STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 99-3073

)

GARY BOWEN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on October 5, 1999, in Fort Lauderdale, Florida, before Claude

B. Arrington, a duly-designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Daniel Villazon, Esquire

Department of Business

and Professional Regulation, Division of Real Estate

Post Office Box 1900 Orlando, Florida 32802-1900

For Respondent: Jerome L. Tepps, Esquire

Jerome L. Tepps, P.A.

3411 Powerline Road, Suite 701 Fort Lauderdale, Florida 33309

STATEMENT OF THE ISSUES

Whether Respondent engaged in activities requiring licensure as a real estate professional without such licensure

in violation of Sections 455.228 and 475.42(1)(a), Florida Statutes, thereby violating the provisions of Section 475.25(1)(e), Florida Statutes.

PRELIMINARY STATEMENT

On April 14, 1999, Petitioner filed an Administrative Complaint against Respondent pertaining to his dealings in a real estate transaction involving property owned by Jessie Finley. Based on those alleged facts, Petitioner charged that Respondent engaged in activities requiring licensure as a real estate professional without such licensure in violation of Sections 455.228 and 475.42(1)(a), Florida Statutes, thereby violating the provisions of Section 475.25(1)(e), Florida Statutes. Respondent timely requested a formal hearing to challenge the alleged violations, the matter was referred to the Division of Administrative Hearings, and this proceeding followed.

At the formal hearing, Petitioner presented the testimony of Angelina Salvia and offered eleven exhibits, each of which was admitted into evidence. Respondent testified on his own behalf and presented two exhibits, each of which was accepted into evidence. Official recognition was taken of all relevant statutes and rules.

A Transcript of the proceedings was filed November 17, 1999. Petitioner filed a Proposed Recommended Order, which has

been duly-considered by the undersigned in the preparation of this Recommended Order. Respondent did not file a post-hearing

submittal.

FINDINGS OF FACT

1. Petitioner is a licensing and regulatory agency of the State of Florida charged with the responsibility and duty to administer the provisions of Chapters 455 and 475, Florida Statutes, and the rules promulgated pursuant thereto.

2. Respondent has never been licensed by Petitioner as a real estate professional in the State of Florida.

3. At all times pertinent to this proceeding, Respondent was a vice-president of Wall Street Mortgage Corporation (Wall Street).

4. On November 21, 1996, Jessie Finley and Wall Street entered into a contract (the Finley contract) whereby Ms. Finley agreed to sell to Wall Street a house located at 1417 Thirteenth Street, West Palm Beach, Florida (the subject property) for the sum of $40,000.00.

5. The Finley contract required Wall Street to make a deposit in the amount of $1,000.00 that would be forfeited if Wall Street defaulted on the contract.

6. The subject property was in foreclosure as of

   
   

   November 21, 1996. Wall Street arranged to purchase the second mortgage at a deep discount and to forestall the foreclosure.

   The Finley contract reflected that there would be no real estate commission paid and that the buyer intended to immediately resell the property. There was no provision stating whether the buyer could assign its interest in the Finley contract to a third party.

7. Respondent caused an advertisement to be placed in the Palm Beach Post on February 8 and 9, 1997 (a Saturday and Sunday, respectively), which provided certain information about the subject property, including its status in foreclosure, the number of bedrooms and baths, the total square footage, and the estimated value ($65,000) and assessed value ($57,000). The advertisement offered the subject property for sale for the sum of $39,000 and provided a telephone number for prospective purchasers to call.

8. Angelina Salvia responded to the advertisement on February 9, 1997, by calling the telephone number listed in the advertisement. Respondent answered Ms. Salvia's call and told her the street address. Ms. Salvia drove by the house and made a follow-up call to Respondent. During the second telephone conversation, Respondent and Ms. Salvia agreed to meet at the subject property the next day so he could show her the interior of the house.

9. On February 10, 1997, Wall Street, as seller, and Ms. Salvia, as buyer, entered into a contract (the Salvia

   contract) by which Ms. Salvia agreed to purchase the subject property for the sum of $39,000. She paid Wall Street a deposit in the amount of $8,000 on February 10, 1997. She agreed to pay the sum of $2,000 ten days later. The balance of the purchase price was due at the closing, which was set for on or before March 11, 1997.

10. The Salvia contract contained a special clause that provided as follows: "Buyer shall receive clean title with no liens except Buyer's new 1st mortgage."

11. Respondent signed the Salvia contract with Ms. Salvia on the signature designated as the Seller. The signature line did not explicitly state that he was signing as vice-president of Wall Street. Petitioner's contention that Respondent was acting in his individual capacity when he executed this contract is rejected because the greater weight of the evidence established that he was acting as a corporate officer on behalf of the corporation.

12. The Salvia contract reflected that the provision pertaining to the payment of real estate commissions was not applicable.

13. On February 10, 1997, Respondent and Ms. Salvia discussed that she would require a mortgage to finance the balance of the purchase price. Respondent recommended to

    Ms. Salvia a person who could give her a prompt answer to her credit application. 1/

14. Ms. Salvia was not able to get financing for the balance of the purchase price and defaulted on her contract to purchase the subject property. 2/

15. On March 12, 1997, Wall Street, through Respondent, executed a contract to sell the subject property to Keith Stopforth for the sum of $42,000.00. Mr. Stopforth signed the contract the following day. The Stopforth contract closed on March 24, 1997, with Ms. Finley deeding the property to

    Mr. Stopforth.

