STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RECOMMENDED ORDER

Pursuant to notice, a final hearing was conducted in this case on October 13, 2009, in Viera, Florida, before Administrative Law Judge R. Bruce McKibben of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Patrick J. Cunningham, Esquire

Department of Business and Professional Regulation

400 West Robinson Street

Hurston Building-Suite 801 North Orlando, Florida 32801

For Respondents: Joseph G. Colombo, Esquire

2351 West Eau Gallie Boulevard, Suite 1 Melbourne, Florida 32935

STATEMENT OF THE ISSUE

The issue in this case is whether Respondents negotiated the sale of real property and collected a commission on said sale without the requisite real estate license issued by the State of Florida.

PRELIMINARY STATEMENT

On December 11, 2008, Petitioner, Department of Business and Professional Regulation, Division of Real Estate (the "Department"), filed an Administrative Complaint against Respondents, Rene Larralde, Jr., and Maxous, Inc., alleging failure by Larralde and/or Maxous to obtain a valid license to operate as a real estate broker or real estate sales associate. On December 16, 2008, Petitioner filed an Administrative Complaint against Respondent, Glinda G. Hatfield, alleging that Hatfield operated as a broker for Maxous, despite Maxous not being a licensed brokerage entity and Larralde not being a licensed real estate agent. Larralde and Maxous filed an

Election of Rights form disputing the allegations of fact. Hatfield also filed an Election of Rights form disputing the allegations of fact as to her involvement. The Administrative Complaints and Election of Rights forms were forwarded to the Division of Administrative Hearings and assigned to the undersigned.

At the final hearing, Petitioner called two witnesses: Flora Huaman, investigator for the Department; and Deborah J. Gaffney, owner of Exit One Realty. Petitioner's Exhibits 1 through 6 were admitted without objection.

Respondents Larralde and Maxous did not appear at the final hearing. Respondent Hatfield appeared with counsel and testified on her own behalf. Respondent Hatfield's Exhibit 1 was received into evidence without objection.

The parties indicated that a transcript of the final hearing would be ordered. The parties were to submit proposed recommended orders within ten days of the transcript being filed at DOAH. The Transcript was filed on October 27, 2009.

Petitioner filed its Proposed Recommended Order on November 5, 2009, and it was duly considered in the preparation of this Recommended Order. No proposed recommended orders were submitted by any of the Respondents.

FINDINGS OF FACT

1. Petitioner is the state agency charged with the responsibility and duty of prosecuting Administrative Complaints filed against real estate practitioners pursuant to the laws of the State of Florida.

2. Respondent Rene Larralde, Jr., is a citizen of the State of Florida. At no time relevant to this proceeding did Larralde hold a Florida-issued license as a real estate sales associate or real estate broker.

3. Respondent Maxous, Inc., is a Florida for-profit corporation formed on August 10, 2004. Larralde is president and registered agent of Maxous.

4. Respondent Glinda G. Hatfield has held licenses as a Florida real estate broker and a Florida real estate associate. As of the date of the incident relevant to this proceeding, Hatfield's real estate broker's license was in an inactive status. Hatfield had failed to meet one of the continuing education requirements for renewal of her license that year. She was not aware of that fact until notification by the state relevant to the issues in this proceeding. Upon receiving

   notice, Hatfield took the necessary measures to have her license re-instated to active status.

5. Hatfield assisted Larralde in forming Maxous. It was Hatfield's responsibility, as the licensed real estate broker in

   the new entity, to make sure Maxous was duly registered with the state as a real estate broker. Hatfield went to the Melbourne Association of Realtors to register the business once it had been incorporated. Hatfield did not understand that the business also had to be registered through the Florida Real Estate Commission in Tallahassee. Not being aware of that requirement, Hatfield never registered Maxous with the state.

   Rather, she paid the fees associated with registration of the company with the local real estate association and made the erroneous presumption that the company could then operate as a licensed real estate broker in the state.

