STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 94-2269

)

CHARLES SEYMOUR SMITH, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on November 1, 1994, in Boca Raton, Florida, before J. Stephen Menton, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Theodore R. Gay, Esquire

Department of Business and Professional Regulation

401 Northwest Second Avenue, Suite N-607 Miami, Florida 33128

For Respondent: Charles Seymour Smith, pro se

18768 Caspian Circle

Boca Raton, Florida 33469 STATEMENT OF THE ISSUE

The issue in this case is whether disciplinary action should be taken against Respondent's real estate broker and real estate school instructor licenses based upon the alleged violation of Section 475.25(1)(b), Florida Statutes, set forth in the Administrative Complaint.

PRELIMINARY STATEMENT

In a one count Administrative Complaint dated March 9, 1994, Petitioner charged Respondent with violating Section 475.25(1)(b), Florida Statutes.

Specifically, the Administrative Complaint alleged that Respondent was guilty of "fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in [a] business transaction." Respondent disputed the allegations contained in the Administrative Complaint and requested a formal administrative hearing. The case was transferred to the Division of Administrative Hearings ("DOAH").

While the case was pending before DOAH, the parties entered into a proposed settlement agreement which was presented to the Florida Real Estate Commission (the "Commission") for its approval. The Commission rejected the proposed settlement and a formal hearing was duly noticed and conducted by DOAH pursuant to Section 120.57(1), Florida Statutes.

At the outset of the hearing, the parties stipulated that paragraphs 1 through 4, 7, and 8 of the Administrative Complaint were true. During the hearing, Petitioner presented the testimony of one witness, John Greer.

Petitioner offered four exhibits into evidence, all of which were accepted without objection. The parties stipulated that Respondent wrote and mailed the letters marked and accepted as Petitioner's Exhibits 1, 2 and 4.

Respondent testified on his own behalf and offered one exhibit into evidence which was accepted without objection. Petitioner recalled John Greer to testify in rebuttal.

At the conclusion of the hearing, a schedule was established for the submission of proposed recommended orders. Petitioner timely submitted proposed findings of fact and conclusions of law in accordance with that schedule. A ruling on each of Petitioner's proposed findings of fact is included in the Appendix to this Recommended Order. Three days after the deadline for filing proposed recommended orders, Respondent submitted a letter objecting to the recommended penalties set forth in Petitioner's proposed recommended order.

Respondent's letter discusses certain prehearing settlement proposals offered by Petitioner and the proposed settlement stipulation which was rejected by the Florida Real Estate Commission. As explained to Respondent at the hearing, a formal hearing under Section 120.57(1), Florida Statutes, is a de novo proceeding and the rejected settlement agreement is not pertinent to this proceeding. Respondent's letter did not include any proposed findings of fact. Consequently, no rulings are made with respect to that submittal.

FINDINGS OF FACT

Based upon the oral and documentary evidence presented at the final hearing and the entire record in this proceeding, the following findings of fact are made:

1. Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to the laws of Florida, in particular Section 20.165, and Chapters 120,

   455 and 475, Florida Statutes, and the rules promulgated pursuant thereto.

   
   

2. At all times pertinent to this proceeding, Respondent was a licensed real estate school instructor and real estate broker in Florida having been issued license numbers ZH35593 and 0520063 in accordance with Chapter 475, Florida Statutes. No evidence was presented of any prior disciplinary action against Respondent's licenses.

   
   

3. The last licenses issued to Respondent were as a school instructor at 23424F SW 53rd Avenue, Boca Raton, Florida 33433, and as a broker c/o The Place for Real Estate, Inc., 2 E. Camino Real, Boca Raton, Florida 33432.

   
   

4. From November 1992 through August 1993, Respondent was employed as a real estate instructor by the Gold Coast School of Real Estate II, Inc. ("Gold Coast"), a real estate school. During this time period, Gold Coast had five

   locations in Dade, Broward, and Palm Beach Counties. Respondent taught at all five locations.

   
   

5. Sometime in August of 1993, Gold Coast terminated Respondent's employment as a real estate instructor. Respondent was given little or no advance notice of the termination.

   
   

6. Respondent was extremely upset and distraught over the abrupt termination of his employment. Respondent's employment with Gold Coast was the primary source of income for his family. His contract with Gold Coast did not provide for any severance pay or benefits.

   
   

7. After Respondent was terminated, he sent letters dated August 11, 1993 and August 20, 1993 to John Greer, vice president of Gold Coast. In those letters, Respondent threatened to report certain alleged improprieties in Gold Coast's operations to the Department of Professional Regulation (the "Department") unless Gold Coast provided Respondent with "an amicable severance package."

   
   

8. Greer ignored the first letter he received from Respondent. After he received the second letter, Greer consulted with an attorney and conducted an investigation into the matters enumerated by the Respondent. Greer also reported the situation to the Department.

   
   

9. Greer's investigation failed to corroborate any of the alleged improprieties that Respondent had threatened to report. The Department also conducted an investigation which did not result in any action against Gold Coast.

   
   

10. In a letter to Respondent dated August 24, 1993, Greer responded to Respondent's August 11 and August 20, 1993 letters and stated, "[U]pon advice of counsel, I am informing you that the making of threats in pursuit of monetary gain is extortion."

