STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 91-2967

)

RONALD R. WARREN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to written notice, a formal hearing was held in this case before Daniel Manry, a duly designated Hearing Officer of the Division of Administrative Hearings, on April 15, 1992, in West Palm Beach, Florida.

APPEARANCES

For Petitioner: Theodore R. Gay, Senior Attorney

Department of Professional Regulation Division of Real Estate

401 Northwest 2nd Avenue, Suite N-607 Miami, Florida 33128

For Respondent: No Appearance

STATEMENT OF THE ISSUE

The ultimate issue for determination at the formal hearing was whether Respondent committed the offenses set forth in the Administrative Complaint and if so, what penalty, if any, should be imposed.

PRELIMINARY STATEMENT

At approximately 10:25 a.m. on April 15, 1992, the Division of Administrative Hearings received a telegram from Ms. Ann M. Phillips 1/

stating in substance that the Respondent would not attend the formal hearing due to unspecified health problems. No return address or telephone number was given in the telegram. Both the undersigned and counsel for Petitioner attempted unsuccessfully to reach Respondent at his telephone number of record, in order to determine the nature and extent of the health problems referred to in the telegram.

Petitioner objected to any continuance 2/ and requested that the formal hearing proceed for two reasons. First, the telegram, on its face, did not request a continuance and could be reasonably construed as merely a notice of convenience from Respondent that he would not be in attendance at the hearing. Second, even if the telegram were construed as a request for a continuance, a

continuance should be denied because it was made less than five days before the formal hearing, and the telegram contained no competent and substantial evidence that an "extreme emergency" existed within the meaning of Florida Administrative Code Rule 22I-6.017. Petitioner's objection was sustained.

At the formal hearing, Petitioner presented the testimony of Mr. Sanford Drayer, Mr. Leif Grazi, Ms. Susan Soukup, and Ms. Terry Giles. Petitioner submitted 15 exhibits for admission in evidence. Petitioner's Exhibits 1-15 were admitted into evidence without objection.

A transcript of the formal hearing was not requested by Petitioner.

Petitioner timely filed its proposed findings of fact and conclusions of law on April 24, 1992. Respondent did not file proposed findings of fact and conclusions of law. Petitioner's proposed findings of fact are addressed in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Respondent is a licensed real estate salesman in the State of Florida. Respondent's license number is 0199374. Respondent was licensed as a salesman in limbo with a home address of 1850 Palm City Road, CC 102, Stuart, Florida 34994-7205.

   
   

2. From late 1987 until early 1990, Respondent was employed as a real estate salesperson for Soukup Realty, Inc. ("Soukup"). While so employed, Respondent procured a contract for sale and purchase of Lot 4, Lake Harbor Estates, Martin County, Florida. The buyer was Mr. Sanford Drayer ("Drayer"), and the seller was Mr. Leif Grazi ("Grazi"). The original contract was dated May 1, 1988.

   
   

3. Respondent mailed a copy of the signed original contract to Soukup together with a deposit check from Drayer dated May 1, 1988, in the amount of

   $500. The $500 deposit check was payable to Soukup. The original contract provided that Soukup was to receive a commission of $10,000. Pursuant to a separate agreement between Respondent and Soukup, Soukup was to receive $1,000 of the commission and Respondent was to be paid $9,000. After agreeing to the provisions in the original contract regarding payment of a real estate commission and the separate agreement with Respondent, Soukup deposited the check in its escrow account on or about May 4, 1988.

   
   

4. Further discussions between Drayer and Grazi led to the execution of an amended contract for the same property, dated May 18, 1988. The amended contract superseded the original contract and is the contract upon which the parties closed their transaction on or about June 16, 1988.

   
   

5. Upon Respondent's instruction, Grazi wrote in the space at the bottom of page 4 of the amended contract the name "Soukup Realty, Inc." The addition indicated that Soukup was to receive the real estate commission of $10,000 provided for in both the original and amended contracts.

   
   

6. The amended contract changed the time and manner in which the $10,000 commission was to be paid to Soukup. The original contract provided that Grazi was to pay the entire commission at the time of closing. The amended contract provided for, "$5,000 to be paid at closing and $400 per month from the proceeds of the mortgage note, until paid in full."

7. Prior to the closing, Soukup approved the terms of the amended contract based upon the following two conditions. First, Soukup and Respondent would share the $10,000 commission using the same percentage split which they had used previously in sharing commissions from other transactions, i.e., 90 percent ($9,000) to Respondent and 10 percent ($1,000) to Soukup. Second, Soukup would collect all of its 10 percent share ($1,000) "up front,"-i.e., from the $5,000 commission payment to be made by Grazi at closing.

