95-003710 Board Of Auctioneers vs. Irwin Sherwin Status: Closed Recommended Order on Tuesday, February 17, 1998.

Summary: Failed to pay or account for money of another; engaged in bad faith/dishonesty; commingled property; found guilty of auctioneering/auctioneering crimes directly related to license from another state. Revocation and fine.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, BOARD )

OF AUCTIONEERS, )

)

Petitioner, )

)

vs. ) Case No. 95-3710

)

IRWIN SHERWIN, )

)

Respondent. )

__________________________________)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, BOARD )

OF AUCTIONEERS, )

)

)

Petitioner, )

)

vs. ) Case No. 95-5044

)

BEACH AUCTION HOUSE, )

)

Respondent. )

__________________________________)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, BOARD )

OF AUCTIONEERS, )

)

)

Petitioner, )

)

vs. ) Case Nos. 95-5045

) 95-5046

IRWIN SHERWIN, d/b/a ) 95-5047

BEACH AUCTION HOUSE, INC., )

)

Respondent. )

__________________________________)

RECOMMENDED ORDER

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

on January 28 1997; July 16, 1997; 1 and August 14, 1997, at West

Palm Beach, Florida, before Errol H. Powell, a duly designated

Administrative Law Judge of the Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Theodore R. Gay, Esquire

Department of Business and

Professional Regulation

401 Northwest 2nd Avenue, Suite N-607

Miami, Florida 33128

For Respondent: Louis Sherwin, Qualified Representative

237 Alexander Palm Road

Boca Raton, Florida 33128

STATEMENT OF THE ISSUE

Whether Respondents committed the offenses set forth in the

administrative complaints and the amended administrative

complaint and, if so, what action should be taken.

PRELIMINARY STATEMENT

In 1995, the Department of Professional Regulation, Board of

Auctioneers (Petitioner) filed several administrative complaints

against Irwin Sherwin, Beach Auction House, and Irwin Sherwin,

d/b/a Beach Auction House, Inc. (Respondents), alleging various

violations of Chapter 468, Florida Statutes (1993), the statute

governing the practice of auctioneering. The Respondents

disputed the allegations of fact in the administrative complaints

and requested a formal hearing. The matters were referred to the

Division of Administrative Hearings (Division) and assigned the

following case numbers: Case Nos. 95-2855, 95-3710, 95-5044,

95-5045, 95-5046, and 95-5047. The cases were consolidated for

hearing. Subsequently, the Division's file in Case No. 95-2855

was closed. By Order dated May 21, 1996, Petitioner was

permitted to amend its administrative complaint in Case

No. 95-5045.

In 1996, Petitioner filed another administrative complaint

against Respondent Sherwin, charging him with violations of

Chapter 468, Florida Statutes (1993). Respondent Sherwin

disputed the allegations of fact in the administrative complaint

and requested a formal hearing. The matter was referred to the

Division and assigned Case No. 96-3916. Case Nos. 95-3710,

95-5044, 95-5045, 95-5046, 95-5047, and 96-3916 were consolidated

for hearing. Subsequently, the Division's file in Case

No. 96-3916 was closed.

Regarding Case No. 95-3710, Petitioner filed a two-count

administrative complaint against Respondent Sherwin. Petitioner

charged Respondent Sherwin with: Count I--violating Subsection

468.389(1)(l), Florida Statutes (1993), by having pled to four

counts of embezzlement in the State of North Carolina; and Count

II--thereby, violating Subsection 468.389(1)(k), Florida Statutes

(1993).

As to Case No. 95-5044, Petitioner filed an administrative

complaint against Respondent Beach Auction House. Petitioner

charged Respondent Beach Auction House with violating Subsection

468.389(1)(e), Florida Statutes (1993), by engaging in conduct in

connection with a sales transaction, which demonstrates bad faith

or dishonesty.

Regarding Case No. 95-5045, Petitioner filed a two-count

amended administrative complaint against Respondent Sherwin,

d/b/a Beach Auction House. Petitioner charged Respondent

Sherwin, d/b/a Beach Auction House with: Count I--violating

Subsection 468.389(1)(j), Florida Statutes (1993), through

violating Subsection 468.385(9), Florida Statutes, by failing to

post a surety bond for an auctioneer in the amount of $10,000

with the Petitioner in order to do business in the State of

Florida; and Count II--violating Subsection 468.389(1)(j),

Florida Statutes (1993), through violating Subsection

468.385(10), Florida Statutes, by failing to post a surety bond

for an auction business in the amount of $25,000 with the

Petitioner in order to do business in the State of Florida.

