STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) Case No. 97-4728

)

JOHN W. KEENAN, JR., )

)

Respondent. )

)

RECOMMENDED ORDER

Robert E. Meale, Administrative Law Judge of the Division of Administrative Hearings, conducted the final hearing in Fort Myers, Florida, on January 15, 1998.

APPEARANCES

For Petitioner: Christine M. Ryall

Senior Attorney

Department of Business and Professional Regulation

Division of Real Estate Post Office Box 1900

Orlando, Florida 32802-1900

For Respondent: Mark W. McFall, Esquire

Post Office Box 60572

Fort Myers, Florida 33906 STATEMENT OF THE ISSUE

The issue is whether Respondent is guilty of alleged acts and omissions constituting 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), Florida Statutes, and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

By Administrative Complaint filed July 18, 1997, Petitioner alleged that Respondent has been a licensed real estate broker at all relevant times. The Administrative Complaint alleges that, on February 17, 1995, Respondent entered into a contract with Edward and Debra Henderson for the sale of a home to be constructed at 6100 Waterway Bay Drive, Fort Myers. The Administrative Complaint alleges that Respondent served as the general contractor, and the parties closed the sale on May 1, 1995.

The Administrative Complaint alleges that, at closing, Respondent signed and delivered an affidavit attesting that all persons supplying materials and labor had been paid in full, except for two parties whom Respondent owed $2796. The Administrative Complaint alleges that Respondent had also failed to pay Charlie Brown's Plumbing, which was unmentioned in the affidavit, and that Charlie Brown's Plumbing later filed a Claim of Lien against the Henderson's home.

At the hearing, Petitioner called three witnesses and offered into evidence 11 exhibits. Respondent called two witnesses and offered into evidence four exhibits. All exhibits were admitted.

The court reporter filed the transcript on February 12, 1998.

FINDINGS OF FACT

1. Respondent is a licensed real estate broker, holding license number 0143761.

2. As president of Mission Bay Homes, Inc., Respondent entered into a sales contract on February 13, 1995, with Edward and Debra Henderson. The contract contemplates that Mission Bay Homes, Inc., would construct a home on a lot and that, at closing, Mission Bay Homes, Inc., would present the Hendersons with an affidavit that the property was unencumbered by any liens for materials and labor.

3. The closing took place on May 1, 1995. At closing, Respondent, as president of Mission Bay Homes, Inc., general contractor, executed and delivered an affidavit attesting that all parties had been paid except for two parties whose claims totaled $2796. The final paragraph of the affidavit states:

   In the event any of the matters herein sworn to, represented, and alleged, are not true and correct, affiants, jointly

   
   

   
   

   and severally (if more than one) agree to hold [the title company] harmless therefrom including all costs and reasonable attorneys fees i[n] connection therewith.

   
   

4. On the same date, Respondent, as president of Mission Bay Homes, Inc., owner, executed and delivered another affidavit attesting that there were no liens against the property, without exception.

5. In fact, Mission Bay Homes, Inc., had not paid, prior to closing, a plumbing subcontractor, Charlie Brown's Plumbing, Inc. Charlie Brown's Plumbing, Inc., filed a Claim of Lien on July 3, 1995, for work performed on April 19, 1995. The Claim of Lien is for $1175.

6. The representative of Charlie Brown's Plumbing, Inc., who is the secretary and bookkeeper for the company and wife of the owner, admitted that the claim was excessive by $250. She testified that Respondent told her to combine their bills for the Henderson and other jobs. She also testified that she sent a Notice to Owner to Mission Bay Homes, Inc., on

   April 18, 1995.

   
   

7. The representative of Charlie Brown's Plumbing, Inc., was not a credible witness. Besides admitting to filing a fraudulent Claim of Lien, which is a sworn document, and then filing an action in small claims court against the title

   
   

   
   

   company to recover this excessive amount, she could not produce a copy of the Notice to Owner that she claimed to have mailed to Mission Bay Homes, Inc., on April 19. She could only produce a copy of the return-receipt card, indicating that Mission Bay Homes, Inc., received something from her.

   However, she testified that she sent a statement that Mission Bay Homes, Inc., received on April 19. It is found that, prior to the closing, Charlie Brown Plumbing, Inc., sent Mission Bay Homes, Inc., a single document stating it was owed money on the Henderson job: this was a statement for $925.

8. Charlie Brown Plumbing, Inc., sent the Hendersons a Notice to Owner, on May 16, 1995, claiming to be entitled to

   $1175. The Hendersons declined to pay. Charlie Brown Plumbing, Inc., later dismissed a small claims action against the title company after receiving $600 from the title company.

9. Respondent's claim that he was unaware of an unpaid statement from Charlie Brown's Plumbing, Inc., is buttressed by the testimony of a former employee, who testified that she found no such invoice when she was preparing the closing papers. It is also unclear why Respondent would disclose two liens of nearly $2800 and conceal a third lien of about one- third as much.

   
   

   
   

10. On the present record, it is impossible to find clear and convincing evidence that Respondent was aware of the invoice from Charlie Brown's Plumbing, Inc., prior to the Henderson closing. Charlie Brown Plumbing, Inc., sent an invoice, but it did not find its way into the Henderson file. At the time of this sale, Mission Bay Homes, Inc., was working on 20 homes involving millions of dollars.

11. The record is relatively silent as to Respondent's actions following the commencement of the small claims action by Charlie Brown's Plumbing, Inc., and the $600 payment by the title company. More evidence as to Respondent's subsequent failure to honor his responsibilities might have provided a basis to infer a fraudulent intent at the time of closing. (Evidence of this later failure might have established a separate fraudulent act, but Petitioner did not charge Respondent with fraud for his acts and omissions after the closing.)

12. On the present record, Petitioner has not proved by clear and convincing evidence its allegation that Respondent culpably failed to pay the plumbing invoice at the time of the closing.

    CONCLUSIONS OF LAW

    
    

    
    

13. The Division of Administrative Hearings has jurisdiction over the subject matter. Section 120.57(1), Florida Statutes. (All references to Sections are to Florida Statutes.)

14. Section 475.25(1)(b) provides that the Florida Real Estate Commission may impose discipline if Respondent is 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.

15. Petitioner must prove the material allegations by clear and convincing evidence. Department of Banking and Finance v. Osborne Stern and Company, Inc., 670 So. 2d 932 (Fla. 1996) and Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

16. Petitioner has failed to prove by clear and convincing evidence that Respondent culpably failed to disclose the plumbing invoice at the May 1 Henderson closing.

RECOMMENDATION

It is

RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the Administrative Complaint against Respondent.

DONE AND ENTERED this 26th day of March, 1998, in Tallahassee, Leon County, Florida.

ROBERT E. MEALE

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 26th day of March, 1998.

COPIES FURNISHED:

Christine M. Ryall Senior Attorney Division of Real Estate

Department of Business and Professional Regulation

Post Office Box 1900 Orlando, Florida 32802-1900

Mark W. McFall, Esquire Post Office Box 60572

Fort Myers, Florida 33906

Lynda L. Goodgame, General Counsel Office of the General Counsel Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

Henry M. Solares, Division Director Division of Real Estate

Department of Business and Professional Regulation

Post Office Box 1900 Orlando, Florida 32802-1900

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 must be filed with the agency that will issue the final order in this case.

Docket for Case No: 97-004728

Orders for Case No: 97-004728