STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 92-5757

)

ROBERT WILLIAM ENGLISH, )

)

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 January 5, 1993, in St. Augustine, Florida.

APPEARANCES

For Petitioner: James H. Gillis, Esquire

Post Office Box 1900 Orlando, Florida 32802-1900

For Respondent: Robert William English, pro se

5930 A1A South, #7B

St. Augustine, Florida 32084 STATEMENT OF THE ISSUES

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

PRELIMINARY STATEMENT

In a three-count administrative complaint filed on September 4, 1992, petitioner, Department of Professional Regulation, Division of Real Estate, charged that respondent, Robert William English, licensed as a real estate salesman, had violated certain provisions within Chapter 475, Florida Statutes (1991). More specifically, the complaint alleged that in July 1991, while licensed as a real estate salesman but employed as a condominium manager in Crescent Beach, Florida, respondent solicited and obtained buyers for a condominium unit, and that the seller agreed to pay respondent a realtor's commission for his services. It is further alleged that in October 1991, respondent placed his license with a St. Augustine Beach real estate firm, and without the knowledge or consent of his broker, was paid a real estate brokerage commission of $2,355.00 at a closing held in November 1991. According to the complaint, this conduct constituted a violation of Subsections 475.25(1)(a) and

1. and 475.42(1)(b) and (d), Florida Statutes (1991).

   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 28, 1992, with a request that a Hearing Officer be assigned to conduct a hearing. By notice of hearing dated October 12, 1992, a final hearing was scheduled on November 19, 1992, in St. Augustine, Florida. At petitioner's request, the matter was later rescheduled to January 5, 1993, at the same location.

   
   

   At final hearing, petitioner presented the testimony of Clark W. Wheeler, Barry G. Carver, and Carol J. Collins. Also, it offered petitioner's exhibits 1-6. All exhibits were received in evidence. Respondent testified on his own behalf and offered respondent's exhibit 1 which was received into evidence.

   
   

   There is no transcript of hearing. Proposed findings of fact and conclusions of law were filed by petitioner on January 15, 1993. A ruling on each proposed finding is set forth in the Appendix attached to this Recommended Order.

   
   

   FINDINGS OF FACT

   
   

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

   
   

   1. Respondent, Robert William English, is a licensed real estate salesman having been issued license number 0532972 by petitioner, Department of Professional Regulation, Division of Real Estate (Division). Respondent was last associated with a real estate firm known as Terry W. Pacetti, Inc., 5413 Highway A1A South, St. Augustine, Florida. He has been licensed as a salesman since January 9, 1989. Except for this proceeding, there is no evidence that respondent has ever been the subject of a disciplinary action in connection with his license.

      
      

   2. In May 1991, respondent accepted a position as manager of the Creston House Condominiums in Crescent Beach, Florida. Prior to that time, he worked for two realtors and a developer. From May 1991 until October 1991, respondent did not have his license placed with any real estate broker and accordingly his license was known in the trade as being "in limbo."

      
      

   3. In July 1991 Clark Wheeler and his wife approached respondent and inquired if any units in the Creston House Condominiums were for sale. He was advised that Nancy Ho, who owned unit 7-C, had her unit on the market. As it turned out, Ho had entered into an exclusive right-of-sale contract with Carol Collins, broker of record for Remax 100 Realty, Inc., on April 24, 1991. The contract was in effect until August 23, 1991. Under the terms of the contract, Collins was to have exclusive rights to sell the property during that period of time and was to receive a 6% sales commission in the event the property was sold. The contract further provided that Ho would pay the commission if the property was sold within 120 days after the termination of the contract if the negotiations for such sale occurred before August 23, 1991.

