98-005478 Division Of Land Sales, Condominiums, And Mobile Homes vs. Gregory C. Linnemeyer Status: Closed Recommended Order on Friday, June 18, 1999.

Summary: Respondent failed to display salesman`s license, place deposits into trust account, allowed salesman to act as a broker and to violate various provisions of the Yacht and Ship Brokers` Act. Recommend revocation and administrative fine.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

AND PROFESSIONAL REGULATION, )

DIVISION OF FLORIDA LAND SALES, )

CONDOMINIUMS AND MOBILE HOMES, )

)

Petitioner, )

)

vs. ) Case No. 98-5478

)

GREGORY C. LINNEMEYER, )

)

Respondent. )

__________________________________)

RECOMMENDED ORDER

A formal hearing was held by the Division of Administrative

Hearings, before Daniel M. Kilbride, Administrative Law Judge, on

March 2, 1999, in Melbourne, Florida.

APPEARANCES

For Petitioner: William Oglo, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

For Respondent: Gregory Linnemeyer, pro se

613 Rockledge Drive

Rockledge, Florida 32955

STATEMENT OF THE ISSUES

Whether Respondent committed five violations of the Yacht

and Ship Brokers' Act, including the following counts: 1) failing

to have the license of each salesperson in his employ prominently

displayed in his principal place of business; 2) failing to place

deposits received from clients pursuant to transactions involving

yachts into a broker's trust account; 3) allowing a person

licensed only as a salesperson to act as a broker and to use the

broker's name to evade the provisions of the Yacht and Ship

Brokers' Act; 4) failing to deposit funds into the broker's trust

account within three working days of receipt of funds pursuant to

a purchase contract by a salesperson licensed under him; 5)

allowing a salesperson licensed under him to carry out acts which

if committed by the broker would place him in violation of the

Yacht and Ship Brokers' Act and the rules thereunder, such as

violating the Notary Public Law, failing to exercise due

professional care in the performance of brokerage services, and

making substantial and intentional misrepresentations with

respect to transactions involving yachts, as alleged in the

Amended Notice to Show Cause, in violation of the Yacht and Ship

Brokers' Act, Chapter 326, Florida Statutes, and if so, what

penalty should be assessed.

PRELIMINARY STATEMENT

Petitioner filed an Amended Notice to Show Cause, dated

June 25, 1997. In response to the Notice, Respondent denied the

allegations and requested a formal hearing. This matter was

referred to the Division of Administrative Hearings on a

December 9, 1998, and was set for hearing.

At the formal hearing, Petitioner presented the testimony of

three witnesses: Jim Courchaine, investigator; Peter Butler,

Section Head for General Regulation (which administers the Yacht

and Ship Brokers' Act) of the Division; Edward Hall, an expert in

the management of yacht broker's offices; and Christopher June,

an individual who purchased a yacht from Respondent. Petitioner

presented a number of exhibits which were introduced into

evidence. At the request of Petitioner, official recognition was

taken of Chapter 326, Florida Statutes, and Rule 61B-60, Florida

Administrative Code. Respondent testified on his own behalf and

introduced two exhibits in evidence.

A Transcript of the proceeding was filed on May 5, 1999. At

the request of the parties, the time for filing post-hearing

submissions was set for 20 days following the filing of the

Transcript. Petitioner filed its Proposed Recommended Order on

May 25, 1999. Respondent has not filed proposals as of the date

of this order.

FINDINGS OF FACT

1. Petitioner is the agency of the State of Florida charged

with the responsibility to administer and enforce the Florida

Yacht and Ship Brokers' Act, Chapter 326, Florida Statutes. The

purpose of the Yacht and Ship Brokers' Act is to protect the

consumer.

2. A yacht broker is an individual who, in expectation of

compensation, sells used boats in excess of 32-feet in length for

other persons. In order to obtain a license to act as a yacht

broker, an individual must submit an application, undergo a

background check for moral character, submit a surety bond, and

demonstrate to the Division that he has a trust account to place

funds received in pending yacht transactions.

3. Before being able to independently perform yacht

brokering services as a yacht broker, an individual must spend

two consecutive years as a yacht salesperson in a mentorship

working under a broker.

