STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 98-3049

)

ROBERT A. SCHWARTZ, )

)

Respondent. )

) DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 98-3783

)

1. A. SCHWARTZ & ASSOCIATES, INC., )

   )

   Respondent. )

   )

   
   

   RECOMMENDED ORDER

   
   

   Pursuant to notice, the Division of Administrative Hearings by its duly designated Administrative Law Judge, William J. Kendrick, held a formal hearing in the above-styled case on November 17, 1998, in West Palm Beach, Florida.

   APPEARANCES

   
   

   For Petitioner: Laura McCarthy, Esquire

   Department of Business and Professional Regulation

   Division of Real Estate Post Office Box 1900

   Orlando, Florida 32802-1900 For Respondents: Frederick H. Wilsen, Esquire

   The Rolls Building, Suite 211 1999 West Colonial Drive Orlando, Florida 32804

   STATEMENT OF THE ISSUES

   
   

   At issue is whether Respondents' committed the offenses alleged in the Administrative Complaints and, if so, what disciplinary action should be taken.

   PRELIMINARY STATEMENT

   
   

   By a two-count Administrative Complaint dated May 20, 1998, Petitioner charged that Respondent, Robert A. Schwartz, a licensed real estate broker, whose license was under suspension pursuant to a final order of the Florida Real Estate Commission, as well as having expired and become inactive, violated certain provisions of Section 475.25, Florida Statutes. The operative facts, as alleged in the Administrative Complaint, were as follows:

   1. On or about February 18, 1998, Respondent Schwartz and R.A. Schwartz & Assoc. Inc. submitted to Helen Young ("seller") an offer from Craig Mattes ("buyer") to purchase real property located at 358 Wooddale Drive, Wellington,

      Florida. . . .

   2. The offer provided that Respondent Schwartz and R.A. Schwartz & Assoc. Inc., as "selling broker," would be paid 5% commission.

   3. The offer noted that Respondent Schwartz and R.A. Schwartz & Assoc. Inc. would hold in escrow a $2000 earnest money deposit.

   4. In February 1998, Respondent Schwartz operated without a valid and current active license.

Based on such allegations, Petitioner alleged in Count I that Mr. Schwartz violated the provisions of Subsection 475.42(1)(a), Florida Statutes, and, therefore, Subsection 475.25(1)(e),

Florida Statutes, by "having operated as a broker without being the holder of a valid and current license." Count II alleged that, based on such allegations, Respondent also violated Subsection 475.25(1)(e), Florida Statutes, by "failing to follow a final order of the Florida Real Estate Commission."

Mr. Schwartz filed a response wherein he disputed the allegations of fact contained in the Administrative Complaint. Consequently, Petitioner referred the matter to the Division of Administrative Hearings (DOAH) for the assignment of an administrative law judge to conduct a formal hearing pursuant to Sections 120.569, 120.57(1), and 120.60(5), Florida Statutes, and the matter was assigned DOAH Case No. 98-3049.

On June 25, 1998, Petitioner filed a one-count Administrative Complaint against Respondent, R. A. Schwartz & Associates, Inc. (the Company), which charged that, based on the transaction previously noted, supra, it was guilty of violating Subsections 475.42(1)(a) and 455.228, Florida Statutes, by "having operated as a real estate broker or salesperson without being the holder of a valid and current license."

The Company filed a response wherein it disputed the allegations of fact contained in the Administrative Complaint, and Petitioner referred the matter to DOAH for the assignment of an administrative law judge to conduct the formal hearing and the matter was assigned DOAH Case No. 98-3783. By order of

September 14, 1998, DOAH Case Nos. 98-3049 and 98-3783 were

consolidated.

At hearing, Petitioner called Craig Mattes and Mark Sulloway as witnesses, and Petitioner's Exhibits 1 through 7 were received

into evidence. Respondents called Robert A. Schwartz as a witness, but offered no additional proof.

The transcript of the hearing was filed January 12, 1999, and the parties were accorded 30 days from that date to file proposed recommended orders. Consequently, the parties waived the requirement that a recommended order be rendered within 30 days after the transcript has been filed. Rule 28-106.216(2), Florida Administrative Code. The parties elected to file such proposals and they have been duly considered.

