STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF PROFESSIONAL )
REGULATION, DIVISION OF )
REAL ESTATE, )
)
Petitioner, )
vs. ) CASE NO. 84-0311
)
JEAN PITTENGER, LAN THI )
TRAN and LEROY G. BAILEY, )
)
Respondents. )
) DEPARTMENT OF PROFESSIONAL )
REGULATION, CONSTRUCTION )
INDUSTRY LICENSING BOARD, )
)
Petitioner, )
vs. ) CASE NO. 84-1112
)
JEAN P. PITTENGER, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice the above cases came on for formal hearing before P. Michael Ruff, duly designated Hearing Officer on June 13, 1985 in Naples, Florida. The appearances were as follows:
APPEARANCES
For Petitioner: James H. Gillis, Esquire
Department of Professional Regulation Division of Real Estate
Post Office Box 1900 Orlando, Florida 32802
For Respondent, Wesley A. Lauer, Esquire LeRoy G. Bailey: ACKERMAN, BAKST, GUNDLACH,
LAUER & ZWICKEL, P.A.
515 North Flagler Drive
West Palm Beach, Florida 33402-3948
For Respondents, Jean P. PITTENGER,
and Lan Thi Tran: No appearance
By its Administrative Complaint, the Petitioner, Department of Professional Regulation, Construction Industry Licensing Board, alleges, in an eight-count complaint against Respondent Jean Pittenger, that that Respondent failed to
qualify a new business organization with the Construction Industry Licensing Board; diverted funds received for a specified construction project which resulted in his inability to perform the terms of his contract; abandoned a construction project for over 90 days without notification to the prospective owner; diverted funds received for a different, specific project which resulted in his failure to fulfill the terms of that obligation; diverted funds received for a third construction project which resulted in his inability to fulfill the obligation of that contract (Count Six); failed to notify the Construction Industry Licensing Board within 30 days of his change of address as required by Section 21E-15.07, Florida Administrative Code; and finally, as to Count Eight, engaged in fraud, deceit and misconduct in the practice of contracting.
The Petitioner, Department of Professional Regulation, Division of Real Estates has filed a seven-count complaint against the three above Respondents alleging, generally, that Pittenger and Tran (the Pittengers) both solicited Louis and Lamquet DeWinter, husband and wife, and J. M. Demeulemeister as purchasers and joint venturers concerning certain real property, including the construction of a house for investment upon that property. It is alleged generally, that in reliance upon various representations made by the Pittengers, the DeWinters paid the Pittengers a large sum of money, in accordance with a sales contract, to purchase the property, pay architectural fees and attorneys fees, as well as for an advance upon construction costs. It is then alleged that the Pittengers abandoned the joint venture agreement and construction and sales venture without good cause, without accounting or delivering the DeWinters' funds back to them after demand. Similar allegations are made with regard to the $5,000 given the Pittengers by the DeWinters concerning the proposed purchase of a parcel of property in Bonita Springs.
A third real estate transaction was allegedly entered into between the DeWinters and the Pittengers which is treated beginning at Count Five of the Amended Administrative Complaint. In that transaction, the DeWinters agreed to purchase a restaurant. That transaction was entered into by Mr. and Mrs.
DeWinter and Respondent Lan Thi Tran (Marie Pittenger) through the entity known as Gerlanelie, Inc. as purchasers from Respondent LeRoy G. Bailey, as president of Hospitality Condo- Inn, Inc. This transaction is treated in the remaining counts of the complaint. The Respondents, Jean and Marie Pittenger, allegedly agreed to share in payment of the purchase money mortgage payments with the DeWinters. They allegedly solicited and obtained $104,795 from the DeWinters for the purpose of remodeling the restaurant. The incomplete remodeling work allegedly done by the Pittengers purportedly was worth considerably less than the $104,795 amount paid them by the DeWinters. After closing the transaction, the DeWinters allegedly discovered that approximately $70,000 in mechanics' and materialmens' liens had been recorded against the property, representing subcontractors who were unpaid for labor and materials which had been ordered and contracted for by the Pittengers.
