STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, DIVISION ) OF FLORIDA LAND SALES, CONDOMINIUMS ) AND MOBILE HOMES, )

)

Petitioner, )

vs. ) CASE NO. 96-1614

)

ROBERT O'BRIEN, III, d/b/a )

O'BRIEN YACHT SALES, )

)

Respondent. )

) DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, DIVISION ) OF FLORIDA LAND SALES, CONDOMINIUMS ) AND MOBILE HOMES, )

)

Petitioner, )

vs. ) CASE NO. 96-2005

)

DAVID SANDMANN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Claude B. Arrington, held a formal hearing in the above-styled case on June 11, 1996, in West Palm Beach, Florida.

APPEARANCES

For Petitioner: Mary Denise Bryant, Esquire

Department of Business and Professional Regulation

Northwood Centre - Clemons Building 1940 North Monroe Street Tallahassee, Florida 32399-1007

For Respondent: J. Reeve Bright, Esquire

Bright and Chimera, P.A.

29 Notheast Fourth Avenue Delray Beach, Florida 33483

STATEMENT OF THE ISSUES

As to Case 96-1614, whether Respondent O'Brien committed the offenses set forth in the Notice to Show Cause served against him, and the penalty, if any, that should be imposed.

As to Case 96-2005, whether Respondent Sandmann committed the offenses set forth in the Notice to Show Cause served against him, and the penalty, if any, that should be imposed.

PRELIMINARY STATEMENT

The Notice to Show Cause that underpins Case 96-1614 alleged that Respondent O'Brien violated the Yacht and Ship Broker's Act, Chapter 326, Florida Statutes, as follows:

1. On October 27, 1995, at the 36th Annual Fort Lauderdale International Boat Show, Respondent allowed an unlicensed person to attempt to sell a 52' Hatteras known as "Watermellon" on behalf of O'Brien Yacht Sales, in violation of Section 326.006(2)(e)7, Florida Statutes.

The Notice to Show Cause that underpins Case 96-2005 alleged that Respondent Sandmann violated the Yacht and Ship Broker's Act, Chapter 326, Florida Statutes, as follows:

1. On October 27, 1995, at the 36th Annual Fort Lauderdale International Boat Show, Respondent offered, or negotiated to sell, a yacht in excess of 32 feet in length for other persons, specifically, a 52' Hatteras known as "Watermellon" on behalf of O'Brien

Yacht Sales, in violation of Section 326.004(1), Florida Statutes.

Both Respondents timely requested a formal administrative hearing, each matter was referred to the Division of Administrative Hearings where they were assigned the case numbers reflected above and consolidated.

At the formal hearing Petitioner presented the testimony of Peter P. Butler, Sr., and of Robert Badger. Mr. Butler is the Section Head for Petitioner's General Regulation Section. Mr. Badger is an investigator employed by Petitioner.

Respondents O'Brien and Sandmann testified on their own behalf and also presented the testimony of Henry Mellon, the owner of the yacht "Watermellon". Respondents presented no exhibits. At the request of the parties, official recognition was taken of Chapter 326, Florida Statutes, and of Chapter 61B-60, Florida Administrative Code.

A transcript of the proceedings has been filed. At the request of the parties, the time for filing post-hearing submissions was set for more than ten days following the filing of the transcript. Consequently, the parties waived the requirement that a recommended order be rendered within thirty days after the transcript is filed. Rule 60Q-2.031, Florida Administrative Code. Rulings on the parties' proposed findings of fact may be found in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Petitioner is the agency of the State of Florida that administers and enforces the Florida Yacht and Ship Brokers' Act, Chapter 326, Florida Statutes.

   
   

2. At all times pertinent to this proceeding, Respondent O'Brien has been licensed as a Yacht and Ship Broker pursuant to the provisions of Chapter 326, Florida Statutes. Respondent O'Brien owns and operates O'Brien Yacht Sales. Respondent O'Brien resides in and has his principal place of business in Palm Beach County, Florida.

