94-003252 Division Of Real Estate vs. W. Ryan Heath Status: Closed Recommended Order on Wednesday, February 8, 1995.

Summary: Broker who failed to timely implement remedial action should be reprimanded, placed on probation, and complete Continuing Program of Education.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 94-3252

)

W. RYAN HEATH, )

)

Respondent. )

____________________________________)

RECOMMENDED ORDER

A formal hearing was conducted in this proceeding before Daniel Manry, a

duly designated Hearing Officer of the Division of Administrative Hearings, on

January 12, 1995, in Orlando, Florida. The parties, witnesses, and court

reporter attended the hearing in Orlando. The undersigned participated by video

conference from Tallahassee, Florida.

APPEARANCES

For Petitioner: Daniel Villazon, Esquire

Senior Attorney

Department of Professional Regulation

Division of Real Estate

400 West Robinson Street

Post Office Box 1900

Orlando, Florida 32802

For Respondent: W. Ryan Heath, pro se

4864 South Orange Avenue

Orlando, Florida

STATEMENT OF THE ISSUE

The issues for determination in this proceeding are whether Respondent

violated Sections 475.25(1)(b), (d), and (e), Florida Statutes, 1/ through

culpable negligence or breach of trust in a business transaction; by failing to

account or deliver trust funds; and by failing to timely notify the Florida Real

Estate Commission of a deposit dispute or to implement remedial action; and, if

so, what, if any, penalty should be imposed.

PRELIMINARY STATEMENT

Petitioner filed an Administrative Complaint against Respondent on March

18, 1994. Respondent timely requested a formal hearing.

At the formal hearing, Petitioner presented the testimony of: Mr. Anthony

Rodgers, the purchaser in a failed real estate transaction; Ms. Geraldine

Barnosk, an employee of the Division of Real Estate; and Ms. Sara Kimmig, an

Investigation Specialist for Petitioner.

Petitioner submitted four exhibits for admission in evidence. Petitioner's

Exhibit 1 is a copy of the contract for purchase and sale of real estate.

Petitioner's Exhibit 2 is a copy of a letter from Respondent to Petitioner in

July, 1993. Petitioner's Exhibit 3 is a copy of two letters sent to Respondent

by Petitioner. Petitioner's Exhibit 4 is a copy of a letter sent to Petitioner

by Respondent in February, 1994. Petitioner's Exhibits 1-4 were admitted in

evidence without objection.

Respondent testified in his own behalf and submitted six exhibits for

admission in evidence. Respondent's Exhibit 1 is a copy of a letter from

Respondent's attorney in the deposit dispute notifying Petitioner of the

purchaser's release and forfeiture of the deposit to the seller. Respondent's

Exhibit 2 is a copy of the release and forfeiture of the deposit signed by the

purchaser. Respondent's Exhibit 3 is a copy of the cover letter transmitting a

copy of the release and forfeiture of deposit to Petitioner. Respondent's

Exhibit 4 is a copy of a letter to Ms. Kimmig. Respondent's Exhibit 5 is a copy

of a letter from Petitioner dated March 8, 1994. Respondent's Exhibit 6 is a

copy of an escrow disbursement order sent to Petitioner on February 18, 1994.

Respondent's Exhibits 1-6 were admitted in evidence without objection.

A transcript of the formal hearing was not requested by either party.

Petitioner timely filed its proposed recommended order ("PRO") on January 23,

1995. Respondent did not file a PRO. Proposed findings of fact in Petitioner's

PRO are accepted in this Recommended Order.

FINDINGS OF FACT

1. Petitioner is the governmental agency responsible for issuing licenses

to practice real estate and for regulating licensees on behalf of the state.

Respondent is a licensed real estate broker under license number 0037920. The

last license issued to Respondent was issued as a broker at Heath Realty, 4864

S. Orange Avenue, Orlando, Florida.

2. On May 18, 1993, Mr. Anthony Rodgers and Ms. Jill Rodgers (the

"buyers") entered into a contract to purchase real property from Ms. Norma A.

Cash (the "seller"). The buyers entrusted Respondent with a total earnest money

deposit of $1,000. The transaction failed to close.

3. On July 8, 1993, Respondent timely notified Petitioner in writing that

there were conflicting demands for the earnest money deposit and a good faith

doubt regarding the deposit. However, Respondent failed to institute one of the

settlement procedures described in Section 475.25(1)(d)1. until legal

proceedings between the buyer and seller were amicably settled approximately

seven months later.

4. Respondent failed to institute a prescribed settlement procedure in a

timely manner even though Petitioner advised Respondent in letters dated July

26, 1993, and September 9, 1993, of the action Respondent should take. On

February 9, 1994, Respondent finally requested an escrow disbursement order in

accordance with Section 475.25(10(d)1. The escrow deposit was paid to the

seller pursuant to the agreement of the parties.