4. At all times relevant to this action, Respondent held a

license with Petitioner to operate as a yacht broker. Respondent

continues to be licensed as a yacht broker.

5. In late 1995 and early 1996, Respondent operated his

yacht brokerage business, Greg and Associates, from two

locations. His main office was located in Rockledge, Florida,

and a branch office was located in Sarasota, Florida. No brokers

were present at the Sarasota location.

6. Respondent operated the Sarasota branch office from his

main office in Rockledge, Florida. He never visited the Sarasota

branch office. Respondent viewed his relationship to the

Sarasota branch office as an "escrow agent." Bullock, a

salesman, had complete autonomy to run the Sarasota branch

office. Respondent met Bullock only once, and he never met any

of the other salesmen who operated out of the branch office.

7. Respondent had only a commission arrangement with

Bullock. Respondent sent checks for all commissions to Bullock,

who deposited them in Bullock's company, Friar Tuck, Inc's.,

Barnett Bank business account. Respondent allowed Bullock to

hire the other salesmen, to determine a commission arrangement

with the other salesmen, and to disburse commissions to the other

salesmen. Respondent did not know the commission arrangement

with most of the salesmen in the branch office.

8. On April 16, 1996, Respondent was interviewed in his

office about some complaints that had been received concerning

the operation of his Sarasota branch office. Among the salesmen

working under Respondent's broker's license in his Rockledge

office at that time were Darrell Lawson and Mark Salmuller.

Respondent did not have the licenses of either of these two

salesmen displayed. Both men were listed as active employees by

Respondent.

9. At all times relevant to this proceeding, Respondent

maintained a broker's trust account, entitled Greg and

Associates, d/b/a Yacht Brokerage USA, in the Rockledge branch of

the Barnett Bank.

10. At all times relevant to this proceeding, Chester

Bullock, a yacht salesperson working for Respondent in

Respondent's Sarasota branch office, maintained a business

checking account entitled Friar Tuck, Inc., d/b/a Yachtmasters,

in a Sarasota branch of the Barnett Bank. Bullock was listed as

president of the company and was identified as a signatory on the

account. This was not a proper broker's trust account, as

Bullock, being a yacht salesman, could not have established such

an account.

11. In July 1995, Chester Bullock and Jeff Webb, salesmen

in the Sarasota branch office, took an offer and received a

$1,000.00 deposit from David and Cynthia Cislo, on a 1979 34-foot

Marine Trade Trawler. Respondent's salesmen did not deliver the

deposit to Respondent's trust account within three days of its

receipt. The funds were deposited in Bullock's business checking

account at the Sarasota branch of the Barnett Bank. Sometime

later, the money was redeposited in Respondent's trust account.

12. Bullock notarized the vessel bill of sale at the time

of the closing, and received a commission on the sale.

13. In November 1995, Bullock took an offer and received a

$5,350.00 deposit from a Louisiana client, Charles Cosgrove, on a

1964 38-foot Chris-Craft Commander yacht. Respondent's salesman

did not deliver the deposit to Respondent's trust account within

three days of its receipt.

14. On November 27, 1995, Bullock and Jeff Webber,

Respondent's salespeople, acted as listing broker and

salesperson, respectively, on the lease-purchase of the 1964

38-foot Christ Craft Commander by Cosgrove. Respondent never

signed the brokerage sales record, which is the closing statement

given to the lease-purchaser, Cosgrove, and was never identified

as broker of record on any of the sales documents. Instead, the

purchase-sale agreement lists Bullock as the broker, and the

closing statement lists Bullock as the broker. Bullock acted as

the notary public for the lease-purchase agreement.

15. In January 1996, Bullock and Harold Raines, yacht

salesmen in the Sarasota branch office, took an offer and

received a $1,700.00 deposit from a client, Michael Hill, on a

1973, 53-foot Huckins yacht. The letterhead of the draft

purchase and sales agreement, which stated "Yachtmasters" and a

phone number for the Sarasota area, further indicated that Hill's

offer was made through yacht salesmen at the Sarasota branch

office. Respondent's salesmen did not deliver the $1,700.00

deposit to Respondent's trust account within three days of its

receipt. Instead of delivering the $1,700.00 deposit to

Respondent for deposit in Respondent's Rockledge broker's trust

account, the check was delivered to Friar Tuck, Inc's., Sarasota

account. Hill's deposit, which was supposed to be held in a

trust account, intermingled with the other business funds of

Bullock's account.

