08-005802PL
Department Of Business And Professional Regulation, Division Of Real Estate vs.
Michael W. Bugg
Status: Closed
Recommended Order on Wednesday, June 17, 2009.
Recommended Order on Wednesday, June 17, 2009.
1STATE OF FLORIDA
4DIVISION OF ADMINISTRATIVE HEARINGS
8DEPARTMENT OF BUSINESS AND )
13PROFESSIONAL REGULATION, )
16DIVISION OF REAL ESTATE, )
21)
22Petitioner, )
24)
25vs. ) Case No. 08-5802PL
30)
31MICHAEL W. BUGG, )
35)
36Respondent. )
38)
39RECOMMENDED ORDER
41On April 10, 2009, a duly-noticed hearing was held by means
52of video teleconferencing in Jacksonville and Tallahassee,
59Florida, before Lisa Shearer Nelson, an Administrative Law Judge
68assigned by the Division of Administrative Hearings.
75APPEARANCES
76For Petitioner: Patrick Cunningham, Esquire
81Department of Business and
85Professional Regulation
87400 West Robinson Street
91Hurston Building-North Tower, Suite N801
96Orlando, Florida 32801
99For Respondent: William Haley, Esquire
104Brannon, Brown, Haley,
107Robinson & Bullock, P.A.
111Post Office Box 1029
115Lake City, Florida 32056-1029
119STATEMENT OF THE ISSUES
123The issues to be decided in this proceeding are whether Respondent was guilty of the violations alleged in the two-count
143Administrative Complaint and if so, what penalties should be
152imposed.
153PRELIMINARY STATEMENT
155On January 17, 2008, the Department of Business and
164Professional Regulation, Division of Real Estate (Division),
171filed a two-count Administrative Complaint charging Respondent
178with violating Section 455.227(1)(j)(aiding, assisting,
183procuring, employing, or advising any unlicensed person or entity
192to practice a profession contrary to Chapter 455, 475 or the
203rules of the Division) and Section 475.25(1)(e) by virtue of
213Section 475.42(1)(c), Florida Statutes (employing any person as a
222sales associate who is not the holder of a valid and current
234license as sales associate, and thus violating any part of
244Chapter 475, Florida Statutes). On February 12, 2008, Respondent
253filed an Election of Rights disputing the allegations in the
263Administrative Complaint and requesting a Section 120.57(1)
270hearing. On November 19, 2008, some nine months later, the
280Division forwarded the matter to the Division of Administrative
289Hearings for assignment of an administrative law judge.
297A Notice of Hearing issued on November 25, 2008, scheduling
307the case for hearing to be conducted February 19, 2009. At the
319request of Respondent, the hearing was continued and rescheduled
328for April 10, 2009, and proceeded as scheduled.
336Petitioner presented the testimony of Fred Seli and Marsha
345Creviston, and Petitioner's Exhibits 1-5 were admitted into
353evidence. Respondent testified on his own behalf and presented
362the testimony of Clifton Coates, and Respondent's Exhibits A-F
371were admitted. The proceedings were recorded and a Transcript
380was filed with Division of Administrative Hearings on May 6,
3902009. At the request of the parties, the time for filing
401proposed recommended orders was extended until May 22, 2009.
410Respondent filed a Proposed Recommended Order May 20, 2009.
419Petitioner's Proposed Recommended Order was filed May 26, 2009,
428and no objection to its late filing has been entered. Both
439submissions have been carefully considered in the preparation of
448this Recommended Order.
451Respondent also filed a Request for Official Recognition on
460May 11, 2009, asking for official recognition of the Department
470of Professional Regulation, Division of Real Estate, Florida Real
479Estate Commission News & Report, Summer 1992, Volume XL. The
489Department has not filed any objection to the request, and it is
501hereby granted. Unless otherwise indicated, all references shall
509be to the codification of the Florida Statutes in effect at the
521time of the conduct alleged, i.e. , 2005.
528FINDINGS OF FACT
5311. Petitioner is the state governmental agency charged with
540the licensing and regulation of real estate brokers and sales
550associates, pursuant to Section 20.165 and Chapters 120, 455, and
560475, Florida Statutes.
5632. Respondent is and was at all times material to these
574proceedings, a licensed real estate broker, issued license number
583BK-3013375.
5843. Respondent is the qualifying broker for Lifestyles
592Realtors, LLC, d/b/a Belleza (Lifestyles), located at 1400 Marsh
601Landing Parkway, Suite 112, Jacksonville, Florida, and was the
610qualifying agent at the time of the events giving rise to this
622case. Lifestyles is an agency that works primarily for
631developers.
