STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

)

JOHN E. EGAN, ) CASE NO. 77-183

) P.D. No. 2943

Respondent, )

and )

)

EDWIN RESNICK, ) CASE NO. 77-185

) P.D. No. 2945

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a consolidated public hearing in the above styled cases on August 9, 1977 at Miami, Florida.

APPEARANCES

For Petitioner: Richard J. R. Parkinson, III, Esquire

Louis B. Gutman, Esquire Staff Attorneys

Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

For Respondent: Stephen Avrach, Esquire Robert Berger 420 Lincoln Road

Miami Beach, Florida

For Respondents: William J. McPharlin, Esquire National Property 1711 Northwest 40th Avenue, Suite 401 Services, Inc., & Ft. Lauderdale, Florida

Gary A. Tritsch

Representing John E. Egan

himself: 11944 Northwest 30th Street Coral Springs, Florida

By administrative complaints filed September 1, 1976 the Florida Real Estate Commission (FREC) seeks to revoke, suspend or otherwise discipline the registration of National Property Services, Inc. (NPS), as a corporate broker, the registration of Gary Adam Tritsch as broker and Active Firm Member (AFM) of NPS, and the registration of Robert S. Berger, John E. Egan, and Edwin Resnik as salesmen with NPS. As grounds therefor it is alleged that NPS by and through its AFM, Tritsch, solicited by telephone and mail of property owners nationwide the payment of a fee in return for a listing to sell property by holding out to said property owners that a bona fide effort would be made to sell the property so listed which was false and known to be false when made; that this constituted a scheme to fraudulently secure money from the public; and that Tritsch and NPS are guilty of a course of conduct which shows that they are so dishonest and untruthful that the money, property, and rights of investors may not safely be entrusted to them, all in violation of 475.25(1)(a) and 475.25 (3) F.S.

With respect to the salesmen Berger, Egan, and Resnik the complaint alleges that these Respondents obtained advanced fees for listings upon false representation regarding sales of listings, inflated sales prices for these properties, and that building contractors would be brought down at company expense to view the property so listed; that Respondents knew no bona fide effort would be made to-sell the property so listed; that they aided and conspired with NPS to engage in dishonest dealing, trick, scheme or device in a real estate transaction and committed overt acts in furtherance of such intent; and that they are guilty of a course of conduct or practices which show that they are so dishonest and untruthful that the money, property, transactions and rights of inventors may not safely be entrusted to them, all in violation of 475.25(1)(a) and 475.25(3) F.S.

At the commencement of the hearing all respondents stipulated that at all times alleged in the administrative complaints they were registered with the FREC and Respondent Berger further stipulated that his address registered with FREC is 710 Coco Plum Circle, Plantation, Florida. Thereafter the four respondents testified and 12 exhibits were admitted into evidence including Exhibit 2(a) which was submitted as a late-filed exhibit. Objections to Exhibits 2, 5, and 6 were overruled. Records of NPS which were subpoenaed were not produced at the hearing. Exhibit 6, which consisted of photocopies of check stubs, cancelled checks, and deposit slips, was admitted over objection that they were not the best evidence.

FINDINGS OF FACT

1. In July 1976 Berger was working as a salesman for Property Resales Services when he and Tritsch decided to set up a similar advance fee listing operation. Berger was knowledgeable of the operation and Tritsch held a broker's license. Both had been engaged for several years in land sales in Florida and at one time both worked for the same land developer selling land to mostly out of state investors.

   
   

2. Each put up $1,000 to get the corporation formed and in operation. Stock was equally split between Berger's son Albert and Tritsch with two shares unissued. Shortly after the business became operational Berger and Tritsch repaid themselves $750 of their investment/loan.

3. Berger was to supervise the obtaining of listings and Tritsch was to set up the resale operation. Shortly before the beginning of operations Berger suffered a heart attack and was hospitalized For some two and one half weeks. Following his release from the hospital he was able to spend only limited time in the office. However, script for the telephone salesmen had been prepared as well as listing contracts and brochure to be sent to those customers indicating a desire to sell their land. The business opened as scheduled in a rented office with WATS lines installed.

