03-000359PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Jonathan M. Dougherty Status: Closed Recommended Order on Wednesday, August 27, 2003.

Summary: Petitioner failed to prove that Respondent interfered with or intimidated a witness when his threat of legal action was predicated on her failure to tell the truth.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 03 - 0359PL

)

JONATHAN M. DOUGHERTY, )

)

Respondent. )

______ ________________________)

RECOMMENDED ORDER

Robert E. Meale, Administrative Law Judge of the Division

of Administrative Hearings, conducted the final hearing in

Orlando, Florida, on June 12, 2003.

APPEARANCES

For Petitioner: Christopher J. DeCosta

Senior Attorney

Division of Real Estate

Department of Business and

Professional Regulation

400 West Robinson Street

Suite N - 8 01

Orlando, Florida 32801

For Respondent: Jonathan M. Dougherty, pro se

127 West Fairbanks Avenue

Number 439

Winter Park, Florida 32789

STATEMENT OF THE ISSUES

T he issues are whether Respondent is guilty of interfering

with or intimidating any person who is, or is expected to be, a

witness in any investigation or proceeding relative to a

violation of Chapter 475, Florida Statutes, in violation of

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

PRELIMINARY STATEMENT

By Administrative Complaint dated December 19, 2002,

Petitioner alleged that, at all material times, Respondent was a

licensed Florida real estate broker, whose last license was as

an involuntary inactive broke r at 127 West Fairbanks Avenue,

Suite 439, Winter Park. The Administrative Complaint alleges

that, on March 2, 2002, Respondent facilitated a contract for

purchase and sale between Anna Marie Nealey, as seller, and Paul

Branic, as buyer, of property in Ov iedo. The Administrative

Complaint alleges that Respondent collected $3150 from the buyer

as an earnest money deposit, but failed to forward the deposit

to the seller. The Administrative Complaint alleges that, after

the seller filed a complaint against Respondent with Petitioner,

he induced the seller to sign a document in which she agreed not

to pursue her claim in return for payment of $3550. A few days

later, the Administrative Complaint alleges, Respondent learned

of the disciplinary complaint that the seller had already filed

against him and sent her a letter, threatening civil and

criminal actions if she did not rescind her complaint.

At the start of the hearing, Petitioner dismissed Counts I

and II of the Administrative Complaint, which had alleg ed

violations pertaining to Respondent's acts and omissions at the

time of the underlying transaction. Count III, which is the

sole remaining count, alleges that Respondent is guilty of

interfering with, or intimidating, any person who is, or is

expected to be, a witness in any investigation or proceeding

relative to a violation of Chapter 475, Florida Statutes, in

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

At the hearing, Petitioner called one witness and offered

into evidence six exhibits: Pe titioner Exhibits 4 - 6 and 9 - 11.

Respondent called no witnesses and offered into evidence five

exhibits: Respondent Exhibits 1 - 5. All exhibits were admitted.

The court reporter filed the transcript on July 16, 2003.

The parties filed their proposed rec ommended orders by August 4,

2003.

FINDINGS OF FACT

1. Respondent was actively licensed as a Florida real

estate salesperson through March 31, 2002, and was so licensed

during the events described below.

2. In 2001, Anna Marie Nealey and her husband, Edward

Nealey, were selling their home in Oviedo. On January 20, 2001,

Respondent submitted a contract of purchase and sale on behalf

of the buyer, Paul Branic. The parties agreed to a closing on

March 2, 2001.

3. The record does not describe in much detail the nature

of this real estate transaction. The exhibits do not include

even the contract. The only witness was Ms. Nealey, who claims

only a limited understanding of the transaction.

4. Ms. Nealey's complaint centers on Respondent's handling

of an earnest mo ney deposit, but no competent evidence supports

findings of any kind concerning such a deposit or how it was

handled.

5. In her complaint letter to Petitioner, Ms. Nealey

describes her dissatisfaction with a closing statement that her

friend and real esta te agent received on April 11, although it

seems that the statement was prepared by an independent closing

agent, not Respondent. Ms. Nealey asserts that, two days after

receiving the closing statement, she and her real estate agent

met with the closing a gent, who stated that $3150 had been paid

the sellers outside closing.

