08-002165PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Juan C.Chavarriaga Status: Closed Recommended Order on Monday, September 8, 2008.

Summary: Respondent was involved in the rental of property for which he received rental payments that he did not deposit with his employing real estate broker; his employing real estate broker was unaware of the rental. He violated Sections 475.25(1) & 475.42(1).

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 08-2165PL

)

JUAN C. CHAVARRIAGA, )

)

Respondent. )

)

RECOMMENDED ORDER

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

before Larry J. Sartin, an Administrative Law Judge of the

Division of Administrative Hearings, on June 30, 2008, by video

teleconference at sites in Lauderdale Lakes and Tallahassee,

Florida.

APPEARANCES

For Petitioner: Patrick Cunningham, Esquire

Division of Real Estate

Department of Business and

Professional Regulation

400 West Robinson Street, Suite N-801

Orlando, Florida 32801

For Respondent: Alan Glenn, Esquire

14629 Southwest 104th Street, No. 432

Miramar, Florida 33186

STATEMENT OF THE ISSUES

The issues in this case are whether Respondent, Juan C.

Chavarriaga, committed the violations alleged in a four-count

Administrative Complaint issued by Petitioner, the Department of

Business and Professional Regulation, Division of Real Estate,

on January 17, 2008, and, if so, what disciplinary action should

be taken against his Florida real estate broker associate

license.

PRELIMINARY STATEMENT

On January 17, 2008, the Department of Business and

Professional Regulation, Division of Real Estate issued a four-

count Administrative Complaint, FDBPR Case No 2007004262,

against Juan C. Chavarriaga, who holds a Florida real Estate

broker associate license, in which it alleged that Respondent

had violated the following provisions of Florida law: (a)

Section 475.25(1)(b) Florida Statutes (2006)(Count I); Section

475.25(1)(e), Florida Statutes (2006), by violating Section

475.42(1)(b), Florida Statutes (2006)(Count II); Section

475.25(1)(e), Florida Statutes (2006), by violating Section

475.42(1)(d), Florida Statutes (2006)(Count III); and Section

475.25(1)(e), Florida Statutes (2006), by violating Florida

Administrative Code Rule 61J2-14.009 and Section 475.25(1)(k),

Florida Statutes (2006)(Count IV).

Respondent executed an Election of Rights form disputing

the material facts of the Administrative Complaint and

requesting a formal administrative hearing. Through counsel,

Respondent also filed an Answer and Affirmative Defenses in

response to the Administrative Complaint.

On May 2, 2008, Petitioner filed the Administrative

Complaint, Respondent’s request for hearing, Respondent’s Answer

and Affirmative Defenses, and a letter requesting that an

administrative law judge be assigned to hear the matter. The

request for hearing was designated DOAH Case No. 08-2165PL and

was assigned to the undersigned.

On May 12, 2008, the final hearing of this matter was

scheduled for June 30, 2008, by Notice of Hearing by Video

Teleconference.

On June 10, 2008, Respondent filed Respondent’s Motion for

a Continuance to Prevent Material Prejudice to the Respondent,

and Supporting Memorandum of Law. In the Motion, counsel for

Respondent represented that on or about April 4, 2008, he had

been informed by Respondent’s spouse that she believed that

Respondent had been taken into custody by the United States

Immigration and Naturalization Service (hereinafter referred to

Counsel for Respondent, therefore, requested a continuance of

the final hearing until Respondent is located.

On June 16, 2008, Petitioner filed Petitioner’s Objection

to Respondent’s Motion for Continuance to Prevent Material

Prejudice to the Respondent. In the Objection, Petitioner

represented that Respondent will be/or has been deported from

the United States and attached an order entered by the United

States Court of Appeals for the Eleventh Circuit in the case of

Juan Carlos Chavarriaga Orozco v. U.S. Attorney General , Case

No 07-13430, denying a Petitioner for Review of a Decision of

the Board of Immigration Appeals, a decision denying

Respondent’s motion to reopen his removal proceedings.

On June 25, 2008, a hearing was held by telephone on the

motion for continuance. After hearing argument from the

parties, it was concluded that Respondent has been deported back

to Columbia and that it was not likely that he would be

returning to the United States any time in the near future.

Therefore, the motion for continuance was denied. Counsel for

Respondent was informed, however, that Respondent would be given

an opportunity to file a post-hearing deposition (in person or

by telephone) of his testimony. It was also agreed that

Petitioner would be given the opportunity to file the deposition

testimony of one of its witnesses and file it post-hearing.

At the final hearing, Petitioner presented the testimony of

German Ocampo and Veronica Hardy. Petitioner also had admitted

Petitioner’s Exhibits 1 through 3. Respondent had admitted

Respondent’s Exhibits 1 and 2. Those exhibits were filed

August 27, 2008.

