STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 86-0969

)

CHARLES A. ALARIO SR., AND ) REAL ESTATE SERVICES UNLIMITED, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

Final hearing in the above-styled action was held in Sarasota, Florida, on July 21, 1986, before Mary Clark, Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

The parties were represented as follows:

For Petitioner: James R. Mitchell, Esquire

Department of Professional Regulation Division of Real Estate

400 West Robinson Street Orlando, Florida 32802

For Respondent: John M. Strickland, Esquire

46 North Washington Boulevard, Suite 1 Sarasota, Florida 33577

Background and Procedural Matters

In its Administrative Complaint filed on February 11, 1986, Petitioner alleges that both Respondents violated subsections 475.25(1)(d), Florida Statutes and 475.25(1)(e) Florida Statutes. The latter subsection was allegedly violated as a consequence of violation of Rule 21V-14.13 Florida Administrative Code. Respondents answered the Complaint and requested a formal hearing on the charges. Prior to hearing Respondents moved for leave to amend their answer to add certain affirmative defenses. That motion, and Petitioner's motion for official recognition of certain rules, were granted on the record at the beginning of the formal hearing.

At hearing the Petitioner presented the testimony of Donald J. Opitz.

Petitioner's exhibits 1,2,3, and 7 were received into evidence; exhibits 4 5, and 6 were marked for identification with ruling on admissibility reserved.

Respondent Charles A. Alario, testified in his own behalf, and Respondent's exhibits 1,2,6,8,9 and 10 were received into evidence.

After hearing, both parties submitted proposed recommended orders, these have been carefully considered and rulings on each proposed finding of fact are found in the attached appendix.

FINDINGS OF FACT

1. The parties' pre-hearing stipulation filed on July 18, 1986, establishes the following:

   
   

   1. Respondent Charles A. Alario Sr. is now and was

      at all times material hereto a licensed real estate broker in Florida having been issue license number 0229080.

   2. Respondent Real Estate Services Unlimited, Inc.

      is now and was at all times material hereto a cor- poration licensed as a real estate broker in Florida having been issued license number 0209707.

   3. Respondent Real Estate Services Unlimited, Inc.'s broker license is currently "in limbo".

   4. At all times material hereto, Respondent Alario

      was officer of and qualifying broker for Respondent Real Estate Services, Inc. [sic]

   5. That a judgement was entered on December 14, 1984.

   6. That the judgement has not been satisfied.

   7. That the Respondents failed to maintain $37,000.00

      of the money or any part thereof in their real estate brokerage trust account without the prior knowledge or consent of Rider, Opitz and Seale Realty, Inc. [This sub-paragraph reflects the parties' amendment on the record at hearing. T-24,2.5]

      
      

2. Phyllis Bell was a real estate salesperson at Rider and Opitz, Inc. [previously called Rider, Opitz and Seale] from January 1979 through August 1980. (T-19). In early 1980, Ms. Bell had some dealings with Charles Alario and made some arrangements for a meeting regarding the listing of Palm Island, a property located in Charlotte County. (T-32-34) Charles Alario and Real Estate Services Unlimited represented a group of persons interested in purchasing this property. (T 31,32)

   
   

3. On June 19, 1980, an agreement for sale and purchase of Palm Island was entered between Palm Island Partners, Ltd., seller, and Buck Creek Development Corporation, buyer. (Respondent's exhibit #8)

   
   

4. Respondents did not have a co-buyer agreement with Rider and Opitz nor with Ms. Bell. (T-20,40,41)

   
   

5. Charles Alario offered Phyllis Bell a referral fee to be paid to her broker of record. (T-41, Respondents' exhibit #6) This offer was refused and Rider, Opitz and Seale Realty demanded half the Palm Island sales commission:

   $145,100.00. (T-18,20,21, Respondent's exhibits #1 and #9)

   
   

6. Rider, Opitz and Seale filed a civil action for the commission in 1982. Defendants were Real Estate Services Unlimited, Inc., Charles A. Alario and Knight Island Associates, Limited. (T-17, Petitioner's exhibits #4 and 5) A judgement was entered on December 14, 1984, dismissing Charles A. Alario and

   confirming the jury verdict of $37,000.00 against Real Estate Services, Unlimited, Inc. (Petitioner's exhibit #6)

   
   

7. Real Estate Services Unlimited, Inc. has lawsuits for commissions against Buck Creek Development Corporation, whom it represented in sales other than the Palm Island parcel, and against Knight Island Associates, to whom the Palm Island contract for sale and purchase was assigned. (T-52-54)

CONCLUSIONS OF LAW

1. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding. Sub-section 120.57(1), Florida Statutes and Subsection 455.225(4) Florida Statutes.

