The Issue The issue at the hearing was whether Petitioner is entitled to an award of attorney's fees and costs pursuant to Section 57.111, Florida Statutes and Rule 22I-6.035, Florida Administrative Code.
Findings Of Fact Petitioner is the sole proprietor of an unincorporated business engaged in the real estate brokerage business. Petitioner's principal office is located in Niceville, Florida. Petitioner's business does not employ more than twenty- five (25) full-time employees and has a net worth not exceeding $2,000,000.00. In DOAH Case No. 88-3758, the Department of Professional Regulation, Division of Real Estate, filed an Administrative Complaint dated June 23, 1988. The Administrative Complaint alleged that the Petitioner was guilty of having failed to account and deliver to any person at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery, deposit, draft or other documents or things of value, which has come into his hands and which is not his property or which he is not in law or equity entitled to retain, under the circumstances in violation of Subsection 475.25(1)(d), Florida Statutes. The facts allegedly supporting the Administrative Complaint were Petitioner's failure, after entry of a County Court Judgment, to return a sum of money to the potential buyers of Petitioner's own house. The money was received by Petitioner and retained by Petitioner in a transaction involving the sale of his own home. The transaction did not involve Petitioner as a broker and did not involve Petitioner as an escrow agent. The escrow agent specified in the contract was another real estate company. The Administrative Complaint was based on the Board's determination of probable cause at its meeting on June 21, 1988. At that meeting, Mr. Fred Wilson, Chief Staff attorney for the Division of Real Estate, presented the case to the probable cause panel. The presentation of the case was wholly based on the investigative file developed by DPR's investigator. A review of that investigative file and the transcript of the probable cause proceeding does not support a finding of probable cause in this case. In order to support such a finding, the evidence considered by the Board must disclose that there is a reasonable basis in law and fact for the agency to proceed with its intended action. In this case, The agency's intended action was to clearly and convincingly establish that the licensee failed to account and deliver escrowed property to the person entitled to such property in violation of Section 475.25(1)(d), Florida Statutes and in light of the controlling law in this area as set forth in Fleischman v. Department of Professional Regulation, 441 So.2d 1121 (Fla. 3d DCA 1983). It is clear that from the inception of these proceedings, the facts which drove the prosecution of this case were that a sale of real property was involved along with an unpaid civil court judgment and a buyer's check with the words "house down payment" written in the space for memos on the check. The investigative report did not contain any facts supporting an escrow between Petitioner and his potential buyers. Nor, did the report contain any facts which established that Petitioner acted as a real estate broker in the transaction involving his house. The investigative report seems to be more concerned with collection of the judgment debt than with ascertaining facts crucial to the determination of a violation in this case. As such, the Division did not have a reasonable basis in law and fact at the time it initiated the action against Petitioner and therefore said proceeding was not substantially justified. After hearing, a Recommended Order was entered on April 11, 1989, recommending dismissal of the Administrative Complaint. The recommendation was based on findings that the Petitioner, Nevin H. Nordal, was acting as the seller of his own property and not as a broker in the transaction in question and that the sum of money received by the Petitioner was not properly escrowable property. Additionally, the recommendation was based on conclusions of law that Subsection 475.25(1)(d), Florida Statutes, the subsection under which the Petitioner was charged, only applies when escrowed property is involved and is not applicable in instances where a real estate broker is acting as the seller of his own real property unless the contract for sale establishes the seller/broker as the escrow agent, citing Fleischman. Other types of contractual disputes, whether involving personal real estate transactions by a licensee or not, may not be enforced by disciplinary action undertaken by a regulatory agency. The fact that a judgment had been rendered against the Petitioner by the civil court does not, by itself, make a contractual dispute actionable by a regulatory agency since such a judgment was nothing more than a debt similar to any debt owed to a bank or a department store. Mere refusal to pay such debts is not a ground for discipline under Chapter 475. The Final Order of the Division, through the Florida Real Estate Commission, adopted the Findings of Fact, Conclusions of Law and Recommendation contained in the Recommended Order and dismissed the Administrative Complaint on May 16, 1989. The Petition for Attorney's Fees and Costs pursuant to Rule 22I-6.035, Florida Administrative Code, and Section 57.111, Florida Statutes, subsequently filed was timely, having been filed within sixty days (60) after the date on which the Petitioner became a prevailing small business party. According to the initial Affidavit filed by Petitioner's attorney, Petitioner initially incurred legal fees in the amount of $5,160.00 and costs in the amount of $505.65 in DOAH Case NO. 88-3758. These fees and costs are reasonable. At the Final Hearing in this cause, Petitioner's attorney filed an Affidavit as to Additional Fees and Costs incurred by Petitioner in the preparation for and litigation of Petitioner's entitlement to an award of attorney's fees and costs under Section 57.111, Florida Statutes. Said Affidavit stated the additional attorney's fees incurred as $530.00 and the additional costs as $15.40. The additional fees and costs are reasonable. No evidence was presented that demonstrated the presence of any special circumstances which would make an award of attorney's fees and costs unjust in this case. Petitioner is entitled to an award of attorney's fees in the amount of $5,690.00 and costs in the amount of $521.05 for a total amount of $6,211.05 due to Petitioner from Respondent.
