STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 91-1714

)

DONALD L. KATZ, )

)

Respondent. )

)

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 February 18, 1992, in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: James H. Gillis, Esquire

Senior Attorney

Department of Professional Regulation

Division of Real Estate Hurston Building North Tower

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801-1772

For Respondent: Donald L. Katz, pro se

2518 Van Buren Street Hollywood, Florida 33020

STATEMENT OF THE ISSUES

At issue in this proceeding is whether respondent committed the offenses alleged in the administrative complaint and, if so, what disciplinary action should be taken.

PRELIMINARY STATEMENT

By administrative complaint dated February 20, 1991, petitioner charged that respondent, a licensed real estate broker in the State of Florida, was guilty of culpable negligence or breach of trust in a business transaction in violation of Sections 475.25(1)(b), Florida Statutes. Such charge is premised on petitioner's contention that respondent was negligent in rendering an appraisal to the Veterans Administration because he appraised the wrong piece of property.

At hearing, petitioner called the respondent as a witness, and its exhibits 1-5 were received into evidence. Respondent testified on his own behalf, and called Leonard Steinberg as a witness. Respondent's exhibits 1-3 were received into evidence.

The transcript of hearing was filed March 23, 1992, and the parties were granted leave until April 2, 1992, to file proposed findings of fact.

Respondent elected to file such proposals and they have been addressed in the appendix to this recommended order.

FINDINGS OF FACT

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, Donald L. Katz, is now and was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0111863. The last license issued was as a broker, c/o KLF, Inc., 7991C Johnson Street, Hollywood, Florida 33024.

   
   

3. At all times pertinent to this proceeding, respondent was a member of the Veteran Administration (VA) Fee Panel, and appraised properties for the VA in Broward, Dade and the upper half of Monroe Counties.

   
   

4. On or about October 2, 1989, Unified Mortgage Company, which apparently held a mortgage guaranteed by the VA on the property and was in the process of foreclosure, requested that respondent do an "as is" appraisal of the residential property located at 11950 SW 176th Street, South Miami, Dade County, Florida. Consequently, respondent undertook to appraise the property as requested, and thereafter submitted an appraisal report to the VA which identified the property that was appraised as being located at 11950 SW 176th Street, South Miami, Florida, and estimated its market value at $32,900.00. Unfortunately, respondent had erroneously identified the residential property located at 11940 SW 176th Street, which lay immediately next door to the subject property, as the property to be appraised and, consequently, his appraisal was not of the correct property. Such error was, however, promptly caught by the VA, and there was no apparent damage to anyone as a result of respondent's error.

   
   

5. Regarding the origin of such error, the proof at hearing demonstrated that the two residential properties, which lay next to each other, were quite similar, although not identical, and that their improvements were in similar states of disrepair. Each property was abandoned, both were boarded up, their lots were extremely overgrown, and neither had any identifying sign or number. As a consequence of such difficulties, although exercising his best judgment, respondent erred in his identification of the correct property. Such error was not, however, shown to have resulted from any act or failure on his part that a reasonable appraiser under similar circumstances would have done differently.

   To the contrary, petitioner offered no proof as to what, if anything, respondent could or should have done, that he did not do, to correctly identify the property.

   CONCLUSIONS OF LAW

   
   

6. 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.

   
   

7. At issue in these proceedings is whether respondent's conduct violated the provisions of Section 475.25(1)(b), 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.

   
   

8. 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 circum- spection 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 liveli- hood 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)

9 . Pertinent to this case, Section 475.25(1), Florida Statutes (1989), provides that the Florida Real Estate Commission, may:

place a licensee . . . on probation;

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

(b) Has been guilty of . . . culpable negli- gence, or breach of trust in any business transaction in this state . .

Here, petitioner charges that respondent's failure to appraise the correct property constitutes culpable negligence in a business transaction.

1. Culpable negligence, as that term is used, evidences more than a failure to exercise ordinary care. Rather, culpable negligence evidences a:

   
   

   reckless disregard of human life, or of the safety of persons exposed to its

   dangerous effects, or there is that entire want of care which would raise the presumption of a conscious indifference to consequences, or which shows wantonness or recklessness, or a grossly careless disregard of the safety and welfare of the public, or that reckless indifference to the rights of others which is equivalent to an intentional violation of them.

   
   

   Cannon v. State, 107 So.360, 363 (Fla. 1926). See also, Carraway v. Revell,

   116 So.2d 16 (Fla. 1959), and 38 Fla.Jur.2d, Negligence, Section 3. 1/

   
   

2. Here, if anything, the conduct shown by the record reflects no more than an error of judgment, which falls far short of the degree of culpable and

wanton misconduct which must be shown to sustain the charge at issue in this proceeding.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be rendered which dismisses the

administrative complaint.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 8th day of May 1992.

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 8th day of May 1992.

ENDNOTES

1/ In its proposed recommended order petitioner equates culpable negligence with ordinary negligence. Such is a mischaracterization of the law. The distinction between the two is profound; a distinction that was not lost on the respondent in this case. [Transcript pp 26-27]

APPENDIX

The Department's proposed findings of fact are addressed as follows:

1. Adopted in paragraph 1.

2. Adopted in paragraph 2.

3. Adopted in paragraph 3.

4 & 5. Adopted in paragraph 4.

6. First two sentences addressed in paragraph 4 to the extent pertinent. Otherwise, rejected as unnecessary detail. The third sentence, which quotes from a report by Jay C. Biggs, Jr., is a correct representation of the contents of the report but is hearsay and, in large measure, contrary to the competent proof. The last sentence is rejected as not relevant. [See Transcript page 10]8(sic). Addressed in paragraph 5.

COPIES FURNISHED:

James H. Gillis, Esquire Senior Attorney

Department of Professional

Regulation

Division of Real Estate Post Office Box 1900 Orlando, Florida 32801-1772

Donald L. Katz, pro se 2518 Van Buren Street Hollywood, Florida 33020

Darlene F. Keller Division Director Division of Real Estate

Department of Professional Regulation

Post Office Box 1900 Orlando, Florida 32801

Jack McRay 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 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: 91-001714

Orders for Case No: 91-001714