STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 90-1182

)

)

LINDA B. SCHUMACHER and )

LINDA B. SCHUMACHER, INC., )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William J. Kendrick, held a formal hearing in the above-styled case on April 19, 1991, in West Palm Beach, Florida.

APPEARANCES

For Petitioner: James H. Gillis, Esquire

Department of Professional Regulation

Northwood Centre

1940 North Monroe Street Suite 60

Tallahassee, Florida 32399-0792

For Respondent: G. Michael Keenan, Esquire Suite 212

100 South Dixie Highway

West Palm Beach, Florida 33401 STATEMENT OF THE ISSUES

At issue in this proceeding is whether respondents, licensed real estate brokers in the State of Florida, violated the provisions of Section 475.25(1), Florida Statutes, and, if so, what disciplinary action should be taken.

PRELIMINARY STATEMENT

By administrative complaint dated October 18, 1989, petitioner charged respondents with having violated the provision of Section 475.25(1), Florida Statutes, by refusing and delaying petitioner's inspection of respondent's escrow accounts, by having failed to timely account and deliver trust funds, by having failed to maintain trust funds in the real estate brokerage trust account or some other proper depository until disbursement was properly authorized, by failing to keep an accurate account of all trust fund transactions together with

such additional data as good accounting practice requires, and by being guilty of culpable negligence and breach of trust in a business transaction.

Respondent filed a timely request for formal hearing, disputing the allegations of fact contained in the administrative complaint, and the matter was referred to the Division of Administrative Hearings for the assignment of a Hearing Officer to conduct a formal hearing pursuant to Section 120.57(1), Florida Statutes.

At hearing, petitioner called Joseph Swift and Janet Lebedeker, as witnesses, and its exhibits 1-9, 10B, and 11-19 were received into evidence. Respondent, Linda B. Schumacher, testified on her own behalf, and called Marion Jones, Sally Bullock, Sharon Thayer, and Clifford Hertz, as witnesses.

Respondents exhibits 3-6, 6A, 7-9, 9A, 10-40, and 42, were received into evidence.

The transcript of hearing was filed May 6, 1991, and the parties were granted leave, on their request, until May 27, 1991, to file proposed findings of fact. Consequently, the parties waived the requirement that a recommended order be rendered within thirty days after the transcript is filed. Rule 22I- 6.031, Florida Administrative Code. The parties' proposed findings are addressed in the appendix to this recommended order.

FINDINGS OF FACT

The parties

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

   
   

2. Respondent, Linda B. Schumacher, is now and was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0171642 in accordance with Chapter 475, Florida Statutes. The last license issued was as a broker, c/o Linda B. Schumacher, Inc., 155 Worth Avenue, Palm Beach, Florida 33480.

   
   

3. Respondent, Linda B. Schumacher, Inc., is now and was at all times material hereto a corporation registered as a real estate broker in the State of Florida having been issued license number 0237256 in accordance with Chapter 475, Florida Statutes. The last license issued was at the address of 155 Worth Avenue, Palm Beach, Florida 33480.

   
   

4. At all times material hereto, respondent Linda B. Schumacher was licensed and operating as a qualifying broker and officer for Respondent Linda

   B. Schumacher, Inc.

   
   

   The Brokerage

   
   

5. While respondent, Linda B. Schumacher (Schumacher) was a qualifying broker and officer of respondent, Linda B. Schumacher, Inc. (the "Brokerage"), at all times material hereto, the proof also demonstrates that one Marion Jones (Jones), a licensed real estate broker in the State of Florida, was also an officer of the Brokerage and duly licensed to manage its affairs during times pertinent to this proceeding.

6. Regarding Jones' involvement in the Brokerage, the proof demonstrates that in 1988, Schumacher had accepted a proposal of marriage from one Peter Widner, and contemplated moving to Wyoming, the state of Mr. Widner's residence, and selling the Brokerage. Consequently, in or about October 1988, with the mutual expectation that acceptable terms could be negotiated with Jones for the purchase of the Brokerage, Schumacher employed Jones to operate and manage the Brokerage. Incident to such employment, Jones acquired signature authority for the escrow and operating accounts of the Brokerage, and operated the Brokerage on a daily basis from November 1988 until March 13, 1989.

