STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) Case No. 97-0950

)

JALENE L. CLAYTON, )

)

Respondent. )

)

RECOMMENDED ORDER

Notice was provided and on May 29, 1997, a formal hearing was held in this case. Authority for conducting the hearing is set forth in Sections 120.569 and 120.57(1), Florida Statutes (1996 Supp.). The hearing location was the Grand Jury Room, Volusia County Courthouse, 120 West Indiana Avenue, DeLand, Florida. Charles C. Adams, Administrative Law Judge, conducted the hearing.

APPEARANCES

For Petitioner: Christine M. Ryall, Esquire

Department of Business and Professional Regulation

Division of Real Estate

400 West Robinson Street, Suite N-308 Orlando, Florida 32801

For Respondent: William A. Parsons, Esquire

Woerner & Parsons

2001 South Ridgewood Avenue South Daytona, Florida 32119

STATEMENT OF THE ISSUES

Should Petitioner discipline Respondent's real estate sales- person's license for alleged conduct evidencing fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in a business transaction in violation of Section 475.25(1)(b), Florida Statutes?

PRELIMINARY STATEMENT

Petitioner brought an administrative complaint against Respondent in FDBPR Case No. 95-18533 charging Respondent with the above-referenced violations. That complaint was dated August 23, 1996. On March 5, 1997, Petitioner filed a request asking that the Division of Administrative Hearings conduct a formal hearing pursuant to Section 120.57(1), Florida Statutes, to resolve fact disputes between the parties. The case was assigned and the hearing conducted on the date described.

At hearing, Petitioner presented Jason Robert Foster and Denise Hansen as its witnesses. Petitioner's Exhibits 1, 3, 4, 5, 6, 7 and 8 were admitted. Ruling was reserved on the admission of Petitioner's Exhibit No. 2. Subsequently, Petitioner gave notice that it had withdrawn that exhibit from consideration. Respondent testified in her own behalf and presented the witness Mark A. Carper. Respondent's Exhibits Nos.

1 and 2, demonstrative exhibits, were admitted over objection by

Petitioner.

Petitioner propounded requests for admissions to Respondent.

In some instances, Respondent admitted the facts propounded. Those admissions are available for fact finding purposes.

A hearing transcript was filed on June 16, 1997. Petitioner filed a proposed recommended order. Respondent filed a proposed recommended order, together with written argument. Those matters have been considered in preparing the Recommended Order.

FINDINGS OF FACT

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 the State of Florida. In particular, Petitioner carries out its duties in compliance with Chapters 20, 120, 455 and 475, Florida Statutes and the rules promulgated under authority set forth in those statutes.

2. At times relevant to the inquiry, Respondent was, and is now, a licensed Florida Real Estate salesperson. Her license number is 0591902. That license was issued in accordance with Chapter 475, Florida Statutes.

3. At times relevant to the inquiry, Respondent worked as a licensed real estate salesperson for Ideal Real Estate Central Florida, Inc., t/a Coldwell Banker Ideal Real Estate in Orange City, Florida (Ideal). The broker for that firm was John S. Chinelli.

4. On April 13, 1993, Respondent listed an exclusive right of sale for property owned by Jason and Kelly Foster at 2853 Sweet Springs Avenue, Deltona, Florida. That listing contemplated that Ideal would earn a real estate commission of 7 percent of the gross purchase price. The listing price in the exclusive right of sale was $69,900.

5. In arriving at the sales price, Mr. Foster relied upon Respondent's advice. That advice included a consideration of the price received for the sale of comparable homes. The establishment of comparable prices as a means to arrive at the listing price for the Foster property involved the use of the Coldwell Banker buyer/seller presentation booklet, as well as a marketing analysis. The price $69,900 was chosen to attract those buyers who were looking for homes that cost less than

   $70,000. That choice was designed to garner more interest in the home. While the Foster home was being advertised, it was available through the multiple listing pool. Respondent showed the house two times between April 13, 1993, and May 14, 1993.

   This did not involve a showing to any prospective buyers. Other brokers or salespersons showed the house twice to prospective buyers, but no offers were generated from those showings.

   Subsequently, Respondent suggested to Mr. Foster that the Foster residence might be appropriate for her use.

6. Respondent offered to buy the Foster property for

   
   

   $65,000. On May 14, 1993, Respondent and Mr. Foster entered into

   a contract for sale and purchase of the Foster residence. The purchase price was $65,000. Respondent deposited $500 into the escrow account managed by Ideal in furtherance of her interest in the property. The earnest money deposit was placed with Mr.

