STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION, DIVISION OF REAL ESTATE,

Petitioner,

vs.

WILLIAM S. WALSH,

Respondent.

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) Case No. 02-2975PL

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RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly-designated Administrative Law Judge,

Jeff B. Clark, held a formal administrative hearing in this case on September 24, 2002, in Orlando, Florida.

APPEARANCES

For Petitioner: Christopher J. Decosta, Esquire

Department of Business and Professional Regulation

400 West Robinson Street, Suite N-308 Hurston Building, North Tower Orlando, Florida 32801

For Respondent: William S. Walsh, pro se

13079 South Taylor Creek Road Christmas, Florida 32709

STATEMENT OF THE ISSUES

Whether Respondent violated Subsections 475.25(1)(b), (1)(d)1, and (1)(e), Florida Statutes, and, if so, what discipline should be imposed.

PRELIMINARY STATEMENT

On April 17, 2002, Petitioner, Department of Business and Professional Regulation, Division of Real Estate, filed an Administrative Complaint against Respondent, William S. Walsh, alleging him to be "guilty of misrepresentation, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction in violation of Section 475.25(1)(b), Florida Statutes"; "guilty of failure to account or deliver funds when it is required by law in violation of Section 475.25(1)(d)1, Florida Statutes"; and "guilty of having violated a lawful order of the Florida Real Estate Commission in violation of Section 475.42(1)(e), Florida Statutes and, therefore, in violation of Section 475.25(1)(e), Florida Statutes." On July 3, 2002, Respondent submitted an Election of Rights disputing allegations of fact contained in the Administrative Complaint.

On July 26, 2002, the Division of Administrative Hearings received a request for formal proceedings from Petitioner. On July 29, 2002, an Initial Order was forwarded to both parties.

On August 20, 2002, the case was scheduled for final hearing on September 24 and 25, 2002, in Orlando, Florida.

The case proceeded as scheduled on September 24, 2002.

Petitioner presented one witness, Margaret Mitnik, and offered two exhibits, which were received into evidence as Petitioner's Exhibits 2 and 3. Petitioner's Exhibit 3 consisted of eight depositions, six of which were admitted into evidence based on Respondent's Response to Request for Admissions and two of which were admitted by agreement. Respondent testified on his own behalf and presented 24 exhibits; twenty-two of Respondent's exhibits were admitted into evidence and marked Respondent's Exhibits 1-21 and 1A. Two of Respondent's exhibits were not admitted; these were proffered and marked Respondent's Exhibits A and B. By Order dated August 29, 2002, Official Recognition was taken of Chapters 455 and 475, Florida Statutes (2001), Chapter 61J2, Florida Administrative Code, and the Recommended Order and Final Order in DOAH Case No. 99-3006, Department of Business and Professional Regulation, Division of Florida Land

Sales, Condominiums, and Mobile Homes, v. William S. Walsh.

The Transcript of Proceedings was filed with the Division of Administrative Hearings on October 31, 2002. By agreement, the parties were given 20 days from the filing of the Transcript to file proposed recommended orders. Both parties timely filed Proposed Recommended Orders.

FINDINGS OF FACT

Based on the oral and documentary evidence presented at the final hearing, the following findings of facts are made:

1. Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to the laws of the State of Florida, in particular, Section 20.165 and Chapters 120, 455, and 475, Florida Statutes, and the rules promulgated pursuant thereto.

2. Respondent is and was at all times material hereto a licensed Florida real estate salesperson, issued license

   number 0530788 in accordance with Chapter 475, Florida Statutes.

   
   

3. The last license issued to Respondent was an involuntary inactive salesperson at 2156 Turnberry Drive, Oviedo, Florida 32764.

4. On or about April 13, 2000, an Administrative Law Judge entered a Recommended Order finding Respondent guilty of violations of Subsections 721.11(4)(a), (h), (j), and (k), Florida Statutes (1995), by making oral misrepresentations in his sales pitch to timeshare purchasers.

5. On or about June 15, 2000, the Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums, and Mobile Homes, issued a Final Order adopting the Findings of Fact and Conclusions of Law of the

   Administrative Law Judge and rejecting all of Respondent's exceptions.

6. In the Final Order, the Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes, ordered Respondent to cease and desist from any further violations of Chapter 721, Florida Statutes, and ordered Respondent to pay a penalty of $28,000.

7. As of September 24, 2002, Respondent had failed to pay the penalty pursuant to the terms of the Final Order of the Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums, and Mobile Homes.

8. On or about July 22, 2000, a uniform disciplinary citation was issued to Respondent for failing to notify the Florida Real Estate Commission of his current mailing address or any change of the current mailing address in violation of

   Rule 61J2-10.038, Florida Administrative Code.

