08-004406PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Rosa Fernandez Status: Closed Recommended Order on Monday, January 26, 2009.

Summary: Respondent is guilty of six counts of failing to keep adequate real esate broker records.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 08-4406PL

)

ROSA FERNANDEZ, )

)

Respondent. )

)

RECOMMENDED ORDER

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

before Larry J. Sartin, an Administrative Law Judge of the

Division of Administrative Hearings, on November 13, 2008, by

video teleconference at sites in Miami and Tallahassee, Florida.

APPEARANCES

For Petitioner: Patrick Cunningham, Esquire

Division of Real Estate

Department of Business and

Professional Regulation

400 West Robinson Street, Suite N-801

Orlando, Florida 32801

For Respondent: Douglas D. Stratton, Esquire

Stratton & Feinstien, P.A.

407 Lincoln Road, Suite 2A

Miami Beach, Florida 33139

STATEMENT OF THE ISSUES

The issues in this case are whether Respondent, Rosa

Fernandez, committed the violations alleged in a six-count

Administrative Complaint filed with the Petitioner Department of

Business and Professional Regulation on July 17, 2008, and, if

so, what disciplinary action should be taken against her Florida

real estate broker license.

PRELIMINARY STATEMENT

On July 17, 2008, a six-count Administrative Complaint,

FDBPR Case No 2007004262, was filed with Petitioner Department

of Business and Professional Regulation against Rosa Fernandez,

who holds a Florida real estate broker license. It was alleged

in the Administrative Complaint that Respondent had violated the

following provisions of Florida law with regard to six separate

transactions: Section 475.25(1)(e) Florida Statutes (2004 or

2005), by violating Section 475.5015, Florida Statutes (2004 or

2005), and Florida Administrative Code Rule 61J2-14.012(1).

On or about July 31, 2008, Respondent executed an Election

of Rights form disputing the material facts of the

Administrative Complaint and requesting a formal administrative

hearing. Through counsel, Respondent also filed an Answer and

Affirmative Defenses in response to the Administrative

Complaint.

On September 8, 2008, Petitioner filed the Administrative

Complaint, Respondent’s request for hearing, Respondent’s Answer

and Affirmative Defenses, and a letter requesting that an

administrative law judge be assigned to hear the matter. The

request for hearing was designated DOAH Case No. 08-4406PL and

was assigned to the undersigned.

On September 17, 2008, the final hearing of this matter was

scheduled for October 17, 2008, by Notice of Hearing by Video

Teleconference. The hearing was rescheduled to November 13,

2008, at the request of Respondent.

On November 5, 2008, the parties filed a Pre-Hearing

Stipulation. In the Stipulation, the parties stipulated to the

accuracy of most of the factual allegations of the

Administrative Complaint. Respondent, as she did in her Answer

and Affirmative Defenses, denied the allegations of fact of

paragraphs 9, 14, 21, 22, 28, 29, 35, 42, 43, and 45.

Petitioner withdrew the allegation of fact contained in

paragraph 21 and there was no paragraph 44 in the Administrative

Complaint.

At the final hearing, Petitioner presented the testimony of

Georgia Corbin, Enrique Betancourt, and Derrick Ham. Petitioner

also had admitted Petitioner’s Exhibits 1 through 13.

Respondent offered no evidence.

The Transcript of the final hearing was filed with the

Division of Administrative Hearings on December 3, 2008. By

Notice of Filing of Transcript entered December 15, 2008, the

parties were informed that their proposed recommended orders

were to be filed on or before December 29, 2008.

Petitioner filed Petitioner’s Proposed Recommended Order

timely. Respondent filed Respondent’s Proposed Recommended

Order on December 31, 2008. It does not appear that Petitioner

has been prejudiced in any way by Respondent’s late-filing.

Accordingly, both proposed orders have been fully considered in

preparing this Recommended Order.

All further references to the Florida Statutes in this

Recommended Order are to the 2004 and 2005 editions, unless

otherwise noted.

