Judges: DONALD D. CONN
Agency: Department of Business and Professional Regulation
Latest Update: Sep. 30, 1985
Summary: Qualifying broker sharing office with other business charged with misconduct for appearing to assist in other business' questionable transaction.
85-1419.PDFSTATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF PROFESSIONA1 ) REGULATION, FLORIDA REAL ) ESTATE COMMISSION, )
)
Petitioner, )
)
vs. ) CASE NO. 85-1419
)
PEGGY M. RACANO, )
)
Respondent. )
)
RECOMMENDED ORDER
A final hearing was held in this case on August 21, 1985, in Fort Lauderdale, Florida, before Donald D. Conn, a duly designated Hearing Officer of the Division of Administrative Hearings. The parties were represented as follows:
For Petitioner: James H. Gillis, Esquire
Post Office Box 1900 Orlando, Florida 32802
For Respondent: Richard R. Michelson, Esquire
Robert Zippin, Esquire 5460 North State Road 7
Suite 220
Fort Lauderdale, Florida 33319
The Department of Professional Regulation, Division of Real Estate, Petitioner, filed an Administrative Complaint charging that Peggy M. Racano, Respondent, was guilty of fraud, misrepresentation, false promises and a breach of trust in a business transaction, as well as the failure to account for, deliver or maintain deposit funds, and the employment of an unlicensed person as a real estate salesman. Petitioner and Respondent each called two witnesses and Respondent also testified on her own behalf. Twelve joint exhibits were received in evidence. Petitioner introduced four additional exhibits and Respondent three additional exhibits. A transcript of the final hearing was filed on September 11, 1985.
At the conclusion of Petitioner's case in chief, Respondent moved for a directed verdict. A ruling on the motion was reserved to allow a review of the Petitioner's exhibits that were received in evidence, as well as twelve jointly offered exhibits, and to incorporate the ruling on the motion in this Recommended Order.
The parties were allowed to submit posthearing proposed findings of fact pursuant to Section 120.57(1)(b)4, Florida Statutes. A ruling on each proposed finding of fact that was timely filed 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
The parties stipulated to the following factual matters:
The Respondent was, at all times alleged in the Administrative Complaint in this cause, a licensed real estate broker having been issued license number OliB294.
From February 2, l9B4 to August 13, l9B4 Respondent was licensed and operating as the sole qualifying broker and officer of Commercial International Realty, Inc., a corporation licensed as a real estate broker, 219 Commercial Boulevard, Lauderdale- By-The-Sea, Florida.
At all times alleged in the Administrative Complaint, Elaine Sherban was president, sole stock holder and owner of Commercial International Realty, Inc., 219 Commercial Boulevard, Lauderdale-By-The-Sea, Florida.
Elaine Sherban is not now, nor was she ever, licensed or a holder of a valid and current license as a real estate salesman, broker-salesman or broker in the State of Florida.
On or about December 29, l9B4, Respondent and Commercial International Realty, Inc., via Elaine Sherban, entered into an employment agreement whereby Respondent was employed as a real estate broker.
The Respondent has not paid any sum whatsoever to Bobbi Jo Magee.
Based upon the evidence received and the demeanor of the witnesses who testified, the following additional findings of fact are made:
On or about March 7, 1984, Bobbi Jo Magee, as purchaser, executed a purchase agreement with Robert E. Moon, seller, for an establishment known as Cowboy's Lounge and Restaurant, Inc. The purchase agreement provided for a purchase price of $257,500 and a $10,000 non-refundable deposit. The date of closing was specified in the agreement to be June 7, 1984.
In connection with this purchase agreement, Bobbi Jo Magee also executed a promissory note, dated March 7, 1984, in the amount of $35,000, payable to Elaine Sherban or her assigns. The promissory note was due and payable on March 12, 1984 and stated it was for "consulting fees and cash loan."
Bobbi Jo Magee testified that she had no money of her own for the deposit called for in the promissory note, but that her mother, Mary Rose Turner, was financially backing her in this transaction. On March 30, 1984, Mary Rose Turner executed a wire transfer in the amount of $35,000 plus an additional $500 to Commercial International Business Brokers Corp., a business owned by Elaine Sherban. Commercial International Business Brokers was located in the same building as Sherban's other business, Commercial International Realty, Inc., but was a separate business with different telephone lines and financial accounts.
