STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, BOARD OF REAL )

ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 82-019

)

JAMES E. YOWELL, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held before the Division of Administrative Hearings, by its duly designated Hearing Officer, DONALD R. ALEXANDER, on March 2, 1981, in Fort Myers, Florida.

APPEARANCES

For Petitioner: James H. Gillis, Esquire

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: James E. Yowell, pro se

230 South West 47th Terrace Cape Coral, Florida 33904

BACKGROUND

By Administrative Complaint dated November 2, 1981, Petitioner, Department of Professional Regulation, Board of Real Estate, has charged that Respondent, James E. Yowell, has violated Subsections 475.25(1)(d), 475.42(1)(b) and (1)(d), Florida Statutes, for which disciplinary action against his real estate broker's license should be taken. In summary form, it is charged that in February, 1980, Respondent, while employed as a salesman with West Coast Realty, Inc. in Matlacha, Florida, entered into an oral agreement with one John Lindemann to rent Lindemann's mobile home; that Yowell thereafter advertised for a tenant using his own name, home address and telephone number; that after having obtained tenants he charged a 10 percent fee from the rental payments for his services; that Yowell did not immediately turn over the rental fees to Lindemann; that Yowell offered only a part of the total fees collected while retaining a portion thereof for himself as expenses; and that by reason of the foregoing Respondent (1) has operated as a broker while being licensed as a salesman for someone not registered as his employer [475.42(1)(b)], (2) ". .

.collected rental payments and commission in his own name and not in the name of his registered broker and without the express consent of his employer. . ." [475.42(1)(d), and (3) is ". . . guilty of having failed to account and deliver funds which were not his property and which he was not entitled to retain in law or equity. . ." [475.25(1)(d)].

Respondent requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes, to contest the charges. The matter was forwarded by Petitioner to the Division of Administrative Hearings on January 4, 1982, with a request that a Hearing Officer be assigned to conduct a hearing. By Notice of Hearing dated February 2, 1982, the final hearing was scheduled on March 2, 1982, in Fort Myers, Florida.

At the final hearing, Petitioner called Stanley N. Miller, S. Dale Johnson, Joseph Ohlhausen, John Lindemann, John S. Swalac, Marcella Yowell and William F. Gross as its witnesses and offered Petitioner's Exhibits 1-4, each of which was received into evidence. Respondent testified on his own behalf and called Benjamin T. Travers and Stanley N. Miller as his witnesses and offered Respondent's Exhibit 1, which was received in evidence.

The transcript of hearing was filed on March 18, 1982. The parties were given the opportunity to file proposed findings of fact and conclusions of law; however, none were filed.

The issue herein is whether Respondent should be disciplined for the alleged violations set forth in the Administrative Complaint.

Based upon all the evidence, the following findings of fact are determined: FINDINGS OF FACT

1. At all times relevant hereto, Respondent, James E. Yowell, held real estate broker's license number 0319244 issued by Petitioner, Department of Professional Regulation, Board of Real Estate. 1/ Respondent and his wife, Marcella Yowell, were real estate salesmen registered with West Coast Realty, Inc., a real estate firm in Fort Myers, Florida. The broker of record and office manager was Stanley N. Miller while S. Dale Johnson served as president and active broker of the firm. Both Miller and Johnson continued in those capacities until November 17, 1980, when William F. Gross purchased the business and became the active broker.

   
   

2. On May 31, 1979, Marcella Yowell entered into an agreement with West Coast Realty, Inc. to manage a branch office in Matlacha, Florida. The agreement provided that the office would be operated ". . . in the name of the Broker. . .(and) under the supervision of the Broker. . ." Yowell also agreed, inter alia, to ". . . properly equip. . .(the) office. . ." to not ". . . contract any bills in the name of the Broker. . .", to pay ". . . the bills and charges of the business including. . .rent, advertising, utilities, telephone and office expense. . .," to permit the Broker ". . . access to all books and records of the business. . ." and to make periodic audits, and to divide commissions received from the branch office. The Yowells paid West Coast $2000 for the opportunity to operate the branch office subject to those conditions.

   
   

3. In February, 1980, John V. and Patricia Lindemann purchased a mobile home and lot in Lee County from Donald Harris, a real estate salesman with West Coast Realty. Because the mobile home was rented at that time and unavailable for immediate occupancy, Mr. Lindemann approached Respondent and asked him if he could rent the trailer until he returned from Wisconsin the following winter. Yowell and Lindemann orally agreed that Yowell would retain 10 percent of rental proceeds as his commission. The parties did not specify what the monthly rent for the trailer would be, nor did they reduce their agreement to writing.

4. The occupants at the time Lindemann purchased the property vacated the premises on or about March 15, 1980. At some later time, Yowell placed an advertisement to rent the trailer in the Pine Island Eagle, a local newspaper, giving the branch office's address and telephone number for prospective renters to contact.

