STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 81-3268

) TIM JOHNSON, a/k/a LYLE TIMOTHY ) JOHNSON, a/k/a TIMOTHY LYLE ) JOHNSON, )

)

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 10 February 1982 at Clearwater, Florida.

APPEARANCES

For Petitioner: Frederick H. Wilsen, Esquire

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: Patrick Maguire, Esquire

1253 Park Street

Clearwater, Florida 33516

By Administrative Complaint dated 4 December 1981 the Department of Professional Regulation, Petitioner, seeks to revoke, suspend, or otherwise discipline the license of Tim Johnson, Respondent. As grounds therefor it is alleged that Respondent failed to pay a money judgment to Jacques Skinner, failed to pay a promissory note to the landlord of a building leased to Respondent, and he was found guilty of resisting an officer with violence and of stopping payment on a check with intent to defraud.

At the commencement of the hearing Respondent, by and through his attorney, moved to dismiss Counts I and II on grounds the Complaint failed to state a cause of action and to dismiss Count III on the ground the Respondent had pleaded nolo contendere and adjudication of guilt had been withheld. Rulings on these motions were reserved. Thereafter, Petitioner called three witnesses, and four exhibits were admitted into evidence.

Finding it unnecessary to dispose of this case on the basis of the preliminary motions to dismiss made by counsel for Respondent, Respondent's motions to dismiss Counts I, II and III are now denied. Proposed findings submitted by the parties and not included herein were not supported by the evidence or were deemed immaterial to the results reached. Conclusions of law submitted by the parties and not included herein were deemed inaccurate.

FINDINGS OF FACT

1. Respondent is a licensed real estate salesman and was so licensed at all times here relevant.

   
   

2. On November 18, 1980, a money judgment was obtained against Respondent in Small Claims Court by Jacques Skinner for services performed by Skinner for Respondent. Respondent has failed to satisfy the judgment. Prior to the institution of the suit Respondent had paid Skinner approximately two-thirds of the contract price for work done on a building occupied by Respondent.

   
   

3. On January 16, 1979, Respondent executed a lease on which he obligated himself to pay the sum of $600 for rent for the months of March and April 1979, and $1,000 per month thereafter with the sum of $2,000 due on May 1, 1979. Respondent was unable to comply with this payment schedule and, in exchange for rents due, the landlord accepted a promissory note in the amount of $3,200 due and payable December 1, 1979. Respondent has failed to pay any part of this

   $3,200 note given to the landlord.

   
   

4. On 7 January 1980 Respondent pleaded nolle contendere to stopping payment on a check with intent to defraud, resisting an officer with violence, battery of a law enforcement officer and battery. Adjudication of guilt was withheld by the court and Respondent was placed on probation for three years.

   
   

   CONCLUSIONS OF LAW

   
   

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

   
   

6. Respondent is charged with violating the following provisions of Section 475.25(1), Florida Statutes:

   
   

   (b) Being guilty of. . .dishonest dealing. .

   .breach of trust. . .[or] violated a duty imposed upon him by law or by the terms of a listing contract, written, oral, express or implied in a real estate transaction. . .

   (d) Failed to account or deliver to any person.

   . .upon demand of the person entitled to such accounting and delivery, any personal property such as money. . .which has come into his hands and which is not his property or which he is not in law or equity entitled to retain under the circumstances. . .

   (f) Been found guilty, regardless of whether adjudication was withheld, of a crime against the laws of this state. . .which crime relates directly to the activities of the licensed broker or salesman or involves moral turpitude or fraudulent or dishonest dealings. . .

7. In Counts I and II Respondent is alleged to have (1) failed to pay a judgment and (2) failed to pay a promissory note. These proceedings are penal in nature. State ex rel. Vining v. Florida Real Estate Commission, 281 So.2d

   487 (Fla. 1973). Failure to pay a judgment is purely a civil matter with adequate provision for execution on the judgment. The same is true on failure to pay a promissory note. Debtors prisons went out around the Seventeenth Century and they should not be brought back in the guise of license revocation. Nor should the threat of license revocation be used to coerce the payment of a civil judgment unrelated to the licensee's conduct in a real estate transaction.

   
   

8. If this rationale, that revocation proceedings should emanate from poor financial planning or as a result of financial hardship over which the licensee had little control is followed, it should follow that filing bankruptcy to extinguish such debts, would be even more reprehensible. That this is not so was conclusively established by the Supreme Court in Perez v. Campbell, 402 U.S. 673 (1971). Perez involved an Arizona statute which provided for the suspension of drivers' licenses of uninsured motorists involved in accidents until judgments rendered against them resulting from such accidents were paid. It further provided that suspension would continue until the judgment was paid and that a "discharge in bankruptcy following the rendering of any such judgment shall not relieve the judgment debtor from any of the requirements of this article." The Court held this provision of the Arizona statute repugnant to the Supremacy Clause of the U.S. Constitution and therefore void.

   
   

9. While the Supremacy Clause is not here involved, we do have a situation where a licensee is charged with dishonest dealing and breach of trust solely because he is financially unable to pay debts. No evidence was presented that Respondent was guilty of bad faith or that he contumaciously refused to pay these debts. The only evidence presented was that he had not done so and was perhaps without assets to be attached by the judgment creditor. This does not constitute a violation of Section 475.25(1)(b), Florida Statutes, above quoted.

