STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, FLORIDA REAL ESTATE )

COMMISSION, (formerly Board ) of Real Estate), )

)

Petitioner, )

)

vs. ) CASE NO. 81-2898

)

VANNOY BANKS, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause came on for administrative hearing before P. Michael Ruff, duly designated Hearing Officer of the Division of Administrative Hearings, on April 27, 1982, in West Palm Beach, Florida.

APPEARANCES

For Petitioner: John Huskins, Esquire

Department of Professional Regulation Post Office Box 1900

Orlando, Florida 32802

For Respondent: Vannoy Banks, pro se

1025 Congress Avenue

West Palm Beach, Florida 33409

This cause was initiated on an Administrative Complaint filed by the Petitioner against the Respondent wherein it is alleged that Respondent was associated with Jim Graham, Inc., Realtor from March 20, 1978 to July 6, 1979, and then became associated with Florida Gold Coast Real Estate III, Inc. effective July 6, 1979. It is alleged that on July 1, 1979, Keva Davis, a prospective purchaser of a house, contacted the Respondent at the office of Jim Graham, Inc. to request him to show her residential property, which request and showing of the property resulted in her agreeing to purchase it and give the Respondent a $500.00 binder check in conjunction with the signed contract on July 2, 1979. The check was made payable to Florida Gold Coast Realty and allegedly deposited in that company's escrow account on or about July 3, 1979. The Petitioner alleges that the Respondent, when he accepted that earnest money check, was still in the employ of Jim Graham, Inc. and had not yet transferred his registration to his new employer, concomitantly therefore failing to place the deposit money in escrow with his registered employer. It is charged that Keva Davis entrusted her money to the Respondent as an associate of Jim Graham,

Inc. Thus, the Petitioner alleges that by having the earnest money deposit check made payable to the new employer, Florida Gold Coast, the Respondent was therefore operating as that firm's salesman, which was not yet his registered employer and therefore he is guilty of violating Section 475.421(1), Florida Statutes, as well as Subsection 475.25(1)(k), Florida Statutes.

The Petitioner presented three witnesses and the Respondent presented three witnesses. The Petitioner presented three exhibits and the Respondent presented eight exhibits. Respondent's Exhibits 1 and 2 were not admitted on the basis that they are hearsay and not corroborative of competent evidence or testimony. Respondent's Exhibit 4 is admitted as corroborative of the Respondent's testimony that he began working for Gold Coast Realty, Inc. and Mr. Steinhart on July 1, 1979, with the same ruling applying to Respondent's Exhibit 5.

Respondent's Exhibit 6 was not admitted on the basis of its irrelevancy. Respondent's Composite Exhibit 7 was admitted to the extent that the two letters in that exhibit authored by the Respondent, who testified and were cross- examined at the hearing, were deemed admissible. Subsequent to the hearing, the parties ultimately elected not to file proposed findings of fact and conclusions of law or briefs.

FINDINGS OF FACT

1. The Respondent is a licensed real estate broker holding license number 0111816 registered with Florida Gold Coast Real Estate III, Inc. of Royal Palm Beach, Florida.

   
   

2. The Petitioner is an agency of the State of Florida charged with regulating the licensure status of real estate salesmen, broker salesmen, and brokers in the State of Florida.

   
   

3. The Respondent was associated with Jim Graham, Inc. from March 13, 1978, and signed a change of registration form "401" requesting that his license be changed from registration with Jim Graham, Inc. to Florida Gold Coast Real Estate III, Inc. on July 3, 1979, also signed by his new broker, Martin Steinhardt on July 3, 1979.

   
   

4. Some time in about the first week of June, 1979, one Keva Davis, a prospective residential real estate purchaser, contacted the Respondent's wife who was also at that time associated with the office of Jim Graham, Inc. to request her to show her residential property. She showed Keva Davis a number of residences, but no purchase was contracted for at that time. The Respondent's wife, Christina Banks, gave notice to Jim Graham, Inc. that she was leaving its employ and she applied for a transfer of her certificate to Gold Coast Real Estate III, Inc. as evidenced by her check of June 27, 1979, made out to the Florida Real Estate Commission. She gave notice that she and her husband were leaving on a trip to Europe. She left for Europe sometime after June 20, 1979, and her husband was to follow later after concluding certain business. Keva Davis contacted her regarding viewing certain residential property and she referred Ms. Davis to her husband since she was about to leave on her trip.

