STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 98-3606

)

CLAUDIO VERZURA, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a Section 120.57(1) hearing was conducted in this case on March 2, 1999, by video teleconference at sites in Miami and Tallahassee, Florida, before Stuart M. Lerner, a duly-designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Geoffrey T. Kirk, Esquire

Department of Business and Professional Regulation

Division of Real Estate

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

For Respondent: David J. Valdini, Esquire

Leiby Construction Law Firm, P.A.

8551 West Sunrise Boulevard, Suite 304 Fort Lauderdale, Florida 33322

STATEMENT OF THE ISSUES

1. Whether Respondent committed the violation alleged in the Administrative Complaint?

   
   

   him?

2. If so, what disciplinary action should be taken against

   
   

   PRELIMINARY STATEMENT

   
   

   On July 23, 1998, the Department of Business and

   
   

   Professional Regulation, Division of Real Estate (Department) issued an Administrative Complaint alleging that Respondent, a Florida-licensed real estate salesperson, "operated as a salesperson without being the holder of a valid and current license as a salesperson in violation of [Section] 475.25(1)(a), Fla. Stat. and therefore in violation of [Section] 475.25(1)(e), Fla. Stat." Respondent denied "the allegations of fact contained in the Administrative Complaint" and requested a Section 120.57(1) hearing on the matter. On August 10, 1998, the case was referred to the Division of Administrative Hearings (Division) for the assignment of a Division Administrative Law Judge to conduct the hearing Respondent had requested.

   As noted above, the Section 120.57(1) hearing was held on March 2, 1999. Five witnesses testified at the hearing: Mary Stimmel, Kenneth Rehm, Frances Ricca, Rose Miguelena and Respondent. In addition to testimony of these five witnesses, 33 exhibits (Joint Exhibits 1 through 33) were offered and received into evidence.

   At the conclusion of the evidentiary portion of the hearing, the undersigned, on the record, advised the parties of their right to file proposed recommended orders and established a

   deadline (10 days from the date of the undersigned's receipt of the transcript of the hearing) for the filing of proposed recommended orders. The hearing transcript was filed on

   March 23, 1999. Respondent and the Department filed their proposed recommended orders on April 1, 1999, and April 2, 1999, respectively. These post-hearing submittals have been carefully considered by the undersigned.

   FINDINGS OF FACT

   
   

   Based upon the evidence adduced at hearing, and the record as a whole, the following findings of fact are made:

   1. Respondent is a Florida-licensed real estate salesperson. He holds license number 0186760.

   2. From October 1, 1991, through September 30, 1993, Respondent's license was inactive. His address of record during this period was 290 174th Street L11, North Miami Beach, Florida 33160.

   3. On October 1, 1993, Respondent's license became involuntarily inactive due to non-renewal, and it remained in involuntary inactive status through August 11, 1996. Respondent's address of record during this period remained 290 174th Street L11, North Miami Beach, Florida 33160.

   4. On June 1, 1995, after having successfully completed a license reactivation course at the Gold Coast School of Real Estate,1 Respondent went to The Keyes Company to apply for a position as a sales associate.

   5. The Keyes Company is now, and was at all times material to the instant case, a corporation registered in Florida as a real estate broker.

   6. During his visit to The Keyes Company, Respondent completed (with the assistance of a Keyes Company secretary) and signed various forms, including a Department-issued "Request for License or Change of Status" form (400.5 Form). The 400.5 Form contained three sections: Section A, the "action requested" section; Section B, which was to be "completed by [the] licensee applying for [the] change"; and Section C, which was to be "completed by [the] broker/employer if the applicant [was] requesting active salesperson or broker-salesperson status." On the reverse side of the 400.5 Form were instructions, which indicated, among other things, that if the licensee was seeking to renew his or her license, the 400.5 Form had to "be accompanied by the required fee."

   7. In Sections A and B of the 400.5 Form, Respondent indicated, among other things, that he was seeking to renew his license and gain active status and that his "residence address" was 2182 Northeast 186th Terrace, North Miami Beach, Florida 33179. Although there was a box on the top of the form that he could have checked to reflect that this was a "change [of] residence address," he failed to do so.

   8. After completing Sections A and B, Respondent signed and dated the partially completed 400.5 Form.

   9. The secretary who assisted Respondent in filling out the

      
      

      400.5 Form (Secretary) told Respondent that The Keyes Company would complete Section C of the form and then mail it to the Department for processing. She further advised Respondent that she would let him know in a few days "exactly how much [he] would have to pay" the Department to obtain the "[c]hange of [s]tatus" he was requesting.

   10. Three or four days later, the Secretary contacted Respondent and informed him that he had to pay a $90.00 fee to the Department. Respondent relied upon the information that the Secretary had given him regarding the amount of the fee he had to pay. He made no effort to contact the Department to verify the accuracy of the information. On June 5, 1995, Respondent wrote a

       $90.00 check, payable to the Department, and left it with the Secretary for her to mail, along with the completed 400.5 Form, to the Department. The Keyes Company's payroll clerk, Rosa Miguelena, thereafter contacted the Department by telephone to confirm that $90.00 was the amount that Respondent had to pay. The person with whom she spoke told her that the total fee for late renewing a license was $90.00 ($65.00 for the renewal and a

       $25.00 late fee).