   
   

4. Similar to other advance fee operations the salesmen worked from about

   6 P.M. until 10 P.M. making phone calls to out of state owners of Florida land. Most of the owners contacted were those who had earlier bought land in the developments of Rotunda, Royal Highlands, and Port Charlotte with which Tritsch and Berger were familiar.

   
   

5. Lists of owners were purchased from a company in Miami providing such information and copies of the Charlotte County tax records were obtained.

   
   

6. NPS joined the National Multiple Listing Service (NMLS) and the listings obtained were to be published in that publication. They also indicated in their sales pitch and on the listing contract that advertising would be placed in local newspapers.

   
   

7. Salesmen were paid $125 for each listing received with the $350 advance listing fee obtained from the property owner except Egan who was paid $175 for each listing.

   
   

8. Shortly after Berger became well enough to devote time to the affairs of NPS, Tritsch broke a shoulder in a motorcycle accident and was limited in his movements by a cast for some six weeks. This was followed by an operation on his nose also injured in the accident.

   
   

9. Berger did little, if any, telephone solicitation. His function appeared to be that of supervisor and consultant. His son, Albert Berger, was given the job of secretary, bookkeeper and keeper of the records which the son, a fifty percent shareholder in the corporation, had no idea what happened to following his departure in December, 1975. Exhibit 6 shows checks were made payable to Annette Berger, presumably a daughter, as wages.

   
   

10. Berger and Tritsch were paid $300 to $500 per week (net) for their services depending upon availability of funds, Albert Berger received $250 per week (net) and Annette Berger received $100 to $225 per week (net). Net wages are normally the salary left after the deduction for withholding and FICA taxes. Since no check stubs showed payment to the Internal Revenue Service the withheld portion of the salaries apparently was not remitted. Additionally Berger and Tritsch were reimbursed for travel expenses, but no testimony was adduced that Berger did any traveling on the business of the company. Nevertheless Berger was paid travel expenses and one check was made payable to an airline for nearly

    $300.

    
    

11. Respondents Egan and Resnik as well as several other salesmen, not named as Respondents here, manned the telephones during the operating hours of 6:00 to 10:00 P.M. They generally followed the script given to them and no evidence was presented that any known false representation was made by either Egan or Resnik. Neither Egan nor Resnik attempted to sell property. However, Egan testified that if a customer was happy with his land and didn't want to sell, he would ask if the customer would like to buy more. No evidence was

    presented that either salesmen advised customers that contractors and other brokers were being transported to the property or that they suggested the customer could obtain an inflated price for his property. No sales of the listings so received was ever made by NPS.

    
    

12. If the customer indicated a willingness or desire to sell his property when first called he was advised that literature would be mailed to him to more fully explain the services offered by NPS. The salesman then turned the name in to the office and a blank contract (Exhibit 3) and brochure (Exhibit 4) were mailed to the customer. After the customer received the material the salesman would again call and go over the provisions of the contract with the customer and attempt to induce the customer to sign the contract and forward it with his

    $350 listing fee for services NPS were to perform in selling the property so listed.

    
    

13. The customers were told that the advance fee was used to advertise the property and to cover office expenses, however the fee would be deducted from the commission when the property was sold, and, in effect, refunded to the property owner.

    
    

14. Both Resnik and Egan were led to believe that a sales office was being set up on the west coast, near the property for which listings were being solicited, however, no such office was ever opened.

    
    

15. No advertising of any property was ever placed in newspapers or in any other media than the National Multiple Listing Services. As a matter of fact, no evidence was presented that any property for which NPS was paid an advance listing fee was ever advertised for sale in NMLS. Exhibit 6 indicates that NPS paid a total of $62.50 to NMLS before going out of business near the end of 1975.

    
    

16. During the four to five months NPS remained in operation in excess of

    $52,000 was received from customers as advance listing fees and no sales of any of these listings was made. Respondents Tritsch and Berger both blamed their respective accident and illness for their failure to consummate sales of the properties for which listing fees were obtained.

    
    

    CONCLUSIONS OF LAW

    
    

17. Section 475.25(1)(a) provides in pertinent part that the registration of a registrant may be suspended for a period not to exceed two years upon a finding 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 . . ."

