STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 88-4929

)

LINDA DIANE BENNETT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing in the above-styled matter was held on May 23, 1989, in West Palm Beach, Florida, before Joyous D. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings. The parties were represented at the hearing as follows:

APPEARANCES

For Petitioner: Steven W. Johnson, Senior Attorney

Department of Professional Regulation Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

For Respondent: Bruce W. Parrish, Jr.

BRUCE W. PARRISH, JR., P.A.

105 South Narcissus Avenue, Suite 712 West Palm Beach, Florida 33401

STATEMENT OF THE ISSUES

The central issue in this case is whether the Respondent is guilty of the violations alleged in the administrative complaint, and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

This case began on August 25, 1988, when the Department of Professional Regulation, Division of Real Estate (Department) filed an administrative complaint against the Respondent and alleged violations of Chapter 475, Florida Statutes. Specifically, the Department alleged Respondent improperly retained monies she had claimed for a commission in violation of Section 475.25(1)(b), Florida Statutes, and that she had operated as a broker while licensed as a salesman in violation of Sections 475.25(1)(a) and (b), Florida Statutes.

Respondent executed an election of rights which disputed the allegations of fact in the administrative complaint and requested a formal hearing regarding the

charges. The case was forwarded to the Division of Administrative Hearings for formal proceedings on October 5, 1988. This case was originally scheduled for hearing on January 6, 1989; however, the parties represented that they had reached a stipulation and required time to present it to the Florida Real Estate Commission. Subsequently, the parties requested that the matter be rescheduled for hearing and the case was set for May 23, 1989.

At the hearing, the Department presented the testimony of the following witnesses: Tom Scott, project manager for Nottingham Development; Dan Webber, a real estate associate with SOS Real Estate; Ruth Sluth, assistant vice president for Palm Beach Savings & Loan; and Jodi Fischer, an investigator employed by the Department. The Department's exhibits numbered 1 through 7 were admitted into evidence. The Respondent testified in her own behalf and offered the testimony of Dan Webber. Respondent's exhibits numbered 1 through 3 were admitted into evidence.

No transcript of the proceedings was filed. After the hearing, the parties filed proposed recommended orders which have been considered in the preparation of this order. Specific rulings on the proposed findings of fact are included in the attached appendix.

FINDINGS OF FACT

Based upon the testimony of the witnesses and the documentary evidence received at the hearing, I make the following findings of fact:

1. At all times material to the allegations of the administrative complaint, Respondent was known as Linda Diane Bennett, a licensed real estate salesman, license no. 0370329, associated with Edward C. Schultz, an individual broker t/a SOS Real Estate which is located in Palm Beach County, Florida.

   
   

2. In early February, 1988, Mindy Anderson telephoned Respondent from Texas and requested assistance in the procurement of a three month lease which Ms. Anderson needed to commence on or about February 11, 1988. It was Ms. Anderson's intention to return to the Palm Beach area for a limited time in connection with work she was to perform for Nottingham Development. As part of the agreement with Nottingham, the company was to provide her with temporary living arrangements. Ms. Anderson outlined her rental needs to Respondent who agreed to look for an apartment.

   
   

3. After several telephone conversations with Ms. Anderson, Respondent finally offered a shared rental arrangement which would require Ms. Anderson to move in with an individual named Sally Krenzel. An associate working in Respondent's office, Dan Webber, had a rental listing on Ms. Krenzel's apartment. The listing specified a three month minimum at a seasonal rental rate of $1100 per month with a commission of $500. The roommate arrangement was suggested since Ms. Krenzel would have no time to move and since the $1100 per month rate exceeded Ms. Anderson's budget.

   
   

4. The real estate agents, Webber and Respondent, worked out the details of the transaction whereby Anderson agreed to pay $550 per month rent to share with Krenzel and Krenzel agreed to a three month term at $350 per month. The difference, $600 over the three month period, was retained by Respondent as the commission. Respondent shared this commission with Webber after their broker received his portion.

5. Since the entire rental arrangement was negotiated by telephone, Ms. Anderson did not know the amount of the commission to be paid by Ms. Krenzel. There is no evidence to establish whether or not Ms. Krenzel knew, in advance, the amount of rent actually paid by Anderson.

