STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION, FLORIDA REAL ESTATE COMMISSION,

Petitioner,

vs.

DENNIS MAURICIO MERAZ,

Respondent.

/

Case No. 13-1834PL

RECOMMENDED ORDER

Robert E. Meale, Administrative Law Judge of the Division of Administrative Hearings, conducted the final hearing on July 22-23, 2013, by videoconference in Tallahassee, West Palm Beach, and Miami, Florida.

APPEARANCES

For Petitioner: Susan Leigh Matchett, Esquire

Daniel Brackett, Esquire Magdalena Ozarowski, Esquire Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 42

Tallahassee, Florida 32312

For Respondent: Nancy Pico Campiglia, Esquire

Your Towne Law, P.A.

80 Bonnie Loch Court Orlando, Florida 32806

STATEMENT OF THE ISSUES

The issues are whether Respondent has violated Florida Administrative Code Rule 61J2-14.010(1) and section 475.25(1)(e) and (k), Florida Statutes, by failing to place immediately into escrow a security deposit of $5482; violated section 475.25(1)(u) by not being involved with the daily operations of Advantage International Realty, Inc. (AIR), by being hired to qualify AIR and receiving payment from AIR, and failing to direct, control or manage Jennifer Briceno, a sales associate employed by Respondent, while she provided real estate services to two individuals; and violated section 475.25(1)(d)1. by failing to refund $5308 upon demand by Mr. Mansour and

Ms. Haddad on December 20, 2011. If so, an additional issue is the penalty that should be imposed.

PRELIMINARY STATEMENT

The Amended Administrative Complaint alleges that Respondent was the qualifying broker for AIR from November 8, 2011, through December 6, 2012. During this time, Jennifer Briceno was allegedly a licensed real estate sales associate employed by Respondent.

The Amended Administrative Complaint alleges that, in November 2011, Ms. Briceno helped Morris Mansour and Jackie Haddad procure a lease from December 15, 2011, through April 15,

2012, for 5200 North Ocean Boulevard, Apartment 706, Fort Lauderdale, Florida (Lease).

The Amended Administrative Complaint alleges that, on or about November 16, 2011, Mr. Mansour wired about $5842 to AIR's Bank of America operating account, ending in 6220, as the security deposit for the Lease. The Amended Administrative Complaint alleges that Respondent did not promptly deposit this check into AIR's escrow or trust account. After the lease agreement failed to close, Mr. Mansour, on or about November 29, 2011, signed and faxed a release, which stated that AIR would return to him the security deposit--less wire and application fees.

The Amended Administrative Complaint alleges that, when he did not receive a refund of the security deposit, Ms. Haddad sent an email to Respondent on December 20, 2011, demanding the return of his security deposit. But Respondent allegedly did not return the security deposit to Mr. Mansour or Ms. Haddad.

The Amended Administrative Complaint alleges that Petitioner conducted an office inspection and escrow account audit of AIR on January 5, 2012. The inspection and audit allegedly failed to reveal that AIR maintained an escrow account, but allegedly revealed that AIR maintained an operating account ending in 6220.

The Amended Administrative Complaint alleges that, on January 31, 2012, Respondent cashed a check from AIR, drawn on its operating account ending in 6220, in the amount of $1610.

The Amended Administrative Complaint alleges that, on February 27, 2012, during an interview with one of Petitioner's investigators, Respondent admitted that he was not involved with the day-to-day operations of AIR and had been hired merely to qualify the company.

The Amended Administrative Complaint alleges that, on May 1, 2012, Respondent cashed a check from AIR, drawn on its operating account ending in 6220, in the amount of $3225.

Count One of the Amended Administrative Complaint alleges that Respondent failed to immediately place into escrow the security deposit and thus violated rule 61J2-14.010(1) and section 475.25(1)(e).

Count Two alleges that Respondent failed to immediately place into escrow the security deposit and thus violated section 475.25(1)(k).

Count Three alleges that Respondent was not involved with the daily operations of AIR, was hired to qualify AIR and receive payments from the company, and failed to direct, control or manage Ms. Briceno when, as a sales associate employed by Respondent, she provided real estate services to Mr. Mansour and Ms. Haddad and thus violated section 475.25(1)(k) and (u).

Count Four alleges that Respondent failed to deliver the security deposit to Mr. Mansour or Ms. Haddad on demand on December 20, 2011, and thus violated section 475.25(1)(d)1.

Respondent timely requested a hearing.

At the hearing, Petitioner called six witnesses and offered into evidence 25 exhibits: Petitioner Exhibits 1-5, 7-22, and 24-27. Respondent called one witness, who declined to complete his testimony, and offered into evidence no exhibits. The Administrative Law Judge had disregarded the testimony of Respondent's lone witness, who essentially decided not to testify about his experience with Ms. Briceno for fear of prosecution by Petitioner. All exhibits were admitted.

