99-001265 Florida Real Estate Commission vs. Fazal Ali Status: Closed Recommended Order on Tuesday, August 10, 1999.

Summary: Respondent failed to deposit purchaser`s deposit, failed to make agency disclosure, and failed to disclose association with new broker.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

FLORIDA REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) Case No. 99-1265

)

FAZAL ALI, )

)

Respondent. )

_________________________________)

RECOMMENDED ORDER

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

before Larry J. Sartin, a duly designated Administrative Law

Judge of the Division of Administrative Hearings, on June 29,

1999.

APPEARANCES

For Petitioner: Ghunise Coaxum, Senior Attorney

Division of Real Estate

Department of Business and Professional

Regulation

Hurston North Tower, Suite N308

400 West Robinson Street

Orlando, Florida 32801-1772

For Respondent: Rodney G. Gregory, Esquire

Rodney G. Gregory, P.A.

3900 Atlantic Boulevard

Jacksonville, Florida 32207

STATEMENT OF THE ISSUE

The issue in this case is whether Respondent, Fazal Ali,

committed the offenses alleged in an Administrative Complaint

issued against him on December 16, 1998.

PRELIMINARY STATEMENT

On December 16, 1998, Petitioner, the Department of Business

and Professional Regulation, issued an Administrative Complaint

alleging that Respondent, Fazal Ali, violated Sections

475.25(1)(b),(d)1, and (q), Florida Statutes (by failing to make

disclosure regarding agency as required by Section 475.278,

Florida Statutes). Mr. Ali disputed the allegations of fact of

the Administrative Complaint by an Election of Rights dated March

2, 1999.

A copy of the Administrative Complaint and the Election of

Rights were filed with the Division of Administrative Hearings on

March 22, 1999, by Petitioner with a request that the matter be

assigned to an Administrative Law Judge. The matter was assigned

to the undersigned.

The formal hearing of this case was conducted by video

conferencing equipment. The undersigned was located in a hearing

room of the Division of Administrative Hearings located in

Tallahassee. Petitioner, Respondent, the court reporter, and all

the witnesses were located in Video Room 300, Building A, Duval

Regional Service Center, in Jacksonville, Florida.

Petitioner presented the testimony of James E. Pierce, J.

Earline Lamb, and Herbert Ray Lively. Petitioner's Exhibits 3

through 6 were accepted into evidence.

Respondent testified on his own behalf and presented the

testimony of Angela Lorraine Lively and Karen Gray. Respondent's

Exhibits 1 and 2 were accepted into evidence.

A Transcript of the hearing was filed on July 13, 1999.

Proposed orders were, therefore, due on or before August 2, 1999.

Petitioner filed a proposed order on August 2, 1999. No proposed

order was filed by Respondent. Petitioner's proposed order has

been fully considered in entering this Recommended Order.

FINDINGS OF FACT

1. Petitioner, the Department of Business and Professional

Regulation, Division of Real Estate (hereinafter referred to as

the "Division"), is an agency of the State of Florida. The

Division is charged with the responsibility for, among other

things, regulating the practice of persons holding real estate

brokers' and real estate salespersons' licenses in Florida.

Section 20.165, and Chapters 455 and 475, Florida Statutes

(1997).

2. Respondent, Fazal Ali, is now, and at all times relevant

to this matter has been, licensed as a real estate salesperson in

Florida. Mr. Ali holds license number 0604229.

3. Prior to and during September and October 1997 Mr. Ali

was employed as a salesperson by S & J Enterprise of

Jacksonville, Inc., t/a/ Re/Max Alpha Realty (hereinafter

referred to as "Re/max").

4. During September 1997 Re/Max had listed a parcel of real

property located at 3444 Deer Street, Jacksonville, Florida

(hereinafter referred to as the "Deer Street Property").

5. In or about September 1997 Herbert and Angela Lively

contacted Re/Max about the Deer Street Property. Mr. Ali was

designated as the salesperson to assist the Livelys.

6. At the time that Livelys inquired about the Deer Street

Property, a contract for sale was already pending on the

property. In the event that the pending contract fell through,

Mr. Ali prepared a back-up contract on the Deer Street Property

for the Livelys. The Livelys gave Mr. Ali a check made payable

to Re/Max in the amount of $500.00 to be used as a deposit on the

contract.

7. The contract on the Deer Street Property ultimately was

carried out. Thereafter Mr. Ali continued to show the Livelys

other property, including a parcel at 1602 East 10th Street,

Jacksonville, Florida (hereinafter referred to as the "10th

Street Property").

