STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 89-6351

)

MURRAY WIEDER AND )

WIEDER REALTY, INC., )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this case on June 8, 1990, in Fort Lauderdale, Florida, before Stuart M. Lerner, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Steven W. Johnson, Esquire

Department of Professional Regulation Division of Real Estate

Legal Section

400 West Robinson Street

P.O. Box 1900

Orlando, Florida 32802

For Respondents: John W. Bowen, Esquire

Barnett Bank Tower Suite 402

2929 East Commercial Boulevard Fort Lauderdale, Florida 33308

STATEMENT OF THE ISSUES

1. Whether Respondents committed the offenses described in the administrative complaint?

   
   

2. If so, what disciplinary action should be taken against them?

PRELIMINARY STATEMENT

On July 20, 1989, the Department of Professional Regulation (Department) issued an administrative complaint against Respondents charging them with misconduct in connection with their handling of escrow monies. Respondents subsequently requested a formal hearing on the allegations set forth in the complaint. On November 22, 1989, the matter was referred to the Division of Administrative Hearings for the assignment of a Hearing Officer.

At hearing, the Department presented the testimony of two witnesses. It also offered seven exhibits into evidence. All seven exhibits were admitted by the Hearing Officer. The only evidence adduced by Respondents, other than the testimony they elicited on cross-examination, was a single exhibit, which the Hearing Officer received into evidence.

At the close of the evidentiary portion of the hearing, the Hearing Officer advised the parties on the record that their post-hearing submittals had to be filed no later than 30 days following the Hearing Officer's receipt of the transcript of the hearing. The Hearing Officer received the hearing transcript on June 28, 1990. On July 25, 1990, Respondents filed a motion requesting that the deadline for the filing of post-hearing submittals be extended to August 6, 1990. By order issued July 26, 1990, the motion was granted. The Department and Respondents filed their proposed recommended orders on August 6, 1990.

The proposed findings of fact set forth in these proposed recommended orders have been carefully considered and are specifically addressed in the Appendix to this Recommended Order.

FINDINGS OF FACT

Based upon the record evidence and the stipulations entered into by the parties, the following Findings of Fact are made:

1. Murray Wieder (Respondent Wieder) is now, and was at all times material hereto, a real estate broker licensed in the State of Florida pursuant to license number 0303130. His last license was issued c/o Wieder Realty, Inc., 900 S. Pompano Parkway, Pompano Beach, Florida 33069.

   
   

2. Wieder Realty, Inc. is now, and was at all times material hereto, a corporation licensed in the State of Florida as a real estate broker pursuant to license number 0254413. Its last license reflects its address as 900 S. Pompano Parkway, Pompano Beach, Florida 33069.

   
   

3. Respondent Wieder is now, and was at all times material hereto, the President of Wieder Realty, Inc., and its qualifying broker.

   
   

4. Margaret Hoskins has been an investigator with the Department of Professional Regulation for the past year and a half. As part of her responsibilities, she conducts audits of escrow accounts maintained by real estate brokers licensed in the State of Florida.

   
   

5. On April 27, 1989, Hoskins conducted a routine audit of Respondents' escrow accounts.

   
   

6. Her investigation revealed that, on that date, Respondents maintained at Bank Atlantic in Fort Lauderdale, Florida, a noninterest-bearing escrow account (number 005-50199 0-3) with a balance of $14,577.39 and an interest- bearing account (number 005-175922-1) with a balance of $32,955.50.

   
   

7. Respondents' "trust liability" with respect to these two accounts was

   $41,856.50.

   
   

8. The $5,676.39 difference between the total balance of these two escrow accounts and Respondents' "trust liability" represented accrued interest on the monies deposited in the interest-bearing account.

9. Respondents used the accrued interest to cover their incidental operating expenses.

   
   

10. Hoskins further discovered as a result of her investigation that on March 13, 1989, Respondents had deposited $50,000.00 into the noninterest- bearing account, which prior to the transaction had had a balance of $950.58, and that on March 30, 1989, Respondents had withdrawn $25,000.00 from the interest-bearing account and had deposited $25,000.00 in the noninterest-bearing account.

    
    

11. During the course of her investigation, Hoskins spoke with Respondent Wieder, who indicated to her that it was his practice to transfer funds from one of the Bank Atlantic escrow accounts to the other.

    
    

12. Of the fully executed sales contracts and lease agreements Respondents' had on file, only one, the Kutner-Fox contract, contained a provision authorizing Respondents to place escrow monies in the interest-bearing account and to use the accrued interest for incidental operating expenses. The remaining contracts and leases were silent regarding the matter. Hoskins, in her conversation with Respondent, therefore attempted to find out from him if the escrow monies in the interest-bearing account, other than those attributable to the Kutner-Fox contract, had been deposited in the account with the permission of all interested parties. Wieder, who was otherwise very cooperative, failed to provide Hoskins with a direct answer to her question. Hoskins did not thereafter make any effort to contact these parties and ask them if they had given Respondents permission to place monies held in escrow in an interest- bearing account and to use the accrued interest to cover incidental operating expenses.

