the department to engage in business as a mortgage lender. The plaintiff employed two relevant classes of employees that assisted customers in applying for and obtaining mortgage loans: mortgage loan originators (MLOs) and home loan consultants (HLCs).1 MLOs are licensed by the state to take residential mortgage loan applications and to offer and negotiate terms of residential mortgage loans.2 HLCs, on the other hand, interact with potential borrowers but are not licensed as MLOs. HLCs are not authorized to take residential mortgage loan applications or to offer or negotiate terms of residential mortgage loans. The plaintiff‘s HLCs used a software program called Byte3 to input information received from potential borrowers into a database, which was used to populate a loan application with the information collected by the HLCs.
whether the plaintiff‘s HLCs were improperly engaging in conduct that required an MLO license and whether the plaintiff was otherwise complying with Connecticut‘s lending requirements. The audit report, published on February 1, 2018, expressed concerns that the plaintiff was violating, inter alia,
On May 3, 2018, two associate financial examiners from the department visited the plaintiff‘s place of business unannounced to conduct a routine compliance examination. The plaintiff, along with other mortgage lenders, was scheduled to be examined between the first quarter of 2016 and May 3, 2018. Of the mortgage lenders that the department was required to examine, the examiners chose the plaintiff on the basis of the date of its last examination and the location of its place of business. During the examination, Massey and Eric Sanders, the plaintiff‘s chief exеcutive of loan servicing, completed Uniform Manager‘s Questionnaires, which the department gives to all licensees for mortgage lender exams. In response to the questionnaire, Massey and Sanders provided the examiners with, inter alia, the plaintiff‘s 2017 internal audit report, which indicated that the plaintiff was not in compliance with state and federal law governing mortgage lenders. The examiners also interviewed various personnel of the plaintiff, including MLOs, HLCs, and executives. Following the May 3, 2018 examination, the examiners requested additional documents from the plaintiff, which Massey and Sanders provided. Beginning on September 19, 2018, one of the department‘s attorneys, Stacey Serrano, also emailed Massey requesting documents, some of which she provided.
On December 5, 2018, as a result of the department‘s compliance examination, the commissioner issued to the plaintiff notices of (1) intent to revoke the plaintiff‘s mortgage lender license, (2) intent to issue a cease and desist order, (3) intent to impose
sent letters notifying the plaintiff of the opportunity to show compliance with the legal requirements for retention of its mortgage lender license. The plaintiff, however, did not show compliance. On July 15, 2019, the commissioner issued amended and restated notices of intent to (1) revoke the plaintiff‘s mortgage lender license, (2) issue an order to cease and desist, and (3) impose a civil penalty (amended notice). The amended notice alleged eleven grounds for finding that the plaintiff violated state and federal law.6
While the revocation proceeding regarding the plaintiff‘s cоmpliance issues (compliance matter) was pending, the plaintiff‘s surety company notified the department, in May, 2019, that it was cancelling the plaintiff‘s surety bond coverage effective July 31, 2019. Upon receiving this notice, the department sent the plaintiff “a letter, dated June 7, 2019, stating that [General Statutes]
On July 29, 2019, the plaintiff sent an email to the department stating that it was voluntarily surrendering its license. Id., 278. The commissioner did not accept the plaintiff‘s license surrender and instead suspended the plaintiff‘s mortgage lender license on July 31, 2019. Id. In light of the plaintiff‘s failure to reinstate or obtain a new surety bond, on August 1, 2019, the commissioner, pursuant to
lender license, and its right to a hearing (surety bond matter). Id. “The plaintiff requested a hearing, which was held in September, 2019. Following the hearing, the commissioner upheld the suspension. The commissioner also concluded that, pursuant to
In November, 2019, the plaintiff appealed the commissioner‘s order in the surety bond matter to the Superior Court, which subsequently dismissed the appeal. See 1st Alliance Lending, LLC v. Dept. of Banking, Superior Court, judicial district of New Britain, Docket No. CV-19-6056459-S (August 26, 2020) (70 Conn. L. Rptr. 365, 369), aff‘d, 342 Conn. 273, 269 A.3d 764 (2022). In March, 2021, the plaintiff appealed to our Supreme Court, which affirmed the judgment of the trial court. See 1st Alliance Lending, LLC v. Dept. of Banking, supra, 342 Conn. 292. In doing so, our Supreme Court rejected the plaintiff‘s claims that “the governing statutes do not permit the defendants to suspend the plaintiff‘s license . . . [and] that, even if the relevant statutes gave the defendants discretion to suspend its license, the trial court incorrectly concluded that the commissioner lawfully exercised his discretion.” Id., 279–80. The Supreme Court held that the plaintiff‘s attempted surrender of its license was ineffective because it did not comply with