It is asserted that, as part of their agreement with the DeWinters, the Pittengers engaged in the operation and management of the restaurant business from July 10, 1982 to August 12, 1982 and allegedly incurred massive personal expenses charged to the restaurant which the DeWinters were forced to pay. The claimed result was that the DeWinters were financially unable to meet the mortgage payments to Respondent LeRoy G. Bailey. The Respondents Pittenger allegedly failed to fulfill their obligation to assist with the mortgage payments which they had agreed to do as an inducement to get the DeWinters to enter into the real estate transaction involving the purchase of the restaurant.
It is then alleged that on August 12, 1982, Respondent Bailey solicited from the DeWinters, through his attorney, an assignment of their beneficial interest in the restaurant in lieu of foreclosure, and thereupon promised the DeWinters that they could continue to work and manage the restaurant and share in its profits. It is then charged that on August 15, 1982, Respondent Bailey terminated the DeWinters' employment as managers of the restaurant, did not share with them the profits of the restaurant, nor pay them any consideration for their financial rights or equity in the restaurant.
Finally, it is alleged that Respondent Bailey conspired with the Pittengers to obtain the DeWinters' participation in the sales contract and, purchase of the restaurant at a total purchase price of $850,000, which the three Respondents allegedly knew was far in excess of the actual value of the property at the time of the purchase.
By reason of the foregoing, the Respondents Pittenger and Lan Thi Tran are charged with fraud, misrepresentation, concealment, false promises and pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction as envisioned by Section 475.25(1)(b), Florida Statutes, and with failure to account and deliver funds in violation of Subsection 475.25(1)(d), Florida Statutes. In a like vein, Respondent LeRoy G. Bailey is charged in the last two counts of the complaint with similar violations of Section 475.25(1)(b), Florida Statutes.
These cases were consolidated by order of the Hearing Officer upon motion by the Petitioner. The causes came on for hearing, at which the Petitioner offered 19 exhibits, including several composite exhibits received into evidence without objection. The Respondent; LeRoy Bailey, testified on his own behalf after waiving the privilege against self-incrimination, with advice of counsel. The Petitioner presented 5 witnesses. The Petitioner and Respondent Bailey submitted proposed findings of fact and conclusions of law. Those proposed findings of fact have been addressed in this Recommended Order and, in view of the decision in Island Harbour Beach Club, Ltd. v. Department of Natural Resources, Case No. BE-355 and Sunset Realty Corp. et al. v. Department of Natural Resources, Case No. BE-352 (1st DCA, Opinion filed October 10, 1985) an appendix is attached hereto and incorporated by reference herein also addressing those proposed findings of fact.
The issues to be resolved in this proceeding concern whether the various Respondents committed the acts and omissions charged in the complaint of the Florida Construction Industry Licensing Board and the amended complaint of the Division of Real Estate and, if so, whether those acts and omissions constitute violation of the legal authority pled in the complaints.
FINDINGS OF FACT
Respondent Jean P. Pittenger is a licensed general contractor holding license number CGC010323 issued by the Florida Construction Industry Licensing Board and is a licensed real estate broker-salesman, holding license number 0341210. Respondent Lan Thi Tran also known as Marie J Pittenger; is a licensed real estate salesman, holding license number SLO216661. Respondent LeRoy G. Bailey is a real estate broker in the State of Florida, holding license number BKO184114.
On or about December 11, 1981, the Respondents Pittenger and Tran solicited and obtained Louis and Lamquet DeWinter and J. M. Demeulemeister as purchasers and joint venturers for the purchase of a certain piece of real property in Collier County, and for the construction of a house thereon. The Respondent Pittenger was the President and qualifying agent for his construction company known as "The Pittenger Company," d/b/a Real Estate Technology Group. Jean Pittenger entered into the joint venture agreement with Louie Philippe DeWinter and the others, as president of that entity. Pursuant to this agreement, DeWinter agreed to purchase a lot at Site 51, Block A, The Pelican Bay, Unit 1, a recorded subdivision in Collier County, Florida, and Respondent Jean Pittenger agreed to construct a first-class residence" on the property for purposes of investment and resale.
