vs. ) CASE NO. 87-2619
RICHARD A. ANGLICKIS, )
Respondent. )
A hearing was held in this case in Fort Myers, Florida, on March 21, 1988, before Arnold H. Pollock. The issue for consideration was whether Respondent's license as a registered real estate broker should be disciplined because of the alleged misconduct outlined in the Administrative Complaint.
For Petitioner: James H. Gillis, Esquire
On May 27, 1987, Petitioner herein, Department of Professional Regulation (DPR), filed an administrative complaint against the Respondent which in four counts alleges the Respondent 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 in violation of Section 475.25(1)(b), Florida Statutes. The counts differ only in that they allege four different individuals with whom Respondent had allegedly done business.
Respondent requested a formal hearing which was initially set for December 2, 1987. However, based upon a joint motion for continuance, the case was continued until March 21, 1988, at which time it was held as scheduled.
At the hearing, Petitioner presented the testimony of the Respondent, Richard A. Anglickis, Davis E. Williamson, and Clarence Tap, two of the four individuals named in the Administrative Compliant with whom Respondent did
business. Petitioner also introduced Petitioner's Exhibits 3, 4, 5, 7, and 8. Petitioner offered Petitioner's Composite Exhibit 6 for identification but it was withdrawn prior to admission.
Respondent testified in his own behalf and presented the testimony of Rudolph L. Ferster, a licensed contractor; Charles R. Matheny, Assistant to the President, Lehigh Corporation; Fred D. Elliott, a certified residential contractor; and Joseph Ohlhausen, an investigator for DPR. Respondent also introduced Respondent's Exhibits A through O.
Subsequent to the hearing no transcript of testimony was furnished.
However, both parties submitted Proposed Recommended Orders, the Findings of Fact of which have been ruled upon in the Appendix to this Recommended Order.
At all times pertinent to the allegations contained herein, Respondent was licensed by the State of Florida as a registered real estate broker under license #0001869, which was issued to him as a broker in care of American Heritage Realty, Inc., 102 East Leeland Heights Boulevard, Lehigh, Florida 33936.
At all times pertinent to the allegations contained herein, Respondent owned American Heritage Builders, Inc. (AHB).
Rudolph L. Ferster, a certified contractor, served as vice-president in charge of construction for American Heritage Builders, Inc., from August 1978 until October 13, 1984. As a licensed contractor, he qualified American Heritage Builders as a residential contractor in the State of Florida. During the time he was with AHB, he supervised the construction of nearly 100 houses for the company. Most of these houses were one of four basic models. When Mr. Ferster left his association with AHB, another contractor, Warren Fuller, had been hired by Respondent to work with the company. He does not know whether Mr. Fuller ever qualified AHB or not.
On January 23, 1983, employees of the Respondent entered into a contract with William D. Thomas for the construction and purchase of a lot and house to be constructed thereon by AHB. Contract price was $30,737 for the entire package and Mr. Thomas put down a $4,000 deposit. The balance of $26,737 was to be paid at the start of construction which, in the contract, was stated to be April 15, 1983.
The Administrative Complaint alleges that Respondent delayed construction of the Thomas property for over two years and then abandoned it, causing a $6,000 plus loss to Mr. Thomas. The Thomas property was contracted initially to be a shell home. Mr. Thomas was going to do much of the work himself. When Respondent could no longer do the work due to the lack of licensure status, Mr. Thomas contracted with Fred D. Elliott, a certified residential contractor to complete the property which at the time was 50 percent done. Respondent took Mr. Elliott to Mr. Thomas with whom Elliott made an agreement directly. At that time, Mr. Thomas still owed approximately $8,000 on the work agreed upon in the original contract. The additional $6,000 alleged in the Administrative Complaint was for work agreed upon by Mr. Thomas over and above that called for in the initial contract and was in no way connected to the work left undone by Respondent.
