STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 86-2733

)

TERRY A. KILGORE and )

KAREN C. OBLUCK, )

)

Respondents. )

)

RECOMMENDED ORDER

James H. Gillis, Esquire, of Orlando, for Petitioner. Ronald E. Perez, Esquire, of Tampa, for Terry A. Kilgore.

J. B. Hooper, Esquire, of Tampa, for Karen C. Obluck.

The issue in this case is whether Petitioner, Department of Professional Regulation, should discipline either Respondent, Terry A. Kilgore (Kilgore), or Respondent, Karen C. Obluck (Obluck), for (1) allegedly violating Section 475.25(1)(b), Florida Statutes (1985), by not paying the commission due to a fellow licensee on the sale of real property to one of respondents' clients and

1. allegedly violating Sections 475.42(1)(b) and 475.25(1)(a), Florida Statutes (1985), by operating as a broker while licensed as a salesman or operating as a salesman for a person not registered as her employer.

   
   

   The formal administrative hearing in this case was held in Tampa on October 31, 1986. The parties ordered the preparation of a transcript of the hearing and requested 30 days from the filing of the transcript in which to file proposed recommended orders. The transcript was filed on November 17, 1986.

   Rulings on proposed findings of fact contained in the proposed recommended orders are in the appendix to the Recommended Order.

   
   

   FINDINGS OF FACT

   
   

   1. Both Respondent, Terry A. Kilgore (Kilgore), and Respondent, Karen C. Obluck (Obluck), are duly licensed Florida real estate brokers holding license numbers 0317402 and 0387822, respectively. Starting June 1, 1983, both were registered as employees of Florida Leasing Services, along with a third friend, Karen Kolander. It was understood among the parties to the employment agreement that the three friends intended to form their own brokerage company as soon as one of them obtained a broker license. Obluck got her broker license first on or about July 26, 1983, and Kilgore placed her salesman's license with Obluck on or about August 22, 1983. Obluck then attempted to qualify the new corporation the three had formed, "National Investment Properties, Inc." (emphasis added), as a corporate real estate broker. But, due in part to unfortunate technical

      errors in the application process and in part to Obluck's inadequate appreciation for the significance of legal technicalities, on or about August 19, 1983, Obluck instead qualified "National Investment Properties" as the corporate broker. Starting approximately August 19, 1983, the three began operating their new real estate brokerage business, sometimes using the name "National Investment Properties," as technically officially registered, but more often using the full corporate name, "National Investment Properties, Inc." (emphasis added.) But they omitted to have Kilgore's salesman's license transferred to the corporate broker license until she got her broker's license and tried to place it under the corporate broker license on March 14, 1984.

      Because of the technical errors in qualifying the corporate broker, the Department placed Kilgore's broker license under Obluck, an individual broker trading as National Investment Properties. By the time Obluck was notified in March, 1986, that the corporate broker had not been registered properly, Kilgore was no longer working with Obluck's company.

      
      

   2. On or before June 23, 1983, while still employed by Florida Leasing Services but anticipating the formation of the new business under the name Obluck had reserved at the time (Investment Properties of Central Florida, Inc.), Kilgore contacted fellow licensee, Robert R. Elkin (Elkin), an employee of Sun-Tan Realty, Inc. 1/ in an effort to help a client, U.S. Homes Corporation, find real property to buy. Elkin had an exclusive listing on five acres of property owned by Manor Care, Inc., and he and Kilgore negotiated a deal between the parties on June 23. On June 24, Kilgore and Elkin signed a "Cooperation Agreement Between Brokers" on the Manor Care property, providing that the two brokers involved would divide equally any brokerage commission.

      
      

   3. But when Elkin presented U.S. Homes' signed offer to his client, Manor Care rejected it, asking for more money. U.S. Homes refused to increase its offer. Kilgore passed this information on the Elkin, and the deal fell through.

      
      

   4. Kilgore then asked Elkin if he knew of any other land available for sale that might be of interest to U.S Homes. Elkin gave her the name of Dr. Michael Tedone as the owner of approximately 16 acres at County Road 581 and Skipper Road for sale at approximately $972,000.

      
      

   5. Trying to generate business, Elkin had located Tedone's name as owner of the 16 acres on microfiche records in his office and first spoke to Tedone by telephone in approximately October, 1982. Elkin asked if the property was for sale. Tedone said it was for sale for the right price, $972,000, but that it was not actually on the market. Elkin asked if Tedone would pay a commission if Elkin found a buyer. Tedone said he would but it would have to be negotiated. Elkin asked for some information about the property and asked for a survey. Elkin picked up a survey from Tedone's office and put together an information packet on the property for use in crying to find a buyer. Between October, 1982, and July, 1983, Elkin distributed the packet to a handful of builders and land developers he thought might be interested in the property or know a prospective buyer. Elkin spoke to Tedone about three more times by telephone before approximately April, 1983, confirming that the property was still for sale at $972,000. He never met Tedone and did not have any contact with him in May or June, 1983. He was never even aware that there was a co-owner of the property, a James Carlstedt.

