STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 83-2915

)

WILLIAM JOSEPH FRANCIS and V R ) BUSINESS BRPKERS OF LAKELAND, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above- styled case on January 13, 1984, at Lakeland, Florida.

APPEARANCES

For Petitioner: Tina Hipple, Esquire

400 West Robinson Street Orlando, Florida 32801

For Respondent: Richard C. May, Esquire

4110 South Florida Avenue, Suite B Lakeland, Florida 33803

By Administrative Complaint filed July 26, 1983, the Department of professional Regulation, Division of Real Estate, Petitioner, seeks to revoke, suspend, or otherwise discipline the license of William Joseph Francis as a real estate broker and the license of V R Business Brokers of Lakeland, Inc., as a corporate real estate broker. As grounds therefor it is alleged that during the proceedings involving a contract for the sale and purchase of a business Respondent failed to obtain the earnest money deposit required by the contract, attempted to persuade the seller to finance the sales transaction after learning buyers had insufficient funds and were a poor credit risk, and failed to disclose these facts to the seller, all in violation of Section 475.25(1)(b), Florida Statutes.

The parties presented a prehearing stipulation and thereafter Petitioner called one witness, Respondent and his wife testified on behalf of Respondent, and 11 exhibits were admitted into evidence.

Proposed findings submitted by the parties insofar as they are included herein are adopted; otherwise, they are rejected as not supported by the evidence or unnecessary to the results reached.

FINDINGS OF FACT

1. William J. Francis, Respondent, is now, and was at all times alleged in the Administrative Complaint, a licensed real estate broker in the State of Florida, having license No. 0388666.

   
   

2. Respondent, V R Business Brokers of Lakeland, Inc., is currently, and was at all times alleged in the Administrative Complaint, a real estate broker corporation, having been issued license No. 0224405.

   
   

3. At all times alleged in the Administrative Complaint, Respondent Francis was licensed and operating as a real estate broker and sole qualifying broker and officer of Respondent, V R Business Brokers of Lakeland, Inc.

   
   

4. Respondent, via Theresa Rosalie Francis, a broker/salesman and wife of Respondent, employed by V R Business Brokers, obtained from Joyce Houser a listing agreement (Exhibit 1) to sell a restaurant called "Bac O' The Mall at a price of $43,000. This listing agreement provided a minimum commission of

   $6,000 to the broker.

   
   

5. Subsequent to obtaining the listing agreement, another employee of V R Business Brokers, James Rice, a real estate salesman, obtained a written offer to purchase "Bac O' The Mall" on January 13, 1983 (Exhibit 2). This offer was made by Robert Stevens and Richard Destin to purchase the business for $30,000, with a $500 deposit and an additional $1,500 down payment when the seller accepted the offer and the balance of $28,000 at closing.

   
   

6. Joyce Houser was advised the offer had been received and was requested to come down to Respondent's office to have it presented. Mrs. Houser went to the office of Respondent and was quite upset with the disparity in asking price and the offer. Salesman Rice, who had obtained the offer, urged Mrs. Houser to accept the contract immediately because the business had been losing money and a better offer might not be forthcoming. Mrs. Houser refused this offer and contacted her brother, a real estate broker, who helped her prepare a counteroffer.

   
   

7. Prior to this offer being submitted, Mrs. Houser had become unhappy with her dealings with V R Business Brokers due to salesmen bringing clients in at inopportune times to show the business and for failing to maintain secrecy with respect to her employees of the fact that the business was for sale. A prior offer had also been obtained on which Mrs. Houser felt she had been pressured by Respondent to accept; and she had directed all negotiations to be made through her brother, Charles Whitten.

   
   

8. The buyers accepted the counteroffer (Exhibit 7) When the counteroffer was accepted, Whitten reminded Respondent that the additional $1,500 was due. When the buyers did not appear the following day with the additional deposit, Respondent, who had agreed to hold the buyers' personal check for $500 to be replaced with a cashier's check for $2,000, apparently became suspicious of the buyers' ability to pay and called the bank on which the check had been written to find out if sufficient funds were on deposit to cover the check. When advised that there were insufficient funds to cover the check, Respondent sent the check to his escrow agent to have the check sent to the bank where, in fact, it was subsequently dishonored. Respondent never advised Mrs. Houser or Charles Whitten that the $500 check bounced or that the buyers had failed to deposit the additional $1,500 required by the contract until after the scheduled date of closing.

9. A few days before the February 15, 1983, scheduled closing date Respondent or his salesman contacted Whitten to solicit Mrs. Houser to finance part of the purchase price. She declined to do so.

   
   

10. At the time the initial contract was submitted by Destin and Stevens, Respondent knew these buyers were unemployed engineers and soon thereafter learned they were attempting to borrow the money to finance the deal, and that the banks would not lend them the money they needed. Nevertheless, Respondent attempted to induce the seller to finance the sale of the business when he knew, or should have known, the buyers to be sufficiently poor credit risks they could not obtain financing.

