STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FREC, HAROLD L. CLARK, )

)

Petitioner, )

)

vs. ) CASE NO. 75-1699

) PROGRESS DOCKET NO. 2705

WALTER K. MCGRATH, ) HIGHLANDS COUNTY

)

Respondent. )

)

RECOMMENDED ORDER

The subject cause came on for hearing before the undersigned on December 8, in 1975, Florida, based on an administrative complaint which was issued by the Florida Real Estate Commission on or about July 12, 1975.

APPEARANCES

For Petitioner: Frederick W. Jones, Esquire

Staff Counsel

Florida Real Estate Commission Winter Park, Florida 32789

1. Along therewith, Respondent was advised of his rights by by service of a copy of the "Explanation of Rights" and a copy of "Election Rights". Thereafter, the Respondent timely petitioned for an Administrative Hearings pursuant to Chapter 120.57, Florida Statutes. The Respondent Walter K. McGrath, at all times alleged and at all times relevant thereto was a registered real estate broker doing business in the State. The Florida Real Estate Commission hereinafter called "Commission" seeks to revoke, suspend or otherwise discipline the Respondent based on the fact that he engaged in the issuance of checks that were returned for nonsufficient funds and therefore he violated Section 475.271(1)(b), Florida Statutes; that the Respondent did not hold in his escrow account monies that were given to him and entrusted to him as a broker and as an escrow agent and ?

   transactions more specifically set forth in the complaint which is attached hereto and is marked for identification as Petitioner's Exhibit #1; that by so doing the Respondent is in

   violation of Subsection 475.25(1)(i), Florida Statutes, which requires that a broker must maintain in his escrow bank account, monies which are entrusted to him by a person dealing with him as a broker until disbursement thereof was properly authorized and inasmuch as this money was allegedly not in fact maintained in his escrow bank account, he is guilty of appropriating and converting the money to his own use. Finally the complaint alleges that the Respondent is guilty of a course of conduct or practices which shows that he is so incompetent, negligent, dishonest, and untruthful that monies, properties, transactions and the rights of those with whom he may sustain a confidential relationship may not be entrusted to him, all in violation of Section 475.25(3), Florida Statutes. The Commission based this allegation on the fact that numerous transactions of this type occurred.

   
   

2. The Administrative Complaint sets forth approximately twelve counts which the undersigned will not enumerate specifically herein but will state, and it suffices to say, that most of the alleged transactions occurred during the periods of May 1974 through January, 1975.

   
   

3. The Respondent was not represented by counsel at the hearing and although advised that the Hearing Officer would entertain a motion to recess the hearing until such time as he obtained counsel due to the extensive and serious allegations alleged in the complaint and based on the fact that the Commission was seeking to revoke his license, the Respondent nevertheless elected to proceed without the advice and/or representation by counsel and the record reflects that he was aware of such rights but did not care to exercise such. The Respondent merely wanted to admit to the factual allegations of the complaint and to state for the record various factors which in his opinion would serve as mitigation of these allegations.

   
   

4. As stated, the Respondent admitted all of the factual allegations contained in the complaint which is received in evidence and marked for identification as Petitioner's Exhibit #1. The Respondent stated that he has been a registered real estate broker from some 15 odd years and that during this period of time, he has received various commendations and awards from the Commission and other real estate boards within the state. The Respondent also testified and the Commission does not dispute the fact that restitution has been made for all of the checks issued by the Respondent and which were returned due to insufficient funds. The Respondent also denied that there was any intent or attempt on his part to defraud and/or convert to his personal use any of the monies entrusted to him. He testified further that he

   has, during the course of his employment as a realtor, had in his possession millions of dollars entrusted to him and at no other time has he attempted to convert or otherwise defraud people who had entrusted such monies to him. Finally, the Respondent testified that due to personal problems that he had which he was unable to resolve, he failed to maintain his escrow account with the proper funds to disburse escrow monies as he was by law required to do.

   
   

5. It thus appears that the Respondent in this case was laboring under personal financial difficulties to which he utilized funds which were entrusted to him as a realtor and used such to his personal use. The record also reflects that he has been engaged in the real estate business for approximately 15years and this is the first occasion in which any disciplinary action has been instituted against him. In all disciplinary matters, reprimand and leniency should be considered for first offenders and/or minor infractions of the law. Obviously in view of the numerous allegations in the complaint and the Respondent's admission thereof, we're not here dealing with a minor infraction. However, the Petitioner is, as far as the record reveals, a first offender. The degree of the Petitioner's culpability is certainly relevant in respect to the proper penalty to be imposed for the alleged violations. In Brod v. Jernigan, 188 So.2d 575, the Second District Court indicated that the Commission, though vested with broad discretionary power and authority to supervise those engaged in the real estate business, even to the point of taking away their means of livelihood by revocation or suspension of license, such action must always be reasonably and cautiously and even sparingly utilized and that the administrative processed of the Commission should be aimed at dishonest and unscrupulous operators; persons who cheat, swindle or defraud the general public in handling real estate transactions. A realtor occupies a fiduciary relationship between the customer in whose behalf he is working and therefore is held to a high degree of trust and confidence. Therefore, this is a matter which is a proper subject for reasonable regulation. See Horne v. Florida Real Estate Commission, Fla. App. 1964, 163 So.2d 515, 517. In view of the fact that the Respondent admittedly issued checks which were returned for the nonsufficient funds and also in view of the fact that by law he was commanded to immediately place in an escrow account and to account for and deliver such monies upon the directive of the parties at interest, he failed to satisfy his obligation and/or responsibilities. Reviewing the facts of the case and the appropriate and relevant statutes, that is Chapter 475, Florida Statutes, the Respondent clearly violated the letter if not the spirit of the law. However, the administrative and

