STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, )

)

Petitioner, )

)

vs. ) CASE NO. 81-240

)

GEORGE MAY, )

)

Respondent. )

)

RECOMMENDED ORDER APPEARANCES

For Petitioner: John Huskins, Esquire

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: George May in pro se

2300 West Oakland Park Boulevard, Suite 202 Fort Lauderdale, Florida 33311

PROCEDURAL BACKGROUND

By Administrative Complaint dated November 12, 1980, the Petitioner, Department of Professional Regulation, has charged Respondent George May, with having violated certain provisions of Chapter 475, Florida Statutes, and a rule promulgated thereunder, for which disciplinary action against his real estate license should be taken. In summary form, it is charged that Respondent became associated as a salesman for one Lee W. Holliday in Davie, Florida, on October 10, 1979, and continued in that capacity until January 11, 1980; that while registered as an associate of Holliday he took employment with and accepted compensation from another realtor, Riken Realty, Inc., without properly registering with the Department; that he subsequently registered with Riken Realty, Inc., in North Miami Beach, Florida, from January 11, 1980, until March 24, 1980, and that while an associate of Riken, he took employment with another realtor, National Home Realty, Inc., in Hollywood, Florida, without having registered with the Department; and that the foregoing acts constitute a violation of Sections 475.42(1)(a), (b) and (d), Florida Statutes, and Rule 21V- 6.06, Florida Administrative Code.

Respondent disputed the factual allegations set forth in the Administrative Complaint and requested a formal hearing pursuant to Section 120.57(1), Florida Statutes. On January 30, 1981, the Petitioner forwarded the matter to the Division of Administrative Hearings and requested that a Hearing Officer be assigned to conduct a hearing. By Notice of Hearing dated March 6, 1981, a final hearing was scheduled for April 21, 1981, in Fort Lauderdale, Florida. By motion dated March 9, 1981, Respondent requested a continuance of the hearing in

order to conduct discovery; the motion was granted on March 23, 1981, and the matter was rescheduled to May 18, 1981, at the same location.

At the final hearing, Petitioner called Floyd M. Stevens, James A. Burns, Gerald Rosen and Steven Mishken as its witnesses and offered Petitioner's Exhibits 103, each of which was received into evidence. Respondent testified on his own behalf and called Lee Holliday, Pamela Brice, Sandra Grindle and James

1. Burns as his witnesses and offered Respondent's Exhibits 1-3, each of which was received into evidence.

   
   

   The transcript of hearing was filed on June 1, 1981. The parties were given the opportunity to file proposed findings of fact and conclusions of law; however, none were filed.

   
   

   The issue to be determined is whether Respondent's real estate broker's license should be revoked or suspended or as a salesman for a person not registered as his employer, and receiving compensation in that capacity.

   
   

   Based upon all evidence, the following facts are determined:

   
   

   FINDINGS OF FACT

   
   

   1. Respondent, George May, at all times relevant thereto, was a licensed real estate broker-salesman, having been issued license number 0056693 by Petitioner, Department of Professional Regulation, in 1976 (Petitioner's Exhibit 1).

      
      

   2. On or about October 8, 1979, Respondent filed an application for licensure as a broker-salesman to associate himself with Lee Holliday, a registered real estate broker with offices at 6191 SW 45th Street, Davie, Florida (Petitioner's Exhibit 1). The application was signed by both May and Holliday on October 4, 1979, and received by the Department on October 8, 1979. Prior to that time, May's license had been in an inactive status for approximately eight months. May registered with Holliday with no intention of actively engaging in real estate transactions. He simply desired to keep his license active in the event other opportunities arose. May subsequently left Holliday some "two or three weeks" later. During his association with Holliday, neither May nor Holliday consummated any real estate transactions.

      
      

   3. In November, 1979, May became a salesman for Riken Realty, Inc., located at 1742 NE 163rd Street, North Miami Beach, Florida. The exact date was never disclosed. However, May was observed at Riken Realty by a Department investigator on or about November 15, 1979, and signed rental agreements on behalf of Riken shortly thereafter, which corroborate the approximate date of employment given by May. On November 13, 1979,May signed a Form 400.5 to transfer his registration to Riken Realty. This form is used to request a registration certificates for a number of categories, including "a change of broker or owner by a salesman or broker-salesman". A change of an employer by a salesman requires that both the salesman and the broker-employer execute the form. After May signed the form, he gave it the same day to Steve Mishken, the office manager. Mishken filled out a portion of the space where the broker is to sign, and then gave it to Gerald Rosen, the active broker of the firm. The date on which Mishken gave it to Rosen was not disclosed. Rosen eventually signed the form on December 11, 1979. The form itself reflects receipt by the Florida Real Estate Commission on December 11, 1979, and by the Board of Real Estate on January 11, 1980. 1/ However, the Department considers January 11, 1980, to be the official date on which the form was received. Rosen was unable

      to account for the four weeks that it took him to sign the form, or why it was apparently not mailed for several weeks thereafter. Mishken, who initially received the form, could not explain the reason for the delay.