      
      

   4. Respondent was aware of Collins' exclusive contract by virtue of Collins having told him in May 1991. Even so, respondent showed the Ho apartment to the Wheelers and attempted to telephone Ho to advise her the Wheelers were interested in her unit. He was unsuccessful in speaking with her. Eventually, Wheeler himself telephoned Ho and, after discussing a possible sale, mailed her a deposit receipt and purchase and sale agreement on July 13, 1991, wherein Wheeler and his wife offered to purchase the unit for $78,500.00.

      Wheeler placed a provision in the contract which provided that the "seller shall pay for: realtor's commission due Bob English and/or other realtors." However, respondent was not involved in the preparation of the contract and did not actually see the contract until the day of final hearing. Notwithstanding this, the evidence shows that respondent knew he would receive a sales commission for his services if the transaction closed. Shortly after receiving the contract, Ho accepted Wheeler's offer.

      
      

   5. On October 14, 1991, but before the closing on the Wheeler-Ho transaction, respondent placed his license with Century 21 At the Beach Realty, Inc., a St. Augustine Beach real estate firm. The broker of record was Barry Carver. However, respondent was hired as a "referral agent" by Peter Oliver, also a broker and president of the firm. According to Carver, this meant that respondent could only conduct sales through Oliver rather than the firm in general and was to be under Oliver's direct supervision.

      
      

   6. On November 26, 1991, the Ho-Wheeler transaction closed. The closing was handled by Raymond M. Ivey, a Gainesville attorney identified on the settlement statement as the "settlement agent". The statement reflects that a realtor's commission of $4,710.00 was paid by the seller. However, respondent accepted only $2,355.00 as a commission, and Ivey apparently deposited the remainder of the commission in his trust account. Whether it still remains in his account is not of record.

      
      

   7. According to respondent, the $2,355.00 represented the sales commission which a salesperson would be paid on such a transaction. He says the remainder was to be given to whatever broker was entitled to receive the same. When he accepted the commission, he did so in his own name and not in the name of Century 21, with whom his license was placed. Indeed, prior to closing respondent did not notify either Century 21 or the broker who had the exclusive listing that a contract had been executed and a closing would be held.

      
      

   8. After the closing, respondent carried his commission check to Oliver and explained the circumstances under which he had received the money. After obtaining what respondent says was Oliver's approval to keep the commission, respondent endorsed the check and deposited the same into his personal bank account. The hearsay statements of Oliver contained in a letter identified as respondent's exhibit 1 tend to corroborate respondent's testimony on this issue.

      
      

   9. On an undisclosed date after the closing, a Century 21 salesman apparently learned of the sale and the fact that Century 21 received no share of the commission. At about the same time, Collins also learned of the sale. Although respondent then visited the offices of Century 21 and explained his role in the transaction, at least two brokers were not satisfied with his explanation, and the broker of record later filed a complaint against respondent with DPR in March 1992. Century 21 acknowledged that it has no claim on the escrowed money but is concerned that respondent had to "work through" a broker in order to receive a commission. After learning of Century 21's dissatisfaction, but prior to the filing of the complaint, in February 1992 respondent voluntarily advised Carol Collins that the sale had taken place and she should contact Ivey to collect her commission.

      
      

   10. Although Collins appears to be entitled to receive a commission on the sale pursuant to the exclusive right of sale contract, she has never received any money. She has spoken with attorney Ivey and Ho concerning the commission due under the contract but her efforts have been unsuccessful.

       CONCLUSIONS OF LAW

       
       

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

       
       

   12. Because respondent's real estate license 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).

       
       

   13. As clarified at hearing, respondent is first charged with being guilty of dishonest dealing by trick, scheme or device and breach of trust in a business transaction in violation of Subsection 475.25(1)(b), Florida Statutes. He is also charged with operating as a broker while licensed as a salesperson in violation of Subsection 475.42(1)(b), Florida Statutes, thereby also violating Subsection 475.25(1)(a), Florida Statutes, which makes it unlawful to violate any provision within Section 475.42, Florida Statutes. Finally, he is charged with violating Subsection 475.42(1)(d), Florida Statutes, by having collected money in connection with a real estate brokerage transaction except in the name of the employer and without the express consent of his employer. By allegedly violating this latter statute, the complaint also alleges respondent violated Subsection 475.25(1)(a), Florida Statutes, in a second respect.