   
   

10. Nor does it constitute a violation of Section 475.25(1)(d), Florida Statutes. That section contemplates personal property such as money coming into the licensee's hands as a result of his fiduciary relationship with the parties to a real estate transaction and thereafter failing to produce this personal property when claimed by the rightful owner. Any money coming into Respondent's hands with which he could rightfully satisfy the judgment or note would first be his property until such time as he paid his creditors. The phrase, "[W]hich he is not in law or equity entitled to retain under the circumstance" applies only to escrowed property. Roberts v. Ayers, 380 So.2d 1057 (Fla. 1st DCA 1979). Furthermore, there is no evidence that the funds from which the judgment and note could have been paid ever was in the possession of Respondent. He can hardly be charged with failure to deliver that which he never had.

    
    

11. With respect to charge III, it is noted that Respondent pleaded nolle contendere, inter alia, to stopping payment on a check with intent to defraud and adjudication of guilt was withheld. Both Petitioner and Respondent in their briefs cite Holland v. Real Estate Commission, 352 So.2d 914 (Fla 2d DCA 1977) for the holding that action to suspend a license under Section 475.25(1)(e), Florida Statutes, (the predecessor to 475.25(1)(f)) cannot be taken when adjudication of guilt has been withheld. Subsequent to the Holland decision, the legislature amended this provision of the real estate license law to include the phrase, "[R]egardless of whether adjudication was withheld," which was absent from 475.25(1)(e) when disciplinary action was taken against Holland's license. By this amendment the legislature has overruled the Holland decision.

12. A plea of nolo contendere admits the facts for the purpose of the pending prosecution. It raises no issue of fact or law under the accusation. After such a plea the trial court has no authority to enter a judgment of not guilty. Instead, the trial court has the choice to: (1) Accept the plea and enter judgment and sentence thereon; or (2) Reject the plea, enter a plea of not guilty for defendant, after which defendant would have a choice of pleading guilty or not guilty and then proceeding with trial. A plea of nolo contendere is construed for all practical purposes as a plea of guilty and, in essence, places the defendant at the mercy of the court. When such a plea is entered it is proper for the court to hear testimony, determine the degree of guilt and assess the punishment authorized by the statutes. Vinson v. State, 345 So.2d 711 (Fla. 1977)

    
    

13. Although the Court withheld adjudication of guilt, it placed Respondent on probation for three years. He was accordingly found guilty. Had he been found not guilty, he could not have been placed on probation.

    
    

14. The offense of which Respondent was charged in the criminal court, and for which adjudication of guilt was withheld, was not a crime relating directly to the activities of a licensed real estate salesman. Accordingly, the only basis for disciplinary action against Respondent's license is if the crime involves moral turpitude or fraudulent or dishonest dealing.

    
    

15. In State ex rel. Tullage v. Hollingsworth, 146 So. 660 (Fla. 1933), the Court stated:

    
    

    Moral turpitude involves the idea of inherent baseness or depravity in the private social relations or duties owed by man to man or man to society. It may also be defined as anything done contrary to justice, honesty, principle or good morals, though it often involves a question of intent.

    
    

16. In Carp v. Florida Real Estate Commission, 211 So.2d 240 (Fla. 3d DCA 1968), the Court held a registered real estate broker who was convicted of bookmaking was guilty of a crime against the laws of this State involving moral turpitude as affecting the powers of the Real Estate Commission to revoke his license. In Kiner v. State Board of Education, 344 So.2d 656 (Fla. 1st DCA 1977), a plea of guilty to manslaughter was held to constitute prima facie evidence of guilt of an act involving moral turpitude. However, in Florida Bar

    v. Davis, 361 So.2d 159 (Fla. 1978), the Court held the issuance of four worthless checks, three to pay a secretary, and one to open an account in another bank, with knowledge that there were insufficient funds on deposit to pay the checks on presentation, did not constitute moral turpitude, absent an intent to defraud. The Davis case may be distinguished from the instant case as here Respondent pleaded nolo contendere to stopping payment on a check with intent to defraud. In Pearl v. Florida Board of Real Estate, 349 So.2d 189 (Fla. 3d DCA 1981), the Court held that conviction of a felony possession of a controlled substance does not constitute conviction of a crime involving moral turpitude.

17. The offense of stopping payment on a check with intent to defraud is an offense involving moral turpitude. However, this determination is not essential to this case because committing an offense "with intent to defraud" constitutes fraudulent or dishonest dealing whether or not moral turpitude is involved.

    
    

18. From the foregoing it is concluded that Counts I and II do not allege violations of the real estate license law. It is further concluded that even if they do allege such violation, the evidence presented will not support a finding that Respondent was guilty of Counts I and II. It is also concluded that Respondent has been found guilty of a crime against the laws of Florida involving moral turpitude and fraudulent and dishonest dealings. It is, therefore,

RECOMMENDED that the license of Tim Johnson be suspended for a period of sixty (60) days.

ENTERED this 4th day of March, 1982, at Tallahassee, Florida.

K. N. AYERS 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 4th day of March, 1982.

COPIES FURNISHED:

Frederick H. Wilsen, Esquire Assistant General Counsel Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Patrick T. Maguire, Esquire Richards Building

1253 Park Street

Clearwater, Florida 33516

C. B. Stafford, Executive Director Board of Real Estate

Department of Professional Regulation

Post Office Box 1900 Orlando, Florida 32802

Samuel Shorstein, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 81-003268

Orders for Case No: 81-003268