STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 82-755

) GUARDIAN ASSOCIATION, INC.; JANE ) FOSTER, and BENJAMIN C. FOSTER, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal administrative hearing was conducted in this matter on July 27, 1982, in Fort Myers, Florida. The following appearances were entered: David P. Rankin, Tampa, Florida, appeared on behalf of the Petitioner, Department of Professional Regulation, Board of Real Estate (now the Florida Real Estate Commission); and the Respondent Benjamin C. Foster appeared on his own behalf and on behalf of the other Respondents. The Respondent Jane A. Foster did not personally appear at the hearing. The Respondent Benjamin C. Foster is the husband of the Respondent Jane A. Foster.

The Petitioner, Department of Professional Regulation, Florida Real Estate Commission, issued an Administrative Complaint against the Respondents on or about February 26, 1982. The Respondents requested a formal administrative hearing, and the matter was forwarded to the office of the Division of Administrative Hearings for the assignment of a Hearing Officer and the scheduling of a hearing on March 16, 1982. The final hearing was scheduled as set out above by notice dated April 20, 1982. Two motions to amend the Administrative Complaint were granted on the record at the final hearing.

Petitioner was permitted to amend the Administrative Complaint to reflect the entity "Guardian Association, Inc.," as the Respondent rather than "Guardian Associates, Inc."; and to amend the alleged dates of employment of certain named individuals.

At the hearing, the Petitioner called the following witnesses: Tammy Steffans, Sandy Pleak, Carolyn Kim Pressley, and Sharel Royal, all of whom were former employees of the Respondent Guardian Association, Inc. The Respondent Benjamin C. Foster appeared as a witness on behalf of the Respondents and called Lory Knight, a former employee of Guardian Association, Inc., as an additional witness. Hearing Officer's Exhibit 1, Petitioner's Exhibits 1 and 2, and Respondents' Exhibits 1 through 5 were offered into evidence and received.

Respondents' Exhibit 6 was offered into evidence and rejected. The parties requested an extended period following the hearing within which to submit post- hearing legal memoranda. The requests were granted. The Petitioner has included in his post-hearing submittal proposed findings of fact and conclusions of law. The proposed findings and conclusions have been adopted only to the extent that they are expressly set out in the Findings of Fact and Conclusions of Law which follow. They have been otherwise rejected as contrary to the

evidence, not supported by the evidence, irrelevant to the issues, or legally erroneous.

ISSUES

The ultimate issues in this proceeding are whether the Respondents have violated provisions of Florida Statutes pertaining to the licensing of real estate brokers and salesmen, as alleged in the Administrative Complaint and, if so, what disciplinary action should be taken by the Florida Real Estate Commission. The Administrative Complaint includes twenty-six separate counts. Counts I through XVIII contain allegations that Respondents employed various persons who were not licensed as real estate salesmen or brokers to perform duties that can only be performed by licensed persons. These counts allege violations of the provisions of Sections 475.01(3), 475.25(1)(h), and 475.42(1)(c), Florida Statutes. In Counts XIX through XXVI, various allegations of specific acts of misrepresentation or dishonest dealing are alleged. The Petitioner contends that the facts alleged in these counts constitute violations of the provisions of Sections 475.25(1)(a), (b), and (e), and 455.227(1)(a), Florida Statutes.

The Respondents contend that the duties performed by employees as alleged in Counts I through XVIII do not constitute activities of real estate brokers or salesmen, and that the persons were not required to be licensed. The Respondents contend that they were not guilty of any fraud or misrepresentation as alleged in Counts XIX through XXVI.

FINDINGS OF FACT

1. The Respondents Jane A. Foster and Benjamin C. Foster have, at all times material to this proceeding, been licensed by the Petitioner as real estate brokers. The Respondent Guardian Association, Inc., has at all material times been licensed as a corporate real estate broker. The Respondents Jane A. Foster and Benjamin C. Foster were at all material times the qualifying brokers for the Respondent Guardian Association, Inc.

   
   

2. During the period from approximately 1978 through 1981, the Respondents were engaged in the business of selling interval ownership shares in a condominium project located in Fort Myers Beach, Florida. The Respondents utilized telephone solicitations in order to generate sales. Individuals were employed by the Respondents to contact potential customers and to induce them to visit the project.

