STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 98-0029

)

RANDALL FRANK KLADEK, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the final hearing in this case was held on March 30, 1999, before Patricia Hart Malono, the

duly-designated Administrative Law Judge of the Division of Administrative Hearings, via video teleconference, with the Petitioner and the Respondent appearing at Miami, Florida.

APPEARANCES

For Petitioner: Laura McCarthy

Deputy Chief Attorney Department of Business and

Professional Regulation Division of Real Estate

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

For Respondent: Randall F. Kladek, pro se

1185 Southwest Ninth Avenue Pompano Beach, Florida 33060

STATEMENT OF THE ISSUES

Whether the Respondent committed the violation alleged in Count II of the Administrative Complaint dated August 17, 1995, and, if so, the penalty which should be imposed.

PRELIMINARY STATEMENT

In an Administrative Complaint dated August 17, 1995, the Department of Business and Professional Regulation, Division of Real Estate ("Department") charged in Count I that Randall F. Kladek had violated Section 475.25(1)(b), Florida Statutes, based on allegations that he was guilty of dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in a business transaction; the Department charged in Count II that

Mr. Kladek had violated Sections 475.42(1) and 475.25(1)(e), Florida Statutes, based on allegations that he was guilty of having operated as a salesperson without being the holder of a valid and current license as a salesperson. Mr. Kladek timely disputed the material facts alleged in the Administrative Complaint and requested an administrative hearing pursuant to Chapter 120, Florida Statutes. The Department transmitted the request to the Division of Administrative Hearings and requested the assignment of an administrative law judge. Pursuant to notice, the final hearing was held on March 30, 1999.

At the hearing, the Department dismissed Count I of the Administrative Complaint and elected to go forward only on Count

1. It offered the testimony of Daniel Jonas and of Scott

   Betten. Petitioner's Exhibits 1 and 3 through 8 were offered and received into evidence. 1/ Mr. Kladek testified in his own behalf but did not offer any exhibits into evidence. Petitioner requested that official recognition be taken of Chapters 475 and 455, Florida Statutes (1994), and Rule Chapter 61J2, Florida Administrative Code, and the request was granted. 2/

   The transcript of the proceeding was filed with the Division of Administrative Hearings, and the parties timely filed proposed findings of fact and conclusions of law.

   FINDINGS OF FACT

   
   

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

   1. The Department of Business and Professional Regulation is the state agency charged with the responsibility for investigating and prosecuting complaints pursuant to Chapters 455, and 475, Florida Statutes. The Florida Real Estate Commission operates within the Department and is the entity directly responsible for licensing and disciplining persons licensed under Chapter 475. Section 475.02, Florida Statutes. The Division of Real Estate operates within the Department and assists the Commission in carrying out its statutory duties. Section 475.021, Florida Statutes.

   2. Randall F. Kladek has been licensed as a real estate salesperson since 1991, having been issued license

      number 0567643. His license has been periodically inactive either because he has failed to renew the license timely or because he was not employed by a broker. According to the Department's records, Mr. Kladek's license has been in involuntary inactive status since October 1, 1998, because it has not been renewed.

   3. With regard to the issues presented in this proceeding, Mr. Kladek's license expired on September 30, 1994, and his license was in an involuntary inactive status until it was renewed by the Department effective December 9, 1994.

   4. On or about October 16, 1994, Mr. Kladek approached Scott Betten, the broker for Income Real Estate, Inc., about possible employment with the agency. At that time, Mr. Betten checked with the Department to verify that Mr. Kladek had a current real estate salesperson license, and he learned that Mr. Kladek's license was inactive. Mr. Kladek had not renewed his salesperson license because he did not have the required continuing education credits.

   5. On or about October 30, 1994, Mr. Kladek returned to Income Real Estate, having completed the education requirements necessary for renewal of his salesperson license. At that time, Mr. Betten completed license renewal forms for Mr. Kladek, and he gave Mr. Kladek the completed renewal application and a form 400.5, which is used to register a licensed salesperson who has an active or an inactive license with an agency. Mr. Kladek

      mailed the forms to the Department on October 30, 1994, the day he received them from Mr. Betten.

   6. Mr. Betten was the broker who would supervise

      
      

      Mr. Kladek's activities as a real estate salesperson were he to be employed by Income Real Estate. Mr. Betten believed, albeit mistakenly, that Mr. Kladek's license would be considered active once he mailed the renewal application to the Department.

      Accordingly, Mr. Betten permitted Mr. Kladek to begin his employment with Income Real Estate the day after Mr. Kladek mailed the renewal application and the form 400.5 to the Department.

   7. On or about November 13, 1994, the Department returned the application packet to Mr. Kladek because he had failed to sign an affidavit attesting to the fact that, if the Department ever asked, he would provide proof that he had completed the necessary continuing education credits. Mr. Kladek had included with his application a certificate showing that he had completed the credits, but the affidavit was a new requirement for license renewal of which neither Mr. Betten nor Mr. Kladek was aware. Mr. Kladek signed the affidavit and immediately returned the packet to the Department, which duly renewed his salesperson license effective December 9, 1994.

