STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, DIVISION ) OF FLORIDA LAND SALES, CONDOMINIUMS ) AND MOBILE HOMES, )

)

Petitioner, )

)

vs. ) CASE NO. 95-4418

)

DOUGLAS BUCHHEIT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Claude B. Arrington, held a formal hearing in the above-styled case on November 7, 1995, in Stuart, Florida.

APPEARANCES

For Petitioner: Tracy Sumner, Esquire

Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes

1940 North Monroe Street Tallahassee, Florida 32399-1007

For Respondent: William E. Guy, Jr., Esquire

55 East Ocean Boulevard Stuart, Florida 34994

STATEMENT OF THE ISSUES

Whether Respondent, a licensed yacht broker, committed the offenses set forth in the Notice to Show Cause dated June 20, 1994, and the penalties, if any, that should be imposed.

PRELIMINARY STATEMENT

The Notice to Show Cause dated June 20, 1994, alleged that Respondent violated the Yacht and Ship Brokers' Act, Chapter 326, Florida Statutes, as follows:

1. The Respondent, as the employing broker

   for Stuart Cay Marina, has allowed an unlicensed salesman to broker yacht transactions, in violation of, Section 326.006(2)(e)7, Florida Statutes. More specifically, Mr. Buchheit, on

   February 18, 1994, at the Sixth Annual Miami Brokerage Yacht Show, on Miami Beach, Florida, allowed Jim Withers, an unlicensed salesman, to show and negotiate to sell yachts to

   prospective clients, in expectation of compensation.

   
   

2. The Respondent has conducted business under a fictitious name for which licenses have not been issued, in violation of Section 326.004(2), Florida Statutes. More specifically, Mr. Buchheit's business is registered with the Division under the name of 'Rampage of Stuart', but while at the Sixth Annual Miami Brokerage Yacht Show, on Miami Beach, Florida, his business was listed in the show program, and his salesmen conducted business under the name of 'Stuart Cay Marina.'

Respondent timely responded by letter to the Notice to Show Cause.

Notwithstanding his response, the Petitioner entered a default final order against him that assessed fines totaling $3,500.00. After Respondent established that he had timely responded, the default final order was rescinded and the parties proceeded on an informal basis. At the informal hearing, it became apparent that there existed a disputed issue of material fact that should have led to the referral of the proceedings to the Division of Administrative Hearings for formal proceedings. Following the informal hearing, the Petitioner entered a final order against Respondent that found Respondent guilty of the alleged violations and assessed an administrative fine in the amount of

$2,500.00 for violating Section 326.006(2)(e)7, Florida Statutes, and an administrative fine in the amount of $500.00 for violating Section 326.004(2), Florida Statutes. Thereafter, the Respondent timely appealed the final order to the Fourth District Court of Appeal, which set aside the final order based on the disputed issues of material fact and ordered that the proceeding be referred to the Division of Administrative Hearings. That referral was made, and this formal proceeding followed.

The parties stipulated that Respondent committed the violation of Section 326.004(2), Florida Statutes, set forth in paragraph numbered two above, and they also stipulated that the appropriate disposition of that violation would be an administrative fine in the amount of $500.00.

At the formal hearing (and at the informal hearing) the Respondent disputed whether he had permitted an unlicensed person (Mr. Withers) " . . . to use his name to evade the provisions of the Yacht and Ship Brokers' Act" in violation of Section 326.006(3)(e)7, Florida Statutes. Respondent asserts that a violation of this provision requires intent and that there was no intent to evade the provisions of the Act.

At the formal hearing, Petitioner presented 21 exhibits which were accepted into evidence, and presented the testimony Peter P. Butler, Sr., James Courchaine, Kathy Forrester, James Withers, and Wayne Dion. Mr. Butler is the Section Head for General Regulation of the Division of Florida Land Sales, Condominiums, and Mobile Homes (FLSCMH). Mr. Courchaine is an investigator employed by FLSCMH. Ms. Forrester is a Professional Regulation Specialist employed by FLSCMH. Mr. Withers and Mr. Dion were, at the times pertinent hereto, employed by the Respondent. At the request of the Petitioner, official

recognition was taken of Chapters 60Q-2 and 61B-60, Florida Administrative Code, and Chapters 326 and 20, Florida Statutes.

