STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 89-1660

) RONALD E. FETTERS, t/a RONTRON REALTY ) & INVESTMENT, and TARIK HYDER CHOUDHURY, )

)

Respondents. )

)

RECOMMENDED ORDER

The final hearing in this case was held on May 24, 1989, in Clearwater, Florida, before Donald D. Conn, Hearing Officer, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Arthur R. Shell, Esquire

Division of Real Estate Post Office Box 1900 Orlando, Florida 32802

For Respondents: Leslie M. Conklin, Esquire

2120 U.S. 19, South, Suite 210

Clearwater, Florida 34624 (Tarik Hyder Choudhury)

Ronald P. Teevan, Esquire

200 North Garden Avenue, Suite A Clearwater, Florida 34615 (Ronald E. Fetters, t/a

RONTRON Realty & Investment) STATEMENT OF THE ISSUE

The issue in this case is whether the licenses of Ronald E. Fetters, t/a RONTRON Realty & Investment (Fetters) and Tarik Hyder Choudhury (Choudhury) should be disciplined by the Florida Real Estate Commission based upon actions they are alleged to have taken, or failed to have taken, between January and March, 1988, in the sale of certain real property owned by Stanley Jankiewicz.

PRELIMINARY STATEMENT

At the hearing, the Department of Professional Regulation, Division of Real Estate (Petitioner), called three witnesses, and introduced seven exhibits, while two additional exhibits which Petitioner sought to introduce were rejected

as irrelevant. Respondent Fetters introduced two exhibits, and Respondent Choudhury introduced one exhibit. Choudhury testified on his own behalf, and called one additional witness.

The transcript of the final hearing was filed on June 9, 1989, and the parties requested, and were given twenty days thereafter to file their proposed recommended orders, including proposed findings of fact. A ruling on each timely filed proposed finding of fact is included in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. At all times material hereto, Fetters has been a licensed real estate broker in the State of Florida, trading as RONTRON Realty and Investment, with offices in Largo, Florida, and Choudhury has been a licensed real estate salesperson at RONTRON Realty. Fetters was Choudhury's broker at all times material hereto.

   
   

2. Stanley and Mary K. Jankiewicz listed their home for $189,000 with Harvey Seybold, a licensed real estate broker, and neighbor. On January 28, 1988, Choudhury contacted Seybold and asked to see the Jankiewicz house. Seybold showed the house that same day. On January 30, 1988, Choudhury presented a contract for the sale and purchase of the home to Seybold and Jankiewicz. The purchasers, John and Gail Taylor, offered $185,000, but this offer was unacceptable to Jankiewicz because it called for him to hold a

   $150,000 purchase money mortgage. Jankiewicz proposed a counteroffer, which still provided for a sales price of $185,000, but only required him to hold a purchase money mortgage of $25,000. It also required the Taylors to obtain a firm financing commitment within 45 days for a first mortgage in the amount of

   $129,000. The Taylors accepted this counteroffer, and the transaction was scheduled to close on March 30, 1988, as proposed in Jankiewicz' counteroffer.

   
   

3. Jankiewicz and Seybold testified that Choudhury told them, on January 30, 1988, that the Taylors had a net worth of from $2 to $3 million, and that he had a copy of their financial statement in his office, which he had reviewed. They claim that he promised to provide them with a copy of this financial statement on February 1, 1988. Jankiewicz testified that Choudhury's representation about the financial condition of the Taylors was a significant inducement for him to propose his counteroffer, and he would not have gone through wish this sale had he known on January 30, 1988, what he subsequently learned about their net worth. Choudhury denies making any representation about the Taylors' net worth. He testified that he had only met the Taylors on one occasion, and had no way of knowing their net worth since he denies having a copy of their financial statement at that time.

