STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARING

DEPARTMENT OF PROFESSIONAL )

REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 88-6331

)

FREDERICK A. BENTLEY, )

)

Respondent. )

)

RECOMMENDED ORDER

Upon due notice issued by the prior Hearing Officer, P. Michael Ruff, this cause came on for formal hearing on April 12, 1989, in Deland, Florida, before Ella Jane P. Davis, a duly assigned Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Arthur R. Shell, Esquire

Department of Professional Regulation Division of Real Estate

400 W. Robinson Street Orlando, Florida 32802

For Respondent: Frederick A. Bentley, pro se

402 Daytona Avenue

Holly Hill, Florida 32017 ISSUE

By a single count Administrative Complaint dated July 28, 1988, Petitioner charges Respondent with a violation of Section 475.25(1)(b), F.S.: misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence and breach of trust in a business transaction.

PRELIMINARY STATEMENT

Petitioner presented the oral testimony of Richard M. Dow and Sidney Hirsch, and had five exhibits admitted in evidence.

Respondent presented the testimony of Jean Hambrick and testified in his own behalf. He had nine out of ten exhibits admitted in evidence.

Petitioner announced at formal hearing that a transcript would be filed and later decided not to do so. Petitioner also has not filed any post-hearing proposals. Respondent's proposed findings of fact and conclusions of law were

filed on May 4, 1989, and these are ruled on pursuant to Section 120.59(2), F.S., in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Petitioner is a state governmental licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Section 20.30, F.S., Chapters 120.455 and 475, F.S., and the rules promulgated pursuant thereto.

   
   

2. Respondent is now and at all times material hereto was a licensed real estate salesman in the State of Florida having been issued License No. 0418629, in accordance with Chapter 475, F.S. The last license issued was as a salesman with a home address of 594 Andrews Street, Ormond Beach, Florida, 32075. From April 8, 1987, until September 11, 1987 he was on inactive status. From September 11, 1987 until at least November, 1987, he was on active status. His license expired March 31, 1988 and has not been renewed.

   
   

3. Respondent and the owners (Goldsmiths) of certain property at 49 Sea Island Drive, North Ormond Beach, Florida, entered into an equity sharing agreement on October 1, 1986. Thereafter, Respondent was half owner of the property, and acted as agent for himself and the Goldsmiths for management and rental of the property.

   
   

4. Sometime in early 1987, Respondent's former wife contacted Richard M. Dow of Watson Realty Corporation concerning Watson Realty Corporation's assuming management and rental authority over the property. Mr. Dow gave Respondent's wife a packet of information which included several types of material, including but not limited to, a blank standard lease form which had been stamped at the top with the name

   
   

   WATSON REALTY CORPORATION

   425 S. YONGE STREET [U.S. 1] ORMOND BEACH, Florida 32074

   
   

   The name "Watson Realty" was also printed in the body of the lease as agent for the premises, which, like all other crucial information was left blank. No agreement was ever reached by which Watson Realty Corp. or Mr. Dow were to take over management of the premises.

   
   

5. On or about April 1, 1987, while still on active license status, the Respondent negotiated a six month lease of the premises at 49 Sea Island Drive, North Ormond Beach, Florida, with Sidney and Edythe Hirsch. By filling out the blank lease form obtained from Watson Realty Corp., Respondent entered into the six-month lease on behalf of himself and the Goldsmiths. He filled out the blank spaces with his name as lessor and the Hirsches as lessees, and crossed out the "Watson Realty Corp." in the body of the lease, substituting his own name therefor. He failed to cross out the stamped Watson Realty Corp. name and address at the top of the page.

   
   

6. At the time of the signing of the lease, Respondent advised Mr. Hirsch that he was a licensed real estate agent because he had been taught he must make such disclosures in personal dealings so as not to take advantage of laymen. At formal hearing, he denied ever representing himself as an agent of Watson Realty Corp. or of Mr. Dow. Mr. Hirsch likewise testified that no such representation was made, only that Respondent said something like, "I work with them." Both Respondent and Mr. Hirsch concur that Respondent represented himself as the

   owner of the property in question without mentioning the Goldsmiths' interest. Hirsch knew and agreed to the scratching through of the Watson corporate name in the body of the contract, and to the substitution of Respondent's name therefor, but no one thought to cross through the stamped Watson name and address at the top of the page.

   
   

7. In connection with the lease, Mr. Hirsch gave to the Respondent a $600 security deposit. Respondent shared the rent proceeds with the Goldsmiths even though he did not include their names on the lease or specifically advise the Hirsches of the Goldsmiths' interest in the property. Although the better course of action would have been for Respondent to make a fuller disclosure and to accurately make out the lease agreement with regard to the Goldsmiths' interest, no fraud or intent to defraud either the Goldsmiths or the Hirsches was demonstrated in Respondent's omissions in this regard.