As to Case No. 95-5046, Petitioner filed an administrative

complaint against Respondent Sherwin, d/b/a Beach Auction House.

Petitioner charged Respondent Sherwin, d/b/a Beach Auction House

with violating Subsection 468.389(1)(e), Florida Statutes (1993),

by engaging in conduct in connection with a sales transaction,

which demonstrates bad faith or dishonesty.

Regarding Case No. 95-5047, Petitioner filed a five-count

administrative complaint against Respondent Sherwin, d/b/a Beach

Auction House. Petitioner charged Respondent Sherwin, d/b/a

Beach Auction House with: Count I--violating Subsection

468.388(1), Florida Statutes (1993), by an auctioneer or auction

business failing to execute a written agreement with the owner or

the agent of the owner of any property offered for sale, prior to

conducting an auction in the State of Florida; Count II--

violating Subsection 468.389(1)(e), Florida Statutes (1993), by

engaging in conduct in connection with a sales transaction which,

demonstrates bad faith or dishonesty; Count III--violating

Subsection 468.389(1)(h), Florida Statutes (1993), by an

auctioneer commingling money or property of another person with

his own; Count IV--violating Subsection 468.389(1)(e), Florida

Statutes (1993), by engaging in conduct in connection with a

sales transaction, which demonstrates bad faith or dishonesty;

and Count V--violating Subsection 468.389(1)(c), Florida Statutes

(1993), by failing to account for or to pay, within a reasonable

time not to exceed 30 days, money belonging to another which came

into the control of this Respondent through an auction.

At hearing, Petitioner presented the testimony of 2

witnesses and entered 15 exhibits into evidence. 2 Respondents

presented the testimony of 1 witness (Respondent Sherwin) and

entered 22 exhibits into evidence.

No transcript of the hearing was ordered. At the request of

the parties the time for filing post-hearing submissions was set

for more than ten days following the conclusion of the hearing.

An extension of time was granted for the submission of the post-

hearing submissions. The parties filed post-hearing submissions

which have been duly considered.

FINDINGS OF FACT

1. On May 26, 1989, the Department of Professional

Regulation (now, the Department of Business and Professional

Regulation), Board of Auctioneers (Petitioner) licensed Irwin

Sherwin (Respondent Sherwin) as an auctioneer. He was issued

license number AU 0000720.

2. However, Respondent Sherwin was initially denied

licensure. On December 29, 1986, Respondent Sherwin submitted an

application for licensure, without examination, as an auctioneer

to the Petitioner. By order dated October 22, 1987, the

Petitioner denied Respondent Sherwin's application on the basis

that Respondent Sherwin had been charged with grand theft.

3. Respondent Sherwin requested an informal hearing on his

denial. By final order dated September 14, 1988, and filed

September 19, 1988, the Petitioner granted Respondent Sherwin's

application, subject to certain special conditions, including

payment of a $10,000 fine, posting of a $300,000 auctioneer

bond, 3 and imposition of a period of probation after licensure,

with Respondent Sherwin, during the probation, practicing under

the supervision of an approved auctioneer. Subsequently, through

agreement made by Respondent Sherwin at Petitioner's meeting held

on February 16, 1989, the Petitioner modified the bond

requirement by order dated March 4, 1989, and filed March 9,

1989, to include the following: (a) a $10,000 auctioneer bond

and a $25,000 auction business bond, within 30 days of

February 16, 1989, to permit licensure; and (b) a $25,000

auctioneer bond and a $50,000 auction business bond, within 30

days of the date of the order, in order for Respondent Sherwin to

maintain licensure.

4. On or about October 20, 1989, after Respondent Sherwin

was licensed by the Petitioner, Respondent Sherwin obtained a

$25,000 auctioneer bond from American Bankers Insurance Company

of Florida. On November 6, 1989, Respondent Sherwin posted the

bond with the Petitioner.

5. On February 19, 1990, Respondent Beach Auction House,

Inc. (Respondent Auction House) was licensed by the Petitioner as

an auction business. Respondent Auction House was issued license

number 0000531. As a condition of licensure, Respondent Auction

House was required to obtain a bond for an auction business. On

or about December 1, 1989, Respondent Auction House obtained a

$25,000 bond as a auction business from American Bankers

Insurance Company of Florida, the same surety for Respondent

Sherwin.

