Respondents. )
Pursuant to notice, the above-styled matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Daniel M. Kilbride, on October 16, 1992, in Tampa, Florida. The following appearances were entered:
For Petitioner: Steven W. Johnson, Esquire
For Respondent: J. Stanford Lifsey, Esquire
101 E. Kennedy Blvd. Suite 1465
Whether the Respondents' real estate license in Florida should be disciplined because the Respondents, committed fraud, misrepresentation, dishonest dealing by trick, scheme or device, culpable negligence or breach of trust in a business transaction in violation of subsection 475.25(1)(b), Florida Statutes.
By an Administrative Complaint filed April 23, 1992, the Petitioner, Department of Professional Regulation, Division of Real Estate, alleges that the Respondents have violated subsection 475.25(1)(b), Florida Statutes. Based on that charge, the Petitioner seeks to discipline the Respondents' real estate licenses.
The Respondents disputed the charges, and requested a hearing pursuant to Section 120.57(1), Florida Statutes. Thereafter, a formal hearing was held.
At hearing, the Petitioner presented the testimony of Roy Exum, Leroy Beard, Gladys Williams, and J.A. James, DPR Investigator, and Exhibits 1,2,3,4,5 and 8 were received into evidence. Respondents offered one Exhibit, and no other evidence. Petitioner filed its Proposed Recommended Order on November 5, 1992, and Respondents filed their proposals on November 6, 1992. The proposals submitted by the parties have been given careful consideration, and adopted when supported by the evidence. My specific rulings on proposed findings are contained in the Appendix attached hereto.
Petitioner is a state 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.
Respondent Paul F. Savich is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0077390 in accordance with Chapter 475, Florida Statutes.
Respondent, Ernest M. Haefele, is a licensed real estate broker, having been issued license number 0517821 in accordance with Chapter 475, Florida Statutes.
On October 1, 1984, the Respondents, purchasers in their individual capacities, entered into a contract for deed to a tract at the Tropical Acres Subdivision, with Tropical Sites, Inc., and Angie S. Crosby and Eugene T. Crosby, at a sales price of $9,046.50. Said amount to be paid at the rate of
$90 per month until paid.
Pursuant to the agreement, the Respondents agreed not to assign the agreement without the permission of Tropical Sites, Inc.
A closing was held on May 8, 1990, and the Respondents transferred possession of the tract by assignment of contract to Leroy H. and Charlotte Beard. A mobile home on the real property was part of the purchase price for a total sales price of $39,000.00 The agreement called for a down payment of
$2,000 to the Respondent Savich. The Beards also signed a mortgage note in favor of the Respondents Savich and Haffele, for $37,000. The note was payable at the rate of $373.15 per month. Upon payment in full, Respondents were obligated to deliver a good and sufficient deed to the property to the purchasers.
At the closing, Respondent Haefele was not present. The Beards received two documents at closing, a contract for sale and one other document, but did not receive a copy of the original agreement for deed, a disclosure statement, or a title to the trailer on the tract. In addition, Respondent Savich did not seek permission of Tropical Sites, Inc., prior to the closing.
Prior to the closing, the Beards moved onto the property, and subsequently began making monthly payments of $373.15 to Respondent Savich.
The Beards had purchased two or three pieces of property in the past, but had always gone through a bank. In relation to this agreement, they understood the nature of the transaction at the time of the closing.
In early 1991, Mr. Beard made a telephone inquiry to the County property appraiser's office as to the status of the property for homestead exemption purposes. He was advised that Tropical Sites, Inc. was the current owner of the tract, and that he was not eligible for homestead exemption.
The Beards did not apply for homestead exemption at the appraiser's office.
In August 1991, the Beards stopped making payments to the Respondents on the advice of their attorney, but continued to reside on the premises until December 1991.
In November 1991, an attorney acting on behalf of the Beards made a demand upon Respondent Paul F. Savich for the return of the $2,000.00 deposit.
The Respondents did not return the $2,000.00 deposit or otherwise pay the money claimed by the Beards.
In his dealings with the Beards, Respondent Savich did not withhold information, lie or mislead the purchasers. They simply were unhappy with the agreement, and decided to get out of it when they recognized that they would not receive title to the mobile home and property until the note was paid in full.
In early 1992, the Beards quitclaimed their interest to the property to Respondent Savich's former wife, and they were released from their obligations under the note.
CONCLUSIONS OF LAW
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 pursuant to the notice provisions of Chapter 120, Florida Statutes (1991).
