STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 89-4981

)

MICHAEL L. LIDDLE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer J. Stephen Menton, held a formal hearing in the above styled case on December 12, 1989, in Key Largo, Florida.

APPEARANCES

For Petitioner: James H. Gillis, Esquire

Department of Professional Regulation

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

For Respondent: No appearance

STATEMENT OF THE ISSUES

The issue in this case is whether the Respondent's real estate broker's license should be revoked or otherwise penalized based upon the charges set forth in the Administrative Complaint.

PRELIMINARY STATEMENT

On April 19, 1989, the Petitioner, Florida Department of Professional Regulation, Division of Real Estate, filed a three count Administrative Complaint against Respondent Michael L. Liddle. Count I alleges 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 in violation of Subsection 475.025(1)(b), Florida Statutes. Count II alleges that Respondent is guilty of failing to account and deliver funds in violation of Subsection 475.25(1)(d), Florida Statutes. Count III alleges that Respondent is guilty of having failed to provide the Petitioner with adequate supporting documentation of his escrow accounts in violation of Rule 21V-14.12, Florida Administrative Code and Subsection 475.25(1) (e), Florida Statutes.

In an election of rights dated August 26, 1989, the Respondent requested a formal hearing to contest the allegations of fact contained in the Administrative Complaint. By Amended Notice of Hearing dated November 1, 1989, the final hearing was scheduled for December 12, 1989. A copy of the Amended Notice of Hearing was sent to Respondent at the address listed on the election of rights form. The Respondent has not advised the Petitioner or the Division of Administrative Hearings of a change of address and the Amended Notice of Hearing sent to Respondent was not returned as undeliverable.

At the hearing, Petitioner offered 12 exhibits into evidence and called three witnesses to testify, including the Petitioner's investigator. All the exhibits were admitted in evidence. The Respondent did not make an appearance and hence submitted no exhibits or testimony for the record.

At the request of Petitioner, official recognition has been taken pursuant to Rule 221-6.020, Florida Administrative Code, of Section 20.30 and Chapters 120, 455 and 475, Florida Statutes (1987).

A transcript of the proceedings was received on January 5, 1990. The filing deadline for proposed recommended orders was ten days after the filing of the transcript. Proposed findings of fact and conclusions of law were submitted by the Petitioner. The Respondent has not filed any proposals. Petitioner's proposed findings of fact are addressed in the Appendix.

FINDINGS OF FACT

1. Petitioner is a state 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, Florida Statutes, Chapters 120, 445 and 475, Florida Statutes, and the rules promulgated pursuant thereto.

   
   

2. Respondent, Michael L. Liddle, is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0241275 in accordance with Chapter 475, Florida Statutes. The last license was issued to Respondent as a broker, c/o Liddle Property Services, Inc., 10877 Overseas Highway, Marathon, Florida 33050.

   
   

3. In 1988, Respondent undertook to manage the rental of an apartment for Patricia D. King and her husband Leonard King. Chris Fullum, an employee of the Respondent, was handling the details of renting the apartment for the Kings.

   
   

4. In conjunction with the rental of the Kings' apartment, Respondent sent the Kings a net rental income check dated October 1, 1988, for $612 which the Kings attempted to deposit in their bank account.

   
   

5. The escrow check from the Respondent was returned to the Kings on October 21, 1988, marked "NSF" (non-sufficient funds). At the request of Respondent, Ms. King attempted to redeposit the check, but it was returned again on November 1, 1988 marked "NSF" and "do not present again as a cash item enter only for collection."

   
   

6. Ms. King filed a complaint with the Florida Department of Professional Regulation and sent a copy of her complaint letter to the Respondent on November 10, 1988. On November 15, 1988, she received a cashier's check from Respondent for the returned net rental income check plus returned check charges.

7. In the latter part of 1988, Respondent managed the rental of an efficiency apartment (#116 Ocean Isles Fishing Village), for Marva Kay Mizell.

   
   

8. In conjunction with the rental described in paragraph 7, the Respondent sent to Ms. Mizell her net rental income checks for September and October 1988 totaling $620.37.

   
   

9. After Marva Kay Mizell deposited the checks, the checks were returned to her marked "NSF".

   
   

10. Ms. Mizell sent a copy of the complaint she filed with the Department of Professional Regulation to the Respondent. Thereafter, on January 9, 1989, Respondent sent Marva Kay Mizell a cashier's check covering the returned net rental income checks plus returned check charges.

    
    

11. On January 20, 1989 Respondent was interviewed in his office by Petitioner's investigator, George B. Sinden, who was accompanied by another investigator, William Reich. Respondent advised Petitioner's investigators that his bookkeeper had left his employ in August 1988, and Respondent had been lax in maintaining the escrow account during September and October of that year during which period of time approximately IS checks were returned for insufficient funds.

    
    

12. At the January 20, 1989 meeting, Respondent further advised that he had "made all the checks good." In response to a request for documentation regarding the rentals he was managing, Respondent admitted he had no written rental agreements or leases. He offered as an explanation that his rentals were short term, i.e., one day to three months.

    
    

13. Investigator Sinden determined from Respondent that Respondent typically maintains a "tally sheet" on each unit and sends the owner a monthly "recap" with their net rental income check each month.

