10-000749PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Janet Hurst Status: Closed Recommended Order on Friday, October 29, 2010.

Summary: Division of Real Estate did not prove by a clear and convincing evidence that a real estate broker failed to appropriately supervise a sales associate, or that the broker concealed a change of the listing price of certain property from the sellers.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION , )

DIVISION OF REAL ESTATE , )

)

Petitioner, )

)

vs. ) Case No. 10 - 0 749PL

)

JANET HURST , )

)

Respondent. )

)

RECOMMENDED ORDER

A n administrative hearing was conducted in this case on

August 3 and 4 , 20 10 , in DeFuniak Springs , Florida, before

James H. Peterson, III, Administrative Law Judge with the

Division of Administrative Hearings.

APPEARANCE S

For Petitioner: Joseph A. Solla , Esquire

Department of Business and

Professional Regulation

Division of Real Estate

400 West Robinson Street, Suite N801

Orlando, Florida 3280 1 - 1757

For Respondent: Lyndia Pad gett Spears, Esquire

7024 State Highway 83 , N orth

DeFuniak Springs , Florida 32 433

STATEMENT OF THE ISSUE S

I. W hether Janet Hurst (Respondent) , a s a licensed

residential real estate broker , should be subject to

disciplinary action by the Department o f Business and

Professional Regulation, Division of Real Estate ( Petitioner ) ,

for failure to direct, control, or manage a sales associate in

her employ, in violation of Section 475.25(1)(u), Florida

Statutes. 1 /

I I . Whether Respondent , as a licensed reside ntial real

estate broker , should be subject to disciplinary action by

Petitioner for fraud, misrepresentation, concealment, false

promises, false pretences, dishonest conduct, culpable

negligence, or breach of trust in any business transaction, in

violatio n of Section 475.25(1)(b) , Florida Statutes .

PRELIMINARY STATEMENT

In December 2009, Petitioner filed an a dministrative

c omplaint (Administrative Complaint) against Respondent and her

sales associate, Carol Rosell , alleging that on or about May 3,

2006, Ca rol Rosell increased the listing price of certain real

property from $199,000 to $239,000 without the consent or

authorization of the sellers and that Respondent violated

Section 475.25(1)(u), Florida Statutes, because Respondent

failed to direct, control or manage the sales associate by

allowing Carol Ros ell to make the price change when Respondent

knew, or should have known, that the sellers did not authorize

or consent to the price increase. The Administ rative C omplaint

further allege s that both Respond ent and Carol Rosell violated

Section 475.25(1)(b), Florida Statutes, because they allegedly

concealed the price change of the property from the seller s .

Carol Rosell entered into a stipulation with Petitioner in

settlement of the allegations against her and, although she

offered testimony at the final hearing, was not a party to this

proceeding. Respondent timely filed an Election of Rights form

disputing the allegations and requesting an administrative

hearing . In a letter dated February 8, 2010, Petit ioner

forwarded the case to the Divi sion of Administrative Hearings

( DOAH). The case w as originally assigned to Administrativ e Law

Judge Lisa Shearer Nelson, but was subsequently transferred to

the undersigned to conduct the administrative hearing.

At the administrative hearing in t his matter held on

August 3 and 4, 2010 , Petitioner presented the testimony of

Petitioner's investigator, Diana Woods; one of the sellers,

Darlene Rosell; and Carol Rosell. Petitioner offered seven

exhibits which were received into evidence as Petitioner Ós

E xhibits P - 1 through P - 7 . Respondent presented the testimony of

former employees of Respondent's real estate agency, including

Sandra Fillingim, Rhonda Turner, Linda Marie Yaun, and

Respondent's son, Michael Hurst. Responden t further offered the

testimony of Charles Christian, the owner of an Alabama

corporation named the Christian Company , doing business as

Paradise Realty and Development , and engaged in the sale and

development of real estate. Respondent also testified on her

own behalf and offered eleven exhibits that were received into

evidence as Respondent ' s E xhibits R - 1 through R - 3, R - 7, R - 8 , and

R - 20 through R - 25.

The hearing concluded on August 4 , 2010 . The proceedings

were recorded and a transcript was ordered. T h e parties were

given ten days following the filing of the transcript within

which to file their respective P roposed Recommended O rders. A

two - volume transcript of the final hearing was filed on

September 2, 2010. Petitioner and Respondents timely filed

t heir Proposed Recommended Orders, which have been considered in

the preparation of this Recommended Order.