   8. On October 30, 1994, Mr. Kladek entered into an agreement with Jonathan Polisar, who owned several rental apartments in a condominium building in Miami's South Beach area.

      Nine of the apartments were located at 524 Washington on Miami Beach, and one of the apartments was located at Bay Harbor Islands. The agreement provided that Mr. Kladek would manage the apartments owned by Mr. Polisar, providing basic maintenance repair and cleaning services, arranging for more extensive repairs, collecting rent, evicting tenants if the need arose, and renting vacant apartments. The agreement provided that, in exchange for his services, Mr. Kladek would be allowed to rent an apartment from Mr. Polisar at a reduced rent, and he would receive a $50.00 decrease in his monthly rent for each apartment rented, for the duration of the rental, with a permanent $50.00 decrease in his monthly rent for each apartment sold. In November 1994, shortly after Mr. Kladek moved into the apartment, Mr. Polisar terminated the agreement and demanded that Mr. Kladek vacate the apartment.

   9. At the time Mr. Polisar entered into the agreement with Mr. Kladek, Income Real Estate had an agreement with Mr. Polisar pursuant to which it was to market, rent, and sell any condominium units Mr. Polisar might have available. Neither

      Mr. Betten nor Income Real Estate were parties to the agreement between Mr. Kladek and Mr. Polisar, and Mr. Betten notified Mr. Polisar in writing that any agreement between him and

      Mr. Kladek was personal and did not involve Income Real Estate.

      
      

   10. On November 4, 1994, Mr. Kladek executed on behalf of Income Real Estate a contract in which Vincenz Amaddeo agreed to

       purchase and Jonathan Polisar agreed to sell condominium unit number 205 at 524 Washington on Miami Beach, the same condominium building which was the subject of the October 30, 1994, agreement between Mr. Kladek and Mr. Polisar. There is no evidence in the record to establish whether this sale would result in a decrease in Mr. Kladek's rent pursuant to his agreement with Mr. Polisar, but Mr. Kladek did expect to get a portion of the five-percent commission which Income Real Estate would receive when the sale was completed.

   11. During the time his license was inactive, Mr. Kladek did not execute any contracts for sale on behalf of Income Real Estate other than the one he executed on November 4, 1994, although he did do some rentals and "different things." Although he was affiliated with Income Real Estate until September 30, 1996, Mr. Kladek was not very active as a real estate salesperson while he was associated with the agency.

   12. The evidence is uncontroverted that Mr. Kladek did not have an active real estate salesperson license from October 1, 1994, through December 8, 1994. The evidence presented by the Department is sufficient to establish that Mr. Kladek operated as a real estate salesperson without holding a current license when he executed on behalf of Income Real Estate the November 4, 1994, contract for the sale and purchase of unit 205 of the Washington Center condominium building. The evidence is also sufficient to establish that Mr. Kladek operated as a real estate salesperson

       with respect to the agreement he entered into with Mr. Polisar. That agreement clearly contemplated that Mr. Kladek would manage, rent, and sell apartments owned by Mr. Polisar in exchange for compensation, even though the compensation was in the form of a decrease in his rent rather than by commission.

   13. Finally, the evidence is uncontroverted that

       
       

       Mr. Betten, the broker for Income Real Estate, incorrectly advised Mr. Kladek that his license would be valid and current at the time he mailed the completed application to the Department on October 30, 1994. The evidence is also uncontroverted that

       Mr. Kladek relied on Mr. Betten's advice when he operated as a real estate salesperson prior to learning that his license was not, in fact, renewed on October 30, 1994.

       CONCLUSIONS OF LAW

       
       

   14. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and of the parties thereto pursuant to Sections 120.569 and .57(1), Florida Statutes (1997).

   15. As the prosecuting agency for the Florida Real Estate Commission, the Department seeks to impose administrative penalties which may include suspension of his license and/or the imposition of an administrative fine. Therefore, the Department has the burden of proving by clear and convincing evidence that Mr. Kladek committed the violations alleged in the administrative complaint. Department of Banking and Finance, Division of

       Securities and Investor Protection v. Osborne Stern and Co.,

       
       

       670 So. 2d 932 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292

       
       

       (Fla. 1987).

       
       

   16. Section 475.25, Florida Statutes (Supp. 1994), authorizes the Commission to impose administrative sanctions as follows:

       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:

          
          

          * * *

          
          

          (e) Has violated any of the provisions of this chapter or any lawful order or rule made or issued under the provisions of this chapter or chapter 455.

          
          

          In the Administrative Complaint, the Department alleged that Mr. Kladek violated Section 475.42(1)(a), Florida Statutes

          (1993), which provides: "No person shall operate as a broker or salesperson without being the holder of a valid and current active license therefor."