16. Hill requested and received an oral extension from

Bullock on his closing date to purchase the yacht. About a month

later, Bullock notified Hill that the yacht was sold to another

party. It was only after Hill threatened to sue Respondent, the

responsible broker, and after Hill filed a complaint with

Petitioner that Respondent refunded Hill his deposit.

17. The Yacht and Ship Brokers' Act does not permit

licensed salespeople to perform certain acts. It requires the

employing broker to do them. An employing broker, a broker who

holds the license of his salesperson, must make all trust account

deposits and withdrawals of monies involved in a transaction

brokered by the salesman. An employing broker is required to

supervise the yacht transactions brokered by his salespeople and

to sign closing statements, which itemize all charges and credits

of the transaction for the client.

18. Respondent minimized his own involvement in his

Sarasota branch office and permitted his salesman, Bullock, to

operate it. This enabled Bullock to sign as the broker a closing

statement of the sale of a yacht, which is an action that should

have been performed only by a broker.

19. During the same time period that Respondent granted

Bullock autonomy to supervise the Sarasota branch office, Bullock

operated another business from the same location, Sarasota Marine

and Maintenance Services, which did boat surveys and cleaned

boats. Bullock was the president of Sarasota Marine and

Maintenance Services.

20. In early 1996, Wittman, a Colorado resident at that

time, telephoned Bullock about the 1988, 34-foot Wellcraft

Grandsport in the magazine advertisement placed by Bullock.

Bullock sent Wittman a videotape of the yacht. After reviewing

the videotape, Wittman did not think that it was the same yacht

advertised in the magazine. Bullock admitted that the yacht in

the videotape was not the same yacht advertised in the magazine,

but claimed that it was a sister ship. Based upon Bullock's

assurances that the sister yacht was in good condition and the

results of a survey done by Bullock's company stating that the

yacht was in good condition, Wittman purchased the yacht.

21. Bullock acted as both the listing broker and the

selling broker in the sale of the 1988, 34-foot Wellcraft

Grandsport yacht to Boyd Wittman, the purchaser. Notwithstandng

the fact that he was representing the seller, Bullock did not

obtain the written consent of Wittman, the purchaser.

22. Wittman wanted a registered surveyor to do a survey of

the condition of the yacht, because Wittman lived out-of-state

and wanted to avoid spending money to fly to Florida to inspect

it. Bullock arranged for his own company, Sarasota Marine and

Maintenance Services, to perform the survey. The survey was

signed by Ernest Shaffer, who was identified as a Certified

Marine Surveyor and Consultant with the Society of Accredited

Marine Surveyors, the National Association of Marine Surveyors,

and the National Marine Investigators. Ernest Shaffer was

someone that Bullock hired to wash boats. He was not a certified

surveyor, as he was held to be.

23. When the yacht was delivered to Wittman in Colorado, he

was shocked by the poor condition of the yacht. The interior,

the cockpit, the exterior, the bilge, and the mufflers were all

in poor condition. Wittman was expecting a yacht that he could

take someone out on a lake with, and it was not in good enough

condition.

24. Wittman had to pay another $15,000 to $20,000 to repair

the yacht to improve it to good condition. Repairs included

replacing all of the interior of the cabin, replacing the port

windshield, putting new mufflers in, fixing a transmission leak,

fixing the air-conditioning, rebuilding the water pumps so that

the engines cooled properly, and replacing the dry-rot wood on

the main deck on the cockpit. In sum, Wittman purchased the

yacht for $38,000, spent another $15,000 to $20,000 in repairs,

and eventually sold it for $37,000.

25. Bullock also quoted to Wittman a fee for shipping the

yacht from Florida to Colorado for $1,500. Wittman thought the

price was reasonable. When the yacht was finally shipped, it

cost Wittman approximately $3,800, which he paid, because he had

already bought the yacht and had to finish the transaction.

26. Bullock acted as both the listing broker and the

selling broker in the sale of a 1973, 34-foot Nautiline yacht to

Ernest C. Shaffer, the purchaser. Bullock arranged for his

company, Sarasota Marine and Maintenance Services, to perform the

survey. The survey was signed by Ted Williams, who was

identified as a Certified Marine Surveyor and Consultant with the

Society of Accredited Marine Surveyors (SAMS), the National

Association of Marine Surveyors (NAMS), and the National Marine

Investigators.

