STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, FLORIDA ) REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 85-2429

)

FRANCIS N. HECTOR, )

)

Respondent. )

)

RECOMMENDED ORDER

Consistent with the Notice of Hearing furnished to the parties on August 7, 1985, a hearing was held in this case before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings, in Pensacola, Florida, on October 8, 1985. The issue for consideration at the hearing was whether Respondent's license as a real estate broker in Florida should be disciplined because of the alleged misconduct outlined in the Administrative Complaint filed herein.

APPEARANCES

For the Petitioner: Arthur R. Shell, Jr., Esq.

Department of Professional Regulation Division of Real Estate

400 W. Robinson Street Orlando, Florida 32801

For the Respondent: Thomas M. Brady, Esq.

601 South Palafox Street Pensacola, Florida 32501

BACKGROUND INFORMATION

On March 27, 1985, Fred Roche, Secretary, Department of Professional Regulation, filed an Administrative Complaint against the Respondent, Francis N. Hector, alleging two violations of Section 475.25(1), Florida Statutes, by, in Count I, being convicted of a crime which involves fraudulent or

dishonest dealing dishonest dealing and, in Count II, failing to inform the Florida Real Estate Commission in writing within 30 days of the entry of the order of conviction. On May 9, 1985, the Respondent submitted an Election of Rights form on which he disputed the allegations of fact contained in the Administrative Complaint and requested a formal hearing. Thereafter, on July 15, 1985, the file was forwarded to the Director of Administrative Hearings for the appointment of a Hearing Officer. On August 7, 1985, the undersigned furnished the parties with a Notice of Hearing.

At the hearing, Petitioner presented the testimony of Paul

1. Bratton, III, an investigator with the Department of Professional Regulation and submitted Petitioner's Exhibits 1 and 2. Respondent testified in his own behalf and introduced Respondent's Exhibits A through H.

   
   

   At the hearing, Respondent moved to dismiss the Administrative Complaint filed herein on the basis that an Order of Expungement was entered by the Circuit Court in Escambia County on October 2, 1985, under the provisions of Section 943.058, Florida Statutes, which precludes disciplinary action against the Respondent based on the criminal conviction expunged by the court order. Because of the fact that the Order of Expungement was not presented to the Hearing Officer at the hearing, a ruling on the motion was held in abeyance and the hearing officer proceeded to take testimony on the merits from both parties conditioned upon a ruling, subsequent to the hearing, that the expungement did not bar disciplinary action.

   It is the ruling of the Hearing Officer, however, that the Order of Expungement bars action on the Respondent's license proposed in Count I.

   
   

   Though neither party submitted posthearing proposed findings of fact, counsel for Respondent, on October 10, 1985, submitted a copy of the aforementioned Order of Expungement and further authority in argument on his motion to dismiss.

   Further, by letter of October 25, 1985, counsel for Respondent submitted further argument on the motion to dismiss and outlined the background events which might in effect constitute proposed findings of fact. These facts have been thoroughly considered and evaluated in the preparation of this Recommended Order by the undersigned but because of the ruling regarding the Order of Expungement, were considered only as background material except for the fact that the adjudication of guilt was entered and that Respondent failed to notify the Board within 30 days.

   FINDINGS OF FACT

   
   

   1..At all times pertinent to the issues herein, Respondent was licensed real estate broker in Florida.

   
   

   1. On February 23, 1983, Respondent, Francis N. Hector, entered a plea of nolo contendere to the offense of misapplication of funds by a contractor before Judge Edward Barfield, in the Circuit Court of Escambia County, Florida, in Case No. 82-5187. As a result of this plea, an adjudication of guilt and imposition of sentence were withheld and Respondent was placed on probation for a period of five years under standard terms imposed by the Department of Corrections and, in addition, conditioned upon his making restitution as directed by his probation supervisor and paying $150.00 court costs.

      
      

   2. Respondent did not notify the Florida Real Estate Commission of the entry of the court order within 30 days. However, on August 8, 1984, in his application for renewal of his license, Respondent did list the entry of the court order pursuant to his plea of nolo contendere and it was through this method that the commission became aware of the order.

      
      

   3. The plea of nolo contendere to a charge of misapplication of funds resulted from the Respondent's using some of the proceeds of a partial draw on a loan which he took out to develop a tourist center in the Pensacola area and for which collateral was the piece of property on which the center was being developed. The funds were used to pay bills not relating to the development of the center as required.

      
      

   4. When the situation first came to light, Respondent called in his creditors, explained the situation to them, and agreed to repay them in full. From that date on, he tried to settle with the creditors as he could by payment of case raised through the sale of property and equipment. At the time of the criminal proceedings, Respondent had paid off approximately three-quarters of the amount owed and by the time of this hearing, had completely repaid all creditors in full.

      
      

   5. At all times, Respondent was totally candid with his creditors and in no way attempted to conceal assets or defraud creditors. He pleaded nolo contendere to the charge even though he did not believe he had committed a criminal act and no one had lost any money by virtue of Respondent's misconduct.

