STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 94-1206

)

CAROLEE HARSE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William J. Kendrick, held a formal hearing in the above-styled case on July 13, 1994, in West Palm Beach, Florida.

APPEARANCES

For Petitioner: Theodore R. Gay, Esquire

Department of Business and Professional Regulation

401 Northwest 2nd Avenue, Suite N607 Miami, Florida 33128

For Respondent: Thomas L. Howard, Esquire

112 North U.S. Highway One Tequesta, Florida 33469

STATEMENT OF THE ISSUE

At issue in this proceeding is whether respondent committed the offense alleged in the amended administrative complaint and, if so, what disciplinary action should be taken.

PRELIMINARY STATEMENT

By administrative complaint dated January 19, 1994, as amended by order of June 17, 1994, petitioner charged that respondent, a licensed real estate broker, was guilty of "misrepresentation, concealment, culpable negligence or breach of trust in any business transaction in violation of [Section] 475.25(1)(b), Fla. Stat." The predicate for such charge was is petitioner's allegation that respondent solicitated and obtained a contract for the sale/purchase of certain real property, that an initial deposit of $200 was deposited in escrow with an additional $3,000 to be delivered within five days after the effective date of the contract, that the additional deposit was not made, and that "[a]t no time material herein did the Respondent inform the listing office or the sellers that the additional deposit had not been made in accordance with the terms of the contract."

Respondent executed an election of rights, which disputed the fact that she had failed to inform the listing office or the sellers that the additional deposit had not been made. Accordingly, the matter was referred to the Division of Administrative Hearings for the assignment of a Hearing Officer to conduct a formal hearing pursuant to Section 120.57(1), Florida Statutes.

At hearing, petitioner called, as witnesses: Sue Williams, Anita Couch, David Couch, Barbara Blaine, and Dana Hielema. Petitioner's exhibits 1-4 were received into evidence. Respondent testified on her own behalf, and respondent's exhibits 1-8 were received into evidence.

The transcript of hearing was filed September 12, 1994, and the parties were accorded ten days from that date to file proposed findings of fact. The parties' proposals have been addressed in the appendix to this recommended order.

FINDINGS OF FACT

1. Petitioner, Department of Business and Professional Regulation, Division of Real Estate, is a state government 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 20.165, Florida Statutes, Chapters 120, 455 and 475, Florida Statutes, and the rules promulgated pursuant thereto.

   
   

2. Respondent, Carolee Harse, is now, and was at all times material hereto, a licensed real estate broker in the State of Florida, having been issued license number 0493946. The last license issued was as a broker- salesperson with William S. Frank Associates, Inc., 120 U.S. Highway 1, Tequesta, Florida 33469.

   
   

3. In August 1993 respondent showed a home to Mr. and Mrs. Jose Manzo that had been listed with the Multiple Listing Service by Jupiter By The Sea, a brokerage business in Jupiter, Florida. The house was owned by Mr. and Mrs. David Couch and Cynthia Nixon.

   
   

4. Effective August 11, 1993, respondent obtained a contract between the Manzos, as buyers, and Couch/Nixon as sellers. Pursuant to the contract, the buyers' initial deposit of $200 was held in escrow by respondent's broker, William S. Frank Associates, Inc., and an additional escrow deposit of $3,000 was to be made by the buyer within five days of the effective date of the contract, to wit: by August 18, 1993. 1/

   
   

5. Following execution of the contract, the Manzos returned to their home in Mexico; however, they were scheduled to return on August 16, 1993, and arrangements were made for them to meet with respondent on August 17, 1993, to make the additional deposit. Unfortunately, Mrs. Manzo apparently required surgery while in Mexico, and Mr. Manzo did not return until the evening of August 17, 1993.

   
   

6. Respondent spoke with Mr. Manzo by telephone the evening of August 17, 1993, and an appointment was made for him to meet with her broker, Mr. Frank, on August 18, 1993, to make the additional deposit. As respondent explained to Mr. Manzo, she would be out of town on August 18, and her broker would take care of the deposit.

7. Indeed, respondent did have plans to be out of town on that date, and those plans had been made well prior to the subject contract. In this regard, the proof demonstrates that respondent and her husband had prior plans to attend a class reunion in Long Island, New York, and that they left Florida at 6:29 a.m., August 18, 1993, and did not return until late afternoon Sunday, August 22, 1993. Respondent advised the listing agent at Jupiter By The Sea that she would be out of town that week, and that Mr. Frank was scheduled to meet with Mr. Manzo on February 18 to receive the additional deposit.