Respondent Jean Pittenger never qualified his company or the joint venture entity under which he intended to undertake to construct the house with the Florida Construction Industry Licensing Board.
In connection with the joint venture, the DeWinters gave to Marilyn Evanish of Coral Ridge-Collier Properties, Inc., a $17,000 earnest money deposit in accordance with the sales contract calling for DeWinter to purchase the property at a total of $170,000. The DeWinters' also paid $15,000 for architectural services and $13,151 for advance construction costs, attorney's fees and the like to Respondents' Pittenger and Tran. The DeWinters' made these disbursements from their own funds in trust and reliance upon the statements, actions and representations of Respondents' Pittenger and Tran to the effect that an architect would be retained to design the residence to be built, and that construction permits would be obtained and construction would `begin at a time certain.
Thereafter, on or about April 14, 1982, Pittenger and Tran, unilaterally terminated the professional services of the architect and abandoned the joint venture agreement and the construction of the residence without explanation to their fellow joint venturers, the DeWinters, who were the owners of the lot upon which the residence was to be constructed. Respondent Pittenger never returned to complete construction. This unilateral action by the Respondents resulted in the DeWinters losing the use and benefit of approximately $28,151 which they had paid to those Respondents for architectural services and construction costs, which services were never performed.
Louis DeWinter made demand on the Pittengers for return of the funds. Respondents' Pittenger and Tran, however, failed to justify the abandonment of construction of the dwelling, and failed and refused to account for the funds or what services, if any, had been purchased with the funds provided them by DeWinter for development of the property. Respondents' Pittenger and Tran utilized the $13,151 for their own use and benefits or in any event, for a use and benefit not intended by their joint venture partners and clients, the DeWinters. An indefinite portion of the $15,000 attributable to architectural services was apparently paid to the architect engaged to design the house; but in any event, Pittenger and Tran terminated the professional services of the architect before he completed his design and failed to account for or deliver the $13,151 entrusted to them by the DeWinters and intended for initiation of construction. The evidence does not clearly establish what became of the
$15,000 advance for architectural services, but the DeWinters never received the benefit of any architectural services purchased.
On or about March 24, 1982, Respondents' Jean P. Pittenger and Lan Thi Tran solicited and obtained $5,000 from the DeWinters supposedly for the purpose of purchasing real property in Bonita Springs, Florida, for investment and resale. The DeWinters' gave $5,000 to Respondents' Jean P. Pittenger and Lan Thi Tran in trust and reliance upon the acts, representations and statements of those Respondents which were made in order to induce the DeWinters' to deliver the $5,000 to them. Thereafter, those Respondents refused and neglected to account for or deliver to the Dewinters the $5,000 after demand and they never used that sum to purchase any property on behalf of the DeWinters, their clients.
On or about April 22, 1982, Respondents' Pittenger and Tran solicited and obtained a sales contract on a restaurant known as "The Elephant Walk." The property was owned by Hospitality-Condo Inn, Inc. (seller) and was listed by the real estate brokerage known as Tri-Dynamics Realty of Florida, Inc., which was the brokerage of Respondent LeRoy Bailey, who is also the President of Hospitality-Condo Inn, Inc. The property was sold to Gerlanelie, Inc. by Lee Nichols Realty, Inc., the "selling broker," pursuant to that contract. Gerlanelie, Inc., was owned by the DeWinters and Respondent Tran who in effect were the purchasers of the property. Respondent Tran was the real estate salesperson who secured and negotiated the purchase from Mr. Bailey's corporation, at which time she was a salesman for Lee Nichols Realty, Inc., the selling broker. In executing the contract, the DeWinters acted upon the advice and representations of the Pittengers, who represented that the purchase price of $850,000 was a reasonable price and- knowing that the DeWinters were foreign nationals and uninitiated in the legal aspects of real estate transactions in Florida, represented to them that it was illegal under Florida law to counter- offer for less than that purchase price, which representation the DeWinters apparently believed.
