L. REAGAN, )
vs. ) CASE NO. 76-1745
Respondent. )
Pursuant to notice, the above cause came on for hearing before the Division of Administrative Hearings' duly designated Hearing Officer, James E. Bradwell, on December 6, 1976, in Coral Gables, Florida.
The Florida Real Estate Commission (hereinafter sometimes called the Commission), by its nominal Petitioner, C.L. Reagan, filed an administrative complaint against Bernard Bauman seeking to revoke his registration or otherwise discipline him for acts and practices he allegedly engaged in during the periods of approximately January 2, 1976 through January 16, 1976 as alleged in three Counts. 1/
Under Count One, it is alleged that Respondent Bernard Bauman operated as a real estate salesman for a person not registered as his employer, in violation of the provisions and intent of Subsection 475.42(1)(b), Florida Statutes, and thereby violated Subsection 475.25 (1)(b), Florida Statutes.
Under Count Two it is alleged that Respondent Bernard Bauman solicited real estate sales listings by means of dishonest dealing, trick, scheme or device, in violation of the provisions and intent of Subsection 475.25(1)(a), Florida Statutes.
Under Count Three it is alleged that Respondent Bernard Bauman engaged in a course of conduct or practices as set forth in the above counts one and two, which show that he is so dishonest and untruthful that money, properties, transactions and rights of investors or those with whom he may sustain a confidential relation may not safely be entrusted to him, in violation the provisions and intent of Subsection 475.25(3), Florida Statutes.
Based upon my observation of ,the witnesses and their demeanor while testifying, I make the following:
Testimony established that during late December, 1975, Land Re-Sale Service, Inc., a Florida corporation, filed application with the Commission, seeking registration as a corporate real estate broker. That application revealed that Respondent Frank Viruet was to become the Active Firm ember Broker, and Vice President of the company; that Carol Bauman was to become Secretary-Treasurer and that Lee Klein was to become President and Director of the company. Testimony reveals that Carol Bauman is the wife of the Respondent Bernard Bauman; that Lee Klein is the sister of Carol Bauman and that Jeffrey Bauman is the son of Bernard Bauman.
Subsequent to the filing of the above referenced corporate application for registration, the name was changed to Noble Realty Corporation and shortly thereafter to Deed Realty, Inc., and that at each such change, new application for corporate registration was filed with the Commission. Evidence also revealed that the officers and Active Firm Member Broker remained as stated and therefore for all legal purposes, the above corporate entities are one and the same.
Turning to the complaint allegations in Count One, according to the certificates of the Commission's Chairman, dated December 3, which was offered in evidence by Petitioner and admitted without objection, during the period of November 1, 1975 through the date of said certificate (December 3, 1976), which covers the material dates of the complaint herein, no registration was issued to or held by the above three named corporations. This was further confirmed by testimony of Bernard Bauman who was to have become a salesman associated with the above entities and by Frank Viruet, the broker, who was to have become the Active Firm Member Broker for the above entities.
Approximately December 2, 1975, Land Re-Sales Service, Inc., entered a written lease for office premises known as Room 212, Nankin Building, which is located at 16499 N.E. 19th Avenue, North Miami Beach, covering the period January 1, through December 31, 1976. (A copy of the lease was entered into evidence by stipulation of the parties.)
The unrebutted testimony of Petitioner Reagan was that he observed, during his investigation of this cause, a building directory on the ground floor entrance to the Nankin Building displaying the name Noble Realty Inc., and a similar display on the building directory on the second floor.
Petitioner's witness, Peter King, representative for Southern Bell Telephone Company testified that based on records received, three phones were installed in said room 212, Nankin Building on December 27, 1975, in the name of Land Re-Sale Service, Inc. and that from January 2, 1976 through January 16, 1976, approximately 575 calls were made from the above phones during evening hours to out-of-state numbers.
Bernard Bauman and Jeffrey Bauman admitted to having made phone calls to out-of-state numbers for purposes of soliciting real estate sales listings, but both were unable to recall nor did they have records to substantiate how many calls they made.
Bernard Bauman testified that approximately four listings were obtained with an advance fee of $375.00 for each listing. He further testified that upon being advised by the investigator with the Commission that the operation was in violation of the licensing law, by reason that no registration had been issued
to the applicant company and that all who were engaging in real estate activities for said company were in violation of the licensing law. Thereafter the premises were closed and as best as can be told, all real estate activities ceased. This was further confirmed by Petitioner Reagan. The evidence respecting Count two of the administrative complaint established as stated above that Respondents Bernard and Jeffrey H. Bauman solicited real estate listings with representations to property owners that the listings would in fact be published and disseminated to brokers nationwide. However, both Baumans admitted that their listings were never published or otherwise disseminated to brokers. According to Bernard Bauman's testimony, no monies received were ever returned. There was no evidence to show that Respondent Bernard Bauman knew at the time of soliciting that no bona fide effort would be made to sell properties so listed with Noble Realty Corporation.
CONCLUSIONS OF LAW
As stated at the outset, Respondent Bernard Bauman is charged in Count One of the administrative complaint with violation of Subsection 475.42(1)(b), Florida Statutes, and thereby he violated Subsection 475.25(1)(d), Florida Statutes. It suffices to say that that statute provides in pertinent part that no person registered as a real estate salesman shall operate as a salesman or broker for any person not registered as his employer.
The evidence clearly established that Bernard Bauman was soliciting sales listings and was therefore operating as a real estate broker or salesman as defined in Subsection 475.42(3)(a), Florida Statutes. He was not the holder of a valid current registration certificate as defined in Subsection 475.42(3)(b), Florida Statutes, during the period of solicitation. Since the corporate entity was not holder of registration as a broker it follows that Frank Viruet, Bernard Bauman and Jeffrey H. Bauman were not holders of valid current registration certificates. Accordingly, it is concluded that Bernard Bauman is guilty of operating as a real estate broker or salesman in violation of Subsection 475.42(1)(b), Florida Statutes. Respondent Bernard Bauman is charged in count two with dishonest dealing, trick, scheme or device in a real estate transaction and of committing overt acts of intent, design or scheme in violation of Subsection 475.25(1)(a) Florida Statutes. Although the allegation is made that Bernard Bauman knew that no bona-fide effort would be made to sell the properties listed with Noble Realty Corporation, there was no competent substantial evidence to support this allegation. Accordingly, Respondent Bernard Bauman is not guilty as to the allegations set out in Count Two.
Bernard Bauman is charged in Count Three with a course of conduct under provisions of Subsection 475.25(3), Florida Statutes, based on repeated acts set out in Counts One and Two. By his own admissions, Bernard Bauman testified that approximately four listings were obtained in January, 1976, with
$375.00 advance fee for each and that the listings were not published nor were the monies refunded. From these acts, it is concluded that Bernard Bauman is guilty of a course of conduct in violation of provisions of Subsection 475.25(3), Florida Statutes. It is also concluded that since the corporation sought to be registered was a family, or close corporation, wherein Respondent Bernard Bauman had considerable influence over the corporate activities. The evidence established that the Respondent Frank Viruet (FREC Progress Docket #2856, a companion case), was not aware of activities engaged in by Bernard Bauman and Jeffrey Bauman until he was so advised by the Commission's investigator and by his independent investigation and determination thereafter.
The Division of Administrative Hearings has jurisdiction over the parties to this action.
The parties were properly noticed pursuant to notice provisions of Chapter 120, Florida Statutes.