   
   

3. During the period beginning January 1, 1981, and ending August 31, 1981, the Respondents employed the following persons as telephone solicitors: Susan Simcic, Tammy Steffans, Sandy Pleak, Carolyn Kim Pressley, Sharel Royal, Betty Price, and Sandy Liese. The telephone solicitors were instructed to call selected telephone numbers, and during an average workday might call as many as one hundred persons. The solicitors were directed to read a script which advised the person they reached that they were a sweepstakes winner and that their prize could be claimed by making and keeping an appointment to visit the resort. An appointment would be made for the person called to visit the resort. The person would be advised that this was part of an advertising promotion. No details concerning interval ownership, or the resort itself were discussed. The solicitors were given definite instructions not to discuss any specific aspects of the promotion beyond the script. After the telephone conversation terminated, the prospective customer would be mailed a packet of materials describing the resort. When the potential customer arrived at the resort, they

   would collect the prize that they won in the so-called sweepstakes and be given a sales presentation regarding interval ownership and the resort. The persons who made the sales presentation at the resort were licensed real estate brokers or salesmen.

   
   

4. The specific script that the telephone solicitors read was changed periodically. The substance of the script, however, remained unchanged during the period from January 1 through August 31, 1981. A representative script was received into evidence at the hearing. The script is attached to this Recommended Order as Appendix "A" and is hereby incorporated into these Findings of Fact as fully as if it were set out verbatim herein.

   
   

5. None of the telephone solicitors identified above were licensed by the Petitioner as real estate brokers or real estate salesmen. This fact was well known to the Respondents. The solicitors were not instructed to identify themselves as employees of a real estate broker during telephone solicitations. Instructions given the telephone solicitors were given either directly by the Respondents Jane A. Foster and Benjamin C. Foster, or at the direction of the Respondents.

   
   

6. The telephone solicitors were compensated at an hourly rate. In addition, the solicitors received two dollars for each person they solicited who kept the appointment to visit the resort.

   
   

7. The telephone solicitors were instructed to represent themselves in telephone conversations with prospective purchasers as "the Public Relations Director of the Guardian Association." This title was clearly a misleading one and was designed to persuade prospective purchasers that the person calling them had some special position of authority. In fact, the telephone solicitors directed nothing and were involved in public relations only in the sense that they were making telephone calls to members of the public.

   
   

8. The telephone solicitors were instructed to represent to prospective purchasers that the prospective purchasers were winners in a sweepstakes. If the prospective purchasers "qualified," i.e., were married and between the ages of twenty-five and sixty-two, they were advised that they won their choice of a three-day, two-night vacation at one of several well-known vacation areas, and that they also would be eligible to win prizes ranging from cameras to microwave ovens. The potential customers were not actually winners of any sweepstakes or game of chance. All prospective purchasers solicited were identified as "winners." There was no game of chance or drawing which resulted in their being selected. Offering gifts such as the vacation and other prizes as winnings, rather than merely gifts offered to induce them to visit the resort, was designed to get prospective customers to the resort to receive the sales presentation.

   
   

9. During the telephone solicitation, the solicitors were instructed to represent to prospective customers that they would be receiving printed matter relating to the resort and instructions for claiming the prizes. Possession of the printed matter was necessary in order for the prospective customer to claim the prizes. Respondents instructed the telephone solicitors to note whether the person they reached appeared to be a black person or a Hispanic person. If the solicitor believed that to be the case, the solicitor was to make a special notation on the solicitation form. Materials were not mailed to such persons despite representations made during the telephone solicitation that the person had won a prize and would be receiving pertinent materials. The motivation for these instructions was apparently not overt racial hostility, but rather a

   feeling on the part of Respondents that black and Hispanic persons were likely to be of lower income and thus not viable prospective customers.

   
   

10. No evidence was offered from which it could be concluded that Maureen Downey, a person identified in the Administrative Complaint, was employed by the Respondents.

    
    

11. No evidence was offered at the hearing from which it could be concluded that any prospective purchaser was injured by the misstatements made during telephone solicitations other than that persons who should have been eligible to receive "prizes" were not mailed materials which they would have needed in order to collect the "prizes."

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding. Sections 120.57(1), 120.60, Florida Statutes.

    
    

13. Section 475.25(1)(h), Florida Statutes, provides that the Petitioner may take disciplinary action against a licensee if the licensee has paid a fee or other compensation to a person for providing any of the services set forth in Section 475.01(3), Florida Statutes, unless the person is duly licensed as a broker, broker-salesman, or salesman. Under Section 475.42(1)(c), Florida Statutes, it is made a second degree misdemeanor for a broker to employ an unlicensed person as a salesman. Under the provisions of Section 475.25(4)(a), Florida Statutes, the Board is authorized to take disciplinary action against a licensee who has violated the provisions of Section 475.42. Accordingly, if the persons employed by the Respondents as telephone solicitors performed functions for which they would need to be licensed as real estate salesmen, the Respondents would be guilty of violations of Sections 475.25(1)(a) and (h), Florida Statutes. Whether the activities of the telephone solicitors constitute activities of a real estate salesman is governed by the provisions of Section 475.01(3), Florida Statutes. The section defines "broker" as, inter alia, a person who directs or assists in the procuring of prospects which is calculated to result in a sale of an interest in real property. Section 475.01(4) defines a "salesman" as a person who performs the same actions under the direction of another person.