While the appeal of the surety bond matter was pending, the department continued with the revocation proceeding in the compliance matter. Between September, 2019, and February, 2020, the department held fifteen days of administrative hearings on the amended notice, during which the parties presented witness testimony and thousands of pages of exhibits to the hearing officer, Attorney Cynthia Antanaitis. At the end оf the administrative hearings, the hearing officer, pursuant to
activities of call center employees; (5)
Pursuant to
remanded the matter to the department, ordering it to consider additional evidence from the Byte system. On April 5, 2022, the commissioner issued a supplemental decision in which he found that the additional Byte system evidence did not refute the relevant facts upon which his decision was based and declined to make any changes to his decision. The plaintiff appealed the commissioner‘s decision and supplemental decision to the Superior Court, which dismissed the plaintiff‘s administrative appeal. This appeal followed. See
The plaintiff first claims that the trial court improperly failed to vacate or modify the commissioner‘s order to revoke the plaintiff‘s mortgage lender license because the commissioner did not have the authority to revoke it. It argues that the commissioner could not have revoked its license on April 16, 2021, because its license already had been revoked on October 4, 2019, in the surety bond matter. The department, on the other hand, argues that the commissioner had authority to revoke the plaintiff‘s license because (1) the plaintiff‘s license was active when the department sought revocation of the plaintiff‘s license in the compliance matter; (2) the plaintiff attempted to avoid revocation in the compliance matter by attempting to surrender its license in the surety bond matter, in which the department was statutorily required to proceed in revoking the plaintiff‘s license; and (3) revocation in the compliance matter and revocation in the surety bond matter have
materially different purposes and consequences. We agree with the department.
“We begin by articulating the applicable standard of review in an appeal from the decision of an administrativе agency. Judicial review of [an administrative agency‘s] action is governed by the [Uniform Administrative Procedure Act (UAPA),
“Cases that present pure questions of law, however, invoke a broader standard of review than is ordinarily involved in deciding whether, in light of the evidence,
the agency has acted unreasonably, arbitrarily, illegally or in abuse of its discretion. . . . [Our Supreme Court has] determined, therefore, that the traditional deference accorded to an agency‘s interpretation of a statutory term is unwarranted when the construction of a statute . . . has not previously been subjected to judicial scrutiny [or to] . . . a governmental agency‘s time-tested interpretation . . . . Whether the relevant statutory scheme granted the commissioner the legal authority to . . . revoke the plaintiff‘s mortgage lender license is a question of statutory interpretation over which our review is plenary. . . . We review . . . the relevant statutory
We also note that, “[b]ecause the . . . appeal to the trial court [was] based solely on the [administrative] record, the scope of the trial court‘s review of the [commissioner‘s] decision and the scope of our review of that decision are the same. . . . In other words, the trial court‘s decision in this administrative appeal is entitled to no deference from this court.” (Citation omitted; internal quotation marks omitted.) Commissioner of Correction v. Freedom of Information Commission, 307 Conn. 53, 63 n.15, 52 A.3d 636 (2012); see also Hartford Police Dept. v. Commission on Human Rights & Opportunities, 347 Conn. 241, 246 n.1, 297 A.3d 167 (2023).
to cancel a mortgage lender‘s bond, it must notify the commissioner of the effective date of cancellation, at which point the “commissioner shall automatically suspend the licenses of a mortgage lender . . . .”18 (Emphasis added.) Our Supreme Court has stated that “the use of the word ‘shall’ in
Essentially, the plaintiff argues that its license, having been revoked once, could not be revoked a second time. The commissioner argues that the plaintiff cannot
successfully thwart an ongoing revocation proceeding based on allegedly significant substantive compliance failures by surrendering its license or by engineering an automatic revocation due to the cancellation of its surety bond. The resolution of this issue is important because the parties agree that not all revocations are equal and that the revocation at issue in the
Section
the commissioner to revoke mortgage lender licenses that have expired or been surrendered up to one year after expiration or the date that the commissioner accepted a request to surrender. Although the statutory scheme is silent as to whether the commissioner may revoke a license that already has been revoked, we find that the commissioner has such authority under the circumstances in the present matter.
