STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 94-1855

)

BERNARD L. COVINGTON, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this matter was heard in Orlando, Florida, before the Division of Administrative Hearings, by its duly-designated Hearing Officer, Daniel M. Kilbride, on June 23, 1994.

APPEARANCES

For Petitioner: Steven W. Johnson, Esquire

Senior Attorney

Florida 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

For Respondent: Bernard L. Covington (pro se)

1034 Old South Lane Apopka, Florida 32702

STATEMENT OF THE ISSUES

Whether the Respondent's real estate broker license should be disciplined based upon the alleged violations of Sections 475.25(1)(b),(c),(d)1. and (e), Florida Statutes.

PRELIMINARY STATEMENT

On March 9, 1994, the Petitioner filed a Five Count Administrative Complaint against the Respondent, alleging violations of Chapter 475, Florida Statutes. Respondent filed an Election of Rights, dated March 20, 1994 and requested a formal hearing. This matter was referred to the Division of Administrative Hearing and this hearing followed.

At the formal administrative hearing, the Petitioner presented the testimony of four witness. Petitioner offered a total of nine (9) exhibits which were received in evidence.

The Respondent cross-examined each of Petitioner's witnesses, and testified on his own behalf. No exhibits were offered in evidence. Official Recognition was taken of Section 20.165 and Chapters 120, 455 and 475, Florida Statutes.

The transcript of the hearing was filed on July 26, 1994. The Petitioner filed a proposed recommended order with the Division on July 29, 1994. Proposed findings of fact have not been filed by Respondent as of the date of this order. The Petitioner' proposed findings of fact have been considered and utilized in the preparation of this Recommended Order, except where such proposals were not supported by the evidence or were irrelevant, immaterial, cumulative, or subordinate. Specific rulings on the proposed findings of fact are contained in the Appendix attached hereto.

Based upon all of the evidence, the following findings of fact are determined:

FINDINGS OF FACT

1. Petitioner is a state government 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 20.165, Florida Statutes, Chapters 120, 455 and 475, Florida Statutes, and the rules promulgated pursuant thereto.

   
   

2. Respondent Bernard L. Covington is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0178235 in accordance with Chapter 475, Florida Statutes. The last license was issued as a broker at 4383 U.S. Hwy. 1, Edgewater, Florida 34141.

   
   

3. On September 6, 1990, Terra Mar Village's prospectus to sell proprietary leases in mobile home lots was approved by the Florida Department of Business Regulation. Included in said prospectus is a form Contract for Purchase and Installation of a Cooperative Unit and Manufactured Home at Terra Mar Village for use when lot was to be sold in said Village.

   
   

4. On July 25, 1992, Respondent, through the actions of his agent, Alvin

   D. Booten, solicited and obtained a purchase agreement between sellers, Terra Mar Village Association, and buyers, Jack W. Miller and Jacqueline Miller for Lot 132 in Terra Mar Village.

   
   

5. Respondent's agent represent that the buyers were purchasing a mobile home lot in fee simple at the Village. In actuality, they were only purchasing a proprietary lease in the lot.

   
   

6. Al Booten, an unlicensed agent, was employed by Terra Mar Village, LTD. as a sales representative. In the course of his employment, he promised the Millers a deed to the property. They relied on his representations, and they put down their deposit on the lot.

   
   

7. Booten never advised the Millers they were buying into a cooperative association.

8. Respondent failed to use the approved Contract for Purchase agreement form contained in the prospectus approved in September 1990 by the Department in its dealings with the Millers.

   
   

9. The Respondent failed to disclose prior to the closing that the buyers were purchasing only a proprietary lease in the lot.

   
   

10. On January 14, 1993, the transaction closed with Respondent acting on behalf of Terra Mar Village, LTD. and Terra Mar Village Association, Inc.

    
    

11. After closing, the buyers received the Prospectus and title policy. Upon examining their title insurance policy, they learned that they had purchased a proprietary lease, not a fee simple interest in the lot as has been represented to them by Booten.

    
    

12. The mobile home park has gone into foreclosure and the ownership interest of the Millers, among others, in their lots have been put in jeopardy.

    
    

13. The Millers had relied on the representations of the Respondent as a licensed broker in their decision to purchase a lot in Terra Mar Village.

    
    

14. Respondent committed a breach of trust by failing to disclose that the lot being sold was by proprietary lease.

    
    

15. On April 1 and May 10, 1993, buyer Reginald B. Randolph gave Respondent's unlicensed agent, Al Booten, two checks totalling $45,000 for the purchase of a mobile home and lot at Terra Mar Village.

    
    

16. On May 10, 1993, Respondent closed the transaction without the knowledge or consent of the buyer. However, Respondent failed to have the title to the property recorded.

    
    

17. Randolph was misled by the Respondent's agent Booten, who told Randolph and his wife that they could buy a lot on a canal in the Village. When the Randolphs discovered they had been deceived and demanded their money back, the Respondent refused to refund it. They also discovered the money was not being held in escrow.

    
    

18. The Randolphs believed Al Booten was a licensed real estate salesperson because he claimed he was selling the lot.

    
    

19. There were many problems associated with the park. The source of potable water at the park was not approved and a moratorium was placed on it by Volusia County. Later, Terra Mar Village, LTD. filed for bankruptcy, but it was denied. The Respondent seeks to blame the "recession" and the water problems for the difficulties he encountered with the Millers and Randolphs. However, Respondent collected their downpayments and misappropriated the funds after allowing them to be misled by his agent.

    
    

    CONCLUSIONS OF LAW

    
    

20. The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this case. Subsection 120.57(1), and Section 120.60, Florida Statutes.

