STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 90-2409

)

RICHARD F. GALLO, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter was heard by William R. Dorsey, Jr., the Hearing Officer designated by the Division of Administrative Hearings, by telephone conference call on January 4, 1991, from Tallahassee, Florida.

APPEARANCES

For Petitioner: James H. Gillis, Esquire

Department of Professional Regulation

Post Office Box 1900 Orlando, Florida 32802

For Respondent: No Appearance

STATEMENT OF THE ISSUE

The issue to be resolved is whether the Respondent's license as a real estate broker should be disciplined because he violated a lawful order of the Florida Real Estate Commission and because he failed to timely account for and deliver an escrowed real estate deposit.

PRELIMINARY STATEMENT

The formal hearing was conducted by telephone conference call due to a well founded belief by the hearing officer that the Respondent would not appear at a formal hearing. A formal hearing had been previously noticed for November 16, 1990 by Notice of Hearing entered October 22, 1990. No direct contact was had with the Respondent, but someone contacted the Hearing Officer on his behalf, who stated that Respondent would not attend the November 16, 1990 final hearing. That hearing was cancelled. The Respondent had notice of the arrangements for the January 4, 1991, hearing made according to the Order To Show Cause and Notice of Telephone Hearing issued November 21, 1990. That order was not returned by the U.S. Postal Service for any reason. Respondent knowingly chose not to avail himself of the opportunity to either object to the telephone conference formal hearing, in which case an ordinary final hearing would have been reset, or to make himself available for the telephone conference formal

hearing. In essence, after the Administrative Complaint was filed, the Respondent wrote one letter to counsel for the Commission stating his position, and then ignored this matter.

At hearing, the Petitioner offered the following documents which were received in evidence: a certified copy of Respondent's licensure file - (Petitioner's Exhibit 1); a letter dated July 5, 1990, from Respondent to counsel for the Petitioner - (Petitioner's Exhibit 2); a copy of a letter dated January 8, 1990, from Investigator Terry Giles to Respondent - (Petitioner's Exhibit 3); a copy of Investigator Terry Giles, January 22, 1990 Affidavit of Diligent Search to Locate Subject of Complaint - (Petitioner's Exhibit 4); a copy of Respondent's letter dated May 4, 1990, to counsel for Petitioner - (Petitioner's Exhibit 5); a copy of an Affidavit of Eugene McCrory dated April 13, 1990 - (Petitioner's Exhibit 6); a composite copy of the front and back of Respondent's Escrow Check No. 201, dated April 20, 1989, in the amount of $300 made payable to the order of Eugene McCrory - (Petitioner's Exhibit 7); and a copy of a Escrow Disbursement Order filed March 20, 1989 - (Petitioner's Exhibit 8).

Subsection 20.30, and Chapters 120, 455 and 475, Florida Statutes, were officially recognized pursuant to Rule 22I-6.020, Florida Administrative Code.

The parties were given until January 14, 1991, to submit proposed findings of fact, proposed conclusions of law, and a proposed disposition of this matter.

FINDINGS OF FACT

1. Petitioner is a state government licensing and regulatory agency charged with the responsibility to prosecute Administrative Complaints pursuant to Section 20.30, Florida Statutes, Chapters 120, 455 and 475, Florida Statutes, and the rules promulgated pursuant to those statutes.

   
   

2. Respondent Richard F. Gallo was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0029993 in accordance with Chapter 475, Florida Statutes.

   
   

3. The last license issued the Respondent, as of November 7, 1990, was as a broker-salesman % Bucek & Bucek, Inc., in Port St. Lucie, Florida, with a home address of 2664 West End Road, West Palm Beach, Florida 33406. That is the same address Respondent placed on the request for hearing he filed in this case.

   
   

4. On or about March 20, 1989, an Escrow Disbursement Order was issued by the Florida Real Estate Commission and received by the Respondent whereby the Respondent, as a broker, was ordered to disburse a $300 earnest money deposit to the buyers, Eugene and Dorothy McCrory, as a refund in accordance with the terms of a sales contract.

   
   

5. The escrow funds were to be disbursed to the buyers in accord with the terms of their offer.

   
   

6. As of March 22, 1990, the Respondent and not disbursed the $300 earnest money deposit to the buyer, Eugene McCrory. On April 11, 1990, almost one year after the filing of the Administrative Complaint, a stale-dated check for $300 was delivered to Eugene McCrory.

7. From January 3, 1990 through January 22, 1990, Petitioner's Investigator Terry Giles made a diligent effort to locate the Respondent at his business address and listed home address, but could not contact him at either place.