The court reporter filed the transcript on August 9, 2013.

Petitioner filed its proposed recommended order on August 19, 2013. Due to an emergency involving a member of counsel's family, Respondent timely filed his proposed recommended order on August 26, 2013.

FINDINGS OF FACT

1. At all material times, Respondent has been a licensed real estate broker, holding license numbers 69234 and 3093422. He has never been disciplined.

2. Licensed as a sales associate since 2000, Respondent served as a sales associate with three brokers. Licensed as a real estate broker in 2002, Respondent served as a broker

   
   

   associate with two brokers until, in August 2002, Respondent served as the broker for his first real estate brokerage.

   He served as a broker for two brokerages, much of the time simultaneously, from 2002-05 and 2007-09. For the last five months of 2008, Respondent worked as a broker sales associate for a third brokerage, and, from 2009-11, Respondent was registered as a sole proprietorship broker.

3. From November 14, 2011, through January 6, 2012, Respondent served as the broker for AIR. On November 7, 2011, Respondent was listed as a director of AIR with the Department of State, Division of Corporations.

4. AIR became licensed as a Florida real estate brokerage on November 14, 2011, holding license number 104302. Respondent was the qualifying broker of AIR from November 14, 2011, to January 6, 2012. No longer a brokerage after Respondent resigned as its qualifying broker, AIR resumed operations as a brokerage on March 1, 2012, when Jennifer Briceno served as the qualifying broker. She served in this capacity until March 4, 2013, at which point Petitioner suspended the licenses of AIR and Ms. Briceno by separate emergency orders.

5. Ms. Briceno was first licensed as a sales associate in 2008. She served as a sales associate with an unrelated corporation in Tamarac, Florida from May 28, 2008, to

   
   

   October 24, 2011. Her license was inactive until November 14, 2011, on which date she became a sales associate with AIR.

   On February 17, 2012, she became licensed as a broker and served as a broker associate with AIR until March 1, 2012, at which time she served as its qualifying broker.

6. As noted in paragraph four, from January 6 to March 1, 2012, AIR's brokerage license became invalid due to the lack of a qualifying broker. As noted in paragraph five, Ms. Briceno served at AIR as a sales associate from January 6, 2012, and then as a broker associate from February 17, 2012, until

   March 1, 2012--an eight-week period during which AIR's brokerage license was invalid due to its lack of a qualifying broker.

7. On November 7, 2011, Respondent was listed as a director of AIR with the Department of State, Division of Corporations. At no time was Respondent ever a signatory on the operating account of AIR.

8. Jackie and Sam Haddad and Morris Mansour are residents of Canada and friends. They decided that they wanted to enter into a lease of a residence in Fort Lauderdale for a vacation during the winter of 2011-12. They agreed that

   Mr. and Ms. Haddad would occupy the residence for two months, and Mr. Mansour would occupy the residence for the ensuing two months. For the sake of simplicity, they agreed that

   
   

   Mr. Mansour would take in his name the lease for the entire four months, which was to run from December 15, 2011, through

   April 15, 2012.

   
   

9. Ms. Haddad found the subject property on the Internet and got in touch with Ms. Briceno at an unspecified point in time. At some point, Ms. Briceno sent to Mr. Mansour a blank Agreement to Enter into a Lease and asked him to complete, sign, and return the form to her with a check for the entire rent. Mr. Mansour objected to paying the entire rent and asked that he be allowed to pay half at that time and half upon occupancy.

   Ms. Briceno agreed. Accordingly, on November 12, 2011, Mr. Mansour wired $5500 to AIR and faxed to Ms. Briceno a completed Agreement to Enter into a Lease.

10. AIR did not have an escrow account. Although there was a listing broker for the rental property, Ms. Briceno did not give the deposit check to her. Nor did Ms. Briceno present the funds to AIR's qualifying broker. It appears that

    Ms. Briceno conducted this real estate business and received the funds prior to AIR's obtaining a qualifying broker. In any event, it appears that Ms. Briceno deposited the funds in AIR's operating account.

11. However, on November 12, 2011, Ms. Briceno faxed the signed Agreement to Enter into a Lease to a sales associate of the listing broker. The net of $5482 posted on AIR's general

    
    

    operating account on November 16. On the same day, AIR's bank statement shows a "counter debit" of $5010. From November 16 through the end of January 2012, this account never had sufficient funds to repay the $5500 or net $5482.

12. After receiving the offer to lease from Ms. Briceno, the sales associate of the listing broker spoke with the owner and learned that the cost of short-term insurance precluded a lease for less than one year. By email dated December 1, the sales associate informed Ms. Briceno that the owner would not accept the offer.

