STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 94-4247

) DIANA L. BASHANT and GREGORY J. ) BASHANT, )

)

Respondent. )

)

RECOMMENDED ORDER

Suzanne F. Hood, Hearing Officer of the Division of Administrative Hearings, held a formal hearing in this case in Stuart, Florida, on November 8, 1994.

APPEARANCES

For Petitioner: Theodore R. Gay, Esquire

Senior Attorney

Department of Business and Professional Regulation

401 North West 2nd Avenue, N607 Miami, Florida 33128

For Respondent: William D. Anderson, Esquire

Anderson and Galante Post Office Box 288 Stuart, Florida 34995

STATEMENT OF THE ISSUES

The issues are whether Respondents committed the offenses set forth in the Administrative Complaint, and if so, what disciplinary action should be taken.

PRELIMINARY STATEMENT

On June 24, 1994, Petitioner Department of Business and Professional Regulation (Petitioner) filed an Administrative Complaint against Respondent Diana L. Bashant (Mrs. Bashant) and Respondent Gregory J. Bashant (Mr. Bashant) charging them with violation of Sections 475.25(1)(b) and 475.25(1)(d)2, Florida Statutes, and charging Mr. Bashant with violation of Section 475.25(1)(o), Florida Statutes. On or about July 22, 1994, Mr. and Mrs. Bashant (collectively referred to as "the Bashants") filed an Answer and an Election of Rights form with Petitioner requesting a formal hearing pursuant to Section 120.57(1), Florida Statutes. Petitioner referred the case to the Division of Administrative Hearings on July 25, 1994.

The undersigned heard the case on November 8, 1994, in Stuart, Florida. At the hearing, Petitioner presented the testimony of three (3) witnesses and offered fourteen (14) exhibits, all of which were admitted into evidence. Mr.

Bashant testified on his own behalf and offered one (1) exhibit which was admitted into evidence. Counsel represented Mrs. Bashant who was unable to be present at the hearing.

The parties did not order a transcript of the proceeding; however, both parties filed proposed recommended orders. The undersigned has considered the parties' proposed findings of fact and used them in preparation of this Recommended Order, except where the evidence does not support such proposals, or where they are irrelevant, immaterial, cumulative, or subordinate. The Appendix attached to this Recommended Order contains specific rulings on the parties' respective findings of fact.

FINDINGS OF FACT

Based on the evidence presented at the hearing, the undersigned makes the following findings of fact:

1. At all times material to this proceeding, Mrs. Bashant held a Florida real estate salesperson license, number 0551150, which was involuntarily inactive.

   
   

2. At all times material to this proceeding, Mr. Bashant held a Florida real estate broker license, number 0419768, which was involuntarily inactive.

   
   

3. At all times material to this proceeding, Mr. Bashant was the broker of record for The Real Estate Group, Inc., a corporation which was no longer in business and which had no escrow accounts. The corporation's license to do business as a real estate agency has been inactive since May 12, 1993.

   Florida's Department of State, Division of Corporations, administratively dissolved the corporation on August 13, 1993.

   
   

4. On December 8, 1993, Mr. Bashant executed a written offer to purchase a house belonging to John and Carolyn DelPrete (Sellers). The Bashants wanted to buy the house, located at 194 North East Blairwood Terrace, Jensen Beach, Martin County, Florida, as their personal residence.

   
   

5. Mr. Bashant gave the written offer to Stacy Mathias (Mathias), who was the Sellers' exclusive listing agent. The offer called for an initial cash deposit of $1,000 and an additional payment of $9,000 in the form of a promissory note, payable at closing. The $1,000 cash deposit was to be held in trust by the Real Estate Group, Inc. This first offer reflects that the buyers rather than the sellers would pay for title insurance.

   
   

6. Mr. Bashant never intended to make a $1,000 cash deposit in any escrow account or to make and deliver a $9,000 promissory note at closing. Instead, he only intended to execute and deliver a $10,000 promissory note at closing. He executed a $10,000 promissory note but did not deliver it to anyone until he gave it to his attorney in January of 1994.

   
   

7. Sometime between December 8, 1993 and December 14, 1993, Mathias presented the offer to the Sellers. They would not agree to accept the $9,000 promissory note at closing. The Sellers also wanted to make certain other changes and additions to the contract.

