STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, ) FLOYD M. STEVENS, REPRESENTATIVE, )

)

Petitioner, )

)

VS. ) CASE NO. 75-1341

) BARRY P. RIFKIN, SANDRA MAE ) RIFKIN, BOBBY GLENN JOHNSON, AND ) FLAG REALTY, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause was heard before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, at 1:00 P.M. on November 4, 1975, in Suite 210, S. Andrews Avenue, Ft. Lauderdale, Florida.

APPEARANCES

For Petitioner: Mr. Vaughan David Hulse

Associate Counsel

Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

For Respondent: Mr. Ellis S. Simring

City Hall Circle

2630 Hollywood Boulevard

Hollywood, Florida 33020 INTRODUCTION

By an information filed by the Florida Real Estate Commission, the four respondents were charged with causing to be made and disseminating a misleading advertisement in violation of F.S. Sections 817.41 and 817.45, a crime of fraudulent or dishonest dealing in violation of F.S. Section 475.25(1)(e) .

The advertisement in question contained the words "Free appraisals by licensed real estate appraiser" and appeared as a full page ad in the telephone book.

Prior to the hearing, it was represented to the undersigned that respondent Bobby Glenn Johnson made an offer of settlement to the Commission, which offer was accepted. Hence, Mr. Johnson's case was not presented to the Hearing Officer for determination.

By the same information, Count II thereof, respondent Barry P. Rifkin was charged with causing to be made or disseminating a misleading advertisement in violation of F.S. Sections 817.41 and 817.45, a crime of fraudulent or dishonest dealing in violation of F.S. Section 475.25(1)(e) . This charge relates to a door-hanger advertisement used by Broward Investment Company.

FINDINGS OF FACT

Based upon the oral and documentary evidence adduced at the hearing, the following relevant facts are found:

1. At all times pertinent to these proceedings, respondents Barry P. Rifkin and Flag Realty, Inc. were registered with the Florida Real Estate Commission as brokers, and respondent Sandra Mae Rifkin was registered as a broker-salesman.

   
   

2. Respondents caused to be placed in the yellow pages of a Southern Bell Telephone and Telegraph Company telephone directory for Hollywood a full page advertisement containing the words "Free Appraisals by Licensed Real Estate Appraiser".

   
   

3. As noted above, all the respondents were registered with the Florida Real Estate Commission, but none were specifically licensed as appraisers by any governmental or regulatory agency regulating only appraisers. Bobby Glenn Johnson, who was a broker for Flag Realty, Inc. at the time the ad was placed, had received on December 1, 1971, a certificate from an instructor of the Broward County Public Schools, Division of Vocational, Technical and Adult Education, certifying that ,he had met the requirements of a 36-hour course of training in real estate appraising.

   
   

4. Prior to November or December of 1974, respondent Barry Rifkin and one Arnold Savader each held a fifty percent interest in Broward Investment Company. The purpose of this company was to purchase from the owner derelict houses needing repair or houses going into foreclosure, fix them up and then resell them. It appears from the testimony that at the time houses were originally purchased by Broward Investment, respondent Rifkin was nothing more than a silent partner an investor who at times gave advice to Savader regarding the value of the property to be purchased. After the houses were repaired or restored by Savader, they were listed with Flag Realty, Inc. for resale. The homes purchased were put in Savader's name, and only Savader's name appeared on the Company's business card. It appears that prior to purchasing the homes and listing them with Flag Realty, all contact with prospective clients was done by Savader.

   
   

5. A form of advertising used by Broward Investment Company was a door- hanger advertisement stating in part "No Brokers Involved (No Commissions)". There was no evidence that brokers' commissions were ever charged to the sellers.

   
   

   CONCLUSIONS OF LAW

   
   

6. The respondents in this cause are charged with violations of F.S. Sections 817.41 and 817.45 regarding misleading advertising and thus with a crime involving fraudulent or dishonest dealing within the meaning of F.S,. Section 475,25,(1)(e) . Section 817.41 prohibits misleading advertising, and a violation thereof constitutes a misdemeanor of the second degree. The phrase "misleading advertising" is defined by F.S. Section 817.40(5) 1/ as statements made or disseminated "which are known, or through the exercise of reasonable care or investigation could or might have been ascertained, to be untrue or misleading...". Thus, the question to be resolved as to each of the counts charged is whether the language used in the advertisements was untrue or misleading.

7. The real estate license law, Ch. 475 of the Florida Statutes, fully defines the activities of a real estate broker and a real estate salesman, and prescribes the procedures which must be fulfilled for one to qualify to engage in the pursuits enumerated. The definition of a person engaged as a real estate broker or salesman is broad and comprehensive and embraces the activity of appraisement for another for compensation or valuable consideration. Appraisement is indeed one of the defined activities of a real estate broker or real estate salesman is under the control of the Real Estate Commission. F.S. Section 475.01(2). Foulk v. Fla. Real Estate Commission, 113 So.2d 714 (Fla. App. 2nd, 1959). Appraising real estate and holding one's self out to the public as an appraiser are included in the range of duties for which registration as a real estate broker or salesman is required by state law.

   Burke v. Metropolitan Dade County, 213 So.2d 40 (Fla. App. 3rd, 1968). It thus follows that one who is registered with the Florida Real Estate Commission, as are respondents in this case, is "licensed", in the sense of being permitted, to do and hold himself out to the public as being qualified to do appraisals.

   Therefore, an advertisement which states "Free Appraisals by Licensed Real Estate Appraiser" does not fall within the scope of an untrue or misleading statement prohibited by F.S. .817.4l.

   
   

8. This then brings us to the second charge involving Barry Rifkin. Respondent Rifkin owned a fifty percent interest in Broward Investment Company which purchased derelict houses directly from the owners for the purposes of repair and resale. An advertisement used by Broward -``-,5 Investment stated in part "No Brokers (No Commissions). It undoubtedly would have been more correct to use the words "no brokers' commissions involved", inasmuch as respondent Rifkin was a real estate broker and had a fifty percent interest in the business. However, the language used was, at most, a violation so technical in nature as to defy its recognition as such. Here, the evidence clearly illustrates that when the houses were purchased from their owners, respondent Rifkin had absolutely no contact with such owners and no broker commissions were included in the transactions. The houses were bought by Savader and were held in his name. Rifkin's activities with regard to the purchases was limited to occasionally advising Savader of the value of the property sought to be purchased. He never met the owners nor were broker commissions ever charged the owners. Where then are the statements that are "untrue or misleading" as prohibited by Section 817.41? It is concluded that there are none. The fact that these houses, after bought and restored by Savader, were later listed for sale through Flag Realty has no relevance to the charge of misleading advertising by Broward Investments or respondent Rifkin.

In summary, it is concluded that the charges against respondents of misleading advertising find no support in the record, and thus do not provide a ground for disciplinary action in accordance with F.S. Section 475.25(1)(e)

RECOMMENDATION

In consideration of the findings of fact and conclusions of law recited above, it is recommended that the charges contained in the information based upon the offenses of misleading advertising be dismissed.

Respectfully submitted and entered this 17th day of December, 1975, in Tallahassee, Florida.

DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

ENDNOTE

1/ Said section is to be read and considered in pari materia with Section

817.41. Major v. State, 180 So.2d 335 (Fla. 1965)

COPIES FURNISHED:

Mr. Vaughan David Hulse Associate Counsel

Florida Real Estate Commission 2699 Lee load

Winter Park, Florida

Mr. Ellis S. Simring City Hall Circle

2630 Hollywood Boulevard

Hollywood, Florida 33020

Docket for Case No: 75-001341

Orders for Case No: 75-001341