00-001415 Department Of Business And Professional Regulation, Division Of Florida Land Sales, Condominiums, And Mobile Homes vs. Giovanna Gallottini Status: Closed Recommended Order on Tuesday, February 6, 2001.

Summary: Petitioner failed to demonstrate that Respondent failed to exercise due professional care in the performance of brokerage services relating to a closing. Not sustaining Notice to Show Cause.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF FLORIDA LAND SALES, )

CONDOMINIUMS, AND MOBILE HOMES, )

)

Petitioner, )

)

vs. ) Case No. 00-1415

)

GIOVANNA GALLOTTINI, )

)

Respondent. )

________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

on November 15, 2000, in Fort Lauderdale, Florida, before

Errol H. Powell, a designated Administrative Law Judge of the

Division of Administrative Hearings.

APPEARANCES

For Petitioner: Scott K. Edmonds, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399-2202

For Respondent: Giovanna T. Gallottini, pro se

Yachting Consultants, Inc.

1050 Marina Drive

Hollywood, Florida 33019

STATEMENT OF THE ISSUE

Whether Respondent committed the offenses set forth in the

Notice to Show Cause and, if so, what action should be taken.

PRELIMINARY STATEMENT

On January 26, 2000, the Department of Business and

Professional Regulation, Division of Florida Land Sales,

Condominiums, and Mobile Homes (Petitioner), filed a Notice to

Show Cause against Giovanna Gallottini (Respondent). Petitioner

charged Respondent with violating Rule 61B-60.008(3)(a), Florida

Administrative Code, through her failure to exercise due

professional care in the performance of brokerage services in

holding up a closing by not providing a financial institution

with a sufficient power of attorney as requested, threatening to

hold up a closing due to a dispute regarding the amount of a

commission, and demanding payment of the disputed commission

prior to closing. Respondent filed a response to the Notice to

Show Cause and requested a hearing. On March 31, 2000, this

matter was referred to the Division of Administrative Hearings.

At final hearing, Petitioner presented the testimony of

eight witnesses and entered 11 exhibits (Petitioner's Exhibits

numbered 1-11) into evidence. Respondent testified in her own

behalf and entered two exhibits (Respondent's Exhibits numbered

1-2) into evidence.

A transcript of the hearing was ordered. At the request of

the parties, the time for filing post-hearing submissions was set

for more than ten days following the filing of the transcript.

The Transcript, consisting of one volume, was filed on

November 21, 2000. The parties timely filed their post-hearing

submissions, which were considered in the preparation of this

Recommended Order.

FINDINGS OF FACT

1. Petitioner is the state agency charged with regulating

yacht and ship brokers and salespersons pursuant to Chapter 326,

Florida Statutes.

2. At all times material hereto, Respondent was a licensed

yacht broker. 1 She is the yacht broker for Yachting Consultants,

Inc. in Fort Lauderdale, Florida.

3. In April 1999, Respondent was the listing broker of

record regarding the sale of a 43-foot Pilgrim yacht. The

selling broker was Mark Lipkus, a licensed yacht broker.

4. John Pribik, a licensed salesperson, was Respondent's

representative in the sale of the Pilgrim yacht. Mr. Pribik was

under the supervision and control of Respondent and Respondent

was responsible for his actions.

5. Respondent had a buyer for the Pilgrim yacht, and the

closing for the sale of the yacht was scheduled for April 13,

1999. The buyer was financing the purchase of the yacht.

6. In a sale situation, a buyer and a seller have different

responsibilities. The seller is responsible for providing all of

the documents needed for a sale. The buyer is responsible for

providing the funds for a sale. In the sale of the Pilgrim

yacht, the responsibilities of the Seller and the Buyer did not

change.

7. There is a commission from the sale of a yacht, which is

paid by the seller and, in accordance with standard industry

practice, paid at closing. By standard industry practice, the

commission split is 70/30, but can differ upon agreement.

8. Mr. Lipkus received a down payment of $15,000.00 from

the Buyer and placed the down payment in his escrow account.

Mr. Lipkus was of the mistaken belief that the commission was

payable by the Buyer, not the Seller.

9. No co-broker agreement was entered into between

Respondent or Mr. Pribik and Mr. Lipkus regarding commission.