Findings Of Fact At all times pertinent to this hearing, The Vacation Shoppe, Inc., was a real estate brokerage corporation licensed by the State of Florida and the Florida Real Estate Commission was the agency responsible for regulating the practice of real estate in Florida. On or about April 7, 1987, the Florida Real Estate Commission filed an Administrative Complaint against Mike W. Trowbridge and Barbara Harvey Cage, registered real estate brokers, and The Vacation Shoppe, Inc., a registered real estate brokerage corporation, alleging that the three Respondents had unlawfully shared real estate commissions with non-licensed personnel. A formal hearing on the matter was held before the undersigned, a Hearing Officer with the Division of Administrative Hearings, who on December 4, 1987 entered an Order finding that DPR had failed to establish the alleged violations and recommending that the complaint against all Respondents be dismissed. This was done by the Florida Real Estate Commission by its Final Order of January 19, 1988. The filing of the Administrative Complaint was brought about by a complaint filed with the Commission by an individual by the name of Gerald Hartman who, on October 31, 1986, introduced DPR's investigator, Mr. Harris, to a Mr. and Mrs. Paquette. The Paquettes, formerly managers of a resort condominium and employed by IRPM, a management company, indicated they had been paid $10.00 in cash for each apartment they rented for the Respondent, The Vacation Shoppe, by Keith Trowbridge, the owner of IRPM. The Paquettes indicated that when Keith Trowbridge brought the last payment in cash for Mrs. Paquette and another employee, he stated that due to a complaint filed against him by Mr. Hartman, he could no longer pay the rental commissions by check as he had previously done. The Paquettes were not licensed real estate professionals. When Mr. Harris received this information, he contacted Respondent Cage at the office of The Vacation Shoppe, Inc. where she gave him rental forms verifying Mrs. Paquette had arranged certain rentals for TVS. Mr. Harris assumed the Paquettes and the other manager had been employed by TVS and contends Respondent Cage did not correct this assumption when he made the connection, but he did not attempt to verify their status. By the same token, Mr. Harris assumed Keith Trowbridge owned TVS at the time the questioned payments were made. The evidence indicates, however, that Keith Trowbridge had no priority interest in TVS and made his payments to the Paquettes as he did as a continuation of a long-Standing practice to reward employees of his company, IPRM. Keith Trowbridge may well have had some hidden interest in TVS, but no evidence was presented to establish this fact. Mr. Harris stated at this hearing, "It was common knowledge that Keith Trowbridge owned TVS. No one denied that." while no one may have denied it to Mr. Harris, a strong denial was presented at the hearing on the original complaint and no evidence was presented to contest the denial. Based on the above information, Mr. Harris concluded the evidence showed that Mike Trowbridge and Barbara Cage, both employees of TVS, were guilty of paying commissions to non-licensed people even though Mrs. Paguette had indicated that Keith Trowbridge, not Mike Trowbridge, had made the payments He relied on his belief, contrary to the evidence, that Keith Trowbridge owned TVS; his understanding that Keith Trowbridge had previously surrendered his real estate license in another matter arising out of a complaint filed by Mr. Hartman; and his knowledge that Barbara Cage had agreed to a prior consent order regarding the payment by her of unauthorized commissions. Mr. Harris' Reports of Investigation were referred to the Probable Cause Panel of the Florida Real Estate Commission for consideration of possible action. Ms. Pilar Montes, a Commissioner, was a member of that Panel and reviewed the investigative files relating to this case both before the Panel convened and again at the meeting. Ms. Montes was led to the conclusion that the three Respondents here were guilty of the violation alleged by what she perceived as evidence they were making the unauthorized payments. One of the items which she considered was the Cease and Desist Order signed by Respondent Cage. In Ms. Montes' words, "if she was not guilty, why did she sign the Order?" Mrs. Montes did not independently investigate the facts but concedes that the fact Respondent Cage signed the Cease and Desist Order in a prior case had some effect on her conclusion that she was also guilty in the instant case. She also considered the statements of the Paquettes and Ms. Minor, the other lady paid by Keith Trowbridge, and though they indicated the money was paid by Keith Trowbridge, Ms. Montes believed he was "involved" with TVS. The Report of Investigation of Mike Trowbride indicates in the investigator's summary of his interview with Keith Trowbridge that Keith Trowbridge is the owner of The Vacation Shoppe. There is no independent evidence of