STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 94-3252

)

W. RYAN HEATH, )

)

Respondent. )

)

RECOMMENDED ORDER

A formal hearing was conducted in this proceeding before Daniel Manry, a duly designated Hearing Officer of the Division of Administrative Hearings, on January 12, 1995, in Orlando, Florida. The parties, witnesses, and court reporter attended the hearing in Orlando. The undersigned participated by video conference from Tallahassee, Florida.

APPEARANCES

For Petitioner: Daniel Villazon, Esquire

Senior Attorney

Department of Professional Regulation Division of Real Estate

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

For Respondent: W. Ryan Heath, pro se

4864 South Orange Avenue Orlando, Florida

STATEMENT OF THE ISSUE

The issues for determination in this proceeding are whether Respondent violated Sections 475.25(1)(b), (d), and (e), Florida Statutes, 1/ through culpable negligence or breach of trust in a business transaction; by failing to account or deliver trust funds; and by failing to timely notify the Florida Real Estate Commission of a deposit dispute or to implement remedial action; and, if so, what, if any, penalty should be imposed.

PRELIMINARY STATEMENT

Petitioner filed an Administrative Complaint against Respondent on March 18, 1994. Respondent timely requested a formal hearing.

At the formal hearing, Petitioner presented the testimony of: Mr. Anthony Rodgers, the purchaser in a failed real estate transaction; Ms. Geraldine

Barnosk, an employee of the Division of Real Estate; and Ms. Sara Kimmig, an Investigation Specialist for Petitioner.

Petitioner submitted four exhibits for admission in evidence. Petitioner's Exhibit 1 is a copy of the contract for purchase and sale of real estate.

Petitioner's Exhibit 2 is a copy of a letter from Respondent to Petitioner in July, 1993. Petitioner's Exhibit 3 is a copy of two letters sent to Respondent by Petitioner. Petitioner's Exhibit 4 is a copy of a letter sent to Petitioner by Respondent in February, 1994. Petitioner's Exhibits 1-4 were admitted in evidence without objection.

Respondent testified in his own behalf and submitted six exhibits for admission in evidence. Respondent's Exhibit 1 is a copy of a letter from Respondent's attorney in the deposit dispute notifying Petitioner of the purchaser's release and forfeiture of the deposit to the seller. Respondent's Exhibit 2 is a copy of the release and forfeiture of the deposit signed by the purchaser. Respondent's Exhibit 3 is a copy of the cover letter transmitting a copy of the release and forfeiture of deposit to Petitioner. Respondent's Exhibit 4 is a copy of a letter to Ms. Kimmig. Respondent's Exhibit 5 is a copy of a letter from Petitioner dated March 8, 1994. Respondent's Exhibit 6 is a copy of an escrow disbursement order sent to Petitioner on February 18, 1994.

Respondent's Exhibits 1-6 were admitted in evidence without objection.

A transcript of the formal hearing was not requested by either party.

Petitioner timely filed its proposed recommended order ("PRO") on January 23, 1995. Respondent did not file a PRO. Proposed findings of fact in Petitioner's PRO are accepted in this Recommended Order.

FINDINGS OF FACT

1. Petitioner is the governmental agency responsible for issuing licenses to practice real estate and for regulating licensees on behalf of the state. Respondent is a licensed real estate broker under license number 0037920. The last license issued to Respondent was issued as a broker at Heath Realty, 4864

   S. Orange Avenue, Orlando, Florida.

   
   

2. On May 18, 1993, Mr. Anthony Rodgers and Ms. Jill Rodgers (the "buyers") entered into a contract to purchase real property from Ms. Norma A. Cash (the "seller"). The buyers entrusted Respondent with a total earnest money deposit of $1,000. The transaction failed to close.

   
   

3. On July 8, 1993, Respondent timely notified Petitioner in writing that there were conflicting demands for the earnest money deposit and a good faith doubt regarding the deposit. However, Respondent failed to institute one of the settlement procedures described in Section 475.25(1)(d)1. until legal proceedings between the buyer and seller were amicably settled approximately seven months later.

   
   

4. Respondent failed to institute a prescribed settlement procedure in a timely manner even though Petitioner advised Respondent in letters dated July 26, 1993, and September 9, 1993, of the action Respondent should take. On February 9, 1994, Respondent finally requested an escrow disbursement order in accordance with Section 475.25(10(d)1. The escrow deposit was paid to the seller pursuant to the agreement of the parties.