   
   

4. When the Taylors' financial statement was not provided on February 1, 1988, Jankiewicz and Seybold made repeated attempts to contact Choudhury, most of which were futile. He would not return their calls. Finally, on March 7, 1988, Choudhury did send Seybold a copy of the Taylors' financial statement, and Seybold immediately forwarded it to Jankiewicz. The financial statement is dated January 31, 1988, and indicates a net worth of $238,100. Choudhury testified that he forwarded this financial statement to Seybold as soon as he received it from the Taylors, but that when he looked it over he was "shocked". Choudhury offered no credible explanation of why he would be "shocked" to see the Taylors' financial statement, unless he had expected a far higher net worth. Yet, he testified that he had no knowledge of their net worth.

5. Based upon the demeanor of the witnesses, and after considering the testimony of Choudhury, Seybold and Jankiewicz, as well as Choudhury's unexplained testimony about being "shocked" to see the Taylors' net worth, it is found that Choudhury did represent to Jankiewicz and Seybold on January 30, 1988, that the Taylors had a net worth of from $2 to $3 million. This statement was false, but it was a material inducement which led Jankiewicz to make his counteroffer, accepting a $25,000 purchase money mortgage.

   
   

6. The contract for sale did not provide any contingency which addressed Jankiewicz' concerns about the Taylors' net worth. He and Seybold believed Choudhury's representations, and admitted at hearing that it was an oversight on their part not to insist on a contingency in the sales contract. They simply took Choudhury's word that he had seen their financial statement, and it showed a net worth of $2 to $3 million.

   
   

7. When he received the Taylors' financial statement in early March, 1988, Jankiewicz tried to back out of the deal, but because there was no contingency in the sales contract, and because the Taylors threatened to sue him for breach of contract if he did not close, he went through with the sale.

   
   

8. The sale closed, as scheduled, on March 30, 1988. The Taylors had obtained a first mortgage through bank financing in early March, and have subsequently made payments to Jankiewicz under the purchase money mortgage which he holds, although on occasion they have been late with their payments.

   
   

9. At no time did Fetters participate in the discussions which took place with Jankiewicz and Seybold concerning this sale. Choudhury made all contacts with them, presented the sales contract, and attended the closing.

   
   

10. The Petitioner's investigator, Leo Huddleston, visited Fetters on June 28, 1988, to examine Fetters' records concerning the Jankiewicz transaction, but Fetters brought no records with him to this meeting. He claimed that Choudhury had all of these records. Subsequently, he did provide Huddleston with escrow records showing a $20,000 deposit in his escrow account, and copies of three checks from the Taylors totaling $20,000, which he claimed he received as their deposit on the Jankiewicz house, and which he stated he then deposited in his escrow account. These checks do indicate on their face that they were for a house deposit. However, Fetters was never able to produce a copy of his deposit slips or bank records which would directly establish that the Taylors' checks were in fact deposited into his escrow account. There was no indication on the face of the checks that they were deposited into his escrow account, or that he had an escrow account established for this purpose. Fetters testified at hearing, that he had lost his bank records, and presumed that a former tenant had taken them when he moved.

    
    

11. Fetters failed to keep adequate records of his escrow account that would allow an audit of funds deposited into, and withdrawn from, such account. He could not establish that he had an escrow account on which he was signatory. He was also negligent in failing to safeguard any such records which he may have had, and could not produce complete records of his escrow account which would establish that the Taylors' deposit checks were placed in his escrow account, and remained there until they were withdrawn by a $20,000 cashier's check that was exchanged at closing.

    
    

12. Following initial investigation of a complaint filed by Jankiewicz against Fetters and Choudhury, a probable cause panel decided not to issue an Administrative Complaint, and they were informed, in August, 1988, that this

    complaint file had been closed. Subsequently, however, new evidence was discovered concerning the fact that Seybold had also been present on January 30, 1988, when Choudhury met with Jankiewicz, and Seybold confirmed Jankiewicz' recollection of Choudhury's statements. Thereupon, this complaint was resubmitted to a probable cause panel, and the Administrative Complaint which is at issue in this case was filed.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the parties, and the subject matter in this cause. Section 120.57(1), Florida Statutes. Since this is a case in which the Petitioner is seeking to discipline the Respondents' licenses, and could thereby adversely affect their ability to continue to engage in the real estate profession, Petitioner has the burden of establishing the basis for license disciplinary action by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

14. Petitioner has charged Respondents Fetters and Choudhury with violating Section 475.25(1)(b), Florida Statutes, by engaging in misrepresentation and dishonest dealing, and by making false promises during the transaction which resulted in the sale of the Jankiewicz house to the Taylors. Respondent Fetters is also charged with violating Sections 475.25(1)(e) and (k), and Rules 21V-14.010 and 21V-14.12, Florida Administrative Code, by failing to maintain trust funds in his escrow account until disbursement, failing maintain an escrow account on which he was signatory, and failing to maintain business records.