   
   

2. Section 475.25(1), Fla. Stat., (1985) provides the Florida Real Estate Commission may suspend a license for a period not exceeding 10 years; revoke a real estate license; may impose an administrative fine not to exceed $1,000.00 for each count or separate offense; and may issue a reprimand, or any and all of the foregoing, if it finds that the licensee:

   
   

   1. Has failed to account or deliver to any person, including a licensee under this chapter, at the time which has been agreed upon or is required

      by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and deliver, any personal property such

      as money, fund, deposit, check, draft, abstract of title, mortgage, conveyance, lease, or other document or thing of value, including a share of a real estate commission ... which has come into his hands and which is not his property or which he is not in law or equity entitled to retain under the circumstances.

   2. Has violated any of the provisions of this chapter or any lawful order or rule made or issued under the provisions of this chapter or chapter 455.

      
      

3. The Administrative Complaint also alleges violation of Rule 21V-14.13 Florida Administrative Code, which provides as follows:

   
   

   21V-14.13 Commission to be Held in Trust Account or Operating Account. Any broker who shall receive any funds, money, check, draft, or other things of value, which by the terms of any lawful cooperative broker contract, or any..other contract, whether the same shall be oral or written, is to be shared, divided, or paid over, to any other broker, or non-licensed person, the broker receiving the same shall hold it

   in his trust or escrow account for such other broker, or non-licensed person, and

   upon demand, or on the date provided by the terms of said contract, shall promptly account for any pay or deliver the same

   to the broker or non-licensed person entitled to receive it, provided, however, that such broker may deduct such lawful set-offs, or counter-claims as may at

   that time be due and owing to him by the other broker, or non-licensed person, entitled to receive such refunds. In the case of a broker receiving a commission, part of

   which is due to one of his registered salesmen, said broker may transfer and disburse said commission from his operating account and shall not be required to disburse to his salesmen directly from his trust or escrow account, provided, however, that

   said broker shall be required to account for any pay said commission to the salesman and may properly deduct any lawful set-offs, or counter-claims due said broker

   from the said salesmen.

   
   

4. The principal segment of Petitioner's case at hearing consisted of the identification and introduction of a complaint, amended complaint and judgement in civil action number 82-204-JRA. These documents were marked for identification as Petitioner's exhibits #4, 5 and 6, respectively, and a ruling on their admissibility was taken under advisement. Counsel for Respondent cited for authority for exclusion the case of Holland v. Florida Real Estate Commission, 352 So 2nd 914 (Fla 2nd DCA 1977), in which evidence of a nolo contendere plea was held inadmissible in a license suspension case where the statute required an adjudication of guilt. This case has no applicability to the instant proceeding.

   
   

5. Exhibits #4, 5, and 6 are deemed admitted but their evidentiary value is limited to proof that: a) Rider, Opitz and Seale Realty, Inc. sued Real Estate Services Unlimited, Inc. and Charles A. Alario for one half share of a commission for sale of property known as "Palm Island" and b) Judgement was entered against Real Estate Services Unlimited, Inc., for $37,000.00. The exhibits are not competent evidence, in and of themselves, of violations of subsections 475.25(1)(d) and (e) Florida Statutes. It is not possible to extrapolate from the complaints and the very briefly worded judgement that the essential elements of those subsections were proven. The involuntary dismissal of Charles Alario and the jury award of $37,000.00 damages bear little resemblance to the relief sought and allegations made by the Plaintiff, Rider Opitz, and Seale, Realty, Inc.