In Stern v. Medical Examining Board, 208 Conn. 492, 545 A.2d 1080 (1988), our Supreme Court concluded that the Medical Examining Board (board) had no jurisdiction to revoke the plaintiff‘s license to practice medicine because the plaintiff allowed his license to expire before the board filed disciplinary charges against him. Id., 501. The court reasoned that the board only had authority to discipline “physicians,” and the fact that the plaintiff‘s license had expired meant that he was not a physician at the time that the board commenced disciplinary proceedings. Id., 502. The court further reasoned that, although the board might have had “continuing jurisdiction to levy a monetary fine on the plaintiff,” the board only sought revocation of the plaintiff‘s license. Id., 503.
Although the present matter is similar to Stern because the plaintiff did not have an active mortgage lender license at the time that the commissioner revoked its license in the underlying proceedings, the present matter is distinguishable from Stern in two significant ways. First, the
initiated revocation proceedings against it in the compliance matter. The plaintiff‘s license did not become inactive until approximately ten months after the commissioner first issued notice of intent to revoke the plaintiff‘s license in the compliance matter. Second, the department not only sought to revoke the plaintiff‘s license, but also to impose a civil fine аnd to issue a cease and desist order, whereas the board in Stern sought only to revoke an expired license. Accordingly, unlike the board in Stern, the commissioner had authority to pursue revocation proceedings and civil penalties in the compliance matter because the plaintiff was a licensed mortgage lender subject to the department‘s authority at the time that the proceedings commenced. See Patel v. Board of Healing Arts, 22 Kan. App. 2d 712, 713, 920 P.2d 477 (1996) (because jurisdiction was proper at time disciplinary proceedings commenced, court found that subsequent cancellation of plaintiff‘s license did not affect board‘s jurisdiction).
Moreover, the plaintiff cannot avoid the consequences of violating the mortgage loan statutes merely by forfeiting its surety bond during the department‘s compliance revocation proceeding. If that were the case, the department‘s ability to hold mortgage lenders accountable for violating mortgage loan statutes would be significantly circumscribed because compliance revocation proceedings, which by nature require intensive fact finding, take more time than revocation proceedings based on a mortgage lender‘s failure to maintain proper surety bond coverage. “In construing a statute, common sense must be used and courts must assume that a reasonable and rational result was intended.” (Internal quotation marks omitted.) Goldstar Medical Services, Inc. v. Dept. of Social Services, supra, 288 Conn. 803. Thus, we conclude that the commissioner had the authority to follow through with its initial revocation proceedings in the compliance matter after
the plaintiff forfeited its surety bond, which required the commissioner to initiate additional revocation proceedings that carry lesser consequences. See id., 805 (“[t]he plaintiffs’ contention that a provider can place itself beyond the reach of these strong statutory sanctions and provisions simply by terminating its provider agreement on thirty days notice, defies logic and requires a construction of the statute that thwarts its intended purpose, and leads to an absurd result“).
Furthermore, the final status of the plaintiff‘s license was not yet settled when the commissioner revoked the plaintiff‘s license in the compliance matter. The commissioner issued the order to revoke the plaintiff‘s license in the compliance matter on April 16, 2021. At that time, the plaintiff‘s appeal of the surety bond matter to the Supreme Court was still pending. Our Supreme Court‘s affirmance of the surety bond revocation in February, 2022, would not constitute a basis for the Superior Court to reverse the commissioner‘s revocation decision in the underlying matter. Clearly, the commissioner had the authority and jurisdiction to revoke the plaintiff‘s license for its various compliance failures given that that the revocation proceedings were instituted prior to the surety bond matter and the plaintiff was still disputing the revocation of its license in the surety bond matter when the commissioner acted in the present matter. The plaintiff could have chosen to abandon its appeal of the revocation in the present matter because its revocation in the surety bond matter had been upheld by our Supreme Court, but it chose to continue with the appeal because of the regulatory consequences of the revocation
Because we find that the commissioner had the authority to revoke the plaintiff‘s mortgage lender license in the compliance matter after the compelled revocation of the plaintiff‘s license in the surety bond matter, the trial court did not err in failing to modify or vacate the commissioner‘s revocation order.