FINDINGS OF FACT

1. Petitioner is the licensing authority for real estate

brokers in Florida , with revocation and disciplinary authority

over its l icensees pursuant to Section 20.165 and Chapter s 455

and 475, Florida Statutes.

2. Respondent is , and at all material times was , a

licensed Florida real estate broker who operated a real estate

brokerage named Lake DeFuniak Realty, Inc.

3. Carol Rosell w as first licensed as a real estate sales

associate in Florida in February or March, 2005, and began her

first employment in that capacity in April 2005, at Lake

DeFuniak Realty, Inc.

4. Although a newly - licensed real estate sales asso ciate,

Carol Rosell w as not unsophisticated in financial matters,

having been involved in the banking industry for over 20 years

prior to becoming licensed as a real estate sales associate.

5. In 2005, Carol Rosell sold over one million dollars in

real estate through Lake DeF uniak Realty, Inc., and earned over

$60,000 in real estate commissions.

6. O n December 23 , 2005, Carol Rosell placed a telephone

call to her first cousin in New Jersey , Richard Rosell, and

advise d him of two parcels of adjacent land on Kings Lake Road

nea r DeFuniak Springs that were for sale. Both Mr. Rosell and

his wife, Darlene Rosell, considered the purchase and, after the

holidays, advised Carol Rosell that they wanted to purchase one

of the parcels.

7. Carol Rosell, who was the listing agent for the sellers

of the property through Lake DeFuniak Realty, Inc., advised that

the two parcels were to be sold together. Richard and Darlene

Rosell decided to purchase both parcels (collectively, "the

Property") . Although they intended to visit the P roperty b efore

closing, the Rosells decided to close on the purchase without

viewing the P roperty. They paid $182, 9 00 for the P roperty.

8. After purchasing the Property, Richard and Darlene

Rosell visited the P roperty in February, 2006 , and shortly

thereafter dec ided to sell the P roperty . According to Darlene

Rosell, during that visit, they also met with county officials

who indicated that, contrary to the way the P roperty was

advertised, the Rosell's rights in the P roperty did not include

lake access.

9. On Feb ruary 23, 2006, Richard and Darlene Rosell, as

sellers, entered into a written listing agreement (Listing

Agreement) giving Lake DeFuniak Realty, Inc., the exclusive

right to sell the P roperty. The Listing Agreement listed Carol

Rosell as the listing asso ciate and provides that "[t]he

property is offered for sale on the following terms

($199,500.00), or on other terms acceptable to Seller."

10. The Listing Agreement does not address how price

changes are to be authorized by the sellers.

11. According to the Emerald Coast multiple real estate

listing (MLS) printout for the Property, after the Rosells

entered into the Listing Agreement on February 23, 2006, the MLS

listing price for the Property was originally set at $199,500.

12. Contrary to the allegatio ns of the Administrative

Complaint, the price change for the Property reflected on the

MLS printout shows that on March 3, 2006, the price change was

from $199,500 to $299,500, as opposed to $239,500 as alleged in

the Administrative Complaint. The evidenc e further shows that

it was Respondent, not Carol Rosell, who made entry in the MLS

listing to increase the price to $299,500 on May 3, 2006.

13. Real estate agents and sales associates obtain access

to the MLS system through a member broker. In this cas e, both

Carol Rosell and Respondent were signed up for MLS access during

the pertinent time through Lake DeFuniak Realty, I nc. When

signing up, each associate or agent is assigned a unique access

code which identifies the agent and given a password to acc ess

the MLS system.

14. Once they access the system under their unique access

code s and passwords, agents and sales associates can make

changes to the MLS list price or note certain other changes in

the listing . C hanges made by those who access the sys tem show

up on the MLS listing history along with the access code of the

agent who made the change . Real estate agents and sales

associates are prohibited from sharing their passwords , and are

su bjected to fines if they do.

15. Respondent's access code t o the MLS system during the

pertinent period was E1705 . Carol Rosell's access code was

E5619 .

16. Entries in the MLS history report for the Property

show that Carol Rosell was the listing agent from the time that

the Rosells purchased the P roperty unti l they sold it.

