STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, BOARD OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 81-2745

)

HORTENSIA H. SMITH, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause was heard by Linda M. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on June 14 and 15, 1982, in Miami, Florida.

APPEARANCES

For Petitioner: Harold M. Braxton, Esquire

Miami, Florida

For Respondent: Manuel E. Oliver, Esquire

Hialeah, Florida

By Administrative Complaint, Petitioner seeks to suspend or revoke or take other disciplinary action against the Respondent as licensee and against her license to practice real estate under the laws of the State of Florida.

Respondent timely requested a formal hearing on the allegations in that Administrative Complaint. Accordingly, the issues for determination are whether Respondent is guilty of the allegations contained within the Administrative Complaint and, if so, what disciplinary action should be taken, if any.

Petitioner presented the testimony of John Forte, Hortensia H. Smith, Roberto E. Smith, Jr., and Andrew C. Hall. Additionally, Petitioner's Exhibits numbered 1 through 19 were admitted in evidence.

Respondent Hortensia H. Smith testified on her own behalf and presented the testimony of Lee Milich, Carlos Arazosa, and Roberto E. Smith, Jr. Respondent's Exhibits numbered 1 and 2 were marked for identification only.

During the formal hearing in this cause, the Petitioner moved to strike the testimony of Respondent's witness, Lee Milich, and ruling was reserved on that motion. Petitioner's motion to strike be and the same is hereby denied.

Both parties waived their right to submit post-hearing proposed findings of fact in the form of a proposed recommended order.

FINDINGS OF FACT

1. Respondent Hortensia H. Smith is a licensed real estate broker having been issued license number 82346.

   
   

2. By written agreement dated December 10, 1975, Respondent was employed by Brickell Bay Club, Inc., a condominium developer, as part of its sales staff on weekends only to sell new condominium apartment units.

   
   

3. In March of 1976, a new agreement between Respondent and Brickell Bay Club, Inc., was entered into whereby Respondent was given the right not only to sell new condominium units but also to resell and to rent other units in the complex. Respondent then began working full-time in the Brickell Bay Club sales office.

   
   

4. Brickell Bay Club, Inc., allocated three percent of the sales price of the new condominiums to be distributed in the following manner: one-third to Respondent, one-third to the developer as rental for the space occupied by Respondent on the premises (this money to be placed in escrow), and one-third to be distributed one-half to the sales staff and the other one-half to be placed into an escrow account to be divided between Respondent and Brickell Bay Club, Inc.

   
   

5. Respondent prepared all records regarding sales and rentals effectuated through the sales office, established the "escrow account" called for by the March, 1976 agreement, and met with the president of Brickell Bay Club, Inc., approximately once a month to go over a monthly schedule prepared by her reflecting commissions earned by and expenses incurred by the sales office. At no time did Respondent provide the records upon which her general heading schedules were prepared, and at no time did Respondent present itemization of the general headings carried on her schedule, such as the line item called expenses.

   
   

6. Periodically, Brickell Bay Club would pay to Respondent commissions earned.

   
   

7. The April, 1978, Brickell Bay Club, Inc., had sold all of its intended units in the Brickell Bay Club condominium. Having fulfilled its business purpose, Brickell Bay Club, Inc., sold its assets to J. M. F. Corporation and ceased doing business.

   
   

8. As J. M. F. Corporation had determined to sell certain hotel room suites and commercial spaces not intended to be sold by Brickell Bay Club, Inc.,

   J. M. F. Corporation assumed the agreement with Respondent concerning the payment of rent and the distribution of the escrowed money during the time that the additional sales would be made.

   
   

9. At the beginning of September, 1979, J. M. F. Corporation requested Respondent to vacate the office space she had been occupying, since there was no longer any need for a sales office. J. M. F. Corporation also made demand on Respondent to turn over to J. M. F. the accrued rental payments due J. M. F. of approximately $51,000. This amount was claimed since it was the amount shown to be due on the schedule prepared by Respondent at that time.

