STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 98-1458

)

RICHARD R. KAUFMAN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was conducted in this case on June 18, 1998, before Judge Michael M. Parrish, an Administrative Law Judge of the Division of Administrative Hearings. The hearing was conducted by means of video teleconference with the Judge in Tallahassee, Florida, and all other participants in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: Geoffrey T. Kirk, Esquire

Department of Business and Professional Regulation

Division of Real Estate Post Office Box 1900

Orlando, Florida 32802-1900 For Respondent: No Appearance

STATEMENT OF THE ISSUES

This is a license discipline proceeding in which the Petitioner seeks to take disciplinary action against the Respondent on the basis of alleged violations set forth in a

three-count Administrative Complaint. The Administrative

Complaint alleges two violations of Section 475.25(1)(b), Florida Statutes, and one violation of Section 475.25(1)(d), Florida Statutes.

PRELIMINARY STATEMENT

All parties were duly notified in writing of the date, time, and place at which the final hearing would be conducted. On the morning of the final hearing, the Petitioner and its witnesses appeared at the designated time and place. There was no appearance by or on behalf of the Respondent, nor was there any communication by the Respondent requesting a continuance or explaining his absence. An effort to contact the Respondent by telephone was unsuccessful.

After waiting approximately 15 minutes past the scheduled commencement time, the final hearing was called to order at approximately 9:00 a.m. Thereupon, the Petitioner presented the testimony of three witnesses and offered five exhibits, all of which were received in evidence. At the conclusion of the hearing, all parties were allowed 10 days from the filing of the transcript within which to file proposed recommended orders.

The transcript of the hearing was filed with the Division of Administrative Hearings on July 29, 1998.1 On August 7, 1998, the Petitioner filed a proposed recommended order containing proposed findings of fact and conclusions of law. As of the date of this order, the Respondent has not filed any post-hearing documents.

FINDINGS OF FACT

1. At all times material to this case, the Respondent, Richard R. Kaufman, was a licensed real estate salesperson in the State of Florida, having been issued license number 0368819.

2. In January of 1997, Melody Ferron took a foreclosure course. The purpose of the course was to teach people how to invest in real estate with little or no money down. Shortly thereafter, Melody Ferron ran a newspaper ad seeking properties in which she could invest for little or no money down. Donna Vivio responded to her ad.

3. Ferron looked at Vivio's property (a mobile home) and was initially interested in buying it. Then Ferron's interest waned, due to the illness of her father, and Ferron decided she would be unable to buy Vivio's property.

4. In the meantime, the Respondent had looked at Vivio's property and he expressed an interest in buying the property. For reasons not revealed in the record of this case, Respondent chose not to enter into an agreement to purchase the Vivio property in his own name. Eventually, the Respondent told Vivio that he was unable to buy her property himself, but that he and Ferron would find someone else to buy the property and he and Ferron would manage and sell Vivio's property.

5. On or about February 18, 1997, the Respondent and Ferron went to see Vivio and took with them a document titled Agreement to Sell Real Estate. Pursuant to that agreement Donna Vivio

   agreed to sell her property to "Melody Ferron and/or assigns" for a total purchase price of $46,000.00. The agreement also provided for Donna Vivio to hold in trust the deposit in the amount of $10.00.

6. At some time prior to February 18, 1997, the Respondent and Ferron entered into some form of oral joint venture agreement pursuant to which they would work together to acquire the Vivio property, fix up the property, and then sell it, hopefully for a profit. The record in this case reveals hardly any of the terms of the joint venture agreement between the Respondent and Ferron. Specifically missing from the record in this case is any information about what each would be contributing to the joint venture by way of funds or services, or about how any proceeds from the activities of the joint venture would be shared by the two joint venturers.2

7. On or about March 13, 1997, the Respondent prepared a document titled Deposit Receipt and Contract for Sale and Purchase. The document identified the buyer as Paul and Melinda Street and the seller as Richard Kaufman and Melody Ferron. The document was signed by Paul and Melinda Street on or about

   March 13, 1997. The document was never signed by Ferron. The record in this case does not reveal whether the Respondent signed the document. The document purported to be a contract for the sale of the same property Ferron had agreed to purchase from Vivio.

8. The document described immediately above provided for the Streets to pay a deposit of $300.00 upon signing the document, and to pay an additional $700.00 deposit within a few days. The document provided that the deposit money would be held by Respondent and Ferron. The document also included a provision reading as follows: "Seller agrees to allow buyer to preoccupy this property for which buyer agrees to pay seller $800.00 per month as long as buyer is in conformance with the terms of this contract. Buyer shall pay seller on the 1st of every month during preoccupancy."

