STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, DIVISION OF REAL ) ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 90-4522

) RICHARD SHINDLER and GLOBAL ) REAL ESTATE & MANAGEMENT, INC., )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to Notice, this cause was heard by Linda M. Rigot, the assigned Hearing Officer from the Division of Administrative Hearings, on January 9, 1991, in Miami, Florida.

APPEARANCES

For Petitioner: James H. Gillis, Esquire

Department of Professional Regulation Division of Real Estate, Legal Section

400 West Robinson Street, Suite N-308 Hurston Building, North Tower

Post Office Box 1900 Orlando, Florida 32802-1900

For Respondents: Harold M. Braxton, Esquire

Suite 400, One Datran Center 9100 South Dadeland Boulevard Miami, Florida 33156-7815

STATEMENT OF THE ISSUE

The issue presented is whether Respondents are guilty of the allegations contained in the Administrative Complaint filed against them, and, if so, what disciplinary action should be taken against them, if any.

PRELIMINARY STATEMENT

Petitioner, Department of Professional Regulation, Division of Real Estate, filed an Administrative Complaint against Respondents Mark H. Adler, Richard Shindler, and Global Real Estate & Management, Inc., alleging that each Respondent had violated statutory provisions regulating their conduct as a real estate broker or salesman. Respondents Richard Shindler and Global Real Estate & Management, Inc., timely requested a formal hearing regarding the allegations contained in that Administrative Complaint. Respondent Mark H. Adler entered into a settlement agreement with Petitioner which resolved those allegations

contained in the Administrative Complaint as to Respondent Adler. This matter was transferred to the Division of Administrative Hearings for conduct of the formal proceeding requested by Respondents Richard Shindler and Global Real Estate & Management, Inc.

Petitioner presented the testimony of Respondent Richard Shindler and of Mark H. Adler, Jay I. Hirsch, Roberto Castro, and Kenneth G. Rehm. Respondent Richard Shindler testified on behalf of both Respondents and presented the testimony of Paul Shindler. Additionally, Petitioner's Exhibits numbered 3, 5, and 8-14, and Respondents' Exhibit numbered 1 were admitted in evidence.

All parties submitted post-hearing proposed findings of fact. A ruling on each proposed finding of fact can be found in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. At all times material hereto, Respondent Richard Shindler has been a licensed real estate salesman in the State of Florida, having been issued License No. 0395044. The last license issued was as a salesman with Global Real Estate & Management, Inc.

   
   

2. At all times material hereto, Respondent Global Real Estate & Management, Inc., has been a corporation registered as a real estate broker in the State of Florida, having been issued License No. 0223589.

   
   

3. At all times material hereto, Mark H. Adler was licensed and operated as the qualifying broker and officer of Global Real Estate & Management, Inc. Adler's license is currently under suspension by agreement with Petitioner as a result of the activities complained of in the Administrative Complaint filed in this cause.

   
   

4. At no time has Respondent Shindler been a director or officer of Respondent Global Real Estate & Management, Inc.

   
   

5. At all times material hereto, Respondent Shindler has been the sales manager for Respondent Global Real Estate & Management, Inc. As the sales manager, Respondent Shindler sometimes helped other salesmen structure financing and helped them with other problems. Respondent Shindler was not responsible for the collection of funds from individual salesmen. Each individual salesman was responsible for collecting funds from any real estate transaction and giving those funds to Respondent Global's bookkeeper for deposit. As sales manager, Shindler was a signatory on the escrow account in order to make disbursements for small transactions mainly involving rental properties. In addition, Respondent Shindler was responsible for the hiring and firing of office personnel. However, he had no control over the contracts of other salesmen.

   
   

6. On March 13, 1989, Respondent Shindler, as a private purchaser, made two purchase offers for two pieces of property owned by the same sellers. The purchase offers were for $115,000 and $80,000, respectively, and required that Respondent Shindler place $6,000 and $5,000, respectively, into Respondent Global's escrow account as a deposit on the purchase of the properties. Respondent Global and real estate broker Jay Hirsch were to receive commissions on the sale of the properties. Those offers to purchase disclosed in writing that Respondent Shindler was also a licensed real estate salesman.

