The Issue At issue in this proceeding is whether Respondent Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes, Section of General Regulation has violated Section 120.535 F.S. by adoption of a policy which meets the definition of a "rule" under Section 120.52(16) F.S., without complying with the rulemaking procedures established by Section 120.54 F.S.
Findings Of Fact Petitioner originally applied and was licensed as a yacht and ship salesman in June, 1992. To be a salesman, one must be associated with a licensed broker who prominently displays the salesman's license. On April 15, 1994, Petitioner contacted Respondent agency by telephone to discuss renewal of his salesman's license issued June 3, 1992 and due to expire under its own terms on June 3, 1994. At that time, Kathy Forrester told Petitioner that his file reflected that his license had been "cancelled" effective March 10, 1993 due to a letter received on or about March 1, 1993 from Petitioner's employing broker, Frank Stanzel. Mr. Stanzel's letter showed that he was relocating his business from Miami to Ft. Lauderdale and that he wanted his two salesmen's licenses transferred to the new location. He enclosed with his letter the two salesmen's licenses for agency action, as required by agency rules. Mr. Stanzel further reported that Petitioner had left his employ on October 19, 1992, taking his license with him, so Mr. Stanzel could not return Petitioner's license to the agency. On March 22, 1993, five months after Mr. Stanzel heard the last of Petitioner and approximately three weeks after he notified the agency of Petitioner's leaving his employ, Mr. Stanzel's broker's license expired. Under the terms of the agency rules, Mr. Stanzel was required to apply for a new license. He applied. His broker's license was not renewed retroactively, and his new license became effective August 30, 1993. For approximately five months, from March 22, 1993 to August 30, 1993, Mr. Stanzel was not a licensed Florida broker. Neither Mr. Stanzel nor the Respondent agency notified Petitioner of this fact nor did anyone notify Petitioner at that time that his salesman's license was deemed "cancelled" during the broker's lapse. After finding out for the first time on April 15, 1994 that the agency presumed his salesman's license "cancelled" by Mr. Stanzel's notification that Petitioner had taken his salesman's license and left Mr. Stanzel's employ, Petitioner and his father prevailed upon Mr. Stanzel to execute an affidavit dated May 19, 1994 to the effect that Mr. Stanzel had misunderstood, now believed Petitioner had been diligently working at yacht sales after October 19, 1992, and wanted Petitioner's salesman's license reinstated. The affidavit was submitted to the agency. Although Ms. Forrester had misgivings about the affidavit, the agency reinstated Petitioner's salesman's license effective April 29, 1994, after receiving the affidavit (TR 25-28). The reinstated license still had the original expiration date of June 3, 1994. The agency did not reinstate Petitioner's salesman's license retroactive to October 19, 1992 when Petitioner went into construction work fulltime, to the date of Mr. Stanzel's original broker's license expiration, or to the date of Mr. Stanzel's new broker's license. Petitioner accepted his salesman's license as reinstated. Petitioner did not renew his salesman's license on June 3, 1994, so it expired by its own terms. On July 21, 1994, Petitioner filed an application to be licensed as a yacht and ship broker, together with the required bond, fee, and fingerprints. On August 2, 1994, Peter Butler, Head of the Section of Yacht and Ship Brokers, wrote Petitioner a deficiency notice, explaining that the agency regarded Petitioner's salesman's license "cancelled" during the lapse of his employing broker's license. The agency has no rule which specifically states that when an employing broker's license expires, his salesmen's licenses are automatically cancelled. The language employed in the deficiency notice was, "any salesman licenses held by [the employing broker] were considered cancelled (sic) for that period of time [the period while the employing broker's license was expired/lapsed] because they did not have an actively licensed broker holding their license." [Bracketed material added for clarity.] This language is the focus of this proceeding. The deficiency notice did not refer to the prior "cancellation" of Petitioner's salesman's license based on Mr. Stanzel's March 1, 1993 notice that Petitioner had left his employ effective October 19, 1992. The deficiency notice cited Section 326.004(8) F.S. [1993] which provides: Licensing.- (8) A person may not be licensed as a broker unless he has been a salesman for at least 2 consecutive years, and may not be licensed as a broker after October 1, 1990, unless he has been licensed as a salesman for at least 2 consecutive years. Bob Badger, an agency investigator, submitted a report to Mr. Butler dated September 1, 1994 expressing his opinion that even with Mr. Stanzel's after-the-fact affidavit, Petitioner's salesman's license would have been interrupted by the fact that he had no licensed broker holding his salesman's license during Mr. Stanzel's broker's license lapse of five months. He further concluded that Petitioner's salesman's license was "suspended" for a short period for not renewing his salesman's license bond. After review of the investigation report, on September 19, 1994, the agency issued its Intent to Reject Petitioner's broker's application pursuant to Rule 61B-60.002(6) F.A.C. alluding to the deficiency notice and citing Section 326.004(8) F.S., for Petitioner's failure to complete two consecutive years as a salesman. Section 326.004(14)(a) and (b) F.S. and rules enacted thereunder clearly place on the broker the responsibility of maintaining and displaying the broker's and salesmen's licenses as well as providing for a suspension of a salesman's license when a broker is no longer associated with the selling entity. Typically, salesmen turn in their licenses through the original broker for cancellation by the agency and receive new ones when they move from one broker's oversight to another's. Salesmen who are employed by one broker also switch their salesman's licenses to another active broker whenever the first broker disassociates from a yacht sales company and moves to another company, quits, retires, or lets his broker's license lapse. Due to the common dynamics of the employment situation whereby salesmen are under the active supervision of their employing broker in the company office, they usually know immediately when a broker's license is in jeopardy or the broker is not on the scene and supervising them. This knowledge is facilitated by the statutes and rules requiring that all licenses be prominently displayed in the business location. Anybody can look at anybody else's license on the office wall and tell when it is due to expire. If licensees are in compliance with the statutes and rules, no active salesman has to rely on notification from the agency with regard to the status of his own or his broker's license. In the present case, Petitioner removed himself from all contact with Mr. Stanzel as of October 19, 1992. Therefore, he did not know what was occurring in the office or with any licenses. All agency witnesses testified substantially to the effect that since they have been employed with the agency and so far as they could determine since its inception, agency personnel have relied on Sections 326.002(3), 326.004(8), 326.004(14)(a) and (b) F.S. and Rules 61B-60.005 and 61B-60.008(1)(b) and (c) F.A.C. to preclude licensing someone who has not been actively supervised by a Florida licensed employing broker for two consecutive years. More specifically, agency personnel have always applied Sections 326.004(14)(a) and (b) to place on the broker the responsibility of maintaining and displaying the broker's and salesman's licenses as well as providing for a suspension of the salesman's license when his broker is no longer associated with the sales entity. The agency has always interpreted the word "broker" as used in Chapter 326 F.S. and Chapter 61B-60 F.A.C. to mean "Florida licensed broker." See also, Section 326.002(1) and 326.004(1) F.S. and Rule 61B-60.001(1)(g) F.A.C. These interpretations are in accord with the clear language of the applicable statutes and rules. Petitioner unsuccessfully attempted to show that he had received treatment different than others similarly situated.
