STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) Case No. 97-0547

)

JANICE H. LITTLE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on April 21, 1997, before Patricia Hart Malono, a duly-designated Administrative Law Judge of the Division of Administrative Hearings, with the Petitioner and the Respondent appearing via video teleconference at Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: Daniel Villazon, Senior Attorney

Florida Department of Business and Professional Regulation

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

For Respondent: Herbert H. Rolnick, Esquire

6800 West Commercial Boulevard Suite 5

Fort Lauderdale, Florida 33319 STATEMENT OF THE ISSUES

Whether the Respondent committed the violations alleged in the Administrative Complaint dated April 20, 1995, and, if so, the penalty which should be imposed.

PRELIMINARY STATEMENT

In an Administrative Complaint dated April 20, 1995, the Department of Business and Professional Regulation, Division of Real Estate ("Department"), charged that Janice H. Little, a licensed real estate broker, committed "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 violation of . . . section 475.25(1)(b), Fla. Stat." The charges are based on allegations that Ms. Little prepared an employment verification form containing false employment information for a prospective purchaser of a home listed by Ms. Little, that Ms. Little signed the name "Hyacinth Fuller" to the verification form, and that

Ms. Little sent the employment verification form to the mortgage company where the prospective purchaser had applied for financing.

Ms. Little timely requested a formal hearing on the charges, and the Department forwarded the file to the Division of Administrative Hearings for assignment of an administrative law judge. Pursuant to notice, the formal hearing in this case was held on April 21, 1997.

At the hearing, the Department presented the testimony of Donaval Powell, and Petitioner's Exhibits 1, 2, 3, 6, and 7 were offered and received into evidence. Ms. Little testified in her own behalf but offered no exhibits. The Department presented the

testimony of Henry Yee to rebut testimony presented by

Ms. Little. The parties also filed a Prehearing Stipulation in which they stipulated that the facts set out in paragraphs one through twelve of the Administrative Complaint are not in dispute.

A transcript of the hearing was filed, and the parties timely submitted proposed findings of facts and conclusions of law, which have been duly considered.

FINDINGS OF FACT

Based on the oral and documentary evidence presented at the final hearing, the stipulation of the parties, and on the entire record of this proceeding, the following findings of fact are made:

1. The Department of Business and Professional Regulation is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to Chapters 120, 455, and 475, Florida Statutes. The Florida Real Estate Commission ("Commission") operates within the Department and is the entity directly responsible for licensing and disciplining those licensed under Chapter 475. Section 475.02, Florida Statutes. The Division of Real Estate operates within the Department and assists the Commission in carrying out its statutory duties. Section 475.021, Florida Statutes.

2. Janice H. Little is, and was at all times material to this action, licensed as a real estate broker in Florida and was issued license number 0370239.

3. The last license issued to Ms. Little was as a broker

   
   

   %Dennis & Little, Inc., t/a Kays Realty, 421 Southwest 31st Avenue, Fort Lauderdale, Florida, 33312.

4. On April 7, 1993, Ms. Little obtained an offer from Karlene Bascombe to purchase real property owned by Maxine Williams. Ms. Little was acting as the seller's co-broker in this transaction.

5. Ms. Little provided Ms. Bascombe with the names of several mortgage companies. Ms. Bascombe decided to apply for financing to Vision Mortgage Corporation, one of the companies identified by Ms. Little, and she met with Henry Yee, the manager of Vision Mortgage Corporation, at Ms. Little's office.

   Ms. Little introduced Ms. Bascombe to Mr. Yee but did not participate in their meeting.

6. As part of her loan application, Ms. Bascombe authorized Vision Mortgage Corporation to verify her past and present employment records, among other things.

7. At some point during the time Ms. Bascombe's loan application was being processed, Ms. Little learned that

   Ms. Bascombe's income was not sufficient to warrant approval of the application. Ms. Little was aware that Ms. Bascombe was a bookkeeper and that she worked full time at Lerner's.

8. After learning that Ms. Bascombe had insufficient income to secure financing for the purchase of Ms. Williams' property, Ms. Little approached Donaval Powell and asked if he would be interested in hiring a part-time bookkeeper.

9. Mr. Powell owns Filament Electronics, a business that sells and repairs electronic equipment. The business is located in the same shopping center in which Ms. Little's office was located and in close proximity to her office. Filament Electronics has been in the same location since it opened in 1992. Ms. Little and Mr. Powell have known each other since shortly after he opened his business.