    
    

15. It has been clearly and convincing established that Fetters failed to maintain proper business records concerning his escrow account, and could not produce records which would show that he had an escrow account on which he was signatory. He could not establish that the Taylors' deposit went into his escrow account, and remained there until disbursement at closing. Even if a former tenant had taken his records, this does not relieve Fetters of his responsibility. He should have maintained his business records in a secure place, and taken reasonable steps to insure their safety and integrity.

    
    

16. However, it was not shown that Fetters was in any way directly involved in the Jankiewicz transaction, or even spoke with Jankiewicz or Seybold about this sale. While a broker does have a responsibility to supervise the actions of salespersons working at his brokerage, misrepresentations and false promises of the agent cannot be imputed to the broker without some showing of knowledge on his part of such statements, or a showing that he condoned such conduct by failing to properly supervise his salespersons. Astore v. Florida Real Estate Commission, 374 So.2d 40, 42 (Fla. 3rd DCA 1979); Brod v. Jernigan,

    188 So.2d 575, 580 (Fla. 2nd DCA 1966). Therefore, clear and convincing evidence was not produced which would establish that Fetters has violated Section 475.25(1)(b).

    
    

17. It was clearly and convincingly shown, however, that Choudhury violated Section 475.25(1)(b). He knowingly misrepresented the net worth of the Taylors by stating it was from 2 to $3 million, when in fact, he did not know their net worth, and had not seen their financial statement prior to making this representation on January 30, 1988. He thereby dealt dishonestly with Jankiewicz, who made his counteroffer under false pretenses based upon Choudhury's dishonest statements. At hearing, Choudhury did not testify

    truthfully about this matter, and could offer no credible explanation of his testimony that he was "shocked" to see the Taylors' financial statement, when he had previously testified that he had no idea what their net worth was.

    
    

18. In recommending an appropriate penalty for the Respondents' violations in this case, the disciplinary guidelines set forth in Rule 21V-24.001(3)(h),(k) and (q), Florida Administrative Code, have been considered, as well as mitigating and aggravating factors enumerated in Rule 21V-24.001(4)(b).

RECOMMENDATION

Based upon the foregoing, it is recommended that Florida Real Estate Commission enter a Final Order suspending Respondent Fetters license for a period of six months, and suspending Respondent Choudhury's license for a period of one year.

DONE AND ENTERED this 17th day of July, 1989 in Tallahassee, Florida.

DONALD D. CONN

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

Filed with the Clerk of the Division of Administrative Hearings this 17th day of July, 1989.

APPENDIX

The Petitioner did not timely file Proposed Findings of Fact.

Respondent Choudhury did file a Memorandum of Law which contains unnumbered paragraphs under a section referred to as "Facts". This Memorandum has been considered in the preparation of this Recommended Order, but specific rulings cannot be made on the matters contained in the section labeled "Facts" since this consists largely of argument on the evidence without any citation to the record as required by Rule 22I-6.031(3), F.A.C.

Rulings on the Respondent Fetters' Proposed Findings of Fact: 1-2. Adopted in Finding 1.