The Issue The Petitioner, P & M Transit Company, Inc., d/b/a Jim Walker's Yamaha (hereinafter "Walker") filed an application to relocate its Yamaha dealership. A protest to the application was filed by the Respondent, Suzuki of Hamilton, Inc., d/b/a Daytona Yamaha, U.S.A. (hereinafter "Hamilton"). The basic issue in this case is whether the Walker application should be denied. Underlying issues are (a) whether Section 320.642, Florida Statutes (1987), applies to relocations of existing dealerships and, if so, (b) whether the existing dealers ". . . are providing adequate representation in the community or territory. . . ." (The parties stipulated that there is no issue in this case regarding breach of the dealer agreement by a dealer.) At the hearing, Yamaha Motor Corporation, U.S.A. (hereinafter "Yamaha"), presented the testimony of John Donaldson, an expert in the area of motorcycle dealer network analysis, and offered exhibits 1 through 21, all of which were received into evidence. Hamilton presented the testimony of Alec Mobbs and offered into evidence exhibits A through G. The transcript of the hearing was filed on January 4, 1989, and thereafter Yamaha and Hamilton filed timely proposed recommended orders containing proposed findings of fact and conclusions of law. The parties' proposals have been carefully considered during the formulation of this recommended order. All findings of fact proposed by the parties are specifically addressed in the attached appendix.
Findings Of Fact Based on the evidence received at the hearing, I make the following findings of fact: Petitioner Walker filed an application seeking to relocate its Yamaha motorcycle dealership from 1147 "B" North Dixie Freeway, New Smyrna Beach, Florida 32069, to the location of its Honda-Suzuki Store at 2385 South Ridgewood Avenue, South Daytona, Florida 32019. The new Yamaha location would be approximately nine miles north of the original location and within six miles of Respondent Hamilton's existing dealership. The traffic in the six miles between the proposed new Walker location and the existing Hamilton location is much more dense than the traffic in the nine miles south of the proposed location. The population of Volusia County is separated from the surrounding counties on the north and south, such as to constitute it as a separate community or territory. For purposes of the applicable statutory provisions, the geographic boundaries of the subject "territory or community" are the same as the geographic boundaries of Volusia County. The proposed relocation of Walker is from one point in a territory or community in which he is presently located to another point in that same territory or community. The motorcycle industry is in a decline. Florida currently ranks eighth in the nation in motorcycle sales, which is down from its previous ranking of sixth. Hamilton, the protesting dealer, has owned and operated a successful Yamaha dealership at 324 Eleventh Street, Holly Hill, Florida 32017, since 1983. The dealership is well marked and easily accessible. Although the majority of Hamilton's sales are made to customers who live within five miles of the dealership location, Hamilton considers its market area to be Volusia County. Eleven motorcycle dealerships are currently located in the county. Volusia County's population in 1982-83 was 281,512. In 1987-88 the total was 337,909, for a growth rate of 20 percent. This growth rate is significantly less than Florida as a whole. The typical motorcycle purchaser is aged eighteen to thirty-four. The population of eighteen to thirty-four year olds in Volusia County grew only 16 percent between 1982 and 1988, and, as a percentage of the total population, that age group declined from 25 percent to 24 percent. Hamilton has actively cultivated all of Volusia County as a sales market area since 1983. It spends an average of $17,500 a year advertising on the radio, in newspapers, yellow pages, and participating in various exhibits and mall shows. Hamilton's efforts have been successful. The dealership was a financial disaster when purchased by Hamilton in 1983. But after its first year of operation the dealership showed a profit. The dealership continues to show a profit in the face of a declining industry and a declining market population. Hamilton has over $100,000 invested in his business. Hamilton's store consists of 10,000 square feet in which only Yamaha products are marketed. This is approximately 4,000 square feet larger than the average store. The dealer employs two sales people and three mechanics. Walker has 10,000 square feet for two brands, Honda and Suzuki. If the relocation is permitted, three brands would be housed in the same amount of space Hamilton has for Yamaha alone. Since 1983, Hamilton has probably accounted for the majority of Yamaha sales in Volusia County. In 1983 it sold 163. In 1984 it sold 207. In 1985 it sold 186. In 1986 it sold 139 and in 1987 it sold 122. By the beginning of December 1988, with ten more selling days remaining it had already sold the same as last year's total. Eighty-four percent of all of Hamilton's sales during the last five years were made to customers who lived within a five mile radius of the dealership. In the last two years, 86 percent of total sales were made in the same area. If another dealer were permitted to locate within that radius, the number of sales that Hamilton could reasonably expect to make would probably significantly decrease. Walker's proposed relocation is in the center of the southern half of the majority of Hamilton's sales. Hamilton is an award winning dealer. Yamaha introduced its pacesetter awards program in 1985. There are separate awards for service, parts and accessories, and sales. A dealer receiving all three awards in the same year is named a pacesetter. In 1985, Hamilton won the pacesetter award. In 1986, 1987, and 1988 it won the parts and accessories, and service awards. Hamilton won the service award in spite of intense competition from 20 motorcycle businesses in the Volusia County area. Yamaha has requested Hamilton to perform service warranty work on machines sold by Walker. Hamilton is 17 points above national average in customer service, and at 155 percent of the target sales figures for parts and accessories. Hamilton was chosen by Yamaha as one of only ten dealers in the United States to test market a line of Yamaha clothing. Yamaha attempts to measure the adequacy of sales performance by determining market penetration. Market penetration is determined by adding the total number of motorcycle registrations to the total number of scooter registrations and dividing that total into the total number of Yamaha motorcycle registrations plus the total registrations of Yamaha scooters. All terrain vehicles, ATVs, and motorcross (off road competition dirt) bikes are not included in Yamaha's computation because they are not registered with Florida's Department of Highway Safety and Motor Vehicles. The registration data that Yamaha relies on is compiled by the R.L. Polk Company. Polk purchases the data with which to compile the reports from various state motor vehicle agencies. Polk's reports are based only on vehicle registrations. Therefore the data is not an accurate reflection of sales performance in Florida because ATVs and motorcross bikes are not registered with the State. In addition, registrations reflect only where the motorcycle purchaser lives, not where the unit was purchased. In other words, if a person who lives in Orlando bought a Yamaha in Daytona, that motorcycle registration would show up in a Polk report as an Orlando registration. It is difficult, if not impossible, to accurately evaluate a dealer's sales performance, or representation of its manufacturer, using the Polk data. It is unreasonable to judge Hamilton's representation of Yamaha on a formula based solely on motorcycles and scooters because unregistered vehicles are a large part of Hamilton's sales. Use of registration data also sometimes yields absurd results. For example, Yamaha based their market share of Volusia County for 1985 on 181 vehicles. Hamilton alone sole 186 units that year. Yamaha dealers have had difficulty ordering and maintaining a sufficient supply of machines to sell. Yamaha allocates a certain number of units to each dealer. The allocations are small and made up of mixtures of units that are difficult to sell. On occasion Yamaha has not been able to fill even an allocated order. The manufacturer has also instituted package sales which place small single line dealers such as Hamilton at a distinct disadvantage in the market area. Because of this packaging system, Hamilton was unable to sell any competition machines, a segment of its beach market, in 1988. Overall, there are fewer Yamaha machines available for dealers to buy and retail. The evidence suggests that Florida's "Space Coast" does not purchase motorcycles at a rate commensurate with the rest of the state. In 1985, 1986, and 1987, the only years for which comparable data was introduced, the counties surrounding Volusia (Flagler, Seminole, St. Johns, Orange, Lake, and Putnam) had market percentages below the Florida and national average. Nevertheless, the Florida Yamaha average for 1987 (21.11 percent) was almost achieved in the zip code area in which Hamilton is located. In that area, Yamaha achieved 20.58 percent by registering 14 scooters and motorcycles out of 68 total. Yamaha has never expressed any dissatisfaction with Hamilton's sales performance or representation of the manufacturer. Hamilton was never told to make any changes in its business and never had any indication that it was providing less than adequate sales representation.