FINDINGS OF FACT

1. Petitioner, Department of Business and Professional Regulation, Division of Real Estate (Department), is a state government licensing and regulatory agency charged with the duty and responsibility to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Section 20.165, Florida Statutes, Chapters 120, 455, and 475, Florida Statutes, and the rules promulgated pursuant thereto.

2. Respondent, Robert A. Schwartz, is now and has been at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0481297; however, due to the suspension of his license on November 3, 1994, he was not authorized to practice real estate brokerage at anytime material to this proceeding.1

3. Respondent, R. A. Schwartz & Associates, Inc., is not now nor has it ever been licensed as a real estate brokerage

   corporation in the State of Florida. Mr. Schwartz is the

   president and sole corporate officer, as well as the sole owner of the corporate stock.

4. In February 1998, Helen Young telephoned Mr. Schwartz regarding a residence she owned at 358 Wooddale Drive, Wellington, Florida. At the time, Ms. Young was most likely under the impression that Mr. Schwartz was an active broker,2 and telephoned him for assistance with a tenant problem. During the course of that conversation, Ms. Young also let Mr. Schwartz know that the property was available for sale for $80,000.

5. Thereafter, Mr. Schwartz brought the property to the attention of Craig Mattes, an acquaintance, who was also of the understanding that Mr. Schwartz was involved in the real estate business. Mr. Mattes elected to tender an offer on the property and Mr. Schwartz prepared the contract.

6. The contract prepared by Mr. Schwartz was dated February 8, 1998, and provided for a purchase price of $80,000, with a deposit of $2,000 to be held by R. A. Schwartz & Associates, Inc.,3 an additional deposit of $6,000 within 30 days of acceptance, and a balance at closing of $72,000. (Petitioner's Exhibit 6.) The contract further provided:

   Seller agrees to pay to the Broker named below, at the time of closing, from the disbursements of the proceeds of the sale, compensation in the amount of (COMPLETE ONLY ONE) 5 % of gross purchase price or

   $ for Broker's services in effecting the sale by finding the Buyer ready, willing and able to purchase pursuant to the foregoing Contract. If Buyer fails to perform and deposit(s) is retained, 50%

   thereof, but not exceeding the Broker's fee above provided, shall be paid Broker as full consideration for Broker's services, including costs expended by Broker, and the balance shall be paid to Seller. If the transaction shall not close because of refusal or failure of Seller to perform, Seller shall pay the full fee to Broker on demand. In any litigation arising out of the Contract concerning the Broker's fee, the prevailing party shall recover reasonable attorney's fees and costs.

   The contract named R. A. Schwartz & Associates, Inc., as the broker, and both Mr. Mattes and Mr. Schwartz (on behalf of

   R. A. Schwartz & Associates, Inc.) signed the contract.

   
   

7. Subsequently, on February 18, 1998, Mr. Schwartz faxed a copy of the contract, with addendum, and a copy of Mr. Mattes' check, to Ms. Young. The cover sheet, under the letterhead of

   R. A. Schwartz & Associates, Inc., provided:

   
   

   Ms Helen Young

   The Fax's are for you

   
   

   Thank you Bob Schwartz

   
   

   Please sign and return so we can start all paper work.

   
   

8. On February 20, 1998, the Department received an inquiry from Roseann Ure, a licensee associate with Coldwell Banker, questioning the licensure status of Mr. Schwartz and the propriety of his pursuing the contract with Ms. Young. Apparently, Mr. Schwartz's licensure status was disclosed and the contract submitted by him was never accepted. However,

   Mr. Mattes did ultimately purchase the property, but through

   Coldwell Banker.

   
   

9. During the course of the Department's investigation and at hearing, Mr. Schwartz explained his involvement as follows:

   SCHWARTZ claims to know MATTES through his family in the neighborhood. SCHWARTZ claimed to have been contacted by YOUNG about selling her home. SCHWARTZ stated, "I just put the buyer and seller together," and "I would receive no commission." SCHWARTZ stated he had now, "Removed himself from the transaction."

