09-005219PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Joaquin Inigo Status: Closed Recommended Order on Wednesday, March 3, 2010.

Summary: Respondent, representing sellers, violated Section 475.25(1)(b) by concealing from second buyers that sellers had already entered into contract to sell subject property to other buyers, which contract had priority over the second buyers' contract.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 09-5219PL

)

JOAQUIN INIGO, )

)

Respondent. )

__________________________________)

RECOMMENDED ORDER

Pursuant to notice, a hearing was conducted in this case

pursuant to Sections 120.569 and 120.57(1), Florida Statutes, 1

before Stuart M. Lerner, a duly-designated Administrative Law

Judge of the Division of Administrative Hearings (DOAH), on

January 14, 2010, by video teleconference at sites in Miami and Tallahassee, Florida.

APPEARANCES

For Petitioner: Patrick J. Cunningham, Esquire

Department of Business and

Professional Regulation

Division of Real Estate

400 West Robinson Street, Suite N-801

Orlando, Florida 32801

For Respondent: Steven W. Johnson, Esquire

20 North Orange Avenue, Suite 700

Orlando, Florida 32801

STATEMENT OF THE ISSUE

Whether Respondent committed the violation alleged in the

Amended Administrative Complaint in the manner specified therein

and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

On or about April 21, 2009, Petitioner issued an

Administrative Complaint against Respondent and Mark Tenzer,

charging each with one count of violating Section 475.25(1)(b),

Florida Statutes. Respondent and Mr. Tenzer each requested an

administrative hearing pursuant Section 120.57(1), Florida

Statutes. On September 23, 2009, these matters were referred to

the DOAH. Respondent's case was docketed as DOAH Case No. 09-

5219PL. Mr. Tenzer's case was docketed as DOAH Case No. 09-

5220PL.

On September 25, 2009, Petitioner filed a motion requesting

leave to amend the Administrative Complaint to add an additional

count against Mr. Tenzer. The motion was granted by Order

issued October 8, 2009. The Amended Administrative Complaint

contains the following "[e]ssential [a]llegations of [m]aterial

[f]act":

1. Petitioner is a state government

licensing and regulatory agency charged with

the responsibility and duty to prosecute

Administrative Complaints pursuant to the

laws of the State of Florida, in particular

Section 20.165 and Chapters 120, 455 and

475, of the Florida Statutes and the rules

promulgated thereto.

2. Respondent Joaquin Inigo is and was at

all times material hereto a licensed Florida

real estate sales associate, issued license

number 691286 in accordance with Chapter 475

of the Florida Statutes. The last license

issued was as an inactive sales associate at

5410 SW 88th Path, Miami, Florida 33173.

3. Respondent Mark Tenzer is and was at all

times material hereto a licensed Florida

real estate broker, issued license numbers

3008525, 87984, and 3012867 in accordance

with Chapter 475 of the Florida Statutes.

The last license issued was as an active

broker at Foreclosure Specialists Realty,

Inc., 10745 SW 104th Street, Miami, Florida

33176; Tenzer Realty Inc. & Associates,

10745 SW 104th Street, Miami, Florida

33176; and Tenzer Realty and Associates,

Inc., 10745 SW 104th Street, Miami, Florida

33176.

4. At all times material, Respondent Mark

Tenzer was the qualifying broker for Tenzer

Realty Inc. & Associates.

5. At all times material, Respondent Mark

Tenzer employed Respondent Joaquin Inigo as

a sales associate.

6. Respondents were the listing agents for

a property located at 14081 S.W. 166th

Street, Miami, Florida 33177 ("Subject

Property") owned by Wiltamar & Alessandra S.

Mendes ("Sellers").

7. On or about January 18, 2008, Respondent

negotiated a sales and purchase contract

with Mario and Sulena Hernandez for $338,640

for the Subject Property. A copy of the

contract is attached hereto and incorporated

herein as Administrative Complaint Exhibit

1.

8. Respondent[s] concealed from Buyers that

the sale and purchase contract was a back-up

contract. A copy of the settlement

statement is attached and incorporated

herein as Administrative Complaint Exhibit

2.

9. Respondents concealed from Buyers that

Respondent Tenzer had an interest in the

Subject Property.

10. Respondent[s] knew or should have known

that in reliance on Respondents' full

disclosure, the Buyers entered into a

contract to purchase the Subject Property.

Count I of the Amended Administrative Complaint is the only one

of the complaint's three counts directed against Respondent. It

alleges that, "[b]ased upon the foregoing [essential allegations

of material fact], Respondent is guilty of fraud,

misrepresentation, concealment, false promises, false pretenses,

dishonest dealing by trick, scheme or device, culpable

negligence, or breach of trust in any business transaction in

this state, 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 furtherance of

such intent, design, or scheme in violation of Section

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

On October 16, 2009, DOAH Case Nos. 09-5219PL and 09-5220PL

were consolidated at the Petitioner's request. The cases were

subsequently severed, however, after Petitioner announced at the

outset of the final hearing on January 14, 2010, that it was

dismissing all charges against Mr. Tenzer.

During the evidentiary proceedings that followed

Petitioner's announcement, Petitioner presented the testimony of

Felix Mizioznikov, Roger Shapiro, Jack Tenzer, and Sulena

Hernandez. It also offered eight exhibits (Petitioner's

Exhibits 1 through 8), all of which were received into evidence.

Respondent testified on his own behalf. He presented no other

evidence.

At the conclusion of the evidentiary portion of the hearing,

the undersigned announced, on the record, that the deadline for

the filing of proposed recommended orders was 25 days from the

date of the filing of the hearing transcript with DOAH.

The hearing Transcript (consisting of one volume) was filed

with DOAH on January 29, 2010.

Petitioner and Respondent filed their Proposed Recommended

Orders on February 18, 2010, and February 24, 2010, respectively.

FINDINGS OF FACT

Based on the evidence adduced at hearing, and the record as

a whole, the following findings of fact are made:

1. Respondent is now, and has been at all times material

to the instant case, a Florida-licensed real estate sales

associate, holding license number SL-691286.