10. Mr. Powell told Ms. Little he might want to hire a part-time bookkeeper, but Mr. Powell heard nothing further about

    this matter. He never met Ms. Bascombe, he did not hire her, and she was never employed by Filament Electronics.1

11. Blanca Tanadell, an employee of Vision Mortgage Corporation, prepared a Fannie Mae Request for Verification of Employment form for Ms. Bascombe. Ms. Tanadell filled out boxes one through eight of the form, and she identified Filament Electronics as the employer from whom verification of Karlene Bascombe's employment was sought. Ms. Tanadell sent the form to Ms. Little, even though the instructions included on the form direct the lender to send the form to the named employer.

12. Ms. Little completed boxes nine through thirty of the employment verification form in which Filament Electronics was

    identified as Ms. Bascombe's employer. Ms. Little represented that Ms. Bascombe was employed there in January, 1991, and that her present position was as a bookkeeper. Ms. Little knew when she completed the form that Ms. Bascombe had not been employed by Filament Electronics prior to April 10, 1993, but she testified that she believed that Mr. Powell had hired Ms. Bascombe subsequent to that date.

13. Ms. Little further represented that Ms. Bascombe's annual "current gross base pay" was $24,250.00 and that her gross earnings for 1992 were $24,250.00 and for 1991 were $23,500.00. At the time she completed the employment verification form, Ms. Little had no documentation to support the earnings she attributed to Ms. Bascombe.2

14. Finally, Ms. Little signed the name "Hyacinth Fuller" and identified her as "Supervisor."3 She then sent the completed employment verification form to Vision Mortgage Corporation.

15. Ms Little did not ask Mr. Powell to complete the employment verification form, nor did she ask him whether he employed Ms. Bascombe and, if so, the amount of her earnings.

16. Ms. Bascombe's loan application was approved, and she purchased the real property offered for sale by Maxine Williams. Ms. Little was paid a commission at closing in the amount of three percent of the sales price of the property.

17. Ms. Bascombe subsequently defaulted on her loan, and it was in the course of the loan company's investigation of the default that Mr. Powell denied ever having employed Ms. Bascombe.

18. Ms. Little is licensed in Florida as a mortgage broker, and, at one time, her license was with Vision Mortgage Corporation. She is familiar with the procedures for processing loan applications.

19. The stipulation entered into by the parties and the evidence presented by the Department are sufficient to establish that Ms. Little is guilty of fraud or misrepresentation in a transaction related to her business as a real estate broker.

20. Ms. Little seeks to excuse her actions by claiming that she believed that Ms. Bascombe had been hired by Mr. Powell after April 10, 1993, and that she was provided with the earnings figures by Henry Yee, who was the manager of Vision Mortgage and whom she considered trustworthy. She also claims that Mr. Powell wants to harm her because she spurned his sexual advances and told his wife that he constantly bothered her. These contentions are, however, contrary to the more credible and persuasive proof and, even if true, do not alter the fact that Ms. Little acted with, at the very least, extreme reckless disregard for the truth.

    CONCLUSIONS OF LAW

    
    

21. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and of

    the parties thereto pursuant to Section 120.57(1), Florida Statutes (Supp. 1996).

22. The Florida Real Estate Commission may deny, suspend, or revoke a license, registration, or permit issued pursuant to Chapter 475, Florida Statutes, may impose an administrative fine, and/or may issue a reprimand. Section 475.25(1), Florida Statutes.

23. As the prosecuting agency for the Commission, the Department sought in the Administrative Complaint to have the Commission impose administrative penalties ranging from suspension or revocation of Ms. Little’s license to imposition of an administrative fine. Therefore, the Department has the burden of proving by clear and convincing evidence that she committed the violations alleged in the complaint. See Department of Banking and Finance, Division of Securities and Investor Protection v. Osborne Stern and Co., 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

24. In Evans Packing Co. v. Department of Agriculture and Consumer Services, 550 So. 2d 112, 116, n. 5 (Fla. 1st DCA 1989), the court explained:

    [C]lear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the evidence must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact the firm belief of conviction, without hesitancy, as to the

    truth of the allegations sought to be established. Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983).

    
    

25. Section 475.25(1)(b) authorizes the Commission to impose administrative sanctions if it finds that a licensee "[h]as 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. "

26. In Munch v. Department of Professional Regulation, Division of Real Estate, 592 So. 2d 1136, 1143-44 (Fla. 1st DCA 1992), the court held:

    It is clear that Section 475.25(1)(b) is penal in nature. As such, it must be construed strictly, in favor of the one against whom the penalty would be imposed.