8. On or about September 26, 1997, Mr. Ali completed an

offer to purchase the 10th Street Property on behalf of the

Livelys. The contract specified that the Livelys had deposited a

$500.00 binder deposit on the property. Mr. Ali agreed to use

the check for $500.00 check previously given to him by the

Livelys on the Deer Street Property as the binder deposit on the

10th Street Property.

9. Mr. Ali failed to provide the Livelys with required

agency disclosures at the time the offer on the 10th Street

Property was completed.

10. Mr. Ali also failed to remit the $500.00 binder deposit

to Re/Max. Instead, Mr. Ali kept the check in his possession.

11. The Livelys' offer was accepted and a contract for the

sale of the 10th Street Property to the Livelys was executed on

September 30, 1997. The $500.00 deposit check was still not

deposited by Mr. Ali.

12. When J. Earline Lamb, Re/ Max's registered real estate

broker, learned that there was a contract on the 10th Street

Property and that the $500.00 binder deposit had not been

remitted by Mr. Ali, she contacted the Livelys and Mr. Ali.

13. Mr. Ali admitted to Ms. Lamb that he had the $500.00

binder deposit check and some financial documents that belonged

to the Livelys. Mr. Ali agreed to retrieve and return the check

and documents to Ms. Lamb.

14. On or about October 20, 1997, Mr. Ali returned the

$500.00 check which the Livelys had given him in September to Ms.

Lamb. The original check was destroyed.

15. On or about October 17, 1997, the Livelys wrote a new

$500.00 check for the binder deposit. That check was deposited

by Re/Max.

16. The contract for sale of the 10th Street Property

eventually closed. The Livelys purchased the property for the

purchase price agreed to after the offer prepared by Mr. Ali on

their behalf had been submitted.

17. The Livelys were satisfied with Mr. Ali's assistance.

The evidence failed to prove that the Livelys suffered any harm

as a result of the failure of Mr. Ali to deposit their binder

deposit check or his failure to provide them with agency

disclosures.

18. The evidence failed to prove why Mr. Ali failed to

deposit the Livelys' $500 check with Re/Max. The evidence also

failed to prove that Mr. Ali attempted to gain any advantage from

his failure to deposit the check.

19. Prior to October 1997 Mr. Ali decided to leave the

employ of Re/Max. On October 2, 1997, Mr. Ali filed a form 400.5

with the Division reporting a change in employment. Mr. Ali

reported that he was employed by Results Real Estate Investments

Corp. Mr. Ali certified on the form that "I have notified my

former broker of this change . . . ."

20. Mr. Ali did not inform anyone at Re/Max that he was

resigning or that he was employed by Results Real Estate

Investments Corp. Mr. Ali also retained the $500.00 binder

deposit check which he had received while employed by Re/Max.

21. On October 16, 1997, Ms. Lamb informed Mr. Ali that he

was terminated from Re/Max because of his failure to deposit the

$500.00 binder deposit from the Livelys. Mr. Ali did not inform

Ms. Lamb that he had already filed a form 400.5 with the Division

reporting his association with Results Real Estate Investments

Corp.

22. Ms. Lamb learned of Mr. Ali's association with Results

Real Estate Investments Corp. after filing a form 400.5 with the

Division reporting Mr. Ali's termination by Re/Max.

23. The evidence failed to prove why Mr. Ali failed to

timely report to Re/Max his new association with Results Real

Estate Investments Corp. The evidence also failed to prove that

Mr. Ali gained or attempted to gain anything from his failure to

disclose. The evidence also failed to prove that Re/Max or

Results Real Estate Investments Corp. suffered any harm from Mr.

Ali's failure to disclose.

24. The evidence failed to prove that Mr. Ali has had any

other disciplinary actions brought against him by the Division.

CONCLUSIONS OF LAW

25. The Division of Administrative Hearings has

jurisdiction of the parties to, and the subject matter of, this

proceeding. Section 120.57, Florida Statutes (1997).

26. The burden of proof in this proceeding was on the

Division, the party asserting the affirmative of the issue: that

Respondent committed violations of Section 475.25(1), Florida

Statutes. See Florida Department of Transportation v. J.W.C.

Company, Inc. , 396 So. 2d 778 (Fla. 1st DCA 1981); Balino v.

