94-002094 Florida Real Estate Commission vs. Charles Mckee
 Status: Closed
Recommended Order on Tuesday, October 4, 1994.


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Summary: Respondent guilty of transferring funds from business he operated with ex-wife to new business he opened; checks to clients bounced; failed to protect clients.

1STATE OF FLORIDA

4DIVISION OF ADMINISTRATIVE HEARINGS

8DEPARTMENT OF BUSINESS AND )

13PROFESSIONAL REGULATION, DIVISION )

17OF REAL ESTATE, )

21)

22Petitioner, )

24)

25vs. ) CASE NO. 94-2094

30)

31CHARLES A. MCKEE, )

35)

36Respondent. )

38___________________________________)

39RECOMMENDED ORDER

41Pursuant to notice, a formal hearing was conducted in this case on

53September 1, 1994 in Fort Pierce, Florida, before J. Stephen Menton, a duly

66designated Hearing Officer of the Division of Administrative Hearings.

75APPEARANCES

76For Petitioner: Steven W. Johnson, Senior Attorney

83Department of Business and

87Professional Regulation

89Division of Real Estate

93Hurston North Tower, No. 308A

98400 West Robinson Street

102Orlando, Florida 32801

105For Respondent: No appearance

109STATEMENT OF THE ISSUE

113The issue in this case is whether Respondent is guilty of the violations

126alleged in the Administrative Complaint filed by Petitioner and, if so, whether

138Respondent's real estate license should be suspended, revoked or otherwise

148disciplined.

149PRELIMINARY STATEMENT

151In a four count Administrative Complaint filed on March 9, 1994,

162Petitioner, the Department of Business and Professional Regulation, Division of

172Real Estate, charged Respondent with violating several sections of Chapter 475,

183Florida Statutes. Specifically, Petitioner sought to discipline Respondent's

191real estate license charging that Respondent (1) was guilty of dishonest dealing

203by trick, scheme or device, culpable negligence or breach of trust in a business

217transaction in violation of Subsection 475.25(1)(b), Florida Statutes; (2)

226failed to maintain an office and office entrance sign as required by Subsection

239475.22(1), Florida Statutes and 61J2-10.024, Florida Administrative Code and,

248therefore, Respondent had violated Subsection 475.25(1)(e); was guilty of

257violating Rule 61J2-10.027, Florida Administrative Code, and Subsection

265475.25(1)(e), Florida Statutes, as a result of his use of an identification or

278designation of an association or organization having to do with real estate in

291such a manner as to lead persons to believe that he was a member in good

307standing of such association or organization, when in fact he was not a member

321thereof in good standing and was not otherwise entitled to use such

333identification or designation; and, (4) was in violation of Subsection

343475.25(1)(o), Florida Statutes, because he was guilty for a second time of

355misconduct that warrants his suspension or was guilty of a course of conduct or

369practices which show that he is so incompetent, negligent, dishonest, or

380untruthful that the money, property, transactions, and rights of investors, or

391those with whom he may sustain a confidential relation, may not safely be

404entrusted to him.

407Respondent disputed the charges and requested a hearing pursuant to Section

418120.57(1), Florida Statutes. The case was referred to the Division of

429Administrative Hearings which noticed and conducted the hearing.

437Efforts by a previously assigned Hearing Officer to reach Respondent by

448phone during the week preceding the hearing were unsuccessful. Respondent did

459not appear at the time and place scheduled for the hearing. A review of the

474file confirmed that the Notice of Hearing was sent to Respondent at the address

488listed on the Election of Rights form which Respondent filed to request a formal

502hearing. There is no indication in the record that Respondent has relocated nor

515is there any indication that the Notice of Hearing was returned as

527undeliverable. Respondent did not notify Petitioner or the Division of

537Administrative Hearings that he was unavailable on the scheduled hearing date

548and/or that he wanted a continuance of the hearing. After waiting for

560approximately 20 minutes for Respondent to appear, the hearing was commenced and

572Petitioner presented its evidence. One of the witnesses at the hearing was

584Respondent's former wife who stated that she had seen Respondent earlier in the

597week and he was aware of the scheduled hearing. No communications from

609Respondent have been received subsequent to the hearing.

