STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, FLORIDA REAL )

ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 82-3335

)

KENNETH W. SCHWING, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held before Arnold H. Pollock, Hearing Officer with the Division of Administrative Hearings, on March 1, 1983, in Palatka, Florida. The issue for determination was whether Respondent's license as a real estate broker-salesman in the State of Florida should be suspended, revoked, or otherwise disciplined for violations of the Florida Statutes as charged in the Administrative Complaint dated October 6, 1982.

APPEARANCES

For Petitioner: Tina Hipole, Esquire

Department of Professional Regulation Post Office Box 1900

Orlando, Florida 32802

For Respondent: Alan B. Fields, Jr., Esquire

Post Office Drawer F Palatka, Florida 32078

INTRODUCTION

By Administrative Complaint filed October 6, 1982, the Respondent has been charged with certain violations of Chapter 475, Florida Statutes (1981); to wit:

1. that he failed to account for a share of a real estate commission which came into his hands which he was not in law or equity entitled to retain; and (2) that he was guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, or breach of trust in any business transaction and had aided, assisted or conspired with any other person engaged in any such misconduct and in furtherance thereof; had formed an intent, design, or scheme to engage in any such misconduct; and had committed an overt act in furtherance of such intent, design, or scheme.

   
   

   In support of the allegations, Petitioner presented the testimony of Elmer Schiller; Walter C. Messer, Jr.; Edward G. Thompson; John A. Glance; C. A. Wilkerson; Jason H. Gullett; and Robert Maxwell; and Petitioner's Exhibits 1

   through 11. Respondent testified in his own behalf and presented the testimony of William S. Hart and E. Melinda Prevatt.

   
   

   FINDINGS OF FACT

   
   

   Upon consideration of the oral and documentary evidence presented at the hearing, the following facts are found:

   
   

   1. At all times pertinent to this proceeding, Respondent, Kenneth W. Schwing, was licensed as a real estate broker-salesman in the State of Florida with license number 0150494, effective April 1, 1981.

      
      

   2. On August 3, 1981, Elmer Schiller listed for sale with Palatka Realty, Inc., a piece of property owned by him and his wife located on Turner Road in East Palatka, Florida, for a sales price of $23,500 with the express understanding that upon sale, he was to net $20,000. This exclusive listing was to expire on February 2, 1982.

      
      

   3. During the period of the listing, Mr. Schiller received several oral offers to buy the property, none of which were acceptable. Also, during the period of the listing, the property was shown to a Mr. Alfred Wilkerson by Shelly Sunne, an agent with Palatka Realty.

      
      

   4. On November 16, 1981, Mr. James T. Beckham, an agent with Century 21, Beckham Realty, in Palatka, brought to Mr. Walter C. Messer, a broker-salesman with Palatka Realty, a contract/offer by Mr. Alfred Wilkerson to buy the Schiller property for $20,000. This offer was rejected by Mr. Schiller, who made a counteroffer which was also rejected.

      
      

   5. Subsequent to this time, but while the property was still listed with Palatka Realty, Mr. Alfred Wilkerson's father, C. A. Wilkerson, came to Mr. Schiller and offered to buy the property without going through the agency with which it was listed and without paying a commission to the broker. It was his stated intent to buy the property for his son. Mr. Schiller consistently refused to be a party to this subterfuge.

      
      

   6. When the listing with Palatka Realty expired without the property being sold, Mr. Schiller, on February 9, 1982, entered into an agency listing with Mr. Albert Glance of Red Thompson ERA Realty (Red Thompson), also in Palatka. The terms of this agreement, insofar as the price and the property are concerned, were the same as in the previous listing, but under the terms of this agreement, Mr. Schiller retained the right to sell the property himself to anyone not brought to him by the agency, without paying a commission.

