STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION, DIVISION OF REAL ESTATE,

Petitioner,

vs.

KATHLEEN MARIE OROS,

Respondent.

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) Case No. 02-2198PL

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RECOMMENDED ORDER

This case came before Administrative Law Judge John G. Van Laningham for final hearing on September 26, 2002, in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: Stacy N. Robinson Pierce, Esquire

Department of Business and Professional Regulation

400 West Robinson Street Suite N308

Orlando, Florida 32801-1772

For Respondent: John B. Dichiara, Esquire

507 Southeast 11th Court

Fort Lauderdale, Florida 33316-1145

STATEMENT OF THE ISSUES

In this disciplinary proceeding, the issues are, first, whether Respondent, a licensed real estate salesperson, intentionally concealed an offer to purchase her clients’ house

and, second, whether Respondent engaged in a course of conduct so egregious that she cannot be trusted to deal with the public.

PRELIMINARY STATEMENT

On April 17, 2002, Petitioner Department of Business and Professional Regulation, Division of Real Estate, issued a two- count Administrative Complaint against Respondent Kathleen Marie Oros, wherein it was alleged that Respondent had violated Sections 475.25(1)(b) and 475.25(1)(o), Florida Statutes.

Respondent timely requested a formal hearing to contest these allegations, and the matter was referred to the Division of Administrative Hearings (“DOAH”) on May 28, 2002.

The presiding administrative law judge set the final hearing for August 14, 2002. Petitioner later moved for a continuance, and the final hearing was rescheduled for September 26, 2002. Both parties appeared at the appointed place and time.

At hearing, Petitioner presented the testimony of two witnesses: John C. Lee and Jacqueline Federico. It also introduced eleven exhibits, and each was admitted into evidence. Included among Petitioner’s exhibits were the depositions of Francis Leonard and Rita Leonard, which were received in lieu of personal appearances by these witnesses. Respondent testified on her own behalf and presented the testimony of three other witnesses: Lorraine Fletcher, John Leto, and David M. Comanic.

In addition, Respondent offered three exhibits, which were received into evidence. At Petitioner’s request, the undersigned took official recognition of the applicable statutes.

The parties timely submitted their respective proposed recommended orders, as directed, within fifteen days after the filing of the transcript with DOAH on October 22, 2002, and these papers were carefully considered.

FINDINGS OF FACT

1. Material Adjudicative Facts

   
   

   The evidence adduced at hearing establishes the facts set forth in paragraphs 1 through 12 clearly and convincingly.

   1. The Parties

      
      

      1. Respondent Kathleen Marie Oros (“Oros”) is a licensed real estate salesperson subject to the regulatory jurisdiction of the Florida Real Estate Commission (“Commission”).

      2. Petitioner Department of Business and Professional Regulation, Division of Real Estate (“Department”), has jurisdiction over disciplinary proceedings for the Commission. At the Commission’s direction, the Department is authorized to prosecute administrative complaints against licensees within the Commission’s jurisdiction.

   2. The Leonard Transaction

      
      

      1. On or about July 22, 2000, Re/Max Consultants Realty (“Re/Max”), as the Listing Broker, entered into a Residential Listing Contract (“Listing Contract”) with Francis E. and Rita Leonard (“Sellers”) for the exclusive right to secure a purchaser for the Sellers’ house in Fort Lauderdale, Florida.

      2. Oros, who several years earlier had assisted the Sellers in purchasing the house they now intended to sell, procured the Listing Contract for Re/Max. She and her partner, David Comanic, were identified collectively in the Listing Contract as the “Listing Agent.”

      3. In early November 2000, a real estate salesperson named Jacqueline Federico (“Federico”) brought her client Doreen Moskowitz (“Moskowitz”) to the Sellers’ house, where they were shown around by Oros. Thereafter, on November 9, 2002, Moskowitz executed a written offer to purchase the property for

         $210,000, which Federico presented to Oros.

         
         

      4. Oros presented Moskowitz’s offer to the Sellers, who considered it too far below their asking price of $249,000 to accept. The Sellers authorized Oros to make a counteroffer of

         $245,000, which she did. Moskowitz rejected the counteroffer.

         
         

      5. Over the next couple of weeks, Moskowitz made two more offers to purchase the Sellers’ house, for $220,000 and

         $225,000, respectively, neither of which was in writing. Oros

         presented both of these verbal offers to the Sellers, who rejected each with a counteroffer of $245,000.

      6. Meanwhile, Oros had twice shown the Sellers’ property to Carol Kuehnle and Michael Cleary (“Buyers”), who were engaged to be married and wanted to purchase a home in the area. On November 22, 2002, the Buyers called Oros and asked to see the house again that day. Oros arranged for them to do so.