6. The president of Respondent Auction House was Respondent

Sherwin's son, Louis Sherwin. The address for Respondent Auction

House was 2009 Northeast 2nd Street, Deerfield Beach, Florida.

7. On December 1, 1993, Respondent Auction House's license

became delinquent for failure to renew its license. Respondent

Auction House's license has remained delinquent since December 1,

1993.

Case No. 95-3710

8. In August 1974, the North Carolina Auctioneer Licensing

Board (North Carolina Auctioneer Board) licensed Respondent

Sherwin as an auctioneer and licensed Blowing Rock Auction

Galleries, Inc., his business, as an auction firm.

9. On March 14, 1994, in the General Court of Justice,

Superior Court Division, Wake County, North Carolina, Case

Nos. 94-CRS-2435, 2441, 2443, 2448, pursuant to a plea agreement,

Respondent Sherwin pled guilty to two felony counts of

embezzlement of state property and two felony counts of

embezzlement of county property. The embezzlement related to

unpaid sales tax due the State of North Carolina and one of its

counties by Respondent Sherwin's business, Blowing Rock

Galleries, Inc., for which Respondent Sherwin was responsible

under the law of the State of North Carolina. As part of the

plea agreement, among other things, Respondent Sherwin was

sentenced to 6 years in North Carolina's state prison, but his

sentence was suspended, and he was placed on unsupervised

probation for 5 years under certain specific conditions.

10. On advice of counsel, Respondent Sherwin entered into

the plea agreement. 4

11. The felony convictions against Respondent Sherwin have

not been set-aside or voided by a court of competent

jurisdiction.

12. By Consent Order dated December 21, 1994, the North

Carolina Auctioneer Board took action against Respondent Sherwin

and Blowing Rock Auction Galleries, Inc., related to several

improprieties, including the embezzlement felonies, under the

laws and rules governing auctioneers in the State of North

Carolina. As to the improprieties, Respondent Sherwin, his son,

Louis Sherwin and Blowing Rock Auction Galleries, Inc., entered

into a settlement agreement in which they agreed, among other

things, that their licenses, issued by the North Carolina

Auctioneer Board, would be surrendered and that their licenses

would be considered permanently revoked. By the Consent Order,

the North Carolina Auctioneer Board approved the settlement

agreement and pursuant to the settlement agreement, ordered,

among other things, the surrender of the licenses of Respondent

Sherwin, his son, and Blowing Rock Auction Galleries, Inc.,

subject to the conditions and limitations of the settlement

agreement.

Case Nos. 95-5044 and 95-5046

13. On March 17, 1994, Tanya Braunshteyn and her husband,

Michael Braunshteyn, while on vacation, attended an auction at

Respondent Auction House. Respondent Sherwin was present at the

auction but did not conduct the auction. The Braunshteyns were

successful bidders on a picture or framed sculpture, a ring, and

a china set at a total cost of $3,483.30. The Braunshteyns did

not purchase the merchandise at that time but left a deposit.

14. The following day the Braunshteyns returned to

Respondent Auction House to retrieve and pay for their

merchandise. They paid $3,250 in cash as partial payment for the

merchandise and received the picture or framed sculpture and the

ring, together with a receipt, written descriptions of the

merchandise received, and certificates of valuation. Respondent

Sherwin agreed that the Braunshteyns could pay the balance,

$233.30, for the china by check at a later time and that the

china would be shipped to them after receipt of the check.

15. On March 26, 1994, Mrs. Braunshteyn mailed a check to

Respondent Sherwin in the amount of $233.30 for the balance on

the china. On April 11, 1994, the check cleared her bank.

However, the Braunshteyns did not receive the china. They made

several telephone calls to Respondent Auction House and spoke

with Respondent Sherwin several times inquiring about the china.

The Braunshteyns received several different and unsatisfactory

reasons as to why the china was not sent to them.

16. On March 18, 1995, approximately 11 months after the

balance was paid on the china, the Braunshteyns were again

vacationing in Florida. They visited the Respondent Auction

House with the specific intent of receiving a refund of the money

they paid for the china that they never received. At that time,

Respondent Sherwin refunded their money in full for the china.

Case No. 95-5045

17. After inquiry from the Petitioner, by letter dated

May 19, 1995, American Bankers Insurance Company notified the

Petitioner that Respondent Sherwin's surety bond had been

cancelled. The Bond Notice of Cancellation, accompanying the

letter, indicates that the auctioneer's bond was cancelled

effective November 18, 1990, due to an underwriting decision by

the surety.