Department of Health and Rehabilitative Services , 348 So. 2d 349

(Fla. 1st DCA 1977). The Division was required to meet its

burden by clear and convincing evidence. Ferris v. Turlington ,

510 So. 2d 292 (Fla. 1987).

27. Section 475.25, Florida Statutes (1997), authorizes the

Florida Real Estate Commission to take disciplinary action

against the license of any real estate broker or real estate

salesperson if the licensee commits certain specified acts. Of

the specified acts of Section 475.25, Florida Statutes (1997),

Respondent was charged with violating the following:

. . .

(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 . . . .

. . . .

(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 .

. . . 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 the 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. . . .

If the licensee promptly employs one of the

escape procedures contained herein, and if she

or he abides by the order or judgment resulting

therefrom, no administrative compliant may be

filed against the licensee for failure to

account for, deliver, or maintain the escrowed

property.

. . . .

(q) Has violated any provision of s. 475.276

or s. 475.278, including the duties owed under

those sections.

28. Rule 61J2-14.009, Florida Administrative Code, requires

that:

Every salesperson who receives any deposit,

as defined in Rule 61J2-14.008, Florida

Administrative Code, shall deliver the same

to the broker or employer no later than the

end of the next business day following

receipt of the item to be deposited.

Saturdays, Sundays and legal holidays shall

not be construed as business days. . . .

29. The evidence in this case proved that Mr. Ali, in his

capacity as a real estate salesperson, received a "deposit" as

defined in Rule 61J2-14.008, Florida Administrative Code, in the

amount of $500.00 from the Livelys. The evidence also proved

that Mr. Ali did not deliver the deposit to Re/Max within the

time require by Rule 61J2-14.009, Florida Administrative Code.

30. Having failed to deliver the $500.00 check to Re/Max as

required by Rule 61J2-14.009, Florida Administrative Code, Mr.

Ali violated Section 475.25(1)(d)1, Florida Statutes (1997), as

alleged in Count 1 of the Administrative Complaint.

31. Mr. Ali's failure to disclose his dual association with

Re/Max and Results Real Estate Investments Corp. constituted a

beach of trust in a business transaction in violation of Section

475.25(1)(b), Florida Statutes (1997).

32. Mr. Ali's failure to make the agency disclosures

required by Section 475.278, Florida Statutes (1997).

33. The Division has requested that Mr. Ali be placed on

probation for a period of one year from the entry of the final

order in this case; that he be required to successfully complete

a -hour escrow management course for real estate brokers; and

that he be required to pay an administrative fine of $1,000.00.

34. The punishment recommended by the Division is

consistent with Rule 61J2-24.001, Florida Administrative Code.

The Division, however, has failed to take into account the

mitigating factors of Rule 61J2-24.001(4), Florida Administrative

Code, or the disciplinary guidelines of Rule 61J2-24.002, Florida

Administrative Code, in recommending a fine of $1,000.00. A fine

of $500.00 is more reasonable when the fact that the evidence

failed to prove that Mr. Ali committed any of the violations for

financial reward is taken into account and the fact that no one

was financially harmed by Mr. Ali's actions is taken into

account.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that a final order be entered by Petitioner

finding that Respondent has violated Sections 475.25(1)(b), (d)1,

and (q), Florida Statutes, as alleged in the Administrative

Complaint issued against Respondent. It is further

RECOMMENDED that Respondent be placed on probation for a

period of one year from the entry of the final order; that he be

required to successfully complete a 45-hour post-licensure

course; and that he be required to pay an administrative fine of

$500.00.

DONE AND ENTERED this 10th day of August, 1999, in

Tallahassee, Leon County, Florida.

___________________________________

LARRY J. SARTIN

Administrative Law Judge

Division of Administrat ive Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Admini strative Hearings

this 10th day of August, 1999.

COPIES FURNISHED:

Ghunise Coaxum, Senior Attorney

Division of Real Estate

Department of Business and

Professional Regulation

Hurston North Tower, Suite N308

400 West Robinson Street

Orlando, Florida 32801-1772

Rodney G. Gregory, Esquire

Rodney G. Gregory, P.A.

3900 Atlantic Boulevard

Jacksonville, Florida 32207

Herbert S. Fecker, Division Director

Division of Real Estate

Department of Business

and Professional Regulation

400 West Robinson Street

Post Office Box 1900

Orlando, Florida 32802-1900

William Woodyard, General Counsel

Department of Business

and Professional Regulation

1940 North Monroe Street

Northwood Centre

Tallahassee, Florida 32933-1920

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.