6. Ms. Nealey's complaint letter adds that she and her

husband left the closing without any money, although she does

not preclude the possibility of a credit for the $3150 by way of

a note or other credit on the closing statement. When

Ms. Nealey finally spoke with Respondent, he said that he had

done everything that he was supposed to have done. Ms. Nealey's

complaint states: "I didn't like the manner in which he talked

to me about this situation; it led me to believe there was more

than what was being told." Later, Ms. Nealey's letter asserts:

"I have a gut feeling that [Respondent] is trying to hide some

things, and won't be completely honest with me. . . . I just

want to know if there is a copy of a cashier's check or money

order receipt given to the mortgage company with our names on it

and where my money is at this time."

7. By letter dated May 18, 2001, one of Petitioner's

investigators acknowledge the receipt of Ms. Nealey's "recent

complaint." However, the complaint letter itself is undated.

8. Also on May 18, 2001, Mr. and Ms. Nealey entered into

an agreement with Respondent. Respondent agreed to pay the

Nealeys $3550 upon the delivery of a duly assigned note,

originally f rom Mr. Branic to the Nealeys; a signed covenant

against further action; and a signed statement to the Florida

Department of Banking to the effect that the dispute involving

Respondent has been settled. The covenant provides that the

Nealeys will not file a legal action or disciplinary complaint

against Respondent or the mortgage company, and the $3550

settles all pending disputes to the full satisfaction of the

Nealeys, who retract any allegations that they had already made

against Respondent or the mortg age company.

9. Prior to the signing of the Agreement and other

settlement documents, the Nealeys had filed a complaint with the

Florida Department of Banking and Finance against a mortgage

company involved in the transaction. Respondent was aware of

this complaint when he and the Nealeys signed the Agreement and

the Nealeys signed the other settlement documents. However,

when signing the Agreement, Respondent was unaware that the

Nealeys had also filed a complaint against him with Petitioner.

10. After signin g the Agreement, Ms. Nealey informed

Respondent that she had also filed a complaint against him with

Petitioner. Respondent became angered and refused to complete

the settlement transaction, although he called the Nealeys the

next morning and indicated he would purchase the mortgage the

following day, which he did.

11. A few days later, when Respondent received formal

notice of the Nealeys' complaint from Petitioner on May 23,

2001, he wrote them a letter accusing them of defrauding him out

of $3550 and ident ifying their action as a basis for a civil

proceeding in fraud and misrepresentation and for criminal

action. The letter warns that, if the Nealeys did not take

corrective action immediately, Respondent would file a civil

action and refer the matter to th e State Attorney's Office. The

letter adds that the Nealeys' original claims were baseless, but

time - consuming and damaging to business reputations.

12. The Nealeys' satisfaction with the $3550 that they

obtained for the Branic second mortgage sufficed for th e Florida

Department of Banking and Finance to close the case against the

mortgage company. However, Petitioner continued to prosecute

this case, which originally involved claims arising out of the

underlying transaction and a claim arising out of the pos t -

closing dealings between Respondent and the Nealeys, but now

only involves a claim arising out of the post - closing dealings

between Respondent and the Nealeys.

13. As already noted, the record does not permit more than

a rough reconstruction of the real esta te transaction that has

engendered this disciplinary case. However, Ms. Nealey supplied

more detail during her testimony than she supplied in her

complaint letter. She conceded during her testimony that she

and her husband had agreed to hold a second pur chase - money

mortgage and note from Mr. Branic. Ms. Nealey testified that

her problems with the transaction only surfaced when Mr. Branic

failed to make payments on this mortgage and another that he had

given to Ms. Nealey's real estate agent. This failur e caused

Ms. Nealey to file her complaints against the mortgage company,

and Respondent.

14. Based on this record, there is no evidence of any

fraud or misdealing by Respondent in the underlying real estate

transaction. It appears that the Nealeys, and perhap s

Ms. Nealey's real estate agent, took notes from Mr. Branic, and

Mr. Branic did not make the payments for very long. It appears

that, even though she lacked evidence of misdealing, Ms. Nealey

reported suspicions and concerns to Petitioner, and it appears

that Petitioner initially found cause to prosecute Respondent

for his acts and omissions in connection with the underlying

transaction, as well as his post - closing acts and omissions.

15. It is unclear if Petitioner's theory of the remaining

case relies in part on Respondent's acts and omissions in

connection with the Agreement and other settlement documents.

