STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, FLORIDA REAL ESTATE ) COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 86-3982

)

CHERYLYN STOPPLER, DOROTHY ) DIANE OWENS & ESCAMBIA REALTY, INC., )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, this matter came on for formal hearing before P. Michael Ruff, duly designated Hearing Officer on January 16, 1987, in Pensacola, Florida. The appearances were as follows:

APPEARANCES

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

Division of Real Estate

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

For Respondents: Cherylyn Stoppler, pro se

Dorothy Diane Owens, pro se Escambia Realty, Inc.

310 South Pace Boulevard Pensacola, Florida 32501

Pursuant to Administrative Complaint filed by the Petitioner, the Respondents Stoppler and Owens, real estate salesman and broker, respectively, are alleged to have solicited and obtained a $400 deposit from Kenneth and Linda Williams as prospective tenants for property to be rented located at 6853 Lake Charlene Drive, Pensacola, Florida. It is alleged that, upon receipt of the

$400, Respondent Stoppler told the Williamses that if they did not execute a lease agreement the $400 would be returned to them, which statement the Williamses allegedly relied upon and which allegedly induced them to entrust the

$400 to Respondents. It is alleged that a lease was not executed or entered into because the lease agreement provided by Respondents was not in accordance with the Williams' understanding as to the terms of the lease as originally proposed. It is alleged that the prospective tenants, the Williamses, advised the Respondents they would not execute the lease agreement and then they made demand upon the Respondents for the return of the subject deposit. The Respondents allegedly ignored these demands and advised the Williamses that the

$400 deposit would be disbursed as a forfeiture to the owners of the property less the commission to be disbursed to the Respondents. It is further charged

that at no time did the Respondents notify the Petitioner that a dispute regarding this deposit was occurring. Based upon these allegations, the Respondents Stoppler and Owens and Escambia Realty, Inc. are charged with being guilty of fraud, misrepresentation, concealment and the other types of misconduct enumerated in Subsection 475.25(1)(b), Florida Statutes (see Counts I through III).

In Count IV it is alleged, based upon the above pled facts, that Respondent Owens is guilty of having failed to return the $400 to the Williamses and failed to notify the Commission of a deposit dispute in violation of Section 475.25(1)(d), Florida Statutes. Count V contains the same allegation related to Respondent Escambia Realty, Inc. In Count VI it is alleged that Respondent Owens failed to maintain the $400 in a real estate brokerage escrow account until disbursement was properly authorized, an alleged violation of Subsection 475.25(1)(k), Florida Statutes. Count VII contains the same allegation with regard to the Respondent Escambia Realty, Inc.

The cause came on for hearing as noticed. The Petitioner adduced the testimony of Linda Brewer, also known as Linda Williams; Kenneth Williams, her husband; Ms. Elsa Ward, her mother; and Petitioner offered Exhibits 1-7, all of which were admitted into evidence. The Respondent presented the testimony of Steven Stoppler, Respondent Stoppler's husband; Dorothy Celano, a saleswoman with Escambia Realty and mother of Respondent Owens, Respondent Dorothy Diane Owens and Respondent Cherylyn Stoppler. Respondents' Exhibits 1 and 2 were admitted into evidence, as were Respondents' 3 and 4. Respondents' Exhibit 7 was admitted only as "corroborative hearsay" pursuant to Section 120.58, Florida Statutes. Respondents' Exhibit 8 was admitted and Respondents' Exhibit 9 was admitted only for purposes of Section 120.58, Florida Statutes, as was Respondents' Exhibit 10. Respondents' Exhibit 11 was admitted into evidence.

Respondents' Exhibits 12 and 13 were admitted as corroborative hearsay only. Section 120.58, Florida Statutes.

The parties elected to transcribe the proceedings and to file Proposed Findings of Fact and Conclusions of Law, concomitantly waiving the time requirements of Rule 28-5.402, Florida Administrative Code. The Proposed Findings of Fact and Conclusions of Law were timely submitted and are treated in this Recommended Order and addressed once again in the Appendix attached hereto and incorporated by reference herein.

The issue to be resolved in this proceeding concerns whether the Respondents committed the wrongful conduct alleged, whether that conduct, if committed, constitutes violations of the statutory authority pled in the Complaint and, if so, what if any penalty is warranted.

