STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DIVISION OF PROFESSIONAL ) REGULATION, DIVISION OF REAL ) ESTATE )

)

Petitioner, )

)

vs. ) CASE NO. 88-1472

)

HARRIET M. ARNDT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the above matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Don W. Davis, on June 30, 1988 in West Palm Beach, Florida. The following appearances were entered:

APPEARANCES

For Petitioner: Steve W. Johnson, Esquire

Department of Professional Regulation Post Office Box 1900

Orlando, Florida 32802

For Petitioner: Robert E. Gordon, Esquire

2601 Tenth Avenue North, Suite 314 Lake Worth, Florida 33461

BACKGROUND

The Respondent is a licensed real estate broker. By an administrative complaint, Petitioner noticed Respondent of an intention to take disciplinary action with regard to Respondent's license for alleged violations of Chapter 475, Florida Statutes. The Respondent requested formal administrative proceedings.

Prior to the final administrative hearing, Respondent filed a motion for continuance. After ore tenus discussions with counsel for the parties, the matter was resolved and the request for continuance denied.

At hearing, both parties stipulated to the facts as set forth in the administrative complaint and to conduct of the proceeding pursuant to provisions of section 120.57(1), Florida Statutes. The Petitioner submitted 11 evidentiary exhibits. The Respondent offered testimony of one witness and six evidentiary exhibits. Proposed findings of fact submitted by the parties are addressed in the appendix to this recommended order.

Based upon all of the evidence, the following findings of fact are determined:

FINDINGS OF FACT

1. The parties stipulated to facts set forth in paragraphs 1-8, below.

   
   

   Stipulated Facts

   
   

2. The Petitioner is the Division of Real Estate of the Department of Professional Regulation. As such, Petitioner acts as the licensing and regulatory agency for real estate broker licensees.

   
   

3. The Respondent is Harriet M. Arndt, holder, at all times pertinent to these proceedings, of license number 0002216 issued by Petitioner. Her address of record is One South Ocean Boulevard, Suite 322, Boca Raton, Florida 33431.

   
   

4. On January 28, 1987, Respondent received in trust an earnest money deposit in the amount of $39,000 from a buyer for a piece of property listed with another realtor, Merrill Lynch Realty, Inc.

   
   

5. At closing of the sales transaction on February 25, 1987, Respondent delivered a check drawn on her trust account in the amount of $15,600 and made payable to Merrill Lynch Realty, Inc. This payment represented payment of one half of the $31,200 real estate brokerage commission. The check was subsequently returned to Merrill Lynch Realty, Inc. due to "non-sufficient funds."

   
   

6. On March 27, 1987, Respondent delivered a cashier's check in the amount of $15,600 to Merrill Lynch Realty, Inc., to replace the February 25, 1987, check.

   
   

7. The Respondent's real estate brokerage trust account was overdrawn from January 8, 1987 through March 4, 1987, by amounts ranging from $12,991.39 to

   $14,306.53 on various days during that period.

   
   

8. The Respondent failed to maintain the $39,500 earnest money deposit in her trust account from February 2, 1987 until February 25, 1987, because the trust account's daily balance was less than that amount during that period. The Respondent subsequently failed to maintain the $15,660 due to Merrill Lynch Realty Inc., in the trust account from February 25, 1987, through March 25, 1987, because the trust account's daily balance was less than $15,600.

   
   

9. From March 19, 1987, through October 29, 1987, Petitioner's investigator requested Respondent to produce for inspection and copying those books and papers relating to Respondent's trust account which are maintained in connection with Respondent's real estate activities. The Respondent failed to make the requested trust account books and records available at any time.

   
   

   Other Facts

   
   

10. The Respondent offered mitigating testimony establishing that she was initially licensed in 1978 and has never been censured by Petitioner for any professional violations. She is 57 years of age and her real estate license is her sole source of support. Further, Respondent has borrowed money from her children to make up the deficit in her trust account.

11. The testimony of Respondent also established that she was introduced to a gentleman named Robert H. Lajoie by another realtor in December of 1986. Subsequently, on or about December 8, 1986, Respondent entered into a nefarious arrangement with Lajoie. Under terms of the arrangement, Lajoie gave Respondent a check for $25,500 as a deposit to purchase a property listed with Respondent. In turn, Respondent gave Lajoie back a cash deposit of $10,000 from her trust fund in connection with a contract between the two of them whereby Respondent was to purchase a property of Lajoie's. The closing of the sale of Lajoie's property to Respondent would not take place until May, 1987. Lajoie returned to his native Canada shortly after receiving the $10,000 cash payment from Respondent and died. Shortly thereafter, payment on Lajoie's $25,500 check to Respondent was stopped. The Respondent is not sure whether this action was taken by Lajoie prior to his death or by his estate subsequent to that event.