2. At no time during the almost ten years he has held this

license has any disciplinary action been taken against him. 2

3. From August 31, 2000, to March 31, 2002, and from

April 16, 2002, to June 26, 2008, Respondent worked as a real

estate sales associate for Tenzer Realty, Inc., and Associates

(Tenzer Realty).

4. Jack Tenzer is a Florida-licensed real estate broker.

He has owned and operated Tenzer Realty since January 30, 1990.

5. On or about December 13, 2007, Wiltamar Mendes executed

a written agreement giving Tenzer Realty the "exclusive right to

sell" residential property, located at 14081 Southwest 166th

Street in Miami Florida, he and his wife owned (Subject

Property). Under the terms of the agreement, "Tenzer Realty

[was] to receive only [a] 3% commission" on the sale of the

Subject Property, plus a "transaction coordination fee [of]

$395.00 at closing."

6. At no time has Mr. Tenzer ever had an interest in the

Subject Property.

7. Respondent was the listing agent for the Subject

Property, and he represented the Mendeses throughout the sale

process.

8. In January 2008, Sulena Hernandez and her husband were

looking to purchase a home in the Miami area.

9. Roger Shapiro, a Florida-licensed real estate associate

then working for Coldwell Banker, was helping them in their

search and acting as their representative.

10. Mr. Shapiro telephoned Respondent to make arrangements

for the Subject Property to be shown to Ms. Hernandez.

11. Ms. Hernandez, accompanied by Mr. Shapiro, was

subsequently shown the Subject Property by the Mendeses. 3

12. After the showing, the Hernandezes decided to make an

offer on the Subject Property of $338,640.00 (money they hoped

to obtain through a 100% financed Veteran's Administration

loan 4 ), with the "additional [monetary] term" that the Mendeses

would "contribute 2% of the sale price toward [the Hernandezes']

closing cost[s]."

13. The offer was written up for the Hernandezes by

Mr. Shapiro on a Florida Association of Realtors (FAR)-developed

Residential and Sale Purchase Contract form that Coldwell Banker

used, on behalf of its clients, for such purposes (FAR Form).

14. This FAR Form had eight pages, not including the "attached

addenda." On the bottom of each page were spaces for the buyers

and sellers to put their initials to "acknowledge receipt of a

copy of th[e] page."

15. Page 7 of the FAR Form contained the "Addenda" and

"Additional Terms" provisions of the contract.

16. The "Addenda" provision began as follows:

20. ADDENDA . The following additional

terms are included in the attached addenda

and incorporated into this Contract (check

if applicable):

This introductory language was followed by a lettered checklist

of various possible "addenda" items, including "F. VA

Financing," "H. As is w/Right to Inspect," "I. Inspections,"

"P. Back-up Contract," "Q. Broker - Pers. Int. in Prop.," "V.

Prop. Disclosure Stmt.," and "Other." Next to (immediately to

the left of) each listed item was a box (to be "check[ed] if

applicable").

17. On the written offer he prepared for the Hernandezes

(Contract Offer), Mr. Shapiro checked the "F. VA Financing,"

the "H. As is w/Right to Inspect," the "V. Prop. Disclosure

Stmt.," and the "Other" boxes, 5 and he attached an appropriately

initialed addendum corresponding to each of these checked items. 6

No other boxes were checked.

18. Page 8 of the FAR Form was the signature page.

19. Numbered lines 412 through 416 on page 8, as filled in

by Mr. Shapiro (for the Hernandezes), read as follows:

OFFER AND ACCEPTANCE

( Check if applicable : Buyer received a

written real property disclosure statement

from Seller before making this Offer.)

Buyer offers to purchase the Property on the

above terms and conditions. Unless this

Contract is signed by Seller and a copy

delivered to Buyer no later than 5 a.m.

p.m. on January 21, 2008 , this offer will

be revoked and Buyer's deposit refunded[ 7 ]

subject to clearance of funds.[ 8 ]

20. On numbered lines 417 through 420 on page 8, directly

beneath this "Offer and Acceptance" provision, was the following

"Counter Offer/Rejection" provision, which contained a box for

the Mendeses to check if they wanted to counter the Contract

Offer, as well as a box for the Mendeses to check if,

alternatively, they wanted to reject the Contract Offer

outright:

COUNTER OFFER/REJECTION

Seller counters Buyer's offer (to accept

the counter offer, Buyer must sign or

initial the counter offered terms and

deliver a copy of the acceptance to Seller.

Unless otherwise stated, the time for

acceptance of any counteroffer shall be 2

days from the date the counter is delivered.

Seller rejects Buyer's offer.

21. On the next numbered line (421) on page 8, in the

spaces provided, Ms. Hernandez signed her name and wrote in the

date, "1/18/08." Acting under a power of attorney, she also

signed (on numbered line 423) for her husband, who was on

military deployment in Afghanistan at the time.

22. The penultimate numbered line (433) on page 8 provided

that the "[e]ffective date" of the contract would be "[t]he date

on which the last party signed or initialed and delivered the

final offer or counteroffer."

23. Ms. Hernandez put her and her husband's initials in

the spaces provided on the bottom of page 8, as well as in the

spaces provided on the bottom of the preceding seven pages, to

"acknowledge receipt of a copy of th[ese] page[s]."

24. Mr. Shapiro sent the Hernandezes' signed, dated and

initialed Contract Offer to Respondent (by facsimile

transmission) for presentation to the Mendeses for their

consideration.

25. Respondent guided the Mendeses through their review of

the Contract Offer and provided them with advice.

26. On January 23, 2008, after they had finished going

over the Contract Offer with Respondent, the Mendeses (on

numbered lines 427 and 428) signed and dated the document. They

also initialed the bottom of each of the offer's first eight

pages, as well as the bottom of each addendum that had been

attached thereto, in the appropriate spaces. This was all done

in Respondent's physical presence.

