STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, DIVISION OF REAL ESTATE )

)

Petitioner, )

)

vs. ) CASE NO. 89-0138

)

DEAN O. VANDERWOUDE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings by its duly designated Hearing Officer, James E. Bradwell, held a public hearing in this case on March 28, 1989, in Clearwater, Florida. Thereafter, the parties completed filing their post hearing proposed Recommended Orders on May 22, 1989, which were considered in preparation of this Recommended Order. Proposed Findings which are not incorporated herein are the subject of specific rulings in an Appendix attached hereto.

APPEARANCES

For Petitioner: James H. Gillis, Esquire

Senior Attorney

Department of Professional Regulation Legal Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

For Respondent: Brian E. Johnson, Esquire

Brian E. Johnson, P.A. 7190 Seminole Boulevard

Seminole, Florida 34642 STATEMENT OF THE ISSUES

The issues presented for decision is whether or not the Respondent's real estate license should be disciplined because he was culpably negligent in a business transaction, failed to maintain trust funds in an escrow account or some other depository until disbursement thereof was properly authorized, failed to account and deliver escrow funds and operated as a broker while licensed as a salesman in violation of subsections 475.25(1)(b), (d), (e) and (k), Florida Statutes.

PRELIMINARY STATEMENT

On September 25, 1988, Petitioner, Florida Department of Professional Regulation, filed its Administrative Complaint alleging that Respondent, Dean O.

Vanderwoude, Anne M. Graffunder (Graffunder) and P.M.M. Capital, Inc., t/a

P.M.M. Properties, had violated Subsections 475.25(1)(b), (d), (e), and (k), Florida Statutes. Based on these charges, the Petitioner accepted the voluntary surrender of license, registration, certificate/permit of Graffunder, the Respondent's broker. Likewise, Petitioner found that P.M.M. Capital, Inc., t/a

1. Properties was in default for having failed to request a hearing or otherwise respond to service of the Administrative Complaint, and revoked the registration of P.M.M. Petitioner further ordered that the license of Graffunder be revoked effective March 22, 1989, by Final Order filed April 5, 1989. No administrative appeal was noticed concerning this final agency action. Based on the remaining charges, Petitioner seeks to discipline Respondent, who is now a real estate broker as defined by statute.

   
   

   Respondent disputed the issues and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes. Thereafter, the initial hearing was set for February 22, 1989, and continued until March 28, 1989, at which time it was held in Clearwater, Florida. The parties were granted leave through May 22, 1989, to file proposed Recommended Orders.

   
   

   Official notice was taken of Sections 20.30, 120, 455, 475, Florida Statutes, and rules and regulations promulgated thereunder.

   
   

   At hearing, Petitioner presented the testimony of Donna Kiser, Gary Alan Dahl, Anne M. Graffunder and Respondent. Petitioner's Exhibits 1-15 were received in evidence without objection. Respondent cross-examined Petitioner's witnesses, testified on his own behalf and presented Exhibits 1 and 2 which were received without objection.

   
   

   Based on the evidence presented at hearing, the following relevant facts are determined:

   
   

   FINDINGS OF FACT

   
   

   1. Petitioner is a state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Chapter 475, Florida Statute, and rules promulgated pursuant thereto.

      
      

   2. Respondent Dean O. Vanderwoude is now a real estate broker and was at all times material hereto a real estate salesman in Florida having been issued license number 0432878 in accordance with Chapter 475, Florida Statutes. On August 15, 1988, Respondent passed an examination to be licensed as a broker and was licensed as a broker on September 1, 1988.

      
      

   3. At all times material hereto, Respondent was licensed as a salesman and operated under the direction, control, or management of a licensed real estate broker, Anne M. Graffunder, and P.M.M. Properties under a 100 percent commission agreement whereby Respondent rented office space from his broker Graffunder. Respondent was affiliated with Graffunder and P.M.M. Capital, Inc., from approximately November 4, 1986, to October 16, 1987. When Respondent became affiliated with P.M.M., he had been licensed less than one year having first been affiliated with Security Realty Florida from December 20, 1985, to November 4, 1986. Under Graffunder's supervision, Respondent received little assistance in the form of guidance or instructions as to the methods and manner of presenting purchase contracts to sellers, little or no office support in the

      form of clerical assistance or technical training in the methods of handling escrow funds, no malpractice insurance coverage in the form of errors or omission's policy and no sales/training seminars.

