STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) Case No. 85-3863

)

SHIRLEY JANE JOHNSON, )

)

Respondent. )

)

RECOMMENDED ORDER

Consistent with the Notice of Hearing furnished to the parties on January 6, 1986, a hearing was held in this case before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings in Pensacola, Florida, on April 11, 1986. The issue for consideration at the hearing was whether Respondent's license as a real estate salesman in Florida should be disciplined because of the alleged misconduct outlined in the Administrative Complaint filed herein.

APPEARANCES

For Petitioner: Arthur R. Shell, Jr., Esquire

Division of Real Estate Post Office Box 1900 Orlando, Florida 32802

For Respondent: Was not present and was not

represented by counsel. BACKGROUND INFORMATION

On July 3, 1985, Fred Roche, Secretary of the Department of Professional Regulation, on behalf of the Division of Real Estate, filed an Administrative Complaint in this case alleging, in seventeen Counts, various, violations of Subsection 475.25(1), Florida Statutes, relating to misconduct in the practice of real estate. By letter dated September 30, 1985, Respondent's counsel indicated Respondent's desire for a formal hearing in this case and on October 14, 1985, the file was forwarded to the Division of Administrative Hearings for the appointment of a Hearing

Officer. On November 20, 1985, the undersigned forwarded a Notice of Assignment to both counsel and on November 26, 1985, counsel for Respondent submitted a Motion to Withdraw. Since there was no indication that the motion had been furnished to Respondent and since Respondent had not had an opportunity to respond thereto, the Motion to Withdraw was denied on December 16, 1985, until such time that counsel could establish that Respondent was aware of his motion and had opportunity to respond. On January 9, 1986, Respondent's counsel furnished her a copy of a renewed Motion to Withdraw and indicated she should make any objections to this motion known to the undersigned at the appropriate address. When no response was received by January 31, 1986, the undersigned granted the renewed motion.

Respondent's counsel was notified of the time, date, and location of the hearing prior to withdrawal and presumably advised Respondent of this information. At the hearing, the undersigned delayed convening for 15 minutes beyond the scheduled hearing time, but Respondent failed to appear. There are indications from Counsel for Petitioner that Respondent has left the state and is currently residing in California.

At the hearing, Petitioner presented the testimony of Emmison and Lillie Mae Lewis, of Pensacola, individuals from whom Respondent took a deposit for the purchase of a home; James E. and Pearlie Webster of Pensacola, also individuals from whom Respondent took deposits for the purchase of property; and Lester

1. Bickel, a real estate broker in Pensacola with whose firm, Respondent had listed her license as a salesman at the time of the alleged misconduct herein. Petitioner also introduced Petitioner's Composite Exhibits 1 and 2.

   
   

   Neither party submitted proposed findings of fact subsequent to the hearing.

   
   

   FINDINGS OF FACT

   
   

   1. At all times pertinent to the matters involved herein; Petitioner held Florida real estate salesman's license number 0403224. Her license was listed with Century 21 ACR Equities; Inc., 4222 W. Fairfield Drive, Pensacola; on May 25; 1983. On March 4, 1985, Respondent listed her license with Century 21; Five Flags Properties; Inc., in Pensacola, without terminating her listing with ACR Equities. On March 22, 1985, Five Flags terminated her listing with that firm and on April 30; 1985, ACR Equities terminated her listing with that firm. On May 14; 1985; Respondent applied for a change of status to list her license with Old South Properties; Inc., in Pensacola. That firm terminated the association on July 9, 1985.

   2. On March 19; 1985; Emmison Lewis and his wife; Lillie Mae signed a handwritten sales agreement prepared by Respondent for the purchase of a piece of property located in Escambia County; for $33,000.00. The Lewises gave her a deposit of

      $500.00 by check made payable to Respondent and which bears her endorsement on the back. This check was made payable to Respondent because she asked that it be made that way. Several days later; Respondent came back to the Lewises and asked for an additional $1,500.00 deposit. This was given her, along with a rental payment of $310.00; in a $2,000.00 check on March 29, 1985. Respondent gave the Lewises the balance back in cash along with a receipt reflecting the payment of the $1,500.00.

      
      

   3. On that same date; Respondent had the Lewises sign a typed copy of the sales agreement which reflected that both the

      $500.00 deposit and the additional $1,500.00 were due on closing. This typed copy was backdated to March 19; 1985. Both the handwritten and typed copies of the sales agreement bear the signature of the Respondent as a witness.