18. Respondent Sherwin does not dispute that a surety bond

was not maintained and in force for either him, as an auctioneer,

or for Respondent Auction House, as an auction business. 5

Case No. 95-5047

19. In 1989 Louis Carusillo consigned to Jack Beggs

approximately 1000 items of merchandise, including furniture,

jade, and sculptures, worth between $600,000 and $800,000.

Mr. Beggs owned an auction business located in Sarasota, Florida.

20. Sometime in 1990, without Mr. Carusillo's knowledge or

consent, Mr. Beggs re-consigned and delivered a substantial

portion of Mr. Carusillo's merchandise to Respondent Sherwin in

Blowing Rock, North Carolina. Respondent Sherwin received the

merchandise in two or three truckloads at his auction gallery,

Blowing Rock Auction Galleries, Inc., in Blowing Rock.

21. At the time of delivery, Respondent Sherwin failed to

inventory Mr. Carusillo's merchandise. As a result of the

failure to inventory, Mr. Carusillo's merchandise was commingled

with merchandise belonging to Respondent Sherwin at Blowing Rock

Auction Galleries.

22. All of Mr. Carusillo's merchandise were tagged with his

initials on them. At some point in time, Respondent Sherwin

noticed Mr. Carusillo's initials on the merchandise. Respondent

Sherwin recognized Mr. Carusillo's initials, due to a prior

business dealing in years past in which Mr. Carusillo had

consigned some merchandise to Respondent Sherwin.

23. In the summer of 1990, Respondent Sherwin telephoned

Mr. Carusillo regarding Mr. Carusillo's merchandise at Blowing

Rock Auction Galleries received from Mr. Beggs. The telephone

conversation with Respondent Sherwin was the first time that

Mr. Carusillo had knowledge of the merchandise that he had

consigned to Mr. Beggs being delivered to Respondent Sherwin.

24. Mr. Carusillo viewed his past transaction with

Respondent Sherwin as unsatisfactory and had no intentions of

allowing Respondent Sherwin to possess and sell his merchandise.

Mr. Carusillo conveyed his position to Respondent Sherwin.

Mr. Carusillo refused to consign any of his merchandise to

Respondent Sherwin and refused to sign any written agreement

authorizing Respondent Sherwin to sell any of the merchandise.

25. Despite knowing of Mr. Carusillo's position and despite

having no written agreement authorizing the sale of any of

Mr. Carusillo's merchandise, Respondent Sherwin retained

Mr. Carusillo's merchandise and sold some of the merchandise at

both Blowing Rock Auction Galleries and at Respondent Auction

House. (In the winter of 1990, Respondent Sherwin had

Mr. Carusillo's merchandise delivered to Respondent Auction

House.)

26. In 1991, Mr. Carusillo filed a civil action against,

among others, Respondent Sherwin and his son, Louis Sherwin, in

the Circuit Court of Broward County, Florida, Seventeenth

Judicial Circuit, Case No. 91-03351. Through the law suit,

Mr. Carusillo sought, among other things, the return of his

merchandise in the possession of Respondent Sherwin, an

injunction to stop further sales of his merchandise by Respondent

Sherwin, and an accounting of his merchandise from Respondent

Sherwin. An Agreed Temporary Injunction was entered by the Court

on February 14, 1991, forbidding, among other things, the sale or

removal of Mr. Carusillo's merchandise and ordering an accounting

of his merchandise. An Agreed Order as to Replevin was entered

by the Court on May 9, 1991, allowing, among other things,

Mr. Carusillo to remove his merchandise from Respondent Sherwin's

possession.

27. Even though Respondent Sherwin rendered an accounting

of Mr. Carusillo's merchandise, the accounting was not

satisfactory. Furthermore, even after Mr. Carusillo removed what

he thought was all of his merchandise, Respondents sold other

merchandise belonging to Mr. Carusillo.

28. After protracted litigation, by an Amended Final

Judgment dated April 26, 1995, entered nunc pro tunc August 18,

1994, the Court entered judgment against Respondent Sherwin, his

son (Louis Sherwin), and Mr. Beggs. As to Respondent Sherwin and

his son, the Court found that they were jointly and severally

liable and awarded Mr. Carusillo, among other things, the sum of

$468,959.74, which included the following: a total pecuniary

loss of $113,639.30 (including interest of $12,167.80), pre-

judgment interest of $44,347.28, treble damages for civil theft,

which brought the total to $473,959.74, and a credit to

Respondent Sherwin and his son, which reduced the total to

$468,959.74.