   
   

6. On the day Ms. Anderson was to arrive from Texas, Respondent went to Nottingham Development and, in accordance with Ms. Anderson's directions to Nottingham, received a check in the amount of $2000. This check was made payable to Linda Bennett and was cashed by the Respondent. Respondent requested that the check be payable to her personally since her broker was unavailable and since Ms. Krenzel had indicated she would not let Ms. Anderson move in until the rent had been paid. Respondent then delivered $1400 cash to Ms. Krenzel. This amount was calculated as three months rent and a security of $350 which was to be returned to Nottingham at the end of the rental term if there were no damages or charges for long distance telephone calls. According to Ms. Anderson, the monies should not have been paid until she had viewed the apartment, met Ms. Krenzel, and accepted the arrangement.

   
   

7. Later, when Ms. Anderson arrived at the apartment and met Ms. Krenzel, they determined the shared rental arrangement would not succeed. Consequently, Ms. Krenzel agreed to refund $1300 to Ms. Anderson which she did, in cash, on or about February 12, 1988. Thereafter, Ms. Anderson, through an attorney, sought the return of the monies retained by Respondent. An attorney wrote to Respondent's broker seeking a refund of the monies retained by Respondent. The refund was not made. Later, after the administrative complaint had been filed, Respondent offered to return the commission to Nottingham Development. Mr. Scott refused to accept the funds until this case could be decided.

   
   

8. Ms. Krenzel's apartment is a two-bedroom, one bath unit. Ms. Anderson had specified two baths. Ms. Anderson claimed Respondent had told her the unit was lavishly decorated; however, Ms. Anderson described the apartment as "a dump." Respondent never personally viewed the unit and based her representations of its appearance on the information furnished to her by Mr. Webber.

   
   

   CONCLUSIONS OF LAW

   
   

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

   
   

10. Section 475.25, Florida Statutes, provides, in pertinent part:

    
    

    1. The commission may deny an application for licensure, registration, or permit or renewal thereof; may suspend a license or permit for a period not exceeding 10 years; may revoke a license or permit; may impose an administrative fine not to exceed $1000 for each count or separate offense; and may issue a reprimand, or any or all of the foregoing, if it finds that the licensee, permittee, or applicant:

       1. Has violated any provision of S. 475.42 or of S. 455.227(1).

       2. Has been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, 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, assisted, or conspired with any other person engaged in any such misconduct and in furtherance thereof; or has form 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.

          
          

11. Section 475.42, Florida Statutes, provides, in pertinent part:

    
    

    1. VIOLATIONS.--

       1. No person shall operate as a broker or salesman without being the holder of a valid and current license therefor.

          (d) No salesman shall collect any money in connection with any real estate brokerage transaction, whether as a commission,

          deposit, payment, rental or otherwise, except in the name of the employer and with the express consent of the employer; . . .

          
          

12. Count 1 of the administrative complaint alleged Respondent to be guilty of a violation of Section 475.25(1)(b), Florida Statutes, based upon Respondent's refusal to return the $600 commission retained in connection with the rental transaction. Generally, a broker is entitled to a commission based upon the performance of a specified service or when it is established the broker was the procuring cause in a real estate transaction. Danieli Corporation v. Bryant, 399 So.2d 387 (Fla. 4th DCA 1981). The amount of a commission is not limited by statute but is based upon the agreement of the parties. In this case, the original listing agreement for the lease was not followed. The Department has not established the basis for its claim that Respondent somehow misrepresented the commission. At best, the record demonstrates that Ms. Anderson agreed to pay $550 per month for an apartment and Ms. Krenzel agreed to accept $350 per month to share her unit. The landlord and tenant arrangement, however, never was accepted by Ms. Anderson. The evidence is not clear and convincing that the arrangement failed due to a misrepresentation made by Respondent. While, it may be that Respondent was not due a commission since the transaction failed, the wrongful retention of monies does constitute fraud. In order to demonstrate fraud there must be a misrepresentation or concealment of material fact. Steigman v. Danese, 502 So.2d 463 (Fla. 1st DCA 1987). The Department has not established that Respondent misrepresented a material fact

    which was relied upon by Ms. Anderson to her detriment. If monies were not owed to SOS Real Estate and its agents, Webber and Respondent, the improper retention may be a form of conversion but not fraud, misrepresentation, concealment, false pretenses or the other matters addressed in Section 475.25(1)(b). Respondent believed the commission was due based upon her perception of the rental arrangement. She did not misrepresent the transaction to Ms. Anderson. The appropriate jurisdiction for the resolution of the commission dispute rests with the courts.

