STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, )

)

Petitioner, )

)

vs. ) CASE NO. 90-4588

)

PETER H. BOS, JR., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this matter came on for hearing in Pensacola, Florida, before the Division of Administrative Hearings, by its duly-designated Hearing Officer, Diane Cleavinger, on November 8, 1990.

APPEARANCES

FOR PETITIONER: Janine B. Myrick, Esquire

Department of Professional Regulation

Division of Real Estate

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

FOR RESPONDENT: E.C. Deeno Kitchen, Esquire

Post Office Box 1854 Tallahassee, Florida 32302-1854

STATEMENT OF THE ISSUE

Whether the Respondent's real estate broker's license should be suspended, revoked, or otherwise disciplined based upon alleged violations of Chapter 475, Florida Statutes.

PRELIMINARY STATEMENT

On June 21, 1990, the Petitioner filed an Administrative Complaint against the Respondent, Peter H. Bos, Jr., alleging several violations of Chapter 475, Florida Statutes. Specifically, the Administrative Complaint alleged that Respondent's real estate brokerage license should be disciplined for (1) violating Subsection 475.25(1)(b), Florida Statutes, by acts constituting fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence or breach of trust, scheme, or device, culpable negligence or breach of trust in a business transaction; (2) violating Subsection 475.25(1)(d), Florida Statutes, by failing to account or deliver trust funds; and (3) violating Subsection 475.25(1)(k), Florida Statutes, by failing to maintain trust funds in the real estate

brokerage escrow bank account or some other proper depository until disbursement thereof was properly authorized. The Respondent contested the allegations contained in the Administrative Complaint and requested a formal administrative hearing.

At the hearing, the Petitioner presented the testimony of two witnesses and offered three exhibits into evidence. The Respondent testified in his own behalf and presented the testimony of two witnesses. Additionally, Respondent offered two exhibits into evidence.

Petitioner and Respondent filed Proposed Recommended Orders on December 31, 1990, and December 17, 1990, respectively. The parties' proposed findings of fact have been considered and utilized in the preparation of this Recommended Order, except where such proposals were not supported by the evidence or were immaterial, cumulative or subordinate. Specific rulings on the parties' proposed findings of fact are contained in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. The Respondent, Peter H. Bos, Jr., is a licensed real estate broker in the State of Florida, holding License Nos. BK 0225668 and 0189099. He is the registered broker for Bos Realty Company, Inc., and Sandestin Realty, Inc. Bos Realty, Inc., and Sandestin Realty, Inc., are registered real estate brokerage companies. The Respondent is also the Chairman of the Board and Vice President of Sandestin Corporation, Inc. ("Sandestin") . Sandestin is not a real estate brokerage company and does not engage in any real estate business regulated under Chapter 475, Florida Statutes. Sandestin is a licensed hotelier.

   
   

2. In 1987, Sandestin ceased acting as the management company of Sandestin Resort. Sandestin Corporation instead became a company which operated a hotel. In order to obtain rooms for its hotel operation, the corporation entered into leases with various local condominium owners, including Sandestin Resort unit owners. These leases were entered into under a landlord and tenant contract and not a management contract. The landlord and tenant contract did not establish any fiduciary relationship between Sandestin Corporation, Respondent, or the landlord/unit owner. Similarly, the landlord and tenant agreement did not establish any escrow relationship between Sandestin Corporation, Respondent, or the landlord/unit owner.

   
   

3. During this time, the leasehold agreement did contain two typographical errors. One error, committed by the law firm who drafted the agreement, placed Sandestin Realty's name over the signature block at the end of the contract.

   The other error was contained in an exhibit to the contract and listed Sandestin Realty in its title. All of the typographical errors were discovered and corrected by 1988. None of the errors materially effected the understanding of the parties as to who those parties were or the relationship they had. In reality none of the parties involved in the contracts containing the typographical errors noticed either fallacy.

   
   

4. Around May 22, 1987, Margaret Irwin purchased a unit from Sandestin Realty Company, Inc. She signed a landlord and tenant agreement dated March 25, 1987, between herself, as landlord, and Sandestin Corporation, Inc., as tenant. Although Ms. Irwin was somewhat confused about the exact relationship between the parties, the contract she signed was plain on its face and unambiguous in its language that the agreement she was entering into was a leasehold agreement with her as a landlord and Sandestin Corporation as a tenant. Ms. Irwin's

   confusion appeared to result from assumptions that emanated from her own mind. The evidence did not establish that any representation was made either on behalf of or by Respondent that the lease agreement was other than what it purported to be. Moreover, the evidence did not establish that Ms. Irwin's confusion was caused by any actions of Respondent or any of the typographical errors which were in the agreement at the time Ms. Irwin signed it.

   
   

5. Up until 1989, Ms. Irwin received all of the lease payments she was entitled to receive under the lease agreement. In 1989, Sandestin Corporation experienced financial difficulties. Beginning in August 1989, Sandestin Corporation, on the advice of its attorneys, did not make the agreed upon lease payments to Ms. Irwin as well as other unit owners from which it had leased units. All of the unit owners's including Ms. Irwin, were made aware of Sandestin Corporation's financial difficulties in a letter dated October, 1989.