      
      

   6. Because of what had happened on the Manor Care deal, Kilgore asked if the price was firm. Elkin replied that he had not verified the price in several months and would have to check. He said he would give her an information packet on the property and verify the price.

   7. Kilgore got part of the information packet on or about July 5, 1983, but Elkin told her that Tedone was out of town and that Elkin had not yet been able to verify the price.

      
      

   8. At this point, the evidence began to diverge sharply.

      
      

      The Department attempted to prove through Elkin's testimony that Elkin got Kilgore to agree to co-broker this property under the same terms as the "Cooperation Agreement Between Brokers" for the Manor Care property. He says he added the Tedone property to the list of properties covered on his copy of the agreement shortly after July 5, 1983. He also says he asked Kilgore not to show the information to U.S. Homes until he had a chance to verify the price. But, he says, Kilgore disregarded his request and, on the following Monday (three days later), Kilgore called back to say U.S. Homes was ready to sign a contract at $972,000. Elkin says he then was able to contact Tedone to relay the offer and was told that the price was too low and the Tedone wanted $70,000 an acre for the property. Elkin says he relayed this to Kilgore and that he never heard back.

      
      

      Kilgore, on the other hand, testified that she never agreed to co-broker the Tedone property and that Elkin never asked her not to show U.S. Homes the information on the property. She says she waited for Elkin to verify the price but that he kept making excuses why he had not been able to contact Tedone.

      Kilgore says finally she went to Tedone herself to get the information. She testified that she made an appointment to see Tedone and showed him the information Elkin had given her. She says Tedone's response was: "I don't know who this [Elkin and Sun-Tan] is but the information is wrong." Kilgore says Tedone never acknowledged that he knew Elkin or had any agreement with him to broker the property. Kilgore says she therefore negotiated the deal for U.S. Homes directly with Tedone and Carlstedt, completely independent of Elkin, and successful concluded negotiations on July 20, 1983. The sales price for the property was $1.1 million; the brokerage commission to National Investment Properties, Inc., was 2 1/2 percent or $27,500. Kilgore testified that she never heard from Elkin again until approximately March, 1984, after the January 9, 1984, closing of the deal, and that she assumed Elkin had abandoned the deal.

      
      

      The key to resolution of the sharp differences between the testimony of Elkin and Kilgore is Tedone. But, for reasons not explained, Tedone did not testify. Without Tedone's testimony to corroborate Elkin's testimony, the Department's case was insufficient to prove the truth of the facts to which Elkin testified.

      
      

   9. Elkin brought Tedone another prospective buyer in August, 1983. Tedone told him he already had a contract. Elkin did not ask for details. Instead, he began to try to locate Kilgore, who by this time was working for National Investment Properties, Inc., (National) under Obluck. He did not confront Kilgore and Obluck until approximately March, 1984. They confirmed that the property had been sold to U.S. Homes. Elkin demanded a share of the brokerage commission. Kilgore replied that he had abandoned the deal, leaving Kilgore to try to complete the deal herself, and that he was not entitled to any share of the brokerage commission.

      
      

   10. Obluck knew generally that Kilgore had negotiated a deal between U.S. Homes and Tedone and Carlstedt and that, after a short delay, the deal closed in January, 1984. But Obluck knew none of the details of what had transpired between Kilgore and Elkin.

   11. On the other hand, Kilgore knew generally that Obluck had taken steps to properly qualify National as a corporate broker. But she did not know or inquire into any of the details of the qualification process. She left National on or about August 23, 1985, long before the Department notified Obluck in March, 1986, that National was not properly registered.

       
       

   12. Kilgore, however, must take personal responsibility for failing to take any steps between August 19, 1983, and March 11, 1984, to have her salesman's license transferred from Obluck, individual broker, to National. See Finding Of Fact 1, above.

       
       

   13. The technical licensure errors made by Obluck and Kilgore, referred to in Findings Of Fact 1 and 12, above, should have come to the Department's attention before March, 1986. On March 11, 1984, Kilgore applied to place her new broker license under "National Investment Properties, Inc.," and the Department accepted the application and placed it under Obluck, trading as National Investment Properties. On March 1, 1985, Kilgore applied to change her personal mailing list, showing her employing broker as "National Investment Properties, Inc.," and the Department accepted the application. The Department did not take either of these opportunities to notify Obluck and Kilgore that the corporate broker had not been properly qualified and registered. On November 13, 1984, the Department received notification from Obluck, "doing business as National Investment Properties, Inc.," that she had lost her license. The Department simply struck through the "Inc." on the notification but did not give Obluck any explanation why.

