03-000125 Department Of Business And Professional Regulation, Division Of Real Estate vs. Rudolph G. Dyer And Golden Key Realty, Inc. Status: Closed Recommended Order on Wednesday, June 11, 2003.

Summary: Respondents failed to reconcile their brokerage escrow account; to maintain trust funds in the account; obstructed/hindered Petitioner`s investigation; revocation of their respective licenses and fine of $3,000, jointly and severally.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 03 - 0125PL

)

RUDOLPH G. DYER, and )

GOLDEN KEY REALTY, INC., )

)

Respondents. )

RECOMMENDED ORDER

This case came before Administrative Law Judge John G.

Van Laningham for final hearing by video teleconference on

March 24, 2003, at sites in Tallahassee and Fort Lauderdale,

Florida.

APPEARANCES

For Petitioner: Christopher J. DeCosta, Esquire

Department of Business and Professional

Regulation

400 West Robinson Street, Suite N308

Hurston Building, North Tower

Orla ndo, Florida 32801 - 1772

For Respondents: Rudolph G. Dyer, pro se

Golden Key Realty, Inc.

6221 Margate Blvd.

Margate, Florida 33063

STATEMENT OF THE ISSUES

In this disciplinary proceeding, the issues are whether

Respondents, who are l icensed real estate brokers, failed to

reconcile their brokerage escrow account properly; failed to

maintain trust funds in an escrow account as required; filed a

false report or record; obstructed or hindered Petitioner’s

investigator in an official inves tigation; failed to account for

and deliver trust funds; committed various acts of fraud,

misrepresentation, dishonest dealing, or culpable negligence in

any business transaction; or committed any of these enumerated

offenses, as alleged by Petitioner in i ts Administrative

Complaint.

PRELIMINARY STATEMENT

On December 19, 2002, Petitioner Department of Business and

Professional Regulation, Division of Real Estate, issued a

twelve - count Administrative Complaint against Respondents,

wherein it was alleged tha t Respondents had violated various

provisions of Chapter 475, Florida Statutes, and Chapter 61J2,

Florida Administrative Code. Respondents timely requested a

formal hearing to contest these allegations, and the matter was

referred to the Division of Admin istrative Hearings on

January 15, 2003.

The presiding administrative law judge set the final

hearing for March 24, 2003. Both parties appeared at the

appointed place and time.

At hearing, Petitioner presented the testimony of one

witness: Catherine River a. Petitioner also offered ten

exhibits, numbered 2 through 11, inclusive, and all except

Petitioner’s Exhibit 3 (which was withdrawn) were admitted into

evidence. At Petitioner’s request, the administrative law judge

took official recognition of the app licable statutes and rules.

Respondent Dyer testified on his own behalf and presented the

testimony of one other witness: Elysee Joseph. Respondents

offered no exhibits.

The administrative law judge issued a post - hearing order on

May 13, 2003, requiri ng the parties to submit proposed

recommended orders on or before May 22, 2003. Petitioner timely

submitted a proposed recommended order; Respondents did not.

FINDINGS OF FACT

The Parties

1. Respondent Rudolph Dyer (“Dyer”) is a licensed real

estate bro ker subject to the regulatory jurisdiction of the

Florida Real Estate Commission (“Commission”).

2. Respondent Golden Key Realty, Inc. (“Golden Key”) is

and was at all times material hereto a corporation registered as

a Florida real estate broker subjec t to the regulatory

jurisdiction of the Commission.

3. Dyer is the president and a director of Golden Key, and

at all times relevant to this case he had substantial, if not

exclusive, control of the corporation. Indeed, t he evidence

does not establish t hat Golden Key engaged in any conduct

distinct from Dyer’s in connection with the transactions at

issue. Therefore, Respondents will generally be referred to

collectively as “Dyer” except when a need to distinguish between

them arises.

4. Petitioner De partment of Business and Professional

Regulation, Division of Real Estate, has jurisdiction over

disciplinary proceedings for the Commission. At the

Commission’s direction, Petitioner is authorized to prosecute

administrative complaints against licensees within the

Commission’s jurisdiction.

Escrow Account Irregularities and Related Misconduct

5. On or about November 14, 2001, Petitioner conducted a

routine audit of Dyer’s records. Pursuant to the audit,

Catherine Rivera (“Rivera”), Petitioner’s invest igator,

determined that as of October 31, 2001, the balance in Dyer’s

escrow account was $127.

