STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 91-4554

)

DORIS DUKE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted before Stephen F. Dean, Hearing Officer, Division of Administrative Hearings, on October 4, 1991 in Jacksonville, Florida.

APPEARANCES

For Petitioner: Steven W. Johnson, Esquire

Senior Attorney

Florida Department of Professional Regulation

Division of Real Estate

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

For Respondent: Doris Duke pro se

6676 Cedar Point Road Jacksonville, Florida 32226

STATEMENT OF THE ISSUES

Whether the Respondent's Florida real estate license should be disciplined based upon the charge that the 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 475.25(1)(b), Florida Statutes.

PRELIMINARY STATEMENT

By an Administrative Complaint filed June 24, 1991, the Petitioner, Department of Professional Regulation, Division of Real Estate, alleges that the Respondent violated Subsection 475.25(1)(b), Florida Statutes.

Based on that charge, the Petitioner seeks to discipline the Respondent's real estate license.

The Respondent disputed the charge and timely requested a Section 120.57(1), Florida Statutes, hearing and in accordance with Subsection 120.68, Florida Statutes and Rule 28-6.011, Florida Administrative Code, a formal hearing was held October 4, 1991.

At hearing, the Petitioner presented the testimony of Shirley Holland, James Booher, Will Rudloff, Debra L. Tyler, Sandra King, and Mary Anderson, as well as the testimony of Investigator Crawford Richardson. The Respondent also testified. The Petitioner's Exhibits 1-7 were received into evidence, as were the Respondent's Exhibits 1-5.

The Respondent filed a letter which was read and considered. The Petitioner filed proposed findings which were read and considered. The Appendix to this Recommended Order states which findings were adopted and which were rejected and why.

FINDINGS OF FACT

1. Petitioner is a state licensing and regulatory agency charged with the responsibility to Administrative Complaints pursuant to the laws of he State of Florida, in particular, Section 20.30, Florida Statues, Chapters 120, 455, and 475, Florida Statutes and the rules promulgated pursuant thereto.

   
   

2. Respondent Doris Duke is now and was at all material hereto a licensed real estate salesman in the State of Florida having been issued license number 0441054 in accordance with Chapter 475, Florida Statutes.

   
   

3. On June 13, 1989, the Respondent solicited and obtained a listing for the sale of an adult care center from seller Shirley Holland. The listing price was $300,000. (Petitioner's Exhibit 1).

   
   

4. The property had been on the market for sometime and seller was anxious to sell. S. L. Patterson and Anne M. Reese had been interested for sometime.

   
   

5. On January 19, 1990, the Respondent solicited and obtained an offer to purchase the adult care center from S. L. Patterson and Anne M. Reese, buyers, in the amount of $225.000. The contract was contingent upon financing. The Respondent presented the offer to the seller on or about January 20, 1990. Seller would have received approximately $25,000 and a second mortgage for

   $65,000. (Petitioner's Exhibit 2).

   
   

6. Subsequently the buyers were unable to obtain financing, and the contract was void at this point. In an effort to consummate the sale, Respondent arranged financing for the buyers. The terms of this transaction as reflect in the closing documents, FREC 4, showed a sales price of $125,00, with a first mortgage of $100,000, a second mortgage of $46,250 and a third mortgage to seller of $84,500. However, this financing required an added $25,000 which came from the $25,000 originally to the seller.

   
   

7. The Respondent advised the seller of the changes the day before the closing; however, the changes to the contract were not reflected in writing either in the contract or in an addendum. Instead the changes were reflected in the closing documents (FREC 4). Instead of receiving about $2,000 the seller had to pay $68.08 at closing.

8. The Respondent and Respondent's employer Century 21 Harris Real Estate & Associates, Inc. profited in the amount of a $22,500 commission, an amount which they earned under the listing contract.

   
   

9. Subsequently, the purchasers, who were black and operated an adult congregate living facility, were the targets of racially motivated vandalism and hate crimes. As result they were unable to make a financial success on the venture.

