STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

W. WESLEY WALLACE, )

)

Petitioner, )

)

vs. ) CASE NO. 75-1912

)

DONALD G. DeGEORGE, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in the above-captioned matter, after due notice to the parties, on January 16, 1976, at Fort Lauderdale, Florida, before the undersigned Hearing Officer.

APPEARANCES

For Petitioner: Richard J.R. Parkinson

Associate Counsel

Florida Real Estate Commission

For Respondent: Respondent appeared in his own behalf

ISSUE PRESENTED

Whether Respondent's registration as a real estate broker should be suspended or revoked for alleged violations of Sections 475.25(1)(a) , (i) & (j)

, Florida Statutes.

The Respondent appeared at the hearing without legal counsel and was advised as to his right to be represented by legal counsel at his own expense. He elected to represent himself at the hearing. He was also advised of his rights under the Administrative Procedure Act, including his right to testify under oath if he so desired, and he indicated his understanding of these rights.

The hearing officer advised counsel for Petitioner that although the Administrative Complaint contained an alleged violation of Section 475.25(1)(i), this violation was not stated in the Notice of Hearing. Petitioner's counsel stated that Paragraph 2, Count 2, of the Administrative Complaint stated a violation of that subsection, but that it had not been alleged as a separate ground therein for adverse action. However, counsel stated that if the evidence presented indicated such a violation, Petitioner would amend its complaint at that time to conform to the evidence, and that it desired to present evidence concerning such a possible violation. At the conclusion of the hearing, Petitioner requested that this alleged violation be included in its Complaint.

Respondent was advised that he could request a continuance if necessary to defend against the additional allegation, but he stated that he was able to defend against it without need for a continuance.

FINDINGS OF FACT

1. Respondent was a registered real estate broker during the period when the alleged violations occurred and is currently registered in the same capacity. (Petitioner's Exhibit 9).

   
   

2. On or about February 27, 1973, Respondent was the real estate broker for Associated Real Estate of Broward, Inc., a Florida Corporation, in which he owned all of the stock. On that date, one Lawrence Tellschow delivered to Respondent a check in the sum of 4000.00 as a deposit upon property which he desired to purchase from Louise M. Orner, located in Boca Raton, Florida. Tellschow signed a deposit receipt contract on that date which provided on the reverse under "Deposit" that "(Checks issued for the deposit on this contract will be deposited promptly for clearance (after acceptance of this contract by all parties) and the holder of the deposit will not be responsible for the nonpayment of checks". Respondent thereupon obtained the signature of the seller on the contract and returned to his office at which time Tellschow told him not to deposit the check in the escrow account because he had no bank and the check was no good. He further stated that someone else was supposed to give him a check for the deposit, but had not done so. Respondent thereupon returned the check to Tellschow, called up the seller's son and informed him that there was no contract and that he would send a letter to that effect. He did so on March 1st, wherein it was stated that the check did not clear the bank and that after returning the check to Tellschow, the latter had then decided to withdraw his offer. However, Respondent also stated in this letter words that indicated he had not, in fact, deposited the check (Testimony of DeGeorge, Harper, Chappell; Petitioner's Exhibits 1,4,5,6,7)

   
   

3. On March 1, 1973, Respondent, Henry Pinelli, Lawrence Tellschow, and Associated Real Estate of Broward, Inc., entered into an agreement whereby Pinelli and Tellschow would contribute monies for the purchase of stock in the corporation, and become officers and directors thereof. The agreement further provided that the corporation would engage in real estate investment and development. It also stated that Pinelli had made certain loans to the corporation for the purchase of properties, that he contemplated making and/or securing additional loans for such purpose, and that he would be entitled to receive a note and mortgage from the corporation as to all such funds. This agreement was modified by a later undated agreement which provided that a certain single family residence under construction at Lighthouse Point, Florida, real property owned by the corporation should be held by the corporation simply as "nominee and for the account of Henry Pinelli" who would assume all obligations and be entitled to all profits derived from said property. It further provided that Respondent and the corporation would have the exclusive right to sell the said property and that the six percent commission there for would go solely to the benefit of Respondent Respondent's Exhibits 1 & 2).

   
   

4. The three principals in the corporation had a number of disputes with respect to the activities of the corporation which resulted in the resignation of Tellschow on June 15, 1973, and differences between Respondent and Pinelli as to entitlement to real estate commissions. Although their agreement provided that Respondent would have the exclusive right to sell properties which were acquired by funds advanced by Pinelli (and which were later deeded to him by the corporation), Pinelli gave listings to other realtors for his property located at 3531 N.E. 30th Avenue, Lighthouse Point, Florida. Respondent's conviction that he was being ill-treated by Pinelli led him to place a mechanic's lien on the Lighthouse Point property on November 1, 1973. This lien was predicated

   upon Respondent allegedly having furnished labor, services or materials consisting of: "exclusive sales agent". On May 9, 1974, the Circuit Court of Broward County, Florida, issued an Order requiring Respondent to remove the claim of lien. Respondent had not had the permission of the owners of the property to place the lien thereon. By the time the lien was removed, various law suits were pending between the parties which had not been resolved (Testimony of Bamman, Henry Pinelli, Patricia Pinelli, Waderlow, DeGeorge; Petitioner's Exhibits 10 & 11: Respondent's Exhibits 4-20).

