STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, ) ROBERT H. CORDA, REPRESENTATIVE, )

)

Petitioner, )

)

vs. ) CASE NO. 75-1759

)

WILLIAM D. FOLZ, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in the above-captioned matter on January 27, 1976 in St.

Petersburg, Florida, after due notice to the parties, before the undersigned Hearing Officer.

APPEARANCES

For the Petitioner: Frederick W. Jones, Esquire

Staff Counsel

For the Respondent: Richard B. Moritz, Esquire

801 West Bay Drive, Suite 704

Largo, Florida 33540 ISSUE PRESENTED

Respondent's alleged violation of Section 475.25(2) Florida Statutes.

Respondent's counsel filed a MOtion for Continuance on January 8, 1976, which was denied by Delphene Strickland, Hearing Officer, on January 13, 1976. At the hearing, Petitioner moved to amend its complaint. In the original Administrative Complaint, Petitioner sought to take adverse action concerning Respondent with respect to his registration as a real estate salesman.

Specifically, it was alleged therein that Respondent had concealed information from the Commission by answering "No" to Question 11 in his application for registration as a real estate salesman concerning whether there was any case pending against him in any court, including any appellate court, in which he was charged in any pleading with fraudulent or dishonest dealing. The application was executed on December 14, 1973 and filed with the Commission on January 4, 1974. He thereafter received his registration as a real estate salesman on April 2, 1974. The Administrative Complaint was mailed to Respondent on September 12, 1975 and, on September 18, his counsel signed an "Election of Rights" requesting an administrative hearing which was received by the Commission on September 22. On September 30, Respondent applied for Registration as a real estate broker, which application was received by the Commission on October 3rd. The broker registration was thereafter issued on December 22, 1975.

In his application for broker registration, Respondent answered "no" to Question 8 therein which was substantially the same as Question 11 in his application for salesman registration. Petitioner's contention at the hearing was that since it intended to establish concealment in violation of Section 475.25(2) as to the broker application by the same facts that it had intended to use in establishing such a violation in connection with the application for salesman registration, the Respondent would not be prejudiced by the proposed amendment to the Complaint. The Hearing Officer granted the Motion to Amend the Complaint after advising Respondent of his right to request a continuance of the hearing, if such was necessary in order to adequately prepare a defense to the amended Complaint. Respondent elected to proceed with the hearing.

Accordingly, the Administrative Complaint was amended in the following respects:

1. Paragraph 1 - Revised to read:

   "That on or about October 3, 1975, the defendant filed with the commission his sworn application for registration as a real estate broker."

2. Paragraph 2 - Revised to read:

   That said application contained therein Question

   8 which reads as follows:

   8. Is there any case pending against you in any court, including any appellate court, in which you are charged in any pleading with any fraudulent or dishonest dealing? No

   (If your answer to any one of questions 6,7 or 8 is in the affirmative - "Yes" or its equivalent - attach your complete

   signed statement of the charges and facts, together with the name and location of the court in which the proceedings were had or are pending.)

3. Paragraph 3 - Revised to read:

   "That said defendant answered the said Question 8 as follows: "No"

4. Paragraph 4 - Revised to read:

   "That thereafter said application was approved and the defendant subsequently received his registration as a real estate broker and has been continuously registered with the Commission as a broker since December 22, 1975".

5. Paragraph 5 - In second line, substitute the word and figure "Question 8" for "Question 11."

6. Paragraph 6 - Revised to read:

"That by reason of the foregoing, it appears that the defendant, William D. Folz, is guilty of obtaining his registration as

a real estate broker by means of fraud, misrepresentation and concealment in violation of subsection 475.25(2), Florida Statutes.

Respondent moved to dismiss the amended Administrative Complaint and said Motion was denied.

It was stipulated by the parties that Respondent filed an application for registration as a real estate broker on October 3, 1975 and in his application answered "No" to Question 8 set forth therein. It was further stipulated that

the first four paragraphs of the amended complaint are true and correct and that only paragraphs 5 and 6 thereof remained in issue. It was further stipulated that the civil suit which provides the basis for Petitioner's allegation that Respondent concealed information is presently pending in the appellate courts of Florida.