6. Rivera determined further that Dyer’s trust liability,

i.e. the total amount of money that Dyer should have been

holding in escrow on his clients’ behalf, was $2,870. Thus,

there existed a shortfall of $2,743 in Dyer’s escrow account.

7. In light of this discovery, Rivera requested that Dyer

provide additional records, including previous bank statements

and the reconciliation statements that licensed bro kers must

prepare each month showing either that their trust liabilities

and bank balances are in agreement or explaining why they are

not. Dyer was unable to produce these records, whereupon Rivera

advised him that Petitioner would initiate disciplinary

proceedings.

8. On or about April 26, 2002, after being formally

notified of pending administrative charges arising from the

aforementioned deficiencies concerning his escrow account and

associated records, Dyer sent Rivera a letter in which he a)

admitt ed having failed to reconcile his bank balances and trust

liabilities and b) informed Rivera that “immediately after the

audit [on November 14, 2001,] steps were taken to close out all

escrow deposit accounts being held by the company.” In fact,

Dyer cont inued to use his escrow account to hold funds in trust

through June 2002; as it happened, the escrow account would not

be completely closed until July 29, 2002. The undersigned is

not convinced, however, that Dyer lied to Petitioner about

closing the escr ow account, as Petitioner here contends.

Rather, given the ambiguity of the language used (“steps were

taken”), the undersigned accepts Dyer’s explanation that what he

intended to communicate was that activity in the escrow account

was being allowed to wi nd down in an orderly fashion —— which was

substantially true.

9. Continuing to investigate the matter, Rivera arranged

to meet with Dyer at his office on June 19, 2002, to review the

previously requested bank records and files. When Rivera

arrived on that date, however, Dyer again failed to provide the

desired documents. As a result, Rivera scheduled yet another

appointment to inspect records at Dyer’s office. The next such

meeting would take place on July 29, 2002.

10. In the meantime, Petitioner ser ved a subpoena duces

tecum on Dyer’s bank and obtained a complete set of bank

records, including canceled checks, pertaining to Dyer’s escrow

account.

11. On July 29, 2002, Dyer finally provided reconciliation

statements for his escrow account pursuant to Rivera’s

longstanding request. These statements were self - contradictory

and woefully inadequate, but, if nothing else, they clearly

demonstrated (and the undersigned finds) that the escrow account

balance fell significantly short of Dyer’s total trust liability

during the months of May through August 2001, inclusive.

Indeed, there is no dispute (for Dyer admitted at final

hearing), and it is hereby found, that at all times relevant to

this case, Dyer was commingling trust funds with other funds, to

the point that the escrow account effectively became an

operating account of Golden Key.

12. Dyer also produced documents purporting to be copies

of checks drawn on his escrow account. At least seven of these

copies were not genuine reproductions of the r espective

originals but were, instead, fakes. 1 Specifically, in five

instances, the payee of an escrow - account check was, according

to the copies that Dyer produced, an individual whom, the

inference is clear, Dyer owed escrowed funds. In reality, each

s uch check actually had been made payable to and been uttered by

Golden Key , which latter facts are irrefutably established by

the bank - produced records. 2

13. Dyer admitted that the above - described copies of

checks he had produced to Petitioner were fa kes, but he denied

having personally altered the underlying documents to create the

false copies, blaming an unnamed accountant for that misdeed,

and he disclaimed advance knowledge of the tampering. The

undersigned, however, does not fully believe Dyer’s explanation.

Dyer had exclusive authority over the escrow account and

substantial control over Golden Key’s operations. The

undersigned finds it inconceivable that a stranger to the

subject transactions could have knowingly falsified these

particular ch ecks, in the manner shown, without Dyer’s active

assistance. Therefore, while acknowledging the possibility that

Dyer himself might not have altered the documents in question,

the undersigned finds that he was, at the very least, aware of

and knowingly co mplicit in the attempted deception.

The Fanfan Transactions

14. On or about June 13, 2001, Dyer facilitated a contract

between Herinslake, as seller, and Francique Fanfan (“Fanfan”),

as buyer, for the purchase and sale of real property commonly

known as 5435 Northwest Tenth Street, Plantation, Florida. The

contract called for an initial deposit of $500 and an additional

deposit of $500 to be placed with Dyer within ten days after the

buyer’s acceptance.

