STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ROBERT V. LIONETTI, )

)

Petitioner, )

)

vs. ) CASE NO. 92-1170

) FLORIDA REAL ESTATE COMMISSION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this case on May 27, 1992,1 in Boca Raton, Florida, before Stuart M. Lerner, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Scott A. Orth, Esquire

2021 Tyler Street

Post Office Box 229010 Hollywood, Florida 33022-9010

For Respondent: Manuel E. Oliver, Esquire

Assistant Attorney General

400 West Robinson Street Suite 107, South Orlando, Florida 32801

STATEMENT OF THE ISSUE

Whether Petitioner's application for licensure as a real estate salesman should be denied because of the consent judgment entered against him in Hillsborough Circuit Court Case No. 86-14282?

PRELIMINARY STATEMENT

On November 13, 1991, Petitioner filed an application for licensure as a real estate salesman. At its January 22, 1992, meeting, the Florida Real Estate Commission (Commission, Respondent) preliminarily denied Petitioner's application because of his "answer to Questions #8, #14 and #15 of the licensing application and/or [his] criminal record according to the appropriate law enforcement agency." In his letter to Petitioner advising him of the Commission's action, counsel for the Commission stated that "[s]pecifically, the Commission's decision was based on the following: The 1991 judgment against you in an action where you were charged with fraudulent and dishone[s]t dealing in the sale of unregistered securities, and your failure to meet the qualification requirements set forth in s.475.17, Florida Statutes."

By letter dated February 13, 1992, Petitioner requested a formal administrative hearing on the matter. On February 24, 1992, the case was referred to the Division of Administrative Hearings for the assignment of a Hearing Officer to conduct the formal administrative hearing Petitioner had requested.

At the final hearing held in this matter Petitioner presented, in addition to his own testimony, the testimony of seven other witnesses: Margaret Ann Lionetti, his wife; Doreen Cherry; Michael Langer; Herb Meyers; Richard Moogan; Jenie Alonso; and Rene Alonso, Petitioner's current employer.

Petitioner also offered, and the Hearing Officer received, six exhibits into evidence. The only evidence Respondent offered were the documents contained in Petitioner's licensure application file. The Hearing Officer received these documents into evidence as a composite exhibit.

At the close of the evidentiary portion of the hearing on May 27, 1992, the Hearing Officer advised the parties on the record of their opportunity to file post-hearing submittals. Petitioner filed a proposed recommended order on June 26, 1992, fourteen days after the Hearing Officer's receipt of the transcript of the hearing. The proposed findings of fact set forth in Petitioner's proposed recommended order have been carefully considered and are specifically addressed in the Appendix to this Recommended Order. On July 6, 1992, the Hearing Officer received a copy of letter, dated July 1, 1992, that counsel for Petitioner had sent to counsel for Respondent. The body of letter read as follows:

Thank you for accepting my telephone call yesterday.

As we discussed the court reporter sent the transcript out on June 10th. I sent you my Proposed Findings on June 23rd. To date, I have not received your Proposed Order and you indicated that you would not be submitting any further argument.

My research reveals that not even a criminal nolo contendre plea is presumptive evidence. All the evidence discredits the judgment in our case and establishes my client's subsequent reputation for good character. Accordingly, Mr. Lionetti should be approved for licensure.

To date, Respondent has not filed any post-hearing submittal.

FINDINGS OF FACT

Based upon the record evidence, the following Findings of Fact are made:

1. Petitioner has resided in Florida since June 1, 1981.

   
   

2. From March or April of 1984 until October of 1985, Petitioner was employed by GIC Government Securities, Inc. (GIC).

   
   

3. GIC was a Tampa-based corporation that sold securities to the public at large.

   
   

4. Petitioner started selling securities for GIC after obtaining his Series 63 license in late July or early August of 1984. Prior to this time, he was in training.

   
   

5. Petitioner worked in GIC's Boca Raton branch office.

6. In addition to his salesman duties, from January or February of 1985, until the termination of his employment with GIC, Petitioner was the manager of the Boca Raton branch office.

   
   

7. His secretary was the only other GIC employee assigned to this branch office during the time Petitioner was its manager. She too had a Series 63 license and was involved in the sale of securities.

   
   

8. All client monies that Petitioner received in his capacity as branch manager were sent on a daily basis by overnight delivery to GIC's corporate headquarters in Tampa, except during a one or two month period when they were deposited in a corporate account in a local Boca Raton bank. Petitioner was not authorized to make any withdrawals from this account.

   
   

9. In April of 1985, the Florida Department of Banking and Finance ordered GIC to immediately cease its operations in Florida. This emergency order remained in effect for approximately 24 hours.

