STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 91-0407

)

RICHARD L. BOHNER and )

BOHNER REAL ESTATE, )

)

Respondents. )

)

RECOMMENDED ORDER

A hearing was held in this case in West Palm Beach, Florida on February 13, 1992, before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings.

APPEARANCES

For the Petitioner: Theodore Gay, Esquire

Department of Professional Regulation

401 N.W. 2nd Avenue, Suite N-607 Miami, Florida 33128

For the Respondent: Richard L. Bohner, pro se

205 East Osceola Street Stuart, Florida 34994

STATEMENT OF THE ISSUES

The issue for consideration in this case is whether the Respondent's licenses as a real estate broker should be disciplined because of the matters set forth in the Administrative Complaint filed herein.

PRELIMINARY MATTERS

By Administrative Complaint dated December 10, 1990, the Florida Real Estate Commission, seeks to discipline the Respondent's license as a real estate broker because, it alleges, he commingled trust funds received from tenants with personal funds in an interest bearing trust account in violation of various subsections of Section 475.25(1), Florida Statutes. The Department also alleged that the Respondent's company, described as Bohner Real Estate, Inc. was equally guilty of the same violations. At the hearing, Petitioner amended the Administrative Complaint to delete the allegation that Bohner Real Estate is a corporation.

Petitioner presented the testimony of Sharon Thayer, an Investigations Specialist II located in the Department's West Palm Beach office; and Michelle Faulkner Casale, custodian of records for the 1st National Bank & Trust Company of the Treasure Coast and introduced Petitioner's Exhibits 1 through 4.

Respondent testified in his own behalf and presented the testimony of his wife, Kirsten Lockhart Bohner, and also introduced Respondent's Exhibit A.

A transcript was provided and Petitioner submitted Proposed Findings of Fact which have been ruled upon in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. At all times pertinent to the allegations of misconduct in the Administrative Complaint, the Petitioner, Division of Real Estate, was the state agency charged with the responsibility for the licensing and regulation of the real estate profession in this state. The Respondent, Richard L. Bohner, was licensed as a real estate broker in Florida operating, with his wife, Kirsten, Bohner Real Estate, located at 205 E. Osceola Street in Stuart, Florida.

   
   

2. On October 1, 1989, Mr. Bohner as owner/lessor, entered into separate rental agreements with Trudy Dohm and Thelma Reynolds, with Bohner Real Estate identified as agent, for the lease for 12 months each of apartments number 105 and 204, respectively, at 1674 S.E. St. Lucie Blvd. in Stuart, Florida, for a monthly rental of $350.00 each. Each lease provided for the placement of a security deposit and last month's rental in advance; those sums, according to the terms of the lease, to be held by the agent, Bohner Real Estate, in a non- interest bearing escrow account at the Florida National Bank in Stuart.

   
   

3. In actuality, the sums above-mentioned were, in each case, deposited into an account at the First National Bank and Trust Company in Stuart. This account, number 8000030400, was held in the name of Richard L. Bohner or Kirsten

   L. Bohner, Trust account. This account was an interest bearing account and, over the time in question, also received several large deposits of funds by or on behalf of the Respondent, Richard L. Bohner which were his personal funds and not funds received as a part of or in conjunction with his activities as a real estate broker or those of Bohner Real Estate. For the most part, the funds placed in that account were Bohner's personal funds and security deposits and last month's rent on apartments in the building owned as a personal investment by Mr. and Mrs. Bohner.

   
   

4. On February 20, 1990, Sharon Thayer, an investigator for the Department, in the normal course of business, went to the Respondent's real estate office, unannounced as was her prerogative, and asked to speak with Mr. Bohner. He was not present at the time and she asked Mrs. Bohner, who was present, to produce the Respondent's books for the brokerage's escrow account, which she did. In the course of their conversation, Mrs. Bohner identified herself as being in partnership with the Respondent and admitted to assisting him in the maintenance of the escrow account. When Ms. Thayer asked for the backup documents for the escrow account, these were produced.