      
      

   4. The sale was never closed and the Lewises have never received any of the $2;000.00 deposit back. On about four different occasions, Mr. Lewis contacted Respondent requesting that she refund their money and she promised to do so, but never did. They did, however, receive the $310.00 rent payment back in cash approximately two weeks later.

      
      

   5. On April 26, 1985, James E. Webster and his wife Pearlie signed a sales agreement as the purchasers of real estate with Respondent. This property had a purchase price of $31,900.00.

      At the time of signing, Mr. Webster gave Respondent $150.00 in cash and a check drawn by his wife on their joint account for

      $400.00. Due to Mrs. Webster's change of mind, the Websters did not close on the property. They requested a refund of their deposit and Respondent gave the Websters a check for $400.00 which was subsequently dishonored by the bank because of insufficient funds. The Websters called Respondent at home several times, but she was always out. Calls to the broker with whom her license was placed were unsuccessful. Finally, however, Respondent refunded the $400.00 to the Websters in cash.

      
      

   6. Respondent had listed her license with ACR Equities in May, 1983. At no time while Respondent had her license with Mr. Bickel's firm did she ever turn over to him as broker either the

      $2.000.00 she received from the Lewises or the $550.00 she received from the Websters. Mr. Bickel, the broker, was not aware of these contracts and did not question her about them. He terminated the placement of her license with his firm because he found out that in early March 1985, she had placed her license with another firm.,

   7. Both sales agreements for the Lewises and that for the Websters had the firm name of ACR Equities printed on them as broker.

      
      

      CONCLUSIONS OF LAW

      
      

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

      
      

   9. In Count I of the Administrative Complaint, Petitioner alleges that the Respondent, having solicited a $500.00 escrow deposit from the Lewises on certain real property, thereafter failed to present that check to her employing broker, Century 21 ACR Equities; Inc.; and that such failure constituted fraud; misrepresentation; concealment; false promises; false pretenses, dishonest dealing by trick; scheme or device; culpable negligence and breach of trust in a business transaction in violation of Subsection 475.25(1)(b); Florida Statutes.

      
      

   10. That stated statutory provision permits the commission to discipline a salesman's license for certain stated violations. The evidence is clear that Respondent is guilty as alleged. Her acceptance of a deposit relating to the sale of a specific piece of realty without subsequently delivering that deposit to her broker for placement in the broker's escrow account constitutes a breach of trust and is a violation of the statute.

       
       

   11. In Count II; the Petitioner alleges that based on the above factual situation; Respondent is guilty of operating as a broker without being the holder of a valid current license there for in violation of Subsection 475.42(1)(a). If established a violation of this provision would also be a violation of 478.25(1)(e); which permits discipline of a license for any violation of this chapter or any order or rule made under provisions of this chapter or chapter 455.

       
       

   12. The evidence here, however; does not conclusively establish the fact that Ms. Johnson was acting as a broker. Admittedly; the check made payable to her as the deposit in question was made out to her personally. However; both the original handwritten contract and the typewritten copy executed shortly thereafter both reflect Century 21 ACR Equities; Inc.; as the broker. According to the documentation; there was never any attempt by Ms. Johnson to conceal the fact that ACR Equities; Inc.; was the agent and the mere fact that she signed documents in her own name, without holding herself out as broker, does not sufficiently demonstrate her attempt to serve as a broker. Further, the fact that she held deposits in her own account without delivering them to the broker is an independent

       violation, but does not necessarily to establish that she held herself out as a broker. Consequently, the evidence ,here is insufficient to establish a violation.

       
       

   13. The same can be said of the allegation in Count III wherein Petitioner charges that Respondent operated as a broker or salesman for a person not registered as her employer. At the time in question, Respondent's license was listed with ACR Equities, Inc.; and the contracts that she prepared on forms listed that firm as the broker. On the other hand, in Count IV, it is alleged that Respondent is guilty of collecting an escrow deposit in connection with a real estate transaction in the name of someone other than the employing broker without the express consent of the broker in violation of Subsection 475.42(1)(d) which, if proven, is also a violation of 475.25(1)(e). The evidence here clearly indicates that Respondent accepted the

       $500.00 deposit in the form of a check made payable to her personally without any reference to her employing broker and without any showing that this was with the consent of her broker. Consequently, a violation here has clearly been established.

