STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 89-1724

)

EDWARD E. DIAMOND, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in the instant case on June 27, 1989, in West Palm Beach, Florida, before Stuart M. Lerner, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Steven W. Johnson, Esquire

Department of Professional Regulation

400 West Robinson Street Orlando, Florida 32801

For Respondent: No Appearance

STATEMENT OF THE ISSUES

1. Whether Respondent committed the offenses described in the administrative complaint filed against him?

   
   

2. If so, what penalties should be imposed by the Florida Real Estate Commission?

PRELIMINARY STATEMENT

On January 19, 1989, an administrative complaint was filed against Respondent, who then was a licensed real estate salesman. The complaint alleges that on May 19, 1987, Respondent was "found guilty upon a plea of guilty in the Circuit Court of Palm Beach County, Florida, to three counts of the sale of unregistered securities" and that he failed to timely notify the Florida Real Estate Commission in writing of his guilty plea. According to the complaint, such conduct violated Section 475.25 (1)(f) and (p), Florida Statutes, because the crimes to which he pled guilty are felonies and they "directly relate to the activities of a licensed real estate salesman or involve moral turpitude or fraudulent or dishonest dealing."

In accordance with Respondent's request, the matter was referred to the Division of Administrative Hearings for the assignment of a hearing officer to

conduct a formal hearing on the allegations set forth in the administrative complaint. Although he had requested the hearing, Respondent failed to make an appearance at the hearing site either in person or through counsel or a qualified representative. Petitioner appeared through counsel, who announced at the outset of the proceeding that Petitioner would not be presenting any evidence in support of the "failure to notify" allegation set forth in the administrative complaint.

Petitioner presented no testimony at hearing. Its case against Respondent consisted exclusively of six exhibits which it offered into evidence: a copy of material reflecting the status of Respondent's license; a copy of the criminal information filed against Respondent; a copy of a newspaper article describing the criminal enterprise in which Respondent was allegedly involved; a copy of the judgment and sentence in Respondent's criminal case; a copy of the sentencing guideline scoresheet used to determine Respondent's sentence; and a copy of the special conditions of the probationary sentence Respondent received for his criminal misconduct. All six exhibits were received into evidence.

Following the conclusion of his evidentiary presentation, counsel for Petitioner made a closing argument. In his closing remarks, he proposed that the Hearing Officer recommend that Respondent's real estate salesman license be suspended for a period of three years for his having been found guilty in criminal court of selling unregistered securities.

After having been apprised by counsel for Petitioner that Petitioner would not be supplying the Hearing Officer with a copy of the hearing transcript, the Hearing Officer stated on the record that any proposed recommended orders or written arguments had to be filed no later than ten days following the conclusion of the hearing. The hearing then concluded. To date, neither Petitioner nor Respondent have made any posthearing submissions.

FINDINGS OF FACT

Based on the record evidence, the Hearing Officer makes the following Findings of Fact:

1. Respondent was first licensed as a real estate salesman in the State of Florida on May 26, 1983.

   
   

2. On March 31, 1985, his license reverted to involuntarily inactive status because of his failure to take the necessary measures to seek its renewal. As of June 26, 1989, he had made no effort to reactivate his license.

   
   

3. By information filed May 22, 1986, in Palm Beach County Circuit Court, Respondent was charged with having committed various criminal acts in connection with a mortgage investment scam. Counts 3, 7, and 9 of the information contained the following allegations:

   
   

   [I]n the County of Palm Beach and State of Florida, on June 15, 1983, EDWARD E. DIAMOND, salesperson, offered for sale to FLORENCE PATRIANI a security to wit: an equal dignity mortgage and note which security was not registered as required by Chapter 517 of Florida Statutes, contrary to Florida Statutes 517.07 and 517.302,

   [I]n the County of Palm Beach and State of Florida, on July 18, 1983, EDWARD E. DIAMOND, salesperson, offered for sale to SAPENOFF and HARRIS, P.A., PROFIT

   SHARING ACCOUNT, a security to wit: an equal dignity mortgage and note which security was not registered as required by Chapter 517 of Florida Statutes, contrary to Florida Statutes 517.07 and 517.302,

   
   

   [I]n the county of Palm Beach and State of Florida, on January 21, 1984, EDWARD

   E. DIAMOND, salesperson, offered for sale to VINSON HARPER and MARJORIE H. HARPER, a security to wit: an equal dignity mortgage and note which security was not registered as required by Chapter 517 of Florida Statutes, contrary to Florida Statutes 517.07 and 517.302[.]