9. Shortly after the Streets signed the document described above, the Respondent asked Vivio to move out of the subject property so that the Streets could move in. Within a few days, Vivio moved out and the Streets moved into Vivio's mobile home. Vivio did not clearly understand the transactions that were taking place regarding her property. However, Vivio trusted the Respondent because he had a real estate license and because, on at least one occasion, the Respondent reassured her by saying, "Don't worry, I have a real estate license and I would never do anything to jeopardize my license."

10. It was Vivio's understanding that when the Streets moved into her house, someone would be paying the mortgage and the maintenance fees on her property. It is not clear from the record in this case what was represented to Vivio as to who would make the mortgage and maintenance fee payments on her property.

    The Respondent never promised anything to Vivio.3

11. Vivio does not know if the Streets ever paid any money to the Respondent. There is no clear and convincing evidence in the record that the Streets ever paid any money to the Respondent. Vivio does know that after the first month, no one

    was paying the mortgage or the maintenance fees on her property. Eventually, Vivio's house was foreclosed by the mortgage holder.

12. Ferron does not know if the Streets ever paid any money to the Respondent. The Respondent never gave Ferron any money.

    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, Florida Statutes.

14. In a case of this nature, proof greater than a mere preponderance of the evidence must be submitted. Clear and convincing evidence is required. 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); McKinney v. Castor,

    667 So. 2d 387, 388 (Fla. 1st DCA 1995); Tenbroeck v. Castor,

    
    

    640 So. 2d 164, 167 (Fla. 1st DCA 1994); Nair v. Department of Business and Professional Regulation, 654 So. 2d 205, 207 (Fla. 1st DCA 1995); Pic N' Save v. Department of Business Regulation, 601 So. 2d 245 (Fla. 1st DCA 1992); Munch v. Department of Professional Regulation, 592 So. 2d 1136 (Fla. 1st DCA 1992); Newberry v. Florida Department of Law Enforcement, 585 So. 2d 500 (Fla. 3d DCA 1991); Pascale v. Department of Insurance, 525

    So. 2d 922 (Fla. 3d DCA 1988); Section 120.57(1)(h), Florida Statutes. ("Findings of fact shall be based on a preponderance of the evidence, except in penal or licensure disciplinary

    proceedings or except as otherwise provided by statute.")

15. "'[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 testimony 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 a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established.'" In re Davey, 645 So. 2d 398, 404 (Fla. 1994), quoting, with approval, from Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983).

16. The disciplinary action taken against the licensee may be based only upon the offenses specifically alleged in the administrative complaint. See Cottrill v. Department of Insurance, 685 So. 2d 1371 (Fla. 1st DCA 1996); Kinney v. Department of State, 501 So. 2d 129, 133 (Fla. 5th DCA 1987); and Hunter v. Department of Professional Regulation, 458 So. 2d 842, 844 (Fla. 2d DCA 1984).

17. In determining whether Sections 475.25(1)(b) and 475.25(1)(d), Florida Statutes, have been violated in the manner charged in the Administrative Complaint, one "must bear in mind that it is, in effect, a penal statute. . . . This being true, the statute must be strictly construed and no conduct is to be regarded as included within it that is not reasonably proscribed by it. Furthermore, if there are any ambiguities included such must be construed in favor of the . . . licensee." Lester v.

    Department of Professional and Occupational Regulations, 348 So. 2d 923, 925 (Fla. 1st DCA 1977).

18. The applicable statutory provisions read as follows, in pertinent part:

    475.25 Discipline.–

    (1) The commission may deny an application for licensure, registration, or permit, or renewal thereof; may place a licensee, registrant, or permittee on probation; may suspend a license, registration, or permit for a period not exceeding 10 years; may revoke a license, registration, or permit; may impose an administrative fine not to exceed $1,000 for each count or separate offense; and may issue a reprimand, and any or all of the foregoing, if it finds that the licensee, registrant, permittee, 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 in this state or any other state, nation, or territory; has violated a duty imposed upon her or him by law or by the terms of a listing contract, written, oral, express, or implied, in a real estate transaction; has aided, assisted, or conspired with any other person engaged in any such misconduct and in furtherance thereof; 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 intended victim of the misconduct has sustained no damage or loss; that the damage or loss has been settled and paid after discovery of the misconduct; or that such victim or intended victim was a customer or a person in confidential relation with the licensee or was an identified member of the

    general public.

