Judges: LINDA M. RIGOT
Agency: Department of Business and Professional Regulation
Latest Update: Feb. 28, 1985
Summary: Amended complaint dismissed since Department failed to prove Respondents made false representation or engaged in any dishonest dealings.
84-0990STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF PROFESSIONAL )
REGULATION, FL0RIDA REAL )
ESTATE COMMISSION )
)
Petitioner, )
)
vs. ) CASE NO. 84-0990
)
HOWARD B. BERMAN, MICHAEL J. ) WEIL, AND PARAMOUNT REALTY, INC., )
)
Respondents. )
)
RECOMMENDED ORDER
Pursuant to notice, this cause was heard by Linda M. Rigot, the assigned Hearing officer of the Division of Administrative Hearings, on September 17, 1984, in Miami, Florida.
Petitioner Department of Professional Regulation, A Florida Real Estate Commission was represented by Fred Langford, Esquire, Orlando, Florida; and Respondents Howard B. Berman, Michael J. Weil and Paramount Realty, Inc., were represented by Richard S. Rachlin, Esquire, Miami, Florida.
Petitioner filed an Administrative Complaint seeking to suspend, revoke, or take other disciplinary action against Respondents as licensees and against their licenses to practice the real estate brokerage business under the laws of the state of Florida, and Respondents timely requested a formal hearing on the allegations contained within that Administrative Complaint. Thereafter, Petitioner filed an Amended Administrative Complaint, which substantially reduced the allegations against the Respondents, and Respondents filed an Answer and Affirmative Defenses to Amended Administrative Complaint. Just prior to the Final Hearing in this cause, the parties filed a Pre-Trial Stipulation, which again reduced the allegations against Respondents and which set forth the only' remaining issues as follows:
Whether the Respondents falsely represented to Pat Dalton that they were going to invest their own funds in the development being developed by North Beach Development Group, Ltd.; and
Whether the Respondents reimbursed the North Beach Development Group, Ltd. for the upgrading and changes referred to in paragraphs 18c, 18d, 18e, 181 and 18n of the Amended Administrative Complaint.
Petitioner presented the testimony of Jeffry Faine, Richard Pyne, and by way of deposition David Patrick Dalton. Additionally, Petitioner's Exhibits numbered 1-5, 7, and 8 were admitted in evidence.
Respondents presented the testimony of Respondent Berman, Respondent Weil, Richard Young, Donald W. Piersol, Daniel D. Adache, William Reiter, by way of deposition Stanley J. Schwartz, and by way of affidavit Harold A. Cohen.
Additionally, Respondents' Exhibits numbered 1-6 were admitted in evidence.
A proposed recommended order containing findings of fact has been submitted by Respondents and considered in the preparation of this Recommended order.
When the Respondents' findings of fact were consistent with the weight of the credible evidence introduced at final hearing, they were adopted and are reflected in this Recommended Order. To the extent that the findings were not consistent with the weight of the credible evidence, they have been either rejected, or when possible, codified to conform to the evidence.
FINDINGS OF FACT
At all times material hereto Respondent Howard B. Berman has been a licensed real estate broker having been issued license number 0178090.
At all times material hereto Respondent Michael J. Weil has been a licensed real estate broker having been issued license number 0179132.
At all times material hereto Respondent Paramount Realty, Inc., has been a corporation licensed as a broker having been issued license number 0196048.
Although Respondent Berman was a director of Respondent Paramount Realty, Inc. since at least March 7, 1979, he did not become an officer or stockholder in that corporate broker until December of 1982 or January of 1983.
Although Respondent Weil was a director of Respondent Paramount Realty, Inc. since at least March 7, 1979, he did not become an officer or stockholder in that corporate broker until January of 1984.
Prior to the time that Respondent Berman and Respondent Weil became officers and stockholders of Paramount Realty, Inc., they were not employed by Paramount but rather had an independent contractor relationship with that corporate broker.
On or about June 13, 1979, Respondent Weil, acting as trustee for himself and for Respondent Berman, entered into a contract to purchase a certain parcel of land located in Broward County, Florida, with the intent of developing that land by building a condominium thereon.
On or about October 18, 1979, Respondent Weil as trustee sold the above-referenced parcel of land to an investors group known as North Beach Development Group, Ltd., a Florida limited partnership, which the Respondents organized. The general partner in that limited partnership was North Beach
Development Company, a Florida corporation, in which none of the Respondents had an interest.
On or about October 18, 1979, Respondents Berman and Weil, as employees of North Beach, Inc., a Florida corporation, negotiated and obtained a consultation agreement between North Beach Development Group, Ltd. and North Beach, Inc. under which Respondents Berman and Weil would provide consultation services in connection with the development of a 34 unit condominium complex on the above-referenced parcel of land.
