STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, FLORIDA REAL )

ESTATE COMMISSION, )

)

Petitioner, )

)

v. ) CASE NO. 81-2995

)

WILLIAM A. CANTY, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, R. L. Caleen, Jr., held a formal hearing in this case on April 23, 1982, in Orlando, Florida.

APPEARANCES

For Petitioner: Frederick H. Wilsen, Esquire

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: John Hefferan, Jr., Esquire

1214 East Robinson Street Orlando, Florida 32801

ISSUE PRESENTED

Whether respondent's real estate broker's license should be revoked or otherwise disciplined on the grounds: (1) that he operated as a real estate broker without holding a valid and current license, and (2) that he is guilty of misrepresentation, false promises, false pretenses, dishonest dealing, and breach of trust in a business transaction.

Background

By administrative complaint dated October 30, 1981, petitioner Department of Professional Regulation, Florida Real Estate Commission 1/ ("Department"), charged respondent William A. Canty ("respondent") with six violations of the Florida Real Estate Law, Chapter 475, Florida Statutes (1979). Respondent disputed the charges and requested a Section 120.57(1) proceeding.

On November 30, 1981, the Department forwarded this case to the Division of Administrative Hearings for assignment of a hearing officer. Hearing was thereafter set for April 23, 1982.

At hearing, the Department voluntarily dismissed Count Nos. Three through Six, inclusive, leaving only Count Nos. One and Two. Count One alleges that respondent's broker's license expired; that he then negotiated a real estate transaction in violation of Sections 475.42(1)(a) and 475.25(1)(a), Florida Statutes (1979). Count Two alleges that in connection with this real estate transaction, respondent signed a sales contract incorrectly acknowledging receipt of a $5,000 earnest money deposit, when, in fact, he had received a demand note; that the seller was led to believe that he held a $5,000 earnest money deposit in escrow; that such actions constituted misrepresentation, false promises, false pretenses, dishonest dealing, and breach of trust in a business transaction, all in violation of Section 475.25(1)(b), Florida Statutes (1979).

The Department called Robert S. Harrell and Alfred C. Harvey as its witnesses, and offered Petitioner's Exhibit Nos. 1 through 3 into evidence, each of which was received. Respondent testified in his own behalf and Respondent's Exhibit 2/ No. 1 was received in evidence.

The transcript of hearing was received on April 27, 1982. Neither party has filed proposed findings of fact and conclusions of law.

Based on the evidence presented at hearing, the following facts are determined:

FINDINGS OF FACT

As to Count One

1. Respondent is a licensed Florida real estate broker. He holds license No. 0012715 and his business address is 988 Woodcock Road, Orlando, Florida. (Testimony of Canty; P-1.)

   
   

2. Since obtaining his broker's license in the early 1970s, respondent has earned a livelihood as a real estate broker. He has been a sole practitioner, having never employed any other person in connection with his practice. (Testimony of Canty.)

   
   

3. A real estate broker's license must be renewed every two years. Effective April 1, 1978, respondent paid the requisite fee and renewed his then existing broker's license the new expiration date was March 31, 1980. (P-1.)

   
   

4. On March 31, 1980, respondent's broker's license expired for failure to renew. His failure to timely renew was due to simple inadvertence; he admits that it was an oversight on his part. (Testimony of Canty; P-1.)

   
   

5. As soon as he realized his omission, he filed a renewal application and paid the requisite $40 fee in addition to a $15 late fee. His license renewal became effective on July 25, 1980. (Testimony of Canty; P-1.)

   
   

6. In May, 1980, respondent negotiated, prepared, and assisted in the execution of a written contract for the sale and purchase of 1.6 acres, including a 21,000 square-foot warehouse, located at 315 West Grant Street, Orlando, Florida. The seller was Alfred Harvey, the buyer was Preferred Services, Inc., and the purchase price was $208,000. The contract called for the buyer to pay the sales commission under separate agreement with respondent. The

   commission agreement never materialized since the sales transaction failed to close. But, the buyer understood that he had an obligation to pay a real estate commission, and respondent fully expected to receive one. (Testimony of Canty, Harrell.)

   
   

   As to Count Two

   
   

7. Prior to the parties' execution of the sales agreement mentioned above, respondent and the buyer, Robert Harrell, of Preferred Services, Inc., discussed with Alfred Harvey, the seller, the acceptability of using a demand note as the

   $5,000 earnest money deposit required by the agreement. (The buyer wished to avoid tying up his funds in escrow during the extensive time required to obtain Small Business Administration approval for assuming the existing mortgage loan.) The seller agreed to the depositing of a $5,000 demand note. 3/ (Testimony of Canty, Harrell.)

   
   

8. When the sales contract was executed by the parties, respondent acknowledged on page 2 that he held the specified earnest money deposit in escrow. The deposit was a $5,000 demand note. He did not indicate on the face of the contract that the deposit was in the form of a demand note. But, neither did he indicate that the deposit was in cash or check form. Respondent acknowledges that he was "sloppy" in failing to indicate on the contract that the deposit was a demand note. (Testimony of Canty.)

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. 120.57(1), Fla. Stat. (1981).

   
   

10. The Florida Real Estate Commission is empowered to discipline a licensed real estate broker if it finds that he has:

    
    

    (1)(a) Violated any provision of s.

    475.42 or of s. 455.227(1);

    (b) Been guilty of fraud, misrepresen- tation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence,

    or breach of trust in any business transaction in this state Section

    475.25, Florida Statutes (1981).