    
    

21. Revocation of license proceedings are penal in nature. State ex rel Vining v. Florida Real Estate Commission, 281 So.2d 487 (Fla. 1973). The burden

    of proof required in this matter is that relevant and material findings of fact must be supported by clear and convincing evidence of record. Hal Halfetz 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).

    
    

22. Petitioner has the burden of proving by clear and convincing evidence the allegations in the Administrative Complaint. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

23. Subsections 475.25(1)(b), (d)1 and (e), Florida Statutes (1993) as they pertain to the alleged facts in this matter read, in pertinent parts:

    
    

    1. The commission may ... suspend a license, certification, registration, or permit for a period not exceeding 10

       years; may revoke a license, certification, registration, or permit; may impose an administrative fine not to exceed $1,000 for each count or separate offense ... if it finds that the licensee ....

       1. Has been guilty of fraud, misrepresenta- tion, concealment, false pretenses, dishonest dealing by trick, scheme, or devise, culpable negligence, or breach of trust in a business transaction in this state or any other state, nation, or territory; has violated a duty imposed ... by law ...

       2. Has advertized property or services in a manner which is fraudulent, false, deceptive, or misleading in form or content.

       3. 1. Has failed to account or deliver to any person,..., 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...

          such as money ...

       4. 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. ...

       
       

24. Relative to the above statutory prohibitions, the Commission's disciplinary guidelines are codified in Rules 61J2-24.001(2) and (3), Florida Administrative Code. These rules provide that the Respondent may be fined up to

    $1,000.00 per count and may have his broker license penalized as follows:

    
    

    . . .

    "(c) 475.25(1)(b) - Up to 5 years

    suspension

    or revocation.

    . . .

    "(f) 475.25(1)(e) - Up to 8 years

    suspension

    or revocation.

    
    

25. The above rules also provide that when "aggravating or mitigating circumstances" can be demonstrated to the Commission by clear and convincing

    evidence, the Commission shall be entitled to deviate from the above guidelines in imposing discipline upon a licensee. These circumstances include, inter alia, the severity of the offense, the degree of harm to the consumer or public, and the number of counts in the Administrative Complaint.

    
    

26. Inasmuch as a real estate license in Florida belongs to a privileged class, the State has prescribed a high standard of qualifications. Zichlin vs. Dill,25 So.2d 4 (Fla. 1946). "The law specifically requires that a person, in order to hold a real estate license, must make it appear that he is ... trustworthy, ... and that he bears a good reputation for fair dealing." McKnight v. Florida Real Estate Commission, 209 So.2d 199 (Fla. 2nd DCA 1967).

    
    

27. The Respondent failed to control Booten's actions while acting as an unlicensed salesperson. Booten's misrepresentations were made under color of selling land. The Respondent knew or should have known of Booten's misrepresentations to buyers.

    
    

28. The Randolphs and Millers were misled by the Respondent and his employee because no effort was taken to make the true nature of their real estate interest known to them.

    
    

29. When the nature of this cooperative ownership was demonstrated after the bogus "closings" the Respondent refused to return their money, claiming severe business problems prevented it.

    
    

30. The Petitioner's proof is clear and convincing, and is sufficient to justify the imposition of a penalty within the range of those provided for the above-cited statutory authority. Here, the Respondent's behavior, which was based on a land developers desire to close any deal, goes to the central theme of professional conduct. The Respondent clearly failed to live up the standards expected of and required of a licensed real estate professional. The Respondent did not deal honestly with the Millers or the Randolphs. The facts indicate disregard for the fundamental principles of fair dealing and professional standards on the part of the Respondent.

    
    

31. The Petitioner presented clear and convincing testimony and evidence that each of the five charges in the Administrative Complaint occurred as alleged, and therefore the Respondent should be found guilty of the charges.

    
    

32. There was little or no mitigation of record concerning Respondent's violations. Respondent provided no character witnesses during the hearing Respondent showed little understanding or concern for his obligation to insure that the laws of Florida that applied to this property were followed.

Respondent seeks to avoid taking any personal responsibility for the acts of his agent or his own acts of omission.

35. Suspension of Respondent's license is an appropriate penalty and is within the Commission's penalty guidelines for one or more of the offenses proven.

RECOMMENDATION

Based on the foregoing, it is RECOMMENDED as follows:

1. The Florida Real Estate Commission issue and file a Final Order finding the Respondent guilty of violating Subsections 475.25(1)(b), (d)1 and (e), Florida Statutes, as charged in the Administrative Complaint.

   
   

2. The Final Order should further direct that all of Respondent's real estate licenses, registrations, certificates and permits, be suspended for a period of two (2) years and that he pay an administrative fine of $1,000.

DONE and ENTERED this 10th day of August, 1994, in Tallahassee, Florida.

DANIEL M. KILBRIDE

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 10th day of August, 1994.

APPENDIX

The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties.

Petitioner's proposed findings of fact.

Accepted in substance: paragraphs 1-14 Respondent's proposals.

Respondent did not submit proposed findings of fact.

COPIES FURNISHED:

Steven W. Johnson, Esquire Florida Department of Professional Regulation Division of Real Estate

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

Bernard L. Covington, pro se 1034 Old South Lane

Apopka, Florida 32702

Darlene F. Keller Division Director Division of Real Estate

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

Jack McRay, Esquire Acting General Counsel

Florida Department of Business and Professional Regulation

Division of Real Estate Northwood Centre

1940 N Monroe Street Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to the 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 consult with the agency that will issue the final order in this case concerning their 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: 94-001855

Orders for Case No: 94-001855