At the closing, the DeWinters executed documents assigning their beneficial interests back to the sellers Bailey and Hospitality Condo-Inns Inc., as collateral and security for the mortgage and promissory note obligations by which they were to pay the purchase price, to which obligations they both corporately and personally obligated themselves. Additionally, the Respondents' Pittenger and Tran agreed to share and participate in the mortgage payments, by which $728,000 of the purchase price was to be paid, as an inducement to get the Dewinters to enter into the sales contract and close the transaction.
In connection with the purchase and renovation of the restaurant, the Respondents, Pittenger and Tran solicited and obtained $104,795 from the DeWinters between May 17, 1982 and July 10, 1982. Respondent Jean Pittenger, who was to do the construction work for the renovation, originally represented that the construction work would cost no more than $75,000. In any event, very little renovation work was completed by the Respondent Pittenger, and he and Respondent Tran abandoned the project, leaving $70,000 in unpaid, recorded mechanics' and materialmens' liens and approximately $30,000 in unpaid bills for food, liquor and other expenses, which were in large part incurred by Respondents' Pittenger, Tran and their invited guests and business associates. This $30,000 amount had to be paid by the DeWinters through a loan and they had to pay the $70,000 liens as well. As a result of this unforeseen, massive expense, the DeWinters were unable to meet their August, 1982, mortgage payment,
although in the first full month of operation they had grossed approximately
$60,000 with the restaurant operation and it appeared to be a very viable business. Additionally, Respondents' Pittenger and Tran failed to pay their share of the mortgage payments, notwithstanding their promise to the DeWinters that they would participate in making the mortgage payments as inducement to the DeWinters entering into the purchase transaction in the first place.
In any event, Respondents' Pittenger and Tran abandoned the project and left the state and were last known to be in the Atlanta, Georgia area. They thus deprived the DeWinters of the vast majority of the $104,795 to have been used to pay for renovation on their restaurant, the $70,000 in addition to that required to discharge the liens and the $30,000 expended to pay various expenses incurred by those Respondents.
The former owner and mortgagee, Respondent LeRoy G. Bailey advised the DeWinters during the initial month of operation of the restaurant after the sale, that Pittenger and Tran were not to be trusted, and that they should remove them from management of the restaurant and seek legal counsel, which the DeWinters did. Respondent Bailey additionally cooperated with the DeWinters, attempting to help them make the business a successful operation, but in the ends due to the perfidy of Pittenger and Tran, and the severe financial hardship it caused the DeWinters, the DeWinters were forced to assign all of their right, title and interest in the restaurant back to Respondent Bailey, at the point of the restaurant's mortgage becoming in default, as they had earlier agreed to do. Mr. Bailey employed the DeWinters in a management capacity for a short time after the assignment, but then discharged them and operated the restaurant himself for a time until he ultimately sold it.
In any event, it was not established that Bailey entered into any conspiracy or scheme with Pittenger and Tran to attempt to defraud the DeWinters, or otherwise engage in any dishonest dealing by trick, scheme, device or otherwise at the expense of the DeWinters. The financial and legal problems which befell the DeWinters were due to their naive reliance on the representations, promises and statements made by Jean Pittenger and Lan Thi Tran, his wife. All their agreements with Bailey were entered into with counsel present and upon advice of counsel. The DeWinters knew at the closing of the transaction that they had executed an assignment, in the nature of a deed in lieu of foreclosure, back to Bailey, which would be exercised should the mortgage become in default.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the subject matter of and the parties to these proceedings. Section 120.57(1), Florida Statutes.