   
   

7. From November 1988 to mid-January 1989, Schumacher resided in Wyoming with her finance and from mid-January 1989, to March 13, 1989, following the breach of her engagement, she resided in Miami, Florida. During such periods, Schumacher occasionally visited the Brokerage, but the day-to-day responsibility for its operation was reposed in Jones.

   
   

8. On March 13, 1989, Schumacher terminated discussions with Jones concerning the proposed sale of the Brokerage, and also terminated Jones' employment as manager of the Brokerage. The predicate for such action was Schumacher's belief that Jones was diverting staff and customers of the Brokerage to her own business, and the consequent belief that Jones no longer intended to purchase the Brokerage.

   
   

9. At the time of Jones' termination, she claimed that Schumacher owed her approximately $4,000.00 for management fees, as well as $4,000.00 for the deposit she paid Schumacher toward the purchase of the Brokerage. Schumacher disputed such sums in light of the matters set forth in paragraph 8, supra.

   
   

10. Schumacher, concerned with the possibility that Jones might attempt to access the escrow account of the Brokerage to satisfy her claims against Schumacher, closed the escrow account of the Brokerage at Florida National Bank on March 13, 1989, and contemporaneously opened a new escrow account at that institution, over which she alone had signature authority. All funds that existed in the old escrow account were deposited into the new account. 1/

    
    

11. When Schumacher changed escrow accounts, a number of checks were outstanding on the old account. To address such problem, Schumacher promptly drew replacement checks on the new account, and promptly forwarded such checks to most of the affected persons. Here, there is no persuasive proof that any such person was seriously inconvenienced by the change in escrow accounts or failed to receive the monies due them. 2/

    
    

12. While all outstanding checks were replaced with reasonable promptness, the Department points to the return of three checks drawn on the old account as evidencing some impropriety. In this regard, the proof demonstrates that on March 3, 1989, Jones drew three checks on the old escrow account, two payable to Michael Gretschel (Gretschel) in the sum of $102.50 and $57.84, and one payable to Janet Lebedeker (Lebedeker) in the sum of $341.71. 3/ Lebedeker deposited her check on March 13, 1989, when she knew that escrow account had been closed, and Gretschel deposited his checks on March 15, 1989. These checks were returned by the bank because of the closure of that account. Such checks were, however, replaced with reasonable promptness and, under the circumstances of this case, no impropriety is found in Schumacher's change of escrow accounts, and the consequent return by the bank of these checks.

    The Department's attempt to audit the Brokerage accounts

    
    

13. On Friday, March 24, 1989, the Department's investigator, Sharon Thayer (Thayer) contacted Schumacher to schedule an audit of the Brokerage's escrow accounts. At that time, Schumacher agreed to make her books and records available during regular business hours on Monday, March 27, 1989.

    
    

14. Later, on March 24, 1989, Schumacher, apparently uneasy least the escrow records not be in order following Jones' departure, contacted her attorney, G. Michael Keenan (Keenan). Keenan telephoned Thayer and told her that she had no authority to inspect the subject records. In response, Thayer directed Keenan to the legal authority for such inspection, and Keenan thereupon accused her of practicing law without a license, threatened to report her to the Bar Association, told her that she had no authority to review such records on Monday, and that she could see such records "when we're ready to let you see them." 4/

    
    

15. Notwithstanding the advice given the previous Friday by Schumacher's attorney that the records would not be produced, Thayer, along with another investigator, presented herself at the Brokerage at approximately 9:00 a.m. and again at 2:30 p.m., March 27, 1989, to conduct the audit. On each occasion the office was locked, and the person in attendance denied admission.

    
    

16. On April 5, 1989, the Department, having been denied access to the records of the Brokerage, issued a Subpoena Duces Tecum to Florida National Bank to obtain copies of any trust account records that it might possess. Such subpoena was served by Thayer on April 10, 1989. 5/

    
    

17. By letter of May 8, 1989, Florida National Bank's counsel notified Thayer that it was customary to advise a customer of a request to produce bank records, and that unless she could provide the bank with legal authority to the contrary, the records could not be produced absent such notification. Apparently not receiving any authority to the contrary, Florida National Bank advised Schumacher of the pending subpoena and by letter of May 12, 1989, her counsel advised Thayer that:

    
    

    By means of this letter, please be advised that Linda B. Schumacher, Inc. and Linda B.