   
   

10. Respondent refused to vacate the premises and refused to turn over to

    J. M. F. Corporation the monies being held in escrow by her for J. M. F. Corporation.

11. On September 14, 1979, the attorney for J. M. F. Corporation sent Respondent a demand letter.

    
    

12. Respondent refused to vacate the premises and refused to turn over to

    J. M. F. Corporation the escrowed monies.

    
    

13. J. M. F. Corporation filed a civil action seeking eviction of Respondent from premises owned by it and seeking payment by Respondent of the escrowed $51,000.

    
    

14. As a result of the discovery proceedings engaged in by J. M. F. Corporation and Respondent in that civil action, it became clear that Respondent owed substantially more than the $51,000 initially claimed. During the trial of that action, the case was settled, and Respondent paid to J. M. F. Corporation the sum of $97,909.

    
    

15. The $97,909 paid by Respondent to J. M. F. Corporation represented accrued rents and the developer's share of commission, both of which sums under the terms of the March, 1976 agreement were to have been held in escrow from time of receipt until disbursement.

    
    

16. The discovery engaged in in the civil litigation between Respondent and J. M. F. Corporation also revealed that Respondent had no escrow account. She had one bank account related to her activities at Brickell Bay Club, which was used as a general operating account.

    
    

17. Respondent never rendered to either Brickell Bay Club, Inc., or J. M.

    F. Corporation an accounting as to their monies which she was holding in escrow.

    
    

18. Respondent has admitted that she refused to vacate the premises at Brickell Bay Club when demand was made on her to do so. Respondent has admitted that she owed $51,000 to J. M. F. Corporation at the time that demand was made on her to turn over those escrowed monies. Respondent has admitted that she never rendered to anyone an accounting of the monies in her alleged "escrow account."

    
    

19. Respondent admits that she operated an unregistered branch office at the Brickell Bay Club, 2333 Brickell Avenue, Miami, Florida, from March, 1976 to December 2, 1977.

    
    

20. Respondent admits that she prepared and submitted a 1099 form to the Internal Revenue Service for the year 1978, which indicated that Respondent had paid to J. M. F. Corporation the sum of $72,741 when no such money was every paid to J. M. F. Corporation.

    
    

    CONCLUSIONS OF LAW

    
    

21. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties hereto. Section 120.57(1), Florida Statutes.

22. Section 475.25(1), Florida Statutes, authorizes the Board of Real Estate (now known as the Florida Real Estate Commission) to take disciplinary action against a licensee who has:

    
    

    (b) . . . has violated a duty imposed upon him by law or by the terms of a listing contract, written, oral, express, or implied, in a real estate transaction;

    1. Failed to account or deliver to any person, . . . upon demand of the person entitled to such accounting and delivery, any personal property such as money, fund, deposit, check, draft, . . . including a share of a real estate commission, . . . or any divisible share or portion thereof, which has come into his hands and which

       is not his property or which he is not in law or equity entitled to retain under the circumstances . . .

    2. Violated any of the provisions of this chapter or any lawful order or rule made or issued under the provisions of this chapter or chapter 455;

    (1) Made or filed a report or record

    which the licensee knows to be false, . . .

    
    

    Section 475.24, Florida Statutes, regulates the registration of branch offices and provides:

    
    

    Whenever any licensee desires to conduct business at some other location, either in the same or different munici- pality or county than that in which he

    is licensed, such other place of business shall be registered as a branch office, and an annual registration fee prescribed by the board, in an amount not exceeding

    $20, shall be paid for each such office. It shall be necessary to maintain and register a branch office whenever, in the judgment of the board, the business conducted at a place other than the prin-

    cipal office is of such a nature that the public interest requires registration of a branch office. Any office shall be deemed to be a branch office if the name or advertising of a broker having a prin-

    cipal office located elsewhere is displayed in such manner as to reasonably lead the public to believe that such office is

    owned or operated by such broker.

    
    

    Section 21V-10.23, Florida Administrative Code, is derived from Section 475.24, Florida Statutes, and provides that: "If a broker desires to conduct business from more than one office, each additional office must be registered as a branch office, and a fee must be paid for its registration."