15. Dyer received $500 from Fanfan on June 19, 2 001. In

evidence as Petitioner’s Exhibit 9 is a $500 money order dated

June 18, 2001, which names the sender (maker) as “Fan Fan” and

lists as his address “601 W Oakland Pk Blvd, Ft Lauderdale

33311.” The undersigned infers that Petitioner’s Exhibit 9 is ,

in fact, a copy of the money order that Fanfan tendered to Dyer

on June 19, 2001, as a deposit on the contract to purchase

property from Herinslake.

16. Petitioner alleges (and Dyer disputes) that some time

after June 19, 2001, Dyer collected the agreed - upon second $500

deposit from Fanfan, making a total of $1,000 being held in

escrow on Fanfan’s behalf. Petitioner asserts that Petitioner’s

Exhibit 7, which is a $500 money order dated July 9, 2001,

payable to Golden Key, is proof of the second deposit.

Petitioner further alleges that after the contract between

Herinslake and Fanfan failed to close (which is undisputed),

Dyer returned $500 to Fanfan and kept $500 (which is disputed).

17. Taken together, the testimony of Dyer and that of his

former sale sman, Elysee Joseph, is imprecise, confusing, and

somewhat in conflict as it relates to Fanfan. They agree,

however, that when the Herinslake - Fanfan transaction fell apart,

Dyer returned Fanfan’s entire deposit —— of $500.

18. Dyer also points out that mon ths later he assisted

Fanfan in the purchase of a condominium unit located at 2800

Northwest Fifty - Sixth Avenue, Lauderhill, Florida. His

testimony is corroborated by the settlement statement from that

transaction, which is in evidence as part of Petition er’s

Exhibit 11. The settlement statement identifies the seller as

Evelyn Goodison; names Francique Fanfan, “a single man,” as

buyer; and indicates that the transaction closed on April 10,

2002. According to the settlement statement, Fanfan had placed

a $1,000 deposit against the purchase price, and the testimony

at final hearing established that Dyer had held this sum in

escrow pending the closing.

19. The undersigned finds that Petitioner has failed to

prove, clearly and convincingly, that Dyer retaine d $500

belonging to Fanfan in connection with the aborted contract

between Herinslake and Fanfan, for several reasons.

20. First, the money order dated July 9, 2001, a copy of

which is in evidence as Petitioner’s Exhibit 7, appears not to

have been tender ed by Francique Fanfan, the alleged victim here.

This particular money order identifies the sender as “Michelle

Fanfan” and gives as her address “2076 Kimberly Blvd, N

Lauderdale, Fl 33068.” There is no evidence whatsoever in the

record regarding Michell e Fanfan, and hence no finding can be

made that she was in any way related to Francique Fanfan, who

(the evidence shows) was a single man. Moreover, Michelle

Fanfan’s address does not match Francique Fanfan’s address as

reported in Petitioner’s Exhibit 9.

21. Second, the undersigned believes that it is highly

unlikely Fanfan would have continued to do business with Dyer

if, as Petitioner alleges, Dyer had cheated him out of $500 on

an earlier deal. Thus, the very fact that Fanfan purchased the

Goodison p roperty through Dyer tends to refute Petitioner’s

charge.

22. Finally, Fanfan, the alleged victim, did not testify

at the final hearing, and consequently there is no direct

evidence that Dyer took $500 from Fanfan.

The Charges

23. In counts I and VII of its Administrative Complaint,

Petitioner accuses Respondents of having failed to properly

prepare monthly escrow - reconciliation statements. Petitioner’s

position is that in maintaining records showing significant

shortages in the escrow account for a period of approximately

six months, and by failing to take corrective action regarding

the shortages, Respondents failed to comply with Rule 61J2 -

14.012, Florida Administrative Code, and hence violated Section

475.25(1)(e), Florida Statutes.

24. In counts II and VIII, Petitioner alleges that

Respondents committed 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 viola tion of Section 475.25(1)(b),

Florida Statutes. Petitioner’s position is that Respondents

committed fraud or misrepresentation when they tendered false or

forged documents to Rivera during the course of her official

investigation. In addition, Petitioner asserts that Respondents

committed culpable negligence towards the individuals who placed

their funds in trust with Respondents.

