STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, (Florida Real )

Estate Commission), )

)

Petitioner, )

)

vs. ) CASE NO. 82-3065

)

EUGENE LAY and DIVERSIFIED )

BUSINESS BROKERS, )

)

Respondent. )

)

RECOMMENDED ORDER

This case was heard before the Division of Administrative Hearings by its designated Hearing Officer, Michael Pearce Dodson, on June 9, 1983, in Orlando, Florida. The following appearances were entered:

APPEARANCES

For Petitioner: Fred Langford, Esquire

Department of Professional Regulation

400 West Robinson Street Orlando, Florida 32801

For Respondent: Kenneth M. Meer, Esquire

LAW OFFICES OF THOMAS V. INFANTINO

Post Office Drawer 30 Winter Park, Florida 32790

BACKGROUND

These proceedings began on October 1, 1982 when the Secretary of the Department of Professional Regulation signed an Administrative Complaint against Respondent Eugene Lay. The Complaint alleged that Mr. Lay violated various terms of Chapter 475, Florida Statutes, by soliciting money which was to be held in trust for the purchase of businesses, but that Mr. Lay spent the money himself in violation of his fiduciary responsibilities. Mr. Lay requested a formal hearing on the allegations of the Administrative Complaint and on November 8, 1982 the case was forwarded to the Division of Administrative Hearings for the assignment of a Hearing Officer and the scheduling of a final hearing. On December 20, 1982 the Department of Professional Regulation filed a Motion to Dismiss before the Florida Real Estate Commission to request a dismissal of the complaint due to a lack of jurisdiction over Respondent's registration as a business broker under Section 475.17(3), Florida Statutes.

The Motion was denied and the case was initially set for final hearing on February 23, 1983. That date was continued twice at the request of Respondent and the final hearing was thereafter held as indicated above.

At the final hearing Petitioner presented the testimony of witnesses and offered Exhibits 1, 2, 3, 4, 5, 6 and 7 into evidence. Exhibits 1, 2, 3, 4, 5 and 7 were so received. Respondent presented the testimony of a witness and offered Respondent's Exhibits 1 and 2, which were received into evidence.

Subsequent to the final hearing both parties have submitted Proposed Recommended Orders. The proposed order submitted by the Petitioner contains proposed findings of fact which have each been given careful consideration here. To the extent that the proposed findings are not reflected in this Order, they are rejected as being either not supported by the weight of credible admissible evidence, or as being irrelevant to the issues determined here. 1/

FINDINGS OF FACT

1. Respondent Eugene Lay was registered as a business opportunity broker on March 15, 1982 by the Board of Real Estate (now the Florida Real Estate Commission). His registration was effective from January 5, 1982 until January 1, 1984. He was issued registration number 1800461.

   
   

2. On February 12, 1982 Mr. Lay received $3,750 from Christopher Orthodox on a contract for the purchase of a business known as Personal Valet Services, Inc. The $3,750 were to be held in trust by Mr. Lay until the closing of the business purchase transaction. Mr. Lay did not put the money in a trust account but instead spent the money for his own personal business. When it later appeared to Mr. Orthodox that the transaction was not going to close, he demanded the return of his $3,750 deposit. Mr. Lay failed to return it to him and Mr. Orthodox was not able to purchase the business. His $3,750 has never been returned.

   
   

3. On February 27, 1982 Mr. Lay obtained from Mr. Orthodox and Loretta Orthodox an additional $9,000 as a deposit to be held in trust pending their obtaining a Small Business Administration loan to purchase a business known as Starlight Creations, Inc. The purchase contract was conditioned upon the ability of the Orthodoxes to secure the loan for $121,500. They were unable to obtain the loan. When it appeared that the purchase transaction would not close, Mr. Orthodox demanded the return of his $9,000. Mr. Lay did not return the money because he had spent it for his own personal business. Subsequent to the Orthodoxes initial demand for the return of their money, Mr. Lay's wife returned

   $1,000 to them in cash. No further repayments have been made.

   
   

   CONCLUSIONS OF LAW

   
   

4. Section 475.42(1)(a), Florida Statutes requires that, "No person shall operate as a broker or salesman without being the holder of a valid and current license therefor." In 1980 the Florida Legislature amended the definition of "broker" to include one who buys and sells, etc., business enterprises or business opportunities. Chapter 80-405, Section 3, Laws of Florida (1980). The same Session Law in Section 4 amended Section 475.17, Florida Statutes, by adding subparagraph (3) which states:

   
   

   (3) All individuals engaged in the activity of dealing in business enterprises

   or business opportunities for another and for valuable consideration on the effective date of this act may continue to operate in this activity without complying with the qualification for practices provisions of

   Section 475.17(2) and 475.175, Florida Statutes, for a period of two years. During this two-year period all such individuals shall either qualify as a real estate broker under the provisions of Chapter 475, Florida Statutes, or satisfactorily complete Board approved courses of instruction and pass an examination prescribed by the Board. The total classroom hours of instruction in the Board approved course or courses of instruction shall not exceed the combined total for broker and salesman applicants contained in Section 475.17(2), Florida Statutes. After this two-year period, full compliance with this act and Chapter 475,

   Florida Statutes, is mandatory. (Emphasis added.)

