STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 00-0201

)

LEON STELLINGS, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on May 2, 2000, at West Palm Beach, Florida, before Errol H. Powell, a designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Sunia Y. Marsh, Esquire

Florida Department of Business and Professional Regulation

Division of Real Estate Post Office Box 1900

Orlando, Florida 32802-1900

For Respondent: Steven W. Johnson, Esquire

Steven W. Johnson, P.A.

1801 East Colonial Drive, Suite 101

Orlando, Florida 32803

STATEMENT OF THE ISSUE

The issue for determination is whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

On August 19, 1999, the Department of Business and Professional Regulation, Division of Real Estate (Petitioner) filed a two-count Administrative Complaint against Leon Stellings (Respondent). Petitioner charged Respondent with the following: Count I--violating Subsection 475.25(1)(b), Florida Statutes, by being guilty of dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction; and Count II--violating Subsections 475.278(2)(a) and 475.25(1)(e) and (q), Florida Statutes, by being guilty of violating the transaction broker relationship. Respondent, through his counsel, disputed the allegations of fact of the Administrative Complaint and requested a hearing.

On January 10, 2000, this matter were referred to the Division of Administrative Hearings.

At hearing, Petitioner presented the testimony of two witnesses and entered 12 exhibits (Petitioner's Exhibits numbered 1-12) into evidence. Through Petitioner's Exhibit numbered 11, Petitioner presented the testimony of a third witness by deposition. Respondent testified on his own behalf

and entered two exhibits (Respondent's Exhibits numbered 1-2) into evidence. Respondent's Exhibit numbered 1 was permitted to be late-filed. Official recognition was taken of Chapters 475, 455, 120, and 20, Florida Statutes, and Chapter 61J2, Florida Administrative Code.

A transcript of the hearing was ordered. At the request of the parties, the time for filing post-hearing submissions was set for more than ten days following the filing of the transcript.

The Transcript, consisting of one volume, was filed on May 15, 2000. Petitioner was granted an extension of time to file its post-hearing submission. The parties timely filed their post-hearing submissions, which were considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. At all times material hereto, Respondent was licensed by the State of Florida as a real estate broker, having been issued license number 0521991. Respondent's last license issued was as a broker c/o Stellings Realty, Inc., 2368 Saratoga Bay Drive, West Palm Beach, Florida.

2. Beginning on or about March 1, 1998, until August 31, 1998, Respondent had an Exclusive Right of Sale Listing Agreement (Agreement) with Judy Cominse (Seller) for real property, owned by the Seller, located at 4397-B Woodstock

   Drive, West Palm Beach, Florida. Respondent represented the Seller as a transaction broker and owed her certain duties pursuant thereto. A Brokerage Relationship Disclosure statement was provided to the Seller by Respondent.

3. Another broker, Robert Berman, was the referring agent and was personally known by the Seller. Respondent was of the opinion that Berman was to receive a referral fee of 25 per cent in the event of a sale.

4. The listing was problematic for Respondent. Respondent encountered problems due to restrictions placed on the showing of the property by the Seller and her tenants, who were the Seller's son and daughter-in-law.

5. Respondent contemplated not continuing with the listing. He even mentioned discontinuing the listing with the Seller, but he did not discontinue it.

6. A contract for sale of the Seller's property was entered into by the Seller and Evelyn Swinton (Buyer Swinton). Buyer Swinton signed the contract on June 1, 1998, and the Seller signed it on June 3, 1998. The contract provided, among other things, for an escrow deposit of $1,500 to be held by Sun Title, located in Lake Worth, Florida. The $1,500 was paid and held in escrow by Sun Title.

7. The transaction for the sale of Seller's property failed to close. By a Release and Cancellation of Contract for

   Sale and Purchase form (Release and Cancellation) dated July 28, 1998,1 both the Seller and Buyer Swinton agreed, among other things, that the $1,500 escrow deposit would be disbursed to the Seller.

