vs. ) CASE NO. 86-3941
MELVIN M. LEWIS, FAYE F. )
LEWIS, LARRY B. LEWIS, )
CINDY L. MORALES, and )
MELVIN M. LEWIS LICENSED )
Respondents. )
Pursuant to notice, the Division of Administrative Hearings by its duly designated Hearing Officer, Sharyn L. Smith, held a formal hearing in this case on March 26, 1987, in Miami, Florida. The parties were represented as follows:
For Petitioner: James H. Gillis, Esquire
For Respondents: Herman T. Isis, Esquire
ISIS & AHRENS, P.A.
At the final hearing, the Petitioner Division of Real Estate, presented the testimony of Kenneth G. Rehm, an investigator with the Department of Professional Regulation. Arthur Trembley, purchaser of the subject property, Edward Guber, Chester Herringshaw, Joe Ratondo, a building zoning official in Metro-Dade, Robert Maxwell, an investigator in the State Attorney's Office, Randy Landes, a mail carrier in Broward County, and Norman Spugal, a real estate salesman and former employee of the Respondent Lewis. Petitioner's Exhibits 3-
26 were offered and admitted into evidence. Ruling was reserved on Petitioner's Exhibit 2 which is hereby admitted.
The Respondents presented the testimony of Melvin Lewis and Respondents' Exhibits 1-10 were offered and admitted into evidence.
The parties filed proposed recommended orders. Each Findings of Fact contained therein is discussed in the Appendix to this Recommended Order.
The Petitioner Department of Professional Regulation, Division of Real Estate (hereafter Department), is a state governmental licensing and regulatory agency charged with the responsibility to prosecute complaints concerning violations of the real estate licensure laws of the State of Florida.
The Respondent Melvin M. Lewis is now and was at all material times a licensed real estate broker in Florida holding license number 0052222. The Respondent Melvin M. Lewis' last known address is Melvin M. Lewis, Licensed Real Estate Broker, Inc., 633 N.W. 167th Street, North Miami Beach, Florida 33162.
The Respondent Faye F. Lewis is now and was at all material times a licensed real estate salesman in Florida holding license number 0052101. The Respondent F. Lewis' last known address is Melvin M. Lewis, Licensed Real Estate Broker, Inc., 633 N.W. 167th Street, North Miami Beach, Florida 33162.
The Respondent Larry B. Lewis is now and was at all material times a licensed real estate salesman in Florida holding license number 0052189. The Respondent L. Lewis' last known address is Melvin M. Lewis, Registered Real Estate Broker, Inc., 633 N.W. 167th Street, North Miami Beach, Florida 33162.
The Respondent Cindy L. Morales is now and was at all material times a licensed real estate salesman in Florida holding license number 0123347. The Respondent Morales' last known address is Melvin M. Lewis, Licensed Real Estate Broker, Inc., 633 N.W. 167th Street, North Miami Beach, Florida 33162.
The Respondent Melvin M. Lewis Licensed Real Estate Broker, Inc., is now and was at all material times a corporation registered as a real estate broker in Florida holding license number 0243694. The Respondent corporation last known address is Melvin M. Lewis, Licensed Real Estate Broker, Inc., 633
N.W. 167th Street, North Miami Beach, Florida 33162.
At all material times, the Respondent M. Lewis was licensed and operating as a qualifying broker and officer for the corporate broker, Melvin M. Lewis Licensed Real Estate Broker, Inc.
The Respondents M. Lewis, F. Lewis, L. Lewis and Morales, from May 4, 1977 to September 9, 1979, as sellers individually and/or in concert as owners, officers and directors of various corporations, including South Florida Property, Inc., and West Dade Acres, Inc., solicited and obtained through telephone and mail, 58 purchasers who entered into agreements for deed for one and one-fourth acre lots located within a sixty-acre parcel of land in Section 21, Range 37, Township 54, Dade County, Florida.
On September 24, 1979, the Respondent Melvin M. Lewis, acting on behalf of South Florida Properties, Inc., a Florida corporation, entered into a deposit receipt contract, as purchasers with InterAmerican Services, Inc., by Lester Gottlieb, as sellers, for the purchase of 60 acres, more or less, more particularly described as:
The N.W. 1/4 of the N.W. 1/4 of the N. 1/2 of the S.W. 1/4 of the N.W. 1/4 Section 21, Township 54, Range 37E, Dade County, Florida.
The total purchase price of the parcel of land was $120,000.00.
