STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 96-2945

) WARREN P. COX t/a COASTAL REAL ) ESTATE, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in this case in Bradenton, Florida, on September 20, 1996, before Arnold H. Pollock, an Administrative Law Judge, with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Christine M. Ryall, Esquire

Department of Business and Professional Regulation

Division of Real Estate Post Office Box 1900

400 West Robinson Street, N-308 Orlando, Florida 32802-1900

For Respondent: Terrence Matthews, Esquire

5190 26th Street West, Suite D Bradenton, Florida 34207

STATEMENT OF THE ISSUE

The issue for consideration in this hearing is whether Respondent's license as a real estate broker in Florida should be disciplined because of the matters alleged in the Administrative Complaint filed herein.

PRELIMINARY MATTERS

By Administrative Complaint dated May 23, 1996, Henry M. Solares, Director of the Division of Real Estate, for Richard T. Farrell, Secretary of the Department of Business and Professional Regulation, charged Respondent herein, Warren P. Cox, with obtaining his license as a real estate broker by fraud, misrepresentation or concealment, (Count I); having been found guilty a second time of misconduct which shows he may not be trusted with the funds or property of others, (Count II); and having had a registration acted against in any jurisdiction, (Count III), all violations of various subsections of Section

475.225(1), Florida Statutes. At hearing, Petitioner voluntarily dismissed Count III of the Administrative Complaint. Petitioner also indicated its intention to seek revocation of Petitioner's license as penalty. Respondent requested formal hearing and this hearing ensued.

At the hearing, Petitioner presented the testimony of Steven Pence, an investigator/supervisor with the Department, and introduced Petitioner's Exhibits 1 and 2. Respondent testified in his own behalf and introduced Respondent's Exhibits A though C. Petitioner requested the undersigned officially recognize Chapters 20, 120, 455, 475 and 489, Florida Statutes.

No transcript of the proceedings was provided. Both counsel submitted Proposed Findings of Fact and Argument which have been carefully considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. At all times pertinent to the issues herein, the Petitioner, Division of Real Estate (Division), for the Florida Real Estate Commission, was the state agency responsible for the licensing of real estate professionals and the regulation of the real estate profession in Florida. Respondent was licensed as a real estate salesperson or broker in Florida.

   
   

2. During pertinent portions of 1990, Respondent was licensed both as a real estate broker by the Division, and as a contractor by the Construction Industry Licensing Board of the State of Florida. During that period he handled numerous sales of real property for the United States Veterans Administration and received deposits of funds on those sales which he placed in his brokerage trust account with First Commercial Bank of Manatee County. At that time, the bank had a policy on availability of funds of seven business days for out-of- town checks and three business days for local checks.

   
   

3. In January 1990, Respondent wrote five checks from his trust account, each in excess of $1,000.00. Three of these were to the VA for sales deposits, and two were to others. All five checks were dishonored for insufficient funds. Thereafter, on August 24, 1990, the Division filed an Administrative Complaint against the Respondent alleging the utterance of dishonored checks as misconduct. Respondent, at an informal hearing, admitted the utterance of the dishonored checks, and as a result, the Florida Real Estate Commission revoked his broker's license on October 16, 1990. Respondent's subsequent appeal of that action to the Second District Court of Appeal resulted in a per curiam denial of his petition for review.

   
   

4. Sometime later, in 1991, Respondent appealed to the Commission for reinstatement. At a subsequent hearing before the Commission, an exculpatory letter of explanation from Respondent's accountant resulted in the Commission allowing Respondent to sit for the salesman's examination, as a result of which he was subsequently licensed as a salesman. Respondent was thereafter again licensed as a broker on December 6, 1993.

   
   

5. In the interim, however, on June 4, 1992, Respondent's contractor's license was disciplined by the Construction Industry Licensing Board for misconduct involving his failure to properly supervise a construction project and allowing an unlicensed individual to do the work on a project for which he had pulled the permit. An informal hearing was held by the Board as a result of which it imposed an administrative fine of $2,000.00, and to assure the payment

   thereof, provided for suspension of Respondent's license if the fine was not paid within thirty days.

