10-003198PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Terri Johnson Status: Closed Recommended Order on Wednesday, October 20, 2010.

Summary: Petitioner proved that Respondent did not deposit funds into escrow account as required, but used them for her own purposes.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 10 - 3198PL

)

TERRI JOHNSON, )

)

Respondent. )

)

RECOMMENDED ORDER

On August 30, 2010 , a final hea ring was held by means of

video teleconferencing with sites in Jacksonville and

Tallahassee, F lorida , before Lisa Shearer Nelson , an

a dministrative l aw j udge assigned by the Division of

Administrative Hearings .

APPEARANCES

For Petitioner: Joseph A. Solla, Esquire

Assistant General Counsel

Department of Business and

Professional Regulation

Division of Real Estate

400 West Robinson Street

Orlando, Florida 32801 - 1757

For Respondent: Terri Johnson, pro se

Lowell Correctional Institution

11120 N orth West Gainesvi lle Road

Ocala, Florida 34482

STATEMENT OF THE ISSUE S

The issues to be determined are whether Respondent violated

Section s 475.25(1)( b), 475.25(1)(e), 475.25(1)(k), and

475.42(1)(d), Florida Statutes (2006), and Florida Administrative

Code Rule 63 J2 - 14.009, as alleged in the Administrative

Complaint, and if so, what penalty should be imposed?

PRELIMINARY STATEMENT

At some time presumably in December 2009, 1/ the Department

of Business and Professional Regulation, Division of Real Estate

(Department ) issued a three - count Administrative Complaint

against Respondent, alleging the statutory and rule violations

described above. Respondent disputed the allegations in the

Administrative Complaint and filed a Petition for Formal

Administrative Hearing , whi ch was received by the Department on

January 25, 2010. On May 26, 2010, counsel for Respondent filed

with the Department a Motion to Withdraw as counsel. The Motion

to Withdraw, as well as the Administrative Complaint and Petition

for Formal Hearing, wer e filed with the Division of

Administrative Hearings on June 14, 2010, with a request that an

administrative law judge be assigned.

On July 2, 2010, the case was noticed for a hearing to occur

on August 30, 2010. Respondent's counsel's Motion to Withdraw

was granted by Order dated July 21, 2010. On August 17, 2010,

Petitioner filed a Motion to Permit Witness to Appear by

Telephone, and stat ed in the motion that Respondent was

incarcerated. Arrangements were made for Respondent to appear

telephonically a t the hearing, and she did so.

The hearing commenced and concluded on August 30, 2010, as

scheduled. Petitioner presented the testimony of Melanie Malone

and Katrin Rabren, and Petitioner's Exhibits 1 and 2 were

admitted into evidence. Respondent did no t present any witnesses

or submit any exhibits.

The one - volume Transcript was filed with the Division on

September 16, 2010, and Petitioner filed its Proposed Recommended

Order on September 28, 2010. To date, no submission has been

received from Responde nt. Unless otherwise indicated, all

references to Florida Statutes are to the 2006 codification.

FINDINGS OF FACT

1. Petitioner is the state agency charged with the

licensing and regulation of the real estate industry in the State

of Florida, pursuant to Section 20.165 and Chapters 455 and 475,

Florida Statutes.

2. At all times material to this proceeding, Respondent was

a licensed real estate sales associate, having been issued

license number SL 706026. During the time relevant to this case,

Respondent was a sales associate affiliated with Jacksonville

Home Finders, Inc., a brokerage company located in Jacksonville,

Florida.

3. Katrin Rabren was the broker/owner of Jacksonville Home

Finders, Inc. (Homefinders) . In approximately 2006, she hired

Respond ent as a sales associate, and Respondent's license was

listed as affiliated with Homefinders in September 2006.

4. In early April 2007, Ms. Rabren received a call from

Alvin Reynolds, the owner of some property Homefinders was

managing at 3501 Kernan Boul evard, Number 234, in Jacksonville.

Mr. Reynolds was calling to ask for his funds from the rental of

the property.

5. The property was apparently rented and funds received

from the tenant for a security deposit and first month's rent on

or about March 12 , 2007. However, those funds , totaling

$1,444.99, were not placed in the broker's trust account.

6. Ms. Rabren confronted Respondent about the funds and was

told that Respondent spent the money on personal bills.

Respondent told Ms. Rabren that she woul d replace the money.

7. On April 5, 2007, Respondent gave Ms. Rabren a check

made out to Jacksonville Homefinders for $1,489.99 . The check

was from a n account for Winter Property Maintenance, Respondent's

husband's company. Ms. Rabren's husband deposi ted the check in

Homefinder's escrow account.

8. On April 6, 2007, the check was returned for

insufficient funds.

9. Ms. Rabren paid the property owner out of her personal

funds. Respondent has not replaced the funds or delivered funds

to the employer /broker for deposit into the escrow account.

CONCLUSIONS OF LAW

10. The Division of Administrative Hearings has

jurisdiction over the subject matter and the parties to this

action in accordance with Sections 120.569 and 120.57(1), Florida

Statutes (2010) .

11. Petitioner is seeking to take disciplinary action

against Respondent's license. Because of the penal nature of the

proceeding, Petitioner bears the burden of proof to demonstrate

the allegations in the Administrative Complaint by clear and

convinc ing evidence. Department of Banking and Finance v.

Osborne Stern & Co. , 670 So. 2d 932 (Fla. 1996); Ferris v.

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

12. As stated by the Florida Supreme Court:

Clear and convincing evidence requires that

the evidence m ust be found to be credible;

the facts to which the witnesses testify must

be distinctly remembered; the testimony must

be precise and lacking in confusion as to the

facts in issue. The evidence must be of such

a 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).