On January 30, 1984, employees of the Respondent entered into a similar contract with Clarence and Lillian Tap for the construction and purchase of a house and lot in Lehigh Acres to be built by AHB. Mr. Tap intended to pay cash for his purchase and agreed to the construction of a residence on a particular lot which had been shown to him by Respondent's employees. Several days after signing the contract, however, Respondent's employees telephoned him telling him that though the lot he had selected was not available, he could have the lot next door. Since the lot he had selected was a corner lot and the lot subsequently offered was an interior lot, he rejected this offer and Respondent's employees offered to show him other lots with the caveat that if the new lot he selected was more expensive than the original, he would have to pay the difference. Mr. Tap agreed and selected a new lot for an additional cost of $2,500.
The original contract was for a total purchase price of $34,995 with
$18,250 to be paid down at start of construction on March 1, 1984, and three additional payments to be made periodically at various stages of construction. When the new lot was decided upon, however, a new contract was drawn up and signed by the parties which reflected the new purchase price. It also called for Mr. Tap to apply for a mortgage in the amount of $8,500 with appropriate adjustments to other cash payments. At the time, Mr. Tap was not sure he would be able to make the total cash payment called for since his prior owned mobile home had not yet sold.
Because of this development regarding the application for mortgage, Respondent included this parcel in the security given for his half million dollar line of credit with Florida Federal Savings and Loan. As Mr. Tap was not going to make the total cash payment, Respondent would need to secure a fund draw from Florida Federal in order to complete construction.
This created a substantial problem not only for Respondent, but for Tap as well. The Taps did not have to take out a mortgage after all, but were able to pay cash for the entire property when it was completed. However, because of financial difficulties that had come up between Respondent and Financial Federal by that time, the lending institution was unwilling to release the Tap property from its security agreement even though Respondent was willing to pay the entire amount due on that property. When the Taps could get no satisfaction from Respondent, they hired an attorney who got him to sign a warranty deed in favor of the Taps, transferring title to the property in question. At the time, Respondent and the Taps' attorney both knew that there was still a security interest in the property in the hands of Florida Federal but Respondent was of the opinion, based on conversations and correspondence he had with the institution, that they were going to release the Tap property. As a result, he signed the warranty deed and advised the Taps at the time that they should receive their copy of the deed within four to six weeks. This time was supposedly sufficient to allow payment of the outstanding obligation to Florida Federal and Florida Federal's recordation of the deed from AHB to the Taps. However, Florida Federal refused to release the Taps' property and has subsequently initiated foreclosure action against it to recover the $30,400 they claim to be due and owing on that section of the line of credit. Mr. Tap has offered to pay the entire $30,400 to Florida Federal in addition to the full amount of the contract price he has already paid to Respondent, but Florida Federal refuses to accept any partial payment. Instead, it insists upon satisfaction of the entire line of credit which now is approximately $200,000.
On April 17, 1984, employees of the Respondent entered into a contract with Davis and Reba Williamson as purchasers of a new house to be constructed by
AHB on a lot already owned by the Williamsons which they had purchased separately from the Lehigh Corporation for $8,000. Mr. Williamson paid AHB approximately $12,000 down payment on a home to cost $34,245. The house was not completed until October 1985, at which time the Williamsons took possession.
They noticed that mechanics' liens had been placed on the property but these were satisfied by the Respondent with funds coming from Financial Federal prior to the Williamsons taking possession. It would appear that the liens were the result of the failure of the actual building contractor, Mr. Price, of New Homes of Lee County, to pay suppliers and subcontractors. When Mr. Williamson looked at the permit posted outside the construction, he first learned AHB was not actually doing the construction. Prior to that time, though Respondent, Mr.
Anglickis had not so represented, Williamson had assumed AHB was the actual constructor. When Mr. Williamson spoke with Mr. Price about the liens, he was advised that the construction had stopped because Respondent owed Price money. Respondent denies this and there is no evidence presented by either side to establish the truth of that allegation.