27. Nei ther Bullock, Ernest Shaffer, nor Ted Williams, his

employees who signed the surveys of the yachts described above,

was certified with NAMS or SAMS, two marine surveys accreditation

associations.

28. In the case of a 1973, 53-foot Huckins yacht, Bullock

tried to sell the boat three times and took three simultaneous

contacts on the same vessel. He took a contract from Michael

Hill, a prospective purchaser, extended the closing date for Hill

to March 6, 1996, and simultaneously had contracts for the same

boat with the prospective purchasers Sam Bankester and Steven

Kenneally, with the closing dates of February 29, 1996, and

March 2, 1996, respectively. Ultimately, Steven Kenneally

purchased the yacht. The terms of the contracts did not provide

for simultaneous contracts on the same vessel.

29. The prospective purchaser who did not come up with the

money first lost out on the opportunity to purchase the yacht.

In addition, the Hills, the prospective purchasers, had a

difficult time obtaining their earnest money back from Bullock.

30. In January of 1996, Raines, Respondent's salesman,

showed Chris June, a North Carolina resident, a 1970, 42-foot

Trojan Sea Voyager yacht named "Fantasia." June liked the 42-

foot Trojan Sea Voyager and entered into a contract to purchase

it through Raines and Bullock. Bullock recommended a surveyor,

John Pomeroy, in St. Petersburg, Florida, to complete the survey.

Pomeroy was, in fact, not certified with NAMS or SAMS.

31. Bullock told June that the boat was in very goo d

condition and that it was a great value. During the survey, June

noticed that wood on the yacht was separating in the bow, and

asked Bullock and Pomeroy about it. They explained that this was

"wet/dry expansion" which occurs in yachts that sit for a long

time and can easily be fixed with some screws and caulking.

"Wet/dry expansion" causes wood in wooden yachts to start

separating, according to Bullock and Pomeroy, due to the wet wood

below the waterline and the dry wood above the waterline. The

survey disclosed no substantial problems with the yacht.

32. Relying on the statements of Bullock and Pomeroy, June

purchased the "Fantasia" for $22,000, with money loaned to him by

a relative. A month after purchasing his yacht, June was

informed that his boat was sinking while moored at the dock.

June had to hire a marine recovery company to recover the yacht,

just before it was about to go completely under water.

33. The yacht took on water in an area near the stern that

was not well checked-out, where a basketball-sized wad of putty

holding the corner together came loose.

34. As the estimate to repair the boat was more than three

times what the boat was worth, June sold it to a salvage yard for

$2,500. However, the salvage yard defaulted on that payment.

35. June has been making accelerated payments on his loan,

and has the loan down to approximately $19,000. He made a claim

against Respondent's surety bond and settled the action for a

small amount from the bonding company.

36. Respondent atten ded two all-day workshops hosted by the

Petitioner's Section of General Regulation, which cover in detail

how to display a license, to display trust accounts, to display

broker's duties and responsibilities, and to display branch

offices. Respondent was exposed to the statutes and rules which

were violated.

37. Respondent took a cavalier attitude towards following

the requirements of the Act.

38. On February 15, 1996, Petitioner entered a Final Order

against Respondent in Docket No. YS95397, imposing a fine of

$1,500 for Respondent's violation of the Act. Respondent used

the name "Yachtmasters" for his Sarasota branch office without

having a license issued in that name in violation of Florida law.

39. In the case DBPR v. Chester C. Bullock , Docket

No. YS97172 (December 11, 1998), the Petitioner charged Chester

Bullock, a registered salesman, with five violations:

Charge 1 - The Respondent acted as a broker

when he was licensed only as a salesman.

Charge 2 - The Respondent made substantial

and intentional misrepresentations with

respect to transactions involving yachts upon

which people have relied.

Charge 3 - The Respondent violated other laws

governing transactions involving yachts,

specifically, he violated Chapter 117,

Florida Statutes, by notarizing signatures on

documents in which he had a financial

interest.