   
   

3. Mr. Sandmann is a resident of Essex, Connecticut. He has never been licensed as a yacht salesman or as a yacht broker. Mr. Sandmann makes his livelihood as the owner of a dog collar manufacturing business.

   
   

4. Henry Mellon, the boat's owner, held a salesman's license issued by Petitioner that expired in August 1994. At the times pertinent to this proceeding, Mr. Mellon was not licensed by the Petitioner.

   
   

5. Respondent Sandmann, Respondent O'Brien, and Mr. Mellon have been close friends for many years. Mr. Mellon formerly worked for O'Brien Yacht Sales.

   Mr. Mellon and Respondent Sandmann are old friends from college.

   
   

6. The Fort Lauderdale International Boat Show permitted only new yachts or brokered yachts. Individuals were not supposed to sell boats in this show. Respondent O'Brien was aware of this restriction. In October 1995, Respondent O'Brien had the boat "Watermellon" displayed and listed for sale at the 36th Annual Fort Lauderdale International Boat Show. The asking price for the sale of the Watermellon was $425,000. Mr. Mellon is neither an officer or a director of O'Brien Yacht Sales. Mr. Mellon signed a form styled "Application and Contract for Exhibit Space" so that the Watermellon could be exhibited at the boat show and on this application represented that he was a vice president of O'Brien Yacht Sales. Neither Respondent O'Brien or his company paid to put the Watermellon in the Boat Show and neither expected to receive any commission from the sale of the Watermellon. Respondent O'Brien was acting out of friendship with Mr. Mellon. 1/

   
   

7. On October 27, 1995, Peter Butler and Robert Badger, in their official capacities as employees of the Petitioner, attended the Boat Show and went to the Watermellon. They observed a sign on the back of the boat that advised that the boat was being offered by O'Brien Yacht Sales and gave its telephone number.

   
   

8. Mr. Butler and Mr. Badger approached the boat and asked a person, later identified as Respondent Sandmann, whether Respondent O'Brien was aboard.

   
   

9. Respondent Sandmann told Mr. Butler and Mr. Badger that Respondent O'Brien was not aboard, asked if he could help them, and gave them a business card with his name and the name of O'Brien Yacht Sales on it. No licensed salesman was on board at this time, but Mr. Mellon, the owner of the boat, was aboard. 2/

   
   

10. Respondent Sandmann gave Mr. Butler and Mr. Badger a copy of a printed sheet containing basic information about the Watermellon. This sheet, referred to as a spec sheet, contained errors that Respondent Sandmann verbally corrected when he gave them the sheet.

11. In response to questions, Respondent Sandmann told Mr. Butler and Mr. Badger that the price of the boat was negotiable and that the commission would be paid by the seller.

    
    

12. Mr. Butler and Mr. Badger asked Respondent Sandmann if they could see a copy of the contract that a buyer would need to sign if he purchased the boat. In response, Respondent Sandmann contacted the O'Brien Yacht Sales office and had someone fax to him a copy of the contract used by O'Brien. Respondent Sandmann then gave the form contract to Mr. Butler and Mr. Badger.

    
    

13. The business card given by Respondent Sandmann to Mr. Butler and Mr. Badger was printed in 1994 when Respondent Sandmann, who is fluent in French, Spanish, and Italian, accompanied Mr. Mellon to a boat show in Europe.

    
    

14. Mr. Butler and Mr. Badger did not inquire as to the amount of the commission that would have been paid by the seller of the Watermellon because Petitioner does not regulate commissions.

    
    

15. None of Respondent Sandmann's acts, when considered individually, required a license from the Petitioner. 3/ The conflict as to whether Respondent Sandmann's acts, considered collectively, establish that he was attempting to sell the boat is resolved by finding that he was not attempting to sell the boat. It is clear that Respondent Sandmann was at no time acting as an employee of Mr. Mellon or Respondent O'Brien or with the expectation of receiving compensation for his acts. Respondent Sandmann was at the Boat Show and on the Watermellon solely as a friend of Mr. Mellon, the owner.

