STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 90-3805

)

MICHAEL A. LIPPIS, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the above-styled matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Daniel M. Kilbride, on February 14, 1991, in Tampa, Florida. The following appearances were entered:

APPEARANCES

For Petitioner: Steven W. Johnson, Esquire

Senior Attorney

Department of Professional Regulation

Division of Real Estate

400 West Robinson Street Orlando, Florida

For Respondent: Michael A. Lippis (pro se)

4904 Eisenhower Boulevard,

Apartment No. 350 Tampa, Florida

STATEMENT OF THE ISSUES

Whether the Respondent's real estate license in Florida should be disciplined because the Respondent committed fraud, misrepresentation, dishonest dealing by trick, scheme or device, culpable negligence or breach of trust in a business transaction in violation of Subsection 475.25(1)(b), Florida Statutes.

PRELIMINARY STATEMENT

By a two count Administrative Complaint filed on May 17, 1990, the Petitioner alleges that the Respondent has violated Subsection 475.25(1)(b), Florida Statutes. The Respondent disputed the charges and requested a hearing. This matter was referred to the Division of Administrative Hearings, and was set for hearing. At the formal hearing held on October 17, 1990, in Tampa, Florida, the Respondent was represented by Lawrence H. Luppen, Jr., Esquire. The Department orally stipulated to amend the Administrative Complaint by dismissing

Count II of the Complaint. The parties consented to the continuance of the formal hearing. On January 7, 1991, Respondent, through counsel, filed a Motion to Dismiss which, after response by Petitioner, was denied. This matter was transferred to the undersigned for hearing. At the hearing, counsel for the Respondent did not appear. Both parties indicated that all witnesses were present and ready to proceed. Respondent waived the presence of his attorney.

Respondent fully participated in the proceedings and cross examined witnesses. Petitioner presented the testimony of six witnesses: John Gieder, Kathy Gieder, Pat Gieder, William Shroeder, A.E. Shevy, and Ken Hissong. Four exhibits were admitted in evidence. The Respondent offered one exhibit in evidence and did not testify. Petitioner submitted its proposed findings of fact and conclusions of law on February 26, 1991. Respondent did not submit proposals. The proposals submitted by the Petitioner have been given careful consideration and adopted when supported by the evidence. My specific rulings are contained in the Appendix attached hereto.

Based upon all of the evidence, the following findings of fact are determined:

FINDINGS OF FACT

1. Petitioner is a state 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, Michael A. Lippis, is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0502783 in accordance with Chapter 475, Florida Statutes. The last license issued was as a broker at 4904 Eisenhower Boulevard #350, Tampa, Florida.

   
   

3. In August 1989, John Steven Gieder and Kathryn Marie Gieder made an offer to purchase a house from the United States Department of Housing and Urban Development (HUD). The Gieders entrusted a $2,000 earnest money deposit to the selling broker, Realty Shop. Respondent who was neither an agent nor subagent for the seller or the purchasers in the transaction accepted the offer on August 17, 1989.

   
   

4. Subsequent to August 17, 1989, Respondent in bad faith and not as a party to the transaction began calling the purchasers and their relatives telling the they were paying too much money for the property, were mislead by their broker and that the property was bad and so was the neighborhood.

   
   

5. Around August 21, 1989, Respondent in bad faith sent unsolicited information to the purchasers.

   
   

6. Respondent even telephoned the purchasers' mother, Pat Gieder, and questioned her about her son's pending purchase from HUD. Respondent told Mrs. Gieder that the property was priced too high and tried to persuade Mrs. Gieder to keep her son from purchasing the property. Respondent also told Mrs. Gieder that he was "sick and tired of losing commissions" to other brokers who out bid him.

   
   

7. The transaction closed on August 31, 1989. Respondent did not participate.

8. Respondent had been actively certified as a HUD broker. During this same period, Respondent contacted more than one buyer and attempted to interfere in sales.

   
   

9. Respondent stated to a HUD official that he would continue to interfere in HUD transactions even though he was employed as one of HUD's agents, if he thought the contracts were being presented at too high a price.

   
   

10. The loyalty of a HUD broker to his employer is the same fiduciary duty a broker owes to any seller who employs him.

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding, and the parties thereto, pursuant to subsection 120.57(1), Florida Statutes.

    
    

12. The parties were duly noticed pursuant to the notice provisions of Chapter 120, Florida Statutes (1989).

    
    

13. The Petitioner is responsible for the disciplining of licenses of real estate brokers. Section 475.25, Florida Statutes (1989).

    
    

14. Subsection 475.25, Florida Statutes (1989), provides that the Florida Real Estate Commission may suspend a license for a period of not exceeding five

    (5) years; revoke a real estate license; may impose an administrative fine not to exceed $1000 for each count or separate offense; and may impose a reprimand or, any or all of the foregoing, if it finds that a licensee has violated, inter alia, Subsection 475.25(1)(b), Florida Statutes.