At the close of the final hearing, the parties were given

until July 31, 2008, to inform the undersigned whether the

authorized late-filed depositions would be taken. During a

subsequent telephone conference call, the parties were given

until August 1, 2008, to inform the undersigned of their

respective decisions. Absent notice of a decision to file a

post-hearing deposition, the parties were informed that they had

until August 18, 2008, to file proposed recommended orders.

Neither party informed the undersigned of their intent to

file post-hearing depositions. Petitioner filed Petitioner’s

Proposed Recommended Order on August 14, 2008. That proposed

order has been fully considered.

On August 20, 2008, Respondent filed “Petitioner’s [sic]

Motion for Enlargement of Time to Complete Proposed Order.”

Counsel for Respondent represented that he had not been able to

timely file a proposed order due to Tropical Storm Fay. On

August 25, 2008, Respondent filed Respondent’s Proposed

Recommended Order. Counsel for Respondent obviously considered

and responded to Petitioner’s Proposed Recommended Order in

preparing Respondent’s Proposed Recommended Order. Therefore,

counsel for Petitioner was contacted by the undersigned’s

administrative assistant to determine whether he had any

objection to Respondent’s Proposed Recommended Order being

considered. Counsel for Petitioner indicated he had no

objection. Therefore, the Motion for additional time to file a

proposed recommended order filed by Respondent is hereby

granted. Respondent’s Proposed Recommended Order has been fully

considered before issuing this Recommended Order.

All further references to the Florida Statutes in this

Recommended Order are to the 2006 edition, unless otherwise

noted.

FINDINGS OF FACT

1. Petitioner, the Department of Business and Professional

Regulation, Division of Real Estate (hereinafter referred to as

Section 20.165, Florida Statutes, and charged with the

responsibility for the regulation of the real estate industry in

Florida pursuant to Chapter 475, Florida Statutes.

2. Respondent, Juan C. Chavarriaga, is, and was at the

times material to this matter, the holder of a Florida real

estate broker associate license, license number 3130017, issued

by the Division.

3. At all times relevant, Mr. Chavarriaga was employed as

a real estate associate with Ocampo & Alvarez Realty LLC.

4. On or about March 30, 2006, Mr. Chavarriaga rented real

Carlos Alvarez for an annual lease amount of $18,000.00 or

$1,500.00 per month (Pre-hearing Stipulation). The Subject

Property was rented pursuant to a Residential Lease for Single

Family Home and Duplex agreement (hereinafter referred to as the

“Lease”) which was entered into on or about March 30, 2006

(Petitioner’s Exhibit 5).

5. Mr. Chavarriaga, according to an admission he made to

Veronica Hardy, a Division investigator, received rent paid for

the rental of the Subject Property pursuant to the Lease.

6. According to an admission of Mr. Chavarriaga, the

Subject Property was owned by Claudia Mejia.

7. Mr. Chavarriaga’s real estate broker employer was

unaware of the Lease or Mr. Chavarriaga’s involvement therein.

8. The Lease was entered into without written permission

from Ms. Mejia, according to another admission of

Mr. Chavarriaga. The evidence failed to prove, however, that

Ms. Mejia was unaware of the Lease or that she had not verbally

authorized Mr. Chavarriaga to rent the Subject Property on her

behalf.

9. Mr. Chavarriaga also admitted to Ms. Hardy that he

received rents pursuant to the Lease which were deposited with a

company named Maux Management. What Maux Management is was not

proved. Nor was it proved that Mr. Chavarriagag owned Maux

Management.

10. As to what was done with moneys received pursuant to

the Lease, the only competent substantial evidence again

consists of an admission by Mr. Chavarriaga: he told Ms. Hardy

that the rents were deposited with Maux Management, which then

paid part of the proceeds for reasonable expenses related to the

Lease and deposited the remainder in the account of Ms. Mejia.

CONCLUSIONS OF LAW

A. Jurisdiction .

11. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

the parties thereto pursuant to Sections 120.569 and 120.57(1),

Florida Statutes (2008).

B. The Burden and Standard of Proof .

12. The Division seeks to impose penalties against

Mr. Chavarriaga pursuant to the Administrative Complaint that

include the suspension or revocation of his real estate

associate license. Therefore, the Division has the burden of

proving the specific allegations of fact that support its

charges by clear and convincing evidence. See Department of

Banking and Finance, Division of Securities and Investor

Protection v. Osborne Stern and Co. , 670 So. 2d 932 (Fla. 1996);

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

Department of Insurance and Treasurer , 707 So. 2d 941 (Fla. 3d

DCA 1998).