Charge 4 - The Respondent failed to

immediately deliver deposits received from

clients for the purchase of yachts to the

broker under whom he was licensed as a

salesman.

Charge 5 - The Respondent failed to exercise

due professional care in the performance of

brokerage services, such as recommending his

own company as a surveyor to a client and

representing it as being an accredited

surveyor company, when it was not.

40. Bullock was found guilty on all charges and assessed a

civil penalty of $45,000 in that case and had his yacht

salesperson's license revoked.

41. The Petitioner has proven each of the violations by

clear and convincing evidence. Respondent's explanations for his

conduct is not credible.

CONCLUSIONS OF LAW

42. The Division of Administrative Hearings has

jurisdiction over the parties and subject matter of this

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

Statutes.

43. Petitioner is charged with the responsibility to

prosecute this matter pursuant to Section 326.006, Florida

Statutes.

44. Petitioner has the burden of proof as to the

allegations contained in the Amended Notice to Show Cause.

Balino v. Department of Health and Rehabilitative Services , 348

So. 2d 349 (Fla. 11st DCA 1977). Since the revocation of license

proceedings are penal in nature, State ex rel. Vining v. Florida

Real Estate Commission , 281 So. 2d 487 (Fla. 1973), the

Petitioner bears the burden of proving, by clear and convincing

evidence, each count as alleged in the Amended Notice.

Department of Banking and Finance v. Osborne Stein & Co. , 670

So. 2d 932 (Fla. 1996.)

45. In Count 1, Respondent is charged with failing to have

the license of each salesperson in his employ prominently

displayed in his principal place of business.

46. Section 326.004(14)(a), Florida Statutes, provides in

pertinent part:

Each license must be prominently displayed in

the office of the broker.

47. Based upon Respondent's failure to have the licenses of

his salesmen, Darrell Lawson and Mark Salmuller displayed, he has

violated Section 326.004(14)(a), Florida Statutes. Respondent's

excuses, that he only had a temporary license on Mr. Lawson and

that Mr. Salmuller was inactive in the business, did not obviate

the need for displaying the licenses. Respondent had them

licensed as active salesmen.

48. In Count 2, Respondent is charged with failing to place

deposits received from clients pursuant to transactions involving

yachts into a broker's trust account.

49. Section 326.005(1), Florida Statutes, provides:

A broker shall place any funds received

pursuant to a transaction into a trust

account in a savings and loan association,

bank, trust company, or other financial

institution located in this state having a

net worth in excess of $5 million until he or

she disburses such funds. A separate record

shall be maintained of all such moneys

received and the disposition thereof.

50. Based upon the facts discussed in paragraphs 11, 13,

and 15, Respondent failed to place deposits received from clients

into a broker's trust account in violation of this section.

51. In Count 3, Respondent is charged with allowing a

person licensed only as a salesperson to act as a broker and to

use the broker's name to evade the provisions of the Yacht and

Ship Brokers' Act (ACT).

52. Section 326.006(2)(e)7, Florida Statutes, provides:

The division may suspend or revoke the

license of a broker or salesperson who:

* * *

7. Allows an unlicensed person to use his

or her name to evade the provisions of the

Yacht and Ship Brokers' Act.

53. Based upon the facts discussed in paragraphs 6, 7, 10,

17, 18, and 19, Respondent allowed Charles Bullock, who was only

a salesman, to operate as a broker and evade the provisions of

the act in violation of this section.

54. In Count 4, Respondent is charged with failing to

deposit funds into the broker's trust account within three

working days of receipt of funds pursuant to a purchase contract

by a salesperson licensed under him.

55. Rule 61B-60.006(3), Florida Administrative Code (1990),

provides in pertinent part:

Within 3 working days of receipt of funds

pursuant to a purchase contract, all funds

received by a broker or salesman in

connection with the sale, exchange, or

purchase of a yacht shall be deposited in the

broker's trust account and shall be deposited

in the broker's trust account and shall

remain in the account until the funds are

disbursed pursuant to the provisions of the

contract or controlling statute. . . .