The house was subsequently completed by Mr. Williamson acting as his own contractor and hiring subcontractors to do the actual work through the assistance of Mr. Ohlhausen, the DPR investigator, to whom he had complained previously. The materialmen and subcontractors were paid by Mr. Anglickis who issued funds from the construction loan. No additional funds were required of Mr. Williamson. Respondent did not do the final construction to complete the property because, not being a licensed contractor, he could not lawfully do so.
On July 26, 1984, the employees of the Respondent entered into a contract with Samuel J. and Dorothy Sapp to construct a house on a lot already owned by the Sapps for a total price of $56,347. The contract called for the Sapps to apply for a mortgage in the amount of $36,000.
To facilitate the transaction, the Sapps conveyed the lot they owned to AHB. Respondent admits the home was not built even though the lot was conveyed and Mr. Sapp paid in a deposit of $21,324. When the property was not constructed, Respondent reimbursed Mr. Sapp in the amount of $20,000 which constituted his deposit minus certain expenses incurred for such things as survey fee, attorney fee, mortgage fees and the like.
Respondent claims that prior to 1978 when Mr. Ferster came on board, there had always been a licensed contractor to qualify AHB. Initially, upon first purchasing the business, Respondent used all licensed contractors who had worked for the corporation when it was owned by Lehigh Corporation. Respondent assumed that the contractors he utilized were doing the same thing for him as the owner of the corporation in order to keep matters legal as they had done when the corporation was owned by Lehigh Corporation, and for many years this was the case. Mr. Ferster maintained AHB as a qualified contractor until he left in 1984. It was at point that the new contractors utilized by Respondent, Mr. Price in particular, failed to qualify the corporation with their licenses. However, Respondent contends, and the evidence seems to establish, that at no time did Respondent ever represent himself as a licensed contractor to the buyer of the homes in question here. In fact, he did not even speak with them until well after the contracts were signed by the purchasers and his signature appearing thereon in each case is an ex post facto action on his part.
The problems which confront Respondent herein deal with his relationship with Florida Federal with whom he had established a half million dollar line of credit. Just about the time these current houses were coming up for construction, Respondent's relationship with Florida Federal deteriorated.
It well may be that his financial arrangements with the institution were less than satisfactory. Evidence of this was not forthcoming from either party.
However, it has been shown that each of the properties in question was made a part of the security for Respondent's line of credit which had fallen delinquent. Florida Federal indicated its intention to foreclose and, with few exceptions, took the position that the mortgage which it held on Respondent's properties did not provide for releases of individual parcels. Though this may have been the case, and the mortgage was not introduced, Respondent testified, and there is no reason to disbelieve him, that prior to the time in question, as a practice, Florida Federal did release individual parcels upon payment of the amount represented as the construction loan in each case. Respondent assumed that this practice would continue but in the case of the Sapps' property, it did not. Respondent has, from the very beginning, made a good faith effort to secure the release of the Taps' property which should not have been made a portion of the security in the first place. The Williamson property was released and they acquired a clear title to it.
When the Tap property was completed and ready for closing, Mr. Tap brought the $8,500 still outstanding with him to the closing. Florida Federal, however, would not accept this money because it was not the full payoff on Respondent's construction loan. While Respondent brought with him the amount he thought was due, the figure was wrong and Florida Federal would not accept the amount offered since both his amount and the $8,500 Tap payment still did not constitute the full amount due under the construction loan. Thereafter, Florida Federal would not accept the correct amount due on this particular property even though Respondent offered and had available to him sufficient funds to make the full payment.
The $500,000 line of credit was not renewed by the Respondent at his own choice when it became time for the rollover. However, because there were still four homes still in work, Respondent offered to roll over a lesser amount,
$161,000, which was agreed upon by Florida Federal by letter dated March 14, 1985.
At the time of this letter, Mr. Tap's property had been completed three months previously and Respondent had given Tap a warranty deed. Respondent asked Florida Federal on an almost daily basis for the payoff on the
Tap loan so that he could have that portion of the mortgagee released. However, he was never given it. At the time, Respondent was working with Florida Federal to get as many properties released as he could and though Florida Federal verbally agreed to work with Respondent, it appears he never got any cooperation. In fact, by letter dated April 3, 1985, Financial indicated that if the unpaid principal balance was not paid in full by April 13, 1985, foreclosure action would be initiated.