8. Mathias prepared a second draft of the original offer which required an initial cash deposit of $1,000 to be held in escrow by The Real Estate Group, Inc. It also required an additional $9,000 cash deposit to be placed in escrow within ten (10) days after the effective date of the contract. The second draft of the offer did not include any language referring to a promissory note payable at closing. In the second draft, seller was responsible for providing title insurance.

   
   

9. After receiving the second draft of the contract, the Bashants added and initialed a change in paragraph II(b) stating that a $9,000 promissory note would be paid at closing. The Bashants also made and initialed three other changes: (a) They added the master bedroom bedspread to the list of personalty in paragraph I(c); (b) They added "+ or -" to the finance amount in paragraph II(e); and (c) They added "+ or -" to the finance amount in IV(a). The Bashants signed and returned the contract to Mathias. They did not date their signatures.

   
   

10. Mathias presented the contract to the Sellers who initialed the changes in paragraphs II(e) and IV(a). However, the Sellers struck through the language adding the master bedroom bedspread in paragraph I(c) and the promissory note language in paragraph II(b). The Sellers changed the party responsible for providing title insurance to buyer rather than seller and changed the time for acceptance from December 14, 1993 to December 15, 1993. On December 14, 1993, the Sellers initialed their changes and deletions, signed the contact, and returned it to Mathias.

    
    

11. Mathias called Mr. Bashant on the telephone to discuss each of the changes. She specifically told Mr. Bashant that the Sellers would not accept a promissory note at closing. Mr. Bashant responded that he had no problem eliminating the promissory note language because he had just sold some cars and had the money to make the cash deposits. He agreed to initial the changes and pick up the contract.

    
    

12. On December 15, 1993, Mathias delivered the contract to the Bashants. They initialed the change crossing out the bedspread in paragraph I(c). They did not initial the change eliminating the promissory note language in paragraph II(b), the change requiring the buyer to pay for title insurance in paragraph V, or the change setting December 15, 1993, as the time for acceptance in paragraph

    III. The Bashants added and initialed a provision requiring the Seller to pay

    $500 towards the cost of the title insurance in paragraph V.

    
    

13. On December 16, 1993, the Bashants returned the contract to Mathias. Mathias told the Sellers about the last change requiring them to pay $500 towards title insurance. The Sellers would not agree to this provision. Therefore, Mathias agreed to pay $500 towards the cost of the title insurance to save the sale. With that understanding, the Sellers initialed the final change in the title insurance provision.

    
    

14. Mathias never reduced to writing the agreement that she would pay $500 towards the cost of title insurance; however, she informed Mr. Bashant of her responsibility and he expressed no objection.

    
    

15. The contract was contingent on the Bashants obtaining financing and being able to construct a 15' by 30' pool on the property.

16. As of December 16, 1993, Mathias and the Sellers assumed that the contract was bilateral. Mathias never specifically asked the Bashants to initial the deleted promissory note language, the change in the time for acceptance, or the change in the party responsible for providing title insurance.

    
    

17. Mr. Bashant told Mathias he would provide her with copies of the checks that he had deposited in escrow. He did nothing to correct the false impression that he had made the cash deposits.

    
    

18. Sometime during December of 1993, the Sellers returned a cash deposit to potential buyers who had a preexisting right of first refusal to buy the Sellers' home. The record does not reveal a specific reason for the couple's decision not to exercise their option to purchase the Sellers' home.

    
    

19. On December 23, 1993, Mrs. Bashant took several members of her family to see the Sellers' home. Mr. Bashant was not present at the time they made the visit.

    
    

20. Shortly after January 1, 1994, the Bashants picked up a survey of the Seller's home from Mathias's office. The Bashants needed the survey to assist them in determining whether they could construct a 15' by 30' pool on the property.

    
    

21. On January 4, 1994, Mr. Bashant faxed a message to Mathias stating that the pool could not be built as suggested by the Sellers because of a 25' buffer on the back side of the property. The message stated that Mr. Bashant would check on alternatives but that he wanted Mathias to be aware of the problem. Mr. Bashant also asked Mathias to send him a copy of the "bilateral contract."

    
    

22. On or before January 5, 1994, Mathias talked to Mr. Bashant who said he would pick up a copy of the "bilateral contract" and give her a copy of the checks he had deposited in escrow.

    
    

23. Later that day, a friend of the Bashants, Al Fontaine, picked up a copy of the contract for Mr. Bashant. Mr. Fontaine informed Mathias that he did not have the deposit check copies but that Mr. Bashant would furnish them.