6. On or about February 27, 2008, certain parties entered into a Contract for Sale and Purchase (the "Contract") of property located at 1033 June Drive, Melbourne, Florida (the "Property"). Maxous was designated as the listing broker in the Contract. On April 21, 2008, the sale of the Property closed, as evidenced by a HUD Settlement Statement. The Settlement Statement indicates a real estate commission in the amount of

   $5,964.18 for the sale. The Settlement Statement indicates

   
   

   $2,982.09 (one half of the commission) is to be paid to Maxous and the other half of the commission to be paid to Exit One Realty.

7. Exit One Realty was the listing agent for the Property, but had not been made aware of the impending sale. As the sole

   listing agent, Exit One Realty would normally expect to receive the entire broker's commission at the time of closing. However, Exit One Realty was not even aware of the sale of the Property until it received its commission.

8. It appears that Maxous, through the person of Larralde, held itself out as the listing broker and assumed ownership of the commission on the sale of the Property. Larralde did, however, designate Exit One Realty as another broker in the sale who was entitled to half of the commission.

9. At the time of the transaction involving the Property, Maxous was not registered with the State of Florida as a real estate broker. Larralde was not licensed as a real estate sales associate.

10. In order to consummate this sale (and others like it), Larralde had established Maxous. It was apparently Larralde's intent, although he did not appear at the final hearing, to use Hatfield's status as a licensed broker to legitimize Maxous' status as a brokerage firm. Hatfield was amenable to that arrangement.

11. Hatfield was designated as the vice-president of Maxous when the company was formed. As previously noted, Hatfield went to the Melbourne Association of Realtors for the purpose of registering Maxous as a brokerage entity. Hatfield paid the necessary fees to the association for the registration

    of Maxous with the local real estate association, and, upon inquiry from that office, felt that she had done everything necessary to allow Maxous to operate as a broker.

12. Thus, at the time of the aforementioned transaction, Maxous was not a legitimate broker in the State of Florida. Hatfield assumed she was the registered broker for Maxous; assumed Maxous was duly registered with the state; and assumed that her broker's license was current. In matter of fact, none of those assumptions proved true.

13. Clearly Hatfield did not attempt to circumvent or avoid the requirements for real estate brokers. Rather, she was mistaken about what had to be done regarding registration with the Florida Real Estate Commission. She did not know that her license had been deemed inactive for failure to complete a continuing education class.

14. Neither Larralde, nor anyone else testified at final hearing as to what their knowledge was concerning these matters. It cannot be determined whether Larralde knew Maxous was not a registered brokerage firm and that the transaction relating to the Property was improper. However, Larralde did share the commission with Exit One Realty.

15. It is clear from Hatfield's testimony at final hearing that she did not intend to defraud anyone or to do anything

    illegal or improper. However, her actions were improper nonetheless.

16. It is not clear from the testimony whether Hatfield received any of the commission provided to Larralde. However, to her credit, Hatfield, upon learning of the violations set forth above, unilaterally ceased doing business as a real estate agent or broker. She acknowledged her mistake and took immediate action to make sure she would not make any further mistakes.

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding pursuant to Section 120.569 and Subsection 120.57(1), Florida Statutes (2009).

18. Petitioner has the burden of proof in this matter.

    
    

    Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987). The standard of proof for a licensure revocation case is clear and convincing evidence. Osborne Stern and Co., Inc. v. Department of Banking and Finance, 647 So. 2d 245, 248 (Fla. 1st DCA 1994).

19. Clear and convincing evidence is an intermediate standard of proof which is more than the "preponderance of the evidence" standard used in most civil cases, but less than the "beyond a reasonable doubt" standard used in criminal cases.

    See State v. Graham, 240 So. 2d 486 (Fla. 2nd DCA 1970). Clear and convincing evidence has been defined as evidence which:

    [R]equires 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.

    
    

    Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983).

    
    

20. The evidence presented in this case met the requirements for clear and convincing evidence.

21. Section 475.25, Florida Statutes (2007), is entitled, "Discipline" and states:

    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 $5,000 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:

       
       

       * * *

       
       

       (q) Has violated any provision of

       s. 475.2755 [relating to sales associates] or s. 475.278, [relating to brokerage relationships] including the duties owed under those sections.

22. Section 475.42, Florida Statutes (2007), states in pertinent part:

    1. Violations

       
       

       (a) A person may not operate as a broker or sales associate without being the holder of a valid and current active license therefor. Any person who violates this paragraph commits a felony of the third degree, punishable as provided in s. 775.082 or

       s. 775.083, or, if a corporation, as provided in s. 775.083.