   
   

   On 4/10/98, SCHWARTZ was again interviewed by telephone and advised essentially as follows: He prepared the contract sent to YOUNG as an example, (1) allow the seller to either show the contract to another broker to obtain a reduced commission, (2) or shown the seller what a sales contract should look like if she decided to sell the home herself.

   Given the proof of record, Mr. Schwartz's explanation is inherently improbable and unworthy of belief. Rather, it is apparent that Mr. Schwartz prepared and submitted the contract to Ms. Young with the expectation that, if accepted, a commission would be paid (to him and his company), as provided by the contract.

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of these proceedings. Sections 120.569, 120.57(1), and 120.60(5), Florida Statutes (1997).

11. Where, as here, the Department proposes the take punitive action against a licensee, it must establish grounds for disciplinary action by clear and convincing evidence. Section 120.57(1)(h), Florida Statutes (1997), and Department of Banking and Finance v. Osborne Stern and Co., 670 So. 2d 932 (Fla. 1996).

    "The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established." Slomowitz v. Walker, 429 So. 2d 797, 800

    (Fla. 4th DCA 1983). Moreover, the disciplinary action taken may be based only upon the offenses specifically alleged in the administrative complaint. See Kinney v. Department of State,

    501 So. 2d 129 (Fla. 5th DCA 1987); Sternberg v. Department of Professional Regulation, Board of Medical Examiners, 465 So. 2d 1324 (Fla. 1st DCA 1985); and Hunter v. Department of Professional Regulation, 458 So. 2d 844 (Fla. 2d DCA 1984). Finally, in determining whether Respondent violated the provisions of Section 475.25(1), as alleged in the Administrative Complaint, one "must bear in mind that it is, in effect, a penal statute. . . . This being true, the statute must be strictly construed and no conduct is to be regarded as included within it that is not reasonably proscribed by it." Lester v. Department of Professional and Occupational Regulations, 348 So. 2d 923, 925 (Fla. 1st DCA 1977).

12. Pertinent to this case, Section 475.25(1), Florida Statutes, provides that the Florida Real Estate Commission may discipline a licensee, if it finds that the licensee:

    (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.

    
    

    Also pertinent to this case, Section 475.42, Florida Statutes,

    provides:

    
    

    1. VIOLATIONS.--

       1. No person shall operate as a broker or sales person without being the holder of a valid and current active license therefor.

    
    

    * * *

    
    

    (e) No person shall violate any lawful order or rule of the commission which is binding upon her or him.

    
    

13. The word "broker," as that term is used in Chapter 475, Florida Statutes, is defined as follows:

    1. "Broker" means 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 broker renders a professional service and is a professional within the meaning of s. 95.11(4)(a). Where the term "appraise" or "appraising" appears in the definition of the term "broker," it specifically excludes those appraisal services which must be performed only by a state-licensed or state-certified appraiser, and those appraisal services which may be performed by a registered assistant appraiser as defined in part II. The term "broker" also includes any person who is a general partner, officer, or director of a partnership or corporation which acts as a broker. The term "broker" also includes any person or entity who undertakes to list or sell one or more timeshare periods per year in one or more timeshare plans on behalf of any number of persons, except as provided in ss. 475.011 and 721.20.

       Section 475.01(a), Florida Statutes.4

14. Here, the Department has demonstrated with the requisite degree of certainty, that Respondent, Robert A. Schwartz, committed the offenses alleged in Counts I and II of the Administrative Complaint filed against him (DOAH Case

    No. 98-3049) and that Respondent, R. A. Schwartz & Associates, Inc., committed the offense alleged in Count I of the Administrative Complaint filed against it (DOAH Case

    No. 98-3783).