29. The Amended Final Judgment was appealed but was upheld

by the appellate court.

30. At the hearing in the instant case, Respondents

attempted to show that the monetary loss to Mr. Carusillo, as

evidenced by the Amended Final Judgment, was incorrect and

improper. However, the evidence presented by Petitioner at

hearing was clear and convincing that the monetary judgment

entered by the Court should not be disturbed. Respondents failed

to present evidence to overcome Petitioner's showing.

31. By Order dated September 27, 1996, the Circuit Court of

Broward County directed payment to Mr. Carusillo for the judgment

from the Auctioneer Recovery Fund in the amount of

Mr. Carusillo's "actual and direct losses occurring subsequent to

October 1, 1991." Subsequently, Mr. Carusillo made a claim for

payment of the judgment from the Auctioneer Recovery Fund.

32. On December 6, 1996, Petitioner considered

Mr. Carusillo's claim. On December 31, 1996, Petitioner entered

an order on the claim ordering, among other things, that

Mr. Carusillo be paid $94,575 from the Auctioneer Recovery Fund

and that $47,287.50 of the $94,575 was attributable to Respondent

Sherwin.

33. On or about January 15, 1997, a warrant from the State

of Florida was issued for $94,575, representing payment to

Mr. Carusillo from the Auctioneer Recovery Fund.

CONCLUSIONS OF LAW

34. Pursuant to Section 120.569 and Subsection 120.57(1),

Florida Statutes, the Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and the

parties thereto.

35. License revocation proceedings are penal in nature.

The burden of proof is on the Petitioner to establish the

truthfulness of the allegations by clear and convincing evidence.

Department of Banking and Finance, Division of Securities and

Investor Protection v. Osborne Stern and Company , 670 So. 2d 932

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

36. Section 468.388, Florida Statutes (1993), provides for

the conduct of an auction and provides in pertinent part:

(1) Prior to conducting an auction in this

state, an auctioneer or auction business

shall execute a written agreement with the

owner, or the agent of the owner, of any

property to be offered for sale, stating:

(a) The name and address of the owner of the

property;

(b) The name and address of the person

employing the auctioneer or auction business,

if different from the owner; and

(c) The terms or conditions upon which the

auctioneer or auction business will receive

the property for sale and remit the sales

proceeds to the owner.

37. Section 468.389, Florida Statutes (1993), provides in

pertinent part:

(1) The following acts shall be grounds for

the disciplinary activities provided in

subsections (2) and (3):

* * *

(c) Failure to account for or to pay, within

a reasonable time not to exceed 30 days,

money belonging to another which has come

into the control of an auctioneer or auction

business through an auction.

* * *

(e) Any conduct in connection with a sales

transaction which demonstrates bad faith or

dishonesty.

* * *

(h) Commingling money or property of another

person with his own. Every auctioneer and

auction business shall maintain a separate

trust or escrow account in an insured bank or

savings and loan association located in this

state in which shall be deposited all

proceeds received for another person through

an auction sale.

* * *

(j) Violating a statute or administrative

rule regulating practice under this part or a

lawful disciplinary order of the board or the

department.

(k) Having a license to practice a

comparable profession revoked, suspended, or

otherwise acted against by another state,

territory, or country.

(l) Being convicted or found guilty,

regardless of adjudication, of a crime in any

jurisdiction which directly relates to the

practice or the ability to practice the

profession of auctioneering.

(2) When the board finds any person guilty

of any of the prohibited acts set forth in

subsection (1), it may enter an order

imposing one or more of the following

penalties:

(a) Refusal to certify to the department an

application for licensure.

(b) Revocation or suspension of a license.

(c) Imposition of an administrative fine not

to exceed $1,000 for each count or separate

offense.

(d) Requirement of bonding in amounts not to

exceed $100,000 for auctioneers and $300,000

for auction businesses.

(e) Issuance of a reprimand.

(f) Placement of the auctioneer on probation

for a period of time and subject to

conditions as the board may specify,

including requiring the auctioneer to

successfully complete the licensure

examination.

38. Section 468.385, Florida Statutes (1993), provides in

pertinent part:

(9) Each auctioneer shall post with the

department a $10,000 surety bond issued by an

insurance company authorized to do business

in this state. . . . The bond shall . . . be

in effect at all times that the auctioneer

has a current active license and conducts

business in this or any other state.