      
      

   7. Thereafter, on February 27, 1982, Mr. Glance; Margie Nichols, an employee of Red Thompson ERA Realty; and the Respondent, also an associate of this agency, were in the agency office when a young man, subsequently identified as Alfred C. Wilkerson, came in looking for a house to buy. During the course of the conversation that ensued, the subject of the Schiller property came up, and Mr. Wilkerson said he was familiar with it because his father had tried to buy it and had not succeeded. Respondent replied that if he wanted the house, he should sign a contract to buy it, and he, Respondent, would get it for him. Mr. Wilkerson then executed an offer/contract to buy this property for $20,000 gross.

      
      

   8. After the contract was signed, Mr. Glance and Respondent went to Mr. Schiller's home to present the offer. When Mr. Schiller found out it was Mr.

      Wilkerson who was making the offer, he at first rejected it. However, after some persuasion, he made a counteroffer which Respondent telephoned to Mr.

      Wilkerson. Respondent testified he talked to Mr. Alfred Wilkerson, but admits he made the call to the phone number listed to C. A. Wilkerson, Alfred's father. In any event, the counteroffer was rejected.

      
      

   9. Sometime thereafter, on or about April 5, 1982, Mr. Schiller received a phone call from Mr. Dwight Lawhorn, who indicated he had seen the "For Sale" sign on the property. Mr. Schiller and Mr. Lawhorn agreed on a price. Mr. Lawhorn presented Mr. Schiller with a contract on the property for $20,000 with the purchaser listed as Dwight Lawhorn. Before signing the contract, Mr. Schiller called his real estate agent, Red Thompson, to find out if they had referred Mr. Lawhorn. When they said they had not, he accepted the contract, took it to a friend of his who checked it over for him, and then signed it. When he next saw a copy of the contract, after the closing, Mr. Lawhorn's name had been scratched through as buyer and the names C. A. and Nora Wilkerson substituted.

      
      

   10. Almost three weeks later, on April 23, 1982, a closing was held at which Mr. and Mrs. Schiller signed a deed to the property in blank and a buyer's closing statement, got their money, and went home. Several days later, Mr. Schiller got a call from the A & P Furniture store in Palatka. The caller indicated that Mr. Wilkerson was there and had related that he had purchased Mr. Schiller's home and wanted credit for furniture. This surprised Mr. Schiller, who understood his agreement to be with Mr. Lawhorn. He went to the courthouse the next day and discovered that the deed he had signed in blank was now made to

       C. A. and Nora Wilkerson. Mr. Schiller paid no commission on this transfer to either Red Thompson Realty, Palatka Realty, or to Respondent.

       
       

   11. The property was bought and paid for by C. A. Wilkerson, but is occupied by Alfred C. Wilkerson.

       
       

   12. Gullett Title and Abstract Company in Palatka was requested by Respondent to issue the title insurance and prepare the appropriate legal documents for the closing on Mr. Schiller's property. When Respondent and Lawhorn brought the contract for sale to Mr. Jason H. Gullett, Respondent asked Mr. Gullett if the contract could be assigned. Mr. Gullett indicated that if the contract did not preclude assignment, it could be. Mr. Gullett was told by Respondent that he asked about the assignment issue because there was a problem with the seller and he had another buyer for the property. Mr. Lawhorn then signed the contract in Gullett's office, and it was subsequently taken to Mr. Schiller for signature. After Schiller signed the contract, it was brought back to Gullett. Respondent brought up Wilkerson's name with the title company sometime between April 5 and 8, 1982, and requested Gullett to place it on the contract between Lawhorn and Schiller. Gullett did what Respondent requested, scratching out Lawhorn's name and replacing it with the Wilkersons'. When Gullett mentioned to Respondent his uneasiness that no commission was shown in the contract, Respondent told him he would be getting his commission "under the table." Also, when Gullett got his instructions on preparing the deed, he was told by Respondent not to let Mr. Schiller know who the buyer was. The deed, reflecting preparation by Mr. Schiller, was in fact prepared by Mr. Gullett, who inserted Wilkerson's name in after Mr. Schiller signed it. Mr. Wilkerson was not present at the closing.

