STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

v. ) CASE NO. 85-0939

)

FREDERICK L. LUNDEEN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a public hearing in this case on June 28, 1985, in West Palm Beach, Florida. The parties were granted leave to submit post-hearing memoranda supportive of their respective positions. Petitioner's counsel has submitted a proposed recommended order which has been considered by me in preparation of this Recommended Order.1 A transcript of the proceedings was received on August 19, 1985.2

APPEARANCES

For Petitioner: James Gillis, Esquire

Department of Professional Regulation Division of Real Estate

400 W. Robinson St. Orlando, Florida 32802

For Respondent: John L. Avery, Jr., Esquire

1001 N. U.S. Highway 1

Suite 500

Jupiter, Florida 33458

ISSUE

The issue presented for decision herein is whether or not the Respondent, Frederick L. Lundeen, is guilty of fraud,

misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction by misrepresenting that money he borrowed from a one Julie Couch would be used for the purchase of a lot but, instead, he utilized the money in connection with the purchase of a house for use by his family and for payment of other vacation and travel expenses and refuses to repay the loan, in a manner violative of Section 475.25(1)(b), Florida Statutes.3

FINDINGS OF FACT

1. Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received, and the entire record compiled herein, I hereby make the following relevant factual findings.

   
   

2. Respondent, Frederick L. Lundeen, is a licensed real estate salesman and holds license number 0329068.

   
   

3. On or about July 13, 1984, Respondent solicited and obtained $3,500 cash from Julie S. Couch (Couch) for the stated purpose of assisting Respondent in purchasing a lot on behalf of Keith and Beverly Rayburn, friends of the Couches. In connection therewith, Respondent executed and delivered to Couch a mortgage note dated July 13, 1984, to secure the $3,500 loan via certain real property owned by Respondent.4 Pursuant to the terms of the note executed by Respondent and given to Mrs. Couch, Respondent was to repay Couch the principal of $3,500 plus $1,000 interest due on or before July 27, 1984.

   
   

4. On July 30, 1984, Respondent attempted to repay part of the loan via check dated July 30, 1984 drawn in the amount of

   $1,000. Respondent's check was returned unpaid by the Drawers Bank with the notification "insufficient funds." (Petitioner's Exhibits 3 and 4) Thereafter, Respondent advised Mrs. Couch that the money was used to pay for his moving, vacation and other relocation costs for his family.

   
   

5. Keith Rayburn attempted to buy property from the Respondent which was owned by Southern Standards Corporation. At no time during the attempted purchase by Keith Rayburn did Respondent offer to loan him money to purchase a lot from Southern Standards Corporation.

6. Respondent executed and drafted the terms of the note which was given to Julie Couch which memorialized the loan from Mrs. Couch to Respondent.

   
   

7. In this regard, Respondent contends that Julie Couch's ex-husband suggested the terms and the rate of interest which he inserted into the note which memorialized the loan from Julie Couch. On the other hand, Julie Couch testified that it was Respondent who suggested the terms and the interest which he provided with the executed note given her. Based on all of the evidence introduced herein including the fact that Respondent misrepresented the purpose for which the money would be utilized, and his failure to call Gary Couch as a witness to substantiate his claim that it was he, Gary Couch, who suggested the terms under which the loan would be made, the testimony of Julie Couch in this regard is credited.5

   
   

8. Respondent has repaid approximately $1,250 of the

   $3,500 loan from Julie Couch. Respondent, based on advice of his counsel, refuses to repay any further amounts on this loan contending that the interest rates were usurious and, further, that the State, in the person of Petitioner, is attempting to use its "strongarm tactics" to exact money from Respondent which is a usurious transaction. Respondent also contends that because the interest rate charged by Mrs. Couch was in excess of

   45 percent per annum, Mrs. Couch committed a third degree felony.

   
   

9. As previously stated, the weight of the evidence reveals that it was Respondent who drafted the note and provided the terms for repayment. It is also clear that Respondent misrepresented to Mrs. Couch the purpose for which he would utilize the money that he borrowed from her. It is therefore concluded that by such acts Respondent engaged in acts of misrepresentation, false pretenses, trick and dishonest dealing in a business transaction.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action. Section 120.57(1), Florida Statutes.

    
    

11. The parties were duly noticed pursuant to the notice provisions of Chapter 120, Florida Statutes.

12. The authority of the Petitioner is derived from Chapter 475, Florida Statutes.

    
    

13. Respondent, a licensed real estate salesman, is subject to the disciplinary guides of Section 475, Florida Statutes. Section 475.25(1)(b), Florida Statutes, provides in pertinent part that the Board may . . . suspend a license . . . revoke[or] impose an administrative fine . . . or may issue a reprimand, if it finds that the licensee . . . has:

    
    

    (b) being guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device . . . in any business transaction in this state. . . .

    
    

14. Competent and substantial evidence was offered herein to establish that the Respondent is guilty of misrepresentation and dishonest dealing by trick, scheme or device in a business transaction in violation of Section 475.25(1)(b), Florida Statutes. See La Rossa v. Department of Professional Regulation, 474 So. 2d 332 (Fla. App. 3 Dist. 1985).

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is, therefore,

RECOMMENDED:

That the license of Respondent, Frederick L. Lundeen, be suspended for a period of one (1) year and that he be fined

$1,000.

RECOMMENDED this 21st day of October, 1985, in Tallahassee, Florida.6

JAMES E. BRADWELL , 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 21st day of October 1985.

ENDNOTES

1/ A ruling has been made on each proposed finding as required by Section 120.59(2), Florida Statutes.

2/ The parties waived the requirement that a recommended order be entered herein within thirty days following receipt of the transcript.

3/ Official notice was taken of Chapters 120, 455 and 475, Florida Statutes, and Section 20.30, Florida Statutes. (TR page 11)

4/ At the outset of the hearing herein, Petitioner's counsel withdrew paragraph 6 of the administrative complaint which alleged that Respondent did not own or otherwise have any right, title or claim to the above-referenced property used to secure the property as collateral to secure the $3,500 loan. Evidence introduced during the hearing reveals that the Respondent, in

fact, owned the property used to secure the $3,500 loan from Julie Couch. (TR pages 5 and 6)

5/ In any event, it is doubtful that such testimony would show that it was Julie Couch who suggested the terms. No claim is here made by Respondent that she, in fact, did so. Moreover, that issue is one best resolved by referring any relevant evidence on that point to the local state attorney's office for appropriate proceedings on Respondent's defense that the transaction is usurious.

6/ Based on the findings herein that it was Respondent who authored the terms which he now claims are usurious, he cannot now claim that no further amounts are due to Mrs. Couch or that this proceeding should not have been brought for that same reason.

COPIES FURNISHED:

James Gillis, Esquire Division of Real Estate

400 W. Robinson St. Orlando, Florida 32802

John L. Avery, Jr., Esquire 1001 N. U.S. Highway One Suite 500

Jupiter, Florida 33458

Salvatore Carpino General Counsel

Department of Professional Regulation

130 N. Monroe St. Tallahassee, Florida 32301

Harold Huff Executive Director

Division of Real Estate

400 W. Robinson St. Orlando, Florida 32802

Docket for Case No: 85-000939

Orders for Case No: 85-000939