vs. ) CASE NO. 87-2192
TERRY G. JEWELL, )
Respondent. )
Pursuant to notice, a formal hearing was held in this cause on August 7, 1987, in Gainesville, Florida, before the Division of Administrative Hearings, by its designated Hearing Officer, Diane K. Kiesling.
For Petitioner: Arthur R. Shell, Jr., Esquire
For Respondent: William C. Andrews, Esquire
The issue is whether Respondent's real estate broker- salesman's license should be revoked or otherwise penalized based on the facts alleged in the Administrative Complaint. The Petitioner, Department of Professional Regulation, Division of Real Estate, (DPR) presented the testimony of Anne Koblinski, Frank Koblinski, Willern F. Koblinski, Patsy Jean Cotten, Neal Bredenberg, and Rudy Dyson. DPR's Exhibits 1-6 were admitted in evidence.
Respondent, Terry G. Jewell, (Jewell) presented his own testimony and that of Joan Mead and Austin Lavoy Middleton. Jewell's Exhibits 1 and 2 were admitted in evidence.
The transcript of the proceedings was filed on August 21, 1987. By stipulation at the conclusion of the formal hearing, the parties agreed that their proposed orders would be filed within fifteen days after the filing of the transcript. Respondent's proposed recommended order was filed on September 3, 1987. Petitioner failed to file a proposed recommended order. All proposed findings of fact and conclusions of law which were timely filed have been considered. A ruling has been made on each proposed finding of fact in the Appendix attached hereto and made a part of this Recommended Order.
The Respondent, Terry G. Jewell, (Jewell) is now and was at all times material to this case a licensed real estate broker-salesman in the State of Florida, having been issued license number 0131811 in accordance with Chapter 475, Florida Statutes. He has held this license since 1974, even though he has worked in the real estate business only off and on since that time.
In November, 1984, Jewell started Sun Country Homes of North Florida, Inc., with E. M. Coullias and another investor. Jewell owned 32 1/2 shares of the corporation and was an employee of the corporation. Coullias was president and chief operating officer of the corporation.
Jewell's duties included managing sales, advertising, development of sales materials, preparation of house plans and procurement of mortgage financing for customers.
Coullias was in charge of field supervision of construction of the homes, keeping the books and records of the corporation, and paying all accounts.
The corporation had another employee, Joan Mead, who acted as a secretary and sales person.
On March 25, 1986, Anne and Frank Koblinski entered into a contract with Sun Country Homes of North Florida, Inc., to have a house built. After the execution of that contract, an account was opened at the Gainesville State Bank in Gainesville, Florida, jointly between Jewell, representing the corporation, and Willern Koblinski, representing his parents.
The Koblinskis deposited $48,000 into that account.
At the time the contract with Sun Country Homes of North Florida, Inc., was executed by the Koblinskis, they were living in the Fort Myers area, so they designated their son, Willern Koblinski, as the person authorized to disburse funds from the joint account on their behalf.
Willern Koblinski lived across the street from the property where the home was to be built. He regularly inspected the building site and determined whether Sun Country was entitled to a draw in accordance with the draw schedule contained in the contract.
Generally, Joan Mead, the secretary for Sun Country, would call Willern Koblinski on his pager to request a draw. After he inspected the property, Willern Koblinski would draw a check on the joint account and drop it off at the corporation's office.
During the course of construction, the following draws were made from the account and were disbursed by checks made payable to Sun Country Homes of North Florida, Inc., and were signed by both Jewell and Willern Koblinski:
Date Amount
5/8/86 (1st draw) $ 9,570.00 5/21/86 (partial 2nd draw) $16,000.00
The following draws were made from the account payable to Sun Country Homes of North Florida, Inc., but were never signed by Jewell:
Date Amount
6/10/86 (balance 2nd draw) $ 3,140.00 6/25/86 (partial 3rd draw) $ 3,000.00 7/11/86 (balance 3rd draw) $ 6,570.00 7/30/86 (partial last draw) $ 5,000.00
The total draws were $43,280. Each draw was deposited in the general operating account of Sun Country Homes of North Florida, Inc.
On July 19, 1986, Jewell took a vacation and was out of town until July 30, 1986.
When he returned, he discovered that some of the homes under construction were behind schedule.
Jewell also discovered that several subcontractors and suppliers had not been paid.
Jewell left messages for the president of Sun Country Homes, E. M. Coullias, and attempted to contact Coullias to discuss the problems with the construction schedules on several homes and the subcontractors who had not been paid.
Jewell and Coullias had a large confrontation regarding the homes that were behind schedule and the non-payment of subcontractors
Shortly after that confrontation, Jewell resigned as an officer and employee of Sun Country Homes of North Florida, Inc.
Even after his resignation, Jewell personally went to the job site of the homes being construction for Waters, Ross, and Koblinski, and completed these homes so that the buyers could occupy them.
At the time of Jewell's resignation from Sun Country Homes of North Florida, Inc., there was $5,332.00 remaining in the joint account for the Koblinskis' house.
As soon as Jewell realized that Coullias had spent the funds previously paid to Sun Country Homes of North Florida, Inc., and could not pay the subcontractors, Jewell advised Mrs. Koblinski and Willern Koblinski to withdraw the remaining funds from the joint account and to use those funds to pay any subcontractors or suppliers who had not been paid. Jewell signed a blank check in order to permit Willern Koblinski to withdraw those funds.
During the time that Jewell worked for Sun Country Homes of North Florida, Inc., the corporation sold and constructed approximately 25 homes. Before the situation arose on the Koblinski contract, Jewell knew of no other incidents where Sun Country Homes failed to pay subcontractors or suppliers.
