STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 86-1884

)

DAVID B.C. YEOMANS, JR., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a final hearing in this case on March 10, 1987 in Miami, Florida. The parties were allowed leave thru May 4, 1987 to submit Memoranda supportive of their respective positions. The parties' proposed findings were considered by me in preparation of this Recommended Order. Proposed findings which are not incorporated herein are the subject of specific rulings in an Appendix to the Recommended Order herein.

APPEARANCES

For Petitioner: Arthur R. Shell, Jr., Esquire

Senior Attorney

Department of Professional Regulation, Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801

For Respondent: Robert C. Lane, Jr., Esquire

3081 Salzedo Street

Coral Gables, Florida 33134 ISSUE PRESENTED

The issue presented for decision herein is whether or not the Respondent's real estate brokers' license should be disciplined for conduct, set forth hereinafter in detail, as is more particularly alleged in an Administrative Complaint filed herein dated April 8, 1986.

BACKGROUND

On April 8, 1986, Petitioner, Department of Professional Regulation, Division of Real Estate, charged Respondent, David B.C. Yeomans, a licensed real estate broker, with violating Subsections 475.25(1)(b), (d) and (k), Florida Statutes. Specifically, it was alleged that Respondent loaned his license for

$200 weekly and failed to direct, control or manage the real estate brokerage

services of salesman, Wilfredo Gonzalez and the business activity of G & A Realty and Investments, Inc. (hereinafter G & A). Specifically, it is alleged that Respondent failed to manage the brokerage escrow account maintained by G & A as its relates to a $10,000 escrow deposit and that Respondent therefore failed to account for and deliver escrow funds; failed to maintained and deposit the escrow funds into an escrow account until disbursement thereof was properly authorized and is therefore 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.

Respondent disputed the allegations and requested a formal hearing pursuant to Section 120.57(1), Florida Statutes. The matter was referred to the Division of Administrative Hearings for formal hearing.

At the formal hearing, Petitioner presented the testimony of Alfredo Susi, Tony Figuerdo, Sonia Hernandez, Carol R. Miller, and Theodore J. Pappas.

Petitioner offered and Exhibits 1-9 were received into evidence.

Respondent testified on his own behalf and presented the testimony of Richard W. King. Respondent's Exhibits 1 and 2 were offered and received in evidence.

FINDINGS OF FACT

Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received and the entire record compiled herein, I hereby make the following relevant factual findings.

1. David B.C. Yeomans, Jr., is now and was at all times material hereto a licensed real estate broker having been issued license number 0163386.

   
   

2. During times material, Respondent was the qualifying broker for G & A Realty and Investments, Inc., a corporation licensed as a real estate broker in the State of Florida. 1/

   
   

3. From approximately April 1985 to December 1985, Respondent Yeomans was the president and qualifying broker for G & A.

   
   

4. Wilfredo Gonzalez, a licensed real estate salesman and Alberto Aranda were each 50 percent shareholders of G & A.

   
   

5. Wilfredo Gonzalez, while licensed as a real estate salesman in the employ of G & A, solicited and obtained a client, Alfredo Susi, who made an offer to purchase a commercial property in Dade County, Florida. In connection with the offer, Alfredo Susi entrusted a $10,000 earnest money deposit with Wilfredo Gonzalez to be held in trust in G & A's escrow account.

   
   

6. The seller rejected Susi's offer to purchase whereupon Alfredo Susi made demands upon Gonzalez for return of the earnest money deposit.

   
   

7. Wilfredo Gonzalez attempted to return the earnest money deposit entrusted by Susi via check dated November 18, 1985 drawn on G & A's escrow account. Upon presentation of the subject check by Susi, it was returned unpaid due to non-sufficient funds.

   
   

8. Alfredo Susi has been unable to obtain a refund of the deposit submitted to Gonzalez.

9. Wilfredo Gonzalez used the deposit presented by Susi and did not apprise Respondent Yeomans of what or how he intended to dispose of Susi's deposit.

   
   

10. Alfredo Susi had no dealing with Respondent Yeomans and in fact testified and it is found herein, that Susi's dealings in this transaction, were exclusively with Wilfredo Gonzalez.

    
    

11. Tony Figueredo, a former salesman with G & A, is familiar with the brokerage acts and services performed by Respondent Yeomans and Wilfredo Gonzalez. During his employment with G & A, Figueredo had no dealing with Respondent Yeonans and in fact gave all escrow monies to Wilfredo Gonzalez.

    
    

12. Carolyn Miller, the president and broker for Rite Way, Realtors, an area brokerage entity, is familiar with the customs and practices in the Dade County area brokerage operations.

    
    

13. Ms. Miller considered it a broker's responsibility to supervise all salesman and to review escrow deposits and corresponding accounts approximately bimonthly.

    
    

14. Theodore J. Pappas, Board Chairman for Keyes Realtors, a major real estate brokerage entity in Dade County, also considered it the broker's responsibility to place escrow accounts into the care and custody of a secretary and not the salesman. Mr. Pappas considered that in order to insure that funds were not misappropriated, checks and balances and intensive training programs would have to be installed to minimize the risk of misappropriation of escrow deposits. Mr. Pappas conceded however that it was difficult to protect against dishonest salesman.

    
    

15. Respondent Yeomans has been a salesman for approximately eleven years and during that time, he has been a broker for ten of those eleven years.