       
       

   13. When Mr. Schiller found out from the furniture company that his property had been purchased by Mr. Wilkerson, he complained to Mr. Gullett quite angrily. Thereafter, on May , 1982, Gullett wrote a letter to the Respondent

       indicating he no longer desired any business from him because of the deceptive way in which this transaction was handled.

       
       

   14. In an interview with investigator Robert Maxwell of the Department of Professional Regulation on June 22, 1982, Respondent denied any impropriety in this transaction. He admitted to knowing and helping Lawhorn buy the property, but denied showing it to either him or Mr. Wilkerson. All he did, he said, was assist in the transfer from Lawhorn to Wilkerson, although he did help Lawhorn draw up the contract for the purchase of the Schiller property. When he prepared it, however, it had no changes on it. He merely advised Gullett that Schiller and Wilkerson did not get along. C. A. Wilkerson is the one, he says, who dealt with Gullett, and he, Respondent, dealt only with Alfred, not his father.

       
       

   15. Respondent indicates he got no notice of the closing nor did he participate in it, denies receiving any compensation or consideration from the sale, and denies telling Mr. Gullett he would. He attributes this entire situation to Mr. Gullett's desire to cause him harm. According to Respondent, Mr. Gullett was previously accused by an attorney of notarizing a forged document and he assumed that the Respondent is the one who got him into trouble. Respondent relates that at that time, Gullett threatened to get him if it were the last thing he would ever do. I find, however, that Respondent did tell Mr. Gullett he would receive his commission "under the table." Whether he did get it or not is another issue, and there is no evidence he did.

       
       

   16. Respondent was discharged from employment with Red Thompson Realty in March, 1982. Though Mr. Thompson did not detail his reasons for discharging Respondent, Respondent infers it was because he took time off to go on a vacation with his parents.

       
       

   17. William S. Hart owned a house which he had agreed to sell to Lawhorn in March, 1982, after Lawhorn had been referred to him by Respondent without fee. However, the transaction fell through because Lawhorn, so he told Hart, had found another house costing about $20,000.

       
       

   18. E. Melinda Prevatt, who has known Respondent for about ten years, was also helped in a real estate transaction by the Respondent, who performed the service without fee.

       
       

   19. Respondent has in the past, therefore, rendered real estate services to individuals from whom he has not received a fee.

       
       

       CONCLUSIONS OF LAW

       
       

   20. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of these proceedings.

       
       

   21. The Complaint in this case has two major thrusts: (1) that Respondent failed to deliver a share of a real estate commission or profit to one entitled to it; and (2) that Respondent engaged in fraud, misrepresentations, concealment, false promises, false pretenses, dishonest dealing, or breach of trust in a business transaction.

   22. Section 425.25(1)(d), Florida Statutes (1981), states:

       
       

       1. The board [Florida Real Estate Commission] may deny an application for licensure or renewal, may suspend a license for a period

          not exceeding 10 years, may revoke a license, may impose an administrative fine not to exceed $1,000 for each count or separate offense, or may issue a repriment, if it finds that the licensee or applicant has:

          (d) Failed to account or deliver to any person, including a licensee under this chapter, at

          the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery, any personal property such as money, fund, deposit, check, draft, abstract of title, mortgage, conveyance, lease, or other document or thing of value, including a share of a real estate commission, or any secret or illegal profit, or any divisible share or portion thereof, 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. . .

          
          

   23. Notwithstanding the testimony that Respondent said to Mr. Gullett he would be getting his commission "under the table," Respondent denied making that statement or receiving any payment from either Lawhorn or Wilkerson. Mrs. Prevatt indicated that Respondent had done real estate work for her without fee and so did Mr. Hart. Even if Respondent did make the "under the table" statement to Gullett, there is no other evidence that it was paid, and I conclude the evidence fails to establish that Respondent received any compensation from this sale that he was obligated to share, notwithstanding the prima facie provisions of Section 475.28(1), Florida Statutes (1981).