    
    

24. On January 13, 1994, Mr. Bashant told Mathias he would apply to the county for a variance to construct the pool. Mathias informed Mr. Bashant that another real estate agent, Carol Pierson, had clients who were interested in buying the property. Mr. Bashant replied that he was willing to step aside if someone else wanted to purchase the property.

    
    

25. Carol Pierson took her clients to view the house. These clients were former prospective buyers who had recently received a settlement and were interested in purchasing a home immediately. They knew about the contract between the Bashants and the Sellers. Either no one ever informed the prospective buyers that the Bashants were willing to step aside or they were not interested in buying the house. In any event, they never made an offer.

    
    

26. On January 19, 1994, Mathias sent Mr. Bashant a letter informing him that the prospective buyers had not made an offer. She assumed Mr. Bashant was working on the variance for the pool and reminded him that he had not produced copies of the checks deposited in escrow.

27. On January 22, 1994, Mathias sent Mr. Bashant another letter demanding evidence that he had deposited the funds into the escrow account. Mathias advised Mr. Bashant that she intended to file a complaint with the Florida Real Estate Commission (Commission) failing the production of such evidence.

    
    

28. On January 24, 1994, Mathias received a letter from Mr. Bashant stating that he understood the contract to be void when Carol Pierson's clients viewed the house. He informed Mathias of his attorney's opinion that the contract was null and void because of certain dates and signatures. Mr. Bashant enclosed a copy of a letter from Coral Gables Federal denying approval of the loan due to insufficient income.

    
    

29. On January 27, 1994, the Sellers' attorney sent letters to the Bashants and The Real Estate Group, Inc., demanding a closing date or $10,000.

    
    

30. On February 8, 1994, the Bashants' attorney responded claiming that contract contingencies had not been met and that the parties never agreed to the form of deposit.

    
    

31. After Mathias filed a complaint with the Commission, Jonathan Platt, Petitioner's investigator, called the Bashants. He spoke with Mrs. Bashant who referred him to her husband.

    
    

32. Mr. Bashant admitted that The Real Estate Group, Inc., was inactive and that naming it as the escrow agent was his mistake. He admitted that he had not deposited any funds in escrow.

    
    

33. The record does not contain clear and convincing evidence that the Sellers lost potential buyers as a result of dealing with the Bashants. For some unspecified reason, one couple declined to exercise their option to buy and requested a refund of their deposit; however, no one contacted this couple when it became apparent that the sale to the Bashants would not close. Carol Pierson's clients looked at the house but, for some unknown reason, did not make an offer. Mathias never told Ms. Pierson that her clients could not make an offer or that the Bashants were willing to step aside.

34 During the period from December 16, 1993 through January 24, 1994, Mr. Bashant misrepresented and concealed his intentions concerning the contract. He never intended to deposit funds in escrow but he let Mathias believe he had made the deposits. The contract was improperly executed because the parties had not agreed in writing on the form of the escrow deposits. However, Mr. Bashant knowingly made false promises and operated under false pretenses by telling Mathias he would furnish her with copies of checks that did not exist.

1. Mrs. Bashant signed the contract but never had any discussions with Mathias concerning the terms. There is no record evidence that Mrs. Bashant was aware of or participated in her husband's representations and promises to Mathias.

   
   

2. On May 31, 1991, the Commission entered a final order against Mr. Bashant and the Real Estate Group, Inc. The Commission reprimanded Mr. Bashant's license, fined him, and placed him on one (1) year of probation for violation of Sections 475.25(1)(b), 475.25(1)(e), and 475.25(1)(k), Florida Statutes (1989). The basis of this disciplinary action included Mr. Bashant's failure to maintain trust funds and depositing and intermingling personal funds with trust funds.

   CONCLUSIONS OF LAW

   
   

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

   
   

4. 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, and in particular, Chapter 120, Chapter 455, Chapter 475, and Section 20.165, Florida Statutes.

   
   

5. Petitioner has the burden to prove by clear and convincing evidence that the Bashants committed the offenses set forth in the Administrative Complaint. Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

   
   

6. Section 475.25 (1), Florida Statutes, provides in pertinent part:

   
   

   1. The commission may deny an application for licensure, registration, or permit, or

      renewal thereof; may place a licensee, registrant, or permittee on probation; may suspend a license, registration, or permit for a period not exceeding

      10 years; may revoke a license, registration, or permit; may impose an administrative fine not to exceed $1,000 for each count or separate offense; and may issue a reprimand, and any or all of the foregoing, it finds that the licensee, registrant, permittee, or applicant:

      * * *

      (b) 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.