25. In counts III and IX, Petitioner asserts that

Respondents obstructed or hindered the enforcement of Chapter

475, Florida Statutes, in violation of Section 475.42(1)(i),

Florida Statutes, and therefore in violation of Section

475.25(1)(e), Florida Statutes. Petitioner’s position is that

Respondents willfully interfered with Rivera’s investigation by

submitting fraudulent doc uments to the investigator.

26. In counts IV and X, Petitioner accuses Respondents of

having made or filed a report or record which the licensee knew

to be false, in violation of Section 475.25(1)(l), Florida

Statutes. Petitioner’s position is that Res pondents knowingly

tendered false copies of canceled checks to Rivera.

27. In counts V and XI, Petitioner charges Respondents

with failing to account for and deliver trust funds, in

violation of Section 475.25(1)(d)1., Florida Statutes.

Petitioner’s posi tion is that Respondents failed to account for

and deliver the second deposit allegedly received from Fanfan in

connection with the Herinslake - Fanfan transaction.

28. In counts VI and XII, Petitioner accuses Respondents

of having failed to maintain trust funds in the real estate

brokerage escrow account until disbursement was properly

authorized, in violation of Section 475.25(1)(k), Florida

Statutes. Petitioner’s position is that during the six months

of concern, Respondents’ escrow account funds were re gularly

several thousand dollars less than the trust liability.

Ultimate Factual Determinations

29. Dyer failed to prepare written monthly reconciliation

statements as required by Rule 61J2 - 14.012, Florida

Administrative Code, and thus he violated Sec tion 475.25(1)(e),

Florida Statutes. Petitioner therefore has established the

charges set forth in counts I and VII of its Administrative

Complaint, by clear and convincing evidence.

30. The evidence does not establish that Dyer committed

fraud, misrepre sentation, concealment, false promises, false

pretenses, dishonest dealing by trick, scheme, or device,

culpable negligence, or breach of trust in any business

transaction . There is no persuasive evidence that Dyer intended

to harm (or actually harmed) an y of his clients. While Dyer did

participate in a dishonest scheme to deceive Rivera by producing

false copies of his canceled checks, this particular wrongdoing

occurred, not in a business transaction, but rather in

connection with a regulatory investiga tion. Thus, Dyer did not

violate Section 475.25(1)(b), Florida Statutes. Counts II and

VIII were not proved.

31. Dyer attempted to obstruct or hinder Rivera’s

investigation by producing copies of canceled checks that he

knew were false and misleading. Petitioner has clearly

established that Dyer violated Section 475.42(1)(i), Florida

Statutes, which in turn constitutes a violation of Section

475.25(1)(e), Florida Statutes, as charged in counts III and IX

of the Administrative Complaint.

32. The evidenc e does not support the charge that Dyer

violated Section 475.25(1)(l), Florida Statutes, which prohibits

the filing false reports and records, because the altered

documents that Dyer produced to Rivera were not signed by Dyer ——

at least not in the sense con templated by the statute, which

specifies that “such reports or records shall include only those

which are signed in the capacity of a licensed broker or

salesperson.” Counts IV and X thus were not proved.

33. The evidence does not clearly establish that Dyer

failed to return a deposit of $500 to Fanfan after his deal with

Herinslake fell through. Thus, counts V and XI, which allege

violations of Section 475.25(1)(d)1., Florida Statutes, were not

proved.

34. Dyer failed to maintain trust funds in a segr egated

escrow account, in violation of Section 475.25(1)(k), Florida

Statutes. Petitioner therefore has established the charges set

forth in counts VI and XII of its Administrative Complaint, by

clear and convincing evidence.

CONCLUSIONS OF LAW

35. T he D ivision of Administrative Hearings has personal

and subject matter jurisdiction in this proceeding pursuant to

Sections 120.569 and 120.57(1), Florida Statutes.

36. Section 475.25, Florida Statutes, under which

Respondents have been charged, sets forth th e acts for which the

Commission may impose discipline. This statute provides, in

pertinent part:

(1) The commission may deny an application

for licensure, registration, or permit, or

renewal thereof; may place a licensee,

registrant, or permittee on prob ation; may

suspend a license, registration, or permit

for a period not exceeding 10 years; may

revoke a license, registration, or permit;

may impose an administrative fine not to

exceed $1,000 for each count or separate

offense; and may issue a reprimand, and any

or all of the foregoing, if it finds that

the licensee, registrant, permittee, or

applicant:

* * *

(b) Has been guilty of fraud,

misrepresentation, concealment, false

promises, false pretenses, dishonest dealing

by trick, scheme, or devic e, 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 furthera nce 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 und er 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 ha s

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

whi ch the licensee is not in law or equity

entitled to retain under the circumstances.