Turner and Magee testified that this wire transfer was for the deposit on Cowboy's Lounge, and was for an amount greater than the $10,000 deposit called for in the purchase agreement because Sherban told them that Moon would not accept a deposit of only $10,000 on this transaction. Respondent did place several telephone calls to Turner, who was out of the state, on behalf of Sherban in which Sherban made requests for more money. Respondent's role was to make the phone call and leave a message that Sherban needed to talk to Turner or to turn the phone over to Sherban who then discussed the details with Turner. Respondent did not discuss the financial, or any other, details of the transaction with Turner in these calls, but simply placed the calls for Sherban and facilitated discussions between Sherban and Turner.
Elaine Sherban was acting through Commercial International Business Brokers in this transaction with Magee,
Turner and Moon. She had Magee execute the $35,000 promissory note to cover the $10,000 deposit and consulting fees she charged for her services. Respondent had no knowledge of the reason for this promissory note or what, if any, services Sherban had performed. Respondent did not participate in the execution of the promissory note and purchase agreement other than as-typist, notary and witness. She was not involved in any substantive discussions which caused Magee to sign either document, nor were any part of the funds that were wire transferred by Turner ever received or used by either Respondent, or Commercial International Realty, Inc., the real estate office in which she was employed.
The funds which were transferred by Turner on behalf of Magee were received by Commercial International Business Brokers and were used thereafter by Elaine Sherban.
The sale of Cowboy's lounge did not close on June 7, l9B4, due to concerns which Magee and Turner developed in late May regarding the business records of Cowboy's Lounge. Because they could not get information which they felt was satisfactory about the financial history of this business, they sought legal advice and notified Sherban and Moon that they would not close. Neither Magee nor Turner have ever received a refund on any part of the $35,500 which was transferred by wire on March 30, l9B4.~_
Between March 7, 1984, and late May Respondent met with Magee on several occasions and with Turner on one occasion at Cowboy's Lounge. Others were also present, including Sherban and Moon. Respondent's role in these meetings was purely social, making casual conversation She did not discuss any aspect of the transaction, or the financial condition of Cowboy 's.
Despite the fact that Respondent did not intend to actively participate in the transaction involving Cowboy's Lounge, and in fact did not solicit, negotiate or otherwise intentionally assist with this sale, she did give the appearance of working with and assisting Sherban in this transaction.
Magee and Turner made the reasonable assumption that Sherban and Respondent were partners for purposes of this sale. This appearance was given by tlle fact that Sherban said they were acting as partners, the very close proximity of the offices of Commercial International Business Brokers and Commercial International Realty, Inc., common ownership by Sherban of both businesses, Respondent's placing phone calls to Turner on behalf
of Sherban, meeting with Turner and Magee at Cowboy's along with Sherban, and her functioning as typist, witness and notary for some of the documents involved in this transaction.
No demand by either Turner or Magee has ever been made on Respondent for return of part or all of the $35,500. Through counsel, they did make demand for return of this sum upon Sherban and Moon.
There is no evidence that Respondent ever employed Sherban. The evidence is that Respondent was employed by Commercial International Realty, Inc., which was owned by Sherban.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this case. Section 120.57(1) Florida Statutes.
Petitioner has charged Respondent with violating Sections 475.25(1)(a),(b),(d) and (k), Florida Statutes, which provide for disciplinary action if a licensee:
Has violated any provision of s. 475.42 or of s. 455.227(1).
Has been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or devise, 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, assisted, 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 committed an overt act in furtherance of such intent, design, or scheme. It is 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 misconduct or that such victim or intended victim was a customer or a person in confidential relation with the licensee or was an identified member of the general public.
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(d) Has 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, any personal property such as money, fund, deposit, cheek, draft, abstract of title, 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. . . . .
