vs. )
Respondent. )
Case No. 11-2213
Pursuant to notice, a hearing was conducted in this case on July 7, 2011, in Jacksonville, Florida, before Lawrence P. Stevenson, a duly-designated Administrative Law Judge of the Division of Administrative Hearings.
Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050
The issue is whether Petitioner's application for licensure as a real estate sales associate should be denied on the ground set forth in the Florida Real Estate Commission's April 4, 2011, Notice of Intent to Deny.
April 4, 2011, the Florida Real Estate Commission ("Commission") advised Petitioner that his application for a real estate sales associate license was denied. Petitioner timely requested a formal hearing on the denial of his application, and on May 2, 2011, the Commission referred the matter to the Division of Administrative Hearings ("DOAH") for the assignment of an Administrative Law Judge to conduct a formal administrative hearing.
The final hearing was scheduled for and held on July 7, 2011. At the hearing, Petitioner testified in his own behalf and presented the testimony of Ann White, his fiancée. Petitioner offered no exhibits into evidence, but a written summary of his oral presentation was accepted for consideration over the objection of the Commission. The Commission presented no witnesses. The Commission's Composite Exhibit 1, consisting of Petitioner's application package to the Commission, was admitted into evidence.
No transcript of the final hearing was filed with DOAH. The parties were given 10 days from the date of the hearing to file proposed recommended orders. The Commission timely filed a Proposed Recommended Order on July 13, 2011. Petitioner timely filed his post-hearing submittal on July 14, 2011. The Proposed
Recommended Orders have been duly considered in the writing of this Recommended Order.
Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made:
On or about December 7, 2010, Petitioner filed an application for licensure as a real estate sales associate with the Department of Business and Professional Regulation, Division of Real Estate ("Division"). On that application, he answered in the affirmative to question number one of the Background Questions. Question number one states, in pertinent part, "Have you ever been convicted or found guilty of, or entered a plea of nolo contendere or guilty to, regardless of adjudication, a crime in any jurisdiction, or are you currently under criminal investigation?"
The application requires any applicant who answers "yes" to question number one to "provide the full details" of any criminal conviction, including the nature of the charges, outcomes, sentences and/or conditions imposed, and the dates, name, and location of the court and/or jurisdiction in which any proceedings were held.
In his explanation for answering "yes" to question number one, Petitioner listed three offenses. All three were violations of former section 831.05, Florida Statutes (2003),
"Vending goods or services with counterfeit trademarks or service marks."1/ The violations occurred in Miami-Dade County on February 2, 2002, January 16, 2003, and June 12, 2003. For the first offense, Petitioner stated that he received "suspended sentence/adjudication withheld/restitution ordered." Petitioner reported that the other two cases were combined into one prosecution resulting in a sentence limited to four months' time served, a probation of two years, and the provision of restitution.
Petitioner described his offenses as follows: "As a merchant, I advertised and sold name-brand, imitation watches to customers willing to buy said merchandise. Consequently, I was monitored, arrested and charged for said activity."
Information obtained by the Division from the Florida Comprehensive Case Information System ("CCIS") indicated that on March 28, 2002, the court withheld adjudication on Petitioner's first charge of vending goods with counterfeit labels. On September 17, 2003, Petitioner was adjudicated guilty of three counts of battery upon a law enforcement officer, one count of resisting an officer without violence, and one count of vending goods with counterfeit labels. On November 25, 2003, Petitioner was again adjudicated guilty of vending goods with counterfeit labels.
By letter to Petitioner, dated December 21, 2010, the Division requested additional information from Petitioner regarding his answer to question number one. More specifically, the Department's criminal background check of Petitioner revealed other undisclosed offenses. The Division's letter stated as follows, in relevant part:
. . . Please provide documentation for the following item:
March 25, 1989/ Carrying a Concealed Weapon/ Miami-Dade Police Department
February 3, 1990/ Assault-Batt Domestic/ Miami-Dade Police Department
February 13, 2004/ Counterfeiting-BW Vending Goods with Forged Counterfeit Label/ Miami-Dade Police Department.