   
   

8. Upon her Sunday return, respondent telephoned Mr. Frank and learned that Mr. Manzo had not made the additional deposit. The next day, respondent spoke with the listing agent by telephone, and advised her that the additional deposit had not been made. 2/ Respondent also advised the agent that she would follow up with the Manzos and try to secure the additional deposit; however, such efforts to secure the additional deposit failed, and by August 25, 1993, it was evident that the Manzos would not proceed with the purchase.

   
   

9. Although Respondent promptly advised the listing agent that the additional deposit had not been made, she did not personally undertake to notify the sellers. Rather, she assumed the listing agent would, in turn, notify that agent's client. Such assumption, given the circumstances, was reasonable.

   
   

10. Standard of Practice 21-18 of the National Association of Realtors, received into evidence without objection, provides:

    
    

    All dealings concerning property exclusively listed, or with buyer/tenants who are exclusively represented shall be carried on with the client's agent, and not with the client, except with the consent of the client's agent.

    
    

    Petitioner offered no proof, either by rule or community standard, which would have placed a different obligation on respondent. Accordingly, there being no proof to the contrary, it is found that respondent's notification to the listing agent was appropriate, and she was under no obligation to also notify the sellers. Rather, that obligation rested with the listing agent. 3/

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings. Sections 120.57(1) and 120.60(7), Florida Statutes.

    
    

12. At issue in this proceeding is whether respondent failed to timely "inform the listing office or the sellers that the additional deposit had not been made in accordance with the terms of the contract," and thereby violated the provisions of Section 475.25(1)(b), Florida Statutes, as alleged in the amended administrative complaint. In cases of this nature, the petitioner bears the burden of proving its charges by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987). "The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established." Slomowitz v. Walker, 492 So.2d 797, 800 (Fla. 4th DCA 1983). 4/

    
    

13. Moreover, in determining whether Section 475.25(1)(b), Florida Statutes, has been violated, one "must bear in mind that it is, in effect, a penal statute . . . This being true the statute must be strictly construed and

    no conduct is to be regarded as included within it that is not reasonably proscribed by it. Furthermore, if there are any ambiguities included such must be construed in favor of the . . . licensee." Lester v. Department of Professional and Occupational Regulations, 348 So.2d 923, 925 (Fla. 1st DCA 1977). Finally, the disciplinary action taken can be based only upon the facts specifically alleged in the administrative complaint. See, Kinney v. Department of State, 501 So.2d 129 (Fla. 5th DCA 1987), and Hunter v. Department of Professional Regulation, 458 So.2d 842 (Fla. 2d DCA 1984).

    
    

14. Pertinent to this case, Section 475.25(1), Florida Statutes, provides that the Florida Real Estate Commission may:

    
    

    . . . place a licensee . . . on probation; may suspend a license . . . for a period not exceed- ing 10 years; may revoke a license . . . 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 . . .

    * * *

    (b) Has been guilty of . . . misrepre-sentation, concealment . . ., culpable negligence, or breach of trust in any business transaction . . . .

    
    

15. Here, as noted in the findings of fact, the proof demonstrated that respondent, upon being made aware of the fact, promptly notified the listing agent of the buyers' failure to make the additional deposit, and that such notice comported with existing practice. Petitioner having failed to prove that respondent did not notify the listing agent in a timely manner, it follows that petitioner failed to demonstrate a violation of Section 475.25(1)(b), Florida Statutes. 5/

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be rendered which dismisses the amended

administrative complaint.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 3rd day of October 1994.

WILLIAM J. KENDRICK

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 3rd day of October 1994.

ENDNOTES

1/ Regarding the computation of time, the contract provided

TIME: Time periods herein of less than 6 days shall in the computation exclude Saturdays, Sundays and state or national legal holidays, and any time period provided for herein which shall end on Saturday, Sunday or a legal holiday shall extend to 5:00 p.m. of the next business day.

August 11, 1993, was a Wednesday. Therefore, under the terms of the contract, the additional deposit was due August 18, 1993.