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(k) Has failed, if a broker, to immediately place, upon receipt, any money, fund, deposit, check, or draft entrusted to him by any person dealing with him as a broker in escrow with a title company, banking institution, or savings and loan association located and doing business in this state, or to deposit such funds in a trust or escrow account maintained by him with some bank or savings and loan association located and doing business in this state, wherein the funds shall be kept until disbursement thereof is properly authorized: or has failed, if a salesman, to immediately place with his registered employer any money, fund, deposit, check, or draft entrusted to him by any person dealing with him as agent of his registered employer. The commission shall establish rules to provide for records
to be maintained by the broker and the manner in which such deposits shall be made. Respondent is also charged with violating Section 475.42(1)(c), Florida Statutes, which provides:
(c) No broker shall employ, or continue in employment; any person as a salesman who is not the holder of a valid and current license as salesman but a license as salesman may be issued to a person licensed as an active broker, upon request and surrender of the license as broker, without a fee in addition to that paid for the issuance of the broker's active license. Petitioner has the burden of proof in this case.
Balino v. Department of Health and Rehabilitative Services, 348 So. 2d 349 (Fla. 1st DCA 1977). Since this is a license disciplinary action which could result in the suspension or revocation of Respondent's license, Petitioner has the burden of establishing the matters alleged by clear and convincing evidence. State ex ref. Vining v. Florida Real Estate Commission, 281 So. 2d 487 (Fla. 1973) Bowling v. Department of Insurance, 394 So.2d 165 (Fla. 1st DCA 1981). This burden exceeds a simple preponderance of the evidence. Petitioner has not met its burden of proof regarding the alleged violations of Sections 475.25(1)(a),(d),(k) and 475.42(1)(c), Florida Statutes. In fact, the evidence presented does not support these alleged violations by even a simple preponderance, were that the standard in this case. Respondent's evidence, including the testimony and demeanor of Respondent herself, is more persuasive and credible than the evidence produced by Petitioner.
Respondent did not deal with Magee or Turner in a fraudulent manner, nor did she intentionally conceal or misrepresent facts concerning their transaction involving Cowboy's Lounge. In addition, she never received, directly or indirectly, any of the funds Turner wire transferred to Sherban and so could not account for, or return these funds. Respondent did not employ Sherban, but rather was herself employed by Sherban as the qualifying broker for Commercial International Realty, Inc.
However, Respondent did give the appearance of working with and assisting Sherban in this transaction. It was reasonable, under the circumstances for Magee and Turner to believe that Sherban and Respondent were partners for purposes of this transaction, and Respondent did nothing to clarify or to correct this misunderstanding. As such Respondent did give the appearance of aiding and assisting Sherban in this transaction. This would subject Respondent to disciplinary action under Section 475.25(1)(b), Florida Statutes, if it had been established that Sherban's actions constituted "misconduct" or a breach of duty imposed upon her by law or the terms of a listing contract. However, this has not been established. To the contrary, it appears that Magee executed a promissory note to Sherban which was specifically for "consulting fees and cash loan." The loan was for the downpayment on Cowboy's Lounge which Sherban advanced for Magee and the fees were for her services in arranging the transaction. Based upon the evidence presented it cannot be determined if Sherban's dealings with Magee and Turner amounted to "misconduct" or a breach of duty. Therefore, Respondent cannot be disciplined under Section 475.25(1)(b) without this prerequisite finding.
RECOMMENDATION_
Based upon the foregoing it is recommended that Petitioner enter a Final Order dismissing the Administrative Complaint filed herein against Respondent.
DONE and ENTERED this 30th day of September, 1985, at Tallahassee, Florida.
DONALD D. CONN, Hearing Officer Division of Administrative Hearings The Oakland Building i
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 30th day of September, 1985.
COPIES FURNISHED:
James H. Gillis, Esquire
Division of Real Estate Post Office Box 1900 Orlando, FL 32802
Richard R. Michelson, Esquire Robert Zippin, Esquire
5460 North State Road 7
Suite 220 ~
Fort Lauderdale, FL 33319
Harold Huff, Executive Director Division of Real Estate
Post Office Box 1900 Orlando, FL 32802
Fred Roche, Secretary Department of Professional
Regulation
130 North Monroe Street Tallahassee, FL 32301
Salvatore A. Carpino, Esquire Department of Professional
Regulation
130 North Monroe Street Tallahassee, FL 32301
Docket for Case No: 85-001419
Orders for Case No: 85-001419
| Issue Date |
Document |
Summary |
|
Sep. 30, 1985 |
Recommended Order
|
Qualifying broker sharing office with other business charged with misconduct for appearing to assist in other business' questionable transaction.
|