   17. Section 475.01(1)(c), Florida Statutes (Supp. 1994) defines "broker" in pertinent part as follows:

       [A] person who, for another, and for a compensation or valuable consideration directly or indirectly paid or promised,

       expressly or impliedly, or with an intent to collect or receive a compensation or valuable consideration therefor, appraises, auctions, sells, exchanges, buys, rents, or offers, attempts or agrees to appraise, auction, or negotiate the sale, exchange, purchase, or rental of business enterprises or business opportunities or any real property or any interest in or concerning the same, including mineral rights or leases, or who advertises or holds out to the public by any oral or printed solicitation or representation that she or he is engaged in the business of appraising, auctioning, buying, selling, exchanging, leasing, or renting business enterprises or business opportunities or real property of others or interests therein, including mineral rights, or who takes any part in the procuring of sellers, purchasers, lessors, or lessees of business enterprises or business opportunities or the real property of another, or leases, or interest therein, including mineral rights, or who directs or assists in the procuring of prospects or in the negotiation or closing of any transaction which does, or is calculated to, result in a sale, exchange, or leasing thereof, and who receives, expects, or is promised any compensation or valuable consideration, directly or indirectly therefor; and all persons who advertise rental property information or lists.

       A salesperson is defined in Section 475.01(1)(d), Florida Statutes (Supp. 1994), as "a person who performs any act specified in the definition of 'broker,' but who performs such an act under the direction, control, or management of another person."

   18. On the basis of the facts found herein, the Department has satisfied its burden of proving by clear and convincing evidence that Mr. Kladek operated as a real estate salesperson without a valid and current license when he negotiated and signed

       the November 4, 1994, contract for the sale and purchase of a condominium apartment with the expectation that he would receive a commission for his services.

   19. With regard to the agreement between Mr. Kladek and Mr. Polisar, Mr. Kladek would not have needed a real estate license if he had been "employed for a salary as a manager of a condominium or cooperative complex as a result of any activities or duties which he may have in relation to the renting of

       individual units within such condominium or cooperative apartment complex if rental arranged by him are for periods no greater than

       1 year." Section 475.011(5), Florida Statutes (Supp. 1994).

       
       

   20. On the basis of the facts found herein, Mr. Kladek's agreement with Mr. Polisar did not fall within this exemption from the requirements of Chapter 475, Part I, Florida Statutes, and the Department has satisfied its burden of proving by clear and convincing evidence that Mr. Kladek operated as a real estate salesperson with a valid and current license with respect to this agreement.

       
       

   21. Having reached the foregoing conclusions, the appropriate penalty must be determined. The maximum administrative fine of $1,000 per count or violation permitted by statute should not be imposed on Mr. Kladek under the circumstances of this case because the uncontroverted evidence establishes that Mr. Kladek did not intentionally violate

Section 475.42(1)(a), Florida Statutes. Rather, Mr. Kladek

relied on the information provided to him by the broker who was in charge of Income Real Estate that his real estate salesperson license renewal was effective when he mailed the application form and fees to the Department. In all other respects, the penalty recommended by the Department in its Proposed Recommended Order is accepted as appropriate. 3/

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:

1. Dismissing Count I of the Administrative Complaint;

   
   

2. Finding Randall F. Kladek guilty of violating Section 475.42(1)(a), Florida Statutes (1993) and, therefore, Section 475.25(1)(e), Florida Statutes (Supp. 1994), as set forth in Count II of the Administrative Complaint;

1. Suspending Mr. Kladek's real estate salesperson license for a period of thirty (30) days;

2. Imposing an administrative fine against Mr. Kladek in the amount of $500.00; and

3. Requiring Mr. Kladek to complete forty-five (45) hours of post-licensure real estate salesperson education, in addition to the continuing education requirements for renewal of his license.

DONE AND ENTERED this 4th day of June, 1999, in Tallahassee, Leon County, Florida.

PATRICIA HART MALONO

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings This 4th day of June, 1999.

ENDNOTES

1/ The Petitioner was asked to supplement Petitioner's Exhibit 1 with Mr. Kladek's actual licensure history. The Petitioner supplied this information but marked it as Petitioner's

Exhibit 9. The exhibit has been re-marked as part of Petitioner's Exhibit 1.

2/ Although counsel for the Petitioner agreed to provide a copy of the Rule Chapter 61J-2 which was in effect during the times relevant to this proceeding, she did not do so.

3/ The Department also sought an award of the costs of the Department's investigation and prosecution of Mr. Kladek, as provided by Section 455.227(3), Florida Statutes (Supp. 1994). The Department did not, however, offer any proof at the hearing regarding what costs, if any, it incurred. Consequently, there is no record basis on which to make a recommendation concerning a cost award.

COPIES FURNISHED:

Laura McCarthy

Deputy Chief Attorney Department of Business and

Professional Regulation Division of Real Estate

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

Randall F. Kladek

1185 Southwest Ninth Avenue Pompano Beach, Florida 33060

William Woodyard General Counsel

Department of Business and Professional Regulation

Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-0792

Herbert S. Fecker, Director Division of Real Estate Department of Business and

Professional Regulation

400 West Robinson Street Orlando, Florida 32802-1900

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.

Docket for Case No: 98-000029

Orders for Case No: 98-000029