   
   

5. The Respondent notified Jim Graham on or about the 1st of June, 1979, that be was no longer working for him. He actually last worked for Graham in late May of 1979. He and his wife bought their passports for their trip on June 20, 1979, and he recalls submitting his change of employment form to the Board of Real Estate before July 1, 1979, and indeed was already a real estate

   instructor with a subsidiary of Gold Coast before that time. He candidly admitted that the application form in the Petitioner's Exhibit 3 indicates that he and his new broker, Mr. Steinhardt, signed that form on July 3, 1979, but his honest belief was that he sent the form in to the Board of Real Estate prior to July 1st.

   
   

6. In any event, Keva Davis contacted him on July 1, 1979, at his home and informed him that she had been shown certain property by his wife, and since his wife was out of town she recommended that Keva Davis engage him to show her another piece of property. He showed her the property and the next day, July 2, 1979, Keva Davis agreed to purchase it and signed the deposit receipt and sales contract and gave Vannoy Banks a check for $500.00 earnest money deposit, made out to Florida Gold Coast Real Estate. The sale of the subject residence never "closed" apparently because Keva Davis did not qualify for financing. Upon her request Mr. Banks immediately returned the $500.00 deposit.

   
   

7. On July 1 and 2, 1979, Mr. Banks was not an associate of Jim Graham, Inc. and Ms. Davis did not seek his services as an associate of Jim Graham, Inc.; she rather called him at home on a referral by his wife. There was shown to be no connection between her request for the Respondent's services and his tenure as an associate of Jim Graham Inc. On July 1st, and thereafter, the Respondent was not in the employ of Jim Graham, Inc. Jim Graham, the former broker employing the Respondent, has never claimed or sought a real estate commission with regard to the subject transaction. The transaction occurred approximately a month after the Respondent informed Jim Graham that he would be doing no more work for him and after he had gone to work in June as a real estate class instructor on behalf of a subsidiary of Florida Gold Coast Real Estate III, Inc. Keva Davis was represented by the Respondent's wife and Respondent in the attempted real estate transaction, and never paid or was asked to pay a real estate commission to Jim Graham ore Jim Graham, Inc., nor for that matter to Respondent or his wife. The earnest money check or deposit check was placed immediately in the escrow account of Florida Gold Coast for whom he believed to be the proper broker to serve as his escrow agent. The deposit money was promptly refunded to Ms. Davis. She suffered no detriment in the transaction, nor did any member of the public, nor did Jim Graham, apparently, because he never sought payment of any real estate commission in spite of the fact that he filed a grievance against the Respondent. In that connection the evidence establishes, through the testimony of the Respondent, as corroborated by other evidence, that Jim Graham apparently owed the Respondent some money. A civil action was filed by the Respondent resulting in his recovering a judgment against Jim Graham in excess off $16,000.00, during the course of which litigation Jim Graham made representations to the Respondent that he would file the subject grievance if the Respondent did not voluntarily dismiss his lawsuit. The civil action proceeded to judgment and the instant proceeding was initiated by Jim Graham's complaint to the Petitioner.

   
   

8. The undersigned finds that the Respondent honestly believed that his employment relationship with Jim Graham, Inc. was validly terminated and that he had no intent to defraud or otherwise harm Jim Graham or Jim Graham, Inc. It is true, however, that the application form by which he effected transfer of his certification to the new employment with Florida Gold Coast was not filed until July 3, 1979--the day after the transaction with Ms. Davis. Steven Hoyt, a mortgage officer for Manufacturer's Hanover Trust Company, who in July, 1979, worked for Margaretten Mortgage Company and attempted to finance Ms. Davis' purchase of the house, is familiar with the Respondent's reputation in the real estate business and knows him to have a reputation for honest dealing.

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the subject matter of, and the parties to, this proceeding, pursuant to Section 120.57(1), Florida Statutes.

   
   

10. Subsection 475.25(1)(k), Florida Statutes (1979), provides in pertinent part that it is a ground for revocation, suspension or other disciplinary action against a salesman if the salesman fails:

    
    

    . . .to immediately place with his registered employer any money, fund, deposit, check, draft entrusted to him by any person dealing with him as agent of his registered employer.