      It is immaterial to the guilt of the licensee that the victim or intended victim of the misconduct has sustained no damage or loss; that the damage of loss has been settled and paid after discovery off 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.

      * * *

      (d)2. Has failed to deposit money in an escrow account when the licensee is the purchaser of real estate under a contract where the contract requires

      the purchaser to place deposit money in an escrow account to be applied to the purchase price if the sale is consummated.

      * * *

      (o) Has been found guilty, for a second time, of any misconduct that warrants his suspension or has been found guilty of a course of conduct or practices which show that he is so incompetent, negligent, dishonest, or untruthful that the money, property, transactions, and rights of investors, or those with whom he may sustain a confidential relation, may not safely be entrusted to him.

      
      

      Section 475.25(1)(b), 475.25(1)(d)2, 475.25(1)(o), Florida Statutes.

      
      

7. In Count I, Petitioner alleges that Mrs. Bashant violated Section 475.25(1)(b), Florida Statutes. However, Petitioner correctly concedes, in its Proposed Recommended Order, that evidence of Mrs. Bashant's participation in her husband's alleged misrepresentations, false promises and concealment is insufficient to find her guilty of violating this statute.

   
   

8. In Count II, Petitioner alleges that Mr. Bashant violated Section 475.25(1)(b), Florida Statutes. Petitioner has met its burden of proof in this count. Clear and convincing evidence indicates that Mr. Bashant acted in a manner which misrepresented and concealed his intentions concerning the contract's deposit terms. He gave the false impression that he had deposited cash funds in the active escrow account of an ongoing real estate agency. He also made false promises when he told Mathias that he would give her copies of the deposit checks. Therefore, Mr. Bashant is guilty of violating Section 475.25(1)(b), Florida Statutes.

   
   

9. In Count III and IV, Petitioner alleges that Mrs. Bashant and Mr. Bashant, respectively, violated Section 475.25(1)(d)2, Florida Statutes. Petitioner has not met its burden of proof as to either of these counts. The record clearly establishes that the alleged contract between the Bashants and the Sellers was flawed because the Bashants never initialed the deletion of the promissory note language and other changes in the contract terms. The contract provided that "[n]o modification or change in this Contract shall be valid or binding upon the parties unless in writing and executed by the party or parties intended to be bound by it." Standards for Real Estate Transactions, paragraph

   V. Consequently, the Bashants did not fail to deposit money in an escrow account under a contract requiring such a deposit.

   
   

10. In Count V, Petitioner alleges and has proven, by clear and convincing evidence, that Mr. Bashant violated Section 475.25(1)(o), Florida Statutes. In 1991, the Commission found Mr. Bashant guilty of offenses that might have resulted in suspension of his real estate license pursuant to Rule 21V-24.001, Florida Administrative Code (1989). The Commission placed Mr. Bashant on probation rather than suspend his license. There is no record evidence that Mr. Bashant's conduct in Petitioner's Case No. 0166081 actually warranted suspension.

    
    

11. However, Mr. Bashant's misconduct in the instant case indicates that he violated Section 475.25(1)(o) because he has been found guilty of a course of conduct or practices which show he is so dishonest or untruthful that the money, property, transactions, and rights of investors, or those with whom he may sustain a confidential relation, may not safely be entrusted to him. Mr.

Bashant's prior disciplinary history together with his dishonest and untruthful conduct in the instant case support this conclusion.

45. "A registered real estate broker may be disciplined not only for dishonest conduct in transactions in which his only interest is as a broker, but also for such conduct in his own personal business affairs. Section 475.25(1)(b), Florida Statutes." LaRossa v. Department of Professional Regulation, Division of Real Estate, 474 So. 2d 322, 324 (Fla. 3rd DCA 1985).

In this case, Mr. Bashant was not dealing in his professional capacity. Nevertheless, his conduct did not meet the standard "such as is normally expected of a businessman of sound integrity." Rivard v. McCoy, 212 So. 2d 673, 674 (Fla. 1st DCA 1968). Even if the contract was never bilateral, Mr. Bashant was obligated to deal openly and honestly with his peers and the public. This he did not do.

1. The Commission may discipline a licensee, as circumstances warrant, by imposing one or more of the following penalties: (a) reprimand; (b) administrative fine not to exceed $1,000 per count; (c) probation; (d) suspension of licensee, registration or permit for a period not to exceed ten

   (10) years; or revocation or denial of the license, registration or permit. Section 475.25(1), Florida Statutes; Rule 61J2-24.001, Florida Administrative Code.

