STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, BOARD OF REAL ESTATE )

)

Petitioner, )

)

vs. ) CASE NO. 82-0176

) RICHARD ANGLICKIS and AMERICAN ) HERITAGE REALTY, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, R. L. Caleen, Jr., held a formal hearing in this case on June 30, 1982, in Fort Myers, Florida.

APPEARANCES

For Petitioner: James H. Gillis, Esquire

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

For Respondents: Allen Parvey, Esquire

Post Office Box 2366

Fort Myers, Florida 33902 ISSUE PRESENTED

Whether respondents real estate brokers' licenses should be disciplined on charges of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in a business transaction in violation of Subsection 475.25(1)(b), Florida Statutes (1979).

BACKGROUND

By administrative complaint dated January 4, 1982, petitioner Department of Professional Regulation, Board of Real Estate (now Florida Real Estate Commission-- "Department"), seeks to discipline the real estate brokers' licenses of respondents Richard A. Anglickis and American Heritage Realty, Inc., on charges of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in a business transaction in violation of Subsection 475.25(1)(b), Florida Statutes (1979). Respondents disputed the charges and requested a formal Section 120.57(1) proceeding. On January 26, 1982, the Department forwarded this case to the Division of Administrative Hearings for assignment of a hearing officer to conduct the requested hearing.

At hearing, the Department called Louis Hofstetter, Robert Campbell, and Mary Archer as witnesses; Petitioner's Exhibits 1/ No. 1-25 were received into evidence. Ruling on the admissibility of Exhibit No. 26 was reserved.

Respondent Anglickis testified on his own behalf and offered Respondents' Exhibits 1 No. 1-3 into evidence.

The transcript of hearing 1/ was filed on July 23, 1982. The parties agreed that proposed findings of fact and conclusions of law could be filed within 45 days from filing of the transcript, and that the 30-day period for submittal of a recommended order would begin to run from the date of their filings.

Based on the evidence presented at hearing, the following facts are determined:

FINDINGS OF FACT

1. Respondent Anglickis is a Florida real estate broker holding license number 0001869. Respondent American Heritage Realty, Inc., is a corporate real estate broker holding license number 0169476. The address of both respondents is 102 East Leland Heights Boulevard, Lehigh Acres, Florida. (P-26.)

   
   

2. Respondent Anglickis is president of American Heritage Builders, Inc., respondent American Heritage Realty, Inc., and Lee County Mortgage and Title, Inc. All three companies are located at the same address. (Testimony of Campbell; P-5, P-26.)

   
   

3. On March 12, 1979, Louis G. Hofstetter and his wife, Dale I. Hofstetter, both residents of North Carolina, entered into a real estate contract with American Heritage Builders, Inc. Respondent Anglickis signed on behalf of American Hertiage Inc. Under the terms of the contract, the Hofstetters were to Purchase a lot and home to be constructed thereon by American Heritage Builders, Inc. The purchase price included the transfer of a lot owned by the Hofstetters and a cash down payment. (Testimony of Hofstetter; P-1, P-3, P-26.)

   
   

4. The contract estimated closing costs to be approximately $2,000". It also contained conflicting conditions relative to the time within which any mortgage financing must be obtained.

   
   

   . . . In the event PURCHASER'S application for mortgage financing is not approved within sixty (60) days from date hereof, all monies receipted for, less cost of credit report, will be returned to the PURCHASER and this contract will be null and void.

   * * *

   FOR MORTGAGE TRANSACTIONS: This

   contract of Purchase and Sale shall be void unless Purchaser's application for Mortgage has been approved by a bank or financial institution and Purchaser has executed the Mortgage Acceptance Form, within four (3) [sic]

   months from date of this Contract of Purchase. 2/

   
   

   (P-1, R-1.)

   
   

5. On March 12, 1979, the Hofstetters signed a mortgage loan application and submitted it to Lee County Mortgage and Title, Inc. (P-26.)

   
   

6. On May 5, 1979, 45 days after accepting the application, Lee County Mortgage and Title, Inc., submitted the Hofstetters' mortgage loan application to First Federal of DeSoto. (Testimony of Archer.)