    
    

    Section 475.42(1)(a) prohibits any person from acting as a broker without holding a "valid and current license therefore." Id.

    
    

11. License revocation proceedings are penal in nature. Bowling v. Department of Insurance, 394 So.2d 165 (Fla. 1st DCA 1981). The term "substantial competent evidence" takes on vigorous implications. Bowling, supra at 171. The agency must prove its charges by evidence "which is indubitably as 'substantial' as the consequences [for the licensee]." Id. at 172.

    
    

12. Measured by these standards, it is concluded that the evidence establishes that respondent is guilty of Count One: that he violated Sections 475.42(1) and 475.25(1)(a) by acting as a real estate broker 4/ at a time when he did not hold a current and valid license. It is further concluded that

    respondent is not guilty of Count Two, the charge that he engaged in misrepresentation, false promises, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in connection with the earnest money deposit.

    
    

13. Penalty. In Pearl v. Florida Board of Real Estate, 394 So.2d 189, 192 (Fla. 3d DCA 1981), the court stated:

    
    

    The intent underlying the enactment

    of chapter 475 [the Real Estate Law] is to insure the protection of the public from unscrupulous and dishonest real estate brokers. Its purpose is to guard against fraudulent real estate practices . . . [cases omitted].

    
    

    It further held that the penalty of license suspension "should be sparingly and cautiously used and directed at the dishonest and unscrupulous." Id. It should be imposed only for serious derelictions involving fraud or culpable misconduct, not for minor violations of the Commission's rules. Webb v. Florida Real Estate Commission, 351 So.2d 71, 72 (Fla. 3d DCA 1982).

    
    

14. In the instant case, respondent's violation stemmed from oversight, not dishonesty or intentional misconduct. No evidence was presented showing that he has had any prior disciplinary infractions. Under these circumstances, an appropriate penalty is the issuance of a formal written reprimand. See, 475.25(1), Fla. Stat. (1981)

RECOMMENDATION

Based on the foregoing, it is

RECOMMENDED: That respondent be found guilty of violating Sections 475.42(1) and 475.25(1)(a), F.S., and reprimanded.

DONE AND RECOMMENDED this 19th day of May, 1982, in Tallahassee, Florida.

R.L. CALEEN, JR. Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 19th day of May, 1982.

ENDNOTES

1/ Pursuant to Chapter 82-3, Section 6, Laws of Florida (1982), the Board of Real Estate was renamed the Florida Real Estate Commission.

2/ Petitioner's and Respondent's Exhibits will be referred to as "P- ," and "R- ," respectively.

3/ There is conflicting testimony on whether the seller knew of and agreed to the depositing of a demand note rather than cash or a check. The conflict is resolved in favor of respondent. His testimony is corroborated by the buyer.

Moreover, respondent did not indicate in the appropriate blank on the contract that the deposit was in the form of cash or a check. The seller's memory of the incident may have been affected by the fact that he was under serious financial stress during the time in question.

4/ "Broker" is statutorily defined in Section 475.01(3), Florida Statutes.

COPIES FURNISHED:

John Hefferan, Jr., Esquire 1214 East Robinson Street Orlando, Florida 32801

Frederick H. Wilsen, Esquire Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Samuel R. Shorstein, Secretary Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Carlos B. Stafford Executive Director

Florida Real Estate Commission Post Office Box 1900

Orlando, Florida 32802

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AGENCY FINAL ORDER

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

STATE OF FLORIDA

DEPARTMENT OF PROFESSIONAL REGULATION FLORIDA REAL ESTATE COMMISSION

DEPARTMENT OF PROFESSIONAL REGULATION, FLORIDA REAL

ESTATE COMMISSION, (formerly BOARD OF REAL ESTATE)

Petitioner,

vs. CASE NO. 0011580

DOAH NO. 81-2995

WILLIAM A. CANTY,

Respondent.

/

FINAL ORDER

This cause came to be heard by the Florida Real Estate Commission on June 23, 1982, for the purpose of issuing a Final Order in the above cited case. A formal hearing on April 23, 1982 resulted in the rendering of a Recommended Order from the Division of Administrative Hearings, R.L. Caleen, Jr., Hearing Officer, on May 19th, 1982.

The said Recommended Order, attached hereto as Exhibit A, is hereby adopted by the Florida Real Estate Commission as to background and Conclusions of Law, except Paragraph 5 as its own Order, and is incorporated herein by reference.

However, as to the Recommendation, the Florida Reat Estate Commission, upon a complete view of the record, hereby ORDERS that the Respondent's license be suspended for thirty (30) days and that the Respondent pay a fine of $1000 for a violation of Count I. Respondent is prohibited from engaging in real estate activity until his petition for reinstatement is approved by the Florida Real Estate Commission.

This Order shall be effective thirty (30) days from the date of filing with the Clerk of the Department of Professional Regulation.

DONE AND ORDERED this 23rd day of JULY 1982 in Orlando, Florida.

Sonny Wright, Chairman

Florida Real Estate Commission

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by U.S. Mail to John Hefferan, Jr., Esquire, 1214 E. Robinson, Orlando, Florida 32801; to Frederick II. Wilsen, Assistant General Counsel, Department of Professional Regulation, 130 N. Monroe Street, Tallahassee, Florida 32301; and to R.L. Caleen Jr., Hearing Officer, Division of Administrative Hearings, The Oakland Building, 2009 Apalachee Parkway, Tallahassee, Florida 32301, this 15th day of JUNE 1982.

C.B. Stafford

Docket for Case No: 81-002995

Orders for Case No: 81-002995