   
   

5. It was under the authority of Section 475.17(3), Florida Statutes that Mr. Lay registered with the Board of Real Estate (now Florida Real Estate Commission) as a business broker. As required by the statute his term of registration was effective for two years until January 1, 1984. The intention of Section 475.17(3) was to temporarily grandfather in existing business brokers for a two-year period in order to allow them to acquire the necessary education and to pass a competency examination administered by the Board. Because the

   two-year period has expired Mr. Lay no longer has a license. He retains no rights or privileges from the Florida Real Estate Commission. For this reason the Commission may not now assert any disciplinary jurisdiction over him.

   
   

6. This conclusion was recognized by the Commission in Department of Professional Regulation v. Steed, 5 FALR 354-A (Florida Real Estate Commission, Final Order October 19, 1982). In adopting the Hearing Officer's Conclusions of Law the Commission determined that,

There being no proof that the Respondent is a registered or licensed real estate broker or salesman in Florida, or is an applicant for licensure or renewal, the Petitioner [Department of Professional Regulation] has no jurisdiction to proceed against her.

For these reasons, despite the wrongs which Mr. Lay may have committed, it is recommended that the Administrative Complaint against him be dismissed for lack of jurisdiction.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED:

That the Florida Real Estate Commission enter a Final Order dismissing the Administrative Complaint against Eugene Lay for lack of jurisdiction.

DONE and RECOMMENDED this 29th day of February, 1984, in Tallahassee, Florida,

MICHAEL PEARCE DODSON

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 29 day of February, 1984.

ENDNOTE

1/ Sonny's Italian Restaurant v. Department of Business Regulation, 414 So.2d 1156, 1157 (Fla. 3d DCA 1982); Sierra Club v. Orlando Utilities Commission, 436

So.2d 383 (Fla. 5th DCA 1983).

COPIES FURNISHED:

Fred Langford, Esquire Department of Professional

Regulation

400 West Robinson Street Orlando, Florida 32801

Kenneth M. Meer, Esquire

LAW OFFICES OF THOMAS V. INFANTINO

Post Office Drawer 30 Winter Park, Florida 32790

Harold Huff, Executive Director Florida Real Estate Commission Post Office Box 1900

Orlando, Florida 32802

Frederick Roche, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DEPARTMENT OF PROFESSIONAL REGULATION FLORIDA REAL ESTATE COMMISSION

DEPARTMENT OF PROFESSIONAL REGULATION, FLORIDA REAL ESTATE COMMISSION

Petitioner,

vs. CASE NO. 0025138

DOAH NO. 82-3065

EUGENE LAY and

DIVERSIFIED BUSINESS BROKERS

Respondent.

/

FINAL ORDER

The Florida Real Estate Commission heard this case on April 17, 1984 to issue a Final Order.

Hearing Officer Michael Pearce Dodson of the Division of Administrative Hearings presided over a formal hearing on June 9, 1983. On February 29, 1984 he issued a Recommended Order, which is adopted by the Florida Real Estate Commission as to the Background and Findings of Fact. A copy of this Recommended Order is attached hereto as Exhibit A and made a part hereof.

However, as to the Conclusions of Law and Recommendation, after a complete review of the record the Florida Real Estate Commission hereby ORDERS:

1. That the Florida Real Estate Commission had jurisdiction over the Respondent, thereby rejecting Paragraphs 1 and 2 of the Conclusions of Law.

   
   

2. That the Florida Real Estate Commission rejects the Hearing Officer's Recommendation and ORDERS that the Respondent's registration be revoked and, pursuant to Chapters 455 and 475, that the Respondent pay an Administrative Fine of $1000 to the Department of Professional Regulation on or before the effective date of this Order.

This Order shall be effective thirty (30) days from the date of filing with the Clerk of the Department of Professional Regulation.

DONE AND ORDERED this 17th day of April 1984 in Orlando, Florida.

Brian J. Ladell, Chairman

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing was sent by

U.S. Mail to: Kenneth Meer, Esquire, P O Drawer 30, Winter Park, Florida 32700; to Fred Langford, Staff Attorney, Dept. of Professional Regulation, P O Box 1900, 0rlando, Florida 32802; and to Hearing Officer Michael Pearce Dodson, Division of administrative Hearings, 2009 Apalachee Parkway, Tallahassee, Florida 32301, this 3rd day of May, 1984.

Harold R. Huff, Director

RS: pep

Docket for Case No: 82-003065

Orders for Case No: 82-003065