6324. On or about August 2005, Lifestyles employed Clifton
641Coates. At the time he was hired, Clifton Coates was not
652licensed as a real estate sales associate or broker in the State
664of Florida. He was a long-time friend of the Respondent.
6745. At the inception of his employment, Mr. Coates worked in
685marketing under the supervision of the vice president of
694marketing, Katie Armstrong. In that capacity, he worked on floor
704plans, brochures, and communications with the developer for a
713major project with which the company was involved. He did not
724have a role in terms of contact with potential buyers of real
736estate.
7376. The project was a condominium project called Esplanade.
746Lifestyles started selling units of the project in November 2005.
756At that time, the project was still under construction. When the
767sales began in November, volume was very heavy, so Mr. Coates
778began working with the sales team, which consisted of two
788licensed agents on the premises, Julie Seago and Marcia
797Creviston. He did so at the developer's request because of his
808familiarity with the particular type of development being
816marketed.
8177. Throughout his employment, Mr. Coates was a salaried
826employee. He did not receive commissions from any of the
836properties sold. He wore a name tag that simply listed his name
848and the name of the company.
8548. When customers came into the sales office, Mr. Coates
864would see that they were comfortable, take down preliminary
873information such as their name and address and what their plans
884were, and input the information into a computer. He would hand
895out preprinted brochures, and would relay prices provided by the
905developer. He did not show the actual property, but would show
916customers a scaled model of the project that was on display in
928the sales area. Mr. Coates dealt only with people who came into
940the sales office. No evidence was presented to show that he took
952any action to advertise the project or induce people to come look
964at it.
9669. If the customer indicated a desire to purchase a unit,
977Mr. Coates would enter the information regarding the unit the
987customer wanted, pull the fields from the initial welcome
996information, and the computer would self-populate the remaining
1004information for a contract.
100810. Mr. Coates could not change or negotiate anything
1017related to price of a unit, the price of upgrades, the amount of
1030the deposit or where it went. All of these items were controlled
1042by the developer.
104511. Once Mr. Coates entered the information into the
1054computer and a contract was generated, Mr. Coates would take the
1065printed contract and the customer to Julie Seago, a licensed
1075sales agent. Ms. Seago would go over the contract with the
1086customers and, should the customer ultimately decide to purchase
1095the property, would sign the contract on behalf of Lifetsyles.
110512. Based on the evidence presented, a contract with Gina
1115Gatlin was signed by Ms. Seago. There was no credible evidence
1126presented regarding the Gatlin sale other than that Ms. Seago
1136signed the contract and an internal listing existed showing
1145Mr. Coates as the agent for the sale. However, this internal
1156listing identifies people as "agent" based upon whose computer
1165terminal is used to input data, as opposed to any information
1176regarding licensure.
117813. Mr. Coates took the real estate examination and became
1188a licensed agent in April 2006. Until that time, he abided by
1200the instructions given to him when he first worked with the sales
1212team. At that time, he was given a list of "do's and don'ts"
1225that purported to be from the Florida Real Estate Broker's Guide
1236published by the Florida Association of Realtors. This same list
1246was also printed in the Florida Real Estate Commission's
1255newsletter in the summer of 1992.
126114. The list, upon which Mr. Coates and Respondent relied,
1271indicated that it was permissible for an unlicensed person to
1281answer and forward telephone calls; write ads for approval of a
1292supervising broker or licensee; receive, record and deposit
1300earnest money and deposits; type contract forms for approval by a
1311licensee and supervising broker; prepare flyers and promotional
1319information for approval by licensee and supervising broker;
1327answer oral questions about listings if the answer could be
1337obtained from preprinted materials; and hand out objective,
1345written information on a listing, along with other activities not
1355relevant to these proceedings. Mr. Coates' activities did not
1364vary from these permissible activities.
136915. In short, Mr. Coates did not show properties, but only
1380a model. He did not negotiate prices. He did not hold himself
1392out as a licensed agent; did not receive commissions; and did not
1404set closing dates. Mr. Coates did not engage in the unlicensed
1415sale of real estate, and Respondent did not assist him in doing
1427so.
1428CONCLUSIONS OF LAW
143116. The Division of Administrative Hearings has
1438jurisdiction over the subject matter and the parties to this
1448action in accordance with Sections 120.569 and 120.57(1), Florida
1457Statutes (2008).
