STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, ) DIVISION OF FLORIDA LAND SALES, ) CONDOMINIUMS, AND MOBILE HOMES, )

)

Petitioner, )

)

vs. ) Case No. 99-5322

)

THOMAS I. DAVIS, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on April 13, and July 16, 2000, by video teleconference at Tallahassee and Fort Lauderdale, Florida, before Susan B. Kirkland, a designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Janis Sue Richardson, Esquire

Department of Business and Professional Regulation

1940 North Monroe, Suite 60

Tallahassee, Florida 32399-1007

For Respondent: Ashley R. Pollow, Esquire

Atrium Financial Center

1515 North Federal Highway, Suite 300 Boca Raton, Florida 33432-1994

STATEMENT OF THE ISSUE

Whether Respondent engaged in the activities of a yacht broker without a license in violation of Chapter 326, Florida Statutes.

PRELIMINARY STATEMENT

On November 15, 1999, Petitioner, Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums, and Mobile Homes (Department), served Respondent, Thomas I. Davis (Davis), with a Notice to Show Cause, requesting that Davis explain why a cease and desist order should not be entered against him for acting as a yacht broker without a license. Davis requested an administrative hearing, and the case was forwarded to the Division of Administrative Hearings on December 20, 1999, for assignment to an Administrative Law Judge.

The final hearing commenced on April 13, 2000. Counsel for Respondent stated at the final hearing that he had not received the exhibits which Petitioner listed on its prehearing statement. The final hearing was continued until May 12, 2000. On May 9, 2000, Respondent filed a request for continuation, stating that he had terminated his relationship with his counsel. A telephone conference was held with the parties, and Respondent advised that he had retained new counsel. By orders dated May 12, 2000, the newly retained counsel was to file a notice of appearance no later than May 23, 2000, and the final hearing was continued. No notice

of appearance was filed. The final hearing was rescheduled for July 26, 2000.

By the date of the final hearing, Davis had retained counsel, who requested a continuance, which was denied. Davis was given leave to take and file the depositions of John Lloyd and

William Elliot no later than September 21, 2000. No depositions were filed. However, a letter from John Lloyd dated September 21, 2000, was filed with the Division of Administrative Hearings on October 3, 2000. This letter is treated as an ex-parte communication and has not been considered in the rendering of this Recommended Order.

At the final hearing, Petitioner called James Courchaine, Don Gillman, Diana Harvey, Gary Fisette, and Peter Butler.

Petitioner's Exhibits numbered 1-16, 19, and 20 were admitted in evidence. Petitioner's Exhibits numbered 17 and 18 were rejected. Respondent testified in his own behalf. Respondent's Exhibits numbered 1-3 were admitted in evidence, and Respondent's Exhibits numbered 4-5 were rejected.

The parties agreed to file proposed recommended orders on or before October 2, 2000. Petitioner filed its Proposed Recommended Order on September 29, 2000, and Respondent filed his Proposed Recommended Order on October 3, 2000. The parties' proposed recommended orders have been considered in rendering this Recommended Order.

FINDINGS OF FACT

1. The Department is charged with licensing and regulating yacht and ship brokers and salespersons pursuant to Chapter 326, Florida Statutes.

2. In May 1993, the Department issued a yacht and ship salesman's license to Davis. In 1995, after a formal hearing, the Department revoked Davis' license for misrepresentation in entering false answers on his license application. Davis had been a licensed stock broker with the Securities and Exchange Commission between 1971 and 1991. He failed to tell the Department on his application that the National Association of Securities Dealers had censured him, imposed a fine of $20,000, and suspended his license for two years.

3. Davis attended a Department workshop on yacht and ship brokerage laws during the time he held a license. The workshop covered Chapter 326, Florida Statutes, brokerage activities, and administrative rules.

4. In June 1997, Davis approached Don Gilman of Gilman Yachts with an offer to co-broker the purchase of the Princessa del Mar by his client, William Bond Elliott (Elliott). Davis suggested that Gilman split the commission on the purchase with him on a 50/50 basis.

5. Gilman is a licensed yacht and ship broker. Gilman, who knew Davis personally and knew that Davis had been licensed by the Department, agreed to co-broker the transaction. Gilman was

   unaware that Davis' license had been revoked. Davis had an office in Palm Beach, Florida, with a local telephone and facsimile machine number.

6. Diana Harvey, an employee of Gilman Yachts who handled the closing and paperwork associated with the sale of the Princessa del Mar, thought that Davis had represented himself to her as a licensed broker.

7. The Princessa del Mar is a 105-foot Broward yacht built in 1984. Throughout the negotiations for Elliott's purchase, the Princessa del Mar was moored at docks in West Palm Beach, Florida.

8. The listing broker for the Princessa del Mar was Richard Betram Yachts, Inc. Gary Fisette (Fisette) was the licensed broker handling the listing.

9. Davis requested that Fisette send him the listing specifications on the Princessa del Mar. Fisette sent the specifications to Davis by facsimile transmission and by mail to Davis' Palm Beach office.