Petitioner responded by letter dated January 18, 2011, which stated as follows in relevant part:
. . . [Y]ou asked for documentation and details on the following items:
March 25, 1989/Carrying a Concealed Weapon/Miami-Dade Police Department.
February 3, 1990/Assault-Batt Domestic/Miami-Dade Police Department.
February 13, 2004/Counterfeiting-BW (i.e., Bench Warrant) Vending Goods with Forged Label/MDPD.
Re:#1-- This incident was over two decades ago and my specific recollection may not be exact. . . but I believe it was an arrest caused by my harmlessly carrying a concealed weapon (type not recalled) with no connection
to violence or threat or accusation of violence. (Please note that for most of the last 25 years, I possessed a CWP in one of two states). I also tend to believe the charge/case was disposed without penalty. I am writing to the Miami-Dade Clerk of Courts for a copy of their record of this incident and will forward the same to your office within 2-3 weeks.
Re:#2-- Likewise, this incident was over two decades ago and my specific recollection may not be exact. . . but I believe it was an arrest stemming from a verbal quarrel between I and my ex-wife, who subsequently made a partially-false complaint to the police. I also tend to believe that the charge/case was dismissed for "lack of prosecution"/ cooperation (on her part). Again, I am writing to the Miami-Dade Clerk of Courts for a copy of their record of this incident and will forward the same to your office upon receipt (estimated timeframe: 2-3 weeks).
Re:#3-- I do have clear recollection and documentation of this incident. . . It was an arrest caused by a Bench Warrant ("BW") enforced during a routine traffic stop.
Specifically, this Warrant originated from my then Probation Officer for "Violation of Probation" for alleged Failure to Meet Probation Conditions of scheduled Fine/Restitution Payments connected to a prior case (#FO31585-- already reported and documented to your office). The out-come being that the "Probation Warrant" was "quashed" (discharged) upon request by my Defense Counselor and the Probation Conditions were "Modified" to accommodate my financial limits. (Please find the pertinent Arrest Affidavit and court reporting document, enclosed)....
Petitioner never followed up with the promised information regarding his 1989 arrest for carrying a concealed weapon or his 1990 arrest for domestic violence.
The Commission considered Petitioner's application at its regularly scheduled meeting on March 16, 2011, and voted to deny the application. In its Notice of Intent to Deny, the Commission made four factual findings: Petitioner's complete criminal record was not revealed in his application; Petitioner's testimony or evidence in explanation and/or mitigation was unpersuasive; Petitioner's criminal history shows a pattern and practice of criminal behavior over an extended period of time; and Petitioner has not had sufficient time free of government supervision to establish rehabilitation.
Those findings of fact led the Commission to make the following conclusions of law:
Failing to demonstrate: honesty, truthfulness, trustworthiness and good character, a good reputation for fair dealing, competent and qualified to conduct transactions and negotiations with safety to others. 475.17(1)(a), 475.181 F.S.
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. 475.25(1)(b), 475.181, F.S.
Convicted or found guilty or entered a plea of nolo contendere to, regardless of adjudication, a crime which directly relates
to activities of a licensed broker or sales associate or involves moral turpitude or fraudulent or dishonest dealing.
475.25(1)(f), 475.181 F.S.
The Commission concludes that it would be a breach of its duty to protect the health, safety and welfare of the public to license this applicant and thereby provide him/her easy access to the homes, families or personal belongings of the citizens of Florida. 455.201, F.S.
At the hearing, Petitioner testified that he should not be held liable for failing to disclose his full criminal record at the time of his application. He stated that he had forgotten the 1989 concealed weapons charge and the 1990 domestic battery offense. When the Division requested more information about these offenses, he promptly provided everything he could recall and undertook to obtain further information from the Miami-Dade Clerk of Courts. Petitioner stated that he in fact obtained that information and provided it to the Division. He did not understand why the information did not appear in the Division's files. Petitioner did not have the information with him at the time of the hearing.