    
    

18. Section 475.25(3) F.S. provides:

    
    

    "The registration of a registrant may be revoked if the registrant shall, for a second time, be found guilty of any misconduct that warrants his suspension under subsection (1) of this section, or if he shall be found guilty of a course of conduct or practices

    which show that he is so incompetent, negligent, dishonest or untruthful that the money, property, transaction and rights of investors or those with whom he may sustain a confidential relation, may not safely ice entrusted to him."

    
    

19. As noted above Resnik and Egan were hired to solicit listings. They were not engaged in the resale of the land so listed and were led to believe that Tritsch and others not located in the Miami office wore handling the resales. While it could be assumed that both Resnik and Egan were fully aware that bona fide efforts were not being made to resell the property for which they solicited listings, a finding of guilty as alleged cannot be founded upon such an assumption. Absent evidence of knowledge on the part of these Respondents of the efforts (or lack thereof) being made to resell the property so listed, these two respondents cannot be found guilty of 475.25(1)(a) F.S. above quoted.

    Absent a finding of guilty of violation of 475.25(1)(a) F.S. they perforce cannot be found guilty of a course of conduct as proscribed by 475.25(3) F.S.

    
    

20. Tritsch and Berger were both fully aware of the entire operation.

    They conspired to set up the operation and took the necessary steps to carry out their plan. They both envisioned the advance listing fee operation as a "good deal" and proceeded to remove the funds solicited as rapidly as they accumulated. Berger obviously prepared the scripts (or borrowed them from the company for which he previously worked) as well as the contracts and brochure.

    Tritsch provided the broker's license and presumably the expertise to resell the listings so received. Other than make a few trips to the vicinity of the properties for which listing fees were solicited, no evidence was presented that Tritsch ever did anything likely to result in the resale of any of the property listed.

    
    

21. From the very beginning Berger and Tritsch concentrated their efforts toward getting listings and the accompanying fees. They prepared brochures tending to lead prospective customers to believe they operated a successful resale operation when in fact not one resale of a listing was ever made. They exhorted the salesmen at sales meetings to use high pressure tactics with the go, go, go approach advocated.

    
    

22. Those customers who forwarded the advance listing fees were induced to do so by the promises and pretenses of Respondents Berger and Tritsch which clearly presented to these customers that they (NPS) would make bona fide efforts to sell the property listed with them. At the time these representations were made Respondents Berger and Tritsch knew these representations were false and were made for the purpose of inducing the customers to pay the advanced listing fee.

    
    

23. Both Berger and Tritsch have been involved with real estate sales for several years. Accordingly they have been exposed to various methods employed to sell property and most certainly are aware that to sell property the availability of the property for sale must be made known to potential customers. They are also aware that this is accomplished by some form of advertising.

    
    

24. By the time adverse newspaper articles regarding the negative aspects of the advance listing fee operations caused NPS to cease operations, some

    $62.50 had been spent presumably advertising the listings for sale and more than

    $52,000 in listing fees had been received. Thus slightly more than 0.1 percent of the money received by NPS to assist them in making a bona fide effort to sell

    the properties for which NPS solicited listings, had been spent in trying to sell this property.

    
    

25. From the foregoing it is concluded that NPS as corporate broker, Gary Adams Tritsch as broker, and Robert S. Berger as salesman are guilty of violation of 475.25(1)(a) F.S. as alleged. It is further concluded that these three Respondents engaged in a course of conduct or practices which show that they are so dishonest and untruthful that money, property and rights of investors may not safely be entrusted to them as set forth in 475.25(3) P.S. It is further concluded that Respondents John E. Egan and Edwin Resnik are not guilty as charged. It is therefore,

RECOMMENDED that the registrations of National Property Services, Inc., as a corporate broker, of Gary Adams Tritsch as broker, and of Robert S. Berger as salesman be revoked. It is further,

RECOMMENDED that the charges against John E. Egan and Edwin Resnik be dismissed.

DONE and ENTERED this 20th day of September, 1977, in Tallahassee, Florida.

