STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 87-3847

)

SCARLETT P. FAULK, STANLEY )

MAC PHILLIPS and SCARLETT )

FAULK & ASSOCIATES, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above- styled cause on April 19, 1988, at Clearwater, Florida.

APPEARANCES

For Petitioner: Steven W. Johnson, Esquire

Department of Professional Regulation

400 West Robinson Street Orlando, Florida 32802

For Respondent: Stephen O. Cole, Esquire

Post Office Box 1669 Clearwater, Florida 34617

By Administrative Complaint filed August 4, 1987, the Department of Professional Regulation, Board of Real Estate, seeks to revoke, suspend or otherwise discipline the license of Scarlett P. Faulk as a real estate broker, the license of Stanley Mac Phillips as a real estate salesman, and the license of Scarlett Faulk & Associates, Inc. as a corporate broker. As grounds therefor, it is alleged that Respondents were guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, and breach of trust in a business transaction regarding the listing and sale of gulf front property to

1. Scane Bowler.

   
   

   At the commencement of the hearing, Petitioner's Motion to Amend Count I of the Administrative Complaint to delete paragraph 7 and in paragraph 6 and 8 delete Scarlett Faulk and Scarlett Faulk and Associates, Inc., and replace with Lily Nelson and Sandpiper Realty was granted. Petitioner voluntarily dismissed all charges against Stanley Mac Phillips who was not a licensed real estate salesman in Florida at the time of the transaction noted in the Administrative Complaint. Thereafter Petitioner called two witnesses, Respondent called four witnesses and two exhibits were admitted into evidence.

   Proposed findings have been submitted by the parties. Treatment accorded those proposed findings is contained in the Appendix attached hereto and made a part hereof.

   
   

   FINDINGS OF FACT

   
   

   1. At all times relevant hereto Scarlett P. Faulk and Scarlett Faulk and Associates, Inc. were licensed as a broker and corporate broker, respectively, by the Florida Board of Real Estate.

      
      

   2. Lily Nelson, broker at Sandpiper Realty, managed property at 1800 Gulf Boulevard, Bellaire Shores, owned by Larry and Sheena Bowa, who resided out of state. This property consisted of a residence which Ms. Nelson rented on behalf of the Bowas.

      
      

   3. Scarlett Faulk owned a residence located at 1720 Gulf Boulevard which she had purchased in June, 1986.

      
      

   4. In late June, 1986, Faulk telephoned Lily Nelson to ask if the Bowas were interested in selling their property at 1800 Gulf Boulevard as she might have a client interested in the property. Ms. Faulk's brother, Mac Phillips, was planning to move to Clearwater and was looking for a residence. Also, Faulk had another client, Clarence Trice, to whom she had sold several properties over the past few years. At the time, Trice was contemplating the purchase of property at 1420 Gulf Boulevard and had asked Faulk to join him in a joint venture to purchase this property. Faulk declined, but suggested that her brother, Mac Phillips, might be interested. On June 25, 1986, Phillips wired

      $62,500 to Faulk to participate in this purchase, but Trice opted to purchase the property by himself. Faulk held these funds in her escrow account (Exhibit 2).

      
      

   5. Mrs. Bowa told Lily Nelson that she would talk it over with her husband and call back. When she did call back to say they were interested in selling, she inquired about prices in the neighborhood. Mrs. Bowa then agreed to have the property listed for $600,000. This was communicated to Ms. Faulk who passed the information to Phillips. Phillips made an offer of $500,000 for the property, and Bowa countered with $525,000 which Phillips accepted.

      
      

   6. The contract to purchase the property at 1800 Gulf Boulevard was executed by the buyer on July 1, 1986, and by the sellers on July 7, 1986.

      
      

   7. Rebecca Watson, at all times relevant, was registered as a real estate sales person and associated with the Respondent. Ms. Watson had a client, Scane Bowler, whose wife was interested in having a house built on a lot facing the Gulf of Mexico. Lots on the west side of Gulf Boulevard face the Gulf of Mexico.

      
      

   8. Rebecca Watson asked Respondent Faulk if she could show the Bowlers the residence at 1720 Gulf Boulevard that Faulk had recently purchased. Faulk agreed, met Watson and her client, and allowed Watson to show the house. This was the occasion on which Faulk first met the Bowlers.

      
      

   9. This meeting occurred June 27, 1986, the day the Bowlers departed to attend the tennis matches at Wimbleton. Bowler told Watson the price Faulk was asking, $725,000, was more than the $600,000 he was willing to pay for gulf

      front property. Bowler asked Watson to keep looking and he would contact her when they returned from Wimbleton in about ten days.

      
      

   10. When Bowler returned to Clearwater from Wimbleton on July 10, 1986, he contacted Watson to inquire if any lots had become available. Watson showed the Bowlers 1800 Gulf Boulevard and told them that Phillips, the brother of Faulk, had a contract to purchase the property. The Bowlers liked the property and inquired if Phillips would sell the contract to them.

       
       

   11. Following some negotiation, Phillips sold the contract to the Bowlers for $100,000, and Bowler was the grantee on the deed executed by Bowa.