When Respondent received this letter he immediately called Florida Federal. He was advised orally that he could have a second chance and that papers would be forwarded for him to sign, but he never received them. Instead, on April 18, 1985, he received a letter stating that he had failed to meet the terms and conditions of the previous offer and that it was rescinded.
Respondent wrote back on April 24 protesting the decision and alleging a mistake. Nothing was done until July 17, almost three months later, when he was again advised in writing that the bank would consider a proposal from him.
Respondent responded quickly and on August 27, received a reply from the bank apologizing for the failure to respond to his proposal and indicating that the matter was still open for negotiation. Nonetheless, Mr. Tap has still not been given the opportunity to pay off his property. Florida Federal refuses to
accept any pay off for individual homes unless the entire line of credit is paid in full. During the period of these negotiations, Florida Federal accepted two other loans for Respondent's line of credit but has refused to advance any funds under these loans. One of these is the Sapp house. Florida Federal took the Sapp lot previously deeded to AHB as security for the line of credit and refuses to release it though no funds have been advanced for any construction on that lot. Respondent, in addition to reimbursing Mr. Sapp $20,000 of his deposit, has offered payment for the lot or an exchange of lots, but Mr. Sapp has declined.
With regard to the Tap house, covered by a $30,400 construction loan, Respondent has offered Florida Federal $50,000 in cash to release this property but the institution refuses insisting that the full line of credit be paid off.
Respondent contends that he has never received a complaint from Mr. Williamson or any of the other individuals listed in the Administrative Complaint. This is so found.
Charles Matheny, assistant to the President of Lehigh Corporation, the developer of Lehigh Acres, has known the Respondent for nearly 19 years, having first met him when Respondent worked for the corporation in advertising and promotion. Respondent left Lehigh Corporation at some point in the interim. When he did so, he purchased certain assets of the corporation which included the name American Heritage Builders, Inc., and the model site owned by the corporation. At that point, Respondent went in business for himself and started American Heritage Realty in order to market the property and homes he built.
According to Mr. Matheny, Respondent was active in little league in years past though he had, at the time, no children of his own, and when doing so, was instrumental in molding the character of the children who played for him for the better. Respondent has also been active in the junior Chamber of Commerce and reportedly was President of the statewide organization. He has also been active in other community activities such as the local Chamber of Commerce and the Community Day Care Center. He is known to be quite charitable and devotes a considerable amount of time and money to charitable activities.
As Mr. Matheny knows it, Respondent's reputation for truth and honesty in the community is good. He has never heard any reports to the contrary.
Respondent was interviewed by Mr. Ohlhausen in 1984 in regard to a complaint filed by the Construction Industry Licensing Board relating to Respondent serving as a contractor without a license. When Ohlhausen advised Respondent he was operating in violation of the law, Respondent appeared not be to aware of this. When so advised, he immediately agreed to sign a cease and desist agreement and stopped all further construction activity. He cooperated fully with efforts of the Department to get the properties completed and in the hands of the owners.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding.
In each of the counts of the Administrative Complaint, Petitioner alleges that the Respondent is guilty of the various offenses listed in section 475.25(1)(b), Florida Statutes. The theory of the Petitioner's case is that Respondent should have known that his acts and statements were false and incomplete because his company had not been licensed and the Respondent did not,
himself, possess the intent, knowledge, skill, experience, training, or financial ability to perform in compliance with the contract.
There is no evidence other than Respondent's testimony and the documents themselves to indicate what happened in the Thomas and Sapp cases. The testimony of Mr. Elliott confirms that of the Respondent that the $6,000 alleged in the Administrative Complaint as an additional cost to Mr. Thomas was in fact a payment for matters not covered under the contract and Respondent cannot be held responsible for that amount. Further, there is no evidence that Respondent in any way represented to any of the individuals with whom he did business that he or his company were licensed builders. Respondent never spoke
with the clients prior to their executing the contracts and the testimony of Mr. Ferster indicates, in any case, that until October 1984, a date subsequent to the execution of each of the four contracts in issue, his license qualified AHB properly under the law.
