STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BOARD OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 80-889

)

RANDOLPH E. KOUT and MARY )

ANN BERLIN, )

)

Respondent. )

)

RECOMMENDED ORDER

An administrative hearing was held on the above matter by H. E. Smithers on July 16, 1980, at Miami, Florida. The Petitioner was represented by Frederick H. Wilsen and the Respondent by David M. Rogero. The issue is whether the Respondents' real estate salesman's license should he suspended or revoked for violating Section 475.25(1)(a), Florida Statutes (1977), or Section 475.25(1)(b)

, Florida Statutes (1979). Count I involves Respondents' failure to disclose VA closing costs or returning the signed sales contract to the sellers after they changed their minds prior to the delivery of the contract to the buyer. Count II involves Respondent Kout operating without a license.

The record consists of the oral testimony of the Respondents, the depositions of Mr. and Mrs. Bentkowski (the Complainants), and Renata M. Hedrick and Howard Hadley (of the Board), and Petitioner's Exhibit 1.

The Board of Real Estate, the Petitioner, prior to July 1, 1979, was called the Florida Real Estate Commission. The redesignation is not significant; therefore, "Board" or "Petitioner" refers to both entities. Similarly, reference to the Bentkowskis or "Complainants" refers to either or both Mr. and Mrs.

Bentkowski.

The Petitioner did not submit timely proposed findings, Respondents' proposed findings of fact not included in this Order are rejected as being erroneous or conclusions, or not relevant or material.

COUNT I FINDINGS OF FACT

1. On January 5, 1979, the Bentkowskis entered a standard form exclusive sales contract with Respondent Berlin, real estate salesman for The Keyes Company; Respondent Kout was manager of a Keyes' branch office and was Berlin's supervisor. The contract involved the sale of a four-unit apartment building for

   $79,500 with terms written in as "All cash, cash above existing financing or cash above new financing to he arranged by purchaser, owner may take back purchase money second mortgage." At that time, the sellers explained to Respondent Berlin that they wanted to net $72,000 ($40,000 cash to them and pay- off of a $32,000 mortgage); they had paid $63,000 six years before and had

   invested additional money in improvements. Berlin then added the estimated sales commission and a cushion of $1,500 to arrive at the suggested selling price of

   $79,500.

   
   

2. The first sales contract was submitted by broker All American Properties dated April 25, 1979, for $70,000, with Berlin also present during the discussion; this was a standard form VA Deposit Receipt and indicated the buyers were to seek a VA mortgage for $55,000. The Bentkowskis changed this contract to $79,000 with $64,000 from the VA. The contract provided that sellers pay the mortgage discount, which was acceptable. The buyers did not accept the counter-offer.

   
   

3. The next offer was on a Keyes standard form Deposit Receipt with Fennema (a real estate salesman) as the buyer offering $76,000. This was rejected by the Bentkowskis. Fennema then submitted another offer on the same Keyes form on June 20, 1979, for the asking price of $79,500 -- $500 down and a

   $79,000 VA loan. Although the Keyes' form contract involved VA financing, with the seller paying the discount, it was not as obvious as the first All American contract noted above. Berlin contends that she spent at least 45 minutes discussing all aspects of this contract and did not force or coerce the sellers into signing the contract; the Bentkowskis contend that Berlin was with them only four minutes or so, as she had to hurry to another appointment. In any event, Bentkowskis did not read the contract or ask about having to pay a VA discount, and Berlin did not offer any information about the amount of the VA closing costs.

   
   

4. After Berlin left with the signed contract, the Bentkowskis read the contract and concluded that they would have to pay VA closing costs. Bentkowskis telephoned and told Berlin to hold the contract; she said she would have to talk with her supervisor (Kout). The Complainants then called a banker who said they would have to pay from $5,000 to $7,000, then went to see an attorney (Larkin) who tried to talk with Berlin while the Bentkowskis were in his office, and then that evening telephoned and told Berlin again to hold the contract and that their attorney wanted to talk with her. Apparently, a couple of days went by without the Bentkowskis or their attorney being able to talk to either Berlin or Kout. Meantime, Berlin alerted Fennema, the buyer, to the possible problem; Fennema talked to the Bentkowskis and was able to satisfy them to some extent. During the subsequent conversation, with Kout, Bentkowskis claimed that they were told that they had "boo-booed" in signing the contract and that there was nothing Kout could or would do. Kout contends that his conversation involved a simple explanation of the alternatives with Bentkowskis eventually appearing satisfied with proceeding with the contract. After that, Attorney Larkin wrote Kout on July 12, 1979, to the effect that the Bentkowskis were looking to Keyes, Kout and Berlin to pay the closing costs. The complaint ensued with acknowledgment by the Board on August 13, 1979. Closing on the property was October 5, 1979.

