STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RICHARD REED, )

)

Petitioner, )

)

vs. ) Case No. 11-5798

) FLORIDA REAL ESTATE COMMISSION, )

)

Respondent. )

)

RECOMMENDED ORDER

Administrative Law Judge Edward T. Bauer held a final hearing in this case by video teleconference between sites in West Palm Beach and Tallahassee, Florida, on January 4, 2012.

APPEARANCES

For Petitioner: Richard Reed, pro se

600 Via Lugano Circle No. 106 Boynton Beach, Florida 33426

For Respondent: Thomas Barnhart, Esquire

Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

Whether Petitioner's application for licensure as a real estate sales associate or broker should be granted.

PRELIMINARY STATEMENT

On October 13, 2011, Respondent filed a Notice of Intent to Deny Petitioner's application for licensure as a real estate

sales associate or broker. The Notice of Intent to Deny was accompanied by a Notice of Rights, which advised Petitioner of his right to a hearing on the intended action.

Subsequently, on November 1, 2011, Petitioner, by e-mail, requested a formal hearing on the intended denial of his application. The matter was referred to Division of Administrative Hearings on November 14, 2011, for the assignment of an administrative law judge to conduct the hearing Petitioner had requested.

As noted above, the final hearing was held on January 4, 2012, during which Petitioner testified on his own behalf.

Petitioner called no other witnesses, nor did he submit any exhibits for admission into evidence. Respondent called Petitioner as a witness and submitted one composite exhibit into evidence, identified as Respondent's Exhibit 1.

Neither party requested a transcript of the hearing. On January 17, 2012, Respondent timely filed its Proposed Recommended Order, which the undersigned has considered.

Petitioner did not file a post-hearing submittal of any kind.

Unless otherwise indicated, statutory citations refer to the 2011 Florida Statutes.

FINDINGS OF FACT

1. The Parties

   
   

   1. Petitioner, who was 49 years old at the time of the final hearing in this cause, is an applicant for licensure as a real estate sales associate or broker.

   2. Respondent Florida Real Estate Commission is authorized to certify for licensure persons who are qualified to practice as real estate brokers and sales associates in the state of Florida.

2. Petitioner's Criminal History

   
   

   1. On April 15, 1986, Petitioner was arrested in Middleton, New York, for the charge of second degree assault. Petitioner ultimately pleaded guilty to the reduced charge of third degree assault and was ordered to pay a fine of $300.

   2. In or around June 1990, the State Attorney for Florida's Fifteenth Judicial Circuit charged Petitioner, in case number 91-239207, with one count of burglary of a dwelling (a second degree felony), three counts of grand theft (each a third degree felony), and two counts of dealing in stolen property (each a second degree felony). Subsequently, on August 14, 1991, Petitioner pleaded guilty to each of the foregoing charges and was sentenced to eight months of incarceration in the Palm Beach County jail.

      
      

   3. Approximately seven years later, the United States Attorney for the Southern District of New York indicted Petitioner for wire fraud. On July 8, 1998, Petitioner pleaded guilty to the charge and was sentenced to 30 months of imprisonment, followed by a term of probation (the exact length of which is not established in the instant record). Petitioner was also ordered to pay $745,000 in restitution to the victim(s) of his fraudulent behavior.

   4. Subsequently, in or around 2003, Petitioner——having previously completed his prison sentence——fell behind on his restitution payments, at which point the government violated his supervision. As a result, Petitioner was incarcerated for approximately 30 days until his wife's family satisfied the arrearage of $26,230.61.

   5. Although not established precisely by the testimony or exhibits, it appears that Petitioner's supervision in connection with the wire fraud charge was terminated in 2005 or 2006 and that the outstanding restitution balance of $500,000 was reduced to a civil judgment.

3. Application for Licensure and Intent to Deny

   
   

   1. On May 16, 2011, Respondent received Petitioner's application for licensure as a real estate sales associate or broker. In the application, Petitioner properly responded "yes" to question number one, which asked, among other things, if he

      
      

      had ever pleaded guilty or no contest to a crime in any jurisdiction.

   2. Subsequently, on May 20, 2011, Respondent advised Petitioner in writing that it required:

      
      

      [T]he full details of any criminal conviction . . . including the nature of any charges, outcomes, sentences, and/or conditions imposed; the dates, name and location of the court and/or jurisdiction in which the proceeding were held or are pending . . . .