   
   

5. Ms. Bohner also provided Ms. Thayer with copies of the bank account she maintained. On inquiry, Mrs. Bohner said the deposits thereon were, in the main, representative of rental and security deposits from tenants on leases which Bohner Real Estate managed. Ms. Thayer asked about the large deposits made on May 3, June 7, and July 7, 1989. These were for $104,542.50,

   $50,000.00, and $4.600.00 respectively. In response, Mrs. Bohner indicated these were personal monies which came from personal sources and funds which had

   been put in that account because that's where they would get the most interest. They were not escrow funds related to the real estate brokerage.

   
   

6. Ms. Thayer made an appointment to return to the brokerage office on February 23, 1990 to speak with Respondent. When she did so, Mr. Bohner accounted for the trust liability of $6,885.00 which existed on that date. This sum was verified with the bank by phone. The trust account had an overage of somewhat more than $881.00 which Respondent explained as accrued interest not removed from the account. Mr. Bohner admitted at hearing that he earned interest on the security and rental deposits he held in that account and used that earned interest to offset the low rentals he charged his tenants. He asserted, and there was no evidence to rebut this assertion, that the only security and rental deposits placed in that account were from tenants in the apartment building he and his wife owned personally. Neither he nor Bohner Real Estate managed or served as rental agent for any rental properties owned by others. It is so found.

   
   

7. Ms. Thayer pointed out, and it is accepted as fact, that a broker is required to reconcile his trust account on a monthly basis and file a monthly reconciliation form which accounts for overages and shortages. Respondent admits he had not completed or filed these reconciliations because neither he nor Bohner Real Estate has a trust or escrow account into which client funds are deposited. He manages no property from which rents would be collected other than his own, and when he takes a deposit on a sale or transfer, a separate trust account is opened for that particular transaction with any interest earned going to the buyer.

   
   

8. Petitioner showed, through the testimony of Ms. Casale, the bank records custodian, that the largest deposit in issue, that one in excess of

   $100,000.00, was the result of the maturity of a certificate of deposit that was transferred to the account in question. Respondent did not endorse the check for deposit or sign any deposit document. He submitted a letter from the bank chairman to support his thesis that he was not a party to the transfer, but the letter, admitted over objection by counsel for Petitioner, indicates the deposit was made by the bank's investment counselor who handled the transaction consistent with telephone instructions given her by the Respondent. This is a collateral matter, however.

   
   

9. When Ms. Thayer completed her audit, she prepared and filed a report on which she indicated, inter alia, that the office met inspection standards and that the property management escrow/trust account was satisfactory. She noted an overage of $889.31 in the account and that it was an interest bearing account although the leases state it would be non-interest bearing. No deadline was given for the correction of this item.

   
   

10. Mrs. Bohner admits that when she gave the apartment security escrow account to Ms. Thayer at her request and described it as a trust account, she was not thinking. In fact, and it is so found, neither Respondent nor Bohner Real Estate have a trust account for the business and have not had one for several years. She reiterates Mr. Bohner's assertion that the only money usually kept in the account referenced by Ms. Casale and referred to by Ms. Thayer, is money received as security deposits and last month's rental from tenants in their own building. In the absence of any evidence to the contrary, it is so found.

    CONCLUSIONS OF LAW

    
    

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

    
    

12. In the Administrative Complaint, Petitioner has alleged that both Respondents are guilty of culpable negligence or breach of trust in a business transaction, in violation of Section 475.25(1)(b), Florida Statutes; intermingled personal funds with escrow funds and thereby failed to maintain trust funds in an escrow account until disbursement was properly authorized, in violation of Section 475.25(1)(e) and (k), Florida Statutes; held trust funds in an interest bearing account without the prior knowledge and consent of all parties, in violation of Section 475.25(1)(e); and failed to prepare and sign the required monthly reconciliation of trust account forms, in violation of Section 475.25(1)(e), Florida Statutes.

    
    

13. The burden is on the Petitioner to establish the Respondents' guilt of each of the offenses alleged by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 212 (Fla. 1987).

    
    

14. Section 475.25(1), Florida Statutes, authorizes the Commission to discipline the license of a broker or salesperson for various violations of the statute. Specifically alleged herein are those cases where the licensee:

    
    

    (b) has been guilty of ... culpable negligence, or breach of trust in a business transaction in this state or any other state, nation or territory, ...

    (e) has 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.