FINDINGS OF FACT

A. The Parties .

1. Petitioner, the Department of Business and Professional

Regulation, Division of Real Estate (hereinafter referred to as

Section 20.165, Florida Statutes. The Division is charged with

the responsibility for the regulation of the real estate

industry in Florida pursuant to Chapters 455 and 475, Florida

Statutes.

2. Respondent, Rosa Fernandez, is, and was at the times

material to this matter, the holder of a Florida real estate

broker license, license number 3000310, issued by the Division.

3. At all times relevant, Ms. Fernandez was the broker for

Vizcaya Realty of Miami, Inc., located at 1630 Southwest 17th

Terrace, Miami, Florida 33145.

B. Count One .

4. In August 2005, Ms. Fernandez was the listing agent in

the Multiple Listing Service (hereinafter referred to as the

“MLS”), for property located at 1827 Southwest 18th Avenue,

Miami, Florida 33145 (hereinafter referred to as the “Count One

Property”). She also represented the buyer in the sale of the

Count One Property.

5. The Count One Property, despite the fact that

Ms. Fernandez had listed the property in the MLS for

$285,000.00, was purchased for $350,000.00, facts which

Ms. Fernandez had to be aware of.

6. In response to a complaint concerning Ms. Fernandez’s

real estate broker practice, Derrick Ham, an investigator for

the Division, met with her. Mr. Ham ordered Ms. Fernandez to

make available and deliver the real estate broker records for

the sale of the Count One Property. Ms. Fernandez provided

Mr. Ham with the records that she had involving the sale of the

Count One Property.

7. While the evidence as to Ms. Fernandez’s precise role

in the sale and purchase of the Count One Property was not clear

(there was a letter in the file purporting to discharge her

services by the seller of the property, but she still continued

to be involved with the transaction thereafter), at no time

while meeting with Mr. Ham did she indicate that she did not act

as broker for the property.

8. Upon review of the records provided to Mr. Ham, it was

found that the following information or documents were not

maintained in Ms. Fernandez’s records:

a. A broker’s disclosure, an executed sales contract, or a

closing statement (HUD1 form);

b. An explanation as to why the sales price ($350,000.00)

exceeded the listing price ($285,000.00). Nor was there an

authorization from the seller authorizing the change in listing

price; and

c. A valid listing agreement between the broker and the

seller of the Count One Property.

C. Count Two .

9. In April 2005, Ms. Fernandez represented Carlos Damain

in the purchase of property owned by Isaac and Teresa Moncarz,

which was located at 447 Aragon Avenue, Coral Gables, Florida

33134 (hereinafter referred to as the “Count Two Property”).

10. The Count Two Property was purchased for $595,000.00,

although it was listed for sale at $545,000.00, facts which

Ms. Fernandez had to be aware of.

11. Mr. Ham ordered Ms. Fernandez to make available and

deliver the real estate broker records for the sale of the Count

Two Property. Ms. Fernandez provided Mr. Ham with the records

that she had involving the sale of the Count Two Property.

12. Upon review of the records provided to Mr. Ham, it was

found that, while the file contained a sales contract and an

HUD1 form for the Count Two Property, the following information

or documents were not maintained in Ms. Fernandez’s records:

a. A broker disclosure;

b. An explanation as to why the sales price ($595,000.00)

would explain this discrepancy, there was no evidence in the

file that such a bidding war had taken place;

c. While the file contained a sales contract, nothing in

the sales contract dealt with any repairs to the Count Two

Property in connection with the sale.

D. Count Three .

13. In March 2006, Ms. Fernandez represented Ramon Rubiera

in the purchase of property located at 1852 Southwest 10th

Street, Miami, Florida 33135 (hereinafter referred to as the

“Count Three Property”).

14. The Count Three Property, despite the fact that the

property was listed for $450,000.00, was purchased for

$499,000.00, facts which Ms. Fernandez had to be aware of.

15. Pursuant to an addendum to the contract for the sale

to Mr. Rubiera of the Count Three Property, the property was

sold to Blanca Dellasera on or about April 12, 2006. The sales

price increased to $515,000.00. The increase in price,

according to the contract, was for “repairs.”