27. On behalf of the Mendeses, Respondent provided (by

facsimile transmission) a copy of the signed, dated, and

initialed document (Genuine Hernandez Contract 9 ) to Mr. Shapiro.

28. By their actions (which Respondent helped

orchestrate), the Mendeses signified their intent to accept the

Contract Offer, without revision. They checked neither of the

boxes in the "Counter Offer/Rejection" provision (on numbered

lines 417 through 420 on page 8), nor did they make any written

entries elsewhere on the document, or attach any appropriately

initialed additional addenda, reflecting a desire to accept an

offer from the Hernandezes only on terms different than those

set forth in the Contract Offer. Most significantly, for

purposes of the instant case, the Mendeses made no changes to

the "Addenda" provision. They checked no additional boxes

(including the "P. Back-up Contract" box), nor attached any

appropriately initialed addendum corresponding to an unchecked

item.

29. After receiving the Genuine Hernandez Contract from

Respondent, Mr. Shapiro showed it to Ms. Hernandez.

30. Ms. Hernandez, with the help of Mr. Shapiro, proceeded

to take those steps necessary for her and her husband to close

on the Subject Property on February 29, 2008, the agreed-upon

closing date. 10 These steps included having the Subject Property

inspected and securing a mortgage loan commitment. 11

31. Respondent and Mr. Shapiro had occasion to speak with

one another over the telephone regarding these post-

contract/pre-closing matters. (There was no direct

communication at any time between Respondent and the

Hernandezes.)

32. At no time either before or after the effective date

of the Genuine Hernandez Contract did Respondent advise

Mr. Shapiro that the Mendeses intended to treat their contract

with the Hernandezes as a "back-up contract," that is, a

contract subordinate to another contract for the sale and

purchase of the Subject Property.

33. This was not information that could be gleaned from a

review of the Genuine Hernandez Contract. Indeed, the Genuine

Hernandez Contract affirmatively indicated that it was not a

"back-up contract," inasmuch as the "P. Back-up Contract" box

in the "Addenda" provision on page 7 was not checked, nor was

there any corresponding "Back-up Contract" addendum attached to

the document.

34. Unbeknownst to Mr. Shapiro and the Hernandezes, by the

time the Genuine Hernandez Contract became effective (which,

according to numbered line 433, was January 23, 2008, "[t]he

date on which the last party [the Mendeses] signed or initialed

and delivered the final offer"), the Mendeses had already

entered into a contract (using the FAR Form) to sell the Subject

Property to another couple, Carlos and Aida Garcia, for

$330,000.00 (95% of which would be financed), with no seller

contribution toward closing costs (Garcia Contract).

35. In the "Addenda" provision (on page 7) of the Garcia

Contract (as in that provision of the Genuine Hernandez

Contract), neither the "I. Inspections" box, the "P. Back-up

Contract" box, nor the "Q. Broker - Pers. Int. in Prop." box

was checked.

36. Respondent was aware at the time that the Mendeses

executed the Contract Offer and entered into the Genuine

Hernandez Contract that it was the Mendeses' intention to

proceed with the Garcia Contract as the primary contract 12 and to

treat the Genuine Hernandez Contract as merely a "back-up" 13

(providing a ready alternative for the Mendeses, as insurance,

in the event their deal with the Garcias fell through). 14

37. This was information that any reasonably prudent buyer

in the Hernandezes' situation would have wanted and expected to

have, as Respondent surely must have known. As a Florida-

licensed real estate sales associate representing the Mendeses,

Respondent had a duty, in the interest of honest and fair

dealing, to disclose this information to the Hernandezes

(notwithstanding that he was not their agent 15 ).

38. Nonetheless, Respondent knowingly and dishonestly

participated in a scheme to conceal from the Hernandezes the

subordinate status of their contract to purchase the Subject

Property. 16

39. As it turned out, the Mendeses did not need to have a

"back-up" buyer, as the Garcias closed on the Subject Property

on February 11, 2008, as scheduled. Respondent "attend[ed] the

closing with the Garcias."

40. Respondent told neither Mr. Shapiro, nor the

Hernandezes, that the Garcias had closed on the Subject

Property.

41. Mr. Shapiro found out about the Garcias and their

having closed on the Subject Property, not from Respondent, but

from a representative of Sunbelt Title (the title company). He

obtained this information just a few days before the

Hernandezes' scheduled February 29, 2008, closing.

42. Mr. Shapiro, in turn, told Ms. Hernandez about the

Garcias' purchase of the Subject Property.

43. Ms. Hernandez was "shocked" to learn that the Mendeses

no longer had title to the Subject Property and that therefore

she and her husband would not be able to purchase the property

from them. She had made all the necessary preparations to move

from the rental property she was living in with her husband to

the Subject Property. She even had family members who were

going to be "flying into town" to help her with the move.

44. Had the Hernandezes known that their contract was only

a "back-up" to the Garcias', they would not have done the things

they did in anticipation of their scheduled February 29, 2008,

closing on the Subject Property.

45. Ms. Hernandez hired an attorney, who contacted

Mr. Tenzer to inquire, on the Hernandezes' behalf, about the

situation.

46. Mr. Tenzer had no "idea what [the attorney] was

talking about."

47. Respondent was unavailable at the time inasmuch as he

was out of the country on vacation.

48. Mr. Tenzer therefore went directly to the filing

cabinets where all of Tenzer Realty's files (both active and

closed) were supposed to be kept and proceeded to look for the

file on the Subject Property.

49. Pursuant to established Tenzer Realty office policy

(with which Respondent should have been familiar), all contracts

dealing with the Subject Property should have been in one file

in these filing cabinets.

50. Mr. Tenzer found only the Garcia Contract in the file

on the Subject Property. The Genuine Hernandez Contract (to

which the Hernandezes' attorney had referred in his conversation

with Mr. Tenzer) was not in the file.

51. Unable to locate a contract for the sale of the

Subject Property to the Hernandezes, Mr. Tenzer left a note on

Respondent's desk asking Respondent to see him about the matter

as soon as he returned to the office from vacation. In his

note, Mr. Tenzer emphasized that "it was urgent" that Respondent

discuss the matter with him "immediately" upon Respondent's

return.