      7. After seeing the property with Oros on the afternoon of November 22, 2002, the Buyers signed a written offer to purchase the Sellers’ house for $235,000. The Buyers’ offer required the Sellers to accept the proposed terms by 5:00 p.m. that day or the offer would be withdrawn.

      8. Oros promptly brought the Buyers’ offer to the Sellers, who were at home. The Sellers timely accepted the offer and entered into a contract for sale with the Buyers. The transaction ultimately closed.

   3. A Previous Complaint

      
      

      1. In April 1996, the Department brought an Administrative Complaint against Comanic and Oros on the allegation that they had failed to present their client with an offer to purchase his property, which they were listing to sell. This matter was referred to DOAH, where it was docketed as Case No. 97-4937 (“DBPR v. Comanic”).

      2. On June 7, 1999, the parties signed a stipulation of settlement pursuant to which Comanic and Oros each agreed to pay a $500 fine plus $100 apiece in costs. The two also agreed to complete 45 hours of post-licensure education for real estate salespersons. Neither respondent admitted the Department’s allegations but rather entered into the stipulation “for the purpose of avoiding further administrative action by [the Department] with respect to [the matter].” The Commission entered a Final Order adopting the stipulation on August 18, 1999.

2. Non-Essential, Explanatory Findings

   
   

   The greater weight of the evidence1 adduced at hearing establishes the facts set forth in paragraphs 13 through 15.

   1. On the morning of November 22, 2002, Federico called Oros and communicated another verbal offer from Moskowitz, this one to purchase the Sellers’ house for $230,000. As a result, before Oros showed the Buyers the house for the third time, which she would do a few hours later, Oros presented Moskowitz’s fourth offer to the Sellers. They turned it down, instructing Oros to repeat their previous counteroffer of $245,000. Oros called Federico and transmitted the Sellers’ counteroffer.

   2. Later that day, when she met the Sellers to present the Buyers’ offer, Oros turned off her cell phone so as not to be interrupted, as she customarily did at such times. Oros’s

      phone remained off throughout her entire meeting with the Sellers, until after they signed the contract. As she was preparing to leave the house, Oros switched her cell phone back on. The phone soon rang, but Oros did not answer it, explaining to the Sellers that the caller was Federico, and that she (Oros) would return the call from her car.

   3. Once she was in her car, Oros called Federico and let her know that the house had been sold. This news upset Federico.

3. The Charges

   
   

   1. In Count I of its Administrative Complaint, the Department accused Oros of having committed fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust, in violation of Section 475.25(1)(b), Florida Statutes. The gravamen of Count I is the Department’s allegation that “[d]uring the meeting with . . . Sellers [on November 22, 2002,] [Oros] refused to respond to calls from [Federico].”

   2. The Department has charged Oros in Count II with a violation of Section 475.25(1)(o), Florida Statutes, which makes it a disciplinable offense either to be found guilty, for the second time, of misconduct warranting suspension or to be found guilty of a course of conduct so egregious that the licensee

      cannot be trusted to deal with the public. The Department is traveling under a “course of conduct” theory, arguing that the circumstances allegedly surrounding the Leonard transaction, coupled with the stipulated disposition of DBPR v. Comanic, demonstrate that Oros repeatedly has refused to convey offers, threatening “unimaginable” danger if not stopped.

4. Ultimate Factual Determinations

Having examined the entire record; weighed, interpreted, and judged the credibility of the evidence; drawn (or refused to draw) permissible factual inferences; resolved conflicting accounts of what occurred; and applied the applicable law to the facts, it is determined that:

1. The evidence is not so compelling as to produce in the undersigned’s mind a firm belief or conviction, without hesitancy, that Oros intentionally concealed an offer from the Sellers or otherwise intentionally deceived, defrauded, or tricked any person interested in the subject transaction. Indeed, the undersigned is not even persuaded, by a preponderance of evidence, that Oros’s handling of this business transaction was merely negligent——a finding that would not, in any event, support a determination of guilt under Section 475.25(1)(b), Florida Statutes. Therefore, Oros is not guilty of the offense charged in Count I of the Administrative Complaint.

2. Because Oros is not guilty of intentional wrongdoing in connection with the Leonard transaction as charged in Count I, she cannot be found guilty of a “course of conduct” in violation of Section 475.25(1)(o), Florida Statutes, for that offense requires a showing of misbehavior in more than one transaction. Further, the stipulated disposition of DBPR v.