   
   

   CONCLUSIONS OF LAW

   
   

5. Count 1 Respondent is alleged to have violated Section 475.42(j), Florida Statutes by placing a false and unauthorized lien upon real property located at Lighthouse Point, Florida, which had not been authorized by the owners of the property, malicious, and for the purpose of collecting a commission or otherwise coercing the payment of money to him as a broker.

   
   

   The statute alleged to have been violated reads as follows:

   "475.42 Violations and Penalties

   1. VIOLATIONS.-

      (j) No real estate broker or salesman shall place, or cause to be placed, upon the public records of any county, any contract, assignment, deed, will, mort- gage, lien, affidavit, or other writing which purports to affect the title of, or encumber, any real property, if the same is known to him to be false, void,

      or not authorized to be placed of record, or not executed in the form entitling it to be recorded, or the execution or re- cording whereof has not been duly authorized by the owner of the property,

      maliciously or for the purpose of collecting a commission, or to coerce the payment of money to the broker or salesman or other person, or for any unlawful purpose.

      
      

6. A court order required removal of the lien because it was not authorized to be placed on the property. The owners of the property testified that the lien had not been duly authorized by them. Respondent's testimony established that he had placed the lien on the property for the purpose of collecting commissions or coercing the payment of money to him by the owners of the property. Accordingly, it is concluded that Respondent violated the statutory provision, as alleged.

   
   

7. Count 2 - A. The complaint, as amended at the hearing, includes alleged violations of Section 475.25(1)(a) and 475.25(1)(i) F.S.

   
   

   B. These statutory provisions state further grounds for suspension of registration and provide in pertinent part as follow:

   "475.25 Grounds for Revocation or Suspension

   (a) Been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing, trick, scheme or device,

   culpable negligence, or breach of trust in any business transaction,...

   (i) Failed, if a broker, to immediately place, upon receipt, any money, fund, deposit, check, or draft, entrusted to him by any person dealing with him as a broker, in escrow with a title company

   or banking institution located and doing business in Florida, or, deposit said funds in a trust or escrow bank account maintained by him with some bank located and doing business in Florida, wherein said funds shall be kept until disbursement thereof is properly authorized..."

   
   

8. The two alleged statutory violations arise from the one incident involving the Respondent's disposition of a "deposit" given to him toward the purchase of property owned by Louise M. Orner. The facts established that the deposit check was invalid because on a nonexistent bank account of Tellschow, but that Respondent did not learn of this fact until after he had secured the seller's signature on the contract which, although not established, was probably on the same day that the check was given to him by Tellschow. Upon learning of its invalidity he returned it to Tellschow. The terms of the contract provided that the check need not be deposited until after acceptance of the contract by all parties. This contractual provision is somewhat at odds with Section 475.25(i), which requires deposits to be immediately placed in escrow upon receipt. However, since the Respondent learned shortly after receipt of the check that it was worthless, it is concluded that there was substantial compliance with escrow requirements and hence no violation of Section 475.25(1)(i)

   
   

9. As to the alleged violation of 475.25(1)(a) , although Respondent's letter to Mrs. Orner was somewhat inaccurate as to the circumstances surrounding the worthless check that had been received as a deposit, there was no competent evidence to establish the allegations contained in paragraphs 4 and 5 of Count II, and the evidence, as a whole, failed to show that Respondent practiced misrepresentation, concealment, dishonest dealing, or breach of trust in a business transaction, as alleged.

   
   

10. Although Respondent's violation of Section 475.42(j) authorizes suspension of his registration under Section 475.25(d) as a violation of "any of the provisions of this chapter," the peculiar circumstances surrounding the recording of the lien upon the property of his business associate warrants consideration in determining an appropriate sanction. Certainly, Respondent, by his own admission recorded the lien out of a sense of indignation and frustration at his conceived mistreatment at the hands of Pinelli and his lawyer. This of course, is insufficient to justify a flagrant violation of the law, but should be considered in mitigation of the offense. In view of the foregoing, and taking into consideration that there is no evidence of Respondent having been disciplined in the past, it is concluded that a written reprimand is appropriate.

RECOMMENDATION

That Respondent Donald D. DeGeorge be issued a written reprimand for violation of Section 475.42(1)(j) , Florida Statutes.

DONE and ORDERED this 4th day of March, 1976, in Tallahassee, Florida.

THOMAS C. OLDHAM

Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Richard J.R. Parkinson, Esquire Mr. Donald G. DeGeorge Florida Real Estate Commission c/o Grear Real Estate, Inc.

.2699 Lee Road 901 S.E. 17th Causeway Street Winter Park, Florida 32789 Ft. Lauderdale, Florida

Docket for Case No: 75-001912

Orders for Case No: 75-001912