STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 91-6213

) ROBERT L. FOUNTAIN, JR., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the above matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Donald R. Alexander, on May 5, 1992, in Tallahassee, Florida.

APPEARANCES

For Petitioner: James H. Gillis, Esquire

P. O. Box 1900

Orlando, Florida 32802-1900

For Respondent: Robert Lee Fountain, Jr., pro se

2124 Shady Oaks Drive Tallahassee, Florida 32303

STATEMENT OF THE ISSUES

The issue is whether respondent's license as a real estate broker should be disciplined for the reasons cited in the administrative complaint.

PRELIMINARY STATEMENT

In a two-count administrative complaint filed on August 29, 1991, petitioner, Department of Professional Regulation, Division of Real Estate, charged that respondent, Robert Lee Fountain, Jr., licensed as a real estate broker, had violated certain provisions within Chapter 475, Florida Statutes (1989). More specifically, petitioner alleged that on April 24, 1991, the Construction Industry Licensing Board had revoked respondent's license to practice contracting and levied a substantial fine against him. The complaint alleged further that this constituted a violation of Subsections 475.25(1)(b) and (e) and 475.455(2), Florida Statutes (1989).

Respondent disputed the above allegations and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes (1991), to contest the proposed agency action. The matter was referred by petitioner to the Division of Administrative Hearings on September 27, 1991, with a request that a Hearing Officer be assigned to conduct a hearing. By notice of hearing dated October

16, 1991, a final hearing was scheduled on January 21 and 22, 1992, in Tallahassee, Florida. At petitioner's request, the matter was rescheduled to March 26 and 27, 1992, and then again to May 5 and 6, 1992, at the same location.

At final hearing, petitioner offered exhibits 1-5 which were received into evidence. These exhibits are certified copies of the administrative complaint, recommended order and final order entered in the Construction Industry Licensing Board case, respondent's answers to the request for admissions in this case, and respondent's licensure status with the Florida Real Estate Commission.

The transcript of hearing was filed on May 8, 1992. Proposed findings of fact and conclusions of law were originally due on May 18, 1992. On June 1, 1992, petitioner requested and was given an extension of time to and including June 12, 1992, in which to file the same. However, none were ever filed.

FINDINGS OF FACT

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

1. Respondent, Robert Lee Fountain, Jr. (Fountain), is a licensed real estate broker having been issued license number 0214081 by petitioner, Department of Professional Regulation, Division of Real Estate (Division). When the events herein occurred, Fountain's license was in limbo with a home address of 2124 Shady Oaks Drive, Tallahassee, Florida.

   
   

2. At one time, respondent also held a license as a certified building contractor issued by the Construction Industry Licensing Board (Board). Certified copies of documents received in evidence establish that on February 14, 1989, the Board issued an administrative complaint charging respondent with various violations of Chapter 489, Florida Statutes (1987), in conjunction with a construction job undertaken by respondent in Leon County, Florida. After an evidentiary hearing was conducted and a Recommended Order entered, the Board issued a Final Order on April 24, 1991, revoking respondent's license for gross negligence, incompetence and misconduct in the practice of contracting and imposing upon him an administrative fine in the amount of $10,750.00. The order also dismissed charges of fraud and deceit. That order is now final and although respondent disputes the findings in the order which resulted in his license being revoked, he does not deny that the order was rendered and the above action being taken by the Board.

   
   

3. The record (transcript and exhibits) which underpins the Board's final order was not entered into evidence in this proceeding. Further, there is no evidence of record that respondent intentionally violated any statute or rule governing the use of either his contractor or real estate licenses.

   
   

   CONCLUSIONS OF LAW

   
   

4. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties hereto pursuant to Subsection 120.57(1), Florida Statutes (1991).

   
   

5. Because respondent's license as a real estate broker is at risk, petitioner is obligated to prove the allegations in the complaint by clear and convincing evidence. Ramsey v. Department of Professional Regulation, Division of Real Estate, 574 So.2d 291 (Fla. 5th DCA 1991).

6. The administrative complaint alleges that by virtue of having had disciplinary action taken against his contractor's license, respondent is also guilty of dishonest dealing by trick, scheme or device, culpable negligence or breach of trust in any business transaction in the State of Florida within the meaning of Subsection 475.25(1)(b), Florida Statutes (1989). He is also charged with violating Subsection 475.455(2), Florida Statutes (1989), which reads as follows:

   
   

   If the commission finds that another state agency has suspended or revoked the license or registration of, or imposed a penalty against, a licensee, it shall issue a notice to the licensee to show cause why the commission should take no action, which notice shall provide for a hearing in accordance with chapter 120, upon request.

