STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 92-3322

)

SHIRLEY A. CRAMER, )

)

Respondent. )

)

RECOMMENDED ORDER

On February 17, 1993, a formal administrative hearing was held in this case in Clearwater, Florida, before J. Lawrence Johnston, Hearing Officer, Division of Administrative Hearings.

APPEARANCES

For Petitioner: James H. Gillis, Esquire

Senior Attorney

Department of Professional Regulation, Division of Real Estate

Legal Section - Suite N 308 Hurston Building North Tower

400 West Robinson Street Orlando, Florida 32802-1772

For Respondent: Peter C. Clement, Esquire

35084 U.S. 19 North

Palm Harbor, Florida 34684 STATEMENT OF THE ISSUES

The issues in this case are framed by the three-count Administrative Complaint, DPR Case No. 9280074, which the Petitioner, the Department of Professional Regulation, Division of Real Estate, filed against the Respondent, Shirley A. Cramer. Count I alleges that the Respondent was guilty of violating Section 475.25(1)(b), Fla. Stat. (1991)(dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in any business transaction).

Count II alleges that the Respondent was guilty of violating Section 475.25(1)(d)1., Fla. Stat. (1991)(failure to account or deliver rental funds). Count III alleges that the Respondent was guilty of violating Sections 475.455(2), and therefore 475.25(1)(e), Fla. Stat. (1991)(having had another state agency suspend her license or registration, or impose a penalty against her).

PRELIMINARY STATEMENT

The Administrative Complaint in this case was filed on March 18, 1992.

After it was served on the Respondent, her attorney requested formal administrative proceedings on her behalf on or about April 30, 1992. The matter was referred to the Division of Administrative Hearings on or about June 1, 1992, and initially was set for final hearing on August 12, 1992, by Notice of Hearing issued on June 24, 1992.

On joint motion of the parties, the hearing was cancelled, and the case was placed in abeyance pending final agency action by the Department of Insurance and possible settlement. When the case was not settled, it was rescheduled for hearing on January 26, 1993. The Respondent moved for a continuance based on a scheduling conflict of counsel, and the hearing was continued to February 17, 1993.

A motion of counsel for the Respondent to withdraw was filed on the day of the hearing, but it was not served on the Respondent by the time of the hearing. The Respondent did not appear at the hearing, but counsel appeared on her behalf and, on the record, withdrew the written motion to withdraw.

During the hearing, the Department had Petitioner's Exhibits 1 through 11 admitted in evidence and called two witnesses. The Respondent cross-examined but presented no other evidence.

At the conclusion of the hearing, the Department ordered the preparation of a transcript of the final hearing. The parties were given ten days from the filing of the transcript in which to file proposed recommended orders. The transcript was filed on February 26, 1993, making proposed recommended orders due on March 8, 1993.

Only the Department filed a proposed recommended order. Explicit rulings on the proposed findings of fact contained in the Department's proposed recommended order may be found in the attached Appendix to Recommended Order, Case No. 92-3322.

FINDINGS OF FACT

1. The Respondent, Shirley A. Cramer, is a licensed real estate broker in the State of Florida. Her license number is 0460613.

   
   

2. On or about June 9, 1990, the Respondent entered into a six-month residential lease in Clearwater, Florida. She entered into the lease on her own account. She was not acting as a real estate broker.

   
   

3. The Respondent breached the lease, and the landlord sued in civil court for damages and recovered a judgment in the amount of $9,740.29. The Respondent has not paid the judgment, or any part of it. (The Respondent made an offer to settle the judgment for less than the full amount, but the landlord rejected the settlement offer.) The landlord has not been able to collect any money on the judgment. A deposition in aid of execution has been taken, but the landlord has not levied on the judgment.

   
   

4. Not long after entering into the lease, the Respondent advertised it for sublease. The advertisement was answered on or about June 29, 1990, by Thomas E. Maloney.

