STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 89-4696

)

WILLIAM H. MCCOY, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held public hearing in the above-styled case, on November 7, 1989, at Tampa, Florida.

APPEARANCES

For Petitioner: John R. Alexander, Esquire

400 West Robinson Street Orlando, Florida 32802

For Respondent: William H. McCoy, pro se

4002 East Pocahontas Avenue, Suite 106

Tampa, Florida 33610 STATEMENT OF THE ISSUES

Whether Respondent is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or devise, culpable negligence and breach of trust in a business transaction in violation of Section 475.25(1)(b), Florida Statutes.

PRELIMINARY STATEMENT

By Administrative Complaint filed July 20, 1989, the Department of Professional Regulation, Board of Real Estate, Petitioner, seeks to revoke, suspend or otherwise discipline the license of William H. McCoy as a real estate broker. As grounds therefor, it is alleged the Respondent submitted a contract to purchase to the seller of real property in which it was reflected that $2000 earnest money deposit had been received and placed in escrow with Respondent's broker, and both the broker and purchaser had signed the contract for sale and purchase agreement, which facts were false.

At the hearing, Petitioner called three witnesses, including Petitioner, and three exhibits were admitted into evidence. The parties waived the right to submit proposed findings.

FINDINGS OF FACT

1. At all times relevant hereto, Petitioner was licensed as a real estate broker by the Florida Real Estate Commission. In May 1988, he was working as a broker-salesman with G.V. Stewart, Inc., a corporate real estate broker whose active broker is G.V. Stewart.

   
   

2. On April 20, 1989, Respondent submitted a Contract for Sale and Purchase to the University of South Florida Credit Union who was attempting to sell a house at 2412 Elm Street in Tampa, Florida, which the seller had acquired in a mortgage foreclosure proceeding. This offer reflected a purchase price of

   $25,000 with a deposit of $100 (Exhibit 2).

   
   

3. The president of the seller rejected the offer by striking out the

   $25,000 and $100 figures and made a counter offer to sell the property for

   $29,000 with a $2000 deposit (Exhibit 2).

   
   

4. On May 9, 1989, Respondent submitted a new contract for sale and purchase for this same property which offer reflected an offering price of

   $27,000 with a deposit of $2000 held in escrow by G.V. Stewart (Exhibit 3).

   This offer, as did Exhibit 2, bore what purported to be the signature of William

   P. Murphy as buyer and G. Stewart as escrow agent. In fact, neither Murphy nor Stewart signed either Exhibit 2 or Exhibit 3, and neither was aware the offers had been made at the time they were submitted to the seller. This offer was accepted by the seller.

   
   

5. This property was an open listing with no brokerage firm having an exclusive agreement with the owner to sell the property. Stewart's firm had been notified by the seller that the property was for sale.

   
   

6. Respondent had worked with Stewart for upwards of ten years and had frequently signed Stewart's name on contracts, which practice was condoned by Stewart.

   
   

7. Respondent had sold several parcels of property to Murphy, an attorney in Tampa, on contracts signed by him in the name of Murphy, which signatures were subsequently ratified by Murphy.

   
   

8. Respondent considers Murphy to be a Class A customer for whom he obtained a deposit only after the offer was accepted by the seller and Murphy confirmed a desire to purchase. Respondent has followed this procedure in selling property to Murphy for a considerable period of time and saw nothing wrong with this practice.

   
   

9. At present, Respondent is the active broker at his own real estate firm.

   
   

   CONCLUSIONS OF LAW

   
   

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

    
    

11. Section 475.25(1)(b), Florida Statutes, provides that the Real Estate Commission may revoke, suspend or otherwise discipline the license of a licensee who has been 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.

12. Because Stewart and Murphy authorized Respondent to sign heir names on contracts to sell and purchase real property as escrow agent and purchaser respectively, there can be no finding that Respondent forged their signatures.

