STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 93-1315

)

JAMES C. TOWNS, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this case on July 29, 1993, in West Palm Beach, Florida, before Stuart M. Lerner, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Janine B. Myrick, Esquire

Senior Attorney

Department of Professional Regulation Division of Real Estate

Legal Section, Suite N308 Hurston Building, North Tower

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

For Respondent: No Appearance

STATEMENT OF THE ISSUES

1. Whether Respondent committed the violations alleged in the Administrative Complaint?

   
   

2. If so, what disciplinary action should be taken against him?

PRELIMINARY STATEMENT

On October 22, 1992, the Department of Business and Professional Regulation (formerly the Department of Professional Regulation and hereinafter referred to as the "Department") issued a four-count Administrative Complaint against Respondent, a licensed real estate broker, charging him with: "fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in a business transaction in violation of Subsection 475.25(1)(b), Florida Statutes" (Count I); "having failed to account for or deliver a deposit in violation of Subsection 475.25(1)(d)1., Florida Statutes" (Count II); "having failed to

maintain trust funds in the real estate brokerage escrow bank account or some other proper depository until disbursement thereof was properly authorized in violation of Subsection 475.25(1)(k), Florida Statutes" (Count III); and "having failed to maintain a proper office as required by Section 475.22, Florida Statutes and Rule 21V-10.022, Florida Administrative Code and therefore in violation of Subsection 475.25(1)(e), Florida Statutes" (Count IV).

Respondent denied the allegations of wrongdoing advanced in the Administrative Complaint and requested a formal hearing. On March 5, 1993, the Department referred the matter to the Division of Administrative Hearings for the assignment of a hearing officer to conduct the formal hearing Respondent had requested.

At the final hearing held in this matter the Department presented the testimony of two witnesses, Charles Burns, an attorney in private practice in Palm Beach County, and Terry Giles, an Investigator Specialist II with the Department. In addition to the testimony of these two witnesses, the Department offered, and the Hearing Officer received, five exhibits (Petitioner's Exhibits

1 through 5) into evidence. Although provided notice of the hearing in accordance with Section 120.57(1)(b)2., Florida Statutes, Respondent did not make an appearance at hearing, either in person or though an attorney or other representative. Accordingly, no evidence was presented on his behalf.

At the conclusion of the evidentiary portion of the hearing, the Hearing Officer, on the record, advised that the parties had the right to file post- hearing submittals and established a deadline, August 9, 1993, for the filing of such submittals. On August 9, 1993, the Department timely filed a proposed recommended order. The Department's proposed recommended order contains what are labelled as proposed "findings of fact." These proposed "findings of fact" have been carefully considered and are specifically addressed in the Appendix to this Recommended Order. To date, Respondent has not filed any post-hearing submittal.

FINDINGS OF FACT

Based upon the evidence adduced at hearing, admissions made by Respondent, and the record as a whole, the following Findings of Fact are made:

1. The Department is a state government licensing and regulatory agency.

   
   

2. Respondent is now, and has been at all times material to the instant case, a licensed real estate broker in the State of Florida.

   
   

3. He holds license number 0265883.

   
   

4. In March of 1990, Ulrich Wingens, by and through his attorney, Charles Burns, entered into a written contract to purchase from Jupiter Bay Shoppes Ltd. (hereinafter referred to as "JBS") certain commercial property located in Palm Beach County.

   
   

5. Respondent brokered the sale.

   
   

6. The sale contract provided that JBS was responsible for payment of Respondent's broker's fee of $50,000.00 and that such compensation was to "[t]o be due and payable only if closing occur[red]."

7. Respondent received a $20,000.00 earnest money deposit from Wingens in connection with the sale.

   
   

8. The sale contract provided that the $20,000.00 was to be held in the Jim Towns Realty escrow account.

   
   

9. The sale did not close.

   
   

10. Litigation between Wingens and JBS ensued.

    
    

11. During the pendency of the litigation, the parties instructed Respondent to continue to hold Wingens' $20,000.00 earnest money deposit in escrow until they advised him to do otherwise.

    
    

12. Wingens and JBS settled their dispute before the case was scheduled to go to trial.

    
    

13. On November 14, 1991, the judge assigned to the case, Palm Beach County Circuit Court Judge Edward H. Fine, entered an order directing Respondent "to immediately transfer to Fleming, Haile & Shaw, P.A. Trust Account the escrow deposit in the amount of $20,000.00 and any accrued interest thereon."

    
    

14. Respondent did not comply with the order.

    
    

15. He had appropriated the $20,000.00 for his own personal use and benefit and was not holding it in escrow.

    
    

16. This was contrary to the instructions he had received from Wingens and

    JBS.

    
    

17. At no time had Wingens or JBS authorized Respondent to take such

    action.