5. In response to the ad, Maloney went to see the Respondent at her office. (The evidence was not clear whether it was a real estate office.) There, she asked for a partial rental deposit in the amount of $1,000, with another $500 due at a later date. The Respondent told Maloney that she was a Florida licensed real estate broker and assured him that his deposit would be safe with her.

   
   

6. The Respondent later contacted Maloney and told him that his credit references did not check out and that she was not going further with the sublease arrangement. When Maloney asked for his deposit back, she told him that she would return it to him as soon as she could raise the money.

   
   

7. The Respondent never returned any of the deposit to Maloney, and he sued her in civil court to recover the $1,000. The case was tried, and a judgment was entered in Maloney's favor but only in the amount of $500.

   
   

8. The evidence was not clear why Maloney was not awarded the full $1,000. He testified that, when he responded to the ad for the sublease, he learned that there already was a woman living there who was supposed to have moved out but did not. The Respondent suggested to Maloney that the woman could sleep on the couch. It is not clear from the evidence whether Maloney agreed to this arrangement. He testified only: "I says, you know --- It was just a stupid move on my part so -- and she is not going to pay me." It may be that the circumstances of the existence of the other tenant, and the possibility that Maloney initially agreed to the arrangement, had something to do with the amount of the judgment Maloney was able to recover.

   
   

9. The Respondent has not paid Maloney any money on the judgment he recovered against her. Maloney has decided not to spend any more of his own money trying to recover on the judgment.

   
   

10. On or about September 28, 1991, the Treasurer of the State of Florida, acting in his capacity as Insurance Commissioner, entered a Final Order suspending, for one year, all insurance licenses and eligibility for licensure held by the Respondent. The Final Order was based on findings that the Respondent had failed either to secure insurance after receipt of insurance premiums from two customers, or to account and deliver the insurance premiums she had collected from them. In one case, the evidence proved that the Respondent was "professionally responsible" for the misconduct of someone acting as her employee, and was personally responsible only for having a refund check dishonored for insufficient funds. In the other case, the Respondent was personally responsible for the entirety of the transaction, and it was found: "If not outright fraud and misrepresentation, Respondent's conduct constitutes, at best, gross negligence and incompetence "

    
    

11. On or about August 9, 1991, the Treasurer of the State of Florida, acting in his capacity as Insurance Commissioner, filed an Administrative Complaint against the Respondent alleging that she engaged in insurance activities which required a license while her licenses were suspended and that she misappropriated, unlawfully withheld, or converted fiduciary funds.

    
    

12. On or about August 20, 1992, the Treasurer of the State of Florida, acting in his capacity as Insurance Commissioner, entered another Final Order requiring that the Respondent pay a $500 administrative fine and placing the Respondent's insurance licenses on probation for two years. This Final Order was based on findings: (1) that, on November 28, 1990, less than two months after her insurance licenses were suspended for a year, but while she was "under

    the impression" that she could continue to sell insurance while the suspension was on appeal (although the suspension never was stayed pending appeal), the Respondent was selling worker compensation insurance; and (2) that she collected a $3,000 premium from a customer, did not put the money into a trust account, failed to place the coverage, withdrew the money from the account and used it for her own benefit on two occasions (replacing it after the first time), and failed to return the premium to the customer until March 8, 1991.

    
    

13. The Respondent, through counsel, asserted that the Respondent has paid the fine referred to in the preceding Finding, but there was no evidence in the record to support that claim.

    
    

    CONCLUSIONS OF LAW

    
    

14. Section 475.25, Fla. Stat. (1991), authorizes the Florida Real Estate Commission to place a licensee on probation, suspend his license for up to ten years, revoke his license, impose an administrative fine of up to $1,000 for each count or separate offense, or issue a reprimand, or do any or all of the above, if it finds that a licensee has violated Section 475.25.