    
    

15. Subsection 475.25(1)(b), Florida Statutes (1989), proscribes fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence or breach of trust in a business transaction.

    
    

16. The burden of proof is on the Petitioner as to each count of the Administrative Complaint. Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (Fla. 1st DCA 1977). Revocation of license proceedings are penal in nature, State ex rel. Vining v. Florida Real Estate Commission, 281 So.2d 487 (Fla. 1973), and Petitioner has to prove by clear and convincing evidence the violations alleged in the Administrative Complaint. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

17. As a real estate licensee in Florida, the Respondent occupies a status under law with recognized privileges and responsibilities. Zichlin v. Dill, 25 So.2d 4 (Fla. 1946); United Homes, Inc. v. Moss, 154 So.2d 351 (Fla. 2nd DCA 1963). Inasmuch as a real estate licensee in Florida belongs to a privileged class, the state has prescribed a high standard of qualifications. Zichlin, supra. "The law specifically requires that a person, in order to hold a real estate license, must make it appear that he is honest, truthful, trustworthy, of good character and that he bears a good reputation for fair dealing." McKnight

    v. Florida Real Estate Commission, 202 So.2d 199 (Fla. 2nd DCA 1967). Anyone who deals with a licensee may assume he is dealing with an honest and ethical person. Shelton v. Florida Real Estate Commission, 120 So.2d 191 (Fla. 2nd DCA 1960).

18. Respondent has ignored the basic principles of agency law in his dealings with HUD. In the real estate industry, the agent must agree to honestly represent the interests of the principal in designated affairs, such as buying or selling real estate or managing property. The essential element is that the principal specifically authorizes the agent to act on his behalf in dealings with other parties. If the agent consents or agrees to accept the authority to act for or represent the principal, then an agency relationship is established. HUD and Respondent were in such a position.

    
    

19. The broker, as an agent, owes to the principal certain duties that are clear and specific and required of brokers in all states. These duties are not mandated by moral or ethical concerns alone, but by the common law of agency. The broker owes the principal the duties of care, obedience, loyalty, and accounting, as well as the duty of notice. Failure to perform these faithfully amounts to fraudulent or dishonest dealings punishable by license suspension, criminal prosecution, or both.

    
    

20. In all business activities, the broker as agent must act for the principal with extreme care. A broker is employed to do more than just locate a property or find a ready, willing, and able buyer, and the broker's obligation to the client extends far beyond these tasks. As professionals, brokers must maintain a standard of care that requires, among other things, they understand matters concerning the land, title, and physical characteristics of the property they have listed. A broker at all times is required to act in good faith and according to the principal's lawful instructions.

    
    

21. Petitioner's proof is both clear and convincing and is sufficient to justify the imposition of a penalty within the range of those provided for in the above-cited statutory authority. Here Respondent's negligent, dishonest and obnoxious behavior goes to the central theme of professional licensure in the State of Florida. Respondent has clearly failed to live up to the standards expected and required of a licensed real estate broker as stated above.

    
    

22. In Hershey v. Keyes Company, 209 So.2d 240 (Fla. 1986), the Florida Supreme Court has stated that "the real estate business is not . . . a means for designing persons to short circuit those who deal squarely and in good faith.

    It is a highly respectable business or profession . . .".

    
    

23. The character of Respondent as revealed by the testimony of witnesses reflects a reckless disregard of principles of good faith, and practices indicate serious deviations from professional standards.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is recommended that the Respondent be found guilty of having violated subsection 475.25(1)(b), Florida Statutes (1989), as charged in the Administrative Complaint, that Respondent's real estate license be suspended for a period of one (1) year, that the Commission require Respondent to pay a fine of $500 and complete a course in ethics in real estate.

RECOMMENDED this 27th day of March, 1991, in Tallahassee, Leon County, Florida.

DANIEL M. KILBRIDE

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 27th day of March, 1991.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-3805

The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties.

Petitioner's proposed findings of fact:

Accepted in substance: paragraphs 1,2,3,4,5,6,7 (in part),8,9

Rejected as against the greater weight of evidence: paragraph 7 (in part) Respondent did not submit proposed findings of fact.

COPIES FURNISHED:

Steven W. Johnson, Esquire Senior Attorney

Department of Professional Regulation

Division of Real Estate

400 West Robinson Street Orlando, FL 32801

Michael A. Lippis

4904 Eisenhower Boulevard,

Apartment No. 350

Tampa, FL 32806

Lawrence H. Luppens, Jr., Esquire

100 Twiggs Street Tampa, FL 33602

Darlene F. Keller Division Director Division of Real Estate

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

Jack McRay, Esquire General Counsel

Department of Professional Regulation

Northwood Centre

1940 North Monroe Street Suite 60

Tallahassee, FL 32399-0750

Docket for Case No: 90-003805

Orders for Case No: 90-003805