The Petitioners are agencies of the State of Florida charged with implementing the provisions of Chapters 475 and 489, Florida Statutes, as they relate to the enforcement of licensure and practice Standards for the two professions involved, and the imposition of penalties for violations of the standards embodied in these two chapters.
Initially, with regard to Respondent Jean Pittenger and the complaint
against him by the Department of Professional Regulation, Florida Construction Industry Licensing Board (Board), the clear and convincing evidentiary basis for the above Findings of Fact, reveals that that Respondent has violated Section 489.129(1)(h), (j) and (k), Florida Statutes, (1981) as well as Section 489.119(2) and (3)(b), Florida Statutes, (1981). Those provisions are set forth below:
Section 489.129(1):
(h) Diversion of funds or property received for prosecution or completion of a specified construction project or operation when as a result of the diversion the contractor is or will be unable to fulfill the terms of his obligation or contract.
* * *
Failure in any material respect to comply with the provisions of this act.
Abandonment of a construction project in which the contractor is engaged or
under contract as a contractor. A project is to be considered abandoned after 90 days if the contractor terminates said project without notification to the prospective owner and without just cause.
Section 489.119:
(2) If the applicant proposes to engage in contracting as a partnership, corporal tion, business trust, or other legal entity, the applicant shall apply through a qualifying agent; the application shall state the name of the partnership and of its partners, the name of the corporation and of its officers and directors, the name of the business trust and its trustees, or the name of such other
legal entity and its members; and the applicant shall furnish evidence of statutory compliance if a fictitious name is used. Such application shall also show that the qualifying agent is
legally qualified to act for the business organization in all matters connected with its contracting business and that
he has authority to supervise construc- tion undertaken by such business organization. The registration or cer- tification, when issued upon application of a business organization, shall be in the name of the qualifying agent, and the name of the business organization shall be noted thereon.
(3)(b) The qualifying agent shall inform the department in writing when he proposes to engage in contracting in his own name or in affiliation with another business organization, and he
or such new business organization shall supply the same information to the department as required of applicants under this act.
Inasmuch as the Respondent Jean Pittenger failed to appear and refute the prima facie showing made by the Board, it has been proven by clear and convincing evidence that Respondent and his wife, Lan Thi Tran, entered into a joint venture agreement with Mr. and Mrs. DeWinter which, in pertinent part, called for construction of a residence on investment property. It is clear from the evidence of record that the Respondent never notified the Board or qualified the joint venture entity under which he was practicing as a contractor, with the Board. The Respondent, having never qualified the entity, "The Pittenger Company d/b/a the Real Estate Technology Group" with the Construction Industry Licensing Board as a new business organization, it is clear that he has violated Section 489.129(1)(j) and 489.119(2) and (3)(b), Florida Statutes (1981).
Further, it has been established, in connection with that construction project that the Respondent received $13,151 for land development, obtaining of permits and other initial construction expenses. The Respondent was established not to have performed those (or any other) duties related to the proposed construction and to have failed to return any of the $13,151 received under the joint venture agreement. There is no evidence to refute the conclusion that Respondent Jean Pittenger diverted funds received for a specified construction project which resulted in his inability, at least in part, to fulfill the terms of his contract. Thus, it has been proven that Respondent Jean Pittenger violated Section 489.129(1)(h), Florida Statutes (198l) quoted above.
It has likewise been established that on or about November 20, 1982, the Respondent Pittenger, without notifying his partners, the DeWinters, abandoned the project and never returned to resume construction and completion of the residence contracted for. Therefore, the Respondent Jean Pittenger violated Section 489.129(1)(k); Florida Statutes (1981) by abandoning that project for more than 90 days without notification to the prospective owners; the DeWinters.
