STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, DIVISION )

OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 85-0288

)

WALLACE E. HUNTER, )

)

Respondent. )

)

RECOMMENDED ORDER

This case came to be heard on May 16, 1985 in Tallahassee, Florida before Donald D. Conn, a duly designated Hearing Officer of the Division of Administrative Hearings. The parties were represented by:

APPEARANCES

For Petitioner: Arthur R. Shell, Jr., Esquire

Division of Real Estate

400 West Robinson Street Orlando, Florida 32801

For Respondent: Wallace E. Hunter, pro se

214 East Hornbeam Drive Longwood, Florida 32779

The Department of Professional Regulation, Petitioner, filed an Administrative Complaint against Wallace E. Hunter, Respondent, alleging that Respondent engaged in a real estate transaction on or about May 30, 1984 while his license was cancelled due to the resignation of his broker, and that he obtained a higher than originally agreed upon commission from this transaction which he kept for his own use and benefit. It is also alleged that Respondent attempted to sell a 50% partnership interest in a franchise even though he had previously been notified that the franchise had been terminated. Finally, Petitioner alleges that on or about June 2, 1984,

Respondent engaged in a real estate transaction while his license was cancelled by receiving $400 from the sellers of a piece of property for an appraisal and telling the sellers that the appraisal was ordered, even though Respondent never in fact ordered the appraisal.

At the hearing Petitioner called one witness and introduced ten exhibits. Respondent testified on his own behalf and was allowed to late file two exhibits. However, Respondent has not timely filed any exhibits, and therefore no exhibits on behalf of Respondent have been admitted. A transcript of the hearing was filed on June 27, 1985. The parties were allowed to submit posthearing proposed findings of fact pursuant to Section 120.57(1)(b)4, F.S., but no such proposed findings were timely filed.

FINDINGS OF FACT

1. At all times material hereto, Respondent was a licensed real estate salesman having been issued license number 0413725.

   
   

2. On November 8, 1983 Respondent submitted a Request for Active Salesman's License indicating the name of the firm at which he would be employed as Corporate Investments of Florida, Inc., d/b/a Corporate Investment Business Brokers and his broker as Lynne Levy. Respondent worked as a salesman with Lynne Levy as his broker until he was terminated by her on or about May 22, 1984. Respondent testified he was not told of his termination until 4:00 p.m. on May 25, 1984 at which time Lynne Levy also resigned as broker with Corporate Investments of Florida, Inc. Respondent's license was cancelled on May 29, 1984 due to the fact that his license was no longer placed with a broker.

   
   

3. From May 29 until July 9, 1984 Respondent's license was not placed with a broker and was therefore in a "cancelled" status. On July 9, 1984 Respondent's license was reactivated since he had been employed by another real estate broker.

   
   

4. On or about June 1, 1984 Respondent attempted to have Mr. Bert Malone register as broker for Corporate Investments of Florida, Inc., d/b/a Corporate Investment Business Brokers, but that application was never accepted by the Florida Real Estate Commission due to Respondent's failure to submit information requested by the Commission, including a copy of the corporation's minutes when Lynne Levy's resignation was accepted and Respondent was elected an officer or director.

5. Respondent was co-owner with Robert L. Levy, Lynne Levy's husband, of Corporate Investments of Florida, Inc., d/b/a Corporate Investment Business Brokers. Lynne Levy was President, Vice President, Secretary and Treasurer of the Corporation, as well as its broker. Robert L. Levy and Respondent each owned 50% of the corporation, but Respondent held a 51% voting interest to Levy's 49%.

   
   

6. Respondent obtained his franchise on June 17, 1983 to open an office in Florida from Corporate Investment Business Brokers, Inc., a franchisor. Respondent contributed the franchise to the corporation he formed with Levy and agreed to keep the franchise current. The franchisor terminated its franchise agreement with Respondent on May 17, 1984 due to Respondent's failure to make payments due thereunder. On June 12, 1984 the franchisor notified Respondent that it would not reconsider the termination of the franchise.