17. A review of the March 3, 2006, change in the MLS

listing price for the Property from $199,500 to $299,500, on the

MLS history report shows that Respondent, as opposed to Carol

Rosell, was the one who accessed the MLS system and made the

change on that date under Respondent's access code number E1705.

18. Respondent testified that she accessed the MLS system

and increased the MLS listing price of the Property to $299,500

on March 3, 2006, only after she had spoken to Carol Rosell and

someone on the telephone identified by Carol Rosell as Darlene

Rosell to confirm that the change in the price was authorized.

19. Respondent further explained that she had previously

asked Carol Rosell to obtain permission from the sellers,

Richard and Da rlene Rosell, for the price increase. Respondent

said , after she discovered that the Rosells wanted to sell the

Property, she did some research regarding the zoning and

recommended the price increase for the Property based upon her

discovery of a similar - sized parcel listed for $299,000 with the

same development potential just one - tenth of a mile away from

the Property.

20. The only change in the MLS listing price for the

Property under Respondent's access code E1705 was the increase

to $299,500 made on M a rch 3, 2006. After that, the only changes

in the MLS listing price for the Property while the Rosells had

it listed with Lake DeFuniak Realty, Inc., were made under Carol

Rosell's access code number E 5619, including a decrease to

$199,500 and then increa se back to $299,500 on April 18, 2006; a

decrease to $199,500, and then an increase to $259,500 on May 1,

2006; and a decrease to $239,000 on July 18, 2006.

21. The e vidence demonstrated that the price was increased

to $299,500 , as opposed to $239,500 on March 3, 2006 , and that

the change on that date was made by Respondent, as opposed to

Carol Rosell as erroneously alleged in the Administrative

Complaint. Nevertheless, in her settlement stipulation with

Petitioner , Carol Rosell "admits the factual allegat ions in all

counts of the Administrative Complaint and that such allegations

constitute a violation(s) of the count(s)." 2 /

22. Under the terms of her settlement stipulation with

Petitioner, Carol Rosell 's real estate license was placed on

probation for a period of one year, and Carol Rosell agreed to

pay costs in the amount of $264, and agreed to pay a fine in the

sum of $500 . Petitioner, however, waived the fine imposed

against Carol Rosell, and she agreed to testify in this

proceeding on behalf of Petit ioner.

23. In further contravention of the Administrative

Complaint and the plain terms of the settlement stipulation with

Petitioner's main witness , Carol Rosell, Petitioner's counsel

stated during his opening at the final hearing that it was

Respondent who changed the price of the Property "as part of a

scheme to make an illegal profit," and that Carol Rosell "never

changed the price."

24. There is no mention in the Administrative Complaint of

a scheme to make an illegal profit and the evidence produced at

final hearing does not support such a finding , nor does it

support a finding that Carol Rosell never changed the MLS

listing price of the Property.

25. At the final hearing, Carol Rosell testified that she

did not recall making any of the changes to t he MLS listing

price . Carol Rosell attempted to explain the fact that her

access code appears next to numerous MLS listing price or other

changes made to the Property's MLS listing by testifying that

she may have left her MLS access code and password on

R espondent's computer at a time when she had to share a computer

with Respondent, and that Respondent may have used them in

making the price changes.

26. Carol Rosell's testimony was refuted by a number of

former employees of Lake DeFuniak Realty, Inc., wh o explained

that Carol Rosell never had to share a computer, and that all

agents knew not to give out their passwords to the MLS system.

27. In addition, during cross - examination , while Carol

Rosell testified that she did not "recall changing prices like

that," she did not deny it. Further, in apparent contradiction

of her earlier testimony, Carol Rosell remembered "changing the

price back to one ninety - nine five," and testified that she had

no proof that Respondent was the one who changed the prices.

28. In view of Carol Rosell's settlement stipulation, the

documentary evidence of the use of her access code on numerous

occasions, her inconsistent testimony , and the credible

testimony of other witnesses regarding passwords and whether she

shared a compute r , it is found that, other than the change made

by Respondent on May 3, 2006, increasing the price to $299,500,

all of the other price and listing changes to the MLS listing

for the Property made during the time that the Rosells owned the

Property were mad e by Carol Rosell.

29. While not mentioned in the Administrative Complaint,

Petitioner, through the testimony of Carol Rosell, attempted to

show that Respondent changed the listing price of the Property

to make an illegal profit.