       
       

   11. The completed 400.5 Form (Section C of which had been filled in and signed on June 9, 1995, by Ray Shaw, a Vice President of The Keyes Company) and the $90.00 check, as well a copy of Respondent's reactivation course completion certificate,

       were subsequently sent to the Department. The check was deposited by the Department on June 19, 1995.

   12. The $90.00 was insufficient to cover the amount necessary to renew and activate Respondent's license for the upcoming two-year renewal cycle commencing October 1, 1995.2 Accordingly, on or about June 23, 1995, the Department sent, by United States Mail, a letter to Respondent, which read as follows:

       We are returning the attached for the following reasons:

       
       

       (X) Request not accompanied by the total fee of $153.00. You need to send additional

       $63.00 in order for us to process your renewal.

       
       

       (X) To be credited for the fee accepted, THIS DOCUMENT MUST BE RETURNED TO THE DIVISION OF REAL ESTATE.

       
       

       PLEASE RETURN ALL OF THE ATTACHED, ALONG WITH A COPY OF THIS LETTER.

       
       

       The letter was mailed to the address (2182 Northeast 186th Terrace, North Miami Beach, Florida 33179) that Respondent had indicated, on the 400.5 Form, was his "residence address." At the time the letter was mailed, Respondent still resided at this address.

   13. Nonetheless, Respondent never received the letter in the mail.

   14. This is not the only time that mail addressed to Respondent at 2182 Northeast 186th Terrace, North Miami Beach,

       Florida 33179 has not been delivered to him by the United States Postal Service. It has been a recurring problem.

   15. Had Respondent received the letter, he would have taken the additional steps needed to renew and activate his license. Not having heard anything from either the Department or The Keyes Company regarding the matter, he erroneously assumed that his license had been renewed and activated, and he acted accordingly.

   16. On or about January 18, 1996, Respondent, acting in his capacity as a Keyes Company sales associate, procured Vito Verzura as a buyer for real property located in Dade County, Florida that was owned by Jack Poulas (Property).

   17. On or about February 1, 1996, The Keyes Company issued to Respondent a check in the amount of $676.00 as commission for his role in the Vito Verzura/Jack Pulos transaction.

   18. On or about June 25, 1996, Respondent, acting in his capacity as a Keyes Company sales associate, procured listing agreements with Vito Verzura regarding the Property. The listing agreements provided that the listing agent(s) would be paid 10% of the sales price.

   19. In late June or early July of 1996, after speaking with a Keyes Company secretary who questioned whether he was associated with the company, Respondent telephoned the Department to inquire whether his license was active. The Department representative with whom he spoke advised him that the

       Department's records revealed that his license had never been activated.

   20. Respondent then contacted The Keyes Company to discuss the matter.

   21. He expressed his desire to have his license activated as soon as possible.

   22. The Keyes Company told Respondent that he needed to pay the Department an additional $125.00.

   23. On or about July 9, 1996, Respondent wrote a check in the amount of $125.00, payable to the Department, which he gave to The Keyes Company to deliver to the Department. On that same date, he also signed (but did not date) another Department-issued "Request for License or Change of Status Form."

   24. The check, along with the signed form (Section C of which was left blank), were subsequently sent to the Department. The Department received these items on or about August 12, 1996. It deposited the check on August 14, 1996.

   25. Because Section C of the "Request for License or Change of Status Form" was left blank, the Department changed the status of Respondent's licensure, effective August 12, 1996, to voluntary inactive rather than to active. The Department sent Respondent a letter informing him of the change. The letter contained the following "explanation":

       The Division of Real Estate computer records do not reflect you to be in the employ of a licensed real estate broker, a registered

       broker corporation or broker partnership, or an unlicensed owner developer at this time.

       
       

       Please have the attached form 400.5 completed by both you and your employer and returned in the enclosed envelope if your license status should be shown as active.

       
       

   26. On February 27, 1997, the Department received from Respondent a completed "Request for License or Change of Status Form," which reflected that he was employed by Gerard International Realty, a duly registered broker. After receiving this form, the Department activated Respondent's license.

   27. At no time prior to February 27, 1997, did Respondent hold a valid and current active real estate salesperson license.

       CONCLUSIONS OF LAW

       
       

   28. The Florida Real Estate Commission (Commission) is statutorily empowered to take disciplinary action against Florida-licensed real estate salespersons based upon any of the grounds enumerated in Section 475.25(1), Florida Statutes. Such disciplinary action may include one or more of the following penalties: license revocation; license suspension (for a period not exceeding ten years); imposition of an administrative fine

       not to exceed $1,000 for each count or separate offense; issuance of a reprimand; and placement of the licensee on probation.

       Section 475.25(1), Florida Statutes.