   
   

9. Pursuant to proper authority, the Florida Real Estate Commission penalized Respondent $100 for the violation. At the time he received the uniform disciplinary citation, Respondent was advised as follows: "You have a total of 60 days from the date this citation was served upon you to pay the fine and costs specified. This citation automatically becomes a Final Order of the board if you do not dispute this citation within 30 days of the date this citation was served upon you. As a Final Order,

   the fine and costs shall be due to the board within 30 days of the date of the Final Order. After this citation has become a Final Order, failure to pay the fines and costs specified constitutes a violation of a Final Order of the board and may subject you to further disciplinary action."

10. On or about August 22, 2002, the citation became a Final Order. As of September 24, 2002, Respondent had failed to pay the penalty pursuant to the terms of the Final Order of the Florida Real Estate Commission.

11. Respondent had more than 20 years' experience selling timeshare units as a salesman, sales manager or sales director; he had worked in sales at various Central Florida timeshare resorts since 1979.

12. Between July 1995 and March 1997, Respondent was employed as a salesman and sales director by Vocational Corporation, the owner/developer of Club Sevilla, a timeshare resort property.

13. On October 24, 1995, Respondent participated in a sales presentation to Raymond and Charlene Sindel at Club Sevilla, which resulted in their purchase of a timeshare. During the sales presentation, Respondent made the following false, deceptive and misleading statements which induced the Sindels to purchase the timeshare: (1) the Sindels would become members of Interval International, a timeshare exchange program,

    in which they could exchange their timeshare and/or utilize another timeshare for $79 or $99 a week 52 weeks per year; and

    (2) representatives of Tri Realty would sell their existing timeshare before the end of the year.

14. On October 24, 1995, Respondent participated in a sales presentation to Clarence and Maxine Shelt at Club Sevilla, which resulted in their purchase of a timeshare. During the sales presentation, Respondent made the following false, deceptive and misleading statement which induced the Shelts to purchase the timeshare: the Shelts would become members of Interval International, a timeshare exchange program, in which they could exchange their timeshare and or utilize another timeshare for $79 a week 52 weeks per year.

15. On June 26, 1996, Respondent participated in a sales presentation to Eugene and Mildred Plotkin and their son, Daniel, at Club Sevilla, which resulted in the purchase by Eugene and Mildred Plotkin of a timeshare. During the sales presentation, Respondent made the following false, deceptive and misleading statements which induced the Plotkins to purchase the timeshare: (1) a timeshare owned by the Plotkins in Las Vegas, Nevada, would be sold within two months; (2) the Plotkins would receive a low-interest credit card with which they would finance the purchase of the Club Sevilla timeshare and that their Las Vegas timeshare would be sold quickly enough that they would not

    have to pay any interest on the credit card; and (3) the Plotkins would become members of Interval International, a timeshare exchange program, in which they could utilize another timeshare anywhere for $149 a week.

16. On July 26, 1996, Respondent participated in a sales presentation to Robert and Susan Bailey at Club Sevilla, which resulted in their purchase of a timeshare. During the sales presentation, Respondent made the following false, deceptive and misleading statements which induced the Baileys to purchase the timeshare: (1) they would receive a low-interest credit card within ten days with a $20,000 credit limit with which they could finance the timeshare purchase; and (2) the Baileys would receive a prepaid 52-week membership in Interval International, a timeshare exchange program.

17. In September 1996, Respondent participated in a sales presentation to Thomas and Betty Prussak at Club Sevilla, which resulted in the purchase of a timeshare. During the sales presentation, Respondent made the following false, deceptive and misleading statements which induced the Prussaks to purchase the timeshare: (1) timeshares owned by the Prussaks in Westgate and Club Sevilla were valued at $12,000 each and that these timeshare units would be sold if the Prussaks purchased a new timeshare unit at Club Sevilla; (2) that the new Club Sevilla timeshare unit would be a "floating" unit (could be used

    anytime); and (3) that the new Club Sevilla timeshare would be rented and that the Prussaks or their daughter would be able to take "getaway" weeks and stay at any RCI timeshare for $149 per week.

18. On December 11, 1996, Respondent participated in a sales presentation to Larry and Carla Eshleman at Club Sevilla, which resulted in their purchase of a timeshare. During the sales presentation, Respondent made the following false, deceptive and misleading statements which induced the Eshlemans to purchase the timeshare: (1) the Eshlemans would receive a low-interest credit card with which they could finance the timeshare purchase; (2) the Eshlemans would become members of Interval International, a timeshare exchange program, in which they could exchange their timeshare and utilize another timeshare for $149 a week; and (3) the timeshare the Eshlemans owned prior to their purchase of the Club Sevilla timeshare would be sold in three months or would be rented for $1,650 per week.