      
      

   4. The standard practice followed by Riken Realty when processing a Form

      400.5 was immediate execution of the form by the broker. The broker then assumed the responsibility of promptly submitting it to the Department.

      
      

   5. After becoming associated with Riken Realty, May was actively involved in both sales and rental transactions, and received compensation for his services.

      
      

   6. Riken Realty closed its offices in early 1980. At the direction of Steve Mishken, May became associated with National Home Realty, Inc., in Hollywood, Florida, in early February, 1980. 2/ The exact date was never disclosed. National's active broker was Gerald Rosen and its principal stockholder was Mishken. May claims he signed and gave a Form 400.5 to Mishken when he transferred to the firm. However, this was not corroborated by Mishken or Rosen, who testified at the hearing, and the Department has no record of any form being filed. On February 10, 1980, a Department investigator visited the offices of National Home Realty and observed May working in the capacity of a salesman. The investigator advised Rosen and Paul Katchmere, the office manager, that a transfer of registration for May would be required. Rosen was under the mistaken impression that a transfer was not needed between corporations owned and operated by the same principals. May subsequently left National two days later (February 12, 1980) to begin his own real estate firm and the form was never executed.

      
      

   7. On February 15, 1980, May executed a Form 400.5 requesting that his registration be transferred to Real Estate Merchandisers, Inc., located at 2300 West Oakland Park Boulevard, Fort Lauderdale, Florida, a firm which May owns and operates. He has continued working as its active broker since that time. The records of the Department reflect the form was received on March 24, 1980.

      
      

      CONCLUSIONS OF LAW

      
      

   8. The Division of Administrative Hearings was jurisdiction of the subject matter and the parties thereto pursuant to Section 120.57(1), Florida Statutes.

   9. Section 475.42(1), Florida Statutes, provides in pertinent part: (1)(a) No person shall operate as a broker

      or salesman without being the holder of a

      valid and current license therefor.

      (1)(b) No person licensed as a salesman shall operate as a broker or operate as a salesman for any person not registered as his employer.

      (1)(d) No salesman shall collect any money in connection with any real estate brokerage transaction, whether as a commission, deposit, payment, rental, or otherwise, except in the name of the employer and with the express consent of the employer...

   10. Rule 21V-6.06, Florida Administrative Code, provides in part that:

       
       

       A salesman or broker-salesman may not be employed by more than one broker, or by a broker and an employing owner.

       
       

   11. The Department has charged that Respondent while licensed as an associate with Lee Holliday, "...was in the employ of and working as a real estate salesman for Riken Realty, Inc."; and then while licensed as an associate of Riken he "...was in the employ of and working for National Home Realty, Inc. without ever obtaining a licensure with said corporate broker." The Department contends that the aforesaid acts constitute a violation of Sections 475.42(1)(a), (b) and (d) and Rule 21V-6.06, supra, in that Respondent (1) operated as a salesman without holding a valid and current license, (2) operated as a salesman for a person not registered as his employer, (3) collected money in connection with a real estate transaction in the name of the other than his employer and without the express consent of the employer, and (4) was employed by more than one broker at the same time.

       
       

   12. In a proceeding under a penal statute for suspension or revocation of a professional license, it is incumbent upon the Department to support its charges with competent evidence, direct or circumstantial. See, e.g., Fitzpatrick v. City of Miami Beach, 328 So.2d 578 (Fla. 3d DCA 1976). Further, the "violation must in all its implications be shown by evidence which weighs as 'substantially' on a scale suitable for evidence as the penalty does on the scale of penalties." Bowling v. Department of Insurance, 394 So.2d 165, 172 (Fla. 1st DCA 1981). In other words, the Department must "offer proof commensurate with the potential penalty." Henderson Signs v. Florida Department of Transportation, So.2d , (Fla. 1st DCA op. filed 5/4/81).

       
       

   13. It is undisputed that May "hung his license" with Lee Holliday on October 10, 1979, after a prior eight month period of inactivity. He remained there for "2 or 3 weeks" but left because of better opportunities elsewhere. In fact, during his stay with Holliday, not a single real estate transaction was consummated in the office.

       
       

   14. The exact date of May's association with Riken Realty, Inc., is not known. May claims it was in early November, 1979, and this was not contradicted. Indeed, testimony by Department Investigator Stevens and rental agreements signed by May (Petitioner's Exhibit 2) confirm this. On November 13, 1979, May signed a Form 400.5 requesting a transfer of his registration to Riken Realty, Inc. May testified he gave the form to the office manager, Steve Mishkin, the same day. Mishkin did not contradict this. For unexplained reasons, Rosen, the active broker, did not sign the form until December 11, 1979, and it was not received by the Department until January 11, 1980. 3/ Rosen and Mishken were vague and ambiguous concerning the delay that Rosen had occasioned and offered no explanation for their conduct.

