STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 89-5418

)

GERARD J. LATULIPPE, JR., ) HANOVER INTERNATIONAL REALTY, ) INC., AND RENT WORLD, INC. )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Claude B. Arrington, held a formal hearing in the above-styled case on January 4, 1990,, in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: Steven W. Johnson, Esquire

Senior Attorney

Department of Professional Regulation Division of Real Estate

400 West Robinson

Orlando, Florida 332801-1772

For Respondent: William S. Isenberg, Esquire

The 110 Tower, Suite 1200

110 S.E. 6th Street

Fort Lauderdale, Florida 33301 STATEMENT OF THE ISSUES

Whether Respondents committed the offenses alleged by the Administrative Complaint, and, if so, the penalties that should be imposed.

PRELIMINARY STATEMENT

Petitioner filed a multiple count Administrative Complaint against Respondent, Gerard Latulippe (Latulippe), a licensed real estate broker, and against Hanover International Realty, Inc. (Hanover) and Rent World, Inc. (Rent World). Mr. Latulippe serves as the qualifying broker for these two corporations. The Administrative Complaint contains a total of thirty counts and details five separate real estate transactions. Counts 25-30, which includes the only counts filed against Rent World, were dismissed without prejudice by

Petitioner at the formal hearing. The remaining counts may be briefly described as follows:

1. Counts 1-6 concern a $1,000 deposit in a transaction involving the Estate of Louise Pio Meritai, as Seller. Respondent charges that Mr. Latulippe and Hanover comitted acts which violated the provisions of Section 475.25(1)(b), (d), and (k), Florida Statutes, during the course of this transaction.

   
   

2. Counts 7-12 concern deposits totaling $2,000 in a transaction involving Elwyn Jacobs, as Trustee, Buyer, and Carl and Dominica Palmisciono, as Sellers. Respondent charges that Mr. Latulippe and Hanover committed acts which violated the provisions of Section 475.25(1)(b), (d), and (k), Florida Statutes, during the course of this transaction.

   
   

3. Counts 13-18 concern a deposit of $1,000 in a transaction involving Elwyn Jacobs, as Trustee, Buyer, and Carol A. Neal, as Seller. Respondent charges that Mr. Latulippe and Hanover committed acts which violated the provisions of Section 475.25(1)(b), (d), and (k), Florida Statutes, during the course of this transaction.

   
   

4. Counts 19-24 concern a deposit in a transaction between Mr. Latulippe as owner and Paul Boulware and Lyn Snody, as tenants and purchasers. Respondent charges that Mr. Latulippe and Hanover committed acts which violated the provisions of Section 475.25(1)(b), (d), and (k), Florida Statutes, during the course of this transaction.

   
   

   Respondents disputed the factual allegations of the Administrative Complaint and timely requested a formal hearing of this matter. This proceeding followed.

   
   

   At the hearing, Petitioner presented the testimony of Georgia Kraff, Dominica Palmisciono, Judy Bloom, Elaine Kirkwood, James Dietz, Dorothy MacIntosh, and Lyn Snody. The testimony of Elwyn Jacobs was presented in the form of a late-filed deposition exhibit on February 13, 1990. Petitioner submitted, in addition to the late-filed deposition exhibit, a total of 21 exhibits, 19 of which were admitted into evidence. The two exhibits which were not admitted into evidence related to Counts 25-30, the counts that were dismissed without prejudice by Petitioner. Respondent testified on his own behalf and presented two documentary exhibits which were accepted into evidence. Respondent presented no other testimony and offered no other exhibits.

   
   

   No transcript of the proceedings has been filed. Specific rulings on the proposed findings of fact submitted by Petitioner may be found in the appendix to this Recommended Order. No proposed findings of fact were filed by Respondent.

   
   

   FINDINGS OF FACT

   
   

   1. Petitioner is a regulatory agency of the State of Florida charged with the responsibility of investigating and prosecuting complaints against real estate professionals, including licensed real estate salesmen.

      
      

   2. At all times pertinent to this case, Respondent, Gerard Latulippe, (Latulippe) was licensed by Petitioner as a real estate broker in the State of Florida in accordance with Chapter 475, Florida Statutes.