(10) Each auction business shall post with

the department a $25,000 surety bond issued

by an insurance company authorized to do

business in this state. . . . The bond shall

be in effect at all times that the auction

business has a current active license and

conducts business in this or any other state.

39. Regarding Counts II and IV in Case No. 95-5047, the two

alleged violations of Subsection 468.389(1)(e), Petitioner has

revised its position to consider the acts or omissions relating

to Mr. Carusillo to constitute only one, instead of two,

violations of Subsection 468.389(1)(e). Consequently, Counts II

and IV are combined to comprise one count of an alleged violation

of Subsection 468.389(1)(e) in Case No. 95-5047.

40. Also, regarding Count I in Case No. 95-5047, the

alleged violation of Subsection 468.388(1), Petitioner points out

that Subsection 468.389(1)(j) was not alleged but argues that a

violation of Subsection 468.388(1) should be deemed to constitute

grounds for disciplinary action pursuant to Subsection

468.389(1)(j). Petitioner's omission of alleging a violation of

Subsection 468.389(1)(j) is not fatal. In the instant case, in

order to have a violation of Subsection 468.389(1)(j), a

violation of Chapter 468, Florida Statutes, must be demonstrated;

therefore, if Petitioner demonstrates a violation of Subsection

468.388(1), a violation of Subsection 468.389(1)(j) has occurred.

Consequently, if Petitioner demonstrates a violation of

Subsection 468.388(1), a violation of Subsection 468.389(1)(j)

will be deemed to have been demonstrated.

41. Additionally, Petitioner points out that the alleged

violations in Case No. 95-5047 occurred prior to the 1993 Florida

Statutes cited. The Florida Statutes in effect at the time of

the alleged violations were the 1989 Florida Statutes. However,

Petitioner points out further that the language and numbering of

the Florida Statutes in effect at the time of the alleged

violations are identical to the 1993 Florida Statutes cited.

Petitioner's error in citing the correct Florida Statutes is not

fatal. The alleged wrongful conduct is the same and requires the

same proof. Moreover, Respondents were on notice of the alleged

wrongful conduct. Consequently, the determination as to whether

the violations alleged in Case No. 95-5047 occurred will be made

in accordance with the 1989 Florida Statutes.

42. Petitioner has demonstrated by clear and convincing

evidence that Respondents committed the violations as alleged and

revised.

43. The penalty provision of Subsection 468.389(2), Florida

Statutes (1989), differs from the statutory provisions set forth

in the 1993 Florida Statutes cited. Subsection 468.389(2),

Florida Statutes (1989), provides in pertinent part:

(d) Requirement of bonding in amounts not to

exceed $25,000 for auctioneers and $50,000

for auction business.

44. Further, as to penalty, Rule 61G2-7.030, Florida

Administrative Code, formerly Rule 21BB-7.030, Florida

Administrative Code, provides in pertinent part:

(1) When the Board finds that an applicant

or licensee whom it regulates under Chapter

468, Part VI, F.S., has committed any of the

acts set forth in Section 468.389, F.S., it

shall issue a final order imposing

appropriate penalties within the ranges

recommended in the following disciplinary

guidelines:

* * *

(c) Failure to account for money belonging

to another which has come into the control of

an auctioneer or auction business through an

auction, within a reasonable time not to

exceed 30 days. The usual penalty shall be:

1st offense -- an administrative fine of $100

to $500 and a reprimand; 2nd offense -- an

administrative fine of $500 to $1,000, an

increase in the amount of bond required,

probation and successful completion of the

licensure examination; 3rd offense -- an

administrative fine of $1,000 and license

revocation.

(d) Failure to pay money belonging to

another which has come into the control of an

auctioneer or auction business through an

auction, within a reasonable time not to

exceed 30 days. The usual penalty shall be:

1st offense -- an administrative fine of $500

to $1,000, probation and/or license

suspension; 2nd offense -- an administrative

fine of $1,000, suspension and an increase in

the amount of bond required; 3rd offense --

an administrative fine of $1,000 and license

revocation.

* * *

(f) Conduct in connection with a sales

transaction which demonstrates bad faith or

dishonesty. The usual penalty shall be: 1st

offense -- an administrative fine of $1,000

and license suspension followed by probation;

2nd offense -- an administrative fine of

$1,000, license suspension followed by

probation and an increase in the amount of

bond required; 3rd offense -- an

administrative fine of $1,000 and license

revocation.