    (k) has failed, if a broker, to immediately place, upon receipt, any [money] entrusted to him by any person dealing with him as a broker in escrow ....

    
    

15. Rule 21V-14.008 defined the terms, "deposit", trust", "escrow", and "immediately" as used in the statute. Rule 21V- 14.012(2) and (3) requires a broker to reconcile, at least once a month, the trust account balances and explain any differences, and Rule 21V-14.014, dealing with interest bearing trust accounts, states:

    
    

    A licensed real estate broker is not prohibited from placing escrow money, ..., in an interest bearing account.

    
    

16. This must be done, however, with the permission of all interested parties.

    
    

17. Here the evidence clearly shows that at no time did Mr. Bohner individually, or by or through Bohner Real Estate, Inc., serve as trustee or manager of any real estate trust funds for any client in an inappropriate manner. The trust situation shown to exist here clearly relates to his personal ownership of rental property and the relationship between him and his wife as owner/lessors, and their tenants in a building owned by them. At no time did those activities pertain or relate to his practice of the real estate profession as a regulated broker. Consequently, the irregularities, if any, found to

    exist, are not cognizant or actionable under the provisions of Section 475.25(1).

    
    

18. Admittedly, the advance security and damage deposits held by Mr. Bohner were kept in an interest bearing trust account when the lease indicated the deposit would not earn interest. Action on any impropriety in that relationship is the exclusive prerogative of the courts and not within the jurisdiction of the Commission. No complaint regarding that matter by any affected tenant has been made to the Commission. This entire proposed disciplinary action resulted from a misstatement of fact by Mrs. Bohner to the Department's investigator and from the fact that the leases examined by Ms. Thayer show Bohner Real Estate as the lessor, which does not appear to be the fact. There appears to be no evidence of any actionable violations of the pertinent statute or rule to support disciplinary action against either Mr. Bohner or Bohner Real Estate.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore:

RECOMMENDED that a Final Order be entered in this case dismissing all allegations of misconduct by Respondents as outlined in the Administrative Complaint filed herein.

RECOMMENDED in Tallahassee, Florida this 1st day of April, 1992.

ARNOLD H. POLLOCK

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 1st day of April, 1992.

APPENDIX TO RECOMMENDED ORDER

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case.

FOR THE PETITIONER:

1. - 3. Accepted and incorporated herein.

   1. Accepted.

   2. - 7. Accepted and incorporated herein.

      1. Accepted and incorporated herein.

      2. First sentence accepted and incorporated herein,. Balance is not Finding of Fact but lore legal conclusion.

      3. Accepted and incorporated herein.

      4. Accepted and incorporated herein.

FOR THE RESPONDENTS:

None submitted.

COPIES FURNISHED:

Theodore Gay, Esquire Department of Professional

Regulation

401 NW Second Avenue, Suite N-607 Miami, Florida 33128

Richard L. Bohner Bohner Teal Estate

205 East Osceola Street Stuart, Florida 34994

Jack McRay General Counsel

Department of Professional Regulation

1940 North Monroe Street Tallahassee, Florida 32399-0792

Darlene F. Keller Division Director Division of Real Estate

400 W. Robinson Street Post Office Box 1900

Orlando, Florida 32802 - 1900

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should consult with the agency which will issue the Final Order in this case concerning its rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should b e filed with the agency which will issue the Final Order in this case.

=================================================================

AGENCY FINAL ORDERS

=================================================================

STATE OF FLORIDA

DEPARTMENT OF PROFESSIONAL REGULATION FLORIDA REAL ESTATE COMMISSION

DEPARTMENT OF PROFESSIONAL REGULATION, DIVISION OF REAL ESTATE

Petitioner

vs. CASE NO. 0171408 0167120

DOAH NO. 91-0407

RICHARD L. BOHNER and BOHNER REAL ESTATE

Respondents

/

FINAL ORDER

On May 19, 1992, the Florida Real Estate Commission heard this case to issue a Final Order.

Hearing Officer Arnold H. Pollock of the Division of Administrative Hearings presided over a formal hearing on February 13, 1992. On April 1, 1992, he issued a Recommended Order, a copy of which is attached hereto as Exhibit A and made a part hereof.

The petitioner filed Exceptions to the Recommended Order. A copy of said Exceptions is attached hereto as Exhibit B and made a part hereof.