52. When Respondent returned to the office, he produced

for Mr. Tenzer a document (Purported Hernandez Contract 17 )

identical in all respects to the Genuine Hernandez Contract,

except that three additional boxes in the "Addenda" provision on

page 7 were checked: the "I. Inspections" box; the "P. Back-

up Contract" box; and the "Q. Broker - Pers. Int. in Prop."

box. 18 (No additional addendum corresponding to any of these

items was attached to the document, however; just the boxes were

checked. 19 ) There were no signatures or initials next to these

three checked boxes. 20

53. Respondent told Mr. Tenzer that this was a "back-up

contract" and that the Hernandezes had been so informed.

54. What Respondent had done was alter the "Addenda"

provision of the Genuine Hernandez Contract in a weak and

transparent attempt to make it appear as if the "back-up" nature

of the contract was apparent from its face.

55. Mr. Tenzer asked Respondent where the Purported

Hernandez Contract had been "all this time." Respondent

responded that he had kept it in his desk drawer. This response

drew a rebuke from Mr. Tenzer, who chastised Respondent for not

keeping the Purported Hernandez Contract in the file together

with the Garcia Contract.

56. Mr. Tenzer then inquired, "Why do we have another

contract when one's already closed?" Respondent answered,

unresponsively (as well as untruthfully), that he had notified

Mr. Shapiro that the Garcias had closed on the Subject Property

and that therefore the Hernandezes would not be purchasing the

property.

57. Upon reviewing the Purported Hernandez Contract,

Mr. Tenzer noticed that the "Q. Broker - Pers. Int. in Prop."

box was checked. When he questioned Respondent about this,

Respondent told Mr. Tenzer that "that was done in error." 21

58. The Hernandezes ultimately purchased another home in

the Miami area. The purchase price of the home was more than

the amount that they had agreed to pay to buy the Subject

Property from the Mendeses.

59. A complaint concerning Respondent's dealings in

connection with the Subject Property was filed with Petitioner.

The complaint was investigated by Felix Mizioznikov, an

investigator with Petitioner.

60. As part of his investigation, Mr. Mizioznikov

interviewed Respondent, both over the telephone and "in person."

61. During the "in person" interview, Respondent gave

Mr. Mizioznikov his file on the Subject Property. The file

contained the Garcia Contract, the Genuine Hernandez Contract, 22

and the Purported Hernandez Contract.

62. Mr. Mizioznikov's investigation led to Petitioner's

filing the instant charge against Respondent alleging a

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

CONCLUSIONS OF LAW

63. DOAH has jurisdiction over the subject matter of this

proceeding and of the parties hereto pursuant to Chapter 120,

Florida Statutes.

64. The Florida Real Estate Commission (Commission) is

statutorily empowered to take disciplinary action against

Florida-licensed real estate sales associates based upon any of

the grounds enumerated in Section 475.25(1), Florida Statutes.

65. Such disciplinary action may include one or more of

the following penalties: license revocation; license suspension

not exceeding ten years; imposition of an administrative fine

not to exceed $5,000.00 for each count or separate offense;

issuance of a reprimand; and placement of the licensee on

probation. § 475.25(1), Fla. Stat. In addition, the Commission

"may assess costs related to the investigation and prosecution

of the case excluding costs associated with an attorney's time."

§ 455.227(3)(a), Fla. Stat.

66. The Commission may take such action only after the

licensee has been given reasonable written notice of the charges

and an adequate opportunity to request a proceeding pursuant to

Sections 120.569 and 120.57, Florida Statutes. See § 120.60(5),

Fla. Stat.

67. An evidentiary hearing must be held if requested by

the licensee when there are disputed issues of material fact.

See Hollis v. Department of Business and Professional

Regulation , 982 So. 2d 1237, 1239 (Fla. 5th DCA 2008); and §§

120.569(1) and 120.57(1), Fla. Stat.

68. At the hearing, Petitioner bears the burden of proving

that the licensee engaged in the conduct, and thereby committed

the violations, alleged in the charging instrument. Clear and

convincing evidence of the licensee's guilt must be presented for

Petitioner to meet its burden of proof. See Department of

Banking and Finance, Division of Securities and Investor

Protection v. Osborne Stern and Company , 670 So. 2d 932, 935

(Fla. 1996); Walker v. Florida Department of Business and

Professional Regulation , 705 So. 2d 652, 655 (Fla. 5th DCA

1998)("The Department had the burden of proving fraud,

misrepresentation or concealment by clear and convincing

evidence, in order to justify revocation of Walker's license.");

upon a preponderance of the evidence, except in penal or

licensure disciplinary proceedings or except as otherwise

provided by statute . . . .").

69. Clear and convincing evidence is an "intermediate

standard," "requir[ing] more proof than a 'preponderance of the

evidence' but less than 'beyond and to the exclusion of a

reasonable doubt.'" In re Graziano , 696 So. 2d 744, 753 (Fla.

1997). For proof to be considered "'clear and convincing' . . .

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 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 a firm belief or conviction, without hesitancy, as to

the truth of the allegations sought to be established." In re

Davey , 645 So. 2d 398, 404 (Fla. 1994)(citing with approval,

Slomowitz v. Walker , 429 So. 2d 797, 800 (Fla. 4th DCA 1983));

see also In re Adoption of Baby E. A. W. , 658 So. 2d 961, 967

(Fla. 1995)("The evidence [in order to be clear and convincing]

must be sufficient to convince the trier of fact without

hesitancy."). "Although this standard of proof may be met where

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

that is ambiguous." Westinghouse Electric Corporation, Inc. v.

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

70. In determining whether Petitioner has met its burden

of proof, it is necessary to evaluate its evidentiary

presentation in light of the specific allegations of wrongdoing

made in the charging instrument. Due process prohibits the

Commission from taking disciplinary action against a licensee

based on conduct not specifically alleged in the charging

instrument, unless those matters have been tried by consent.