* * *

(i) Commingling money or property of another

person with his own. The usual penalty shall

be: 1st offense -- an administrative fine of

$100 to $500 and a reprimand; 2nd offense --

an administrative fine of $500 to $1,000, an

increase in the amount of bond required,

probation and successful completion of the

licensure examination; 3rd offense -- an

administrative fine of $1,000 and license

revocation.

* * *

(k) Violating any provision of Chapter 468,

Part VI, F.S., Chapter 455, F.S., any rule of

the Board or Department. The usual penalty

shall be selected from the full range of

penalties available to the Board and will be

based upon the severity of the underlying

offense.

* * *

(m) Having a license to practice a

comparable profession revoked, suspended, or

otherwise acted against by another state,

territory, or county. The usual penalty

shall be commensurate with the penalty

invoked by the other jurisdiction or a

penalty consistent with these guidelines for

the underlying offense committed in the other

jurisdiction.

(n) Being convicted or found guilty,

regardless of adjudication, of a crime in any

jurisdiction which directly relates to the

practice or the ability to practice the

profession of auctioneering. The usual

penalty shall be an administrative fine of

$1,000 and license suspension or revocation.

(2) Based upon consideration of aggravating

or mitigating factors, present in an

individual case, the Board may deviate from

the penalties recommended in Subsection (1)

above. The Board shall consider as

aggravating or mitigating factors the

following:

(a) The severity of the offense;

(b) The danger to the public;

(c) The number of repetitions of offenses;

(d) The length of time since the violation;

(e) The number of times the licensee has

been previously disciplined by the Board;

(f) The length of time licensee has

practiced;

(g) The actual damage, physical or

otherwise, caused by the violation;

(h) The deterrent effect of the penalty

imposed;

(i) The effect of the penalty upon the

licensee's livelihood;

(j) Any effort of rehabilitation by the

licensee;

(k) The actual knowledge of the licensee

pertaining to the violation;

(l) Attempts by the licensee to correct or

stop the violation or refusal by the licensee

to correct or stop the violation;

(m) Related violations against the licensee

in another state including findings of guilt

or innocence, penalties imposed and penalties

served;

(n) Actual negligence of the licensee

pertaining to any violation;

(o) Penalties imposed for related offenses

under Subsection (1) above;

(p) Any other relevant mitigating or

aggravating factors under the circumstances.

(3) Penalties imposed by the Board pursuant

to Subsection (1) above may be imposed in

combination or individually, and are as

follows:

(a) Refusal to certify to the Department an

application for licensure.

(b) Revocation or suspension of a license.

(c) Imposition of an administrative fine not

to exceed $1,000 for each count or separate

offense.

(d) Requirement of bonding in amounts not to

exceed $100,000 for auctioneers and $300,000

for auction businesses.

(e) Issuance of a reprimand.

(f) Placement of the licensee on probation

for a period of time and subject to such

conditions as the Board may specify,

including requiring the auctioneer to

successfully complete the licensure

examination.

Petitioner points out that prior to August 29, 1993, the bond

requirements in Rule 61G2-7.030(3)(d) were $25,000 for

auctioneers and $50,000 for auction businesses; and that,

effective August 29, 1993, the said Rule was amended and the

bond requirements became $100,000 for auctioneers and $300,000

for auction businesses.

45. Several aggravating factors should be considered in

determining the penalty to be imposed upon the Respondents. The

factors to be considered are found at Rule 61G2-7.030(2)(a), (b),

and (p).

46. As to Rule 61G2-7.030(2)(a), severity of the offense,

the circumstances associated with the numerous violations

committed by the Respondents involving Mr. Carusillo in Case

No. 95-5047 demonstrate that the Respondents have a disregard for

the auctioneering laws protecting consumers and auctioneers,

alike. Further, the loss suffered by Mr. Carusillo was great.

The offenses committed by Respondents in Case No. 95-5047 are

very severe.

47. Regarding Rule 61G2-7.030(2)(b), danger to the public,

the circumstances of the violations committed in Case

Nos. 95-5044, 95-5045, 95-5046, and 95-5047 demonstrate

Respondents disregard for the rights of consumers in the

transactions involving the practice of auctioneering. Also, the

failure of Respondents to maintain a surety bond that would have

provided some protection for consumers in the event of a wrong

causing damages demonstrates Respondents further disregard for

the laws protecting consumers in the practice of auctioneering.