   
   

7. On or about May 30, 1984 Respondent attended the closing of a real estate transaction between Fred Hage, seller, and Frank De Santo, buyer. This was while Respondent's license was cancelled and inoperative. The property had been listed by Respondent and he received a check for $9000 made out to Corporate Investments of Florida, Inc., which represented the broker's commission. On the same day Respondent opened a checking account at Barnett Bank of Central Florida, Longwood Office, and deposited the $9000 commission check in that account without the knowledge or consent of Lynne Levy, his former registered employing broker. On August 16, 1984 Respondent disbursed $3750 to Robert L. Levy, Lynne Levy's husband, from this checking account as the co-partner's share of the $9000 commission.

   
   

8. Respondent had obtained the listing agreement from Fred Hage on this property on March 14, 1984 at which time Respondent and Hage agreed to a $6000 commission, or 12% of the total price upon consummation of a sale. Or or about April 4, 1984 Hage signed another listing agreement which reflected a $9000 commission. When the transaction closed on or about May 30, Respondent collected the $9000 commission. Hage signed the closing statement and the purchase contract for this transaction, both of which disclosed the $9000 commission. Hage did not question the commission amount at the closing but waited until June 6, 1984 to raise his objection in a letter to Lynne Levy.

9. On or about May 21, 1984 Respondent discussed with Paul Russell, II, the acquisition of a 50% partnership interest in his real estate franchise in the central Florida area for

   $50,000. Respondent admits that he was informed on May 17, 1984 that his franchise had been terminated and this termination was reconfirmed on June 12, 1984. Respondent did not inform Russell during their discussions that his franchise had already been terminated, but Russell decided not to go through with the deal.

   
   

10. On or about June 2, 1984 while his license was cancelled and inoperative, Respondent received a check for $400 from Kenneth L. and Mary Lou Welker which represented one-

    half of the appraisal cost on certain property they were selling through Respondent as the selling agent. Respondent represented that he immediately ordered the appraisal as the Welkers requested, but Mrs. Welker learned that it had not been ordered by June 5 and stopped payment on the check.

    CONCLUSIONS OF LAW_

    
    

11. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this case. Section 120.57(1), Florida Statutes.

    
    

12. In pertinent part Petitioner contends that Respondent is subject to disciplinary action for having been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing or breach of trust in a business transaction in violation of Section 475.25(1)(b) having failed to account for or deliver a share of a real estate commission to a person entitled thereto or to notify the Florida Real Estate Commission concerning doubts or conflicting demands being placed upon such funds as required by Section 475.25(1)(d): and having failed to immediately place with his registered broker money entrusted to him by persons dealing with him as a real estate salesman in violation of Section 475.25(1)(k), F.S. Petitioner also urges that Respondent violated Sections 475.42(1)(a) and (b), F.S., by operating as a broker or real estate salesman without a valid and current license, or for a person not registered as his employer. Finally, it is alleged that Respondent violated Section 475.42(1)(d), F.S. which states, in part:

    
    

    No salesman shall collect any money in connection with any real estate brokerage transaction, whether as a commission, deposit, payment, rental, or otherwise, except in the name of the employer and with the express consent of the employer: . . .

    
    

13. The evidence clearly and convincingly establishes that between May 29 and July 9, 1984, Respondent did not have a current active salesman's license due to his termination by his broker, Lynne Levy. Yet during this time when his license was inoperative and cancelled, Respondent engaged in real estate transactions with Fred Hage on May 30, and with Kenneth L. and Mary Lou Welker on June 2. In each transaction Respondent collected money from these persons without the express consent of an employing broker since Respondent's license had been cancelled and was not placed with an employing broker at the time. Respondent did not immediately place these moneys which he received while acting as a salesman with a registered broker. Thus, Respondent violated Sections 475.42(1)(d) and 475.25(1)(k) on these two occasions. His actions on these occasions also constituted violations of Sections 475.42(1)(a) and (b) since he

    was operating during these real estate transactions as a salesman without a current valid license and without a registered employing broker.