* * *

( e) Has violated any of the provisions of

this chapter[, including, as alleged here,

Section 475.42(1)(i), Florida Statutes,] or

any lawful order or rule made or issued

under the provisions of this chapter or

chapter 455[, including, as alleged here,

Rule 61J2 - 14.012, Florida Administrative

Code].

* * *

( k) Has failed, if a broker, to immediately

place, upon receipt, any money, fund,

deposit, check, or d raft 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; or has failed, if a salesp erson,

to immediately place with her or his

registered employer any money, fund,

deposit, check, or draft entrusted to her or

him by any person dealing with her or him as

agent of the registered employer. The

commission shall establish rules to provide

fo r records to be maintained by the broker

and the manner in which such deposits shall

be made.

* * *

( l) Has made or filed a report or record

which the licensee knows to be false, has

willfully failed to file a report or record

required by state or fe deral law, has

willfully impeded or obstructed such filing,

or has induced another person to impede or

obstruct such filing; but such reports or

records shall include only those which are

signed in the capacity of a licensed broker

or salesperson.

37. Se ction 475.42(1), Florida Statutes, which Respondents

are alleged to have violated, committing a disciplinable offense

according to Section 475.25(1)(e), Florida Statutes, provides,

in pertinent part:

( i) No person shall obstruct or hinder in

any manner th e enforcement of this chapter

or the performance of any lawful duty by any

person acting under the authority of this

chapter or interfere with, intimidate, or

offer any bribe to any member of the

commission or any of its employees or any

person who is, or is expected to be, a

witness in any investigation or proceeding

relating to a violation of this chapter.

Section 475.42(1)(i), Florida Statutes.

38. Rule 61J2 - 14.012, Florida Administrative Code, which

Respondents are alleged to have violated, committing a

disciplinable offense according to Section 475.25(1)(e), Florida

Statutes, contains the following requirements:

( 1) A broker who receives a deposit as

previously defined shall preserve and make

available to the BPR, or its authorized

representative, al l deposit slips and

statements of account rendered by the

depository in which said deposit is placed,

together with all agreements between the

parties to the transaction. In addition,

the broker shall keep an accurate account of

each deposit transaction a nd each separate

bank account wherein such funds have been

deposited. All such books and accounts

shall be subject to inspection by the BPR or

its authorized representatives at all

reasonable times during regular business

hours.

(2) Once monthly, a broke r shall cause to

be made a written statement comparing the

broker's total liability with the reconciled

bank balance(s) of all trust accounts. The

broker's trust liability is defined as the

sum total of all deposits received, pending

and being held by the broker at any point in

time. The minimum information to be

included in the monthly statement -

reconciliation shall be the date the

reconciliation was undertaken, the date used

to reconcile the balances, the name of the

bank(s), the name(s) of the account (s), the

account number(s), the account balance(s)

and date(s), deposits in transit,

outstanding checks identified by date and

check number, an itemized list of the

broker's trust liability, and any other

items necessary to reconcile the bank

account balan ce(s) with the balance per the

broker's checkbook(s) and other trust

account books and records disclosing the

date of receipt and the source of the funds.

The broker shall review, sign and date the

monthly statement - reconciliation.

(3) Whenever the trust liability and the

bank balances do not agree, the

reconciliation shall contain a description

or explanation for the difference(s) and any

corrective action taken in reference to

shortages or overages of funds in the

account(s). Whenever a trust bank accou nt

record reflects a service charge or fee for

a non - sufficient check being returned or

whenever an account has a negative balance,

the reconciliation shall disclose the

cause(s) of the returned check or negative

balance and the corrective action taken.

3 9. Being penal in nature, Section 475.25, Florida

Statutes, “must be construed strictly, in favor of the one

against whom the penalty would be imposed.” Munch v. Department

of Professional Regulation, Div. of Real Estate , 592 So. 2d

1136, 1143 (Fla. 1st DCA 1992).

