GIBBS AND SHIRLEY PUHALA, )
)
Respondents. )
)
RECOMMENDED ORDER
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a public hearing in this cause in June 8, 1977, In Ft. Myers, Florida. This matter was transferred to this Division pursuant to Sections 120.57(1)(b)(3), Florida Statutes.
APPEARANCES
For Petitioner: Frederick H. Wilsen, Esquire
Attorney for the Florida Real Estate Commission
2699 Lee Road
Winter Park, Florida 32789
For Respondent: C. Michael Jackson, Esquire
Attorney for Respondents Mrs. Carol Arnold and Mrs. Harriett Bohannon
Stewart, Stewart, Jackson & Keyes Ft. Myers, Florida 33902
Shirley Puhala, in pro per
By way of background, the Florida Real Estate Commission (hereinafter the Commission) held a hearing In its offices in Winter Park, Florida, In Friday, April 15, 1977, for the purpose of considering the immediate emergency suspension of the registrations of Edison Realty, Inc., Richard G. Gibbs and Shirley Puhala for a period of 90 days, pursuant to the Administrative Procedure Act, Chapter 74-310, Florida statutes, Subsections 120.60(5) and 120.54(a).
Based In a 22 count administrative complaint filed April 20, 1977, the Commission, alleging inter alia, that Respondents misappropriated trust deposits in excess of $140,000.00 and failed to pay real estate commissions received to its salesmen, when due, upon demand, and in view of the Commission's contention that the conduct and activities that the Respondent brokers were engaging in was proscribed, the Commission on April 15, 1977, entered a 90 day suspension order respecting the registrations of the above named Respondents i.e., Edison Realty, Inc., Richard G. Gibbs and Shirley Puhala. Thereafter the Commission requested an expedited hearing to resolve the matters alleged in its administrative complaint.
Based upon my observation of the witnesses and their demeanor while testifying and the entire record compiled herein, I make the following:
FINDINGS OF FACT
Respondent-licensee Edison Realty, Inc., was during all times material herein a corporate registered real estate broker and Respondent-licensees, Richard G. Gibbs and Shirley Puhala were registered real estate brokers with the Commission and were operating and registered as active brokers with the official capacity of President and Secretary-Treasurer respectively of Respondent- licensee, Edison Realty, Inc. See Commission's Composite Exhibit #1. Pursuant to a trust agreement dated June 21, 1971, Respondent-licensee, Richard G. Gibbs, as trustee, and Walter Johnson, as beneficiary, entered Into a trust arrangement for certain properties known as Orange River Ranchettes located In Lee County, Florida. (A copy of the trust agreement is attached to the administrative complaint filed herein as exhibit "A".) Testimony adduced during the course of the hearing revealed that approximately 300 acres were purchased which the parties subdivided into 5 acre ranchettes. Pursuant to sale of the ranchettes, approximately $200,000 to $215,000 was received and invested as trust funds. At the end of calendar year 1975, Respondent-licensee, Richard G. Gibbs, obtained without the consent or permission of the remaining trustees, approximately
$127,486.74 in exchange for two promissory notes executed and delivered by Respondent Gibbs, as President of Edison Realty, Inc. (A copy of the promissory notes are attached to the administrative complaint as exhibit "B"). Although the above promissory notes are now due with Interest, Respondent Gibbs refuses to pay despite demands from the trustees. Evidence reveals further that Edison Realty, Inc., received during the course of conducting its real estate brokerage business, during the period of approximately April 23, 1976 thru March 31, 1977, escrow deposits entrusted totaling approximately $37,720.00 and an examination of its escrow account maintained at First National Bank in Ft. Myers, Florida, reveals a closing balance of $5,419.76. Evidence reveals further that Edison Realty, Inc., In the course of conducting its real estate brokerage business is In charge of the management of real property known as Parklane Village Trust, Tamiami City Trust, Union Trust, Kenwood Trust, Pindel Trust, Sancarlo Trust, Broadway Trust and Captain's Quarter. For its management responsibilities, Edison received and was entrusted with funds totaling $19,625.28 and an examination of its escrow account respecting the above trust reflects closing balance of only $5,419.76. Evidence reveals further that Respondent-licensee Richard G. Gibbs, was the only person authorized to and made withdrawals from the above trust account and that as of March 31, 1977, he converted approximately $51,932.52 to his own use or to that of some other person other than the true owner or person entitled thereto.
H. Freeman Bigelow, Norma Jane Morris, Allen Higgens, Hubert R. Foster, Boyd Strasbaugh, Lorelei Jane Irons, Harriet Ann Houck were all former licensed and registered salespersons with the Commission and employed by the Respondent- licensee, Edison Realty, Inc. During the course of their employment with Edison Realty, Inc., they received as payment of their share of commissions earned, checks which were returned to them for insufficient funds. Despite repeated requests by them for their share of commissions earned, Respondent-licensee, Edison Realty, Inc. and Richard G. Gibbs, as President, has failed to honor their demands.
No evidence was introduced to establish that Respondent-licensee, Shirley Puhala, by any means engaged in or assisted Respondent Gibbs in the withdrawal, conversion or other appropriations for his own use of monies
entrusted to him individually or in his official capacity as a trustee or President of Respondent-licensee, Edison Realty, Inc. To the contrary, it appears that Mrs. Puhala was most cooperative in assisting the Commission's investigator in his investigation of this matter.
Pursuant to the emergency suspension hearing before the Commission, Carol Arnold who is presently the President of Edison Realty, Inc., entered an arrangement with Attorney C. Michael Jackson to wind up the corporate affairs of Edison Realty, Inc. The Commission directed them to refrain from engaging in any new corporate business or activity. They were further advised to establish a trust fund for monies received to be disbursed to creditors.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action. Chapter 120.57 (1), Florida Statutes.
The burden of proving that a licensed real estate broker has violated the Real Estate Licensing Law lies with the Florida Real Estate Commission or its representative. State ex rel Vining v. Florida Real Estate Commission, 281 So.2d 487 (Fla. 1973).
The authority of the Commission is derived from Chapter 475, Florida Statutes.
The parties were duly noticed pursuant to the notice provision of Chapters 120 and 475, Florida Statutes.
Insufficient evidence was offered at the hearing to establish that the Respondent-licensee, Shirley Puhala has engaged in any conduct violative of Chapter 475, Florida Statutes, as alleged in the administrative complaint. I shall therefore recommend that the complaint allegations respecting Mrs. Puhala be dismissed.
The acts and conduct of the Respondent-licensee, Edison Realty, Inc., and Richard G. Gibbs, individually and as President of the Respondent corporation, amounts to conduct violative of Chapter 475.25(1)(a)(c)(e) and (i), Florida Statutes.
Based on the violations recited in the paragraph next above, the Respondent-licensee, Richard G. Gibbs, is guilty of a course of conduct or practices which show that he is so incompetent, negligent, dishonest and untruthful that the money, property, transactions and rights of investors or those with whom he may sustain a confidential relation, may not safely be entrusted to him and amounts to conduct violative of Chapter 475.25(3), Florida Statutes.
