STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
FLORIDA REAL ESTATE COMMISSION ) ex rel. CHARLES C. SAMEN, )
)
Petitioner, )
)
vs. ) CASE NO. 75-2028
) P.D 2698
FLORIDA DEVELOPMENT AND SALES ) CORPORATION, LAWRENCE F. TAYLOR ) AND MICHAEL W. LEVINE, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above styled cause on February 11, and May 3, 1976, at Miami, Florida.
APPEARANCES:
For Petitioner: Louis B. Guttmann III, Esquire
Associate Counsel
Florida Real Estate Commission 2699 Lee Road
Winter Park, Florida 32789
For Respondent:
Representing
Development and Lawrence I. Hollander
Sales Corporation 1681 Kennedy Causeway, North Michael W. Levine Bay Village, Florida 33141
Representing Albert G. Siegel, Esquire Lawrence F. 1 Lincoln Road
Taylor: Miami Beach, Florida 33139,
For Respondent: (appearance at May 3, 1976 hearing only).
By Administrative Complaint filed July 25, 1975 the Florida Real Estate Commission ex rel. Charles C. Samen, seeks to revoke, suspend, or otherwise discipline the real estate licenses held by Respondents as brokers and salesman respectively. As grounds there for the complaint alleges the corporate broker and Taylor were guilty of violating the security laws of the State of Missouri by selling unregistered securities, viz. contracts to purchase Florida land without being registered to do so; that the corporate broker and Taylor were guilty of failure to comply with the order of the Commissioner of Securities of the State of Missouri; that Respondent Levine operated as a salesman for one not registered as his employer; and that Levine was guilty of a breach of trust in a
business transaction by selling contracts for deed to persons in Missouri after being directed to make no more sales calls to Missouri.
Respondent Taylor missed the original hearing because his attorney was incarcerated and Taylor was attempting to obtain his release while that hearing was in process. By order dated April 2, 1976 a Motion of Respondent Taylor for a continuance was granted nunc pro tunc for the limited purpose of allowing Taylor to present any defenses he may have to the complaint. At the hearing on May 3, motions made on behalf of Taylor to dismiss the charges against him on grounds that he had been denied due process by not having an opportunity to cross-examine witnesses who testified at the February 11 hearing, and to disregard any of that testimony relating to Taylor, were denied.
Five witnesses, including the Respondents, testified and 11 exhibits were admitted into evidence.
FINDINGS OF FACT
Florida Development and Sales Corporation (FDS) at all times here involved was a registered real estate corporate broker.
Lawrence F. Taylor, at all times here involved, was a registered real estate broker and an Active Firm Member for FDS and Universal Realmark, Inc.
Michael W. Levine, at all times here involved, was a registered real estate salesman for Universal Realmark, Inc., corporate broker.
Florida Development and Sales was a wholly owned subsidiary of Universal Realmark, Inc. The two corporations occupied the same offices, had the same corporate officers, and used the same telephone numbers. Correspondence went out from either corporation on FDS stationery, and all employees of both corporations were paid by check drawn on FDS account. FDS entered into a non-exclusive brokerage agreement on August 2, 1971 (Exhibit 5) with Lake Lucie Estates, Inc., the owner of unimproved land it desired to sell in 1 1/4 acre tracts. Pursuant to said agreement the broker advertised and sold, generally by agreement or contract for deed and generally to out-of-state buyers, these 1 1/4 acre tracts.
In 1973 Universal Realmark, Inc. acquired all of the stock of FDS and accepted the obligations of FDS under supplemental agreement dated May 23, 1973 (Exhibit 6). The brokerage agreement above referred to was undisturbed.
By order dated May 6, 1974 the Commissioner of Securities, State of Missouri ordered St. Lucie Estates, Inc., and FDS, their representatives, inter alia, to cease and desist the offer and/or sale in Missouri of any agreement for deed securities.
Chapter 409, Laws of Missouri, contain the Missouri Uniform Securities Act. Therein security, in 409.401(1), is defined to mean any contract or bond for the sale of any interest in real estate on deferred payments or on installment plans when such real estate is not situated in this state
Section 409.201 makes it unlawful for any person to sell or offer for sale securities in Missouri without being registered to do so and Section
409.301 makes it unlawful for any person to offer or sell any security in Missouri unless: (1) The security is registered, or (2) The security or transaction is exempted under Section 409.402.
Pursuant to these and other provisions of the securities law the cease and desist order was issued and served by certified mail on Lake Lucie Estates, Inc. and FDS. Section 409.410 of the Missouri Statutes provides that any person who has been personally served with a cease and desist order and thereafter willfully violates same shall, upon conviction, be fined not more than $5,000 or imprisoned not more than three year, or both. The Act further provides for personal service upon an out-of-state violator of the act by serving the commissioner who sends notice of the service to the out-of-state violator. Here the Respondents acknowledged receipt of the cease and desist order.
Subsequent to the receipt of the Missouri cease and desist order Levine negotiated agreement for deeds with three purchasers in Missouri of Lake Lucie Estates, Inc. property. On one of these the purchaser's check was made payable to Lake Lucie Estates, Inc. and the checks for the other two were made payable to FDS.