   
   

7. On June 15, 1979 (95 days after receiving the loan application), Lee County Mortgage and Title, Inc., wrote the Hofstetters indicating that the local lender needed additional information on their stock holdings, and enclosing a document titled "Good Faith Estimate of Settlement Charges". This document estimated that closing costs would be $2,754--$754 more than the estimate contained in the real estate contract. (P-5.)

   
   

8. On June 22, 1979, the Hofstetters protested the increased closing cost, requested clarification, and provided the requested information on their stock holdings. (Testimony of Hofstetter; P-26.)

   
   

9. On July 7, 1979, the Hofstetters notified Lee County Mortgage and Title, Inc., that the increased closing cost deviated from the contract, that they therefore considered the contract cancelled and wanted the deposit refunded. (Testimony of Hofstetter; P-8.)

   
   

10. On June 29, 1979, Robert Campbell, vice-president of Lee County Mortgage and Title, Inc., wrote the Hofstetters and explained the meaning of each component of the closing cost.

    (P-7.)

    
    

11. On July 17, 1979, respondent, as president of American Heritage Builders, Inc., wrote a letter to the Hofstetters expressing his position:

    
    

    * * *

    Let me try and put the contract in the proper perspective for you. It's our contention that you have reluctantly provided to us the information that would enable us to make a proper and expedient application to the lending institution and that much of this information has been confused, causing further delays. In accordance with the contract, you were to make

    this application as quickly and as expediently as Possible so that the contract would not expire. However, this is not the case. Thus, my immediate Position is that the contract should be expired and all of the deposits, including the cash and

    the lot which we gave you $6,995.00 trade for, would be forfeited as agreed upon liquidated damages.

    He ended by outlining other alternatives and repeating his asserted right to cancel the transaction and retain the Hofstetters' deposit as liquidated damages

    
    

    * * *

    First, the lending institution

    must make a quick determination based on the facts that they have that you are either eligible or not eligible for a mortgage loan as outlined in our contract. If they still do not have enough information, we have no other choice then but to ask you to pay the increase which we have experienced at this time (price list

    enclosed), and in paying that increase we would be willing to take another

    90 days to try and secure a loan for you. If your mortgage loan is denied,

    your deposit less the costs of processing your mortgage application will be returned to you. Of course, the third choice is the choice I hope we do not have to take, and that is cancelling

    this transaction and retaining your monies as agreed upon liquidated damages.

    
    

    (P-9.)

    
    

12. Mr. Hofstetter responded on July 22, 1979. He denied that he was responsible for any delay or confusion in the Processing of their loan application; asserted that 93 days had elapsed from the submission of their loan application and Mr. Campbell's letter of June 15, 1979, asking for additional financial information; and informed respondent Anglickis that the contract had already expired by virtue of the clause allowing 60 days to obtain mortgage financing. He then, again, asked that his deposit be returned. (P-10.)

    
    

13. On July 30, 1979, respondent Anglickis, as president of American Heritage Builders, Inc., wrote to the Hofstetters indicating that the loan had been approved 3/ and he was prepared to build their home at the contract price. He then addressed Mr. Hofstetter's July 22, 1979, denial of any responsibility for delay in obtaining the mortgage loan:

    
    

    I have reviewed your letter of July 22, 1979 and I understand we certainly

    have a difference of opinion as to

    whose fault the delay has been caused by.

    However, I don't think it's time

    to look at whose fault the delay might be, since it all has worked out to your satisfaction. The mortgage has been approved and we are ready to build. I expect you will now sign the mortgage papers when receipted for so that we

    may begin construction immediately. (P-11.)

14. On August 6, 1979, the Hofstetters restated to respondent Anglickis that they were not prepared to go ahead with construction, that the contract became null and void by operation of the 60-day mortgage financing clause, and that the deposit should be immediately returned. (P-12.)

    
    

15. On August 31, 1979, respondent Anglickis notified the Hofstetters that, pursuant to the contract conditions, he was retaining their full deposit, including cash and the real estate lot for which they received a $6,995 credit toward the purchase price. The full down payment totaled $10,350. (P-1, P-13.)