   
   

5. By this time, warm weather had set in, and because the trailer had no air-conditioner, Yowell found it difficult to rent. There was also no mattress on the bed, and other miscellaneous items were missing. Accordingly, he contacted Lindemann in Wisconsin and asked whether he could install an air- conditioner and purchase a mattress and other items to make it more attractive to rent. Yowell also advised Lindemann that it would be necessary to have a water meter installed so that water could be hooked up to the trailer.

   Lindemann agreed to all these improvements with the understanding that Yowell would advance the money to purchase these items and subtract their cost from the first rental proceeds received. In all, Yowell spent almost $600 of his personal funds to get the trailer presentable to rent.

   
   

6. The trailer was later rented from July 23, 1980 until October 23, 1980 at a rate of $225 per month. During this period of time, Lindemann's wife received the monthly receipts for water payments so that they knew the exact time the trailer was rented. Just before the tenants vacated the premises Yowell contacted Lindemann, who was still in Wisconsin, to ask if he wished a disbursement of the proceeds. Lindemann declined, saying he'd rather wait until he returned to Florida in January, 1981. When he arrived the parties distributed the proceeds, with Yowell retaining his 10 percent commission plus moneys previously advanced for the air-conditioner, mattress, water hook-up and miscellaneous items. A full accounting of all rental fees and expenses was given to Lindemann, and he received all moneys to which he was entitled.

   
   

7. Upon inspecting the premises, Lindemann found his trailer to be heavily damaged. He estimated the total loss to be around $2,800. The damage was attributable to vandalism rather than neglect on the part of the prior occupants. Lindemann filed a claim with his insurance company but received only a $1,400 settlement. He candidly admitted he was not displeased with he disbursement of the rental fees but rather was unhappy with the condition of his trailer and the amount of the insurance settlement. Because of this, he filed a complaint against Yowell with the Board of Real Estate which precipitated this proceeding.

   
   

8. During the operation of the branch office, Marcella Yowell was office manager and handled all deposits, disbursements and the bookkeeping. The Lindemann transaction was the only rental account ever handled by that office. Deposits associated with that rental were placed in the main office's rental escrow account. Rental payments were deposited in a branch office renter's account which also included rents from several rental properties owned by Respondent.

   
   

9. After the branch office was opened both Yowells inquired of their active brokers as to how rental accounts should be handled by their office. They were told by Miller that they would retain 100 percent of all commissions received from rentals and that rental deposits should be placed in the main

   office rental escrow account. Both Johnson and Miller were vague and evasive as to what instructions were given regarding rental payments received by Yowell.

   However, both Yowells stated they were told by Miller that if they had any rental accounts they should "handle it (themselves)". They interpreted this to mean that with the exception of deposits, they would collect the rents and

   disburse them through a branch office bank account. Although Miller denied he was aware of the Lindemann transaction, he admitted he knew that Yowell handled "one or two (rentals) during this period of time." He also acknowledged that Ben Travers, who operated the branch office just prior to the Yowells, ". . .ran his (rent) money through his branch office. . ." rather than depositing the same in the main office accounts.

   
   

10. Other than the instant proceeding, Mr. Yowell has never been subjected to any prior disciplinary action. His broker at West Coast described him as an excellent employee who never received any complaints, and whose integrity and honesty were not questioned. His broker attributed the problems which arose from the Lindemann transaction to a "lack of communications" by West Coast with its salesmen.

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes.

    
    

12. Subsection 475.25(I)(d), Florida Statutes, authorizes disciplinary action by the Department against a licensee if he has:

    
    

    (I)(d) Failed to account or deliver to any person . . . at the time which has been agreed upon or is required by law . . . upon demand of the person . . . fund(s) . . .which (have) 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 . . .

    
    

13. Subsections 475.42(1)(b) and (d), Florida Statutes, prohibit the following activities by a licensee:

    
    

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

    
    

    (1)(d) No salesman shall collect any money in connection with any real estate brokerage transaction, whether as a commission, deposit, payment, rental, or otherwise, except in the name of the employer and with the express consent of the employer; . . .

    
    

    Respondent is charged with violating the foregoing statutes for his actions in dealing with the Lindemanns. Each alleged violation will be dealt with separately.

    
    

    1. Subsection 475.25(1)(d) Violation

       
       

14. Petitioner first contends that ". . . Respondent is guilty of having failed to account and deliver funds which were not his property and which he was not entitled to retain in law and equity. . ." This charge is founded upon the allegation that ". . . Respondent had deducted certain expenses relating to rental from the money he'd collected and the Lindemanns were not satisfied that

    the amount tendered represented the full amount due them." (Paragraph 12, Administrative Complaint).

