STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, BOARD OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 81-1503

) COMMERCIAL EQUITY CORPORATION ) and GEORGE MAY, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice this cause came on for hearing before P. Michael Ruff, duly designated Hearing Officer of the Division of Administrative Hearings on November 19 and December 2, 1981, in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: Theodore Silver, Esquire

9445 Bird Road, Second Floor Miami, Florida 33165

For Respondent: Mr. George May, pro se

2300 West Oakland Park Boulevard, Suite 202 Fort Lauderdale, Florida 33311

The Petitioner herein seeks to revoke, suspend, or take other disciplinary action against the Respondent's licensure as a real estate broker. In the course of a real estate transaction the Respondent allegedly advised the purchaser of his client's property that the purchaser was in default and that the contract had been declared void by the seller, Mrs. Graciela Holden. On the same day, September 30, 1977, the Respondent allegedly informed his client, the seller, that the purchaser did not wish to consummate the transaction, since closing did not occur on the day first agreed upon. Thereupon, the Respondent allegedly represented to his client, the seller, that she would lose the premises due to mortgage foreclosure, since there was now no contract for sale of the property and she was already in default. He therefore proposed a "new deal" to help her out of her predicament. The Respondent reputedly offered to Mrs. Holden an arrangement whereby she would convey her apartment complex to him and he would exchange for it a single family home in Pompano Beach, Florida, which he owned and in which he had an alleged equity of $22,000, which represented the equity he maintained his client had in the apartment complex.

The Respondent also would help her pay the mortgage payment on the house to be exchanged until she obtained financial stability. As a result of his representations Mrs. Holden executed a deed of conveyance of the apartment complex to Eight Villas Corporation of which the Respondent was principal officer and stockholder and the Respondent in turn gave his quit claim deed to the subject single family house to be exchanged. It is thus charged that the

Respondent's statement to the purchaser that the purchaser was in default on the contract and that the seller wished to void the contract was made without knowledge or consent of the seller, Mrs. Holden, and in turn his statement to the seller, Mrs. Holden, that the purchaser, Enfo Inc., did not wish to consummate the transaction was also false. The Petitioner contends that these representations were false and fraudulent, inducing the client, Mrs. Holden, to exchange her property interest in the apartment complex for the Respondent's quit claim deed in the subject single family residence and that her equity and value in the apartment complex were considerably more than the Respondent's equity in the house. The issue is thus whether the Respondent knowingly made such false representations and whether his client relied on them to her detriment.

The Petitioner presented six witnesses, one being the Respondent, called as an adverse witness. At the conclusion of the Petitioner's case, the cause was continued to another date and time at which the Respondent was to go forward with its case. At the subsequently scheduled and duly noticed hearing (December 2, 1981), the Respondent failed to appear. The undersigned learned at the subsequent hearing that another proceeding against the Respondent's license had culminated in a final order of revocation of the real estate license held by the Respondent. See DOAH Case No. 81-1149, order entered October 22, 1981.

Subsequent to this hearing, the undersigned has since learned that, in addition to the final order of revocation in that case, an additional proceeding pending against the Respondent at the time of this hearing has also culminated in a final order of revocation, the appeal time for which has also expired. See DOAH Case No. 81-237.

FINDINGS OF FACT

The following pertinent facts are found based upon the unrefuted testimony and evidence adduced by the Petitioner, the Respondent having failed to appear to put on its case.

1. The Respondent, George May, is a licensed real estate broker, having been issued license number 18515. His principal place of business is located at 2300 West Oakland Park Boulevard, Fort Lauderdale, Florida. At all times pertinent to this case the Respondent was the active firm member for Commercial Equity Corporation, a corporate broker, with offices at the same address. The Respondent was also the principal officer and stockholder of Eight Villas Corporation.

   
   

2. On July 15, 1977, Mrs. Graciela Holden approached the Respondent regarding her desire to sell an apartment complex she owned. She ultimately gave the Respondent a listing for the sale of her property described as:

   
   

   Lot 789, Block 19, Lauderdale-by-the-Sea according to a plat thereof recorded in plat book six, page two of the public records of Broward County, Florida, together with improvements thereon consisting of an apartment complex.

   
   

3. Mrs. Holden had had previous real estate transactions with Commercial Equity Corporation and the Respondent, hence her reliance on the Respondent's services in this situation. She found herself in severe financial difficulty at this time and was becoming ever more delinquent on her mortgage payments on the subject property. She discussed with the Respondent the advisability and means

   by which she might sell that apartment complex. The Respondent recommended to her that she sell the property.

   
   

4. On September 9, 1977, she entered into a deposit-receipt sales contract for the sale of the apartment complex to Enfo Inc., a Florida corporation. The Respondent negotiated and arranged for the contract and sale on behalf of Mrs. Holden. During the negotiation of the proposed sale the Respondent explained the details of the contract to Mrs. Holden and counseled her on the advisability of and method by which the sale could be consummated. During these negotiations and counseling sessions he became aware of her delinquent mortgage payments on the subject premises.

   
   

5. After agreeing to the terms and conditions and entering into the contract, the seller and purchaser agreed to close the sale of the property on September 30, 1977. Errors became apparent in the preparation of certain mortgage assumption documents on the part of the purchaser, however, and therefore the mortgagee required re-submission of proper forms for assumption of the outstanding mortgage by the purchaser, which resulted in the scheduled closing being cancelled and the time for closing extended for two to three days.