       
       

   29. Proof greater than a mere preponderance of the evidence must be submitted. Clear and convincing evidence of the licensee's guilt is required. See Department of Banking and

       Finance. Division of Securities and Investor Protection v. Osborne Stern and Company, 670 So. 2d 932, 935 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987); Munch v. Department of Professional Regulation, 592 So. 2d 1136 (Fla. 1st DCA 1992); Section 120.57(1)(h), Florida Statutes ("Findings of fact shall be based on a preponderance of the evidence, except in penal or licensure disciplinary proceedings or except as otherwise provided by statute.").

   30. "'[C]lear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the testimony must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. 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.'" In re Davey, 645 So. 2d 398, 404 (Fla. 1994), quoting, with approval, from Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983).

   31. The disciplinary action taken against the licensee may be based only upon those offenses specifically alleged in the administrative complaint. See Cottrill v. Department of Insurance, 685 So. 2d 1371 (Fla. 1st DCA 1996); Kinney v. Department of State, 501 So. 2d 129, 133 (Fla. 5th DCA 1987); Hunter v. Department of Professional Regulation, 458 So. 2d 842, 844 (Fla. 2d DCA 1984).

   32. In determining whether Section 475.25(1), Florida Statutes, has been violated in the manner charged 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. Furthermore, if there are any ambiguities included such must be construed in favor of the . . . licensee." Lester v. Department of Professional and Occupational Regulations, 348 So. 2d 923, 925 (Fla. 1st DCA 1977).

   33. The Administrative Complaint issued in the instant case alleges that Respondent violated subsection (l)(e) of Section 475.25, Florida Statutes, by "operat[ing] as salesperson without being the holder of a valid and current license as a salesperson, as required by Section 475.42(1)(a), Florida Statutes.

   34. Subsection (1)(e) of Section 475.25, Florida Statutes, authorizes the Commission to take disciplinary action against a Florida-licensed real estate salesperson who "[h]as violated any of the provisions of this chapter [Chapter 475, Florida Statutes] or any lawful order or rule made or issued under the provisions of this chapter or chapter 455."

   35. Among the provisions of Chapter 475, Florida Statutes, the violation of which also constitutes a violation of Section 475.25(1)(e), Florida Statutes, is the provision in Section 475.42(1)(a), Florida Statutes, that "[n]o person shall operate

       as a broker or salesperson without being the holder of a valid and current active license therefor."

   36. "Broker," as that term is used in Chapter 475, Florida Statutes, is defined in Section 475.01(1)(a), Florida Statutes, as follows:

       "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.

   37. "Salesperson," as that term is used in Chapter 475, Florida Statutes, is defined in Section 475.01(1)(k), Florida Statutes, as follows:

       "Salesperson" means a person who performs any act specified in the definition of "broker," but who performs such act under the direction, control, or management of another person. A salesperson renders a professional service and is a professional within the meaning of s. 95.11(4)(a).

       
       

   38. A person who "operate[s] as a broker or salesperson without being the holder of a valid and current active license therefor" is guilty of violating Section 475.42(1)(a), Florida Statutes, even if that person is misinformed concerning his or her licensure status or is otherwise unaware of the illegality of his or her actions. See Wallen v. Department of Professional Regulation, Division of Real Estate, 568 So. 2d 975 (Fla. 3d DCA 1990("Because he is a broker, Wallen is charged with knowledge of chapter 475, which controls the actions of real estate brokers, salesmen, schools, and appraisers, and the specific pertinent provisions thereof which require him to take prompt action to

       account or deliver those funds he is not entitled by law to retain."); Department of Business and Professional Regulation, Division of Real Estate v. Gordon, 118 WL 8664641 (Fla. DOAH 1998)("Respondent's apparent lack of knowledge regarding the need for licensure to operate as a rental agent [did] not excus[e] the violation given the expectation that Respondent should know and abide by the law."); see also Division of Professional Regulation, Board of Cosmetology v. Allied Corporation, 1992 WL 880612 (Fla. DOAH 1992)("Respondent, acting by and through its president, Ms. Gladys Sheer, permitted an unlicensed person to practice a cosmetology specialty in violation of Section 477.029(1)(c), Florida Statutes. [Such a violation was committed notwithstanding that that] Ms. Gladys Sheer was mistaken in her assumption that [the unlicensed person] had an active license.").

   39. In the instant case, the evidence clearly and convincingly establishes that Respondent operated as a real estate salesperson at a time when he did have a "valid and current active license therefor," as alleged in the Administrative Complaint.

   40. Before it can be determined whether Respondent should be found guilty of violating of Section 475.42(1)(a), Florida Statutes, and therefore also Section 475.25(1)(e), Florida Statutes, based upon such conduct, it is necessary to consider the following "affirmative defenses" raised by Respondent in the

       Answer and Affirmative Defenses he filed prior to the commencement of the final hearing:

       FIRST AFFIRMATIVE DEFENSE

       
       

       As [his] first affirmative defense, Respondent CLAUDIO VERZURA states that any alleged violation of Section 475.42(1)(a), Florida Statute[s] and/or Section 475.25(1)(e), Florida Statute[s] w[as] caused by The Keyes Company's breach of fiduciary duty to Respondent CLAUDIO VERZURA by failing to properly forward to the Department of Business and Profession[al] Regulation ("Department"), the necessary documents for the purpose of activating Respondent CLAUDIO VERZURA's real estate salesman license to a current status. The documents that The Keyes Company failed to properly forward to the Department, include, but are not limited to, drafts executed by Respondent and paid to the order of the Department for the purpose of activating Respondent's real estate salesman license to a current status, Respondent's Request for License or Change of Status form, and Respondent's Proof of Completion of Reactivation Course. Therefore, the violations alleged in Count I of the Administrative Complaint were caused by The Keyes Company rather than Respondent CLAUDIO VERZURA.