Respondents are a danger to the public.

48. As to Rule 61G2-7.030(2)(p), other relevant aggravating

factors under the circumstances, in Case Nos. 95-5044, 95-5045,

and 95-5046 the circumstances of the violations committed

demonstrate the other factors to be considered. The failure to

maintain a surety bond was in direct contradiction of the special

conditions placed upon Respondent Sherwin for licensure and

demonstrates his disregard for the Petitioner's authority and

responsibility for the practice of auctioneering. The continued

operation of Respondent Auction House for at least 15 months

after it became unlicensed, as a result of its license not being

renewed, demonstrates again Respondents disregard for the laws

regulating the practice of auctioneering.

49. Also, regarding Rule 61G2-7.030(2)(p), the numerous

violations committed by Respondents are considered as an

aggravating factor.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Board of Auctioneers enter a final

order:

1. Finding that Irwin Sherwin violated Subsection

468.389(1)(l) and (k), Florida Statutes, of Counts I and II,

respectively, in Case No. 95-3710.

2. Finding Beach Auction House violated Subsection

468.389(1)(e), Florida Statutes, in Case No. 95-5044.

3. Finding Irwin Sherwin, d/b/a Beach Auction House, Inc.,

violated:

a. Subsection 468.389(1)(j), Florida Statutes, of Counts I

and II in Case No. 95-5045.

b. Subsection 468.389(1)(e), Florida Statutes, in Case

No. 95-5046.

c. Subsection 468.389(1)(j), Florida Statutes, of Count I

in Case No. 95-5047.

d. Subsection 468.389(1)(e), Florida Statutes, of Count II

in Case No. 95-5047. 6

e. Subsection 468.389(1)(h), Florida Statutes, of Count III

in Case No. 95-5047.

f. Subsection 468.389(1)(c), Florida Statutes, of Count V

in Case No. 95-5047.

4. Imposing a $8,000 administrative fine against Irwin

Sherwin.

5. Imposing a $6,000 administrative fine against Beach

Auction House, Inc.

6. Revoking the license of Irwin Sherwin.

7. Revoking the license of Beach Auction House, Inc.

DONE AND ENTERED this 17th day of February, 1998, in

Tallahassee, Leon County, Florida.

___________________________________

ERROL H. POWELL

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 17th day of February, 1998.

ENDNOTES

1/ The hearing on July 16, 1997, was held by video

teleconference.

2/ Petitioner presented the testimony of Tanya Braunshteyn by

deposition, Petitioner's Exhibit No. 6.

3/ The normal surety bond requirement for an auctioneer was

$10,000. Subsection 468.385(9), Florida Statutes (1987).

4/ Also, as part of the plea agreement, Respondent Sherwin's

business was subject to a civil audit by the North Carolina

Department of Revenue. Respondent Sherwin testified that the

audit results, which showed that sales and use tax was not paid

for certain periods of time, continue to be disputed by him and

are being resolved through an administrative process in North

Carolina. The felony convictions will not be affected by the

outcome of the administrative process regarding the disputed

sales and use tax.

5/ Respondent Sherwin testified that he did not know that the

surety bonds had been cancelled until he was notified by the

Petitioner. Furthermore, he testified that the lapse of the

surety bonds was inadvertent and had to be the result of a

miscommunication between himself and his insurance broker who was

delegated the responsibility for obtaining the surety bonds. The

above reasons expressed by Respondent Sherwin do not relieve him,

as the licensee, of the responsibility of ensuring that the

surety bonds required to engage in the practice of auctioneering

are maintained. Moreover, Respondent Sherwin produced no

documentation in support of his belief that the surety bonds had

been obtained and maintained during the period of time that the

Respondents engaged in the practice of auctioneering.

6/ Counts II and IV in Case No. 95-5047 are combined and

considered one violation of Subsection 468.389(1)(e), Florida

Statutes. See Conclusions of Law.

COPIES FURNISHED:

Theodore R. Gay, Esquire

Department Of Business and

Professional Regulation

401 Northwest 2nd Avenue, Suite N-607

Miami, Florida 33128

Louis Sherwin, Qualified Representative

237 Alexander Palm Road

Boca Raton, Florida 33128

Sue Foster, Executive Director

Department of Business and

Professional Regulation

Board of Auctioneers

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Lynda L. Goodgame, 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.