00-002941 Department Of Business And Professional Regulation, Division Of Florida Land Sales, Condominiums, And Mobile Homes vs. Justo Lamar Status: Closed Recommended Order on Thursday, March 1, 2001.

Summary: Evidence insufficient against yacht salesman accused of failing to deliver a deposit check to broker. Evidence also insufficient to show existence of a contract which would trigger a duty to deposit the proffered check.

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. 00-2941

)

JUSTO LAMAR, )

)

Respondent. )

)

RECOMMENDED ORDER

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

in Miami and Tallahassee, Florida via videoteleconferencing, on

October 10 and October 30, 2000, before Florence Snyder Rivas, 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: Richard L. Lapidus, Esquire

City National Bank Building

Suite 711

25 West Flagler Street

Miami, Florida 33130

STATEMENT OF THE ISSUE

The issue is whether Respondent, a Florida-licensed yacht

salesman, should be disciplined for violation of Rule 61B-

60.006(2), Florida Administrative Code, as alleged in the

Administrative Complaint dated May 10, 2000.

PRELIMINARY STATEMENT

By Administrative Complaint dated May 10, 2000, the

Department of Business and Professional Regulation (DBPR)

charged that Respondent, a licensed yacht salesman, "failed to

immediately deliver the $150,000 deposit, pursuant to the

Purchase Agreement dated December 4, 1998, in connection with

the purchase of the 'Caliente' 72' Knight & Carver Yacht, to

Dwight Tracy, the Broker under whom he was licensed, in

violation of Rule 61B-60.006(2) Florida Administrative Code."

Respondent timely demanded a formal hearing on the charge.

The hearing was held on October 10 and 30, 2000, via video

teleconference.

Respondent objected to proceeding with hearing on

October 10, 2000. Respondent advised, and Petitioner did not

seriously dispute, that the parties had reached a stipulation of

facts, executed by Respondent's counsel, which would have

obviated the need for a hearing.

Based upon that understanding, Respondent's counsel advised

Respondent that the hearing would be canceled, and counsel came

to work dressed for an informal day at his own office.

Instead, Respondent's counsel learned, upon arriving at

work, that the hearing had not been canceled and rushed to the

hearing site, still dressed informally.

At this late hour, Respondent's counsel was unable to

secure his client's attendance.

Respondent's counsel reasonably relied upon counsel for the

Petitioner, who had assured that the scheduled October 10

hearing would not go forward. Petitioner's counsel was

overruled by his superiors, who reversed the professional

commitment counsel had made to Respondent and refused to approve

the stipulation. This, the Petitioner was empowered to do.

The Division of Administrative Hearings (DOAH) is not bound

by informal agreements by the parties, and cases are not settled

until the DOAH is so advised, in writing.

Therefore, the parties were directed to proceed with the

presentation of the Petitioner's evidence and informed that, if

appropriate, additional hearing time would be scheduled at which

the Respondent would be permitted to present his case.

The Petitioner rested on October 10, 2000, and the case was

continued to October 30, 2000, in order to provide Respondent a

fair opportunity to present his defense.

At the beginning of the October 30, 2000, hearing,

Petitioner moved for leave to re-open its case to amend its

unilateral prehearing statement.

Petitioner decided, based upon the testimony adduced at the

October 10 proceedings, to seek an enhanced penalty against

Respondent's license. Petitioner wished to present testimony in

support of an enhanced penalty. Respondent objected. The

testimony was received without prejudice. 1/

At the conclusion of Petitioner's case, and again at the

close of the Respondent's case, and from time to time throughout

the final hearing, Respondent moved to dismiss the

Administrative Complaint for failure to state a claim upon which

the relief sought could be granted, for due process violations

relating to the charges themselves, as well as the proposed

enhanced penalty, and for failure of proof on the charge filed.