    
    

    CONCLUSIONS OF LAW

    
    

16. The Division of Administrative Hearings has jurisdiction of the subject matter of and the parties to this proceeding. See, Section 120.57(1), Florida Statutes.

    
    

17. Section 326.002(1), Florida Statutes, defines the term "broker" as follows:

    
    

    1. "Broker" means a person who, for or in expectation of compensation, sells, offers, or negotiates to sell; buys, offers, or

       negotiates to buy; solicits or obtains listings of; or negotiates the purchase, sale or exchange of yachts for other persons.

       
       

18. Section 326.002(3), Florida Statutes, defines the term "salesman" as follows:

    
    

    (3) "Salesman" means a person who, for or in expectation of compensation, is employed by a broker to perform any acts of a broker.

    
    

19. Section 326.004(1), Florida Statutes, provides, in pertinent part, as follows:

    
    

    1. A person may not act as a broker or salesman unless licensed under the Yacht and Ship Brokers' Act.

20. Section 326.006(2)(e)7, Florida Statutes, authorizes the Petitioner to suspend or revoke the license of a broker or a salesman who does the following:

    
    

    7. Allows an unlicensed person to use his name to evade the provisions of the Yacht and Ship Brokers' Act.

    
    

21. The charge against Respondent Sandmann is that he was attempting to sell this boat without a license in violation of Section 326.004(1), Florida Statutes. The gravamen of the charge against Respondent O'Brien is that he permitted Respondent Sandmann, an unlicensed person, to use his company name to sell the boat, thereby evading the provisions of the Yacht and Ship Brokers' Act in violation of Section 326.006(2)(e)7, Florida Statutes.

    
    

22. Petitioner has the burden of proving by clear and convincing evidence the allegations against Respondent. See Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987); Evans Packing Co. v. Department of Agriculture and Consumer Services, 550 So.2d 112 (Fla. 1st DCA 1989).

    
    

23. Petitioner has failed to meet its burden as to the charges brought against Respondent Sandmann because it failed to establish that he was attempting to sell the yacht. Petitioner also failed to meet its burden as to the charges brought against Respondent O'Brien since those charges are underpinned by the assertion that Mr. Sandmann was attempting to sell the yacht.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petitioner enter a final order as to these

consolidated cases that dismisses the charges filed against these respondents.

DONE AND ENTERED this 27th day of August, 1996, in Tallahassee, Leon County, Florida.

CLAUDE B. ARRINGTON, 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 27th day of August, 1996.

ENDNOTES

1/ Respondent O'Brien is not charged with violating the rules of the Boat Show.

2/ A person trying to sell his own yacht does not have to be licensed by the Petitioner. See, Section 326.004(3)(a), Florida Statutes.

3/ This finding is based, in part, on the explicit testimony of Mr. Butler.

APPENDIX TO RECOMMENDED ORDER

The following rulings are made as to the proposed findings of fact submitted by the Petitioner.

1. The proposed findings of fact in paragraphs 1-14 and 17-18 are adopted in material part by the Recommended Order.

2. The proposed findings of fact in paragraph 15 and 16 are rejected as being speculative. The asking price as reflected on the spec sheet was, as reflected by the findings of fact, $425,000.

The following rulings are made as to the proposed findings of fact submitted by the Respondents.

1. The proposed findings of fact submitted by Respondents are adopted in material part by the Recommended Order or are subordinate to the findings made and to the conclusions reached.