617At the hearing, Petitioner presented the testimony of three witnesses:

627Terry Addleburg, an investigator for the Department; Loretta McKee; and Fran

638Annette. Petitioner offered five exhibits into evidence, all of which were

649accepted. No transcript of the proceeding has been filed. Only Petitioner

660submitted proposed findings of fact and conclusions of law. A ruling on each of

674Petitioner's proposed findings of fact is included in the Appendix to this

686Recommended Order.

688FINDINGS OF FACT

691Based upon the oral and documentary evidence adduced at the final hearing

703and the entire record in this proceeding, the following findings of fact are

716made:

7171. Petitioner is a state licensing and regulatory agency charged with the

729responsibility and duty to prosecute Administrative Complaints pursuant to the

739laws of the State of Florida, in particular, Section 20.30, Florida Statutes,

751Chapters 120, 455, and 475, Florida Statutes and the rules promulgated pursuant

763thereto.

7642. At all times pertinent to this proceeding, Respondent Charles A. McKee

776was a licensed real estate broker in Florida having been issued license no.

7890335079 in accordance with Chapter 475, Florida Statutes. The last license

800issued to Respondent was c/o McKee Realty, 10157 S. Federal Hwy., Port St.

813Lucie, Florida 34952-5607 (the "Federal Highway Office").

8213. On November 23, 1992, the Florida Real Estate Commission (the

"832Commission") entered a Final Order finding Respondent guilty of failing to

844timely notify the Commission of an escrow deposit dispute and, based on that

857violation, assessing a fine of $500 against Respondent and placing him on

869probation for one year with a requirement that he complete a 30 hour broker

883management course.

8854. Respondent's former wife, Loretta McKee, is also a licensed real estate

897broker, and she was a partner with Respondent in McKee Realty. McKee Realty

910began operating as a Century 21 franchise in approximately 1986 at the Federal

923Highway Office.

9255. McKee Realty maintained four separate bank accounts: a general

935operating account; a general escrow account; a property management operating

945account; and a property management escrow account. Both Respondent and Loretta

956McKee were signatories on all of the accounts.

9646. In January of 1993, Respondent and Loretta McKee separated. Divorce

975proceedings were initiated in June. During the summer of 1993, Respondent and

987Loretta McKee engaged in mediation in an effort to resolve the property issues

1000between them, including the distribution of the business.

10087. While the parties were attempting to finalize a property settlement

1019agreement, they divided their time in the office. As part of their

1031negotiations, Respondent and Loretta McKee discussed an arrangement whereby

1040Respondent would continue the property management portion of the business and

1051his former wife would take over the general real estate business.

10628. Sometime in the fall of 1993, Respondent transferred all of the funds

1075in the McKee Realty general operating account and both property management

1086accounts to a new "property management escrow account" which he opened.

1097Respondent transferred the funds and opened the new escrow account without the

1109knowledge or consent of Loretta McKee, one of the brokers for McKee Realty. As

1123a result of Respondent's actions, approximately twenty checks written to clients

1134by McKee Realty on the old accounts were returned for insufficient funds.

11469. On November 16, 1993, Respondent, without the knowledge or consent of

1158broker Loretta McKee (his wife), removed the property management files and

1169office equipment from the McKee Realty Federal Highway Office and took them to

1182the new office opened by Respondent at 1926 Port St. Lucie Boulevard in Port St.

1197Lucie. Many of the files he removed were open or pending and his actions

1211resulted in a great deal of confusion and uncertainty for clients.

122210. On January 10, 1994, Petitioner's Investigator Terry Addleburg

1231inspected Respondent's new office located at 1926 Port St. Lucie Boulevard and

1243audited the escrow/trust accounts.

124711. The audit confirmed that on November 12, 1993, Respondent closed the

1259Century 21 McKee Realty property management escrow account #2274025969

1268maintained at Barnett Bank of Port St. Lucie. Respondent then reopened a new

1281escrow account bearing the name Century 21 McKee Realty Property Management

1292Escrow Account #3388673741 at Barnett Bank.