16. Mr. Ham ordered Ms. Fernandez to make available and

deliver the real estate broker records for the sale of the Count

Three Property. Ms. Fernandez provided Mr. Ham with the records

that she had involving the sale of the Count Three Property.

17. Upon review of the records provided to Mr. Ham, it was

found that the following information or documents were not

maintained in Ms. Fernandez’s records: the HUD1 failed to

reflect the terms of the contract without explanation. In

particular, the HUD1 indicated a seller’s contribution of

3 percent while the contract provided for a 6 percent seller’s

contribution.

E. Count Four .

18. On or about April 20, 2005, Ms. Fernandez represented

the buyer of property located at 903 Red Road, Miami, Florida

(hereinafter referred to as the “Count Four Property”).

19. The Count Four Property was purchased for $549,000.00,

although it was listed for sale at $499,000.00, facts which

Ms. Fernandez had to be aware of.

20. Mr. Ham ordered Ms. Fernandez to make available and

deliver the real estate broker records for the sale of the Count

Four Property. Ms. Fernandez provided Mr. Ham with the records

that she had involving the sale of the Count Four Property.

21. Upon review of the records provided to Mr. Ham, it was

found that the following information or documents were not

maintained in Ms. Fernandez’s records:

a. An indication that the seller made a contribution to

cover buyer’s closing costs in the amount of $32,994.00;

b. An indication that the seller made a contribution to

cover repairs in the amount of $17,000.00;

c. A broker’s disclosure; and

d. An explanation as to why the sales price ($549,000.00)

would explain this discrepancy, there was no evidence in the

file that such a bidding war had taken place.

F. Count Five .

22. On or about June 21, 2005, Ms. Fernandez represented

the buyer in the purchase of property located at 3707 Le Jeune

Road, Coral Cables, Florida (hereinafter referred to as the

“Count Five Property”).

23. The Count Five Property sold for $575,000.00 while the

asking price was $525,000.00, facts which Ms. Fernandez had to

have been aware of.

24. Mr. Ham ordered Ms. Fernandez to make available and

deliver the real estate broker records for the sale of the Count

Five Property. Ms. Fernandez provided Mr. Ham with the records

that she had involving the sale of the Count Five Property.

25. Upon review of the records provided to Mr. Ham, it was

found that the following information or documents were not

maintained in Ms. Fernandez’s records:

a. An indication that the seller made a contribution to

buyer for repairs in the amount of $15,000.00;

b. A broker’s disclosure; and

c. An explanation as to why the sales price ($549,000.00)

would explain this discrepancy, there was no evidence in the

file that such a bidding war had taken place.

G. Count Six .

26. On or about March 19, 2006, Ms. Fernandez represented

the buyer in the purchase of property located at 1631 Southwest

13th Street, Miami, Florida (hereinafter referred to as the

“Count Six Property”).

27. The Count Six Property sold for $500,000.00 while the

asking price was $390,000.00, facts which Ms. Fernandez had to

have been aware of.

28. Mr. Ham ordered Ms. Fernandez to make available and

deliver the real estate broker records for the sale of the Count

Six Property. Ms. Fernandez provided Mr. Ham with the records

that she had involving the sale of the Count Six Property.

29. Upon review of the records provided to Mr. Ham, it was

found that the following information or documents were not

maintained in Ms. Fernandez’s records:

a. A copy of an assignment of the sales contract;

b. A sales and purchase contract signed by Gleen Cabezas;

and

c. An explanation as to why the sales price ($500,000.00)

exceeded the listing price ($390,000.00).

H. Ultimate Facts .

30. Ms. Fernandez failed to maintain complete real estate

broker records for the transaction on the Count One through Six

Properties.

31. Because of the inadequacies of Ms. Fernandez’s real

estate broker records, the Division, through its representative,

Derrick Ham, was unable to ascertain, for any of the properties

at issue in this case, the specifics of what had transpired.