II
The plaintiff next claims that the court improperly deferred to the department‘s statutory interpretation of “mortgage loan originator” as defined in
“[R]eview of an administrative agency decision requires a court to determine whether there is substantial evidence in the administrative record to support the agency‘s findings of basic fact and whether the conclusions drawn from those facts are reasonable. . . . Neither this court nor the trial court may retry the case or substitute its own judgment for that of the administrative agency on the weight of the evidence or questions of fact. . . . Our ultimate duty is to determine, in view of all of the evidence, whether the agency, in issuing its order, acted unreasonably, arbitrarily, illegally or in abuse of its discretion.” (Internal quotation marks omitted.) Goldstar Medical Services, Inc. v. Dept. of Social Services, supra, 288 Conn. 833. “An appellate court‘s duty in assessing whether substantial evidence has been presented is to determine whether the record аffords a substantial basis of fact from which the fact in issue can be reasonably inferred from the evidence presented.” (Internal quotation marks omitted.) Id., 834.
The parties’ dispute as to the meaning of “mortgage loan originator” presents a question of statutory interpretation. As previously stated, although courts afford deference to the construction of a statute applied by the administrative agency empowered by law to carry out the statute‘s purposes, such deference is “unwarranted when the construction of a statute . . . has not previously been subjected to judicial scrutiny [or to] . . . a governmental agency‘s time-tested interpretation . . . .” (Internal quotation marks omitted.) Dept. of Public Safety v. Freedom of Information Commission, 298 Conn. 703, 716-17, 6 A.3d 763 (2010). The department‘s interpretation of “mortgage loan originator” has never been subjected to judicial scrutiny or consistently applied by the agency over a long period of time. Accordingly, the traditional deference normally accorded to an agency‘s interpretation of a statutory term is not warranted in this case. See id., 717-18. Additionally, because the appeal to the trial court was based solely on the record, we accord no deference to the trial court‘s interpretation of “mortgage loan originator.” See Commissioner of Correction v. Freedom of Information Commission, supra, 307 Conn. 63 n.15.
The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (federal
minimum standards in the federal statute as a floor.
Both parties agree that the additional definitions set forth in Regulation H,
“In construing a statute, common sense must be used and courts must assume that a reasonable and rational result was intended. . . . Moreover, [w]e must avoid a construction that fails to attain a rational and sensible result that bears directly on the purpose the legislature sought to achieve. . . . If there are two possible interpretations of a statute, we will adopt the more reasonable construction over one that is unreasonable.” (Citations omitted; internal quotation marks omitted.) Goldstar Medical Services, Inc. v. Dept. of Social Services, supra, 288 Conn. 803-804.
Even if we accepted the plaintiff‘s contention that property addresses are a necessary element of applications, there is substantial evidence in the record showing that the HLCs routinely collected all information necessary, including property addresses, to complete all six components of the 1003 form, which the plaintiff agrees is a residential mortgage loan application. For example, the plaintiff employed Martin Murdock as an HLC from July, 2016, to January, 2019. The following exchange occurred between the department‘s counsel and Murdock before the hearing officer:
“Q. So, looking at the first bullet point [of the HLC job description] it says ‘obtain all applicable information to complete 1003.’ Would you say that while [an HLC for the plaintiff] that you basically obtained all applicable information to complete 1003 for potential borrowers?
“A. Yes.
“Q. And then in parentheses it says ‘no property information or final loan amount.’ Would you at times obtain property information for a potential borrower?
“A. At times, yes.
“Q. And would you obtain a final loan amount for a potential borrower while employed as [an HLC for the plaintiff]?
“A. Yes.
“Q. So, looking at this description of [HLC while employed by the plaintiff] you would obtain all applicable information to complete a 1003, including property information and final loan amount?
“A. Yeah. . . . [A]t times I sometimes didn‘t do the full inquiry. I would get income, assets, credit information, and I would ask them if there‘s a particular property that they had in mind. If they didn‘t, then I would leave that information out for property information, the final loan amount. If they did, I would let them know if that house is something that they could pursue.”