129812. The audit also revealed that Respondent intermingled trust funds by

1309combining $24,227.30 from the Century 21 McKee Realty property management

1320operating account #2274025951 with money deposited in the new property

1330management escrow account #338867341.

133413. The new property management escrow account had a total trust liability

1346of $44,299.35 and a reconciled bank balance of $43,498.43 indicating a shortage

1360of approximately $800.92.

136314. Petitioner's auditor also noted that Respondent had failed to maintain

1374the required office entrance sign at the 1926 Port St. Lucie Boulevard location.

1387In addition, Respondent failed to register this location with the Petitioner

1398until after Petitioner's auditor pointed out that the location had to be

1410registered.

141115. The evidence established that a Century 21 franchise is purchased for

1423a specific location. A franchisee is not permitted to open a new location

1436unless it is purchased and cleared through the franchisor. Respondent opened

1447his new office and placed a Century 21 sign on the door of that location without

1463the authority of the franchisor. Accordingly, it is concluded that Respondent

1474incorrectly represented he was a Century 21 franchisee at the 1926 SE Port St.

1488Lucie Boulevard location.

1491CONCLUSIONS OF LAW

149416. The Division of Administrative Hearings has jurisdiction over the

1504parties to and the subject matter of this proceeding. Section 120.57(1),

1515Florida Statutes.

151717. The parties were duly noticed of the hearing.

152618. Pursuant to Section 475.25, Florida Statutes, the Florida Real Estate

1537Commission is authorized to suspend a license for up to ten years, revoke a

1551license, impose an administrative fine not to exceed $1,000 for each count or

1565separate offense, impose a reprimand, or any or all of the foregoing, if it

1579finds that a licensee has violated any of the provisions of that Statute. In

1593this case, the Administrative Complaint charges Respondent with violating

1602Sections 475.25(1)(b), (e) and (o), Florida Statutes.

160919. Section 475.25(1)(b), Florida Statutes, proscribes dishonest dealing

1617and culpable negligence, as well as breach of trust. Section 475.25(1)(e),

1628Florida Statutes, includes violations of the Florida Administrative Code,

1637specifically Rules 61J2-10.024 and 61J2-10.027, which require the maintenance of

1647an office sign and prohibits the use of an organizational designation in a

1660manner that is misleading. Section 475.25(1)(o), Florida Statutes, proscribes

1669being found guilty a second time of misconduct that warrants suspension or being

1682found guilty of a course of conduct showing incompetence, dishonesty or

1693negligence such that the money and/or property of others may not safely be

1706entrusted to the licensee.

171020. Petitioner has the burden of proof in this license disciplinary

1721proceeding and, since Petitioner has requested revocation or suspension of

1731Respondent's license, the allegations against Respondent must be proven by clear

1742and convincing evidence. See Ferris V. Turlington, 510 So.2d 292 (Fla. 1987);

1754Pic N' Save v. Department of Business Regulation, 601 So.2d 245 (Fla. 1st DCA

17681992); Munch v. Department of Professional Regulation, 592 So.2d 1136 (Fla. 1st

1780DCA 1992); Newberry v. Florida Department of Law Enforcement, 585 So.2d 500

1792(Fla. 3d DCA 1991). "The evidence must be of such weight that it produces in

1807the mind of the trier of fact a firm belief or conviction, without hesitancy, as

1822to the truth of the allegations sought to be established." Slomowitz v. Walker,

1835429 So.2d 797, 800 (Fla. 4th DCA 1983).

184321. Disciplinary action may be based only upon the violations specifically

1854alleged in the administrative complaint. See Kinney v. Department of State, 501

1866So.2d 129, 133 (Fla. 5th DCA 1987); Hunter v. Department of Professional

1878Regulation, 458 So.2d 842, 844 (Fla. 2d DCA 1984).