      
      

      (emphasis added).

      
      

   3. Nearly one month later, on June 17, 2011, Respondent received an eight-page facsimile from Petitioner, which included, in relevant part: the second page of the federal criminal judgment, a document which actually consists of six pages1/ (the other five pages are not part of the record, nor does it appear that they were provided to Respondent); the judgment and sentence in connection with the Florida burglary, grand theft, and dealing in stolen property charges; and, as quoted below, Petitioner's vague explanations of the New York assault charge, Florida offenses, federal mail fraud charge, and probation violation:

      [New York assault charge] Pled guilty to a fight. Fined $300.

      
      

      [Florida charges] [S]tems from one arrest pled guilty sentenced to 8 months jail time. There is an error in record it looks like

      
      

      several arrest [sic] but it was only one document provided.

      
      

      [Federal wire fraud charge] [A] single charge of wire fraud sentenced to 30 months ordered to pay restitution.

      
      

      [Federal probation violation] I was violated for being unable to keep up with restitution payments was released after paying the sum of $26230.61.

      
      

   4. On July 16, 2010, Respondent filed its Notice of Intent to Deny Petitioner's application for licensure. The intended denial was based upon the following reasons:

      B. Failing to demonstrate: honesty, truthfulness, trustworthiness and good character, a good reputation for fair dealing competent and qualified to conduct transactions and negotiations with safety to others.

      
      

      G. Convicted or found guilty or entered a plea of nolo contendre to, regardless of adjudication, a crime which directly relates to activities of a licensed broker or sales associate or involves moral turpitude or fraudulent or dishonest dealing.

      
      

      M. The Commission concludes that it would be a breach of its duty to protect the health, safety and welfare of the public to license this applicant and thereby provide him/her easy access to the homes, families or personal belongings of the citizens of Florida.

      
      

4. Petitioner's Final Hearing Testimony

   
   

   1. During the final hearing, Petitioner testified that he has not been arrested since 2003——when he was violated for the

      
      

      restitution arrearage——and that he presently manages an automobile dealership.

   2. Regarding his criminal conduct, Petitioner offered very little detail other than a brief explanation that the wire fraud charge involved a scheme in which he ordered laptop computers but never paid for them. Notably, Petitioner expressed no remorse for his conduct, either during his hearing testimony or in the written materials submitted to Respondent during the application process. Further, and equally troubling, Petitioner conceded that he has made no payments whatsoever against the outstanding restitution judgment since 2006.

   3. With respect to the Florida burglary, dealing in stolen property, and grand theft charges (to which he pleaded guilty), Petitioner testified that he did not commit a burglary and that he only attempted to pawn items that had been stolen by somebody else——an explanation the undersigned finds dubious at best. Once again, Petitioner expressed no remorse for his criminal misdeeds.2/

   4. As to the present state of his character, Petitioner testified that he now values——and recognizes the importance of—— honesty, a good reputation, and fair dealing. However, other than these self-serving remarks, his present employment, and the absence of any recent arrests, Petitioner offered no persuasive

      
      

      evidence of his honesty or character. Further, no credible evidence was adduced concerning his reputation for fair dealing.

5. Ultimate Factual Findings

1. The undersigned determines, as a matter of ultimate fact, that Petitioner failed to demonstrate that he is honest, trustworthy, of good character, and has a reputation for fair dealing, all of which are requirements for licensure as a real estate professional.

2. Furthermore, the undersigned finds, as a matter of ultimate fact, that the statutory disqualification of eligibility that flows from a guilty plea to one or more crimes involving moral turpitude has not been overcome by way of subsequent good conduct and lapse of time.

   CONCLUSIONS OF LAW

   
   

   1. Jurisdiction

      
      

3. DOAH has jurisdiction over the subject matter of this proceeding and of the parties hereto pursuant to chapter 120, Florida Statutes.

   1. Standard and Burden of Proof

      
      

4. As an applicant for licensure, Petitioner bore the burden at hearing of going forward initially with proof of his qualifications; he was also required to shoulder the ultimate burden of persuasion by a preponderance of the evidence. See Dep't of Banking & Fin. v. Osborne Stern & Co., 670 So. 2d 932,

   
   

   934 (Fla. 1996); Fla. Dep't of HRS v. Career Serv. Comm'n, 289 So. 2d 412, 414 (Fla. 4th DCA 1974). In addition, the burden of proving rehabilitation was on Petitioner. See Antel v. Dep't of Prof'l Reg., 522 So. 2d 1056, 1057, 1058 (Fla. 5th DCA 1988).