If so, this theory would fail because Respondent did not then

know that Petitioner had filed a complaint against him with

Petitioner. Absent Responde nt's knowledge that Petitioner had

commenced a prosecution, he could not have been capable of

interfering with a witness against him.

16. The evidence clearly fails to establish any such

knowledge on the part of Respondent at the time of the execution

of the Agreement and payment of the $3550 for the Branic second

mortgage. At the time, Respondent thought only that he was

resolving a complaint filed against a mortgage company, not him,

with the Florida Department of Banking and Finance. If he had

already kn own of the complaint already filed with Petitioner, he

would not have angrily lost his temper, refused to close, and

then regained his composure the next day and close promptly on

the settlement. When given the opportunity, Ms. Nealey could

not supply any other reason for Respondent's otherwise -

inexplicable behavior.

17. By the time of the May 23 letter, Respondent, who had

been aware of the complaint with Petitioner for several days,

surmised either that the Nealeys had not performed their end of

the bargain or that, if they had, Petitioner would not drop the

disciplinary case.

18. The threat of civil action is unremarkable because, on

the facts of this record, it was justified. The threat of a

criminal complaint to gain civil advantage raises a distinct

issue, but, more important to this case, is whether Respondent

was interfering with, or intimidating, a witness in an

investigation or prosecution against him.

19. A close examination of the record reveals Respondent's

exasperation with a complainant's willingness to use the power

of the disciplinary process to insulate herself from the

consequences of her bad business judgment and impose these

consequences unfairly upon Respondent. Although not obligated

to do so, Respondent voluntarily bought the Branic second

m ortgage and reasonably thought that he was thus purchasing the

satisfaction and acquiescence of the Nealeys.

20. When Petitioner failed to dismiss the subject case

(until the start of this hearing), Respondent threatened

Ms. Nealey with severe consequences if she did not then stop

complaining about him. In essence, as her complaints were

groundless, the threat demanded only that Ms. Nealey stop her

prevarications and start to tell the truth -- i.e., by admitting

that she and her husband had made a bad business d ecision in

taking the Branic second mortgage and Respondent had relieved

them of the mortgage, although he had not legally been required

to do so. The May 23 letter represents an attempt by Respondent

to coerce Ms. Nealey to tell the truth. Such an effor t serves,

rather than impedes, Petitioner's investigation by allowing it

to gather facts on which it may make an informed determination

whether Respondent violated any disciplinary laws. Evidently,

when apprised of those facts, Petitioner determined that

Respondent had not violated any such laws in the underlying

transaction, nor did he in his post - closing dealings with the

Nealeys.

CONCLUSIONS OF LAW

21. The Division of Administrative Hearings has

jurisdiction over the subject matter. Section 120.57(1),

Flor ida Statutes. (All references to Sections are to Florida

Statutes.)

22. Section 475.42(1)(i) provides:

No person shall obstruct or hinder in any

manner the enforcement of this chapter or

the performance of any lawful duty by any

person acting under the author ity 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.

23. Petitioner must prove the material allegations by

clear and convincing evidence. Department of Banking and

Finance v. Osborne Stern and Company, Inc. , 670 So. 2d 932 (Fla.

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

24. For the reasons set fo rth above, Petitioner has failed

to prove that Respondent interfered with or intimidated

Ms. Nealey. He rightly demanded only that she tell the truth.

RECOMMENDATION

It is

RECOMMENDED that the Florida Real Estate Commission enter a

final order dismis sing the Administrative Complaint.

DONE AND ENTERED this 27th day of August, 2003, in

Tallahassee, Leon County, Florida.

S

___________________________________

ROBERT E. MEAL E

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Fl orida 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 27th day of August, 2003.

COPIES FURNISHED:

Marie Powell, Chairman

Florida Real Estate Commission

Department of Business and

Professional Regulation

400 West Robinson Street

Po st Office Box 1900

Orlando, Florida 32308 - 1900

Hardy L. Roberts, III, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

Christopher J. DeCosta

Senior Attorney

Division of Real Estate

Department of Business and

Professional Regulation

400 West Robinson Street

Suite N - 801

Orlando, Florida 32801

Jonathan M. Dougherty

127 West Fairbanks Avenue

Number 439

Winter Park, Florida 32789

NOTICE OF RIGHT TO SUBMIT EX CEPTIONS

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 must be filed with the agency that

will issue the final order in this case.