    
    

14. On January 20, 1989, an office inspection and audit of Respondent's escrow trust accounts was conducted by Petitioner's investigator George B. Sinden, assisted by Petitioner's investigator William Reich. Respondent's escrow accounts were found to be short in the amount of $1,236.19. There were no pending sales at the time of the audit.

    
    

15. Respondent told Petitioner's investigators that he (Respondent) would deposit $1,236.19 into the escrow account and would provide proof thereof along with a copy of the last 13 bank statements, all returned checks and proof of payment by February 6, 1989, to the Miami FDPR office. As of February 23, 1989, the documentation promised by Respondent had not been received.

    
    

16. As of March 28, 1989, very little documentation had been received by Petitioner's investigators. Efforts by Petitioner's investigators to contact Respondent have been unsuccessful and Respondent has failed to return phone calls from the investigators.

    
    

17. Because of Respondent's lack of good accounting practices, both Ms. Mizell and Ms. King were unable to determine whether their real property had, in fact, been rented or leased during any given time or how often the units were rented.

    CONCLUSIONS OF LAW

    
    

18. 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.

    
    

19. Respondent is charged with violations of Section 475.25(1), Florida Statutes, which provides the Department can take disciplinary action against a license of a Florida real estate broker who:

    
    

    (b) 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. ...

    1. 1. Has failed to account or deliver to any person, ... at the time which has been agreed upon or is required by law any

       money ... or thing of value, ... 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 circumstances....

    2. Has violated any of the provisions of this chapter or any lawful order or rule made or issued under the provisions of this chapter or chapter 455.

    
    

20. The rules of the Florida Real Estate Commission include Rule 21V- 14.012, Florida Administrative Code, which requires as follows:

    
    

    1. A broker who receives a deposit such as defined herein shall preserve and make available to the Department, or its authorized representative, all deposit slips and statements of account rendered by the bank and trust company, credit union, or title company with trust powers, in which said deposit is placed, together with all agreements between the parties respecting the transaction, particularly the deposit, all contracts, agreements, instructions, and directions to or with said depository, and shall keep an accurate account in his books of each deposit transaction, as well as an account in his books of each separate bank account where in such trust funds have been deposited, together with a record of all withdrawals therefrom, and shall support such accounts by such additional data as good accounting practice requires. All such books and accounts shall be subject to inspection by the Department or its authorized representatives at all reasonable times during regular business hours.

21. A preceding to discipline a license is penal in nature. Bach v. Board of Dentistry, 378 So.2d 34 (Fla. 1st DCA 1980). In such contests, the Petitioner has the burden of proof and must prove by clear and convincing evidence that the Respondent committed the violations set forth in the administrative complaint. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987). Here, Petitioner has sustained its burden, and has demonstrated that Respondent violated the provisions of Section 475.25(1)(b),(d) and (e), Florida Statutes, and Rule 21V-14.012, Florida Administrative Code, as alleged in the Administrative Complaint.

    
    

22. Counts I and II are based on the same factual predicate. While there is no evidence of deliberate fraud, concealment, or misrepresentation by Respondent, the evidence did establish that Respondent is guilty of culpable negligence and has failed to adequately account to his clients.

    
    

23. In the course of managing real estate for certain clients, Respondent sent his clients checks written on his real estate escrow account even though the account contained funds insufficient to pay those checks. Although Respondent eventually reimbursed his clients for the non-sufficient fund checks, he had the use of the money of his clients without their knowledge and consent for some period of time.

    
    

24. The evidence also established that Petitioner's investigators were not provided those materials, upon request, that were requested to be supplied in accordance with the rules of the Florida Real Estate Commission. Moreover, Respondent did not produce supporting documentation of the Respondent's escrow account kept according to good accounting standards.

8. Rule 21V-24.001(3), Florida Administrative Code, specifically prescribes disciplinary guidelines for violations of Sections 475.25(1)(b), (d) and (e), Florida Statutes, as follows:

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

$1,000 per count... The maximum penalties are as listed:

(h) 475.25(1) (b) - Up to 5 years suspension or revocation.

1. 475.25(1) (d) - up to 5 years suspension.

2. 475.25(1)(e) - up to 8 years suspension or revocation.

RECOMMENDATION

Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order

finding Respondent Michael L. Liddle guilty of all charges as alleged in Case No. 89-4981 and that the real estate broker's license of Respondent be revoked.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of February, 1990.

J. STEPHEN MENTON 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 2nd day of February, 1990.

COPIES FURNISHED:

James H. Gillis, Esquire

Department of Professional Regulation

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

Michael L. Liddle

c/o Liddle Property Services, Inc. 10877 Overseas Highway

Marathon, Florida 33050

Darlene F. Keller Division Director

Department of Professional Regulation

Division of Real Estate Post Office Box 1900 Orlando, Florida 32801

Kenneth E. Easley General Counsel

Department of Professional Regulation 1940 North Monroe Street

Suite 60

Tallahassee, Florida 32399-0792

APPENDIX TO RECOMMENDED ORDER CASE NO. Case Number 89-4981

The Petitioner has submitted proposed findings of fact.

It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.

The Petitioner's Proposed Findings of Fact

Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order where

Accepted or Reason for Rejection

Docket for Case No: 89-004981

Orders for Case No: 89-004981