STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) DOAH CASE NO. 87-2571

) DPR CASE NO. 0155308

NORMA F. NEWFIELD, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this case at Deland, Florida, on July 17, 1987, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings. At the hearing the parties were represented by the following counsel:

For Petitioner: James H. Gillis, Esquire

Division of Real Estate

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

For Respondent: James M. Russ, Esquire

Tinker Building

18 West Pine Street

Orlando, Florida 32801-2697 BACKGROUND AND ISSUES

This is a license discipline case in which the Department of Professional Regulation, Division of Real Estate, has filed a three count Administrative Complaint against Norma F. Newfield, a licensed real estate broker, alleging violations of paragraphs (b), (f), and (p), of Subsection 475.25(1), Florida Statutes. The first two counts are based on allegations that the Respondent pled guilty to and was found guilty of a felony violation of 26 U.S.C. Sec.

7206(2). The third count is based on allegations that the Respondent failed to notify either the Department or the Florida Real Estate Commission of the earlier described plea and finding of guilt.

Following the hearing, a transcript of the proceedings at hearing was prepared and filed with the Hearing Officer. Thereafter both parties filed proposed recommended orders containing proposed findings of fact and proposed conclusions of law. The parties' proposed recommended orders have been given careful consideration in the preparation of this recommended order. Specific rulings on the findings of fact proposed by the parties are contained in the Appendix which is attached to and incorporated into this recommended order.

FINDINGS OF FACT

Based on the stipulations of the parties, on the exhibits received in evidence, and on the testimony of the witnesses at the hearing, I make the following findings of fact:

1. Petitioner is a state government licensing and regulatory agency, charged with the responsibility and duty to prosecute Administrative Complaints pursuant to the laws of the state of Florida, in particular Section 20.30, Florida Statutes, Chapters 120, 455 and 475, Florida Statutes, and rules promulgated pursuant thereto.

   
   

2. Respondent is now and was at all times material hereto a licensed real estate broker in the state of Florida having been issued license number 0120021 in accordance with Chapter 475, Florida Statutes.

   
   

3. The last license issued was as a broker at 1170 John Anderson Drive, Ormond Beach, Florida 32074.

   
   

4. On November 26, 1986, Respondent signed a plea of guilty to the felony offense of willfully aiding or assisting in the preparation and presentation to the Internal Revenue Service of a false or fraudulent corporation federal income tax return in violation of 26 U.S.C. Sec. 7206(2), as charged in Count 7 of an indictment filed against Respondent and others.

5. The indictment count to which Respondent pled guilty read as follows: That on or about January 13, 1983, in

   Volusia County, Florida in the Middle

   District of Florida, NORMA F. NEWFIELD, defendant herein, a resident of Ormond Beach, Volusia County, Florida, did willfully aid and assist in, procure, counsel, and advise the preparation and presentation to the Internal Revenue Service of a U.S. Corporation Income Tax Return, Form 1120, for the fiscal year ending October 31, 1982 for the corporation Aron P. Newfield, D.O., P.A.,

   255 South Yonge Street, Ormond Beach, Florida, which was false and fraudulent as to a material matter, in that the said corporate tax return represented the gross receipts for the corporation Aron P. Newfield, D.O., P.A., to be $361,366.00 for the fiscal year ending October 31, 1982, whereas, the defendant then and there well knew and believed the gross receipts for the corporation Aron P. Newfield, D.O., P.A., for the fiscal year ending October 31, 1982 were in excess of that heretofore stated; all in violation of

   Title 26, United States Code, Section 7206(2).

   
   

6. On December 15, 1986, in the United States District Court for the Middle District of Florida, Respondent was found guilty of the felony offense described above. The Judgment And Probation/Commitment Order issued that date included the following disposition:

   The court asked whether defendant had anything to say why judgment should not be pronounced. Because no sufficient cause to the contrary was shown, or appeared to the court, the court adjudged the defendant guilty as charged and convicted and ordered that the defendant pay a fine to the United States of America in the amount of TWENTY- THOUSAND DOLLARS ($20,000.00).

