STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 78-536

) P.D. NO. 3303

WILLIAM D. FOLZ, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K.N. Ayers, held a public hearing in the above styled case on 14 June 1978 at Clearwater, Florida.

APPEARANCES

For Petitioner: Joseph A. Doherty, Esquire

Staff Counsel

Florida Real Estate Commission

400 West Robinson Street Orlando, Florida 32801

For Respondent: Elwood Hogan, Jr., Esquire and

James Clodfelter, Esquire 613 South Myrtle Avenue Clearwater, Florida 33515

ISSUES

By Administrative Complaint filed 10 February 1978 the Florida Real Estate Commission (FREC) seeks to revoke, suspend or otherwise discipline the registration of William D. Folz, Respondent, as a real estate salesman. As grounds therefor it is alleged in Count I that Respondent placed a "For Sale by Owner" sign on a tract of land he did not own and was thereby guilty of misrepresentation in a business transaction in violation of Section 475.25(1)(a) Florida Statutes and guilty of operating as a broker while registered as a real estate salesman in violation of Section 475.42(1)(b) Florida Statutes. In Count II it is alleged that Respondent was previously found guilty of obtaining his registration by means of fraud, misrepresentation and concealment in violation of Section 475.25(2) Florida Statutes and, therefore, his registration may be revoked pursuant to Section 475.15(3) Florida Statutes. Three witnesses were called by Petitioner, one witness was called by Respondent and 10 exhibits were admitted into evidence.

FINDINGS OF FACT

1. At all times here involved William D. Folz was registered with the Florida Real Estate Commission as a real estate salesman associated with Roger Bouchard Realty, Inc.

   
   

2. Following receipt of a complaint investigators from FREC in November 1977 checked vacant property in Tarpon Springs, Florida and found thereon a For Sale By Owner sign with a telephone number listed to Respondent's home. One of these investigators, testifying from notes made the week before the hearing, testified that he dialed the telephone number on the sign and talked to a person identifying himself as Folz who said he was the owner of the property. The following day this investigator met Respondent in the Real Estate office and at this time Respondent denied ownership of the property but admitted ownership of the sign. Respondent at this meeting claimed to be a friend of the owner and formerly an officer in the company owning the property; however, at the time he did not know if he was still an officer in the company. This witness had little, if any, independent recollection of the events to which he testified and no effort was made to refresh his recollection by use of material recorded by the witness at or about the time of the incident. His testimony, therefore, is entitled to little weight.

   
   

3. The property on which Respondent had placed the sign in question was owned by Melvin McKnight, and wife, and it had been listed by Respondent and placed in Multiple Listing Service (MLS). McKnight is an investor who has had several transactions involving Florida real estate in which Respondent has acted as his agent. He had given the listing of the property here involved to Respondent and had authorized Respondent to place the sign bearing Respondent's telephone number on this property. If specific authorization had not been granted, McKnight ratified those acts of Respondent subsequent to their occurrence. Respondent had represented McKnight at closings and had delivered deeds executed by McKnight at those closings for some five years prior to the incident here involved.

   
   

4. Subsequent to the termination of the listing agreement with Respondent and his broker, Roger Bouchard Realty, Inc., the property was sold through the efforts of another real estate office and no commission was paid to Respondent or Bouchard.

   
   

5. By Final Order filed June 8, 1976 (Exhibit 8) the FREC revoked Respondent's registration as a real estate broker for a violation of Section 475.25(2) Florida Statutes. By Order entered 22 July 1976 following Motion for Reconsideration of Final Order the Commission granted leave to Folz to file application for registration as a real estate salesman and by letter dated December 5, 1976 (Exhibit 10) the FREC advised Respondent that his petition for reinstatement as a broker had been denied and he was ordered to serve twelve months active registration before becoming eligible to apply for reinstatement without having to take the broker's examination.

   
   

6. Section 475.25(3) authorizes the FREC to revoke the registration of a registrant when the registrant is found guilty of a second violation of Section 475.25(1), Florida Statutes. Section 475.25(2) provides a basis for revocation of a registration independent of Section 475.25(3).

   CONCLUSIONS OF LAW

   
   

7. Section 475.25(3) Florida Statutes relied upon by Petitioner as authority upon which Respondent's registration may be revoked provides in pertinent part:

   
   

   The registration of a registrant may be revoked if the registrant shall, for a second time, be found guilty of any misconduct that warrants his suspension under subsection (1) of this section . . . .