    
    

16. Wall Street never held fee simple title to the subject property. Its interest in the property was based on the Finley contract.

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction of the parties to and the subject of this proceeding. Section 120.57(1), Florida Statutes.

18. Section 475.42(1)(a), Florida Statutes, provides that no person shall operate as a broker or salesperson without being the holder of a valid and current active license therefor.

19. Section 475.43, Florida Statutes, provides as follows:

    
    

    In all . . . cases filed pursuant to this chapter, if a party has sold, leased, or let real estate, the title to which was

    not in the party when it was offered for sale, lease, or letting, or . . . has advertised real estate for sale, lease, or rental, generally, or describing property, the title to which was not in such party at the time, it shall be a presumption that such party was acting or attempting to act as a real estate broker, and the burden of proof shall be upon him or her to show that he or she was not acting or attempting to act as a broker or salesperson. All contracts, options, or other devices not based upon a substantial consideration, or that are otherwise employed to permit an unlicensed person to sell, lease, or let real estate, the beneficial title to which has not, in good faith, passed to such party for a substantial consideration, are hereby declared void and ineffective in all cases, suits, or proceedings had or taken under this chapter; however, this section shall not apply to irrevocable gifts, to unconditional contracts to purchase, or to options based upon a substantial consideration actually paid and not subject to any agreements to return or right of return reserved.

    
    

20. Section 475.01(1)(a), Florida Statutes, contains the following definitions:

    1. "Broker" means a person who, for another, and for a compensation or valuable consideration directly or indirectly paid or promised, expressly or impliedly, or with an intent to collect or receive a compensation or valuable consideration therefor . . . sells . . . or offers, attempts or agrees to

       . . . negotiate the sale . . . [of] any real property or any interest in or concerning the same . . . or who takes any part in the procuring of sellers, purchasers, lessors, or lessees of business enterprises or business opportunities or the real property of another . . . or assists in the procuring of prospects or in the negotiation or

       closing of any transaction which does, or is calculated to, result in a sale, exchange, or leasing thereof, and who receives, expects, or is promised any compensation or valuable consideration, directly or indirectly therefor. . . . The term "broker" also includes any person who is a[n] . . . officer . . . of a partnership or corporation which acts as a broker. . . .

       
       

       * * *

       
       

       (i) "Real property" or "real estate" means any interest or estate in land and any interest in business enterprises or business opportunities, including any assignment . .

       
       

       * * *

       
       

       (3) Wherever the word "operate" or "operating" as a broker, broker- salesperson, or salesperson appears in this chapter; in any order, rule, or regulation of the commission; in any pleading, indictment, or information under this chapter; in any court action or proceeding; or in any order or judgment of a court, it shall be deemed to mean the commission of one or more acts described in this chapter as constituting or defining a broker, broker-salesperson, or salesperson, not including, however, any of the exceptions stated therein. A single such act is sufficient to bring a person within the meaning of this chapter, and each act, if prohibited herein, constitutes a separate offense.

       
       

21. The Administrative Complaint charges Respondent with acting as an unlicensed broker in his individual capacity. This Administrative Complaint should be dismissed because Respondent acted at all times pertinent to this proceeding in his capacity as an officer of Wall Street, not in his individual capacity.

    If there is a party guilty of acting as an unlicensed real estate professional, as alleged by Petitioner, it is Wall Street, not Respondent.

22. The Finley contract was a binding, legal document that gave Wall Street the right to purchase the subject property. That right to purchase is an equitable interest in the subject property that Wall Street had the right to assign. Under those circumstances, it is concluded that Respondent rebutted the presumption contained in Section 475.43, Florida Statutes. Dealing with one's own property, as Wall Street was doing in this case, does not require a license as a real estate professional.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Administrative Complaint be dismissed.

DONE AND ENTERED this 15th day of February, 2000, in Tallahassee, Leon County, Florida.

CLAUDE B. ARRINGTON

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 15th day of February, 2000.

ENDNOTES

1/ This recommendation was made after Ms. Salvia indicated that she intended to go to her bank for the loan she needed. There was no evidence that this recommendation was for any improper purpose.

2/ Ms. Salvia's inability to secure financing was not the fault of Respondent or the result of his recommendation as to a potential lender. Litigation ensued after Wall Street refused to refund Ms. Salvia's $8,000 deposit. The second deposit, in the amount of $2,000, was apparently not made.

COPIES FURNISHED:

Daniel Villazon, Esquire Department of Business and

Professional Regulation, Division of Real Estate Post Office Box 1900

Orlando, Florida 32802-1900

Jerome L. Tepps, Esquire Jerome L. Tepps, P.A.

3411 Powerline Road, Suite 701 Fort Lauderdale, Florida 33309

Herbert S. Fecker, Director Division of Real Estate Department of Business and

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

Barbara D. Auger, 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: 99-003073

Orders for Case No: 99-003073