There was no discussion regarding the split of the commission

between them.

10. On a prior sale involving Mr. Pribik and Mr. Lipkus,

the commission split was 60/40. Mr. Pribik and Respondent

assumed the commission split of the sale of the Pilgrim yacht

would again be 60/40. Considering the prior sale, it was not

unreasonable for Respondent and Mr. Pribik to assume a 60/40

split of the commission.

11. Mr. Lipkus assumed the commission split would be 70/30.

12. A power of attorney had been prepared by the Seller who

was unavailable for closing due to being in a remote area in the

Philippine Islands. Mr. Pribik provided the power of attorney to

the documenting agent who reviewed the power of attorney and

found it to be satisfactory.

13. The mortgage broker received a copy of the power of

attorney prior to closing and forward a copy to the lending

institution. The lending institution notified the mortgage

broker at some point before closing that the power of attorney

was unacceptable. In turn, the mortgage broker contacted the

documenting agent regarding the unacceptability of the power of

attorney and informed the documenting agent that a new power of

attorney was required before closing could take place.

14. Mr. Pribik was notified by the mortgage broker that a

new power of attorney was required. The responsibility to obtain

the new power of attorney was the responsibility of the listing

broker, who was Respondent via Mr. Pribik.

15. As far as Mr. Pribik was concerned, with the time

remaining before closing 2 and with the Seller being in the

Philippine Islands, he believed that it was virtually impossible

to obtain a new power of attorney by the time of closing. The

mortgage broker, taking the position that he should do whatever

he could to effectuate a closing, encouraged Mr. Pribik to

attempt to contact the Seller. Complying, Mr. Pribik was able to

make telephonic contact with the Seller and Mr. Pribik and the

mortgage broker spoke with the Seller, who agreed to provide a

new power of attorney. Based on the verbal assurance by the

Seller to provide the new power of attorney, the lending

institution agreed to proceed with the closing, which was re-

scheduled for April 14, 1999. A new power of attorney was faxed

to the Seller, and the Seller executed it and faxed it back.

16. According to industry standard, all commissions are

paid at closing when a seller receives the funds. Also,

according to industry standard, closing is not delayed until a

commission is paid.

17. Mr. Lipkus mistakenly believed that the commission was

paid by a buyer, coming out of a buyer's deposit. As a result,

he expected to take the commission out of the Buyer's down

payment, which was held in Mr. Lipkus' escrow account. After

obtaining his commission, Mr. Lipkus was going to forward the

remaining monies.

18. On April 13, 1999, the original date for the closing,

the closing could not take place because the financing from the

lending institution was not available, based upon the absence of

a new power of attorney. Also, Mr. Lipkus had not made

arrangements for the deposit monies to be at closing or forwarded

a settlement statement to closing, which were both needed for the

closing. Respondent contacted Mr. Lipkus by fax regarding the

commission monies and the settlement statement, demanding both

items in order for closing to take place. The evidence is not

clear and convincing as to whether Respondent demanded the monies

held by Mr. Lipkus prior to closing or whether Respondent was

threatening to delay the closing unless she had the monies prior

to closing. The evidence suggests that Respondent was demanding

the monies to be in place at closing.

19. Additionally, on the original closing date, closing was

to take place at the office of the mortgage broker. Mr. Pribik,

the Buyer, and the mortgage broker were present for the closing.

Mr. Lipkus did not intend to attend, and did not attend, the

closing. Since the commission monies were not available at

closing, Mr. Pribik telephoned Mr. Lipkus and demanded that the

commission monies be available and, told him that if not made

available, the closing could not take place. In Mr. Pribik's

opinion, the monies were needed for closing. The evidence is not

clear and convincing as to whether Mr. Pribik demanded the monies

held by Mr. Lipkus prior to closing or whether Mr. Pribik was

threatening to delay the closing if he did not have the monies

prior to closing. The evidence suggests that Mr. Pribik was

demanding the monies to be in place at closing.

20. Furthermore, for the first time, Mr. Pribik and

Mr. Lipkus, during the telephone conversation, became aware of

their disagreement as to the proper commission split, whether

60/40 or 70/30. Believing that Mr. Pribik would prevent a timely

closing, Mr. Lipkus agreed to Mr. Pribik's split of 60/40.