   1. Qualifications for Licensure

      
      

5. Section 475.17(1)(a), Florida Statutes, sets forth the qualifications for licensure as a real estate sales associate:

   An applicant for licensure who is a natural person must be at least 18 years of age; hold a high school diploma or its equivalent; be honest, truthful, trustworthy, and of good character; and have a good reputation for fair dealing. An applicant for an active broker's license or a sales associate's license must be competent and qualified to make real estate transactions and conduct negotiations therefor with safety to investors and to those with whom the applicant may undertake a relationship of trust and confidence

   . . . . [I]f the applicant has been guilty of conduct or practices in this state or elsewhere which would have been grounds for revoking or suspending her or his license under this chapter had the applicant then been registered, the applicant shall be deemed not to be qualified unless, because of lapse of time and subsequent good conduct and reputation, or other reason deemed sufficient, it appears to the commission that the interest of the public and investors will not likely be endangered by the granting of registration. The commission may adopt rules requiring an applicant for licensure to provide written information to the commission regarding the applicant's good character.

   
   

   (emphasis added).

   
   

6. In turn, section 475.25(1)(f), Florida Statutes, provides that an application for licensure as a real estate sales associate may be denied if the applicant "[h]as been convicted or found guilty of, or entered a plea of nolo contendere to, regardless of adjudication, a crime . . . [that] involves moral turpitude."

   1. Analysis

   
   

7. During the final hearing in this cause, Petitioner failed to demonstrate by a preponderance of the evidence that he is honest, truthful, trustworthy, of good character, and has a good reputation for fair dealing, all of which are prerequisites for licensure pursuant to section 475.17(1)(a). See Taylor v. Dep't of Bus. & Prof'l Reg., Fla. Real Estate Comm'n, Case No. 06-3036, 2007 Fla. Div. Adm. Hear. LEXIS 18 (Fla. DOAH Jan. 9, 2007)(concluding that in order to satisfy the two-prong test of section 475.17(1)(a), a petitioner must offer "more than her own statements and those of her personal friend attesting to her good conduct . . . . Such statements are insufficient to meet the burden of proof.").

8. Even assuming Petitioner met his burden of demonstrating that he is honest, truthful, trustworthy, of good character, and has a good reputation for fair dealing, it is undisputed that between the years 1991 and 1997, Petitioner pleaded guilty to multiple offenses——grand theft, wire fraud,

   
   

   dealing in stolen property, and burglary of a dwelling——that constitute crimes of moral turpitude within the meaning of section 475.25(1)(f).3/ See Doe v. Att'y Gen. of U.S., 659 F.3d 266, 270 n.2 (3d Cir. 2011)(holding that wire fraud constitutes a crime of moral turpitude); Bruner v. Bd. of Real Estate, Dep't of Prof'l Reg., 399 So. 2d 4, 5 (Fla. 5th DCA 1981)(noting that grand theft is a crime involving "moral turpitude, or fraudulent or dishonest dealings"); Freire v. Dep't of Bus. & Prof'l Reg., Case No. 04-1631, 2004 Fla. Div. Adm. Hear. LEXIS 2000 (Fla.

   DOAH Aug. 17, 2004)(concluding that burglary is a crime of moral turpitude); Hinds v. Fla. Real Estate Comm'n, Case No. 91-3370, 1991 Fla. Div. Adm. Hear. LEXIS 6839 (Fla. DOAH Sept. 5, 1991)(finding that dealing in stolen property constituted a crime of moral turpitude within the meaning of section 475.25(1)(f)); see also Pearl v. Fla. Bd. of Real Estate, 394 So. 2d 189, 191 (Fla. 3d DCA 1981)("Crimes constituting violations of one's duties in dealings with members of society may be classified as crimes involving moral turpitude.").

9. Accordingly, in order to avoid a finding that, in light of his guilty pleas, he does not meet the qualifications for licensure as a real estate broker or sales associate set forth in section 475.17(1)(a), and therefore his application for such licensure should also be denied pursuant section 475.25(1)(f), it was Petitioner's burden to establish that,

   
   

   "because of lapse of time and subsequent good conduct and reputation, or other reason deemed sufficient . . . the interest of the public and investors will not likely be endangered" by the granting of his application.

