STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 89-2585

) FRED J. WILL, t/a WILL REALTY, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William R. Cave, held a formal hearing in the above- styled case on September 27, 1989, in Daytona Beach, Florida.

APPEARANCES

For Petitioner: James H. Gillis, Esquire

Department of Professional Regulation

400 West Robinson Street Post Office Box 190 Orlando, Florida 32802

For Respondent: Robert W. Elton, Esquire

648 South Ridgewood Avenue Daytona Beach, Florida 32014

STATEMENT OF THE ISSUES

Whether Respondent's real estate broker's license should be revoked, suspended or otherwise disciplined under the facts and circumstances of this case.

PRELIMINARY STATEMENT

By an Administrative Complaint dated April 19, 1989, Petitioner charged Fred J. Will, t/a Will Realty with violation of specific statutory provisions. While the complaint as filed with the Division of Administrative Hearings on May 10, 1989 named Richard T. Pollock as a respondent, Pollock had not requested a hearing so at the time scheduled for the hearing the Petitioner struck Counts I

- IV, VII, VIII and X - XII of the complaint as those Counts pertained to Pollock and proceeded with the hearing on Counts V, VI, IX and XIII - XV as they pertained to Fred J. Will. Petitioner seeks to revoke, suspend or otherwise discipline Respondent's real estate broker's license in the state of Florida.

As grounds therefor, it is alleged that Respondent Will is guilty of: (a) having failed to account and deliver funds in violation Section 475.25(1) (d), Florida Statutes (Counts V and XIII); (b) 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 (Counts VI and XIV); (c) having failed to provide a prospective tenant with a contract or receipt agreement in writing in violation of Rule 21V-10.030, Florida Administrative Code, and therefore in violation of Section 475.25(1)(e), Florida Statutes (Count IX) and;

(d) having failed to refund any amount over 25 per cent of an advance fee to a prospective tenant when the prospective tenant did not obtain a rental, in violation of Section 475.453(1), Florida Statutes and therefore in violation of Section 475.25(1)(e), Florida Statutes (Count XV).

In support of its charges, Petitioner presented the testimony of Donna Elliott, Fred J. Will, Diane Smith and Crawford C. Richardson. Petitioner's exhibits 1 - 3 and 7 - 10 were received into evidence.

Respondent presented the testimony of Richard L. Angevine. Respondent's exhibits 1 - 6 were received into evidence.

A transcript of this proceeding was filed with the Division of Administrative Hearings on October 19, 1989, and at the Petitioner's request, the parties were granted an extension of time for filing their posthearing Proposed Findings of Fact until November 30, 1989. Consequently, the parties waived the requirement that a recommended order be filed within thirty (30) days of the date a transcript is filed with the Division of Administrative Hearings in accordance with Rule 221-6.031, Florida Administrative Code. Neither party filed their posthearing Proposed Findings of Fact and did not request any further extension of time.

FINDINGS OF FACT

Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found:

1. At all times material to this proceeding, Respondent, Fred J. Will was a licensed real estate broker in the state of Florida having been issued license number 0142418, t/a Will Realty, 326 1/2 South Beach Street, Daytona Beach, Florida 32014.

   
   

2. At all times material to this proceeding, Richard P. Pollock was a licensed real estate salesman in the state of Florida having been issued license number 0139861, c/o Fred J. Will, t/a Will Realty, 326 1/2 South Beach Street, Daytona Beach, Florida, with a last listed home address of Post Office Box 2085, Flagler Beach, Florida 32036.

   
   

3. Either in late December 1987 or early January 1988, Pollock approached Will with the idea of opening a real estate office using Will's real estate broker's license wherein Pollock would run the office since Will was currently employed managing the self storage facility of Regency Health Care Centers, Inc.

   
   

4. In late January 1988, Will filed a Request For License or Change of Status Form using license number 0142418 wherein he advised the Petitioner that he would be operating under Will Realty located at 326 1/2 South Beach Street, Daytona Beach, Florida.

   
   

5. Upon opening the offices at 326 1/2 South Beach Street, Will opened an operating or business bank account and an escrow bank account for the Will Realty at the Commercial National Bank (Commercial) Only Will was authorized to

   write checks on the excrow account. There was insufficient evidence to show whether any funds were ever deposited in the business or escrow account at Commercial.