40. A proceeding, such as this one, to suspend, revoke, or

impose other discipline upon a professional license is penal in

nature. State ex rel. Vining v. Florida Real Estate Commission ,

281 So. 2d 487, 491 (Fla. 1973). Accordingly, to impose

discipline, Petitioner must prove the charges against

Respondents by clear and convincing evidence. Department of

Banking and Finance, Div. of Securities and Investor Protection

v. Osborne Stern & Co. , 670 So. 2d 932, 933 - 34 (Fla.

1996)(citing Ferris v. Turlington , 510 So. 2d 292, 294 - 95 (Fla.

1987)); Nair v. Department of Business & Professional

Regulation , 654 So. 2d 205, 207 (Fla. 1st DCA 1995).

41. Regarding the standard of proof, in Slomowitz v.

Walker , 429 So. 2d 797, 800 (Fla. 4th DCA 1983), the C ourt of

Appeal, Fourth District, canvassed the cases to develop a

“workable definition of clear and convincing evidence” and found

that of necessity such a definition would need to contain “both

qualitative and quantitative standards.” The court held that :

clear 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 testimony

must be precise and explicit and the

witnesses must be lacking confusion as to

th e facts in issue. The evidence must be of

such weight that it produces in the mind of

the trier of fact a firm belief or

conviction, without hesitancy, as to the

truth of the allegations sought to be

established.

Id. The Florida Supreme Court later adop ted the fourth

district’s description of the clear and convincing evidence

standard of proof. Inquiry Concerning a Judge No. 93 - 62 , 645

So. 2d 398, 404 (Fla. 1994). The First District Court of Appeal

also has followed the Slomowitz test, adding the inter pretive

comment that “[a]lthough this standard of proof may be met where

the evidence is in conflict, . . . it seems to preclude evidence

that is ambiguous.” Westinghouse Elec. Corp., Inc. v. Shuler

Bros., Inc. , 590 So. 2d 986, 988 (Fla. 1st DCA 1991), re v .

denied , 599 So. 2d 1279 (1992)(citation omitted).

42. As set forth in the Findings of Fact, the trier has

determined as matter of ultimate fact that Petitioner has proved

Dyer violated both Rule 61J2 - 14.012, Florida Administrative

Code, and Section 475 .42(1)(i), Florida Statutes, which

violations constitute separate disciplinable offenses pursuant

to Section 475.25(1)(e), Florida Statutes; and that he violated

Section 475.25(1)(k), Florida Statutes. The undersigned further

concludes that the plain lang uage of these particular statutory

and rule provisions, being clear and unambiguous, can be applied

to the historical events at hand without a simultaneous

examination of extrinsic evidence or resort to principles of

interpretation. It is therefore unnece ssary to make additional

legal conclusions with regard to these charges.

43. On the other hand, the fact - finder has determined, as

a matter of ultimate fact, that Petitioner has failed to

establish, by the requisite level of proof, that Dyer committed

the other offenses of which he stands accused, namely,

violations of Sections 475.25(1)(b), 475.25(1)(d)1., and

475.25(1)(l), Florida Statutes. The findings concerning Dyer’s

alleged violation of Section 475.25(1)(d)1., Florida Statutes,

which stem from str aightforward resolutions of disputed facts,

require no supporting legal conclusions to be meaningful. The

factual findings regarding the remaining counts, however, were

informed by the administrative law judge’s understanding of the

law. Therefore, a bri ef discussion of the pertinent legal

principles will illuminate the dispositive findings of ultimate

fact regarding the charges that failed on grounds both factual

and legal.

Fraud and Dishonesty

44. Petitioner must show that Respondents committed an

inte ntional act in order to establish a violation of Section

475.25(1)(b), Florida Statutes. See Munch , 592 So. 2d at 1143 -

44. But, importantly, the intentional act must be perpetrated

in a “business transaction” to be disciplinable under this

section. It i s concluded that the term “business transaction,”

which must be strictly construed in this context, does not

comprehend regulatory investigations. That is, Section

475.25(1)(b) is designed to reach real estate transactions

between the licensee and his or her clients or others affected

by or involved in such transactions —— not interactions between

the licensee and the regulatory authorities, which are addressed

in other statutes.

