STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 86-1143

)

STEPHEN E. SCHILLER t/a )

ALLSTATE REALTY, )

)

Respondent. )

)

RECOMMENDED ORDER

For Petitioner: James H. Gillis, Esquire, of Orlando For Respondent: Stephen E. Schiller, of Ft. Myers

The primary issue in this case is how the Florida Real Estate Commission should discipline Respondent, Stephen E. Schiller, t/a Allstate Realty (Respondent), for violations of prohibitions of Chapter 475, Florida Statutes (1985). Schiller admitted all but one of the alleged violations. Nevertheless, a final hearing was held in this case in Ft. Myers on July 17, 1986. At final hearing, Schiller did not seriously contest the sole remaining alleged violation.

FINDINGS OF FACT /1

1. The Respondent's name is Stephen E. Schiller.

   
   

2. Petitioner, Department of Professional Regulation, Division of Real Estate, is the state agency charged with regulating the practice of real estate sales and brokering pursuant to Section 20.30, Florida Statutes, Chapter 455, Florida Statutes, and Chapter 475, Florida Statutes.

   
   

3. Respondent, Stephen E. Schiller, is now and has been at all times alleged in the Administrative Complaint a licensed real estate broker in the State of Florida, having been issued license number 0374362.

   
   

4. The last license issued to the Respondent was as a broker, t/a Allstate Realty, 5235 Ramsey way, Suite #10, Ft. Myers, Florida 33907.

   
   

5. On or about January 7, 1986, John E. Harris, an investigator employed by the Petitioner, conducted an audit of the real estate brokerage transactions and bank accounts maintained by the Respondent in his capacity as a licensed real estate broker.

   
   

6. The audit revealed that from approximately July 1983, to December 1985, the Respondent has engaged in the management of real property.

7. The Respondent has received in trust rental monies (monthly rental payments and security deposits) from tenants on behalf of the owners.

   
   

8. The Respondent placed in rental monies received in his general operating checking account numbered 0323012620 maintained at the Goldome Savings Bank, Ft. Myers, Florida (checking account).

   
   

9. The Respondent has executed and issued numerous checks drawn on the checking account that have been dishonored and returned for reason insufficient funds on account.

   
   

10. The Respondent has caused the checking account to have negative daily closing balances on numerous occasions for the reason the checking account was overdrawn.

    
    

11. On or before December 13, 1985, the Respondent had received in trust approximately $5,700.00 in rental monies which were required to be maintained by Respondent but the closing bank balance on December 13, 1985, was $462.55 resulting in a shortage of $5,237.45 on December 13, 1985.

    
    

12. Respondent's escrow account numbered 6005245701 maintained at the NCNB National Bank of Florida, Tampa, Florida, had a closing balance of $4,715.21 on December 13, 1985, but Respondent was unable to furnish for inspection a checkbook or any other books, records, documents, contracts or other papers to support the $4,715.21 balance in the escrow account.

    
    

13. The dishonored checks Respondent drew on his general operating account at the Goldome Savings Bank were dishonored for insufficient funds because renters' checks that had been deposited in the account were dishonored. This happened approximately six times. Whenever it happened, Respondent promptly made deposits into the account sufficient to make the dishonored checks good. Respondent also made improvements to his clients' properties out of his own pocket and charged the clients for his expenses at a later date. There was no evidence of fraudulent intent or bad faith on Respondent's part.

    
    

14. Respondent is in the process of selling Allstate Realty to Richard A. Miller Realty and moving back to New York to rejoin his wife. He plans to return to the Ft. Myers area with his family in a few years.

    
    

    CONCLUSIONS OF LAW

    
    

15. Count 1 of the Administrative Complaint charges that Respondent is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction in violation of Section 475.25(1)(b), Florida Statutes (1985). The evidence proved only culpable negligence and breach of trust in a business transaction in violation of that statute. There was no evidence of fraud or bad faith, just gross mishandling of escrow accounts and records and property management and bookkeeping.

    
    

16. Count II of the Administrative Complaint charges that Respondent is guilty of having failed to place and maintain monies received in trust in his capacity as a real estate broker in his real estate brokerage escrow bank account or some other proper depository in violation of Section 475.25(1)(k), Florida Statutes (1985). The evidence clearly establishes violations of that statute.

17. Count III of the Administrative Complaint charges that Respondent is guilty of having failed to produce for inspection his real estate brokerage account books and records in violation of Rule 21V-10.14, Florida Administrative Code, and Section 475.25(1)(e) and (k), Florida Statutes (1985). The evidence of this case proved that Respondent was unable to furnish sufficient records from which his escrow account at the NCNB National Bank of Florida could be reconciled. However, there was no evidence that Respondent failed to make appropriate deposits in the escrow account or that the escrow account was improperly established or handled. Accordingly, there was no violation of Section 475.25(1)(k). As for Rule 21V-10.14, that rule was repealed in 1980. /2 Section 475.25(1)(e) is a catch-all provision which depends upon violation of another statutory or rule provision. Therefore, Count III was not established.

    
    

18. Section 475.25(1), Florida Statutes (1985), provides that if the Florida Real Estate Commission finds that a licensee has violated subsection (b) or (k) of the statute, it may revoke a license, suspend a license for a period not exceeding 10 years, impose an administrative fine not to exceed $1,000 for each count or separate offense, issue a reprimand, or any or all of the foregoing. Licensees whose licenses have been suspended would be required to complete all accumulated continuing or reactivation education required under Rules 21V-2-3.09 and 21V-3.10, Florida Administrative Code (1984 Supp.). Hopefully, the accumulated educational requirements would include courses in property management and escrow accounting and bookkeeping.

RECOMMENDATION

Based upon the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Florida Real Estate Commission enter a final order holding Respondent, Stephen E. Schiller, t/a Allstate Realty, guilty of violating Section 475.25(1)(b) and (k), Florida Statutes (1985), under Counts I and II of the Administrative Complaint in this case, and suspending his real estate broker's license no. 0374362 for one year.

DONE and ORDERED this 27th day of August, 1986 in Tallahassee, Florida.

J. LAWRENCE JOHNSTON 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 27th day of August, 1986.

ENDNOTES

1/ Paragraphs 1-11 of the Findings Of Fact were admitted by Respondent by the time of the final hearing.

2/ There is a Rule 21V-14.10, Florida Administrative Code, dealing with escrow accounts, but it has nothing to do with production of records on inspection.

APPENDIX TO RECOMMENDED ORDER 86-1143

The following are rulings on proposed findings of fact as required by Section 120.59(2), Florida statutes (1985).

1. Petitioner's proposed findings of fact 1 through 4are accepted as substantially factually accurate and are incorporated in the Findings Of Fact in the same or similar format.

2. Petitioner's proposed finding of fact 5 would have been included in paragraph 1 above except that it was not proved that Respondent "failed,refused or declined" but rather that he wasunable. See Finding Of Fact 12.

3. Respondent submitted no proposed findings of fact.

COPIES FURNISHED:

James H. Gillis, Esquire Department of Professional Regulation

Division of Real Estate

400 W. Robinson Street Orlando, Florida 32801

Stephen E. Schiller 4781 Albacore Lane

Fort Myers, Florida 33907

Fred Roche Secretary

Department of Professional Regulation

130 N. Monroe Street Tallahassee, Florida 32301

Harold Huff Executive Director

Department of Professional Regulation Division of Real Estate

400 W. Robinson Street Post Office Box 1900 Orlando, Florida 32802

Docket for Case No: 86-001143

Orders for Case No: 86-001143