Petitioner contested the Commission's conclusions regarding the elements of fraud, misrepresentation, and dishonest dealing as they attached to his multiple arrests and convictions
for violations of section 831.05(1)(a), Florida Statutes (2003), which provided:
Whoever knowingly sells or offers for sale, or knowingly purchases and keeps or has in his or her possession, with intent that the same shall be sold or disposed, or vends any goods having thereon a forged or counterfeit trademark, or who knowingly sells or offers for sale any service which service is sold in conjunction with a forged or counterfeit service mark, of any person, entity, or association, knowing the same to be forged or counterfeited, shall be guilty of the crime of selling or offering for sale counterfeit goods or services, punishable as follows:
If the goods or services which the offender sells, or offers for sale, have a retail sale value of $ 1,000 or more, the offender commits a felony of the third degree, punishable as provided in
s. 775.082, s. 775.083, or s. 775.084.
Petitioner introduced evidence that credibly supported his contention that he was selling imitation Rolex watches, but that he was not attempting to fool anyone into believing the watches were genuine Rolex products. Petitioner advertised his products in the "South Florida Bargain Trader," with photographs and text that referred to the watches as "Swiss replicas" and offered them for "under $500," far less than the price of a genuine Rolex. Petitioner contended that he intended to fool no one, and that the only person harmed by his activities was the representative of Rolex USA, Inc., who was the complaining witness in each of his cases.
Petitioner's contention is less than convincing for two reasons, the first being that it has been expressly rejected by a Florida appellate court. In Stern v. State, 739 So. 2d 1203 (Fla. 4th DCA 1999), the court held that a disclaimer as to the genuineness of the article for sale did not constitute a valid defense to the charge of selling counterfeit goods or services under section 831.05(1)(a):
In his third issue on appeal, Stern contends that the trial court erred by failing to give a requested jury instruction on a defense. Stern was charged with violating section 831.05(1)(a), Florida
Statutes (1995), which makes it a crime to sell goods bearing a forged or counterfeit trademark with a retail value of $ 1,000 or more. The underlying basis of any statute prohibiting trademark infringement is the avoidance of confusion in the marketplace. See Great S. Bank v. First S. Bank, 625
So. 2d 463, 464 (Fla. 1993). In the factual context of this case, the crime consists of two statutory elements, which are:
Goods were sold, offered for sale, or vended having a forged or counterfeit trademark, and
Goods had a retail value of $1,000 or more.
See § 831.05(1)(a), Fla. Stat. Case law adds a third element, which is that use of the trademark was likely to cause customer confusion in the market place. See Great S. Bank, 625 So. 2d at 469.
Regarding the third element of the crime, Stern contended at trial that conspicuously displaying large disclaimer signs at his booth stating that his sunglasses were look-
a-likes was a defense to the crime, and he requested that the following instruction be given to the jury:
In the event that you find that the Defendant's use of forged or counterfeit trademarks in the marketplace is likely to cause customer confusion, you should still find the Defendant not guilty if you also find that the likelihood of customer confusion would be effectively cured by Defendant's use of disclaimers.
The trial court declined to give the requested instruction on the grounds that use of disclaimers could not be a defense in cases involving the sale of goods with counterfeit trademarks to the general public.
* * *
In this case, the type of product being sold by the owner of the registered trademark was the same type of product being sold by Stern, except that the registered trademark used on Stern's products was not authorized by the owner of the registered trademark.
Both products were consumer goods being sold to the general public. Once the counterfeit sunglasses leave the booth, no disclaimer, no matter how prominently displayed at the booth, would give notice to the general public that the sunglasses were not the actual designer sunglasses. Thus, the signs Stern displayed at his booth could never cure the confusion in the general marketplace that both the civil statute and the criminal statute in Florida seek to avoid by prohibiting trademark infringement.
During the trial, the trial court properly instructed the jury in this case that before Stern could be found guilty, the state must prove that Stern's use of the forged or counterfeit trademarks in the marketplace was likely to cause customer confusion. The
trial court further instructed the jury on the statutory factors approved by the Florida Supreme Court in Great Southern Bank in evaluating the likelihood that confusion exists. The trial court also properly instructed the jury that the "customer" to be considered in evaluating the likelihood of confusion not only included the potential direct purchasers of the counterfeit goods, but also potential purchasers of the trademark holder's goods and members of the public who encounter the counterfeit goods in a post-sale context. See U.S. v.