   
   

6. Respondent admits he did not pay the fine. He contends he called the Board office to inquire what would happen were he not to pay the fine and was advised his license would be suspended. Since Respondent intended to cease working as a contractor anyway, he elected not to pay the fine and sent his license in to the Board. Respondent's contractor's license was suspended on July 22, 1992, though he claims he did not receive a copy of either the Board's Final Order or the notice of the suspension going into effect. Respondent had an obligation to pay the fine imposed as punishment for past misconduct. Voluntary relinquishment of his license, which he thought he could do without effect on him since he was getting out of the construction business, did not excuse his non-payment of the fine.

   
   

7. On October 21, 1993, after Respondent's salesman's license had been reinstated, he applied for licensure as a broker, In his answer to the first part of question 13 on the application form, Respondent indicated he had had a license suspended. He noted thereon the prior case against his license by the Commission which dealt with the dishonored checks. He did not, however, list the action taken against his contractor's license. He listed the prior real estate case, he contends, upon the advice of someone in the Division office. He did not, at the time of his call to the Division indicate or inquire about the action taken by the Board on his contractor's license. He claims he did not list that action on the application form because the action taken by the Board was not based on fraud or dishonesty but merely a failure to supervise, and because he did not know his license had been suspended. He thought that voluntarily relinquishing his license ended the situation. Respondent claims he did not intend to conceal any misconduct or adverse action as he could not do so. It was a matter of public record, and he believed the information available to one regulatory board was available to all others that were under the Department.

   
   

8. At some point thereafter, not further established, a complaint was filed with the Commission which resulted in the matter being referred to Mr. Pence for investigation. Mr. Pence assembled the documents relating to the allegation of concealment and sent a written notice of his inquiry to the Respondent. Upon receipt of that notice, Respondent telephoned Mr. Pence to discuss the matter. During the ensuing conversation, Pence asked Respondent if he was aware of his suspension by the Construction Board and claims Respondent indicated he was. Respondent allegedly indicated he was under the impression he had been fined by the Board and that the suspension was only to insure the fine was paid. Respondent further indicated that because of the depressed economy and because he was not much interested in keeping his contractor's license he had let it go.

   
   

9. In evaluating the evidence presented, it must be noted that the interview between Pence and the Respondent took place about a year ago. Pence's investigative notes are no longer available and he testified from memory. It was evident that much of Mr. Pence's testimony was a reconstruction of how Mr. Pence, in retrospect, felt he would have handled the interview and what he feels sure he would have asked.

   
   

10. Taken together, the evidence of record establishes that Respondent was disciplined by the Real Estate Commission for dishonored checks and his license revoked. Though, on the basis of his accountant's exculpatory letter, Respondent was allowed to be re-examined for a salesman's license, that evidence

    did not completely exonerate the Respondent. This is shown by the fact that the revocation of his broker's license was not reversed. He was merely allowed to reapply for licensure as a salesman. In addition, the accountant's letter does not explain or justify all the bad checks.

    
    

11. In regard to the Construction Board's discipline, the evidence shows that Respondent pulled a permit and then allowed a non-licensed individual to do most of the work without proper supervision. Respondent contends that complaint was filed by his friend, the owner of the property, after the project in question was determined to be far more extensive than had been anticipated. The complaint, Respondent asserts, was not made because of any dissatisfaction arising out of his performance, but merely to preserve the owner's interest as to a possible insurance claim. That argument is not persuasive. The fact is that Respondent was disciplined because he had committed an act which authorized the imposition of discipline. His approach to the situation was cavalier, and that approach or attitude continues to raise a substantial question as to his fitness to have entrusted to him the money, property, transactions and rights of others.

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this case. Section 120.57(1), Florida Statutes.

    
    

13. Section 475.25 authorizes the Florida Real Estate Commission to discipline a real estate licensee if it finds that licensee:

    
    

    (m) has obtained a license by means of fraud, misrepresentation, or concealment, or

    (o) has been found guilty, for a second time, of any misconduct that warrants his suspension or has been found guilty of a course of conduct or practices which show that he is so incompetent, negligent, dishonest, or untruthful that the money, property, transactions, and rights of investors, or those with whom he may sustain a confidential relationship, may not safely be entrusted to him.