13. What constitutes "clear and convincing" evidence was

described by the court in Evans Packing Co. v. Department of

Agriculture and Consumer Services , 550 So. 2d 112, 116, n. 5

(Fla. 1st DCA 1989), as follows:

. . . [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

in 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 or 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).

See also In re Graziano , 696 So. 2d 744 (Fla. 1997); In re

Davey , 645 So. 2d 398 (Fla. 1994); and Walker v. Florida

Department of Business and Professional Regulation , 705 So. 2d

652 (Fla. 5th DCA 1998)(Sharp, J., dissenting).

C. The Charges of the Administrative Complaint .

14. Section 475.25, Florida Statutes, provides the

Division with authority to discipline a licensee for committing

any of a number of offenses defined therein. In this case, the

Division has charged Mr. Chavarriaga with having violated the

following provisions of Section 475.25, Florida Statutes : (a)

Section 475.25(1)(b) Florida Statutes (Count I); Section

475.25(1)(e), Florida Statutes, by violating Section

Florida Statutes, by violating Section 475.42(1)(d), Florida

by violating Florida Administrative Code Rule 61J2-14.009 and

Section 475.25(1)(k), Florida Statutes (Count IV).

15. Sections 475.25(1)(b), (e), and (k), Florida Statutes,

define the following offenses:

(b) Has been guilty of fraud,

misrepresentation, concealment, false

promises, false pretenses, dishonest dealing

by trick, scheme, or device, culpable

negligence, or breach of trust in any

business transaction in this state or any

other state, nation, or territory; has

violated a duty imposed upon her or him by

law or by the terms of a listing contract,

written, oral, express, or implied, in a

real estate transaction; has aided,

assisted, or conspired with any other person

engaged in any such misconduct and in

furtherance thereof; or has formed an

intent, design, or scheme to engage in any

such misconduct and committed an overt act

in furtherance of such intent, design, or

scheme. It is immaterial to the guilt of the

licensee that the victim or intended victim

of the misconduct has sustained no damage or

loss; that the damage or loss has been

settled and paid after discovery of the

misconduct; or that such victim or intended

victim was a customer or a person in

confidential relation with the licensee or

was an identified member of the general

public.

. . . .

(e) Has violated any of the provisions of

this chapter or any lawful order or rule

made or issued under the provisions of this

chapter or chapter 455.

. . . .

(k) . . . . [H]as failed, if a sales

associate, to immediately place with her or

his registered employer any money, fund,

deposit, check, or draft entrusted to her or

him by any person dealing with her or him as

agent of the registered employer. . . .

16. Section 475.42, Florida Statutes, defines further

(d), Florida Statutes, define the following violations:

(b) A person licensed as a sales

associate may not operate as a broker or

operate as a sales associate for any person

not registered as her or his employer.

. . . .

(d) A sales associate may not collect any

money in connection with any real estate

brokerage transaction, whether as a

commission, deposit, payment, rental, or

otherwise, except in the name of the

employer and with the express consent of the

employer; and no real estate sales

associate, whether the holder of a valid and

current license or not, shall commence or

maintain any action for a commission or

compensation in connection with a real

estate brokerage transaction against any

person except a person registered as her or

his employer at the time the sales associate

performed the act or rendered the service

for which the commission or compensation is

due.

17. Florida Administrative Code Rule 61J2-14.009 provides

the following:

Every sales associate who receives any

deposit, as defined in Rule 61J2-14.008,

Florida Administrative Code, shall deliver

the same to the broker or employer no later

than the end of the next business day

following receipt of the item to be

deposited.

18. The Division’s case consisted primarily of hearsay

evidence; statements made to the Division’s investigator. See

§ 90.801, Fla. Stat. (2008). Although “[h]earsay evidence my

used for the purpose of supplementing or explaining other

evidence,” presented in this matter, “it shall not be sufficient

in itself to support a finding unless it would be admissible

(2008). Other than admissions against interest made by

Mr. Chavarriaga, hearsay evidence presented by the Division was

not subject to any exception to the hearsay rule and was not

sufficient in itself to support a finding of fact. See

§ 90.804(2)(c), Fla. Stat. (2008). Therefore, the only facts

proved by the Division were that Mr. Chavarriaga was involved in

the rental of the Subject Property; that he received rental

payments pursuant to the Lease which he did not deposit with his

employing real estate broker; and his employing real estate

broker was not aware of the Lease. The Division’s allegations

that Mr. Chavarriaga rented the Subject Property without

authorization from the owner and that he directed rental

proceeds to a company he owned were not proven.

D. Count I: Alleged Violation of Section 475.25(1)(b),

Florida Statutes .

19. The evidence failed to prove that Mr. Chavarriaga is

guilty of any misrepresentation, dishonest dealing by trick,

scheme or device, culpable negligence, or breach of trust in any

business transaction as alleged in Count I of the Administrative

Complaint.