Torkington, 812 F.2d 1347, 1350-53 (11th Cir. 1987) (provided that the confusion contemplated by criminal trademark counterfeiting statutes includes potential confusion by potential purchasers in the public who may not have the ability or opportunity to view disclaimers on display for only direct purchases). On the contrary, we find that the instruction requested by Stern could have misled the jury into thinking that the crime did not occur if the jury concluded the direct purchasers of the counterfeit sunglasses sold by Stern knew that Stern's sunglasses were look-a-likes. Therefore, the requested defense instruction was improper, and the trial court properly denied giving the requested instruction.
739 So. 2d at 1206-1207.
The second reason for rejecting Petitioner's argument is the repeat nature of his offenses. Even if one accepts that Petitioner believed in good faith that identifying his products as "Swiss replicas" made it lawful to sell imitation Rolex watches, his first arrest and appearance in court should have disabused him of this belief. On March 28, 2002, the court withheld adjudication, but nonetheless ordered Petitioner to pay
$2,702.25 in restitution for the cost of the investigation as well as court costs.
Petitioner could not have left the courtroom believing that he had been exonerated. He continued to sell his "Swiss replica" Rolex watches in knowing violation of section 831.05(1)(a). He was arrested twice more for the same offense and convicted of a third degree felony violation of the cited statute on each occasion.
Petitioner conceded that after his first arrest, he knew it was against the law to sell imitation Rolex watches, but that he did it anyway because he needed the money.
Petitioner testified that his conviction on three counts of battery upon a law enforcement officer was based upon a false charge. He testified that during one of his arrests for selling replica Rolex watches, he fled from the police, who used excessive force in apprehending him then charged him with battery. Petitioner stated that he pled no contest to the charges on advice of his lawyer.
Petitioner attempted to make a case that the Commission treated him unfairly at its March 16, 2011, meeting. His chief claim was that other applicants with offenses far more serious than his were approved by the Commission because those applicants were represented by counsel at the meeting. Petitioner offered the testimony of his fiancée to bolster this claim, but submitted
no documentation in support of this highly subjective assertion, which cannot be credited.
Petitioner offered little evidence to demonstrate his rehabilitation, as opposed to rationalizations and justifications for his criminal behavior. He testified that he made high marks on his real estate course work. At the time of the hearing, he stated that he had been off supervised probation for two or three years. He states that he is currently in the business of selling legitimate merchandise, and seeks a real estate license to supplement his income. Petitioner noted that he is now nearly 50 years old and is not likely to repeat his past mistakes.2/
Petitioner did not present any disinterested witnesses who could favorably describe Petitioner's dealings in business matters or transactions. Petitioner did not present sufficient evidence to show that he was honest, truthful, trustworthy, had good moral character, or had a good reputation in the community for fair dealing.
Petitioner did not present sufficient evidence to show that he was "competent and qualified to make real estate transactions and conduct negotiations with safety to investors and to those with whom the applicant may undertake a relationship of trust and confidence," as required by section 475.17(1)(a), Florida Statutes.
CONCLUSIONS OF LAW
DOAH has jurisdiction over the subject matter of this proceeding and of the parties hereto pursuant to chapter 120, Florida Statutes (2011).
Petitioner has applied to become licensed as a real estate sales associate in Florida.
The Commission acts in a quasi-judicial capacity and is charged with the duty to regulate real estate brokers, salespersons, and real estate schools in the interest of the public welfare. §§ 475.001 and 475.02, Fla. Stat. The Commission's authority is derived from chapters 475 and 455, Florida Statutes, and the rules promulgated thereto, specifically, Florida Administrative Code Chapter 61J2.
Petitioner has the burden to prove by the preponderance of evidence that he satisfies the requirements for licensure as a real estate sales associate. See Dep’t of Banking & Fin. v. Osborne, Stern & Co., 670 So. 2d 932, 934 (Fla. 1996); Dep’t of Transp. v. J.W.C. Co., Inc., 396 So. 2d 778, 787 (Fla. 1st DCA 1981).