    
    

11. After receiving Greer's August 24 letter, Respondent discontinued his efforts to obtain a severance package from Gold Coast. Respondent sent a letter to Greer dated September 9, 1993, which stated "I certainly do no want my conduct to be construed as an extortion attempt . . . so, forget the severance check."

    
    

12. Respondent never filed a lawsuit against Gold Coast nor has he made any other efforts to collect severance benefits. As of the date of the hearing, Gold Coast had not paid any kind of severance pay or severance benefits to Respondent.

    
    

13. During the hearing in this case, Respondent expressed a great deal of remorse over his actions. He admitted that the two letters in August were ". .

    . rather stupid on my part . . ." and " . . . totally unprofessional . . ."

    
    

    CONCLUSIONS OF LAW

    
    

14. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes.

    
    

15. Pursuant to Section 475.25, Florida Statutes, the Florida Real Estate Commission is empowered to take disciplinary action against a licensed real

    estate broker or real estate instructor who is found guilty of any of the violations enumerated in the statute.

    
    

16. Petitioner has the burden of proving by clear and convincing evidence all of the essential allegations against Respondent. See Ferris v. Turlington,

    510 So.2d 292 (Fla. 1987); Munch v. Department of Professional Regulation, 592 So.2d 1136 (Fla. 1st DCA 1992). "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 allegation sought to be established." Slomowitz v. Walker, 429 So.2d 797, 800 (Fla. 4th DCA 1983).

    
    

17. The Administrative Complaint in this case contains only one count. In that Count, Petitioner alleges that Respondent violated Section 475.25(1)(b), Florida Statutes. Section 475.25(1)(b), Florida Statutes, provides as follows:

    
    

    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:

    * * *

    (b) Has been guilty of fraud, misrepre- sentation, 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 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.

    
    

18. The clear and convincing evidence in this case established that Respondent attempted to obtain money from Gold Coast by threatening to report alleged misconduct to the Department if he did not receive a severance package. These actions are sufficient to establish a violation of Section 475.25(1)(b), Florida Statutes, as alleged in the Administrative Complaint.

19. Pursuant to Section 475.25(1), Florida Statutes, and Rule 61J2-24.001, Florida Administrative Code, disciplinary action by the Florida Real Estate Commission may, as circumstances warrant, include any one or more of the following penalties: a reprimand; an administrative fine not to exceed $1,000 per violation; probation; suspension of a license, for a period not to exceed 10 years; or revocation of the license.

    
    

20. Rule 61J2-24.001(3)(c), Florida Administrative Code, provides for a maximum penalty of up to 5 years suspension or revocation for a violation of Section 475.25(1)(b), Florida Statutes.

    
    

21. Rule 61J2-24.001(4), Florida Administrative Code, permits deviation from the prescribed penalty guidelines if aggravating or mitigating circumstances are demonstrated by clear and convincing evidence. Such aggravating or mitigating circumstances may include, but are not limited to, the following: (a) the 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 a licensee as a result of the imposition of a fine or suspension of the license; and (h) whether a letter of guidance has been previously issued to the licensee.

    
    

22. In this case, there is no evidence of any prior misconduct by Respondent. The suspension or revocation of Respondent's licenses would result in a great financial hardship. While Gold Coast had to consult with its attorney and respond by letter to Respondent's letters, Respondent immediately halted his efforts to obtain severance benefits when he received Gold Coast's response.

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 Respondent guilty of violating Section 475.25(1)(b), Florida Statutes, as alleged in Count I of the Administrative Complaint. As a penalty for the violation, Respondent should be reprimanded, an administrative fine of $250 should be imposed, and Respondent's licenses should be placed on probation for one year.

DONE AND ENTERED this 16th day of December 1994 in Tallahassee, Leon County, Florida.

J. STEPHEN MENTON 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 16th day of December 1994.

APPENDIX

The following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact.

1. Adopted in substance in Findings of Fact 1.

2. Adopted in substance in Findings of Fact 2.

3. Adopted in substance in Findings of Fact 3.

4. Adopted in substance in Findings of Fact 4 except the evidence established that the Respondent began working for Gold Coast in November of 1992.

5. Adopted in substance in Findings of Fact 7.

6. Adopted in substance in Findings of Fact 8.

7. Adopted in substance in Findings of Fact 9.

8. Rejected as unnecessary. The subject matter is addressed in Findings of Fact 9.

9. Adopted in substance in Findings of Fact 11.

10. Adopted in substance in Findings of Fact 5 and 12.

11. Adopted in pertinent part in Findings of Fact 5 and 13.

Respondent's Proposed Findings of Fact.

None submitted.

COPIES FURNISHED:

Theodore R. Gay, Esquire Department of Business and Professional Regulation

401 Northwest 2nd Ave., Suite N-607 Miami, Florida 33128

Charles Seymour Smith 18768 Caspian Circle

Boca Raton, Florida 33469

Darlene F. Keller, Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900

Jack McRay, Acting General Counsel Department of Buisness 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: 94-002269

Orders for Case No: 94-002269