The purchase price was to be paid by a down payment of $1,520.00 and a first priority purchase money mortgage and note of $118,479.80.
From May 4, 1977, to September 24, 1979, the Respondents had no ownership interest in the above described 60- acre parcel of land.
The purchase and sale closed on April 22, 1982, as evidenced by a warranty deed wherein title to the 60-acre parcel more particularly described as:
The N.W. 1/4 of the N.W. 1/4 of the N. 1/2 of the S.W. 1/4 of the N.W. 1/4 Section 21, Township 54, S., Range 37 E. lying and being in Dade County, Florida.
was transferred to South Florida Properties, Inc., by Lester Gottlieb, President.
The subject land lies in the East Everglades moratorium area and is subject to Dade County Ordinance 81-121 which is highly restrictive to owners of parcels or lots of land less than 40 acres. It is approximately ten miles west of Krome Avenue and is underwater on the average of nine months a year. As a result of its isolated location, it is accessible only by airboat.
A building moratorium was enacted for the subject land in September, 1981, and is still in effect with no significant change planned for the reasonably foreseeable future.
Upon discovering the increased restrictions on the 60-acre parcel, the Respondents demanded of InterAmerican Services, Inc., a refund of their purchase price.
As a result, Respondents delivered a Quit Claim Deed dated October, 1982, from South Florida Properties, Inc., executed by Melvin Lewis, President.
InterAmerican Services, Inc., delivered a satisfaction of mortgage to South Florida Properties, Inc. on December 7, 1982, which was executed by Lester Gottlieb, President.
Although Respondents had on December 7, 1982, no ownership interest in the real property described in Paragraph 12 supra, they continued to collect payments from purchasers of the 1 1/4 acre lots.
Respondents attempted to, and were successful in, having some of the purchasers of the 1 1/4 acre lots in the area described in Paragraph 12, supra, agree to exchange their "lots" for lots in a parcel of land more particularly described as portions of Sections 32, 33, 34, of range 37, township 55, Dade County, Florida, that was owned by Respondent Cindy Morales' company, West Dade Acres, Inc. These lots which were sold for approximately $7,500 each, were accessible only by airboat, were near the Everglades National Park and were incapable of being actually surveyed because of their isolated location.
Several purchasers, in particular, Chester Herringshaw and Edward Gruber, refused to exchange their original "lots" and continued making payments to South Florida Properties, Inc.
Respondent Cindy Morales deposited into the bank account of West Dade Acres, Inc., one or more of the payments made by Chester Herringshaw and/or Edward Gruber without authority or consent by them to do so.
Respondents Cindy Morales and Melvin M. Lewis have failed to refund to Edward Gruber the money he paid for the purchase of real property and have failed to provide Edward Gruber clear title to the real property sold to him.
To induce purchasers to enter into one or more of the 58 agreements for deed, the Respondents orally represented the 1 1/4 acre lots as valuable property, that the value would greatly increase in the near future, that the property was suited for residential and other purposes and that the purchase of the property was a good investment.
The subdivisions established by the Respondents through corporations they controlled existed only on paper and were formed as part of a telephone sales operation to sell essentially worthless land to unsophisticated out-of- state buyers who believed they were purchasing potentially valuable land for investment and/or retirement purposes. The various corporations which were formed and dissolved by the Respondents, including South Florida Properties, Inc., and West Dade Acres, Inc., were attempts by the Respondents to shield themselves from liability for their fraudulent land sales activities.
The Respondents collected the initial deposits and monthly payments in accordance with the agreements for deed, but the Respondents failed and refused to deliver warranty deeds as promised upon the full payment of the purchase price. The Respondents attempted to obtain the exchange of property agreements without fully and truthfully advising the agreement for deed purchasers of the quality of any of the property they were buying or exchanging.
The Respondents allowed South Florida Properties, Inc., to become defunct without furnishing good and marketable warranty deeds as promised, and without returning the money received, or otherwise accounting for the money received to the various and numerous agreement for deed purchasers, notwithstanding the purchasers' demands made upon Respondents for accounting and delivery of the money paid.
At the request of Respondent Larry Lewis, Randy Landes agreed to sign a document as President of Miami Kendall Estates, Inc. From that point on, Randy Landes did nothing else with or for the company and had no idea of what business Miami Kendall Estates, Inc., transacted.