   3. At all times pertinent to this case, Respondent, Hanover International Realty, Inc., (Hanover) was a corporation registered as a real estate broker in the State of Florida in accordance with Chapter 475, Florida Statutes, with Mr. Latulippe as the qualifying broker.

      
      

   4. On November 17, 1987, Mr. Latulippe obtained a sales contract entered into by First United Realty, Inc., as purchaser, and the Estate of Louise Pio Meritai (Meritai Estate), as seller, at a sales price of $34,000. The contract provided that a deposit of $1,000 was to be placed with Hanover. The transaction did not close because the purchaser was unable to obtain financing. Neither Mr. Latulippe nor Hanover received the deposit required by the contract.

      
      

   5. On May 11, 1988, Georgia A. Kraff, on behalf of the Meritai Estate, made demands upon Mr. Latulippe and Hanover for the delivery of the deposit money.

      
      

   6. On June 26, 1988, Mr. Latulippe, proceeding as if there were a deposit, prepared and delivered to the Meritai Estate a release of deposit receipt agreement which provided that $500 would be delivered to the Meritai Estate,

      $250 would be returned to Florida First Realty as the listing broker, and $250 would be retained by Hanover.

      
      

   7. On June 27, 1988, Mr. Latulippe and Hanover stated in a letter to the attorney for the Meritai Estate the following:

      
      

      We have in our possession a check for

      $1,000.00 for the Pio Meritai Estate.

      $500.00 for the Estate, $250.00 for Florida First Realty and $250.00 for Hanover International Realty. We are prepared to release these funds as soon as we are authorized by the parties.

      Enclosed please find also a release of deposit form. ...

      
      

   8. On August 10, 1988, the Meritai Estate signed the release of deposit form which was returned to Hanover. Florida First Real Estate, as listing broker, did not execute the release agreement, but there was no evidence that it was called upon to do so.

      
      

   9. As of August 10, 1988, neither Mr. Latulippe nor Hanover had advised the Meritai Estate that no deposit had been received, nor had these Respondents notified the Florida Real Estate Commission or Petitioner that it had received demands on a deposit that had never been received. No monies were paid by Respondents to the Meritai Estate or to Florida First Real Estate.

      
      

   10. On February 9, 1988, Respondent Latulippe obtained two sales contracts for the sale of two condominium units. On each contract, the purchase price was

       $34,600 and for each contract a $1,000 deposit was to be made with Hanover's escrow account. Elwyn Jacobs, trustee, was the purchaser on both contracts and Carl and Dominica Palmisciono were the sellers on both contracts. The purchaser subsequently defaulted on both contracts and neither of these contracts closed. The purchaser did not make the deposits into Hanover's escrow account as required by the contracts.

   11. On June 17, 1988, the Palmiscionos made demands upon the Respondents for delivery of the deposit money. On June 27, 1988, Mr. Latulippe prepared and delivered a release of deposit receipt agreement which provided that $1,000 was to be delivered to the Palmiscionos, $500 was to be delivered to International Partners Realty, Inc., as the listing broker, and $500 was to be retained by Respondents.

       
       

   12. On June 28, 1988, the sellers signed the release of deposit form and returned it to the Respondents. As of June 28, 1988, neither Mr. Latulippe nor Hanover had advised the Palmiscionos that neither deposit had been received, nor had these Respondents notified the Florida Real Estate Commission or Petitioner that it had received demands on deposits that had never been received. No monies were paid by these Respondents to the Palmiscionos or to International Partners Realty, Inc.

       
       

   13. On February 23, 1988, Mr. Latulippe obtained a sales contract for the sale of a condominium unit for the sum of $47,200. Carol A. Neal was the owner and seller and Elwyn Jacobs, trustee, was the purchaser on this contract. The contract required the purchaser to deposit the sum of $1,000 in Hanover's escrow account. This contract did not close as a result of the purchaser's default. The purchaser did not make the deposit into Hanover's escrow account as required by the contract.

