STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 93-6908

) AL EMIL KRAVCHUK and CATHERINE L. ) KRAVCHUK, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to written notice, a formal hearing was conducted in this proceeding by telephone before Daniel Manry, a duly designated Hearing Officer of the Division of Administrative Hearings, on March 30, 1994, in Orlando, Florida.

APPEARANCES

For Petitioner: Steven W. Johnson, Esquire

Department of Business and Professional Regulation

Division of Real Estate

400 West Robinson Street, Suite N-308 Orlando, Florida 32801-1772

For Respondent: Al Emil Kravchuk, pro se

Catherine L. Kravchuk, pro se 3099 Bridgehampton Lane

Orlando, Florida 32812-5951 STATEMENT OF THE ISSUE

The issue for determination in this proceeding is whether disciplinary action should be taken against Respondents' licenses as real estate sales persons for violations of Sections 475.25(1)(a),(b), and (e) and 475.42(1)(b), and (d), Florida Statutes, as alleged in the Administrative Complaint.

PRELIMINARY STATEMENT

Petitioner filed a three count Administrative Complaint on October 22, 1993. Respondents timely requested a formal hearing, and the matter was referred to the Division of Administrative Hearings for assignment of a hearing officer to conduct a formal hearing. Pursuant to the agreement of the parties, the formal hearing was conducted by telephone on March 30, 1994.

At the formal hearing, Petitioner presented the testimony of Mr. Joel C. Davis, President of Buckeye Construction, Inc.; and Mr. Matthew McDonald, Investigation Specialist II for Petitioner. Petitioner submitted four exhibits which were admitted in evidence without objection. Petitioner's Exhibit 1 is a copy of a contract for sale and purchase of the property in question and a cover sheet. Petitioner's Exhibit 2 is a copy of a closing statement for the transaction. Petitioner's Exhibit 3 is a copy of a commission check from the closing agent. Petitioner's Exhibit 4 is a copy of the licensure file for Respondents.

Respondents testified in their own behalf. Respondents submitted no exhibits for admission in evidence.

A transcript of the formal hearing was not requested by either party. Proposed findings of fact and conclusions of law were timely filed by the parties on April 11, 1994. The parties' proposed findings of fact are addressed in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Petitioner is the state licensing and regulatory agency charged with the responsibility and duty to prosecute licensees under Chapters 455 and 475, Florida Statutes. Respondents, Al and Catherine Kravchuk, respectively, hold Florida real estate licenses 0420576 and 0436106. Both licenses are sales licenses.

   
   

2. The license of Respondent, Al Kravchuck, became inactive sometime between June 24, 1991, and October 1, 1991. From July 8, 1991, to January 4, 1993, Respondent, Catherine Kravchuck, was licensed as a salesperson with Davis Land Company, Inc. ("Davis Land Company").

   
   

3. From 1979 through 1993, Davis Land Company was engaged in the development of single family subdivisions in the area of Orlando, Florida. Mr. Joel C. Davis was the president of Davis Land Company. Mr. Davis was a nonlicensed owner-developer.

   
   

4. Flamingo Lakes Subdivision in Kissimmee, Florida ("Flamingo Lakes") was one of the developments undertaken by Davis Land Company. Davis Land Company employed four sales people at Flamingo Lakes. Respondent, Catherine Kravchuck, was one of the four sales people on staff at Flamingo Lakes.

   
   

5. When a contract for sale was generated at Flamingo Lakes, it was turned in at the regular Monday sales meeting. Mr. Davis reviewed the contract to determine the cost of the sale including "extras" and commissions. A cover sheet was attached to each contract to apprise Mr. Davis of the cost of each sale.

   
   

6. Respondent, Al Kravchuck, was the U.S. representative for Mr. Christopher Williams and Mr. Jack Dawson. Mr. Williams and Mr. Dawson are residents of Great Britain. Respondent, Al Kravchuck, performed services for Mr. Williams and Mr. Dawson, including services in connection with the purchase of property in the United States.

   
   

7. Respondent, Al Kravchuck, represented Mr. Williams and Mr. Dawson in connection with the purchase of Lot 45 in Flamingo Lakes. On January 13, 1992, Respondent, Catherine Kravchuck, prepared a contract between Davis Land Company and Messrs. Williams and Dawson for the sale and purchase of Lot 45.

8. The contract was signed by the purchasers and presented to Mr. Davis at the regular Monday meeting along with the cover sheet. Respondent, Al Kravchuck, was listed on the cover sheet as the cooperating realtor and on the contract as the co-broker. The amount of the commission due the cooperating realtor under the terms of the contract was $5,477.50.

   
   

9. Respondents disclosed to Mr. Davis that the commission due Respondent, Al Kravchuck, under the terms of the contract was intended for Mr. Williams. This arrangement was consistent with the understanding that Mr. Williams would refer other customers to Davis Land Company in exchange for the co-broker commission.

   
   

10. The contract for the sale and purchase of Lot 45 closed on or about August 28, 1992. The closing statement disclosed that a check in the amount of

    $5,477.50 was to be paid at closing to Respondent, Al Kravchuck, from the funds due Davis Land Company.

    
    

11. Mr. Davis was present at the closing and discussed the prospect of future business referrals with Mr. Williams. Mr. Davis signed the closing statement and accepted the proceeds of closing.