13. After not hearing from Ms. Briceno for some time, Ms. Haddad and Mr. Mansour tried to reach Ms. Briceno, but repeated calls to her business and cellphone numbers went unreturned. Mr. Mansour, who intended to occupy the subject property first, finally contacted the sales associate of the

    listing broker and learned that the offer had not been accepted.

    
    

14. At some point, Darwin Briceno, Ms. Briceno's husband, became involved. By email to Ms. Mansour dated November 29, 2011, Mr. Briceno sent a release covering a refund of $5308, net wire fees and an application fee. On December 8, Ms. Haddad sent an email to someone at AIR stating that they were still waiting for their refund of $5308. Getting no response and having learned Respondent's name in the interim Ms. Haddad re- sent the December 8 email to the administrator of AIR--

    
    

    attention: Respondent--and warned that they would retain counsel if they did not hear from Respondent within 24 hours.

15. No one heard from Respondent, who cashed AIR checks on January 31 and May 1 in the amounts of $1610 and $3225, respectively. On February 24, 2012, Mr. Briceno sent

    Mr. Mansour an AIR check in the amount of $5308, but it bounced. The Haddads and Mr. Mansour have never recovered any of their deposit.

16. During the investigation, Respondent admitted to Petitioner's investigator that he was not involved with the day- to-day operation of AIR, and he did not know anything about how AIR had handled the money that Mr. Mansour had sent. Respondent specifically admitted that he was a "broker for hire" at AIR, meaning that he had rented his broker's license to qualify AIR as a real estate brokerage.

17. Respondent's lack of involvement in the business of AIR is confirmed by Karrell Brett, whom Mr. Briceno hired, on behalf of AIR, as a sales associate, as of December 9, 2011, Ms. Brett interviewed with Mr. Briceno, not Respondent. While employed by AIR, Ms. Brett did not know Respondent and believed her broker was Mr. Briceno. Although Ms. Brett decided on her own to advise her clients to deposit any escrow funds with a title company, she never received any instruction from Respondent to deposit escrow funds with a title company.

    
    

18. Respondent never made any attempt to supervise any sales associate or other employee of AIR in the conduct of real estate business on behalf of the corporation that Respondent had qualified as a real estate brokerage. Respondent had been the qualifying broker for two days when the deposit was posted to AIR's account; he was responsible for AIR's failure to account for this money from the point of deposit forward until his resignation. Likewise, Respondent had been the qualifying broker for about six weeks when he received the latter of

    Ms. Haddad's emails demanding a refund of the deposit. Respondent did not ensure that AIR refunded the deposit at that time.

    CONCLUSIONS OF LAW

    
    

19. DOAH has jurisdiction over the subject matter.

    
    

    §§ 120.569 and 120.57(1), Fla. Stat.

    
    

20. Section 475.25(1) provides in part:

    
    

    The commission may deny an application for licensure, registration, or permit, or renewal thereof; may place a licensee, registrant, or permittee on probation; may suspend a license, registration, or permit for a period not exceeding 10 years; may revoke a license, registration, or permit; may impose an administrative fine not to exceed $5,000 for each count or separate offense; and may issue a reprimand, and any or all of the foregoing, if it finds that the licensee, registrant, permittee, or applicant:

    
    

    * * *

    
    

    1. 1. Has failed to account or deliver to any person, including a licensee under this chapter, at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery, any personal property such as money, fund, deposit, check, draft, abstract of title, mortgage, conveyance, lease, or other document or thing of value, including a share of a real estate commission if a civil judgment relating to the practice of the licensee's profession has been obtained against the licensee and said judgment has not been satisfied in accordance with the terms of the judgment within a reasonable time, or any secret or illegal profit, or any divisible share or portion thereof, which has come into the licensee's hands and which is not the licensee's property or which the licensee is not in law or equity entitled to retain under the circumstances.

       . . .

       
       

    2. 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, fund, deposit, check, or draft entrusted to her or him by any person dealing with her or him as a broker in escrow with a title company, banking institution, credit union, or savings and loan association located and doing business in this state, or to deposit such funds in a trust or escrow account maintained by her or him with some bank, credit union, or savings and loan association located and doing business in this state, wherein the funds shall be kept until disbursement thereof is properly authorized . . . . The commission shall establish rules to provide for records to be

       
       

       maintained by the broker and the manner in which such deposits shall be made. . . .

       
       

       * * *

       
       

       (u) Has failed, if a broker, to direct, control, or manage a broker associate or sales associate employed by such broker. A rebuttable presumption exists that a broker associate or sales associate is employed by a broker if the records of the department establish that the broker associate or sales associate is registered with that broker. A record of licensure which is certified or authenticated in such form as to be admissible in evidence under the laws of the state is admissible as prima facie evidence of such registration.