that but Ms. Montes relied on it as a member of the Probable Cause Panel. As she clearly stated at the hearing, "It's not our job to go beyond the report." Ms. Montes cannot say if she would have reached a different conclusion on voting Probable Cause had she known that Keith Trowbridge was not an owner or director of TVS. She also did not consider the fact that both Mike Trowbridge and Barbara Cage had indicated they did not know what Keith Trowbridge was doing. She and, apparently the remaining Panel members relied wholly on a report of investigation which was, it appears, inaccurate and misleading, based on unsupported assumptions and unjustified conclusions. When the Administrative Complaint was filed and served on the Respondents, they contacted attorney Jack P. Pankow who represented all three at the formal hearing herein. Mr. Pankow billed The Vacation Shoppe a fee of $3,542.50 plus reimbursement for the cost of the transcript of $303.75. The fee and transcript cost was paid by the billee, TVS. Mr. Pankow billed for 28 and 1/4 hours at an hourly rate of $125.00 per hour which has been his standard hourly fee for the past 5 years. Robert Henderson, an attorney who has practiced in a general trial practice in Lee County since 1972 reviewed Mr. Pankow's file in this case for reasonableness. The file was made up of several sections including the pleadings filed by all parties, memoranda prepared by Mr. Pankow, 18 letters from Mr. Pankow to various individuals, a telephone log relevant to this case, a substantial legal research file, a production and discovery sub-file containing information on the various witnesses, a transcript of the formal hearing, and time sheets prepared by Mr. Pankow which indicated that as of the filing of the Motion for Attorney's Fees, counsel had expended more than 28 hours on this matter. Mr. Henderson has known Mr. Pankow from practice with and against him for approximately 12 or 13 years. The rate of $125.00 per hour is standard for middle level attorneys and is reasonable. Mr. Henderson is of the opinion that considering the nature and complexity of this case there was nothing to justify charging more than the standard hourly rate and the time spent on the case was reasonable. Inquiry of records of the Division of Real Estate reveals that as of July 20, 1988, searching only through the letter "H", The Vacation Shoppe has over 100 licensees affiliated with it. No information was presented as to whether these licensees were employees or independent contractors. TVS indicates it has only 5 employees. The agency did not present any evidence to indicate the actual relationship of the licensees to the corporation. No evidence was Presented as to compensation methods or arrangements, hours, working conditions, liability for tax or any other indicia of relationship. Since a real estate broker, absent a salary or draw agreement or the accomplishment of some commission-earning activity, does not normally become liable for compensation to a licensee whose license is listed with it, it is clear that the licensees are not employees.
Findings Of Fact At one time respondent Raymond M. Ewing, Margaret A. Helms, and Charles J. Hess, Jr., all worked together as real estate salespersons for Jean Bryant Realty in Pensacola. At least since May of 1977, Mr. Ewing has been licensed as a real estate broker. He holds license number 0025647. Petitioner's Exhibit No. 1. Messrs. Hess and Harrison, who lives in Chicago, Illinois, had organized H & H Homes of Pensacola, Inc., and engaged in land development, and in building and selling houses north of Pensacola. Respondent Ewing knew that Hess and Harrison were in business together, although he did not know the particulars of their arrangements. (T. 65) Through Mr. Hess, Mr. Ewing met Arthur J. Harrison, who rented a townhouse he owned at Pensacola Beach for two weeks in 1978 or 1979. Mr. Hess had moved to Ocala, Florida when Mr. Ewing got a telephone call from him. Hess said he was back in Pensacola for a visit, and told Ewing that he needed money and would like to sell or mortgage "a house that he and Art [Harrison] owned on Ninth Avenue." (T. 67) Respondent Ewing inquired of Bob Barr, a loan officer at Pensacola Loan and Savings, about "putting a second on this house on behalf of Mr. Hess to generate some capital for him." (T. 68) Mr. Barr said he would need a "title letter." After Ewing reported to Hess that a title letter would be necessary, Hess asked him to obtain one, and Ewing requested Wesley Mayhall's opinion as to the title. Eventually Mr. Mayhall informed Mr. Ewing that title to the property was in Arthur J. Harrison. The property at 3937 North Ninth Avenue in Pensacola (the property) did indeed belong to Arthur J. Harrison, grantee on a warranty deed executed by George J. Wylie on March 18, 1977, and duly recorded in the public records of Escambia County on April 14, 1977. Exhibit to Deposition of Arthur J. Harrison. Undaunted, respondent Ewing arranged for a longtime friend, Robert William Harris, to look at the house, offering to sell it to Harris for $10,000.00 cash and assumption of an outstanding mortgage. The day Ewing showed Harris the house, Hess was also present, and Ewing told Hess the title was in Harrison. In reply, Hess said to Ewing, "'I have a deed from Arthur Harrison conveying it to H & H Homes.'" (T. 69) Mr. Harris agreed to buy the house for $8,000.00 down, assuming the outstanding mortgage. Two or three weeks later Hess appeared at Ewing's office and, according to Ewing, Hess said, "'Here is the deed to Harris,' or 'I have the deed for Harris, or some play of words around that. ['[Witness it.