The Petitioner specifically took exception to the Hearing Officer's Conclusion of Law that, since the Respondent owned the rented property, any method the Respondent used to handle the tenant's security deposit and last month's rent was beyond the jurisdiction of the Commission.

The Petitioner further took exception to the Hearing Officer's Conclusion that excused or ignored paragraphs 2, 3 and 10 of the Findings of Fact of the Recommended Order. These Findings of Fact state that the Respondent placed the advance security deposits in an interest-bearing trust account, when the lease provided that the funds were to be held by agent Bohner Real Estate in a non-interest-bearing escrow account.

After hearing arguments of counsel and upon a complete review of the record, the Commission adopts the Petitioner's Exceptions to the Hearing Officer's Recommended Order. The Commission cites the lease agreement as evidence that the Respondent was acting in the capacity of a broker in a business transaction. The Commission finds that the terms of the lease used by Respondent identified Bohner Real Estate as the agent and that the lessee dealt with the Respondent as a broker. The lease further outlined the duties to be performed by the Respondent, including the placing of deposits in a non-

interest-bearing account to be held by the agent, Bohner Real Estate. The Commission finds that Respondent Richard L. Bohner failed to maintain the funds in an escrow account.

Therefore, the Commission adopts the Hearings Officer's Findings of Fact, rejects the Hearing Officer's Conclusions of Law, and accepts the Petitioner's Exceptions to the Conclusions of Law.

According, the Commission finds the Respondents guilty of culpable negligence and breach of trust in violation of s.475.25(1)(b), Florida Statutes, as alleged in Counts I and II of the Administrative Complaint, and in violation of s.475.25 (1)(k), Florida Statutes, as alleged in Counts III and IV of the Administrative Complaint.

The Florida Real Estate Commission therefore ORDERS that Respondent Richard L. Bohner be placed on probation for a period of one year, subject to the following terms and conditions:

1. The licensee shall notify the Division of Real Estate of any changes in address or employment.

   
   

2. The licensee shall not violate any provisions of Chapter 475, Florida Statutes, or Rules adopted by the Commission.

   
   

3. The licensee shall not be convicted or found guilty of a crime in any jurisdiction.

   
   

4. The licensee shall enroll in and satisfactorily complete a 30-hour broker management course within one (1) year of the filing date of this Order.

This Order shall be effective 30 days from date of filing with the Clerk of the Department of Professional Regulation. However, any party affected by this Order has the right to seek judicial review, pursuant to s.120.68, Florida Statutes, and to Rule 9.110, Florida Rules of Appellate Procedure.

Within 30 days of the filing date of this Order, review proceedings may be instituted by filing a Notice of Appeal with the Clerk of the Department of Professional Regulation at 400 West Robinson Street, Suite 309, Orlando, Florida 32801. At the same time, a copy of the Notice of Appeal, with applicable filing fees, must be filed with the appropriate District Court of Appeal.

DONE AND ORDERED this 19th day of May 1992 in Orlando, Florida.

Darlene F. Keller, Director Division of Real Estate

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true copy of the foregoing was sent by U.S. Mail to: Richard L. Bohner and Bohner Real Estate, 205 East Osceola Street, Stuart, FL 34994; to Hearing Officer Arnold H. Pollock, Division of Administrative Hearings, 1230 Apalachee Parkway, Tallahassee, FL 32399-1550; to Theodore Gay, Esq. , DPR, Rhode Bldg. Phase II, 401 Northwest 2nd Avenue, Suite 607, Miami, FL 33123; and to Frederick Wilsen, Esq. , DPR, P. 0. Box 1900, Orlando, FL 32802, this 3rd day of June, 1992.

Director

STATE OF FLORIDA

DEPARTMENT OF PROFESSIONAL REGULATION

DEPARTMENT OF PROFESSIONAL )

REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) DOAH CASE NO. 91-0407

) DPR CASE NOS. 0171408

RICHARD L. BOHNER, and ) 0167120

BOHNER REAL ESTATE )

)

Respondent. )

)

CORRECTED FINAL ORDER

On May 19, 1992, the Florida Real Estate Commission heard this case to issue a Final Order.

