STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, FLORIDA REAL ESTATE ) COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 82-3202

)

CHESTER E. MOODY, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in the above case before the Division of Administrative Hearings by its duly designated Hearing Officer, DONALD R. ALEXANDER, on September 2 and October 7, 1983 in Gainesville, Florida.

APPEARANCES

For Petitioner: Fred R. Langford, Esquire

Post Office Box 1900 Orlando, Florida 32802

For Respondent: C. Gary Moody, Esquire

Suite E, 605 North East 1st Street Gainesville, Florida 32601

BACKGROUND

By administrative complaint filed on August 26, 1982, petitioner, Department of Professional Regulation, Florida Real Estate Commission, has alleged that respondent, Chester E. Moody, a licensed real estate broker/salesman, had failed to account for or deliver funds entrusted to him by another person, and that he was accordingly guilty of dishonest dealing and breach of trust in a business transaction in violation of Subsection 475.25(1)(b), Florida Statutes. The complaint was served on respondent on September 14, 1982.

Respondent disputed the above allegations and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes, to contest the allegations. The matter was referred by petitioner to the Division of Administrative Hearings on November 24, 1982 with a request that a hearing officer be assigned to conduct a hearing. At the request of the parties the final hearing was scheduled for July 5, 1983 in Gainesville, Florida. On June 29, 1983 petitioner filed a motion for continuance, and with the agreement of respondent, the matter was continued until August 8, 1983 at the same location. Thereafter, respondent requested a continuance which was granted by order dated August 5, 1983. The final hearing was again rescheduled to September 2, 1983. A continued hearing was held on October 7, 1983. At the final hearing petitioner presented the

testimony of Donald E. Stanaland and Joseph D. Farish and offered petitioner's exhibits 1-6; all were received in evidence. Respondent testified on his own behalf and offered respondent's exhibits 1-11; all were received in evidence.

The transcripts of hearing (two volumes) were filed on October 26, 1983. Proposed findings of fact and conclusions of law were filed by respondent on November 4, 1983 and have been considered by the undersigned in the preparation of this order. Findings of fact not included in this order were considered irrelevant to the issues, immaterial to the results reached, or were not supported by competent and substantial evidence.

The issue herein is whether respondent should be disciplined for the alleged violations set forth in the administrative complaint.

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

FINDINGS OF FACT

1. At all times relevant hereto, respondent, Chester E. Moody, held real estate broker/salesman license number 0061271 issued by petitioner, Department of Professional Regulation, Florida Real Estate Commission.

   
   

2. Respondent has been in the real estate business for a number of years. At one time, Respondent owned a parcel of property in Fernandina Beach which he sold to a group of investors in West Palm Beach, Florida. One of those investors was Joseph D. Farish. Moody later was involved in other projects with Farish and the two developed a "compatible, harmonious" relationship.

   
   

3. In 1980, Moody became aware of a tract of land in Marion County, Florida known as Orange Lake Estates which he believed to have good investment potential. Knowing that Farish was interested in investment opportunities such as this, Moody approached Farish, who then flew to the project site, inspected it, and decided to make an offer to the owner. A contract was prepared and Moody flew to New York at his own expense to present the contract to the owner. After several counter offers, the contract was accepted and a closing was held in June, 1981.

   
   

4. Prior to the actual closing Farish and Moody entered into a written agreement concerning Orange Lake Estates which provided as follows:

   
   

   IT IS HEREBY AGREED between JOSEPH D. FARISH,

   JR., as Trustee, or his assigns, as the Purchaser of that said property designated as Orange Lake Estates, and CHESTER E. MOODY, as follows:

   
   

   That the said Chester E. Moody is to have exclusive re-sale of all property that is to be developed at the said Orange Lake Estates for a period of three (3) years and is to be paid a commission of seven (7) percent of the gross sales price. That the said Chester E. Moody is to supervise, coordinate and negotiate with the approval of the Buyer for all surveying, engineering, land use planning and building and development and said services

   are to be inclusive of the aforesaid seven (7 percent) percent commission. That all services, material, etc. are to be paid by the Buyer, including any promotions, public relations and/or advertising, with the approval of the Buyer.

   
   

   DATED: March 10, 1981.

   
   

   The document was prepared by Farish, and executed by both parties. Their understanding was basically that Moody would remain in Marion County, hire the labor, oversee the development, and Farish would provide the cash.

   
   

5. Although Moody was to receive a 7 percent commission when the property was purchased by Farish, Moody put the commission in the name of a broker (Chester Sanders) who he intended to work for after the sale was consummated. In lieu of a cash commission, however, Sanders was paid in the form of an old clubhouse that sat on the project. At the closing itself, Moody and Sanders split a $1400 charge for title insurance.