   
   

2. The recommended range of penalty for violation of Section 475.25(1)(b), Florida Statutes, is up to five (5) years of suspension or revocation. Rule 61J2-24.001(3)(c), Florida Administrative Code.

   
   

3. The recommended range of penalty for violation of Section 475.25(1)(o), Florida Statutes, is a minimum of one (1) year suspension and $500 fine up to revocation. Rule 61J2-24.001(3)(p), Florida Administrative Code.

   
   

4. Under Rule 61J2-24.001(4), Florida Administrative Code, the Commission may deviate from the recommended penalty range if the record contains clear and convincing evidence of certain aggravating or mitigating circumstances including, but not limited to:

   
   

   1. The severity of the offense.

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

   3. The number of counts in the Administrative Complaint.

   4. The number of times the offenses previously 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 incurred by a licensee as a result of the imposition of a fine or suspension of the license.

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

      
      

      Rule 61J2-24.001(4)(b), Florida Administrative Code.

      
      

5. Petitioner argues that the record supports application of two aggravating circumstances. I do not agree for two reasons. First, the record

does not contain clear and convincing evidence that either of the potential buyers failed to make an offer to buy the Sellers' home because of the alleged contract with the Bashants. Second, I have already considered Mr. Bashant's prior disciplinary history in finding that he violated Section 475.25(1)(o), Florida Statutes. I am not inclined to use that fact again to enhance the penalty.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Commission enter a Final Order finding that: (1) Respondent Diana L. Bashant is not guilty of violating any Florida statute; and

(2) Respondent Gregory J. Bashant is guilty of violating Sections 475.24(1)(b) and 475.24(1)(o), Florida Statutes. It is further recommended that the Commission require Respondent Gregory J. Bashant to pay an administrative fine of $2,000 and revoke his license.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 19th day of December,1994.

SUZANNE F. HOOD, Hearing Officer 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 19th day of December 1994.

APPENDIX

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact (FOF) submitted by the parties to this case.

Petitioner's Proposed Findings of Fact

1-2. Accepted in FOF 1-2 except for subordinate information. 3-4. Accepted in FOF 4-5 except for subordinate information.

5. Accepted in FOF 3.

6-7. Accepted as modified in FOF 6.

1. Accepted in FOF 7-8.

2. Accepted in FOF 11 except as to placement in sequence of events 10-13. Accepted in substance in FOF 12-16.

14-25. Accepted in substance in FOF 19-32.

1. Rejected.

2. Accepted as modified in FOF 34.

3. Accepted in FOF 36.

4. Considered as an argument concerning the credibility of a witness.

Respondent's Proposed Findings of Fact

1-2. Accepted in FOF 1-2.

1. Accepted in substance in FOF 4-5.

2. Accepted as subordinate information. There is no competent substantial evidence that Mr. Bashant ever presented a copy of Respondent's Exhibit 1 to Mathias.

3. Rejected; no persuasive competent substantial evidence.

4. Accepted in FOF 3.

5. Accepted as subordinate information.

6. Accept that Mr. Bashant prepared Petitioner's Exhibit 1 in FOF 4-5; balance of proposed finding not supported by persuasive competent substantial evidence.

9-13. Accepted in substance in FOF 8-13.

1. Accepted in FOF 22-23.

2. Accepted in substance in FOF 20.

3. Accepted in FOF 21.

4. Accepted in substance in FOF 24-25.

5. Accepted in substance in FOF 24-25 except there is no persuasive competent substantial evidence that Mr. Bashant disclosed a financial problem at that time.

19-20. Accepted in substance in FOF 24-25.

21-22. Accepted in FOF 28 except for accuracy of January 29 date.

1. Accepted in FOF 30.

2. Accepted in FOF 35.

COPIES FURNISHED:

Theodore R. Gay, Esquire Senior Attorney

Department of Business and Professional Regulation

401 North West 2nd Avenue, N607 Miami, Florida 33128

William D. Anderson, Esquire Anderson & Galante

Post Office Box 288 Stuart, Florida 34995

Darlene F. Keller Division Director Division of Real Estate

Department of Professional Regulation

Post Office Box 1900 Orlando, Florida 32802-1900

Jack McRay General Counsel

Department of Business

and Professional Regulation Suite 60

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 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: 94-004247

Orders for Case No: 94-004247