23. Count One of the Administrative Complaint charges Respondent with failure to account and deliver escrow property to the person entitled to same in violation of Section 475.25(1)(d), Florida Statutes (1979). Respondent, by her own admission, refused to vacate the premises of Brickell Bay Club and refused to turn over to J. M. F. Corporation upon demand the sum of $51,000, although she admits that she knew at the time that she owed that sum of money to J. M. F. Corporation. Respondent has also admitted that she never rendered an accounting of the monies allegedly being held in escrow for J. M. F. Corporation, and the testimony clearly reveals that Respondent in fact had no escrow account. Respondent's only proffered defense to the allegations contained in Count One is that she provided to Brickell Bay Club, Inc., and subsequently to J. M. F. Corporation monthly schedules prepared by her. Much testimony was taken at the formal hearing in this cause regarding those schedules. First of all, the schedules do not deal with the money that was supposed to be held by Respondent in escrow. Secondly, the schedules are prepared so improperly as to make it difficult, if not impossible, to ascertain from studying them what money was distributed where, or why. Respondent was unable through extensive testimony to explain how she prepared the schedules or to explain how the schedules allegedly matched the agreement between her and the developer for the distribution of monies coming into her hands. To the extent that Respondent's monthly schedules can be interpreted as some form of accounting, they are so improperly done as to render them meaningless. Either Respondent has admitted or Petitioner has proven the allegations contained in Count One of the Administrative Complaint.

    
    

24. Count Two of the Administrative Complaint charges Respondent with failing to register a branch office in violation of Section 475.24, Florida Statutes (1979), in violation of Rule 21V-10.23, found in the Florida Administrative Code, and thus in violation of Section 475.25(1)(e), Florida Statutes (1979). Respondent has admitted the allegations contained in Count Two of the Administrative Complaint.

    
    

25. Count Three charges Respondent with filing a report or record required by federal law which Respondent knew to be false in violation of Section 475.25(1)(l), Florida Statutes (1979), and therefore violating a duty imposed upon her by law in violation of Section 475.25(1)(b), Florida Statutes (1979). Respondent has admitted that the 1099 form she filed with the I.R.S. for the year 1978 indicating that she had paid to J. M. F. Corporation the sum of

    $72,741 was false. She admits that she did not pay to J. M. F. Corporation that sum, or any other sum, during 1978. Accordingly, Petitioner has proven the allegations contained in Count Three of the Administrative Complaint.

    
    

26. Petitioner has recommended that Respondent's license be revoked. A study of the record in this cause indicates that any lesser penalty under the facts of this case would be unjust. Respondent has admitted that she never rendered an accounting of the escrowed funds and that she refused to deliver the escrowed funds to J. M. F. Corporation at a time that she knew that J. M. F. Corporation was entitled to receive those funds. Further, Petitioner has proven that Respondent did not even have an escrow account. After extensive cross- examination, Respondent finally admitted that she knew she had not paid J. M. F. Corporation the sum of $72,741, or even any money, at the time that she filed the 1099 form with the Internal Revenue Service for the year 1978. Respondent has also admitted that she did not register the branch office that she was

operating at the Brickell Bay Club condominium. Each and every allegation in the Administrative Complaint has been proven or admitted by the Respondent. No reasonable defense has even been proffered to any of the allegations contained within the Administrative Complaint. Rather, Respondent's extensive testimony during the formal hearing in this cause is replete with contradictions in almost every area of inquiry.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding the Respondent guilty of

the allegations in the Administrative Complaint and permanently revoking her license as a real estate broker under the laws of the State of Florida.

DONE and RECOMMENDED this 13th day of December, 1982, in Tallahassee, Leon County, Florida.

LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 13th day of December, 1982.

COPIES FURNISHED:

Harold M. Braxton, Esquire

46 SW 36th Court Miami, Florida 33135

Manuel E. Oliver, Esquire

29 East Sixth Street Hialeah, Florida 33010

C. B. Stafford, Executive Director Florida Real Estate Commission

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

Samuel R. Shorstein, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

William F. Furlow, Esquire Florida Real Estate Commission

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

Docket for Case No: 81-002745

Orders for Case No: 81-002745