During the entire time that Jewell worked for Sun Country Homes of North Florida, Inc., Coullias was President of the corporation and controlled and managed the collection and deposit of receipts of the company and disbursement of these funds.
Jewell first learned of unpaid subcontractors and suppliers after he returned from vacation on July 30, 1986.
After his resignation from Sun Country Homes, Jewell attempted to help the Koblinskis in completing their house. He came to their house and finished a "punch list." Jewell received no payment from Sun Country Homes for any of these efforts.
The Koblinskis used part of the funds disbursed to them to pay the air conditioning and plumbing subcontractors. They have about $1,062 left from these funds.
After subcontractors and suppliers were not paid, Coullias told Willern Koblinski that they would be paid. He also told Jewell to have no further contact with the Koblinskis. However, Sun Country Homes of North Florida, Inc., closed its doors without paying the subcontractors and suppliers. Apparently Coullias has left the area and cannot be located.
There are at least four subcontractors who worked on the Koblinski house who have not been paid:
Sun Coast Insulation $1,191.00 Landmark Truss $1,322.39 Dyson Cabinet Millwork $4,029.79 Myers Brothers Septic Tank $ 785.00
Dyson and Myers have filed liens against the Koblinski home for the amount of their respective bills.
Jewell did not receive any funds disbursed to Sun Country Homes for the Koblinski house. The only funds he received from the corporation were salary and reimbursement for expenses. He did not receive any bonuses or cash loans. If the funds paid to Sun Country Homes of North Florida, Inc., for the Koblinski draws were not used to pay the bills on the Koblinski construction, Jewell did not receive any benefit in any way from those funds.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes.
The Administrative Complaint alleges that Jewell violated Section 475.25(1)(b), Florida Statutes, which provides:
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 in any other state, nation, or territory; . . .
The facts of this case establish two things that are dispositive. First, the contract was between Sun Country Homes of North Florida, Inc., and the Koblinskis, and Jewell signed the contract solely in a representative
capacity for the corporation and not in connection with any business as a real estate broker. Second, Jewell had no intent to deceive the Koblinskis either at the time the contract was signed or at any time until the present.
"It is well-settled, . . . absent clear legislative authorization to the contrary, violations of mere contractual rights are concerns only of the courts, and may not been enforced by disciplinary action undertaken by a regulatory agency like the real estate commission." Fleischman v. Department of Professional Regulation, 441 So.2d 1121 (Fla. 3rd DCA 1983); Cannon v. Florida Real Estate Commission, 221 So.2d 240 (Fla. 4th DCA 1969), cert. denied, 226 So.2d 817 (Fla. 1969); Peck Plaza Condominium v. Division of Florida Land Sales and Condominiums, 371 So.2d 152 (Fla. 1st DCA 1979). These cases more generally stand for the proposition that disciplinary action cannot be taken against a real estate broker's license for conduct not connected with the licensee's business as a broker. Additionally, because disciplinary statutes are penal in character and effect, they must be strictly interpreted against the authorization of discipline and in favor of the person sought to be penalized. Fleischman supra.
Each of the acts set forth in Section 475.25(1)(b) involves the element of actual fraud, except breach of trust, which involves the element of constructive fraud. Taylor v. Kenco Chemical and Manufacturing Corp., 465 So.2d
581 (Fla. 1st DCA 1985). "Wilfulness and an intent to deceive are essential elements of `dishonest or fraudulent' acts." Great American Insurance Co. v. Coppedge, 405 So.2d 732 (Fla. 4th DCA 1981); Eglin National Bank v. Home Indemnity Co., 385 F.2d 1281 (5th Cir. 1978). Constructive fraud is a term applied to a wrongful transaction which is similar in its nature or in its effect to actual fraud, and "is deemed to exist where a duty under a confidential or fiduciary relationship has been abused." Taylor, supra; Harrell
v. Branson, 344 So.2d 604 (Fla. 1st DCA 1977).
In the present case, Petitioner has presented no evidence to show any wilfulness or intent to deceive on the part of Jewell. Further, there is no evidence that shows a fiduciary relationship to have existed between Jewell and the Koblinskis. Finally, there is the complete absence of evidence to show that Jewell knew, or even had a reason to suspect, that at the time the Koblinski contract was signed, Sun Country Homes of North Florida, Inc., would, or might, breach its contract with the Koblinskis. To the contrary, the evidence showed that Jewell's signature on the contract was as a representative of the corporation and the contract was between the Koblinskis and Sun Country Homes of North Florida, Inc. As soon as the corporation through its president engaged in activities which led Jewell to believe that the contract between the corporation and the Koblinskis might be breached, Jewell terminated his employment with Sun Country Homes of North Florida, Inc., and personally assisted the Koblinskis in completing their home and recovering the remaining funds from the joint account. Jewell did everything that he could to assist the Koblinskis. At no time did Jewell make any misrepresentations or statements which he knew to be false.
It is concluded that the Petitioner has failed to carry its burden of proving the alleged violation of Section 475.25(1)(b), Florida Statutes, by clear and convincing evidence.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that:
The Florida Real Estate Commission enter a final order dismissing the Administrative Complaint filed against Terry G. Jewell.
DONE and ENTERED this 25th day of September, 1987, in Tallahassee, Florida.
DIANE K. KIESLING, Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway
Filed with the Clerk of the Division of Administrative Hearings this 25th day of September, 1987.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-2192
The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the proposed findings of fact submitted by the parties in this case.
Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Terry G. Jewell
Respondent's proposed findings of fact 1 - 30 are adopted in substance as modified in Findings of Fact 1 - 28.
William C. Andrews, Esquire Post Office Drawer C Gainesville, Florida 32602
Joseph A. Sole, General Counsel Department of Professional