    
    

16. During approximately mid 1984, Respondent Yeomans entered into a six

    (6) month agreement with G & A to be the qualifying broker and to attempt to sell a large tract of land listed by Context Realty in Marion County (Ocala). When Respondent agreed to become the qualifying broker for G & A Respondent was a signator to the escrow account for G & A Realty.

    
    

17. Sometime subsequent to Respondent qualifying as broker for G & A, Wilfredo Gonzalez changed the escrow account and Respondent Yeomans was unfamiliar with that fact.

    
    

18. Respondent Yeomans first became aware of Susi's complaint during late 1985 or early 1986.

    
    

19. Respondent Yeomans was not a signator on the escrow account where Wilfredo Gonzalez placed the escrow deposit entrusted by Alfredo Susi. (Petitioner's Exhibit 9)

    
    

20. During approximately November, 1986, Respondent Yeomans made it known to the officers at G & A that he was withdrawing his license from G & A and attempted to get G & A's officers to effect the change. When this did not occur by December, 1986, Respondent Yeomans effectuated the change himself and terminated his affiliation with G & A.

21. During the time when Respondent was the qualifying agent for G & A, there were approximately four employees and little activity to review in the way of overseeing real estate salespersons. During this period, Respondent Yeomans reviewed the escrow account for G & A that he was aware of.

    
    

22. During the time that Respondent Yeomans was qualifying broker for G & A, he was primarily involved in the undeveloped acreage owned by Context Realty and other REO listed property of G & A.

    
    

23. During the period when Respondent Yeomans was qualifying agent for G & A, Wilfredo Gonzalez spent approximately 95 percent of his time managing rental property that he (Gonzalez) owned.

    
    

    CONCLUSIONS OF LAW

    
    

24. The Division off Administrative Hearings has jurisdiction over the subject matter and the parties to this action. Section 120.57(1), Florida Statutes.

    
    

25. The parties were duly noticed pursuant to the notice provisions of Chapter 120, Florida Statutes.

    
    

26. The authority of the Petitioner, Department of Professional Regulation, Division of Real Estate, is derived from Chapter 475, Florida Statutes.

    
    

27. Section 475.25(1), Florida Statutes authorizes the Petitioner to suspend real estate licenses for a period not exceeding 10 years; to revoke a real estate license; to impose an administrative fine; to impose a reprimand or any or all of the above if it finds that a licensee has violated Subsection 475.25(1)(b),(d) or (k), Florida Statutes.

    
    

28. A broker is charged with informing those with whom he deals in the real estate business in a fair, prompt, and complete manner and to apprise clients of all facts which are or may be material to the situation in connection with which he is employed. Rivarde v. McCoy, 212 So.2d 672 (1968). Further, the purpose of the real estate licensing law is to protect the public in its dealings with real estate agents and should be directed at dishonest and unscrupulous operators who cheat, swindle or defraud the public in real estate transactions and not against charges which are predicated upon factual matters pertaining solely to the internal business affairs of a real estate agency. Cannon v. Florida Real Estate Commission, 221 So.2d 240.

    
    

29. Based on the credible evidence introduced herein which indicates that Respondent Yeomans had no dealing with Alfredo Susi; that Respondent Yeomans was not an authorized signator on the escrow account maintained by G & A in which the Susi earnest money deposit was placed and based on other credible evidence indicating that Respondent Yeomans was at all times open, honest and fairly dealt with Alfredo Susi, even in the absence of any principal agent relationship, it must be and it is therefore concluded that insufficient evidence was offered herein to establish that Respondent David B.C. Yeomans is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in a business transaction as alleged within the purview of Subsection 475.25(1)(b), Florida Statutes.

30. Insufficient evidence was offered herein to establish that Respondent, David B.C. Yeomans, failed to account and deliver, in his escrow or trust account, property which was entrusted to him within the purview of Subsection 465.25(1)(d), Florida Statutes.

    
    

31. Insufficient evidence was offered herein to establish that Respondent failed to maintain trust funds in his real estate brokerage account or some other proper depository until disbursement thereof was properly authorized within the purview of Subsection 475.25(1)(k), Florida Statutes. Noteworthy is the fact that Respondent had no knowledge of the escrow deposit made by Alfredo Susi; Respondent was not an authorized signator on the escrow account maintained by G & A in which the Susi's escrow deposit was made. The situation involved herein does not rise to those where there was an active real estate brokerage account which has not been used as a trust account for an extended period of time and which would therefore be sufficient to place the broker on notice that the brokerage firm was not in compliance with law. See Bryer v. Florida Real Estate Commission, 370 So.2d 95.

    
    

32. Finally, the evidence reveals that Respondent managed the salespersons during times material and that he earned the salary paid him by G & A.

RECOMMENDATION

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

That the Administrative Complaint filed herein be DISMISSED. RECOMMENDED this 9th day of June, 1987 in Tallahassee, Leon County,

Florida.

JAMES E. BRADWELL

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 9th day of June, 1987.

ENDNOTE

1/ When initially referred to the Division of Administrative Hearings, G & A Realty and Investments, Inc., was a party Respondent in this proceeding. Prior to the final hearing, G & A entered into a stipulated settlement with Petitioner.

COPIES FURNISHED:

Arthur R. Shell, Jr., Esquire Senior Attorney

DPR-Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801

Robert C. Lane, Jr., Esquire 3081 Salzedo Street

Coral Gables, Florida 33134

Harold Huss, Executive Director Department of Professional Regulation Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801

Van Poole, Secretary Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Wings T. Benton, General Counsel Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 86-001884

Orders for Case No: 86-001884