STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 84-3054

) RICHARD M. KESSLER and ALDO )

1. PAPALEO, )

   )

   Respondents. )

   )

   
   

   RECOMMENDED ORDER

   
   

   Pursuant to notice, the above matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Donald R. Alexander, on August 14, 1985 in Fort Lauderdale, Florida.

   
   

   APPEARANCES

   
   

   For Petitioner: James H. Gillis, Esquire

   Post Office Box 1900 Orlando, Florida 32802

   
   

   For Respondent: Richard M. Kessler, pro se

   9381 W. Sample Road

   Coral Springs, Florida 33065

   
   

   Aldo J. Papaleo, pro se

   259 Commercial Boulevard

   Lauderdale-by-the-Sea, Florida 33308 BACKGROUND

   By administrative complaint filed on January 25, 1984, petitioner, Department of Professional Regulation, Division of Real Estate has charged that respondents, Richard M. Kessler and Aldo J. Papaleo, both licensed by petitioner, had violated Subsections 475.25(1)(b) and (e), Florida Statutes, and Rule 21V- 3.08(5), Florida Administrative Code, for which disciplinary action against their licenses should be taken. Generally, petitioner has alleged that respondents offered and conducted a real estate course given to candidates for licensure as salesmen in March, 1983, that they "failed, refused and neglected to conduct the course containing course content as required by the Florida Real Estate Commission," that the level of instruction was "inadequate and not approved," and that by doing so they violated Rule 21V-3.08(5), Florida Administrative Code, and Subsections 475.25(1)(b) and (e), Florida Statutes.

   
   

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

   the Division of Administrative Hearings by petitioner on August 22, 1984, with a request that a Hearing Officer be assigned to conduct a formal hearing.

   Thereafter, respondents filed a motion to dismiss the complaint for failure to state a cause of action. Argument on said motion was held on February 13, 1985, and an order denying the motion was entered on February 21, 1985. By notice of hearing dated March 12, 1985, the final hearing was scheduled for April 23, 1985 in Fort Lauderdale, Florida. By agreement of the parties the hearing was rescheduled to August 14, 1985, at the same location.

   
   

   At final hearing petitioner presented the testimony of respondent Papaleo, Brenda Privett, Felice Crammer and Marcia Blue Herzog, and offered petitioner's exhibits 1 and 2. Both were received in evidence. Respondents testified on their own behalf and presented the testimony of Marilyn Kessler. Respondent Kessler also offered respondents' exhibit 1 which was received in evidence.

   
   

   The transcript of hearing was filed on August 22, 1985. Proposed findings of fact and conclusions of law were filed by petitioner on September 3, 1985. A ruling on each proposed finding of fact has been made either directly or indirectly in this Recommended Order, except where such proposed findings of fact have been rejected as subordinate, cumulative, immaterial or unnecessary.

   
   

   At issue herein is whether respondents' real estate licenses 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 thereto, respondent, Richard M. Kessler, was a licensed real estate broker and real estate school permit holder having been issued license number 0119097 by petitioner, Department of Professional Regulation. Division of Real Estate (Division). Respondent, Aldo J. Papaleo, is a licensed real estate broker and real estate school instructor having been issued license number 33367 by petitioner.

      
      

   2. Kessler has operated a real estate school in Broward County Florida since 1977. When the events herein occurred, the school operated under the trade name "Investors Property Management and Read Estate, Inc." in Coral Springs, Florida. Among other things, the school is designed to offer the pre- licensing education necessary for persons desiring to become licensed as real estate salesmen. According to rules promulgated by petitioner in 1983, the course format had to have sixteen three-hour sessions with a one-hour quiz and review session at the end of each three hour block of instruction. In addition, each student had to take a three-hour examination at the end of the classroom work and achieve a grade of 70 percent or better in order to take the real estate salesman examination.

