STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 96-4399

)

LOIS KEY, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal administrative hearing was held in this case on October 31, 1997, by videoconference between Tallahassee and Tampa, Florida, before Carolyn S. Holifield, Administrative Law Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Steven W. Johnson, Senior Attorney

Department of Business and Professional Regulation

Division of Real Estate

400 West Robinson Street, Suite N-308 Orlando, Florida 32802

For Respondent: No appearance

STATEMENT OF THE ISSUE

Whether the Respondent, Lois Key, is guilty of culpable negligence or breach of trust in a business transaction in violation of Section 475.25(1)(b), Florida Statutes, and, if so, what penalty should be imposed on her real estate license.

PRELIMINARY STATEMENT

On July 19, 1996, Petitioner, the Department of Business and Professional Regulation (Department), filed a one-count Administrative Complaint against Respondent, Lois Key (Respondent). The Administrative Complaint charged that Respondent was guilty of dishonest dealing, culpable negligence, or breach of trust in a business transaction in violation of Section 475.25(1)(b), Florida Statutes.

Respondent timely filed an Election of Rights form disputing the allegations and requesting a formal hearing. By letter dated September 17, 1996, the Department referred the matter to the Division of Administrative Hearings to conduct a formal proceeding. The case was initially assigned to Judge William F. Quattlebaum, but was transferred to the undersigned prior to hearing.

At the formal hearing, Petitioner presented the testimony of three witnesses: Bridget Barbera; Jeani Chastain; and Jesse A. Jackson. Petitioner offered and had admitted five exhibits into evidence. Respondent did not appear at hearing and no evidence or testimony was presented on her behalf.

The proceeding was recorded, but not transcribed. Petitioner timely filed its Proposed Recommended Order. Respondent filed no proposed recommended order.

FINDINGS OF FACT

1. The Department is a state licensing and regulatory agency responsible for licensing, regulating, and disciplining real estate brokers and salespersons in Florida. Additionally, the Department is charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida; in particular, Chapters 455 and 475, Florida Statutes, and Rule Chapter 61J-2, Florida Administrative Code.

2. Respondent, Lois Key, is now and was at all times material hereto, a licensed real estate salesperson having been issued license number 0567365 in accordance with Chapter 475, Florida Statutes.

3. At all times relevant hereto, Bridget A. Barbera owned and resided in a house (Lutz property) located at 2925 East 148th Avenue, Lutz, Florida.

4. On or about April 25, 1995, Ms. Barbera entered into an "exclusive right of sale listing contract" with Sun Cove Realty in regard to the Lutz property. Ms. Barbera listed the Lutz property because she wanted to sell that property and purchase another house.

5. Respondent was employed as a real estate salesperson at Sun Cove Realty when Ms. Barbera listed the Lutz property with that company.

6. At all times relevant hereto, Rosetta Milian owned a house (Sunrise property) located at 17821 Sunrise Drive, in Lutz,

   Florida. On or about April 25, 1995, Ms. Barbera made an offer of $81,500 to purchase the Sunrise property. In this transaction Respondent acted on behalf of and as agent for Ms. Barbera.

7. Ms. Barbera gave Respondent $500 as a deposit toward the purchase price of the Sunrise property. The Contract for Sale and Purchase of Real Estate, Purchase Agreement for Buyer Representation (Contract) was executed by both Respondent and Ms. Barbera. The Contract included provisions which made the purchase of the Sunrise property by Ms. Barbera subject to three contingencies. Specifically, Ms. Barbera's offer was contingent upon: (1) a structural inspection of the Sunrise property; (2) the sale of the Lutz property; and (3) Ms. Milian's paying $1500 toward the buyer's closing costs.

8. On or about April 25, 1995, Respondent submitted Ms. Barbera's offer to Jeani Chastain of Dennis Realty and Investment Company. At that time, the Sunrise property was listed with Dennis Realty, and Ms. Chastain, a licensed real estate salesperson with that company, represented the seller, Ms. Milian.

9. The seller of the Sunrise property made a counteroffer of $85,900. Ms. Barbera accepted the counteroffer and Ms. Milian signed the Contract.