    
    

16. On September 8, 1979, the Hofstetters replied:

    
    

    We cannot understand why you continue to ignore the provisions of the second sentence of Paragraph Two on the reverse side of Contract No. 1997, dated 12 March 1979. You say you intend to invoke the Provisions of the third sentence of this para-

    graph, but this sentence is Predicated on the assumption that the mortgage would be approved within sixty (60) days. The mortgage was not approved until late July (your letter of

    17 July 1979 indicated it was not yet approved, and your letter of 30 July 1979 stated that it had now been approved), more than 120 days past the date of the original contract.

    
    

    Our Position is as Previously stated on several occasions: on

    12 May 1979 the contract became null and void, and on that date our deposit should have been refunded. Any action other than this is illegal, according to the terms of the contract. We are due return of our down payment, plus interest, from 12 May 1979. (P-24.)

    
    

17. On October 3, 1979, First Federal of DeSoto, which had continued to process the Hofstetter loan application, issued a commitment approving the requested loan. On October 10, 1979, the Hofstetters rejected the mortgage loan. (P-26.)

    
    

18. Subsequently, the Hofstetters wrote letters to the Florida Department of Legal Affairs and the Lehigh Chamber of Commerce complaining of respondent Anglickis' retention of their deposit; they, then, retained an attorney and filed a civil action against respondents in the circuit court of Lee County. That action was settled out-of-court.

    
    

19. There is no evidence whatsoever to support respondent Anglickis' assertion to the Hofstetters that they were dilatory or responsible for confusion or delay in obtaining the necessary mortgage financing.

    CONCLUSIONS OF LAW

    
    

20. The Division of Administrative Hearings has jurisdiction over the Parties and subject matter of this proceeding. Section 120.57(1), Florida Statutes (1981).

    
    

21. License revocation proceedings are penal in nature. The prosecuting agency is required to prove its charges by clear and convincing evidence by evidence as substantial as the con sequences facing the licensee. See, Bowling

    v. Department of Insurance, 394 So.2d 165 (Fla. 1st DCA 1981); Walker v. State,

    322 So.2d 612 (Fla. 3d DCA 1975); Reid v. Florida Real Estate Commission, 188 So.2d 846 (Fla. 3d DCA 1966)

    
    

22. Section 475.25(1) empowers the Florida Real Estate Commission (formerly Board of Real Estate) to suspend or revoke a license or impose an administrative fine if it finds that a licensee has:

    
    

    (b) Been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction in this state or any other state,.

    
    

    A licensed broker may be disciplined for dishonest conduct of business affairs for his own account, as well as for such conduct in real estate transactions where his only interest is that of a broker. Sellars 4. Florida Real Estate Commission, 360 So.2d 1052, 1054 (Fla. 1st DCA 1980). A real estate broker's license is a valuable property right:

    
    

    . . . one to be proud of and to be zealously guarded and protected. It singles out a person as being an honorable citizen in the society of people.

    
    

    Reid, supra, at 851.

    
    

23. In the instant case, the evidence establishes that respondent Richard Anglickis violated Section 475.25(1)(b) by engaging in dishonest dealing by scheme or device in a business transaction. Under the terms of the contract for sale of real property, the contract was void unless the purchaser's mortgage application was approved within 60 days, three months, or four months from March 12, 1979, the date of the contract. Here, the application was not approved within any of these time periods. The contract was thus null and void on July 12, 1979, four months from the date of the contract, and the deposit (less the cost of a credit report) was required to be returned to the purchasers. The Hofstetters asserted that the contract was void and demanded a refund, yet respondent Anglickis refused. When the Hofstetters refused to close the transaction, he retained the deposit as liquidated damages.

    
    

24. Respondent knew or should have known that he had no right to retain the deposit. In Correspondence with the Hofstetters he refused to respond to their contention that the contract had expired because the mortgage financing deadline had lapsed. His only reference to mortgage financing was to blame the

    Hofstetters for confusion and delay in obtaining the financing, a contention that was totally unfounded. In effect, he attempted to force the Hofstetters to perform under a contract which had clearly expired by its own terms. Upon their refusal to acquiesce, he and without justification, kept the deposit. Such conduct constitutes dishonest dealing by a scheme or device within the meaning of Section 475.25(1)(b).