Recommendation For all of the foregoing reasons, it is recommended that the Department of Highway Safety and Motor Vehicles enter a final order in this case denying the application of P & M Transit Company, Inc. d/b/a Jim Walker's Yamaha, to relocate its dealership premises. DONE and ENTERED this 6th day of April 1989, in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of April 1989. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 88-3519 The following are my specific rulings on all proposed findings of fact submitted by the parties. Findings proposed by Petitioner, Hamilton: Paragraphs 1 through 10: Accepted. Paragraph 11: Accepted in substance. Paragraphs 12 through 16: Accepted. Paragraph 17: Rejected as constituting primarily argument rather than proposed findings of fact. Paragraphs 18 and 19: Rejected as admittedly inaccurate. Paragraph 20: Rejected as constituting inferences which are not warranted by the evidence; there is insufficient evidence in the record upon which to base the proposed opinion. Paragraphs 22 through 24: Accepted. Findings proposed by Respondent, Yamaha: Paragraphs 1 through 4: Accepted. Paragraphs 5 and 6: Rejected as constituting a discussion of statutory interpretation rather than proposed findings of fact. Paragraph 7: Accepted in substance. Paragraph 8: First sentence accepted. The remainder is rejected as subordinate and unnecessary details. Paragraph 9: Rejected as subordinate and unnecessary details. Paragraphs 10 and 11: Rejected in part as subordinate and unnecessary details and in part as constituting inferences not warranted by the evidence. Paragraphs 12 and 13: Rejected as subordinate and unnecessary details. Paragraph 14: Accepted in substance. Paragraphs 15 and 16: Accepted in substance. Paragraph 17 and 18: Rejected as subordinate and unnecessary details. Paragraphs 19 through 23. Rejected as based on inferences not warranted by the evidence; the Polk data standing alone is simply not a persuasive basis upon which to reach conclusions regarding the scope of the area within which the existing dealers enjoy a "geographic advantage." Paragraph 24: First four lines rejected as based on inferences not warranted by the evidence. Last three lines accepted in substance. Paragraphs 25 and 26: Rejected as contrary to the greater weight of the evidence and as not supported by persuasive competent substantial evidence. Paragraph 27: Rejected as constituting a statement of legal principles rather than proposed findings of fact. Paragraph 28: Rejected as constituting inferences not warranted by the evidence and not supported by competent substantial evidence. Paragraph 29: Rejected as subordinate and unnecessary details; also irrelevant. Paragraph 30: Rejected as constituting inferences not warranted by the evidence. Further, the reasonableness of the proposed standard, without more, is questionable in view of the fact that by simple logic half of the dealers nationwide are performing below the national average. Paragraph 31: Accepted in substance. Paragraph 32: First sentence rejected for same reason as rejection of Paragraph 30. Remainder rejected because the Polk data is not a persuasive basis upon which to draw conclusions regarding market penetration. Paragraphs 33 through 38: Rejected because the Polk data is not a persuasive basis upon which to draw conclusions regarding market penetration. Paragraph 39: First sentence is rejected as irrelevant. Last sentence is rejected as constituting an inference not warranted by the evidence and not supported by competent substantial evidence. Paragraph 40: First sentence is rejected as constituting a legal conclusion not warranted by the evidence. Last sentence rejected as redundant. Paragraph 41: Rejected as constituting argument rather than findings of fact. Paragraphs 42 through 48: Rejected as irrelevant. Paragraphs 49 and 50: Rejected as subordinate and unnecessary details. Paragraph 51: Rejected as constituting subordinate, unnecessary, and irrelevant details. Paragraph 52: Rejected as subordinate, unnecessary, and irrelevant details that are closer to argument than to proposed findings of fact. Paragraphs 53 through 56: Rejected as constituting argument about the evidence rather than proposed findings of fact. COPIES FURNISHED: Dean Bunch, Esquire Rumberger, Kirk, Caldwell, Cabaniss, Burke & Wechsler 101 North Monroe Street Suite 900 Tallahassee, Florida 32301 Linda McMullen, Esquire McFarlain, Sternstein, Wiley & Cassedy 600 First Florida Bank Bldg. Tallahassee, Florida 32301 Michael J. Alderman, Esquire Office of General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Bldg. Tallahassee, Florida 32399-0500 Enoch J. Whitney, Esquire General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Bldg. Tallahassee, Florida 32399-0500 Charles J. Brantley, Director Division of Motor Vehicles Room B-439, Neil Kirkman Bldg. Tallahassee, Florida 32399-0500 =================================================================
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, I hereby make the following Findings of Fact: The Respondent, Holiday Interval Ownership, Inc., is the developer and seller of Ocean 80 Resort, a condominium and time-share plan. Ocean 80 Resort is located in the Florida Keys on U.S. Highway 1, mile marker 80, Islamorada, Florida. Mr. and Mrs. William Seibert II received an advertisement concerning Ocean 80 Resort which promised prospective buyers a free trip to Mexico simply for visiting the condominium and listening to a sales presentation. On May 28, 1983, Mr. and Mrs. Seibert went to Islamorada and visited Ocean 80 Resort. The Seiberts were given a sales presentation by Bonnie Seide, a sales agent for Respondent. Ocean 80 Resort consists of 79 separate units located in one building. There are 8 different types of units, ranging from the Mako units which are efficiencies consisting of approximately 520 square feet, to the Tarpon units which are 2 bedroom, 2 bath units consisting of approximately 1,056 square feet. The Seiberts first listened to a description of the program and facilities of Ocean 80 Resort and then were taken by Bonnie Seide to see a model on the fourth floor. The Seiberts told Ms. Seide that they were only interested in the large Marlin units, which are 2 bedroom, 2 bath units consisting of approximately 944 square feet. The Seiberts were taken to Model Unit 404, a Marlin unit located on the fourth floor. Ms. Seide told the Seiberts that there was a similar unit available on the third floor below. The exact words used by Ms. Seide to describe the third floor unit were not established by the witnesses at the hearing with any degree of persuasiveness. Neither party presented the testimony of Ms. Seide. The Seiberts believed that the "similiar" third floor unit would be located directly beneath the model unit with an identical view of the pool as was enjoyed by the model unit. The model unit was situated in the middle of the corridor, with its balcony directly overlooking the pool. The Seiberts and Ms. Seide went down to the third floor, but were unable to walk down the hall and visit the unit that the Seiberts were to purchase because of construction. The Seiberts and Ms. Seide looked down the corridor towards the unit. There were no numbers on the doors at that time. Even though they were unable to inspect the unit, the Seiberts decided that they would purchase it anyway. The Seiberts then went to the sales office where they entered into a purchase agreement with Respondent for Unit 300, week 52 in Ocean 80 Resort. Although the Seiberts believed that their unit would be located directly beneath the model unit which they were shown, they were apparently unconcerned that the model unit's number was 404 and their unit was numbered 300. The purchase agreement provided that the price of the unit would be $9,270 and that the Seiberts would be entitled to occupancy of the unit during the appropriate week of 1983. The purchase agreement specifically advised the Seiberts of their right to cancel the contract without penalty or obligation within 10 days from the date of signing the agreement. The purchase agreement contained an exclusionary clause in bold print which stated as follows: Oral representations cannot be relied upon as correctly stating the representa- tions of the developer. The developer makes no representations other than those contained in this contract, the offering statement and the condominium documents. Upon entering into the purchase agreement on May 28, 1983, the Seiberts received several condominium documents, including a prospectus text, declaration of condominium, articles of incorporation and a floor plan. Because 1983 was a leap year, week 52 entitled the Seiberts to two weeks occupancy. The Seiberts decided that they would rent out one of the weeks and "spacebank" the other with Resort Condominiums International, Inc., (RCI). RCI is an organization which trades and transfers time share units. The