penal processes of the Commission should be aimed at the dishonest and unscrupulous operator and in the opinion of the undersigned, the Respondent in this case is not one who be design cheats, swindles or otherwise defraud the public in handling real estate transactions. This brings up the question of the penalty to be imposed by the Commission and to which the undersigned is charged with recommending. Based on the Respondent's length of service, the numerous awards alluded to by him, the fact that restitution has been made of all monies entrusted to him, the undersigned hereby recommends that the ultimate penalty of revocation would be harshly inappropriate in light of the facts, the law, and the regulatory intent as stated by the various court decisions which have construed the Commission's administrative processes and the pertinent guidelines governing them. The undersigned therefore recommends that the Respondent's license be suspended for a minimum of 6 months or a maximum of 1 year.

DONE and ENTERED this 19th day of December, 1975, in Tallahassee, Florida.

JAMES E. BRADWELL

Hearing Officer

Division of Administrative Hearings Room 530, Oakland Building Tallahassee, Florida 32304

(904) 488-9675

================================================================= AGENCY FINAL ORDER

================================================================= FLORIDA REAL ESTATE COMMISSION

FREC, HAROLD L. CLARK,

Petitioner,

vs. CASE NO. 75-1699

PROGRESS DOCKET NO. 2705

WALTER K. MCGRATH, HIGHLANDS COUNTY

Respondent.

/

FINAL ORDER

At a regular meeting of the Florida Real Estate Commission held at its Executive Headquarters in Winter Park, Florida on February 16, 1976,

Present: Edgar L. Schlitt, Chairman John R. Wood, Vice Chairman Maggie S. Lassetter, Member

Appearances: Frederick W. Jones, Attorney for Plaintiff Walter K, McGrath, Defendant, in Proper Person

This matter came on for Final Order upon the Examiner's Recommended Order the Plaintiff's and Defendant's Exceptions thereto, and upon consideration thereof, together with the record and oral argument of Counsel for the Plaintiff and Statements made by the Defendant in proper person, and the Commission being otherwise fully advised in the premises, finds:

1.

That according to the records of the Commission, the Defendant Walter K. McGrath is currently registered with the Commission as a real estate broker at 213 Circle Drive, Sebring, Florida 33870.

2.

The Plaintiff's Exceptions to the Examiner's Recommended Order are well taken and should be adopted.

3.

The Defendant's Exceptions to the Examiner's Recommended Order are not well taken and should be denied.

4.

The Hearing Officer's Findings of Fact are supported by competent, substantial evidence in the record and should be adopted by the Commission, however, the Commission finds that the penalty recommended by the Hearing Officer was unduly mild for the gravity of the offenses as supported by the evidence and the Defendant's registration as a real estate broker should be revoked.

IT IS THEREFORE ORDERED:

1. That the Plaintiff's Exceptions to the Hearing Officer's Recommended Order be, and the same are hereby adopted.

   
   

2. That the Defendants' Exception to the Hearing Officer's Recommended Order be, and the same are hereby denied.

   
   

3. That the Defendant Walter K. McGrath be, and he is hereby adjudged guilty of violating Subsection 475.25(1)(c), 475.25(1)(a), 475.25(1)(e), 475.25(1)(i), 475.25(3), Florida Statutes, as charged in the Administrative Complaint.

   
   

4. That for said violations the Defendant Walter K. McGrath's registration as a real estate broker be, and the same is hereby, revoked; however, the Commission grants leave to the Defendant to make a new application for registration as a real estate salesman with said application being considered on its own merits at the time it is made.

DONE AND ORDERED at Winter Park, Florida, this 9th day of March, 1976.

Edgar L. Schlitt Chairman

John R. Wood Vice Chairman

Maggie S. Lassetter Member

I CERTIFY that a copy of the foregoing Final Order was mailed to the defendant, Walter K. McGrath, 213 Circle Drive, Sebring, Florida 33870, by United States certified mail this 8th day of April, 1976.

Executive Director

NOTICE TO DEFENDANTS:

This Order shall become effective upon the 8th day of April, 1976, unless Petition for Writ of Certiorari is filed on or before that time, and your registration certificate will be picked up by our field representative. See Subsection 475.31(3) and Sections

475.35 and 475.40, Florida Statutes, and Rule 4.1 and Rule 4.5(c), Florida Appellate Rules.

Docket for Case No: 75-001699

Orders for Case No: 75-001699