Each such motion was reserved upon. 2/

At the hearing, Petitioner presented the testimony of Craig

Cadwalader, President of Ardell Brokers; Yvonne Tawfik-Mestre,

an investigator with DBPR, and Peter Butler, Sr., a senior

Management Analyst with DBPR. Petitioner also introduced twelve

exhibits.

Respondent testified in his own behalf and introduced

seventeen exhibits. 3/

A Transcript of the proceedings was filed December 5, 2000.

The parties jointly sought and were granted enlargements of time

for the submission of proposed recommended orders, through

February 21, 2001. The Proposed Recommended Orders have been

carefully considered in the preparation of this Recommended

Order.

FINDINGS OF FACT

1. At all times pertinent to the issues herein, DBPR,

through its Division of Florida Land Sales, Condominiums and

Mobile Homes (the Division) was the state agency in Florida

responsible for the licensing and discipline of yacht

salespersons and brokers in this state and the regulation of the

yacht-brokering profession.

2. Respondent, Justo Lamar (Lamar), has been licensed as a

yacht salesperson since November 1976.

3. Prior to this action, Lamar has never been the subject

of disciplinary action arising out of the practice of his

profession.

4. This action was precipitated by a yacht owner, Juan A.

Galan (Galan), who unsuccessfully attempted to sell his yacht to

a client of Lamar's.

5. In July 1998, Galan listed his yacht, the Caliente, for

sale through Ardell Yacht and Ship Brokers (Ardell).

6. The listing resulted in negotiations for the purchase

of the Caliente by one Larry Griggs ( Griggs), a prospective

customer represented by Lamar.

7. At all times relevant to this case, Lamar was acting as

a sales agent for Allied Marine and its broker, Dwight Tracy

(Tracy). As set forth in more detail below, the negotiations

between Galan and Griggs took place over a three-month period

from October 1998 through December 1998 with no meeting of the

minds.

8. On July 12, 1999, some seven months after negotiations

between Griggs and Galan terminated, Galan lodged a complaint

with DBPR. Although the complaint was ostensibly directed

against salesman Lamar and broker Tracy, each and every

allegation in the complaint was directed to the broker's

conduct, not Lamar's.

9. Galan, who did not testify at final hearing, alleged in

his complaint that "Broker presented a contract representing

that deposit had been received/deposited (upon acceptance). In

fact, broker never deposited check and we wasted our time and

money on survey/sea trial as buyer was not (at that time or any

time later) financially capable of buying boat @ $1.75 million."

10. Galan provided some, but by no means all, of the

documents which revealed the details of the prolonged and

ultimately unsuccessful negotiations between Galan and Griggs.

11. In the narrative portion of his complaint, Galan

asserted that he lost money on sea trials and implied, without

actually stating, that the Caliente had been taken off the

market during the pendency of negotiations with Griggs.

12. For reasons which remain unclear, the Division did not

focus its investigation on Tracy, who was the obvious target of

Galan's complaint. Instead, it targeted Lamar, who was an

obvious add-on target of Galan's ire.

13. The exhibits reveal a complex series of offers and

counteroffers and jockeying for negotiating advantage, not just

between Galan and Griggs as prospective Seller and Buyer of the

Caliente, but also between Lamar and the two brokers, all three

of whom stood to profit if the transaction were consummated.

14. Negotiations for the Caliente began in late October

1998. On October 30, 1998, Lamar's client Griggs, through a

corporation he controlled, issued a $150,000 check for "Deposit,

72' (sic) Caliente Sportfisherman." This check accompanied a

Brokerage Purchase and Sale Agreement dated October 29, 1998,

offering to purchase the Caliente for $1,500,000.

15. That same day, Galan's representatives faxed Lamar to

advise that Griggs' offer was insufficient.

16. Lamar forthwith provided the check to his broker,

Tracy.