30. Carol Rosell testifi ed that Respondent told her that

she had a verbal contract with Charles "Chuck" Christian and

that there was a secret deal with him to inflate the reported

sales price of the property and the profit would be split among

Respondent, Mr. Christian, and Carol Rosell .

31. Carol Rosell's testimony regarding the alleged

transaction, however, was not c redible. At the final hearing,

the exchange between Petitioner's counsel and Ca rol Rosell

regarding that alleged secret deal was as follows:

Q. [ MR. SOLLA ]. D id you enter into a

listing agreement on behalf of DeFuniak

Springs Realty with Darlene Rosell and her

husband?

A. [ CAROL ROSELL ]. Yes I did.

Q. And what was the listing price in

that agreement?

A. At the time, it was one ninety - nine

five ($ 199,500).

Q. Okay. Did there come a time when

the price changed?

A. Yes.

Q. How did that happen? How did it

arise?

A. The first price change was done by

Janet Hurst, the initial price change. And

at the time, I didn't know it was bei ng

done. After the fact, she indicated that

she had changed it because of interest that

she had from individuals, investors, out of

south Florida who were concerned about the

price at one ninety - nine five ($199,500).

They felt that it was too low, and th ey were

concerned that there were problems with the

property.

Q. Did she explain to you at some point

that she intended for the buyer to resell

the property and to profit?

A. Later on yes, we had that

discussion. She told me that, essentially,

b uy low, sell high. She said that she had

somebody that was interested in the

property, that they were going to purchase

it on paper for the one ninety - nine five

($199,500). And I'm not sure of the exact

amount. It was one ninety - nine or one

ninety - five. And then they were going to

turn around and flip it and sell it for two

ninety - nine or three fifty. And again, I

can't remember exactly what the initial

amount was, but they were going to sell it

for a higher price.

Q. So raising the listing price would

make it appear that the property was worth

more?

MS. SPEARS: Objection, Your Honor,

he's leading his own.

THE COURT: I'll sustain that objection.

BY MR. SOLLA:

Q. Why would they raise the listing

price? Why would Janet Hurst raise the

listing price

A. She told me that this way it looked

like they were paying more for the property,

so when they sold it for more than the

listing price, they were showing a profit

that they were making, and it looked better

for business purposes. Th ose weren't her

exact words, but that was what she was

saying.

Q. And did she agree to share some of

that profit with you?

A. She did. Initially, she said that

we would split it three ways, and she went

cha ching, cha ching. And then she said,

well, I can't give you - - I can't split it

because you're a realtor. I can give you a

bonus. And that's how it was left.

Q. Did you let Darlene Rosell know that

the price had been changed?

A. I honestly don't remember if I did

initially. I know we had that conversation,

I'm going to say, about a week after the

price - - after I realized it had been done.

And I called Darlene. Because at the time,

we had a verbal contract with - - or Janet

had a verbal contract with an individual.

And the way it was presented to me was that

he was going to pay the one ninety - nine - -

he was going to pay two ninety - nine

($299,000) for it, and he was going to sell

it and flip it. And I remember saying to

her, that's great, they'll be happy.

They're going to get more than they even

asked for it. And then she explained to me

that they weren't going to get that price,

they would still get the amount that they

had listed it for, but the other individual

was going to show that it was more than what

he was paying for it so that he could sell

it.

32. Aside from the rambling, convoluted nature of the

testimony, there are other reasons to question its credibility.

A t the final hearing, Mr. Christian took the witness stand and

denied the alleg ed scheme . Responden t also denied it, and the

credible testimony of Respondent's former employees indicated

that Lake DeFuniak Re alty, Inc., was not involved in "flipping"

property.

33. In addition, the alleged scheme is illogical . It is

unlikely that Respondent would tell Carol Rosell that she

planned to make an illegal profit from the proceeds of a sale

from property owned by Carol Rosell's relative s . Carol Rosell

testified that she would not do anything illegal. Carol Rosell

also testified that she told Darlene Rosell o f all the details

of the verbal agreement, and yet, later, Darlene Rosell and her

husband entered into a contract with Mr. Christian's company.

These factors, together with Carol Rosell's lack of clear recall

of prices or the timing of her revelation of t he price changes

to Darlene Rosell, as well as the fact that Carol Rosell was

required to testify against Respondent in exchange for a

favorable settlement stipulation with Petitioner, make Carol

Rosell's testimony regarding the alleged scheme untrustworth y.

