STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL REGULATION, ) DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 82-3414

)

V. ROBERT E. ZIMMERLY AND )

HAINES CITY REALTY, INC. )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held before William R. Cave, Hearing Officer with the Division of Administrative Hearings, on November 14, 1984 in Lakeland, Florida.

APPEARANCES

For Petitioner: John Huskins, Esquire

Staff Attorney

Department of Professional Regulation Division of Real Estate

400 West Robinson Street, Suite 308 Post Office Box 1900

Orlando, Florida 32802

For Respondent: Arthur C. Fulmer, Esquire

Post Office Drawer J Lakeland, Florida 33802

By an administrative complaint filed October 26, 1982, petitioner seeks to revoke or suspend or otherwise discipline the license of Robert E. Zimmerly and Haines City Realty, Inc. As grounds therefor, it is alleged that respondents are guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, negligence or breach of trust in a business transaction.

In support of the charges, petitioner presented the testimony of Barbara R. Costello, N. B. Willoughby and Tommy R. Willoughby. Petitioner's Exhibit Nos.

1. were received into evidence.

   
   

   Respondent Robert E. Zimmerly testified on his own behalf and on behalf of Haines City Realty, Inc. and presented the testimony of John M. Jones, III. Respondent's Exhibit Nos. 1-7 were received into evidence.

   
   

   Parties have submitted post-hearing, Proposed Findings of Fact and Proposed Conclusions of Law pursuant to Section 120.57(1)(b)4, Florida Statute (Supp.

   1984). A ruling on each Proposed Findings of Fact has been made either directly

   or indirectly in this recommended order, except where such Proposed Findings of Fact have been rejected as subordinate, cumulative, immaterial or unnecessary.

   
   

   FINDINGS OF FACT

   
   

   Upon consideration of the oral and documentary evidence adduced at the hearing, the following facts were found:

   
   

   1. Respondent, Robert E. Zimmerly (Zimmerly) is a licensed real estate broker having been issued license No. 0127833, with last known address of 500 Hinson Avenue, Haines City, Florida and at all times pertinent to these proceedings was licensed by the State of Florida as a real estate broker.

      
      

   2. Respondent, Haines City Realty, Inc. (Haines City) is a licensed corporate real estate broker having been issued registration No. 0146307, with its last known business address of 500 Hinson Avenue, Haines City, Florida and at all times pertinent to these proceedings was licensed by the State of Florida as a corporate real estate broker. Haines City's license is currently in an inactive status.

      
      

   3. At all times pertinent to these proceedings, Zimmerly was the sole broker, of and for Haines City, and was its President.

      
      

   4. Several weeks prior to April 23, 1981, the date N. B. Willoughby (Willoughby) signed the first offer to purchase the property (offer), Zimmerly along with Barbara Costello (Costello) and Chancellor I. Hannon (Hannon) showed the property described as "Lots 230 and 233 of the Lucerne Park Fruit Association Subdivision, P1at Book 3, Page 67, Public Records of Polk County, Florida" (property), consisting of approximately 20 acres and contiguous to the city limits of Winter Haven, Florida to Willoughby, a prospective buyer, along with Ray Workman (Workman), Willoughby's associate. Costello at the time was a sales person for American Realty of Haines City, now known as American Realty of Polk County, Inc., (American Realty). Zimmerly was representing Haines City. Hannon was representing Ridge Holding Association, Inc., (seller) the owner of the property. The property had originally been listed with Haines City but presently was considered as being listed with American Realty.

      
      

   5. Subsequent to having seen the property, Willoughby instructed Zimmerly to prepare an offer to purchase, with a purchase price of $70,000, subject to the condition, among others, that the seller would obtain a special exception for a mobile home park. A deposit check for $500 was submitted along with the offer. Costello submitted the offer to Hannon for seller. Sometime around April 25, 1981, Hannon notified Costello that the seller had rejected Willoughby's offer because of the condition concerning a special exception for mobile home park. Within a day, Costello notified Zimmerly of the rejection. Zimmerly requested rejection in writing which Hannon did not furnish until May 11, 1981 due to his involvement in personal matters. Willoughby was not notified of seller's rejection of his first offer until around May 11, 1981.

      
      

   6. On April 27, 1981, after a verbal notification by Costello of rejection of Willoughby's offer, Zimmerly prepared and submitted an offer to purchase (Ridge offer) from Ridge Crest, Ltd., Agent, (This was apparently meant to be Ridge Crest Villas, Ltd.) signed by Bob Zimmerly, a general and limited partner, to seller, with a purchase price of $72,000, subject to the condition, among others, that seller furnish a letter requesting a special exception for mobile homes park. The Ridge offer was submitted to Hannon for the seller and was accepted by seller on May 5, 1981. On May 18, 1981 Willoughby submitted his

      second offer to purchase (second offer), with deposit, to seller through Zimmerly. The second offer was identical to the first offer except for the deletion of the condition requiring a special exception for mobile home park. Zimmerly did not advise Willoughby at this time, or at any other time material to the transaction, that Zimmerly was involved in an attempted purchase of the property through Ridge Crest Villas, Ltd. even though the Ridge offer had been accepted on May 5, 1981. Although the Ridge offer indicated a closing date of May 15, 1981, the transaction did not close for reasons not clear in the record, until May 27, 1981. The warranty deed and the mortgage deed executed on day of closing shows Ridge Crest Villas, Ltd. as the Grantee and Mortgagor, respectively. The deposits submitted with both of Willoughby's offers were timely refunded by Zimmerly. Willoughby was notified by Hannon after the closing that his second offer was rejected.

