STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 98-0812

)

DOROTHY A. MCGEE, )

)

Respondent. )

)

RECOMMENDED ORDER

An administrative hearing was conducted in this proceeding on June 16, 1998, in Melbourne, Florida, before Daniel Manry, Administrative Law Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Geoffrey T. Kirk, Senior Attorney

` Department of Business and Professional Regulation

Division of Real Estate

400 West Robinson Street Orlando, Florida 32802

For Respondent: Dorothy A. McGee, pro se

109 11th Avenue Indiatlantic, Florida 32801

STATEMENT OF THE ISSUE

The issue in this case is whether Respondent violated Section 475.25(1)(b), Florida Statutes (1997), by failing to disclose that a tenant was her son, by failing to collect a required security deposit, and by acting as the agent for the

tenant rather than the landlord. (All reference to Chapters and Sections are to Florida Statutes (1997) unless otherwise stated.)

PRELIMINARY STATEMENT

Petitioner filed an Administrative Complaint against Respondent on January 22, 1998. Respondent timely requested an administrative hearing.

At the hearing, Petitioner presented the testimony of one witness and submitted eight exhibits for admission in evidence. Respondent testified in her own behalf and submitted four exhibits for admission in evidence.

The identity of the witness and exhibits, and the rulings regarding each, are set forth in the transcript filed on

July 29, 1998. Petitioner timely filed its Proposed Recommended Order ("PRO") on August 17, 1998. Respondent did not file a PRO.

FINDINGS OF FACT

1. Petitioner is the state agency responsible for regulating the practice of real estate. Respondent is licensed as a real estate broker pursuant to license number 0480790. At all relevant times, Respondent was employed by Norris Realty, Inc. ("Norris").

2. In March 1990, Mr. and Mrs. George and Margaret Nichols entered into a property management agreement with Norris. Respondent was aware of the management agreement. Norris was the

   agent for the Nichols and assumed all duties owed to a principal by an agent. The managing broker was Mr. Alan Norrie.

3. On March 22, 1996, Mr. Norrie died, and Respondent assumed responsibility as the broker/office manager for Norris. Respondent had no experience managing a real estate office at the time. She continued in that role for approximately seven months.

4. During the time Respondent was the broker/office manager for Norris, another agent for Norris obtained a lease from

   Mr. Joseph McGee to rent the Nichol's property. There were no written amendments made to the lease during the time Respondent was the broker/office manager of Norris.

5. The lease required all rents and other monies to be paid to Norris. The tenant was to deposit with Norris a $750.00 security deposit and the last month's rent of $750.00 prior to occupying the property.

6. Respondent failed to disclose to the Nichols that the tenant was her son. The lease does not disclose the relationship of the tenant to the broker/office manager of Norris. The Nichols did not learn that the tenant was Respondent's son until March or April of 1997, approximately four months after the tenant occupied the rental property.

7. Respondent permitted the tenant to move into the property without collecting either the security deposit or last month's rent from the tenant. Respondent failed to disclose to

   the Nichols that the tenant had paid neither the security deposit nor the last month's rent.

8. Shortly after occupying the property, the tenant failed to pay further rent. A judgment of eviction was eventually entered against the tenant. The tenant vacated the property and took the stove that was in the rental property. Respondent acted as her son's agent in the rental transaction.

9. By letter dated May 21, 1997, the Nichols filed a complaint against Respondent with Petitioner. During the formal hearing, Respondent admitted to being negligent regarding the transaction in question and acting as her son's agent.

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over the subject matter and parties. The parties were duly noticed for the administrative hearing.

11. Petitioner has the burden of proof in this proceeding. Petitioner must show by clear and convincing evidence that Respondent is guilty of the allegations against her and the reasonableness of any proposed penalty Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987). Petitioner satisfied its burden of proof.

12. In relevant part, Section 475.25(1)(b) provides that Respondent may be disciplined if Respondent is:

    . . . guilty of . . . misrepresentation, concealment, false promises, false pretenses . . . culpable negligence,

    or breach of trust in any business transaction in this state . . . or has violated any duty imposed by law. . . .