8. On July 30, 1998, Sun Title prepared an escrow check in the amount of $1,500, made payable solely to the Seller. The check was forwarded to Respondent sometime after July 30, 1998; the evidence presented was insufficient to show when Sun Title forwarded the check to Respondent.2

9. On August 6, 1998, Respondent prepared an addendum (Respondent's Addendum) to the Agreement that he had with the Seller. Respondent's Addendum was dated and signed by Respondent on this same date.

10. Respondent's Addendum provided, among other things, the following:

    1. This contract [Agreement] will be extended from August 31, 1998 until March 1, 1999; if necessary.3

       * * *

       
       

       1. Stellings Realty, Inc. will receive 7% of the total purchase price. In addition 25% commission of the listing side will be given to Berman Realty as a referral fee.

          
          

       2. If the Seller should cancel this listing the cancelation fee would be $1000.00.

          
          

       3. Judy Cominse [Seller] will receive

       $1500.00 by mail upon acceptance.

11. Paragraph numbered 5 of Respondent's Addendum indicates that, upon the Seller accepting Respondent's Addendum, the Seller will receive $1,500, which was the escrow deposit, by mail.

12. The Seller did not accept Respondent's Addendum although the Seller was of the opinion that the only way for her to obtain the $1,500 was to agree to an addendum to the contract that she had with Respondent. With the assistance of her sister, who was a licensee, licensed by Petitioner,4 the Seller negotiated a change of terms to Respondent's Addendum. The seller prepared and executed an addendum (Seller's Addendum) on August 6, 1998, and forwarded it to Respondent.

13. The Seller's Addendum provided, among other things, the following:

    1. This listing agreement [Agreement] will be extended six months (i.e., from August 31, 1998 until February 28, 1999).

       
       

       * * *

       
       

       1. Stellings Realty, Inc. will receive 7% of the total selling price (if sold at full listing price), otherwise negotiable; however, no lower than 6%. Additionally,

          $533.75 to the listing agency (Stellings Realty), which amount will not be subject to the referral fee due and payable to Robert

          A. Berman Real Estate, the referring broker to the listing agency.

       2. If the seller should cancel this listing, the cancellation fee would be

          $788.75 ($250.00 cancellation fee, plus

          $533.75).

          
          

       3. Judy Cominse [Seller] will receive

       $1,500.00 (100% of the escrow deposit relinquished by the buyer [Buyer Swinton]) by mail upon acceptance.

       
       

14. Paragraph 5 of Seller's Addendum indicates that, upon Respondent's accepting the Seller's Addendum, the Seller will receive $1,500, which was the escrow deposit, by mail.

15. Respondent executed the Seller's Addendum on August 11, 1998, and faxed it to her on this same date. Respondent accepted the Seller's Addendum on August 11, 1998.

16. Prior to August 11, 1998, Berman had contacted Respondent on behalf of the Seller. Berman was requested by the Seller to make an attempt to obtain the escrow deposit of $1,500 for her. Berman contacted Respondent who indicated to Berman that, as soon as the escrow check was received, he would contact Berman. Sometime after July 30, 1998, Berman contacted Sun Title and was informed that the escrow check had been prepared and forwarded to Respondent.

17. On or about August 11, 1998, Respondent contacted the Seller and informed her that the escrow check had been received by him. On or about August 11, 1998, Respondent also contacted Berman regarding the receipt of the escrow check. At the request of the Seller, Berman went to Respondent's office,

    obtained the escrow check, and forwarded it to the Seller via express delivery.

18. Based upon the required proof, the evidence fails to demonstrate that Respondent refused to relinquish the $1,500 escrow deposit to the Seller in order to force or pressure the Seller to agree to an addendum to their Agreement.