FINDINGS OF FACT

1. On October 3, 1975, Respondent filed an application with Petitioner for registration as a real estate broker (Stipulation, Petitioner's Exhibit 2).

   
   

2. That said application contained therein Question 8 which is set forth in paragraph 2 of the Amended Complaint and to which Respondent answered "No." (Stipulation, Petitioner's Exhibit 2.)

   
   

3. That thereafter the application was approved and the Respondent subsequently received his registration as a real estate broker and has been continuously registered the Petitioner as a broker since December 22, 1975 (Stipulation.)

   
   

4. That at the time of the execution of the application, as aforesaid, Respondent'S answer to Question 8 was incorrect in that he failed to reveal, disclose and fully explain a Complaint filed against him on August 6, 1973, in the Circuit Court of the Sixth Judicial Circuit of the State of Florida, in and for Pinellas County, by one Kenneth Beard, an individual, which complaint alleges false representations on the part of the Respondent in a business transaction.

   
   

5. A judgment of the aforesaid Circuit Court in the above-mentioned action was in the process of appeal at the time Respondent filed his application for registration as a real estate broker (stipulation.)

   
   

6. Respondent testified at the hearing substantially as follows: After the civil action had been filed against him, he sought the advice of counsel who informed him that the complaint therein was defective as a matter of law. He was therefore of the opinion that there was not a viable suit against him at the time he filled out his application, and thus was not attempting to mislead or hide any facts from the Petitioner. He also felt that, since he had not, in fact, committed any fraud or misrepresented any matters to the purchaser of the business in question, a negative answer on the question in the application was justified. However, upon reflection at the hearing, he conceded that, probably he had misread the question and misconstrued its meaning.

   
   

7. Respondent's good reputation for truth and veracity in the community and in his business dealings was attested to by past officials of the Clearwater, Largo, Dunedin Board of Realtors (Testimony of Merhige, Blanton).

   CONCLUSIONS OF LAW

   
   

8. The statutory provision which Respondent allegedly violated states in pertinent part:

   
   

   475.25 Grounds for Revocation or Suspension. -

   (2) The registration of a registrant shall be revoked, if such registration, or certificate issued thereon, is found to have been obtained by

   the registrant by means of fraud, misrepresentation, or concealment, . .

   
   

9. To violate the foregoing statutory provision, it is necessary that a registrant obtain his registration by means of fraud, misrepresentation or concealment. Here, only concealment is in issue. The term concealment" presupposes a knowing and intentional omission or hiding of material information from Petitioner, in the context of the broker application form. If such is established, it then becomes necessary to determine whether, if such information had been known by Petitioner, the applicant would not have obtained his registration. In the instant case, it is necessary only to answer the first question as to the existence of a knowing and intentional concealment of material facts.

   
   

10. It is undoubtedly true that Respondent incorrectly answered Question 8 on his broker application inasmuch as there was at the time a "case" pending against him in the appellate courts of Florida in which the complaint alleged what amounted to fraudulent or dishonest dealings. Although Respondent's testimony as to his reasons for answering the critical question in the negative was less than crystal clear, his assertion that he sincerely believed he was not required to answer 1,"Yes" to the question in view of his attorney's advice, and due to his belief in his innocence of the allegations in the civil action, is credible, and it is determined therefore that he had no intent to mislead the Petitioner. His demeanor at the hearing, his denial of wrongdoing, and his obvious confusion over the literal meaning of the question set forth in the application, bolstered by the character evidence presented in his behalf, leads to the conclusion that he is innocent of intent to conceal in this situation. Accordingly, it is unnecessary to consider whether he would have obtained the broker registration had the Commission been aware of the suit pending against him.

RECOMMENDATION

That the Complaint against Respondent, William D. Folz, be dismissed. DONE and ENTERED this 5th day of April, 1976, in Tallahassee, Florida.

THOMAS C. OLDHAM

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

(904) 488-9675

COPIES FURNISHED:

Frederick W. Jones Staff Counsel

Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

Richard B. Moritz, Esquire 801 West Bay Drive

Suite 704

Largo, Florida 33540

Docket for Case No: 75-001759

Orders for Case No: 75-001759