      
      

   4. On approximately April 6, 1987, Respondent obtained a sales listing from Gary Alan Dahl (Dahl), a real estate investor, concerning real property, the record owner of which was Joe Belcik who had granted to Dahl equitable title to the property by Quit Claim Deed yet unrecorded. (Petitioner's Exhibit 2).

      
      

   5. The real property located at 2785 Adrian Avenue, Largo, Florida, had been purchased by Belcik from Dahl who had previously purchased the property from the Veteran's Administration.

      
      

   6. Respondent was aware of the condition of the title to the property listed by him for sale as he reviewed an abstract of the property.

      
      

   7. On April 6, 1987, prospective purchasers David and Donna A. Kiser (herein purchasers) viewed the real property at 2785 Adrian Avenue, Largo, Florida, and contacted Respondent at a telephone number observed on a "for sale" sign posted on the property. On that date, the purchasers executed a written offer to purchase the property, which offer was prepared by Respondent. (Petitioner's Exhibit 3).

      
      

   8. In conjunction with the offer to purchase, the purchasers tendered an earnest money deposit to Respondent, by cashier's check number 703917, dated April 10, 1987, in the amount of $100.00 made payable to P.M.M. Properties.

      
      

   9. The cashier's check was deposited into the escrow account of P.M.M. Capital, Inc., Sun Bank of Tampa Bay account number 265-014-3405 on April 15, 1987.

      
      

   10. The transaction closed on April 22, 1987. Following the closing, Graffunder issued a check number 140 written on the escrow account of P.M.M. Capital, Inc., Sun Bank/Southeast, account number 265-014-3405, dated April 22, 1987, made payable to Respondent in the amount of $100.00. The check was received by Respondent with Dahl's full permission and consent.

       
       

   11. Respondent represented to the purchasers that the seller, Dahl, had accepted their offer and desired to close the transaction immediately. Toward that end, Dahl came to Pinellas County from Sarasota County and executed all documentation necessary to effectuate the transfer on or before April 15, 1987.

       
       

   12. On April 15, 1987, Respondent met with the purchasers and had them sign all closing documents. This included execution of a closing statement and the Kisers requested an extension in order to obtain the $4,900.00 closing proceeds from Mrs. Kiser's father.

       
       

   13. On April 22, 1987, Mrs. Kiser presented the closing proceeds check and the transaction was finalized. That proceeds check and the $100.00 deposit check were both placed in Graffunder's operating account and pursuant to instructions from Dahl, Respondent received the closing proceeds as agent for Dahl. Dahl and the purchasers completed the closing by executing an Agreement for Deed on April 15, 1987. That agreement provides, in pertinent part, that the purchaser's would pay Dahl the total purchase price of $65,000.00 which included a down payment of $5,000.00 and monthly payments of $557.07 commencing May 1, 1987, and continuing for twenty-nine (29) months at which time the remaining principal balance of $60,073.18 would be payable in the form of a

       balloon payment. Dahl agreed to carry fire insurance for the full insurable value of the property and the purchasers were to have their names added to the policy as additional insureds. Additionally, both parties agreed that a Memorandum of Interest would be filed in the records of Pinellas County at the time of entering into the Agreement for Deed. Finally, the Agreement for Deed represented that there was a first mortgage in favor of Chrysler First and stated the condition that should the purchasers fail to make payments required of them within thirty (30) days after the same becomes due, the seller may, at his option, declare the contract null and void and all monies paid may be retained as full satisfaction and/or liquidated damages.

       
       

   14. Respondent did not provide the purchasers a warranty deed until approximately June 27, 1988, when he first became aware that Dahl had not given one to the Kisers. Respondent acknowledges that given the opportunity to reconstruct that transaction, he would have ensured that the seller provided a Warranty Deed to the purchasers as agreed in the Agreement for Deed. Respondent did not follow-up to ensure that a Memorandum of Interest was filed in the public records of Pinellas County as the parties agreed.

       
       

   15. Within months following the Riser's purchase of the subject property from Dahl, they became disenchanted with the property and ceased making payments under the agreement for Deed causing a large arrearage to accumulate and a subsequent mortgage foreclosure action was initiated.

       
       

       CONCLUSIONS OF LAW

       
       

   16. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this action pursuant to Subsection 120.57(1), Florida Statutes (1987).

       
       

   17. Subsection 475.25, Florida Statutes (1987), authorizes the commission to suspend a license for a period not exceeding ten (10) years; revoke a real estate license; impose an administrative fine not to exceed $1,000.00 for each count or separate offense; and may impose a reprimand or, any or all of the foregoing, if it finds that the licensee has violated Subsection 475.25, Florida Statutes (1987).