10. Davis and Gilman met with Elliott onboard the Princessa del Mar in June 1997 for Elliott to view the yacht. The two discussed the yacht, including the purchase of the yacht, with Elliott. Davis also discussed placing the yacht into charter service to cover some of the costs of the purchase, operation and maintenance of the yacht.

11. Davis met with both the buyer and seller alone and with Gilman and Fisette. On July 3, 1997, Elliott signed an initial

    purchase contract, offering $1.5 million for the Princessa del Mar on the condition of a sea trial and survey satisfactory to him.

    Davis signed the contract on the witness line.

    
    

12. On July 16, 1997, Fisette sent a letter by facsimile transmission to Davis at his Palm Beach office with information on the engine rebuild on the Princessa del Mar that Davis had discussed with him. Fisette also wrote that the owner would sign and return the agreement by facsimile transmission.

13. Davis arranged for William Seger to conduct the survey. Davis also arranged for the sea trial, which was conducted along the Intracoastal Waterway in Florida. Davis, Gilman, and Elliott attended the sea trial. Captain John Lloyd piloted the yacht. Davis arranged for some engine repair to the yacht.

14. On August 5, 1997, Diana Harvey sent the executed purchase agreement and addendum to Davis at his Palm Beach office. On the same day, Gilman advised Elliott by facsimile transmission with a copy to Davis at his Palm Beach office that the yacht should be hauled for an inspection of the bottom.

15. Gilman and Elliott met to negotiate the final offer. The closing was scheduled in the Bahamas.

16. On September 3, 1997, Gilman confirmed his conversation with Davis about their agreement to reduce their commission by

    $4,000 toward the seller's request of an additional $12,000 to close the transaction.

17. At the conclusion of the transaction, Gilman received a commission check from the attorney handling the closing. Davis directed Gilman and Harvey to pay his share of the commission,

    $19,500, in five separate checks: $5,000 to himself as his commission, $1,000 to Foley Law Office for legal fees for the yacht, $1,000 to A. Stokes and $9,500 to Peter Gollsby for reimbursement for expenses for the yacht, and $3,000 to Bill Seger for the survey. A check for $2,850 was also given to Davis for repairs to the yacht. Davis picked up the checks in person from Ms. Harvey at Gilman Yachts.

18. Davis claims that any brokering activities that he may have done were not done in the State of Florida. He claimed that calls to his Palm Beach office were forwarded to Rhode Island, and that only conversations between him and Elliott concerning chartering services and assisting with Elliott's due diligence activities took place in Florida. Davis' claims are rejected as not credible.

    CONCLUSIONS OF LAW

    
    

19. The Division of Administrative Hearings had jurisdiction over the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes.

20. Petitioner alleged that Davis acted as a yacht broker without being licensed in violation of Section 326.004(1), Florida Statutes, which provides that a person may not act as a broker or salesperson unless licensed pursuant to the Yacht and Ship

    Brokers' Act. Section 326.002(1), Florida Statutes, defines "broker" and provides:

    1. 'Broker' means a person who, for or in expectation of compensation: sells, offers, or negotiates to sell; buys, offers, or negotiates to buy; solicits or obtains listings of; or negotiates the purchase, sale or exchange of, yachts for other persons.

       
       

21. Petitioner has the burden to establish the violations by clear and convincing evidence. Department of Banking and Finance v. Osborne Stein & Co., 670 So. 2d 932 (Fla. 1996).

22. Petitioner has established by clear and convincing evidence that Davis acted as a broker in the Princessa del Mar transaction. Davis' conversations during the showing of the yacht while moored at docks in West Palm Beach, Florida, were related in part to the purchase of the yacht. Davis directed that documents be sent to his Palm Beach office, and documents pertaining to the sale were sent to his Palm Beach office. Additionally, telephone calls were made to Davis' Palm Beach office relating to the purchase of the yacht. Davis was present in Florida when he arranged for the sea trial, the survey, and the repairs to the vessel. Davis collected his commission in person at the Palm Beach office of Gilman Yachts.

23. Subsection 326.006(2)(d)2, Florida Statutes, provides that the Department may issue a cease and desist order from an unlawful practice under the Yacht and Ship Brokers' Act. Subsection 326.006(2)(d)4, Florida Statutes, provides that the

Department may impose a civil penalty for each violation of Chapter 326, Florida Statutes, not to exceed $10,000.

RECOMMENDATION

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

That a final order be entered requiring Thomas I. Davis to cease and desist from engaging in yacht and ship brokerage activities in Florida and imposing a civil penalty of $5,000.

DONE AND ENTERED this 19th day of October, 2000, in Tallahassee, Leon County, Florida.

Susan B. Kirkland 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 19th day of October, 2000.

COPIES FURNISHED:

Janis Sue Richardson, Esquire Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399-1007

Ashley R. Pollow, Esquire Atrium Financial Center

1515 North Federal Highway, Suite 300 Boca Raton, Florida 33432-1994

Barbara D. Auger, General Counsel Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-1007

Ross Fleetwood, Director Division of Florida Land Sales,

Condominiums, and Mobile Homes Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-1007

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: 99-005322

Orders for Case No: 99-005322