Seiberts were interested in exchanging their unit week for a unit week in another facility in Paris. The Seiberts submitted a form to Ocean 80 Resort indicating that they desired that one of their weeks in 1983 be placed in a rental pool. At some point, the Seiberts were advised by Ocean 80 Resort that their unit would not be ready for occupancy in 1983. Nevertheless, the Respondent mailed the Seiberts a check for $371.02 reflecting a rental fee for the unit. In January of 1984, the Seiberts were advised by RCI that their request to "spacebank" and exchange their unit was denied because the unit was not yet ready for occupancy. A few weeks later, Ocean 80 Resort spacebanked a substitute unit with RCI on the Seiberts' behalf. Because their unit was not completed and ready for occupancy in 1983 and because their initial request to space-bank with RCI had been denied, the Seiberts became increasingly irritated and dissatisfied with Ocean 80 Resort. On March 17, 1984, the Seiberts went to Ocean 80 Resort and visited their unit for the first time. Much to their dismay, the Seiberts discovered, apparently for the first time, that unit 300 was not in the middle of the corridor, directly opposite the pool. Unit 300 afforded a view of the pool, but the unit was located at the end of the corridor directly opposite the roof of a common area. The pool was visible from unit 300 when looking at an angle from the balcony. Although some attempts were made by Ocean 80 Resort to resolve the matter by substituting a different unit, the Seiberts decided that they wanted nothing further to do with Ocean 80 Resort and desired a cancellation of the agreement. The Seiberts have never used their unit at Ocean 80 Resort. Stan Zabetakis received an advertisement for Ocean 80 Resort Condominium in 1983 and went to a sales presentation primarily because he was interested in receiving a promised free trip to Mexico. After listening to the sales presentation, Mr. Zabetakis purchased unit #202, week 2 for a total cost of $5400. On December 29, 1984, Mr. Zabetakis visited Ocean 80 Resort to "take a look around" and spoke with a sales representative. After this discussion Mr. Zabetakis decided to enter into a purchase agreement with Respondent whereby he would trade his current unit in on a larger, more expensive unit. The purchase agreement, signed by both parties on December 29, 1984, reflects that Zabetakis purchased unit 414, week 5 at a total purchase price of $8,500. Zabetakis was credited with $5,400 as equity in his previous unit (202) and the balance of $3,100 was financed with Respondent at 14 percent interest for 5 years, with monthly payments of $72.14. The Purchase Agreement specifically provided that the buyer had the right to cancel the contract without any penalty or obligation within 10 days from the date the contract was signed and executed. On January 6, 1985, Mr. Zabetakis wrote Respondent a letter indicating his desire to cancel the purchase agreement for unit 414, week 5. The Respondent received Mr. Zabetakis' letter of cancellation on January 8, 1985. Initially, Respondent refused to honor Mr. Zabetakis' cancellation and claimed that the letter was not received within the statutory 10 day period. On August 17, 1985, the Respondent changed its position and wrote Zabetakis a letter acknowledging the timely receipt of his letter of cancellation and enclosing a Quit-claim Deed for unit 414, week 5, which Zabetakis was asked to sign and return. However, by this time, Respondent had resold Mr. Zabetakis' original unit week. Further complicating Mr. Zabetakis' dilemma, by the time Respondent agreed to cancel the purchase agreement, the Respondent had sold the note and mortgage to a third-party financial institution. Mr. Zabetakis made his first payment of $72.14 in March 1985 and has made a timely payment of $72.14 each month, up to the date of the final hearing. Because Mr. Zabetakis' original unit and his mortgage note had been sold, he was leery of signing the Quit-claim Deed and did not return it to Respondent.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED that a final order be entered: Assessing a civil penalty of $5,000 against Respondent; and Requiring that Respondent honor the right of Mr. Zabetakis to cancel his contract and receive an appropriate refund. DONE and ORDERED this 31st day of March, 1987 in Tallahassee, Leon County, Florida. W. MATTHEW STEVENSON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of March, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-1765 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner Adopted in Findings of Fact 1 and 2. Addressed in Conclusions of Law section. Partially adopted in Findings of Fact 3, 4, 5, 6, 7, 8 and 9. Sentence 4 is rejected as misleading and contrary to the weight of the credible evidence presented. The credible evidence did not establish that Ms. Seide stated that the similar unit would be located directly below the unit which the Seiberts were shown. Sentence 1 is rejected as contrary to the weight of the credible evidence. Sentences 2 and 3 are rejected as misleading but addressed in Findings of Fact 9 and 10. Sentences 4 and 5 are adopted in substance in Finding of Fact 10 and 11. Sentences 1 and 2 are adopted in substance in Finding of Fact 17. Sentences 3 and 4 are rejected as misleading but addressed in Finding of Fact 18. Sentence 1 is rejected as misleading but addressed in Finding of Fact Sentences 2 and 3 are adopted in substance in Finding of Fact 19. Adopted in Finding of Fact 22. Adopted in Findings of Fact 24, 25, 26 and 27. Rejected as subordinate and/or unnecessary. COPIES FURNISHED: Thomas Presnell, Jr., Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007 John A. Ritter, Esquire 9040 Sunset Drive - Suite 20 Miami, Florida 33173 James Kearney Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1000 Thomas A. Bell, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1000 Richard Coats Director Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1000
The Issue The issue presented herein is whether or not the names Miami Yacht Sales, Inc. and Miami Yacht Brokerage, Inc. are deceptively similar.
Findings Of Fact Based upon my observation of the witness and his demeanor while testifing, documentary evidence received, pleadings and responses, and the entire record compiled herein, I hereby make the following relevant factual findings. On 0ctober 7, 1977, Respondent, Division of Corporations, issued Charter number F40099 permitting the use of the corporate name Miami Yacht Sales, Inc. to the Petitioner in reliance on Chapter 607, Florida Statutes. On January 3, 1984, Respondent, Division of Corporations, issued Charter number 087231 permitting, the `use of the corporate name Miami Yacht Brokerage, Inc. to the Respondent in reliance on Chapter 607, Florida Statutes. Petitioner is engaged in the business of selling new and used boats and yachts. Petitioner conducts its business at 2122 N. River Drive, Miami, Florida. Petitioner, through its president, Larry Stevens, related one incidence of a telephone communique from Merrill Stevens Brokerage, a competitor which was seeking information respecting one of Respondent, Miami Yacht Brokerage, Inc., salesmen. Mr. Stevens also related at least one instance wherein a supplier misdelivered a package which was destined for the Respondent's business, end Petitioner rerouted that package to Respondent. Petitioner, through Mr. Stevens, generally alluded to "confusion, client-wise" which he believed would continue as soon as Respondent, Miami Yacht Brokerage, Inc., was able to get an advertisement in the Yellow Pages of the Miami telephone directory. Petitioner pointed to no specific acts of confusion or other deceptive practices by Respondent, Miami Yacht Brokerage, Inc.. example, Petitioner did not substantiate that any of its customers went to the Respondent's business and had to ultimately be directed to Petitioner's business. Likewise, Petitioner did not allege or otherwise claim that the name Miami Yacht Brokerage, Inc. was selected by Respondent based on an attempt to deceive or otherwise defraud the consuming public. As stated herein, Respondent, Miami Yacht Brokerage, Inc., did not appear at the hearing herein although it was properly noticed by copy of a notice of hearing filed May 28, 1984 scheduling this matter for hearing on June 28, 1984. However, the evidence reveals that Respondent, Miami Yacht Brokerage, Inc., is also engaged in the business of selling new and used boats and yachts and its business is situated approximately four miles from Petitioner's business site.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is therefore recommended that the petition of Miami Yacht Sales, Inc., seeking to forbid the use by the Respondent of the name Miami Yacht Brokerage, Inc., be DENIED. Recommencded this 13th day of November, 1984, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of November, 1984.
