STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 89-4524

)

ELLIOTT H. NACHWALTER, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Jane C. Hayman, held a formal hearing in the above- styled case on November 22, 1989, in Miami, Florida.

APPEARANCES

For Petitioner: Steven W. Johnson, Esquire

Department of Professional Regulation Division of Real Estate

Post Office Box 1900 Orlando, Florida 32302

For Respondent: John M. McDaniel, P.A.

777 Brickell Avenue, Phase II Miami, Florida 33131

STATEMENT OF THE ISSUES

The issue presented is whether Respondent committed the offenses alleged in the administrative complaint, and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

On June 22, 1989, Petitioner issued an administrative complaint against Respondent alleging that Respondent had committed fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealings by trick, scheme or device, culpable negligence and breach of trust in a business transaction involving the alleged sale of platinum to Mrs. J. D. Morrison in violation of Section 475.25(1)(b), Florida Statutes.

By answer to the administrative complaint, Respondent denied the charges therein, and by letter dated August 16, 1989, Petitioner requested that a Hearing Officer be appointed to conduct a formal hearing in this case.

At the hearing, Petitioner, presented the testimony of one witness, David Morrison who is the son of Mrs. J. D. Morrison and offered eight exhibits, seven of which were received into evidence. Respondent proffered no witnesses nor any exhibits. By stipulation of the parties, the provisions of Rule 28- 5.042, Florida Administrative Code were waived, and the parties were granted leave to file proposed recommended orders on or before December 12, 1989. Both parties timely filed proposed recommended orders. A ruling on each proposed finding of fact has been made and is reflected in the appendix to this recommended order.

FINDINGS OF FACT

1. At all times material hereto, Respondent, Elliott H. Nachwalter was a licensed real estate salesman in the State of Florida, having been issued license number 0451805 by Petitioner, Florida Real Estate Commission. The last license issued to Mr. Nachwalter was as a salesman, c/o Expo Realty, Inc., 9445 Bird Road, #101, Miami, Florida 33165. License number 0451805 remains in involuntary inactive status.

   
   

2. A person by the name of Elliott Nachwalter served as an officer of a Florida corporation, Liberty Metals Corporation, which was involuntarily dissolved on November 16, 1987.

   
   

3. At the hearing, Petitioner asserted that the Elliott Nachwalter of Liberty Metals Corporation was the same Elliott Nachwalter who is the Respondent is the instant case. Petitioner further asserted that in the summer of 1988, through Liberty Metals Corporation, Respondent agreed to sell to Mrs. J. D. Morrison platinum and solicited from Mrs. J. D. Morrison checks totaling $63,000 in payment for the platinum, that the platinum was never delivered to Mrs. Morrison and that Respondent induced Mrs. Morrison into returning a check in the amount of $168,202 which was offered to Mrs. Morrison by Respondent when her account with Liberty Metals was closed.

   
   

4. Neither Mrs. Morrison nor Respondent were present or testified at the hearing. Instead, Mrs. Morrison's assertions were delivered through the testimony of her adult son, J. Davis Morrison, Jr. Mr. Morrison holds the durable family power of attorney over the property and assets both real and personal of his father, Kirk Morrison. It was under this authority that Mr. Morrison sought to propose the testimony about his mother's dealings with Liberty Mutual. Mr. Morrison stated that his mother was aged and incompetent to testify; however, no competent evidence of her condition was offered. Further, the relationship between the power of attorney which Mr. Morrison held over his father's property and assets, and any authority over his mother's property and assets which may have been involved with Liberty Mutual was not demonstrated.

   
   

5. Mr. Morrison overheard his mother talking on the telephone to someone she identified as "Elliot." He was also aware, through his mother, that she was engaging in dealings for platinum with a Carlos Mas who she told him was in business with Mr. Nachwalter. Mr. Mas has since died.

   
   

6. When Mr. Morrison discovered checks of his mother made out to Liberty Metals during the summer of 1988 and saw no confirmations for the purchases, he insisted that his mother close her account with Liberty Metals. On August 23, 1988, a check was delivered to Mrs. Morrison in the amount of $168,202 drawn on Pan American Bank, N.A., and made payable to Mrs. Kirk Morrison. According to Mr. Morrison, the check was returned to the sender by his mother at the insistence of either Mr. Nachwalter or Mr. Mas.

7. Mr. Morrison appeared to be a truly concerned son with, no doubt, the interest of his mother in mind. However, without direct testimony and other forms of competent evidence, the proof has failed to demonstrate that Respondent was involved in the proposed scheme or committed any of the acts alleged by Petitioner.

   
   

   CONCLUSIONS OF LAW

   
   

8. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of these proceedings. Section 120.57(1), Florida Statutes.

   
   

9. The administrative complaint filed in this case alleged that 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 with Mrs. J. D. Morrison in violation of Section 475.25(1)(b), Florida Statutes, and seeks to discipline Respondent under his real estate salesman's license. In his proposed recommended order, Petitioner's counsel recommends revocation of Respondent's license as the appropriate sanction.

   
   

10. Section 475.25(1) (b) authorizes the Florida Real Estate Commission to impose certain penalties against a licensee, including revocation of the license, who

    
    

    [h]as been guilty of fraud, misrepresentation, concealment, false promises, false pretense, dishonest dealing by trick, scheme, or devices, culpable negligence, or breach of trust in any business transaction in this state. . .has aided, assisted, or conspired with any other person engaged in any such misconduct and in furtherance thereof; or has formed an intent, design, or scheme to engage in any such misconduct or committed an overt act in furtherance of such intent, design, or scheme. ...