   Chinelli pending the closing of the sale. The contract called for Respondent to assume an existing mortgage of $63,556. The contract identified that the Respondent was a licensed real estate agent in Florida, but the purchase was not being made through Ideal. Under this contract, the real estate commission that had been contemplated initially would not be paid to Ideal and Respondent.

7. When Respondent entered into a contract to buy the Foster property, she did not tell Mr. Foster that she would no longer be representing him as a real estate salesperson.

8. The contract between Respondent and Mr. Foster called for a closing date on or before June 30, 1993.

9. In entering into the agreement for Respondent to purchase the home, Respondent told Mr. Foster that she intended to personally occupy that property. Respondent never told Mr. Foster that she entered into the contract to purchase his home with the intent to sell the home to another person. Originally that was not her intention.

10. Respondent held to the view that in the event that her purchase of the home was not concluded, Respondent would still represent Mr. Foster in his desire to sell the home. This is

    taken to mean that she would be representing Mr. Foster as a real estate salesperson.

11. Sometime around June 20, 1993, Kai and Denise M. Hansen, husband and wife, contacted Ideal to show the Hansens property in the Deltona area. Respondent assisted the Hansens in this pursuit, acting as a real estate salesperson. There was no written agreement between Respondent or her firm signed with the Hansens to represent them in their attempt to purchase a home.

12. Respondent showed the Hansens 8 to 12 homes in the Deltona area. The Hansens were not interested in purchasing those homes. At that point, Respondent suggested that the Hansens look at the home that she was purchasing from Mr. Foster. Respondent told the Hansens that Respondent was buying the Foster house from the Fosters who were moving out of town and that Respondent was helping the Fosters "out of a bind." Respondent told the Hansens that the home might be "too big for her anyway." Respondent told the Hansens that if she could help the Hansens out she would sell the Foster home to the Hansens if the Hansens liked that property.

13. If a suitable home had been found through a real estate listing, other than the Foster residence, a commission would have been paid from the seller of the hypothetical house to the broker for Ideal. In that circumstance, the Hansens would not be responsible for paying a commission to the Respondent or Ideal. The properties other than the Foster property which Respondent

    was showing the Hansens were shown by Respondent as a sub-agent for the sellers.

14. Respondent showed the Hansens the Foster residence during the week of June 20, 1993.

15. On June 24, 1993, Respondent entered into a contract with the Hansens for sale and purchase of the Foster property. An addendum to that contract indicated that "this contract is contingent upon seller obtaining clear Title on 2853 Sweet Springs, Deltona, FL." The Hansens paid a $1,000 earnest money

    deposit toward the purchase of the Foster property. That deposit was placed in the escrow account for Ideal. That deposit was to be held until the closing date scheduled for July 16, 1993.

    Again, it was not contemplated that a real estate commission would be paid to Respondent and Ideal.

16. The price arrived at between Respondent and the Hansens to purchase the Foster property was $72,500. Initially, Respondent had offered to sell the property for $73,000. The Hansens counter-offered to pay $72,000 leading to the final purchase price of $72,500. The contract between the Respondent and the Hansens called for an assumption of a mortgage in the amount of 63,500.

17. Although Respondent had advised the Hansens that the property was being purchased from the current occupants, the Fosters, Respondent did not advise the Hansens of the price the Respondent was paying the Fosters to purchase that property.

18. Respondent never advised the Fosters that the Hansens had sought to purchase the Foster home and that Respondent had entered into a contract with the Hansens for the Hansens to purchase that property.

19. On June 29, 1993, the closing occurred between Respondent and the Fosters and a warranty deed was prepared noting the change in ownership. At the closing Respondent told the Fosters that she still intended to occupy the home.

20. On July 16, 1993, the closing occurred between the Respondent and the Hansens and a warranty deed was drawn conveying the property from the Respondent to the Hansens.

21. As established by Mark A. Carper, a real estate appraiser, the value of the Foster property on April 13, 1993 was between $65,000 and $72,500.

22. In anticipation of moving into the Foster home, Respondent had made arrangements to move out of the residence where she had been living by giving notice that she intended to move.

    CONCLUSIONS OF LAW

    
    

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

24. Petitioner intends to impose discipline against Respondent's real estate salespersons license based upon the allegations set forth in the administrative complaint.

    Therefore, Petitioner must prove the allegations by clear and convincing evidence. Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

25. The administrative complaint alleges that through conduct associated with the listing, purchasing, and sale of the Foster property, Respondent is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in violation of Section 475.25(1)(b), Florida Statutes. For that conduct, the Petitioner wishes to impose a penalty as contemplated by Section 475.25(1), Florida Statutes and Section 455.227, Florida Statutes, pursuant to guidelines set forth in Rule 61J2-24.001, Florida Administrative Code.