10. The undersigned concludes that Petitioner failed to demonstrate that he is completely rehabilitated and that the interest of the public and investors will not likely be endangered if he is granted the license he seeks. Petitioner's arrest-free record since 2003, current lawful employment, and self-assessment of his character are simply insufficient to satisfy the burden of proof——particularly in light of the absence of any expression of remorse and the fact that Petitioner has applied not one cent of his income toward the

    $500,000 restitution balance in roughly five years. See Akbar v. Fla. Real Estate Comm'n, Case No. 11-2213, 2011 Fla. Div.

    Adm. Hear. LEXIS 211 (Fla. DOAH Oct. 14, 2011)("The only remaining question is whether Petitioner proved rehabilitation sufficient to allow a conclusion that the interest of the public and investors will not likely be endangered by the granting of a license. Petitioner failed to meet this burden of proof. He presented no disinterested witnesses to support his assertions of good moral character, honestly, trustworthiness, and truthfulness"); Reed v. Fla. Real Estate Comm'n, Case No. 10- 4226, 2010 Fla. Div. Adm. Hear. LEXIS 247 (Fla. DOAH Dec. 28,

    
    

    2010)("Petitioner has offered no credible explanation of his offenses, or sufficient evidence that he is now of good moral character . . . . He presented no disinterested witnesses to support his claims of good moral character, honesty, trustworthiness, and truthfulness. Petitioner's testimony, uncorroborated by a single disinterested witness, is legally insufficient to meet his burden of proof"); Acosta v. Fla. Real Estate Comm'n, Case No. 10-4224, 2010 Fla. Div. Adm. Hear. LEXIS

    149 (Fla. DOAH Oct. 21, 2010)(concluding that petitioner's uncorroborated testimony was insufficient to meet the burden of proof; recommending denial of application for licensure as a real estate sales associate).

11. For these reasons, Petitioner's application for licensure should be denied at this time.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Florida Real Estate Commission issue a Final Order denying Petitioner's application for licensure as a real estate sales associate or broker.

DONE AND ENTERED this 20th day of January, 2012, in Tallahassee, Leon County, Florida.

S

Edward T. Bauer Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 20th day of January, 2012.

ENDNOTES

1/ "Page 2 of 6" is printed on page two of the judgment.

2/ As to the New York third degree assault charge, Petitioner described the incident as a "bar fight."

3/ Petitioner's New York charge of third degree assault does not constitute a crime of moral turpitude for the purposes of this proceeding. Pursuant to the New York Penal Code, a person is:

[G]uilty of assault in the third degree when:

1. With intent to cause physical injury to another person, he causes such injury to such person or to a third person; or

   
   

2. He recklessly causes physical injury to another person; or

   
   

3. With criminal negligence, he causes physical injury to another person by means of a deadly weapon or dangerous instrument.

Assault in the third degree is a class A misdemeanor.

N.Y. Penal Law § 120.00 (2011).

The closest equivalent to the foregoing charge under Florida law is misdemeanor battery, which is committed when a person "actually and intentionally touches or strikes another person against the will of the other; or [i]ntentionally causes bodily harm to another person." See § 784.03(1)(a), Fla. Stat.

Significantly, the Fifth District has held that a violation of section 784.03(1)(a) is not a crime of moral turpitude in the real estate licensure context. Nelson v. Dep't of Bus. & Prof'l Reg., 707 So. 2d 378, 379 (Fla. 5th DCA 1998)(holding that real estate applicant's commission of a battery by setting off a smoke bomb in a public building did not constitute a crime of moral turpitude).

COPIES FURNISHED:

Richard Reed

600 Via Lugano Circle No. 106 Boynton Beach, Florida 33426

Thomas Barnhart, Esquire Office of the Attorney General The Capitol, Plaza Level 01

Tallahassee, Florida 32399-1050

Layne Smith, General Counsel Department of Business and

Professional Regulation Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-0792

Darla Furst, Chair

Florida Real Estate Commission

400 West Robinson Street, Suite N801 Orlando, Florida 32801

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: 11-005798

Orders for Case No: 11-005798