7. Although both offers to purchase were accepted by the sellers, the transactions involving the purchase of these properties did not close due to Respondent Shindler's inability to obtain financing, which was a contingency of the contracts. In October, 1989, demands for the release of the escrowed monies were made by the sellers and by the sellers' broker Jay Hirsch. They made demand upon Respondent Global's attorney. Additionally, Jay Hirsch made demand on Mark Adler by telephone and then by demand letter to Adler, who, as the qualifying broker for Respondent Global, was responsible for the release of the escrowed funds.

   
   

8. Subsequent to the demands made by the sellers and their broker, Respondent Global filed a complaint for interpleader. The escrowed deposits were eventually disbursed pursuant to a settlement among the parties claiming an interest in the escrowed deposits.

   
   

9. In March, 1990, Petitioner began an investigation of the Respondents and Adler. Investigators Castro and Rehm both participated in the investigation. Investigator Castro believed Respondent Shindler to be the office manager of Respondent Global.

   
   

10. During the initial interview with Respondent Shindler, he produced records which indicated that a deposit of $14,265.69 had been made on January 13, 1989, into Respondent Global's escrow account. This check had been given by Respondent Shindler to Global's bookkeeper for deposit. This deposit represented proceeds from the sale of property owned by Respondent Shindler's brother Paul, and was placed in escrow in anticipation of the offers to purchase made by Respondent Shindler on the two properties involved in this cause.

    
    

11. Investigator Rehm examined the escrow account bank records and determined that for a two-month period the escrow account balance had dropped below the minimum $11,000 balance required by the two contracts in question herein alone.

    
    

12. Initially, Respondent Shindler advised the investigators that the bank where the escrow account was maintained had represented that it had debited the escrow account as a result of a lien placed on that account by the Internal Revenue Service. Upon further investigation, Respondent Shindler advised the investigators that the bank itself had withdrawn $3,200 from Global's escrow account to cover a shortage in Respondent Global's operating account.

    
    

13. At all times material hereto, both Adler and Respondent Shindler were signatories on the escrow account.

    
    

14. As part of its investigation, Petitioner served a subpoena on Maria Aguerra, Respondent Global's bookkeeper, requesting from Adler, or Respondent Shindler, or the custodian of records for Respondent Global Real Estate, all contracts, leases, agreements, monthly bank statements, deposit slips, and cancelled checks for all accounts for the period of January 1, 1989, through March 22, 1990. Some of the requested documents were initially unavailable because they had previously been sent to the Florida Real Estate Commission. Although Adler testified that he was initially unaware that a subpoena had been served, he was given a 30-day extension to produce the records when he met with investigators Castro and Rehm on May 1, 1990. Although Adler had both the responsibility for and control over the records of Respondent Global, he was not fully familiar with the records, and the bookkeeping was in disarray.

15. At all times material hereto, Adler, as the broker for Respondent Global, was responsible for operating the Global office, for overseeing Global's escrow account, for reviewing contracts, and for being aware of the day-to-day events in the Global office. In addition, as the broker, Adler was required to be an officer of the corporation, to be a signatory on the escrow account, to have prepared and to sign the monthly escrow account reconciliations, and to respond to Petitioner if there were complaints or requests for production of documents.

    
    

16. Adler, as the broker for Respondent Global, did not reconcile and sign escrow account statements on a monthly basis since he was not aware of the requirement that he do so. However, Adler did testify that he was aware of his responsibility for escrowed funds.

    
    

17. At no time did Respondent Shindler have the responsibility to maintain Global's escrow account or to reconcile the escrow account on a monthly basis.

    
    

18. At no time did Respondent Shindler represent that he was the broker for Respondent Global or that he was a broker. Respondent Shindler did not state to investigator Rehm that he was acting as the broker for Global or that Adler had simply lent Adler's license to Shindler to use.

    
    

19. At no time did Adler and Respondent Shindler enter into an agreement whereby Shindler would act as the broker for Global using Adler's broker's license, and Adler was never paid any monies for any use of his broker's license. Adler testified that his involvement with Global's business had declined as he had pursued his growing interest in performing appraisals.

    
    

    CONCLUSIONS OF LAW

    
    

20. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes (1990).

    
    

21. The Administrative Complaint herein was filed against Mark H. Adler, Richard Shindler, and Global Real Estate & Management, Inc. The Administrative Complaint contains nine counts. Counts I, IV, and VI relate only to Mark H. Adler. Adler and Petitioner have entered into a settlement stipulation which disposed of those counts of the Administrative Complaint. Accordingly, the only counts remaining for determination herein are those counts relating to either Respondent Shindler or Respondent Global Real Estate & Management, Inc. The remaining counts are Counts II, III, V, VII, VIII, and IX.