The plaintiff also employed Alexander Cottone as an HLC from June, 2016, to December, 2018. Similar to Murdock, Cottone testified that he would obtain all information necessary to complete all six parts of the 1003, including property addresses, which he used to gather information on loans available to potential borrowers.22 Sara Jenkins, an HLC employed by the plaintiff from July, 2013, to July, 2019, also testified that she would obtain purchase and sales agreements from potential borrowers, which showed the property addresses. Furthermore, the plaintiff‘s own internal compliance audit report stated that HLCs engaged in activity that required an MLO license and that the compliance issues were “systemic.” Because the рlaintiff‘s HLCs testified that they routinely obtained property addresses from potential borrowers, substantial evidence supports a finding that the HLCs took mortgage loan applications even under the plaintiff‘s own interpretation of Regulation H.
The plaintiff additionally argues that the HLCs’ collection of information does not constitute the taking of a mortgage loan application because the HLCs did not input consumer information directly into applications. The appendix to Regulation H, however, provides that “[a]n individual ‘takes a residential mortgage loan application’ even if the individual . . . [o]nly inputs the information into an online application or other automated system . . . .”
Lastly, the plaintiff argues that the HLCs’ collection of information does not
The trial court properly concluded that substantial evidence supports the commissioner‘s finding that the plaintiff violated the Connecticut SAFE Act by using unlicensed HLCs to take residential mortgage loan applications. The administrative record reveals that, under the plaintiff‘s business model, HLCs collected information from potential borrowers, including their property addresses, and input the collected information into the Byte system, which automatically generated draft applications for the MLOs. We conclude that this conduct constitutes “taking a residential mortgage loan application” under the definitions set forth in Regulation H and the Connecticut SAFE Act. Accordingly, we conclude that the court did not improperly defer to the department‘s interpretation of the definition of MLO in reaching its conclusion that substantial evidence supports the commissioner‘s finding that the plaintiff violated the Connecticut SAFE Act.
III
The plaintiff next claims that the commissioner improperly applied
The appropriate standard of review is well settled. As previously stated, “[r]eview of an administrative agency decision requires a court to dеtermine whether there is substantial evidence in the administrative record to support the agency‘s findings of basic fact and whether the conclusions drawn from those facts are reasonable.” (Internal quotation marks omitted.) Goldstar Medical Services, Inc. v. Dept. of Social Services, supra, 288 Conn. 833.
Section 36a-498e (b) provides in relevant part: “(1) [n]o person, other than an individual, who is required to be licensed . . . shall fail to establish, enforce and maintain policies and procedures reasonably designed
Here, the commissioner made the following findings: “While [the plaintiff] had a patchwork of policies and procedures that were modified over time, these were insufficient to address the violations involved in this case. More important, such policies and procedures were not enforced. [The plaintiff] hired employees with no prior experience or training in the financial services industry to be the main point of consumer contact; did not sufficiently address the red flags associated with call center employee conduct; assigned call center employees to sales rather than having them supervised by a licensed MLO; offered only sporadic training . . . which was at odds with the compensation structure and employee contests that encouraged call center employees to snare borrowers at any cost; and did not utilize a predictable and consistent pattern of discipline in dealing with problem employees. While [the plaintiff] argues that it subsequently attempted remedial measures, including discipline, in some instances, this was a case of ‘too little, too late.‘”
Substantial evidence in the record supports the commissioner‘s finding that the plaintiff failed to establish, enforce, and maintain policies and procedures reasonably designed to achieve compliance with regulatory requirements and that such failure resulted in conduct that violated state and federal law. The plaintiff‘s own 2017 internal audit report, which was published on February 1, 2018, stated that its business model increased the likelihood of violations, and communications between the plaintiff‘s compliance officer and executives confirmed that the plaintiff understood this. Indeed, the plaintiff created a business model that incentivized the HLCs to close loans by paying them commission, holding contests, and offering prizes based on the number of loans they closed. Some HLCs made more in commission than base salary, and many believed they were the primary contact between the plaintiff and potential borrowers. Although the plaintiff incentivized the HLCs to close loans, it instructed them not to take the property information of potential borrowers to avoid the unlicensed taking of mortgage loan applications. As discussed in part II of this opinion, however, this instruction was often ignored by HLCs, without negative consequences, and, thus, substantial evidence supports the commissioner‘s finding that the plaintiff violated the Connecticut SAFE Act. Moreover, the plaintiff concedes that it violated TILA and other regulatory requirements related to issuing adverse action notices to borrowers. Accordingly, the plaintiff‘s policies and procedures resulted in regulatory violations.