   
   

   According to the complaint, this latter violation constitutes a violation of Subsection 475.25(1)(e), Florida Statutes (1989), which makes it unlawful for a licensee to violate a provision of chapter 475.

   
   

7. Taking the last charge first, it is noted that subsection 475.455(2) does not describe a type of prohibited conduct for which a licensee may be disciplined. Rather, it prescribes the steps to be followed by the Florida Real Estate Commission in the event it discovers that a licensee has been disciplined by another board or agency. Put another way, the statute is not penal in nature and thus it is inappropriate to charge a licensee with violating that statute. This is not to say that information obtained from another agency cannot be used to discipline a licensee. Rather, such information would form the basis for the issuance of a complaint in which the licensee is charged with violating another provision within chapter 475, such as one of the prohibited acts described in sections 475.25 or 475.42. Since respondent did not (and could not) violate subsection 475.55(2), the charge in Count II that he violated a provision of chapter 475 and thus subsection 475.25(1)(e) should be dismissed.

   
   

8. In Count I, respondent is charged with having violated subsection 475.25(1)(b) by being guilty of dishonest dealing by trick, scheme or device, culpable negligence or breach of trust in any business transaction in the State of Florida. The charge ostensibly arises out of his conduct while supervising a contracting job in Leon County, Florida. A broker may, of course, be charged not only for dishonest conduct in transactions in which his only interest is as a broker, but also for such conduct in his own personal business affairs. See,

   e. g., LaRossa v. Department of Professional Regulation, Division of Real Estate, 474 So.2d 322 (Fla. 3d DCA 1985). However, in order to establish a violation of subsection 475.25(1)(b), "an intentional act (must) be proved before a violation may be found." Munch v. Department of Professional Regulation, Division of Real Estate, 592 So.2d 1136 (Fla. 1st DCA 1992). In other words, there must be a finding of wrongful intent or scienter on the part of Fountain. Morris v. Department of Professional Regulation, 474 So.2d 841, 843 (Fla. 5th DCA 1985). In this case, there is no evidence of record to support such a finding. 1/ On this basis alone, the charge in Count I must fail.

   
   

9. Notwithstanding the above conclusion, the charge in Count I must also fail because the statutory scheme under which respondent is charged in this case differs from the statutory scheme for regulating building contractors. That is

   to say, respondent was found guilty of gross negligence, incompetence and misconduct in the practice of contracting within the meaning of subsection 489.129(1)(h) and (m) while he is charged here with dishonest dealing by trick, scheme or device, culpable negligence or breach of trust in a business transaction in the state within the meaning of subsection 475.25(1)(b), a wholly different statutory scheme. Absent at a minimum the underlying record in the Board case, or independent proof of respondent's alleged transgressions, there is an insufficient factual record in this case upon which to make a determination as to whether Fountain's conduct constituted a violation of subsection 475.25(1)(b). This is especially true since gross negligence and culpable negligence are not the same, incompetency and misconduct in the practice of contracting do not facially or substantively correlate to dishonest dealing and the like in a business transaction, and the Board's decision was made in the context of the contracting profession and not the real estate profession. For this further reason, the charge should be dismissed.

   
   

10. Finally, at hearing petitioner took the position that respondent was foreclosed by the doctrines of collateral estoppel and res judicata from relitigating the facts in the other board proceeding. Assuming arguendo that this theory is correct, if respondent did not dispute that he was the same individual whose license was revoked in the other proceeding, his proof here would be limited to merely presenting mitigating evidence regarding the type of penalty to be imposed. While a certified copy of a conviction is statutorily deemed under subsection 475.25(1)(f) to be adequate to make a prima facie case to show that a licensee has been convicted of a crime, there is no comparable provision in the statute which allows the agency to establish a prima facie case of dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in a business transaction of this state by simply offering a certified copy of a final order in another agency proceeding. Indeed, several court decisions suggest that something more than this is required. For example, in the case of Newberry v. Florida Department of Law Enforcement, Criminal Justice Standards Commission, 585 So.2d 500 (Fla. 3d DCA 1991), the court declined to invoke the doctrines of collateral estoppel and res judicata where, as here, two separate and distinct governmental units independently considered similar factual allegations but for different purposes. This decision strongly suggests that where an agency seeks to rely on action taken by another board (as opposed to a criminal conviction), it must independently reprove those allegations in a de novo setting. For this additional reason, the charge in Count I must fail.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is recommended that the Florida Real Estate Commission enter a final order dismissing all charges against respondent.

RECOMMENDED this 24th day of June, 1992, in Tallahassee, Florida.

DONALD R. ALEXANDER

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 24th day of June, 1992.

ENDNOTES

1/ In the Board proceeding, the two allegations requiring a showing of intent or scienter, fraud and deceit, were dismissed.