   Comanic——assuming for argument’s sake that it constitutes competent evidence of the underlying allegations2——does not convince the undersigned that Oros truly committed the offense charged in that previous disciplinary proceeding, for two reasons. First, because of the settlement, the Department never proved the charge clearly and convincingly at a formal hearing; and, moreover, as the stipulation expressly states, Oros “neither admit[ted] nor den[ied] the factual allegations” that had been brought against her. Second, the undersigned, who was able personally to observe Oros’s credibility and demeanor as a witness at hearing, credits and believes Oros’s testimony that she did not refuse to convey an offer as charged in DBPR v.

   Comanic; in fact, she acceded to a light punishment only to avoid the much greater expense certain to be incurred in litigating that matter to conclusion. Therefore, Oros is not guilty of the offense charged in Count II of the Administrative Complaint.

   CONCLUSIONS OF LAW

   
   

3. The Division of Administrative Hearings has personal and subject matter jurisdiction in this proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes.

4. Section 475.25, Florida Statutes, under which Oros has been charged, sets forth the acts for which the Commission may impose discipline. This statute provides, in pertinent part:

   1. The commission may deny an application for licensure, registration, or permit, or renewal thereof; may place a licensee, registrant, or permittee on probation; may suspend a license, registration, or permit for a period not exceeding 10 years; may revoke a license, registration, or permit; may impose an administrative fine not to exceed $1,000 for each count or separate offense; and may issue a reprimand, and any or all of the foregoing, if it finds that the licensee, registrant, permittee, or applicant:

      
      

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      (b) Has been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction in this state or any other state, nation, or territory; has violated a duty imposed upon her or him by law or by the terms of a listing contract, written, oral, express, or implied, in a real estate transaction; has aided, assisted, or conspired with any other person engaged in any such misconduct and in furtherance thereof; or has formed an intent, design, or scheme to engage in any such misconduct and committed an overt act in furtherance of such intent, design, or

      scheme. It is immaterial to the guilt of the licensee that the victim or intended victim of the misconduct has sustained no damage or loss; that the damage or loss has been settled and paid after discovery of the misconduct; or that such victim or intended victim was a customer or a person in confidential relation with the licensee or was an identified member of the general public.

      
      

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      (o) Has been found guilty, for a second time, of any misconduct that warrants her or his suspension or has been found guilty of a course of conduct or practices which show that she or he is so incompetent, negligent, dishonest, or untruthful that the money, property, transactions, and rights of investors, or those with whom she or he may sustain a confidential relation, may not safely be entrusted to her or him.

5. Being penal in nature, Section 475.25 “must be construed strictly, in favor of the one against whom the penalty would be imposed.” Munch v. Department of Professional Regulation, Div. of Real Estate, 592 So. 2d 1136, 1143 (Fla. 1st DCA 1992).

6. A proceeding, such as this one, to suspend, revoke, or impose other discipline upon a professional license is penal in nature. State ex rel. Vining v. Florida Real Estate Commission,

   281 So. 2d 487, 491 (Fla. 1973). Accordingly, to impose discipline, the Department must prove the charges against Oros by clear and convincing evidence. Department of Banking and Finance, Div. of Securities and Investor Protection v. Osborne

   Stern & Co., 670 So. 2d 932, 933-34 (Fla. 1996)(citing Ferris v. Turlington, 510 So. 2d 292, 294-95 (Fla. 1987)); Nair v.

   Department of Business & Professional Regulation, 654 So. 2d 205, 207 (Fla. 1st DCA 1995).

7. Regarding the standard of proof, in Slomowitz v.

   
   

   Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983), the Court of Appeal, Fourth District, canvassed the cases to develop a “workable definition of clear and convincing evidence” and found that of necessity such a definition would need to contain “both qualitative and quantitative standards.” The court held that

   clear 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 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.

   
   

   Id. The Florida Supreme Court later adopted the fourth district’s description of the clear and convincing evidence standard of proof. Inquiry Concerning a Judge No. 93-62, 645 So. 2d 398, 404 (Fla. 1994). The First District Court of Appeal also has followed the Slomowitz test, adding the interpretive comment that “[a]lthough this standard of proof may be met where the evidence is in conflict, . . . it seems to preclude evidence

   that is ambiguous.” Westinghouse Elec. Corp., Inc. v. Shuler Bros., Inc., 590 So. 2d 986, 988 (Fla. 1st DCA 1991), rev.

   denied, 599 So. 2d 1279 (1992)(citation omitted).

   
   

8. As set forth in the Findings of Fact, the trier has determined as matter of ultimate fact that the Department failed to establish, by the requisite level of proof, that Oros committed the offenses of which she stands accused. These factual findings, however, were necessarily informed by the administrative law judge's application of the law. A brief discussion of the pertinent legal principles, therefore, will illuminate the dispositive findings of ultimate fact.