      
      

   3. Kessler offered a six week salesman pre-licensing education course beginning on March 23, 1983, which consisted of three three-hour sessions per week in the evenings. The course was offered at his offices located in Coral Springs, Florida. Jeffrey (last name unknown), who was considered an outstanding instructor, was going to teach the course, but was out of the country at that time. Needing a replacement instructor, Kessler advertised for one in the local newspaper. Papaleo, who is also known as Alan A. Parker, had just received his instructor's license that month and answered the ad. Papaleo

      was a college graduate, had previously taught insurance licensing courses (but not real estate) for over twenty years in New York and Connecticut, and in addition to holding a broker's license, was designated as a GRI (graduate of real estate institute) and CRS (certified residential specialist). The latter two designations are awarded to real estate licensees who take additional coursework beyond the salesman and broker level. Finding his qualifications to be satisfactory, Kessler hired Papaleo to teach the course. Before the first session, Kessler reviewed all course materials with Papaleo, and the format to be followed. The course materials included the March, 1983 Syllabus and Instructor's Guide prepared by the Florida Real Estate Commission and the FREC Handbook, and students were required to purchase an approved real estate textbook authored by C C. Curtis. Papaleo was specifically told to "conform" and "abide" by the teaching syllabus.

      
      

   4. Nine individuals enrolled in and completed Kessler's course, each paying $95.00 for the instruction and $9.00 for the Curtis textbook. At least two of the nine enrolled in the class because of its "excellent reputation" while several others were attracted by its location in Coral Springs and the evening instruction format.

      
      

   5. The complaint herein stems from four students in Papaleo's course, three of whom testified at final hearing. They characterized the instruction offered by Papaleo as "confusing," not "adequate," and insufficient to enable them to pass the final examination. They complained that Papaleo read much of the class instruction from the syllabus and textbook, that he did not encourage class participation, and did not devote a great deal of time to reviews and answering questions. They also complained that course material used in other real estate courses (for example, Bert Rogers) was better and easier to understand.

      
      

   6. Because of what they perceived to be deficiencies in the level of instruction, three of the students approached Kessler one day after much of the course had been completed. In their meeting with Kessler they complained about Papaleo's teaching techniques, and their dissatisfaction with his instruction. Kessler promised to look into it, and later spoke with Papaleo. He instructed Papaleo to explain the course material in even greater detail so that the complaining students would better comprehend the subject, and he monitored the first thirty minutes of the next session. Finding Papaleo's instruction to be "appropriate," he thought the problem had been resolved.

      
      

   7. About a week later, Mrs. Kessler received an anonymous telephone call complaining that Papaleo was not a good instructor and asking that he be "removed" from the classroom. At that point, Papaleo and Kessler mutually agreed that Papaleo should leave. The remaining week of the course was taught by Kessler's son, Scott, without any complaint from the students. After the course ended, the four students demanded that Kessler return their $95.00 tuition fee. When he refused they wrote him a letter on May 14, 1983, advising him that the course instruction by Papaleo was inadequate and that unless he refunded their fees, their "only recourse would be to register a formal complaint with the DPR." Interpreting this to be blackmail, and believing their claims to be without merit, Kessler refused their demands to refund the fees. The issuance of the administrative complaint followed.

      
      

   8. In teaching the course, Papaleo used only those materials approved by the Division. Even though some of it was read directly from the syllabus and FREC handbook, there is no evidence that this technique is prohibited by the Division. Moreover, there was no expert testimony as to what instruction is or

      is not "approved," or what constitutes an "adequate" level of instruction. The complaining students knowledged that they were allowed to ask questions, but that one student consumed much of the time with detailed questions that they did not understand. They also conceded that Papaleo frequently used the blackboard, and expounded on the text material by giving examples from his own personal experiences in real estate. Although the record is conflicting as to whether an appropriate amount of time was devoted to a quiz and review session after each block of instruction, it is found that Papaleo did not deviate from the Division requirements. It is further found that Papaleo did not discourage students from "class participation" as alleged in the complaint. Of the three students testifying at final hearing, two passed the end of course examination and were qualified to then take the salesman examination. In accordance with his school policy Kessler offered a free repeat of the course to any students who did not pass the final examination.

      
      

      CONCLUSIONS OF LAW

      
      

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

      
      

   10. Kessler and Papaleo are charged with two violations in conjunction with the real estate course offered on March 23, 1983. First, it is alleged that they "failed, refused and neglected to conduct the course containing course content as required by the (Division). . . in that a one hour quiz and session review was not offered nor conducted after each of the sixteen three-hour sessions, and that the level of instruction was inadequate and not approved because the Respondents simply read text book material and class participation was discouraged and non-existent." According to the complaint, this violated Rule 21V-3.08(5), Florida Administrative Code, as it then existed, and Subsection 475.25(1)(e) Florida Statutes, which makes it unlawful for a licensee to violate any rule promulgated by the Division. Secondly, the Division alleges that the foregoing conduct constituted fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction within the meaning of Subsection 475.25(1)(b), Florida Statutes.