   
   

   It Is Further Ordered that imposition of a sentence of imprisonment is suspended and the defendant is placed on probation with the probation office of the Court for a period of THREE (3) YEARS under the standing conditions of probation and the Special Conditions that the defendant perform 250 hours of community service and that the defendant serve FIVE (5) DAYS in a jail-type institution reporting to the institution designated by the Bureau of Prisons no later than Noon January 15, 1987.

   
   

   Said institution to be the Seminole County Jail.

   
   

7. Following the completion of her 250 hours of community service, Respondent's Probation Officer recommended the Respondent be discharged from probation. By order dated April 21, 1987, the court discharged Respondent from probation.

   
   

8. By letter dated May 18, 1987, and received May 20, 1987, counsel wrote to the Florida Real Estate Commission on Respondent's behalf and advised the Commission of Respondent's plea of guilty and of Respondent's conviction. The letter had attached to it copies of the judgment and sentence and the order terminating probation. The letter of May 18, 1987, was the first notification to the Commission by or on behalf of the Respondent regarding her plea of guilty and her felony conviction.

   
   

9. The corporation named "Aron P. Newfield, D.O., P.A.," is an incorporated medical practice of Aron P. Newfield, who is Respondent's husband. The corporation named "Aron P. Newfield, D.O., P.A.," is not involved in the business of real estate brokerage.

   
   

   CONCLUSIONS OF LAW

   
   

   Based on the foregoing findings of fact and on the applicable legal principles, I make the following conclusions of law.

   
   

10. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Sec. 120.57(1), Fla. Stat.

    
    

11. Section 475.25(1), Florida Statutes, reads as follows, 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, permitee, 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 or any other state.

       * * *

       (f) Has been convicted or found guilty, regardless of adjudication, of a crime in any jurisdiction which directly relates to the activities of a licensed broker or salesman or involves moral turpitude or fraudulent or dishonest dealing...

       * * *

       (p) Has failed to inform the commission writing within 30 days after pleading guilty or nolo contendere to, or being convicted or found guilty of, any felony.

       
       

12. As noted in LaRossa and DuPont Realty Investment Corporation v. Department of Professional Regulation, 474 So.2d 322 (Fla. 3rd DCA 1985):

    
    

    A registered real estate broker may be disciplined not only for dishonest conduct in transactions in which his only interest is as a broker, but also for such conduct in his own personal business affairs. Sec.

    475.25(1)(b), Fla. Stat. (1981); Sellers v. Florida Real Estate Commission, 380 So.2d 1052 (Fla. 1st DCA, review denied, 389 So.2d 1114 (Fla. 1980); McKnight vs. Florida Real Estate Commission, 202 So.2d 199 (Fla. 2d DCA

    1967), cert. denied, 209 So.2d 672 (Fla. 1968).

    
    

13. With regard to the alleged violation of Section 475.25(1)(b), Florida Statutes, it is clear that Respondent's conviction of willfully participating in the filing of an income tax return which was "false and fraudulent as to a material matter" constitutes at least "fraud" or "misrepresentation" within the meaning of the last-cited statutory provision.

    
    

14. However, an essential element to the establishment of a violation of the subject statutory provision is proof that the conduct complained of occurred in a "business transaction." Petitioner argues that filing of a corporate tax return is a "business transaction" between the corporate taxpayer and the federal government while Respondent argues that it is not. Neither argument is supported by citation to authority. It is, nevertheless, a well-settled notion of statutory construction that "words of common usage, when used in a statute, should be construed in their plain and ordinary signification..." Gasson v.

    Gay, 49 (So.2d 525 (Fla. 1950). And the plain and ordinary meaning of the term "business transaction" is not broad enough to encompass the act of filing a tax return. Absent proof of a business transaction, there can be no violation of the relevant portion of Section 475.25(1)(b), Florida Statutes. Accordingly, Count One of the Administrative Complaint should be dismissed.

