STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 86-2961

) JOHN E. MITCHELL & FLORIDA ) EAST COAST MANAGEMENT, INC., )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William J. Kendrick, held a public hearing in the above-styled case on February 3, 1987, in West Palm Beach, Florida.

RECOMMENDED ORDER

For Petitioner: Susan Hartmann, Esquire

Department of Professional Regulation

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

For Respondents: Donald S. Hershman, Esquire

Squires Building, Suite 203 1300 North Federal Highway Boca Raton, Florida 33432

PRELIMINARY STATEMENT

By administrative complaint filed with the Division of Administrative Hearings on August 11, 1986, Petitioner, Department of Professional Regulation, Division of Real Estate, seeks to discipline Respondents, John E. Mitchell and Florida East Coast Management, Inc., licensed real estate brokers in the State of Florida. The Petitioner asserts that Respondents failed to refund a rental deposit as required by contract, and therefor violated sections 475.25(1)(b) and (d), Florida Statutes.

At final hearing the Petitioner called Jospeh G. Chestnut and Debra M. Best as witnesses. Petitioner's exhibits 1-8 were received into evidence.

Respondents called John E. Mitchell as a witness, and their exhibit 1 was received into evidence.

The transcript of hearing was filed February 23, 1987, and the parties were granted leave until March 5, 1987, to file proposed findings of fact. The parties proposed findings have been addressed in the appendix to this recommended order.

FINDINGS OF FACT

1. Respondent, John E. Mitchell (Mitchell), was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0184919. Mitchell was the owner and qualifying broker for Respondent, Florida East Coast Management, Inc. (Florida East Coast), which was at all times material hereto a licensed real estate broker in the State of Florida under license number 0211550.

   
   

2. Respondents are, inter alia, engaged in the business of managing rental apartments for landlords. On April 17, 1985, Mr. and Mrs. Joseph Chestnut executed an application to rent an apartment through Florida East Coast, and delivered to Florida East Coast a deposit of $460.00. Pertinent to this case, the agreement provided:

   
   

   Applicant has deposited the sum of

   $460.00 in partial payment of the first month's rent with the understanding that this application is subject to approval and acceptance by the Landlord. Upon approval and acceptance, the applicant agrees to execute the Landlord's standard agreement before possession of residence is given and to pay any balance due on the first month's rent and security deposit within five (5) days after the approval of application or the deposit will be forfeited to the Landlord. If this application is not approved, or if applicant cancels within five (5) days, the deposit will be refunded, the applicant hereby waiving any claim for damages by reason of non- acceptance. This application is for information only and does not obligate Landlord to execute a lease or deliver possession of the

   proposed residence. (Emphasis added)

   
   

3. Within five days of the date of application, Mr. Chestnut spoke telephonically with Ms. Debra M. Best, the rental agent for Florida East Coast with whom he had dealt, and advised her that his anticipated job transfer to the area had not materialized and requested a refund of his deposit. 1/ Ms. Best promised to return his deposit.

   
   

4. On April 29 or May 1, 1985, Mr. Chestnut telephoned Ms. Best to inquire of his deposit. At that time, Ms. Best advised Mr. Chestnut that it was company policy not to refund deposits. By letter of May 13, 1985, Florida East Coast

   responded to Mr. Chestnut's written inquiry of Hay 1, 1985, by stating: "... it is our policy NOT TO RETURN ANY DEPOSIT FOR ANY REASON WHATSOEVER."

   
   

5. Following receipt of Florida East Coast's letter of May 13, 1985, Mr. Chestnut filed a complaint with the Department of Professional Regulation, Division of Real Estate (Department). Approximately seven months later, December 10, 1985, Florida East Coast refunded Mr. Chestnut's deposit.

   
   

   CONCLUSIONS OF LAW

   
   

6. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

   
   

7. Pertinent to this case Section 475.25, Florida Statutes, provides:

   
   

   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:

      * * *

      (b) 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 ... 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.

      * * *

      (d) 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 delivery, 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, or any secret or illegal profit, or any divisible share or portion thereof, 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.

      
      

8. Respondents' refusal to refund Mr. Chestnut's deposit on demand and in accordance with the express terms of the parties' written agreement constituted a violation of Section 475.25(1)(b) and (d), Florida Statutes, and was contrary to the public trust inherent in their licensure as real estate brokers.

RECOMMENDATION

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

That an administrative fine be imposed against Respondents, John E. Mitchell and Florida East Coast Management, Inc., jointly and severally, in the sun of one thousand dollars ($1,000.00).

DONE AND ORDERED this 17th day of March, 1987, in Tallahassee, Florida.

WILLIAM J. KENDRICK

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 17th day of March, 1987.

ENDNOTE

1/ At hearing, notwithstanding their admission (Petitioner's Exhibit 1) that Mr. Chestnut had advised Ms. Best on April 22, 1985, that he would not be able to take the apartment and that she had agreed to refund his deposit, Respondents attempted to demonstrate that such request was not received within 5 days of the parties' agreement. According to Respondents, it was Ms. Best who telephoned Mr. Chestnut to discern whether he was still going to take the apartment. The date of April 22, 1985, was established by reference to a long distance telephone log the company maintained to assure that charges incurred on a landlord's behalf would be properly billed. Subsequently, Respondent averred,

it discovered a telephone bill for the period of April 17 through 22, 1985, which failed to reflect a long distance call to Mr. Chestnut on April 22, 1985. Consequently, Respondents conclude that they did not receive timely notice from Mr. Chestnut. Respondent's conclusion is unpersuasive.

The telephone bill Respondents rely upon purports to be page 11 of a telephone bill dated April 23, 1985. That page relates only to telephone number 305-736-2577. While long distance charges from that number fail to reflect a call to Mr. Chestnut on April 22, 1985, Respondents offered no proof that all charges for that date would necessarily be included on that bill or that the telephone call was not made from another telephone number assigned to Respondents. Notably, the remaining pages of the telephone bill for April 23, 1985, were not produced at hearing, the telephone bill for the next billing period was not produced, and the telephone log was not produced.

The telephone bill does, however, support Ms. Best's assertion that the refund request was made on April 22, 1985, rather than April 19, 1985, as alleged by Mr. Chestnut. Were the refund request made earlier, Ms. Best would have had no reason to check Mr. Chestnut's credit reference on April 22, 1985. Whether the refund request was made on April 22, 1985, as I conclude from the evidence, or April 19, 1985, is not, however, significant Since either date was within the contractual 5 day period.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-2961

Petitioner's proposed findings of fact are addressed as follows:

1. Addressed in paragraph 1. 2-4. Addressed in paragraph 2.

5-6. Addressed in paragraph 3 and footnote to paragraph 3.

1. Addressed in paragraph 4.

2. Addressed in paragraph 5.

Respondent's proposed findings of fact are addressed as follows: 1-2. Addressed in paragraph 2.

3-5 and 8-13. Addressed in paragraph 3 and the footnote to paragraph 3.

1. Addressed in paragraph 4.

2. Addressed in paragraph 5.

COPIES FURNISHED:

Susan Hartmann, Esquire Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801

Donald S. Hershman, Esquire Squires Building, Suite 204 1300 North Federal Highway Boca Raton, Florida 33432

Harold Huff, Executive Director Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

Van Poole, Secretary

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Wings Benton, General Counsel Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Docket for Case No: 86-002961

Orders for Case No: 86-002961