    
    

13. However, with respect to the seller, Respondent, by submitting an offer to purchase by a purchaser who had not authorized the offer before it was made, is guilty of fraud, misrepresentation and breach of trust in a business transaction. Similarly, submitting an offer reflecting a down payment, as consideration for the contract, had been received and placed in escrow when, in fact, no such deposit had been made, also constitutes fraud, misrepresentation and dishonest dealing in a real estate transaction.

    
    

14. Murphy, as an attorney, certainly knew he was not bound by a offer submitted in his name in which no earnest money deposit was made. Absent an earnest money deposit, no consideration to purchase was provided by the buyer, and acceptance by the seller did not result in a valid contract. That this situation existed is evident in this case as Murphy declined to go through with the transaction, and the seller was left with an empty bag and no recourse against the putative buyer.

    
    

15. As the putative agent for the buyer in this case, Respondent evidently forgot that his principal in a real estate transaction is the seller, and to the seller he owes the duty owed by an agent to his principal. This is a higher duty than is owed to a person, here the buyer, who is not paying the agent for the services performed.

    
    

16. Respondent has been licensed as a real estate broker since 1973, some

16 years, and these are the first charges filed against him by the Real Estate Commission. Unfortunately, Respondent saw nothing wrong with submitting an offer to a seller which reflected an earnest money deposit had been received when, in fact, no such deposit was made. A real estate broker or salesman who fails to perform the duties owed by an agent to his principal constitutes a threat to the public. Here, it is clear that Respondent did not intend to commit fraud and dishonest dealing on the seller of the property--he simply didn't understand the consequence of his actions.

RECOMMENDATION

It is

RECOMMENDED that William H. McCoy's license as a real estate broker be suspended for one year. However, if before the expiration of the year's suspension Respondent can prove, to the satisfaction of the Real Estate Commission, that he fully understands the duty owed by a broker to the seller and the elements of a valid contract, the remaining portion of the suspension be set aside.

ENTERED this 29th day of November, 1989, in Tallahassee, Florida.

K. N. AYERS 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 29th day of November, 1989.

COPIES FURNISHED:

John Alexander, Esquire Kenneth E. Easley

400 West Robinson Street General Counsel

Orlando, Florida 32802 Department of Professional

Regulation

William H. McCoy 1940 North Monroe Street 4002 South Pocahontas Avenue Suite 60

Suite 106 Tallahassee, Florida 32399-0792

Tampa Florida 33610

Darlene F. Keller Division Director

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

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

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. 0162112

DOAH CASE NO. 89-4696

WILLIAM H. McCOY,

Respondent.

/

FINAL ORDER

On January 16, 1990, the Florida Real Estate Commission heard this case to issue a Final Order.

Hearing Officer K. N. Ayers of the Division of Administrative Hearings presided over a formal hearing on November 7, 1989. On November 29, 1989, he issued a Recommended Order, which is adopted by the Florida Real Estate Commission as to all Findings of Fact, Conclusions of Law and Recommendation, except that the Commission deletes the second sentence of the Hearing Officers recommended penalty because it has no lawful authority. A copy of this Recommended Order is attached hereto as Exhibit A and made a part hereof.

The Florida Real Estate Commission therefore ORDERS that the license of William H. McCoy be suspended for a period one (1) year.

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 s. 120.68, Florida Statutes, and to Rule 9.110, Florida Rules of Appellate Procedure.

Within 30 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 tine, 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 16th day of January, 1990 in Orlando, Florida.

Darlene F. Keller, Director Division of Real Estate

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true copy of the foregoing was sent by U.S. Mail to: William H. McCoy, 4002 South Pocahontas Avenue, Suite 106, Tampa, Fl 33610; to Hearing Officer K. N. Ayers, Division of Administrative Hearings, 1230 Apalachee Parkway, Tallahassee, Fl 32399-1550; and to John Alexander, Esquire, DPR, Post Office Box 1900, Orlando, Fl 32802, this 26th day of January, 1990.

Director

Docket for Case No: 89-004696

Orders for Case No: 89-004696