Hearing Officer Arnold H. Pollock of the Division of Administrative Hearings presided over a formal hearing on February 13, 1992. On April 1, 1992, he issued a Recommended Order, a copy of which is attached hereto as Exhibit A and made a part hereof.

The Petitioner filed Exceptions to the Recommended Order. A copy of said Exceptions is attached hereto as Exhibit B and made a part hereof.

The Petitioner specifically took exception to the Hearing Officer's Conclusion of Law that, since the Respondent owned the rented property, any method the Respondent used to handle the tenant's security deposit and last month's rent was beyond the jurisdiction of the Commission.

The Petitioner further took exception to the Hearing Officer's Conclusion that excused or ignored Paragraphs 2, 3 and 10 of the Findings of Fact in the Recommended Order. These Findings of Fact state that the Respondent placed the advance security deposits in an interest-bearing trust account, when the lease

provided that the funds were to be held by agent Bohner Real Estate in a non- interest-bearing escrow account.

After hearing arguments of counsel and upon a complete review of the record, the Commission adopts the Petitioner's Exceptions to the Hearing Officer's Recommended Order. The Commission cites the lease agreement as evidence that the Respondent was acting in the capacity of a broker in a business transaction. The Commission finds that the terms of the lease used by Respondent identified Bohner Real Estate as the agent and that the lessee dealt with the Respondent as a broker. The lease further outlined the duties to be performed by the Respondent, including the placing of deposits in a non- interest-bearing account to be held by the agent, Bohner Real Estate. The Commission finds that Respondent Richard L. Bohner failed to maintain the funds in an escrow account.

Therefore, the Commission adopts the Hearing Officer's Findings of Fact, rejects the Hearing Officer's Conclusions of Law, and accepts the Petitioner's Exceptions to the Conclusions of Law.

Accordingly, the Commission finds the Respondents guilty of culpable negligence and breach of trust in violation of s.475.25(1)(b), Florida Statutes, as alleged in Counts I and II of the Administrative Complaint, and in violation of s.475.25(1)(k), Florida Statutes, as alleged in Counts III and IV of the Administrative Complaint.

The Florida Real Estate Commission therefore ORDERS that Respondent Richard

1. Bohner be placed on probation for a period of one year, subject to the following terms and conditions:

   
   

   1. The licensee shall notify the Division of Real Estate of any changes in address or employment.

      
      

   2. The licensee shall not violate any provisions of Chapter 475, Florida Statutes, or Rules adopted by the Commission.

      
      

   3. The licensee shall not be convicted or found guilty of a crime in any jurisdiction.

      
      

   4. The licensee shall enroll in and satisfactorily complete a 30-hour broker management course within one (1) year of the filing date of this Order.

The Commission further ORDERS that Respondent Richard L. Bohner pay an administrative fine of $1000.00.

This Order shall be effective 30 days from date of filing with the Clerk of the Department of Professional Regulation. However, any party affected by this Order has the right to seek judicial review, pursuant to s.120.68, Florida Statutes, and to Rule 9.110, Florida Rules of Appellate Procedure.

Within 30 days of the filing date of this Order, review proceedings may be instituted by filing a Notice of Appeal with the Clerk of the Department of Professional Regulation at 400 West Robinson Street, Suite 309, Orlando, Florida 32801. At the same time, a copy of the Notice of Appeal, with applicable filing fees, must be filed with the appropriate District Court of Appeal.

DONE AND ORDERED this 19th day of May 1992 in Orlando, Florida.

Darlene F. Keller, Director Division of Real Estate

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true copy of the foregoing was sent by U.S. Mail to: Richard L. Bohner and Bohner Real Estate, 205 East Osceola Street, Stuart, FL 34994; to Hearing Officer Arnold H. Pollock, Division of Administrative Hearings, 1230 Apalachee Parkway, Tallahassee, FL 32399-1550; to Theodore Gay, Esq., DPR, Rhode Bldg. Phase II, 401 Northwest 2nd Avenue, Suite 607, Miami, FL 33128; and to Frederick Wilsen, Esq., DPR, P.O. Box 1900, Orlando, FL 32802, this 11th day of August 1992.

DARLENE F. KELLER

Director

Docket for Case No: 91-000407

Orders for Case No: 91-000407