       SECOND AFFIRMATIVE DEFENSE

       
       

       As [his] second affirmative defense, Respondent CLAUDIO VERZURA states that the Department of Business and Professional Regulation failed to provide Respondent with the statutory Notice of Renewal and Possible Reversion pursuant to Section 475.182(4), Florida Statutes. Respondent CLAUDIO VERZURA was denied due process and adequate notice to activate his real estate salesman's license to a current status. Therefore, Petitioner is estopped from bringing this action against Respondent CLAUDIO VERZURA.

       THIRD AFFIRMATIVE DEFENSE

       As [his] third affirmative defense, Respondent CLAUDIO VERZURA states that the Department of Business and Professional Regulation failed to provide Respondent with the statutory Notice pursuant to Section 475.183([2])), Florida Statutes. Respondent CLAUDIO VERZURA was denied due process and adequate notice to activate his real estate salesman's license to a current status.

       Therefore, Petitioner is estopped from bringing this action against Respondent CLAUDIO VERZURA.

       FOURTH AFFIRMATIVE DEFENSE

       
       

       As [his] fourth affirmative defense, Respondent CLAUDIO VERZURA states that there are circumstances mitigating the allegations of Count I of the Administrative Complaint.. As a result, Respondent CLAUDIO VERZURA should not incur any disciplinary action, penalties and/or fines for the violations alleged in Count I of the Administrative Complaint.

   41. Respondent had the burden of proof with respect to these affirmative defenses. See Jarrad v. Associates Discount Corporation, 99 So. 2d 272, 277 (Fla. 1957)("Before an estoppel can be raised there must be certainty and the facts necessary to constitute it cannot be taken by argument or inference, nor supplied by intendment. They must be clearly and satisfactorily proved."); Public Health Trust of Dade County, Florida v. Holmes, 646 So. 2d 266 (Fla. 3d DCA 1994)("The burden of proof is placed on the defendant asserting the affirmative defense."); Flanigan's Enterprises, Inc. v. Barnett Bank of Naples, 614 So. 2d 1198, 1200 (Fla. 5th DCA 1993)("It is well established that when estoppel is raised as a defense, the burden of proof is on the party asserting it."); see also Balino v. Department of Health

       and Rehabilitative Services, 348 So. 2d 349, 350 (Fla. 1st DCA 1977)("[T]he burden of proof, apart from statute, is on the party asserting the affirmative issue before an administrative tribunal.").

   42. The record evidence fails to support the claim made in Respondent's First Affirmative Defense that The Keyes Company "failed to properly forward to the Department . . . drafts executed by Respondent and paid to the order of the Department for the purpose of activating Respondent's real estate salesman license to a current status, Respondent's Request for License or Change of Status form, and Respondent's Proof of Completion of Reactivation Course." Indeed, the record affirmatively establishes that The Keyes Company did "properly forward [these documents] to the Department." Moreover, even if The Keyes Company had not done so, or if The Keyes Company was, in some other manner, responsible for Respondent's failure to renew and activate his license, this would not constitute a defense to the charge made against Respondent in the Administrative Complaint inasmuch as Respondent had the nondelegable responsibility to exercise reasonable prudence and make certain, before engaging in activity for which a "valid and current active" real estate salesperson license was required, that the steps necessary for him to obtain such a license had been taken and that such a license had in fact been issued to him by the Department, a responsibility that he failed to fulfill.

   43. In both his Second and Third Affirmative Defenses, Respondent makes an equitable estoppel argument. "As a general rule, equitable estoppel will be applied against the state only in rare instances and under exceptional circumstances. Another general rule is that the state cannot be estopped through mistaken statements of the law. In order to demonstrate estoppel, the following elements must be shown: 1) a representation as to a material fact that is contrary to a later- asserted position; 2) reliance on that representation; and 3) a change in position detrimental to the party claiming estoppel, caused by the representation and reliance thereon." Department of Revenue v. Anderson, 403 So. 2d 397, 400 (Fla. 1983). "One seeking to invoke the doctrine of estoppel against the government first must establish the usual elements of estoppel, and then must demonstrate the existence of affirmative conduct by the government which goes beyond mere negligence, must show that the governmental conduct will cause serious injustice, and must show that the application of estoppel will not unduly harm the public interest."3 Council Brothers, Inc. v. City of Tallahassee, 634 So. 2d 264, 266 (Fla. 1st DCA 1994). Under certain exceptional circumstances, the government may be estopped by a governmental omission, but only where the government had a duty to act or speak. See Pasco County v. Tampa Development Corporation, 364 So. 2d 850, 853 (Fla. 2d DCA 1978).

