STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 76-218

)

WILLIAM W. BUCHANAN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a hearing was held before Charles C. Adams, Hearing Officer, with the Division of Administrative Hearings, at Court Room D, Second Floor, New Wing, Sarasota County Courthouse, Sarasota, Florida at 10:00 A.M., April 7, 1976. Notice of hearing had been mailed by the undersigned March 19, 1976. A copy of this notice of hearing is made Hearing Officer's Exhibit no.

1. Charles E. Felix, Esquire, associate counsel for the Petitioner indicated that a copy of the notice of hearing had been forwarded by the Petitioner. Prior to the hearing, the undersigned received a call from Frederick W. Jones, Esquire, an attorney for the Petitioner, who indicated that he had received a letter from the Respondent requesting a continuance. Mr. Jones was told to forward a copy of the letter requesting a continuance to the undersigned for imposition. The transmittal letter from Mr. Jones and the copy of the Respondent's letter requesting continuance are Hearing Officer's composite Exhibit no. 2. By order of April 2, 1976, the continuance was denied. A copy of the order is made Hearing Officer's Exhibit no. 3. The Respondent did not appear at the hearing.

   
   

   APPEARANCES

   
   

   For Petitioner: Charles C. Felix

   Associate Counsel

   Florida Real Estate Commission 2699 Lee Road

   Winter Park, Florida 32789 ISSUES

   1. Whether the Respondent, William W. Buchanan, while in the employ of Joe

      Z. Lovingood, Inc., corporate broker, and without the knowledge and consent of said corporate broker did purloin three blank checks, from the checkbook used by the said corporate broker for its general business account and, on or about May 7, 1974 and May 31, 1974, did embezzle the aggregate sum of $3,600, by making checks payable to the Respondent on the account of Joe Z. Lovingood, Inc., and forged the signature of Joe Z. Lovingood on those checks, which were subsequently endorsed and negotiated for the Respondent's personal use. Furthermore, whether these acts by the Respondent. William W. Buchanan, constituted acts which make him guilty of fraud, concealment, dishonest dealing, trick, scheme or device, or breach of trust in a business transaction, in

      violation of Subsection 475.25(1)a, Florida Statutes; and guilty of a course of conduct or practices which show that he is so incompetent, negligent, dishonest or untruthful that the money, property, transactions and rights of investors or those with whom he may sustain a confidential relation, may not safely be entrusted to him, in violation of Subsection 475.25(3), Florida Statutes.

      
      

   2. Whether or not the Respondent, William W. Buchanan, by two separate acts, the first of which was August 28, 1974 and the second of which was September 13, 1974, did on those respective dates obtain a check in connection with a real estate transaction for $200 on the first date, and $2,500 on the second date, in connection with a real estate transaction as an earnest money deposit from Walter E. Lingard and Hans Hellmann, respectively. Whether or not these checks were made out to the Respondent instead of the corporate broker employer, Joe Z. Lovingood, Inc. and were never delivered to the Respondent's employer and the checks were negotiated in the face amounts for the personal use of the Respondent. Whether or not, by reason thereof, the Respondent, William

1. Buchanan, has been guilty of fraud, misrepresentation, concealment, dishonest dealing, trick, scheme or device, culpable negligence, or breach of trust in a business transaction in violation of Subsection 475.25(1)(a), Florida Statutes; and has failed as a registered real estate salesman to immediately place with his registered employer any money, fund, deposit, check or draft, entrusted to him by any person dealing with him as agent of his registered employer, in violation of Subsection 475.25(1)(i), Florida Statutes; and is guilty of a course of conduct or practices which show that he is so incompetent, negligent, dishonest or untruthful that the money, property, transactions and rights of investors or those with whom he may sustain a confidential relation, may not safely be entrusted to him, in violation of Subsection 475.25(3), Florida Statutes.

   
   

   FINDINGS OF FACT

   
   

   1. In the beginning of the hearing, proof was made that the Respondent, William W. Buchanan, was a licensed real estate salesman in the State of Florida, in an active capacity from June 18, 1973 thru March 31, 1976. This proof was established through Petitioner's Exhibit no. 1, which is a certification and copies of the real estate registration document.