21. Closing occurred on April 14, 1999. The necessary

documents and finances were present.

22. At the final hearing, Respondent expressed with

sincerity that, if she did anything wrong, she wanted to know

exactly what it was, so that she would not engage in the same

conduct again. Furthermore, Respondent expressed the frustration

that, prior to hearing, no one had explicitly told her what she

had done wrong and that, at hearing, she continued to be unsure

what she had done wrong because she had not been explicitly told

what she had done wrong.

23. Respondent has no prior disciplinary action.

CONCLUSIONS OF LAW

24. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and the

parties thereto pursuant to Section 120.569 and Subsection

120.57(1), Florida Statutes.

25. License revocation proceedings are penal in nature.

The burden of proof is on the Petitioner to establish by clear

and convincing evidence the truthfulness of the allegations in

the Administrative Complaint and the amendment thereto.

Department of Banking and Finance, Division of Securities and

Investor Protection v. Osborne Stern and Company , 670 So. 2d 932

(Fla. 1996); Ferris v. Turlington , 510 So. 2d 292 (Fla. 1987).

26. Respondent is charged with violating Rule 61B-60.008,

Florida Administrative Code, by failing to provide the lending

institution with a sufficient power of attorney as requested,

threatening to hold up the closing due to a dispute over the

amount of the commission, and demanding payment of the commission

prior to closing. Rule 61B-60.008, Florida Administrative Code,

provides in pertinent part:

(3) Standards of Conduct:

(a) A licensee . . . shall exercise due

professional care in the performance of

brokerage services . . . .

(b) A broker shall be deemed responsible by

the Division for the actions of all salesmen

who perform brokerage functions under his

supervision and control.

27. Section 326.006, Florida Statutes, provides in

pertinent part:

(2) The division has the power to enforce

and ensure compliance with the provisions of

this chapter and rules adopted under this

chapter, relating to the sale and ownership

of yachts and ships. In performing its

duties, the division has the following powers

and duties:

* * *

(d) Notwithstanding any remedies available

to a yacht or ship purchaser, if the division

has reasonable cause to believe that a

violation of any provision of this chapter or

rule adopted under this chapter has occurred

. . . .

* * *

4. The division may impose a civil penalty

against a broker or salesperson . . . for any

violation of this chapter or a rule adopted

under this chapter. A penalty may be imposed

for each day of continuing violation, but in

no event may the penalty for any offense

exceed $10,000. . . . .

28. Petitioner failed to demonstrate that Respondent failed

to exercise due professional care in the performance of brokerage

services relating to the closing. The evidence was not clear and

convincing that Respondent held up the closing by not providing

the financial institution with a sufficient power of attorney as

requested, by threatening to hold up the closing due to a dispute

over the amount of the commission, or by demanding payment of the

commission prior to the closing.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department of Business and Professional

Regulation, Division of Florida Land Sales, Condominiums, and

Mobile Homes, enter a final order:

1. Finding that Giovanna Gallottini did not violate Rule

61B-60.008(3)(a), Florida Administrative Code.

2. Not sustaining the Notice to Show Cause.

DONE AND ENTERED this 6th day of February, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

ERROL H. POWELL

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 6th day of February, 2001.

ENDNOTES

1/ Petitioner did not submit any documentary evidence to

demonstrate that Respondent was a licensed yacht broker.

However, through the testimony of the witnesses and the evidence

presented, an inference is drawn that Respondent was a licensed

yacht broker.

2/ From the evidence presented, this Administrative Law Judge was

not able to ascertain the time period, days or hours, from the

time that Mr. Pribik was notified of the need for a new power of

attorney to the time of the closing.

COPIES FURNISHED:

Scott K. Edmonds, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399-2202

Giovanna T. Gallottini

Yachting Consultants, Inc.

1050 Marina Drive

Hollywood, Florida 33019

Ross Fleetwood, Director

Division of Florida Land Sales,

Condominiums, and Mobile Homes

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Barbara D. Auger, General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15

days from the date of this recommended order. Any exceptions to

this recommended order should be filed with the agency that will

issue the final order in this case.