    
    

15. Count I charges the Respondent with a violation of Section 475.25(1)(b), Fla. Stat. (1991). Section 475.25(1)(b) proscribes fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in any business transaction. It also proscribes the violation of a duty imposed upon the licensee by law or by the terms of a listing contract, written, oral, express, or implied, in a real estate transaction. But Count I of the Administrative Complaint in this case only alleges that the Respondent engaged in dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction.

    
    

16. The Respondent was guilty of culpable negligence and breach of trust in a business transaction. As found, she did not refund Maloney's deposit money, after assuring Maloney that his money was safe with her, since she was a real estate broker. Although the evidence is not clear why the civil court did not require the Respondent to pay Maloney the entire $1,000, she clearly owed him at least $500.

    
    

17. No other violations were proven under Count I with respect either to her dealings with Maloney, or with her dealings with her landlord. (The evidence as to the landlord proved only that the landlord recovered a money judgment against the Respondent for breach of a lease and that the judgment has not been paid.)

    
    

18. Count II charges the Respondent with violating Section 475.25(1)(d)1., Fla. Stat. (1991). Section 475.25(1)(d)1. requires that a licensee "account or deliver to any person, . . . at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery, [property] . . . which has come into his hands and which is not his property or which he is not in law or equity entitled to retain under the circumstances."

    
    

19. Since the Respondent entered into the Maloney transaction on her own account, her failure to return Maloney's deposit money, or pay him the $500 judgment, ordinarily would not be a violation of Section 475.25(1)(d)1. See Fleischman v. Dept. of Prof. Reg., 441 So. 2d 1121 (Fla. 3d DCA 1983). But, in this case, the evidence was that the Respondent enticed Maloney to leave his

    deposit money with her by assuring him that she was a real estate broker and that his money would be safe with her. It is concluded that her use of her license in this way subjected her to the requirements of Section 475.25(1)(d)1.

    
    

20. The Respondent and Maloney had a dispute as to what Maloney was entitled to recover from the Respondent. Under Golub v. Dept. of Prof. Reg.,

    450 So. 2d 229 (Fla. 1st DCA 1984), the Respondent was not obligated to deliver the disputed $1,000 claim until a court determined the amount owed. But once the amount was fixed at $500 by the court, the Respondent clearly was obligated to pay it to Maloney under Section 475.25(1)(d)1.

    
    

21. Count III charges the Respondent with violating Sections 475.455(2), and therefore 475.25(1)(e), Fla. Stat. (1991). Section 475.455(2) provides:

    
    

    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.

    
    

    In pertinent part, Section 475.25(1)(e), Fla. Stat. (1991), authorizes discipline if the licensee:

    "Has violated any of the provisions of this chapter "

    
    

22. It is concluded that Section 475.455(2) is not a provision subject to being "violated," so as to establish an independent basis for discipline under Section 475.25(1)(e). Rather, it is concluded that the issue under Section 475.455(2) is whether the action of the other agency was based on facts which, under principles of collateral estoppel, establish a violation under the balance of Chapter 475.

    
    

23. It is recognized that, in the Final Order, Dept. of Prof. Reg. v. Fountain, DOAH Case No. 91-6213, entered August 18, 1992, the Florida Real Estate Commission granted certain exceptions to the Recommended Order entered in the case and held "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 Recommended Order had held:

    
    

    [I]t 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. (Emphasis added.)

    
    

24. It is concluded that neither the Final Order nor the Recommended Order in the Fountain case correctly interprets Section 475.455(2).

    
    

    The interpretation suggested by the Final Order would raise serious constitutional problems. It would seem to allow the Florida Real Estate Commission to discipline a real estate licensee based on the action of another agency, regardless of the nature of the conduct resulting in the action by the other agency, i.e., how it relates to the kind of conduct for which discipline is authorized under the balance of Chapter 475. There would be no guidelines whatsoever as to what conduct would justify the Florida Real Estate Commission in "taking action," or as to what "action" the Commission should take.