CONCLUSIONS OF LAW

5. The Division of Administrative Hearings has jurisdiction over the

subject matter of this proceeding and the parties thereto. The parties were

duly noticed for the formal hearing.

6. Petitioner has the burden of proof in this proceeding. Petitioner must

show by clear and convincing evidence that Respondent committed the acts alleged

in the Administrative Complaint and the reasonableness of any penalty to be

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

7. The charges against Respondent are contained in three counts in the

Administrative Complaint. The first count charges Respondent with culpable

negligence or breach of trust within the meaning of Section 475.25(1)(b). The

second count charges Respondent with failure to account or deliver trust funds

in violation of Section 475.25(1)(d)1. The third count charges Respondent with

failing to timely notify the Florida Real Estate Commission of a deposit dispute

and failure to implement remedial action in violation of Section 475.42(1)(e)

and Florida Administrative Code Rule 61J2-10.032.

8. Petitioner failed to show that Respondent breached the trust of either

the seller or the buyers in violation of Section 475.25(1)(b). The parties were

engaged in a dispute over the buyers' deposit. Respondent made full disclosure

to all parties and remitted the deposit to the seller in a timely manner

pursuant to the settlement agreement between the parties. For the same reasons,

Respondent did not violate Section 475.25(1)(d)1. by failing to account and

deliver trust funds to the parties.

9. Respondent did not fail to notify the Florida Real Estate Commission of

a deposit dispute in violation of Section 475.42(1)(e) and Florida

Administrative Code Rule 61J2-10.032. Respondent provided the requisite notice

in a timely manner.

10. Petitioner showed by clear and convincing evidence that Respondent

knew, or should have known, of the settlement procedures and remedial action

prescribed for deposit disputes by applicable law. Respondent did not comply

with those requirements for approximately seven months after the time required

by statute. Thus, Respondent failed to implement remedial action in the deposit

dispute in a timely manner in violation of Section 475.42(1)(e) and Florida

Administrative Code Rule 61J2-10.032. However, Respondent's failure to comply

with applicable law was not a result of culpable negligence within the meaning

of Section 475.25(1)(b).

11. Section 475.25 authorizes Petitioner to reprimand Respondent, place

Respondent on probation, and impose a fine of up to $1,000 for each separate

offense committed by Respondent. See also, Florida Administrative Code Rule 21V-

24.001. In its PRO, Petitioner seeks a reprimand, probation, and a fine of

$2,000.

12. The reprimand sought by Petitioner is appropriate. Respondent has no

previous history of violations. Respondent was not dishonest and unscrupulous

in his dealings with the buyer and seller. Neither party was deprived of any

money except as agreed to by the parties.

13. Probation is appropriate. Respondent's failure to comply with

applicable law is a result of Respondent's lack of knowledge and not his refusal

to comply with applicable law.

14. The terms of the probation sought by Petitioner are not appropriate.

Petitioner seeks one year of probation and 60 hours of broker management courses

during that year. Although a probation period of one year is appropriate, one

or two broker management courses of two to four hours each are more reasonable

in view of the period of probation and the technical nature of Respondent's

violations.

15. A fine is not appropriate in this situation. Respondent's violation was

his first and was not intentional. The probation and education imposed on

Respondent more reasonably address the cause and nature of Respondent's

violations.

RECOMMENDATION

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

RECOMMENDED that Petitioner enter a Final Order finding Respondent not

guilty of violating Sections 475.25(1)(b), 475.25(1)(d)1., but guilty of

violating Section 475.42(1)(e) and Florida Administrative Code Rule 61J2-10.032.

It is further recommended that the Final Order place Respondent on probation for

a period of one year and, during the period of probation, require Respondent to

complete courses in broker management not to exceed eight credit hours.

RECOMMENDED this 8th day of February, 1995, in Tallahassee, Florida.

___________________________________

DANIEL S. MANRY

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 8th day of February 1995.

ENDNOTE

1/ All section references are to Florida Statutes (1993) unless otherwise

stated.

COPIES FURNISHED:

Darlene S. Keller, Division Director

Division of Real Estate

Department of Professional Regulation

400 West Robinson Street

Post Office Box 1900

Orlando, Florida 32802-1900

Jack McRay, Esquire

General Counsel

Department of Professional Regulation

1940 North Monroe Street

Tallahassee, FL 32399-0792

Daniel Villazon, Esquire

Senior Attorney

Department of Business and

Professional Regulation

Division of Real Estate

Hurston Building, Suite N308

400 West Robinson Street

Orlando, Florida 32801-1772

W Ryan Heath, Esquire

4864 S. Orange Avenue

Orlando, Florida 32806

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

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

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

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

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

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

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

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