      
      

   2. The Respondent, while employed by Joe Z. Lovingood, Inc., his corporate broker employer, took checks from the corporate check book. Three of the checks that were taken from that checkbook were forged by making the Respondent the payer and showing the signature of Joe Z. Lovingood. These checks were dated May 7, 1974, and May 31, 1974. There were two checks of May 7, 1974 for $600 and 2,500 respectively and the May 31, 1974 check was for $500. The Petitioner's Exhibit no. 2 is a xerox copy of the aforementioned checks. The originals of the checks were not produced because they are in the care and custody of the State Attorney's Office for Sarasota County, Florida. The owner of Joe Z. Lovingood, Inc., Mr. Joe Z. Lovingood, did not allow these acts, nor allow any employee within his employ to authorize the Respondent to take the checks from the check book to make the checks payable to the Respondent nor to forge Mr. Lovingood's signature. Furthermore, neither Mr. Lovingood nor any employee of his corporation who was acting upon his authority allowed the Respondent to negotiate these checks, although the Respondent did negotiate them and expend the funds for his own personal use. The exhibits which show the Respondent's negotiation of the checks are Petitioner's Exhibits no. 3 and no.

1. Petitioner's Exhibit no. 3 is a copy of a bank statement of the Joe Z. Lovingood corporation which indicates debits placed against the corporate bank account in the amount of the aforementioned checks. The Petitioner's composite

   Exhibit no. 4 shows copies of the forged checks with the endorsement signature on the back together with deposit credits, found in the bank statement on the Respondent's account. In addition, the testimony of the bank official of the Respondent's bank indicated a partial cash withdrawal from the amount of the

   $600 and $500 checks which were negotiated through the Respondent's bank. Joe

   Z. Lovingood, Joan Lovingood, his wife, and Harold Merritt, the former accountant for Joe Z. Lovingood, Inc., established that the Respondent had told them about taking the checks from the corporate checkbook, and forging the signature of Joe Z. Lovingood after practicing to sign the signature. They also testified that the Respondent told them that he had intercepted bank statements at the post office in order to cover up the theft of the checks and subsequent forgery.

   
   

   1. After the discovery of Mr. Buchanan's acts, Mr. Lovingood notified the Petitioner. In addition after consultation with his legal adviser and the prosecutors of the jurisdiction, he determined to give the Respondent an opportunity to reimburse Joe Z. Lovingood, Inc. To accomplish this end, Mr. Lovingood co-signed a note in the amount of $3,000 which the Respondent took out in order to improve Mr. Buchanan's financial position. The Respondent agreed to pay back the $3,600 that he had taken from the corporation together with interest and also to repay the $3,000 loan with interest. A statement of his agreement can be found in his letter of July 8, 1974, addressed to Joe Z. Lovingood, as President of Joe Z. Lovingood, Inc., which is Petitioner's Exhibit no. 5 and in his letter of July 8, 1974, addressed to the National Bank of Sarasota which is Petitioner's Exhibit no. 6. Through the date of the hearing, these funds had not been paid to the National Bank of Sarasota.

      
      

   2. In August of 1974, the Respondent entered into discussion with one Walter E. Lingard about the purchase of real estate. Out of the conversation a deposit was made in the amount of $200 and a receipt for deposit, offer to purchase and contract for sale was entered into by the Respondent and Mr. Lingard. Mr. Lingard was approached by Mr. Buchanan on the question of the purchase of property and informed him that a better piece of property was available in another location and the $200 deposit would be allowed as a partial deposit on the substituted parcel. The contract document on the first parcel contemplated for purchase is Petitioner's Exhibit no. 9. Petitioner's Exhibit no. 10 is a copy of the check from Mr. Lingard and Petitioner's Exhibit no. 11 is a copy of the contract pertaining to the substituted parcel of land. The deposit check was written to William Buchanan at the request of William Buchanan who told Mr. Lingard that he would see that it was placed with his employer, Joe

      Z. Lovingood, Inc.

      
      

   3. In September of 1974, the Respondent entered into a conversation with one Hans Hellmann. The nature of this conversation concerned the investment of Mr. Hellmann's money in a real estate purchase. To this end, Mr. Hellmann deposited $2,500 with the Respondent through a check made out to William W. Buchanan. Again, this check was made out to Mr. Buchanan at his request with an assurance to Mr. Hellmann that the deposit would be placed with Joe Z. Lovingood, Inc. The Petitioner's Exhibit no. 7, is a copy of a contract document and Petitioner's Exhibit no. 8 is a copy of the deposit check.