    
    

22. Counts II and III allege that Respondents Shindler and Global Real Estate, respectively, are guilty of culpable negligence or breach of trust in a business transaction, in violation of Section 475.25(1)(b), Florida Statutes. The evidence is uncontroverted that on March 13, 1989, Respondent Shindler, as a private purchaser and not as a real estate salesman, made two purchase offers for two pieces of property; pursuant to those purchase offers, Respondent Shindler was required to place and did place $11,000 in Respondent Global's escrow account as a deposit on those properties; the offers to purchase were accepted by the sellers; no closing ever took place; demand was made on Mark Adler and on Respondent Global's attorney for the deposit monies; Respondent Global filed an interpleader action; and the interpleader proceeding was subsequently settled. Petitioner has not met its burden of proof as to Counts II and III of the Administrative Complaint. As to Respondent Shindler, there is no prohibition against real estate salesmen purchasing property, and not every

    failure to close a real estate transaction is due to culpable negligence or breach of trust. As to Respondent Global, Global's only involvement was as the escrow agent and Global was to share in the commission. Petitioner has failed to disclose what facet of the real estate transaction Petitioner maintains constitutes culpable negligence or breach of trust on the part of either Respondent.

    
    

23. Count V of the Administrative Complaint alleges that Respondent Global is guilty of having failed to maintain trust funds in the real estate brokerage escrow bank account or some other proper depository until disbursement thereof was properly authorized, in violation of Section 475.25(1)(k), Florida Statutes. The evidence is uncontroverted that a deposit of $14,265.69 was made into the Global escrow account for the purpose of covering the deposit monies required under Respondent Shindler's offers to purchase. The evidence indicates that the bank at which Global maintained its escrow account unilaterally and without notice to Global transferred funds from Global's escrow account to Global's operating account to cover a shortage in the operating account. Respondent Global cannot be held responsible for that. However, the documents admitted in evidence indicate that the transfer occurred on May 26, 1989. The documentary evidence further indicates that the ending balance for the escrow account on September 18, 1989, was $9,564.70, and the statement of account as of October 16, 1989, reflected an ending balance in the escrow account of $10,809.85. Accordingly, during that time period the Global escrow account did not have sufficient funds since the amount of monies required to be in escrow pursuant to Respondent Shindler's contracts alone was $11,000. Accordingly, Petitioner has proven that Global failed to maintain trust funds, as alleged in Count V of the Administrative Complaint.

    
    

24. Count VII alleges that Respondent Global failed to produce records for inspection when subpoenaed by the Petitioner or its authorized agent, in violation of Section 475.25(1)(k), Florida Statutes, and Rule 21V-14.012, Florida Administrative Code, and, therefore, in violation of Section 475.25(1)(e), Florida Statutes. Petitioner has failed to meet its burden of proof as to this Count. The evidence reveals that a subpoena for the production of records was served on the bookkeeper for Global on March 22, 1990. That subpoena commanded that records be produced at the office of Petitioner. The evidence further reveals that at some point Petitioner's investigators came to Global's office to examine records and that some records were not available at Global's office since they had been sent to Petitioner's office. It is also clear that on May 1, 1990, Petitioner's investigators met with Adler, the qualifying broker for Global, apparently for the first time. On that date, Adler was given an extension of time to produce records, and no evidence was presented regarding the production of records subsequent to May 1. Petitioner has failed to identify what records were not produced pursuant to its subpoena. The vagueness of Petitioner's allegation and proof falls short of that proof required for disciplinary action to be taken.

    
    

25. Count VIII of the Administrative Complaint alleges that Respondent Shindler is guilty of having failed to deposit funds with his employing broker, in violation of Section 475.25(1)(k), Florida Statutes. The evidence is uncontroverted that Respondent Shindler did deposit funds with his employing broker prior to the time that the offers to purchase were submitted to the sellers. Further, it is noteworthy that Shindler was purchasing these properties as an individual and had no obligation to place the deposit funds in the account of his employing broker. Petitioner has failed to prove the allegations contained in Count VIII of the Administrative Complaint.