   
   

8. At closing, Grazi gave Respondent a check in the amount of $5,000 payable to Soukup as partial payment of the commission in accordance with the amended contract. Respondent placed the check in an envelope and wrote a note on the outside of the envelope which read, "Susan, please note you have $500 in escrow therefore please write me a check for $4,500. Is there a chance you might have it here tomorrow morning. If so call me and I will pick it up. Ron." Later on the day of the closing, Soukup found the envelope with the check inside on the door of her house. 3/

   
   

9. Soukup deposited the $5,000 check. On June 20, 1988, Soukup wrote a check for $4,500 to Respondent and delivered the check to Respondent. Not yet having seen the closing statement, however, Soukup did not disburse the $500 deposit out of its escrow account to the operating account. Some time later, Soukup received a copy of the closing statement and, even though it did not specifically refer to the $500 deposit, Soukup disbursed the $500 to Soukup in reliance upon Respondent's statement in his note on the envelope. Soukup had never received any other instructions or requests concerning the $500 from Drayer, Grazi, the closing agent, or anyone else.

   
   

10. On June 20, 1988, Respondent requested Soukup's permission to collect Soukup's remaining unpaid real estate commission directly from Grazi, i.e., in his own name instead of in the name of Soukup. Soukup refused Respondent's request. Respondent had never made such a request before, and such a procedure would have been contrary to Soukup's custom and practice. Soukup also believed that such a request was contrary to Florida law governing real estate transactions. Soukup stated that any real estate commission payments which Respondent collected would have to be delivered to Soukup and an equal amount paid to Respondent from Soukup. Soukup made a contemporaneous note of the conversation and placed the note in the file folder.

    
    

11. Soukup closed its file. Since Soukup had received payment in full of its 10 percent share of the commission, Soukup expected to have nothing further to do with the transaction except to receive commission payment checks collected by the Respondent and to exchange those checks for Soukup checks in equal amounts to Respondent.

    
    

12. Soukup received no further real estate commission payments from Respondent or Grazi. Without the knowledge or consent of Soukup, Respondent collected the remaining unpaid real estate commissions directly from Grazi. Respondent collected two checks totalling $5,000. The checks were dated September 21, 1988, and December 16, 1988, and were in the respective amounts of

    $1,000 and $4,000.

    
    

13. The check for $1,000 was made payable to Respondent. At Respondent's request, Grazi wrote "Ron Warren/Soukup Realty" on the line for the name of the payee of the $4,000 check. Both checks were paid by Grazi's bank. Both checks were endorsed by Respondent alone. Respondent never presented or disclosed the checks to Soukup.

14. Two years after the closing, Soukup reviewed all files relative to Respondent (as a result of civil litigation filed by Respondent against Soukup). Soukup's records for the Drayer/Grazi transaction reflected that Soukup had received only $5,500 of the total $10,000 real estate commission. On June 13, 1990, Soukup wrote a letter to Grazi inquiring about the matter. Correspondence between Soukup and Grazi ensued. In a letter dated July 3, 1990, from Grazi to Soukup the checks for $1,000 and $4,000 were disclosed.

    
    

15. The disclosure caused Soukup to believe that $500 had been paid in excess of the $10,000 real estate commission amount provided for in the amended contract. The $500, together with the other payments of $5,000, $1,000, and

    $4,000, totalled $10,500. Drayer did not receive credit in the Drayer/Grazi transaction for the $500 deposit he had paid in connection with the original contract.

    
    

    CONCLUSIONS OF LAW

    
    

16. 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. The parties were duly noticed for the formal hearing.

    
    

17. The burden of proof is on Petitioner to prove the allegations in the administrative complaint by clear and convincing evidence. Where an agency seeks to revoke a professional license, the evidence must be clear and convincing. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

18. Section 475.25(1)(b), Florida Statutes, in relevant part authorizes the imposition of prescribed penalties against Respondent if Respondent:

    
    

    Has been guilty of...misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device...or breach of trust in any business transaction in this state...[or] has violated a duty imposed upon him by law or by the terms of a listing contract, written or oral...

    
    

19. Petitioner showed by clear and convincing evidence that Respondent violated Section 475.25(1)(b), Florida Statutes. Respondent's receipt and negotiation of two checks for $1,000 and $4,000 from Mr. Leif Grazi ("Grazi") without the knowledge of Soukup Realty, Inc. ("Soukup") and in direct contravention of Soukup's specific instructions constitutes concealment and breach of trust in a business transaction in violation of Section 475.25(1)(b). The fact that Respondent endorsed the check for $4,000 without the knowledge of Soukup when Soukup was a co-payee evidence's Respondent's culpable intent and breach of trust with which he is imbued as a result of his licensure by the state.