FINDINGS OF FACT

1. Respondent Cherylyn Stoppler, at all times pertinent hereto, was licensed as a real estate saleswoman in the State Of Florida, holding license No. 0467803. Her last and current license was issued authorizing practice at Escambia Realty, Inc., 310 South Pace Boulevard, Pensacola, Florida 32501. Respondent Dorothy Diane Owens, at all times pertinent hereto, was a licensed real estate broker in the State of Florida, holding license No. 0380831.

   
   

2. Respondent Escambia Realty, Inc., at all times pertinent hereto, was a licensed corporate real estate brokerage holding license No. 0232503. Its address is 310 South Pace Boulevard, Pensacola, Florida 32501.

3. The Petitioner is an agency of the State of Florida charged with enforcing the provisions of Chapter 475, Florida Statutes, related to the licensure of real estate brokers and salesmen, the real estate professional practice standards embodied in that chapter and with prosecuting alleged violators of those standards.

   
   

4. On April 13, 1986, Kenneth and Linda Williams, also known as Linda Brewer, requested that Cherylyn Stoppler show them rental property consisting of a single family residence located at 6853 Lake Charlene Drive in Pensacola.

   They had observed the Respondent corporate broker's sign on the front of that premises, advertising it for rental. Respondent Stoppler, Respondent Owens and the Escambia Realty, Inc. represented the owners of the property. Kenneth and Linda Williams examined the property and decided that they wanted to rent it.

   In their discussion with Cherylyn Stoppler concerning the terms of the rental arrangement, they requested that they be allowed to paint the premises and that the garage door be repaired. Respondent Stoppler agreed to this and indicated the owners would supply two gallons of paint and the prospective tenants, the Williamses, could do the painting with the owners ensuring repair of the garage door. Respondent Stoppler and the Williamses agreed to those terms and to the rental amount of $625 per month. They also agreed to pay Respondent Stoppler a

   $400 deposit, on behalf of the owners.

   
   

   Ms. Stoppler informed the Williamses that if they did not consummate the lease arrangement, upon which they had verbally agreed, the $400 would be retained and remitted over to the owners of the property. The Williamses agreed to this arrangement. The Williamses and Ms. Stoppler returned to Ms.

   Stoppler's office and she noted these terms on a lease agreement form with the additional term that the owner would steam clean the carpet in the house. The lease terms also provided that the premises would be used by no more than two adults and "zero" children, but the lease agreement has the "zero" stricken through indicating that that term was to be deleted. The striking of the zero on the term concerning the number of children to occupy the premises appears to have been executed with the same pen, inasmuch as the ink is the same color as the rest of Mrs. Stoppler's handwritten terms on the lease form.

   
   

   In any event, the Williamses were anxious to return to their home in Louisiana directly from the Respondent's office that same afternoon and to accommodate them Ms. Stoppler agreed to mail the lease form to them to be executed, urging them to send it back immediately. When they left the premises that day, Respondent Stoppler removed her firm's sign from the front of the premises and also told the Williamses that the property would be off the market as of that day, hence her admonishment to them to waste no time in returning the executed lease since the property would be off the market during the interim on the strength of the verbal agreement. The Williamses did not inform Ms.

   Stoppler that Mr. Williams had two children who might visit them from time to time or live with them at the premises.

   
   

5. The Williamses returned to Louisiana and the lease was mailed to them by Ms. Stoppler. The Williamses decided not to execute the lease and to not consummate the rental arrangement. They informed Ms. Stoppler of this by phone on April 24, 1986, as well as communicating on that day with Respondent Owens. They indicated they did not desire to rent the premises and one reason given was that they felt that the two children were precluded by the lease terms from living on the premises for any period of time with them. In fact, the Williamses had never mentioned that they had any children and had sought to negotiate a reduction in the rent when they originally discussed the matter with Ms. Stoppler on the basis that only the two of them would live in the premises.

   The terms and conditions of the rental arrangement were those given to Ms. Stoppler by the Williamses themselves. When they conferred with Ms. Owens and Ms. Stoppler, they were again informed that the $400 would be retained and transmitted to the owners, to which they did not then object. In fact, they never did make any demand upon the Respondents for return of the $400 which was actually communicated to the Respondents. There is a letter in evidence (Petitioner's Exhibit 6) which the Respondents never received, as is shown by the certified mail receipt card and by Respondents' and Ms. Celano's testimony.