   
   

8. At no time alleged herein was Respondent registered as a real estate salesman in the employ of Watson Realty Corp. and at no time was the Respondent employed by Watson Realty Corp. in any capacity.

   
   

9. Upon the termination of the lease period, the Hirsches vacated the house and made demands upon the Respondent for the return of their $600 security deposit.

   
   

10. The Respondent refused to return the deposit because of substantial damage to the property in three rooms of the house.

    
    

11. Hirsches' attorney and Respondent met to attempt to resolve the issue and then had a trial date set. Respondent appeared on the originally scheduled trial date but the case was continued.

    
    

12. Respondent separated from his wife and moved to a different address without maintaining contact with the Hirsches' attorney, the court, the Department of Professional Regulation, or the Florida Real Estate Commission (FREC). Over a period of time, he lived at several addresses and eventually moved out of state. Although he was still living in the State of Florida at the time, he did not appear for trial on the security deposit demand, and on January 14, 1988, the Hirsches obtained a civil judgment against Respondent for payment of the $600 security deposit.

    
    

13. Respondent had not satisfied the judgment as of the date of the filing of the Administrative Complaint herein and did not do so up through the date of formal hearing. Although Respondent expended a great deal of effort at formal hearing attempting to establish that he never received actual notice of the trial date for the $600 civil damages suit due to his frequent change of addresses during the course of his divorce, that is immaterial because the law presumes notice once suit is filed and properly served as apparently occurred in that case. Unless set aside, the judgment against Respondent was final and Respondent owed Hirsch the money due under it. However, under the circumstances, it is found that Respondent did not fail to pay Hirsch on the judgment through any intent to defraud, but merely through a misunderstanding as to the effect of the judgment.

    
    

14. Mr. Hirsch eventually sought and obtained reimbursement of the $600 judgment amount from the FREC client security fund. The fund paid after significant unsuccessful attempts had been made to find Respondent. Respondent also maintained that he did not know about the reimbursement proceedings instituted by FREC until four days before formal hearing and he made offers at

    formal hearing to pay off this amount. He was not charged in the pending Administrative Complaint in this proceeding with any fraud with regard to his failure to respond to service in the FREC client security fund reimbursement proceeding.

    
    

    CONCLUSIONS OF LAW

    
    

15. The Division of Administrative Hearings has jurisdiction of the parties and subject matter to this cause. See, Section 120.57 (1) F.S.

    
    

16. Respondent is charged, pursuant to Section 475.25(1)(b), F.S., as follows:

    
    

    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;

    
    

17. No such fraud or dishonest dealings have been demonstrated in this case.

    
    

18. Contractual disputes, i.e., return of the security deposit, may not be enforced by disciplinary action, and the fact that Mr. Hirsch held an unpaid judgment from a civil court does not alter that fact. See, Fleischman vs. Department of Professional Reu1ation, 441 So.2d 1121 (Fla. 3rd DCA 1983) at pp. 1122-1123, and Department of Professional Regulation, Division of Real Estate vs. Nordal, DOAH Case No. 88-3758 (RO of Hearing Officer Diane Cleavinger, entered March 4, 1989).

    
    

19. It is abundantly clear that if Respondent had kept FREC informed of his address as required by its rules, this prosecution could have been forestalled. Likewise, had he kept FREC informed he would have had an opportunity to be heard concerning whether a disbursement was to be made from the client security fund. Now, in equity, Respondent may owe the FREC client security fund for its payment of the judgment against him, but this forum is not a court of equity nor has that issue been presented here as a disciplinary matter within the four corners of the Administrative Complaint.

Accordingly,

RECOMMENDATION

Upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Real Estate Commission enter a Final Order dismissing the Administrative Complaint.

DONE and ENTERED this 30th day of May, 1989, in Tallahassee, Florida.

ELLA JANE P. DAVIS

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 30th day of May, 1989.

APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 88-6331

The following constitute specific rulings pursuant to Section 120.59(2), F.S., upon the parties' respective Proposed Findings of Fact (PFOF): Petitioner' s PFOF: Petitioner filed no PFOF.

Respondent' s PFOF:

1,13,14 Accepted in part; the remainder is rejected as subordinate to the facts as found.

2-5 Rejected as subordinate to the facts as found.

6-12 Rejected as immaterial and as referencing and relying upon matters outside the record as created at formal hearing.

15,16 Rejected in part as subordinate to the facts as found and in part as cumulative and otherwise as mere argument.

COPIES FURNISHED:

Arthur R. Shell, Jr. Senior Attorney Division of Real Estate

Department of Professional Regulation

400 W. Robinson Street Orlando, Florida 32801

Mr. Frederick A. Bentley

402 Daytona Avenue

Holly Hill, Florida 32017

Darlene F. Keller, Director Division of Real Estate

400 W. Robinson Street Tallahassee, Florida 32802

Kenneth Easley, General Counsel Department of Professional Regulation

1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399-0750

Docket for Case No: 88-006331

Orders for Case No: 88-006331