STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 95-4050

)

RETHA JO WALLMAN, )

)

Respondent. )

)

RECOMMENDED ORDER

A formal hearing was conducted in this proceeding by video conference before Daniel Manry, a duly designated Hearing Officer of the Division of Administrative Hearings, on December 12, 1995, in Orlando, Florida.

APPEARANCES

For Petitioner: Steven W. Johnson, Esquire

Senior Attorney

Department of Professional Regulation Division of Real Estate

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

For Respondent: Retha Jo Wallman, pro se,

t/a Concord Financial Realty Company 5965 Red Bug Lake Road, Number 117 Winter Springs, Florida 32708

STATEMENT OF THE ISSUES

The issues for determination in this proceeding are whether Respondent violated Section 475.25(1)(b) Florida Statutes, 1/ by committing the acts alleged in the Administrative Complaint and, if so, what, if any, penalty should be imposed.

PRELIMINARY STATEMENT

Petitioner filed an Administrative Complaint against Respondent on June 26, 1995. Respondent timely requested a formal hearing.

At the formal hearing, Petitioner presented the testimony of its investigator and the alleged victim. Petitioner submitted 10 exhibits for admission in evidence. Respondent testified in her own behalf and called her husband as her only witness. Respondent submitted three exhibits for admission in evidence. The identity of the witnesses and exhibits, and the rulings

regarding each, are set forth in the record of the formal hearing. Neither party requested a transcript of the formal hearing.

Petitioner timely filed its proposed recommended order ("PRO") on December 22, 1995. Respondent timely filed her PRO on December 26, 1995. Proposed findings of fact in Petitioner's PRO are accepted in this Recommended Order.

Proposed findings of fact in Respondent's PRO fail to comply with the order of the undersigned entered on the record at the formal hearing. None of the paragraphs in Respondent's proposed findings of fact are numbered, and none of the paragraphs cite to that portion, or portions, of the record upon which Respondent relies for her proposed finding.

FINDINGS OF FACT

1. Petitioner is the governmental agency responsible for issuing licenses to practice real estate and for regulating licensees on behalf of the state. Respondent is a licensed real estate broker under license number 0478560. The last license issued to Respondent was issued as a broker t/a Concord Financial Realty Co. ("CFR"), 495 E. Semoran Boulevard #115, Casselberry, Florida 32708.

   
   

2. Respondent is the sole owner of CFR. CFR carries on regular business activities that include apartment rentals and sales of real estate.

   
   

3. On January 31, 1992, Respondent and Mr. Charles Wallman, Respondent's husband, owned all of the stock of C.L. Wallman Associates, Inc ("CWA"). 2/ Respondent's husband owned Concord Financial Services, Inc. ("CFS"). CFS was formed to sell insurance and securities.

   
   

4. Respondent and her husband operated CFR, CWA, and CFS out of shared office space. Respondent performed bookkeeping and secretarial duties for CWA and CFS.

   
   

5. In January, 1992, Respondent's husband (the "seller") verbally agreed ("agreed") to sell 35 percent of the stock of CFS to Mr. John Topercer (the "purchaser") for $35,000. The seller and purchaser agreed to operate the company as "partners." The sale proceeds were to be invested in the company in which the seller and purchaser were to be partners.

   
   

6. The purchaser paid the $35,000 purchase price in five installments from January 31, 1992, through March 12, 1992. During that time, the seller agreed to sell an additional 14 percent of the stock of CFS for an additional $13,000.

   The purchaser paid the additional $13,000 in three installments from April 14, 1992, through May 13, 1992.

   
   

7. In May, 1992, the purchaser and seller agreed to another stock acquisition for $20,000. The seller would merge CFS, CWA, and CFR into a new company to be known as Concord Financial Centre ("CFC"). All of the business activities carried out by the separate companies would be consolidated into CFC.

   
   

8. The purchaser would receive 49 percent of the stock of CFC in exchange for his 49 percent stock ownership in CFS. The seller and purchaser would operate CFC as "partners" in the same manner as originally contemplated for CFS. The sale proceeds were to be invested in the company in which the seller and purchaser were to be partners.

9. The purchaser paid $20,000 in five installments from June 2 through June 22, 1992, and tendered his stock in CFS. However, the purchaser never received any stock in CFC.