The Issue The issues in these two cases are whether Respondent violated provisions of chapter 475, Florida Statutes (2015),1/ regulating real estate sales brokers, as alleged in the Administrative Complaints, by (1) failing to return a rental deposit to a potential tenant; (2) serving as the qualifying broker for Friendly International Realty, Inc. (“Friendly”), but failing to actively supervise Friendly’s operations and/or sales associates; failing to preserve Friendly’s transaction records and escrow account documents; and (4) acting in a manner that constitutes culpable negligence or a breach of trust. If there was a violation, an additional issue would be what penalty is appropriate.
Findings Of Fact Parties The Department is the state agency that regulates the practice of real estate pursuant to section 20.165, and chapters 455 and 475, Florida Statutes. Ms. King is a licensed real estate broker registered with the Department (license numbers BK 3203595, 3261628, 3293588, 3306619, 3335771, 3354773, and 3363985). Ms. King is registered with the Department as the qualifying broker for 16 brokerages located throughout the state of Florida. At all times relevant to this case, Ms. King’s registered address with the Department was 4430 Park Boulevard North, Pinellas Park, Florida 33781. Friendly International Realty, LLC Friendly was a Florida licensed real estate corporation, holding license number CQ 1040825. Records reflect that James Berthelot was the registered agent for Friendly at the time of incorporation, June 2011. At all times relevant, Mr. Berthelot was a licensed Real Estate Sales Associate (license number SL 3226474) registered with Friendly. In May 2014, Respondent drafted and entered into a Limited Qualifying Broker Agreement (“Broker Agreement”) with Friendly and its owner, Ivania De La Rocha.2/ Friendly and Ms. King entered into the Broker Agreement, “in order to comply with the requirements of the Florida Department of [Business and] Professional Regulation.” Under the terms of the Broker Agreement, Respondent was not paid by Friendly per transaction. Rather, Respondent agreed to serve as the “Corporate Broker of Record” in exchange for a payment of $300 a month “as a flat fee for any and all real estate business conducted by [Friendly].” The Broker Agreement also provided for a “late fee” penalty if Friendly was delinquent in this monthly payment. Section 1.1 of the Broker Agreement outlined Respondent’s duties to Friendly, requiring her to: (1) keep her and Friendly’s licenses active and in good standing under Florida law; (2) keep her other business interests separate from those involving Friendly’s interests; and (3) provide Friendly notice of any governmental inquiry involving her serving as Friendly’s broker. There was no mention in the Broker Agreement of either Respondent’s or Friendly’s responsibilities regarding oversight of transactions, training for sales associates, or day-to-day operations. Regarding document retention, the Broker Agreement provided: Section 9.0 AUDIT & REVIEW RIGHT: Broker shall have the right to enter [Friendly’s] offices upon reasonable advance written notice to verify compliance with the real estate laws of the State of Florida. There was no evidence that Ms. King ever provided Friendly with the kind of notice described in section 9.0 of the Broker Agreement. Although the Broker Agreement did not prohibit Friendly from holding funds or assets on behalf of third parties, section 10.0 (Miscellaneous) explicitly prohibited Friendly from operating an escrow account. (g) Escrow and Ernest Money Accounts. [Friendly] shall not be permitted to hold any escrow account(s). On July 31, 2014, Ms. King was registered with the Florida Department of State, Division of Corporations, as “manager” of Friendly. Ms. King was the qualifying broker for Friendly (license number BK3303898) from August 6, 2014, through September 30, 2015, and November 4, 2015, through January 13, 2016.3/ During the time Ms. King served as the qualifying broker, Friendly operated from a number of addresses in Miami- Dade County, including 11900 Biscayne Boulevard, Suite 292, Miami, Florida 33181; and 2132 Northeast 123rd Street, Miami, Florida 33181. The office door of the Friendly office located on Northeast 123rd Street was painted in large letters, “FRIENDLY INTERNATIONAL REALTY” and “ALICIA KING” painted underneath. At the hearing, when asked about Friendly’s address, Ms. King could only confirm that when she became the broker the office was “on Biscayne.” The Biscayne Boulevard address is the one listed on the Broker Agreement. At the hearing, Ms. King was wrong about when the Friendly office had moved from the Biscayne Boulevard to the Northeast 123rd Street location, insisting it was over the Christmas holidays in 2015. Records establish Friendly moved from the Biscayne Boulevard location to the Northeast 123rd Street location sometime between April and July 2014. In January 2016, Ms. King believed the office was still on Biscayne Boulevard. In reality, it had been over a year since the office had relocated to that location. At the hearing, when asked by her own counsel how many transactions a month Friendly handled, Ms. King replied, “That’s hard to say. It was not many at all. Ten, maybe.” Respondent could not give the exact number of employees or sales associates affiliated with Friendly; when asked, she stated she could not remember the exact amount, but knew it was “very limited.” Respondent did not have any agreements or documentation related to how many sales associates were registered under her broker’s license. Respondent could not name any other sales associates affiliated with Friendly while she was the qualifying broker, except for Mr. Berthelot. While she was Friendly’s qualifying broker, Respondent did not perform any of the training for the sales associates at Friendly. Respondent did not have any face-to-face meetings with any Friendly sales associates, except for Mr. Berthelot. Respondent did not have phone or e-mail contact with any of the Friendly sales associates, except for Mr. Berthelot. Respondent did not have copies of any forms, handbooks, reports or files related to Friendly. All of these documents were in paper form and kept in the Friendly office. Respondent had no access or signatory authority for any of Friendly’s bank accounts. Natalie James was a registered real estate sales associate affiliated with Friendly for approximately five months, from November 2015 through March 2016. Ms. James worked out of the Friendly office and was physically present at the office at least three or four times a week. Ms. James was involved in several rentals and one sales transaction while at Friendly. For each transaction she assembled a file, which was kept in the Friendly office. For rental transactions, Ms. James would negotiate and facilitate lease agreements. When she represented potential tenants, she received deposit funds that she deposited with Friendly. Ms. James attended meetings at Friendly; Ms. King was not present at any of them. Ms. James never had any telephonic, electronic, personal, or other contact with Respondent. While at Friendly, neither Mr. Berthelot nor any of Ms. James’ co-workers mentioned Ms. King to Ms. James. Although Ms. King’s name was on the door of Friendly’s office, Ms. James was unaware Ms. King was Friendly’s broker. There was conflicting testimony as to how often Respondent visited the Friendly office. Ms. King’s testimony at the hearing was at odds with the Department’s evidence and testimony regarding this issue. Ms. King insisted that while she was Friendly’s broker, she would travel from Pinellas Park to the Friendly office once or twice a week. This was not believable for a number of reasons. First, had Ms. King visited Friendly’s office as often as she stated, she would have known about the change in location; she did not. Second, Ms. King could not give one concrete date or detail about her travels to the Friendly office. Third, and most compelling, was the testimony of Ms. James (who worked at Friendly for at least two months while Ms. King was its broker) that she had never seen, communicated with, or heard mention of Ms. King while at Friendly. Ms. James’ unbiased and compelling testimony alone supports a finding that Ms. King did not visit the Friendly office as frequently as she indicated. Ms. King was aware that Friendly and Mr. Berthelot provided rental or “tenant placement” services.4/ Friendly collected security deposits and other move-in funds from potential renters and held them in an escrow account. Ms. King was not aware Friendly had an escrow account until January 2016 when she was contacted by the Department in an unrelated case. On January 13, 2016, Respondent resigned with the Department as the qualifying broker for Friendly effective that same day. On January 14, 