    Schumacher Real Estate, Inc. hereby object

    to the service of the Subpoena Duces Tecum on Florida National Bank and to the request that monthly bank statements for September, 1988 through March, 1989 on any and all trust accounts and escrow accounts in the name of Linda B. Schumacher, Inc. and/or Linda B. Schumacher Real Estate, Inc. be produced.

    Further, the undersigned on behalf of Linda

    B. Schumacher, Inc. and Linda B. Schumacher Real Estate, Inc. have advised Florida National Bank of their objection and directed Florida National Bank not to produce any said documents to the Department of Professional Regulation.

    As in the past, Linda B. Schumacher, Inc. and Linda B. Schumacher Real Estate, Inc. remain ready, willing and able to permit the Department of Professional Regulation to

    review their monthly bank statements for September, 1988 through March, 1989 for any and all trust accounts and escrow accounts upon being provided reasonable notice as to the time and date the Department wishes to make the inspection. In the event you wish

    to make the necessary arrangements to schedule an inspection, please do not hesitate to contact the undersigned immediately inasmuch as my clients remain willing to cooperate with the Department of Professional Regulation.

    
    

18. While her counsel's letter of May 12, 1989, references Schumacher's past willingness to make her records available on "reasonable notice," the proof in this case is to the contrary. Rather, the proof supports the conclusion that Schumacher wanted to delay any audit until she could have the records reviewed to insure that they were in order following Jones' departure. 6/ As to her then willingness to produce the records, the proof supports the conclusion that she was then amenable to producing her records; however, the Department delayed contacting her until after May 31, 1989, when Schumacher withdrew her objection to the subpoena served on First National Bank.

    
    

    The audit

    
    

19. The First National Bank records were delivered to Thayer on June 2, 1989. Between June 6 and 20, 1989, Thayer audited, with Schumacher's cooperation, the books and records at the Brokerage.

    
    

20. The audit of such escrow accounts identified three transactions which the Department contends were improper: a deposit of $2,000.00 made by Val Gabaldon on November 17, 1988, which the Department asserts was not timely returned; a security deposit of $1,500.00 made by Mr. and Mrs. Marvin Silverman on December 2, 1988, which the Department asserts was not timely returned; and, a withdrawal of $50.00 by Schumacher on May 5, 1989, from the escrow account for petty cash.

    
    

21. Regarding the Val Gabaldon (Gabaldon) deposit, the proof demonstrates that on November 17, 1988, Gabaldon placed in escrow with the Brokerage a

    $2,000.00 deposit toward the purchase of a unit at the Palm Beach Hotel. On January 17, 1989, and again on January 25, 1989, Lebedeker, an associate employed by the Brokerage, executed "escrow request forms" seeking the return of the deposit to Gabaldon ostensibly because the contact had been cancelled since financing had not been secured. However, such forms also reflect that on February 2, 1989, Jones, who was then managing the Brokerage, instructed that the deposit not be returned to Gabaldon.

    
    

22. At hearing, the Gabaldon purchase agreement was not offered in evidence, Gabaldon did not testify, and no explanation was offered as to why Jones felt it necessary not to disperse the deposit as requested by Lebedeker. Accordingly, there was no competent proof as to the terms of the purchase agreement, when or how it was cancelled, and when the deposit became due to be returned to Gabaldon.

    
    

23. The proof does, however, demonstrate that on March 15, 1989, two days after Schumacher regained control of the Brokerage and changed the escrow accounts, that she issued a check to Gabaldon for the return of his deposit, but because the Brokerage had the wrong address for Gabaldon he did not receive his

    deposit until April 25, 1989. Here, there was no complaint by Gabaldon that his deposit was not returned in accordance with the terms of his purchase agreement, and no impropriety shown regarding Schumacher's handling of this deposit.

    
    

24. Regarding the deposit of Mr. and Mrs. Marvin Silverman (Silverman), the proof demonstrates that on or about December 2, 1988, they placed in escrow with the Brokerage a $1,500.00 security deposit under a "memorandum to enter into a lease" of property from Martin and Linda Perlmutter (Perlmutter). That memorandum agreement provided:

    
    

    7. THIS MEMORANDUM SHALL NOT HAVE THE EFFECT OF A LEASE. THE PARTIES' RIGHTS HEREUNDER ARE CONTINGENT ON (A) FINALIZATION AND EXECUTION OF THE LEASE AGREEMENT WHICH IS CONTEMPLATED BY THIS MEMORANDUM, AND (B) IF APPLICABLE, APPROVAL BY THE CONDOMINIUM BOARD (ASSOCIATION).