   6. As to the failure to report the court action to the Real Estate Commission, Respondent admits he did not do so, but contends his reason for not reporting it was that he did not know that he had to. It was his understanding at the time of the entry of his plea that it would not affect his real estate license and, in fact, when he applied for renewal of his license, he listed the action on the application form. He, at all times, cooperated fully with the investigator of the Department of Professional Regulation.

      
      

      CONCLUSIONS OF LAW

      
      

   7. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of the proceedings.

      
      

   8. Respondent is charged with two violations of the Florida Statutes. In the first, he is alleged to have violated Section 475.25(1)(f) by being found guilty of a crime which involves fraudulent of dishonest dealing. In Count II he is charged with a violation of Section 475.25(1)(p) by failing to inform the Florida Real Estate Commission in writing within 30 days of pleading nolo contendere to a felony. The offense of misapplication of funds by a contractor is a felony under the laws of the State of Florida.

      
      

   9. In his motion to dismiss, Respondent states that because of action of the Circuit Court was expunged by the entry of a subsequent Order of Expungement on October 2, 1985, Respondent is restored in full to the status he occupied prior to the events alleged in Petitioner's Administrative Complaint and may lawfully deny the events alleged in the complaint.

      
      

   10. Section 943.058(6)(b) states:

       
       

       When all criminal history records, except for records retained under seal by the courts or the Department of Law Enforcement, have been expunged, the subject of such records may lawfully deny or fail to acknowledge the events covered by the expunged or sealed records, except in the following circumstances:

       
       

       1. When the person who is the subject of the record is a candidate for employment with a criminal justice agency

          
          

       2. When the person who is the subject of the record is a defendant in a criminal prosecution

          
          

       3. When the person who is the subject of the record subsequently petitions for relief under this section or

          
          

       4. When the person who is the subject of the record is a candidate for admission to the Florida Bar.

          
          

   11. Petitioner contends that the Order of Expungement does not foreclose the Real Estate Commission from taking disciplinary action based on the circumstances underlying the court action on the authority set out in Walton v. Turlington, as Commissioner of Education, 444 So. 2d 1082 (Fla. 1st DCA 1984). This same case is cited as authority for Respondent's position as well. In the Walton case, the Court held that the court-ordered sealing of a nolo contendere plea to a charge of possession or marijuana did not preclude revocation of a teaching certificate based on the same conduct as that underlying the criminal charge. In that case, the Commissioner of Education, as the accrediting agency, was allowed to consider the action of the teacher's possession of marijuana as a basis for revoking the teaching certificate even though the conviction could not be considered because of expungement. Petitioner claims here that the Real Estate Commission may, on the authority of Walton, consider Respondent's misapplication of funds without necessarily considering the fact that he plead nolo contendere to that charge.

       
       

   12. Even were this to be the case, however, a careful examination of the Administrative Complaint, as to Count I, reflects that the allegation therein is based on the entry of the plea of nolo contendere. The Administrative Complaint fails to in any way charge the background misconduct which led up to the entry of the plea or rely on it as the basis for action.

       
       

   13. It is very clear from a reading of the statute that once the Order of Expungement has been entered, the Court record cannot be used as the basis for disciplinary action against_ Respondent's license. The statute clearly lists four exceptions to the basic expungement action and this case does not fall within any of those four categories. The Commission is, therefore, precluded from utilizing the entry of the plea of

       nolo contendere under the provisions of the statute and since it failed to charge the background facts and misconduct, it cannot now seek to discipline the Respondent on the basis of uncharged misconduct.

       
       

   14. With regard to the allegation contained in Count II, however, a different situation exists. The law as it existed at the time of the entry based on the plea of nolo contendere required Respondent as a licensed real estate broker, to notify the Commission within 30 days of the entry of the order. He failed to do so. The fact that the plea was expunged some approximately 18 months later does not excuse his failure to comply with the law as it was at the time the obligation existed.

       
       

   15. However, it is clear that Respondent did not intend to conceal. His statement that he did not report the entry of the order because he did not realize he had to do so is supported by the surrounding facts and circumstances and it must be noted that when he applied for renewal of his license, he in no way attempted to conceal the entry of the nolo contendere plea.

       
       

   16. Considering this and considering the fact that full restitution was made after a complete disclosure to the creditors of all facts and circumstances of the situation, it is clear that while disciplinary action against Respondent's license is warranted, the severity of that action should be minimal.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore:

RECOMMENDED that Count I of the Administrative Complaint alleging a violation of Section 475.25(1)(f), Florida Statutes be dismissed, and that based on Respondent's violation of Section 475.25(1)(p), Florida Statutes, he be reprimanded.

RECOMMENDED in Tallahassee, Florida, this 21st day of November, 1985.

ARNOLD H. POLLOCK

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 21st day of November, 1985.

COPIES FURNISHED:

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

Regulation

Division of Real Estate

400 W. Robinson Street Orlando, FL 32801

Thomas M. Brady, Esq. Attorney at Law

601 S. Palafox Street Pensacola, FL 32501

Harold Huff Executive Director

Division of Real Estate Department of Professional

Regulation

P. O. Box 1900 Orlando, FL

Fred Roche, SecretaryI Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Salvatore Carpino, Esq. General Counsel

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 85-002429

Orders for Case No: 85-002429