08-003687PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Curt Douglas Francis Status: Closed Recommended Order on Tuesday, November 25, 2008.

Summary: Respondent failed to deposit funds from buyer into an escrow account in violation of Section 475.25(1)(k), Florida Statutes.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 08-3687PL

)

CURT DOUGLAS FRANCIS, )

)

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 September 19, 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: Daniel Villazon, Esquire

1420 Celebration Boulevard, Suite 200

Celebration, Florida 34747

STATEMENT OF THE ISSUES

The issues in this case are whether Respondent, Curt

Douglas Francis, committed violations alleged in a three-count

Administrative Complaint issued by Petitioner, the Department of

Business and Professional Regulation, Division of Real Estate,

on April 17, 2007, and, if so, what disciplinary action should

be taken against his Florida real estate broker associate

license.

PRELIMINARY STATEMENT

On April 17, 2007, the Department of Business and

Professional Regulation, Division of Real Estate issued a three-

count Administrative Complaint, FDBPR Case No. 2006014394,

against Curt Douglas Francis, who holds a Florida real estate

broker license, in which it alleged that Respondent had violated

the following provisions of Florida Law: Section 475.25(1)(b),

Statutes (2005)(Count II); and Section 475.25(1)(d)1., Florida

Statutes (2005)(Count III).

On May 10, 2007, 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.

The final hearing for this matter was scheduled for

September 8, 2008, by Notice of Hearing by Video Teleconference

but was rescheduled until September 19, 2008, due to severe

weather.

At the final hearing, Petitioner presented testimony of

Ms. Magaly Grippa and Ms. Jennifer North. Petitioner also

admitted Petitioner’s Exhibit 1 and Petitioner’s Exhibits 5A

through 5D. Those Exhibits were filed on August 29, 2008.

Respondent testified on his own behalf but did not admit any

exhibits.

On October 17, 2008, parties were notified that the

Transcript of the final hearing had been filed with the Division

of Administrative Hearings. In the Notice of Filing Transcript,

the parties were instructed to file proposed recommended orders

on or before November 6, 2008. On November 6, Petitioner and

Respondent timely filed their respective Proposed Recommended

Orders. Both Petitioner’s and Respondent’s Proposed Recommended

Orders were fully considered before issuing this Recommended

Order.

All references to Florida Statutes are to the 2005 version,

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 (2008), and charged with the

responsibility for the regulation of the real estate industry in

Florida pursuant to Chapter 475, Florida Statutes.

2. Respondent, Curt Douglas Francis (hereinafter referred

to as “Mr. Francis”), is, and was at the times material to this

matter, the holder of a Florida real estate broker license,

license number 668736, issued by the Division.

3. At all times relevant, Mr. Francis was the real estate

broker for Progressive Real Estate 2000, Corp., located at 16921

North East 6th Avenue, Miami, Florida 33612.

4. At all times relevant, Mr. Francis represented Ms.

Velma King as her real estate broker.

5. On or about March 17, 2005, Mr. Francis, on behalf of

Ms. Velma King (hereinafter referred to as the “Buyer”),

presented an offer to Roland Joachim (hereinafter referred to as

the “Seller”) for the purchase of real property located at 6904

South West 37th Street, Mirimar, Florida, 33023 (hereinafter

referred to as “Subject Property”).

6. At the same time, the Buyer and Seller entered into a

contract for the purchase and sale of the Subject Property

Exhibit 5A).

7. Under the terms of the Contract, the Buyer agreed to

place an initial deposit of $1,000.00 (hereinafter referred to

as the “Initial Deposit”), in escrow with Richmond Abstract of

Florida (hereinafter referred to as “Escrow Agent”)

simultaneously with the execution of the Contract. The Buyer

agreed further to place an additional deposit of $4,000.00 in

escrow with the Escrow Agent within ten days of the effective

date of the Contract.

8. The Buyer timely delivered the Initial Deposit to the

Escrow Agent. Mr. Francis, however, instructed the Buyer to

retrieve the Initial Deposit after the Escrow Agent informed

Mr. Francis that it could not hold the Buyer’s monies.

9. Thereafter, Mr. Francis took possession of Buyer’s

Initial Deposit and placed it in his desk drawer. As of the

date of the final hearing in this matter, Mr. Francis continued

to hold the Initial Deposit and has failed to place Buyer’s

monies in an escrow account or any other account.

10. Neither Mr. Francis nor Progressive Real Estate Corp.

maintains an escrow account.

11. Mr. Francis received no other monies from the Buyer

relevant to the purchase and sale of the Subject Property.

