FLORIDA DEPARTMENT OF BUSINESS ) AND PROFESSIONAL REGULATION, ) DIVISION OF REAL ESTATE, )
vs. ) Case No. 98-1207
Respondent. )
Pursuant to notice, a final hearing was conducted by the Division of Administrative Hearings via video teleconference, with its Administrative Law Judge, David M. Maloney, presiding in Tallahassee, Florida, on June 12, 1998. The court reporter was present in Orlando, Florida, along with the other participants.
For Petitioner: Christine M. Ryall, Senior Attorney
For Respondent: Frederick H. Wilsen, Esquire
Whether Respondent is guilty of fraud, misrepresentation or concealment as charged in the Administrative Complaint which initiated this proceeding.
On March 9, 1998, the Division of Administrative Hearings received a letter from Petitioner requesting that the Division conduct a formal hearing in the above-styled cause. Attached to the letter was both an Administrative Complaint and Respondent's answer to the complaint.
The Administrative Complaint charged Respondent with one count of obtaining a real estate broker's license "by means of fraud, misrepresentation, or concealment in violation of [Section] 475.25(1)(m), Florida Statutes." In his answer, Respondent denied the allegations in Count I of the complaint and "demand[ed] a formal hearing before the [Division] of Administrative Hearings."
The request for formal hearing was honored and on March 16, 1998, the case was assigned Case No. 98-1207. Administrative Law Judge Mary Clark was designated to conduct the proceedings.
Shortly thereafter, a notice of hearing was issued setting the final hearing for June 12, 1998. The undersigned was thereafter designated to conduct the proceedings in place of Judge Clark.
June 12, 1998, by video teleconference. The parties and the court reporter participated in the hearing in Orlando with the undersigned presiding in Tallahassee. Petitioner called Respondent as a witness at the final hearing and introduced five exhibits, all of which were admitted into evidence. Respondent offered one exhibit which was admitted.
June 24, 1998. The parties each filed proposed recommended orders: Petitioner filed its proposed order on July 2, 1998; Respondent filed his on July 8.
Petitioner, the Division of Real Estate in the Department of Business and Professional Regulation is the state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida under Chapter 455, Florida Statutes, (governing the Department of Business and Professional Regulation) and Chapter 475, Florida Statutes, (governing the practice or real estate brokerage in the State of Florida). Petitioner is also charged with the duty of prosecuting administrative complaints that allege violations of Chapter 61J2, Florida Administrative Code, which constitute the rules and regulations promulgated by the Florida Real Estate Commission to regulate the practice of brokering real estate transactions.
Respondent, Edward Gensen, is a licensed real estate broker in the State of Florida under license number 0595539. Mr. Gensen has been licensed in such a capacity at all times material to the Administrative Complaint which initiated this proceeding. Mr. Gensen has also been licensed as a real estate broker in the State of Illinois since 1983 and is an enrolled agent with the Internal Revenue Service.
Battery in 1984
On September 18, 1984, Timothy G. Vojak swore out a complaint in the Circuit Court of the Eighteenth Judicial Circuit of the State of Illinois, (the "criminal court"). The complaint accused Mr. Gensen of criminal battery in that "said defendant [Mr. Gensen] without legal justification, intentionally cause[d] bodily harm to Timothy G. Vojak, in that he struck . . . Vojak on the side of his head with his fist." Petitioner's Exhibit No. 4.
A certified copy of the criminal complaint shows that a copy of the complaint was delivered to Mr. Gensen the same day that it was executed by the complainant.
Mr. Gensen's explanation of the battery charge offered in this license discipline proceeding was that the facts leading to the charge were nothing more than a "traffic argument." (Tr. 13). Mr. Vojak
pulled me over and got out of the car . . . I was in the car and got out . . . and he come out of his car and he come up to me and took a swing at me and hit me.
* * *
I hit him back.
(Id.) Apparently, at least the fact that Mr. Gensen hit Mr. Vojak was agreed to by the parties at Mr. Gensen's criminal trial. (See the next paragraph, below.)
On October 5, 1984, a criminal sentence form was filed with the Illinois criminal court in Mr. Gensen's case. It indicates that the criminal case of Mr. Gensen had been initiated not by indictment or information (that is, a charging document filed in court by the local prosecuting attorney for the state), as would be expected in the typical criminal case, but by "complaint." (Petitioner's Exhibit No. 4, page 1 of 3.) "[C]omplaint" obviously refers to the complaint filed by Mr. Vojak several weeks earlier. The sentence form also indicates that Mr. Gensen pled "not guilty." Written in the same handwriting as the name "Edward Gensen" in the blank on the form for "Defendant" are the words "STIP TO FACTS." These words are taken to mean that Mr. Gensen reached an agreement with the complainant and the prosecuting attorney as to what the facts were in the case.