32. As a consequence of the foregoing, the Division,

through Mr. Ham, was unable to determine whether Ms. Fernandez

complied with the requirements of Chapter 475, Florida Statutes.

CONCLUSIONS OF LAW

A. Jurisdiction .

33. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

the parties thereto pursuant to Sections 120.569 and 120.57(1),

Florida Statutes (2008).

B. The Burden and Standard of Proof .

34. The Division seeks to impose penalties against

Ms. Fernandez pursuant to the Administrative Complaint that

include the suspension or revocation of her real estate broker’s

license. Therefore, the Division has the burden of proving the

specific allegations of fact that support its charges by clear

and convincing evidence. See Department of Banking and Finance,

Division of Securities and Investor Protection v. Osborne Stern

and Co. , 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington , 510

So. 2d 292 (Fla. 1987); and Pou v. Department of Insurance and

Treasurer , 707 So. 2d 941 (Fla. 3d DCA 1998).

35. What constitutes "clear and convincing" evidence was

described by the court in Evans Packing Co. v. Department of

Agriculture and Consumer Services , 550 So. 2d 112, 116, n. 5

(Fla. 1st DCA 1989), as follows:

. . . [C]lear 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 evidence must be precise and

explicit and the witnesses must be lacking

in confusion as to the facts in issue. The

evidence must be of such weight that it

produces in the mind of the trier of fact

the firm belief or conviction, without

hesitancy, as to the truth of the

allegations sought to be established.

Slomowitz v. Walker , 429 So. 2d 797, 800

(Fla. 4th DCA 1983).

See also In re Graziano , 696 So. 2d 744 (Fla. 1997); In re

Davey , 645 So. 2d 398 (Fla. 1994); and Walker v. Florida

Department of Business and Professional Regulation , 705 So. 2d

652 (Fla. 5th DCA 1998)(Sharp, J., dissenting).

C. The Charges of the Administrative Complaint .

36. Section 475.25, Florida Statutes, authorizes the

Division to discipline any Florida real estate broker licensee

who commits any of a number of offenses defined therein. In

this case, the Division has charged Ms. Fernandez with having

committed six violations of Section 475.25(1)(e) Florida

Statutes, by having violated Section 475.5015, Florida Statutes,

and Florida Administrative Code Rule 61J2-14.012(1).

37. Section 475.25(1)(e), Florida Statutes, defines the

following conduct as an offense:

(e) Has violated any of the provisions of

this chapter or any lawful order or rule

made or issued under the provisions of this

chapter or chapter 455.

38. Section 475.5015, Florida Statutes, which the Division

alleges Ms. Fernandez violated, describes a real estate broker’s

duty with regard to maintaining records, in part, as follows:

Each broker shall keep and make available

to the department such books, accounts, and

records as will enable the department to

determine whether such broker is in

compliance with the provisions of this

chapter. Each broker shall preserve at

least one legible copy of all books,

accounts, and records pertaining to her or

his real estate brokerage business for at

least 5 years from the date of receipt of

any money, fund, deposit, check, or draft

entrusted to the broker or, in the event no

funds are entrusted to the broker, for at

least 5 years from the date of execution by

any party of any listing agreement, offer to

purchase, rental property management

agreement, rental or lease agreement, or any

other written or verbal agreement which

engages the services of the broker. . . .

39. Florida Administrative Code Rule 61J2-14.012(1), which

the Division alleges Ms. Fernandez violated, provides further

specification as to a real estate broker’s duty to maintain

records:

(1) A broker who receives a deposit as

previously defined shall preserve and make

available to the BPR, or its authorized

representative, all 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 and each separate

bank account wherein such funds have been

deposited. All such books and accounts

shall be subject to inspection by the DBPR

or its authorized representatives at all

reasonable times during regular business

hours.

D. The Division’s Proof .

40. The Division proved clearly and convincingly that

Ms. Fernandez’s real estate broker records for the sale and

purchase of the Count One through Six Properties were not

complete.