    
    

14. The Respondents contend that the telephone solicitors' activities do not fall within the definitions of Sections 475.01(3) and (4). A virtually identical issue was confronted by the Second District Court of Appeal in Alligood v. Florida Real Estate Commission, 156 So.2d 705 (2 DCA Fla. 1963).

    The court was therein confronted with the issue of whether a telephone solicitor would need to be licensed as a real estate salesman. The solicitor's duties consisted of calling persons by telephone and inviting them to visit her employer's development. Prices or terms of any real estate transaction were not discussed, nor were any details relative to the land being offered for sale.

    Persons solicited in this manner were transported to the area by the developer. The telephone solicitor was paid at an hourly rate plus three dollars for every person whom she successfully solicited to visit the area. The court concluded that the telephone solicitor's activities were included in the provisions requiring licensure as a real estate broker or salesman. The court stated (at p. 707):

    
    

    The legislature has seen fit to provide that one who directs or assists in the procuring of

    prospects for the purchase of real estate shall be registered, or licensed, as a real estate salesman, or broker.

    
    

    The language which is pertinent to this case is admittedly broad, but it is equally clear and unambiguous. The problem at hand is, therefore, not to determine the meaning of the statute or interpret it, but to determine

    whether the appellant [the telephone solicitor] was assisting in the procuring of prospects

    for the purchase of real property.

    
    

    It appears that each of the essential elements of the statute were involved in the appellant's employment and the pursuit of her duties in such employment.

    
    

    The "bonus" of $3.00 for each prospect the plaintiff produced is a material factor in this determination. This element takes the job out of the classification of simple clerical employment and indicates the importance of the salesmanship element. True, she makes no direct effort at sales but like the circus "drummer" she gets them in the tent for the show.

    
    

    The ultimate consideration is that these prospects who are the object of extensive exposure to the sales program at some considerable expense are those determined by the efforts of the plaintiff [the solicitor] to be at least interested in the project. She certainly is taking part in the procuring of prospective customers. The specific activities of the appellant constituted the first and very important step in the field of endeavor which lends itself logically to the safeguards of the regulatory measures of the Florida Real Estate Commission.

    
    

    The facts of the Alligood case are not distinguishable from the facts of this case in any material respect. The provisions of Chapter 475, Florida Statutes, have been amended on several occasions since the Alligood decision; however, the provisions of Section 475.01(3) are substantively identical to the language of the statute construed by the court in Alligood.

    
    

15. The Respondents' hiring of unlicensed persons to engage in telephone solicitations violated the provisions of Sections 475.25(1)(a) and (h), Florida Statutes, as alleged in Counts 1 through XVI of the Administrative Complaint.

    
    

16. Section 475.25(1)(b), Florida Statutes, authorizes Petitioner to take disciplinary action against a licensee who has:

    
    

    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. . .It shall be immaterial to the guilt of the licensee that the victim or intended victim of the

    misconduct has sustained no damage or loss. . .

    
    

    Section 455.227(1)(a), Florida Statutes, authorizes all professional licensing boards to take disciplinary action against licensees who have made misleading, deceptive, or untrue representations in the practice of their professions.

    Under Section 475.25(1)(a), a violation of these provisions is specifically set out as grounds for the Petitioner to take disciplinary action. By instructing telephone solicitors to identify themselves as "Public Relations Directors," by instructing telephone solicitors to represent to prospective purchasers that they were winners in a sweepstakes, and by instructing telephone solicitors to identify certain ethnic groups during solicitations and to appropriately mark forms so that these individuals would not receive packets promised them during the solicitation, the Respondents made misrepresentations in the practice of real estate and violated Sections 475.25(1)(a) and (b), as alleged in Counts XIX, XX, XXIII, XXIV, XXV, and XXVI of the Administrative Complaint.

    
    

17. Under the provisions of Section 475.25(1)(e), Florida Statutes, the Petitioner is authorized to take disciplinary action against a licensee who violates any rule promulgated under the provisions of the chapter by the Petitioner. Under the provisions of Section 455.227(1)(b), Florida Statutes, boards are given authority to discipline licensees who violate provisions of the boards' rules; and under the provisions of Section 475.25(1)(a), a violation of Section 455.227 constitutes a violation of Section 475.25. The Petitioner's Rule 21V-10.20, Florida Administrative Code, provides:

    
    

    Plans or schemes through which the public is invited to solve puzzles or sign cards upon the pretense of a drawing in order to receive property free or at a nominal price, or at cost, and all schemes which pretend to be, but are not actually, lotteries and drawings, or where the persons answering advertisements, giving their names or signing cards, are told that they may be selected to receive property free or at a reduced price, or at price, are declared to be plans of selling, by reason of which the interest[s] of the public are endangered.