2016, Respondent filed a complaint with the Department against Mr. Berthelot for operating an escrow account and collecting deposit funds without her knowledge. Facts Related to the Viton Case In November 2015, during the time Ms. King was Friendly’s qualifying broker, Christian Viton signed a lease agreement to rent an apartment located in Miami at 460 Northeast 82nd Terrace, Unit 8 (“Viton transaction”). The Viton lease agreement listed Friendly as the holder of the deposit monies and required Friendly to transfer the deposit and move-in funds to the owner of the property. Pursuant to the terms of the Viton lease agreement, Mr. Viton remitted an initial deposit of $500, and received a written receipt from Friendly dated November 2, 2015. Mr. Viton gave Friendly a second deposit of $380, and received a written receipt dated November 4, 2015. Mr. Viton never moved into the apartment and demanded a refund of his deposit from Friendly. On December 8, 2015, Friendly issued a check to Mr. Viton in the amount of $530. Three days later, Friendly issued a stop-payment order on the $530 check to Mr. Viton. On February 29, 2016, Mr. Viton filed a complaint with the Department seeking a return of the $880 he had given to Friendly. As a result, the Department initiated an investigation into Mr. Viton’s complaint and contacted Respondent. Upon learning about the Viton complaint, Ms. King contacted Mr. Berthelot who admitted Friendly had stopped payment on the $530 refund check, but had reissued the full amount of the deposit to a third-party not named on the lease. There is no evidence Mr. Viton ever received a refund of his $880 deposit. Facts Related to Dorestant Case In June 2015, during the time Ms. King served as Friendly’s qualifying broker, Cindy Dorestant entered into a lease agreement to rent a condominium located at 1540 West 191 Street, Unit 110 (“Dorestant transaction”). In the lease, Friendly was listed as the “broker” and holder of the deposit; TIR Prime Properties (“TIR”) was listed as the owner’s agent. The Dorestant lease agreement required Friendly to transfer the deposit and move-in funds collected from Ms. Dorestant to TIR. Pursuant to the terms of the Dorestant lease agreement, Ms. Dorestant gave Friendly $1,050 as an initial deposit, and received a written receipt dated June 24, 2015. In late July 2015, Ms. Dorestant contacted TIR’s property manager and sales agent to ask for information about the status of her move into the condominium. TIR explained to Ms. Dorestant that Friendly had not conveyed any of monies collected from Ms. Dorestant to TIR. Both Ms. Dorestant and TIR attempted to contact Friendly, but Friendly was non-responsive. The TIR sales associate relayed this information to TIR’s broker, Mariano Saal, who in turn tried to reach Friendly to resolve the issue. Eventually, TIR was told by Mr. Berthelot that Friendly would release the move-in funds to TIR and that Mr. Berthelot would schedule the move-in. TIR did not receive any funds from Friendly, nor did Mr. Berthelot facilitate Ms. Dorestant’s move into the condominium. On August 31, 2015, Mr. Saal contacted Mr. Berthelot and informed him that if TIR did not receive the move-in funds for the Dorestant transaction by 5:00 p.m. that day, it would be required to find another tenant. Ms. Dorestant did not move into the condominium and demanded a refund from Friendly and TIR. On September 14, 2015, Mr. Saal sent an e-mail to what he believed was Respondent’s address, demanding the $1,050 from Friendly because it considered Ms. Dorestant’s failure to move into the property a default of the lease agreement. Respondent, however, did not have access to Friendly’s e-mails. The e-mail was also sent to Mr. Berthelot, and Ms. De La Rocha. TIR did not receive any funds from Friendly for the Dorestant transaction. After discovering she could not move into the condominium because Friendly had not transferred the deposit to TIR, Ms. Dorestant demanded a refund of her deposit monies from Friendly. She did not receive it. On February 10, 2016, Mariano Saal, TIR’s qualifying broker, filed a complaint against Mr. Berthelot and Friendly with the Department regarding the Dorestant transaction. Ms. Dorestant initially did not receive a refund from Friendly and, therefore, filed a police report against Mr. Berthelot and sued him in small claims court. Eventually, Mr. Berthelot refunded Ms. Dorestant her deposit monies. Department Investigations of Friendly Upon receiving the Viton complaint, the Department assigned the case (DPBR Case No. 2016018731) to Erik Lluy, an Investigator Specialist II in the Miami field office. Similarly, on or around the same time the Department received the Dorestant complaint; it was also assigned to Mr. Lluy (DPBR Case No. 2016018069). On April 25, 2016, Mr. Lluy officially notified Ms. King of each of the complaints. On May 25, 2016, the Department transferred both the Viton and Dorestant complaints from Mr. Lluy to Percylla Kennedy. Ms. King provided a written response to both complaints via e-mail to Mr. Lluy on May 26, 2016. At that time, Mr. Lluy indicated the case had been transferred to Ms. Kennedy and copied Ms. Kennedy on the response. Ms. Kennedy was familiar with Friendly, Mr. Berthelot and Ms. King. In January 5, 2016, she had conducted an investigation of Friendly in an unrelated complaint filed against Friendly by Borys Bilan (“Bilan complaint”). As part of the investigation into the Bilan complaint, Ms. Kennedy arrived at the Friendly office address registered with the Department on Biscayne Boulevard to conduct an official office inspection. When she arrived, however, she found the office vacant. As a result, that same day Ms. Kennedy contacted the registered qualifying broker for Friendly–-Ms. King-–by phone. During that call, Ms. Kennedy asked Ms. King where Friendly’s office was located, but Ms. King did not know. Eventually, Ms. Kennedy determined the Friendly office had relocated to the Northeast 123rd Street location. Ms. Kennedy testified that during this call, Ms. King admitted to her that she had not been to the Northeast 123rd Street location. Respondent testified she did not tell Ms. Kennedy this and as proof insisted that the January call was inconsequential and “a very short call.” The undersigned rejects Respondent’s version of events and finds Ms. Kennedy’s testimony and report regarding the January 2016 interview more reliable. First, although Ms. King describes the conversation as occurring on January 7, 2016, both Ms. Kennedy’s testimony and the Inspection Report establish the conversation occurred on January 5, 2016. Second, Respondent’s characterization of the call as inconsequential contradicts her own May 26, 2016, written response to the Department in which Ms. King outlines a number of substantive issues discussed during this phone conversation, including: the nature of Friendly’s practice, whether Friendly had an escrow account, the type of payment accepted by Friendly, and the address of Friendly’s office. After speaking with Ms. King about the Bilan complaint, Ms. Kennedy conducted the inspection at Friendly’s Northeast 123rd Street location. Respondent was not present when Investigator Kennedy conducted the office inspection. Ms. Kennedy then e-mailed the Office Inspection form to Respondent. As a result of the January 5, 2016, phone conversation with Ms. Kennedy, Ms. King contacted Mr. Berthelot about the Bilan complaint. On January 13, 2016, Mr. Berthelot provided Ms. King with the transaction file related to the Bilan complaint. When Ms. King reviewed the lease agreement, she realized that Friendly was holding deposit funds in escrow. As a result, on December 13, 2016, Ms. King filed a resignation letter with the Department explaining she was no longer the qualifying broker for Friendly. Ms. King did not ask Mr. Berthelot or anyone else at Friendly for any other transaction records at this time, nor did she make any effort to review any of Friendly’s transaction files to determine whether Friendly had obtained other deposit funds or conducted other transactions similar to the one that was the subject of the Bilan complaint. After having knowledge of the Bilan complaint and transaction, and suspecting Friendly had been operating an escrow account, Ms. King made no immediate effort to access the operating or escrow bank accounts or reconcile the escrow account. After resigning as Friendly’s qualifying broker with the Department, Ms. King filed a complaint with the Department against Mr. Berthelot for unlicensed activity involving an escrow deposit.5/ Despite no longer being Friendly’s qualifying broker, on January 21, 2016, Ms. King executed and sent back to Ms. Kennedy the Inspection Report related to the Bilan complaint. Five months later, on or around May 25, 2016, Ms. Kennedy notified Ms. King she was taking over the investigation into the Viton and Dorestant cases. Ms. Kennedy testified that as part of her investigation into the Viton and Dorestant complaints, she interviewed Respondent again. Respondent denies she was interviewed by Ms. Kennedy regarding the Viton and Dorestant complaints, and instead insists she was only interviewed in January 2016 in connection with the Bilan complaint. Ms. King testified she believed Ms. Kennedy lied about interviewing her more than once because Ms. Kennedy was “lazy.” The undersigned rejects this assertion. Ms. Kennedy’s testimony was specific, knowledgeable, and credible, unlike Ms. King’s testimony, which was intentionally vague. Moreover, Ms. Kennedy specifically attributes her findings to specific sources such as Ms. King’s written response, her interview with Ms. King relating to the Viton and Dorestant transactions, and to her previous conversation with Ms. King during the Bilan investigation. The citations to information gleaned from the January 5, 2016, call were marked by the following sub-note. SUBJECT was previously interviewed by this Investigator in January 2016 for the unrelated complaint and was unaware that FRIENDLY INTERNATIONAL REALTY LLC had moved from license location 11900 Biscayne Blvd.