   
   

10. Thereafter, Petitioner received a letter, dated April 12, 1985, from Al Wise, Sr., the general manager of GIC, which read as follows:

    
    

    Enclosed you will find a copy of the letter from our attorneys. This letter lets you know what you can do and what you cannot do. Mr. Lambozzetta [one of GIC's attorneys] will meet with the state within the next two weeks to discuss matters. He feels confident that we can work things out.

    So, just keep your chin up and keep selling those Ginnies, Freddies and Zeros!!

    You can count on my keeping you informed on everything! Please be sure that every broker has a copy of these letters.

    
    

11. The letter accompanying Wise's letter was written by Lambozetta and addressed to Lonnie Kilpatrick, the president of GIC. It read as follows:

    
    

    We are in receipt of an order to cease and desist, notice of rights and administrative charges and complaint regarding GIC Securities Corp. and GIC Government Securities Inc. and we have reviewed same. The order to cease and desist applies to GIC Securities Corp. It orders the company and its employees to cease from violating Florida securities laws by selling securities to any person in the State of Florida or from any office in the State of Florida and from selling unregistered or non-exempt securities.

    The administrative charges and complaint are brought against GIC Government Securities Inc.'s Broker Dealer Registration. However, it contains no cease and desist order or injunction. Therefore, GIC Government Securities Inc. may continue its operations and may continue to engage in the sale of government securities. You may advise your salesmen accordingly. We have spoken with officials from the State of Florida and expect to meet with them in the next two weeks in an effort to resolve this matter.

12. On June 19, 1985, while on vacation in California, Petitioner was seriously injured in a motorcycle accident. He remained in the hospital for approximately two weeks. Upon his return to work, he was able to work no more than only a few hours each day. He continued to work on a part-time basis until the termination of his employment with GIC in October of that year.

    
    

13. At no time during his employment with GIC did Petitioner make any representations to his clients that he knew, or should have known, were false.

    
    

14. Although Petitioner's superiors at GIC may have misappropriated monies that should have been used to purchase securities for his clients, Petitioner was not knowingly involved in, nor did he have actual or constructive knowledge of, such wrongdoing.

    
    

15. Following the demise of GIC, a civil action was filed against Petitioner and others who been associated with GIC. The matter was docketed as Hillsborough Circuit Court Case No. 86-14282.

    
    

16. The plaintiffs filing the lawsuit were former GIC clients. They alleged that they had been defrauded by Petitioner and his codefendants.

    
    

17. During a prehearing conference held on May 10, 1991, Petitioner, who was unrepresented by counsel, agreed to the entry of a consent judgment against him, notwithstanding that he had not engaged in the misconduct alleged by the plaintiffs. He did so in order to avoid the expense and risk he would have faced had he gone to trial.

    
    

18. The Stipulation for Judgment that Petitioner signed provided that his "consent to the entry of the above and foregoing judgments d[id] not constitute an admission or denial of the allegations of the Second Amended Complaint, and that [he did] not admit the allegations in the Second Amended Complaint herein."

    
    

19. A consent judgment against Petitioner was entered by the court on May 13, 1991.

    
    

20. On April 27, 1992, Petitioner filed a motion requesting that the court vacate this judgment and set the matter for trial. The motion is still pending.

    
    

21. Petitioner has a good reputation for honesty, trustworthiness and fair dealing.

    
    

22. The interest of the public and investors will not likely be endangered if he is granted the license he is seeking.

    
    

    CONCLUSIONS OF LAW

    
    

23. An applicant for licensure as a real estate salesman "must be at least

    18 years of age; hold a high school diploma or its equivalent; be honest, truthful, trustworthy, and of good character; and have a good reputation for fair dealing." Furthermore, "if the applicant has been guilty of conduct or practices in this state or elsewhere which would have been grounds for revoking or suspending his license under [Chapter 475, Florida Statutes] had the applicant then been registered, the applicant shall be deemed not to be qualified unless, because of lapse of time and subsequent good conduct and reputation, or other reason deemed sufficient, it appears to the [Florida Real Estate C]ommission that the interest of the public and investors will not likely be endangered by the granting of registration." Section 475.17(1), Fla. Stat.

24. At all times material hereto, Chapter 475, Florida Statutes, specifically Section 475.25(1)(b), Florida Statutes, has provided that a real estate salesman's license may be suspended or revoked if the licensee:

    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 or any other state, nation, or territory; has violated a duty imposed upon him by law or by the terms of a listing contract, written, oral, express, or implied, in a real estate transaction; 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 and committed an overt act in furtherance of such intent, design, or scheme.