Concerning Count Six of the Construction Board's complaint, it was established that the Respondent Pittenger contracted to remodel "The Elephant Walk Restaurant" for a price of $75,000. The final represented cost of remodeling, however, reached $104,795, which the DeWinters paid the Respondent in cash. The Respondent abandoned that project in an unfinished state with approximately $70,000 in mechanics' and materialmens' liens remaining outstanding, over and above the $104,795 which DeWinter had already paid him. The DeWinters also had to defray that $70,000 encumbrance. Thus it was clearly established that the Respondent Jean Pittenger diverted funds he received for completion of that construction project, which prevented his completion of the terms of his obligation.
Further, as to Count Seven of the Construction Board's complaint, the Respondent fled the state on or about November 20, 1982, without notifying the Board. He thus violated Section 489.129(1)(c), Florida Statutes (1981) and Section 21E-15.07, Florida Administrative Code by failing to notify the board within 30 days of a change of address.
Finally, there is no question that Jean Pittenger violated Subsection 489.129(1)(m), Florida Statutes (1981), by promising and assuring the DeWinters that he would construct the residence as agreed, perform the renovation work on the restaurant for the price agreed, and instead pocketing and diverting the funds provided him for these purposes and abandoning both projects without responding to demands for return of those funds. There is no evidence whatever to justify his cessation of work on either of those projects and retention of the subject funds and it has thus been established that he is guilty of deceit and misconduct in the practice of contracting, as proscribed by the above subsection.
With regard to Count Five of the complaint of the Board, Jean Pittenger received $5,000 by wire from the DeWinters in order to invest in the parcel of land in the Bonita Springs area referenced above, failed to advise the DeWinters of what use was made of the $5,000, and failed to return it to the DeWinters upon demand. The charge in Count Five involving diversion of funds for a specific construction operation resulting in the Respondent's failure to fulfill the terms of his obligation has not been proven however, since it has not been established that the $5,000 sum remitted to Pittenger was for purposes of construction, as opposed to what was proven, that is, that the $5,000 was an advance to Respondent Jean Pittenger for purchase of the parcel of land in question.
CASE NO. 84-0311
The Respondents Jean Pittenger, Lan Thi Tran and LeRoy G. Bailey are charged with violation of Section 475.25(1)(b) and (d), Florida Statutes (1981) set forth as follows:
The Board may deny an application for licensure or renewal, may suspend a licensure for a period not exceeding
10 years, may revoke a license, may impose an administrative fine not to exceed $1,000 for each count or separate offense, or may issue a reprimand if it finds that the licensee or applicant has:
(b) Been guilty of fraud, misrepresentation, concealment, false promises, dishonest
dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction in this state or any other state, nation, or territory; has violated a duty imposed upon him by law or by the terms of a listing contract, written, oral, express, or implied, in a real estate transaction; has aided, assist- ed, or conspired with any other person engaged in any such misconduct and in furtherance thereof; or has formed an intent, design, or scheme to engage
in any such misconduct and has com- mitted an overt act in furtherance of such intent, design, or scheme. It shall be immaterial to the guilt of
the licensee that the victim or intended victim of the misconduct has sustained no damage or loss; that the damage or loss has been settled and paid after discovery of the miscon- duct; or that such victim or
intended victim was a customer or a persons in confidential relation with the licensee, or was an identi- fied member of the general public;
* * *
(d) Failed to account or deliver to any person, including a licensee under
this chapter, at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery, personal property such
as money, fund, deposit, check, draft, abstract of titled mortgage, conveyance, lease; or other document or thing of value, including a share of a real estate commission or any secret or illegal profit, or any divisible share or portion thereof, which has come into his hands and which is not his property or which he is not in law or equity entitled to
retain under the circumstances. . .