K.N. AYERS Hearing Officer

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

COPIES FURNISHED:

Richard J. R. Parkinson, III, Esquire and Louis B. Guttmann, Esquire

2699 Lee Road

Winter Park, Florida

Stephen Avrach, Esquire

420 Lincoln Road Miami Beach, Florida

William J. McPharlin, Esquire

1771 Northwest 40th Avenue, Suite 401 Ft. Lauderdale, Florida

John E. Egan

11944 Northwest 30th Street

Coral Springs, Florida Edwin Resnik 4800 Roosevelt Street

Hollywood, Florida

=================================================================

AGENCY FINAL ORDER

=================================================================

FLORIDA REAL ESTATE COMMISSION

JACK KING,

Petitioner,

vs. CASE NO. 77-181

JOHN E. EGAN,

Respondent.

/

FINAL ORDER

At a regular meeting of the Florida Real Estate Commission held at its Executive Headquarters in Winter Park, Florida on October 19, 1977. Present were Maggie S. Lassetter, Chairman and Levie D. Smith, Jr., Vice Chairman.

APPEARANCES

For Petitioner: Louis B. Guttmann, III For Respondent: Richard J. R. Parkinson

This matter came on for Final Order upon the Petitioner's Administrative Complaint, the Respondent's Election of Rights-form and the Hearing Officer's Recommended Order, and the Petitioner's Exceptions thereto, and upon consideration thereof, together with the record and oral argument by counsel for the Petitioner and the Commission having fully reviewed the entire record, the Findings of Fact and Conclusions of Law in the Recommended Order, and the Commission being fully advised in the premises finds:

1.

That according to the records of the Commission, Respondent John E. Egan, is registered with the Commission as a non-active real estate salesman, 11944 Northwest 30th Street, Coral Springs, Florida 33065.

2.

The Petitioner's Exceptions to the Findings of Fact of the Hearing Officer as set forth in the Recommended Order are well taken and should be sustained.

3.

That Respondent John E. Egan had knowledge of the nature of the advance fee operation of National Property Service, Inc., and of the falsity of the representations made by Respondent Egan in the solicitation of advance fee

listings, since Respondent Egan earned approximately $3,500.00 in commissions during a period of forty five (45) days.

4.

That the Petitioner's Exceptions to the Conclusions of Law as set forth in the Hearing Officer's Recommended Order, are well taken and should be sustained.

5.

That the Findings of Fact and Conclusions of Law of the Hearing Officer which were not excepted to, by the Petitioner, are supported by competent, substantial evidence in the record and should be adopted, as amended by the Commission, as the Findings of Fact and Conclusions of Law of the Commission.

6.

That the Petitioner's Exceptions to the Recommendation of the Hearing Officer are well taken and should be sustained.

IT IS THEREUPON ORDERED that the Findings of Fact and Conclusions of Law of the Hearing Officer, as amended by the Commission above, be, and the same are hereby, adopted as the Findings of Fact and Conclusions of Law of the Commission.

IT IS FURTHER ORDERED that Respondent John E. Egan be, and he is hereby, adjudged guilty of violation of Subsection 475.25(1)(a), Florida Statutes, as charged in Counts One and Two of the Administrative Complaint.

IT IS FURTHER ORDERED that Respondent John E. Egan be, and he is hereby, adjudged not guilty of violation of Subsection 475.25(3), Florida Statutes, as charged in Count Three of the Administrative Complaint, and said Count is hereby, dismissed.

IT IS FURTHER ORDERED that for such violation the registration of Respondent John E. Egan be, and the same is hereby, suspended for a period of six (6) months, said suspension to become effective upon the effective date of this Order as provided by law.

DONE and ORDERED at Winter Park, Florida this 22nd day of November, 1977.

Maggie S. Lasseter, Chairman

Vice Chairman

I HEREBY CERTIFY that I mailed a copy of the foreoing Final Order to Respondent, John E. Egan, 11944 Northwest 30th Street, Coral Springs, Florida 33065, by United States Registered mail this 22nd day of November, 1977.

Executive Director

NOTICE TO RESPONDENT:

This Order shall become effective upon the 22nd day of December, 1977. You have a right of review by an Appellate Court.

Please comply with this Order. We are enclosing an envelope for your convenience in surrendering your certificate.

RJRP/cb

Docket for Case No: 77-000181

Orders for Case No: 77-000181