COPIES FURNISHED:

Mary Denise Bryant, Esquire Department of Business and

Professional Regulation

Northwood Centre - Clemons Building 1940 North Monroe Street Tallahassee, Florida 32399-1007

J. Reeve Bright, Esquire Bright and Chimera, P.A.

29 Northeast Fourth Avenue Delray Beach, Florida 33483

W. James Norred, Acting Director Department of Business and

Professional Regulation Division of Florida Land Sales,

Condominiums and Mobile Homes Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-0792

Lynda Goodgame, General Counsel Department of Business and

Professional Regulation Northwood Centre

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 ten 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.

================================================================= AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS AND MOBILE HOMES

DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION, DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS AND MOBILE HOMES,

Petitioner,

vs. DOAH Case No. 96-1614

DBPR Case No. YS96184

ROBERT O'BRIEN III, d/b/a O'BRIEN YACHT SALES,

Respondent.

/ DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION, DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS AND MOBILE HOMES,

Petitioner,

vs. DOAH Case No. 96-2005

DBPR Case No. YS96165

DAVID SANDMANN,

Respondent.

/

FINAL ORDER PRELIMINARY STATEMENT

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Administrative Law Judge, Claude B. Arrington, held a formal hearing in the above-styled case in West Palm Beach, Florida, on June 11, 1996.

The following exhibits were received in evidence: Petitioner's 1, 2, 3, 4,

5, 6, 7, 8, and 9. Respondents offered no exhibits. At hearing the Petitioner

presented the testimony of Peter P. Butler and Robert Badger, and Respondents presented the testimony of Robert O'Brien, David Sandmann and Henry Mellon.

A Recommended Order dated August 27, 1996, was filed by Administrative Law Judge Arrington (Attachment 1). The Petitioner filed Exceptions to the Recommended Order on September 16, 1996. Respondent did not file Exceptions.

STATEMENT OF THE ISSUE

On February 28, 1996, the Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes (Petitioner) issued a Notice To Show Cause to Robert O'Brien (O'Brien) alleging that O'Brien violated Section 326.006(2)(e)7, Florida Statutes. Specifically, O'Brien was charged with allowing an unlicensed person to attempt to sell a 52' Hatteras known as "Watermellon" on behalf of O'Brien Yacht Sales. The issue is whether this violation occurred and, if so, what penalty is appropriate.

On May 15, 1996, the Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes (Petitioner) issued an Amended Notice To Show Cause to David Sandmann (Sandmann) alleging that Sandmann violated Section 326.004(1), Florida Statutes. Specifically, Sandmann was charged with offering or negotiating to sell a 52' Hatteras, known as "Watermellon". The issue is whether this violation occurred and, if so, what penalty is appropriate.

RULINGS ON PETITIONER'S EXCEPTIONS TO ADMINISTRATIVE LAW JUDGE'S FINDINGS OF FACT

1. Petitioner filed an exception to the Administrative Law Judge's Finding of Fact number 15. Section 120.57(1)(j), Florida Statutes, states that:

   
   

   The agency may not reject or modify the findings of fact unless the agency first determines from a review of the entire record, and states with particularity in the order, that the findings of fact were not based upon competent substantial evidence.

   
   

   A thorough review of the record has been made. The Division adopts and incorporates by reference the first sentence of the Administrative Law Judge's Finding of Fact number 15.

   
   

   Petitioner's exceptions to the remainder of Finding of Fact number 15 are accepted because the remainder of the Administrative Law Judge's Finding of Fact number 15 is not supported by competent substantial evidence.

   
   

2. The second sentence, "The conflict as to whether Respondent Sandmann's acts, considered collectively, establish that he was attempting to sell the boat is resolved by finding that he was not attempting to sell the boat." is rejected because, the Petitioner presented testimony which proved that Sandmann:

   
   

   • offered "to help" the Division investigators when they approached the boat. (T. 20, 38-39).

   • gave the Division investigators a business card with his name and O'Brien Yacht Sales, Inc. written on it. (T. 19, 38-19, 52)( P's Exh. 2)

   • gave the Division investigators a spec sheet containing

     information about the boat. (T. 21, 32, 39, 52). (P's

     Exh. 3).