3. Adopted in Findings 2, 8. 4-5. Adopted in Findings 3, 4.

1. Rejected in Finding 5, and as argument on the evidence, rather than a proposed finding of fact.

2. Adopted and Rejected in part in Findings 10, 11.

3. Rejected in Finding 11.

4. Not a proposed finding of fact.

COPIES FURNISHED:

ARTHUR R. SHELL, ESQUIRE DIVISION OF REAL ESTATE

P. O. BOX 1900 ORLANDO, FLORIDA 32802

LESLIE M. CONKLIN, ESQUIRE 2120 U.S. 19, SOUTH

SUITE 210

CLEARWATER, FLORIDA 34624

RONALD P. TEEVAN, ESQUIRE

200 NORTH GARDEN AVENUE SUITE A

CLEARWATER, FLORIDA 34615

DARLENE F. KELLER DIVISION DIRECTOR

P. O. BOX 1900 ORLANDO, FLORIDA 32802

KENNETH EASLEY, GENERAL COUNSEL NORTHWOOD CENTRE

1940 NORTH MONROE STREET SUITE 60

TALLAHASSEE, FLORIDA 32399-0792

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AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA DEPARTMENT OF PROFESSIONAL REGULATION

FLORIDA REAL ESTATE COMMISSION

DEPARTMENT OF PROFESSIONAL REGULATION, DIVISION OF REAL ESTATE,

Petitioner,

vs. CASE NO. 0160778 0160777

DOAH NO. 89-1660

RONALD E. FETTERS t/a

RONTRON REALTY & INVESTMENT and TARIK CHOUDHURY,

Respondents.

/

FINAL ORDER

On September 19, 1989, the Florida Real Estate Commission heard this case to issue a Final Order. Hearing Officer Donald Conn of the Division of Administrative Hearings presided over a formal hearing on May 24, 1989. On July 17, 1989, he issued a Recommended Order, a copy of which is attached hereto as Exhibit A and made a part hereof.

Both Respondent Fetters and Respondent Choudhury, separately and through their individual attorneys, filed Exceptions to the Recommended Order stating that the Recommendation of the Hearing Officer was harsh and unwarranted, considering the facts of the case. Copies of said Exceptions are attached here to as Exhibits B and C and made a part hereof.

After hearing arguments of counsel and having been otherwise fully advised in the premises, the Commission determined that it would rule separately on each Respondents Exceptions.

Regarding Respondent Choudhury, the Commission accepts the Respondents Exceptions, except the last sentence of Paragraph 1. The Commission rejects the Hearing Officers Recommended Order, Findings of Fact, Conclusions of Law and the Recommended Penalty.

Regarding Respondent Fetter, the Commission rejects the Respondents Exceptions to the Hearing Officers Recommended Order for the reason that the same arguments were made to the Hearing Officer and were rejected. The Commission accepts the Findings of Fact, Conclusions of Law and Recommendation of the Hearing Officer in the Fetters case.

Therefore, the Florida Real Estate Commission ORDERS that the case against Respondent Choudhury be dismissed.

The Florida Real Estate Commission further ORDERS that Respondent Fetters license be suspended for a period of six months.

This Order shall be effective 30 days from date of filing with the Clerk of the Department of Professional Regulation. However, any party affected by this Order has the right to seek judicial review, pursuant to Section 120.68, Florida Statutes, and to Rule 9.110, Florida Rules of Appellate Procedure.

Within 3O days of the filing date of this Order, review proceedings may be instituted by filing a Notice of Appeal with the Clerk of the Department of Professional Regulation at 400 West Robinson Street, Suite 309, Orlando, Florida 32801. At the same time, a copy of the Notice of Appeal, with applicable filing fees, must be filed with the appropriate District Court of Appeal.

DONE AND ORDERED this 19th day of September 1989 in Orlando, Florida.

Darlene F. Keller, Director Division of Real Estate

I HEREBY CERTIFY that a true copy of the foregoing was sent by U.S. Mail to Leslie Conklin, Esquire, 2120 US 19 South, Clearwater, Fl 34624; to Ronald Teevan, Esquire, 200 North Garden Avenue, Suite A, Clearwater, Fl 34615; to

Hearing Officer Donald Conn, Division of Administrative Hearings, 1230 Apalachee Parkway, Tallahassee, Fl 32399-1550; and to James Gillis, Esquire, DPR, P O Box 1900, Orlando, Fl 32802, this 16th day of October 1989.

MB:JM:pep Darlene F. Keller Director

Docket for Case No: 89-001660

Orders for Case No: 89-001660