26. Count IX alleges that Respondent Shindler is guilty of having operated as a broker while licensed as a salesman, in violation of Section 475.42(1)(b), Florida Statutes, and, therefore, in violation of Section 475.25(1)(a), Florida Statutes. Petitioner's basis for this charge is that the failure of Adler, Global's broker, to comply with the laws of this state in operating as a licensed broker implies that Respondent Shindler was performing or was obligated to perform the broker's duties required by Florida law. The only specific allegation regarding Shindler acting as a broker is the allegation of one of the investigators that Shindler acknowledged that he had been operating as a broker and running the real estate brokerage business of Global. The other investigator who was present at that meeting heard no such statement and believed Shindler to be only the "office manager." Shindler has denied making such a statement, and the Department's own witness Adler has denied that such activity occurred. In short, no one else at the meeting heard such a statement, and Petitioner has failed to prove that Shindler in fact acted as a broker.

    Even if Shindler had stated to the investigator that he was acting as a broker, that statement in and of itself is insufficient to establish that Shindler was, in fact, acting as a broker. Further, no evidence was offered that Respondent Shindler performed any function other than as the sales manager for Global.

    Petitioner has presented no evidence that would establish that Shindler performed any of the legal functions of a broker or that Shindler represented or advertised himself to be a licensed broker. It is clear that Adler failed to perform his functions as a broker, and that Petitioner has suspended Adler's license because of that failure to perform his duties. The fact that Adler did not perform his duties does not prove that Shindler acted as a broker.

    Petitioner has failed to meet its burden of proving that Shindler was acting as a broker without a license, as alleged in Count IX.

    
    

27. Rule 21V-24.001, Florida Administrative Code, contains the disciplinary guidelines to be considered, including mitigating or aggravating circumstances. There is no evidence that Global has been previously disciplined or has received a letter of guidance. Global's failure to maintain Shindler's deposits in trust was precipitated by the unilateral action of the bank, followed by Adler's failure to correct the bank's error. No evidence was offered to establish that Global committed a knowing and intentional act. No harm resulted to any customer or to the public, and the deposited funds were available for disbursement upon settlement of the interpleader action. Petitioner has already taken disciplinary action against Adler, the person whose responsibility it was to maintain escrow funds, by suspending Adler's license. An administrative fine in the amount of $500 for the corporate broker is appropriate.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered:

1. Dismissing Counts II, III, VII, VIII, and IX of the Administrative Complaint filed herein;

   
   

2. Finding Respondent Global Real Estate & Management, Inc., guilty of the allegations contained in Count V of the Administrative Complaint; and

   
   

3. Ordering Respondent Global Real Estate & Management, Inc., to pay a fine in the amount of $500 by a date certain.

RECOMMENDED in Tallahassee, Leon County, Florida, this 20th day of March, 1991.

LINDA M. RIGOT

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 20th day of March, 1991.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-4522

1. Petitioner's proposed findings of fact numbered 2-5, 7-9, 11-12c, 13, 14, and 16 have been adopted either verbatim or in substance in this Recommended Order.

2. Petitioner's proposed finding of fact numbered 1 has been rejected as not constituting a finding of fact but rather as constituting a conclusion of law.

3. Petitioner's proposed finding of fact numbered 6 has been rejected as being unnecessary for determination of the issues herein.

4. Petitioner's proposed findings of fact numbered 10, 15, and 17 have been rejected as not being supported by the weight of the credible evidence in this cause.

5. Petitioner's proposed finding of fact numbered 12d has been rejected as being irrelevant to the issues under consideration herein.

6. Respondents' proposed findings of fact numbered 1-22 have been adopted either verbatim or in substance in this Recommended Order.

The transcript of proceedings, together with Petitioner's Exhibits numbered 3, 5, and 8-14 and Respondents' Exhibit numbered 1 which were admitted in evidence.

COPIES FURNISHED:

James H. Gillis, Esquire

Department of Professional Regulation Division of Real Estate - Legal Section

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

Harold M. Braxton, Esquire 9100 South Dadeland Boulevard Suite 400 - One Datran Center Miami, Florida 33156

Jack McRay General Counsel

Department of Professional Regulation Northwood Centre, Suite 60

1940 North Monroe Street Tallahassee, Florida 32399-0792

Darlene F. Keller Division Director Division of Real Estate

Department of Professional Regulation

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

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 90-004522

Orders for Case No: 90-004522