On or about October 19, 1979, the general partner North Beach Development Company, and each of its stockholders, and each of the limited partners of North Beach Development Group Ltd. executed an Approval, Consent and Ratification agreement approving the above mentioned consultation agreement, establishing Respondent Paramount as the exclusive real estate agent for the condominium units, and approving the purchase by Respondents Berman and Weil of condominium units Nos. 604 and 607 for a combined total purchase price of
$185,000.
Prior to the creation of North Beach Development Group, Ltd., Respondents Berman and Weil placed $25,000 of their moneys on deposit under the contract to purchase the above-referenced land. During the existence of the limited partnership Respondents Berman and Weil loaned approximately $40,000 to the partnership. Respondents Berman and Weil also personally guaranteed the three million dollar construction loan involved in the project. Accordingly, both Respondents Berman and Weil had their personal funds at risk in the development of the condominium project.
At no time did either Respondent Berman or Respondent Weil represent to Pat Dalton or any other investor or potential investor that either or both of them had invested or would invest any of their personal moneys in either the general partner North Beach Development Company or the partnership North Beach Development Group, Ltd.
Five changes were made to Respondent Berman's unit 604, the total cost of all five changes being approximately $2,300. On May 19 and May 20, 1981, two checks were written off the account of North Beach Development Group, Ltd. to pay for the five changes to unit 604. On May 26, 1981, Respondent Berman (and his wife) closed on their purchase of unit 604. At the closing, Respondent Berman totally reimbursed North Beach Development Group, Ltd. the moneys it spent six days earlier for the five changes to unit 604.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter hereof and the parties hereto. Section 120.57(1), Florida Statutes.
Count I of the Amended Administrative Complaint charges that Respondents are guilty of misrepresentation and false promises in violation of Section 475.25(1)(b), Florida Statutes, by falsely representing to Pat Dalton that they were going to invest their own funds in the development, that they failed to do so, and that they had none of their funds at risk in the development of the condominium project. These charges are simply not supported by any evidence. Respondents made no representation to Dalton that they would invest their own funds but rather specifically told Dalton they would not in view of the fact that they had signed personal guarantees for the three million dollar construction loan. Further, the Approval, Consent and Ratification agreement signed by Dalton on October 19, 1979 clearly reflects all stockholders of the general partner North Beach Development Company and all limited partners in North Beach Development Group, Ltd., and it is clear from that Agreement that Paramount Realty, Inc., Berman and Weil had no interest in the general partner and were not limited partners. Petitioner has clearly failed to meet its burden of proving the allegations contained within Count I of the Amended Administrative Complaint.
Count II of the Amended Administrative Complaint charges that Respondents are guilty of fraud, breach of trust and dishonest dealing in a business transaction in violation of Section 475.25(1)(b), Florida Statutes, in that they failed to reimburse North Beach Development Group, Ltd. for upgrading and changes made to condominium units numbers 604 and 607. The Pre Trial Stipulation entered into by the parties narrowed down those changes alleged so that the only remaining changes in controversy between the parties were the five changes totaling approximately $2,300 made to Respondent Berman's condominium unit. No evidence was presented, and no theory was argued as to the source of some responsibility that Paramount Realty, Inc. or Respondent Weil eight have to pay for Respondent Berman's condominium; rather, it is clear that Count II of the Amended Administrative Complaint, as modified, does not charge Respondents Paramount Realty, Inc. or Weil with any statutory violations. As to Respondent Berman, his testimony is clear that those five changes were paid for by the limited partnership on May 19 and May 20, 1981 and that the partnership was reimbursed 100 per cent for those payments on May 26, 1981. Berman's testimony is supported by copies of the cancelled checks, and Petitioner presented absolutely no evidence to the contrary. Accordingly, Petitioner has also failed to meet its burden of proving the allegations contained within Count II of the Amended Administrative Complaint.
RECOMMENDATION
Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final order be entered finding Respondents Howard B.
Berman, Michael J. Well and Paramount Realty, Inc., not guilty of the allegations in the Amended Administrative Complaint filed against them and dismissing that Amended Administrative Complaint with prejudice.
DONE and RECOMMENDED this 25th day of January, 1985, in Tallahassee, Leon County, Florida.
LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 25th day of January, 1985.
COPIES FURNISHED:
Harold Huff, Executive Director Division of Real Estate
Post Office Box 1900 Orlando, Florida 32802
Fred Roche, Secretary Department of Professional Regulation
130 North Monroe Street Tallahassee, Florida 32301
Fred Langford, Esquire Department of Professional Regulation
Post office Box 1900 Orlando, Florida 32802
Richard S. Rachlin, Esquire 1810 New World Tower
100 N. Biscayne Boulevard Miami, Florida 33132
Docket for Case No: 84-000990
Orders for Case No: 84-000990
| Issue Date |
Document |
Summary |
|
Feb. 19, 1985 |
Agency Final Order
|
|
|
Jan. 25, 1985 |
Recommended Order
|
Amended complaint dismissed since Department failed to prove Respondents made false representation or engaged in any dishonest dealings.
|