The above Findings of Fact and unrefutted evidence of record reveal conclusively that Respondents Jean Pittenger and Lan Thi Tran, clearly are guilty of fraud, misrepresentation, concealment, false pretenses, dishonest dealing by trick, scheme or device, and breach of trust in the business transactions referenced in the above Findings of Fact. They received monies referenced in the above Findings of Fact. They received monies entrusted to them in their fiduciary capacity as real estate licensees in return for which they promised to perform certain duties which they did not reasonably attempt to do. They failed to return and account for those monies upon proper demand to those they knew to be entitled to them, the DeWinters. When it became obvious to tie DeWinters that the Respondents were not going to fulfill the promises and representations they had made concerning the purchase of the property in Bonita Springs, for which $5,000 was advanced to them, the renovations to the restaurant which were paid for and not performed, the sharing of the mortgage payments on the restaurant, together with the failure by the Respondents to carry through with their responsibilities under the initial joint venture agreement, the DeWinters demanded redress and return of the money advanced. These Respondents responded by retaining the funds entrusted to them, or the benefit of them, and fleeing the state. This renders their intent underlying the dealings with the Dewinters obviously deceitful and fraudulent. This fraudulent intent, is especially blatant regarding Pittenger's and Tran's inducement of the DeWinters into the purchase of the restaurant, when the misrepresentation was made concerning counter-offers in real estate transactions in Florida. The victims acted in reliance on this intentional misrepresentation to their ultimate, extreme financial detriment.
The burden of proof in penal cases such as this is on the Petitioner. Balino v. Dept. of Health and Rehabilitative Services, 348 So.2d 349 (Fla. 1st DCA 1977). cf. State ex rel Vining v. Florida Real Estate Commission; 281 So.2d
487 (Fla. 1973). The cases of Bach v. Board of Dentistry 378 So.2d 34 (Fla. 1st DCA 1979) and Poirier v. Division of Health, Department of HRS 351 So.2d 50 (Fla. 1st DCA 1977), illustrate that the violation of penal statutes is not to be founded on loose interpretations and problematic evidence. In Robinson v. Dept. of Professional Regulation, Board of Dentistry, 447 So.2d 930 (Fla. 3rd DCA 1984), the court held that procedural due process rights are involved in evidentiary standards of proof in license revocation proceedings. This corresponds to the Supreme Court's holding in Santowsky v. Kramer, 102 S.Ct. 1388, 1396 (1981) wherein the Court stated:
This court has mandated an intermediate standard of proof - `clear and convincing' - evidence when the individual interests in a state pro- ceeding are `particularly important' and `more substantial than mere loss
of money,' Addington v. Texas, 441
U.S. 424, 99 S.Ct. 1808. Standards of proof, like other `procedural due process rules; are shaped by the risk of error in the truth-finding process as applied to the generality of cases, not the rare exception.'
Matthew v. Eldridge, 96 S.Ct. at 907.
Clearly the loss of a valuable professional license, accompanied by the right to practice one's profession, is more grave than mere loss of money or other property, and thus, as Petitioner acknowledges, the findings made herein must be predicated upon a showing of clear and convincing evidence. Reid v. Florida Real Estate Commission, 188 So.2d 896 (Fla. App. 1966). Here, the evidence against the defaulting Respondents is overwhelming and patently clear and convincing. The Petitioner has presented an unrefuted prima facie case that the Respondents Pittenger and Tran were licensees during the period of time in question and engaged in serious misconduct in violation of the several practice acts. They have violated Section 475.25(1)(b) and (d), Florida Statutes in all the respects alleged in the Complaint.
It is patently obvious that the Petitioner's proof is sufficiently substantial, with no countervailing, mitigating considerations, so as to justify tee imposition of the most serious penalty authorized within the range of those provided by the referenced statutory authority. Here the Respondents' violations are not merely technical infractions of diminutive importance, but rather go to the basic philosophy behind the system of professional licensure and regulation in the State of Florida, that is, the appropriate handling of such business and financial affairs is often critical to the well-being of the people of the state. Cf. Pearl v. Florida Bd. of Real Estate, 394 So.2d 189 (Fla. App. 1981); Peck v. Florida Real Estate Commission, 204 So.2d 355 (Fla. App. 1967). It having been proven that Respondents Pittenger and Tran are guilty of the violations charged in both administrative complaints, it becomes obvious that the repetitive nature of those serious violations involving intentional mishandling of their client's business affairs and funds, renders
their trustworthiness as licensees, handling fidicuiary funds and other details of their client's financial affairs, to be fatally tainted. So flawed is their reliability as fiduciaries for future clients that it becomes obvious that they should no longer be licensed as either real estate licensees, or with regard to Jean Pittenger, as a licensee of the Construction Industry Licensing Board.