       
       

   24. As to the other allegations, Section 475.25(1)(b), Florida Statutes (1981), states:

       
       

       1. The board [Florida Real Estate Commission] may deny an application for licensure or renewal, may suspend a license for a period

          not exceeding 10 years, may revoke a license, may impose an administrative fine not to exceed $1,000 for each count or separate offense, or may issue a reprimand, if it finds that the licensee or applicant 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, nation, or territory; has violated a duty imposed upon him by law or by

          the terms of a listing contract, written, oral, express, or implied, in a real estate transaction; has aided, assisted, or conspired

          with any other person engaged in any such misconduct and in furtherance thereof; or has formed an intent, design, or scheme to engage in any such misconduct and has committed an overt act in furtherance of such intent, design, or scheme. 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; that the damage or loss has been settled and paid after discovery of the misconduct; or that such victim or intended victim was a customer or a person in confidential relation with the licensee, or was an identified member of the general public. . .

          
          

   25. In support of this allegation is the testimony of several responsible witnesses who had no apparent motivation for falsely incriminating the Respondent except, perhaps, Mr. Gullett, and his motivation is uncorroborated. There is little evidence to counter it except the testimony of Mr. Hart, which bears on the issue only indirectly, and the Respondent, who was evasive and not credible. Accordingly, I conclude the evidence clearly establishes that Respondent was a party to a dishonest scheme to obtain Mr. Schiller's property for Mr. Wilkerson, and in violation of Subsection 475.25(1)(b), Florida Statutes. That no one suffered financial loss as a result of his actions is immaterial.

RECOMMENDATION

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

That Respondent's license to practice real estate in the State of Florida be suspended for a period of two years.

RECOMMENDED this 8th day of April, 1983, in Tallahassee, Florida.

ARNOLD H. POLLOCK

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 8th day of April, 1983.

ENDNOTE

1/ The parties have submitted proposed recommended orders which include 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 better weight of the evidence, not supported by the evidence, irrelevant to the issues, or legally erroneous.

COPIES FURNISHED:

Tina Hipple, Esquire Department of Professional

Regulation

Post Office Box 1900 Orlando, Florida 32802

Alan B. Fields, Jr., Esquire Post Office Drawer F Palatka, Florida 32078

William M. Furlow, Esquire Department of Professional

Regulation

Post Office Box 1900 Orlando, Florida 32802

Mr. Harold Huff Executive Director

Florida Real Estate Commission Department of Professional

Regulation

Post Office Box 1900 Orlando, Florida 32802

Mr. Fred Roche Secretary

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

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AGENCY FINAL ORDER

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STATE OF FLORIDA

DEPARTMENT OF PROFESSIONAL REGULATION FLORIDA REAL ESTATE COMMISSION

DEPARTMENT OF PROFESSIONAL REGULATION, FLORIDA REAL ESTATE COMMISSION

Petitioner,

vs. CASE NO. 0024930

DOAH NO. 82-3335

KENNETH SCHWING

Respondent.

/

FINAL ORDER

The Florida Real Estate Commission heard this case on June 21, 1983 to issue a Final Order.

Hearing Officer Arnold H. Pollock of the Division of Administrative Hearings presided over a formal hearing on March 1, 1983. On April 8, 1983, he issued a Recommended Order, which is adopted by the Florida Real Estate Commission as to all Findings of Fact and Conclusions of Law. A copy of this Recommended Order is attached hereto as Exhibit A and made a part hereof.

However, as to the Recommendation, after a complete review of the record the Florida Real Estate Commission hereby ORDERS that the Respondent's real estate license be suspended for a period of one (1) year. Respondent is prohibited from resuming real estate activity until his petition for reinstatement is approved by the Florida Real Estate Commission.

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 21st day of June 1983 in Orlando, Florida.

Howard C. Babcock, Jr., Chairman Florida Real Estate Commission

Docket for Case No: 82-003335

Orders for Case No: 82-003335