    
    

25. Respondent Amglickis contends that the Hofstetters waived the contract expiration by Providing the request additional financial information on June 22, 1979. This contention is rejected. First, if the four-month financing period is used, the contract did not expire until July 12, 1979. Thus, the June 22, 1979, letter simply submitted additional financial information and cannot fairly be construed as a waiver of any contract provision. Second, since the Statute of Frauds requires contracts for the sale of land to be in writing to be enforceable, Section 725.01, Florida Statutes (1981), any renewal or modification of such a contract must be in writing. 11 Fla. Jur. 2d, Contracts

160. Here, the contract was never renewed or modified in writing by the Parties.

1. The charges against American Heritage Realty, Inc., must be dismissed. The evidence is insufficient to establish that this corporate defendant is guilty of any misconduct. Respondent Anglickis' dishonesty arose out of a business transaction undertaken for his own account. He did not act as or represent himself to be a real estate broker in the real estate transaction at issue.

   
   

2. Ruling was reserved on the admissibility of Petitioner's Exhibit No. 26, "Respondent's Response to Request for Admissions". The Department, having not moved these admissions into evidence during its case-in-chief, moved to reopen its case for such purpose. The authenticity of this exhibit is not at issue. The admissions were not part of the record prior to hearing because respondent Anglickis did not file them as required by Rule 1.370(a), Florida Rules of Civil Procedure. He thus cannot complain of this procedural defect.

   
   

3. Having considered the parties' memoranda on this question, the Department's motion is granted and Petitioner's Exhibit No. 26 is received into evidence. There are two reasons favoring such action. First, admissions filed in response to a request for admissions are conclusive and do not even have to be introduced into evidence. Lutsch v. Smith, 397 So.2d 337 (Fla. 1st DCA 1981). Second, parties are properly permitted to reopen upon a showing of inadvertence, especially where, as here, the other party would not be unfairly prejudiced. 32 Fla. Jur., Trial 46.

   
   

4. No evidence of prior misconduct by respondent Anglickis was presented. Revocation or suspension of a real estate license is a drastic action which should be taken only in the most flagrant and serious cases. See, Reid, supra; Pearl v. Board of Real Estate, 394 So.2d 189 (Fla. 3d DCA 1981). Under the circumstances of this case, it is concluded that the imposition of a $1,000 fine would be appropriate.

RECOMMENDATION

Based on the foregoing, it is RECOMMENDED:

1. That the charges against respondent American Heritage Realty, Inc., be dismissed;

   
   

2. That respondent Richard A. Anglickis be administratively fined $1,000.

DONE and RECOMMENDED this 13th day of October, 1982, in Tallahassee, Leon County, Florida.

R. L. CALEEN, Hearing Officer

Division of Administrative Hearings The Oaklnd Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 13th day of October, 1982.

ENDNOTES

1/ Petitioner's and Respondents' Exhibits will be referred to as "P- " and "R-

", respectively. Pages of the transcript will be referred to as "Tr.

2/ There is conflicting evidence on whether this "four (3) [sic] months" mortgage financing clause was on the original contract offer signed by the Hofstetters. Although this (rubber stamped) clause was omitted on the contract carbon copy, it is concluded that it was contained in the original contract offer signed by the Hofstetters and the copy of the validated contract Subsequently forwarded to them on March 22, 1979, by respondent Anglickis (P-1, R-1, R-2.)

3/ On July 23, 1979, First Federal of DeSoto had notified Lee County Mortgage and Title, Inc., by telephone, that the Hofstetter mortgage loan was approved. The formal commitment, however, was not extended to the Hofstetters until approximately two and one-half months later.

COPIES FURNISHED:

James H. Gillis, Esquire Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Allen Parvey, Esquire Post Office Box 2366

Fort Myers, Florida 33902

C. B. Stafford, Executive Director Florida Real Estate Commission

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

Samuel R. Shorstein, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

William M. Furlow, Esquire Florida Real Estate Commission

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

Docket for Case No: 82-000176

Orders for Case No: 82-000176