    
    

14. Respondent also violated Section 475.25(1)(d) by improperly placing the $9000 commission he received from Fred Hage in a checking account he opened on the same day he received the commission check. At the time he was not properly licensed to engage in real estate transactions and receive commissions, and he should reasonably have foreseen that doubts would arise and conflicting claims would be made for these funds, as in fact they were. Under these circumstances, Respondent was required to notify the Florida Real Estate Commission of such doubts or conflicting demands, which he never formally did. Respondent did subsequently resolve the conflicting demand on these funds with the disbursement $3750 to Robert L. Levy on August 16, 1984, but his technical violation of Section 475.25(1)(d) by failing to formally notify the Commission remains.

    
    

15. The evidence presented at the hearing does not establish clearly or convincingly that Respondent violated Sections 475.25(1)(b), F.S. It cannot be concluded that Respondent dealt fraudulently or dishonestly with Fred Hage when he collected a $9000 commission from the transaction on May 30. Although Hage had previously signed a listing agreement with Respondent that provided for a lesser commission, Hage did sign a second listing agreement on April 4 which called for the $9000 commission. There is no evidence of fraud or misrepresentation in the execution of this second agreement. In fact, Hage specifically acknowledged the $9000 commission at closing by signing the closing statement and the purchase contract, both of which disclosed the commission amount. Hage did not object to the commission until June 6, one week after the closing and two months after he signed the second listing agreement with Respondent which provided for this commission.

    
    

16. Respondent's discussions with Paul Russell, II, about acquiring an interest in his franchise do not constitute a violation of Chapter 475. Although at the time of these discussions on May 21 Respondent had been notified by his franchisor of the termination of his franchise, the franchisor did not reconfirm this termination until June 12. By this time Russell had already decided not to go through with the deal or pursue discussions with Respondent. Russell was not harmed by these discussions and the simple fact that these discussions took place prior to the reconfirmation of the franchise's

    termination does not constitute a violation of Section 475.25(1)(b).

    
    

17. In summary, it has been clearly and convincingly established that Respondent violated Sections 475.42(1)(a)(b) and (d) and 475.25(1)(k) in his dealings with Fred Hage and the Welkers on May 30 and June 2, 1984, and also that he violated Section 475.25(1)(d) in his handling of the $9000 commission he received from Hage. However, no violation of Section 475.25(1)(b) has been established.

    
    

18. The violations in this case arise from two transactions occurring within a three day period. There is no evidence that Respondent engaged in a recurring course of conduct which would justify the imposition of the penalty of revocation of his license under the circumstances as established herein. Pauline v. Borer, 274 So. 2d 1 (Fla. 1973) Kopf v. Florida Real Estate Commission, 379 So. 2d 1327 (Fla. 3rd DCA 1980). Therefore, a reasonable suspension of Respondent's license is appropriate in this case.

RECOMMENDATION

Based upon the foregoing findings of fact and conclusions of law, it is recommended that a Final Order be issued suspending Respondent's license for a period of ninety (90) days.

DONE and ENTERED this 17th day of July, 1985 at Tallahassee, Florida.

DONALD D. CONN 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 17th day of July, 1985.

COPIES FURNISHED:

Arthur R. Shell, Jr., Esquire Department of Professional

Regulation

Division of Real Estate

400 West Robinson Street Orlando, Florida 32801

Wallace E. Hunter

214 East Hornbeam Drive Longwood, Florida 32779

Harold Huff, Executive Director Division of Real Estate

400 West Robinson Street Orlando, Florida 32801

Fred Roche, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Salvatore A. Carpino, Esquire Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 85-000288

Orders for Case No: 85-000288