   
   

   Conclusions

   
   

5. While it is true that the Complainants had every right to expect a complete disclosure from Berlin, their sales agent, they were responsible for reading and understanding the contract prior to signing, particularly where two prior contracts dealt with VA financing and the instant contract provided for only $500 down and a $79,000 loan. Although the Respondents should have exercised more care with the Bentkowskis because of their age and background, the actions or in actions of Berlin and Kout do not constitute "false pretenses, dishonest dealing, concealment, misrepresentation and breach of trust" as

   contemplated by 475.25(1)(a), Florida Statutes (1977) or 475.25(1)(b), Florida Statutes (1979).

   
   

   COUNT II FINDINGS OF FACT

6. After Respondent Kout was unsuccessful in his judicial review of the Board's Order suspending his real estate salesman's license, the Board confirmed his sixty-day suspension commencing November 20, 1978. The license that was suspended had expired on September 30, 1978, and had not been renewed. During November, 1978, Kout submitted an incomplete application which was returned, corrected and resubmitted; the Hoard received this on January 10, 1978, and subsequently issued a license with an effective date of November 20, 1978. The Board's computer, records notwithstanding, did not know of the suspension until March, 1978, and did not know of the issuance of the license until August, 1978, when the Keyes Company forwarded Kout's affidavit that his Registration Certificate had been stolen. Keyes was informed that the license was suspended as no renewal had been received. Application was made and Kout's license reissued. Until his license was stolen, along with his wallet, Kout carried the license issued in January, 1979, and assumed he had been reinstated on January 19, 1979, at the end of the sixty-day suspension.

   
   

   Conclusions

   
   

7. The Board contends that under the above facts, Kout operated without a valid current real estate license between November 20, 1978, and August 21, 1979, and specifically during June, 1979, regarding the Bentkowski sale, discussed under Count I, as required by Section 474.42(1)(a), Florida Statutes (1977 and 1979)(misdemeanor), and therefore contrary to Sections 457.25(1)(a), Florida Statutes (1977), and 474.25(1)(b) Florida Statutes (1979)(revocation/suspension for violating the real estate law). There is no doubt that confusion existed between the Board's records and computer as to what the current status of Kout's license was during the period in question. However, absent rebutting evidence by the Board of the testimony of Kout, the allegations of the Board are not supported by the evidence.

RECOMMENDATION

It is , therefore, RECOMMENDED:

That Count I and Count II of the Petition of the Board of Real Estate be dismissed with prejudice.

DONE and ORDERED this 28th day of August, 1980, in Tallahassee, Florida.

HAROLD E. SMITHERS

Hearing Officer

Division of Administrative Hearings Room 101 Collins Building Tallahassee, Florida 32301

(904) 488-9675

Filed this 28th day of August with the Clerk of the Division of Administrative Hearings.

COPIES FURNISHED:

Ms. Nancy Kelley Wittenberg Secretary, Department of Professional Regulation 2009 Apalachee Parkway

Tallahassee, Florida 32301

Mr. C.B. Stafford Executive Director Board of Real Estate

Department of Professional Regulation Post Office Box 1900

Orlando, Florida 32802

Frederick H. Wilsen, Esquire Staff Attorney

Department of Professional Regulation Board of Real Estate

2009 Apalachee Parkway

Tallahassee, Florida 32301

David M. Rogerio, Esquire Blackwell, Walker, Gray, Powers,

Flick and Hoehl

2400 AmeriFirst Building One Southeast Third Avenue Miami, Florida 33131

Docket for Case No: 80-000889

Orders for Case No: 80-000889