STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA BOARD OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 79-550

) P.D. NO. 3350

LEROY HERRON and )

CHASE REALTY, INC., )

)

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 tile above styled case on 2 August 1979 at West Palm Beach, Florida.

APPEARANCES

For Petitioner: Kenneth Meer, Esquire

Staff Attorney

Florida Board of Real Estate

400 West Robinson Street Orlando, Florida 32802

For Respondent: Michael E. Christiansen, Esquire

Post Office Box 3704

West Palm Beach, Florida 33402

By Administrative Complaint filed 20 April 1978 the Florida Real Estate Commission, now the Florida Board of Real Estate, Petitioner, seeks to revoke, suspend or otherwise discipline the real estate broker's license of Leroy Herron and the corporate broker's license of Chase Realty, Inc., Respondents. As grounds therefor it is alleged that Respondent Herron, as active firm member of Respondent, Chase Realty, Inc., was guilty of culpable negligence in failing to supervise the activities of Carl F. German, owner of Chase Realty, Inc., in a real estate transaction involving the sale of a liquor lounge known as Crazy Jim's. An allegation that Respondent failed to maintain a deposit in escrow or return a deposit when the transaction failed to close was dropped at the hearing. Petitioner proceeded only on the allegation that Respondent was guilty of culpable negligence.

Four witnesses were called by Petitioner, two witnesses were called by Respondent and six exhibits were admitted into evidence.

FINDINGS OF FACT

1. The facts here involved are undisputed. At all times here relevant Leroy Herron, Respondent, was registered with the Florida Real Estate Commission as a broker and active firm member of Chase Realty, Inc. Chase Realty, Inc. was

   a corporate broker, one hundred percent of whose stock was owned by Carl F. German, a non-registrant.

   
   

2. At and prior to August 1977, Respondent Herron was employed at the Ramada Inn at Lake Worth as bartender. He had received his real estate broker's registration two or three years before, but had never actively participated in a real estate office or sold real estate.

   
   

3. Carl F. German, a former comptroller for the business owning Ramada Inn, came into the Ramada Inn several times per month and during a conversation with Herron learned that Herron was a registered broker. German said he was in need of a broker and asked if Herron was interested. The conversation was general and no specific employment agreement was reached.

   
   

4. Although German had Herron registered with the Petitioner as active firm member of Chase Realty, Inc., Herron was assigned no duties, provided with no office space or was ever invited to come to the office. German explained the firm's business at this time did not involve real estate sales and that he had Herron available in case a deal came up involving a real estate transaction.

   
   

5. In August 1977 German brokered a deal to sell a liquor lounge known as Crazy Jim's to one Sheridan, who gave German a $5000 deposit on the transaction. Herron had no involvement in this deal and was totally unaware of it until Sheridan contacted him after he had, been unable to get his deposit back from German.

   
   

6. The Deposit Receipt and Contract for Sale and Purchase (Exhibit 2) was prepared by the attorney for the seller and stated "This represents the purchase and sale of personal property only and the lease of the real estate." The contract provided for a commission of $5000 to Chase Realty, Inc. or one-half of the deposit in case the buyer forfeited.

   
   

7. The $5000 down payment was deposited by German in an account of Chase Realty, Inc. on which German was the only authorized signature. When the transaction failed to close and the buyer demanded return of his deposit, German refused to return the deposit. A complaint by the buyer to the Petitioner led to the investigation and the charges here involved.

   
   

8. German contends that the transaction was for the sale of a business only and that he was not involved with the lease recited in Exhibit 2, as that was between the buyer and the lessor. German readily acknowledged that he had made no specific arrangements with Herron to perform the functions of an active firm member broker but insisted that at this time the company was not engaged in any real estate transactions and that he had no need for a registrant.

   
   

9. Upon being advised that he had been registered as active firm member of Chase Realty, Inc. Herron had his certificate removed from the Chase Realty Office and presumably placed his registration in an inactive status. He cooperated fully with the investigator for Petitioner and with the buyer regarding the return of the buyer's deposit.

   
   

10. Carl F. German was tried on criminal charges resulting from the transaction leading to the charges preferred against Herron. Those criminal charges against German involved acting as a real estate broker without a license.

11. The business card German showed to Herron had the name Carl F. German, President, Chase Realty, Inc. (address) Real Estate Brokers. Herron was not aware that German was not a registered real estate broker or that Herron was to be registered as the active broker of Chase Realty, Inc. when he agreed to have his license registered with Chase Realty, Inc.

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of these proceedings.

    
    

13. Section 475.25, Florida Statutes, provides in pertinent part:

    
    

    1. The registration of a registrant may be suspended for a period lot exceeding 2 years. . . . upon a finding of facts showing that the registrant has:

       1. 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. . . .

          
          

14. The allegation pursued here is only that Herron was guilty of culpable negligence in not being aware of the transaction involving the sale of the lounge or in allowing himself to be registered as active firm member of a corporate broker where he was not actually working.

    
    

15. Reckless indifference or grossly careless disregard for the safety of others is necessary to prove culpable negligence. State v. Greene, 348 So.2d 3 (Fla. 1977).

    
    

16. Gross negligence has come to mean the same as described by the terms wanton, wilful or reckless conduct. The term is broad enough to include not only wanton acts but also acts performed with intent to injure the person or property of another. This equates gross negligence with an utter disregard of consequences so as to suggest an intent to inflict injury. As stated in 57 AM.JUR. Negligence Section 100:

    
    

    Such a use of the term "gross negligence" has been said to be an anomaly and contradiction in terms, because the term "negligence" where employed to describe a certain consequence, means that the consequence ought to have been seen and avoided. "Gross negligence" used in this sense, means that tile injury actually was foreseen and intended, or implies a wil- fulness in pursuing a course of conduct which would naturally and probably result in injury to another. The designation of wanton acts as "gross negligence" is a misnomer, because such acts are not negligence at all. In other words, if only one degree of negligence is properly to be recognized, and inadvertent and unintentional acts are the very essence of negligence, a reference to gross and wanton conduct imports conduct which differs

    essentially from that which is merely negligent. However, where "gross negligence" is considered to mean wilful or wanton con- duct, the term has such significance in the law that a statute which incorporates it as an element of liability is not thereby ren- dered void for want of certainty. [Citations omitted]

    
    

17. The facts here presented show that Respondent Herron was negligent in allowing German to have him designated active firm member of Chase Realty, Inc. without his (Herron's) knowledge, but do not equate to that wilful and wanton disregard of the consequences necessary to prove gross or culpable negligence.

    
    

18. From the foregoing it is concluded that culpable negligence of Respondents Herron and Chase Realty, Inc. was not shown by a preponderance of the evidence. It is therefore

RECOMMENDED that these proceedings be dismissed. Entered this 15th day of August, 1979.

K. N. AYERS Hearing Officer

Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

COPIES FURNISHED:

Kenneth Meer, Esquire Staff Attorney

Florida Board of Real Estate

400 West Robinson Street

P. O. Box 1900

Orlando, Florida 32802

Michael Eric Christiansen, Esquire NASON, GILDAN, YEAGER & LUBIN, P.A.

212 Professional Plaza

2250 Palm Beach Lakes Boulevard

P. O. Box 3704

West Palm Beach, Florida 33402

Docket for Case No: 79-000550

Orders for Case No: 79-000550