    
    

11. Petitioner has the burden to prove by clear and convincing evidence that Respondent violated the above provision and is, thus, is subject to discipline under his license. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

12. Although Section 475.25(1) (b) would authorize discipline of a licensee who was involved in a scheme such as Petitioner asserted that Respondent committed, the evidence presented at the hearing was virtually void of any competent evidence connecting Respondent and the alleged business dealings between Mrs J. D. Morrison and Liberty Metals. The relevant testimony Presented by Petitioner was in the form of the hearsay testimony of Mr. J Davis Morrison.

    
    

13. The power of attorney which Mr. Morrison offered as giving him the authority over his mother's "affairs" is limited on its face to "perform all acts and execute any and all instruments with respect to any of my property or assets both real and Personal" on behalf of his father, Kirk Morrison. Section

    709.08, Florida Statutes. No mention is made of authority over his mother's affairs. Regardless, even if Mr. Morrison had been given similar authority over his mother's affairs, the grant would not authorize him to testify for his mother or in any manner overcome the logical infirmity which the hearsay doctrine places on his testimony.

    
    

14. Section 120.58(1)(a), Florida Statutes, Succinctly specifies the controlling rule regarding the admissibility of hearsay and its use in the formation of the findings of fact in a Proceeding under Section 120.57, as here. In relevant part, Section 120.58(1)(a) states:

    
    

    Hearsay evidence may be used for the purpose of supplementing or explaining other evidence, but it shall not be sufficient in itself to support a finding unless it would be admissible over objection in civil actions.

    
    

    See W.M. v. DHRS, Case No. 88-2727 (Fla. 1st DCA, Slip Opinion, November 28, 1989); Johnson v. DHRS, 546 So.2d 741, 743 (Fla. 1st DCA 1989); Florida Min. and Materials Corp. v. Florida Unemployment Appeals Comm'n, 530 So.2d 426 (Fla. 1st DCA 1988); Juste v. DHRS, 520 So.2d 69, 71 (Fla. 1st DCA 1988); Harris v. Game

    and Fresh Water Fish Commission, 495 So.2d 806, 809 (Fla. 1st DCA 1986); MacPherson v. School Bd. of Monroe County, 505 So.2d 682 (Fla. 3d DCA 1987); Adams v. School Bd. of Brevard County, 470 So.2d 760 (Fla. 5th DCA 1985); Spicer

    v. Metropolitan Dade County, 458 So.2d 792 (Fla. 3d DCA 1984); CF Chemicals, Inc., v. Florida Dept. of Labor and Employment Security, 400 So.2d 846 (Fla. 2d DCA 1981); Astore v. Florida Real Estate Comm'n, 374 So.2d 40, 43-44 (Fla. 3d DCA 1979).

    
    

15. When considering hearsay evidence presented in a Proceeding under Section 120.57, the distinction to be drawn is between admissibility, and incorporation into the formation of a finding of fact. Admissibility is allowed; but, incorporation is not Permissible without competent evidence which the hearsay evidence supplements or explains.

    
    

16. Here, the evidence which may have connected Respondent to the acts alleged by Petitioner was hearsay and cannot be considered as competent evidence of the alleged acts - much less clear and convincing, competent evidence. Accordingly, Petitioner has failed to sustain its burden of proof that Respondent committed the acts alleged in the administrative complaint and violated Section 475.25(1)(b).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is:

RECOMMENDED that the Florida Real Estate Commission issue a Final Order dismissing the administrative complaint filed against Elliott Nachwalter, licensed real estate salesman holding license number 0451805.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 9th day of March, 1990.

JANE C. HAYMAN

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 9th day of March, 1990.

APPENDIX TO RECOMMENDED ORDER IN CASE NO. 89-4524

The following represent the rulings on the proposed findings of fact submitted by parties. The rulings are reflected by the paragraph number of each proposed finding of fact.

PETITIONER

1. Adopted in paragraph 1.

2. Adopted in paragraph 1.

3. Rejected as hearsay.

4. Rejected as hearsay.

5. Rejected as not supported by competent, substantial evidence.

6. Rejected as hearsay.

7. Rejected as hearsay.

8. Rejected as not supported by competent, substantial evidence.

9. Adopted, in part, in paragraph 6, rejected, in part, in part, as hearsay.

10. Rejected as not supported by competent, substantial evidence.

11. Rejected as irrelevant.

12. Rejected as not supported by competent, substantial evidence.

13. Rejected as irrelevant.

RESPONDENT

1. Adopted in paragraph 1.

2. Adopted in paragraph 2.

3. Adopted in paragraph 3.

4. Adopted in paragraph 6.

5. Adopted in paragraph 4.

6. Adopted in paragraph 6.

7. Rejected as hearsay.

COPIES FURNISHED:

Steven W. Johnson, Esquire Department of Professional Regulation

400 West Robinson Street Orlando, Florida 32801

John M. McDaniel, Esquire 777 Brickell Avenue, PH-2 Miami, Florida 33131

Kenneth E. Easley General Counsel

Department of Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

Darlene F. Keller, Division Director Division of Real Estate

Department of Professional Regulation

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

Docket for Case No: 89-004524

Orders for Case No: 89-004524