It can be reasonably inferred from the administrative record that the plaintiff‘s systemic compliance issues continued after the effective date of
Moreover, Murdock, Cottone, and Jenkins, who were employed by the plaintiff as HLCs before and after July 1, 2018, testified that, throughout their employment with the plaintiff, they collected all information necessary to complete residential mortgage loan applications, which supports the commissioner‘s finding that the plaintiff violated the SAFE Act, as discussed in part II of this opinion. Neither Murdock, Cottone, nor Jenkins indicated that the plaintiff changed their job responsibilities after July 1, 2018. Because the evidence demonstrates that the plaintiff did not make any significant changes to ensure regulatory compliance after July 1, 2018, the commissioner reasonably could infer from the record that the plaintiff‘s violations that took place prior to the effective date of
Substantial evidence in the record supports the commissioner‘s finding that the plaintiff failed to establish, enforce, and maintain policies and procedures reasonably designed to achieve compliance with regulatory requirements, which resulted in conduct that violated, inter alia, the Connecticut SAFE Act after July 1, 2018. Because substantial evidence supports the commissioner‘s finding that the plaintiff violated
IV
The plaintiff next claims that the commissioner improperly concluded that the plaintiff failed to fulfill its obligation pursuant to
Section 36a-17 provides in relevant part: “(c) For the purpose of any investigation . . . the commissioner may . . . direct, order or subpoena such person to produce records the commissioner deems relevant or material. . . . (e) Any person who is the subject of any inquiry, investigation, examination or proceeding pursuant to this section shall (1) make its records available to the commissioner in readable form . . . (3) provide copies or computer printouts of records when so requested; (4) make or compile reports or prepare other information as directed by the commissioner . . . and (6) otherwise cooperate with the commissioner. . . .”
The following additional facts are relevant to the resolution of this claim. On September 19, 2018, as part of the department‘s investigation into the compliance matter, Serrano requested that the plaintiff provide emails sent and received by ten of the plaintiff‘s employees over a specified four month period. In recognition that the materials requested were voluminous, Serrano offered to allow a “rolling basis for the production of such records” and advised the plaintiff that it did not have to produce emails protected by the
The commissioner found that, “[d]uring the hearing, the department noted that no emails were produced in response to the request, notwithstanding the department‘s subsequent issuance of a subpoena . . . with which [the plaintiff] failed to comply.” It further found that “[the plaintiff‘s] claim of hardship is not persuasive. In addition, as a regulated member of the financial services industry serving consumers in Connecticut and other states, [the plaintiff‘s] failure to comply with a governmental subpoena is unacceptable.” The commissioner thereafter concluded that “[the plaintiff‘s] failure to produce the requested emails even after the agency subpoenaed them constitutes a violation of [§] 36a-17 (e) . . . . As a then-licensed mortgage lender, [the plaintiff] had an obligation to comply with state laws governing the operation of its licensed business.”
On appeal, the plaintiff argues that the commissioner cannot find that it had failed to cooperate in violation of
district of Hartford, Docket No. CV-07-4034033-S (March 24, 2008) (45 Conn. L. Rptr. 238, 238–39) (“[b]y its application to quash an investigative subpoena issued pursuant to [the commissioner‘s statutory authority], the plaintiff is asserting his right to be heard expeditiously on a matter that is limited in scope from an ordinary civil action“). Accordingly, we conclude that the department was not required to seek judicial enforcement in order to find that the plaintiff failed to cooperate with its subpoena.
The plaintiff next argues that the evidence does not support the commissioner‘s finding that it violated
Despite the department‘s willingness to work with the plaintiff so that it could meet its burden of production, the record demonstrates that the plaintiff did not produce all emails requested. Although the plaintiff points to emails cited in the commissioner‘s order as evidence that it complied with the department‘s production request, Daniel Landini, an associate financial examiner for the department, testified that the plaintiff never produced the emails requested. The plaintiff‘s counsel also stated before the hearing officer that “our issue is not that we didn‘t have the emails. It is that there were way too many.” Moreover, John DiIorio, the plaintiff‘s chief executive officer, testified that he did not know if the plaintiff ever produced the emails requested by the department. He also testified, however, that the plaintiff did not produce the emails requested in the department‘s subpoena because it was “waiting for [the department] to seek enforcement, and [it] didn‘t.” Thus, contrary to the plaintiff‘s assertions, substantial evidence supports a finding that the department conferred with the plaintiff to resolve the plaintiff‘s concerns, but the plaintiff still failed to produce all requested emails.