       
       

   14. In Count V, Petitioner alleges that after having received the $500.00 deposit, Respondent also accepted an additional escrow deposit of $1,500.00 from the Lewises and that this second check also was not delivered to her broker. This is alleged as a breach of trust in a business transaction in violation of 475.25(1)(b) as outlined in Count I. For the same reason as discussed therein, the same conclusion is reached. The failure of Respondent to deliver the deposit to her broker is a breach of trust and constitutes a violation of the statute. By the same token, the allegations in Count VI and VII are, for the same reasons as contained in the discussions of Counts II and III, not proven. The allegation in Count VIII is established on the basis of the rationale contained in the discussion of Count IV herein.

       
       

   15. In Count IX, Petitioner alleges that on March 19, 1985, the Respondent also collected a $300.00 rent payment from the Lewises and thereafter failed to present it to the broker which allegedly constitutes a violation of 475.25(1)(b). Here, while the advance rent payment was subsequently returned to the Lewises; this return was not accomplished for approximately a two week period and Respondent's failure to timely account to her broker for its receipt constitutes a breach of trust as outlined in the Administrative Complaint.

       
       

   16. For the same reasons as contained in the discussion of Counts II, III; VI and VII herein; however, the misconduct outlined in Counts X or XI, does not constitute a violation since there is no showing that Respondent either acted or held herself

       out as a broker in this transaction. She did, however, collect that rent deposit which should have been placed in escrow and collected it in her own name without the express consent of her broker. This constitutes a violation of Section 475.42(1)(d) and 475.25(l)(e), as alleged in Count XII.

       
       

   17. In Count XIII, Respondent is alleged to have received an escrow deposit in the amount of $550.00 from Mr. and Mrs. Webster in connection with the intended purchase of real property, again while she was employed by ACR Equities, Inc.

       This check was, by Respondent's instructions, made payable to her and was not transmitted to the broker with whom her license was listed at the time. This constitutes a breach of trust in a business transaction in violation of 475.25(1)(b) as well as collecting a deposit in connection with a real estate brokerage transaction in her own name rather than that of her broker without the broker's consent, in violation of 475.42(1)(d) and 475.42(1)(e), as alleged in Count XVI. It does not, however, constitute operating as a broker without a broker's license or operating as a broker for someone other than the agency with which she was registered as is alleged in Counts XIV and XV.

       
       

   18. In XVII, Petitioner alleges that Respondent operated as a salesman without being the holder of a valid license after April 1, 1985. Specifically, Petitioner alleges that Respon- dent's license had been terminated by Century 21 ACR Equities, Inc., on April 1, 1985. The evidence, on the other hand, estab- lishes that Respondent's license was listed with ACR Equities, Inc., from May 5, 1983 through April 30, 1985 with Five Flags between March 4, 1985 and March 22, 1985 and with Old South between May 14, 1985 and July 9, 1985, and while Mr. Bickel may say that he terminated Respondent on April 1, 1985, a copy of the Request for License or change of Status signed by him, requesting termination of the Respondent, is not dated until April 30, 1985. Consequently, Ms. Johnson did not at any period relating to the above two contracts operate without a valid license and is not guilty of the allegation contained in Count XVII.

       
       

   19. Having established that Respondent is guilty of several violations, the remaining question is what disciplinary action is appropriate. Section 475.25 authorizes the commission to suspend or revoke the license of, reprimand, or impose an administrative fine of no more than $1,000.00 on a license holder for each separate offense established. Here, Respondent has been found guilty of several offenses which go to the very core of the fiduciary relationship of the real estate professional with his clients and her misconduct herein demonstrates, without any doubt; her unsuitability to operate in the fiduciary situation. Ms. Johnson was dealing with funds that did not belong to her and

her cavalier approach to their security demonstrates clearly the need for severe corrective action.

RECOMMENDATION

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

RECOMMENDED that Respondent's license as a real estate salesman in Florida be revoked.

DONE and ORDERED this 23rd day of May, 1986, in Tallahassee; Florida.

ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 23rd day of May, 1986.

COPIES FURNISHED:

Arthur R. Shell, Esquire

p. O. Box 1900 Orlando, Florida 32802

Ralph Armstead; Esquire

P. O. Box 2629

Orlando; Florida 32802

Docket for Case No: 85-003863

Orders for Case No: 85-003863