[']" (T. 70) Respondent Ewing obliged, signing a deed dated November 1, 1980, drawn in favor of H & H Homes of Pensacola, Inc., and purportedly executed by Arthur J. Harrison, whose signatur,e Ewing purported to witness. Ewing testified that he was in the middle of a telephone conversation and was holding the receiver in one hand when he signed with the other. Harrison did not in fact sign the deed or authorize its execution. At the time of the hearing, Mr. Ewing still "d[id]n't believe that" (T. 87) Hess had admitted to him forging Harrison's signature. Charles H. Hess, Jr., as president of H & H-Homes of Pensacola, Inc., executed a warranty deed to the property in favor of R. W. Harris on November 10, 1980. Mr. Ewing delivered the deed to Mr. Harris that day in Mr. Harris' office in exchange for two cashier's checks, one in the amount of $6,000.00 and one in the amount of $2,000.00. Hess got the proceeds of the larger cheek. Mr. Ewing told Mr. Harris he would deposit the smaller cheek in escrow, for disbursal to Hess, once the house was painted. In fact, Mr. Ewing pocketed the $2,000.00. (T. 82, 83) At hearing, he offered this explanation: [Hess] owed me something like $2,000.00. And it was one of those deals he was up here one day, he needed some money. I had some and I just said, okay, I can let you have some fora few days and you'll have to give it back to me, but this preceded the incident by, you know, some length of time. (T. 34) Mr. Ewing did not ask Hess for a promissory note when he made the loan supposedly repaid with Harris' check. (T. 80) After the LH house had gone unpainted for some time, Ewing paid Harris $500.00, telling Harris that he had already paid Hess the other $1500.00. Respondent Ewing "did not prepare a sales agreement . . . [in connection with the conveyance to Harris because he] wasn't thinking anything was going to come back to haunt [him]." (T. 84) At some point in "early November" of 1980, Mr. Harrison spoke to Mr. Ewing by telephone. Harrison had learned earlier, from the holder of the mortgage on the property, that Ewing had inquired about a purchaser's assuming the mortgage. When Harrison told Ewing he was not interested in selling the property, Ewing told Harrison that Hess had already accepted earnest money (although this was not accurate.) On Mr. Harrison's behalf, Margaret A. Helms rented the property in February or March of 1981. Mr. Harris noticed the tenant moving in and stopped to talk to the lady, who told him that she was renting from Ms. Helms. Mr. Harris did not confide in the tenant, but went to see his lawyer. On May 18, 1980, Mr. Ewing secured an owner's title insurance policy covering the property for Mr. Harris. Eventually Mr. Harris filed suit to quiet title and won. On appeal, however, Mr. Harrison prevailed and the judgment was reversed. Litigation is ongoing. To date, Mr. Harrison has expended some $6,000.00 in attorney's fees and costs.
Recommendation It is, upon consideration of the foregoing, RECOMMENDED: That petitioner reprimand respondent, impose an administrative fine of one thousand dollars ($1,000.00), and suspend his license for one year. DONE and ENTERED this 8th day of January, 1986, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of January, 1986. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Post Office Box 1900 Orlando, Florida 32802 Barry Z. Rhodes, Esquire 8198 Squire Road Pensacola, Florida 32514 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esquire General Counsel 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff, Executive Director Division of Real Estate 400 W. Robinson Street Orlando, Florida 32802 APPENDIX Petitioner's proposed findings of fact I through 4, 6, 7, and 10 have been adopted,, in substance, as being clearly and convincingly established by the evidence. Petitioner's proposed finding of fact 5 was not clearly and convincingly established, although the evidence suggested that the transaction had not closed when Harrison told Ewing the property was not for sale. The evidence as to Ewing's financial interest in the transaction is dealt with in paragraph 7 of the recommended order. Respondent's proposed order of disposition contains no proposed findings of fact so labelled. In general, Mr. Ewing's testimony has not been credited. The evidence did not show that he "did not know the instrument was allegedly forged" and did not prove that he "did not witness an act of forgery."
