STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 98-5249

)

PETER H. MEYERS, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice the Division of Administrative Hearings by its duly designated Administrative Law Judge, Mary Clark, held a formal hearing in the above-styled case on February 11, 1999.

The hearing was conducted by video-conference; the Administrative Law Judge presided from Tallahassee; the parties, counsel, and court reporter participated from Orlando, Florida.

APPEARANCES

For Petitioner: Ghunise Coaxum, Esquire

Department of Business and Professional Regulation

Division of Real Estate

400 West Robinson Street, N 308 Post Office Box 1900

Orlando, Florida 32802-1900

For Respondent: Howard Hadley, Esquire

2352 Carolton Road

Maitland, Florida 32715-3625

STATEMENT OF THE ISSUES

An Administrative Complaint dated October 21, 1998, alleges that Respondent committed violations of Chapter 475, Florida Statutes, by dishonest dealing, culpable negligence, or breach of trust; by failing to account for delivering certain funds; and by violating a lawful order of the Real Estate Commission. The issues in dispute are whether those violations occurred and if so, what penalty is appropriate.

PRELIMINARY STATEMENT

Respondent contested the allegations of the administrative complaint and requested an evidentiary hearing. The case was referred to the Division of Administrative Hearings which assigned an Administrative Law Judge and scheduled the hearing as described above.

At the hearing the Division of Real Estate (Agency) presented testimony of its investigator, Russell L. Lambert; and complaining witness, Delthina Julia Harmon. The Agency offered 8 Exhibits; Exhibits numbered 1,3,4, and 6 were received in evidence without objection; Exhibits numbered 2,5,7, and 8 were taken under advisement at the hearing, but are received in evidence now and have been considered in the preparation of this Recommended Order.

Respondent testified in his own behalf and presented no other evidence.

At the hearing the Agency voluntarily dismissed the corporate co-respondent Ocean Village Sales and Rentals, Inc., because it was not registered as a corporation during the time of the alleged violations.

Through counsel, Respondent had filed a Motion to Dismiss based on his not being advised of Miranda rights prior to being interviewed by the Agency investigator. This motion was taken under advisement to give the parties an opportunity to brief the issue.

The Transcript was filed on March 11, 1999; the parties' Proposed Recommended Orders were filed on March 23 and

March 29, 1999.

Findings of Fact

1. Respondent Peter H. Myers is, and was at all times material, a licensed Florida real estate broker with license Number 0313462 issued pursuant to Chapter 475, Florida Statutes. His last license issued was as a broker, c/o Ocean Village Sales and Rentals, Inc., in Ormond Beach, Florida. He has been licensed in Florida for approximately 20 years.

2. Tom and Delthina Harmon are retired teachers from Virginia who purchased a residential unit at 695B Flamingo Drive in Ormond Beach, Florida. After retirement from teaching Mrs. Harmon obtained a real estate license in Virginia but did not actively practice that profession beyond selling a couple of houses to friends.

3. The Harmons decided to rent their unit in Ormond Beach and in November 1994, approached Respondent Peter Myers whom they had met a few years earlier. On or about November 10, 1994, the Harmons and Mr. Myers completed an exclusive management agreement form, giving Mr. Myers the right to lease or rent out the Harmon's property. The form agreement provides that Mr. Myers, as exclusive agent, has the authority to execute leases and collect rents and security deposits, among other related activities, on behalf of the Harmons.

4. By design or by oversight, the Harmons did not sign the agreement. Instead, their names are printed by hand with their Virginia address at the end of the document. Nonetheless, the parties proceeded as if they had a fully-executed agreement.

5. In May 1995, Peter Myers found renters for the Harmon property, and he signed a rental agreement with Chris and Janet Stierle. The agreement provides a term of six months, with rent for $600.00 per month. The agreement recites that the first month's rent of $600.00 and $200.00 "damage security deposit" were received.

6. Mr. Myers never actually collected the $200.00 deposit. Mrs. Stierle asked him if she could delay payment as she had to make utilities deposits for the move. Mr. Myers simply filed the agreement and never followed up to demand the deposit from the tenants.

7. The tenants stayed in the Harmons' unit for approximately six months and paid rent, which in turn was provided appropriately to the Harmons.

8. After the tenants moved and after the Harmons returned to Florida and inspected their property, Mr. Myers received conflicting demands for the $200.00 security deposit. The Harmons claimed that there were damages and that some items were taken; the tenants denied the damages, and they returned items accidently packed when neighbors helped them move to a unit down the street. Mr. Myers' books were in disarray at that time and, relying on the lease copy he had, he thought he had collected the

   $200.00.

   
   

9. As required by law, Mr. Myers requested that the Florida Real Estate Commission help resolve the conflicting claims. An escrow disbursement order by the Commission dated May 24, 1996, requires that the deposit be disbursed to the tenants because there was no evidence that the landlord had given the notice of claim against the deposit as provided by Section 83.49, Florida Statutes (Landlord-Tenant Act).