   • told the Division investigators that the price of the boat was negotiable. (T 22, 29-30, 39-40, 52).

   • told the Division investigators that the commission would be paid by the seller. (T 21, 22, 29-30, 32, 34,

     40, 43)

   • had a copy of a blank sales contract faxed to him (from O'Brien Yacht Sales, Inc.) at the boat show. (T. 22- 23, 41, 52)

   
   

   Also at Recommended Order, page 5, paragraphs 9, 10, 11 and 12.

   
   

   Additionally, there was no competent substantial evidence to support the Hearing Officer's Finding of Fact that Respondent Sandmann was not offering or negotiating to sell the boat, because these actions were uncontroverted.

   Respondent Sandmann never denied that he was offering or negotiating to sell the boat.

   
   

3. Furthermore, the sentence in question is not a Finding of Fact, but rather a Conclusion of Law. The Administrative Law Judge's characterization of this as a Finding of Fact, does not make it so. In Hernicz v. State Dept. of Professional Reg., 390 So.2d 194 (Fla. 1st DCA 1980), facts were undisputed that a nurse practitioner had done certain acts, and when the Board concluded that the actions were a violation of the statute, the court held that that amounted to a Conclusion of Law and not a Finding of Fact. The "facts" were the individual actions that were taken by the Respondent, whether these acts violated the statute was a Conclusion of Law. As stated above, the acts, themselves, in this case were neither denied nor disputed.

   
   

   The second sentence in Finding of Fact number 15 is stricken in its entirety.

   
   

4. The third sentence in Finding of Fact number 15 states that "[I]t is clear that Respondent Sandmann was at no time acting as an employee of Mr. Mellon or Respondent O'Brien or with the expectation of receiving compensation for his acts". The "expectation of receiving compensation" was the argument relied on by the Respondents at hearing as their defense to participating in the boat show.

   
   

   Because "compensation" is an integral part of Chapter 326, Florida Statutes, its interpretation should be left to the expertise of the agency. It is a well settled principle that the interpretation of a statute by the agency responsible for its enforcement is entitled to great weight, and will not be overturned unless clearly erroneous. Department of Environmental Regulation v. Goldring, 477 So.2d 532 (Fla. 1985); Shell Harbor Grou, Inc. v. Department of Business Regulation, 487 So.2d 1141 (Fla. 1st DCA 1986). The Division believes that "compensation" can be other than a monetary commission, as claimed by Respondents. "Compensation" can be "perks" such as transportation or use of a house or yacht, or something intangible, such as friendship and affection. The existence of a quid pro quo is what is looked for.

   
   

   Furthermore, from a thorough reading of the record, it was proven by substantial competent evidence that a commission was anticipated being paid, because Petitioner's investigators were told that "the commission would be paid by the seller". (T 21, 22, 29-30, 32, 34, 40, 43). Possibly, no monetary commission was paid to Sandmann, because the yacht did not sell. Regardless,

   the Division finds that the friendship between Mr. Mellon and Sandmann was adequate compensation under Chapter 326, Florida Statutes.

   
   

   The third sentence of Finding of Fact number 15 is stricken in its entirety.

   
   

5. The fourth sentence, "Respondent Sandmann was at the Boat Show and on the `Watermellon' solely as a friend of Mr. Mellon, the owner", is also rejected. The Division does not dispute the long standing friendship of Respondent Sandmann and Mr. Mellon, however being someone's "friend", does not exempt them from Chapter 326, Florida Statutes. There was uncontroverted testimony that Respondent Sandmann was offering or negotiating to sell the boat. That is all that is necessary for him to be within the jurisdiction of the Division, and require him to have a license. Although his friendship could be his motivation or compensation for being on the yacht, his actions, while there, show that he was offering or negotiating to sell the "Watermellon".