From the evidence presented however, it is clear that the Respondent LeRoy G. Bailey has not violated Subsection 475.25(1)(b) nor (d), Florida Statutes. He has not been shown to have initiated or assisted in any fraud, misrepresentation, concealment, false promise, false pretense, dishonest dealing or any of the other reprehensible forms of conduct enumerated above. The evidence of record clearly reveals that all aspects of the transaction involving the DeWinters and Bailey were explained to the DeWinters by their own legal counsels as, well as Bailey's legal counsel and Bailey, and that the DeWinters understood that they had executed an assignment of their beneficial interest to be used in lieu of foreclosure should the mortgage become in default. The DeWinters had the opportunity to have an independent appraisal of the property done to ascertain if Bailey's asking price of $850,000 was justifiable. Respondent Bailey, was not shown to have played any part in any of the tricks or schemes fulminated by the Pittengers, and it was not established that his seeking an unusually high purchase price for the restaurant amounted to evidence of a fraudulent representation or scheme which he wad attempting to impose on the DeWinters. The purchase price may, for instance; have represented both the price for the real estate involved, as well as the "going concern" value of the restaurant business. Accordingly, it is concluded that Petitioner has not adduced sufficient evidence to justify a finding that the charges levied against Respondent LeRoy G. Bailey are true.
Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of records the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, therefore
RECOMMENDED that the charges against the Respondent LeRoy G. Bailey be DISMISSED and it is further,
RECOMMENDED that all licenses issued by the Construction Industry Licensing Board to Jean P. Pittenger be REVOKED and that he be fined the amount of $5,000. It is further
RECOMMENDED that the licenses of Jean P. Pittenger and Lan Thi Tran, also known as Marie J. Pittenger, issued by the Florida Real Estate Commission be REVOKED, and that they each be fined in the amount of $6,000.
DONE and ENTERED this 20th day of November, 1985 in Tallahassee, Florida.
P. MICHAEL RUFF 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 20th day of November, 1985.
APPENDIX TO RECOMMENDED ORDER, CASE NOs. 84-0311 AND 84-1112
Petitioner's Proposed Findings of Fact
Accepted. 4. Accepted.
Accepted. 5. Accepted.
Accepted. 6. Accepted.
Respondent's Proposed Findings of Fact
Accepted. 5. Accepted.
Accepted. 6. Accepted.
Accepted. 7. Accepted.
Accepted. 8. Accepted.
COPIES FURNISHED:
James H. Gillis, Esquire Division of Real Estate Post Office Box 1900 Orlando, Florida 32802
Wesley A. Lauer, Esquire ACKERMAN, BAKST, GUNDLACH,
LAUER & ZWICKEL, P.A.
515 North Flagler Drive Orlando, Florida 32802
Jean P. PITTENGER and Lan Thi Tran
235 Tallwood Terrace Roswell, Georgia 30075
James Linnan Executive Director Construction Industry
Licensing Board Post Office Box 2
Jacksonville, Florida 32202
Harold Huff, Executive Director Division of Real Estate
Post Office Box 1900 Orlando, Florida 32802
Fred Roche, Secretary Department of Professional
Regulation
130 North Monroe Street Tallahassee, Florida 32301
| Issue Date | Proceedings |
|---|---|
| Nov. 20, 1985 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Jan. 21, 1986 | Agency Final Order | |
| Nov. 20, 1985 | Recommended Order | Respondent repeatedly mishandled client funds and business affairs. Diverted funds and abandoned development projects. Recommend revocation. |