2/ Why respondent's broker, Mr. Frank, had not advised the listing agent of Mr. Manzo's failure to make the additional deposit on August 18, 1993, is not of record.

3/ The proof is conflicting as to whether the listing agent notified the sellers of the buyers' failure to make the additional deposit on August 23, 1993, or on August 25, 1993. Such conflict is resolved by finding that the listing agent notified the sellers on August 23, 1993, but consistent with her conversation with respondent, also advised them that efforts would continue to secure the deposit. When those efforts failed, the sellers were notified August 25, 1993, that the deposit would not be made.

4/ In establishing the foregoing standard, the court in Ferris v. Turlington, supra, noted at page 293:

. . . the revocation of a professional license is of sufficient gravity and magnitude to warrant a standard of proof greater than a mere preponderance of the evidence . . . The correct standard for the revocation of a professional license such as that of a lawyer, real estate broker, or, as in this instance, a teacher, is that the evidence must be clear and convincing. We agree with the district court in Reid v. Florida Real Estate Commission, 188 So.2d 846, 851 (Fla. 2d DCA 1966), that:

The power to revoke a license should be exercised with no less careful circum-spection than the original granting of it. And the penal sanctions should be directed only toward those who by their conduct have forfeited their right to the privilege, and then only upon clear and convincing proof of substantial causes justifying the forfeiture.

And, in Brod v. Jernigan, 188 So.2d 575 (Fla. 2d DCA 1966), the court noted, at page 581:

Chapter 475 vests in the Florida Real Estate Commission a broad discretionary power and authority to supervise the privileged business of real estate broker and to deal firmly with those engaged in it, even to the point of taking away their means of liveli-hood by revocation or suspension of license. But such potent administrative weapons must always be reasonably and cautiously, and even sparingly, utilized. The administrative process of the Commission should be aimed at the dishonest and unscrupulous operator, one who cheats, swindles, or defrauds the general public in handling real estate transactions. (Emphasis added)

5/ In its proposed recommended order petitioner suggests that respondent should, for some unenunciated factual or legal reason, be held responsible for Mr. Frank's failure to notify the listing agent in respondent's absence. First, no such charge was included within the administrative complaint. Second, assuming, without deciding, that respondent suffered some vicarious responsibility for Mr. Frank's failure, such vicarious responsibility could hardly support the conclusion that respondent was "guilty of . . . misrepresentation, concealment, culpable negligence or breach of trust in any business transaction" because of Mr. Frank's failure to do so. See, e.g.,

Cannon v. State, 107 So.360 (Fla. 1926); Carraway v. Revell, 116 So.2d 16 (Fla. 1959), and 38 Fla. Jur 2d, Negligence, Section 3.

APPENDIX

Petitioner's proposed findings of fact are addressed as follows:

1. Adopted in paragraph 1.

2 & 3. Adopted in paragraph 2.

4-6 & 8. Addressed in paragraphs 3 and 4.

7. Addressed in paragraphs 5, 6 and 8.

1. Rejected as contrary to the facts as found. See endnote 3.

2. First sentence rejected as not relevant since respondent made no such representations to the Couches. Second sentence rejected as hearsay. Third sentence rejected as contrary to the credible proof. Fourth sentence rejected as not relevant.

3. Addressed in paragraph 7.

4. Addressed in paragraph 8.

5. Adopted in paragraph 8.

Respondent's proposed findings of fact are addressed as follows:

1 & 2. Addressed in paragraph 4 and endnote 1, otherwise unnecessary detail.

1. Addressed in paragraph 7.

2. Accepted. Addressed in paragraphs 6 and 7.

3. Addressed in paragraph 8.

4. Subordinate.

7-10. Accepted, but not necessary to the result reached.

11. Addressed in paragraph 14.

COPIES FURNISHED:

Theodore R. Gay, Esquire Department of Professional

Regulation

401 N.W. 2nd Avenue Suite N607

Miami, Florida 33128

Thomas L. Howard, P.A.

112 North U.S. Highway One Tequesta, Florida 33469

Darlene F. Keller Division Director Division of Real Estate

Department of Professional Regulation

Post Office Box 1900 Orlando, Florida 32802-1900

Jack McRay General Counsel

Department of Business

and Professional Regulation Suite 60

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 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: 94-001206

Orders for Case No: 94-001206