The department, pursuant to its statutory authority in
V
The plaintiff next сlaims that it was deprived of due process because (1) the department failed to give the plaintiff an opportunity to be heard by an independent fact finder, and (2) the court failed to provide meaningful review of the commissioner‘s decision.26 We conclude that the plaintiff‘s due process claim lacks merit.
The plaintiff first argues that the department failed to provide a neutral and impartial hearing because both the commissioner and the hearing officer were biased in favor of the department. It argues that the hearing officer was biased because she is employed by the department and reports to the commissioner. It additionally argues that the commissioner was biased because he (1) improperly found that the plaintiff violated the Connecticut SAFE Act and (2) filed the notices of intent and issued the final decision in the administrative matter. We are not persuaded.
Our Supreme Court has “held repeatedly that the procedures required by the UAPA exceed the minimal procedural safeguards mandated by the due process clause.” (Internal quotation marks omitted.) Pet v. Dept. of Health Services, 228 Conn. 651, 661, 638 A.2d 6 (1994). The UAPA provides that, “[i]n a contested case, all parties shall be afforded an opportunity for hearing after reasonable notice.”
“It is well established that [i]t is not violative of due process for the same authority which initiated the subject of the hearing to listen to and determine its outcome as long as that authority gives the person appearing before it a fair, open and impartial hearing. . . . An administrative agency can be the investigator and adjudicator of the same matter without violating due process.” (Internal quotation marks omitted.) Elf v. Dept. of Public Health, 66 Conn. App. 410, 425, 784 A.2d 979 (2001). Moreover, “there is a presumption that
Here, the department provided the plaintiff with fifteen days of administrative hearings before a hearing officer, and the commissioner subsequently issued a final decision after reviewing the hearing officer‘s proposed decision as well as the administrative record. The plaintiff does not point to any evidence that shows that the hearing officer personally carried out investigative functions in this matter. The fact that the hearing officer is an employee of the department, standing alone, does not render the proceedings offensive to due process. See Elf v. Dept. of Public Health, supra, 66 Conn. App. 425. Nor is due process offended merely because the commissioner initiated the administrative proceeding and determined its outcome. See id. Although the plaintiff argues that the evidence relied on by the commissioner does not support his determination that the HLCs took applications and offered or negotiated loan terms, mere disagreement with the commissiоner‘s findings is not sufficient to demonstrate that the commissioner was biased. Rather, the plaintiff attacks the propriety of the structure of the department generally, essentially arguing that there is inherent potential for bias. Because, as previously noted, the combination of investigatory and adjudicative functions within the same agency does not itself offend due process, the plaintiff has not satisfied its burden of showing that it suffered unconstitutional bias. See id. Accordingly, we conclude that the department‘s hearing procedures complied with the UAPA and the plaintiff has failed to establish any facts indicating that the hearing officer or commissioner was biased. Thus, the department did not deprive the plaintiff of due process.
The plaintiff additionally argues that the trial court deprived it of due process by failing to provide meaningful review of the commissioner‘s decision. Again, we are not persuaded. “Our case law establishes that judicial review of administrative decisions is deferential. A statutory right to appeal, however, must be meaningful. [A] court cannot take the view in every case that the discretion exercised by the local [agency] must not be disturbed, for if it did the right of appeal would be empty . . . .” (Internal quotation marks omitted.) Gibbons v. Historic District Commission, 285 Conn. 755, 766, 941 A.2d 917 (2008). As previously discussed, “[r]eview of an administrative agency decision requires a court to determine whether there is substantial evidence in the administrative record to support the agency‘s findings of basic fact and whether the conclusions drawn from those facts are reasonable.” (Internal quotation marks omitted.) Goldstar Medical Services, Inc. v. Dept. of Social Services, supra, 288 Conn. 833.