Respondent testified on his own behalf and presented six exhibits which were accepted into evidence.

A transcript of the proceedings has been filed. At the request of the parties, the time for filing post-hearing submissions was set for more than ten days following the filing of the transcript. Consequently, the parties waived the requirement that a recommended order be rendered within thirty days after the transcript is filed. Rule 60Q-2.031, Florida Administrative Code. Rulings on the parties' proposed findings of fact may be found in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Petitioner is the agency of the State of Florida charged with the responsibility to administer and to enforce the Florida Yacht and Ship Brokers' Act, Chapter 326, Florida Statutes.

   
   

2. At all times pertinent to this proceeding, Respondent has been a licensed Yacht and Ship Broker pursuant to the provisions of Chapter 326, Florida Statutes. Respondent resides in and has his principal place of business in Martin County, Florida.

   
   

3. Respondent's corporation, Rampage of Stuart, Inc., has been licensed by Petitioner at all times pertinent to this proceeding. The parties stipulated that Respondent's corporation was, at times pertinent to this proceeding, doing business as Stuart Cay Marina, a fictitious name that had not been registered with the Petitioner. The parties stipulated that Respondent was guilty of violating the provisions of Section 326.004(2), Florida Statutes, as alleged in the Notice to Show Cause dated June 20, 1994. The parties also stipulated that the appropriate penalty for this violation is an administrative fine in the amount of $500.00.

   
   

4. James Withers began working for Respondent at Stuart Cay Marina in January 1994. At the time he began working at Stuart Cay Marina, Mr. Withers was not licensed under the Yacht and Ship Brokers' Act. Respondent knew or should have known that Mr. Withers was not licensed when he first became employed at Stuart Cay Marina.

   
   

5. On January 27, 1994, Mr. Withers attended an educational seminar sponsored by Petitioner where the attendees received instruction as to the requirements for licensure as a salesman or a broker under the Yacht and Ship Brokers' Act. The successful applicant must submit a completed application form, a completed fingerprint card, the proper application fee, and a surety bond. The Petitioner's processing of the application includes having the Federal Bureau of Investigation (FBI) run a fingerprint check on the applicant. The attendees of the educational seminar were told that the application fee had increased from $538.00 to $539.00 as of December 20, 1993, due to a $1.00 increase in the fee charged by the FBI to process fingerprint cards.

   
   

6. Mr. Withers and the Respondent knew, or should have known, that Mr. Withers could not act as a salesman until after his license had been issued.

   
   

7. In late January 1994, Mr. Withers applied for licensure as a salesman pursuant to the Yacht and Ship Brokers' Act. Because the application form used

   by Mr. Withers reflected the old application fee, Mr. Withers submitted a check in the amount of $538.00 with his application and fingerprint card. There was no evidence as to where Mr. Withers had obtained this application form.

   
   

8. Mr. Wither's application package was received by Petitioner's Finance and Accounting Office on February 4, 1994. The check for the application was deposited and the application forwarded for further processing. On February 7, 1995, Mr. Withers was advised by mail that his application was deficient since the application fee was short by $1.00. This letter, from the Petitioner's Yacht and Ship Section, advised Mr. Withers that the $1.00 was needed to continue the application process.

   
   

9. Mr. Withers forwarded his $1.00 check, dated February 9, 1994, to the Petitioner to correct this deficiency. This check was received and deposited by Petitioner's Finance and Accounting Office, which is located in the John's Building in Tallahassee, on February 17, 1994. The Finance and Accounting Office released the application package for further processing on February 18, 1994. From the Finance and Accounting Office, the application package went to the Division Director's Office located in the Warren Building in Tallahassee. From that office the application package was sent to the Yacht and Ship Section located in the Bloxham Building in Tallahassee, where it was received February 21, 1994.

   
   

10. Licenses are not completely processed until after the Yacht and Ship Section receives notification that the entire application fee has been paid. Processing of Mr. Withers' application was completed by the Yacht and Ship Section and his license was issued on February 21, 1994.

    
    

11. Mr. Withers and the Respondent knew, or should have known, that Mr. Withers had not received his license from the Petitioner as of February 18, 1994. 1/ There was no evidence that either man had reason to believe as of February 18, 1994, that the license had been issued and was being forwarded by mail. Both men correctly believed that Mr. Withers had substantially complied with the licensure requirements as of February 18, 1994, and that the license would be issued at some juncture since the only deficiency had been corrected.