    It is Respondent's contention that the loss of the $10,000 cash deposit to Lajoie resulted in a negative net balance in her trust account and eventually all of her financial difficulties in this case.

    
    

12. The Respondent was sent an overdraft notice by her bank on January 8, 1987, stating that her trust account was overdrawn by $13,500 and that a check for $25,500 had been returned. Subsequent overdraft notices dated January 13, 1987 and January 21, 1987, were received by Respondent noting the rejection of two of Respondent's checks; one in the amount of $294.90 and the other in the amount of $34.35. The notice of January 13, 1987, indicated a hold on the account in the amount of $2,862.94 against the account's balance of $3,006.19. The January 21, 1987, notice continued this hold on the account's balance of

    $2,891.45.

    
    

13. The Respondent related a series of personal matters at hearing that had prevented her from keeping appointments with Petitioner's investigators to inspect her records. She agreed to make access to those records immediately available.

    
    

    CONCLUSIONS OF LAW

    
    

14. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding, and the parties thereto, pursuant to subsection 120.57(1), Florida Statutes.

    
    

15. The evidence that Respondent committed the offenses set forth in the administrative complaint is incontestably clear and convincing. As alleged in count I of the complaint, Respondent has committed a breach of trust as to trust funds held by her in violation of section 475.25(1), (b), Florida Statutes. Count II of the complaint charges Respondent with failing to account and deliver a deposit in violation of section 475.25(1), (d), Florida Statutes. The Respondent is guilty of this offense, as well as violation of section 475.25(1), (k), Florida Statutes, as charged in count III of the complaint, for her failure to maintain the deposit in a trust account until disbursement was properly authorized. The Respondent also is guilty of the charge in count IV of the complaint that she failed to produce trust books and accounts for inspection by Petitioner's investigator in violation of section 475.25 (1), (e), Florida Statutes.

    
    

16. Section 475.25(1), Florida Statutes, provides that the Florida Real Estate Commission may suspend a license for a period not exceeding 10 years; may revoke a real estate license; may impose an administrative fine not to exceed

    $1,000 for each count of an administrative complaint; and, impose a reprimand or

    any of the foregoing, upon a finding that a licensee has violated section 475.25(1), (b), (d), (e) and (k), Florida Statutes.

    
    

17. Penalty guidelines are also established by Petitioner in section 21V- 24.001, Florida Administrative Code, for the offenses committed by Respondent. In accordance with those guidelines, mitigating circumstances may be considered in the imposition of penalties for Respondent's offenses.

    
    

18. The Respondent's age, her livelihood dependence upon her license, her previously unblemished record and her replacement of the entrusted funds cannot serve as a defense of her actions. However, it is found that these factors should be considered mitigating circumstances, along with her loss of the cash funds given by her to Lajoie, in determining the penalty to be imposed upon Respondent. In that regard, counsel for Petitioner has suggested a very temporary suspension of Respondent's license for 30 days and an administrative fine of $1000. While concurring with the recommendation as to the monetary amount of a fine, the length of suspension proposed by Petitioner fails to account for the gravity of Respondent's violations and is considered too lenient.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered finding Respondent guilty of the

offenses charged in the administrative complaint, imposing an administrative fine of $1,000 and suspending her license for a period of six months.

DONE AND RECOMMENDED this 22nd day of July, 1988, in Tallahassee, Leon County, Florida.

DON W. DAVIS

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 22nd day of July, 1988.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-1472

The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties.

Petitioner's Proposed Findings 1-2. Included in finding 1.

3-8. Included in findings 3-8 respectively.

Respondent's Proposed Findings

1. Included in finding 2. 2-5. Included finding 10.

1. Included in finding 3.

2. Included in finding 4, 5, and 10.

3. Included in finding 8 and 12. 9-10. Rejected.

11. Included in finding 9.

COPIES FURNISHED:

Steve W. Johnson, Esquire Department of Professional

Regulation

Post Office Box 1900 Orlando, Florida 32802

Robert E. Gordon, Esquire 2601 Tenth Avenue North Suite 314

Lake Worth, Florida 33461-3197

William O'Neil, Esquire General Counsel

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Darlene F. Keller, Acting Director Department of Professional Regulation Division of Real Estate

130 North Monroe Street Tallahassee, Florida 32399-0750

Docket for Case No: 88-001472

Orders for Case No: 88-001472