The sentencing form provides other information about the outcome of the case. It indicates that after the stipulation to the facts, Mr. Gensen was found guilty by the court (as opposed to by a jury).
On the form, under the heading "TYPE OF SENTENCE" are a number of blocks to be checked. Among these blocks are:
"Periodic Imprisonment," "County Jail," "No credit for good time," "Custody of U.S. Attorney General," and "Illinois Department of Corrections." None of the blocks associated with these "types of sentences," all of which are types of outcomes one would normally associate with a criminal sentence, are checked.
Instead, two blocks are checked: "Fined," and "Probation." The "Fined" block shows that Mr. Gensen was fined
$55 and assessed $35 in court costs. The "Probation" block is checked as well. But the word "[p]robation" is scratched through. In its place is written the word, "supervision."
The criminal sentence form indicates that Mr. Gensen had a defense attorney named "McGrath." The initials of the State's Attorney are shown as "SPW." The sentence form is signed by a judge, whose name appears to be "R.A. McLaren." Finally, the criminal sentence form indicates that Mr. Gensen's "sentence" was stayed until "4/12/85," approximately 6 months after the form was signed by Judge McLaren.
Supervision and a Question of Expungement
Mr. Gensen completed the period of supervision without incident. But supervision "didn't call for me to do anything." (Tr. 14.)
At the time of his trial, Mr. Gensen was told by an attorney unidentified in the record of this license proceeding, that his case "was a minor thing and it was erased and didn't
exist afterward. After the supervision they take it away or something. He said you wouldn't have any record." (Tr. 19.)
Mr. Gensen also had a vague recollection of Judge McLaren telling him that any record of his guilt would be expunged if he successfully completed the period of supervision. "If I remember right, it was something like, 'You have the conviction. You go on supervision and then everything is taken away.'" (Tr. 19.)
Whatever Mr. Gensen may have been told at the time of his trial and sentencing, the record of his battery conviction in 1984 was not expunged.
There was, moreover, no evidence offered in this proceeding that the court's maintenance of the records of his conviction for battery and "sentence" of a fine, assessment of court costs and supervision was a clerical error or in error in any other way.
Application for a Florida Real Estate Broker's License
By licensure application signed by Respondent on February 5, 1996, Respondent applied to become licensed as a real estate broker in the State of Florida.
On the application for his real estate license,
Respondent was asked to indicate whether he had
ever been convicted of a crime, found guilty, or entered a plea of guilty or nolo contendere (no contest), even if adjudication was withheld. This question applies to any violation of the laws of any municipality,
county, state, or nation, including traffic offenses (but not parking, speeding, inspection, or traffic signal violation), without regard to whether you were placed on probation, had adjudication withheld, paroled or pardoned. . . you are responsible for verifying the expungement or sealing prior to answering "NO." If you do not fully
understand this question, consult with an attorney or the Division of Real Estate.
(Petitioner's Ex. No. 2, pg. 2, question 9) (Emphasis added.)In response to this question, Respondent checked the "No" box. (Id.)
Respondent swore that all answers and information contained in his application were true and complete. Respondent's signature was duly notarized. Respondent knew that his application for licensure had to be approved by the Florida Real Estate Commission.
Respondent did not contact the Illinois court system to determine whether the court maintained records of the judge's finding that he was guilty or the sentence (payment of a fine, assessment of court costs and supervision).
Respondent did not consult a lawyer about how to answer Question 9 on his real estate application.
Respondent did not consult with the Division of Real Estate to determine whether he should mention the Illinois finding of guilt, probation and payment of fine, on the application for licensure.
On or about March 18, 1996, in reliance upon Respondent's application, the State of Florida issued Respondent a license as a real estate broker.
Other Applications; Other Convictions
In addition to his licensure as a real estate broker in Florida, Mr. Gensen is also licensed as a real estate salesman. When he applied for his real estate salesman's license, he answered no to the question about whether he had ever been convicted of a crime or had a criminal record.