    
    

12. Mr. Withers represented Respondent at the Sixth Annual Miami Brokerage Yacht Show on February 18, 1994, where he acted as a salesman within the meaning of the Yacht and Ship Brokers's Act. Respondent permitted Mr. Withers to use his company name at this show.

    
    

13. On Friday, February 18, 1994, James Courchaine and Peter Butler, in their official capacities as employees of the Petitioner, located Mr. Withers at the boat show and inquired as to whether he was licensed. Mr. Withers told them that he had completed his application package and was merely waiting to receive his license in the mail.

    
    

14. Mr. Butler thereafter called his office in Tallahassee and learned that Mr. Withers' check for $1.00 may have been received, but that the application had not been received by the Yacht and Ship Section and that the license had not been issued. Mr. Butler informed Mr. Withers that the earliest his license could be issued was Monday, February 21, 1994.

    CONCLUSIONS OF LAW

    
    

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

    
    

16. Section 326.002(1), Florida Statutes, defines the term "broker" as follows:

    
    

    1. 'Broker' means a person who, for, or

       in expectation of compensation: sells, offers, or negotiates to sell; buys, offers, or nego- tiates to buy; solicits or obtains listings of; or negotiates the purchase, sale, or exchange of, yachts for other persons.

       
       

17. Section 326.002(3), Florida Statutes, defines the term "salesman" as follows:

    
    

    (3) 'Salesman' means a person who, for, or in expectation of compensation is employed by a broker to perform any acts of a broker.

    
    

18. Section 326.004(1), Florida Statutes, provides, in pertinent part, as follows:

    
    

    1. A person may not act as a broker or salesman unless licensed under the Yacht and Ship Brokers' Act. . . .

       
       

19. Section 326.06(2)(e)7, Florida Statutes, authorizes the Petitioner to suspend or revoke the license of a broker or a salesman who does the following:

    
    

    7. Allows an unlicensed person to use his name to evade the provisions of the Yacht and Ship Brokers' Act.

    
    

20. Respondent's defense is centered on his assertion that neither he nor Mr. Withers intended to evade the provisions of the Act. While, as argued by Respondent, the term "evade" can mean "to dodge or to circumvent", definitions that connote an intentional act, the following definitions of the key terms of Section 326.06(2)(e)7, Florida Statutes are found to be more appropriate for a correct interpretation of the statute.

    
    

21. First, the term unlicensed person is a person who has not been licensed by Petitioner under the Yacht and Ship Brokers' Act. The fact that Mr. Withers had substantially complied with the licensing provisions as of February 18, 1994, did not change his status from an unlicensed person to a licensed person.

    
    

22. Second, the definition of the term "allows" that is most appropriate is "to let do or happen; permit." See, The American Heritage Dictionary of the English Language (1981). There is no dispute that Respondent permitted Mr. Withers to use his company name at the show on February 18, 1994.

23. Third, the definition of the term "evade" that is most appropriate is "to avoid fulfilling, answering, or performing: evade responsibility." See, The American Heritage Dictionary of the English Language (1981).

    
    

24. By allowing Mr. Withers to represent his company at the show, Respondent enabled Mr. Withers to act as a salesman before he had completed the licensing process, thereby evading the requirements of Section 326.004(1), Florida Statutes. Consequently, it is concluded that the Petitioner proved by clear and convincing evidence that Respondent violated the provisions of Section 326.06(2)(e)7, Florida Statutes, as alleged in the Notice to Show Cause. Respondent's argument that Petitioner failed to prove all elements of the violation is rejected.

    
    

25. Pursuant to the provisions of Section 326.006(2)(d)4, Florida Statutes, the Petitioner ". . . may impose a civil penalty against a broker . .

    . or against an unlicensed person . . . for any violation of this chapter or a rule adopted under this chapter. A penalty may be imposed for each day of continuing violation, but in no event may the penalty for any offense exceed

    $10,000. . . ."