   
   

10. CFC was never formed. The seller never tendered any stock in CFC to the purchaser.

    
    

11. The seller used some of the sale proceeds to operate CFS. However, approximately $30,000 of the sale proceeds were misappropriated and used by Respondent and her husband for personal purposes including a down payment on a house and a car.

    
    

12. On January 6, 1993, the purchaser filed a civil complaint against Respondent and her husband alleging fraud, recision, and mismanagement of corporate funds. On August 8, 1994, the purchaser received judgment against Respondent and her husband in the amount of $30,000.

    
    

13. Respondent and her husband have not satisfied the judgment. Neither has paid any money toward the judgment, and the purchaser has been unable to satisfy the judgment.

    
    

14. Respondent knew of the negotiations and business transactions between her husband and Mr. Topercer. Respondent performed the duties of bookkeeper and documented all of the payments made by Mr. Topercer.

    
    

15. Respondent was present during some of the discussions between her husband and Mr. Topercer. Respondent agreed to the merger of CFR into CFC. Respondent participated in the misappropriation of the purchase proceeds for her own personal use.

    
    

16. When considered in their totality, the acts committed by Respondent constitute fraud and dishonest dealing by trick, scheme, or device within the meaning of Section 475.25(1)(b). Those acts were repeated and continued for more than six months. The amount misappropriated by Respondent is significant.

    During the three and a half years since June, 1992, Respondent has made no attempt at restitution.

    
    

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction over the subject matter and parties in this proceeding. The parties were duly noticed for the formal hearing.

    
    

18. Petitioner has the burden of proof in this proceeding. Petitioner must show by clear and convincing evidence that Respondent committed the acts alleged in the Administrative Complaint and the reasonableness of any penalty to be imposed. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

19. Petitioner satisfied its burden of proof in this proceeding. Petitioner showed by clear and convincing evidence that Respondent violated Section 475.25(1)(b) by committing fraud, misrepresentation, concealment, false pretenses, and dishonest dealing by trick, scheme, or device in a business transaction.

    
    

20. Section 475.25(1), in relevant part, authorizes Petitioner to revoke Respondent's license. See also, Rule 61J2- 24.001(3)(c), (f), and (l). Revocation of a license should be aimed at the dishonest and unscrupulous. Cf.

    Dryer v. Florida Real Estate Commission, 370 So.2d 95, 100 (Fla. 4th DCA 1979); Brod v. Jernigan, 188 So.2d 575, 581 (Fla. 2d DCA 1966); Rivard v. McCoy, 212

    So.2d 672, 674-676 (Fla. 1st DCA 1968).

    
    

21. Revocation is appropriate in this proceeding. Respondent was dishonest and unscrupulous. She breached the trust of Mr. Topercer repeatedly and continuously for six months.

    
    

22. Respondent misappropriated and converted for her own use $30,000 in purchase proceeds intended for investment in a joint venture between her husband and Mr. Topercer. She participated directly and indirectly in fraud, misrepresentation, false pretenses, concealment, trick, scheme, and device.

    
    

23. The offenses committed by Respondent are severe within the meaning of Rule 61J2-24.001(4)(b)1. They involve a significant amount of money, egregious harm, and are the result of ongoing, continuing, and repeated acts. The repeated and continuing nature of the acts committed by Respondent evidence her culpable intent. Respondent has not provided even partial restitution.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent guilty

of violating Section 475.25(1)(b) and revoking Respondent's real estate license.

RECOMMENDED this 9th day of January, 1996, 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 9th day of January 1996.

ENDNOTES

1/ All section and chapter references are to Florida Statutes (1993) unless otherwise stated.

2/ The business purpose of CWA is not disclosed in the record.

COPIES FURNISHED:

Darlene S. Keller, Division Director Division of Real Estate

Department of Business and Professional Regulation

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

Lynda Goodgame General Counsel

Department of Business and Professional Regulation

Northwood Center

1940 North Monroe Street Tallahassee, Florida 32399-0792

Steven W. Johnson, Esquire Department of Business and

Professional Regulation Division of Real Estate

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

Retha Jo Wallman, pro se,

t/a Concord Financial Realty Company 5965 Red Bug Lake Road, Number 117 Winter Springs, Florida 32708

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: 95-004050

Orders for Case No: 95-004050