   44. In the instant case, in his Second and Third Affirmative Defenses, Respondent alleges that the Department should be estopped from prosecuting him based upon the Department's failure to furnish him with the notification the Department had a duty to provide pursuant to Section 475.182(4) and Section 475.183(2), Florida Statutes, which read as follows:

       Section 475.182(4)

       
       

       Sixty days prior to the end of the license period and automatic reversion of a license to inactive status, the department shall mail a notice of renewal and possible reversion to the last known address of the licensee.

       
       

       Section 475.183(2)

       
       

       Any license which has been involuntarily inactive for more than 2 years shall automatically expire. Once a license expires, it becomes null and void without any further action by the commission or department. Ninety days prior to expiration of the license, the department shall give notice to the licensee. The commission shall prescribe by rule a fee not to exceed $100 for the late renewal of an involuntarily inactive license. The department shall collect the current renewal fee for each renewal period in which the license was involuntarily inactive in addition to any applicable late renewal fee.

   45. At the final hearing, the Department presented the testimony of the Chief of its Bureau of Licensing, Mary Stimmel, to establish that it mailed to Respondent, at his last known address of record,4 the notices required by Section 475.182(4) and Section 475.183(2), Florida Statutes, in 1993 and 1995, respectively. Ms. Stimmel testified as to the routine practice

       followed by the Department to comply with the notification requirements of Section 475.182(4) and Section 475.183(2), Florida Statutes. Ms. Stimmel, however, started her employment with the Department in April of 1996. Because she has no personal knowledge as to what the Department's practices were in 1993 and 1995, her testimony is insufficient to support a finding as to what, if anything, the Department did in those years to give Respondent the notice required by Section 475.182(4) and Section 475.183(2), Florida Statutes. See Eig v. Insurance Company of North America, 447 So. 2d 377, 379 (Fla. 3d DCA 1984)("While it is no longer necessary that a party claiming routine practice offer evidence that the routine practice was followed in the particular instance at issue, . . . the party does have to prove by competent substantial evidence what its routine practice is. That is lacking here. Appellee's witness could not say what the routine practice was in 1978 or 1979 because he had not yet started his employment with the company at that time.").

   46. It was Respondent, however, not the Department, who, as part of his estoppel defenses, had the burden of proof with respect to the issue of whether the Department breached its duty to notify him in accordance with the requirements of Section 475.182(4) and Section 475.183(2), Florida Statutes.

   47. In support of the claim made in his Second Affirmative Defense that the Department "failed to provide [him] with the

       statutory Notice pursuant to Section 475.183([2]), Florida Statutes," Respondent took the stand and testified (as reported on page 53 of the transcript of the final hearing) that he did not receive any notices from the Department between June 30, 1995, through July 30, 1995 (which was the period 60 to 90 days prior to the date that his license, if not renewed and activated, would have been involuntarily inactive for two years). Absent evidence that Respondent met his obligation, under Section 455.275(1), Florida Statutes, of timely "notifying the [D]epartment in writing of [his then] current mailing address," Respondent's testimony regarding his failure to receive from the Department, between June 30, 1995, through July 30, 1995, the notice required by Section 475.183(2), Florida Statutes, is insufficient to support a finding that the Department did not mail such a notice to him during this 30-day period. Moreover, Respondent's failure to have received a Section 475.183(2) notice from the Department during this time period did not in any way prejudice him. The notice, had he received it, would have simply advised him that "any license which has been involuntary inactive for more than 4 years shall automatically expire" and that therefore his license would automatically expire after October 1, 1997, if he failed to renew it before then. Notwithstanding that Respondent may not have received such a warning from the Department, he nonetheless renewed his license prior to

       October 1, 1997, and therefore it did not automatically expire after October 1, 1997.

   48. With respect to Respondent's claim that the Department acted in derogation of its duty under Section 475.182(4), Florida Statutes, to "mail a notice of renewal and possible reversion [to involuntary inactive status] to [his] last known address," the record is devoid of evidence supporting such a position. In fact, it appears from Respondent's own testimony that, prior to his engaging in the unlawful activities that are the subject of the Administrative Complaint, he did receive an advisement from the Department concerning the renewal of his license, which prompted him to ultimately initiate the process to renew and activate his license. Moreover, even if Respondent had not received such an advisement from the Department, it would have been unreasonable for him to have believed, based upon the Department's silence regarding the renewal of his license, that he had an active license (enabling him to operate as a real estate salesperson) inasmuch as his license, during the licensure period ending September 30, 1993 (60 days prior to which the Department, pursuant to Section 475.182(4), Florida Statutes, should have mailed to him "a notice of renewal and possible reversion to [his] last known address") was voluntary inactive. Therefore, even if the Department, through its silence, had led Respondent to reasonably believe that there would be no change in his licensure status after the end of this licensure period,

       Respondent would not have, as a result of such silence, any reason to assume that he would be free, at that time, to act as a real estate salesperson.