26. In deciding the consequences of Respondent's conduct, to the extent that she is acting as a real estate agent for the benefit of her principal, the Fosters, she was obligated to disclose any material facts involving the sale of their property. Santaniello v. Department of Professional Regulation, 432 So. 2d 84 (Fla. 2d DCA 1983).

27. Respondent's duties as a real estate agent for the benefit of the Fosters involving an agent and principal existed from April 13, 1993, until May 14, 1993. On the latter date through an arrangement made between Respondent and Mr. Foster, that did not involve any fraud, misrepresentation, concealment,

    false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in a business transaction by Respondent, those parties knowingly and willingly arranged for Respondent to purchase the property outside the arena of Respondent's duties as a real estate salesperson. The fact that the contract for sale and purchase was on a form provided by Ideal and that the earnest money deposit was held in escrow by that firm pending the closing, does not change the perception concerning the nature of the contract for sale and purchase. It was a contract for sale and purchase between two private individuals. As such, there were no limitations placed upon Respondent's ability to dispose of the property once it came into her possession. With the advent of the contract signed on May 14, 1993, Respondent had no obligation to disclose material facts involving the sale of the property as a representative of her broker who had listed the property originally and as agent for a principal, Mr. Foster. The commissions had been waived. The real estate transaction was outside the normal experience of purchases made through real estate brokers.

28. Prior to the point at which Respondent and Mr. Foster entered into a contract for Respondent to purchase the Foster property, Respondent had satisfactorily fulfilled her duties as representative of the broker who had entered into an exclusive right of sale with the Fosters. Respondent acted appropriately

    in arriving at a listing price and in attempting to sell the property between the listing date April 13, 1993 and May 14, 1993, when Respondent and Mr. Foster decided to pursue a different course in selling and purchasing the property.

29. Respondent's conduct in assisting the Hansens in trying to find a suitable home through her actions as sub-agent for prospective sellers of the 8 to 12 homes that were seen by the Hansens did not evidence fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in a business transaction involving her duties as a real estate agent for the benefit of a prospective seller and the Hansens. Likewise, Respondent's decision to sell the Hansens the property that she was obtaining from the Fosters through a private purchase, did not evidence fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in that business transaction.

30. When Respondent entered into the contract with Mr. Foster she intended to live in the home. She had no other offer to present to Mr. Foster. Beyond the point in time at which she entered into that contract with Mr. Foster, she was not obligated to extend an offer from the Hansens to Mr. Foster. She was not obligated to tell Mr. Foster that she intended to sell the property to the Hansens at a profit, in that the offer was made

    after the binding contract that had been entered into between the Respondent and Mr. Foster. Respondent was not obligated to advise the Hansens that she intended to purchase the home for less than she would sell the home to the Hansens at a future date. It is immaterial that Respondent told the Fosters at closing that she intended to live in their home, knowing that she was obligated to sell the home to the Hansens.

31. The price at which Respondent sold the home to the Hansens was a reasonable price. The price that she purchased the home from Mr. Foster was a reasonable price.

32. Petitioner has failed to prove its case.

RECOMMENDATION

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

That a Final Order be entered which dismisses the administrative complaint against Respondent.

DONE AND ENTERED this day of July, 1997, in Tallahassee, Leon County, Florida.

CHARLES C. ADAMS

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this day of July, 1997.

COPIES FURNISHED:

Christine M. Ryall, Esquire Department of Business and

Professional Regulation Division of Real Estate

400 West Robinson Street, Suite N-308 Orlando, Florida 32801-1772

William A. Parsons, Esquire Woerner & Parsons

2001 South Ridgewood Avenue South Daytona, Florida 32119

Henry M. Solares, Division Director Division of Real Estate

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

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 within 15 days from the date of this recommended order. Any exceptions to this recommended order should be filed with the agency that will issue the final order in this case.

CHRISTINE M RYALL ESQ DEPT OF BUSINESS AND

PROFESSIONAL REGULATION DIVISION OF REAL ESTATE

400 W ROBINSON ST STE N-308 ORLANDO FL 32801-1772

WILLIAM A PARSONS ESQ WOERNER & PARSONS 2001 S RIDGEWOOD AVE

SOUTH DAYTONA FL 32119

LYNDA L GOODGAME GEN COUN DEPT OF BUSINESS AND

PROFESSIONAL REGULATION 1940 N MONROE ST TALLAHASSEE FL 32399-0792

Docket for Case No: 97-000950

Orders for Case No: 97-000950