   
   

6. Ms. Irwin elected to terminate her lease agreement with Sandestin Corporation and demanded the back rant which was owed to her. The back rent remains unpaid to this date.

   
   

7. In late 1989, Sandestin Corporation filed for a Chapter 11 bankruptcy. That bankruptcy is ongoing today. The unit owners who elected to continue leasing their units to Sandestin Corporation have begun to receive incremental payments on the back rent owned to them by a special order of the bankruptcy court. Importantly, all of the unit owners, including Ms. Irwin, were treated as landlord/creditors of Sandestin Corporation. The money owed to these unit owners has been treated as property of Sandestin Corporation and therefore part of the bankrupt's estate. The money was not treated as property being held by Sandestin Corporation on behalf of and as fiduciary for these various unit owners.

   
   

8. There was absolutely no clear and convincing evidence presented of any fraud, misrepresentation, scheme, trick, or device, or breach of trust on the part of Respondent. The language of the lease agreement is plain on its face and clearly establishes a landlord and tenant contract. The agreement did not establish any fiduciary or escrow relationship. Additionally, Respondent's duties in relation to Sandestin Corporation were not those which involved any real estate duties regulated by Chapter 475, Florida Statutes. Therefore, Respondent is not guilty of violating any of the provisions of 475.25(1)(b), (d), or (k), Florida Statutes.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Sections 120.57 and 120.60, Florida Statutes.

   
   

10. Section 475.25, Florida Statutes, empowers the Florida Real Estate Commission to revoke, suspend, or otherwise discipline the real estate licenses of the Respondents if Respondents are found guilty of any of the acts enumerated in Section 475.25, Florida Statutes. Section 475.25(1), Florida Statutes, provides as follows in pertinent part:

    
    

    1. The Commission may ... suspend a license or permit for a period not exceeding ten

       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 the licensee, permittee, or applicant....

       (b) Has been guilty of ... false promises,

       ... culpable negligence, or breach of trust in any business transaction ... has violated a duty imposed upon him by law or the terms of the listing contract, written, oral, express, or implied, in a real estate transaction.

       (d) Has failed to account or deliver to any person ... at the time which has been agreed upon ... or ... upon demand of the person entitled to such accounting and delivery, any personal property such as money, fund, deposit, check, ... which has come into his hands and which is not his properly or which he is not in law or equity entitled to retain under the circumstances.

       (k) Has failed, if a broker, to immediately replace, upon receipt, any money, fund, deposit, or draft entrusted to him by any person dealing with him as a broker in escrow with a . . banking institute ... or to deposit such funds in a trust or escrow account maintained by him with some bank ...

       wherein the funds shall be kept until disbursement thereof is properly authorized.

       
       

11. Petitioner has the burden of proving by clear and convincing evidence that Respondent is guilty of violating Chapter 475, Florida Statutes. Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (Fla. 1.3t DCA 1977); and State ex rel Vining v. Florida Real Estate Commission, 281 So.2d 487 (Fla. 1973). In this case, the first thing the Petitioner must establish is that Respondent's conduct falls into an area regulated by Petitioner. That area is the practice of real estate. Petitioner is not authorized to regulate any other legal business activity engaged in by a licensee and the licensee is free and has the constitutional right to enter into any type of lawful contract which the licensee may desire. The evidence was clear that Respondent was not engaged in the practice of real estate in regards to his duties with Sandestin Corporation. The evidence was also clear that the relationship established by the leasehold agreement was one of landlord and tenant. There was no fiduciary or escrow arrangement established by that leasehold agreement. Since Chapter 475, Florida Statutes, does not apply to the business transaction between Ms. Irwin and Respondent, there can be no violation of Chapter 475, Florida Statutes, for which respondent can be held accountable.

RECOMMENDATION

Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, the pleadings and argument of the parties, it is therefore,

RECOMMENDED that the Board enter a Final Order dismissing the Administrative Complaint against Respondent.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 30th day of January 1991.

DIANE CLEAVINGER

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 30th day of January 1991.

APPENDIX

1. The facts contained in paragraphs 2, 3, 4, 5, 6, 12, 13, 14, 15, 24, 26, 26, and 30, of Petitioner's Proposed Findings of Fact are adopted.

   
   

2. The facts contained in paragraphs 1, 7, 8, 9, 10, 11, 18, 20, 21, 22, 31, 32, 33, 34, and 35 of Petitioner's Proposed Findings of Fact are subordinate.

   
   

3. The facts contained in paragraphs 16, 17, 19, and 28, of Petitioner's Proposed Findings of Fact are immaterial.

   
   

4. The facts contained in paragraphs 23, 25, 29, and 36 of Petitioner's Proposed Findings of Fact were not shown by the evidence.

   
   

5. The facts in paragraphs 1, 2, 3, and 4 of Respondent's Proposed Findings of Fact are adopted.

COPIES FURNISHED:

Janine B. Myrick, Esquire Department of Professional

Regulation

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

E.C. Kitchen, Esquire Post Office Box 1854

Tallahassee, Florida 32302-1854

Darlene F. Keller Division Director Division of Real Estate

Department of Professional Regulation

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

Kenneth E. Easley General Counsel

Department of Professional Regulation

1940 North Monroe Street Suite 60

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 lease 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: 90-004588

Orders for Case No: 90-004588