    
    

18. Wingens' attorney, Burns, brought the matter to the attention of the Department.

    
    

19. The Department assigned one of its investigators, Terry Giles, to the case.

    
    

20. As part of her investigation, Giles interviewed Respondent.

    
    

21. During the interview, Respondent admitted to Giles that he had closed his real estate office in October of 1991 and had not at any time prior to the interview notified the Department of the closure. At the time he closed his office, Respondent's real estate broker's license was still in active status.

    
    

    CONCLUSIONS OF LAW

    
    

22. The Florida Real Estate Commission (hereinafter referred to as the "Commission") is statutorily empowered to take disciplinary action against a State of Florida-licensed broker based upon any of the grounds enumerated in Section 475.25(1), Florida Statutes. Such disciplinary action may include one or more of the following penalties: license denial; license revocation; license suspension for a period not exceeding ten years; imposition of an administrative fine not to exceed $1,000 for each count or separate offense; issuance of a reprimand; and placement of the licensee on probation. Section 475.25(1), Fla. Stat.

23. Where the disciplinary action sought is the revocation or suspension of the broker's license, the proof of guilt must be clear and convincing. See Ferris v. Turlington, 510 So.2d 292 (Fla. 1987); Pic N' Save v. Department of Business Regulation, 601 So.2d 245 (Fla. 1st DCA 1992); Munch v. Department of Professional Regulation, 592 So.2d 1136 (Fla. 1st DCA 1992); Newberry v. Florida Department of Law Enforcement, 585 So.2d 500 (Fla. 3d DCA 1991). "The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established." Slomowitz v. Walker, 429 So.2d 797, 800 (Fla. 4th DCA 1983).

    
    

24. Where the discipline does not involve the loss of licensure, the broker's guilt need be established by only a preponderance of the evidence. See Allen v. School Board of Dade County, 571 So.2d 568, 569 (Fla. 3d DCA 1990).

    
    

25. Regardless of the disciplinary action taken, it may be based only upon the violations specifically alleged in administrative complaint. See Kinney v. Department of State, 501 So.2d 129, 133 (Fla. 5th DCA 1987); Hunter v. Department of Professional Regulation, 458 So.2d 842, 844 (Fla. 2d DCA 1984).

    
    

26. Furthermore, in determining whether Section 475.25(1), Florida Statutes, has been violated in the manner charged in the administrative complaint, one "must bear in mind that it is, in effect, a penal statute. . . This being true the statute must be strictly construed and no conduct is to be regarded as included within it that is not reasonably proscribed by it. Furthermore, if there are any ambiguities included such must be construed in favor of the . . . licensee." Lester v. Department of Professional and Occupational Regulations, 348 So.2d 923, 925 (Fla. 1st DCA 1977).

    
    

27. The Administrative Complaint issued in the instant case charges that Respondent committed four separate violations of Section 475.25(1), Florida Statutes.

    
    

28. The first three counts of the Administrative Conduct concern Respondent's handling of the $20,000.00 earnest money deposit that he received from Wingens and allege that his actions in connection therewith violated Section 475.25(1)(b), Florida Statutes (Count I), Section 475.25(1)(d)1., Florida Statutes (Count II) and Section 475.25(1)(k), Florida Statutes (Count III).

    
    

29. Section 475.25(1)(b), Florida Statutes, authorizes the Commission to discipline a licensed broker who "[h]as 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." "It is immaterial to the guilt of the licensee that the victim or intended victim of the misconduct sustained no damage or loss; that the damage or loss has been settled and paid after discovery of the misconduct; or that such victim or intended victim was a customer or a person in confidential relation with the licensee or was an identified member of the general public." Section 475.25(1)(b), Fla. Stat.

    
    

30. Section 475.25(1)(d)1., Florida Statutes authorizes the Commission to discipline a licensed broker who "[h]as failed to account or deliver to any person, including a licensee under this chapter, 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 and delivery, any personal property such as . . . [a] deposit . . . , which has come into his hands and which he is not in law or equity entitled to retain under the circumstances."

    
    

31. Section 475.25(1)(k), Florida Statutes, authorizes the Commission to discipline a licensed broker who "[h]as failed . . . to immediately place, upon receipt, any money, fund, deposit, check, or draft entrusted to him by any person dealing with him as a broker in escrow with a title company, banking institution, credit union, or savings and loan association located and doing business in this state, wherein the funds shall be kept until disbursement thereof is properly authorized."

    
    

32. The evidence clearly and convincingly establishes that Respondent violated Section 475.25(1)(b), (d)1. and (k), Florida Statutes, as alleged in Counts I, II and III of the Administrative Complaint, by misappropriating the

    $20,000.00 earnest money deposit with which he had been entrusted, instead of keeping it in his escrow account as he had been instructed and then delivering it to the Fleming, Haile & Shaw, P.A. Trust Account in accordance with Judge Fine's order.

    
    

33. The fourth and final count of the Administrative Complaint charges Respondent with violating "Section 475.22, Florida Statues and Rule 21V-10.022, Florida Administrative Code and therefore . . . Subsection 475.25(1)(e), Florida Statutes."