    
    

11. When February 15, 1983, passed without the scheduled closing taking place by reason of default on the port of the buyers, Mrs. Houser, on February 18, 1983, wrote to Respondent (Exhibit 5) requesting the earnest money deposit as liquidated damages and a release from the listing agreement which she had been promised. In response thereto, Respondent, by letter dated February 24, 1983 (Exhibit 6), advised Mrs. Houser that the buyers' $500 check was no good and that they had failed to put up the additional $1,500 required by the contract. He agreed to cancel the listing agreement `as soon as this matter is resolved." Mrs. Houser then reported the entire transaction to the Florida Real Estate Commission and these proceedings followed their investigation.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

13. Section 475.25(1)(b) Florida Statutes, provides, in part, that disciplinary action, including revocation or suspension of a license, may be taken if it is found the licensee has:

    
    

    Been guilty of fraud, misrepresentation, concealment, false promises, false pre- tenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business trans- action in this state . . . 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. . .

    
    

14. Respondent is here charged with concealing from the seller the fact that no earnest money deposit had been received from the buyers and that the buyers were in default on the contract; while, at the same time, trying to induce the seller to provide financing for the transaction although Respondent knew, or should have known, the buyers were poor financial risks. Respondents are further charged with breach of trust in a business transaction.

    
    

15. A review of the listing agreement (Exhibit 1) discloses that Respondent promised to do nothing--except collect a commission if the business was sold while the listing agreement was in effect. Although not an issue in these proceedings, an argument could be made that this listing agreement is invalid for lack of consideration on the part of the Respondent.

16. As broker the Respondent is acting as an agent for his principal, the seller. The agent has well-defined fiduciary responsibilities to the principal including a duty to advise his principal of facts coming to the broker's attention which are inimical to the interests of the principal. Not only did Respondent fail to advise his principal, Mrs. Houser, that no earnest money deposit had been received and the buyers were in default on the contract, hut also strongly suggested that it would be in the sellers interest to finance the sale to financially unsound buyers. This is a violation-of Section 475.25(1)(b) Florida Statutes, above-quoted.

    
    

17. The burden of proof in these proceedings is on Petitioner. Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (Fla. 1st DCA 1977). While Bowling v. Department of Insurance, 349 So.2d 165 (Fla. 1st DCA 1981) declines to adopt the clear and convincing evidence standard of proof in license revocation proceedings, the court does hold the standard of evidence required is "evidence which weighs as 'substantially' on a scale suitable for evidence as the penalty does on the scale of penalties." In making the findings listed above, the standard used was clear and convincing evidence.

    
    

18. From the foregoing it is concluded that in failing to apprise his client, Mrs. Houser, that the contract to purchase her restaurant was in default because the buyers had failed to comply with the earnest money deposit requirement; and in attempting to persuade Mrs. Houser to finance the sale of her business to buyers who were poor credit risks, Respondent violated Section 475.25(1)(b), Florida Statutes, as alleged. It is therefore

RECOMMENDED that the license of William J. Francis as a real estate broker and the license of V R Business Brokers of Lakeland, Inc., as a corporate broker be suspended for a period of one (1) year.

ENTERED this 15th day of February, 1984, at Tallahassee, Florida.

K. N. AYERS, 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 15th day of February, 1984.

COPIES FURNISHED:

Tina Hipple, Esquire Department of Professional

Regulation - Legal Post Office Box 1900 Orlando, Florida 32802

Richard C. May, Esquire 4110 South Florida Avenue Suite B

Lakeland, Florida 33803

Harold Huff, Director Division of Real Estate Department of Professional

Regulation

Post Office Box 1900 Orlando, Florida 32802

Fred M. 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. 0035542

DOAH NO. 83-2915

WILLIAM JOSEPH FRANCIS and

VR BUSINESS BROKERS OF LAKELAND INC.

Respondents .

/

FINAL ORDER

The Florida Real Estate Commission heard this case on March 20, 1984 to issue a Final Order.

Hearing Officer K. N. Ayers of the Division of Administrative Hearings presided over a formal hearing on January 13, 1984. On February 15, 1984, 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 here to 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 license of William Joseph Francis and the registration of VR Business Brokers of Lakeland Inc. be suspended for a period of six (6) months. Respondents are required to file a petition for reinstatement with 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 20th day of March 1984 in Orlando, Florida.

Brian J. Ladell, Chairman Florida Real Estate Commission

CERTIFICATE OF SERVICE

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

U.S. Mail to; Richard C. May, Esquire, Suite B, 4110 South Florida Avenue, Lakeland, Florida 33803; to Hearing Officer K. N. Ayers, Division of Administrative Hearings, 2009 Apalachee Parkway, Tallahassee, Florida 32301; and to Tina Hipple, Staff Attorney, Dept. of Professional Regulation, P O Box 1900, Orlando, Florida 32802, this 3rd day of April, 1984.

Harold R. Huff, Director

RA:pep

Docket for Case No: 83-002915

Orders for Case No: 83-002915