   
   

8. In the event the facts as noted above result in Respondent being found guilty of violation of Section 475.25(1) Florida Statutes, this will be Respondent's first violation of subsection (1) and not the second as alleged by Petitioner. The prior incident upon which Respondent's registration was revoked was alleged to be a violation of Section 475.25(2), not 475.25(1), which authorizes only suspension of a registration.

   
   

9. Section 475.25(1), Florida Statutes provides in pertinent part:

   
   

   The registration of a registrant may be suspended for a period not exceeding two years . . . upon a finding of facts showing that the registrant has:

   1. Been guilty of fraud, misrepresentation, concealment or

      breach of trust in any business transaction . . . .

      * * *

      (d) Violated any of the provisions of this chapter, or any lawful order, rule or regulation made or issued under the provisions of this chapter . . . .

      
      

10. By authorizing or ratifying Respondent's placing of the For Sale By Owner sign on the property McKnight made Respondent his agent and thereafter the placing of the For Sale By Owner sign on the property became the act of McKnight and no longer constituted misrepresentation. However, by becoming the agent or employee of the owner, Respondent brought himself under the aegis of Section 475.42(1)(b) Florida Statutes which provides:

    
    

    No person registered as a real estate salesman shall operate as a real estate broker, or operate as a salesman for any person not registered as his employer.

    
    

11. This provision of the Statute is further amplified by Rule 21V-6.04 Florida Administrative Code which provides in pertinent part:

    
    

    A salesman may not be employed by more than one broker, or by a broker and an employing owner.

    
    

12. Thus, when McKnight ratified the acts of Respondent in placing the For Sale By Owner sign on McKnight's property while the property was listed in Multiple Listing Service, he thereby made Folz his agent or servant. As

    expressed in the rule above quoted a salesman, registered with a broker, who holds a fiduciary relationship with said broker, cannot serve two masters, viz. broker and owner of the property.

    
    

13. In other words Respondent cannot, at the same time, serve McKnight as an employing owner and the broker under whom his registration is carried. McKnight can authorize Respondent to place a For Sale By Owner sign on the property only if Respondent is the agent for McKnight. However, he cannot be McKnight's agent while registered with Bouchard without violating Section 475.42(1)(b).

    
    

14. From the foregoing it is concluded that Respondent violated Section 475.25(1)(d) Florida Statutes by violating Section 475.42(1)(b) Florida Statutes and Rule 21V-6.04 Florida Administrative Code in purporting to act for an employing owner at the time his registration was carried by a registered broker.

    
    

15. It is further concluded that Respondent is not guilty of violation of Section 475.25(3) Florida Statutes since this is the first violation of Section 475.25(1) Florida Statutes and not the second such violation as alleged. Therefore no basis exists for the revocation of Respondent's registration pursuant to Section 475.25(3) Florida Statutes.

    
    

16. When the relevant facts here involved are compared to the more serious violations enumerated in Section 475.25(1) it clearly appears that the acts here committed are minor in import. No evidence was presented that the public, or any member thereof, was deceived or defrauded by the violation here committed by Respondent. As noted by the Court in Webb v. Florida Real Estate Commission,

351 So.2d 71 (Fla. 3 DCA 1977) suspension of a license (for a period of 60 days) is a harsh penalty which ought not be imposed except in cases of serious dereliction involving either fraud or culpable negligence. Neither was evident here. It is therefore

RECOMMENDATION

RECOMMENDED that Respondent be issued a written reprimand for violation of Section 475.42(1)(b) Florida Statutes and Rule 21V-6.04 Florida Administrative Code.

DONE AND ENTERED this 19th day of July, 1978.

K. N. AYERS Hearing Officer

Division of Administrative Hearings Room 101, Collins Building

Mail: Room 530, Carlton Building Tallahassee, Florida 32304 904/488-9675

Filed with the Clerk of the Division of Administrative Hearings this 15th day of June.

COPIES FURNISHED:

James A. Doherty, Esquire Florida Real Estate Commission

400 W. Robinson Street Orlando, Florida 32801

Mr. William D. Folz

c/o Roger Brouchard Realty, Inc.

301 South Missouri Avenue Clearwater, Florida 33516

Docket for Case No: 78-000536

Orders for Case No: 78-000536