   
   

8. Investigator Giles has been unable to locate and interview the

   R Respondent and no response from the Respondent was made to Investigator Giles. The only statement received from Mr. Gallo was the letter addressed to counsel for the Commission in this case on July 9, 1990. (Exhibit 2) No proof of the contentions made in that letter was offered at the final hearing. The contentions are rejected as unsupported.

   
   

9. The Respondent was aware that a Division of Administrative Hearing's case number had been assigned and therefore that the proceeding were forthcoming. (See, Exhibit 2.)

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over this matter. Section 120.57(1), Florida Statutes.

    
    

11. The Florida Real Estate Commission may discipline a license for violation of Chapter 475, Florida Statutes. Subsections 475.25(1)(d), and (e), Florida Statutes (1987) read, in pertinent part:

    
    

    1. The commission may ... suspend a license, certification, registration, or permit for a period not exceeding 10 years; may revoke a license, certification, registration, or permit; may impose an administrative fine not exceed

       $1,000 for each count or separate offense... if it finds that the licensee ... :

       * * *

       1. Has failed to account or deliver to any person... 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... 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 any lawful order or rule made or issued under the provisions of this chapter or chapter 455. ...

       
       

12. Applicable disciplinary guidelines of the Florida Real Estate Commission are found in Rule 21V-24.001(3)(e), and (f), Florida Administrative Code. They provide that the Respondent may be fined up to $1,000.00 per count and may have his licenses, registrations, certifications and permits suspended for a period of years or revoked in accord with the following schedule:

    
    

    1. 475.25(1)(d), Florida Statutes - Up to 5 years suspension

    2. 475.25(1)(e), Florida Statutes - Up to 8 years suspension or revocation.

13. The Escrow Disbursement Order, done and ordered the 20th day of March, 1989, is a lawful order of the Florida Real Estate Commission. Compliance with that order would have furnished partial financial reimbursement protection for the Respondent up to $25,000 from the Real Estate Recovery Fund, not including attorney fees and court costs, in according with Subsection 475.482(2), Florida Statutes.

    
    

14. The evidence has shown that Respondent's violations are not merely technical in nature, but rather go to some of the very basic responsibilities of licensed real estate brokers in Florida in dealing with moneys deposited in escrow accounts. Violation of trust, in retaining the deposit, the Respondent's knowing failure to abide by the requirements of an Escrow Disbursement Order issued by the Florida Real Estate Commission, and his failure to timely account for and deliver escrow funds, should result in a signficant penalty. While the guidelines set a maximum penalty, they do not prescribe a minimum or floor. Given the relatively small amount at issue here, a penalty at the top of the range would be too severe. A substantial fine and period of suspension is called for. The Respondent's failures show an utter disregard by the Respondent for the lawful responsibilities of a licensed real estate professional.

    
    

15. The Petitioner has shown by clear and convincing evidence of record that the Respondent has violated Subsections 475.25(1)(d) and (e), Florida Statutes (1987), as charged in the two (2) numbered counts of the Administrative Complaint.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered by the Florida Real Estate Commission finding the Respondent:

guilty of failing to account for or deliver money 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, as prohibited by Subsection 475.25(1)(d),

Florida Statutes, as charged in Count I of the Administrative Complaint; and

guilty of having violated the provisions of a lawful escrow disbursement order as prohibited by Subsection 475.25(1)(e), Florida Statutes, as charged in Count II of the Administrative Complaint.

It is further recommended that the Final Order suspend all real estate certifications, licenses, permits and registrations of the Respondent as to Counts II of the Administrative Complaint, for a period of 2 years and that he be fined $1,000 and that such real estate certifications, licenses, permits and registrations of the Respondent also be suspended concurrently for a period of one (1) year as to Count I of the Administrative Complaint, and that he be fined an additional $1,000 for a total fine of $2,000.

RECOMMENDED this 15th day of January, 1991, at Tallahassee, Florida.

WILLIAM R. DORSEY, JR.

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 15th day of January, 1991.

COPIES FURNISHED:

James H. Gillis, Esquire

Department of Professional Regulation Post Office Box 1900

Orlando, Florida 32802-1900

Richard F. Gallo 2664 West End Road

West Palm Beach, Florida 33406

Darlene F. Keller, Director Department of Professional Regulation Post Office Box 1900

Orlando, Florida 32802-1900

Kenneth E. Easley, General Counsel Department of Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

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: 90-002409

Orders for Case No: 90-002409