       
       

23. Section 425.228, Florida Statutes (2007), states:

    
    

    1. When the department has probable cause to believe that any person not licensed by the department, or the appropriate regulatory board within the department, has violated any provision of this chapter or any statute that relates to the practice of a profession regulated by the department, or any rule adopted pursuant thereto, the department may issue and deliver to such person a notice to cease and desist from such violation. In addition, the department may issue and deliver a notice to cease and desist to any person who aids and abets the unlicensed practice of a profession by employing such unlicensed person. The issuance of a notice to cease and desist shall not constitute agency action for which a hearing under ss. 120.569 and 120.57 may be sought. For the purpose of enforcing a cease and desist order, the department may file a proceeding in the name of the state seeking issuance of an injunction or a writ of mandamus against any person who violates any provisions of such order. In addition to the foregoing remedies, the department may impose an administrative penalty not to exceed $5,000 per incident pursuant to the provisions of chapter 120 or may issue a citation pursuant to the provisions of subsection (3). If the

       department is required to seek enforcement of the order for a penalty pursuant to

       s. 120.569, it shall be entitled to collect its attorney's fees and costs, together with any cost of collection.

       
       

       It is clear from the evidence that Larralde and Maxous did not hold a valid and current active license as a broker or sales associate. Petitioner has met its burden of proof as to this issue.

24. It is equally true that Hatfield did not have an active license at the time she attempted to have Maxous qualified as a broker in this state. That deficiency on her part, however, was clearly unintentional. Upon learning that her license was inactive, she took steps to remedy that situation. Upon learning that a violation had occurred,

    vis-à-vis her connection with Maxous, she stopped practicing real estate altogether. In short, Hatfield made every effort to comply with the rules and statutes governing her, but made mistakes.

25. Section 455.227, Florida Statutes (2007), states in pertinent part:

    Grounds for discipline; penalties; enforcement.

    
    

    1. The following acts shall constitute grounds for which the disciplinary actions specified in subsection (2) may be taken:

       1. Making misleading, deceptive, or fraudulent representations in or related to the practice of the licensee's profession.

          
          

       2. Intentionally violating any rule adopted by the board or the department, as appropriate.

          
          

          * * *

          
          

          (j) Aiding, assisting, procuring, employing, or advising any unlicensed person or entity to practice a profession contrary to this chapter, the chapter regulating the profession, or the rules of the department or the board.

          
          

          Hatfield's actions were not intentional. Inasmuch as the penalties against her under this statute are not mandatory, i.e., the Department "may" discipline her, but is not statutorily mandated to do so, her lack of intent must be taken into consideration.

26. Petitioner has met its burden of proof to establish that Hatfield is subject to discipline for her actions. However, there is insufficient evidence to support the maximum

fine allowed by statute.

RECOMMENDATION

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

RECOMMENDED that a final order be entered by Petitioner, Department of Business and Professional Regulation, Division of Real Estate: (1) imposing a fine in the amount of $5,000

against Respondent, Rene Larralde; (2) imposing a fine of $5,000 against Respondent, Maxous, Inc; (3) imposing a fine of $250 against Respondent, Glinda G. Hatfield; (4) requiring Hatfield to pay the costs of the investigation in this matter; and

(5) suspending Hatfield's real estate license for a period of one year.

DONE AND ENTERED this 24th day of November, 2009, in Tallahassee, Leon County, Florida.

R. BRUCE MCKIBBEN Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 24th day of November, 2009.

COPIES FURNISHED:

Amy Toman, Hearing Officer Office of the General Counsel Department of Business and

Professional Regulation Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-0792

Reginald Dixon, General Counsel Department of Business and

Professional Regulation Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-0792

Patrick J. Cunningham, Esquire Department of Business and

Professional Regulation

400 West Robinson Street

Hurston Building-Suite 801 North Orlando, Florida 32801

Joseph G. Colombo, Esquire

2351 West Eau Gallie Boulevard, Suite 1 Melbourne, Florida 32935

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: 09-004247

Orders for Case No: 09-004247