56. Based upon Respondent's failure to see to it that the

earnest money paid by Hill, Cosgrove, and the Cislos, be

deposited into Respondent's trust account within three days of

receipt of it, Respondent has violated Rule 61B-60.006(3),

Florida Administrative Code. Cosgrove's yacht transaction, which

was a lease-purchase agreement, is a transaction also covered by

the Act because the agreement contains an offer to purchase. An

offer to purchase is a covered transaction pursuant to Section

326.002(1), Florida Statutes, which includes a person who offers

to buy a yacht for another person in the definition of broker.

57. In Count 5, Respondent is charged with allowing a

salesperson licensed under him to carry out acts which if

committed by the broker would place him in violation of the Act

and the rules thereunder, such as violating the Notaries Public

Law, failing to exercise due professional care in the performance

of brokerage services, and making substantial and intentional

misrepresentations with respect to transactions involving yachts.

58. Rule 61B-60.009(1) and (2), Florida Administrative Code

(1992), provides:

(1) A licensee shall not knowingly

misrepresent facts, shall have an affirmative

duty to inform the division of any changes in

status or of any knowledge of any facts which

may adversely affect the licensee's fitness

for licensure, shall undertake to perform

only those brokerage services which he can

reasonably expect to complete with

professional competence, shall exercise due

professional care in the performance of

brokerage services, and shall not permit

others to carry out on his or her behalf,

either with or without compensation, acts

which, if carried out by the licensee, would

place him in violation of sections 326.001

through 326.006, Florida Statutes or chapter

61B-60, Florida Administrative Code.

(2) A broker shall be deemed responsible by

the division for the actions of all salesmen

who perform brokerage functions under his

supervision and control.

59. Section 326.006(2)(e)(8), Florida Statutes, provides:

The division may suspend or revoke the

license of a broker or salesperson who:

8. Violates any law governing the

transactions involving a yacht, including any

provision relating to the collection of

payment of sales or use taxes.

60. Section 117.05(6)(e), Florida Statutes, provides:

A notary public may not notarize a signature

on a document if:

(e) The notary public has a financial

interest in or is a party to the underlying

transaction; provided, however, a notary

public who is an employee may notarize a

signature for his or her employer and this

employment is not a financial interest in the

transaction nor is he or she a party to the

transaction under this subsection unless he

or she receives a benefit other than salary

and any fee for services authorized by law.

For purposes of this paragraph a notary

public who is an attorney does not have a

financial interest in and is not a party to

the underlying transaction evidenced by a

notarized document if he or she notarizes a

signature on that document for a client for

whom he or she serves as an attorney of

record and the attorney has no interest in

the document other than a fee paid to him or

her for legal services and any fee authorized

by law for services as a notary public.

61. Since Respondent's salesman, Bullock, had a financial

interest in the Cosgrove yacht transaction, the Cislo yacht

transaction, and the Wittman yacht transaction, and Bullock

notarized documents necessary for the sale, Bullock violated

Section 326.006(2)(e)(8), Florida Statutes, which prohibits a

broker or salesman to violate any law governing the sale of

yachts including Section 117.05(6)(e), Florida Statutes, of the

Notary Public law.

62. Rule 61B-60.009(1), Florida Administrative Code (1992),

provides:

A licensee shall not knowingly misrepresent

facts, shall have an affirmative duty to

inform the division of any changes in status

or of any knowledge of any facts which may

adversely affect the licensee's fitness for

licensure, shall undertake to perform only

those brokerage services which he can

reasonably expect to complete with

professional competence, shall exercise due

professional care in the performance of

brokerage services, and shall not permit

others to carry out on his or her behalf,

either with or without compensation, acts

which, if carried out by the licensee, would

place him in violation of sections 326.001

through 326.006, Florida Statutes or chapter

61B-60, Florida Administrative Code.

63. Section 326.006(2)(e)4, Florida Statutes, provides:

The division may suspend or revoke the

license of a broker or salesperson who:

4. Acts for both the buyer and seller in a

transaction involving a yacht without the

knowledge and written consent of both

parties.

64. Chester Bulloc k violated Rule 61B-60.009(1), Florida

Administrative Code, which requires that a licensee exercise due

professional care in the performance of brokerage services.

Bullock failed to exercise due professional care by using his own

company to survey yachts for Wittman and Shaffer, his clients.