   
   

   The Williamses objected to consummating the lease because they contended that Ms. Stoppler had assured them that they could 1ive in the premises rent- free from the beginning of the lease, April 26, until May 1, during the time in which they would be painting the house and instead they were being charged $84 for those days. Mrs. Williams' testimony is somewhat equivocal in this regard in that she exhibited an incomplete memory regarding certain critical dates in the transaction, for example, the date she allegedly called Mrs. Stoppler to inform her of their refusal of the rental and the date she believed the lease was to commence. Mrs. Stoppler's testimony was corroborated by that of Ms.

   Owens, and was not refuted by the Williamses. It is accepted over that of Mrs. Williams in establishing that indeed the lease period and the rental there for was to commence on April 26. The Respondents' testimony shows that the house was off the rental market from April 13, when the verbal agreement with Ms.

   Williams was entered into and the sign was removed from the property and that both Respondents informed Mrs. Williams on two occasions that the $400 was not refundable but would be remitted to the owners of the property. The Respondents also established that Escambia Realty, Inc. followed a consistent policy of retaining deposit monies and remitting them to the owners without refund to prospective tenants when the tenants agreed to lease the premises after being informed that the deposit would be retained and the property taken off the market, when such tenants elect of their own volition to negate a lease or rental agreement.

   
   

6. The Williamses additionally maintained that they did not want to consummate the lease arrangement because, in their view, the Respondents and the owners would not permit any children unrestrictedly visit or to live on the premises. That was established not to be the case. They also objected because they would not be allowed to live in the premises rent-free for several days during the time in which they were painting the premises. Additional objections involved various inconsequential technical deficiencies, such as misspellings, in the content of the lease. The employment position Mr. Williams was to have taken in the Pensacola area, and which was in large measure their reason for moving to Pensacola and renting the subject premises, failed to materialize. Ultimately, however, the Williamses moved to Pensacola and rented a different house at the lower rate of $600 per month.

   
   

7. In short, the complaining witnesses contend that they did not want to execute the lease because of the problem of the $84 prorated rent required of them by the Respondents and the owners for the days when they thought they would live rent-free while painting the premises, because they felt that Mr. Williams' children by a previous marriage were precluded from unrestricted visits at the rental premises and because they felt that the proffered lease did not contain the proper initial date of tenancy. Thus, the Williamses breached the agreement because the Respondents refused to "correct" the lease according to the Williamses' desires. Those desires were not communicated to the Respondents until, at the very earliest, the phone conversations of April 24, 1986, some twelve days after the verbal agreement to rent the premises to the Williamses had been entered into and the $400 deposited with the Respondents on behalf of

   the owners. During that time, and longer, the property was taken off the rental market and the Respondents and the owners forbore the opportunity to secure other tenants. The Williamses themselves acknowledged that the letter by which they sought return of the $400 deposit was never actually received by the Respondents. Further, Ms. Williams in the telephone conversation on April 24, 1986, acknowledged that the owners were entitled to the $400 deposit. Even so, Ms. Owens waited approximately 25 days before remitting the funds over to the owners. Thus, no dispute as to the deposit was ever communicated to the Respondents, and the Respondents never misrepresented to either Mr. or Mrs.

   Williams the manner of disbursement of the deposit funds. It is noteworthy that Mrs. Williams is a licensed realtor herself and had some experience in similar real estate transactions. The Respondents carried out their portion of the bargain.

   
   

8. Finally, it has been demonstrated that Respondent Owens is a well- respected real estate practitioner in the Pensacola area, having served as an officer and director of her local board of realtors and having been accorded a number of honors and certifications in connection with her professional performance as a realtor and her securing of advanced training in the field of real estate brokerage. Ms. Stoppler is relatively new to the profession, but neither she nor Ms. Owens have been shown to have ever engaged in any questionable practice or conduct in the course of their practice and neither have been shown to have been the subject of any other complaint of any nature resulting from a real estate transaction.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has juris- diction of the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes (1985).