34. Therefore, in addition to the fact that the alleged

scheme is beyond the pleadings of the Administrative Complaint,

it is found that Petitioner failed to show that Respondent

changed the price of the Property as part of an alleged scheme

to make an illegal profit.

35. Moreover, it is further found that Petitioner failed

to provide evidence of any incentive for Respondent to change

the MLS listing . The only credible explanation for the price

change to $299,000 on March 3, 2006, was provided by Respond ent

when she explained that she made the change for the benefit of

the sellers to better reflect a nearby comparative listing .

36. Finally, it is alleged that Respondent concealed from

the sellers the fact that the listing price for the Property wa s

changed. For this allegation, Petitioner relies upon the

testimony of Carol Rosell, as well as the testimony of Darlene

Rosell. Carol Rosell's testimony in this regard does not

support a finding that the pri ce change was concealed from the

sellers . Wh en asked when she advised Darlene Rosell of the

first price change, Carol Rosell testified, " I honestly don't

remember if I did initially. I know we had that conversation,

I'm going to say, about a week after the price - - after I

realized it had been don e. " In fact, Carol Rosell's indefinite

testimony could arguably support a finding that she "initially"

told the sellers of the price change.

37. Darlene Rosell testified at the final hearing that she

was not advised of the March 3, 2006, pri ce change unt il April ,

2006, when Carol Rosell called and told her that "the broker"

had changed the price to $239,000.

38. In contrast, a ccording to Respondent, once she had

decided that the sale s price listed for the Property was too

low, but before changing the MLS listing price, she asked Carol

Rosell to find the contact numbers for the sellers. Respondent

testified that Carol Rosell then came into Respondent's office

with a telephone to her ear and then handed it to Respondent ,

explaining that Darlene Rosell was on the phone. Respondent

further testified that, during that telephone conversation, she

discussed with the person identified as Darlene Rosell that she

would try listing the Property at a higher price and then go

down if it was not selling.

39. Then, ac cording to Respondent, she asked Carol Rosell

to get written confirmation of the sellers ' price change

authorization by having Darlene Rosell fax something into the

office. While Respondent introduced a copy of the L isting

A greement that apparently had be en faxed from Lake DeFuniak

Realty, Inc., with changes to the listing price, only the

original date of the listing agreement, as opposed to the date

of the price change authorization, is evident on the copy

provided, and thus no weight is given to the docu ment.

40. While Respondent did not introduce reliable evidence

of written authorization from Darlene Rosell, Respondent

recalled that Carol Rosell provided written proof of Darlene

Rosell's authorization at the time Respondent made the change on

March 3, 2006 . In addition, t here is evidence that Carol Rosell

often did not keep up with her work files at office, and that

the file Carol Rosell assembled for the Property in the

possession of Lake DeFuniak Realty, Inc., was incomplete.

41. Even without writte n confirmation, Respondent's

version is the only credible version of the facts under the

circumstances, and Respondent's testimony that she informed

someone identified as Darlene Rosell of the fact that she

intended to make the price change on the Property is credited.

42. Even without Respondent's testimony, Carol Rosell's

equivocal testimony that she does not recall "initially"

contacting the sellers about the price change is inadequate

evidence to show that there was a delay between Respondent's

change of the price on March 3, 2006, and the sellers' receipt

of information informing them of the price change.

43. Moreover, it is clear that the sellers were contacted

within weeks of the March 3, 2006, price change. Petitioner

produced no evidence, throu gh expert testimony or otherwise,

indicating that a week or so delay in informing a client of a

MLS listing price change would constitute a violation of a

Florida real estate license standard.

44. Although Carol Rosell testified that Respondent was

someti mes hard to reach or unavailable to answer questions that

Carol Rosell may have had regarding her duties, the evidence was

insufficient to show that Respondent did not properly direct,

control, or manage Carol Rosell while she was a sales associate

with La ke DeFuniak Realty, Inc. In fact, with regard to the

Property, the evidence indicate s that Respondent went out of her

way to help Carol Rosell with the listing for the Property by

making recommendations for a price increase based upon

Respondent's indepen dent investigation. Moreover, contrary to

the testimony of Carol Rosell, the credible testimony of

Respondent and former employees of Lake DeFuniak Realty, Inc.,

demonstrated that Respondent offered continued education and

provided mentoring to sales asso ciates, all of whom worked with

Lake DeFuniak Realty, Inc., as independent contractors .