145917. The Department seeks to discipline Respondent's license
1467as real estate broker. It therefore has the burden of proving
1478the allegations of the Administrative Complaint by clear and
1487convincing evidence. Department of Banking and Finance v.
1495Osborne Stern & Co. , 670 So. 2d 932 (Fla. 1996); Ferris v.
1507Turlington , 510 So. 2d 292 (Fla. 1987).
151418. Count I of the Administrative Complaint charges
1522Respondent with violating Section 455.227(1)(j), Florida
1528Statutes, which provides:
1531(1) The following acts shall constitute
1537grounds for which the disciplinary actions
1543specified in subsection (2) may be taken:
1550* * *
1553(j) Aiding, assisting, procuring, employing,
1558or advising any unlicensed person or entity
1565to practice a profession contrary to this
1572chapter, the chapter regulating the
1577profession, or the rules of the department or
1585the board.
158719. The Legislature has defined the terms "broker" and
"1596salesperson" in Section 475.01, Florida Statutes:
1602(1) As used in this part:
1608(a) "Broker" means a person who, for
1615another, and for a compensation or valuable
1622consideration directly or indirectly paid or
1628promised, expressly or impliedly, or with an
1635intent to collect or receive a compensation
1642or valuable consideration therefor, . . .
1649sells, . . . or offers, attempts or agrees to
1659appraise, auction, or negotiate the sale ,
1665exchange, purchase, or rental of . . . any
1674real property or any interest in or
1681concerning the same, . . ., or who advertises
1690or holds out to the public by any oral or
1700printed solicitation or representation that
1705she or he is engaged in the business of . . .
1717selling, . . . real property of others or
1726interests therein, . . . or who takes any
1735part in the procuring of sellers, purchasers ,
1742lessors, or lessees of business enterprises
1748or business opportunities or the real
1754property of another, . . . or who directs or
1764assists in the procuring of prospects or in
1772the negotiation or closing of any transaction
1779which does, or is calculated to, result in a
1788sale, exchange, or leasing thereof, and who
1795receives, expects, or is promised any
1801compensation or valuable consideration,
1805directly or indirectly therefore . . . . A
1814broker renders a professional service and is
1821a professional within the meaning of s.
182895.11 (4)(a). . . . (Emphasis supplied.)
1835* * *
1838(j) "Sales associate" means a person who
1845performs any act specified in the definition
1852of "broker," but who performs such act under
1860the direction, control, or management of
1866another person. . . .
187120. The Division has not demonstrated by clear and
1880convincing evidence that Respondent committed the violation
1887alleged in Count I. Mr. Coates was employed initially for
1897another purpose, i.e. , to work on floor plans and other marketing
1908materials needed for the developer. He assisted the sales team
1918once the units began to sell. However, he was salaried, received
1929no commissions, exercised no discretion and engaged in no
1938negotiations. He referred only to preprinted materials and a
1947scaled model, and relayed cost information controlled and
1955provided by the developer. At Respondent's request, Mr. Coates
1964followed the guidelines printed in the Florida Real Estate
1973Commission's newsletter regarding what an unlicensed person can
1981do and did not engage in those activities that were identified as
1993prohibited.
199421. Count II of the Administrative Complaint asserts that
2003Respondent is guilty of having employed any person as a sales
2014associate who is not the holder of a valid and current license as
2027a sales associate, in violation of Section 475.42(1)(c), Florida
2036Statutes, and therefore violated Section 475.25(1)(e), Florida
2043Statutes.
204422. Section 475.42(1)(c) provides:
2048(c) A broker may not employ, or continue in
2057employment, any person as a sales associate
2064who is not the holder of a valid and current
2074license as sales associate; but a license as
2082sales associate may be issued to a person
2090licensed as an active broker, upon request
2097and surrender of the license as broker,
2104without a fee in addition to that paid for
2113the issuance of the broker's active license.
212023. Section 475.25(1)(e) provides:
2124(1) The commission may deny an application
2131for licensure, registration, or permit, or
2137renewal thereof; may place a licensee,
2143registrant, or permittee on probation; may
2149suspend a license, registration, or permit
2155for a period not exceeding 10 years; may
2163revoke a license, registration, or permit;
2169may impose an administrative fine not to
2176exceed $1,000 for each count or separate
2184offense; and may issue a reprimand, and any
2192or all of the foregoing, if it finds that the
2202licensee, registrant, permittee, or
2206applicant:
2207* * *
2210(e) Has violated any of the provisions of
2218this chapter or any lawful order or rule made
2227or issued under the provisions of this
2234chapter or chapter 455.