       
       

21. Florida Administrative Code Rule 61J2-14.010(1)

    
    

    states:

    
    

    Every broker who receives from sales associates, principals, prospects, or other persons interested in any real estate transaction, any deposit, fund, money, check, draft, personal property, or item of value shall immediately place the same in a bank, savings and loan association, trust company, credit union or title company having trust powers, in an insured escrow or trust account. The broker must be a signatory on all escrow accounts. If the brokerage entity has more than one broker licensee, then one broker licensee may be designated as the signatory. If the deposit is in securities, intended by the depositor to be converted into cash, the conversion shall be made at the earliest practical time, and the proceeds shall be immediately deposited in said account.

    
    

22. Petitioner must prove the material allegations by clear and convincing evidence. Dep't of Bank. & Fin. v. Osborne Stern & Co., 670 So. 2d 932 (Fla. 1996).

23. Clearly, AIR has violated section 475.25(d)1. and (k) in its mishandling of the deposit that it received from

    Mr. Mansour. The question is whether Respondent is responsible for these violations.

24. The transaction evidently was negotiated prior to Respondent's assumption of the duties of a qualifying broker-- and prior to AIR's authority to engage in real estate brokerage business. Mr. Mansour wired the money two days before Respondent became AIR's qualifying broker. But this international wire transfer did not post on AIR's account until two days after Respondent became AIR's qualifying broker.

25. This case does not raise the issue of whether Respondent may be held strictly liable for the mishandling of the $5500 deposit. Respondent has been a licensed real estate professional for 13 years--the past 11 as a broker. Respondent knew that AIR was engaged in real estate business, but had no idea how AIR handled its escrow monies, nor does it appear that he entered into this relationship with AIR with any intention of doing anything but cashing an occasional check that AIR sent him for the use of his broker's license. During the two days that he was the qualifying broker, Respondent had ample time to

    
    

    undertake his obligations by the time that the $5500 deposit posted, but it would not have mattered if he had had 60 days--he never intended to assume these obligations. Respondent's failure was not merely negligent and reckless; it was intentional.

26. Respondent's failure to account for or deliver the deposit upon demand in late December is another failure to discharge his professional obligations. His failure even to contact Ms. Haddad after receipt of an email directed to him at the email address of AIR's administrator is either a direct failure on Respondent's part, if he received the email, or, if he did not, a reflection of the conditions he had created by renting his broker's license to AIR. In this manner, again, Respondent's failure in this regard was, under either scenario, intentional, not merely negligent and reckless.

27. Lastly, Respondent failed to supervise and control Ms. Briceno or any other professional employees of AIR during Respondent's brief tenure as its qualifying broker. As to this matter too, Respondent's failure was intentional, not merely negligent and reckless. Respondent's sole record activity in connection with AIR appears to have been to have filed the necessary documentation to serve as its qualifying broker, to have cashed a couple of AIR checks, and to have filed the

    
    

    necessary documentation to resign as AIR's qualifying broker after a couple of months.

28. Through Respondent's intentional disregard of his professional obligations, as well as negligence and recklessness, Respondent helped AIR defraud three persons of their $5500 deposit--in return for payments of an unspecified amount of "rent" for his broker's license. The public has been damaged, and Respondent has failed to make restitution on his violations. This last failure suggests a serious lack of insight and raises the probability that, if Respondent remains licensed, this kind of fraud may be perpetrated again by another brokerage that he decides to qualify without any attempt to discharge his professional obligations.

RECOMMENDATION

It is RECOMMENDED that the Florida Real Estate Commission enter a final order finding Respondent guilty of Counts 2, 3, and 4, dismissing Count 1 as duplicative of Count 2, and revoking Respondent's real estate broker's license.

DONE AND ENTERED this 10th day of September, 2013, in Tallahassee, Leon County, Florida.

S

ROBERT E. MEALE

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 10th day of September, 2013.

COPIES FURNISHED:

Nancy Pico Campiglia, Esquire Your Towne Law, P.A.

5465 Lake Jessamine Drive Orlando, Florida 32839

Daniel Brackett, Esquire Department of Business and

Professional Regulation Suite 42

1940 North Monroe Street Tallahassee, Florida 32399

J. Layne Smith, General Counsel Department of Business and

Professional Regulation Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-0792

Darla Furst, Chair Real Estate Commission

Department of Business and Professional Regulation

400 West Robinson Street, N801 Orlando, Florida 32801

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.

Docket for Case No: 13-001834PL

Orders for Case No: 13-001834PL