Section 475.181, Florida Statutes (2011), provides in pertinent part:
The department shall license any applicant whom the commission certifies, pursuant to subsection (2), to be qualified to practice as a. . . sales associate.
The commission shall certify for licensure any applicant who satisfies the requirements of ss. 475.17, 475.175, and
475.180. . . .
Section 475.17 sets forth the qualifications for licensure. Subsection (1)(a) of the statute provides as follows:
An applicant for licensure who is a natural person must be at least 18 years of age; hold a high school diploma or its equivalent; be honest, truthful, trustworthy, and of good character; and have a good reputation for fair dealing. An applicant for an active broker’s license or a sales associate’s license must be competent and qualified to make real estate transactions and conduct negotiations therefore with safety to investors and to those with whom the applicant may undertake a relationship of trust and confidence. If the applicant has been denied registration or a license or has been disbarred, or the applicant’s registration or license to practice or conduct any regulated profession, business, or vocation has been revoked or suspended, by this or any other state, any nation, or any possession or district of the United States, or any court or lawful agency thereof, because of any conduct or practices which would have warranted a like result under this chapter, or if the applicant has been guilty of conduct or practices in this state or elsewhere which would have been grounds for revoking or suspending her or his license under this chapter had the applicant then been registered, the applicant shall be deemed not to be qualified unless, because of lapse of time and subsequent good conduct and reputation, or other reason deemed sufficient, it appears to the commission that the interest of the public and investors will not likely be endangered by the granting of registration. The commission may adopt rules requiring an
applicant for licensure to provide written information to the commission regarding the applicant’s good character.
Subsection 475.25(1)(f) provides in relevant part that an application for licensure as a real estate sales associate may be denied if the applicant "[h]as been convicted or found guilty of, or entered a plea of nolo contendere to, regardless of adjudication, a crime in any jurisdiction which directly relates to the activities of a licensed broker or sales associate, or involves moral turpitude or fraudulent or dishonest dealing."
Subsection 475.25(1)(o) (2011), provides that an applicant may be denied licensure if the applicant:
. . . 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.
In the instant case, the Commission preliminarily denied Petitioner's application for licensure based on his criminal history, his failure to fully disclose that history in his application, and his failure to demonstrate rehabilitation.
The evidence established that Petitioner was brought before the circuit court in Miami-Dade County three times for violating section 831.05(1)(a), a third-degree felony. For the first offense, the court withheld adjudication, but later
adjudicated Petitioner guilty for the second and third offenses. Petitioner's incarceration was limited to time served, but he was required to make restitution and to serve probation. The documents introduced into evidence did not make clear the date on which Petitioner's probation ended, but at the hearing Petitioner freely admitted that he was released from probation only within the last two to three years. Petitioner was also convicted of three counts of battery on a law enforcement officer in violation of section 784.07(2)(b), Florida Statutes (2003), a crime ranging from a first-degree misdemeanor to a third-degree felony.
The Division argues that Petitioner's convictions for battery on a law enforcement officer and for selling counterfeit goods constitute crimes involving "moral turpitude," within the meaning of subsection 475.25(1)(f). The Florida Supreme Court has defined "moral turpitude" as follows:
Moral turpitude involves the idea of inherent baseness or depravity in the private social relations or duties owed by man to man or by man to society. It has also been defined as anything done contrary to justice, honesty, principle or good morals, though it often involves the question of intent as when unintentionally committed through error of judgment when wrong was not contemplated.
State ex rel. Tullidge v. Hollingsworth, 146 So. 660, 661 (Fla. 1933) (citations omitted).
The undersigned is cognizant of the cases from other jurisdictions cited by the Division holding that battery on a law
enforcement officer is a crime involving moral turpitude, e.g., People v. Lindsay, 209 Cal. App. 3d 849, 857-858 (Cal. Ct. App. 5th Dist. 1989), and holding that selling a counterfeit trademark is a crime involving moral turpitude because the offense is inherently fraudulent. Tall v. Mukasey, 517 F.3d 1115 (9th Cir. 2008). However, it is concluded that the facts of this case do not establish that Petitioner acted with the requisite "baseness or depravity" to justify the label of moral turpitude.