   
   

6. The contract for sale provided that Farish would have access to the property prior to closing for the purpose of doing "engineering work, moving, clearing" and the like. The property itself had heavy vegetation and underbrush which needed to be cleared. It also had "mush" areas where access was difficult. In view of this, Moody advised Farish he would need a front-end loader and rubber tire tractors to perform the work. Farish told him to go ahead and rent this equipment. Moody did so at $40 and $25 per hour, respectively. The work began in the spring of 1981 and involved 3 to 4 persons working from 5 to 7 days per week in an effort to get the job completed by the end of the summer. In all, over 200 acres of land were mowed and cleared under Moody's supervision.

   
   

7. Early on in the project, Moody visited Farish in West Palm Beach with flow sheets of revenues and costs and projections to advise him of the status of the project. Farish told Moody he did not want to incur as much cost as Moody had projected. Moody advised Farish the minimum cash outlay required would be

   $50,000 in view of the potential sales of several million dollars. The record is unclear whether Farish agreed or disagreed with this amount of expenditures.

   
   

8. On June 11, and July 28, 1983, Farish gave Moody checks in the amount of $2,500 and $20,000, respectively, as an advance towards the $50,000 development cost for the project. Prior to receiving the $20,000 check, Moody had requested $30,000 but Farish told him he only had $20,000 in his account.

   
   

9. Of the $22,500, Moody paid $1500 to Moorhead Engineering, a land surveying firm in Ocala, Florida. That firm had been contracted by DENCO, an investment firm owned by Farish, to set iron pins on lot corners in the development and to prepare road plans for the project. The total estimated cost was $7,500. A representative of Moorhead testified that the work was completed, that only $1,500 was paid, and that $6000 is still owed. It subsequently filed a $6000 lien on the property. Moody also paid $500 to Hull-Mozely, a land planning firm, for aerial photograph work, geodetics, zoning, and preparation of a preliminary plan, $420 to Paul Harvey Advertising for constructing an 8' X 24' sign on the property, $4,286.72 to John Frykman for marketing assistance in promoting the venture, $156.19 as personal reimbursement for expenses incurred in staging a barbecue at the development site for promotional purposes, and

   $19,545.50 to the persons who furnished the heavy equipment and labor services

   in clearing over 200 acres of land in the spring and summer of 1981. In all, these cash outlays exceeded the $22,500 advanced by Farish, and the excess was personally borne by Moody. He has not been reimbursed by Farish to date. In addition, Moody estimated he had invested an additional $10,000 to $15,000 in the project for which he is entitled to be paid. All expenditures were related to the project and no money was converted for personal use.

   
   

10. During this period of time, Farish visited the property site on numerous occasions to check the progress of the work.

    
    

11. In September, 1981 Farish sent Moody a letter requesting a formal accounting of all monies expended on the project. Shortly thereafter, Moody drove to West Palm Beach for the purpose of providing Farish an accounting. In this regard, he had prepared a written accounting dated September 28, 1981 outlining the disposition of all funds expended the progress of the project, and anticipated costs to complete the project. Farish refused to meet with him and consequently Moody was unable to give Farish an accounting.

    
    

12. Farish later filed suit in Palm Beach County circuit court against Moody in 1952. The suit was subsequently transferred to Alachua County and has lay dormant for many months. Farish also filed a complaint with petitioner which precipitated the filing of the administrative complaint.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

14. In the administrative complaint, petitioner has charged Moody with violating Subsection 475.25(1)(d), Florida Statutes, by "fail(ing) to account or deliver to another person, upon demand of the person so entitled, any money or fund which has 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", and that Moody was also "guilty of dishonest dealing and breach of trust in a business transaction," in violation of Subsection 475.25(1)(b), Florida Statutes.

    
    

15. The evidence reveals that although Moody received $22,500 from Farish, he did not convert these funds to his own personal use, or otherwise improperly expend such monies. All moneys were spent in conjunction with the development of the project. During the course of the project, and prior to the rift between the parties, Moody furnished documentation itemizing each expenditure, and how it related to the project in question. Farish visited the project on a number of occasions when such expenditures were made, and was orally advised as to all steps being taken to complete the project. When he formally requested an accounting, Moody prepared one but Farish refused to see him. Accordingly, the evidence fails to support a finding of guilt, and it is concluded that all charges should 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 30th day of November, 1983, 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 30th day of November, 1983.

COPIES FURNISHED:

Fred R. Langford, Esquire Post Office Box 1900 Orlando, Florida 32802

C. Gary Moody, Esquire

Suite E, 605 North East 1st Street Gainesville, Florida 32601

Fred Roche, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Randy Schwartz

Assistant Attorney General Department of Legal Affairs Suite 212

400 West Robinson Street Orlando, Florida 32801

Docket for Case No: 82-003202

Orders for Case No: 82-003202