Mr. Gensen testified that the 1984 battery in Illinois was not the only conviction in his past. "There was [another] one thirty-five or forty years ago. I can't remember the exact date. [It was also] a traffic argument." (Tr. 14.)
No Other Administrative Complaints
Mr. Gensen, in his several capacities as a licensee or holder of a privilege from the states of Illinois and Florida and the federal government, has never been disciplined or had to answer to an administrative complaint with the exception of one time: this case initiated by the Administrative Complaint.
The Administrative Complaint
The Administrative Complaint in this case seeks action against Mr. Gensen's real estate broker's license only. It does not ask the Florida Real Estate Commission or any other authority to take action against his salesman's license.
Likewise, the complaint is based solely on the 1984 battery. There is no mention or allegation in the complaint relating to another conviction thirty-five or forty years ago.
Consistent with the findings of fact in paragraphs 23 and 24, above, the Administrative Complaint charges Mr. Gensen with only one count: "the Respondent has obtained a license [the real estate broker's license] by means of fraud, misrepresentation, or concealment in violation of [s.] 475.25(1)(m), Florida Statutes." Administrative Complaint, p. 2.
Fraud, Misrepresentation and Concealment
At the close of the presentation of evidence in this case, Mr. Gensen made a lengthy statement. He admitted that he had been "guilty of making a mistake on my application. I failed to put down that I was found guilty of a charge of battery and fined . . . and given supervision . . . " . (Tr. 22.)
Mr. Gensen then reviewed the numerous times in Florida, Illinois and with the federal government that he had applied for licensure or some sort of privilege in which the applications asked whether he had ever been convicted of a crime or had a criminal record. "In every instance in all these years I have put down that I had no criminal record. The battery charge never entered my mind when I filled out the application[s]." (Tr. 23.)
Mr. Gensen also pointed out that revoking his license would cause him little if any financial loss because he has not
been very active as a real estate broker in the last four years. Mr. Gensen closed with the following statement,
So why am I here? Because I did not knowingly commit fraud, misrepresentation and concealment. I'm here because I try to be honest and I keep my word all my life and I did not cheat anybody. I make mistakes, but I'm not a dishonest person and I don't want to be found guilty of doing something dishonest."
(Tr. 23.)
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter pursuant. Section 120.57, Florida Statutes.
Petitioner has the burden of proof. Balino v. Department of Health and Rehabilitative Services, 348 So. 2d 349 (Fla. 1st DCA 1977). The standard of proof necessary to revoke or suspend a license has been determined by the Florida Supreme Court to be "clear and convincing evidence." Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).
The Administrative Complaint is not ambiguous in this case about the charges or the license it seeks to have disciplined. There is only one license at stake here: Respondent's Real Estate Broker's license. The charge of a violation is limited to the allegations in the complaint of only one prior crime, the battery in 1984. Testimony about an earlier conviction is ruled irrelevant to this proceeding. Furthermore,
this outcome of this proceeding concerns only Mr. Gensen's broker's license not his salesman's license.
The purpose of Chapter 475, Florida Statutes, and the rules enacted pursuant to it, is to protect the public from dishonest real estate brokers and untrained, unsupervised brokers. Paris v. Hilton, 352 So. 2d 534, 535 (Fla. 1977), cert. denied, 441 U.S. 931, 99 S.Ct 2050, 60 L.Ed.2d 659 (1978). Real estate licensees engage in fiduciary relationships with members of the public in serious financial transactions. The public has a great interest in ensuring that licensees are held to a high standard of honesty. Accordingly, Petitioner and FREC rely upon the application for licensure as a means of determining "whether the applicant is honest truthful, trustworthy, of good character, and bears a good reputation for fair dealings. . ." Rule 61J2- 2.027(2), Florida Administrative Code.
Great effort was obviously taken in drafting Question 9 on the application to ensure that there be no misunderstanding about the information it seeks. It did not ask merely whether the applicant had a criminal record. The question is designed to be as exhaustive as possible as to whether the applicant has ever been involved as a defendant in any type of criminal proceeding in which the outcome was other than acquittal.
With regard to instances of expunction, Question 9 on the application also attempts to leave no ambiguity. As found in the findings of fact section of this recommended order, it gives
clear instruction as to what the applicant must do if criminal records were expunged or sealed. "If you intend to answer 'NO' because you believe those records have been expunged or sealed by court order . . . you are responsible for verifying the expungement or sealing prior to answering 'NO.'"