12. On or around April 4, 2005, the listing agent for the

Seller, ERA Realty (hereinafter referred to as the “Listing

Agent”), received a letter via facsimile transmission affirming

that “Progressive Real Estate has received from Velma King for

the total amount of $5,000.00 in the form of a check as deposit

on the [Subject Property].” The letter is written on

Progressive Real Estate 2000, Corp.’s letterhead and purports to

be authored and signed by Mr. Francis.

13. Mr. Francis denied signing the letter or ever

communicating to the Seller or the Listing Agent that the Buyer

deposited the total amount of the deposit ($5,000.00) with

Mr. Francis or Progressive Real Estate, Corp. His testimony,

which is credited, was unrefuted by the Division.

14. Mr. Francis further denied representing to Seller or

the Listing Agent that Progressive Real Estate, Corp., was the

escrow agent for purposes of the purchase and sale of the

Subject Property. Again, this unrefuted testimony is credited.

15. The Buyer and Seller did not close on the Contract for

the sale and purchase of the Subject Property. The

circumstances surrounding the failure to close were not proved.

16. Mr. Francis, after the failure of the sale and

purchase of the Subject Property to close, attempted

unsuccessfully to contact the Buyer several times to address the

return of her Initial Deposit. Mr. Francis believed that the

Buyer was entitled to the Deposit, a belief which was not

refuted by the evidence.

17. After unsuccessfully attempting to contact the Buyer,

Mr. Francis then made several unsuccessful attempts to contact

the Listing Agent regarding the Initial Deposit. Precisely why

Mr. Francis attempted to the contact the Listing Agent was not

explained by the evidence.

18. Mr. Francis was contacted by an attorney regarding the

return of the deposit. It is unclear what party, if any, the

attorney represented.

19. Mr. Francis was unable to resolve the question of what

to do with the Initial Deposit, which remained in his possession

at the time of the final hearing of this case.

CONCLUSIONS OF LAW

Jurisdiction

20. 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).

The Burden and Standard of Proof

21. The Division seeks to impose penalties against

Mr. Francis pursuant to the Administrative Complaint that

include the suspension or revocation of his real estate license.

Therefore, the Division has the burden of proving the specific

allegations of fact that support its charges by clear and

convincing evidence. See Dep’t of Banking and Fin., Div. of

Sec. & Investor Prot. v. Osborne Stern & Co. , 670 So. 2d 932

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

and Pou v. Dep’t of Ins. & Treasurer , 707 So. 2d 941 (Fla. 3d

DCA 1998).

22. What constitutes “clear and convincing” evidence was

established by the court in Evans Packing Co. v. Dep’t of Agric.

& Consumer Servs. , 550 So. 2d 112, 116, n.5 (Fla. 1st DCA 1989).

In the words of the court:

. . . [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); Walker v. Florida Dep’t of

Bus. & Prof’l Regulation , 705 So. 2d 652 (Fla. 5th DCA 1998)

(Sharp, J., dissenting).

Charges of the Administrative Complaint

23. 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. Francis 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)(k), Florida Statutes (Count II); and Section

475.25(1)(d), Florida Statutes (Count III).

24. Section 475.25(1)(b), (k), and (d), 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.

. . . .

(d)1. Has failed to account or deliver to

any person, including a licensee under this

chapter, 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, any personal property such as

money, fund, deposit, check, draft, abstract

of title, mortgage, conveyance, lease, or

other document or thing of value, including

a share of a real estate commission if a

civil judgment relating to the practice of

the licensee's profession has been obtained

against the licensee and said judgment has

not been satisfied in accordance with the

terms of the judgment within a reasonable

time, or any secret or illegal profit, or

any divisible share or portion thereof,

which has come into the licensee's hands and

which is not the licensee's property or

which the licensee is not in law or equity

entitled to retain under the circumstances.

However, if the licensee, in good faith,

entertains doubt as to what person is

entitled to the accounting and delivery of

the escrowed property, or if conflicting

demands have been made upon the licensee for

the escrowed property, which property she or

he still maintains in her or his escrow or

trust account, the licensee shall promptly

notify the commission of such doubts or

conflicting demands and shall promptly:

a. Request that the commission issue an

escrow disbursement order determining who is

entitled to the escrowed property;

b. With the consent of all parties,

submit the matter to arbitration;

c. By interpleader or otherwise, seek

adjudication of the matter by a court; or

d. With the written consent of all

parties, submit the matter to mediation. The

department may conduct mediation . . . .

. . . .