    
    

15. The evidence discloses that Yowell did indeed fully account for all moneys owed the Lindemanns. After deducting those expenses to which he was entitled, including the 10 percent rental commission, and cash advanced for hooking up the water, and buying a mattress, air-conditioner and other miscellaneous items, Yowell paid all moneys due in January, 1981. Any delay in settling with Lindemann was occasioned by Lindemann's own request that no disbursement of rental moneys be made until after he returned to Florida. It is noteworthy that Lindemann's complaint did not relate to the amount of moneys received from Yowell but rather with the condition of his vandalized trailer and a less-than-satisfactory settlement with the insurance company. For some reason, he holds Yowell responsible for the damages to his trailer.

    Accordingly, it is concluded that no violation of Subsection 475.25(1)(d) has occurred, and that the charge should be dismissed. 2/

    
    

    1. Subsection 475.42(1)(b) Violation

       
       

16. Here it charged that ". . . Respondent is guilty of having operated as a broker while being licensed as a salesman and/or having operated as a salesman for someone not registered as his employer. . ." While not made explicitly clear in the Administrative Complaint, this charge is apparently based upon the following allegations in the Complaint: (a) that Yowell advertised to rent Lindemann's trailer using his own name, address and home telephone number rather than that of his employer (paragraph 8), (b) that he obtained tenants, collected rents and a 10 percent commission for this activity (paragraph 9), and (c) never informed his broker of this arrangement (paragraph 10). The evidence is contrary to the allegation in (paragraph 8), for Yowell did in fact advertise using the firm's name, address and telephone number. It is true that he obtained tenants, collected rents, and kept 10 percent of the proceeds as a commission. But the collection of rents and retention of a commission was consistent with his agreement with the landlord, instructions given by Miller, the broker, and the procedure used by the prior manager of the branch office. While Miller may not have been aware of the rental transaction by name, he acknowledged he knew that Yowell was handling a rental account at that time, for both Yowells had inquired of Miller as to how to handle that type of transaction. It is concluded, therefore, that Respondent was acting in the capacity of a salesman rather than a broker, and that no violation of Subsection 475.42(1)(b) has occurred.

    
    

    1. Subsection 475.42(1)(d) Violation

    
    

17. The final charge involves the allegation that Respondent ". . . is guilty of having collected rental payments and commissions in his own name and not in the name of his registered broker and without the express consent of his employer. . ."

    
    

18. As noted earlier, the broker was aware of a rental account being handled Yowell, and gave instructions to Yowell as to how it should be handled. Such knowledge and advice constituted the "express consent of his employer" and absolves Respondent from liability for this portion of the charges. 3/ Moreover, when the transaction with Lindemann was entered into, Lindemann clearly perceived it to be with West Coast rather than Yowell individually. Respondent's only error in this affair was in depositing the monthly rental moneys in a branch office account rather than in the main office rental escrow account. He did so upon the advice of his broker and in accordance with the

practice of the prior manager of the branch office. Had the Board charged Respondent with violating Subsection 475.25(1)(k), Florida Statutes, which prescribes such conduct, 4/ disciplinary action would be warranted. However, having failed to do so, the third charge must also be dismissed.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that all charges against Respondent be DISMISSED.

DONE and ENTERED this 5th day of April, 1982, in Tallahassee, Florida.

DONALD R. ALEXANDER

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 5th day of April, 1982.

ENDNOTES

1/ In late 1980, Respondent upgraded his license from a salesman to a broker- salesman. However, when the pertinent events herein began he was a licensed salesman.

2/ During closing argument petitioner belatedly contended that Yowell should have employed one of the three procedures enumerated in Subsection 475.25(1)(d) 1-3 since there was a dispute between the parties over the amount of money owed. However, this charge was not included in she Administrative Complaint and cannot now be raised. Cf. Robins v. Real Estate Commission, 162 So.2d 535 (Fla. 3rd DCA 1964). Further, the evidence did not support the charge that either party was dissatisfied with the actual disbursement of funds made.

3/ Petitioner contended in closing argument that something more than verbal consent is necessary in order to constitute "express consent" within the meaning of the law. However, nothing in the statute implies this result, and because quasi-penal statutes must be strictly construed in favor of Respondent, Bach v. Florida State Board of Dentistry, 378 So.2d 34(Fla. 1st DCA 1980), this construction of the law has been rejected.

4/ Subsection 475.25(1)(k) prohibits the following conduct: . . . or failed, if a salesman, to immediately place with his registered employer any money. .

.entrusted to him by any person dealing with him as an agent of his registered employer.

COPIES FURNISHED:

James H. Gillis, Esquire Hearings

130 North Monroe Street Tallahassee, Florida 32301

James E. Yowell

230 South West 47th Terrace Cape Coral, Florida 33904

Docket for Case No: 82-000019

Orders for Case No: 82-000019