    
    

20. Section 475.25(1)(k), Florida Statutes, in relevant part authorizes the imposition of prescribed penalties against Respondent if Respondent:

    
    

    Has failed . . . to immediately place with his registered employer any money, fund, deposit, check, or draft entrusted to him by any person dealing with him as agent of his registered employer.

21. Petitioner showed by clear and convincing evidence that Respondent violated Section 475.25(1)(k), Florida Statutes. Respondent retained two separate checks in the aggregate amount of $5,000 without "immediately placing" those funds with his registered employer.

    
    

22. Disciplinary guidelines prescribed in Florida Administrative Code Rule 21V-24.001 are to be imposed based upon a single count violation of each statutory provision. A combination of violations may result in a higher penalty than that for a single, isolated violation. Rule 21V-24.001(1). The maximum penalties for violation of Section 475.25(1)(b), Florida Statutes, are: suspension or revocation up to 5 years. The maximum penalty for violation of Section 475.25(1)(k) is revocation of Respondent's license. The minimum penalty for violation of Section 475.25(1)(k) is suspension of Respondent's license for

    90 days.

    
    

23. When mitigating circumstances are demonstrated by clear and convincing evidence, deviation from prescribed disciplinary guidelines is permitted. Such circumstances include without limitation: (a) the severity of the offense; (b) the degree of harm to the consumer or public; (c) the number of counts in the administrative complaint; (d) the number of times the offenses previously have been committed by the licensee; (e) the disciplinary history of the licensee;

    (f) the status of the licensee at the time the offense was committed; (g) the degree of financial hardship incurred by the licensee as a result of the imposition of a fine or suspension of a license; and (h) whether a letter of guidance has previously been issued to the licensee. Florida Administrative Code Rule 21V-24.001(4)(b).

    
    

24. No evidence was presented concerning items 9(e), (g), and (h) in the preceding paragraph. The severity of the offense is great whenever the offense involves the misuse of funds. Respondent misused funds of his employer and a consumer. The degree of harm to the consumer in this proceeding is limited to the misappropriation of $500 in deposit funds. Respondent has never been found guilty of any previous offenses.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent be found guilty of violating Sections

475.25(1)(b)(k), Florida Statutes, and fined $3,000.00 to be paid within 30 days

of the date of the final order. In order to enhance Respondent's regard for the entitlement of others to funds in business transactions and in order to facilitate due care in future transactions, it is recommended that Respondent be placed on probation for a period not to exceed one year from the date of the final order in this proceeding. The conditions of probation may include any of those prescribed in Florida Administrative Code Rule 21V-24.001(2)(a) except those that would require the Respondent to submit to reexamination and to be placed on a lesser license status. In the event that Respondent fails to timely pay any fines imposed or to complete the terms of any probation imposed, it is recommended that Respondent's license be suspended for two years.

DONE and ENTERED this 26th day of May 1992, in Tallahassee, Florida.

DANIEL MANRY

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 26th day of May 1992.

ENDNOTES

1/ The telegram did not disclose the sender's relationship to Respondent, the capacity in which the sender acted, or whether the sender is an attorney or authorized representative for Respondent.

2/ The formal hearing in this proceeding had been continued three times before the date of the formal hearing. Two of those continuances were at Respondent's request.

3/ Susan Soukup understood the $500 deposit from Sanford Drayer which Soukup Realty was holding in its escrow account. She understood the Respondent's note as telling her to treat that $500 as part of Soukup Realty's earned commission and to diburse it out of escrow to Soukup Realty, since that $500 together with

$500 from the check in the envelope would constitute payment in full to Soukup Realty of Soukup Realty's 10% share of the $10,000 commission.

APPENDIX TO RECOMMENDED ORDER

Respondent submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.

The Respondent's Proposed Findings of Fact

Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection

1. Accepted in findings 4-5

2. Rejected as not credible

3. Rejected as not credible

4. Rejected as not credible

5. Rejected as immaterial

6. Rejected as immaterial

7. Rejected as immaterial

8. Rejected as not credible

9. Rejected as irrelevant

10. Rejected as irrelevant

COPIES FURNISHED:

Ted Gay, Esquire Department of Professional

Regulation

401 N.W. 2nd Avenue Suite N-607

Miami, Florida 33128

Ronald R. Warren

1850 Palm City Road, Apt. CC-102 Stuart, Florida 34994

Ronald R. Warren 4414 U.S. 27 South

Sebring, Florida 33870

Darlene F. Keller, Division Director Department of Professional Regulation Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900

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: 91-002967

Orders for Case No: 91-002967