STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 93-2798

) KAREN L. BROWN, FRANK R. TRENT, ) JO MARION TRENT and HOST REALTY, ) INC., )

)

Respondents, )

)

RECOMMENDED ORDER

PURSUANT TO NOTICE, the Division of Administrative Hearings, by its duly designated Hearing Officer, Mary Clark, held a formal hearing in the above- styled case on June 8, 1995, in Melbourne, Florida.

APPEARANCES

For Petitioner: Steven W. Johnson, Esquire

Senior Attorney Division of Real Estate

Hurston North Tower, Number 308A

400 West Robinson Street Orlando, Florida 32801

For Respondents: William C. Potter, Esquire

MCCLELLAND, MARKS & HEALY, P.A.

Post Office Box 2523 Melbourne, Florida 32902

ISSUES

An administrative complaint dated April 22, 1993, and filed April 23, 1993, alleges these violations of Chapter 475, Florida Statutes, by the respondents:

As to Karen Brown and Host Realty - false and deceptive advertising in violation of Rule 21V-10.025, Florida Administrative Code, and Sections 475.25(1)(c) and 475(1)(e), Florida Statutes;

As to Karen Brown, Host Realty, Frank R. Trent, and Jo Marion Trent - fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence or breach of trust, etc. in violation of section 475.25(1)(b), Florida Statutes.

The issue in this proceeding is whether the respondents committed these violations, and if so, what discipline is appropriate.

PRELIMINARY STATEMENT

Respondents answered the administrative complaint and requested a formal hearing. The case was forwarded to the Division of Administrative Hearings, and after several continuances and an abeyance in anticipation of informal resolution, the parties requested that the hearing be rescheduled and the case proceeded as set forth above.

At the hearing Petitioner presented testimony of Leonard Beltle, James Vass and John D. Allen. Petitioner's exhibits #1-5 were received in evidence without objection.

Karen Brown, Elio Lopez and Norman Eliason testified for Respondents.

Respondents' exhibit #1 was received in evidence; Respondents' exhibit #2 was marked for identification only.

After the hearing, on June 22 and 26, 1995, the parties submitted proposed recommended orders. The findings of fact proposed by each are addressed in an appendix attached to this recommended order.

FINDINGS OF FACT

1. Karen Brown is, and was at all times material, a licensed real estate broker in the State of Florida. She was licensed and operated as a qualifying broker and officer of Host Realty, Inc., which corporation is registered as a real estate broker in the State of Florida, in Melbourne, Florida.

   
   

2. Frank R. Trent and Jo Marion Trent are and, at all times material, were licensed real estate salespersons in the State of Florida with licenses issued c/o Host Realty, Inc. in Melbourne, Florida.

   
   

3. Respondents Brown and Host Realty solicited business with advertising that stated, among other claims, that Host Realty was "Appointed Management Broker for the Veterans' Administration, managing all inventory of the Government Homes in Brevard County." (Petitioner's exhibit #1)

   
   

4. Host Realty has been a Veterans' Administration (VA) property management broker for about ten years, in Brevard County only. It has also in the past been a U.S. Department of Housing and Urban Development (HUD) property manager in Brevard County. Host does not have an exclusive right to sell government property. Its function with regard to the governmental property it manages is to secure the property, do foreclosures, conduct inspection reports, visit the property, investigate complaints and perform similar tasks, until it is notified the property has sold. It has a fiduciary relationship with the governmental agency.

   
   

5. Host does not manage all inventory of government homes but all the homes it manages are in Brevard County. Although she had no intent to mislead anyone, Karen Brown can understand now why someone could think the advertisement was misleading and the "all inventory" statement no longer appears.

   
   

6. Leonard Beltle is a state licensed private investigator who was retained by a competing real estate broker to investigate the practises of Host Realty in selling VA property.

7. Some time in late October and early November 1992, Leonard Beltle contacted Host Realty about some houses on the VA property list. He spoke with Roy Trent, the son of Frank and Jo Marion Trent, who told him that the properties would be available for bid on November 13, 1992. He went by the properties and later went back to the Host Realty office to talk with Frank and Jo Marion Trent about what was needed. He claims that he was given a key to the houses after he asked for an opportunity to show them to his wife. He claims he returned the key, but at hearing was not clear when he returned it, either the next day or a week later.

   
   

8. Host Realty does not have a policy of giving out keys to prospective buyers and Karen Brown denies that Beltle was given a key. The VA does not prohibit this practice, but rather encourages whatever is reasonably necessary to sell the property.

   
   

9. On or about November 23, 1992, Beltle returned to Host Realty to present a bid on a house at 1190 Grapefruit Street in Palm Bay. He asked Jo Marion Trent what he needed to bid. She told him, "Go $10,000 over the opening bid," or "I would bid $10,000 over the 'asking price'", or something similar to those terms. He completed the paperwork, including signing his wife's name, and offered $82,721--$10,000 over the VA-advertised minimum bid.

   
   

10. Beltle's executed offer to purchase and contract of sale reflects an earnest money deposit of $500. In fact, when Frank Trent asked him for the deposit, Beltle said he did not have his checkbook with him, so Frank Trent told him to bring it in the next day. Beltle never returned with the deposit.

    
    

11. The bid was due at the VA the next day, and Beltle's paperwork was submitted with approximately 60-70 contracts in a batch. Karen Brown discovered the error the next morning when she was reviewing the contracts and learned that Beltle did not bring the deposit check. She immediately faxed a withdrawal to the VA. It is not Host Realty's practice to accept offers without a deposit and Karen Brown has a system of checking to assure there is a deposit and the funds are in escrow.