       
       

   14. On July 8, 1988, the seller made demands upon the Respondents for the delivery of the deposit money and furnished Respondents with a release of deposit agreement. This agreement was never fully executed and no funds were disbursed to the seller. On July 26, 1988, and on August 10, 1988, additional written demands were made on the Respondents on behalf of Carol A. Neal for the disbursement of the escrowed funds. As of August 10, 1988, neither Mr. Latulippe nor Hanover had advised Carol A. Neal that no deposit had been received, nor had these Respondents notified the Florida Real Estate Commission or Petitioner that it had received demands on a deposit that had never been received. No monies were paid by Respondents to the seller or to the listing broker.

       
       

   15. On May 31, 1988, Mr. Latulippe received in trust a deposit in the amount of $1,000 from Paul Boulware and Lyn Snody in a transaction involving of a lease of certain real property with an option to purchase the real property for the sum of $200,000. Mr. Latulippe was the owner of the subject real property and dealt with Mr. Boulware and Ms. Snody at all times in his capacity as the owner of the property as opposed to his capacity as a real estate broker. This transaction did not close and Mr. Latulippe refused to return the deposit he had received, despite the demands from Ms. Snody for him to do so. Mr. Latulippe believed that the $1,000 deposit was his because he believed that Ms. Snody and Mr. Boulware had defaulted under the terms of their contract. Ms. Snody tried to locate Mr. Latulippe or to contact him by telephone, but she was unable to do so. There was a genuine dispute between Mr. Latulippe and Ms. Snody and Mr. Boulware as to the entitlement of the $1,000 deposit. Mr. Latulippe did not notify the Florida Real Estate Commission or Petitioner that it had received demands on this $1,000 deposit.

CONCLUSIONS OF LAW

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

   
   

2. Section 475.25, Florida Statutes, provides, in pertinent part, as follows:

   
   

   1. The commission may ... place a licensee

      ... on probation; may suspend a license ... for a period not exceeding 10 years; may revoke a license ...; may impose an administrative fine not to exceed $1,000 for each count or separate offense; and may issue a reprimand, and any or all of the foregoing, if it finds that the licensee ...

      * * *

      (b) Has been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction in this state or any other state, nation, or territory ...

      * * *

      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, or any secret or illegal profit, or any divisible share or portion thereof, which has come into his hands and which is not his property or which he is not in law or equity entitled to retain under the circumstances However, if the licensee, in good faith, entertains doubt as to what person is entitled to the accounting and delivery of the escrowed property, or if conflicting demands have been made upon him for the escrowed property, which property he still maintains in his escrow or trust account, the licensee shall promptly notify the commission of such doubts or conflicting demands and shall promptly:

         1. Request that the commission issue an escrow disbursement order determining who is entitled to the escrowed property;

         2. With the consent of all parties, submit the matter to arbitration; or

         3. By interpleader or otherwise, seek adjudication of the matter by a court.

      If the licensee promptly employs one of the escape procedures contained herein, and if he abides by the order or judgment resulting therefrom, no administrative complaint may be filed against the licensee for failure to account for, deliver, or maintain the escrowed property.

      * * *

      (k) Has failed, if a broker, to immediately place, upon receipt, any money, fund,

      deposit, check, or draft entrusted to him by any person dealing with him as a broker in escrow ... wherein the funds shall be kept until disbursement thereof is properly authorized ...

      
      

3. Petitioner has the burden of proving by clear and convincing evidence the allegations against Respondents. See Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

   
   

4. Culpable negligence is defined by Black's Law Dictionary, Fifth Edition, at page 931, as follows:

   
   

   Failure to exercise that degree of care rendered appropriate by the particular circumstances, and which a man of

   ordinary prudence in the same situation and with equal experience would not have omitted.

   
   

5. Petitioner has established by clear and convincing evidence that Respondent Latulippe and Respondent Hanover engaged in conduct proscribed by Section 475.25(1) (b), Florida Statutes, during the course of the Meritai Estate transaction, during the course of the Palmisciono transaction, and during the course of the Neal transaction. These violations were established by the failure of Respondents to collect the deposits required by the respective contracts, by its failure to notify the respective sellers that no deposits had been made, and by the actions it took to mislead the sellers in each of the transactions. At best, Respondents' actions were the result of culpable negligence within the meaning of Section 475.25(1)(b), Florida Statutes. The sellers in these three transactions held their respective properties off the market during the period of time they thought they had a bona fide contract pending. Respondents breached the trust that had been placed in them by these sellers in violation of Section 475.25(1) (b), Florida Statutes.