       
       

   12. When Bowa learned from Bowler that Bowler was paying $625,000 for the property for which Bowa was getting only $525,000, Ms. Bowa wrote a letter to the Florida Board of Real Estate. After the closing, Bowler instituted civil proceedings against Faulk.

       
       

       CONCLUSIONS OF LAW

       
       

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

       
       

   14. Respondent is here charged with violation of Section 475.25(1)(b), Florida Statutes, which provides that disciplinary action may be taken against a licensee who is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence or breach of trust in a business transaction. The transaction complained of involved the sale of the property at 1800 Gulf Boulevard.

       
       

   15. Petitioner has the burden to prove the offense alleged by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987)

       
       

   16. Section 475.01(1)(c) defines "broker to mean a person who, for another, and for a compensation or valuable consideration directly or indirectly, paid or promised . . . sells . . . any real property . . of others .

       . . and who receives, expects or is promised any compensation or valuable consideration, directly or indirectly therefor.

       
       

   17. With respect to Bowa, Respondent was not acting as a broker. Only with respect to the assignment of Phillip's contract to Bowler was Respondent acting as a broker. Respondent received no compensation from Bowler so as to make Respondent the agent or broker for Bowler. Her duty to Bowler was not that of principal and agent, but only to fully disclose all relevant facts known by Respondent in her dealings with Bowler. Had the evidence shown that Respondent purchased the Bowler property with the knowledge that Bowler would pay a higher price than that which Phillips paid for the property and with the intent to sell this contract to Bowler for a profit, a closer case for dishonest dealing would have been made. Here Respondent had seen Bowler for perhaps five minutes and could hardly have assumed that Bowler would buy the contract if one was obtained on the Bowa property. Bowler was never a client of Faulk personally, but was a client of a sales person whose license was held under the auspices of Scarlet Faulk and Associates. At the time Faulk's house was shown to Bowler, the evidence was not clear that Faulk was aware the Bowa property was for sale. Certainly Ms. Watson did not know this was so. Bowler was first shown property by Watson only one day, June 21, 1986, the same day Bowler departed for Wimbleton. Phillips made an offer on July 1, 1986, to purchase the Bowa property and accepted Bowa's counteroffer which was executed by Bowa on July 7,

1986. Bowler returned from Wimbleton on July 10, 1986, learned of the Bowa property, was shown the property and decided to try and buy the contract held by Phillips, knowing that Phillips was Respondent's brother. With respect to the contract to sell the Bowa property to Phillips, Respondent certainly disclosed to Bowa's broker, Lily Nelson, the fact that her offer to purchase was coming from Respondent's brother, Mac Phillips. No evidence was presented to indicate this information was withheld from Bowa.

From the foregoing, it is concluded that Petitioner has failed to prove, by clear and convincing evidence, that Scarlett Faulk and/or Scarlett Faulk and Associates, Inc. violated Section 475.25(1)(b), Florida Statutes, as alleged.

It is

RECOMMENDED that all charges against Scarlett P. Faulk, Scarlett Faulk and Associates, Inc., and Stanley Mac Phillips be dismissed.

ENTERED this 26th day of May, 1988, in Tallahassee, Florida.

K. N. AYERS 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 26th day of May, 1988.

APPENDIX

Treatment Accorded Petitioner's Proposed Findings

1. Included in H.O. #1.

2. Included in H.O. #2.

3. Included in H.O. #4.

4. Rejected. Respondent acted solely as homeowner when Watson showed Bowler Respondent's house.

5. First sentence rejected as unsupported by this evidence. Remainder included in H.O. #6.

6. Included in H.O. #10.

7. Rejected insofar as inconsistent with H.O. #11.

8. First part rejected as unsupported by the evidence.

9. Included in H.O. #11.

Treatment Accorded Respondent's Proposed Findings

1. Included in H.O. #1.

2. Included in H.O. #4.

3. Included in H.O. #4. No credible evidence was presented that Trice saw the Bowa house on June 30, 1986.

4. Included in H.O. #4.

5. Included in H.O. #4.

6. Included in H.O. #5.

7. Included in H.O. #5.

8. Accepted.

9. Included in H.O. #8.

10. Included in H.O. #9.

11. Accepted.

12. Accepted in part. Included in H.O. #10.

13. Included in H.O. #11. Consideration shown in

    assignment of Sales Contract (Ex 1 of Ex 1) is $100,000.

14. Accepted.

15. Irrelevant.

COPIES FURNISHED TO:

STEVEN W. JOHNSON, ESQUIRE

DEPARTMENT OF PROFESSIONAL REGULATION DIVISION OF REAL ESTATE

400 WEST ROBINSON STREET POST OFFICE BOX 1900 ORLANDO, FLORIDA 32802

STEPHEN O. COLE, ESQUIRE

400 CLEVELAND STREET POST OFFICE BOX 1669

CLEARWATER, FLORIDA 34617

DARLENE F. KELLER EXECUTIVE DIRECTOR DIVISION OF REAL ESTATE

400 WEST ROBINSON STREET ORLANDO, FLORIDA 32801

WILLIAM O'NEIL GENERAL COUNSEL

DEPARTMENT OF PROFESSIONAL REGULATION

130 NORTH MONROE STREET TALLAHASSEE, FLORIDA 32399-0750

Docket for Case No: 87-003847

Orders for Case No: 87-003847