During his interrogation by the investigator, Levine acknowledged that he was aware of the cease and desist order at the time he negotiated the three agreements for deed. He obtained his list of people to call from the office,
i.e. FDS/Universal Realmark. At the hearing Levine did not remember whether or not he was aware of the cease and desist order at the time he negotiated the Missouri contracts. He did remember receiving a commission on each sale by check drawn by FDS although he was registered as a salesman under Universal Realmark, Inc.
As noted above Lake Lucie Estates had a brokerage agreement with FDS and no such agreement was ever negotiated with Universal Realmark. Lake Lucie Estates would have no objection to Universal Realmark selling its property.
Respondent Taylor was the Active Firm Member of FDS and Universal Realmark. He was serving in that capacity with Universal Realmark when FDS was acquired. At the same time he operated his own real estate broker's office on Miami Beach, spending part of his time supervising the activities of each office.
Taylor's initial statements to the investigator that he learned of the Missouri cease and desist order in June 1974 upon his return to the office from a stay in the hospital was repudiated at the hearing when he stated he learned of the Missouri order only a few hours before he talked to the investigator in October, 1974. Taylor also testified that he never authorized Levine to sell under his brokerage even though Taylor was the Active Firm Member of Universal Realmark and Levine was registered under the corporate broker, Universal Realmark.
Taylor's main concern appeared to be to insure that the salesmen for these out-of-state land sales adhered to the script that had been prepared for them and from time to time he monitored their conversations. When he realized that the alleged violations of the real estate license law were being investigated he resigned from FDS and Universal Realmark because "they were violating my trust". When the requests for renewal of the FDS corporate broker's registration was submitted in September, 1974, Taylor signed same a Vice President of FDS and the Active Broker of the corporation.
CONCLUSIONS OF LAW
Section 475.21(1) Florida Statutes provides in pertinent part: "(1) The registration of a registrant may be
suspended for a period not exceeding two years, or until compliance with a lawful order imposed in the final order of suspension, or both, upon a finding of facts showing that the registrant has:
Been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing, trick, scheme or device, culpable negligence, or breach of trust in
a business transaction in this state or any other state, nation, or territory; or . . .
Violated any of the provisions of this chapter or any lawful order, rule, or regula- tion made or issued under the provisions of this chapter; or,
Been guilty of a crime against the laws of this state or any other state or of the United States involving moral turpitude, or fraudulent or dishonest dealings; . . ."
Section 475.42 F.S. provides in pertinent part with respect to violations and penalties:
"(1)(b) No person registered as a real estate salesman shall operate as a real estate broker, or operate as a salesman for any person not registered as his employer."
Section 475.25(1)(e) F.S. above quoted does not require that a registrant be adjudicated guilty only that he has been guilty. When Levine sold agreements for deed in Missouri after the cease and desist order was issued this constituted a violation of that order and a criminal violation of the Missouri laws. The people to whom the agreements for deed were sold obviously thought they were buying through FDS and not Universal Realmark. They were sent literature from FDS and the salesman did not disassociate himself from FDS. In selling this interest in the land Levine did so for a broker, FDS, with whom he was not registered to sell. This constitutes a violation of 475.42(1)(d) above quoted. Levine was paid by FDS, as were all employees even though some, like Levine, were technically employed by Universal Realmark. The two corporations, Universal Realmark and its wholly owned subsidiary FDS, so comingled their affairs that each would be responsible for acts of the other apparently committed in its behalf. It would be virtually impossible for any person dealing with the office to recognize any other entity than FDS. Under these circumstances the corporate shield, behind which FDS attempts to negate any violation of the Florida Real Estate License Law, is unavailing.
As Active Firm Member Taylor is responsible for the acts of she corporation here involved. He has the duty to direct the activities of FDS relating to the sale of real estate. His registration, or that of a similarly qualified broker, is a sine qua non for FDS to operate as a corporate broker. One cannot so use his registration and thereafter avoid culpability on the
grounds that he was unaware of events that ordinary diligence would have discovered.
The offense of selling unregistered securities in Missouri by one not licensed to do so, in violation of a cease and desist order, is a felony. Inasmuch as fraud and deceipt are included, the offense also involves moral turpitude.
From the foregoing it is concluded that FDS as corporate broker and Lawrence F. Taylor as Active Firm Member, are guilty of violation of 475.25(1)(a) and (e) and that Michael W. Levine is guilty of violation of 475.42(1)(b) F.S. and 475.25(1)(d) F.S. It is therefore,
RECOMMENDED that the registration of FDS as a corporate broker be suspended for a period of six months and that the registration of Lawrence F. Taylor as a broker and Michael W. Levine as a salesman be suspended for sixty (60) days.
DONE and ENTERED this day of May, 1976, in Tallahassee, Florida.
K.N. AYERS Hearing Officer
Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304
Issue Date | Proceedings |
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Sep. 27, 1976 | Final Order filed. |
May 21, 1976 | Recommended Order sent out. CASE CLOSED. |
Issue Date | Document | Summary |
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Jun. 28, 1976 | Agency Final Order | |
May 21, 1976 | Recommended Order | Respondents sold securities in Missouri while unregistered to do so, a felony involving fraud/moral turpitude. Recommend suspension. |