   
   

6. Once the office and bank accounts were opened, Will left the daily operation of the office to Pollock and was at the office only a couple of times between the time it was opened in late January 1988 and when it was closed around April 23, 1988.

   
   

7. The "agreement", as such, between Will and Pollock was a 50/50 "split" once the business "got going". Will did not receive any compensation from Pollock for the "use of his license". Will did not receive any money from Pollock in regard to Will Realty, personally or for deposit in either bank account at Commercial. The "agreement" was that Will would allow Pollock to "work under" his real estate broker's license.

   
   

8. Will did not have any knowledge of the advertising being used by Pollock for Will Realty such as newspaper ads or business cards until just before the office closed in April 1988.

   
   

9. Will did not have any knowledge of the forms being used by Pollock for Will Realty such as contracts or agreements for advance fee arrangements or receipts evidencing payment of such fee until just before the office closed in April 1988. Additionally, Will did not have any knowledge of the advance fee arrangement which Pollock may have had with prospective tenants as payment for securing rentals until just before the office closed in April 1988.

   
   

10. Will did not have any knowledge of Pollock opening the bank accounts at Coast Federal Savings and Loan Association (Coast) in the name of Will Realty until just before the office closed in April 1988.

    
    

11. None of the funds received by Pollock from prospective tenants while with Will Realty were deposited in the accounts at Commercial. Nor did any of the funds collected by Pollock from prospective tenants while he was with Will Realty go to Will personally.

    
    

12. During the latter part of March 1988, Donna Elliott approached Pollock through Will Realty for the purpose of finding a home to rent. Pollock arranged for Edward R. Brown to show Elliott a home he had for rent. Elliott eventually rented this home and gave Pollock a check in the amount of $100.00 dated March 26, 1988 as a deposit on the home. On March 31, 1988 Elliott mailed Pollock another check in the amount of $1,000.00 as rent for the Brown home. The funds from these two checks were deposited in the account at Coast.

    
    

13. Brown experienced some difficulty in getting Pollock to pay the deposit and rent collected from Elliott. However, once Will became aware of the situation he demanded that Pollock pay over the deposit and rent and, as a result of Will's effort Brown received $575.00 from Pollock. After paying Brown the $575.00 Pollock disappeared and Brown demanded the balance from Will since Pollock was working under Will's real estate broker's license. At first, Will agreed but later on advice of counsel declined to pay on the basis that it was not his responsibility. Brown filed suit and was awarded a judgment for the balance which Will paid.

    
    

14. Around the middle of April 1988 Diane Smith approached Pollock for the purposes of renting a home. Smith

    paid Pollock an advance fee of $75.00 for service to be rendered by Pollock in securing her a rental home. However, before Pollock found a rental home for Smith he disappeared without returning Smith's fee. Within a short period after Smith paid the advance fee she went to the office of Will Realty only to find it closed and Pollock gone. There was no evidence that Smith made a demand on Will for the return of the advance fee paid to Pollock.

    
    

15. After Will became aware of the situation he called Petitioner's Orlando office and was informed by Judy Smith that he should close the office immediately. Will followed this advice and closed the office sometime around April 23, 1988.

    
    

16. As soon as Will began to receive complaints from Pollock's clients he got involved with Pollock and attempted to correct the problems but Pollock disappeared before Will could correct the situation.

    
    

17. There was insufficient evidence to show that while Pollock was at Will Realty, any of his prospective tenants, other than Smith, specifically Catherine Vick, failed to receive reimbursement for any advance fee paid to Pollock where rentals were not obtained for the prospective tenant.

    
    

18. Will was not directly involved with any of the transactions between Pollock and the prospective tenants and did not have any knowledge of these transactions until shortly before Pollock disappeared and Will Realty was closed.

    
    

    CONCLUSIONS OF LAW

    
    

19. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, this proceeding pursuant to Section 120.57(1), Florida Statutes (1989)

    
    

20. Section 475.25(1), Florida Statutes, empowers the Florida Real Estate Commission (Commission) to revoke, suspend or otherwise discipline license of a real estate broker if he is found guilty of any one of the enumerated acts listed in Section 475.25(1) (a - q), Florida Statutes.