   
   

10. The buyers defaulted on their mortgage payments, and foreclosure was initiated by one of the principal mortgagees.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

12. The parties were duly notice pursuant to the notice provisions of Chapter 120, Florida Statutes (1989).

    
    

13. Subsection 475.25, Florida Statutes (1989) provides that the Florida Real Estate Commission may discipline a licensee. Subsection 475.25(1)(b), Florida Statutes (1989) proscribes, fraud, concealment, misrepresentation, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction.

    
    

14. The burden of proof is on the Petitioner as to the counts of the Administrative Complaint. Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (Fla. 1st DCA 1977). Revocation of license proceedings are penal in nature. State ex rel Vining v. Florida Real Estate Commission, 281 So.2d 487 (Fla. 1973).

    
    

15. The standard of proof required in this matter is clear and convincing evidence. Hel Helfetz v. d/b/a Key Wester Inn v. Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, 475 So.2d 1277 (Fla. 1st DCA 1985).

    
    

16. Shirley Holland admitted under oath that Respondent advised her of the details of the changes in the contract at least the day before the closing. Ms. Duke's alleged failure to advise Ms. Holland was the primary basis of the administrative complaint against Ms. Duke.

    
    

17. Although good real estate practice may have been to have another contract drafted and presented, it is not a legal requirement. The changes to the contract apparently occurred shortly before closing and Respondent elected to advised Holland orally of the changes and to let the closing documents reflect the ultimate contract terms.

    
    

18. Contrary to the commission's argument, the parole evidence rule does not preclude Ms. Holland's testimony that Ms. Duke told her about the changes in the contract. The issue is not the terms of contract, but whether Ms. Holland knew about the changes. Ms. Holland said she did; therefore, there can be no fraud, no misrepresentation, no false pretense, no dishonest dealing, no culpable negligence, and no breach of trust. By her silence at closing, Shirley Holland positively accepted the modified terms of the agreement which also were explained by the closing agent.

19. The fact that Ms. Holland testified that she was told not to ask questions at the closing by the Respondent is immaterial, and Ms. Holland remaining silent because Ms. Duke told her it is not credible. Ms. Holland was not unsophisticated in dealing with real estate, and was perfectly capable of saying "no" to a bad deal. Ms. Holland wanted to close and obtain the benefits from the contract which were elimination of her mortgage indebtedness. Respondent's assertion that Ms. Holland was informed prior to closing of the changes and that Ms. Holland knew and accepted those terms is confirmed by Ms. Holland's testimony. The terms called for Ms. Holland to get mortgage payments. The buyers subsequent default was not the fault of Respondent. The Petitioner failed to prove the charges by competent evidence.

    
    

20. The Respondent is not guilty of having committed a violation of Subsection 475.25(1)(b), Florida Statutes (1989).

RECOMMENDATION

RECOMMENDED that charges against the Respondent be dismissed.

DONE AND ENTERED this 30th day of October, 1991, in Tallahassee, Leon County, Florida.

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 30th day of October, 1991.

APPENDIX CASE NO. 91-4554

The Petitioner's Proposed Recommended Order was read and considered. The following is a list of the findings which were adopted and which were rejected and why.

Paragraphs 1, 2, 4, 5, 7, 8, 9, 10, 11, 12 and 13 were adopted. Paragraph 3 was rejected as irrelevant.

Paragraph 6 was rejected as irrelevant and contrary to the best and most credible evidence.

COPIES FURNISHED:

Steven W. Johnson, Esquire Senior Attorney

Florida Department of Professional Regulation

Division of Real Estate

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

Doris Duke

6676 Cedar Point Road Jacksonville, Florida 32226

Darlene F. Keller Division Director

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

Jack McRay, Esquire General Counsel

Department of Professional Regulation

1940 North Monroe Street Suite 60

Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 91-004554

Orders for Case No: 91-004554