   49. The doctrine of equitable estoppel is applied against the government in appropriate circumstances to prevent the government from taking a position, with respect to an issue of fact, that is contrary to a position the government has previously asserted, where it would be unfair and inequitable, because of the other party's detrimental reliance on the government's previously-asserted position, to allow the government to now maintain such a position. In the instant case, the Department takes the position that, at the time that Respondent engaged in the activities described in the Administrative Complaint (for which a "valid and current active [real estate salesperson] license" was required), Respondent did not have such a license. There has been no evidence presented by Respondent that the Department, at any time prior to Respondent engaging in these activities, conveyed to Respondent, by its words, silence, action or inaction, that the Department was of the view that that Respondent possessed a "valid and current active [real estate salesperson] license" authorizing him to engage in these activities. While Respondent may have erroneously assumed he had such a license, it was not because of any representations made to him by the Department regarding his licensure status. Accordingly, the circumstances of the instant

       case do not warrant the invocation of the doctrine of equitable estoppel to foreclose the undersigned (and ultimately the Department) from finding that Respondent did not hold a "valid and current active [real estate salesperson] license" when he acted as real estate salesperson, as alleged in the Administrative Complaint.

   50. For the foregoing reasons, Respondent's Second and Third Affirmative Defenses are without merit.5

   51. In his Fourth Affirmative Defense, Respondent contends that "there are circumstances mitigating the allegations of Count I of the Administrative Complaint." While this is true, it is not a reason to dismiss these allegations. Rather, it is a factor to be taken into consideration in determining the appropriate penalty that should be imposed upon Respondent for committing the violation of Section 475.42(1)(a), Florida Statutes (and therefore also Section 475.25(1)(e), Florida Statutes) alleged in the Administrative Complaint.

   52. In determining the particular penalty the Department should select, it is necessary to first consult Rule 61J2-24.001, Florida Administrative Code, which contains the Department's " "[d]isciplinary [g]uidelines." Cf. Williams v. Department of Transportation, 531 So. 2d 994, 996 (Fla. 1st DCA 1988)(agency is required to comply with its disciplinary guidelines in taking disciplinary action against its employees). Rule 61J2-24.001,

       Florida Administrative Code, provides, in pertinent part, as follows:

       1. Pursuant to s. 455.2273, Florida Statutes, the Commission sets forth below a range of disciplinary guidelines from which disciplinary penalties will be imposed upon licensees guilty of violating Chapters 455 or 475, Florida Statutes. The purpose of the disciplinary guidelines is to give notice to licensees of the range of penalties which normally will be imposed for each count during a formal or an informal hearing. For purposes of this rule, the order of penalties, ranging from lowest to highest, is: reprimand, fine, probation, suspension, and revocation or denial. Pursuant to s. 475.25(1), Florida Statutes, combinations of these penalties are permissible by law. . . .

          
          

          (3) The penalties are as listed unless aggravating or mitigating circumstances apply pursuant to paragraph (4). The verbal identification of offenses is descriptive only; the full language of each statutory provision cited must be consulted in order to determine the conduct included. . . .

          
          

          (w) 475.42(1)(a) Practice without a valid and current license

          
          

          The usual action of the Commission shall be to impose a penalty of a 3 year suspension to revocation. . . .

          
          

          (4)(a) When either the Petitioner or Respondent is able to demonstrate aggravating or mitigating circumstances to the Commission in a s. 120.57(2), Florida Statutes, hearing or to a Division of Administrative Hearings hearing officer in a s. 120.57(1), Florida Statutes, hearing by clear and convincing evidence, the Commission or hearing officer shall be entitled to deviate from the above guidelines in imposing or recommending discipline, respectively, upon a

          licensee. . . .

          (b) Aggravating or mitigating circumstances may include, but are not limited to, the following:

          
          

          1. The severity of the offense.

             
             

          2. The degree of harm to the consumer or public.

             
             

          3. The number of counts in the Administrative Complaint.

             
             

          4. The number of times the offenses previously have been committed by the licensee.

             
             

          5. The disciplinary history of the licensee.

             
             

          6. The status of the licensee at the time the offense was committed.

             
             

          7. The degree of financial hardship incurred by a licensee as a result of the imposition of a fine or suspension of the license.

             
             

          8. Violation of the provision of Chapter 475, Florida Statutes, where in a letter of guidance as provided in s. 455.225(3), Florida Statutes, previously has been issued to the licensee.

          
          

   53. In its Proposed Recommended Order, the Department requests that the undersigned recommend that Respondent "be reprimanded and fined an amount not greater than $750.00." Having considered the facts of the instant case in light of the provisions of Rule 61J2-24.001 set forth above, the undersigned finds that the Department's proposed penalty, which is less severe than the "usual [disciplinary] action" taken by the Commission against a licensee who violates Section 475.42(1)(a), Florida Statutes, is nonetheless the appropriate penalty for the Commission to impose upon Respondent in the instant case, given

the mitigating circumstances present in the instant case (most notably, Respondent's belief that he had a "valid and current active license" at the time he operated as real estate salesperson).6

RECOMMENDATION

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

RECOMMENDED that the Commission issue a final order finding Respondent guilty of the misconduct alleged in the Administrative Complaint and disciplining him therefor by reprimanding him and fining him $750.00.

DONE AND ENTERED this 14th day of April, 1999, in Tallahassee, Florida.