    
    

13. Count 2 of the administrative complaint alleged Respondent was guilty of Section 475.25(1)(a), Florida Statutes, by violating Section 475.42, Florida Statutes. In this case, the Department has proved by clear and convincing evidence that the Respondent collected money in connection with the rental arrangement in her own name, not the name of her broker. Accordingly, Respondent is guilty of the violation alleged in Count 2. Respondent's justification for the actions taken do not excuse the violation of the statute. Further, had Respondent followed the statute, the misunderstanding regarding the commission may have been avoided.

    
    

14. Rule 21V-24.001, Florida Administrative Code, which sets forth the disciplinary guidelines promulgated by the Florida Real Estate Commission provides, in part:

    
    

    (3) The minimum penalty for all below listed sections is a reprimand and/or a fine up to

    $1000.00 per count. The only exception is for discipline cases with payment from the recovery fund which, according to Section 475.484(7), Florida Statutes, requires the automatic penalty of revocation. The maximum penalties are as list:

    (bb) 475.42(1)(d)--Up to 3 years suspension

    
    

15. In this case, there was no evidence of prior disciplinary action against this Respondent nor of aggravating or mitigating circumstances.

RECOMMENDATION

Based on the foregoing, it is RECOMMENDED:

That the Florida Real Estate Commission enter a final order finding the Respondent not guilty of Count 1, guilty of Count 2 of the administrative complaint, and issue a reprimand with an administrative fine in the amount of

$700.

DONE and ENTERED this 29th day of June, 1989, in Tallahassee, Leon County, Florida.

JOYOUS D. PARRISH

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32301

(904)488-9675

Filed with the Clerk of the Division of Administrative Hearings this 29th day of June, 1989.

APPENDIX TO THE RECOMMENDED ORDER

RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY PETITIONER:

1. Paragraphs 1 through 4 are accepted.

2. The first sentence of paragraph 5 is accepted. The second sentence is rejected as unsupported by the weight of the evidence.

3. With the deletion of the phrase "because the unit had been misrepresented to her by the Respondent," paragraph 6 is accepted. The phrase above is rejected as a conclusion of law or irrelevant.

4. Paragraph 7 is rejected as argument, conclusion of law unsupported by the record, or contrary to the weight of the evidence. Respondent offered to refund the $600 to Nottingham.

RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY RESPONDENT:

1. Paragraphs 1 through 4 are accepted.

2. Paragraph 5 is rejected as unsupported by direct evidence.

3. Paragraph 6 is rejected as contrary to the weight of credible evidence.

4. The first sentence of paragraph 7 is accepted. The remainder of paragraph 7 is rejected as contrary to the weight of credible evidence.

5. Paragraph 8 is accepted. No conclusion is reached that Nottingham was supposed to advise Respondent to hold the funds.

6. Paragraph 9 is accepted.

7. Paragraph 10 is rejected as unsupported by direct, nonhearsay evidence or is not supported by the weight of credible evidence.

8. With regard to paragraph 11, with the correction of the date being February 12, 1988, the paragraph is accepted.

9. Paragraph 12 is accepted but is irrelevant.

10. Paragraph 13 is accepted but is irrelevant.

COPIES FURNISHED:

STEVEN W. JOHNSON SENIOR ATTORNEY

DEPARTMENT OF PROFESSIONAL REGULATION DIVISION OF REAL ESTATE

400 W. ROBINSON STREET

P.O. BOX 1900

ORLANDO, FLORIDA 32802

BRUCE W. PARRISH, JR.

BRUCE W. PARRISH, JR., P.A.

105 S. NARCISSUS AVENUE, SUITE 712 WEST PALM BEACH, FLORIDA 33401

DARLENE F. KELLER DIVISION DIRECTOR

400 WEST ROBINSON STREET POST OFFICE BOX 1900 ORLANDO, FLORIDA 32802

KENNETH EASLEY GENERAL COUNSEL

DEPARTMENT OF PROFESSIONAL REGULATIONS 1940 NORTH MONROE STREET, SUITE 60

TALLAHASSEE, FLORIDA 32399-0750

Docket for Case No: 88-004929

Orders for Case No: 88-004929