    
    

26. Rule 61B-60.010(2), Florida Administrative Code, provides the following factors that may be considered in either mitigation or aggravation of a penalty:

    
    

    (2)(a) Criminal record of licensee;

    1. Civil litigation history bearing on issues relating to the administration of chapter 326, Florida Statutes;

    2. Administrative action history, either formal or informal, bearing upon issues relating

       to the administration of chapter 326, Florida Statutes.

    3. Cooperation of respondent relating to the division's investigation and prosecution of the instant matter;

    4. Whether the division required the assistance of external parties in preparation of the division's case;

    5. Whether the licensee's conduct was intentional;

    6. Whether the licensee, or any agent engaged by the licensee, knew or should have known that the subject misfeasance or malfeasance constituted a violation of chapter 326, Florida Statutes, or the rules promulgating thereunder,

       or any other law or rule having impact upon the respective proceeding;

    7. Circumstances precipitating the investigation;

    8. Nature of the violation;

    9. History of similar violations; and

    10. Any combination of any of the above factors.

    
    

27. Petitioner argues that the appropriate penalty to be imposed for the violation of Section 326.06(2)(e)7, Florida Statutes, is the imposition of an administrative fine in the amount of $2,500.00. Petitioner also argues that an aggravating factor may be considered to be that Respondent knew or should have known that the underlying acts constituted a violation of the Act.

28. The penalty recommended by the Petitioner for the violation of Section 326.06(2)(e)7, Florida Statute is excessive because it ignores the mitigating factors that exist in this proceeding. The fact that Respondent knew that Mr. Withers had attended Petitioner's educational seminar and that he had substantially complied with the licensing requirements are not defenses to the violation, as alleged by Respondent, but they are factors that should be considered in mitigation of the penalty to be imposed. In addition, Respondent cooperated fully in the investigation of this proceeding and there was no evidence as to any harm to the public.

    
    

29. The parties stipulated that the appropriate penalty to be imposed for the violation of Section 326.004(2), Florida Statutes, was an administrative fine in the amount of $500.00. It is concluded that an administrative fine in an equal amount is the appropriate disposition for the violation of Section 326.06(2)(e)7, Florida Statutes.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order adopting the findings and

conclusions contained herein, that imposes an administrative fine in the amount of $500.00 against Respondent for the violation of Section 326.004(2), Florida Statutes, and that imposes an additional administrative fine in the amount of

$500.00 against Respondent for the violation of Section 326.06(2)(e)7, Florida Statutes.

DONE AND ENTERED this 8th day of January 1996 in Tallahassee, Leon County, Florida.

CLAUDE B. ARRINGTON, 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 8th day of January 1996.

ENDNOTE

1/ Section 326.004(14)(b), Florida Statutes, provides, in pertinent part, as follows:

(b) Each salesman's license must remain in the possession of the employing broker until canceled or until the salesman leaves such employment . . .

APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-4418

The following rulings are made as to the proposed findings of fact submitted by Petitioner.

1. The proposed findings of fact in paragraphs 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 14, 15, 17, 18, and 19 are adopted in material part by the Recommended Order.

2. The proposed findings of fact in paragraphs 6, 7, 14, 16, 18, and 21 are subordinate to the findings made.

3. The proposed findings of fact in paragraph 13 are rejected as being unnecessary to the conclusions reached.

4. Petitioner omitted paragraph 20 in numbering the paragraphs in the findings of fact portion of its proposed recommended order.

The following rulings are made as to the proposed findings of fact submitted by Respondent.

1. The proposed findings of fact in paragraphs 1, 2, 3, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, and 17 are adopted in material part by the Recommended Order.

2. The proposed findings of fact in paragraph 4 are rejected as being unnecessary to the conclusions reached.

3. The proposed findings of fact in paragraphs 5, 31, 32, 33, and 34 are rejected as being subordinate to the findings made.

4. The proposed findings of facts in paragraphs 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, and 30 are treated as preliminary matters but are rejected as being unnecessary as findings of fact.

COPIES FURNISHED:

Tracy Sumner, Esquire Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-1007

William E. Guy, Jr., Esquire Post Office Box 3385

Stuart, Florida 34995-3386

Henry M. Solares, Director Florida Land Sales, Condominiums

and Mobile Homes

1940 North Monroe Street Tallahassee, Florida 32399-0792

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: 95-004418

Orders for Case No: 95-004418