   CONCLUSIONS OF LAW

   
   

5. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and the parties thereto. The parties were duly noticed for the formal hearing.

   
   

6. Petitioner has the burden of proof in this proceeding. Petitioner must show by clear and convincing evidence that Respondent committed the acts alleged in the Administrative Complaint and the reasonableness of any penalty to be imposed. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

   
   

7. The charges against Respondent are contained in three counts in the Administrative Complaint. The first count charges Respondent with culpable negligence or breach of trust within the meaning of Section 475.25(1)(b). The second count charges Respondent with failure to account or deliver trust funds in violation of Section 475.25(1)(d)1. The third count charges Respondent with failing to timely notify the Florida Real Estate Commission of a deposit dispute and failure to implement remedial action in violation of Section 475.42(1)(e) and Florida Administrative Code Rule 61J2-10.032.

   
   

8. Petitioner failed to show that Respondent breached the trust of either the seller or the buyers in violation of Section 475.25(1)(b). The parties were engaged in a dispute over the buyers' deposit. Respondent made full disclosure to all parties and remitted the deposit to the seller in a timely manner pursuant to the settlement agreement between the parties. For the same reasons, Respondent did not violate Section 475.25(1)(d)1. by failing to account and deliver trust funds to the parties.

   
   

9. Respondent did not fail to notify the Florida Real Estate Commission of a deposit dispute in violation of Section 475.42(1)(e) and Florida Administrative Code Rule 61J2-10.032. Respondent provided the requisite notice in a timely manner.

   
   

10. Petitioner showed by clear and convincing evidence that Respondent knew, or should have known, of the settlement procedures and remedial action prescribed for deposit disputes by applicable law. Respondent did not comply with those requirements for approximately seven months after the time required by statute. Thus, Respondent failed to implement remedial action in the deposit dispute in a timely manner in violation of Section 475.42(1)(e) and Florida Administrative Code Rule 61J2-10.032. However, Respondent's failure to comply with applicable law was not a result of culpable negligence within the meaning of Section 475.25(1)(b).

    
    

11. Section 475.25 authorizes Petitioner to reprimand Respondent, place Respondent on probation, and impose a fine of up to $1,000 for each separate offense committed by Respondent. See also, Florida Administrative Code Rule 21V-

    24.001. In its PRO, Petitioner seeks a reprimand, probation, and a fine of

    $2,000.

    
    

12. The reprimand sought by Petitioner is appropriate. Respondent has no previous history of violations. Respondent was not dishonest and unscrupulous in his dealings with the buyer and seller. Neither party was deprived of any money except as agreed to by the parties.

    
    

13. Probation is appropriate. Respondent's failure to comply with applicable law is a result of Respondent's lack of knowledge and not his refusal to comply with applicable law.

14. The terms of the probation sought by Petitioner are not appropriate. Petitioner seeks one year of probation and 60 hours of broker management courses during that year. Although a probation period of one year is appropriate, one or two broker management courses of two to four hours each are more reasonable in view of the period of probation and the technical nature of Respondent's violations.

    
    

15. A fine is not appropriate in this situation. Respondent's violation was his first and was not intentional. The probation and education imposed on Respondent more reasonably address the cause and nature of Respondent's violations.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent not

guilty of violating Sections 475.25(1)(b), 475.25(1)(d)1., but guilty of

violating Section 475.42(1)(e) and Florida Administrative Code Rule 61J2-10.032. It is further recommended that the Final Order place Respondent on probation for a period of one year and, during the period of probation, require Respondent to complete courses in broker management not to exceed eight credit hours.

RECOMMENDED this 8th day of February, 1995, in Tallahassee, Florida.

DANIEL S. MANRY

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 8th day of February 1995.

ENDNOTE

1/ All section references are to Florida Statutes (1993) unless otherwise stated.

COPIES FURNISHED:

Darlene S. Keller, Division Director Division of Real Estate

Department of Professional Regulation

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, FL 32399-0792

Daniel Villazon, Esquire Senior Attorney

Department of Business and Professional Regulation

Division of Real Estate Hurston Building, Suite N308

400 West Robinson Street Orlando, Florida 32801-1772

W Ryan Heath, Esquire 4864 S. Orange Avenue Orlando, Florida 32806

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: 94-003252

Orders for Case No: 94-003252