   
   

   The fourth sentence of Finding of Fact Number 15 is stricken in its entirety.

   
   

   RULINGS ON PETITIONER'S EXCEPTION TO ADMINISTRATIVE LAW JUDGE'S CONCLUSIONS OF LAW

   
   

6. Petitioner filed an Exception to Conclusion of Law number 23 contained in the Recommended Order. This conclusion stated that the Petitioner had failed to meet its burden as to Sandmann because it failed to establish that he was attempting to sell the yacht, and, if the case against Sandmann failed, then the case against O'Brien failed.

   
   

   The Division rejects this Conclusion of Law because it believes that Petitioner proved by substantial competent evidence that Sandmann was offering or negotiating to sell the "Watermellon", and that friendship is adequate compensation.

   
   

   FINDINGS OF FACT

   
   

7. The Division hereby adopts and incorporates by reference the Findings of Fact numbered 1 - 14 as set forth in the Recommended Order.

   
   

8. Finding of Fact number 15 is addressed above in Rulings on Exceptions.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division hereby adopts and incorporates by reference the Conclusions of Law numbered 16 - 22 as set forth in the Recommended Order.

   
   

10. Conclusion of Law number 23 is addressed above in Rulings on Exceptions.

ORDER

Based on the foregoing, and a thorough review of the record, it is the finding of the Division that Sandmann was offering or negotiating to sell the "Watermellon", as charged in the Notice To Show Cause, and has violated Section 326.004(1), Florida Statutes.

Based on the foregoing, and a thorough review of the record, it is the finding of the Division that O'Brien allowed an unlicensed person to attempt to sell the "Watermellon", as charged in the Notice To Show Cause, and has violated Section 326.006(2)(e)7, Florida Statutes.

IT IS HEREBY ORDERED that Respondent Sandmann pay a civil penalty of

$1,500. Respondent Sandmann shall remit to the Division a certified check, made payable to the Division of Florida Land Sales, Condominiums, and Mobile Homes Trust Fund within 30 days from the execution date of this Final Order

IT IS HEREBY ORDERED that Respondent O'Brien pay a civil penalty of $2,500.

Respondent O'Brien shall remit to the Division a certified check, made payable to the Division of Florida Land Sales, Condominiums, and Mobile Homes Trust Fund within 30 days from the execution date of this Final Order

DONE AND ORDERED, this 18th day of November, 1996.

ROBERT H. ELLZEY JR., DIRECTOR

Division of Florida Land Sales, Condominiums and Mobile Homes

Department of Business and Professional Regulation

Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-1030

RIGHT TO APPEAL

THIS ORDER CONSTITUTES FINAL AGENCY ACTION AND MAY BE APPEALED PURSUANT TO THE FLORIDA RULES OF APPELLATE PROCEDURE AND SECTION 120.68, FLORIDA STATUTES, BY FILING A NOTICE OF APPEAL CONFORMING TO THE REQUIREMENTS OF RULE 9.110(D)1 FLORIDA RULES OF APPELLATE PROCEDURE, BOTH WITH THE APPROPRIATE DISTRICT COURT OF APPEAL ACCOMPANIED BY THE APPROPRIATE FILING FEES AND WITH THE DOCKET CLERK FOR THE DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS AND MOBILE HOMES, WITHIN THIRTY (30) DAYS OF THE RENDITION OF THIS ORDER.

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing was mailed by U.S. Mail, postage prepaid, to J. Reeve Bright, Esquire, attorney for Respondents, Bright and Chimera, P.A., 29 Northeast Fourth Avenue, Delray Beach, Florida, 33483, by U.S. Mail this 19th day of November, 1996.

Kristie L. Harris Docket Clerk

COPIES FURNISHED:

Claude B. Arrington, Administrative Law Judge Denise Bryant, Senior Attorney

Peter P. Butler, Section Head

Docket for Case No: 96-001614

Orders for Case No: 96-001614