STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, FLORIDA REAL )

ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 82-2832

) ATLANTIC COAST PROPERTIES, INC., ) ATLANTIC COAST REALTY, INC., ) BERNARD SALERNO, MICHAEL K. KAPP, ) BARRY LEVINE and BENJAMIN FOX, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause came on for formal hearing before Marvin E. Chavis, duly designated Hearing Officer of the Division of Administrative Hearings, on January 26, 1983, in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: Fred R. Langford, Esquire

Department of Professional Regulation

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

For Respondent: Michael K. Kapp (Appearing on his 511 Northwest 25th Street

own behalf only) Wilton Manors, Florida

ISSUES

The Respondents Barry Levine and Bernard Salerno had previously requested an informal hearing before the Florida Real Estate Commission and waived their right to a formal hearing before this Hearing Officer and were not present at this hearing. The Respondents, Atlantic Coast Properties, Inc., and Atlantic Coast Realty, Inc., had not been served with the Administrative Complaint and the Petitioner therefore did not proceed against them at this hearing. Although Respondent Benjamin Fox had requested a formal hearing he was not present nor was he represented by counsel at the hearing.

The Petitioner proceeded solely against Respondent Michael K. Kapp and presented no evidence as to Count I, Count II, Count V and Count VI of the Administrative Complaint. The case against Michael Kapp involves the issues of whether his license should be suspended, revoked or otherwise disciplined for having issued a check to Elsie J. Rahn which was returned for insufficient funds and for having operated as a real estate broker without a broker's license. The

Petitioner called as witnesses Elsie J. Rahn, Robert C. Pruyn and Michael Kapp, the Respondent. The only witness called by the Respondent was Mr. Michael Wilczynski. The Petitioner had marked for identification five exhibits as follows: Exhibit One, licensing information relating to Michael Kapp; Exhibit Two, licensing information relating to Benjamin Fox; Exhibit Three, a copy of a check for $1,100 payable to Elsie J. Rahn, Exhibit Four, a check from Laura James payable to Atlantic Coast Realty; and Exhibit Five, a sworn statement of Bernard Salerno. Each of these five exhibits were admitted without objection. The Respondent Michael Kapp presented no documentary evidence on his behalf.

FINDINGS OF FACT

1. The Respondent Michael K. Kapp is a licensed real estate salesman having been issued license number 0311564. Mr. Kapp at all times relevant to this proceeding was not licensed as a real estate broker.

   
   

2. Atlantic Coast Realty, Inc., was in the business of leasing and selling property. Mrs. Elsie J. Rahn listed her property with Atlantic Coast Realty, Inc., and Mr. Kapp for the purpose of leasing the property. Upon leasing the property Mrs. Rahn was to receive a check for the first month rent, last month rent, and security deposit minus the commission earned by Atlantic Coast Realty, Inc.

   
   

3. On April 3, 1981, Michael Kapp signed a check payable from the general account of Atlantic Coast Realty, Inc., in the amount of $1,100. This check was made payable to Elsie J. Rahn and constituted the first and last months' rent and security deposit minus the commission due Atlantic Coast Realty, Inc. Mrs. Rahn presented this check for payment and it was not honored because of insufficient funds. Thereafter, Mrs. Rahn contacted Atlantic Coast Realty, Inc., and spoke with Michael Kapp but received no restitution. Mrs. Rahn contacted Atlantic Coast Realty a couple of times and ultimately had to hire an attorney and paid the attorney a $250 fee for the collection of the $1,100 due and owing to her. The restitution of the $1,100 was paid by Michael Kapp out of his own personal funds.

   
   

4. Atlantic Coast Realty, Inc., was owned by Mr. Sam Pollard. Mr. Pollard was not licensed as a real estate salesman or broker. The broker of record for Atlantic Coast Realty, Inc., was Mr. Bernard Salerno.

   
   

5. Pursuant to an agreement between Michael Kapp, Sam Pollard and Bernard Salerno, Mr. Salerno's license as a broker was used as the broker's license for Atlantic Coast Realty and Mr. Salerno was paid a monthly salary of $400. In addition to his salary of $400, Mr. Salerno was to receive a percentage of all sales consummated.

   
   

6. Mr. Salerno was not active in the daily supervision and running of the real estate office of Atlantic Coast Realty, Inc. Atlantic Coast Realty, Inc., had a general account and an escrow account and the signators on both of these accounts were Sam Pollard and Michael Kapp. Mr. Salerno was not a signator on these accounts and had no control over the escrow account. The escrow account was under the exclusive control of the Respondent Michael Kapp and Sam Pollard. Michael Kapp was primarily involved in the advertising, leasing and sales of property and Mr. Pollard was in charge of bookkeeping and was the person who managed the office.

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearing has jurisdiction over the parties and subject matter of this action.

   
   

8. Section 475.25, Florida Statutes empowers the Petitioner to discipline real estate brokers and salesmen for enumerated acts and omissions.

   
   

9. By issuing a check to Mrs. Elsie J. Rahn which was dishonored for insufficient funds, the Respondent Michael Kapp violated Section 475.25(1)(b), Florida Statutes in that such action constituted a breach of trust in a business transaction and a breach of a duty placed upon him by the terms of his listing contract with Mrs. Rahn.

   
   

10. By the enumerated actions set forth in paragraphs 4, 5 and 6 above, the Respondent Michael Kapp violated Section 475.42(1)(b), Florida Statutes which prohibits any licensed salesman from operating as a broker. Section 475.25(1)(a), Florida Statutes provides that a violation of Section 475.42 is subject to the penalties of Section 475.25, Florida Statutes.

    
    

11. Petitioner failed to prove that the Respondent Benjamin Fox violated the real estate license law.

    
    

12. No evidence was presented as to Counts I, II, V and VI of the Administrative Complaint and therefore the Complaint should be dismissed as to those counts.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED:

1. That the Petitioner enter a Final Order finding the Respondent Michael

   K. Kapp guilty of violating Subsections 475.25(1)(b) and 475.25(1)(a), Florida Statutes and that his license as a real estate salesman be suspended for a period of one (1) year.

   
   

2. That the Petitioner enter a Final Order finding the Respondent Benjamin Fox not guilty of the allegations set forth in the Administrative Complaint and dismissing the Complaint against him.

   
   

3. That the Administrative Complaint be dismissed as to Atlantic Coast Properties, Inc., Atlantic Coast Realty, Inc., Bernard Salerno and Barry Levine.

   
   

4. It is further recommended that Counts I, II, V and VI of the Administrative Complaint be dismissed.

DONE and ORDERED this 11 day of April, 1983, in Tallahassee, Florida.

= MARVIN E. CHAVIS

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 11 day of April, 1983.

COPIES FURNISHED:

Fred R. Langford, Esquire Department of Professional

Regulation - Legal Section

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801

Michael K. Kapp

511 Northwest 25th Street Wilton Manors, Florida

Benjamin Fox

7355 Northwest 4th Place Margate, Florida 33063

William M. Furlow, Esquire Department of Professional

Regulation - Legal Section

400 West Robinson Street Orlando, Florida 32801

Harold Huff, Executive Director Florida Real Estate Commission

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

Fred Roche, Secretary Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida

Docket for Case No: 82-002832

Orders for Case No: 82-002832