See Trevisani v. Department of Health , 908 So. 2d 1108, 1109

(Fla. 1st DCA 2005); Shore Village Property Owners' Association,

Inc. v. Department of Environmental Protection , 824 So. 2d 208,

210 (Fla. 4th DCA 2002); and Delk v. Department of Professional

Regulation , 595 So. 2d 966, 967 (Fla. 5th DCA 1992).

71. Furthermore, "the conduct proved must legally fall

within the statute or rule claimed [in the charging instrument]

to have been violated." Delk , 595 So. 2d at 967. In deciding

whether the statute or rule claimed [in the charging instrument]

to have been violated was in fact violated, as alleged by

Petitioner, if there is any reasonable doubt, that doubt must be

resolved in favor of the licensee. See Djokic v. Department of

Business and Professional Regulation, Division of Real Estate ,

875 So. 2d 693, 695 (Fla. 4th DCA 2004); Elmariah v. Department

of Professional Regulation, Board of Medicine , 574 So. 2d 164,

165 (Fla. 1st DCA 1990); and Lester v. Department of

Professional and Occupational Regulations , 348 So. 2d 923, 925

(Fla. 1st DCA 1977).

72. In those cases where the proof is sufficient to

establish that the licensee committed the violation(s) alleged

in the charging instrument and that therefore disciplinary

action is warranted, it is necessary, in determining what

disciplinary action should be taken against the licensee, to

consult the Commission's "disciplinary guidelines," as they

existed at the time of the violation(s). 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 Orasan v. Agency for Health Care

Administration, Board of Medicine , 668 So. 2d 1062, 1063 (Fla.

1st DCA 1996)("[T]he case was properly decided under the

disciplinary guidelines in effect at the time of the alleged

violations."); see also State v. Jenkins , 469 So. 2d 733, 734

(Fla. 1985)("[A]gency rules and regulations, duly promulgated

under the authority of law, have the effect of law."); Buffa v.

Singletary , 652 So. 2d 885, 886 (Fla. 1st DCA 1995)("An agency

must comply with its own rules."); and Williams v. Department of

Transportation , 531 So. 2d 994, 996 (Fla. 1st DCA 1988)(agency

is required to comply with its disciplinary guidelines in taking

disciplinary action against its employees).

73. The Commission's "disciplinary guidelines" are set

forth in Florida Administrative Code Rule 61J2-24.001. At all

times material to the instant case, they provided, in pertinent

part, as follows:

( 1) Pursuant to Section 455.2273, F.S., the

Commission sets forth below a range of

disciplinary guidelines from which

disciplinary penalties will be imposed upon

licensees guilty of violating Chapter 455 or

475, F.S. The purpose of the disciplinary

guidelines is to give notice to licensees of

the range of penalties which normally will

be imposed for each count during a formal or

an informal hearing. For purposes of this

rule, the order of penalties, ranging from

lowest to highest, is: reprimand, fine,

probation, suspension, and revocation or

denial. Pursuant to Section 475.25(1),

F.S., combinations of these penalties are

permissible by law. Nothing in this rule

shall preclude any discipline imposed upon a

licensee pursuant to a stipulation or

settlement agreement, nor shall the range of

penalties set forth in this rule preclude

the Probable Cause Panel from issuing a

letter of guidance.

(2) As provided in Section 475.25(1), F.S.,

the Commission may, in addition to other

disciplinary penalties, place a licensee on

probation. The placement of the licensee on

probation shall be for such a period of time

and subject to such conditions as the

Commission may specify. Standard

probationary conditions may include, but are

not limited to, requiring the licensee: to

attend pre-licensure courses; to

satisfactorily complete a pre-licensure

course; to attend post-licensure courses; to

satisfactorily complete a post-licensure

course; to attend continuing education

courses; to submit to and successfully

complete the state-administered examination;

to be subject to periodic inspections and

interviews by a DBPR investigator; . . . .

(3) The penalties are as listed unless

aggravating or mitigating circumstances

apply pursuant to subsection (4). The

verbal identification of offenses is

descriptive only; the full language of each

statutory provision cited must be consulted

in order to determine the conduct included.

* * *

(c) Section 475.25(1)(b), F.S.- Guilty

of . . . concealment . . . .

* * *

In the case of concealment . . . , the usual

action of the Commission shall be to impose

a penalty of a 3 to 5 year suspension and an

administrative fine not to exceed $5,000.

* * *

(4)(a) When either the Petitioner or

Respondent is able to demonstrate

aggravating or mitigating

circumstances . . . to a Division of

Administrative Hearings [Administrative Law

Judge] in a Section 120.57(1), F.S., hearing

by clear and convincing evidence, the . . .

[Administrative Law Judge] shall be entitled

to deviate from the above guidelines

in . . . recommending discipline, . . . upon

a licensee. . . .

(b) Aggravating or mitigating circumstances

may include, but are not limited to, the

following:

1. The degree of harm to the consumer or

public.

2. The number of counts in the

Administrative Complaint.

3. The disciplinary history of the

licensee.

4. The status of the licensee at the time

the offense was committed.

5. The degree of financial hardship

incurred by a licensee as a result of the

imposition of a fine or suspension of the

license.

6. Violation of the provision of Chapter

475, F.S., wherein a letter of guidance as

provided in Section 455.225(3), F.S.,

previously has been issued to the licensee.

* * *

74. The Amended Administrative Complaint issued in the

instant case alleges that Respondent violated Section

475.25(1)(b), Florida Statutes, by "conceal[ing] from [the

Hernandezes] that the sale and purchase agreement [concerning

the Subject Property that they entered into with the Mendeses]

was a back up contract." 23

75. At all times material to the instant case, Section

475.25(1)(b), Florida Statutes, has authorized the Commission to

take disciplinary action against a Florida-licensed real estate

sales associate who:

[h]as been guilty of . . . concealment . . .

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.