    
    

    At hearing, the Department failed to offer the lease agreement ultimately executed by the parties, and consequently the terms of that agreement are not of record.

    
    

25. The proof does, however, demonstrate that on March 27, 1989, Perlmutter wrote a letter to Schumacher advising her that the Silvermans had fulfilled their lease agreement, and requesting that their security deposit of

    $1,500.00 be released to them in full. On May 11, 1989, Schumacher returned the Silvermans' deposit.

    
    

26. At hearing, no proof was offered as to when the Perlmutter letter was received by the Brokerage (it was apparently mailed from Nashville, Tennessee), or the reason for the delay, if any, in refunding the deposit. As importantly, neither the Perlmutters nor the Silvermans offered any testimony in these proceedings, and the lease agreement was not offered in evidence. Consequently, there is no competent proof that the deposit was not returned in accordance with the terms of the parties' agreement.

    
    

27. Regarding the withdrawal of $50.00 by Schumacher on May 5, 1989, from the escrow account for petty cash, the proof demonstrates that such transaction was inadvertent on her part, in that it should have been withdrawn from her operating account, and that upon such transaction being pointed out to her during the audit of June 6, 1989, by Thayer that Schumacher promptly replaced such funds.

    
    

    Previous disciplinary proceedings

    
    

28. Here, there was no suggestion or proof that Schumacher or the Brokerage had previously been the subject of any prior disciplinary proceeding.

    
    

    CONCLUSIONS OF LAW

    
    

29. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings. Sections 120.57(1) and 120.60(7), Florida Statutes.

    
    

30. At issue in these proceedings is whether respondent's conduct violated the provisions of Section 475.25(1), Florida Statutes, and, if so, what disciplinary action should be taken. In cases of this nature, the Department

    bears the burden of proving its charges by clear and convincing evidence. See Ferris v. Turlington, 510 So.2d 292 (Fla. 1987). The nature of clear and convincing evidence has been described in Slomowitz v. Walker, 429 So.2d 797, 800 (Fla. 4th DCA 1983), as follows:

    
    

    We therefore hold that clear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the testimony must be precise and explicit and the witness must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established.

    
    

    See also, Smith v. Department of Health and Rehabilitative Services, 522 So.2d 956 (Fla. 1st DCA 1988), which quotes with approval the above-quoted language from Slomowitz.

    
    

31. In establishing the foregoing standard, the court in Ferris v. Turlington, supra, noted at page 293:

    
    

    . . . the revocation of a professional license is of sufficient gravity and magnitude to warrant a standard of proof greater than a mere preponderance of the evidence . . . The correct standard for the revocation of a professional license such as that of a lawyer, real estate broker, or, as in this instance, a teacher, is that the evidence must be clear and convincing. We agree with the district court in Reid v. Florida Real Estate Commission, 188 So.2d 846, 851 (Fla. 2d DCA

    1966), that:

    The power to revoke a license should be exercised with no less careful circumspection than the original granting of it. And the penal sanctions should be directed only toward those who by their conduct have forfeited their right to the privilege, and then only upon clear and convincing proof of substantial causes justifying the forfeiture.

    
    

    And, in Brod v. Jernigan, 188 So.2d 575 (Fla. 2d DCA 1966), the court noted, at page 581:

    
    

    Chapter 475 vests in the Florida Real Estate Commission a broad discretionary power and authority to supervise the privileged business of real estate broker and to deal firmly with those engaged in it, even to the point of taking away their means of livelihood by revocation or suspension of license. But such potent administrative weapons must always be

    reasonably and cautiously, and even sparingly, utilized. The administrative process of the Commission should be aimed at the dishonest and unscrupulous operator, one who cheats, swindles, or defrauds the general public in handling real estate transactions. (Emphasis added)

    
    

32. Pertinent to this case, Section 475.25(1), Florida Statutes (1987), provides that the Florida Real Estate Commission, may:

    
    

    . . . suspend a license or permit for a period not exceeding 10 years; may revoke a license or permit; may impose an administrative fine not to exceed $1,000 for each count or separate offense; and may issue a reprimand, or any or all of the foregoing, if it finds that the licensee, permittee, or applicant:

    * * *

    (b) Has been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction in this state. . . .