Finally, it bears repeating as found in the findings of fact, above, Question 9 provides cautionary advice to the unsure applicant: "If you do not fully understand this question, consult with an attorney or the Division of Real Estate."
At a minimum, before answering "no" to Question 9, Mr. Gensen should have realized that the 1984 conviction for battery presented issues requiring the advice of an attorney or if of the Division of Real Estate. He sought the advice of neither.
It is understandable that Mr. Gensen might have been confused about whether he had a criminal record or not because of statements made to him by an attorney and the judge at his criminal trial. There are other indications in the record as well that might have left him less than certain as to whether he had been convicted of a crime or had a criminal record. The sentence for example was not what one would normally assume would have been for conviction of a crime: jail time, credit for time served or even probation. It was simply "supervision," a fine and court costs. But there should have been no question in Mr. Gensen's mind that he had been involved in a criminal proceeding
in which a finding of "guilty" was entered into the record.
There is also no question that the application makes very clear to a person in his shoes as to the suitable course of action when in doubt: inquire of others qualified to give advice. Mr.
Gensen did not do so and it simply does not suffice, given the clarity of Question 9 and its instructions, to assert that "[i]t never entered my mind." If, in fact, the existence of the finding of guilty to the criminal charge of battery never entered Mr. Gensen's mind, it should have.
In sum, Mr. Gensen should have known that he was making a material misstatement of fact on his real estate application by answering "no" to Question 9. Although scienter or guilty knowledge is an element of intentional misconduct, it may be established by showing that the accused was reckless or careless as to the truth of the matter asserted. Ocean Bank of Miami v. Inv-Uni Investment Corp., 599 So. 2d 694, 697 (Fla. 3rd DCA 1992). At a minimum, Mr. Gensen was careless when he answered "no" to question nine.
The proof is not clear and convincing that Mr. Gensen formed specific intent to defraud the licensing authorities in this case. Certainly, he did not take the licensing process as seriously as it deserves and as seriously as does the Division of Real Estate charged with protection of the public from dishonest real estate brokers. But Mr. Gensen's failure was not one of dishonesty. It is apparent that he was not thinking clearly at
the time he filled out the application. Perhaps, he did not read the application closely enough. In the end, however, his failure is one of mere carelessness.
Nonetheless, Mr. Gensen's answer of "no" to Question 9 constitutes concealment whether that concealment was knowing or not. Mr. Gensen should have answered "yes" to Question 9. The failure to do so constitutes concealment in violation of Section 475.25(1)(m), Florida Statutes.
Penalty
Petitioner recommends that Respondent be fined $1,000 and his license be revoked. The penalty is too harsh under the circumstances of this case. There has been no showing that the 1984 battery was justification for denial of his license application. Nor has it been shown that Mr. Gensen's failure to read the application carefully, answer its questions correctly and follow its instructions have a bearing on his ability to practice as a real estate broker. His failure in this case is not the result of dishonesty. Rather, it is the result of not thinking clearly, not being careful and not treating an application for a real estate broker's license with the seriousness it deserves. A better outcome than a stiff fine and revocation of license would be to suspend Mr. Gensen's license for three months and place him on probation for nine months thereafter. One of the terms of probation, in light of what it is hoped Mr. Gensen has learned from this proceeding, should be
that he inform all authorities from whom he has received licenses or privileges of the 1984 battery and any other criminal conviction that he might have incurred prior to the filing of his applications for licenses or privileges with those authorities.
Accordingly, it is recommended that the Florida Real Estate Commission enter a final order finding Edward Gensen to have violated Section 475.25(1)(m), Florida Statutes, as charged in the Administrative Complaint which initiated this proceeding. It is further recommended that his real estate broker's license be suspended for three months to be followed by nine months of probation, by the end of which he must have informed all licensing authorities of his criminal conviction for battery in 1984 and any other criminal conviction prior to the date he applied for his real estate broker's license.
DONE AND ENTERED this 4th day of August, 1998, in Tallahassee, Leon County, Florida.
DAVID M. MALONEY
Filed with the Clerk of the Division of Administrative Hearings this 4th day of August, 1998.
Christine M. Ryall, Senior Attorney Division of Real Estate
Frederick H. Wilsen, Esquire Law Office of Gillis & Wilsen
Lynda L. Goodgame, General Counsel Department of Business and
Henry M. Solares, Division Director Division of Real Estate
Richard T. Farrell, Secretary Department of Business and
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 must be filed with the agency that will issue the Final Order in this case.