9. In order to prove a violation of Section 475.25(1)(b), Florida Statutes, the Department must establish that the licensee’s conduct was intentional, not merely negligent. See

   Munch, 592 So. 2d at 1143-44. Here, the undersigned is not convinced that Oros intended to conceal Moskowitz’s offer from the Sellers or even, for that matter, that Federico was necessarily attempting to present an offer at the time that Oros was presenting the Buyers’ offer to the Sellers on November 22, 2002.

10. The undersigned is not convinced, either, that Oros had a duty to remain accessible to callers while presenting the Buyers’ offer, as the Department has urged. The Department offered no evidence——at least none that was clear and

    convincing——of a standard of conduct that requires a licensee to carry a cell phone and keep it on at all times during regular business hours. See Purvis v. Department of Professional Regulation, Board of Veterinary Medicine, 461 So. 2d 134, 137 (Fla. 1st DCA 1984)(agency seeking to impose discipline must prove applicable standard of conduct where such is not explicitly fixed by statute or rule). Without such proof, whether it be lay or expert testimony, the trier is bereft of an acceptable measure by which to judge the accused licensee’s performance.3

11. To be found guilty of engaging in a harmful course of conduct in violation of Section 475.25(1)(o), Florida Statutes, a licensee must be shown to have committed wrongful acts in connection with more than one transaction. Kopf v. Florida Real

Estate Commission, 379 So. 2d 1327, 1329 (Fla. 3d DCA 1980). Such a showing was not made here; indeed, the undersigned is not convinced that Oros committed a disciplinable offense in even one transaction.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a final order finding Oros not guilty of the charges brought against her in the Administrative Complaint.

DONE AND ENTERED this 25th day of November, 2002, in Tallahassee, Leon County, Florida.

JOHN G. VAN LANINGHAM

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 25th day of November, 2002.

ENDNOTES

1/ The Department’s burden in this case was to produce clear and convincing evidence; thus, competent, credible proof of what likely (as opposed to very probably) happened is insufficient to prove the charges against Oros. While the undersigned is not required to make affirmative findings as to an exculpatory alternative to the agency’s allegations when, as here, the evidence fails clearly and convincingly to prove essential elements of the agency’s case——that is, the licensee need not be found innocent to be deemed not guilty——the findings above will explain why the undersigned is not clearly convinced that Oros committed the offenses with which she was charged.

2/ Actually, although the stipulation proves that certain allegations were made against Oros, it does not prove the truth of those allegations, for which latter purpose the stipulation would be simply uncorroborated hearsay. Nevertheless, the stipulation was admitted at hearing, over Oros’s objection, because the stipulation expressly provides that she and Comanic “agree[d] that [the] Stipulation may be considered by [the Department] and [the Commission] in connection with any future disciplinary proceeding.” Pursuant to this specific agreement, the undersigned, as the trier of fact, has duly considered the

stipulation and found its probative value to be featherweight, as discussed above.

3/ In its proposed recommended order, the Department argues, for the first time, that Oros had a contractual duty, under the Listing Contract, to present Moskowitz’s offer to the Sellers after they had entered into a contract to sell their property to the Buyers. The Listing Contract, however, does not clearly and unambiguously obligate the Listing Agent to continue presenting offers after a contract for sale has been made, and no testimony was elicited at hearing as to the parties’ intent in this regard——not surprisingly, since the Department had not alleged that Oros breached the Listing Contract in such fashion.

Moreover, the evidence does not clearly and convincingly prove that Moskowitz ever offered, or intended to offer, the Sellers a “back up” agreement contingent on the Buyers’ contract failing to close.

Even if the Department’s newly asserted theory had merit, though, due process concerns would forbid its consideration.

Disciplinary action cannot fairly be taken against a licensee for conduct not alleged, or for violating a statute not specified, in the administrative complaint or comparable accusing document. E.g. Cottrill v. Department of Insurance, 685 So. 2d 1371, 1372 (Fla. 1st DCA 1996); Delk v. Department of Professional Regulation, 595 So. 2d. 966, 967 (Fla. 5th DCA 1992); see Werner v. Department of Insurance, 689 So. 2d 1211,

1213-14 (Fla. 1st DCA), rev. denied, 698 So. 2d 849 (1997).

COPIES FURNISHED:

Stacy N. Robinson Pierce, Esquire Department of Business and Professional

Regulation

400 West Robinson Street Suite N308

Orlando, Florida 32801-1772

John B. Dichiara, Esquire

507 Southeast 11th Court

Fort Lauderdale, Florida 33316-1145

Hardy L. Roberts, III, Esquire Department of Business and Professional

Regulation

1940 North Monroe Street Tallahassee, Florida 32399-2202

Buddy Johnson, Director

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

Docket for Case No: 02-002198PL

Orders for Case No: 02-002198PL