STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DAVID EDSTROM, )
)
Petitioner, )
)
vs. ) CASE NO. 84-0789
)
DEPARTMENT OF PROFESSIONAL )
REGULATION, FLORIDA REAL )
ESTATE COMMISSION, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, this cause was heard by Linda N. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on May 11, 1984 in Ft. Lauderdale, Florida.
Petitioner David R. Edstrom appeared on his own behalf, and Lawrence S. Gendzier, Esquire, Orlando, Florida appeared on behalf of Respondent Department of Professional Regulation, Florida Real Estate Commission.
By letter of February 28, 1984 Respondent advised Petitioner that his application for licensure as a real estate salesman was denied, and Petitioner timely requested a formal hearing. Accordingly, the issue for determination is whether Petitioner's application for licensure should be approved.
Petitioner testified on his own behalf and presented the testimony of Alfred Walleser, Clinton E. Taylor, Sam E. Smith, Maryanne Shreeve, and Eugene
Basilici. Additionally, Petitioner's composite Exhibit numbered 1 and Respondent's Exhibits numbered 1-10 were admitted in evidence.
Both parties submitted posthearing proposed findings of fact in the form of a proposed recommended order. To the extent that any proposed findings of fact have not been adopted in this Recommended Order, they have been rejected as not having been supported by the evidence, as having been irrelevant to the issues under consideration herein, or as constituting unsupported argument of counsel or conclusions of law.
FINDINGS OF FACT
On November 29, 1983 Petitioner filed with Respondent an application for licensure as a real estate salesman. By letter dated February 28, 1984 Respondent denied Petitioner's application as follows:
The reason for the Commission's action is based on your answer to Questions 6,
7, 14 and 15 of the licensing application and/or your criminal record and disciplinary actions, and on your
having unlawfully acted as a real estate salesman or real estate broker in the State of Florida. Specifically, your denial is based upon your May 1975 arrests and convictions for five
counts of the sale of unregistered securities five counts of fraudulent sale of securities, five counts of grand larceny, petty larceny, ten counts of conspiracy to commit a
felony, and also on disciplinary actions involving your Insurance License, Mortgage Brokers License and Securities License.
In 1970 or 1971 Petitioner started Summit Investments, a conpany engaged in selling contracts for deed for developers to investors at a discount. The State of Florida determined that these contracts were mortgages and not securities, and, therefore, all persons selling them must be licensed mortgage brokers. Petitioner accordingly obtained a mortgage broker's license.
In 1972 eight mortgage brokers formed S.E.I., Inc., and Petitioner became the president. Everyone selling contracts for deed for that company was licensed under the Mortgage Brokerage Act. Clinton E. Taylor, an investigator for the State of Florida Department of Banking and Finance, Division of Securities, as part of his regular job duties, frequented Petitioner's offices at S.E.I., Inc. to check the advertising and sales pitches being used by the persons selling what the State had classified as mortgages. Taylor monitored Petitioner's operation at Summit Investments and at S.E.I., Inc. for a number of years without receiving any consumer complaint and without finding any basis for any enforcement action against Petitioner.
In 1974, a recession year, five persons to whom S.E.I. had made sales did not receive their interest income and therefore filed complaints with the State of Florida Department of Banking and Finance. In May 1975 state criminal charges were filed against Petitioner as president of S.E.I., against the developer, and against the selling broker, basically alleging that what had previously been classified as mortgages were in fact unregistered securities. After trial, Petitioner was adjudicated guilty of five counts of sale of unregistered securities; five counts of fraudulent sale of securities; five counts of petty larceny; five counts of conspiracy to commit a felony, to-wit: fraudulent sale of securities; and five counts of conspiracy to commit a misdemeanor, to-wit: petty larceny. Petitioner was initially sentenced to a total of ten years of incarceration, $20,000.00 in fines, and 15 years of probation.
In 1976 Petitioner plead no contest to a federal charge of mail fraud in Tampa, Florida in order to obtain a sentence which would run concurrent with that arising out of his state conviction. In 1977 Petitioner plead no contest to a charge in Palm Beach County of selling unregistered securities. Both of these charges were related to the same incidents forming the basis for the 1975 criminal charges.
Based upon the conviction of Petitioner in the 1975 state case, his mortgage broker's license, his securities license, and his insurance license were revoked.
By the time of the final hearing in this cause Petitioner had served 16 months in the State prison system and had been released; restitution had been made to the five people who caused the criminal charges to be filed from payment by Petitioner of the fines assessed against him; Petitioner had finished serving his amended probation period; and Petitioner's civil rights had been restored by the State of Florida.
From September 1980 to November 1983 Petitioner earned his livelihood selling businesses. Be applied for a real estate license in both 1982 and 1983 and was denied both times. Petitioner seeks a real estate license in order that he can return to selling businesses.
