STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 98-3960

)

STEVE MICHAEL WALLACE, )

)

Respondent. )

)

RECOMMENDED ORDER

An administrative hearing was conducted on February 5, 1999, in Viera, Florida, by Daniel Manry, Administrative Law Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Steven Johnson, Esquire

Department of Business and Professional Regulation

Post Office Box 1900 Orlando, Florida 32802-1900

For Respondent: Steven M. Wallace, pro se

361 Godfrey Road, Southeast Palm Bay, Florida 32940

STATEMENT OF THE ISSUES

The issues in this case are whether Respondent violated Sections 475.25(1)(a),(b), and (e) and 475.42(1)(a),(b), and (d), Florida Statutes (1997), by operating as a broker without holding a valid broker's license, operating as a broker while licensed as a salesperson, collecting money except in the name of his

employer, and committing misrepresentation, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust; and, if so, what, if any, penalty should be imposed. (All Chapter and Section references are to Florida Statutes (1997) unless otherwise stated.)

PRELIMINARY STATEMENT

On July 23, 1998, Petitioner filed an Amended Administrative Complaint against Respondent. Respondent timely requested an administrative hearing.

At the hearing, Petitioner presented the testimony of six witnesses and submitted 10 exhibits for admission in evidence. Respondent testified, called one witness, and submitted four exhibits for admission in evidence.

The identity of the witnesses and exhibits, and the rulings regarding each, are set forth in the transcript of the hearing filed on February 24, 1999. Petitioner timely filed its Proposed Recommended Order ("PRO") on March 5, 1999. Respondent did not file a PRO.

FINDINGS OF FACT

1. Petitioner is the state agency responsible for the regulation and discipline of real estate licensees in the state. Respondent is licensed in the state as a salesperson pursuant to license number 0575377.

2. The last license issued was issued as an involuntary inactive salesperson at 361 Godfrey Road Southeast, Palm Bay,

   Florida 32909. After March 31, 1995, Respondent's license as a salesperson became inactive after Respondent did not renew it.

3. Between March 1994 and January 1997, Respondent was employed as a salesperson by Prestige Homes of Brevard, Inc. ("Prestige"). Prestige is a Florida corporation wholly owned by Mr. Mark Pagliarulo and Mr. John Wales. Prestige is engaged in the business of residential construction.

4. Mr. G. Wayne Carter was the sponsoring broker for Respondent from March 1994 through January 1997. Mr. Carter was licensed in the state as a broker until his license was revoked in 1998.

5. Between March 1994 and January 1997, Prestige paid Respondent a sales commission of three percent of the sales price of each home constructed by Prestige and sold by Respondent. Prestige paid Respondent a weekly draw against commissions earned by Respondent. Mr. Carter, the sponsoring broker for Respondent, had no knowledge of the payments received by Respondent. Respondent did not deposit any sales commissions to Mr. Carter's escrow account.

6. Respondent participated in various activities that violate relevant provisions in Sections 475.25 and 475.42. Respondent collected $1,100 from Marcia Pitts for a sprinkler system, a $1,000 initializing fee from Linda and David Grogan, and a $1,000 "design fee" from Mrs. Robert Leudesdorf.

7. Respondent converted the foregoing sums to his personal use without the knowledge of his employers at Prestige and without the knowledge of Respondent's broker. Respondent operated as a broker without a valid broker's license, while licensed as a salesperson, and collected money for himself rather than for his broker or his employer.

8. Respondent routinely designed variations on a "custom" home design without his employers' knowledge. Respondent then charged the purchasers approximately $1,000 for the plan changes. Respondent routinely deducted the $1,000 fee from the contract price Prestige charged the customer and converted the $1,000 fee directly to his personal use.

9. Respondent failed to disclose to the purchasers that he was not acting on behalf of Prestige. The purchasers believed they were dealing with Prestige. The omission and failure to disclose amounted to a misrepresentation, false pretense, and breach of trust in a real estate transaction.

10. For a time, Respondent's employers at Prestige condoned Respondent's "free lance" activities. Respondent's employers reduced Respondent's draws against commissions by the amount of the "free lance" fees converted by Respondent. After Respondent failed to discontinue his "free lance" activities, however, Prestige terminated Respondent's employment.

    CONCLUSIONS OF LAW

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

12. The burden of proof is on Petitioner. Petitioner must show by clear and convincing evidence that Respondent committed the acts alleged in the administrative complaint and the reasonableness of any proposed penalty. Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

13. Petitioner satisfied its burden of proof. Petitioner showed by clear and continuing evidence that Respondent violated Sections 475.25(1)(a),(b), and (e) and 475.42(1)(a),(b), and (d).

14. Section 475.25 authorizes the Florida Real Estate Commission (the "Commission") to impose appropriate penalties on Respondent. Florida Administrative Code Rule 61J2-24.001(3)(g) provides in relevant part that the Commission may impose any penalty ranging from a fine of $1,000 to revocation.

15. Although Respondent's employers initially condoned Respondent's activities, they eventually withdrew their permission and instructed Respondent to discontinue his activities. Respondent failed to comply with the directive, and his employers terminated Respondent's employment. The temporary acquiescence by Respondent's employers did nothing to nullify the misrepresentation, false pretense, and breach of trust Respondent committed against purchasers of Prestige homes.

16. The statutory violations committed by Respondent included multiple offenses over an extended period and resulted in financial harm to multiple victims. Respondent has made no restitution.

RECOMMENDATION

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

RECOMMENDED that the Commission enter a final order finding Respondent guilty of violating Sections 475.25(1)(a),(b), and (e) and 475.42(1)(a),(b), and (d), and revoking Respondent's license.

DONE AND ENTERED this 31st day of March, 1999, 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 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 31st day of March, 1999.

COPIES FURNISHED:

Steven Johnson, Esquire Department of Business and

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

Steven Michael Wallace

361 Godfrey Road

Palm Bay, Florida 32909

James Kimbler, Acting Division Director Division of Real Estate

Department of Business and Professional Regulation

Post Office Box 1900 Orlando, Florida 32802-1900

William Woodyard, Acting 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: 98-003960

Orders for Case No: 98-003960