    
    

13. Later on April 27, 1989, after Hoskins had completed her visit to their office, Respondents withdrew all of the funds from the interest-bearing account and deposited them in the noninterest-bearing account. They then closed the interest- bearing account.

    
    

14. Respondents then transferred from the noninterest- bearing account to their operating account $5,676.39, the amount of interest that had accrued on the monies that had been in the interest-bearing account.

    
    

    CONCLUSIONS OF LAW

    
    

15. The Florida Real Estate Commission (Commission) is statutorily empowered to take disciplinary action against real estate brokers licensed in the State of Florida based upon any of the grounds enumerated in Section 475.25(1), Florida Statutes.

    
    

16. Section 475.25(1)(b), Florida Statutes, authorizes the Commission to discipline a licensed real estate broker who "[h]as 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."

    
    

17. Section 475.25(1)(e), Florida Statutes, gives the Commission authority to punish a licensed real estate broker for "violat[ing] any . . . rule made . .

    . under the provisions of [Chapter 475, Florida Statutes]." Among the rules adopted pursuant to Chapter 475, Florida Statutes, is Florida Administrative Code Rule 21V-14.014, which provides as follows:

    A licensed real estate broker is not prohibited from placing escrow money, entrusted to him by any person dealing with him as a broker, in an interest bearing account. The placement of escrow monies in an interest bearing account, and designation of the party who is to receive the interest, must be done with the permission of all the interested parties. Said escrow account must be in a title company, banking institution, credit union, or savings and loan association located and doing business in Florida. The placement of escrow money must be in only these four types of institutions and not in stock or bond brokerage houses.

    
    

18. Pursuant to Section 475.25(1)(k), Florida Statutes, the Commission may take disciplinary action against a licensed real estate broker who "[h]as failed

    . . . 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 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 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."

    
    

19. The administrative complaint filed against Respondents alleges that they should be disciplined pursuant Section 475.25(1)(b), (e) and (k), Florida Statutes, because they placed escrow monies in an interest-bearing account and used the accrued interest to cover incidental operating expenses without the permission and authorization of all interested parties.

    
    

20. The Department had the burden of proving at hearing that Respondents engaged in such misconduct. See Ferris v. Turlington, 510 So.2d 293 (Fla. 1987). An examination of the record reflects that the Department failed to meet its burden.

    
    

21. The evidence adduced at hearing reveals that, aside from Kutner and Fox, no interested party gave Respondents written permission or authorization to place escrow monies in the interest-bearing account and to use the accrued interest to cover incidental operating expenses. Respondents, however, were under no obligation, pursuant to the statutory and rule provisions referenced in the administrative complaint, to obtain such permission or authorization in writing. 1/ To hold otherwise would impermissibly add to these provisions language that was omitted by their framers. See Chaffee v. Miami Transfer Company, 288 So.2d 209, 215 (Fla. 1974).

    
    

22. It was therefore incumbent upon the Department to show that Respondents not only acted without the interested parties' written consent, but that they lacked their oral consent as well. In arguing that it made such a showing, the Department relies upon Hoskins' testimony that Respondent Wieder was evasive when she questioned him regarding the matter during her April 27, 1989, visit to his office. While Respondent Wieder's evasiveness may reasonably lead some to suspect that Respondents acted without the consent, written or

otherwise, of the interested parties other than Kutner and Fox, mere suspicion is insufficient to support a finding of Respondents' guilt of the offenses charged. Absent additional evidence, such as statements 2/ or testimony 3/ from these interested parties, bearing on the issue of their consent, the Department's proof must be deemed as inadequate to sustain its burden in this case. Accordingly, the instant administrative complaint should be dismissed.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby

RECOMMENDED that the Florida Real Estate Commission issue a final order in this matter finding the proof insufficient to establish Respondents' guilt of the offenses charged and dismissing the instant administrative complaint.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 22nd day of August, 1990.

STUART M. LERNER

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 22nd day of August, 1990.

ENDNOTES

1/ Margaret Hoskins, the Department investigator whose investigation led to the instant charges being filed against Respondents, conceded as much in the testimony she gave at hearing.

2/ Hoskins, as part of her investigation, did not interview any interested party.

3/ The only interested party to testify at hearing was Robert Kutner. Although he testified that he did not know, at the time that he executed his sales contract, that his deposit would be placed in an interest-bearing account and that Weider Realty, Inc., would be able to use the accrued interest for incidental expenses, the sales contract he signed expressly authorized Weider Realty, Inc. to take such action.