[,] Suite 292 Miami, FL 33181 to 2132 NE 123ST[,] Miami, FL 33181 (See Ex. 9). At that time, SUBJECT was unable to provide the transaction file. Ms. Kennedy would have no reason to fabricate the source of the conclusions she reached in her report or the number of times she contacted Ms. King. Ms. Kennedy submitted her original investigative report to the Department for the Viton complaint on October 31, 2016. Per the Department’s request, Ms. Kennedy interviewed Mr. Viton and submitted a supplemental report on December 13, 2016. In this report, Ms. Kennedy determined that on February 25, 2016, Friendly issued a check in the amount of $875 to a person who was not listed on either the lease agreement, the receipts Friendly issued to Mr. Viton, or any other paperwork. Similarly, Ms. Kennedy submitted her original investigative report to the Department for the Dorestant complaint on October 31, 2016. Per the Department’s request, Ms. Kennedy interviewed Ms. Dorestant and submitted a supplemental report on December 13, 2016, indicating Ms. Dorestant did eventually receive a refund. During the course of the Viton investigation, Mr. Lluy and Ms. Kennedy requested that Respondent provide the Department with the file related to the Viton transaction, and documentation for Friendly’s escrow account. Although Respondent provided the Department a response (consisting of a written explanation with a copy of the Bilan file and some communications between Mr. Berthelot and herself from May 2016), she did not provide the Department with the transaction file related to the Viton transaction or Friendly’s escrow account documentation. During the course of the Dorestant investigation Mr. Lluy and Ms. Kennedy requested that Respondent provide the Department with the file related to the Viton transaction, and documentation for Friendly’s escrow account. Although Respondent provided the Department a response (consisting of a written explanation with a copy of the Bilan file and some communications between Mr. Berthelot and herself from May 2016), she did not provide the Department with the transaction file related to the Dorestant transaction or Friendly’s escrow account documentation. Professional Standards Mr. Saal, TIR’s qualifying broker, testified he had served as a broker for approximately ten years. As TIR’s qualifying broker, he kept the documentation related to the transactions handled by TIR’s six sales associates. The testimony of the TIR sales associate and property manager established that they relied on Mr. Saal for advice and to resolve issues. For example, when Ms. Dorestant began contacting TIR’s sales associate and property manager regarding the move-in and then for a refund of her deposit, the sales associate went to Mr. Saal to discuss the situation. Mr. Saal then attempted to resolve the issue by attempting to communicate with Friendly, Mr. Berthelot and Ms. King. Mr. Trafton, an experienced real estate broker and expert in brokerages, reviewed the Department’s investigative files and reports relating to the Viton and Dorestant complaints, as well as applicable Florida Statutes and rules. Mr. Trafton’s testimony and report established that in Florida the usual and customary standard applicable to brokers is that they must promptly deliver funds in possession of the brokerage that belong to others. Petitioner showed that Mr. Viton was entitled to a refund of his deposit from Friendly and that Respondent erred in not ensuring he received this refund. Mr. Trafton also testified that the standard of care applicable to a broker in supervising sales associates requires active supervision. “Active supervision” is not defined by statute or rule, but by usual and customary practices exercised statewide. “Active supervision” requires a broker to: have regular communications with all sales associates, not just communicating when there is a complaint; be aware of problems, issues and procedures in the office and among sales associates; have access to and signatory power on all operating and escrow accounts; hold regular scheduled office/sales meetings; conduct in–person training meetings; provide guidance and advice for sales associates; be intimately involved in how transaction forms and other documents are stored and retrieved; and be available to provide advice and direction on short notice. In other words, a broker should set the tone at the brokerage by overseeing her sales associates’ conduct of transactions. Ms. King failed to manage, direct, and control her real estate sales associate, Mr. Berthelot, to the standard expected of a qualifying broker in both the Viton and Dorestant transactions, if not all of Friendly’s transactions. She did not actively supervise Mr. Berthelot as a sales associate. Mr. Trafton also testified that a broker, not the brokerage, is ultimately responsible for preserving transaction files, forms related to transactions, and other related documents. Although less certain than Mr. Trafton about whether a broker or the brokerage firm is responsible for preservation of transaction files, Mr. Saal testified “the broker is responsible for the . . . transactions. It’s [the broker’s] client at the end of the day.” Ms. King failed to preserve accounts and records relating to Friendly’s accounts, the files related to the Viton and Dorestant rental transactions, or any other documents related to Friendly. Petitioner also clearly established that Respondent was guilty of either “culpable negligence” or “breach of trust” in the Viton or Dorestant transaction. As Investigator Kennedy testified, and as corroborated by cost summary reports maintained by the Department, from the start of the investigation of the Viton complaint through September 14, 2017, the Department incurred $1,625.25 in costs, not including costs associated with an attorney’s time. As Investigator Kennedy testified, and as corroborated by cost summary reports maintained by the Department, from the start of the investigation of the Dorestant complaint through September 14, 2017, the Department incurred $1,608.25 in costs, not including costs associated with an attorney’s time.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Florida Real Estate Commission: Case No. 17-3989 Finding Respondent Alicia Faith King in violation of sections 475.25(1)(d)1., 475.25(1)(u), 475.25(1)(e), and 475.25(1)(b), as charged in Counts I through IV of the Administrative Complaint in the Viton case. Imposing an administrative fine totaling $2,500 ($500 fine per count for Counts I, II and III; and $1,000 fine for Count IV). Imposing license suspension for a total period of nine months (one-month suspensions each for Counts I, II, and III; and a six-month suspension for Count IV). Imposing costs related to the investigation and prosecution of the case in the amount of $1,625.25. Case No. 17-3961 Finding Respondent Alicia Faith King in violation of sections 475.25(1)(u), 475.25(1)(e), and 475.25(1)(b), as charged in Counts I through III of the Administrative Complaint in the Dorestant case. Imposing an administrative fine totaling of $2,000 ($500 fine per count for Counts I and II; and $1,000 fine for Count III). Imposing license suspension for a total period of eight months to be imposed consecutive to the suspension in Case No. 17-3989 (one-month suspensions each for Counts I and II; and a six-month suspension for Count III). Imposing costs related to the investigation and prosecution of the case in the amount of $1,608.75. DONE AND ENTERED this 25th day of January, 2018, in Tallahassee, Leon County, Florida. S HETAL DESAI 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 25th day of January, 2018.