       
       

   15. The Department asserts in its Administrative Complaint that May's registration was not "effective" until December 11, 1979, when Rosen signed the form, and that it was not "perfected" until January 11, 1980, when the Board of Real Estate stamped "Received" on the document (Paragraph 9 of Complaint). Thus, it considers December 11, 1979, as being the date on which the transfer was officially effective, and the date when May could legally commence real estate activities with Riken. The authority for using this date in lieu of the

       date that May signed the form was not given, although common sense dictates that in order to be effective, both signatures should be affixed to the form. 4/

   16. An explicit policy or rule by the Department would provide needed clarification of this problem, but resolution of this point is not necessary to determine the validity of the charge. The Department contends that a "dual burden" on the part of the broker and salesman to file the form exists, and that even after the salesman has signed the form, he has a continuing responsibility to insure that the form is filed. This may have been true under former policy of the Department (see, for example, former Rule 21V-9.04, Florida Administrative Code, now repealed), 5/ but no such requirement is now found in either Department rules or governing statutes. On the other hand, May argues that in the regular course of business in Broward and Dade Counties, the responsibility to file the form rests on the broker, thereby relieving the salesman of any continuing responsibility once he signed the form. However, no corroborating testimony, documentation or other authority was offered by May to support this contention.

       
       

   17. When the standards of conduct to be enforced are not explicitly fixed by statute or by rule, but depend on such debatable expressions as "dual burden" and "in the regular course of business", and when the conduct to be assessed is past, beyond the licensee's power to conform it to agency standards announced prospectively, the "critical matters in issue must be shown by evidence which is indubitally as 'substantial' as the consequences." Bowling, supra at 172. Further, the "violation of a penal statute is not to be found on loose interpretations and problematic evidence." Bowling at 172. Here the evidence discloses that May signed the form when he began employment with Riken, and immediately gave the form to the office manager for further processing. Through negligence, oversight or for some other reason, the active broker failed to fulfill his part of the "dual burden" and to promptly sign and mail the form to the Department. May had no reason to believe that the form had not been signed and mailed the same say for Rosen testified that he normally signed such forms "immediately". No statute or Department rule imposes a continuing responsibility upon a salesman, once a transfer form is signed, to see that his employer fulfills his responsibility relative to the form. That being so, the Department relied upon a so-called "dual burden" standard to show that May was responsible for his employer's inattention or negligence. However, it presented no evidence or argument to support this theory, nor was there any evidence to show that if there was indeed such a Department standard, that Respondent and other real estate salesman were apprised of this requirement. Under these circumstances, there is no basis for erecting a standard on which to judge whether May has violated the Department's registration requirements. Bowling, supra at 172. Accordingly, the charges that May operated as a salesman for Riken Realty without having registered Riken as his employer, and that he improperly accepted compensation while in that capacity, should be dismissed.

       
       

   18. May is charged with a similar offense for operating as a salesman for National Home Realty, Inc. during a part of February, 1980, without having registered National as his employer.

       
       

   19. May readily acknowledges that he worked for National in early February, 1980, and remained there for approximately one week or less. 6/

       Riken Realty had closed its offices in North Miami Beach in early 1980, and May, Mishken and Rosen moved to National Home Realty in Hollywood, Florida. May testified he moved to National at Mishken's direction; this was not contradicted.

   20. Rosen and Paul Karchmere, the office manager, were under the impression that no transfer of registration for May was required because the same principals operated the two corporations. They were advised differently on February 10, 1980, by Department Investigator Burns. However, May left National on February 12, 1980, and no form was ever prepared. On February 15, 1980, May executed a Form 400.5 changing his registration to his newly created firm in Fort Lauderdale. This form was ultimately received by the Department on March 24, 1980. 7/

       
       

   21. May claims he signed a Form 400.5 to transfer his registration from Riken to National and gave it to Mishken for further processing. He assumes it was subsequently lost. Mishken and Rosen, who testified at the proceeding, were never asked to confirm or deny this. Under these circumstances, the evidence is more persuasive that no form was ever filled out or given to the broker for completion, and that a violation of the applicable statutes and rule, albeit technical and extremely minor in nature, has occurred. However, the period of non-registration consumed no more than a week and perhaps as few as two days, and there is no evidence that the act was intentional or that any real estate transactions were ever consummated by May while briefly employed in that capacity. Parenthetically, it is noted that even if May had signed the form on his first day of employment with National, and it had been promptly mailed to the Department, the relationship would have been terminated by the time the Department received and acknowledged the form.