APPENDIX TO RECOMMENDED ORDER IN CASE NO. 89-6351

The following are the Hearing Officer's specific rulings on the findings of fact proposed by the Department and Respondents:

The Department's Proposed Findings of Fact

1. Rejected because it is more in the nature of a statement of the law, albeit an accurate one, than a finding of fact.

2-10. Accepted and incorporated in substance, although not necessarily repeated verbatim, in this Recommended Order.

1. First sentence: Rejected because it is not supported by persuasive competent substantial evidence; Second sentence: Accepted and incorporated in substance.

   
   

2. To the extent that this proposed finding states that "[o]n March 13, 1989, the Respondents withdrew $50,000.00 from the interest-bearing escrow account," it has been rejected because it is not supported by persuasive competent substantial evidence. In all other respects, this proposed finding has been accepted and incorporated in substance.

13-16. Accepted and incorporated in substance.

Respondents' Proposed Findings of Fact

1. Rejected because it is more in the nature of a statement of the law, albeit an accurate one, than a finding of fact.

2-7. Accepted and incorporated in substance.

1. Rejected because it is more in the nature of argument concerning the state of the evidentiary record than a finding of fact based upon the record evidence.

   
   

2. Rejected because it is more in the nature of a statement of the case than a finding of fact.

   
   

3. Rejected because it is more in the nature of argument concerning the state of the evidentiary record than a finding of fact based upon record evidence.

11-13. Accepted and incorporated in substance.

14. Rejected because it is more in the nature of argument concerning the significance of evidence than a finding of fact based upon such evidence.

15-16. Accepted and incorporated in substance.

17. Rejected because it is more in the nature of argument concerning the significance of evidence than a finding of fact based upon such evidence.

18-20. Accepted and incorporated in substance.

COPIES FURNISHED:

Steven W. Johnson, Esquire Senior Attorney

Department of Professional Regulation

Division of Real Estate

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

John W. Bowen, Esquire Melvin, Bowen & Melvin, P.A. Suite 402, Barnett Bank Tower 2929 E. Commercial Boulevard

Fort Lauderdale, Florida 33308

Darlene F. Keller Division Director Division of Real Estate

400 West Robinson Street 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. 0163418 0164223

DOAH NO. 89-6351

MURRAY WIEDER and WIEDER REALTY, INC.

Respondent.

/

FINAL ORDER

On October 16, 1990, the Florida Real Estate Commission heard this case to issue a Final Order.

Hearing Officer Stuart M. Lerner of the Division of Administrative Hearings presided over a formal hearing on June 8, 1990. On August 22, 1990, he issued a Recommended Order, a copy of which is attached hereto as Exhibit A and made a part hereof.

Petitioner and Respondents both filed Exceptions to the Recommended Order. Copies of said Exceptions are attached hereto as Exhibits B and C, respectively, and made a part hereof.

The Petitioner and Respondents took exception to the Hearing Officer's Finding of Fact in Paragraph 14 by stating that there was no substantial and competent evidence to support such a finding. The Respondents also took exception to the Hearing Officer's Finding of Fact in Paragraph 8 for the same reason set forth above.

The Petitioner took exception to the Hearing Officer's Conclusions of Law which pertained to Counts I and II of the Administrative Complaint, stating that the testimony and the record do not support the Hearing Officer's conclusions.

After hearing argument of counsel and upon a complete review of the record, the Commission adopts those Findings of Fact outlined in the Petitioner's and Respondents' Exceptions and rejects the Hearing Officer's Findings of Fact in Paragraphs 8 and 14.

Further, after a complete review of the record, the Commission rejects the Petitioner's Exceptions to the Hearing Officer's Conclusions of Law and adopts the remaining Findings of Fact, Conclusions of Law and Recommendation.

Accordingly, the Commission ORDERS that the violations charged in the Administrative Complaint be dismissed.

DONE AND ORDERED this 16th day of October 1990 in Orlando, Florida.

Darlene F. Keller, Director Division of Real Estate

I HEREBY CERTIFY that a true copy of the foregoing was sent by U.S. Mail to John

W. Bowen, Esq., Suite 402 Barnett Bank Tower, 2929 East Commercial Blvd., Ft. Lauderdale, FL 33308; to Hearing Officer Stuart M. Lerner, Division of Administrative Hearings, 1230 Apalachee Parkway, Tallahassee, FL 32399-1550; and to Steven Johnson, Esq., DPR, P 0 Box 1900, Orlando, FL 32802, this 26 day of August 1990.

Docket for Case No: 89-006351

Orders for Case No: 89-006351