Though it is concluded that Petitioner's poor judgment in pursuing his "Swiss replica" Rolex business even after the first offense does not descend to the level of moral turpitude, Petitioner was certainly involved in "fraudulent or dishonest dealing" within the meaning of subsection 475.25(1)(f).
As the court observed in Stern v. State, 739 So. 2d at 1206-1207, there were greater societal concerns than the immediate transaction between Petitioner and his customer, and these concerns rendered Petitioner's defense nugatory. Petitioner acted without regard to whether some subsequent purchaser of his "Swiss replicas" would be defrauded. In that way, Petitioner participated in and profited from fraudulent, dishonest dealings with full knowledge that he was violating section 831.05(1)(a).
A professional license is not a right, but a privilege granted by the State. Borrego v. Ag. for Health Care Admin., 675
So. 2d 666, 668 (Fla. 1st DCA 1996). An administrative agency such as the Commission has "particularly broad discretion in determining the fitness of applicants who seek to engage in an occupation in the conduct of which is a privilege rather than a right." Dep’t of Banking & Fin. v. Osborne Stern & Co., 670 So. 2d at 934 (quoting Osborne Stern & Co. v. Dep’t of Banking & Fin., 647 So. 2d 245 (Fla. 1st DCA 1994)) (Booth, J., concurring and dissenting). Administrative agencies possess discretion when determining whether an applicant should receive a license, especially when the agency is regulating an occupation which is deemed a privilege rather than a right. Astral Liquors, Inc. v. Dep’t of Bus. & Prof’l Reg., 463 So. 2d 1130, 1132 (Fla. 1985).
Petitioner's criminal history establishes that he has committed dishonest or fraudulent acts and that he continued to pursue his illegal activities well after any reasonable, well- meaning merchant would have ceased. Petitioner failed to fully disclose his criminal record at the time of his application, and he never fully explained two of the offenses found by the Division's CCIS search. Petitioner has offered no credible explanation of his offenses or other evidence of good moral character. The evidence established that at the time of these criminal acts, Petitioner lacked good moral character.
The only remaining question is whether Petitioner proved rehabilitation sufficient to allow a conclusion that the
interest of the public and investors will not likely be endangered by the granting of a license. Petitioner failed to meet this burden of proof. He presented no disinterested witnesses to support his assertions of good moral character, honesty, trustworthiness, and truthfulness. Petitioner's own testimony focused on attempting to rationalize and justify his criminal activities rather than on subsequent good conduct and reputation that might persuade this tribunal of his rehabilitation. Petitioner has been released from supervised probation only within the last two to three years.
Based on all the evidence, it cannot be concluded that Petitioner's being granted a real estate sales associate license poses no danger to the interest of the public and investors.
The Florida Real Estate Commission enter a Final Order denying Petitioner's application for licensure as a real estate sales associate.
DONE AND ENTERED this 14th day of October, 2011, in Tallahassee, Leon County, Florida.
LAWRENCE P. STEVENSON
Filed with the Clerk of the Division of Administrative Hearings this 14th day of October, 2011.
1/ Section 831.05, Florida Statutes, was repealed by section 6, chapter 2008-255, Laws of Florida, effective October 1, 2008.
Chapter 2008-255 enacted sections 831.031 through 831.034, setting forth new offenses regarding the forging or counterfeiting of private labels.
2/ As to Petitioner's last point, it could be said that one might have expected Petitioner not to repeat his past mistakes after his first arrest for selling counterfeit goods, given that Petitioner was 40 years old at that time. (On his application, Petitioner listed his date of birth as December 30, 1961.)
Thomas Barnhart, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399
Jihad K. Akbar
Thomas W. O'Bryant, Jr., Director Division of Real Estate
Roger P. Enzor, Chair Real Estate Commission Department of Business and
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.