45. In sum, Petitioner did not prove that Respondent

failed to appropriately direct, control or manage a sales

associate, or that Respondent concealed the change of th e

listing price of the Property from the sellers.

CONCLUSIONS OF LAW

46. The Division of Administrative Hearings has

jurisdiction over the parties and subject matter of this

proceeding. See §§ 120.569, 120.57(1 ), 120.60(5), and

455.225(5), Fla. Stat. (20 10 ) .

47. Petitioner is responsible for prosecuting disciplinary

cases against licensed real estate brokers . See § 475.021(1),

Fla. Stat. (2009).

48. Petitioner , as t he party asserting the affirmative in

this proceeding, has the burden of proof. See , e. g. , Balino v.

Dept. of Health & Rehabilitative Services , 348 So. 2d 349 (Fla.

1 st DCA 1977). Because the Petitioner is seeking to prove

violations of a statute and impose administrative fines or other

penalties, it has the burden to prove the allegations in the

complaint by clear and convincing evidence. Ferris v.

Turlington , 510 So. 2d 292 (Fla. 1987).

49. Clear and convincing evidence:

[ r ] equires that evidence must be found to be

credible; the facts to which the witnesses

testify must be distinctly rem embered; the

testimony must be precise and explicit and

the witnesses must be lacking 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 Henson , 913 So. 2d 579, 590 (Fla. 2005), quoting Slomowitz

v. Walker , 429 So. 797, 800 (Fla. 4th DCA 1983).

50. D isciplinary statutes , such as Section 475. 25(1) ,

Florida Statutes, are pe nal in nature, and must be construed

against the authorization of discipline and in favor of the

individual sou g h t to be penalized. Munch v. DepÓt of Bus. &

ProfÓl Reg. , 592 So. 2d 1136 (Fla. 1st DCA 1992). A statute

imposing a penalty is never to be con strued in a manner that

expands the statute. Hotel & Restaurant CommÓn v. Sunny Seas

No. One , 104 So. 2d 570, 571 (1958).

51. In determining whether Petitioner has met its burden

of proof, the evidence presented should be evaluated in light of

the specif ic factual allegations in the administrative

complaint. Disciplinary actions against licensees may only be

based upon those offenses specifically alleged in the

administrative complaint. See , e.g. , Trevisani v. Dep't of

Health , 908 So. 2d 1108 (Fla. 1st DCA 2005).

52. In this case, the Administrative Complaint

specifically alleged that Carol Rosell made the price change on

March 3, 2006, whereas the facts show that it was Respondent ,

not Carol Rosell who made th at change. In addition, although

the Admin istrative Complaint alleges that the price change was

concealed from the sellers, the evidence indicates that Carol

Rosell, either initially or within weeks from March 3, 2006,

advised Darlene Rosell that the listing price of the Property

had been increase d.

53. In addition to factual allegation deficiencies, the

allegation in the Administrative Complaint that Respondent

violated Section 475.25(1)(u), Florida Statutes, is problematic

as a matter of law. That is because subsection (1)(u) of

Section 475.25, Florida Statutes, did not come into effect until

July 1, 2006, over three months after the March 3, 2006, price

change. See Ch. 2006 - 210, §§ 4, 19 at 2232, 2241, Laws of Fla.,

codified at § 475.25(1)(u), Fla. Stat (2006).

54. Therefore, to the extent th at the allegation relies on

facts that occurred prior to the effective date of the law,

Respondent cannot be charged with a violation of Section

475.25(1)(u), Florida Statutes. See Delk v. Dep't of Prof'l

Reg. , 595 So. 2d 966, 967 (5th DCA 1992)("This is basic due

process of law and means that not only must the proof at trial

or hearing be that conduct charged in the accusatorial document,

but also that the conduct proved must legally fall within the

statute or rule claimed to have been violated.").

55. E ven if Section 475 .25(1)(u), Florida Statutes, were

effective during the time of the alleged facts, Petitioner

failed to prove a violation of that provision.

56. Section 475.25(1)(u), F lorida Statutes (2006),

authorizes Petitioner to take action against real estate brokers

where is shown that the broker :

(u) Has failed, if a broker, to direct,

control, or manage a broker associate or

sales associate employed by such broker. A

rebuttable presumption exists that a broker

associate or sales associate is e mployed by

a broker if the records of the department

establish that the broker associate or sales

associate is registered with that broker. A

record of licensure which is certified or

authenticated in such form as to be

admissible in evidence under the la ws of the

state is admissible as prima facie evidence

of such registration.