   
   

6. Moreover, the standard of proof, preponderance of the evidence, in a common civil case is different from that standard applied in license suspension or revocation proceedings. See for example, Bowling v. Department of Insurance,

   394 So 2nd 165 (Fla. 1st DCA 1981) and Davis v. Department of Professional Regulation, 475 So 2nd 1074 (Fla. 1st DCA 1984). That distinction effectively precludes reliance on the prior civil judgement for evidence of a violation.

   State of Florida, Department of Health and Rehabilitative Services vs. Vernon,

   379 So 2nd 683 (Fla. 2nd DCA 1980)

   
   

7. In order to establish a violation of subsection 475.25(1)(d) Florida Statutes, the Petitioner must prove:

   
   

   1. a licensee

   2. failed to deliver to any person, including another licensee,

   3. when agreed upon required by law or on demand,

   4. personal property or any divisible share or portion thereof

   5. which has come into his hands, and

   6. which is not his or he is not entitled to retain under the circumstances.

   
   

8. In order to avoid the absurd result of subjecting a licensee to discipline for failure to pay any kind of disputed funds, the court in Fleischman v. Department of Professional Regulation, 441 So 2nd 1121 (Fla. 3rd DCA 1983), has confined the reaches of subsection 475.25(1)(d) to" ... unjustified refusals to account for or return property received in trust or

   `escrow' by a real estate licensee in his professional capacity." p. 1123.

   
   

9. In order to establish a violation of subsection 475.25(1)(e) Florida Statutes, the Petitioner must prove violation of a rule or order. Petitioner has alleged violation of Rule 21V-14.13 Florida Administrative Code which requires:

   
   

   1. any broker

   2. who shall receive any funds, money, etc.,

   3. which by the terms of any lawful cooperative broker contract or other oral or written contract are to be shared or paid over to another broker or unlicensed person,

   c) shall hold such in trust or escrow account, and

   e) pay over or deliver such upon demand or on the date provided in the contract.

   
   

10. At most the record in this proceeding has established that Respondents are licensees who owe $37,000.00 to Rider, Opitz and Seale Realty. Even if that

    $37,000.00 is properly deemed a share of commission or referral fee relating to the sale of Palm Island, Petitioner never proved that Respondents actually received their commission from the sale. That commission is, at least in part, the subject of other lawsuits in which Charles Alario and Real Estate Services Unlimited are the Plaintiffs. Receipt of the disputed funds is an essential element of proof for both subsection 475.25(1)(d) Florida Statutes and Rule 21V-

    14.13 Florida Administrative Code. See paragraphs 4.e) and 5.b), above.

    
    

11. It is unnecessary to address Petitioner's argument that the judgement against Real Estate Services Unlimited necessarily implicates Charles Alario as the firm's alter ego. Nor is it necessary to address Respondents' affirmative defenses relating to constitutional issues and the statutes of limitations and laches.

Based upon the foregoing, it is

RECOMMENDED:

That a final order be entered dismissing the Administrative Complaint against both Respondents.

DONE AND RECOMMENDED this 6th day of October, 1986, in Tallahassee, Florida.

MARY CLARK

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 October, 1986.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-0969

The following constitute specific rulings on the proposed findings of fact submitted in case # 86-0969:

Petitioners Proposed Findings of Fact

1. Adopted in paragraph #1.

2. Adopted in paragraph #6.

3. Incorporated in part in paragraph #6, otherwise rejected as unnecessary.

4. Rejected as unsubstantiated by the record.

5. Adopted in paragraph #6.

6. and 7. Adopted in paragraph #1.

Respondents' Proposed Findings of Fact

1. Adopted in paragraph #1.

2. Adopted as to the description of the civil action, in paragraph #6. Otherwise, rejected as unnecessary.

3. Adopted in part, in paragraphs #2 (as to Phyllis Bell), #4 (as to lack of agreement) and #5 ( as to the offer of referral fee); otherwise rejected as unnecessary.

COPIES FURNISHED:

James R. Mitchell, Esquire

Department of professional Regulation Division of Real Estate

400 West Robinson Street Orlando, Florida 32802

Fred Roche, Secretary

Department of professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Wings S. Benton, Esquire

Department of professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

John M. Strickland, Esquire

46 North Washington Boulevard Suite 1

Sarasota, Florida 33577

Harold Huff, Executive Director Department of professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 86-000969

Orders for Case No: 86-000969