    
    

21. Section 475.25(1)(b)(d) and (e), Florida Statute, provide in pertinent part as follows:

    
    

    (b) Has been found guilty of fraud, mis- representation, concealment, false pre- tenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach

    of trust in any business transaction in this state. ...

    1. Has failed to account or deliver to any person. 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 or delivery, any personal property such as

       money, fund, deposit, check, draft. . 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 cir- cumstances....

    2. Has violated any of the provisions of this chapter or any lawful order or rule

    made or issued under provisions of this chapter or chapter 455.

    
    

22. Section 475.453(1), Florida Statutes, provides as follows:

    1. Each broker or salesman who attempts to negotiate a rental, or who furnishes rental information to a prospective tenant shall provide such prospective tenant with a con- tract or receipt, which contract or receipt contains a provision for the repayment of any amount over 25 percent of the fee to the prospective tenant if the prospective tenant does not obtain a rental. If the rental infor- mation provided by the broker or salesman to

       a prospective tenant is not current or accurate in any material respect, the full fee shall be repaid to the prospective tenant upon demand.

       A demand from a prospective tenant for the return of the fee, or any part thereof, shall be made within 30 days following the day on which the real estate broker or salesman has contracted to perform services to the pros- pective tenant. The contract or receipt shall also conform to the guidelines adopted by the commission in order to effect dis- closure of material information regarding

       the service to be provided to the prospec- tive tenant.

       
       

23. In disciplinary proceedings, the burden is upon the regulatory agency to establish facts upon which its allegations of misconduct are based. Balino

    v. Department of Health and Rehabilitative Services, 348 So.2d 349 (1 DCA Fla. 1977).

    
    

24. While Will as a licensed real estate broker was under a clear statutory duty to supervise the activities of Pollock, a licensed real estate salesman in his employ, Dreyer v. Florida Real Estate Commission, 370 So.2d 95,

    100 (4 DCA Fla. 1979), the Petitioner has failed to prove that Will violated Section 475.25(1)(b), Florida Statutes, Brod v. Jernigan, 188 So.2d 575 (2 DCA Fla. 1966), and thereby failed to sustain its burden of proof in regard to Counts VI and XIV of the Administrative Complaint. Additionally, Petitioner has failed to prove a violation of Rule 21V-10.030, Florida Administrative Code, and thereby a violation of Section 475.25(1)(e), Florida Statutes, in regards to Catherine Vick as alleged in paragraph 41 of the Administrative Complaint, and thereby failed to sustain its burden of proof as to Count IX of the Administrative Complaint.

    
    

25. Petitioner has proven that Will violated Section 475.25(1)(d), Florida Statutes and has sustained its burden of proof as to Counts V and XIII of the Administrative Complaint, and has proven a violation of Section 475.25(1)(e), Florida Statutes, as a result of the violation of Section 475.453(1), Florida Statutes, and has sustained its burden of proof as to Count XV of the Administrative Complaint

RECOMMENDATION

Having considered the foregoing Findings of Fact and Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses and the mitigating circumstances surrounding this case, it is, therefore,

RECOMMENDED that the Board enter a Final Order finding Respondent, Fred J. Will guilty of violating Section 475.25(1) (d) and (e), Florida Statutes, and for such violation impose an administrative fine of $500.00 and issue a reprimand. In recommending the reprimand I have taken into consideration the harshness of a suspension or revocation and feel that under the circumstances of this case that a reprimand and a fine is more appropriate. See: Webb v. Florida Real Estate Commission, 351 So.2d 71 (2 DCA Fla. 1977). It is further RECOMMENDED that Counts VI, IX and XIV of the Administrative Complaint be DISMISSED.

DONE AND ENTERED this 22nd day of February, 1990, in Tallahassee, Leon County, Florida.

WILLIAM R. CAVE

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 Hearing this

22nd day of February, 1990.

COPIES FURNISHED:

Darlene F. Keller, Director Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801

Kenneth Easley, Esquire General Counsel

Department of Professional Regulation Northwood Centre

1940 North Monroe Street Tallahassee, FL 32399-0750

James H. Gillis, Esquire Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801

Robert W. Elton, Esquire 648 S. Ridgewood Avenue

Daytona Beach, Florida 32014

Fred J. Will 2281 Carmen

Daytona Beach, Florida 32119

Docket for Case No: 89-002585

Orders for Case No: 89-002585