CONCLUSIONS OF LAW
The Division of Administrative Bearings has jurisdiction over the subject matter hereof and the parties hereto. Section 120.57(1), Florida Statutes (1983).
Section 475.17, Florida Statutes (1983) provides, in pertinent part, that:
(1)(a) An applicant for licensure who
is a natural person shall be 18 years of age, a bona fide resident of the State, honest, truthful, trustworthy, and of good character and shall have a good reputation for fair dealing. An applicant for an active broker's
license or a saleman's license shall be competent and qualified to make real estate transactions and conduct negotiations there for with safety to investors and to those with whom he
may undertake a relationship of trust and confidence. If the applicant has been denied registration or a license or has been disbarred, or his registration or license to practice or conduct any regulated profession, business, or vocation has been revoked or suspended, by this or any other state, any nation, or any possession or district of the United States, or any court or lawful agency thereof, because of any conduct or practices
which would have warranted a like result under this chapter, or if the applicant has been guilty of conduct or practices in this state or elsewhere which would have been grounds for revoking or suspending his license under this chapter had the applicant then been registered, the applicant shall be
deemed not to be qualified unless, because of lapse of time and subsequent good conduct and reputation, or other reason deemed sufficient, it appears to the
commission that the interest of the public and investors will not likely be endangered by the granting of registration.
(b) No application may be approved if the applicant has acted or attempted
to act, or has held himself out as entitled to act, during the period of l year next prior to the filing of the application, as a real estate broker or salesman in the state in violation of this chapter. This paragraph shall be deemed to bar any person from licensure who has performed any of the acts or services described in s. 475.01(3), unless exempt pursuant to s. 475.011,
during a period of 1 year next preceding the filing of the application, or during the pendency of the application, and until a valid current license has been duly issued to him, regardless of whether the performance of the act
or service was done for compensation or valuable consideration.
(3) All individuals engaged in the activity of dealing in business enter- prises or business opportunities for another and for valuable consideration on January 1, 1982, may continue to operate in this activity without complying with the qualification for practice provisions of subsection
(2) and s. 475.175 for a period of
2 years. During this 2-year period all such individuals shall either qualify as real estate brokers under the provisions of this chapter or
satisfactorily complete commission approved courses of instruction and pass an examination prescribed by the commission.
The total classroom hours of instruction
in the commission-approved course or courses of instruction shall not exceed the combined total for broker applicants and salesman applicants contained in subsection (2).
After this 2-year period, full compliance with this chapter is mandatory.
Petitioner presented the testimony of witnesses that he is honest, truthful, trustworthy, of good character and that he possesses a good reputation for fair dealing. The only evidence presented by Respondent to controvert Petitioner's evidence was the introduction in evidence of a copy of Petitioner's 1975 criminal conviction. Petitioner failed, however, to introduce any facts underlying the basis of that conviction, and the Judgment of Guilty introduced in evidence fails to establish any of the facts forming the basis of the conviction and further fails to cite a single statute with which Petitioner was
charged or of which Petitioner was found guilty. Accordingly, the only factual basis in this record concerning Petitioner's conviction for which his application for licensure was denied is Petitioner's testimony that the contracts he had been selling as mortgages as defined and approved by the State of Florida became, without notice to the brokers selling them, unregistered securities. Accordingly, the evidence fails to indicate any criminal intent but rather only indicates that Petitioner acted in good faith for a number of years conducting the same business which the State's Department of Banking and Finance, Division of Securities, investigators monitored and approved.
Accordingly, the certified Judgment of Guilty, although establishing a prima facie case for denial of Petitioner's application for licensure, has been overcome by Petitioner's direct evidence that he acted in good faith and is an honest and trustworthy person.
Additionally, Petitioner has shown that he has served his term of imprisonment, made restitution to those persons who complained against him, served without incident his term of probation, and has been restored his full civil rights. It is now almost ten years since Petitioner's conviction on what appears to be technical statutory violations, and Petitioner has had no complaints against him before or after the State of Florida determined that what it had called mortgages were in fact securities. Although the letter of denial of licensure recites only the May 1975 conviction, Petitioner himself testified as to the 1976 and 1977 convictions on related charges arising out of the same transaction. No evidence was presented by Respondent to controvert any of that testimony. The evidence in this record therefore indicates that there has been a lapse of time and subsequent good conduct and reputation so that it appears the interest of the public and investors will not likely be endangered by the granting of registration to Petitioner.
Respondent did introduce evidence in the form of a Report, Findings, Conclusions and Recommendations of the Hearing Examiner and in the form of an Order Revoking Respondent's Licenses and Eligibility to Fold Licenses as to the revocation of Petitioner's insurance licenses. Those documents indicate that the sole basis on which those licenses were revoked was Petitioner's conviction in 1975, again with no factual basis appearing of record as to the charges upon which those convictions were based. Petitioner himself testified that his insurance licenses, his mortgage broker's license and his securities license were revoked based upon the conviction. Although revocation of a licensee's right to practice a regulated profession in the State of Florida may well be grounds for denial of licensure, revocation itself alone does not mandate such denial.