    
    

    On the other hand, the interpretation reflected in the Recommended Order would essentially require the Commission to go through an extra "show cause" proceeding prior to prosecuting an administrative complaint on the conduct that resulted in the action taken by the other agency. It is concluded that, to the contrary, the legislative intent behind Section 475.455(2) was to make such a prosecution easier, not more difficult, to pursue.

    
    

25. Although the statute is not clear, it is concluded that the best interpretation is the one given in Conclusion 22. It fosters a legislative intent to streamline the imposition of discipline in cases where another agency has taken action. The Department would not be required to relitigate the matters on which the other agency's action rests. On the other hand, the balance of Chapter 475 would provide the appropriate, and constitutionally required, guidelines for determining whether the Commission should "take action" and, if so, what action should be taken.

    
    

26. In this case, the actions taken by the Insurance Commissioner were based on conduct that constitutes a violation of Section 475.25(1)(b), Fla. Stat. (1991).

    
    

27. The Respondent, through counsel, asserted that the Respondent has paid the fine referred to in Finding 12. But there was no evidence in the record to support that claim. In addition, under the terms of the Insurance Commissioner's Final Order, the Respondent still is on probation. Even if the fine has been paid, payment of the fine is not an impediment to discipline under Count III.

    
    

28. Under F.A.C. Rule 21V-24.001(3)(c),(d) and (ll), the range of possible penalties for the Respondent's violations is from a reprimand and/or a $1,000 fine, per count, through: under Count I, suspension for up to five years, or revocation; under Count II, suspension for up to five years; and, under Count III, suspension for up to six years, or revocation. Under the rationale of Conclusion 22, the range of appropriate penalties under Count III would be further limited to the range under Count I.

29. In view of the cavalier attitude the Respondent has exhibited in this proceeding, and in the Department of Insurance proceeding, it is concluded that a harsher penalty than might otherwise be appropriate is necessary to get the Respondent's attention and to impress upon her the gravity of these matters.

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: (1) finding the Respondent guilty of violating Section 475.25(1)(b) and (d)1., Fla. Stat. (1991); (2) requiring her to immediately (in any event, not more that 30 days after entry of the Final Order) return to Thomas E. Maloney his $500 and to provide the Commission with evidence of payment; (3) requiring her to pay a

$1,000 administrative fine within 30 days after entry of the Final Order; (4) requiring her to successfully complete 60 hours of post-licensure education for brokers, including a 30-hour broker management course, and to provide evidence of completion to the Commission; and (5) suspending her real estate broker license for five years, subject to being reduced to a one-year suspension upon evidence of compliance with (2), (3), and (4), above.

RECOMMENDED this 31st day of March, 1993, in Tallahassee, Florida.

J. LAWRENCE JOHNSTON 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 31st day of March, 1993.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-3322

To comply with the requirements of Section 120.59(2), Fla. Stat. (1991), the following rulings are made on the Department's proposed findings of fact (the Respondent not having filed any):

1.-4. Accepted and incorporated to the extent not subordinate or unnecessary.

5. Rejected in part as not proven. (Maloney did not testify that he was not told about the woman, and indicated that he asked for his deposit back after the Respondent told him that his credit references did not "check out.")

6.-10. Accepted and incorporated to the extent not subordinate or unnecessary.

11. The date of the Final Order was August 20, 1992, not 1991. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary.

COPIES FURNISHED:

James H. Gillis, Esquire Senior Attorney

Department of Professional Regulation, Division of Real Estate

Legal Section - Suite N 308 Hurston Building North Tower

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1772

Peter C. Clement, Esquire 35084 U.S. 19 North

Palm Harbor, Florida 34684

Darlene F. Keller Division Director

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

Jack McRay, Esquire General Counsel

Department of Professional Regulation

Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit to the Florida Real Estate Commission written exceptions to this Recommended Order. All agencies allow each party at least ten days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should consult with the Florida Real Estate Commission concerning its rules on the deadline for filing exceptions to this Recommended Order.

Docket for Case No: 92-003322

Orders for Case No: 92-003322