    
    

    * * *

    
    

    (d)1. Has failed to account or deliver to any person, including a licensee under this chapter, at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery, any personal property such as money, fund, deposit, check, draft, abstract of title, mortgage, conveyance, lease, or other document or thing of value, including a share of a real estate commission if a civil judgment relating to the practice of the licensee's profession has been obtained against the licensee and said judgment has not been satisfied in accordance with the terms of the judgment within a reasonable time, or any secret or illegal profit, or any divisible share or portion thereof, which has come into the licensee's hands and which is not the licensee's property or which the licensee is not in law or equity entitled to retain under the circumstances. . . .

19. Count I of the Administrative Complaint charges the Respondent with a violation of Section 475.25(1)(b), Florida Statutes, by alleging that he "is guilty of fraud, misrepresentation, concealment, false pretenses, dishonest dealing by trick, scheme, or device in any business transaction in this State. . . ." The evidence is simply insufficient to prove the violation charged. The witnesses who testified at the final hearing provided very little information regarding the Respondent's actions and representations. While the evidence submitted is sufficient to raise a strong suspicion that the Respondent may have engaged in some misconduct in his dealings with Vivio and Ferron, there is no clear and convincing evidence

    that the Respondent committed the violations alleged in Count I of the Administrative Complaint. Accordingly, Count I of the Administrative Complaint should be dismissed.

20. Count II of the Administrative Complaint charges the Respondent with a violation of Section 475.25(1)(d), Florida Statutes, by alleging that he "is guilty of failing to account and deliver any secret or illegal profit, or any divisible share or portion thereof, which has come into his hands and which is not his property or which he is not in law or equity entitled to retain under the circumstances. . . ." Again, the evidence is simply insufficient to prove the violation charged. Specifically, there is no clear and convincing evidence that the Respondent ever received any money from the Streets, or from anyone else, in connection with his dealing with Vivio and

    Ferron. And, even if it were to be shown that the Respondent had received money from the Streets, there is no clear and convincing evidence that the Respondent would have to account for or deliver any such money to Vivio or Ferron, because there is no clear and convincing evidence of the terms of the agreements between the Respondent and Vivio and Ferron. Accordingly, Count II of the Administrative Complaint should be dismissed.

21. Count III of the Administrative Complaint charges the Respondent with a second violation of Section 475.25(1)(b), Florida Statutes, by alleging that he "is guilty of breach of trust to a buyer in a real estate transaction, and is guilty of

breach of trust to a seller in a real estate transaction. "

For the reasons discussed in paragraph 19, above, the evidence is insufficient to establish the violation alleged in Count III. Accordingly, Count III of the Administrative Complaint should be dismissed.

RECOMMENDATION

On the basis of all of the foregoing, it is RECOMMENDED that a Final Order be issued in this case

dismissing all charges in the Administrative Complaint for lack of sufficient evidence.

DONE AND ENTERED this 10th day of September, 1998, in Tallahassee, Leon County, Florida.

MICHAEL M. PARRISH

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 10th day of September, 1998.

ENDNOTES

1/ The delay in the filing of the transcript was apparently due to a mishap in the mail. The court reporter appears to have mailed the original transcript on July 1, 1998, but it was never received by the Division of Administrative Hearings. A copy and a substitute original were filed on July 29, 1998, and on July 30, 1998, respectively.

2/ Ferron's testimony about the terms of the joint venture was very vague and incomplete. For example, at page 11 she explains: "It was so new to me, the whole procedure with this, that I didn't know how the ending would turn out. I didn't know if he was going to buy it. We didn't really get down to that, that fine line as far as splitting a profit."

3/ Vivio testified as follows, at page 18 of the transcript: "He promised me nothing. Really, I kept saying that I need to get something out of it. He indicated that he would do what he could, that that was it. I was never told I was going to get anything.

I was just glad to get out of there and have someone else who would be paying the mortgage, supposedly."

COPIES FURNISHED:

Geoffrey T. Kirk, Esquire Department of Business and

Professional Regulation Division of Real Estate Post Office Box 1900

Orlando, Florida 32802-1900

Richard R. Kaufman 5181 Columbo Court

Delray Beach, Florida 33484

Henry M. Solares, Director Division of Real Estate Department of Business and

Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900

Lynda L. 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: 98-001458

Orders for Case No: 98-001458