13. Count One of the Administrative Complaint charges

Respondent with failing to immediately place with a registered

employer any money, fund, deposit, check or draft entrusted to

her as agent of the registered employer in violation of Florida

Administrative Code Rule 6 1J2 - 14.009 and Sections 475.25(1)(e)

and 475.25(1)(k), Florida Statutes.

14. Florida Administrative Code Rule 61J2 - 14.009 provides

as follows:

Every sales associate who receives any

deposit, as defined in Rule 61J2 - 14.008,

Florida Administrative Code, sh all deliver

the same to the broker or employer no later

than the end of the next business day

following receipt of the item to be

deposited. Saturday, Sundays and legal

holidays shall not be construed as business

days. Receipt by a sales associate or any

other representative of the brokerage firm

constitutes receipt by the broker for

purposes of paragraph 61J2 - 14.008(1)(d),

Florida Administrative Code.

15. Section 475.25, Florida Statutes, provides in pertinent

part:

(1) The commis sion may . . . place a

licensee, registrant, or permittee on

probation; may suspend a license,

registration, or permit for a period not

exceeding 10 years; may revoke a license,

registration, or permit; may impose an

administrative fine not to exceed $5,00 0 for

each count or separate offense; and may issue

a reprimand, and any or all of the foregoing,

if it finds that the licensee . . :

* * *

(e) Has violated any of the provisions of

this chapter or any lawful order or rule made

o r issued under the provisions of this

chapter or chapter 455.

* * *

(k) Has failed, . . . if a sales associate,

to immediately place with her or his

registered employer any money, fund, deposit,

check, or draft entrusted to her o r him by

any person dealing with her or him as agent

of the registered employer. The commission

shall establish rules to provide for records

to be maintained by the broker and the manner

in which such deposits shall be made . . . .

16. Petitioner has p roven the violations charged in Count

One by clear and convincing evidence. Respondent received funds

intended for a security deposit and first month's rent which were

required to be deposited in her broker's escrow account. She did

not deliver the funds to her employer, and the check designed to

replace the funds was returned for insufficient funds.

17. Count Two of the Administrative Complaint charges

Respondent with a violation of Section 475.25(1)(b), Florida

Statutes , which makes it a disciplinary offense when a licensee:

(b) Has been 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 or an y

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, 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. 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 relatio n with the

licensee or was an identified member of the

general public.

18. Clear and convincing evidence was presented to

establish that Respondent violated the charge in Count Two.

Respondent committed a breach of trust when she accepted funds

meant for a real estate client and failed to deposit those funds

into the trust account, using them for her own purpose instead.

19. Count III charges Respondent with violating Section

475.25(1)(e), which is quoted above, and with violating Section

475.42(1)(d ), which provides:

(1)(d) A sales associate may not collect any

money in connection with any real estate

brokerage transaction, whether as a

commission, deposit, payment, rental, or

otherwise, except in the name of the employer

and with the express consen t of the employer;

and no real estate sales associate, whether

the holder of a valid and current license or

not, shall commence or maintain any action

for a commission or compensation in

connection with a real estate brokerage

transaction against any perso n except a

person registered as her or his employer at

the time the sales associate performed the

act or rendered the service for which the

commission or compensation is due.

20. For the same reasons expressed with respect to Counts

One and Two, the De partment has proven the allegations in Count

III by clear and convincing evidence.

21. As required by Section 455.2273, Florida Statutes, t he

Florida Real Estate Commission has adopted disciplinary

guidelines which provide a range of penalties for violat ions of

Chapter s 455 and 475 , Florida Statutes, and the rules adopted

pursuant thereto. Fla. Admin. Code R . 61J2 - 24.001. For each of

the offenses committed here, the penalties range from a fine of

varying amounts to suspension or revocation.

22. Th e undersigned has considered the number of violations

proven, and the harm to the complaining witness as well the

potential harm to the public. The Department has asked for

revocation of Respondent' s license, and that penalty is

appropriate. No fine has been requested and none is recommended.

RECOMMENDATION

Upon consideration of the facts found and conclusions of law

reached, it is

RECOMMENDED:

That the Florida Real Estate Commission enter a Final Order

finding that Respondent has violated the provision s of Sections

475.25(1)(b), 475.25(1)(e), 475.25(1)(k), 475.42(1)(d), Florida

Statutes (2006), and Florida Administrative Code Rule 63J2 -

14.009, as alleged in the Administrative Complaint, and revoking

Respondent's license as a real estate sales associate.

DONE AND ENTERED this 20 th day of October, 2010, in

Tallahassee, Leon County, Florida.

S

LISA SHEARER NELSON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Park way

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

this 20 th day of October, 2010.

ENDNOTE

1/ T he Administrative Complaint is neither signed nor dated, and

there is no file stamp indicating that it was filed with the Clerk

of the Agency. However, it is clear that the document was

supplied to Respondent and she filed a response disputing its

contents.

COPIES FURNISHED:

Joseph A. Solla, Esqu ire

Department of Business and

Professional Regulation

400 West Robinson Street, Suite 801N

Orlando, Florida 32801 - 1757

Terri Johnson, DC# J11690

Lowell Correctional Institution

11120 Northwest Gainesville Road

Ocala, Florida 34482 - 1479

Reginald Dixo n, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

Thomas W. O'Bryant, Jr., Director

Division of Real Estate

Department of Business and

Profes sional Regulation

400 West Robinson Street, Suite N801

Orlando, Florida 32801 - 1757

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this recommend ed order. Any exceptions to

this recommended order should be filed with the agency that will

issue the final order in this case.