    See Holmberg v. Department of Natural Resources, 503 So. 2d 944 (Fla. 1st DCA 1987). Reading the first clause of Section 475.25(1)(b) . . . and applying to the words their usual and natural meaning, it is apparent that it is contemplated that an intentional act be proved before a violation may be found. See Rivard v. McCoy, 219 So. 2d 703 (Fla. 1968).

27. "[I]ntentional misconduct is a necessary element of fraud" and requires proof "of a deliberate and knowing misrepresentation designed to cause, and actually causing, detrimental reliance." First Interstate Development Corp. v. Ablanedo, 511 So. 2d 536, 539 (Fla. 1987). To establish a deliberate and knowing misrepresentation, "actual knowledge" of

    falsity or "a reckless or careless" disregard for the truth must be established. Ocean Bank of Miami v. Inv-Uni Investment Corp., 694 So. 2d 694, 697 (Fla. 3d DCA 1992).

28. Based on the facts found herein, the Department has proven by clear and convincing evidence that Ms. Little violated Section 475.25(1)(b) by committing fraud or misrepresentation in a transaction related to her business as a real estate broker. Accordingly, grounds exist to justify the imposition of penalties on Ms. Little.

29. Based upon careful consideration of the facts of this case, the seriousness of the violation proven, and the penalties which may be imposed for violations of Section 475.25(1),

Ms. Little’s license as a real estate broker should be revoked.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Florida Real Estate Commission enter a Final Order finding Janice H. Little guilty of violating Section 475.25(1)(b), Florida Statutes, and revoking her real estate broker's license.

DONE AND ENTERED this 5th day of August, 1997, in Tallahassee, Leon County, Florida.

PATRICIA HART MALONO

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 5th day of August, 1997.

ENDNOTES

1/ Ms. Little testified to the contrary, stating that she arranged a meeting between Mr. Powell and Ms. Bascombe, that she introduced them, and that Mr. Powell said he would "try" her out. In light of the entire record in this case, this testimony is rejected as not credible.

2/ Ms. Little testified that she was given the earnings figures by Henry Yee, the manager of Vision Mortgage Corporation.

Mr. Yee denies giving Ms. Little any such information, and he further denies being involved in any way with the preparation of the employment verification form relating to Ms. Bascombe's loan application. Mr. Yee's testimony is the more persuasive, and Ms. Little's testimony is rejected as not credible.

The Department introduced into evidence, as Exhibit 6, a composite exhibit consisting of several check stubs reflecting

that Karlene S. Bascombe was on the payroll of Filament Electronics and received checks on April 2, 9, and 16, 1993, and on July 16, 1993. Ms. Little attached the check stubs to an affidavit she prepared in September, 1994, in the context of the investigation of the charges which resulted in the filing of the administrative complaint in this case. She testified that she did not prepare the stubs, that she does not know where they came from, and that she had never seen the stubs until the Department began investigating this matter. Mr. Powell denies giving

Ms. Little these check stubs, and he denies that these check stubs were from Filament Electronics. Because no one can identify the origin of these check stubs and since their authenticity has not been established, they are not reliable evidence and have not been considered in preparing this Recommended Order.

3/ Ms. Little testified that she showed Mr. Powell the completed employment verification form and asked him to sign it, that he refused and told her that Hyacinth Fuller was the person who would sign such a form, and that Mr. Powell told her she should sign Hyacinth Fuller's name to the form. On the other hand,

Mr. Powell testified that Ms. Little never contacted him with regard to an employment verification form for Ms. Bascombe, that he never told her Hyacinth Fuller would be the person to sign such a form, that he knows no one by the name of Hyacinth Fuller, and that he did not tell Ms. Little to sign the name Hyacinth Fuller to any form. In light of the entire record in this case, Mr. Powell's testimony on these points is accepted, and

Ms. Little's is rejected as not credible.

COPIES FURNISHED:

Daniel Villazon, Esquire Department of Business and

Professional Regulation

400 West Robinson Street Suite N-308

Orlando, Florida 32801-1772

Herbert H. Rolnick, Esquire 6800 West Commercial Boulevard Suite 5

Fort Lauderdale, Florida 33319

Henry M. Solares, Division Director Division of Real Estate

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

Lynda Goodgame, General Counsel Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

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: 97-000547

Orders for Case No: 97-000547