STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, FLORIDA REAL ESTATE )

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

)

Petitioner, )

)

vs. ) CASE NO. 82-127

)

MICHAEL H. COHEN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a public hearing in this case on July 9, 1982, in Miami, Florida. The hearing officially closed on October 22, 1982, the date the Division of Administrative Hearings received the transcript of the proceedings.

APPEARANCES

For Petitioner: Theodore J. Silver, Esquire

9445 Bird Road

Miami, Florida 33165

For Respondent: Walter F. McQuade, Esquire

700 Northeast 125th Street North Miami, Florida 33161

ISSUE PRESENTED

Whether or not the Respondent, Michael H. Cohen, based on conduct set forth hereinafter in detail, is guilty of fraud, misrepresentation, false promises and breach of trust in a business transaction in the State of Florida, in violation of subsection 475.25(1)(b), Florida Statutes (1979).

Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received, the transcript of the proceedings, and the entire record compiled herein, I hereby make the following relevant:

FINDINGS OF FACT

1. By its Administrative Complaint filed herein signed September 29, 1981, the Petitioner, Florida Real Estate Commission (herein called the "Commission" or "Petitioner") seeks to suspend, revoke, or take other disciplinary action against the Respondent as licensee, and against his license as a real estate broker under the laws of the State of Florida.

2. Respondent is a licensed real estate broker who has been issued license No. 0209033.

   
   

3. On February 17, 1978, Michael Rappaport sold ten townhouse units in Collonade Condominiums, 2275 N.E. 122nd Street, North Miami, FLORIDA, to the Respondent. The Respondent purchased the townhouses, by deed, in the name of his mother-in-law, Luz Sanabria.

   
   

4. At the time of this conveyance, Michael Rappaport owed $2,400 in condominium assessments to the Collonade Condominium Association and, at that time, foreclosure proceedings by the mortgagee, Dade Federal Savings and Loan Association, were pending for failure to pay the mortgages (by Rappaport).

   
   

5. Respondent, as agent for Ms. Sanabria, contacted the condominium association and made promises to pay the past due assessments.

   
   

6. As stated, following transfer of the title to the Respondent, there remained owing to the condominium association past due assessments by the Respondent. The Respondent negotiated a settlement with the condominium association for payment of the delinquent assessments; however, the Respondent defaulted on the terms of the settlement for payment of the delinquent assessments.

   
   

7. On September 25, 1979, Collonade Condominium Association obtained a judgment against Respondent for $7,094.40 which remained unsatisfied at the time of the hearing herein.

   
   

8. It is based upon the above-referred to facts that the Petitioner contends that Respondent is guilty of fraud, misrepresentation, false promises and breach of trust in a business transaction in the State of Florida in violation of subsection 475.25(1)(b), Florida Statutes (1979).

   
   

9. Respondent takes the position that (1) he was not the real party in interest inasmuch as he was attempting to execute a favorable transaction on behalf of his mother-in-law, and (2) that he attempted to strike deals, negotiate settlements and that to do otherwise, either in his capacity as a real estate agent or as a son-in-law, he would be remiss. To support his position, Respondent points to the fact that he retained a knowledgeable mortgage broker to remove these properties from foreclosure proceedings and to attempt to renegotiate, restructure or otherwise put these mortgages, which were in foreclosure, back into current status. Additionally, Respondent avers that there is nothing improper respecting his attempt to negotiate a settlement with the condominium association, which was an everyday common practice.

   
   

10. Respondent admits that he personally agreed to repay the condominium association, which agreement was defaulted and resulted in a judgment being entered against him. However, Respondent's position is that these were matters of a personal nature and were in no manner conduct amounting to fraud, misrepresentation, concealment and false promises, false pretenses, dishonest dealing by trick, scheme, or device or any other acts of conduct which subject him to disciplinary action pursuant to Section 475.25, Florida Statutes, Subsection 1(b) thereof.

    CONCLUSIONS OF LAW

    
    

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

    
    

12. The parties were duly noticed pursuant to the notice provisions of Chapter 120, Florida Statutes.

    
    

13. The authority of the Petitioner is derived from Chapter 475, Florida Statutes.

    
    

14. Respondent, a licensed real estate broker, is subject to the disciplinary guides of Chapter 475, Florida Statutes.

    
    

15. Insufficient evidence was offered to establish that the Respondent, based on the facts found hereinabove, engaged in fraud, misrepresentation, concealment, false promises or other acts and conduct in violation of Section 475.25(1)(b), Florida Statutes (1979), as alleged. All of the evidence herein reveals is that the Respondent became aware that the properties owned by the then owner, Mr. Rappaport, were in foreclosure proceedings and armed with that knowledge, Respondent retained the services of a knowledgeable mortgage broker in an effort to attempt to restructure the outstanding mortgage obligations in a manner which would be acceptable and attractive from an investment standpoint. There was no evidence introduced herein to show that the Respondent, at least from the outset of these conveyances from Mr. Rappaport to his mother-in-law, Luz Sanabria, was acting in someone's behalf other than the main transferee. Also, there was no evidence introduced herein which would tend to establish that the Respondent acted in a manner which was fraudulent or otherwise amounted to a misrepresentation within the meaning of Section 475.25(1)(b), Florida Statutes (1979). The mere fact that Respondent was unable to satisfy a monetary obligation is insufficient, in and of itself, to establish that he engaged in fraud, misrepresentation or other unlawful conduct as alleged. For these reasons, I shall recommend that the Administrative Complaint filed herein be dismissed.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Administrative Complaint filed herein be DISMISSED.

RECOMMENDED this 22nd day of December, 1982, in Tallahassee, Florida.

JAMES E. BRADWELL, 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 22nd day of December, 1982.

COPIES FURNISHED:

Theodore J. Silver, Esquire 9445 Bird Road

Miami Florida 33165

Walter F. McQuade, Esquire 700 Northeast 125th Street North Miami, Florida 33161

William Furlow, Esquire Department of Professional

Regulation - Legal Section

P.O. Box 1900

Orlando, Florida 32802

Mr. C. B. Stafford Executive Director

Florida Real Estate Commission

P.O. Box 1900

Orlando, Florida 32802

Fred Roche, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 82-000127

Orders for Case No: 82-000127