    
    

    The Respondents' instructing telephone solicitors to represent to prospective purchasers that they were winners in a sweepstakes constitutes a plan of selling by reason of which the interests of the public are endangered under the provisions of the rule. Accordingly, the Respondents have violated the provisions of Sections 475.25(1)(a) and (e), as alleged in Counts XXI and XXII of the Administrative Complaint.

    
    

18. No evidence was offered to support the allegations of Counts XVII and XVIII of the Administrative Complaint.

    
    

19. While the Respondents have been found guilty of the allegations set out in twenty-four counts of the Administrative Complaint, their conduct actually amounts to two separate violations: First, they employed unlicensed

persons to make telephone solicitations; and second, they engaged in a telephone solicitation scheme that included making misrepresentations. It does not appear that any member of the public at large was injured as a result of the Respondents' actions.

RECOMMENDED ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law, it is, hereby,

RECOMMENDED;

1. That the Florida Real Estate Commission enter a final order finding the Respondents guilty of the allegations set out in Counts I through XVI and XIX through XXVI of the Administrative Complaint, suspending the Respondents' licenses to practice real estate within the State of Florida for a period of five years, and imposing an administrative fine against each of the Respondents in the amount of $1,000.

   
   

2. That the Florida Real Estate Commission enter a final order dismissing Counts XVII and XVIII of the Administrative Complaint.

RECOMMENDED this 11th day of October, 1982, in Tallahassee, Florida.

G. STEVEN PFEIFFER Assistant Director

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 11th day of October, 1982.

COPIES FURNISHED:

David P. Rankin, Esquire Freeman & Lopez, P.A. Suite 410

4600 West Cypress Avenue Tampa, Florida 33607

Guardian Association, Inc. 867 San Carlos Boulevard

Fort Myers Beach, Florida 33931

Mr. Benjamin C. Foster

5354 Emily Drive, South West Fort Myers, Florida 33908

Mrs. Jane A. Foster

5354 Emily Drive, South West Fort Myers, Florida 33908

Mr. Samuel R. Shorstein Secretary

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Mr. Carlos B. Stafford Executive Director

Florida Real Estate Commission Post Office Box 1900

Orlando, Florida 32802

Frederick H. Wilsen, Esquire Staff Attorney

Florida Real Estate Commission Post Office Box 1900

Orlando, Florida 32802

APPENDIX "A" TO RECOMMENDED ORDER

Hello, is this (number)? This is (Your Name) the Public Relations Director of the Guardian Association on (Bch. Name). Have you ever been a sweepstakes winner before? Well, it looks like you're a winner this time (again) thanks to our research Department.

Would you like to know what you've won if you qualify? You've won your choice of a 3 day 2 night vacation for 2 at Las Vegas, Miami Beach, or the Disney World Area at a beautiful vacation resort. Doesn't that sound like a pretty good prize to win? (wait for response) AND THAT'S NOT ALL---you've also won a key that is guarenteed to open one of eight doors which have prizes ranging from cameras to microwave ovens. . .Sounding better?. . .and before you ask me, no!!, you don't have to buy a thing, and that's a fact. Now, that's go to sound GREAT!!!, doesn't it?

Now, would you like to know for sure, if you qualify and how to claim your prize?. . .Are you married?. . .(wait for response) Are you (Is your husband) between the ages of 25 and 62?. . .(wait for response) Congratulations, you qualify!!!!!!!

Now in what names would you like me to issue your authorization, and please, if it's difficult, spell it. . .and your correct mailing address. O.K., now all I need to know is what day after you and your husband/wife can take a run over to the (Name of resort) on (Name of beach) and claim your prizes. (Set appointment date and time and give directions if necessary).

Now bear in mind this is an advertising promotion for the (Name of resort) and the only thing we ask in return is for you and your husband/wife to take a key tour and be our word of mouth advertising in (Name of County) County. Now is that fair or not?

O.K., I'll mail this authorization out tonight because you'll both need it to claim your prizes. . .and in addition I'll send your personal key that's guarenteed to open a door and the literture on the prizes you have won.

So, Congratulations again and be looking for your confirmation in the mail.

Docket for Case No: 82-000755

Orders for Case No: 82-000755