    * * *

    1. Has failed to account or deliver to any person, including a licensee under this chapter, at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery, any personal property such as money, fund, deposit, check, draft . . . which has come into his hands and which is not his property or which he is not in law or equity entitled to retain under the circumstances. . . .

    2. Has violated any of the provisions of this chapter . . . or rule made under the provisions of this chapter or chapter 455.

    * * *

    (k) Has failed, if a broker, to immediately place upon receipt, any money, fund, deposit, check, or draft entrusted to him by any

    person dealing with him as a broker in escrow with a title company, banking institution, or savings and loan association located and doing business in this state, wherein the funds shall be kept until disbursement thereof is property authorized. . . .

    And, Section 475.42(1), Florida Statutes (1987), provides as follows: 7/

    
    

    1. No person shall obstruct or hinder in any manner the enforcement of this chapter or the performance of any lawful duty by any person acting under the authority of this chapter or interfere with, intimidate, or offer any bribe to any member of the commission or any of its employees or any person who, is, or is expected to be, a witness in any investigation or proceeding relating to a violation of this chapter.

       
       

33. Also pertinent to this case, Rule 21V-14.12, Florida Administrative Code, 8/ provided:

    
    

    Broker's Records. A broker who receives a deposit such as defined herein shall preserve and make available to the Department, or its authorized representative, all deposit slips and statements of account rendered by the bank or trust company, credit union, or title company with trust powers, in which said deposit is placed, together with all agreements between the parties respecting the transaction, particularly the deposit, and all contracts, agreements, instructions and directions to or with the said depository,

    and shall keep an accurate account in his books of each deposit transaction, as well as an account in his books of each separate bank account wherein such trust funds have been deposited, together with a record of all withdrawals therefrom, and shall support such accounts by such additional data as good accounting practice requires. All such books and accounts shall be subject to inspection by the Department or its authorized

    representatives at all reasonable times during regular business hours, (Emphasis added)

    
    

34. Here, as heretofore found, the proof wholly fails to demonstrate that the respondent's conduct violated any of the provisions of Section 475.25(1)(b),

    (d) or (k), Florida Statutes. At best, such proof demonstrated a technical violation of Section 475.25(1)(e), Florida Statutes.

    
    

35. With regard to the later subsection, Schumacher did fail to cooperate with the Department and produce her books and accounts with the promptness required by Rule 21V-14.12, Florida Administrative Code, and thereby technically violated Section 475.42(1)(i) and 475.25(1)(e), Florida Statutes. The delay in auditing respondent's books was not, however, shown to have adversely affected the Department in the performance of its responsibilities or the public. Moreover, no deposits were misappropriated, dissipated or lost; and no one was hurt or shown to be prejudiced by respondent's actions. 9/ In sum, while Schumacher could have handled the Department's records request in a more

    appropriate or diplomatic manner, the proof failed to demonstrate that Schumacher, or the Brokerage, are other than scrupulous and honest real estate brokers. 10/

    
    

36. In considering the appropriate penalty, if any, to be imposed upon respondents, consideration has been given to the Department's disciplinary guidelines, as well as the aggravating and mitigating circumstances, set forth in Rule 21V-24.001, Florida Administrative Code. Upon such consideration, it is concluded that the violation herein found warrants the issuance of a reprimand.

RECOMMENDATION

Based on the foregoing findings fact and conclusions of law, it is RECOMMENDED that a final order be entered finding respondents guilty of

having violated the provisions of Section 475.25(1)(e), Florida Statutes, for having failed to produce their records as required by Rule 21V-14.12, Florida Administrative Code, that respondents be reprimanded for such failure, and that all other charges be dismissed.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 9th day of September 1991.

WILLIAM J. KENDRICK

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 9th day of September 1991.

ENDNOTES

1/ The legitimacy of the dispute between Schumacher and Jones is not resolved by these proceedings. It is, however, concluded that Schumacher had a reasonable basis to believe that, as a consequence of the dispute existent between the parties, action should be taken to protect the escrow account against the possibility that those funds might be accessed by Jones.