    
    

34. Section 475.22, Florida Statutes, provides, in pertinent part, that "[e]ach active broker shall maintain an office."

    
    

35. Rule 21V-10.022, Florida Administrative Code, provides, in pertinent part, that "[e]ach active broker is required to have an office and the office must be registered with the DPR."

    
    

36. Section 475.25(1)(e), Florida Statutes, authorizes the Commission to discipline a licensed broker who "[h]as 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."

    
    

37. The evidence clearly and convincingly establishes that Respondent violated both Section 475.22, Florida Statutes, and Rule 21V-10.022, Florida Administrative Code, a rule promulgated under the provisions of Chapter 475, Florida Statutes, and therefore also Section 475.25(1)(e), Florida Statutes, as alleged in Count IV of the Administrative Complaint, by closing his real estate office in October of 1991, before taking the necessary steps to have his broker's license placed in inactive status.

    
    

38. In determining what disciplinary action should be taken against Respondent for having committed the violations alleged in Counts I, II, III and IV of the Administrative Complaint, it is necessary to consult Rule 21V-24.001, Florida Administrative Code, which contains the disciplinary guidelines adopted by the Commission. Cf. Williams v. Department of Transportation, 531 So.2d 994, 996 (Fla. 1st DCA 1988)(agency is required to comply with its disciplinary guidelines in taking disciplinary action against its employees).

39. Subsection (3) of Rule 21V-24.001, Florida Administrative Code, provides that the normal range of penalties for violations of Sections 475.25(1)(b), 475.25(1)(d)1., 475.25(1)(k), and 475.25(1)(e), Florida Statutes, are as follows:

    
    

    Section 475.25(1)(b)- Up to 5 years suspen- sion or revocation;

    
    

    Section 475.25(1)(d)- Up to 5 years suspen- sion;

    
    

    Section 475.25(1)(k)- A minimum of a 90 day suspension and $1,000 fine up to revocation;

    
    

    Section 475.25(1)(e)- Up to 8 years suspen- sion or revocation.

    
    

40. Subsection (4)(a) of Rule 21V-24.001, Florida Administrative Code, provides that the Commission may impose a penalty outside the normal range where there are mitigating or aggravating circumstances.

    
    

41. The mitigating or aggravating circumstances that may warrant such a deviation are described in subsection (4)(b) of Rule 21V-24.001, Florida Administrative Code, as follows:

    
    

    Aggravating or mitigating circumstances may include, but are not limited to, the following:

    
    

    1. The severity of the offense.

       
       

    2. The degree of harm to the consumer or public.

       
       

    3. The number of counts in the Administra- tive Complaint.

       
       

    4. The number of times the offenses pre- viously have been committed by the licensee.

       
       

    5. The disciplinary history of the licensee.

       
       

    6. The status of the licensee at the time the offense was committed.

       
       

    7. The degree of financial hardship incur- red by a licensee as a result of the imposi- tion of a fine or suspension of the licensee.

       
       

    8. Violation of the provision of Chapter 475, Florida Statutes, where in a letter of guidance as provided in Section 455.225 (3), Florida Statutes, previously has been issued to the license.

42. Having considered the facts of the instant case in light of the provisions of Rule 21V-24.001, Florida Administrative Code, set forth above, the Hearing Officer concludes that the Commission should discipline Respondent for having committed the violations alleged in Counts I, II, III and IV of the Administrative Complaint by revoking his real estate broker's license.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law it is hereby recommended that the Commission enter a final order finding Respondent guilty of the violations alleged in Counts I, II, III and IV of the Administrative Complaint and revoking his real estate broker's license.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 16th day of August, 1993.

STUART M. LERNER

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 16th day of August, 1993.

APPENDIX TO RECOMMENDED ORDER, CASE IN CASE NO. 93-1315

The following are the Hearing Officer's specific rulings on the "findings of facts" proposed by the Department in its post-hearing submittal:

1. Accepted as true and incorporated in substance, although not necessarily repeated verbatim, in this Recommended Order.

2. First sentence: Accepted as true and incorporated in substance; Second sentence: Accepted as true, but not incorporated because it would add only unnecessary detail to the factual findings made by the Hearing Officer.

3-13. Accepted as true and incorporated in substance.

14-15. Accepted as true, but not incorporated because they would add only unnecessary detail to the factual findings made by the Hearing Officer.

1. Accepted as true and incorporated in substance.

2. Accepted as true, but not incorporated because it would add only unnecessary detail to the factual findings made by the Hearing Officer.

3. Accepted as true and incorporated in substance.

COPIES FURNISHED:

Janine B. Myrick, Esquire Senior Attorney

Department of Business and Professional Regulation, Division of Real Estate

Legal Section, Suite N 308 Hurston Building, North Tower

400 West Robinson Street Orlando, Florida 32801-1772

Mr. James C. Towns

7101 Smoke Ranch Road #1007 Las Vegas, Nevada 89128

Darlene F. Keller, Division Director Division of Real Estate

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 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 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: 93-001315

Orders for Case No: 93-001315