As to the Sapp contract, Mr. Anglickis reimbursed Mr. Sapp $20,000 of the $21,000 placed as a deposit, retaining only those funds agreed upon as bona fide expenses. In addition, he has offered to reimburse Mr. Sapp for the cost of the lot deeded to AHB at the time of the contact or to exchange a non- encumbered lot for it. Mr. Sapp has declined both offers. Again, there is no indication that Respondent represented himself as a licensed contractor since he did not deal with the Sapps until well after the contract was executed.
With regard to the Tap property, Petitioner alleges that Respondent caused the property to be subject to a construction mortgage which he did not disclose to the Taps and which he caused to go into default. This may well be true. And it may well also be true that the Tap entered into the contract and delivered the funds out of trust and reliance on the acts and statements of the Respondent. But it is not true that Respondent represented himself as a licensed builder. It is this particular that Petitioner relies upon as foundation for its allegations of impropriety.
As to the Williamsons, Petitioner established that construction on this property stopped prior to completion but this was because Respondent signed a cease and desist agreement on the basis that he was not a licensed contractor. What Petitioner overlooks is that Respondent fully cooperated with the Williamsons and the investigator for DPR in an effort to ensure the Williamsons's property was completed, and Respondent paid all sums necessary to complete it to the point that title was passed. They now occupy it free and clear of all encumbrances.
In each of the four operative counts, Petitioner bases its claim of misconduct on the fact that Respondent failed to advise his clients that he was not a licensed building contractor and that his entry into the contract for construction, unlicensed, should have made him realize that he was incapable, unequipped, and unqualified to fulfill the contracts as written. Petitioner further alleges that the losses suffered by the clients are the result of Respondent's misconduct characterized as fraud, misrepresentation, concealment, and the other categories of misconduct defined in the subsection alleged. This has not been established. Respondent believed, until such time as advised by Mr. Ohlhausen, that his operation was properly licensed. It had been properly licensed at all times from the time Mr. Ferster first came to work there in 1978 until his departure. It was not at all unrealistic for Respondent to assume that his new licensed contractors would have insured that the business was properly protected as the prior contractors had done. His failure to do so may
have constituted negligence but it is not such gross negligence as to constitute the culpable negligence listed in the statute cited.
Further, the evidence establishes that Respondent made every effort to ensure that his customers were satisfied, and the fact that these efforts, in the main, took place subsequent to his notification by the Construction Industry Licensing Board that he was not a licensed contractor, is coincidental and meaningless.
The Florida Supreme Court has clearly established the standard of proof necessary in a case involving the discipline of a professional license. This standard has been determined to be that evidence of misconduct must be clear and convincing. Ferris v. Turlington, 510 So.2d 292, (1987). The evidence here clearly fails to meet this test.
RECOMMENDED that the Administrative Complaint against Respondent herein be dismissed.
RECOMMENDED in Tallahassee, Leon County, Florida, this 20th day of April, 1988.
ARNOLD H. POLL0CK
Filed with the Clerk of the Division of Administrative Hearings this 20th day of April, 1988.
APPENDIX TO RECOMMENDED ORDER IN CASE NO. 87-2619
The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case.
1 - 4. Accepted and incorporated herein.
3 - 4. Accepted and incorporated herein. 5a. Accepted and incorporated herein. 5b. Accepted and incorporated herein. 5c. Accepted and incorporated herein. 5d. Accepted and incorporated herein. 5e. Accepted and incorporated herein. 5f. Accepted and incorporated herein. 5g. Accepted and incorporated herein.
6. Accepted and incorporated herein.
James H. Gillis, Esquire DPR, Division of Real Estate Post Office Box 1900 Orlando, Florida 32801
Darlene F. Keller
Acting Executive Director DPR, Division of Real Estate Post Office Box 1900 Orlando, Florida 32801