    
    

12. The closing agent issued a check for $5,477.50 to Respondent, Al Kravchuck, on September 11, 1992. A memo of the check was sent to Davis Land Company. Pursuant to the agreement of Mr. Williams, Respondent, Al Kravchuck, kept a substantial portion of the $5,477.50 in payment for services rendered to Mr. Williams.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. Section 120.57(1), Florida Statutes. The parties were duly noticed for the formal hearing.

    
    

14. The burden of proof is on Petitioner to prove the allegations in the Administrative Complaint by clear and convincing evidence. Where an agency seeks disciplinary action against a professional license, the evidence must be clear and convincing. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

15. Respondents are not guilty of misrepresentation, concealment, false promises, dishonest dealing by trick, scheme or device, culpable negligence or breach of trust in a business transaction within the meaning of Section 475.25(1)(b), Florida Statutes. Petitioner failed to show by clear and convincing evidence that all of the facts and circumstances known to Respondents were not disclosed to Mr. Davis in a timely and complete manner. Therefore, there could be no misrepresentation, concealment, false promise, trick, scheme, device, culpable negligence or breach of trust.

    
    

16. The cover sheet and contract prepared by Respondent, Catherine Kravchuck, disclosed the fact that Respondent, Al Kravchuck, was to receive a commission check in the transaction. That fact was also disclosed on the closing statement and the memo of the check from the closing agent sent to Davis Land Company. Mr. Davis was present at the closing and conversed directly with Mr. Williams. Respondents' testimony concerning disclosures made to Mr. Davis in sales meetings and at other times was credible and persuasive and not rebutted by clear and convincing evidence presented by Petitioner.

17. Respondent, Catherine Kravchuck, may or may not be guilty of other offenses defined in Chapter 475, Florida Statutes. However, she was not charged in the Administrative Complaint with a violation of any statute except Section 475.25(1)(b).

    
    

18. Respondent, Al Kravchuck, is guilty of violating Sections 475.25(1)(a) and (e) and 475.42(b) and (d), Florida Statutes. Sections 475.25(1)(a) and (e), in relevant, part authorize the imposition of the penalties prescribed in Section 475.25(1) if Respondent, Al Kravchuck, is guilty of violating any of the provisions in Section 475.42.

    
    

19. Respondent, Al Kravchuck, operated as a broker or as a salesperson for one who was not registered as his employer in violation of Section 475.42(1)(b). Respondent, Al Kravchuck, also collected a real estate commission either in his own name or in the name of one who was not an employer within the meaning of Section 475.01(2). An employer is defined in Section 475.25(2) as a broker who employs a salesperson. Whether Respondent, Al Kravchuck, collected the real estate commission for himself or for Mr. Williams, his actions violated Sections 475.42(1)(b) and (d).

    
    

20. Section 475.25(1) authorizes Petitioner to place a licensee on probation, impose and administrative fine, suspend the license, or revoke a license for the violations committed by Respondent, Al Kravchuck. Disciplinary guidelines are further explained in Florida Administrative Code Rule 21V- 24.001(1).

    
    

21. When mitigating circumstances are present, deviation from prescribed disciplinary guidelines is authorized. Mitigating circumstances include without limitation: (a) the lack of severity of the offense; (b) the degree of harm to the consumer or public; (c) the number of counts in the Administrative Complaint; (d) the number of times the offenses previously have been committed by the licensee; (e) the disciplinary history of the licensee; (f) the status of the licensee at the time the offense was committed; (g) the degree of financial hardship incurred by the licensee as a result of the imposition of a fine or suspension of a license; and (h) whether a letter of guidance has previously been issued to the licensee. Florida Administrative Code Rule 21V-24.001(4)(b).

    
    

22. Respondent, Al Kravchuck, has no previous disciplinary history and has never committed a similar offense. The severity of the offense is great whenever the offense involves the misuse of funds. The degree of harm to the consumer or public in this proceeding is not as great as it would have been had Respondent misappropriated funds of a seller or purchaser.

    
    

23. Petitioner has not recommended suspension or revocation of the license of Respondent, Al Kravchuck. Petitioner has recommended an administrative fine of $1,500, probation for one year, a reprimand, and 45 hours of post licensing courses.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondents be found not guilty of violating Section

475.25(1)(b), Florida Statutes. It is further recommended that Respondent, Al Kravchuck, be found guilty of violating Sections 475.25(1)(a) and (e) and 475.42(1)(b) and (d), reprimanded, placed on probation for one year, and required to complete 30 hours of professional education courses within a reasonable period not less than the period of probation.

DONE and ENTERED this 25th day of April, 1994, in Tallahassee, Florida.

DANIEL MANRY

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 25th day of April, 1994.

APPENDIX

Petitioner's Proposed Findings of Fact 1-6 Accepted in substance

1. Accepted as to broker status but not as to employer.

   Compare statement of agency in proposed finding 8.

2. Accepted in substance

3. First two sentences rejected as recited testimony. Remainder accepted in substance

Respondents' Proposed Findings of Fact

4-9 Accepted in substance (The proposed findings are numbered para. 4-9)

COPIES FURNISHED:

Al Emil Kravchuk Catherine L. Kravchuk 3099 Bridgehampton Lane

Orlando, FL 32812-5951

Steven W. Johnson, Esquire Division of Real Estate

400 W. Robinson Street, North Tower Orlando, FL 32801-1772

Darlene F. Keller Division Director Division of Real Estate

Department of Professional Regulation

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

Jack McRay, Esquire Acting General Counsel

Department of Professional Regulation 1940 N. Monroe Street

Tallahassee, FL 32399-0729

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 10 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: 93-006908

Orders for Case No: 93-006908