   
   

10. In the seven counts of the Administrative Complaint, the three Respondents are charged with fraud, misrepresentation, concealment, false promises and the other elements of proscribed conduct enumerated in Subsection 475.25(1)(b), Florida Statutes regarding the retained deposit funds. They are additionally charged with failing to account and deliver the $400 to the prospective tenants and failing to notify the Florida Real Estate Commission of a deposit dispute in alleged violation of Subsection 475.25(1)(d), Florida Statutes. Respondent Owens and Respondent Escambia Realty, Inc. are charged with failing to maintain the $400 deposit in a real estate brokerage escrow account until disbursement was properly authorized, an alleged violation of Subsection 475.25(1)(k), Florida Statutes.

    
    

11. Subsection (1)(b), cited above, in pertinent part proscribes a licensee committing 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. The remaining items of prohibited conduct in that subsection are not specifically charged in the Administrative Complaint and in any event there has been no proof that a duty imposed upon the Respondents by law or by the terms of a contract has been violated, nor that any conspiracy with any other person has been engaged in, in furtherance of any proscribed misconduct or scheme. In fact, none of the proscribed wrongful conduct in that subsection has been proven in this case.

    
    

12. The Respondents did not misrepresent to the prospective tenants the method of disposition of the deposit funds and in fact told them that if the

    rental agreement, verbally entered into on April 13, 1986, was not carried out, then the funds would be forfeited to the owners of the property. The Respondents carried out that representation and remitted the deposit funds over to the owners of the property, even though, in an abundance of caution, Respondent Owens waited some 25 days, during which time no indicia of a dispute as to the proper disposition of those funds was communicated to her, to Respondent Stoppler or to the corporate Respondent, Escambia Realty, Inc.

    Accordingly, it has not been established, that any fraud, misrepresentation, concealment or other form of deceit, trick, scheme, device or culpable negligence has been perpetrated on the complaining witnesses in this matter.

    
    

13. Subsection 475.25(1)(d), Florida Statutes, prohibits a licensee from failing to account or deliver to any person at an agreed upon time or in accordance with legal requirements, or upon demand of a person entitled to such accounting and delivery, any funds which came into their hands and which was not their property or which they were not by law or equity entitled to retain. It has not been demonstrated even that the licensees had good reason to entertain a "good faith doubt" concerning which person was entitled to the accounting and delivery of the deposit funds, for purposes of this subsection, because no demand whatever was ever communicated to them regarding the deposit funds in the first place. Thus, in light of the above Findings of Fact and the credible evidence of record, the Respondents have not been established to have violated this subsection either.

    
    

14. Respondent Owens and Respondent Escambia Realty, Inc. have been charged with violating Subsection 475.25(1)(k), which prohibits a broker from failing to immediately place any funds entrusted to that broker by any person dealing with him in his capacity as a broker, in an appropriate escrow account pending properly authorized disbursement. In fact, as the evidence of record and the above Findings of Fact reveal, Respondent Owens as the individual broker involved herein and as president of Escambia Realty, Inc., the corporate broker, retained those funds for a longer period of time than she would have been required to before remitting them to the owners of the property. Indeed, she would have been justified in remitting the funds over to the owners of the property immediately upon learning that the prospective tenants had refused to carry out the terms of the rental agreement, after having been told by both Ms. Stoppler and Ms. Owens that the deposit funds would be remitted over to the owners in that eventuality. In fact, the record reveals that Respondent Owens did not divert the funds to her own personal use or for any other purpose, but maintained custody of them and remitted them over to the parties entitled to them. The Petitioner's proof in this case does not establish which account the funds were maintained in, nor does it establish that they were not maintained in an appropriate escrow, trust or other statutorially approved bank account.

    
    

15. In summary, it has not been established that the Respondents engaged in any fraudulent scheme, trick, device, breach of trust or misrepresentation in their dealings with the prospective tenants in this transaction. In fact, from the point the transaction was entered into, they represented accurately what dispersion of the funds would be made in the event the prospective tenants did not comply with the terms of the verbal rental agreement, later memorialized in the proposed lease agreement, as a "quid pro quo" justification for the Respondents' removing the to-be-demised premises from the rental market in reliance upon the Williamses' agreement. In turn, when the Williamses did not carry out their obligations under that agreement, the Respondents and particularly, Diane Owens, carried out their representation in a consistent fashion by remitting the deposit funds over to their clients, the owners of the property.