       
       

   22. There being a technical and extremely minor violation by Respondent of Subsections 475.42(1)(a) and (b), Florida Statutes, and Rule 21V-6.06, Florida Administrative Code, a private reprimand is a sufficient penalty given the circumstances herein. 8/ In recommending this penalty, the undersigned has considered the nature of the offense, the extremely short period of nonregistration involved, the lack of intent on the part of Respondent to violate the law, the tacit approval of his employers during the period in question who claimed to have misunderstand the Department's registration requirement, and who have not been charged with similar violations despite the Department's "dual burden" standard, and the fact that no member of the public was involved with or affected by his failure to properly register.

       
       

   23. At the outset of the final hearing, Respondent ore tenus made a motion to dismiss the proceeding on the ground that under Florida law the responsibility for completing and mailing a Form 400.5 rests solely with the broker, and after the salesman has completed his portion of the form, he is relieved of any further responsibility. A ruling on the motion to dismiss was reserved.

       
       

   24. Respondent was unable to cite any rule, statute or judicial decision to support his position and relied solely on argument that this was the practice of realtors in Dade and Broward Counties. On the other hand, Petitioner contends that a "dual burden" to file a form exists, and that a continuing responsibility rests upon the salesman, after signing the form, to insure that it is completed and mailed by the broker. Like Respondent, the Petitioner could cite no specific law, rule or court decision in support of its position. Although given an opportunity to do so, neither party has filed a memorandum of law addressing this issue. In light of the findings and conclusions in paragraph 6 of this portion of the Recommended Order, the motion is rendered moot and accordingly should be denied.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent George May be found guilty of violating

Subsections 475.42(1)(a) and (b), Florida Statutes, and Rule 21V-6.06, Florida Administrative Code, for failing to register as an employee of National Home Realty, Inc. in February, 1980. It is further

RECOMMENDED that Respondent to be given a private reprimand for the aforesaid violations.

DONE AND ORDERED in Tallahassee, Leon County, Florida, this 24th day of June, 1981.

DONALD R. ALEXANDER

Hearing Officer

Division of Administrative Hearings Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 29th day of 1981.

ENDNOTES

1/ There was no explanation given by the Department as to why the form was stamped as being received on two separate dates, the first being by the predecessor to the present Board of Real Estate. Since the first date was the same date as Rosen signed the form, and thus could not have been received by the Department so soon, it is assumed that this date is in error.

2/ Investigator Burns' report indicates that Mishken told him on March 7, 1980, that May worked at National Home Realty for only two days before leaving (Respondent's Exhibit 3).p

3/ As noted in footnote 1, supra, the form was stamped as being received on two separate dates. The Florida Real Estate Commission's stamp reflects receipt on December 11, 1979, while the Board of Real Estate's stamp reflects receipt on January 11, 1980 (Petitioner's Exhibit 1). Since the form was signed on December 11, 1979, the earlier date is presumed to be in error.

4/ Section 4.07 of the Florida Real Estate Handbook suggests that the January 11, 1980, date is the effective date of the certificate of registration. That Section provides in part that "in the event of a reissue upon a change of address or a change of employer, the effective date of the certificate is also the date on which the request in proper form plus the proper fee reaches the office of the Commission." However, this interpretation is contrary to the position taken by the Department, was not relied upon referred to by the Department and seems to be an unsuitable approach to the problem raised herein. For one thing, it leaves a salesman and his employer in limbo for long periods

of time while they wait on the mails to be delivered, the form processed and acknowledgment sent back to the Department.

5/ Former Rule 21V-9.04 provided in part that "...if any salesman or broker- salesman shall cease to be employed by the broker or owner registered as his employer, it shall be the duty of the salesman and the employer to notify the Commission of that fact..." (Emphasis added) While this Rule would not apply to the factual situation herein, it does lend support by analogy to the Department's position that a "dual burden" may have once existed.

6/ See footnote 2, supra, where Mishken advised Investigator Burns that the length of employment was only two days.

7/ Under the Department's "procedure" for establishing the effective date of transfer, and to be consistent with its position taken in this case, May's registration with his own firm was effective on February 15, 1980, and not March 24, 1980, as the Department contends, since this is the date that May, as broker of his own firm, signed and dated the form.

8/ Even this penalty seems too severe for the offense committed, given the circumstances herein, for it becomes a part of Respondent's permanent record. However, the undersigned is unaware of any authority by which a realtor can be found guilty of a violation without assessing some type of penalty.

COPIES FURNISHED:

John Huskins, Esquire Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Mr. George May

2300 West Oakland Park Blvd. Suite 202

Fort Lauderdale, Florida 33311

Docket for Case No: 81-000240

Orders for Case No: 81-000240