       
       

   18. Subsection 475.25(1)(b), Florida Statutes (1987), proscribes culpable negligence and breach of trust in any business transaction.

       
       

   19. Subsection 475.25(1)(d), Florida Statutes (1987), proscribes failure by a licensee to account and deliver a deposit.

       
       

   20. Subsection 475.25(1)(e), Florida Statutes (1987), proscribes having operated as broker while licensed as a salesman.

       
       

   21. Subsection 475.25(1)(k), Florida Statutes (1987), proscribes having failed to maintain trust funds in a real estate brokerage escrow account or some other depository until disbursement thereof is properly authorized.

       
       

   22. Respondent, by failing to ensure that a Warranty Deed and a Memorandum of Interest was provided to the purchasers and was filed in the public records of Pinellas County in connection with the purchaser's property interest in the subject real estate transaction, and his failure to exercise ordinary care by keeping the purchasers informed as to relevant facts surrounding their purchase

       of the Dahl property amounts to culpable negligence and breach of trust in a business transaction within the purview of Subsection 475.25(1)(b), Florida Statutes (1987).

       
       

   23. Insufficient evidence was offered herein to establish that respondent failed to account and deliver a deposit; operated as a broker while licensed as a salesman and failed to maintain trust funds in a real estate brokerage escrow account or some other depository until disbursement thereof was properly authorized. The evidence here reveals that Respondent accounted and delivered all deposits received and operated under the supervision, albeit "loose," of his broker Graffunder and he maintained all trust funds in a Graffunder's depository until disbursements were properly authorized. The one hundred ($100) dollar deposit was placed in an escrow account and the closing funds plus the escrow deposit were properly maintained and disbursed.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law it is RECOMMENDED:

The Petitioner enter a final order finding that an administrative fine of

$500.00 be imposed upon Respondent and his license number 0432878 be placed on probation for a period of sixty (60) days with the condition that the fine be payable to Petitioner within thirty (30) days of entry of the final order.

RECOMMENDED this 29th day of June, 1989 in Tallahassee, Leon County, Florida.

JAMES E. BRADWELL

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 29th day of June, 1989.

COPIES FURNISHED:

James H. Gillis, Esquire

Department of Professional Regulation Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

Brian E. Johnson, Esquire Brian E. Johnson, P.A.

7190 Seminole Boulevard

Seminole, Florida 34642

Kenneth Easley, Esquire General Counsel

Department of Professional Regulation 1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399-0729

Darlene F. Keller, Division Director Division of Real Estate

Department of Professional Regulation Post Office Box 1900

Orlando, Florida 32802

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

AGENCY FINAL ORDER

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

STATE OF FLORIDA DEPARTMENT OF PROFESSIONAL REGULATION

FLORIDA REAL ESTATE COMMISSION

DEPARTMENT OF PROFESSIONAL REGULATION, DIVISION OF REAL ESTATE,

Petitioner,

vs. CASE NO. 0159394

DOAH CASE NO. 89-0138

DEAN O. VANDERWOUDE,

Respondent.

/

FINAL ORDER

On August 15, 1989, the Florida Real Estate Commission heard this case to issue a Final Order. Hearing Officer James E. Bradwell of the Division of Administrative Hearings presided over a formal hearing on March 28, 1989. On June 29, 1989, he issued a Recommended Order, which is adopted by the Florida Real Estate Commission as to all Findings of Fact and Conclusions of Law. A copy of this Recommended Order is attached hereto as Exhibit A and made a part hereof.

However, upon a complete review of the record, the Florida Real Estate Commission finds that the Recommended Penalty be rejected, in part, for the following reason: The penalty of probation was one not authorized by statute at the time the violation occurred.

Therefore, for the reason cited above, the Commission ORDERS that an administrative fine of $500 be imposed upon the Respondent.

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 15th day of August, 1989 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 Brian Johnson, Esquire, 7190 Seminole Boulevard, Seminole, Fl 34642; to Hearing Officer James Bradwell, Division of Administrative Hearings, 1230 Apalachee Parkway, Tallahassee, Fl 32399-1550; and to James Gillis, Esquire, DPR, Post Office Box 1900, Orlando, Fl 32802, this 22nd day of August, 1989.

Director

Docket for Case No: 89-000138

Orders for Case No: 89-000138