STUART M. LERNER

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

Filed with the Clerk of the Division of Administrative Hearings this 14th day of April, 1999.

ENDNOTES

1/ Respondent had completed the course on May 14, 1995.

2/ At all times material to the instant case, Section 475.183(2), Florida Statutes, has provided, in pertinent part, as follows:

The commission shall prescribe by rule a fee not to exceed $100 for the late renewal of an involuntarily inactive license. The department shall collect the current renewal fee for each renewal period in which the license was involuntarily inactive in addition to any applicable late renewal fees.

In his proposed recommended, in support of his position that the Department, due to its failure "to provide him with the required statutory license renewal notices," should be estopped from finding him guilty in the instant case, Respondent cites Machules v. Department of Administration, 523 So. 2d 1132 (Fla. 1988).

Machules, however, involved application of the principle of equitable tolling, which, the Florida Supreme Court pointed out in its opinion, "unlike estoppel, does not require active deception or employer[/government] misconduct, but focuses rather on the [government] employee with a reasonably prudent regard for his rights." Id. at 1134.

3/ Pursuant to Section 455.275(2), Florida Statutes, "service by regular mail to a licensee's last known address of record with the [D]epartment constitutes adequate and sufficient notice to the licensee for any official communication to the licensee by the . . . [D]epartment."

4/ In his Proposed Recommended Order, Respondent, for the first time, makes another estoppel argument not made in his Answer and Affirmative Defenses. He claims that the Department should be estopped from prosecuting him on the charge set forth in the Administrative Complaint because it gave "incorrect information" to The Keyes Company's payroll clerk, Rosa Miguelena, when she inquired concerning the fee Respondent had to pay for late renewing his license. This belated equitable estoppel argument is also without merit. For one thing, the information that the Department provided to Ms. Miguelena has not been shown to be "incorrect." While $90.00 (the amount, Ms. Miguelena was told by the Department, Respondent would be required to pay for the late renewal of his license) was less than the fee Respondent had to pay to renew his license for the two-year licensure period commencing October 1, 1995 (which was the period during which Respondent engaged in the unlawful activities specified in the Administrative Complaint), it appears (from Ms. Miguelena's testimony) that she asked the Department only what the fee would be for Respondent "to renew his license from '93 to '95" and she did not inquire at all about the subsequent two-year licensure period. Furthermore, the information in question was provided to Ms. Miguelena, not to Respondent, and Respondent did not rely on this information. He had already written a check to accompany his completed 400.5 Form at the time Ms. Miguelena obtained this information from the Department. For these reasons, the

Department's representations to Ms. Miguelena cannot give rise to an estoppel against the Department.

5/ At the final hearing, Respondent requested that the undersigned, if he determined that a penalty must be imposed in the instant case, recommend that Respondent be "allow[ed] . . . to keep his commission." To the extent that, in making this request, Respondent sought to have the undersigned recommend disciplinary action that did not include an involuntary forfeiture of any commissions Respondent received during the period that he did not possess a "valid and current active [real estate salesperson] license," Respondent's request has been granted inasmuch as, even if the Commission had the statutory authority under Section 475.25, Florida Statutes, to direct, in a disciplinary proceeding, the return of unlawfully obtained commissions, it could not impose such a sanction in the instant case because Respondent was not given any warning, either in the Administrative Complaint or at any other time prior to the final hearing, that he was at risk of suffering the loss of commissions if found guilty of the violation alleged in the Administrative Complaint. See Cobas v. State, 671 So. 2d 838, 839 (Fla. 3d DCA 1996)("Finally, the trial court erred in imposing a habitual offender sentence in lower court case 89-33369, where Cobas was not given prior notice of the intent to seek enhanced penalties before the plea was accepted."); Williams v. Turlington, 498 So. 2d 468 (Fla. 3d DCA 1986)("Since Williams was not given notice by either the complaint or later proceedings that he was at risk of having his license permanently revoked, the Commission's imposition of the non-prayed-for relief of permanent revocation, even if justified by the evidence, was error."). (It should be noted, however, that the Commission's failure to impose such a penalty in the instant case would not operate to bar a civil action against Respondent for the return of the commissions. See Ganot Corporation v. J.M.G. Construction Corporation, 560 So. 2d 804 (Fla. 4th DCA 1990)("As for the 7% commissions paid by JMG, the record supports the lower court's conclusion that Ganot functioned as a broker in the sale of the lots owned by JMG and Ganot concedes that it was not a licensed broker at that time.

According to law Ganot was not entitled to a commission on the

sale of JMG's property and the commissions paid on this basis were correctly refunded to JMG."); Section 475.41, Florida Statutes("No contract for a commission or compensation for any act or service enumerated in s. 475.01(3) is valid unless the broker or salesperson has complied with this chapter in regard to issuance and renewal of the license at the time the act or service was performed.")).

COPIES FURNISHED:

Geoffrey T. Kirk, Esquire Department of Business and

Professional Regulation Division of Real Estate

400 West Robinson Street Suite N-308

Orlando, Florida 32802

David J. Valdini, Esquire

Leiby Construction Law Firm, P.A.