41. Therefore, the Division proved clearly and convincingly

that Ms. Fernandez failed, as required by Section 475.5015,

Florida Statutes, to “keep and make available to the department

such books, accounts, and records as will enable the department

to determine whether such broker is in compliance with the

provisions of this chapter.”

42. Having violated Section 475.5015, Florida Statutes, Ms.

Fernandez “violated any of the provisions of this chapter” in

violation of Section 475.25(1)(e), Florida Statutes, as alleged

in the Administrative Complaint.

43. The Division failed to prove or explain how Ms.

Fernandez violated Florida Administrative Code Rule 61J2-

14.012(1).

E. The Appropriate Penalty .

44. The only issue remaining for consideration is the

appropriate disciplinary action which should be taken by the

Florida Real Estate Commission (hereinafter referred to as the

“Commission”), against Ms. Fernandez for the violations the

Division proved. To answer this question it is necessary to

consult the "disciplinary guidelines" of the Commission set

forth in Florida Administrative Code Chapter 61J2-24. Those

guidelines effectively place restrictions and limitations on the

exercise of the Commission’s disciplinary authority . See Parrot

Heads, Inc. v. Department of Business and Professional

Regulation , 741 So. 2d 1231, 1233 (Fla. 5th DCA 1999)("An

administrative agency is bound by its own rules . . . creat[ing]

guidelines for disciplinary penalties."); and § 455.2273(5),

Fla. Stat.

45. The penalty guideline for a violation of Section

475.25(1)(e), Florida Statutes, is a suspension of eight years

to revocation and a fine not to exceed $5,000.00. Fla. Admin.

Code R. 61J2-24.001(3)(f).

46. Florida Administrative Code Rule 61J2-24.001(4)

provides for the consideration of certain aggravating and

mitigating circumstances, but only if proper notice is given.

No such notice was provided in this proceeding.

47. In Petitioner’s Proposed Recommended Order, it has

been suggested that the recommended penalty should be the

revocation of Ms. Fernandez’s license or, in the alternative, a

suspension of her license and the payment of a fine. Why

revocation would be an appropriate penalty has not been

explained. Nor do the facts of this case support such a

penalty.

48. Although the penalty guidelines for this violation

range from a low of an eight-year suspension, such a suspension

does not appear justifiable from the facts of this case. The

only thing the Division alleged and proved in this case is that

Ms. Fernandez’s records were incomplete. The Division did not

allege or prove that any of the transactions were in anyway

improper, despite the fact that the increase in actual selling

price over asking price may be puzzling.

49. Consequently, given the lack of any proof that

Ms. Fernandez is guilty of anything other than poor record

keeping, probation, conditioned upon the successful completion

of continuing education courses on record keeping, and a fine

would appear to be a more appropriate penalty.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that a final order be entered by the

Commission:

1. Finding that Ms. Fernandez is guilty of the violation

alleged in Counts One through Six of the Administrative

Complaint as found in this Recommended Order;

2. Placing Ms. Fernandez’s real estate broker license on

probation for a period of five years, conditioned on her

successful completion of continuing education courses on record-

keeping in an amount to be determined by the Commission. Should

she fail to complete the continuing education, her license

should be suspended until the courses are completed; and

3. Requiring that she pay an administrative fine of

$3,000.00.

DONE AND ENTERED this 26th of January, 2009, in

Tallahassee, Leon County, Florida.

LARRY J. SARTIN

Administrative Law Judge

Division of Administrative 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 Administrative Hearings

this 26th day of January, 2009.

COPIES FURNISHED :

Patrick J. Cunningham, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street

Hurston Building-North Tower, Suite N801

Orlando, Florida 32801

Douglas D. Stratton, Esquire

Stratton & Feinstien, P.A.

407 Lincoln Road, Suite 2A

Miami Beach, Florida 33139

Thomas W. O’Bryant, Jr., Director

Division of Real Estate

Department of Business and

Professional Regulation

400 West Robinson Street

Hurston Building-North Tower, Suite N802

Orlando, Florida 32801

Ned Luczynski, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

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 these cases.