223824. The Department has not demonstrated by clear and
2247convincing evidence the allegations in Count II because it has
2257not demonstrated that Mr. Coates was employed as a sales
2267associate. As noted above, the term sales associate is defined
2277by statute. Given that the Department did not prove that
2287Mr. Coates acted within the definition of a real estate broker,
2298he also did not act as a sales associate. Therefore, no
2309violation of Section 475.42, and by extension, Section
2317475.25(1)(e) has been proven.
2321RECOMMENDATION
2322Upon consideration of the facts found and conclusions of law
2332reached, it is
2335RECOMMENDED:
2336That the Florida Real Estate Commission enter a final order
2346dismissing the Administrative Complaint.
2350DONE AND ENTERED this 17th day of June, 2009, in
2360Tallahassee, Leon County, Florida.
2364S
2365LISA SHEARER NELSON
2368Administrative Law Judge
2371Division of Administrative Hearings
2375The DeSoto Building
23781230 Apalachee Parkway
2381Tallahassee, Florida 32399-3060
2384(850) 488-9675
2386Fax Filing (850) 921-6847
2390www.doah.state.fl.us
2391Filed with the Clerk of the
2397Division of Administrative Hearings
2401this 17th day of June, 2009.
2407COPIES FURNISHED:
2409Patrick J. Cunningham, Esquire
2413Department of Business and
2417Professional Regulation
2419400 West Robinson Street
2423Hurston Building-North Tower, Suite N801
2428Orlando, Florida 32801
2431William Haley, Esquire
2434Brannon, Brown, Haley,
2437Robinson & Bullock, P.A.
2441Post Office Box 1029
2445Lake City, Florida 32056-1029
2449Ned Luczynski, General Counsel
2453Department of Business and
2457Professional Regulation
24591940 North Monroe Street
2463Tallahassee, Florida 32399-0792
2466G. W. Harrell, Executive Director
2471Construction Industry Licensing Board
2475Department of Business and
2479Professional Regulation
24811940 North Monroe Street
2485Tallahassee, Florida 32399-0792
2488NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
2494All parties have the right to submit written exceptions within
250415 days from the date of this recommended order. Any exceptions to
2516this recommended order should be filed with the agency that will
2527issue the final order in this case.
![](/images/view_pdf.png)
- Date
- Proceedings
-
PDF:
- Date: 06/17/2009
- Proceedings: Recommended Order cover letter identifying the hearing record referred to the Agency.
-
PDF:
- Date: 05/11/2009
- Proceedings: Order Granting Extension of Time (Proposed Recommended Orders to be filed by May 22, 2009).
-
PDF:
- Date: 05/08/2009
- Proceedings: Unopposed Motion for Extension of Time to File Respondent`s Proposed Order filed.
- Date: 05/06/2009
- Proceedings: Transcript of Proceedings filed.
-
PDF:
- Date: 04/13/2009
- Proceedings: Petitioner`s Notice of Filing Supplemental Exhibit 2 (exhibit not available for viewing) filed.
- Date: 04/10/2009
- Proceedings: CASE STATUS: Hearing Held.
-
PDF:
- Date: 04/03/2009
- Proceedings: Notice of Filing (of Respondent`s Exhibits A-F; exhibits not available for viewing) filed.
-
PDF:
- Date: 02/16/2009
- Proceedings: Order Granting Continuance and Re-scheduling Hearing by Video Teleconference (hearing set for April 10, 2009; 9:30 a.m.; Jacksonville and Tallahassee, FL).
- Date: 02/12/2009
- Proceedings: Petitioner`s Exhibits (exhibits not available for viewing) filed.
-
PDF:
- Date: 02/06/2009
- Proceedings: Petitioner`s Second Notice of Service of Petitioner`s Exhibits filed.
- Date: 01/28/2009
- Proceedings: Petitioner`s Exhibits (not available for viewing) filed.
Case Information
- Judge:
- LISA SHEARER NELSON
- Date Filed:
- 11/19/2008
- Date Assignment:
- 11/19/2008
- Last Docket Entry:
- 10/29/2009
- Location:
- Jacksonville, Florida
- District:
- Northern
- Agency:
- ADOPTED IN TOTO
- Suffix:
- PL
Counsels
-
Patrick J. Cunningham, Esquire
Address of Record -
William Haley, Esquire
Address of Record