In addition, he falsely stated that his company used accredited

surveyors. Bullock acted as an agent of both the seller and

purchaser in Wittman's yacht transaction without obtaining the

written consent of both of the parties. Finally, Bullock

obtained more than one contract on the same vessel in the Hill

yacht transaction. This was not permitted under the terms of the

contracts.

65. Section 326.006(2)(e)1, Florida Statutes, provides:

The division may suspend or revoke the

license of a broker or salesperson who:

1. Makes a substantial and intentional

misrepresentation, with respect to a

transaction involving a yacht, upon which any

person has relied.

66. Based upon the misrepresentations of Bullock in

Wittman's and June's yacht transactions, Bullock violated Section

326.006(2)(e)1.

67. As Respondent has permitted Bullock to carry out the

acts of violating the Notary Public Law, failing to exercise due

professional care, acting for both the buyer and seller of a

transaction without the written consent of both, and making

substantial and intentional misrepresentations in yacht

transactions, Respondent has violated Rule 61B-60.009(1) and (2),

Florida Administrative Code, which prohibits him from permitting

others to carry out acts that if done by Respondent would place

him in violation of the Act.

68. Section 326.006(2)(d)4, Florida Statutes, provides:

The division may impose a civil penalty

against a broker or salesperson or any of his

or her assignees or agents, or against an

unlicensed person or any of his or her

assignees or agents, for any violation of

this chapter or a rule adopted under this

chapter. A penalty may be imposed for each

day of continuing violation, but in no event

may the penalty for any offense exceed

$10,000. . . .

69. Rule 61B-60.010, Florida Administrative Code (1992),

provides guidelines for determining civil penalties. The nature

of Respondent's violation is a factor to be considered in the

penalty guidelines. Rule 61B-60.010(2)(i), Florida

Administrative Code. All of the five charges against Respondent

involve Respondent's failure to follow rules and act in ways that

protect consumers. Respondent has not only acted in ways that

jeopardize consumer protection, but has caused actual consumer

harm by almost requiring the Hills to litigate prior to returning

their $1,700 deposit; by allowing his salesman to make

misrepresentations which resulted in Wittman's purchasing a yacht

that needed $15,000-$20,000 in repairs; and by allowing his

salesman to make misrepresentations to Chris June which resulted

in June's purchasing a yacht for $20,000 that now in a salvage

yard. These are aggravating factors.

70. A penalty factor in Rule 61B-60.010(2)(f), Florida

Administrative Code, applicable in this case is whether

Respondent's conduct was intentional. Based upon the Findings of

Fact, it is apparent that Respondent's violations were

intentional. This also is an aggravating factor.

71. Another penalty guideline applicable in this case is

whether Respondent knew or should have known that the misfeasance

constituted a violation of Chapter 326, Florida Statutes, or its

rules. Rule 61B-60.010(2)(g), Florida Administrative Code

(1992). Respondent's descriptions of his duties as an escrow

agent, corroborated by the statements of Bullock, indicate an

abdication of supervisory responsibility. Respondent should have

known that his lack of supervision and control of the office

would result in violations of the Act for which he is

responsible. This is an aggravating factor.

72. Based upon the evidence described above on counts 2

through 5, it is this type of situation that the maximum civil

penalties and revocation of Respondent's license is designed for.

RECOMMENDATION

Based upon the foregoin g Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Division of Florida Land Sales,

Condominiums and Mobile Homes enter a final order which:

1. Finds Respondent guilty of the charges set forth in

Counts 1, 2, 3, 4 and 5 of the Amended Notice to Show Cause.

2. Respondent's broker's license is hereby revoked.

3. The Division impose a civil penalty of $40,500, which is

$500 for Count 1 and $10,000 each for Count 2, 3, 4,

and 5.

4. The Respondent shall immediately cease and desist f rom

any violations of Chapter 326, Florida Statutes, and the

administrative rules promulgated thereunder.

DONE AND ENTERED this 18th day of June, 1999, in

Tallahassee, Leon County, Florida.

___________________________________

DANIEL M. KILBRIDE

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 18th day of June, 1999.

COPIES FURNISHED:

William Oglo, Esquire

Department of Business

and Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

Gregory Linnemeyer

613 Rockledge Drive

Rockledge, Florida 32955

Philip Nowick, Director

Division of Florida Land Sales,

Condominiums, Mobile Homes

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399

William Woodyard, General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399

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.