76. For there to be "concealment" in violation of Section

475.25(1)(b), Florida Statutes, there must be wrongful intent or

scienter. See Munch v. Department of Professional Regulation ,

592 So. 2d 1136, 1143-44 (Fla. 1st DCA 1992)("It is clear that

Section 475.25(1)(b) Florida Statutes, which, in its first

clause, authorizes the Commission to discipline a licensee

guilty of fraud, misrepresentation, concealment, false promises,

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

culpable negligence, or breach of trust in any business

transaction is penal in nature. As such, it must be construed

strictly, in favor of the one against whom the penalty would be

imposed. . . . Reading the first clause of Section 475.25(1)(b)

(the portion of the statute which appellant was charged with

having violated in Count I of the complaint), and applying to

the words used their usual and natural meaning, it is apparent

that it is contemplated that an intentional act be proved before

a violation may be found."); and Morris v. Department of

Professional Regulation , 474 So. 2d 841, 843 (Fla. 5th DCA

1985)(grounds of "'fraud, misrepresentation, concealment, false

promises, dishonest dealing by trick, scheme or device, culpable

negligence and breach of trust in a business transaction in

violation of section 475.25(1)(b) . . . alleged by the complaint

all require a finding of wrongful intent or scienter . . . .").

77. The wrongful intent or scienter required to establish

a violation of Section 475.25(1)(b), Florida Statutes, may be

proven by circumstantial evidence. See Walker v. Department of

Business and Professional Regulation , 705 So. 2d 652, 654 (Fla.

5th DCA 1998)("DBPR presented undisputed circumstantial evidence

that Walker's acts were intentional."); and Baker v. State , 639

So. 2d 103, 104 (Fla. 5th DCA 1994)("Intent is an operation of

the mind and is not subject to direct proof, however, intent can

be proven by circumstantial evidence."). For instance, it may

be inferred from the licensee's actions. See Baptiste v. State ,

895 So. 2d 1193, 1194 (Fla. 3d DCA 2005)("On appeal, Baptiste

asserts that the state failed to prove beyond a reasonable doubt

that he knew or intended that Scooter would shoot the victim.

However, where there is no direct evidence of intent, it can be

inferred from the circumstances and from the defendant's

actions."); Swanson v. State , 713 So. 2d 1097, 1101 (Fla. 4th

DCA 1998)("Appellant's actions are sufficient to show intent to

participate."); State v Breland , 421 So. 2d 761, 766 (Fla. 4th

DCA 1982) ("Actions manifest intent."); G. K. D. v. State , 391

So. 2d 327, 328-29 (Fla. 1st DCA 1980)("Appellant testified that

he did not intend to break the window, but the record indicates

that he did willfully kick the window, and he may be presumed to

have intended the probable consequences of his actions."); and

State v. West , 262 So. 2d 457, 458 (Fla. 4th DCA 1972)("Intent

is not usually the subject of direct proof. It is inferred from

the acts of the parties and from the surrounding

circumstances.").

78. In the instant case, Petitioner established by clear

and convincing evidence that Respondent engaged in the wrongful

concealment alleged in the Amended Administrative Complaint and,

in so doing, violated Section 475.25(1)(b), Florida Statutes.

That Respondent acted knowingly, with the intent to deceive, in

concealing from the Hernandezes the "back-up" nature of their

contract is apparent from the totality of Respondent's actions,

including, perhaps most significantly, his subsequent efforts to

cover-up the concealment by creating a fraudulent contract

document (the Purported Hernandez Contract) and then lying about

how it was created. See Baena v. Woori Bank , 515 F. Supp. 2d

414, 421-22 (S.D. N.Y. 2007)("The significance of the subsequent

alleged lies is that they speak to whether defendants acted with

scienter --an intent to deceive at an earlier point in time.

The subsequent lies --the cover up--, if proven, would be strong

circumstantial evidence of a bank's state of mind and intentions

at the time of entry into the two sets of agreements. . . .

Here, it is difficult to conjure up many innocent explanations

for a lie about the existence of a second set of agreements.

One who had entered into two sets of agreements innocently and

without intent to facilitate the original fraud would be less

likely to have lied about them when inquiry was later made.");

In re Nature's Sunshine Products Security Litigation , 486 F.

Supp. 2d 1301, 1310 (D. Utah 2007)("Evidence that a defendant

has taken steps to cover-up a misdeed is strong proof of

scienter."); and Spoljaric v. Percival Tours, Inc. , 708 S.W.2d

432, 434 (Tex. 1986)("While a party's intent is determined at

the time the party made the representation, it may be inferred

from the party's subsequent acts after the representation is

made.").

79. Florida Administrative Code Rule 61J2-24.001(3)(c) has

provided at all times material to the instant case that where,

as in the instant case, an alleged "concealment" (proscribed by

Section 475.25(1)(b), Florida Statutes) has been proven, the

"usual action of the Commission" is the imposition of "a penalty

of a 3 to 5 year suspension and an administrative fine not to

exceed $5,000."

80. Having considered the facts of the instant case in

light of this rule provision and the remaining pertinent and

applicable provisions of Florida Administrative Code Rule 61J2-

24.001, it is the view of the undersigned that the Commission

should discipline Respondent for his "concealment" by suspending

his license for a period of four years and fining him

$1,000.00. 24 The Commission should also order Respondent,

pursuant to Section 455.227(3), Florida Statutes, to reimburse

Petitioner for its reasonable investigative costs in this case.

"Due process considerations require, however, that Respondent be

given the opportunity to examine and question the reasonableness

of such costs before any are imposed." Department of Health,

Board of Nursing v. Howard , No. 02-0397PL, 2002 Fla. Div. Adm.

Hear. LEXIS 1310 *10 (Fla. DOAH October 30 2002)(Recommended

Order).

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is hereby

RECOMMENDED that the Commission issue a Final Order finding

Respondent guilty of "concealment" in violation of Section

475.25(1)(b), Florida Statutes, as alleged in the Amended

Administrative Complaint and disciplining him for having

committed this violation by suspending his license for four

years, fining him $1,000.00, and requiring that he reimburse

Petitioner for its reasonable investigative costs in this case.