    CONCLUSIONS OF LAW

    
    

19. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter herein. Subsections 120.57(1) and 455.225(5), Florida Statutes.

20. The burden of proof in this proceeding is on Petitioner. Florida Department of Transportation v. J.W.C.

    Company, Inc., 396 So. 2d 778 (Fla. 1st DCA 1981); Balino v. Department of Health and Rehabilitative Services, 348 So. 2d 349 (Fla. 1st DCA 1977). Petitioner is required to meet its burden by clear and convincing evidence. Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

21. Subsection 475.25(1), Florida Statutes, authorizes the Florida Real Estate Commission to take disciplinary action against the license of any real estate salesperson if the licensee commits certain specified acts. Of the specified acts of Subsection 475.25(1), Florida Statutes, Respondent was charged with the following:

    1. As alleged in Count I of the Administrative Complaint: (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.

       
       

    2. As alleged in Count II of the Administrative Complaint: (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.

       
       

    3. As alleged in Count III of the Administrative Complaint: (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; in that Respondent violated Subsection 475.42(1), Florida Statutes, which reads, as follows: (e) No person shall violate any lawful order or rule of the commission which is binding upon her or him.

       
       

22. Subsection 455.224(1), Florida Statutes, reads as follows:

    1. Notwithstanding s. 455.225, the board or the department shall adopt rules to permit the issuance of citations. The

       citation shall be issued to the subject and shall contain the subject's name and address, the subject's license number if applicable, a brief factual statement, the sections of the law allegedly violated, and the penalty imposed. The citation must clearly state that the subject may choose, in lieu of accepting the citation, to follow the procedure under s. 455.225. If the subject disputes the matter in the citation, the procedures set forth in s. 455.225 must be followed. However, if the subject does not dispute the matter in the citation with the department within 30 days after the citation is served, the citation becomes a final order and constitutes discipline. The penalty shall be a fine or other conditions as established by rule.

       
       

23. Rule 61J2-10.038, Florida Administrative Code, entitled "Mailing Address," reads as follows:

    1. Pursuant to s. 455.275(1), F.S., the Commission defines "current mailing address" as the current residential address which is used by a licensee or permit holder to receive mail through the United States Postal Service.

       
       

    2. Each licensee and permit holder is required to notify the BPR in writing of the current mailing address and any change in the current mailing address within 10 days after the change.

       
       

24. Rule 61J2-24.002, Florida Administrative Code, entitled "Citation Authority," reads as follows:

    1. Pursuant to s. 455.224, Florida Statutes (1999), the Commission sets forth violations for which there is no substantial threat to the public health, safety, and welfare; or, if there is a violation for which there is no substantial threat to the public health, safety, and welfare, such

       potential for harm has been removed prior to the issuance of the citation. Next to each violation is the fine or other conditions to be imposed.

       
       

    2. The following violations with accompanying fine or other conditions may be disposed of by citation:

       
       

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       (gg) 61J2-10.038 -- failed to notify the BPR of the current mailing address or any change in the current mailing address -Fine

       $100.00

       
       

25. Petitioner has proved by clear and convincing evidence the allegations of Count I, a violation of Subsection 475.25(1)(b), Florida Statutes, in that Respondent has been guilty of sundry acts of fraud, misrepresentation, false promises, dishonest dealing by trick, and breach of trust in a business transaction in his dealings with the various witnesses: Susan Bailey, Larry Eshleman, Mildred Plotkin, Thomas Prussak, Maxine Shelt, and Raymond Sindel.

26. Petitioner has failed to prove, as alleged in Count II, that Respondent violated Subsection 475.25(1)(d)1, Florida Statutes. Respondent's failure to pay or deliver a $28,000 fine in response to a Final Order of the Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums, and Mobile Homes, is not failure to "deliver"

    . . . "to any person" . . . "personal property such as money" as is contemplated by Subsection 475.25(1)(d)1, Florida Statutes.

27. Petitioner has proved by clear and convincing evidence that Respondent has violated Subsection 475.42(1)(e), Florida Statutes, by his violation of Rule 61J2-10.038, Florida Administrative Code, and his failure to pay the $100 fine imposed for the violation. His failure to pay the fine 30 days after the unchallenged uniform disciplinary citation became a Final Order of the Florida Real Estate Commission and became a lawful binding order upon him subjects him to further disciplinary action.

28. Rule 61J2-24.001, Florida Administrative Code, establishes disciplinary guidelines and reads as follows:

    1. Pursuant to s. 455.2273, Florida Statutes, the Commission sets forth below a range of disciplinary guidelines from which disciplinary penalties will be imposed upon licensees guilty of violating Chapters 455 or 475, Florida Statutes. The purpose of the disciplinary guidelines is to give notice to licensees of the range of penalties which normally will be imposed for each count during a formal or an informal hearing. For purposes of this rule, the order of penalties, ranging from lowest to highest, is: reprimand, fine, probation, suspension, and revocation or denial. Pursuant to s. 475.25(1), Florida Statutes, combinations of these penalties are permissible by law.