17. Negotiations between Galan and Griggs continued in

November. Galan chose to by-pass his own Broker and negotiate

directly with Lamar over lunch on November 18, 1998. Lamar

wrote Galan's demands on the back of a restaurant placemat. The

primary sticking point was Galan's insistence on a "bottom line"

of $1,665,000 to him, after all commissions and other expenses,

if any, were paid.

18. Griggs nevertheless persevered in his effort to buy

the Caliente for $1,500,000. On November 24, 2000, Griggs

executed another Brokerage Purchase and Sale Agreement in which

he offered an entity called Majua, Inc., of which Galan was

President, the opportunity to sell the Caliente to Griggs for

$1,500,000.

19. Galan signed the November 24 agreement, but added an

addendum which materially changed the terms. The addendum

unilaterally purported to raise the sales prices to Galan's

previously stated "bottom line" of $1,665,000.

20. Thanksgiving passed, and negotiations wore on.

21. On December 4, 1998, Griggs executed a third Brokerage

Purchase and Sale Agreement, raising his offer to $1,755,000.

The new offer expressly stipulated that Griggs' $150,000 earnest

money check could be deposited when and if all parties executed

this new proposed agreement. Like the October 29 and

November 24 brokerage purchase and sale agreements, the December

4 document never ripened into a contract.

22. The December 4 document was a clear and unembarrassed

reminder from Griggs that an earnest money check had been

written by Griggs, but was not on deposit, and was not going to

be on deposit until such time as Galan had signed off on the

contract as written by Griggs. Galan nevertheless permitted a

sea trial of the Caliente in furtherance of negotiations, now in

their fifth week.

23. Also as part of the negotiating process, Galan

permitted some, but not all, of the inspections requested by

Griggs.

24. Expenses for the sea trial and inspections were borne

entirely by Griggs.

25. By Christmas Eve, relations between the parties had

deteriorated to the point where Lamar retrieved the check from

the Allied Marine corporate files and returned it to Griggs.

26. At no time did negotiations with Lamar's client Griggs

preclude or interfere with efforts by Galan to negotiate with

and sell the Caliente to any other prospective purchaser.

CONCLUSIONS OF LAW

27. The Division of Administrative hearings has

jurisdiction over the parties and the subject matter of this

proceeding. Section 120.57(1), Florida Statutes.

28. Pursuant to Chapter 326, Florida Statutes, DBPR is

charged with the task of licensing, regulating, and disciplining

Florida yacht and ship salesmen and brokers.

29. Pursuant to Section 326.006(2)(d)(4), Florida

Statutes, the Division is authorized to impose a civil penalty

against a broker or salesperson for a violation of a Rule

properly adopted under Section 326, to a maximum of $10,000 per

offense.

30. Section 326.006(2)(d) provides in relevant part:

(d) Notwithstanding any remedies

available to a yacht and shop 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 the division may institute

enforcement proceedings in its own name

against any broker or salesperson . . . as

follows:

The division may impose a civil penalty

against a broker or salesperson or any of

his or her assignees or agents . . . for any

violation of this chapter or a rule adopted

under this chapter.

31. Petitioner has the burden of proving by clear and

convincing evidence the allegations against Respondent. Section

120.57(1)(h), Florida Statutes; Ferris v. Turlington , 510 So. 2d

292 (Fla. 1987); Department of Banking and Finance v. Osborne

Stern and Co. , 670 So. 2d 932 (Fla. 1996).

32. Evans Packing Co. v. Department of Agriculture and

Consumer Services , 550 So. 2d 112, 116, fn. 5 (Fla. 1st DCA

1989), provides the following guidance regarding the clear and

convincing evidence standard:

* * *

[C] lear and convincing evidence requires

that the evidence must be found to be

credible; the facts to which the witnesses

testify must be distinctly remembered; the

evidence must be precise and explicit and

the witnesses must be lacking the confusion

as to the facts in issue. The evidence must

be of such weight that it produces in the

mind of the trier of fact the firm belief of

conviction, without hesitancy, as to the

truth of the allegations sought to be

established. Slomowitz v. Walker , 429 So.

