STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, FLORIDA REAL )

ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 88-4140

)

JAMES C. ADKINSON, JR., )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Panama City, Florida, before Robert T. Benton II, Hearing Officer of the Division of Administrative Hearings, on September 30, 1988. On October 24, 1988, petitioner's proposed recommended order was filed; and respondent's proposed recommended order was filed the following day. The attached appendix addresses proposed findings of fact by number.

By administrative complaint dated July 23, 1988, petitioner alleged that respondent was licensed as a real estate salesman "from July 24, 1985 through September 14, 1987, ... in the employ of Carrier Realty, Inc. ... [and] from November 13, 1987 through April, 1988, ... in the employ of JW Properties of Panama City Beach, Inc., t/a Thomas Wray Properties"; that "from approximately May, 1987 through April, 1988, the Respondent engaged in the rental management of a duplex owned by John W. Mortland, ... obtained tenants, collected the rents, paid the bills, and furnished the balance of the monthly rent proceeds to John W. Mortland minus a 10% fee"; that respondent did not turn "rental money

... [over] to his then employing broker but ... utilized his personal checking account"; that he "handled the rental management of the duplex without the prior knowledge and consent ... supervision, direction, control or management of his then employing broker"; so that respondent "is guilty of having operated as a broker or as a real estate salesman for a person not registered as his employer in violation of Subsection[s] 475.42(1)(b) ... and 475.25(1)(a), Florida Statutes."

ISSUE

Whether petitioner should take disciplinary action against respondent for the reasons alleged in the administrative complaint?

FINDINGS OF FACT

1. At all pertinent times, James C. Adkison held a real estate salesman's license. From 1985 until September of 1987, his license was registered with Carrier Realty, Inc. Later in 1987, Mr. Adkison caused his license to be registered with J & W Properties of Panama City Beach, Inc. Even after he left off working for J & W Properties of Panama City Beach, Inc., in early to mid

   1988, possibly May or June, his license continued to be registered there, albeit in an inactive status.

   
   

2. In May or June of 1986, John W. Mortland spoke to respondent Adkison on the telephone for the first time: Mr. Adkison called him at his home in Kissimmee to inquire about purchasing the duplex Mr. Mortland owned at 112 Lakeside Circle in Panama City Beach.

   
   

3. In June of 1986, respondent mailed Mr. Mortland an offer to buy the duplex, for his own account, for $47,000. Petitioner's Exhibit No. 1. The offer recited that "James Adkison is a licensed real estate agent." Id. Mr. Mortland countered with an offer to sell for $50,000.

   
   

4. No agreement was reached, until the spring of the following year. By that time, First Federal Savings & Loan Association of Panama City had threatened to foreclose on a second property Mr. Mortland held as an absentee landlord, a duplex on Center Avenue in Panama City. Over the telephone, he agreed to sell respondent the Lakeside Circle duplex, if he would also buy the Center Avenue duplex. Their verbal agreement specified no deadline for closing either transaction.

   
   

5. On May 16, 1987, Mr. Adkison sent Mr. Mortland a second written offer to buy the duplex for $47,000, along with an offer to purchase the Center Avenue property. In a cover letter, he wrote:

   
   

   The contract on Center Avenue is fairly simple. If you have any questions about it please call me.

   
   

   What I would like to do on Lakeside is do a quiet assumption. This is where

   basically everything remains as it is right now with the lender in your name but you sign a deed over to me but I don't record it until I can arrange either to assume the existing mortgage or new financing. The reason I would like to do this is because my cash reserve

   has not been what it used to be. Petitioner's Exhibit No. 5.

   
   

   Before the Center Avenue property could be sold, the mortgage holder foreclosed. Mr. Mortland never accepted respondent's offer to buy the duplex on Lakeside Circle. He eventually sold it to somebody else for $40,000.

   
   

6. Before the foreclosure, Messrs. Adkison and Mortland agreed that Mr. Adkison would take over management of both properties, for a fee of ten percent of rents collected. On July 27, 1987, Mr. Mortland wrote respondent, as follows:

   
   

   You must have noticed that Gabriela made her check payable to you. In any case you should retain 10% of what you collect as a management fee until we can effect our

   transaction. You may also hold any deposits you collect. Petitioner's Exhibit No. 3.

   In time, things were sorted out, although not without some suspicion on Mr. Mortland's part. Respondent eventually remitted ninety percent of all rent moneys he collected from tenants at both duplexes to Mr. Mortland.

