STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 88-6464

)

RICHARD J. MITCHELL, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a formal hearing in this case on August 29, 1990, in Sarasota, Florida.

APPEARANCES

For Petitioner: Steven W. Johnson, Esquire

Senior Attorney

DPR - Division of Real Estate

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

For Respondent: No appearance 1/

STATEMENT OF THE ISSUES

Whether or not Respondent 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, all in violation of Subsection 475.25(1)(b), Florida Statutes., and, if so, what administrative penalty should be imposed.

PRELIMINARY STATEMENT

By Administrative Complaint filed October 25, 1988, Petitioner, Department of Professional Regulation, Division of Real Estate, alleged that Respondent violated Subsection 475.25(1)(b), Florida Statutes. Based on those charges, Petitioner seeks to discipline Respondent's real estate license.

Respondent timely answered the charges and requested a formal hearing pursuant to Section 120.57(1), Florida Statutes. A formal hearing was held on August 29, 1990, in Sarasota, Florida.

At the hearing, Petitioner presented the testimony of Barbara Curtis and Janine M. Martel. Petitioner's Exhibits 1-6 were offered and received in evidence. Respondent did not appear or offer any evidence at the hearing.

Pursuant to leave, the parties were afforded an opportunity to file proposed recommended orders. On September 17, 1990, Petitioner filed a proposed recommended order which was considered and is substantially incorporated in this Recommended Order.

Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received and the entire record compiled herein, I make the following relevant factual findings:

FINDINGS OF FACT

1. Petitioner, Department of Professional Regulation, Division of Real Estate, is a state licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints filed pursuant to the laws of the State of Florida, in particular, Section 20.30, Florida Statutes and Chapters 120, 455 and 475, Florida Statutes, and rules promulgated thereunder.

   
   

2. Respondent, Richard J. Mitchell, is now and was at all times material hereto, a licensed real estate broker in Florida, having been issued license number 0396926 in accordance with Chapter 475, Florida Statutes. The last license issued to Respondent was as an involuntary inactive salesman with a home address of 2118 South Tuttle Avenue in Sarasota, Florida 33239.

   
   

3. On June 6, 1986, Respondent and Janine Martel (Martel) entered into a contract for the purchase and sale of real property, wherein Respondent agreed to convey his one-half interest in a house that Martel had been renting from him in Sarasota. The remaining one-half interest was held by James Ward. (Petitioner's Exhibit 2.)

   
   

4. Prior to Respondent's conveyance of the real property to Martel, Respondent assured Martel that there was only one mortgage which encumbered the property and that he would undertake the necessary steps to insure that Martel would be able to assume the underlying first mortgage in favor of Stockton, Whatley, Davin & Company. Respondent also assured Martel that he would resolve any other adverse interest which affected or otherwise encumbered the house.

   
   

5. Martel rented from Respondent for an extended period and he periodically advised her regarding the purchase of real property based on his knowledge of real estate transactions and his regular discussions with Martel. As a result of those discussions, Martel placed a great deal of trust and reliance on representations made by Respondent.

   
   

6. Martel and Respondent agreed to close on the contract for the purchase and sale of the property on July 11, 1986. On that date, Respondent executed a quit claim deed to Martel conveying his one-half interest in the property to Martel. Throughout the closing, Respondent concealed from Martel the true status of his interest in the property including several recorded liens which encumbered the property at the time of conveyance. By doing so, Respondent misrepresented and concealed from Martel encumbrances which affects the property.

7. Respondent made the above-referred misrepresentations and concealments in order to effectuate the transaction for personal monetary gain.

   
   

8. After Martel closed on the purchase, she discovered that persons other than Respondent and James Ward claimed legal and/or equitable interest in the property and that the property was encumbered by a second mortgage in the amount of $3,700.00.

   
   

9. Upon Martel's discovery of the misrepresentations by Respondent, Martel initiated a civil suit against Respondent which resulted in her obtaining a default final judgment against Respondent in the amount of $13,864.00 in the Circuit Court of Sarasota County, Florida, on or about August 1, 1988. (Petitioner's Exhibit 4.)

   
   

10. Respondent did not appear at the hearing to contest or otherwise refute the administrative charges filed by Petitioner.

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this action pursuant to Subsection 120.57(1), Florida Statutes.

    
    

12. The parties were duly noticed pursuant to Chapter 120, Florida Statutes.

    
    

13. The authority of the Petitioner is derived from Chapter 475, Florida Statutes.

    
    

14. Section 475.25, Florida Statutes, provides in pertinent part that the Florida Real Estate Commission may suspend a license for a period of not exceeding ten (10) years; revoke a real estate license; impose an administrative fine not to exceed $1,000 for each count or separate offense; and may impose a reprimand or, any or all of the foregoing, if it finds that a licensee has violated Subsection 475.25(1)(b), Florida Statutes.

    
    

15. Section 475.25(1)(b), Florida Statutes, proscribes fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction. Petitioner has the burden of establishing, by clear and convincing evidence, that Respondent committed the acts alleged in the Administrative Complaint. See Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

16. Petitioner presented clear and convincing evidence which establishes that Respondent made material misrepresentations to Martel and concealed the true status of encumberances on real property that he sold her. Respondent's conduct was deliberate and constituted fraud. Respondent was obliged to deal honestly and fairly with Martel and failed to do so. Petitioner is authorized to seek imposition of a penalty within the range as provided for in Subsection 475.25(1)(b), Florida Statutes, based on Respondent's proscribed conduct as set forth herein.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that Petitioner enter a Final Order suspending Respondent's real estate license for a period of two (2) years.

RECOMMENDED this 25th day of October, 1990, in Tallahassee, Leon County, Florida.

JAMES E. BRADWELL

Hearing Officer

Division of Administrative Hearings 1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904)488-9675

Filed with the Clerk of the

Division of Administrative Hearings this 25th day of October, 1990.

ENDNOTES

1/ Although properly noticed, Respondent, or a representative on his behalf, failed to appear at the hearing.

COPIES FURNISHED:

Steven W. Johnson, Esquire Senior Attorney

DPR - Division of Real Estate

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

Richard J. Mitchell

330 Golden Sands Drive Sarasota, Florida 34231

Kenneth E. Easley, Esq. General Counsel

Darlene F. Keller, Executive Director Dept. of Professional DPR - Division of Real Estate Regulation

400 West Robinson Street Northwood Centre, Ste.60

Post Office Box 1900 1940 North Monroe St.

Orlando, Florida 32802 Tallahassee, FL 32399

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS:

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 88-006464

Orders for Case No: 88-006464