   
   

4. On May 18, 1987, Respondent pled guilty to these three counts of the information. Adjudication of guilt was withheld and Respondent was placed on probation. The remaining charges against Respondent were dismissed.

   
   

   CONCLUSIONS OF LAW

   
   

5. The Florida Real Estate Commission (Commission) is statutorily empowered to discipline licensed real estate salesmen for any of the reasons enumerated in Section 475.25(1), Florida Statutes.

   
   

6. Section 475.25(1)(f), Florida Statutes, authorizes the Commission to take disciplinary action against a licensed real state salesman who "[h]as been convicted or found guilty, regardless of adjudication, of a crime in any jurisdiction which directly relates to the activities of a licensed ... salesman

   ... or involves moral turpitude or fraudulent or dishonest dealing."

   
   

7. Section 475.25(1)(p), Florida Statutes, gives the Commission authority to punish a licensed real estate salesman who "[h]as failed to inform the commission in writing within 30 days after pleading guilty or nolo contendre to, or being convicted or found guilty of, any felony."

   
   

8. The administrative complaint filed against Respondent alleges that he should be disciplined pursuant to Section 475.25(1)(f) and (p), Florida Statutes, because, on May 18, 1987, he entered a plea of guilty in Palm Beach County Circuit Court to three counts of the sale of unregistered securities, a third degree felony, and thereafter failed to notify the Commission of the disposition of this criminal matter.

   
   

9. Petitioner presented no evidence to substantiate the allegation that Respondent failed to inform the Commission of the outcome of his criminal case in violation of Section 475.25(1)(p), Florida Statutes.

   
   

10. Petitioner did prove, however, by clear and convincing evidence that, as alleged in the administrative complaint, Respondent was found guilty of three

    counts of the sale of unregistered securities, criminal acts which "directly relate[d] to [his] activities [as a] salesman" inasmuch as they were committed while he was acting in his capacity as a salesman. Petitioner therefore met its burden of proving that Respondent engaged in conduct for which a licensed real estate salesman may be disciplined pursuant to Section 475.25(1)(f), Florida Statutes. Furthermore, a three year suspension, the penalty that Petitioner is seeking, is an authorized and appropriate punishment to give a licensed real estate salesman who has engaged in such conduct. Section 475.25(1), Fla. Stat.; Fla. Admin. Code Rule 21V-24.001(3)(1)(maximum penalty for violation of Section 475.25(1)(f), Florida Statutes, is "[u]p to 7 years suspension or revocation;" minimum penalty is "a reprimand and/or a fine up to $1,000.00 per count").

    
    

11. Nonetheless, the Commission is without authority to take such disciplinary action against Respondent. This is because he is not a "licensee," within the meaning of Section 475.25, Florida Statutes, subject to disciplinary action by the Commission.

    
    

12. The documentary evidence submitted by Petitioner reveals that Respondent's real estate salesman license became involuntarily inactive on March 31, 1985, and that in the four years which followed he made no effort to reactivate it. Section 475.183, Florida Statutes, provides that "[a]ny license which has been involuntarily inactive for more than 4 years shall automatically expire" and that "once [it] expires, it becomes null and void without any further action by the commission or department." Accordingly, because it had been involuntary inactive for more than four years, Respondent's real estate salesman license, which is the subject of the instant disciplinary action, expired and became null and void on April 1, 1989, by operation of Section 475.183, Florida Statutes. In view of the expiration of Respondent's license, the instant administrative complaint should be dismissed on the grounds that the issues raised by the complaint have become moot.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby

RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the instant administrative complaint against Respondent on the grounds of mootness.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 13th day of July, 1989.

STUART M. LERNER

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 13th day of July, 1989.

COPIES FURNISHED:

STEVEN W. JOHNSON, ESQUIRE

DEPARTMENT OF PROFESSIONAL REGULATION

400 WEST ROBINSON STREET ORLANDO, FLORIDA 32801

EDWARD E. DIAMOND

5519 FAIRWAY PARK DRIVE BOYNTON BEACH, FLORIDA 33437

DARLENE F. KELLER DIVISION DIRECTOR

FLORIDA DIVISION OF REAL ESTATE

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

Docket for Case No: 89-001724

Orders for Case No: 89-001724