10. When Mr. Myers went to see Mrs. Stierli to give her the

    
    

    $200.00 check from his escrow account, she said, "Peter, you know, we never did pay that $200.00." He then realized, as she apparently belatedly did, that he never had collected the money.

11. In the meantime, the Harmons continued to press for money to cover the claimed damages. They had also purchased a

    second unit that was rented through Mr. Myers, and he had gone to court to assist them to recover some claims for that unit. Mrs. Harmon insisted that he was responsible to them for the security deposit that he had neglected to collect.

12. On or about March 13, 1997, Mr. Myers gave Tom Harmon a check for $200.00, written on his broker account (not escrow account), with the notation "for repairs."

13. After this Mrs. Harmon insisted that Mr. Myers pay the balance of money that they had been unable to collect in their civil suit on the other rental unit. When he refused she threatened to file a complaint against him and she eventually did file two complaints with the Florida Real Estate Commission.

14. Russell Lambert, a long-time investigator for the Department of Business and Professional Regulations, was assigned to the Myers case. He contacted Mr. Myers by telephone and set up an appointment for an interview sometime in late March 1997. Mr. Myers was very cooperative and spoke freely to the investigator, who spent several hours auditing the records.

    Mr. Myers freely recounted his history with the Harmons, substantially described above, and retrieved a copy of the

    $200.00 check from the files that were at his home.

    
    

15. Since his experience with the Harmon complaints,

    
    

    Mr. Myers has established a better record-keeping system. It was the disarray of his files and the pressure of managing multiple rental units, rather than a knowing and deliberate fraud, that

    caused his failure to collect the security deposit on the Harmons' unit.

    CONCLUSIONS OF LAW

    
    

16. The Division of Administrative Hearings has jurisdiction in this proceeding pursuant to Sections 120.569 and 120.57(1), and 455.225(5), Florida Statutes.

17. In license discipline cases such as this, the Agency must prove the violations it alleges with clear and convincing evidence. Department of Banking and Finance v. Osborne Stern and Comparly, 670 So 2d. 932 (Fla. 1996).

18. In this case the Agency has alleged violations of Sections 475.25(1)(b),(d)1, and (e), Florida Statutes, which provide as follows:

    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.

    * * *

    
    

    1. 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. However, if the licensee,

       in good faith, entertains doubt as to what person is entitled to the accounting and delivery of the escrowed property, or if conflicting demands have been made upon the licensee for the escrowed property, which property she or he still maintains in her or his escrow or trust account, the licensee shall promptly notify the commission of such doubts or conflicting demands and shall promptly:

       a. Request that the commission issue an escrow disbursement order determining who is entitled to the escrowed property;

       * * *

       
       

    2. Has violated any of the provisions of this chapter or any lawful order or rule made or issued under the provisions of this chapter or part I of chapter 455.

    
    

19. An intentional act must be proven before a violation of Section 475.25(1)(b), Florida Statutes, is found. That requisite intent may be established by undisputed circumstantial evidence. Walker v. Florida Dept. of Business and professional Regulation, 705 So. 2d 652 (Fla. 5th DCA 1998).

20. The Agency failed to prove that Mr. Myers' error regarding the damage deposit was willful or intentional. When confronted with conflicting demands, he observed the requirements of Section 475.25(1)(d)1., Florida Statutes, but ultimately realized that the tenants were not entitled to return of money that they never paid. The Agency never suggested what Mr. Myers' obligation was in that event but it is unreasonable to find a violation in his failure to provide a windfall to the tenants.

21. The Agency failed to meet its burden of proof as to the three violations.

22. It is unnecessary to address Respondent's Motion to Dismiss except to observe that he cites no cases where Miranda warnings have been required in civil, non-custodial professional license investigations.

RECOMMENDATION

Based on the foregoing it is, hereby RECOMMENDED: that the Agency enter its Final Order finding Respondent did not commit the alleged violations and dismissing the Administrative Complaint.

DONE AND ENTERED this 27th day of April, 1999, in Tallahassee, Leon County, Florida.

MARY CLARK

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 27th day of April, 1999.

COPIES FURNISHED:

Ghunise Coaxum, Esquire Department of Business and

Professional Regulation Division of Real Estate

400 West Robinson Street N-308 Post Office Box 1900

Orlando, Florida 32802-1900

Howard Hadley, Esquire 2352 Carolton Road

Maitland, Florida 32751-3625

Herbert S. Fecker, Division Director Division of Real Estate

Department of Business and Professional Regulation

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

William Woodyard, General Counsel Department of Business and Professional

Regulation Northwood Centre

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: 98-005249

Orders for Case No: 98-005249