Subsection 475.25, Florida Statutes (1991), provides that the Florida Real Estate Commission may suspend a license for a period of not exceeding ten
(10) years; revoke a real estate license; may impose an administrative fine not to exceed $1000 for each count or separate offense; and may impose a reprimand or, any or all of the foregoing, if it finds that a licensee has violated Subsection 475.25(1)(b), Florida Statutes.
Subsection 475.25(1)(b), Florida Statutes (1991), proscribes fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence or breach of trust in a business transaction.
The burden of proof is on the Petitioner as to each count of the Administrative Complaint. Balino v. Department of Health and Rehabilitative
Services, 348 So.2d 349 (Fla. 1st DCA 1977). Revocation of license proceedings are penal in nature, State ex rel. Vining v. Florida Real Estate Commission, 281 So.2d 487 (Fla. 1973), and Petitioner has to prove by clear and convincing evidence the violations alleged in the Administrative Complaint. Ferris v.
Turlington, 510 So.2d 292 (Fla. 1987).
As a real estate licensee in Florida, the Respondent occupies a status under law with recognized privileges and responsibilities. Zichlin v. Dill, 25 So.2d 4 (Fla. 1946); United Homes, Inc. v. Moss, 154 So.2d 351 (Fla. 2nd DCA 1963).
Inasmuch as a real estate licensee in Florida belongs to a privileged class, the state has prescribed a high standard of qualifications. Zichlin, supra. "The law specifically requires that a person, in order to hold a real estate license, must make it appear that he is honest, truthful, trustworthy, of good character and that he bears a good reputation for fair dealing." McKnight
v. Florida Real Estate Commission, 202 So.2d 199 (Fla. 2nd DCA 1967). Anyone who deals with a licensee may assume he is dealing with an honest and ethical person. Shelton v. Florida Real Estate Commission, 120 So.2d 191 (Fla. 2nd DCA 1960).
However, Chapter 475 provides for certain exemptions to these regulations. Subsection 475.011(2), Florida Statutes (1991) provides is pertinent part:
475.011 EXEMPTIONS.- This part does not apply to: (2) Any individual, corporation, partnership, trust, joint venture, or other entity which sells, exchanges, or leases its own real property; however, this exemption shall not be available if and to the extent that an agent, employee or independent contractor paid a commission or other compensation strictly on a transactional basis is employed to make sales, exchanges, or leases to or with customers in the ordinary course of an owner's business of selling, exchanging, or leasing real property to the public[.]
The evidence in this case is clear that the Respondents, individually and in partnership with each other, purchased an equitable interest in Tract 19 in Tropical Acres subdivision in 1984; subsequently, they moved a mobile home on the property, and in 1990, they transferred possession of the land and the mobile home to the Beards under an assignment of contract for the sum of
$39,000. The terms of the agreement called for the sum of $2,000 payable at closing, and the balance financed through a promissory note to be held by the Respondents. At the time of the closing the Beards knew they were obtaining the property under a contract for deed, but may not have completely understood that they would not receive title to the property until the note had been satisfied. However, they moved into the mobile home prior to the closing and prior to the exchange of any monies. They knew from their prior association that Respondent Savich was a real estate broker, however, they understood that their dealings with him in this transaction was as an individual property owner, and had no expectation that he was dealing with them in his capacity as a broker. Nearly a year after the closing, the Beards became dissatisfied with the terms of the
contract and wished to cancel it, and sought the return of their $2,000 down payment.
As to Respondent Haefele, there was no evidence, other than hearsay evidence, that linked him with the Beard transaction. Mr. Beard could not recall ever meeting him prior to the hearing, had not dealt with him prior to the closing, and could not testify that he was even present at the closing. The fact that Respondent Haefele's name appeared on some of documents does not show that he was acting as a broker in this transaction. In fact, the evidence shows that his only involvement was in his individual capacity as a joint purchaser with Respondent Savich of Tract 19 and, he to, meets the standard for exemption under the provisions of Section 475.011(2), Florida Statutes(1991). Florida Real Estate Commission v. McGregor, 336 So.2d 1156(Fla. 1976), Florida Real Estate Commission v. Johnson, 362 So.2d 674(Fla. 1978).
Respondent Savich also dealt with the Beards clearly as an individual and not in this capacity as a broker. Section 475.011(2), Florida Statutes(1991). McGregor and Johnson, supra. In addition, there was no evidence that Respondent Savich mislead, lied, or had dishonest dealings with the Beards in this transaction. The Beards merely had a change of heart many months after the closing when they believed they would not qualify for the homestead exemption and wished to cancel the contract. The $2,000 they gave to Respondent Savich at the closing was not an earnest money deposit which Respondent Savich had an obligation to place in trust for a third party. Rather, it was the down payment given by the purchaser to the seller directly,