       
       

   14. By clear and convincing evidence, petitioner has demonstrated that by failing to disclose the executed contract to his employer and the listing broker prior to closing, respondent is guilty of a breach of trust in a business transaction in violation of Subsection 475.25(1)(b), Florida Statutes. By collecting a commission in his own name and without the express consent of his broker, and effectively acting as a broker while licensed as a salesperson, he has violated Subsections 475.42(1)(b) and (d), Florida Statutes, thereby also violating Subsection 475.25(1)(a), Florida Statutes. The evidence is less than clear and convincing, and petitioner concedes as much in its proposed order, that respondent used a "trick, scheme, or device" to engage in dishonest dealing within the meaning of Subsection 475.25(1)(b), Florida Statutes, and thus that charge should fail. In reaching these conclusions, the undersigned notes that while respondent met with his broker and explained the circumstances under which he had received a commission in an effort to determine if his actions were appropriate, he did not do so until after the closing was held. At that point, he had violated the trust imposed in him to notify his broker and the exclusive listing agent of the sale, and he had received (but not deposited) a commission check in his own name and without his broker's approval. While respondent's subsequent actions may serve to mitigate the severity of a penalty, they do not absolve him of guilt.

       
       

   15. Rule 21V-24.001, Florida Administrative Code, sets forth a range of disciplinary guidelines to be used when imposing disciplinary penalties upon a licensee. For a violation of subsection 475.25(1)(b), the rule calls for a penalty ranging up to five years suspension or revocation. For a violation of subsection 475.42(1)(b), the same rule sets forth a penalty of up to three years suspension or revocation. Finally, for collecting a commission except in the name of the employer, a salesperson may have his license suspended for up to three years.

       
       

   16. Rule 21V-24.001(4)(a), Florida Administrative Code, allows the consideration of aggravating or mitigating circumstances in assessing a penalty. As is relevant here, the offenses relate to one transaction, there was no harm

to the buyer or seller in the transaction but the listing broker was deprived of her right to make a claim for a commission prior to the closing, the complaint involves three counts, there is no evidence of prior disciplinary action being taken against respondent or of previous violations, and respondent was not actively engaged in the real estate profession when the illicit conduct occurred. Given these considerations, and having also considered the penalty recommended by petitioner's counsel, it is recommended that respondent's license be suspended for ninety days and he be assessed an administrative fine of $500.

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

finding that respondent violated Subsections 475.25(1)(a) and (b) and

475.42(1)(b) and (d), Florida Statutes. It is further recommended that his license be suspended for ninety days and he be assessed a $500 administrative fine.

DONE AND ENTERED this 20th day of January, 1993, in Tallahassee, Florida.

DONALD R. ALEXANDER

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 20th day of January, 1993.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-5757

To comply with the requirements of Section 120.59(2), Florida Statutes, the following rulings are made on petitioner's proposed findings of fact:

rejected as being unnecessary, cumulative, subordinate, irrelevant, not supported by the evidence, or a conclusion of law.

COPIES FURNISHED:

Darlene F. Keller, Director Division of Real Estate Post Office Box 1900

Orlando, Florida 32802-1900

Jack L. McRay, Esquire 1940 North Monroe Street Suite 60

Tallahassee, Florida 32399-0792

James H. Gillis, Esquire Post Office Box 1900 Orlando, Florida 32802-1900

Mr. Robert William English 5930 A1A South, #7B

St. Augustine, Florida 32084

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 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. ANY EXCEPTIONS TO THIS RECOMMENDED ORDER SHOULD BE FILED WITH THE FLORIDA REAL ESTATE COMMISSION.

Docket for Case No: 92-005757

Orders for Case No: 92-005757