On November 15, 1982, Miami Kendall Estates, Inc., issued a warranty deed to Vernon Mead granting a parcel of real property to the grantee. Persons unknown executed the warranty deed by forging Randy Landes' name which forgery was witnessed by Respondents Faye Lewis and Cindy Morales and acknowledged by Respondent Melvin Lewis as a notary public.
On September 24, 1982, the Respondent Larry B. Lewis unlawfully and feloniously committed an aggravated battery upon Carlos O'Toole by touching or striking Carlos O'Toole against his will by shooting him with a deadly weapon, to wit, a revolver, in violation of Subsection 784.045(1)(b), Florida Statutes.
On December 8, 1982, Respondent Larry B. Lewis was convicted of a felony and adjudication was withheld. He was on probation for a period of ten
years beginning December 8, 1982, by the Circuit Court of the Eleventh Judicial Circuit of Florida, in and for Dade County, Florida.
Respondent Larry B. Lewis failed to inform the Florida Real Estate Commission in writing within thirty days after pleading guilty or nolo contendere to, or being convicted or found guilty of, any felony.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. Section 120.57(1), Florida Statutes.
By a seven-count complaint, all Respondents have been charged with violating Section 475.25(1)(b), Florida Statutes, which authorizes the Petitioner to take disciplinary action against a licensee found guilty of fraud, misrepresentation, concealment, false premises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction. Additionally, the Respondent L. Lewis is charged with being found guilty of a crime which directly relates to the activities of a licensed broker or salesman or involves moral turpitude for fraudulent or dishonest dealing in violation of Section 475.25(1)(f), Florida Statutes, and is charged with violating Section 475.25(1)(p), Florida Statutes, by failing to inform the Petitioner in writing within thirty days after pleading guilty or nolo contendere to, or being convicted or found guilty of any felony.
License disciplinary proceedings are penal and the Petitioner must establish by clear and convincing evidence the facts alleged to support any violation of law. See, Ferris v. Turlington, Case No. 69, 561, 12 Fla 393, filed July 16, 1987.
In the instant case, the Petitioner established by clear and convincing evidence that the Respondents violated Section 475.25(1)(b), Florida Statutes, by individually and in concert selling property in the Everglades to unsuspecting out- of-state buyers which they knew to be worthless for development and for which they did not have title when sold and could not deliver a clear title when the purchases were completed. Such unscrupulous tactics by licensed real estate salesmen and brokers can not be tolerated in Florida.
The Respondent L. Landes is also guilty of violating Section 475.25(1)(p), Florida Statutes, by failing to inform the Petitioner within thirty days of being convicted of a felony.
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED:
That the real estate license of all Respondents be revoked.
DONE and ENTERED this 11th day of September, 1987 in Tallahassee, Florida.
SHARYN L. SMITH
Filed with the Clerk of the Division of Administrative Hearings this 11th day of September, 1987.
APPENDIX Case No. 86-3941
Petitioner's Proposed Recommended Order Paragraphs 1-29, 31 - accepted as modified.
Lewis was convicted of.
Paragraph 8 - Rejected. The evidence established that the corporations which the Respondents established and controlled sold the various properties.
Paragraphs 9-13 - Accepted.
Paragraph 14 - Accepted. Although sales were made prior to 1981, the land in question was essentially worthless when purchased.
Paragraph 15 - Rejected. The moratoriums, vested rights provision offers virtually no protection to owners of the property.
Paragraphs 16-17 - Rejected. The Respondents merely traded one set of undevelopable property for another.
Paragraphs 18-19 - Rejected. Irrelevant.
Paragraphs 20-21 - Rejected. Neither Mr. Herringshaw nor Mr. Gruber agreed to exchange their property.
Paragraph 22 - Rejected. Contrary to the weight of the evidence. Paragraph 23 - Rejected. Contrary to the weight of the evidence. Paragraph 24 - Accepted.
Paragraph 25 - Rejected. The corporations were formed by the Respondents to receive monies for these fraudulent land schemes.
Paragraph 26 - Rejected. Contrary to the weight of the evidence. Paragraph 27 - Rejected. See No. 25.
Paragraphs 28-30 - Rejected. Contrary to the weight of the evidence. Paragraphs 31-38 - Rejected. Contrary to the weight of the evidence. Paragraphs 39-42 - Accepted.
Paragraphs 43-46 - Rejected.
James H. Gillis, Esquire
Herman T. Isis, Esquire ISIS & AHRENS, P.A.
Dept. of Professional Regulation
