STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 83-2597

)

GEORGE N. SULLIVAN, )

)

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 December 6, 1983, in Vero Beach, Florida.

APPEARANCES

For Petitioner: Gary Lee Printy, Esquire

Post Office Box 1900 Orlando, Florida 32802

For Respondent: No appearance.

BACKGROUND

By administrative complaint filed on July 18, 1983, petitioner, Department of Professional Regulation, Florida Real Estate Commission, has alleged that respondent, George N. Sullivan, a licensed real estate salesman, had violated various provisions within Chapter 475, Florida Statutes, for which disciplinary action against his license should be taken. In brief, it is charged that respondent, while engaged in the construction of a residence in Vero Beach, Florida, issued a number of checks to subcontractors in September, 1980 knowing that he did not have sufficient funds on deposit with his bank to pay said checks and that respondent was subsequently adjudged guilty of writing worthless checks in July, 1981 by the circuit court for Indian River County. It is also alleged that respondent failed to fulfill his contractual obligations when constructing the house by failing to use construction moneys entrusted to him to pay the subcontractors. Because of this, respondent is charged with (a) failing to account and deliver funds in violation of Subsection 475.25(1)(d), Florida Statutes, and (b) being found guilty of a crime involving moral turpitude or fraudulent or dishonest dealings within the meaning of Subsection 475.25(1)(f), Florida Statutes. (Counts I, II, and III). Respondent has also been charged in Count IV with violating Subsection 475.25(1)(b), Florida Statutes, by agreeing to remodel a home in September, 1980, securing a downpayment for the work, and then wholly abandoning the project.

Respondent disputed the above allegations and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes. The matter was referred by

petitioner to the Division of Administrative Hearings on August 18, 1983 with a request that a hearing officer be assigned to conduct a hearing. By notice of hearing dated October 31, 1983, a final hearing was scheduled for December 6, 1983 in Vero Beach, Florida.

At the final hearing, petitioner presented the testimony of John Stephen Mohler, Jr. and Dorothy M. Cain and offered petitioner's exhibits 1 - 8; all were received in evidence. Respondent did not appear.

The transcript of hearing was filed on December 19, 1983. Petitioner waived its right to file proposed findings of fact and conclusions of law.

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, George N. Sullivan, held real-estate license number 0128470 issued by petitioner, Department of

   Professional Regulation, Florida Real Estate Commission. His current address is

   22 East Spruce Street, Orlando, Florida.

   
   

2. At one time, respondent also held a registered general contractor's license and operated a construction firm under the name of George N. Sullivan, Inc. in Vero Beach, Florida.

   
   

3. On or about December 7, 1979, George N. Sullivan, Inc. and Vero Fore, Incorporated entered into a construction agreement wherein Sullivan agreed to construct a residence at Lot 27, Unit III, the Moorings of Vero Beach, in Indian River County for a price of $155,628. The difference between this price and the price of $171,688 alleged in the administrative complaint is due to "extras" agreed upon by the parties to be added to the project.

   
   

4. Sullivan began construction on the residence but abandoned the project before it was completed. When he left the job he had been paid all sums due under the agreement except one final $18,000 draw. Vero Fore later discovered that approximately $66,000 in unpaid bills were left by Sullivan. It also learned that Sullivan had obtained releases from three material suppliers by issuing worthless checks in the amounts of $5,849, $2,883.48, $1,913.14,

   $4,988.92 and $3,847.23. To date, Vero Fore has not been repaid by Sullivan.

   
   

5. Sullivan was later adjudged guilty of passing worthless checks by the circuit court of Indian River County on July 8, 1981 and was sentenced to eighteen months probation and required to make restitution to the subcontractors. The official records of Indian River County reflect that Sullivan was found to be in violation of probation on March 23, 1983 for failure to make restitution. It is unknown what, if any, penalties were imposed upon him for this violation, or if restitution has ever been made.

   
   

6. On or about September 5, 1980, Sullivan entered into a contract with Mr. and Mrs. James L. Cain to remodel their residence located at 2075 DeLeon Avenue, Vero Beach, Florida. The agreed upon price was $46,900. The Cains paid Sullivan $46890, or 10 percent, as a downpayment for the work on September 8, 1980. Sullivan sent three men to the Cains' house a few days later to build a

   platform. No other work was ever done. Sullivan did not pay the three workmen and the Cains were forced to pay them $788 to obtain a release of liens. To date, they have never been reimbursed by respondent.

   
   

   CONCLUSIONS OF LAW

   
   

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

   
   

8. It is alleged that in the Vero Fore, Inc. transaction, Sullivan was guilty of violating Subsections 475.25(1)(b), and (f), Florida Statutes, while in the Cain transaction, he violated Subsection 475.25(1)(b), Florida Statutes. It is noted that neither transaction occurred in conjunction with real estate activities but were instead related to his construction business.

   
   

   1. Vero Fore, Inc. transaction-

      
      

9. The evidence establishes that respondent is guilty of a breach of trust in a business transaction as proscribed by Subsection 475.25(1)(b) (Count I), and by reason of being found guilty of a crime against the laws of this state involving "fraudulent or dishonest dealings" is in violation of Subsection 475.25(1)(f) (Count III). However, he has not failed to account and deliver funds entrusted to him in a real estate transaction as contemplated by Subsection 475.25(1)(d)( Count II). Cf. Fleishman v. DPR, So.2d (Fla. 3rd DCA 1983, op. filed. 11/8/83). Accordingly, Count II should be dismissed.

   
   

   B. James L. Cain transaction-

   
   

10. The evidence establishes that, by taking the downpayment from the Cains and failing to render any services therefor, Sullivan is guilty of breach of trust in a business transaction within the meaning of Subsection 475.25(1)(b) as charged in Count IV.

    
    

11. Petitioner has recommended that respondent's real estate license be suspended for ten years but that it be reinstated after a period of three years if respondent can demonstrate that restitution to the material suppliers, Vero Fore, Inc. and the Cains has been made. In view of the circumstances herein, this penalty appears to be appropriate.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent George N. Sullivan be found guilty as charged

in Counts I, III, and IV and that Count II be DISMISSED. It is further

RECOMMENDED that respondent's real estate sales license be suspended for a period of ten years with the condition that said license be reinstated after a period of three years if respondent can demonstrate that restitution to the three material suppliers, Vero Fore, Inc. and the Cains has been made.

DONE and RECOMMENDED this 10th day of December, 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 10th day of December, 1983.

COPIES FURNISHED:

Gary Lee Printy, Esquire Post Office Box 1900 Orlando, Florida 32802

Mr. George N. Sullivan

22 East Spruce Street Orlando, Florida 32802

Docket for Case No: 83-002597

Orders for Case No: 83-002597