    
    

    Subsection 475.42(1)(b), Florida Statutes, provides:

    
    

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

    
    

11. The preponderance of the evidence does not establish that the Respondent was acting as the agent of his "registered employer," that is, Jim Graham, Inc., at the time Keva Davis dealt with him on July 1 and 2, 1979. The evidence does establish that his registration technically was still with Jim Graham, Inc., but there was no agency or employment relationship or understanding then existing at all between Respondent and Jim Graham inasmuch as the Respondent had informed Jim Graham on or about the first of June, 1979, that he was no longer in his employ and would no longer be doing any work for or on his behalf. Indeed, he had not worked for him as his associate or agent since late May, 1979. Further, the customer involved, Keva Davis, had contacted the Respondent's wife who had referred her, in her absence, to the Respondent for purposes of demonstrating houses on the market to her and she had called him at his residence. She in no way dealt with him at the office of Jim Graham, Inc. or otherwise in his former capacity as agent, associate, or employee of Jim Graham, Inc. Thus, the evidence does not support the charge that the Respondent failed to place with his registered employer the deposit check entrusted to him by Ms. Davis dealing as the agent of Jim Graham, Inc., which he clearly was not at the time in question. (Emphasis supplied.)

    
    

12. With regard to the second alleged statutory violation in the Administrative Complaint regarding Subsection 475.42(1)(b), there is no question that on July 1 and 2, 1979, Respondent had already begun operating as a broker with Florida Gold Coast Real Estate III, Inc. He had technically not transferred his registration to the new place of employment since he did not complete and file the subject change of registration form contained in Petitioner's Exhibit 3 until the following day. The Respondent demonstrated unequivocally that there was no intent to defraud his former employer-broker and that he honestly believed he was validly acting in his capacity as broker with Florida Gold Coast when he undertook to consummate the transaction involving Keva Davis. The preponderance of the evidence does show that he is in technical violation of this subsection, however, it is also true that the intent of the Legislature in enacting Chapter 475, and the subject subsection, regulating the licensure status of realtors and their practice, was to protect the public involved in business transactions with realtors. The evidence unequivocally demonstrates that no member of the public was harmed by the failure of the

Respondent to effect the transfer of his registration by June 30, 1979. The spirit of the subsection was at least complied with, insofar as the legislative intent of protecting the public and managing brokers for whom salesmen operate is concerned, by the Respondent informing Jim Graham at least a month prior to his assuming his new employment status that he was no longer working for him, and otherwise conducting his real estate practice affairs since late May of 1979 in a way so as to leave no doubt that that employment relationship had been severed. Thus, the violation is a miniscule, technical violation and no significant penalty is warranted. Here the Respondent attempted to obtain a correct licensure status but was only slightly late in doing so. There was no showing of any intent to deceive or defraud anyone connected with the subject transaction. Thus, in the case of Brod v. Jernigan, 198 So.2d 575 (Fla. 2nd DCA 1966), the court held:

. . .such public administrative weapons must always be reasonably and cautiously and even sparingly utilized. Administrative processes of the commission should be aimed at the dishonest and unscrupulous operator, one who cheats, swindles or defrauds the general

public in handling real estate transactions. . .

The court went on to hold that the Respondent's act in that case, failure to timely deposit a $100.00 earnest money deposit in his escrow account, was only a strictly technical violation and an isolated one and did not relate to any dishonest conduct on the part of the Respondent in his dealings with the public. The court ultimately ruled that a private written reprimand was proper. So too, in Pauline v. Borer, 274 So.2d 1 (1973), where a broker failed to make a required disclosure to a seller regarding an offer received, but immediately called the commission's attention to his omission and asked for advice on how to proceed, he was only guilty of a technical violation and the harsh punishment of a one-year suspension was held improper and inappropriate under the circumstances. The Respondent only committed a minor technical violation by which no member of the public was harmed, and his slight misfeasance certainly does not justify jeopardizing his livelihood by the threat of revocation or suspension of his license or even public reprimand. See also, Kopf v. Florida Real Estate Commission, 379 So.2d 1327 (1980), and Lawrence v. Florida Real Estate Commission, 207 So.2d 470 (1968). It must therefore be concluded that for such a slight violation, only a private written reprimand is warranted.

RECOMMENDATION

Having considered the foregoing findings of fact and conclusions of law, the evidence in the record, as well as the candor and demeanor of the witnesses, it is

RECOMMENDED:

That the Respondent, Vannoy Banks, be found guilty of a violation of Subsection 475.42(1)(b), Florida Statutes, and that the penalty of a private written reprimand be imposed upon Respondent.

DONE and ENTERED this 30th day of September, 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 30th day of September, 1982.

COPIES FURNISHED:

John Huskins, Esquire Department of Professional Regulation - Legal Services Post Office Box 1900 Orlando, Florida 32802

Vannoy Banks

1025 Congress Avenue

West Palm Beach, Florida 33409

Frederick H. Wilsen, Esquire Department of Professional Regulation

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

C. B. Stafford, Executive Director Florida Real Estate Commission Post Office Box 1900

Orlando, Florida 32802

Samuel R. Shorstein, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 81-002898

Orders for Case No: 81-002898