2d 797, 800 (Fla. 4th DCA 1983).

33. The Administrative Complaint alleges that Lamar is

guilty of having violated Rule 61B-60.006(2), Florida

Administrative Code, which provides, in pertinent part, as

follows:

A broker holding the license of a salesman

shall make all trust account deposits and

withdrawals of monies involved in a

transaction brokered by the salesman. Any

salesman who receives any deposit shall

immediately deliver the same to the broker

under whom he is licensed as a salesman.

34. The evidence established that salesman Lamar delivered

a proferred deposit to his broker, Tracy, thus complying with

the portion of the Rule directed to Lamar. It is Tracy upon

whom the Rule imposes the duty to deposit "monies involved in a

transaction brokered by the salesman." Lamar cannot be guilty

of violating the portion of the Rule which is not directed to

him.

35. All of the testimony of persons with personal

knowledge suggests that Lamar's actions were entirely consistent

with Rule 61B-60.006(2), Florida Administrative Code. Lamar

immediately delivered Griggs' $150,000 check to Tracy several

weeks before the State asserts Lamar was obliged to do so.

Although there is no direct evidence in the record to explain

why Tracy did not feel obliged to deposit same into his trust

account, the conclusion is inescapable that the deposit was not

made because there was never even a preliminary good faith

belief by Tracy that negotiations would ripen into a contract.

All of the competent, persuasive evidence suggests that no

contract existed on December 4, 1998, nor at any other time,

between Griggs and Galan.

36. Rule 61B-60.006 was recently construed in Woods v.

Department of Business and Professional Regulation, Division of

Florida Land Sales , 738 So. 2d 520 (Fla. 4th DCA 1999). Woods

involved a broker charged with violating Rule 61-B60.006(3) by

failing to properly deposit a check received pursuant to a

purchase agreement. The Court held that failure to prove the

existence of a valid contract was fatal to the case against

Woods.

37. Lamar is charged under Subsection 2 of the same Rule

construed in Woods . While Subsection 2 of the Rule only

requires that any "deposit" received by a salesperson be

provided immediately to the broker holding the salesperson's

license, the Woods case supports the conclusion that a valid

contract is required before a salesperson can be said to have

received a "deposit." Thus, because there was no valid contract

in this case the "check" received by Lamar was not a "deposit"

which he was required to deliver to Tracy. But this point need

not be decided, since, as noted above, Lamar did deliver the

check to Tracy.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that DBPR enter a final order dismissing

the Administrative Complaint against Respondent.

DONE AND ENTERED this 1st day of March, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

FLORENCE SNYDER RIVAS

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 1st day of March, 2001.

ENDNOTES

1/ The recommendation reached in this case moots Petitioner's

motion.

2/ The recommendation reached in this case moots each of these

motions.

3/ For reasons which were not clarified in the record, the

parties elected to file unilateral prehearing statements.

Respondent's exhibits were plainly described in unilateral

filings dated October 5, 2000, and October 16, 2000, both of

which reflect service upon Department counsel. In addition, at

the final hearing Respondent's counsel produced a cover letter

indicating that copies of the exhibits themselves were in fact

informally furnished to the Department. On October 30, 2000,

for the first time, Petitioner's counsel claimed he had not

received the exhibits and therefore objected to their use at

trial. The objection was overruled. The hearing record, taken

as a whole, amply demonstrated that Petitioner was neither

surprised nor prejudiced in any way by the Respondent's

exhibits.

COPIES FURNISHED:

Scott K. Edmonds, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399-2202

Richard L. Lapidus, Esquire

City National Bank Building

Suite 711

25 West Flagler Street

Miami, Florida 33130

Ross Fleetwood, Director

Florida Land Sales, Condominiums

and Mobile Homes

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Hardy L. Roberts, III, 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.