    
    

12. Notices of the availability of government properties include a minimum bid price. VA has a computer bulletin board with information on its property statewide. Karen Brown downloads the information and can determine trends in sales. From this, and her experience, she could reasonably estimate that

    $10,000 over the "asking" or minimum bid would typically be a successful offer. There is no way that she or anyone at Host Realty would, or even could, reveal the highest bid to prospective purchasers, since other realtors are submitting bids for the same property.

    
    

13. Advising a prospective purchaser of trends or the "$10,000 over the asking price" does not violate VA policy or any fiduciary duty.

    
    

    CONCLUSIONS OF LAW

    
    

14. The Division of Administrative Hearings has jurisdiction in this proceeding pursuant to sections 120.57(1), and 455.225(5), Florida Statutes.

15. Section 475.25, Florida Statutes, provides, in pertinent part:

    
    

    475.25 Discipline.--

    1. The commission may deny an application for licensure, registration, or permit, or renewal thereof; may place a licensee, registrant, or permittee on probation; may suspend a license, registration, or permit

       for a period not exceeding 10 years; may revoke a license, registration, or permit; may impose an administrative fine not to exceed $1,000 for each count or separate offense; and may issue a reprimand, and any or all of the foregoing, if it finds that the licensee, registrant, permittee, or applicant:

       * * *

       1. Has been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction in this state or in any

          other state, nation, or territory; has violated a duty imposed upon him by law or by the terms of a listing contract, written, oral, express, or implied, in a real estate transaction; has aided, assisted, or conspired with any other person engaged in any such misconduct and in furtherance thereof; or has formed an intent,

          design, or scheme to engage in any such misconduct and committed an overt act in furtherance of such intent, design, or scheme. It is immaterial to the guilt of the licensee that the victim or intended victim of the misconduct has sustained

          no damage or loss; that the damage or loss has been settled and paid after discovery of the misconduct; or that such victim or intended victim was a customer or a person in confidential relation with the licensee or was an identified member of the general public.

       2. Has advertised property or services in a manner which is fraudulent, false, deceptive, or misleading in form or content.

    * * *

    (e) Has violated any of the provisions of this chapter or any lawful order or rule made or issued under the provisions of this chapter or chapter 455.

    * * *

    
    

16. Rule 21V-10.025, Florida Administrative Code [now codified as 61J2- 10.025] provides, in pertinent part:

    
    

    1. . . . no real estate advertisement placed or caused to be placed by a licensee shall be fraudulent, false, deceptive or misleading.

17. Petitioner contends that Respondents violated the above statutes and rule by giving a key to a prospective buyer, by revealing the bid needed to purchase property, by failing to obtain a stated deposit and by falsely advertising a relationship with government agencies. Petitioner must prove these allegations with evidence that is clear and convincing. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

18. Petitioner failed to provide the required clear and convincing proof of violations. Even if someone at Host Realty gave Beltle a key so he could show his wife the houses, this according to a competent disinterested witness, was not a violation of VA policy. Nor was it a violation to inform a prospective buyer of the usual amount of bid needed for a successful purchase.

    
    

19. The submittal of Beltle's bid without the deposit was wholly inadvertent, and the error was rectified immediately. Similarly, Karen Brown and Host Realty did not intentionally misrepresent the company's status in its advertising. The company is, and was a broker representative for the VA, and also was in the past for HUD, all in Brevard County. Again, upon a suggestion that the claim was misleading, or at least ambiguous, the advertising was dropped.

    
    

20. These unintentional and promptly corrected errors do not rise to the level of violations which would warrant license discipline. Munch v. Dept. of Professional Regulation, Division of Real Estate, 592 So.2d 1136 (Fla. 1st DCA 1992); Morris v. Dept. of Professional Regulation, et al., 474 So.2d 841 (Fla. 5th DCA 1985).

RECOMMENDATION

Based on the foregoing, it is RECOMMENDED that the administrative complaint in this case be dismissed.

DONE AND ENTERED this 29th day of August 1995 in Tallahassee, Leon County, Florida.

MARY W. CLARK, 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 29th day of August 1995.

APPENDIX

The following constitute specific rulings on the parties' proposed findings of fact as required by Section 120.59(2), F.S.:

Petitioner's Proposals

1. Rejected as unnecessary.

2, 5 and 6. Adopted in paragraph 1.

3 and 4. Adopted in paragraph 2.

7 and 8. Adopted in paragraph 3.

1. Rejected as contrary to the evidence that they also managed HUD property for a time.

2. Adopted in paragraph 4.

11 - 14. Adopted in substance in paragraph 7, except that it was not "clearly and convincingly" established that he was given a key.

15 - 17. Adopted in substance in paragraph 9.

1. Adopted in substance in paragraph 10.

2. Adopted in substance in paragraph 11.

Respondents' Proposals

1 - 4. These are arguments and commentary on the evidence, rather than simple findings of fact. As reflected in the findings by the Hearing Officer and recommended disposition, Respondents' evidence is substantially adopted as fact, most of which evidence was uncontroverted.

COPIES FURNISHED:

Steven W. Johnson, Esquire Division of Real Estate Hurston North Tower, No. 308A

400 West Robinson Street Orlando, Florida 32801

William C. Potter, Esquire McClelland, Marks & Healy, P.A. Post Office Box 2523

Melbourne, Florida 32902

Darlene F. Keller, Division Director Division of Real Estate

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

Lynda L. Goodgame, General Counsel Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

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 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: 93-002798

Orders for Case No: 93-002798