The plaintiff argues that the court misapplied the substantial evidence test by deferring to the department and, therefore, violated its due process rights. Such an argument is meritless. The plaintiff has failed to point to anything in the court‘s memorandum of decision that would support a conclusion that the trial court applied an incorrect standard of review. Instead,
VI
The plaintiff next claims that the penalties ordered by the commissioner are unconstitutionally excessive in violation of the eighth amendment to the United States constitution and article first, § 8, of the Connecticut constitution. We conclude that the plaintiff‘s claim is inadequately briefed and, therefore, we decline to review it.
“We repeatedly have stated that [w]e are not required to review issues that have been improperly presented to this court through an inadequate brief. . . . Analysis, rather than mere abstract assertion, is required in order to avoid abandoning an issue by failure to brief the issue properly. . . . [F]or this court judiciously and efficiently to consider claims of error raised on appeal . . . the parties must clearly and fully set forth their arguments in their briefs. . . . The parties may not merely cite a legal principle without analyzing the relationship between the facts of the case and the law cited.” (Citation omitted; internal quotation marks omitted.) State v. Buhl, 321 Conn. 688, 724, 138 A.3d 868 (2016); see also Getty Properties Corp. v. ATKR, LLC, 315 Conn. 387, 413, 107 A.3d 931 (2015) (claim was inadequately briefed when appellants undertook “no analysis or application of the law to the facts of [the] case“). “Where a claim is asserted in the statement of issues but thereafter receives only cursory attention in the brief without substantive discussion or citation of authorities, it is deemed to be abandoned.” (Internal quotation marks omitted.) Connecticut Light & Power Co. v. Dept. of Public Utility Control, 266 Conn. 108, 120, 830 A.2d 1121 (2003).
Here, the plaintiff argues that the penalties ordered by the commissioner are unconstitutionally excessive. The plaintiff uses approximately one and one-half pages to set forth the legal framework for determining whether a civil penalty is an excessive fine in violation of the eighth amendment to the United States constitution or article first, § 8, of the Connecticut constitution. See Seramonte Associates, LLC v. Hamden, 202 Conn. App. 467, 481, 246 A.3d 513 (2021) (“to determine whether a financial penalty is unconstitutional under the excessive fines clause of the eighth amendment to the federal constitution, courts rely on [a] two step inquiry“), aff‘d, 345 Conn. 76, 282 A.3d 1253 (2022). Then, without engaging in legal analysis, the plaintiff concludes that, “[h]ere, the remedies are excessive fines under the federal and state tests.” Not only does the plaintiff fail to discuss the facts of the case, but it also fails to specify which penalties the commissioner imposed and analyze how the legal authorities cited support its argument that such penalties are excessive. Because the plaintiff makes no effоrt to employ the governing “grossly disproportional test“; see Seramonte Associates, LLC v. Hamden, supra, 481-86; the plaintiff‘s claim that the commissioner ordered unconstitutionally excessive penalties is inadequately briefed.
VII
Last, the plaintiff claims that if any of the commissioner‘s findings of violation were made in error, we must remand the matter for a new penalty hearing because the commissioner failed to specify which violations support the imposition of each penalty. As we have previously concluded in this opinion, the commissioner‘s challenged findings are supported by substantial evidence in the record. Therefore, remand is unwarranted.
The judgment is affirmed.
In this opinion the other judges concurred.
Notes
“Q. Okay. So, you would obtain information to complete a 1003?
“A. I would, yes. I would absolutely get all parts that were necessary to complete a 1003, all six parts, yes.
“Q. So, this [HLC job description] indicates no property information. So would you at times get property information . . . ?
“A. Yes, when people would tell me that they found a house I would tell them, send me the cоntract. I wouldn‘t be the one who would put the address in the system. The majority of the time it was done by the [MLO]. They were the one who put that last part in, which we had a few at the company. I‘m sure you guys know. But, yes, we would get that information. It would come in the form of either a purchase and sales contract, which would come directly to us as [an HLC]. And then it was handed off to—which was the last part of the . . . application, and then it was handed off to the [MLO] for them to do the official . . . 1003. . . .
“Q. So, even before you get a purchase and sale contract would you receive information concerning a property address that a borrower was interested [in]?
“A. Yes, absolutely.
“Q. And what if anything would you do with that information?
“A. Usually look up the house, look up taxes, what the purchase price is on Zillow, or . . . something similar to that. That would give me an accurate portrayal of what the potential amount could be for . . . the loan amount.”