E. Count II: Alleged Violation of Section 475.25(1)(e),

Florida Statutes, Due to Violation of Section 475.42(1)(b),

Florida Statutes .

20. The Division alleged in Count II of the Administrative

Complaint that Mr. Chavarriaga was guilty of having operated as

a broker while licensed as a sales associate in violation of

Section 475.42(1)(b), Florida Statutes, and therefore, in

violation of Section 475.25(1)(e), Florida Statutes. The

evidence failed to support this allegation.

F. Count III: Alleged Violation of Section 475.25(1)(e),

Florida Statutes, Due to Violation of Section 475.42(1)(d),

Florida Statutes .

21. The Division proved clearly and convincingly that

Mr. Chavarriaga collected money in connection with a real estate

brokerage transaction without the express consent of his employer

and without collecting the money in his employer’s name.

22. Mr. Chavarriaga is, therefore, guilty of having

violated Section 475.25(1)(e), Florida Statutes, by reason of his

violation of Section 475.42(1)(d), Florida Statutes.

G. Count IV: Alleged Violation of Section 475.25(1)(e),

Florida Statutes, Due to Violation of Florida Administrative

Code Rule 61J2-14.008 and Section 475.42(1)(k), Florida

Statutes .

23. The evidence failed to prove that Mr. Chavarriaga

received any “deposit” related to the Lease. Therefore,

Mr. Chavarriaga did not violate Florida Administrative Code Rule

61J2-14.008 as alleged in the Administrative Complaint.

24. The Division did prove, however, that Mr. Chavarriaga

failed to deposit rental payments he collected under the Lease

to his employing real estate broker in violation of Section

475.25(1)(k), Florida Statutes.

H. The Appropriate Penalty .

25. The only issue remaining for consideration is the

appropriate disciplinary action which should be taken by the

Florida Real Estate Commission (hereinafter referred to as the

“Commission”), against Mr. Chavarriaga for the violations that

were proved. To answer this question it is necessary to consult

the "disciplinary guidelines" of the Commission set forth in

Florida Administrative Code Chapter 61J2-24. Those guidelines

effectively place restrictions and limitations on the exercise

of the Commission’s disciplinary authority . See Parrot Heads,

Inc. v. Department of Business and Professional Regulation , 741

So. 2d 1231, 1233 (Fla. 5th DCA 1999)("An administrative agency

is bound by its own rules . . . creat[ing] guidelines for

disciplinary penalties."); and § 455.2273(5), Fla. Stat.

26. In addition to the imposition of discipline pursuant

to the guidelines, Florida Administrative Code Rule 61J2-24(2)

authorizes the Commission to place a licensee on probation for a

period of time and subject to such conditions as the Commission

specifies.

27. Finally, Florida Administrative Code Rule 61J2-42(4)

provides for the consideration of certain aggravating and

mitigating circumstances, but only if proper notice is given.

No such notice was provided in this proceeding.

28. The Division has proved that Mr. Chavarriaga violated

Section 475.25(1)(e), Florida Statutes, by reason of having

violated Section 475.42(1)(d), Florida Statutes (Count III).

The penalty range for this violation provided in Florida

Administrative Code Rule 61J2-24.001(3)(z) is a three-year

suspension to revocation.

29. The Division has also proved that Mr. Chavarriaga

violated Section 475.25(1)(e), Florida Statutes, by reason of

having violated Section 475.42(1)(k), Florida Statutes (Count

IV). The penalty range for this violation provided in Florida

Administrative Code Rule 61J2-24.001(3)(hh) is an administrative

fine not to exceed $5,000.00 to a six month suspenion.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that a final order be entered by the

Department of Business and Professional Regulation, Division of

Real Estate:

1. Dismissing Counts I and II of the Administrative

Complaint;

2. Finding that Mr. Chavarriaga is guilty of the violation

alleged in Counts III and IV of the Administrative Complaint;

and

3. Suspending Mr. Chavarriaga’s real estate associate

license for a period of one year and requiring that he pay an

administrative fine of $1,000.00.

DONE AND ENTERED this day of 8th day of September, 2008, in

Tallahassee, Leon County, Florida.

LARRY J. SARTIN

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 8th day of September, 2008.

COPIES FURNISHED :

Patrick J. Cunningham, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street

Hurston Building-North Tower, Suite N801

Orlando, Florida 32801

Alan A. Glenn, Esquire

14629 Southwest 104 Street, No. 432

Miami, Florida 33186

Thomas W. O’Bryant, Jr., Director

Division of Real Estate

Department of Business and

Professional Regulation

400 West Robinson Street

Hurston Building-North Tower, Suite N802

Orlando, Florida 32801

Ned Luczynski, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

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 these cases.