2/ Schumacher drew the replacement checks on March 14, 1989, except the Lebedeker check, and mailed them out that day. Regarding these checks, there is no suggestion or proof that they were not negotiated in due course or that the persons failed to promptly receive the monies due them. As to the Lebedeker check, the proof demonstrated that she, a former employee of the Brokerage who was due $356.71 for out-of-pocket expenses, was advised by letter of March 29, 1989, that she could receive a replacement check upon return of the old check.

This course was at variance from the procedure Schumacher employed for all other persons due replacement checks and, more likely than not, a consequence of the animosity Schumacher may have held toward her as a result of her continuing relationship with Jones. In any event, Lebedeker ultimately received her

replacement check on July 5, 1989, and the delay she suffered in securing such replacement check, under the circumstances of this case, is of de minimis import.

3/ The replacement check delivered to Lebedeker on July 5, 1989, in the sum of

$356.71 was to replace this check (No. 642) in the sum of $341.71 and another check (No. 646) in the sum of $15.00.

4/ At hearing, Schumacher offered testimony, if credited, that the reason she contacted her attorney on March 24, 1989, concerning the subject audit was because she had suddenly remembered that she had arranged to be in Miami to assist her daughter in returning to school in Connecticut on Monday and, therefore, could not be available for the audit as scheduled. Accordingly, she says she contacted her attorney to arrange another time for the audit.

Schumacher's testimony in this regard is rejected as not credible.

While Schumacher may have made arrangements to assist her daughter in leaving Miami on Monday, March 27, 1989, the proof also demonstrates that her daughter's flight departed Miami at 9:35 a.m., March 27, 1989, and no reasonable explanation was offered as to why she would not have been available for an audit later that day. [Respondents' Exhibit 42] Further discrediting Schumacher's testimony, is the finding that no mention was made of such plans by her attorney to Thayer, and no effort was made by her or on her behalf to reschedule the audit for later in the week, or at any future date. Notably, before the Department was ultimately permitted to audit her records, Schumacher had an audit done by an independent CPA, to assure that the records were in order following Jones' departure. [Transcript page 233, Respondents' Exhibit 3]

5/ A subpoena was also served on Bankers Trust, which did produce such records without objection from Schumacher. No improprieties were alleged to have existed within the Bankers Trust accounts.

6/ The escrow records of the Brokerage, notwithstanding Schumacher's fears, were apparently in order, but for the issues raised here by the Department. There is, likewise, no suggestion or proof that any impropriety occurred to such records prior to the Department's audit, and the Department had the records from First National Bank at that time against which to measure the quality and quantity of the records produced by Schumacher.

7/ In her proposed recommended order, Schumacher contends that this provision of Section 475.42(1), Florida Statutes, may not form the basis for disciplinary action absent criminal conviction. In light of the provisions of Sections 475.42(2) and 475.25(1)(a), Florida Statutes, such argument is not persuasive.

8/ Rule 21V-14.12, Florida Administrative Code, here cited, was effective at all times pertinent to these proceedings. Currently, such provision is codified at Rule 21V-14.012(1), Florida Administrative Code. That rule (21V-14.012) was amended, effective July 19, 1989, to include subsections (2)-(4) which greatly expanded the broker's responsibilities for record keeping. Among such new provisions were subsections (2) and (3) which required a broker to prepare monthly reconciliation statements. In its proposed recommended order, the Department contends that Schumacher violated such provisions notwithstanding the fact that no facts supporting such charge were contained in the administrative complaint or developed at hearing. More importantly, at all times pertinent to these proceedings, no such responsibility was imposed on Schumacher.

9/ The only loss shown at hearing was returned check charges Lebedeker claimed she incurred for the returned escrow check she deposited on May 13, 1989. These amounts were not quantified at hearing and, moreover, were incurred as a consequence of her own action in depositing the check when she knew the account was closed.

10/ The Department also suggested in its proposed recommended order that Schumacher's objection to the subpoena served upon First National Bank was somehow improper. No authority is, however, cited for such conclusion.

Moreover, the propriety of such subpoena is subject to question. While the Department is authorized to issue subpoenas for the purpose of an investigation, it is also required to give notice of the investigation to such person, absent circumstances not present here, and inform her of the substance of the complaint. Sections 455.223 and 455.225(1), Florida Statutes (1987). No such notice was given to Schumacher in the instant case.