(k) Has failed, if a broker, to

immediately place, upon receipt, any money,

fund, deposit, check, or draft entrusted to

her or him by any person dealing with her or

him as a broker in escrow with a title

company, banking institution, credit union,

or savings and loan association located and

doing business in this state, or to deposit

such funds in a trust or escrow account

maintained by her or him with some bank,

credit union, or savings and loan

association located and doing business in

this state, wherein the funds shall be kept

until disbursement thereof is properly

authorized . . .

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

States .

25. The evidence failed to prove that Mr. Francis is

guilty of any misrepresentation, dishonest dealing by trick,

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

business transaction as alleged in Count I of the Administrative

Complaint.

26. Although the Division established that the Listing

Agent received a letter via facsimile indicating that

Progressive Real Estate Corp., had received $5,000.00 as the

total deposit required by the Contract, the Division failed to

prove by clear and convincing evidence that Mr. Francis sent the

letter to the Listing Agent or that the letter was sent at his

direction. The sole witness for the Division could not confirm

the source of the facsimile and Mr. Francis credibly presented

un-refuted testimony that the signature on the letter was not

his. Because the Division did not properly authenticate the

letter in question, it failed to meet its burden of proving that

Mr. Francis made representations regarding his status as an

escrow agent or that he received or deposited the full deposit

amount of $5,000.00.

Count II: Alleged Violation of Section 475.25(1)(k),

Florida Statutes .

27. The Division proved clearly and convincingly that Mr.

Francis collected the Initial Deposit received from the Buyer

without immediately depositing the monies in an escrow account.

Mr. Francis is, therefore, guilty of having violated Section

475.25(1)(k), Florida Statutes.

Count III: Alleged Violations of Section 475.25(1)(d),

Florida Statutes .

28 Pursuant to Section 475.25(1)(d), Florida Statutes, a

real estate licensee is required to do one of two things with

money which comes into the licensee’s hands: (a) “account or

deliver” the money to the person entitled to it, with or without

demand; or (b) where in good faith, the licensee entertains

doubt as to who is entitled an accounting or delivery of the

money or if their are conflicting demands for it, notify the

Florida Real Estate Commission (hereinafter referred to as the

“Commission”), of such doubts or conflicting demands and then

take one of four steps defined in the statute.

29. While Mr. Francis has failed to deliver the Initial

Deposit to the Buyer, the person he believes is entitled to the

money, and has failed to take notify the Commission, he is not

guilty of having violated Section 475.25(1)(d), Florida

Statutes. Section 475.25(1)(d), Florida Statutes, only applies

to funds which a real estate licensee holds in “escrow.” It

does not by its terms apply to the facts of this case, where the

funds were never placed in escrow.

30. While the initial reference to the type of property

which must be returned does not specifically mention “escrowed

property,” the type of property covered is described more

precisely in outlining what must be done by a licensee where

doubt as to who is entitled to the property arises: “. . . if

the licensee, in good faith, entertains doubt as to what person

is entitled to the accounting and delivery of the escrowed

property . . . .”

31. Clearly Mr. Francis is not entitled to the Initial

Deposit. While his failure to place the Initial Deposit in

escrow constitutes an offense and his failure to return the

funds may constitute some other violation of Chapter 475, his

failure to return the Initial Deposit under the facts of this

case does not constitute a violation of Section 475.25(1)(b),

Florida Statutes.

The Appropriate Penalty .

32. The only issue remaining for consideration is the

appropriate disciplinary action which should be taken by the

Commission against Mr. Francis for the violation that was

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.

33. Finally, Florida Administrative Code Rule 61J2-24(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.

34. The Division has proved that Mr. Francis violated

Section 475.25(1)(k), Florida Statues (Count II). The penalty

range for this violation provided in Florida Administrative Code

Rule 61J2-24.001(3)(l) is a fine not to exceed $5,000.00 and a

90-day suspension to revocation.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is recommended that a final order be entered:

1. Dismissing Counts I and III of the Administrative

Complaint;

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

alleged in Count II of the Administrative Complaint; and

3. Suspending Mr. Francis’s real estate broker license for

a period of 90 days and requiring that he pay an administrative

fine of $1,000.00.

DONE AND ENTERED this 25th day of November, 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]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 25th day of November, 2008.

COPIES FURNISHED :

Daniel Villazon, Esquire

Daniel Villazon, P.A.

1420 Celebration Boulevard, Suite 200

Celebration, Florida 34747

Patrick J. Cunningham, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street

Hurston Building-North Tower, Suite N801

Orlando, Florida 32801

Thomas W. O'Bryant, Jr., Director

Division of Real Estate

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

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 this case.