    
    

14. The burden of proof in this case rests with the Petitioner to establish that Respondent has committed the misconduct alleged by clear and convincing evidence. Ferris vs. Turlington, 510 So. 292 (Fla. 1987).

    
    

15. In the instant case, the evidence is crystal clear that Respondent failed to disclose the prior disciplinary action taken against him by the Construction Board which resulted in the suspension of his license. It matters not that the suspension was the result of Respondent's failure to pay the administrative fine imposed by the Board for the misconduct established, and it matters not that the action taken was for a failure to properly supervise and not something more sinister. What is important is that Respondent was disciplined by the Board and a forfeiture imposed which was secured by a suspension of his license. Respondent chose not to pay the fine, thereby bringing into play the imposition of the suspension. Regardless of the reason for the suspension, Respondent did not mention it and thereby deprived the Commission of the opportunity to look into it as a part of its responsibility to

    insure the credibility and trustworthiness of applicants for real estate licenses. This is doubly true in light of his prior discipline by the Board for the utterance of worthless checks.

    
    

16. Respondent urges that his failure to list the Construction Board action should not justify discipline here because the question seeking the answer in question calls for listing of a revocation or suspension "upon grounds of fraudulent or dishonest dealing or violations of law." Respondent contends that because the Board's action was based upon a "failure to supervise", under the doctrine of ejusdem generis, it does not fall within the proscribed misconduct as outlined in the question and should not be used as a basis for discipline of his current license. That doctrine does not support Respondent's position here. While the misconduct cited in the Board's order is classified as failure to supervise, in reality he was punished because of his lack of forthrightness and what appeared to be an improper arrangement with an unlicensed individual to do work which required the management and supervision of a license contractor. His participation in this scheme was both fraudulent and dishonest, and therefore served as a proper basis for discipline which should have been listed. If not fraud, Respondent's failure to list the Construction Board action is certainly misrepresentation and concealment.

    
    

17. Respondent was found guilty of misconduct in 1990 which resulted in a revocation of his broker's license. While Petitioner's counsel contends in her Proposed Recommended Order that Respondent converted trust funds to his own use, no evidence of that was found in the matters presented at this hearing. Suffice it to say, however, the utterance of dishonored checks is pertinent to a consideration of Petitioner's fitness to be trusted with the money and property of others, and this conclusion is not modified by the subsequent purportedly exculpatory letter of his accountant. Respondent's second incident, relating to the failure to disclose prior disciplinary action in his application for licensure, which has been established here, also constitutes misconduct which warrants suspension. Together, this second action, which again places into question his fitness to be trusted, when taken in conjunction with the first, clearly establish that his lack or concern for the rules; his lack of attention to detail and his willingness to avoid by use of a technicality his established obligations, all point to the conclusion that Respondent does not meet the standards for licensure as a real estate professional in Florida.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore:

RECOMMENDED THAT the Florida Real Estate Commission enter a Final Order finding Respondent, Warren Up. Box, guilty of Misrepresentation and concealment in his application for a license as a real estate broker in Florida, and of having been twice guilty of misconduct which warrants suspension, and revoking his license as a real estate broker in this state.

RECOMMENDED this 9th day of October, 1996, in Tallahassee, Florida.

ARNOLD H. POLLOCK

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 9th day of October, 1996.

COPIES FURNISHED:

Christine M. Ryall, Esquire Department of Business and

Professional regulation Division of real Estate Post Office Box 1900

400 West Robinson Street, N-308 Orlando, Florida 32802-1900

Terrence Matthews, Esquire 5190 26th Street West Bradenton, Florida 34207

Lynda Goodgame General Counsel

Department of Business and Professional Regulation

1940 North Monroe Street Tallahassee, Florida 32399-0792

Henry M. Solares Division Director Division of Real Estate Post Office Box 1900

400 West Robinson Street Orlando, Florida 32802-1900

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions with 15 days from the date of this recommended order. Any exceptions to this recommended order should be filed with the agency which will issue the final order in this case.

Docket for Case No: 96-002945

Orders for Case No: 96-002945