   
   

6. Petitioner has not established by clear and convincing evidence the allegations of the Administrative Complaint that Respondent Latulippe or Respondent Hanover engaged in conduct proscribed by Section 475.25(1)(d) and (k), Florida Statutes. The funds that should have been paid into the Hanover escrow account in the Meritai Estate transaction, the Palmisciono transaction, and the Neal transaction were in fact never paid. Section 475.25(1)(d) and (k), Florida Statutes, relate only to funds that have come into the hands of the licensee. Consequently, these provisions do not apply to funds that should have come into the licensee's hands, but, because of the licensee's negligence, did not.

7. Petitioner failed to establish that Respondent Latulippe violated the provisions of Section 475.25(1)(b), (d), or (k), Florida Statutes, during the course of his dealings with Ms. Snody and Mr. Boulware. This transaction involved a legitimate dispute and not the type behavior proscribed by Section 475.25(1)(b), Florida Statutes. The deposit in question was given to Mr. Latulippe as the owner of the property, not as a licensee.

   
   

8. Rule 21V-24.001, Florida Administrative Code, sets forth the minimum and maximum penalties to be applied in a disciplinary case such as this and provides, in pertinent part, as follows:

   
   

   (3) The minimum penalty for all below listed sections is a reprimand and/or a fine up to $1,000.00 per count. ... The maximum penalties are as listed:

   * * *

   (h) 475.25(1) (b)--Up to 5 years suspension or revocation

   
   

9. Rule 21V-24.001(4) permits Petitioner to deviate from the foregoing guidelines if aggravating or mitigating circumstance are demonstrated. There are no mitigating circumstances presented by this case.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that the Department of Professional Regulation, Florida Real

Estate Commission, enter a final order which:

1. Finds that Respondents Latulippe and Hanover violated the provisions of Section 475.25(1)(b), Florida Statutes, during the course of three separate transactions, to-wit: during the course of the Meritai Estate transaction, during the course of the Palmisciono transaction, and during the course of the Neal transaction.

   
   

2. Suspends all licenses issued by Petitioner to Mr. Latulippe for a period of one year.

   
   

3. Imposes an administrative fine in the amount of $3,000 for which Mr. Latulippe and Hanover will be jointly and severally liable.

DONE and ORDERED this 19th day of March, 1990, in Tallahassee, Florida.

CLAUDE B. ARRINGTON

Hearing Officer

Division of Administrative Hearings The Desoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 19th day of March, 1990.

APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 89-5418

The proposed findings of fact submitted by Petitioner

are adopted in material part by the Recommended Order except as follows:

1. The term "conflicting demands" as used in

   Paragraphs 7, 11, and 15 of the proposed recommended order is not used in the Recommended Order because the escrowed funds never came into the hands of the Respondents Latulippe and Hanover.

   
   

2. The proposed finding in paragraph 20 of the Proposed recommended order that the Respondents misappropriated the $1,000 deposit in the transaction between Mr. Latulippe, as owner and seller, and Ms. Snody and Mr. Boulware as lessee and purchaser, is rejected as being contrary to the findings made and to the conclusions reached.

COPIES FURNISHED:

Steven W. Johnson, Esquire

Department of Professional Regulation

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

William S. Isenberg, Esquire The 110 Tower, Suite 1200

110 S.E. 6th Street

Fort Lauderdale, Florida 33301

Kenneth E. Easley, General Counsel Department of Professional Regulation 1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399-0792

Darlene Keller, Division Director Department of Professional Regulation Division of Real Estate

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

Gerald J. Latulippe

Hanover International Realty, Inc., and Rent World, Inc.

1808 N.W. 115th Way

Coral Springs, Florida 33071

Docket for Case No: 89-005418

Orders for Case No: 89-005418