In conjunction with subsection (3) of section 475.17, Florida Statutes (1983) Respondent has promulgated Section 21V-21.O1 and Section 21V-21.O2 which provide, in pertinent part, as follows:
21V-21.01
Effective January 1, 1982, all individuals engaged in the activity of dealing in business enterprises or business opportunities, hereinafter referred to as business brokerage, must comply with all provisions of Chapter 475, F.S.; however, unlicensed indivi- duals actively engaged in business brokerage activities in Florida prior to January 1, 1982 may continue to operate
in this activity without complying with the qualifications for practice provi- sions of Chapter 475.17(2) and the exami- nations requirements of Chapter 475.175 until January 1, 1984. After this two year period, all individuals dealing
in business brokerage must fully comply with all provisions of Chapter 475, F.S.
During this two year period, unlicensed business opportunity brokers, unlicensed associates of unlicensed business opportunity brokers, licensed salesmen of unlicensed business opportunity brokers
and licensed and unlicensed associates of licensed real estate brokers dealing strictly in business opportunities may qualify for licensure as a real estate
broker by either of the following procedures:
21V-21.02
(1) All unlicensed individuals who were actively dealing in business brokerage prior to January 1, 1982, and wish to continue this activity, must register with the Florida Real Estate Commission. Once registration is approved by the Commission such registrants are eligible to qualify
as a real estate broker under the provisions of Commission Rule 21V-21.01 (2)(b). Registration must be made
on a form prescribed by Commission and will remain in effect until such
registrant is licensed as a real estate broker or until January 1, 1984, whichever date is earlier. The fee
for this registration shall be 25.00.
When the statutory and rule sections are read in conjunction with each other it is clear that individuals engaged in the activity of selling business enterprises or business opportunities on January 1, 1982 could continue to do so without being registered or licensed by Respondent up to January 1, 1984 at which time such person must stop engaging in the sale of businesses or be registered and licensed with Respondent in accordance with Respondent's requirements for licensure. Respondent appears to argue that since Petitioner, during that two year period, attempted to register with the Florida Real Estate Commission and was denied registration that therefore Petitioner was required to cease selling businesses. Such an argument has no basis legally or logically.
Since anyone selling businesses on January 1, 1982 could continue to do so with impunity until January 1, 1984, so could Petitioner. Accordingly, denying Petitioner's application for licensure on the basis that he acted unlawfully as a real estate salesman is without basis in law or fact when Petitioner was doing, admittedly, an activity which was permissible at the time that he did it and he ceased doing it before the time when it was no longer permissible.
Petitioner simply cannot be denied licensure for doing an act allowed to be done.
Respondent also based its denial of Petitioner's application, according to its letter of denial, upon Section 475.25, Florida Statutes, but failed to specify any of the specific grounds contained within that statute. In its proposed recommended order, however, Respondent argues, although no notice was previously given to Petitioner, that he has violated Section 475.25(1)(f), Florida Statutes which permits Respondent in its discretion to deny licensure to an applicant who
(f) Has been convicted or found guilty, regardless of adjudication, of a crime in any jurisdiction which directly relates to the activities of a licensed broker or salesman or involves moral turpitude or fraudulent or dishonest dealing. Any plea of nolo contendere shall be considered a conviction for purposes of this paragraph. The record of a conviction certified or authenticated in such form as to be admissible in evidence under the laws of
the state shall be admissible as prima facie evidence of such guilt.
Respondent's argument, as contained in the proposed recommended order, is composed of the simple statement that Petitioner's criminal convictions involve moral turpitude, fraudulent or dishonest dealing and that the crimes directly relate to the types of activities in which a real estate licensee might become involved. However, Respondent has failed to introduce any factual basis to support that statement and has failed to prove the statutes under which Petitioner was convicted in order that such a determination can be made.
Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered approving Petitioner's application for licensure as a real estate salesman, subject to successful completion of the licensure examination.
RECOMMENDED and ORDERED this 6th day of November, 1984 in Tallahassee, Florida.
LINDA M. RIGOT
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 6th day of November, 1984.
COPIES FURNISHED:
Mr. David R. Edstrom
5748 Northeast 16th Avenue Fort Lauderdale, Florida 33334
Lawrence S. Gendzier, Esquire Department of Professional Regulation
400 West Robinson Street Suite 212
Orlando, Florida 32801
Issue Date | Proceedings |
---|---|
Dec. 14, 1984 | Final Order filed. |
Nov. 06, 1984 | Recommended Order sent out. CASE CLOSED. |
Issue Date | Document | Summary |
---|---|---|
Dec. 05, 1984 | Agency Final Order | |
Nov. 06, 1984 | Recommended Order | Dismiss complaint and allow Respondent to sit for the exam. |