10. On June 23, 1995, Respondent faxed Ms. Chastain a letter regarding the sale/purchase of the Sunrise property. In that letter, Respondent advised Ms. Chastain that "as of this

    date we are removing contingency #1 (Structural Inspection) and #2 (Contingent upon sale of buyer's current home)." Respondent apparently believed that the contingencies were no longer necessary because an offer had been made on Ms. Barbera's house. In the letter to Ms. Chastain, Respondent stated that "We have an Offer to Purchase subject to financing for which we anticipate approval [the] beginning of next week."

11. Ms. Barbera never authorized, requested, or consented to have the contingencies relative to the structural inspection and the sale of the Lutz property removed from the Contract. Ms. Barbera first discovered that the contingencies had been removed only after she received a copy of the amended contract from Ms. Chastain, some time after June 23, 1995.

12. The sale of both the Lutz property and the Sunrise property ultimately failed to close.

    CONCLUSIONS OF LAW

    
    

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

14. The Department is statutorily empowered to suspend, revoke, or otherwise discipline the real estate license of any licensee in Florida found guilty of any act enumerated in Section 475.25, Florida Statutes.

15. The Department has the burden of proof in this proceeding. To meet this burden, the Department must show by

    clear and convincing evidence that Respondent committed the acts alleged in the Administrative Complaint. Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

16. The Administrative Complaint alleges in one count that Respondent is guilty of dishonest dealing, culpable negligence, or breach of trust in a business transaction, in violation of Section 475.25(1)(b), Florida Statutes.

17. Section 475.25(1)(b), Florida Statutes, authorizes disciplinary action if a licensee, registrant, permitee, 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 . . . has violated any duty imposed on him by law or by the terms of a listing contract . . . 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 the intended victim of the misconduct has sustained no damage or loss . . . or that such victim or intended victim was a customer or a person in confidential relationship with the licensee or was a member of the general public.

    
    

18. Section 475.25(1)(b), Florida Statutes, is penal in nature. As such, it must be strictly construed in favor of the one against whom the penalty would be imposed. See Munch v. Department of Business and Professional Regulation, Division of Real Estate, 592 So. 2d 1136, at 1143-1144, (Fla. 1st DCA 1992). That case further states:

    Reading the first clause of Section 475.25(1)(b)

    . . . and applying the words used in their usual and natural meaning, it is apparent that it is contemplated that an intentional act be proved before a violation may be found.

    
    

19. Petitioner has met its burden of proof in this case. It is undisputed that Respondent was Ms. Barbera's agent in the transaction involving the proposed contract to purchase the Sunrise property. Respondent was obligated to present Ms. Barbera's proposal to the seller of the Sunrise property. Under that contract proposal, the purchase of the Sunrise property by Ms. Barbera was contingent on a structural inspection of the Sunrise property and the sale of the Lutz property.

20. The evidence established that Respondent directed, in writing, that the contingencies relative to the structural inspection and the sale of the Lutz property be removed from the Contract. The deletion of these contingencies materially altered the Contract.

21. As agent for Ms. Barbera, Respondent was obligated to obtain permission from Ms. Barbera prior to making any changes to the Contract. However, the clear and convincing evidence established that at no time did Respondent seek or obtain Ms. Barbera's permission to have the aforementioned contingencies removed from the Contract. Based on the evidence adduced at hearing, Respondent took this action without Ms. Barbera's knowledge, permission, or authorization.

22. By deliberately and intentionally altering the Contract in the manner described in paragraph 21, Respondent breached the bond of trust between herself and her principal, Ms. Barbera. Furthermore, by committing this act, Respondent is guilty of culpable negligence.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that the Florida Real Estate Commission (Commission) enter a final order: (1) finding that Respondent, Lois Key, violated Section 475.25(1)(b), Florida Statutes, as alleged in the Administrative Complaint; (2) imposing an administrative fine of $1000; and (3) requiring Respondent to complete a real estate course as deemed appropriate by the Commission.

DONE AND ENTERED this 18th day of December, 1997, in Tallahassee, Leon County, Florida.

CAROLYN S. HOLIFIELD

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 18th day of December, 1997.

COPIES FURNISHED:

Steven W. Johnson Senior Attorney Department of Business

and Professional Regulation Division of Real Estate

400 West Robinson Street, Suite N-308 Orlando, Florida 32802

Lois Key

8619 Huntfield

Tampa, Florida 33635

Lynda L. Goodgame General Counsel Department of Business

and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0700

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of 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: 96-004399

Orders for Case No: 96-004399