      
      

   7. On November 6, 1980, a limited partnership known as Ridge Crest Villas Ltd., was filed with the Secretary of State. The record is not clear, but apparently this limited partnership was involuntarily dissolved for failure to file an annual report and on October 14, 1981, an identical limited partnership, with the same name was filed with the Secretary of State. Both limited partnerships listed Robert E. Zimmerly as a general partner with 5 percent interest and listed Robert E. Zimmerly and Dolores J. Zimmerly as limited partners with 45 percent and 50 percent interests, respectively.

      
      

   8. Respondent Zimmerly's testimony was that: (1) he wanted a written (firm) rejection before notifying Willoughby because of previous dealings with Willoughby; (2) it is not uncommon to use limited partnerships in real estate transactions because of the availability of tax advantages when using a limited partnership; (3) he was acting for Jones and Destefano when he made the offer and purchased the property in the name of the limited partnership; (4) he intended for Jones and Destefano to own the property through the limited partnership and took a promissory note for the down payment; (5) he did not advise Willoughby of his involvement in the purchase of the property, other than in general terms "that some fellows from up north are interested" (Destefano is "from up North") because he had been taught in real estate schools, and it was his policy, not to discuss one prospective buyer's offer with another prospective buyer; and (6) it is common practice to have a "backup" offer as with Willoughby's second offer because you are never sure if a particular transaction will close. Mainly, this testimony went unrebutted by the petitioner.

      
      

      CONCLUSIONS OF LAW

      
      

      The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

      
      

   9. The alleged misconduct of which respondent is accused purportedly violates Section 475.25(1)(b), Florida Statutes, (1981). The pertinent portion of that provision is quoted below:

      
      

      1. The Commission may deny an application for licensure, registration, or permit, or renewal thereof; may suspend a license or permit for a period not exceeding 10 years; may revoke a license or permit; may impose an administrative fine not to exceed $1,000 for

         each count or separate offense; and may issue a reprimand, or any or all of the foregoing if it finds that the licensee, permittee, or applicant:

         
         

         (b) Has been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction. . . .

         
         

   10. It is alleged that Zimmerly while acting as a intermediary between Willoughby and seller withheld or concealed information from Willoughby concerning Zimmerly's active involvement in the purchase of the property from the seller in the name of Ridge Crest Villas, Ltd., a limited partnership in which Zimmerly and his wife owned a 100 percent interest.

       
       

   11. The evidence shows that Zimmerly was acting as an intermediary between Willoughby and the seller and, as such, was under a duty to deal fairly and honestly with Willoughby. Bush v. Palermo Realty, Inc., 443 So.2d 104 (4 DCA Fla. 1983) and Gerber v. Keyes Co., 443 So.2d 199 (4 DCA Fla. 1983).

       
       

   12. If a broker purchases property from a seller for himself, without advising a prospective buyer of his actions, it is a breach of this duty and would constitute a violation of Section 475.25(1)(b) Florida Statutes (1981). Bush v. Palermo Realty, Inc., 443 So.2d 104 (4 DCA Fla. 1983).

       
       

   13. Although the evidence indicates that Zimmerly considered himself acting for Jones and Destefano and intended to sell the partnership to them, the record is clear that Zimmerly purchased the property for Ridge Crest Villas, Ltd., a limited partnership in which Zimmerly had a substantial interest, without advising Willoughby of his involvement in the purchase of the property, thereby violating Section 475.25 (1)(b), Florida Statutes (1981). The fact that Zimmerly considered himself acting for Jones and Destefano does not excuse his failure to advise Willoughby of his involvement in the purchase of the property by Ridge Crest Villas, Ltd., although it may act as a mitigation of the penalty to be imposed.

       
       

   14. In disciplinary proceedings, the burden is upon the regulatory agency to establish facts upon which its allegations of misconduct are based. Balino

v. Department of Rehabilitative Services, 348 So2d 349, (1 DCA Fla. 1977). License revocation proceedings are penal in nature. State ex. rel. Vining v. Florida Real Estate Commission, 281 So.2d 487 (Fla. 1973). As such, "the critical matter in issue must be shown by evidence which is indubitably

`substantial' as the consequences," Bowling v. Department of Insurance, 394 So.2d 165; 172 (1 DCA Fla. 1981). Therefore, the evidence which is required to "substantially" support a license revocation must be greater than required to support conventional forms of regulatory action. The petitioner has met its burden of proof. Accordingly, grounds for disciplinary action have been established.

RECOMMENDATION

Based upon the Findings of Fact and Conclusions of Law recited herein, it is RECOMMENDED that respondent be found guilty of a violation of Section 475.25(1)(b), Florida Statutes 1981) For such violation, considering the mitigating circumstances surrounding the violation, it is RECOMMENDED that the Board issue a letter of Reprimand and impose an administrative fine of

$1,000.00.

DONE and ENTERED this 10th day of May, 1985, in Tallahassee, Leon County, Florida.

WILLIAM R. CAVE

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

FILED with the Clerk of the Division of Administrative Hearings this 10th day of May, 1985.

COPIES FURNISHED:

James R. Mitchell Staff Attorney

Department of Professional Regulation

Division of Real Estate

400 West Robinson Street Suite 308

P.O. Box 1900

Orlando, Florida 32802

Arthur C. Fulmer, Esquire

P.O. Drawer J

Lakeland, Florida 33802

Mr. Fred Roche, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Salvatore A. Carpino, Esquire General Counsel

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Mr. Harold Huff Executive Director

Department of Professional Regulation

Division of Real Estate

400 West Robinson Street

P.O. Box 1900

Orlando, Florida 32802

Docket for Case No: 82-003414

Orders for Case No: 82-003414