   
   

6. During the course of the negotiations with Enfo Inc., and after the contract was signed the seller and purchaser separately made requests through the Respondent to meet with each other. The Respondent, however, informed each on a number of occasions that the other party to the transaction did not wish such a meeting. In effect, then, the Respondent failed to communicate requests by either party to the other regarding their desires to have meetings to discuss terms and conditions of the proposed sale and in representing to each party that the other did not wish such a meeting, the Respondent knowingly made a false representation which was shown by the Petitioner to be material in effecting the ultimate abrogation of the contract.

   
   

7. On September 30, 1977, the original date for closing, the Respondent advised the purchaser that the purchaser was in default on the contract because closing would not be on that previously agreed upon day and therefore the seller was declaring the contract void. Also on September 30, 1977, the Respondent informed his client, Mrs. Holden, that the purchaser did not wish to close the transaction and effect the sale. Shortly thereafter the Respondent informed Mrs. Holden that she would now likely lose the premises to mortgage foreclosure since she was three months delinquent on her mortgage payments and since she no longer had a contract of sale for the premises, on the strength of which the bank might forebear from foreclosure proceedings. The Respondent then advised Mrs. Holden that he would present her with a "new deal" to help her out of her financial predicament.

   
   

8. On the following day, October 1, 1977, the Respondent again reminded Mrs. Holden that her loss of the premises by foreclosure was imminent and offered her a proposition whereby she would convey the subject apartment complex to the Respondent. Her equity in the premises was apparently calculated by the Respondent to be approximately $22,000. The Respondent, by way of exchange, would convey to her a single family home situated at 841 Southwest 13th Court, Pompano Beach, Florida, which he owned and in which he represented to her he had an equity of $22,000. The Respondent additionally assured Mrs. Holden that he would assist her with the mortgage payments on that house until she was able to obtain some financial stability and regular employment. The Respondent persuaded Mrs. Holden to believe that his offer was in her best interests and that in order to keep from "losing everything" she should act on his offer, which she did.

9. As a result of these representations by the Respondent, Mrs. Holden executed a deed of conveyance of her apartment complex to Eight Villas Corporation that same day. That deed was recorded by the Respondent the next day. The Respondent in turn executed and gave to Mrs. Holden a quit-claim deed to the house known as 841 Southwest 13th Court, Pompano Beach, Florida.

   
   

10. The Petitioner's evidence was unrefuted and demonstrates that the Respondent's statement to the purchaser, Enfo Inc., on September 30, 1977, to the effect that the purchaser was in default on the contract and that therefore the contract was going to be cancelled by the seller was made without the knowledge or consent of Mrs. Holden. Mrs. Holden at all times pertinent hereto wished to consummate and close the transaction with Enfo Inc., in order to relieve her financial problems and was not concerned with a slight delay in the original closing date. Similarly, the Respondent's statement to Mrs. Holden that the purchaser, Enfo Inc., did not wish to consummate the transaction and was therefore defaulting on the contract was also false and known by him at the time to be false. At all times pertinent hereto Enfo Inc., desired to close the transaction and had so advised the Respondent. Mrs. Holden believed the Respondent's representations in this regard and relied on his representations and guidance in her conduct of the proposed transaction with Enfo Inc., as well as the transaction with the Respondent himself. The value of the Respondent's Pompano Beach house for which he gave Mrs. Holden a quit claim deed was considerably less than Mrs. Holden's equity and value in the subject apartment complex. The conveyance of the apartment complex from Mrs. Holden to the Respondent's Eight Villas Corporation was induced by the representations of the Respondent, as the alter ego of the corporation, which he knew to be false at the time he made them. The Respondent thus fraudulently advised Mrs. Holden that it was in her best interest to transfer her property to him in exchange for one of lesser value and also falsely advised and misled her when he told her that unless she transferred her property to him in exchange for the house that she would lose the apartment complex and everything else she owned.

    
    

11. The Respondent's real estate license which is the subject of this proceeding has already been revoked and the time for appeal of the Petitioner's final order has expired in DOAH Cases numbered 81-237 and 81-1149.

    
    

    CONCLUSIONS OF LAW

    
    

12. After the commencement of this proceeding it became obvious that the jurisdiction of the Division of Administrative Hearings (and the Petitioner) to entertain this matter had lapsed, since the Respondent's real estate license which is the subject matter of this proceeding was fully and finally revoked in Case No. 81-1149, effective October 22, 1981, the date when the time for appeal of the Board's final order in that cause expired. Thus, although the Petitioner put on a prima facie case which was unopposed because of the Respondent's failure to appear and put on its case at the second hearing, at which time the undersigned learned of the prior revocation, the issue regarding the Respondent's licensure in this cause has become moot and no longer within the agency's subject matter jurisdiction.

RECOMMENDATION

In consideration of the foregoing findings of fact and conclusions of law it is therefore recommended that Case No. 81-1503 be dismissed with prejudice.

DONE AND ENTERED this 3rd day of March, 1982, in Tallahassee, Florida.

P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 3rd day of March, 1982.

COPIES FURNISHED:

Theodore Silver, Esquire 9445 Bird Road, Second Floor Miami, Florida 33165

Mr. George May Suite 202

2300 West Oakland Park Boulevard Fort Lauderdale, Florida 33311

Docket for Case No: 81-001503

Orders for Case No: 81-001503