The Issue The Administrative Complaint alleges that the Respondents are guilty of fraudulently withholding a commission and failing to account for said commission. The Respondents contend that there was no commission owed to the salesperson because the salesperson did not obtain the listing contract upon which the transaction closed and had been discharged for cause before a contract for purchase was obtained. The factual issues upon which the case is determined is whether the listing contract upon which the transaction closed was obtained by the salesperson who claimed the commission, and whether the contract for purchase was received before the salesperson was discharged for good cause. Both parties submitted posthearing findings of fact, which were read and considered. Those findings not incorporated herein are found to be either subordinate, cumulative, immaterial, unnecessary, or not supported by the evidence.
Findings Of Fact At all times relevant to the allegations of the Administrative Complaint and at the time of hearing, the Respondent, Jacqueline B. Ousley, held real estate broker's license number 0333339 and operated the Respondent corporation, Touch of Class Realty, Inc., which held corporate real estate broker's license number 0218522. Both licenses were issued by the Florida Real Estate Commission. (See Petitioner's Exhibit 1.) Diane Carroll was employed by the Respondents as a real estate salesperson from February to June l2, 1982. On June 13, 1982, Ms. Carroll was discharged for good cause by the Respondents. On May 25, 1982, Ms. Carroll obtained an open listing on the Breezeway Motel, 2001 North Dixie Highway, Lake Worth, Florida, from Carl C. Summerson. This listing was good through June 25, 1982. (See Petitioner's Exhibit 2.) Based upon this contract, the Respondents showed the property to prospective buyers, to include Anthony and Deborah Hedley, the ultimate purchasers of the property. However, after the Hedleys had become interested in the property, the Respondents became aware that Summerson was not the sole owner of the Breezeway Motel. Because of the interest of the Hedleys and the prospects of selling the property, the Respondents sought and obtained an exclusive listing agreement from both owners of the motel, Carl Summerson and Roy Chapin, which was signed on June 14, 1982. As an exclusive listing, this contract supplanted the open listing obtained by Ms. Carroll on May 25, 1982. The Respondents obtained an offer to purchase the Breezeway Motel from the Hedleys on June 16, 1982, which offer was accepted by Summerson and Chapin. This transaction closed, and the Respondents received one-half of the ten percent commission, $33,800. The custom of the profession is that salespersons earn a listing commission on a listing contract obtained by them while they were employed if a contract for the purchase of the property is obtained before the salesperson leaves the broker's employment. The Respondents tendered a "referral fee" of $845 to Ms. Carroll, as opposed to a salesperson's share of the commission which was $5,070. Ms. Carroll has a civil action pending, seeking to obtain payment of the commission.
Recommendation Having found the Respondents not guilty of violating Sections 475.25(1)(b) and (d), Florida Statutes, as alleged in the Administrative Complaint, it is recommended that the Florida Real Estate Commission dismiss the Administrative Complaint against the Respondents, Jacqueline B. Ousley and Toch of Class Realty, Inc. DONE and RECOMMENDED this 3rd day of October, 1983, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of October, 1983. COPIES FURNISHED: Fred Langford, Esquire Department of Professional Regulation 400 West Robinson Street Orlando, Florida 32801 Donald P. Kohl, Esquire 3003 South Congress Avenue, Suite 1A Palm Springs, Florida 33461 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff, Executive Director Florida Real Estate Commission 400 West Robinson Street Orlando, Florida 32801 Randy Schwartz, Esquire Department of Legal Affairs 400 West Robinson Street, Suite 212 Orlando, Florida 32801 =================================================================
The Issue Whether Respondent acted as a yacht broker in Florida without holding a yacht broker's license issued by petitioner?
Findings Of Fact Respondent, presently retired, was formerly employed with Sun Yacht Charters located in Camden, Maine. He has never been licensed by the State of Florida as a yacht and ship salesperson or broker. Respondent attended the 57th Annual Miami International Boat Show and Strictly Sail (boat show) held February 12-18, 1998. Respondent was in attendance at the Sun Yacht Charters Exhibit Booth, a booth in the Strictly Sail portion of the boat show. Investigators and other Petitioner employees regularly attend this specific boat show in order to find unlicensed activity, such as selling and brokering of regulated yachts by persons not holding valid salesperson or broker’s licenses. On February 13, 1998, Petitioner investigators James Courchaine and Peter Renje attended the boat show. They carried fictitious business cards with false names and the designation "Yacht Consultant" on the cards. Courchaine’s fictitious name was James K. Ramson. Renje’s card bore the name Pete Benson. While walking through the Strictly Sail portion of the show, the investigators saw the booth for Sun Yacht Charters and Respondent. Respondent’s name tag read "Pat Raum." Outside the tent, the two investigators checked their list of licenses and did not find Pat Raum’s name listed. Although a license is not required in the sailboat portion of the show, Courchaine, posing as James K. Ramson, went back into the show and introduced himself to Respondent, handing him the fictitious business card with the name James K. Ramson, Yacht Consultant, displayed on it. Courchaine, a/k/a Ramson, inquired of Respondent that he was looking for a boat for a client for an outright purchase for a client. Courchaine asked if there were any boats for sale through Sun Yacht Charters. Respondent replied that sometimes people in their charter program wanted to sell a boat and that Sun Yacht Charters would sell it for them. He gave Courchaine his business card identifying himself as Pat Raum, Director of Yacht Sales for Sun Yacht Charters. The business address on the card was Camden, Maine. Respondent also gave Courchaine a specifications sheet on the Southern Belle, destined to come out of the charter program in April of 1998. The specifications sheet listed an asking price of $9,000 for the boat. From conversations he had with Petitioner's employees at a previous time when he discussed obtaining a Florida license, Respondent understood that Florida law did not permit him to sell or purchase yachts in Florida as an owner's agent. On February 17, 1998, following contact with Sun Yacht’s Camden office, Courchaine learned that Respondent was still in Florida. Courchaine contacted Respondent and asked for a contract. Believing that he was dealing with a licensed Florida Yacht broker, Respondent agreed to what he thought was an appropriate arrangement between himself and Courchaine whereby the sale of the Southern Belle would involve a 30/70 split on the commission from the sale. Respondent later confirmed to Courchaine in a fax message that same day that Courchaine, a/k/a Ramson, would get three percent of the sales commission. Also, he included in the fax to Courchaine a blank Yacht Purchase and Sale agreement. It was Respondent’s understanding that in the event of a sale, the matter would have to be handled by Courchaine a/k/a Ramson, or another Florida broker, that he, Respondent could not act as a broker in Florida.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Petitioner enter a final order dismissing the notice to show cause. DONE AND ENTERED this 28th day of May, 1999, in Tallahassee, Leon County, Florida. DON W. DAVIS 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 28th day of May, 1999. COPIES FURNISHED: Kathryn E. Price, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Pat Raum Post Office Box 302 Kennebunkport, Maine 04046 Philip Nowick, Director Division of Florida Land Sales, Condominiums and Mobile Homes Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 William Woodyard, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