DONE AND ENTERED this 3rd day of March, 2010, in

Tallahassee, Leon County, Florida.

S

___________________________________

STUART M. LERNER

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 3rd day of March, 2010.

ENDNOTES

1 Unless otherwise noted, all references in this Recommended

Order to Florida Statutes are to Florida Statutes (2009).

2 From April 1, 2002, through April 15, 2002, Respondent's

license was "invalid [by operation of law] due to non-renewal."

3 Respondent was not at the Subject Property during the showing.

4 At the time, Mr. Hernandez was in the United States military

and on active duty.

5 On the line next to (immediately to the right of) the "Other"

box, he wrote, "mold."

6 The "H. As is w/Right to Inspect" addendum read as follows:

H. As Is With Right to Inspect : This

clause replaces Paragraphs 6 and 8 of the

Contract but does not modify or replace

Paragraph 9. Paragraph 5(a), Repair, WDO

and Permit Limits are 0%. Seller makes no

warranties other than marketability of

title. Seller will keep the Property in the

same condition from Effective Date until

closing, except for normal wear and tear

("Maintenance Requirement"), and will convey

the Property in its "as is" condition with

no obligation to make any repairs. Buyer

may, at Buyer's expense, by 15 ("Inspection

Period") (within 10 days for Effective date

if left blank) make any and all inspections

of the Property. The inspection(s) will be

by a person who specializes in and holds an

occupational license (if required by law) to

conduct home inspections or who holds a

Florida license to repair and maintain the

items inspected. Buyer may cancel the

Contract by delivering written notice to

seller within 5 days (within 5 days if left

blank) from the end of the Inspection Period

if the cost of treatment and repairs

estimated by Buyer's inspector(s) is greater

than $1,000.00 ($250.00 if left blank) or if

Buyer's inspection(s) reveal open permits or

that improvements have been made to the

Property without required permits. For the

cancellation to be effective, Buyer must

include in the written notice a copy of the

portions of the inspector's written report

dealing with the items to be repaired, and

treatment and repair estimates from the

inspector or person(s) holding an

appropriate Florida license to repair the

items inspected or any written documentation

of open permit(s) or permits that have not

been obtained if a permit is required. Any

conditions not reported in a timely manner

will be deemed acceptable to Buyer. If

Buyer fails to timely conduct any inspection

which Buyer is entitled to make under this

paragraph, Buyer waives the right to the

inspection and accepts the Property "as is."

Seller will provide access and utilities for

Buyer's inspections. Buyer will repair all

damages to the Property resulting from the

inspections and return the Property to its

pre-inspection condition. Buyer and/or

Buyer's representative may, on the day

before Closing Date or any other time

agreeable to the parties, walk through the

Property solely to verify that Seller has

fulfilled the Maintenance Requirement and

the contractual obligations.

7 As part of their Contract Offer, the Hernandezes put down a

deposit of $3,000.00. The deposit was held in escrow by

Coldwell Banker.

8 Mr. Shapiro filled in (in the spaces provided) the time and

date by which the Contract Offer had to be signed by the

Mendeses and returned to the Hernandezes. The remainder of

numbered lines 412 through 416 was pre-printed.

9 The Genuine Hernandez Contract was offered and received into

evidence as Petitioner's Exhibit 4.

10 Although the Hernandezes had the right (pursuant to the

"Offer and Acceptance" provision of the Contract Offer) to

revoke their offer after 5:00 p.m. on January 21, 2008, they

chose not to exercise this right and opted instead to go ahead

with their purchase of the Subject Property on the terms they

had offered and the Mendeses (albeit belatedly) had accepted.

See , e.g. , Ocean Atlantic Development Corp. v. Aurora Christian

Schools, Inc. , 322 F.3d 983, 997 (7th Cir. 2003)("One question

that we must address at the outset is whether Ocean Atlantic's

offer to the Koniceks is necessarily a nullity because the

Koniceks did not sign it until the offer, by its own terms, had

already expired. The offer specified that if not signed and

returned to Ocean Atlantic within five days, it 'shall be null

and void.' The offer was dated May 24, 2000, but the Koniceks

did not sign it and return it to Ocean Atlantic until May 31,

2000--two days beyond the deadline for acceptance. Isenstein-

Pasquinelli and the Koniceks assert that this alone renders the

offer unenforceable. But as Ocean Atlantic aptly points out, a

provision of this sort serves to protect the offeror, and the

offeror may, should it so choose, elect to waive strict

compliance with the time limit. Here it would appear that

notwithstanding the Koniceks' failure to sign and return the

offer within the time provided, Ocean Atlantic was nonetheless

prepared to overlook their tardiness and proceed with the

preparation of a contract. Under these circumstances, we cannot

say, as a matter of law, that the offer was null and void simply

because the Koniceks did not sign it in a timely

fashion.")(citations omitted). The Hernandezes were under the

understandable impression at the time they made this choice to

proceed with the purchase that theirs was not a "back-up

contract."

11 The Hernandezes obtained a loan commitment letter from their

lender on February 26, 2008, three days prior to the scheduled

closing.

12 The Mendeses received the Hernandezes' Contract Offer before

the Garcia Contract was finalized. They chose to give the

Garcias, rather than the Hernandezes, first crack at purchasing

the Subject Property because of concerns they had that the

Hernandezes would have difficulty obtaining 100% financing to

make the purchase.

13 Comment a. of The Restatement (Second) of Contracts, Section

146, provides that, "[w]here an owner of property makes two

[otherwise enforceable] agreements to sell the same property to

two different buyers . . . , the first in time ordinarily has

priority." In the instant case, as between the Garcia Contract

and the Genuine Hernandez Contract, the former was "first in

time."

14 The Mendeses were moving to Brazil and wanted to sell the

Subject Property as quickly as possible. Having a "back-up"

contract with the Hernandezes at the ready would have minimized

the delay in the sales process should the Garcias for any reason

not have been able to close on the property. Moreover, the

Genuine Hernandez Contract, from a seller's perspective, was

slightly more attractive, monetarily, than the Garcia Contract,

and it would have provided Tenzer Realty (and therefore also

Respondent) with a larger commission payout.