   
   

7. Until after the arrangement had ended, it never came to the attention either of Johnnie Paulie Carrier, a broker with Carrier Realty, Inc., or of John Thomas Ray, the registered real estate broker for J & W Properties of Panama City Beach, Inc. No money respondent collected from tenants of the duplexes Mr. Mortland owned was deposited in any real estate broker's account. While he managed the properties, Mr. Adkison exterminated insects, maintained lawns, effected various repairs, and replaced a vinyl floor in one of the apartments on Lakeside Circle, without monetary compensation, apart from a tithe of the rentals.

   
   

   CONCLUSIONS OF LAW

   
   

8. After respondent executed an election of rights form indicating that he disputed material allegations of the administrative complaint, and petitioning for a formal hearing, DPR forwarded the matter to the Division of Administrative Hearings, in accordance with Section 120.57(1)(b)3., Florida Statutes (1987), which now "has jurisdiction over the formal proceeding." Section 120.57(1)(b)3., Florida Statutes (1987).

   
   

9. The Florida Real Estate Commission is empowered to take disciplinary action against licensees, including license suspension and revocation, issuing a reprimand, and "impos[ing] an administrative fine not to exceed $1,000," Section 475.25(1), Florida Statutes (1987), in any case in which a licensed salesman "shall operate as a broker or operate as a salesman for any person not registered as his employer." Section 475.42(1)(b), Florida Statutes (1987). Operating as a salesman is defined to include renting real property for another for compensation. Sections 475.01(1)(c) and (3), and 475.011(2), Florida Statutes (1987).

   
   

10. License revocation proceedings have been said to be "'penal' in nature." State ex rel. Vining vs. Florida Real Estate Commission, 281 So.2d 487, 491 (Fla. 1973); Kozerowitz vs. Florida Real Estate Commission, 289 So.2d

    391 (Fla. 1974); Bach vs. Florida State Board of Dentistry, 378 So.2d 34 (Fla. 1st DCA 1979)(reh. den. 1980). Strict procedural protections apply in disciplinary cases, and the prosecuting agency's burden is to prove its case clearly and convincingly. Ferris vs. Turlington, 510 So.2d 292 (Fla. 1987). See Addington vs. Texas, 441 U.S. 426 (1979); Ferris vs. Austin, 487 So.2d 1163 (Fla. 5th DCA 1986) Anheuser-Busch, Inc. vs. Department of Business Regulation,

    393 So.2d 1177 (Fla. 1st DCA 1981); Walker vs. State Board of Optometry, 322 So.2d 612 (Fla. 3rd DCA 1975); Reid vs. Florida Real Estate Commission, 188 So.2d 846, 851 (Fla. 2nd DCA 1966). A licensee's breach of duty justifies revocation only if the duty has a "substantial basis," Bowling vs. Department of Insurance, 394 So.2d 165, 173 (Fla. 1st DCA 1981) in the evidence, unless applicable statutes and rules create a clear duty, which the evidence shows has been breached.

    
    

11. Respondent argues that the services he rendered while managing the duplex on Lakeside Circle, including installation of vinyl flooring, created an ownership interest in the property, on account of the verbal, contingent agreement he had with Mr. Mortland to buy the building. The first difficulty with this contention is the statute of frauds. The parties did not, moreover, contemplate the transfer of any interest in the Lakeside Circle duplex unless respondent acquired the Center Avenue duplex. Whether under the agreement he

    had with Mr. Mortland or independently of their agreement, respondent acquired no ownership interest in either property. As charged in the administrative complaint, he "engaged in the rental management" of Mr. Mortland's duplex on Lakeside Circle without a real estate broker's knowledge, in violation of Section 475.42(1)(b), Florida Statutes (1987).

    
    

12. It is, accordingly, and in keeping with Rule 21V-24.001(25), Florida Administrative Code, which authorizes up to three years' suspension in such cases,

RECOMMENDED:

That the Florida Real Estate Commission impose an administrative fine against respondent in the amount of $500.

DONE AND ENTERED this 14th day of November, 1988, in Tallahassee, Florida.

ROBERT T. BENTON, II

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 14th day of November, 1988.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-4140

Petitioner's proposed findings of fact Nos. 1 through 5 have been adopted, in substance, insofar as material.

COPIES FURNISHED:

Arthur R. Shell, Jr. Senior Attorney Division of Real Estate

Department of Professional Regulation

400 West Robinson Street Orlando, Florida 32801

James C. Adkison, Jr. Post Office Box 14002

Panama City, Florida 32407

Darlene F. Keller Executive Director Division of Real Estate

400 West Robinson Street Orlando, Florida 32802

Lawrence A. Gonzalez Secretary, Department of

Professional Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Bruce C. Lamb General Counsel

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Docket for Case No: 88-004140

Orders for Case No: 88-004140