188722. As a real estate licensee in Florida, Respondent occupies a status

1899under law with recognized privileges and responsibilities. Zichlin v. Dill, 25

1910So.2d 4 (Fla. 2d DCA 1946). "The law specifically requires that a person, in

1924order to hold a real estate license, must make it appear that he is honest,

1939truthful, trustworthy, of good character, and that he bears a good reputation

1951for fair dealing." McKnight v. Real Estate Commission, 209 So.2d 199 (Fla. 2d

1964DCA 1967). Anyone who deals with a licensee should be able to assume he is

1979dealing with an honest and ethical person. Shelton v. Real Estate Commission,

1991120 So.2d 191 (Fla. 2d DCA 1960).

199823. The clear and convincing evidence presented in this case established

2009that Respondent was guilty of culpable negligence and breach of trust as alleged

2022in Count I of the Administrative Complaint. Respondent neglected the duties

2033manifest in his office as broker by closing the operating account and property

2046management accounts without Loretta McKee's knowledge and without making

2055arrangements to insure that all clients were notified and necessary steps were

2067taken to protect their interests.

207224. The evidence also established that Respondent was guilty of the

2083violations alleged in Count II and III of the Administrative Complaint.

2094Respondent failed to register his new office with the Florida Real Estate

2106Commission until the failure was brought to his attention by Petitioner. More

2118significantly, Respondent used the Century 21 tradename at his new office

2129without authority and in violation of the company's policy.

213825. The evidence did not establish that Respondent was guilty of the

2150violation alleged in Count IV of the Administrative Complaint. The prior

2161disciplinary action taken against Respondent did not result in the suspension of

2173his license. Furthermore, it can not be concluded based on the evidence

2185presented that Respondent engaged in a course of conduct which demonstrates

2196that the money and property of others can not be entrusted to him. It appears

2211that all of Respondent's actions in this case were related to his on-going

2224marital problems. Those problems apparently prompted him to exercise extremely

2234poor judgment, but it cannot be concluded that Respondent is dishonest or has

2247deliberately schemed to defraud any clients.

225326. While Respondent was apparently experiencing a great deal of stress in

2265his personal life at the time of the instances alleged in this case, his

2279personal problems do not excuse his failure to handle his responsibilities nor

2291was Respondent justified in unilaterally closing the bank accounts and

2301transferring the files from the business he operated with his estranged wife.

2313Respondent was obligated to place the interests of the clients first and to

2326await a proper legal distribution of the jointly owned business.

233627. Rule 61J2-24.001, Florida Administrative Code, sets forth the

2345disciplinary guidelines adopted by the Commission for Violations of Section

2355475.25, Florida Statutes. Subsection (3), of Rule 61J2-24.001, Florida

2364Administrative Code, provides that the normal range of penalties for violations

2375of Section 475.25(1)(b), Florida Statutes, is "[u]p to 5 years suspension or

2387revocation." Subsection (4)(a) of Rule 61J2.21.001 provides the Commission

2396authority to impose a penalty outside the normal range where there are

2408mitigating and aggravating circumstances. The mitigating or aggravating

2416circumstances that may warrant such a deviation are described in Subsection

2427(4)(b) of Rule 61J2-24.001, Florida Administrative Code, which provides as

2437follows:

2438Aggravating or mitigating circumstances may

2443include, but are not limited to, the following:

24511. The severity of the offense.

24572. The degree of harm to the consumer or public.

24673. The number or counts in the Administrative

2475Complaint.

24764. The number of times the offenses previously

2484have been committed by the licensee.

24905. The disciplinary history of the licensee.

24976. The status of the licensee at the time the

2507offense was committed.

25107. The degree of financial hardship incurred by

2518a licensee as a result of the imposition of a

2528fine or suspension of the licensee.

25348. Violation of the provision of Chapter 475,

2542Florida Statutes, where in a letter of guidance

2550as provided in Section 455.225(3), Florida

2556Statutes, previously has been issued to the

2563licensee.

256428. In this case, Respondent's actions have caused some harm to consumers

2576who received the checks issued by McKee Realty which were returned for

2588insufficient funds. The evidence indicates that some of the clients who

2599received these checks have still not been paid the money owed to them.