    
    

13. The duty imposed by law requires Respondent to be honest, truthful, trustworthy, of good character, and to maintain a good reputation for fair dealing. McKnight v. Florida Real Estate Commission, 202 So. 2d 199, 200 (Fla. 2d DCA 1967). Real estate licensees must treat all parties to the transaction honestly and fairly and with the highest moral standards.

    Zichlin v. Dill, 25 So. 2d 4 (Fla. 1946); Accord United Homes,Inc. v. Moss, 154 So. 2d 351, 354 (Fla. 2d DCA 1963).

14. Respondent owed a fiduciary duty to the Nichols, including the duty of loyalty, obedience, full disclosure, accounting and the duty to use skill, care and diligence. Section 475.01; Hersey v. Keyes Company, 209 So. 2d 240, 241 (Fla. 3d DCA 1968). The duty of full disclosure requires

    Respondent to give prompt and full disclosure to the principal of all material facts known to the agent. E.g., MacGregor v.

    Florida Real Estate Commission, 99 So. 2d 709, 712 (Fla. 1958);

    
    

    Silverman v. Pitterman, 574 So. 2d 275, 276 (Fla. 3d DCA 1991);

    
    

    Chisman v. Moylan, 105 So. 2d 186, 189 (Fla. 2d DCA 1958).

    
    

15. A material fact is "any matter which would reasonably or likely affect or influence the conduct of a reasonable person in entering or declining to enter the proposed brokerage agreement." Ehringer v. Brookfield and Associates, 415 So. 2d

    774, 776 n. 4 (Fla 5th DCA 1982). Whether a matter is material is a determination for the trier of fact. Silverman v.

    Pitterman, 574 So. 2d 275, 276 (Fla. 3d DCA 1991).

    
    

16. Respondent, as the broker/office manager for Norris, assumed all of the fiduciary duties and responsibilities

    owed by Norris, including any fiduciary duties which Norris owed to the Nichols under the parties' rental management agreement and imposed under Florida case law. Instead, Respondent took on the role as a tenant's agent adverse to the interests of the Nichols. Respondent did not first obtain the Nichols' consent to act as the tenant's agent.

17. Respondent failed to make meaningful and timely disclosure to the Nichols that the tenant was her son. See Santaniello v. Department of Professional Regulation, 432 So. 2d 84, 85 (Fla. 2d DCA 1983). Respondent breached her fiduciary duty to the Nichols at the time she began representing her son in the rental transaction.

18. Respondent committed misrepresentation, culpable negligence, or breach of trust in a business transaction which involved real estate, and violated a duty imposed by law. Respondent violated Section 475.25(1)(b).

19. The discipline authorized in Section 475.25(1) includes: revocation, suspension for a period not to exceed ten years, imposition of an administrative fine not to exceed $1,000

for each count or separate offense, reprimand, probation, and any combination of the foregoing. The maximum discipline for a violation of Section 475.25(1)(b) is suspension or revocation up to 5 years. Florida Administrative Code Rule 61J2-24.001(3)(c).

RECOMMENDATION

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

RECOMMENDED that the Florida Real Estate Commission enter a Final Order finding Respondent guilty of violating Section 475.25(1)(b), reprimanding Respondent, requiring Respondent to complete continuing education relevant to the specific offenses, and either imposing an administrative fine of $1,000 or requiring restitution to the Nichols.

DONE AND ENTERED this 1st day of September, 1998, in Tallahassee, Leon County, Florida.

DANIEL MANRY

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 1st day of September, 1998.

COPIES FURNISHED:

Henry M. Solares, Division Director

Division of Real Estate Department of Business and

Professional Regulation

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

Lynda Goodgame, General Counsel Department of Business and

Professional Regulation Northwood Center

1940 North Monroe Street Tallahassee, Florida 32399-0792

Geoffrey T. Kirk, Senior Attorney Department of Business and

Professional Regulation Division of Real Estate

400 West Robinson Street Orlando, Florida 32802

Dorothy A. McGee pro se

109 11th Avenue Indiatlantic, Florida 32801

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: 98-000812

Orders for Case No: 98-000812