       
       

   14. The technical licensing errors referred to in Findings Of Fact 1 and 12, above, were not intentional or intended to deceive. They were inadvertent oversights that Obluck and Kilgore would have cured if they were aware of them. When the Department notified Obluck of the oversights in March, 1986, she immediately had National properly qualified and registered as a corporate broker.

       
       

       CONCLUSIONS OF LAW

       
       

   15. Section 475.25(1), Florida Statutes (1985), provides in pertinent part:

       
       

       1. The commission may deny an application for licensure, registration, or permit, or renewal thereof; may suspend a license or permit for a period not exceeding 10 years; may revoke a license or permit; may

          impose an administrative fine not to exceed $1,000 for each count or separate offense; and may issue a reprimand, or any or all of the foregoing, if it finds that the licensee, permittee, or applicant:

          1. Has violated any provision of s. 475.42 or of s. 455.227(1).

          2. Has been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick scheme,

             or device, culpable negligence, or breach of trust in any business transaction in this state or any other state, nation, or territory; has violated a duty imposed upon him by law or by the terms of a listing contract, written, oral, express, or implied, in a real estate transaction; has aided, assisted, or conspired with any other person engaged in any such misconduct and in furtherance thereof; or has formed an intent, design, or scheme to engage in

             any such misconduct and committed an overt act in furtherance of such intent, design, or scheme.

             It is immaterial to the guilt of the licensee that the victim or intended victim of the misconduct has sustained no damage or loss; that the damage or loss has been settled and paid after discovery of the misconduct; or that such victim or intended victim was a

             customer or a person in confidential relation with the licensee or was

             an identified member of the general public.

             
             

   16. Section 475.42(1)(b), Florida Statutes (1985), provides:

       
       

       (b) No person licensed as a salesman shall operate as a broker or operate as a salesman for any person not registered as his employer.

       
       

   17. As reflected in the Findings Of Fact and even conceded in the Department's proposed recommended order, the Department did not prove a violation of Section 475.25(1)(b) by either Obluck or Kilgore. But it did prove technical violations of Section 475.42(1)(b), and therefore 475.25(1)(a).

Obluck was more responsible for those violations than Kilgore

RECOMMENDATION

Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Florida Real Estate Commission enter a final order: (1) holding both Respondent, Karen C. Obluck, and Respondent, Terry A. Kilgore, guilty of a technical violation of Sections 475.42(1)(b) and 475.25(1)(a), Florida Statutes (1985); (2) imposing a $500 administrative fine against Respondent, Karen C. Obluck, for her violation; (3) reprimanding Respondent, Terry A. Kilgore, for her violation; and (4) dismissing all other charges.

RECOMMENDED this 16th day of January, 1987, in Tallahassee, Leon County, Florida.

J. LAWRENCE JOHNSTON 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 16th day of January, 1987.

ENDNOTE

1/ At the time, Elkin, too, was in a transition, having obtained Iris broker license April 23, 1983, and being in the process of becoming his employer's broker of record.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-2733

To comply with Section 120.59(2), Florida Statutes (1985), these rulings are made on Petitioners proposed findings of fact. (Neither respondent filed any proposed findings of fact.)

1. Unnecessary.

2.-3. Accepted and incorporated to the extent necessary. 4.-7. Accepted and incorporated.

8. Rejected, not proved.

9.-10. Accepted and incorporated in part; in part rejected as subordinate to facts not proved.

11. Accepted and incorporated except Obluck did not actually participate in negotiations.

12.-13. Accepted and incorporated.

1. Accepted and incorporated as to Obluck; as to Kilgore, rejected as contrary to facts found.

2. Rejected as contrary to facts found.

3. Accepted and incorporated as to Obluck; rejected as to Kilgore as contrary to facts found.

4. Accepted and incorporated to the extent not subordinate.

COPIES FURNISHED:

James H. Gillis, Esquire Division of Real Estate Post Office Box 1900 Orlando, Florida 32802

Ronald E. Perez, Esquire

505 East Jackson, Suite 202 Tampa, Florida 33602

J. B. Hooper, Esquire

201 East Kennedy Blvd. Tampa, Florida 33602

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

Wings S. Benton, Esquire General Counsel

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 86-002733

Orders for Case No: 86-002733