    
    

15. With regard to the alleged violation of Section 475.25(1)(f), Florida Statutes, inasmuch as the conviction in question did not involve any activities in Respondent's capacity as a licensed broker or salesman, it cannot be said to be a crime "which directly relates to the activities of a licensed broker or salesman." Accordingly, in this case there can be a violation of Section 475.25(1)(f), Florida Statutes, only if the crime in question "involves moral turpitude or fraudulent or dishonest dealing." Petitioner does not appear to argue that the crime in question involves moral turpitude and, in any event, the collection of examples in Pearl v. Florida Board of Real Estate, 394 So.2d 189 (Fla. 3d DCA 1981), indicates that the question of whether the subject crime involves moral turpitude would be a close call at best. The question of whether the subject crime involves "fraudulent or dishonest dealing" is much less troublesome. An element of the crime of which Respondent was convicted is the willful presentation of a tax return which was "false and fraudulent as to a material matter." Accordingly, the crime of which Respondent was convicted clearly involves "fraudulent or dishonest dealing." Therefore, the proof in this case is sufficient to establish a violation of Section 475.25(1)(f), Florida Statutes, as alleged in Count Two of the Administrative Complaint.

    
    

16. With regard to the alleged violation of Section 475.25(1)(p), Florida Statutes, the statute requires a licensee to inform the Commission in writing within 30 days of any plea of guilty to or conviction of a felony. Respondent was convicted on December 15, 1986, but did not inform the Commission of the conviction until May 18, 1987. Therefore, the proof in this case is sufficient to establish a violation of Section 475.25(1)(p), Florida Statutes, as alleged in Count Three of the Administrative Complaint.

    
    

17. Respondent has raised issues related to the constitutionality of certain statutory provisions. Those issues have not been addressed in this recommended order because such issues are beyond the scope of the statutory authority of Hearing Officers of the Division of Administrative Hearings.

RECOMMENDATION

Based on all of the foregoing, it is recommended that the Florida Real Estate Commission issue a final order in this case to the following effect:

1. Dismissing the allegations in Count One of the Administrative Complaint;

2. Finding the Respondent guilty of violation of Section 475.25(1)(f), Florida Statues, as alleged in Count Two of the Administrative Complaint;

3. Finding the Respondent guilty of a violation of Section 475.25(1)(p), Florida Statutes, as alleged in Count Three of the Administrative Complaint;

4. Imposing an administrative fine in the amount of One Thousand Dollars ($1,000.00) for the violation of Section 475.25(1)(f), Florida Statutes;

5. Imposing an administrative fine in the amount of Five Hundred Dollars ($500.00) for the violation of Section 475.25(1)(p),

   Florida Statutes; and

6. Suspending Respondent's license for a period of three (3) years for the violation of both Section 475.25(1)(f) and Section 475.25(1)(p)

DONE AND ENTERED this 29th day of September, 1987, at Tallahassee, Florida.

MICHAEL M. PARRISH, 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 29th day of September, 1987.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-2571

The following are my rulings on the findings of act proposed by the parties in their respective proposed recommended orders.

Findings Proposed by Petitioner

The findings of fact in this recommended order contain the substance of all of the findings proposed by Petitioner.

Findings Proposed by Respondent

Ruling on the findings of fact proposed by Respondent has been complicated by the fact that at pages three through nine of the Respondent's proposed recommended order the proposed findings are intertwined with proposed conclusions of law and legal arguments. I have attempted to glean the proposed facts from the mixture of facts, conclusions, and arguments, and the findings of fact in this recommended order contain the substance of all of the findings of fact proposed by Respondent, except as specifically noted below.

Proposed findings regarding Respondents application for restoration of civil rights are rejected as irrelevant.

Proposed findings regarding a disgruntled former employee are rejected as irrelevant.

Proposed findings regarding Respondents character traits for responsibility, honesty, and integrity are rejected in part because they are irrelevant and also in large part because they are not fully supported by persuasive competent substantial evidence. Most of the testimony about Respondent's character had to do with how generous and kind she was in her personal life rather than how she conducted her business activities.

Proposed findings regarding notice to the Commission by Margaret Penoyer are rejected as irrelevant.

COPIES FURNISHED:

James H. Gillis, Esquire Division of Real Estate

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

James M. Russ, Esquire Tinker Building

18 West Pine Street

Orlando, Florida 32801-2697

Harold Huff, Executive Director Division of Real Estate

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

Tom Gallagher, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

William O'Neil, General Counsel Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Docket for Case No: 87-002571

Orders for Case No: 87-002571