19. Respondent continued to represent the Seller. The Seller's property was sold on November 3, 1998.

20. Subsequently, Respondent sued the Seller in the County Court of West Palm Beach, Florida for $533.75, based on the Seller's Addendum. The Seller had refused to pay Respondent the

    $533.75, pursuant to the Seller's Addendum, and Respondent sued the Seller to recoup the monies. On or about January 4, 1999, the court suit was settled.

21. Before the end of 1998, Respondent paid Berman the

    
    

    referral fee.

    
    

    CONCLUSIONS OF LAW

    
    

22. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and the parties thereto pursuant to Section 120.569 and Subsection 120.57(1), Florida Statutes.

23. License revocation proceedings are penal in nature.

    
    

    The burden of proof is on Petitioner to establish by clear and convincing evidence the truthfulness of the allegations in the

    Administrative Complaint. Department of Banking and Finance,

    
    

    Division of Securities and Investor Protection v. Osborne Stern and Company, 670 So. 2d 932 (Fla. 1996); and Ferris v.

    Turlington, 510 So. 2d 292 (Fla. 1987).

    
    

24. Section 475.25, Florida Statutes, provides in pertinent part:

    1. The commission may deny an application for licensure, . . . or renewal thereof; may place a licensee . . . on probation; may suspend a license . . . for a period not exceeding 10 years; may revoke a license

       . . .; 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 . . .:

       
       

       * * *

       
       

       (b) Has been guilty of . . . 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; . . . 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.

       
       

       * * *

       
       

       (e) 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 chapter 455.

       * * *

       
       

       (q) Has violated any provision of s. 475.2755 or s. 475.278, including the duties owed under those sections.

       
       

25. Section 475.278, Florida Statutes, provides in pertinent part:

    1. TRANSACTION BROKER RELATIONSHIP.

    (a) Transaction broker - duties of limited representation. A transaction broker provides a limited form of representation to a buyer, a seller, or both in a real estate transaction but does not represent either in a fiduciary capacity or as a single agent. The duties of the real estate licensee in this limited form of representation include the following:

    1. Dealing honestly and fairly;

    2. Accounting for all funds;

    3. Using skill, care, and diligence in the transaction;

    4. Disclosing all known facts that materially affect the value of real property and are not readily observable to the buyer;

    5. Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing;

    6. Limited confidentiality, unless waived in writing by a party. This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or of any other information requested by a party to remain confidential; and

    7. Any additional duties that are mutually agreed to with a party.

26. A licensee is charged with knowing the practice act that governs his/her license. Wallen v. Florida Department of Professional Regulation, Division of Real Estate, 568 So. 2d 975 (Fla. 3d DCA 1990).

27. Petitioner failed to demonstrate that Respondent violated Subsections 475.25(1)(b), (e), and (q) and 475.278(2)(a), Florida Statutes.

RECOMMENDATION

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

RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate enter a final order and therein dismiss the Administrative Complaint filed against Leon Stellings.

DONE AND ENTERED this 31st day of July, 2000, in

Tallahassee, Leon County, Florida.

ERROL H. POWELL

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 July, 2000.

ENDNOTES

1/ The parties agree that the year on the Release and Cancellation, 1997, is incorrect and that the year should be 1998.

2/ Respondent asserts that Sun Title needed two signatures before it could forward the check for the $1,500. No evidence was presented in support of or contradiction to Respondent's assertion.

3/ The ending date originally typed in the Respondent's Addendum was "March 31,st [sic] 1999"; but, that date was scratched out by Respondent and the date of "3/1/99" was inserted by him.

4/ The Seller's sister had been licensed by Petitioner for approximately four years.

COPIES FURNISHED:

Sunia Y. Marsh, Esquire

Florida Department of Business and Professional Regulation

Division of Real Estate Post Office Box 1900

Orlando, Florida 32802-1900

Steven W. Johnson, Esquire Steven W. Johnson, P.A.

1801 East Colonial Drive, Suite 101

Orlando, Florida 32803

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

Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399

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: 00-000201

Orders for Case No: 00-000201