APPENDIX TO RECOMMENDED ORDER

The Department's proposed findings of fact are addressed as follows: 1-4. Addressed in paragraphs 1-4.

5-14. Addressed in paragraphs 13-18.

15-20 and 24. Addressed in paragraphs 19-27.

22 and 23. Addressed in paragraphs 10-12.

The Respondents' proposed findings of fact are addressed as follows:

1. Addressed in paragraphs 1-4.

2. Addressed in paragraphs 6 and 7.

3. Addressed in paragraph 28.

4-20. To the extent pertinent, addressed in paragraphs 5-12. 21-31. To the extent pertinent, addressed in paragraphs 19-26.

32-39. To the extent pertinent, addressed in paragraphs 11 and 12.

40 and 41. Addressed in paragraph 27.

42. To the extent pertinent, addressed in paragraph 8.

43-57. To the extent pertinent, addressed in paragraphs 13-19, and footnote 10.

58-60. Subordinate or not pertinent.

61. To the extent pertinent, addressed in footnote 4, and paragraphs 6, 11, and 12.

COPIES FURNISHED:

James H. Gillis, Esquire Department of Professional

Regulation Northwood Centre

1940 North Monroe Street Suite 60

Tallahassee, Florida 32399-0792

G. Michael Keenan, Esquire Suite 212

100 South Dixie Highway

West Palm Beach, Florida 33401

Jack McRay General Counsel

Department of Professional Regulation

1940 North Monroe Street Suite 60

Tallahassee, Florida 32399-0792

Darlene F. Keller Division Director Division of Real Estate

Department of Professional Regulation

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801

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.

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

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.: 0162967 0165508

DOAH CASE NO.: 90-1182

LINDA B. SCHUMACHER and LINDA B. SCHUMACHER, INC.,

Respondents.

/

FINAL ORDER

On December 3, 1991, the Florida Real Estate Commission heard this case to issue a Final Order.

Hearing Officer William J. Kendrick of the Division of Administrative Hearings presided over a formal hearing on April 19, 1991. On September 9, 1991, he issued a Recommended Order, a copy of which is attached here to as Exhibit A and made a part hereof.

The Petitioner and Respondents both filed Exceptions to the Hearing Officer's Recommended Order. Copies of these Exceptions are attached hereto as Exhibits B and C, respectively, and made a part hereof.

After hearing argument of counsels, and upon a complete review of the record, the Commission rejects the Respondents' Exceptions as a reiteration of the matters considered and ruled on by the Hearing Officer.

The Commission specifically rejects the Hearing Officer's Finding of Fact No. 27, and the Conclusion of Law No. 7, which characterize the violation of ss.475.42(1)(i) and 475.25(1)(e), Florida Statutes, as a "technical violation"; and the Commission adopts the Petitioner's Exceptions to the Hearing Officer's remaining Findings of Fact and Conclusions of Law.

After a complete review of the record, and citing to the reasons established in the Petitioner's Exceptions, the Commission finds the Respondents guilty of violating ss.475.25(1)(b), (k) and (e) and 475.42(1)(i), as charged in the Administrative Complaint.

Accordingly, the Commission increases the Recommended Penalty and ORDERS that the Respondents be reprimanded and pay an administrative fine of $500. The Commission further ORDERS that Respondent Linda B. Schumacher be placed on probation for one (1) year, subject to the following terms and conditions:

1. The licensee shall notify the Division of Real Estate of any changes in address of employment.

   
   

2. The licensee shall not violate any provisions of Chapter 475, Florida Statutes, or Rules adopted by the Commission.

   
   

3. The licensee shall not be convicted or found guilty of a crime in any jurisdiction.

   
   

4. The licensee shall enroll in and satisfactorily complete a 30-hour broker management course.

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 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 3rd day of December 1991 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: G. Michael Keenan, Esq., Suite 212, 100 South Dixie Highway, West Palm Beach, FL 33401; to Hearing Officer William J. Kendrick, Division of Administrative Hearings, 1230 Apalachee Parkway, Tallahassee, FL 32399-1550; and to James Gillis, Esq., DPR, P.O. Box 1900, Orlando, FL 32802, this 13th day of December 1991.

Director

Docket for Case No: 90-001182

Orders for Case No: 90-001182