15 See Dullea v. Department of Business Regulation , 599 So. 2d

207, 208 (Fla. 2d DCA 1992)("It also appears that the appellant

would be eligible to recover based upon Waddle's violation of a

duty imposed upon him by law, namely the duty of honesty,

candor, and fair-dealing imposed upon real estate brokers and

salespersons, even where there is no principal-agent

relationship between the broker and seller."); Ellis v. Flink ,

301 So. 2d 493, 494 (Fla. 2d DCA 1974)("We need not decide here

whether the record below conclusively demonstrated a genuine

issue of fact as to agency, because, as a matter of law, that

issue could not be material. The law of Florida is very clear

that the defendants, as real estate broker and salesmen, owed

the Flinks, a duty of honesty, candor, and fair-dealing (which

they obviously breached) even if there were no principal-agent

relationship at all."); and Department of Business and

Professional Regulation, Division of Real Estate, v. Shad ,

No. 98-5636, 1999 Fla. Div. Adm. Hear. LEXIS 5799 *9 (Fla. DOAH

April 9, 1999)(Recommended Order)("Petitioner has proven the

violation by clear and convincing evidence, in that Respondent

intended to withhold the information concerning the findings in

the termite inspection report involved in the business

transaction. In this connection, Respondent had the duty of

honesty, candor, and fair dealing with the Bampings and

Ms. Irons, in carrying out his obligation to his client, the

Veteran's Administration, notwithstanding the lack of a

principal-agent relationship with those persons.").

16 Contrary to the suggestion made by Respondent in his Proposed

Recommended Order, he did have a motive to conceal from the

Hernandezes that there was a pre-existing contract that had

priority over theirs: the elimination of the possibility that

the Hernandezes would reject such an arrangement and not agree

to be "back-up" buyers.

17 The Purported Hernandez Contract was offered and received

into evidence at the final hearing as Petitioner's Exhibit 3.

18 Although these three additional boxes in the "Addenda"

provision were checked, there was no checkmark in the "Counter

Offer" box on page 8 (to indicate that that there were "counter

offered terms").

19 To the naked eye, the marks in these three boxes, compared to

the marks in the "F. VA Financing," the "H. As is w/Right to

Inspect," the "V. Prop. Disclosure Stmt.," and the "Other"

boxes, appear to be thicker, as if they had been written with a

different writing instrument.

20 The absence of any such signatures or initials belies the

claim made by Respondent during his testimony at the final

hearing that the Hernandezes "accepted" these additional

contract terms.

21 At the final hearing, Respondent testified otherwise

concerning the mark in this box. He claimed that the box had

been checked, not in error, but because Mr. Mendes had an

inactive real estate license. Respondent explained that he had

"always been trained to check that box even if the person had an

inactive license." If this were true, one would expect to find

"that box" also checked on the Garcia Contract, which it was

not.

Concerning the mark in the "I. Inspections" box on the

Purported Hernandez Contract, Respondent testified that the

Mendeses checked this box "because they wanted to make sure that

[the Hernandezes] couldn't come back and break the deal."

According to Respondent's testimony, if this box was checked,

the buyer (in this case, the Hernandezes) would "have a certain

timeframe" beyond which "they could not back out of the

contract" based on the results of an inspection. There was no

need, however, for the Mendeses to add such a provision inasmuch

as the "H. As is w/Right to Inspect" addendum that the

Hernandezes had attached to their Contract Offer already

provided the Mendeses with this protection. Further detracting

from the credibility of Respondent's testimony on this matter is

the fact that the "I. Inspections" addendum, which Respondent

claimed the Mendeses insisted on including in their contract

with the Hernandezes, was not included in the Mendeses' contract

with the Garcias.

Respondent evidently believed that by also checking the "I.

Inspections" box and the "Q. Broker - Pers. Int. in Prop." box

on the Purported Hernandez Contract (as opposed to just checking

the "P. Back-up Contract" box) he would give the document a

greater air of legitimacy and increase the chances that his

fraudulent alteration of the Genuine Hernandez Contract would go

undetected. As it turned out, however, this ploy only made his

deceit more obvious.

22 Respondent would not have had in his possession the Genuine

Hernandez Contract (which was dated and signed by the Mendeses

on July 23, 2008, and did not have, in its "Addenda" provision,

a mark in either the "I. Inspections," the "P. Back-up

Contract," or the "Q. Broker - Pers. Int. in Prop." box) if the

Mendeses had checked these boxes when he had gone over the

Contract Offer with them on that date, as Respondent testified

that they had done.

23 Although the Amended Administrative Complaint further alleged

that Respondent also "concealed from [the Hernandezes] that

[Mr.] Tenzer had an interest in the Subject Property," it

appears from a review of Petitioner's Proposed Recommended Order

that Petitioner has abandoned this additional allegation (which,

in any event, abandoned or not, was not proven at hearing).

24 The undersigned has rejected, as too lenient, the six-month

suspension proposed by Petitioner in its Proposed Recommended

Order. Were the Commission to suspend Respondent for only six

months, it would be deviating downward from its "usual action"

(as established by Florida Administrative Code Rule 61J2-

24.001(3)(c)) in "concealment" cases. The circumstances of the

instant case, however, do not justify any downward departure

from the normal penalty range established in the rule.

COPIES FURNISHED :

Patrick J. Cunningham, Esquire

Department of Business and

Professional Regulation

Division of Real Estate

400 West Robinson Street, Suite N-801

Orlando, Florida 32801

Steven W. Johnson, Esquire

20 North Orange Avenue, Suite 700

Orlando, Florida 32801

Thomas W. O'Bryant, Jr., Director

Division of Real Estate

Department of Business and

Professional Regulation

400 West Robinson Street

Suite 802 North

Orlando, Florida 32801

Reginald Dixon, 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 this case.