8551 West Sunrise Boulevard, Suite 304 Fort Lauderdale, Florida 33322

Herbert S. Fecker, Division Director Division of Real Estate

Department of Business and Professional Regulation

Post Office Box 1900 Orlando, Florida 32802-1900

William Woodyard, 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.

1 Respondent had completed the course on May 14, 1995.

2 At all times material to the instant case, Section 475.183(2), Florida Statutes, has provided, in pertinent part, as follows:

The commission shall prescribe by rule a fee not to exceed $100 for the late renewal of an involuntarily inactive license. The department shall collect the current renewal fee for each renewal period in which the license was involuntarily inactive in addition to any applicable late renewal fees.

3 In his proposed recommended, in support of his position that the Department, due to its failure "to provide him with the

required statutory license renewal notices," should be estopped from finding him guilty in the instant case, Respondent cites Machules v. Department of Administration, 523 So. 2d 1132 (Fla. 1988). Machules, however, involved application of the principle of equitable tolling, which, the Florida Supreme Court pointed out in its opinion, "unlike estoppel, does not require active deception or employer[/government] misconduct, but focuses rather on the [government] employee with a reasonably prudent regard for his rights." Id. at 1134.

4 Pursuant to Section 455.275(2), Florida Statutes, "service by regular mail to a licensee's last known address of record with the [D]epartment constitutes adequate and sufficient notice to the licensee for any official communication to the licensee by the . . . [D]epartment."

5 In his Proposed Recommended Order, Respondent, for the first time, makes another estoppel argument not made in his Answer and Affirmative Defenses. He claims that the Department should be estopped from prosecuting him on the charge set forth in the Administrative Complaint because it gave "incorrect information" to The Keyes Company's payroll clerk, Rosa Miguelena, when she inquired concerning the fee Respondent had to pay for late renewing his license. This belated equitable estoppel argument is also without merit. For one thing, the information that the Department provided to Ms. Miguelena has not been shown to be "incorrect." While $90.00 (the amount, Ms. Miguelena was told by the Department, Respondent would be required to pay for the late renewal of his license) was less than the fee Respondent had to pay to renew his license for the two-year licensure period commencing October 1, 1995 (which was the period during which Respondent engaged in the unlawful activities specified in the Administrative Complaint), it appears (from Ms. Miguelena's testimony) that she asked the Department only what the fee would be for Respondent "to renew his license from '93 to '95" and she did not inquire at all about the subsequent two-year licensure period. Furthermore, the information in question was provided to Ms. Miguelena, not to Respondent, and Respondent did not rely on this information. He had already written a check to accompany his completed 400.5 Form at the time Ms. Miguelena obtained this information from the Department. For these reasons, the Department's representations to Ms. Miguelena cannot give rise to an estoppel against the Department.

6 At the final hearing, Respondent requested that the undersigned, if he determined that a penalty must be imposed in the instant case, recommend that Respondent be "allow[ed] . . . to keep his commission." To the extent that, in making this request, Respondent sought to have the undersigned recommend disciplinary action that did not include an involuntary

forfeiture of any commissions Respondent received during the period that he did not possess a "valid and current active [real estate salesperson] license," Respondent's request has been granted inasmuch as, even if the Commission had the statutory authority under Section 475.25, Florida Statutes, to direct, in a disciplinary proceeding, the return of unlawfully obtained commissions, it could not impose such a sanction in the instant case because Respondent was not given any warning, either in the Administrative Complaint or at any other time prior to the final hearing, that he was at risk of suffering the loss of commissions if found guilty of the violation alleged in the Administrative Complaint. See Cobas v. State, 671 So. 2d 838, 839 (Fla. 3d DCA 1996)("Finally, the trial court erred in imposing a habitual offender sentence in lower court case 89-33369, where Cobas was not given prior notice of the intent to seek enhanced penalties before the plea was accepted."); Williams v. Turlington, 498 So. 2d 468 (Fla. 3d DCA 1986)("Since Williams was not given notice by either the complaint or later proceedings that he was at risk of having his license permanently revoked, the Commission's imposition of the non-prayed-for relief of permanent revocation, even if justified by the evidence, was error."). (It should be noted, however, that the Commission's failure to impose such a penalty in the instant case would not operate to bar a civil action being filed against Respondent for the return of the commissions. See Ganot Corporation v. J.M.G. Construction Corporation, 560 So. 2d 804 (Fla. 4th DCA 1990)("As for the 7% commissions paid by JMG, the record supports the lower court's conclusion that Ganot functioned as a broker in the sale of the lots owned by JMG and Ganot concedes that it was not a licensed broker at that time. According to law Ganot was not entitled to a commission on the sale of JMG's property and the commissions paid on this basis were correctly refunded to JMG."); Section 475.41, Florida Statutes("No contract for a commission or compensation for any act or service enumerated in s. 475.01(3) is valid unless the broker or salesperson has complied with this chapter in regard to issuance and renewal of the license at the time the act or service was performed.")).

v.

J.M.G. CONSTRUCTION CORPORATION,

Docket for Case No: 98-003606

Orders for Case No: 98-003606