COPIES FURNISHED:

Darlene F. Keller, Director Division of Real Estate

P. O. Box 1900

Orlando, FL 32802-1900

Jack L. McRay, Esquire

1940 North Monroe Street, Suite 60

Tallahassee, FL 32399-0792

James H. Gillis, Esquire

P. O. Box 1900

Orlando, FL 32802-1900

Robert Lee Fountain, Jr. 2124 Shady Oaks Drive Tallahassee, FL 32303

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to the 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 consult with the agency that will issue the final order in this case concerning their 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.

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AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DEPARTMENT OF PROFESSIONAL REGULATION FLORIDA REAL ESTATE COMMISSION

DEPARTMENT OF PROFESSIONAL REGULATION, DIVISION OF REAL ESTATE,

Petitioner,

CASE NO.: 9180004

vs.

ROBERT LEE FOUNTAIN, JR.,

Respondent.

/

DOAH CASE NO.: 91-6213

FINAL ORDER

On August 18, 1992, the Florida Real Estate Commission heard this case to issue a Final Order. Hearing Officer Donald R. Alexander of the Division of Administrative Hearings presided over a formal hearing on May 5, 1992. On June 24, 1992, he issued a Recommended Order, a copy of which is attached hereto as Exhibit A and made a part hereof.

The Petitioner filed Exceptions to the Recommended Order. A copy of said Exceptions is attached hereto as Exhibit B and made a part hereof. After hearing argument of counsel and upon a complete review of the record, the Commission adopts the Petitioner's Exceptions to the Hearing Officer's Recommended Order.

Specifically, the Commission accepts the Petitioner's Exception to the Hearing Officer's Finding of Fact No. 3. The Commission disagrees with Hearing Officer Donald R. Alexander's assertion that there was no evidence of record that the Respondent intentionally violated the statute. The Commission cites the previous Division of Administrative Hearings case before the Construction Board concerning this Respondent, wherein Hearing Officer Michael Ruff rendered a conclusion that the Respondent was grossly negligent.

Further, the Commission accepts the Petitioner's Exceptions to the Hearing Officer's Conclusions of Law, Paragraphs Nos. 3 through 6. The Commission finds that s. 475.455(2), Florida Statutes, clearly allows the Commission to act upon a license which another state agency has suspended or revoked. The Commission also finds evidence to support the finding that intent existed on the part of the Respondent and that, again, Hearing Officer Alexander erroneously defined intent.

Further the Commission accepts the Petitioner's Exceptions to the Hearing Officer's Conclusion of Law, Paragraph No. 7. The Commission notes that the Hearing Officer cites Newberry v. Florida Department of Law Enforcement,

Criminal Justice Standards, as evidence that "the court declined to invoke the doctrines of collateral estoppel and res judicata where, as here, two separate and distinct governmental units independently considered similar factual allegations but for different purposes." The Commission rejects the Hearing Officer's interpretation of this case and conclusion that the agency must independently prove again the allegations when seeking to discipline a Respondent's license because of the action taken by another board.

The Commission therefore rejects the cited parts of the Hearing Officer's Findings of Fact, Conclusions of Law and Recommended Penalty and adopts the Petitioner's Exceptions.

The Commission finds the Respondent guilty of culpable negligence in a business transaction, in violation of s. 475.25(1)(b), Florida Statutes, as charged in Count I of the Administrative Complaint.

Accordingly, the Florida Real Estate Commission ORDERS that the license of Robert Lee Fountain Jr. be revoked.

This Order shall be effective 30 days from date of filing with the Clerk of the Department of Professional Regulation. However, any party affected by this Order has the right to seek judicial review, pursuant to s. 120.68, Florida Statutes, and to Rule 9.110, Florida Rules of Appellate Procedure.

Within 30 days of the filing date of this Order, review proceedings may be instituted by filing a Notice of Appeal with the Clerk of the Department of Professional Regulation at 400 West Robinson Street, Suite 309, Orlando, Florida 32801. At the same time, a copy of the Notice of Appeal, with applicable filing fees, must be filed with the appropriate District Court of Appeal.

DONE AND ORDERED this 18th day of August, 1992 in Orlando, Florida.

Darlene F. Keller, Director Division of Real Estate

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true copy of the foregoing was sent by U.S. Mail to: Robert Lee Fountain, Jr., 2124 Shady Oaks Drive, Tallahassee, Florida 32303; to Hearing Officer Donald R. Alexander, Division of Administrative Hearings, 1230 Apalachee Parkway, Tallahassee, Florida 32399-1550; and to James Gillis, Esquire, DPR, Post Office Box 1900, Orlando, Florida 32802, this 2nd day of September, 1992.

Director

Docket for Case No: 91-006213

Orders for Case No: 91-006213