16. Even had the Petitioner established that the disposition of the funds was not performed as the prospective tenants had envisioned and understood was to be the case, the element of fraud, deceit, false pretenses and the like, proscribed by Subsection (1)(b) cited above, necessarily involves the element of scienter or wrongful intent, which has certainly not been proven to be present in this case since the funds were disbursed in the manner originally understood and acceded to by the Williamses from the point of the initial agreement and thence forward. See Shelton vs. Florida Real Estate Commission, 120 So.2d 191 (2nd DCA 1960). In a penal proceeding such as this involving the potential loss of a valuable professional license necessary for the Respondents to practice a profession and earn their livelihood, the Petitioner carries a substantial burden of proof which Petitioner in this instance has failed to meet. Bach v. Florida State Board of Dentistry, 378 So.2d 34 (Fla 1st DCA 1979)(teh. den. 1980); Addington v. Texas, 441 U.S. 426, 995. Ct. 18th (1979); Matthews v. Eldridge, 424 U.S. 319, 96 S. Ct. 893, 47 L. Bd. 2d 18 (1976); State of Florida, Department of Insurance v. Sonin Marcus, DOAH 83-2604, (RO Filed October 27, 1983); Mike Holloway, Superintendent, Escambia County Schools v. James Martin, DOAH 86-1189 (RO Filed November 28, 1986).

RECOMMENDATION

Having considered the foregoing Findings of Fact, Conclusions of Law, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore

RECOMMENDED that the Administrative Complaint against Respondents Cherylyn Stoppler, Dorothy Diane Owens and Escambia Realty, Inc. be dismissed in its entirety.

DONE and ORDERED this 28th day of 1987, in Tallahassee, Florida.

P. MICHAEL RUFF Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 28th day of May, 1987.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-3982

Petitioner's Proposed Findings of Fact: 1-4. Accepted.

1. Rejected as a recitation of testimony and not a Finding of Fact.

2. Rejected as to its material import.

7-9. Rejected as to its material import and as not in accord with the credible testimony and evidence adduced.

10-11. Accepted.

1. Rejected as to its material import and as not in accord with the credible testimony and evidence adduced.

2. Accepted.

3. Rejected as a recitation of testimony and not a Finding of Fact. Also rejected as to its material import and as not in accord with the credible testimony and evidence adduced.

4. Accepted.

5. Rejected as to its material import. 17-18. Accepted.

19. Rejected as to its material import. 20-21. Accepted.

1. Rejected as to its material import and as not in accord with the credible testimony and evidence adduced.

2. Rejected as a recitation of testimony and not a Finding of Fact. Also rejected as to its material import and as not in accord with the credible testimony and evidence adduced.

3. Rejected as to its material import.

4. Rejected as a recitation of testimony and not a Finding of Fact. Also rejected as to its material import.

5. Accepted, but rejected as to its material import.

6. Accepted.

7. Rejected as to its material import.

29-30. Rejected as to its material import and as not in accord with the credible testimony and evidence adduced.

31. Accepted, but not as to its material import.

32-35. Rejected as to its material import and as not in accord with the credible testimony and evidence adduced.

1. Rejected as to its material import.

2. Accepted, but not to the effect that a demand for refund was made.

3. Rejected as to its material import and as not in accord with the credible testimony and evidence adduced.

39-41. Rejected.

Respondents' Proposed Findings of Fact:

Specific rulings are not separately made here because Respondents' Proposed Findings of Fact are inseparably entwined with legal argument and recitations of, and arguments concerning, the weight and credibility of testimony and evidence.

COPIES FURNISHED:

Arthur R. Shell, Jr., Esquire Division of Real Estate

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

Cherylyn Stoppler Dorothy Diane Owens Escambia Realty, Inc.

310 South Pace Boulevard Pensacola, Florida 32501

Van Poole, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Joseph A. Sole, Esquire General Counsel

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Harold Huff, Executive Director Division of Real Estate

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

Docket for Case No: 86-003982

Orders for Case No: 86-003982