       
       

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       Violations

       
       

       (c) 475.25(1)(b) Guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing

       by trick, scheme or device, concealment, false culpable negligence or breach of trust. Guilty of violating a duty imposed by law or by the terms of a listing agreement; aided, assisted or conspired with another; or formed an intent, design or scheme to engage in such misconduct and committed an overt act in furtherance of such intent, design or scheme

       * * * (f) 475.25(1)(e)

       Violated any rule or order or provision

       under Chapters 475 and 455, F.S.

       
       

       Recommended Range of Penalty

       
       

       (c) In the case of fraud, misrepresentation and dishonest dealing, the usual action of the Commission shall be to impose a penalty of revocation.

       In the case of concealment, false promises and false pretenses, the usual action of the Commission shall be to impose a penalty of a

       3 to 5 year suspension and an administrative fine of $1,000

       In the case of culpable negligence and breach of trust, the usual action of the Commission shall be to impose a penalty from a $1,000 fine to a 1 year suspension

       In the case of violating a duty imposed by law or a listing agreement; aided, assisted or conspired; or formed an intent, design or scheme to engage in such misconduct, the usual action of the Commission shall be to impose a penalty from $1,000 fine to a 5 year suspension

       
       

       * * *

       
       

       (f) The usual action of the Commission shall be to impose a penalty from an 8 year suspension to revocation and an administrative fine of $1,000

29. Rule 61J2-24.001(4), Florida Administrative Code, reads as follows:

    1. When either the Petitioner or Respondent is able to demonstrate aggravating or mitigating circumstances

       . . . to a Division of Administrative Hearings hearing officer in a s. 120.57(1), Florida Statutes, hearing by clear and convincing evidence, the . . . hearing officer shall be entitled to deviate from the above guidelines in imposing or recommending discipline, respectively, upon a licensee.

       
       

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    2. Aggravating or mitigating circumstances may include, but are not limited to, the following:

       
       

       1. The severity of the offense.

          
          

       2. The degree of harm to the consumer or public.

          
          

       3. The number of counts in the Administrative Complaint.

          
          

       4. The number of times the offenses previously have been committed by the licensee.

          
          

       5. The disciplinary history of the licensee.

          
          

       6. The status of the licensee at the time the offense was committed.

          
          

       7. The degree of financial hardship incurred by a licensee as a result of the imposition of a fine or suspension of the license.

30. "The statutes regulating the activities of real estate brokers in their business were designed for the protection of the public and the safeguarding of persons who deposit their money and place their trust in the hands of real estate brokers." Shelton v. Florida Real Estate Commission, 121 So. 2d 711 (Fla. 2nd DCA 1960). The fiduciary relationship between customer and broker, inviting and usually receiving a high degree of trust and confidence, is a proper subject of reasonable regulation. The purpose of the statute is to protect the public by permitting only those who possess special qualifications of aptitude, ability and integrity to engage in the business. Horne v. Florida Real Estate Commission, 163 So. 2d 515 (Fla. 1st DCA 1964). Section 475.25, Florida Statutes, ". . . requires nothing more of a real estate dealer or broker then an honest, open and fair relationship with his client, such as normally expected of a businessman of sound integrity." Rivard v. McCoy, 212 So. 2d 672 (Fla. 1st DCA 1968).

RECOMMENDATION

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

RECOMMENDED that Petitioner enter a final order finding that Respondent violated Subsections 475.25(1)(b) and (e), Florida Statutes, and that Respondent's license as a real estate salesperson be revoked, that he be fined $2,000 and be required

to pay the costs of the investigation and prosecution of the case.

DONE AND ENTERED this 3rd day of December, 2002, in Tallahassee, Leon County, Florida.

JEFF B. 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 3rd day of December, 2002.

COPIES FURNISHED:

Christopher J. Decosta, Esquire Department of Business and

Professional Regulation

400 West Robinson Street, Suite N-308 Hurston Building, North Tower Orlando, Florida 32801

William S. Walsh

13079 South Taylor Creek Road Christmas, Florida 32709

Hardy L. Roberts, III, General Counsel Department of Business and

Professional Regulation Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-2202

Buddy Johnson, Director Division of Real Estate Department of Business and

Professional Regulation

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

Nancy P. Campiglia, Chief Attorney Department of Business and

Professional Regulation

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

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: 02-002975PL

Orders for Case No: 02-002975PL