      
      

   4. Neither Mr. Joe Z. Lovingood nor any employee within his corporation knew of the negotiations, contracts or deposit checks which had been entered into between Mr. Lingard and the Respondent and Mr. Hellmann and the Respondent. Mr. Lovingood found out about these matters when his office was contacted about the status of one of the contracts. Joe Z. Lovingood, Inc. did not receive the deposit checks, at any time. The proceeds of the deposit checks that have been

      mentioned, were appropriated to the use of the Respondent, without the knowledge and authority of Mr. Joe Z. Lovingood or any employee within his corporation.

      Restitution for the amounts of the deposit checks has never been made to Mr. Lingard or Mr. Hellmann. The details of the contracts and the fact that the money was appropriated to Mr. Buchanan's use, were related by the Respondent, to Mr. Joe Z. Lovingood, his wife and Mr. Merritt.

      
      

      CONCLUSIONS OF LAW

      
      

   5. It is concluded as a matter of law that the Respondent, William W. Buchanan, while in the employ of Joe Z. Lovingood, Inc., corporate broker, and without the knowledge and consent of said corporate broker did purloin three blank checks from the checkbook used by said corporate broker for the general business accounts, and on or about May 7, 1974 and May 31, 1974, did embezzle the aggregate sum of $3,600 from Joe Z. Lovingood, Inc. through the use of forgery and did negotiate those checks for his own personal use without the knowledge or authority of Joe Z. Lovingood, Inc., and by reason thereof the Respondent has been guilty of fraud, concealment, dishonest dealing, trick, scheme or device, or breach of trust in a business transaction, in violation of Subsection 475.25(1)(a), Florida Statutes. For these acts as stated in these conclusions of law, the Respondent, is also guilty of a course of conduct or practices which show that he is so incompetent, negligent, dishonest or untruthful that the money, property, transactions and rights of investors or those with whom he may sustain a confidential relation, may not safely be entrusted to him, in violation of Subsection 475.25(3), Florida Statutes.

      
      

   6. It is concluded as a matter of law, that the Respondent, William W. Buchanan, by obtaining a deposit check from Walter E. Lingard, as an earnest money for the purchase of real estate and by obtaining a deposit check from Hans Hellmann as an earnest money deposit; for the purchase of real estate without knowledge of his corporate broker, and by causing those checks to be endorsed in the Respondent's personal name, and by failing to deliver those aforementioned checks to his employer, and by negotiating those checks for his own personal use; by reason thereof has been guilty of fraud, misrepresentation, concealment, dishonest dealing, trick, scheme or device, culpable negligence or breach of trust in a business transaction in violation of Subsection 475.25(1)(a), Florida Statutes. For the acts as set forth in this paragraph of the conclusions of law the Respondent has further failed as a real estate salesman to immediately place with his registered employer any money, fund, deposit, check or draft entrusted to him by any person dealing with him as agent for his registered employer in violation of Subsection 475.25(1)(i), Florida Statutes. Finally, for such acts as shown in this paragraph of the conclusions of law, it is concluded as a matter of law that the Respondent is guilty of a course of conduct or practices which shows that he is so incompetent, negligent, dishonest or untruthful that the money, property, transactions and rights of investors or those with whom he may sustain a confidential relation, may not safely be entrusted to him, in violation of Subsection 475.25(3), Florida Statutes.

RECOMMENDATION

It is recommended that the registration of the registrant, William W. Buchanan, be revoked.

DONE and ORDERED this 18th day of June, 1976, in Tallahassee, Florida.

CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

William W. Buchanan

503 North Brink Avenue Sarasota, Florida 33577

Charles C. Felix Associate Counsel

Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

Docket for Case No: 76-000218

Orders for Case No: 76-000218