    
    

25. In the instant case, as it indicated in its answer to the Petitioner's Request for Admissions and Interrogatories upon Respondent, the Florida Real Estate Commission preliminarily denied Petitioner's application for licensure as a real estate salesman based upon "[t]he 1991 judgment against him [in Hillsborough Circuit Court Case No. 86-14282] in an action where [he was] charged with fraudulent and dishone[s]t dealing in the sale of unregistered securities" and because "Petitioner [in the Commission's view] had not provided sufficient evidence of subsequent good conduct and reputation." Had he engaged in the "fraudulent and dishone[s]t dealing in the sale of unregistered securities" alleged in the lawsuit filed in Hillsborough Circuit Court Case No. 86-14282, Petitioner would be disqualified for licensure under Section 475.17(1), Florida Statutes, absent a showing that, "because of the lapse of time and subsequent good conduct and reputation, or other reason deemed sufficient, it appears . . . that the interest of the public and investors will not likely be endangered by granting" him a license. The evidence adduced at the final hearing held in this matter, however, affirmatively establishes that he did not engage in such conduct.

    
    

26. Petitioner took the stand in the instant case and testified in his own behalf. He denied that he was guilty of the "fraudulent and dishone[s]t dealing" alleged in the lawsuit filed in Hillsborough Circuit Court Case No. 86- 14282 and gave a plausible explanation as to why, notwithstanding his innocence, he stipulated (without admitting guilt)2 to the entry of a consent judgment against him in that case. He so testified with apparent sincerity. Moreover, there was no evidence presented by either party giving the Hearing Officer reason to believe that Petitioner was testifying untruthfully. Accordingly, the Hearing Officer has credited Petitioner's exculpatory testimony and found that Petitioner did not engage in the "fraudulent and dishone[s]t dealing" alleged in the lawsuit filed in Hillsborough Circuit Court Case No. 86-14282.

    
    

27. Because Petitioner did not engage in the "fraudulent and dishone[s]t dealing" alleged in the lawsuit filed in Hillsborough Circuit Court Case No. 86- 14282, Petitioner's application for licensure as a real estate salesman should not be denied based upon the consent judgment entered against him in that case.

    
    

28. Inasmuch as the Commission has not alleged that there exists any other reason to deny Petitioner's application, it should enter a final order in this matter finding Petitioner qualified for licensure as a real estate salesman.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby

RECOMMENDED that the Florida Real Estate Commission enter a final order finding that Petitioner is qualified for licensure as a real estate salesman, despite "[t]he 1991 judgment against him [in Hillsborough Circuit Court Case No. 86-14282] in an action where [he was] charged with fraudulent and dishone[s]t dealing in the sale of unregistered securities."

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 15th day of July, 1992.

STUART M. LERNER

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 15th day of July, 1992.

1. The first page of the hearing transcript filed in this case is incorrect to the extent that it indicates that the hearing was conducted on March 27, 1992.

2. The Stipulation for Judgment that Petitioner signed contained a non- admission clause.

APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-1170

The following are the Hearing Officer's specific rulings on the findings of fact proposed by Petitioner:

II- N through Q. Rejected because they would add only unnecessary detail to the factual findings made by the Hearing Officer.

II- R. Accepted and incorporated in substance, although not necessarily repeated verbatim, in this Recommended Order.

II- S. Rejected because it would add only unnecessary detail to the factual findings made by the Hearing Officer.

II- T. Accepted and incorporated in substance.

II- U. First sentence: Rejected because it would add only unnecessary detail to the factual findings made by the Hearing Officer; Second sentence: Rejected because it is a summary of testimony rather than a finding of fact based upon such testimony.

II- V through X. Rejected because they are summaries of testimony rather than findings of fact based upon such testimony.

II- Y. Accepted and incorporated in substance.

II- Z. Rejected because it is a summary of testimony rather than a finding of fact based upon such testimony.

II- AA. Rejected because it would add only unnecessary detail to the factual findings made by the Hearing Officer.

II- BB through EE. Rejected because they are summaries of testimony rather than findings of fact based upon such testimony.

II- FF. Accepted and incorporated in substance.

II- GG. Rejected because it is a summary of testimony rather than a finding of fact based upon such testimony.

II- HH. Accepted and incorporated in substance.

COPIES FURNISHED:

Scott A. Orth, Esquire 2021 Tyler Street

Post Office Box 229010 Hollywood, Florida 33022-9010

Manuel E. Oliver, Esquire Assistant Attorney General

400 West Robinson Street Suite 107, South Orlando, Florida 32801

Darlene F. Keller, Division Director Division of Real Estate

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

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 OF TIME 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: 92-001170

Orders for Case No: 92-001170