Id.

57. Unlike a charge of violating a statute or rule which

requires no proof of a standard of care, the charge against

Respondent under Section 475.25(1)(u), Florida St atutes,

necessarily required evidentiary proof of some standard of

professional conduct regarding a real estate broker's

supervisory obligations, as well as deviation therefrom.

Generally, in order to establish deviation from an applicable

standard of car e in an administrative case against a licensee,

expert testimony or other competent evidence of the applicable

standard is necessary to establish the standar d. Cf. , Purvis v.

Dep't of Bus. & Prof'l Reg. , 461 So. 2d 134, 136 (Fla. 1st DCA

1984)( proof of st andard of care required prior to establishing

that a veterinarian was guilty of negligence and incompetence in

the practice of veterinary medicine).

58. In this case, Petitioner failed to offer any expert

testimony or other evidence of a broker's supervis ory or

management duties over a sales associate under Section

475.25(1)(u), Florida Statutes, or the manner in which

Respondent deviated from those duties.

59. In addition, r ather than supporting the allegation

that Respondent failed to adequately supervi se a sales

associate, the evidence adduced at the final hearing showed that

Respondent provided appropriate supervision and training for

Carol Rosell .

60. Petitioners also failed to prove concealment under

Section 475.25(1)(b), Florida Statutes. That Sec tion authorizes

disciplinary action against brokers in cases where a broker:

(b) Has been guilty of fraud,

misrepresentation, concealment, false

promises, false pretenses, dishonest dealing

by trick, scheme, or device, culpable

negligence, or breach of tru st in any

business transaction in this state or any

other state, nation, or territory; has

violated a duty imposed upon her or him by

law or by the terms of a listing contract,

written, oral, express, or implied, in a

real estate transaction; has aided,

as sisted, 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. 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.

Id.

61. In order to prove a violation of Section 475.25(1)(b),

Florida Statutes, an intentional act must be proven. See Munch

v . Dep't of Prof'l Reg. , 592 So. 2d 1136, 1143 - 44 (Fla. 1st DCA

1992)("it is apparent that it is contemplated that an

intentional act be proved before a violation [of Section

62. The evidence does not s upport a finding that

Respondent intentionally concealed the price change from the

sellers. Rather, the credible evidence supports the finding

that Respondent believed that the sellers were aware of her

recommendation that the listing price for the Proper ty be

increased and that Respondent believed that Darlene Rosell

authorized the price change.

63. In sum, Petitioner failed to prove by clear and

convincing evidence that Respondent violated Section

475.25(1)(u), Florida Statutes, or Section 475.25(1)(b), Florida

Statutes. Therefore, the Administrative Complaint against

Respondent should be dismissed.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department of Business and

Professional Regulation, Division of Real Estate, enter a Final

Order dismissing the Administrative Complaint .

DONE AND ENTERED this 29th day of October , 20 10 , in

Tallahassee, Leon County, Florida.

S

JAMES H. PETERSON, III

Administrative Law Judge

Division of Admi nistrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

t his 29th day of October , 2010 .

ENDNOTE S

1 / Unless otherwise indicated, all references to Florida

Statutes , except for Section 475.25(1)(u), Florida Statutes, are

to the 2005 version in effect at the time of the alleged

violations. As discussed i n the Conclusions of Law Section,

Section 475.25(1)(u), Florida Statutes, was not effective until

July 1, 2006. See discussion at Conclusions of Law paragraphs

53 and 54, sup ra .

2 / Paragraph 4 of the Administrative Complaint alleges that

"[o]n or about March 3, 2006 Respondent Carol Jean Rosell

increased the sale price for the S ubject Property to

$239,000.00.

COPIES FURNISHED :

Joseph A. Solla, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street, Suite 801N

Orlando, Fl orida 32801 - 1757

Lyndia Padgett Spears, Esquire

7024 State Highway 83 , N orth

Defuniak Springs, Florida 32433

Thomas W. O'Bryant, Jr., Director

Division of Real Estate

Department of Business and

Professional Regulation

400 West Robinson Street, Suit e 801N

Orlando, Florida 32801 - 1757

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 t he 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.