2612RECOMMENDATION

2613Based upon the foregoing Findings of Fact and Conclusions of Law, it is

2626RECOMMENDED that a Final Order be entered finding Respondent guilty of the

2638allegations alleged in Counts I, II and III of the Administrative Complaint and

2651dismissing Count IV. As a penalty for the violations, an administrative fine of

2664$1,500 should be imposed against Respondent, his real estate license should be

2677suspended for 1 year followed by a two year probationary period with such terms

2691and conditions as may be imposed by the Commission.

2700DONE and ENTERED this 4th day of October, 1994, at Tallahassee, Florida.

2712___________________________________

2713J. STEPHEN MENTON

2716Hearing Officer

2718Division of Administrative Hearings

2722The DeSoto Building

27251230 Apalachee Parkway

2728Tallahassee, Florida 32399-1550

2731(904) 488-9675

2733Filed with the Clerk of the

2739Division of Administrative Hearings

2743this 4th day of October, 1994.

2749APPENDIX TO RECOMMENDED ORDER

2753Only Petitioner submitted a proposed recommended order. The following

2762rulings are made with respect to the proposed findings of fact submitted by

2775Petitioner.

2776Petitioner's proposed findings of fact

27811. Adopted in substance in Findings of Fact 1.

27902. Adopted in substance in Findings of Fact 2.

27993. Adopted in substance in Findings of Fact 10.

28084. Adopted in substance in Findings of Fact 11.

28175. Adopted in substance in Findings of Fact 12.

28266. Adopted in substance in Findings of Fact 8.

28357. Adopted in substance in Findings of Fact 8 and 9.

28468. Adopted in substance in Findings of Fact 14.

28559. Adopted in substance in Findings of Fact 13.

286410. Adopted in substance in Findings of Fact 15.

287311. Adopted in substance in Findings of Fact 3.

2882COPIES FURNISHED:

2884Steven W. Johnson, Esquire

2888Department of Business and

2892Professional Regulation

2894Division of Real Estate

2898Hurston North Tower #308A

2902400 West Robinson Street

2906Orlando, Florida 32801

2909Charles A. McKee, pro se

2914772 SW Hibiscus Street

2918Port St. Lucie, Florida 34983

2923Darlene F. Keller, Director

2927Division of Real Estate

2931400 West Robinson Street

2935Orlando, Florida 32802-1900

2938Jack McRay, General Counsel

2942Department of Business and

2946Professional Regulation

29481940 North Monroe Street

2952Tallahassee, Florida 32399-0792

2955NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

2961All parties have the right to submit written exceptions to this Recommended

2973Order. All agencies allow each party at least 10 days in which to submit

2987written exceptions. Some agencies allow a larger period within which to submit

2999written exceptions. You should contact the agency that will issue the final

3011order in this case concerning agency rules on the deadline for filing exceptions

3024to this Recommended Order. Any exceptions to this Recommended Order should be

3036filed with the agency that will issue the final order in this case.

Select the PDF icon to view the document.
PDF
Date
Proceedings
Date: 12/12/1994
Proceedings: Final Order filed.
PDF:
Date: 12/06/1994
Proceedings: Agency Final Order
PDF:
Date: 12/06/1994
Proceedings: Recommended Order
Date: 12/06/1994
Proceedings: Final Order filed.
PDF:
Date: 10/04/1994
Proceedings: Recommended Order sent out. CASE CLOSED. Hearing held 09/01/94.
Date: 09/20/1994
Proceedings: (Petitioner) Proposed Recommended Order filed.
Date: 09/01/1994
Proceedings: CASE STATUS: Hearing Held.
Date: 06/06/1994
Proceedings: Notice of Hearing sent out. (hearing set for 9/1/94; 9:30am; Fort Pierce)
Date: 05/02/1994
Proceedings: (Petitioner) Unilateral Response to Initial Order filed.
Date: 04/22/1994
Proceedings: Initial Order issued.
Date: 04/19/1994
Proceedings: Agency referral letter; Administrative Complaint; Election of Rights filed.

Case Information

Judge:
J. STEPHEN MENTON
Date Filed:
04/19/1994
Date Assignment:
08/25/1994
Last Docket Entry:
12/12/1994
Location:
Fort Pierce, Florida
District:
Southern
Agency:
ADOPTED IN TOTO
 

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