       
       

   11. Rule 21V-08(5), Florida Administrative Code, as it read in 1983, provided as follows:

       
       

       (5) Course content and level of instruction of a video tape course shall be the same as that contained in the Board's prescribed course syllabus and Instructor's Guide. This Board prescribed course is structured for sequential presentation in sixteen (16) three

       (3) hour sessions. A one (1) hour quiz and session review is prescribed for each ses- sion. For video presentations; the 4th, 8th, 12th and 16th sessions are prescribed as review and quiz sessions. As an example, the 4th session shall be to administer a quiz and review the first three sessions. A licensed instructor must be in attendance to conduct each quiz and review session. In addition, whenever the video tape is not current with the latest law or real estate practice, the

       tape must be corrected prior to its use in the classroom or a licensed instructor must be in attendance during the affected portion of that session.

       
       

       The thrust of the complaint is that this rule was not followed in various particulars, including a lack of quiz and review sessions, and a failure by Papaleo to follow the "course content." However, the evidence reflects that Papaleo did in fact offer quiz and review sessions as required by the rule. Further, the course content was the same as that contained in the Board's prescribed course syllabus and instructor's guide." There is also insufficient evidence to support the general allegation that the level of instruction was "inadequate" or that "class participation was discouraged and non-existent." In this regard, it is noted that at final hearing petitioner did not disclose which specific sections of the syllabus and guide were violated, or any provision that makes it unlawful to "read text book material" while teaching the class. This being so, the allegation that Rule 21V-3.08(5) and Subsection 475.25(1)(e) have been violated must fail.

       
       

   12. Finally there is insufficient evidence to establish that Papaleo and Kessler are guilty of the various violations set forth in Subsection 475.25(1)(b). Therefore, it is concluded that this charge should similarly be dismissed.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the administrative complaint be DISMISSED, with prejudice. DONE and ORDERED this 5th day of September, 1985, 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 5th day of September, 1985.

COPIES FURNISHED:

James H. Gillis, Esquire Post Office Box 1900 Orlando, Florida 32802

Mr. Richard M. Kessler 9381 W. Sample Road

Coral Springs, Florida 33065

Mr. Aldo J. Papaleo

259 Commercial Boulevard

Lauderdale-by-the-Sea. Florida 33308

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA DEPARTMENT OF PROFESSIONAL REGULATION

FLORIDA REAL ESTATE COMMISSION

DEPARTMENT OF PROFESSIONAL REGULATION, FLORIDA REAL ESTATE COMMISSION,

Petitioner, CASE NO. 0039017 0039018

vs. 0039019

0039020

RICHARD M. KESSLER and 0039269

ALDO J. PAPALEO, DOAH NO. 84-3054

Respondents.

/

FINAL ORDER

The Florida Real Estate Commission heard this case on October 22, 1985 to issue a Final Order.

Hearing Officer Donald R. Alexander of the Division of Administrative Hearings presided over a formal hearing on August 14, 1985. On September 5, 1985, he issued a Recommended Order, which is rejected by the Florida Real Estate Commission as to all Findings of Fact, Conclusions of Law and Recommendation. A copy of this Recommended Order is attached hereto as Exhibit A and made a part hereof. Petitioner's Exceptions to Recommended Order are attached hereto as Exhibit B and accepted in whole.

The Florida Real Estate Commission therefore ORDERS that each Respondent pay an administrative fine in the amount of $250 to the Department of Professional Regulation.

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 22nd day of October, 1985 in Orlando, Florida.

Harold R. Huff, Director Florida Real Estate Commission

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true copy of the foregoing was sent by U.S. Mail to: Richard M. Kessler, c/o Investors Property Management and Real Estate, Inc., 9381 W. Sample Road, Coral Springs, Florida 33065; to Aldo J. Papaleo a/k/a Alan A. Parker, 259 Commercial Boulevard, Lauderdale-by-the-Sea, Florida 33308; to Hearing Officer Donald R. Alexander, Division of Administrative Hearings, The Oakland Building, 2009 Apalachee Parkway, Tallahassee, Florida 32301; and to James H. Gillis, Attorney for Petitioner, Department of Professional Regulation, Post Office Box 1900, Orlando, Florida 32802, this 29th day of October, 1985.

LSG:ba Harold R. Huff

Docket for Case No: 84-003054

Orders for Case No: 84-003054