    
    

15. Having reached the foregoing conclusion, it remains to resolve the appropriate penalty for Respondents' offenses. Here, the Department suggests, as a penalty for Mr. Schwartz's violations, that his license be permanently revoked, and, as a penalty for R. A. Schwartz & Associates, Inc.'s violation, an

administrative fine be imposed in the amount of $5,000. That proposal is consistent with Sections 455.228 and 475.25(1), Florida Statutes, and the Department's penalty guidelines (Rule 61J2-24.001, Florida Administrative Code). Section 455.2273(5), Florida Statutes, and Gadsden State Bank v. Lewis,

348 So. 2d 343, 345 (Fla. 1st DCA 1977) ("[A]gencies must honor their own substantive rules until, pursuant to . . . [Section 120.56, Florida Statutes (1997)], they are amended or abrogated.") C.f. Williams v. Department of Transportation,

531 So. 2d 994 (Fla. 1st DCA 1988) (Agency is required to comply with its disciplinary guidelines in taking disciplinary action against its employees.) Consequently, there being no apparent reason to deviate from the Department's recommendation, its proposed penalty is accepted as appropriate. Walker v. Department of Business and Professional Regulation, supra, (Penalty imposed was within Florida Real Estate Commission's statutory authority and would not be disturbed.)

RECOMMENDATION

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

RECOMMENDED that a Final Order be entered in DOAH Case

No. 98-3049 which finds Respondent, Robert A. Schwartz, guilty of violating Sections 475.25(1)(e), 475.42(1)(a), and 475.42(1)(e), as alleged in the Administrative Complaint and that, as a penalty for such violations, his license be permanently revoked.

It is further RECOMMENDED that a Final Order be rendered in DOAH Case No. 98-3783 which finds Respondent, R. A. Schwartz & Associates, Inc., guilty of violating Subsections 455.228 and 475.42(1)(a), Florida Statutes, as alleged in the Administrative Complaint and that, as a penalty for such violation, an administrative fine in the amount of $5,000 be imposed.

DONE AND ENTERED this 12th day of February, 1999, in Tallahassee, Leon County, Florida.

WILLIAM J. KENDRICK

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 12th day of February, 1999.

ENDNOTES

1/ By a final order of the Florida Real Estate Commission (FREC) in DBPR Case No. 92-83928, the real estate brokerage license of Respondent, Robert A. Schwartz, was suspended for a period of

5 years effective November 3, 1994. Moreover, on March 31, 1996, and again on March 31, 1998, Mr. Schwartz failed to renew his license, and his license has been (since March 31, 1996) involuntarily inactive.

2/ At one time, Mr. Schwartz and Ms. Young were neighbors and she knew he was in the property management business. According to Mr. Schwartz, when she was leaving the area (and the house alone), she asked Mr. Schwartz for advice. At the time, Mr. Schwartz's license was still active, and he told Ms. Young he could manage the property and rent it or sell it for her. (Transcript, pages

37 and 38.) Mr. Schwartz also provided Ms. Young with his business card.

3/ At Mr. Schwartz's direction, Mr. Mattes drew a check payable to R. A. Schwartz & Associates, Inc., for $2,000, and provided Mr. Schwartz with a copy of the check and not the original. The reason for this unusual arrangement is not of record; however, according to Mr. Mattes, the original check was to be the deposit if the contract was accepted.

4/ Also worthy of note, Section 475.28(1), Florida Statutes, provides:

1. In all proceedings before the commission or the courts, civil or criminal, in which the payment, receipt, or expectation of a commission, compensation, or a valuable consideration is a necessary element of the offense, proof of the performance of the act, service, or condition for which such commission, compensation, or valuable consideration is required to be shown shall be prima facie evidence that such act, service, or condition was performed or existed for or in expectation of the payment or receipt of a commission, compensation, or a valuable consideration. If it is material to determine whether or not a party to any action, civil or criminal, is properly licensed, the burden of proof shall be on such party.

COPIES FURNISHED:

Laura McCarthy, Esquire Department of Business and

Professional Regulation Division of Real Estate Post Office Box 1900

Orlando, Florida 32802-1900

Frederick H. Wilsen, Esquire The Rolls Building, Suite 211 1999 West Colonial Drive Orlando, Florida 32804

James Kimbler

Acting Division Director Division of Real Estate Department of Business and

Professional Regulation Post Office Box 1900 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.

Docket for Case No: 98-003049

Orders for Case No: 98-003049