45. In this case, Dyer intentionally acted dishonestly

when he proffered to Rivera copies of canceled checks that he

knew to be false. His wrongdoing was not part of a “business

transaction,” however, and hence not a violation of Section

475.25(1)(b), Florida Statutes. (As for the remaining

allegations charging that Dyer violate d Section 475.25(1)(b) by

committing culpable negligence towards his clients, the evidence

simply did not establish the necessary facts clearly and

convincingly.)

False Reports or Records

46. Section 475.25(1)(l), Florida Statutes, which

proscribes th e making or filing of a false “report” or “record,”

is specifically limited in scope to reports or records that are

“signed in the capacity of a licensed broker or salesperson.”

The purpose of this proviso, it is concluded, is to increase the

likelihood t hat reports or records brought within the reach of

Section 475.25(1)(l) will be those whose accuracy the licensee

reasonably should have thought twice about, owing to the modicum

of formality that a signature brings to a writing. Construing

this qualifica tion strictly against Petitioner, therefore, it is

concluded that the required signature must be one which was

affixed with the intent to attest, explicitly or implicitly, to

the truthfulness of the document’s contents.

47. In this case, the fake cancel ed checks that Dyer

produced to Rivera do, in fact, bear his signature. However, it

is clear that Dyer’s signature on the checks in question was

inscribed not to attest to the accuracy of the information

contained therein, but rather to authorize the bank to disburse

funds from an account over which Dyer had such authority. Thus,

it is concluded that the subject checks are not “reports” or

“records” within the operation of Section 475.25(1)(l), Florida

Statutes.

Disciplinary Guidelines

48. Pursuant to Ru le 61J2 - 24.001, Florida Administrative

Code, the Commission has established disciplinary guidelines

establishing the range of penalties that will be imposed on

licensees guilty of violating Chapter 475. According to the

guidelines, the usual punishment fo r a violation of Section

475.25(1)(e), Florida Statutes, is “an 8 year suspension to

revocation and an administrative fine of $1,000.” (When, as

here, the licensee is guilty of violating Section 475.25(1)(e)

because he obstructed or hindered the enforceme nt of Chapter

475, which misconduct is specifically forbidden pursuant to

Section 475.42(1)(i), Florida Statutes, the Commission usually

“impose[s] a penalty of revocation.”) For a violation of

Section 475.25(1)(k), Florida Statutes, the Commission impose s a

“minimum of a 90 day suspension and $1,000 fine up to

revocation.”

49. Here, Dyer committed two separate violations of

Section 475.25(1)(e), one of which —— obstructing an

investigation —— is an extremely serious offense that warrants the

severe penalt y of revocation. In addition, he commingled trust

funds with other funds, moving escrowed monies into Golden Key’s

operating accounts instead of keeping such funds properly

segregated in an escrow account, which constitutes a violation

of Section 475.25(1 )(k), Florida Statutes. Accordingly, a

penalty of revocation should be imposed, together with a fine of

$3,000.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Commission enter a final order

that: (a) finds Respondents guilty as charged in counts I, III,

VI, VII, IX, and XII of the Administrative Complaint; (b)

revokes Respondents’ respective real estate licenses; and (c)

imposes an administrative fine of $3,000 against Respondents,

jointly and seve rally.

DONE AND ENTERED this 11th day of June, 2003, in

Tallahassee, Leon County, Florida.

___________________________________

JOHN G. VAN LANINGHAM

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkw ay

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 11th day of June, 2003.

ENDNOTES

1 / The evidence clearly and convincingly proves that Dyer

submitted fake copies of checks numbered 1146, 1148, 1155, 1163,

1202, 1206, and 1208.

2 / The five instances to which the text refers involved checks

numbered 1146, 1148, 1202, 1206, and 1208.

COPIES FURNISHED :

Christopher J. DeCosta, Esquire

Department of Business and Professional

Regulation

400 West Robinson Street, Suite N308

Hurston Building, North Tower

Orlando, Florida 32801 - 1772

Rudolph G. Dyer

Golden Key Realty, Inc.

6221 Ma rgate Blvd.

Margate, Florida 33063

Hardy L. Roberts, III, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

Nancy P. Campiglia, Acting Director

Division of Real Estate

Department of Business and

Professional Regulation

400 West Robinson Street

Suite 802 North

Orlando, Florida 32801

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this R ecommended O rd er. Any exceptions

to this R ecommended O rder should be filed with the agency that

will issue the F inal O rder in this case.