STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 90-4939

)

DAVID SHIHADA and )

SHIHADA REAL ESTATE, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

The final hearing in this case was held on November 9, 1990, in Miami, Florida, before Donald D. Conn, Hearing Officer, Division of Administrative Hearings.

APPEARANCES

For Petitioner: James H. Gillis, Esquire

Division of Real Estate

P. O. Box 1900

Orlando, Florida 32802-1900

For Respondents: John H. Duhig, Esquire

702 City National Bank

25 West Flagler Street Miami, Florida 33130-1770

STATEMENT OF THE ISSUE

The issue in this case is whether the Respondents' real estate licenses should be disciplined based upon charges set forth in the Administrative Complaint which allege violations of Sections 475.25(1)(b),(e), and (k), Florida Statutes.

PRELIMINARY STATEMENT

At the hearing, the parties stipulated that there is no dispute regarding the factual allegations set forth in the Administrative Complaint. The parties stipulated to the introduction of three exhibits.

No transcript of the final hearing was filed. A ruling on each timely filed proposed finding of fact included in the parties' proposed recommended orders is included in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. The Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints which allege, in particular, violations of Chapters 455 and 475, Florida Statutes, and rules promulgated thereunder.

   
   

2. Respondent David Shihada is now and, at all times material hereto, has been licensed as a real estate broker in the State of Florida, having been issued license number 0239798. His most recent broker's license was issued to him at Shihada Real Estate, Inc., 959 S.W. 87th Avenue, Miami, Florida 33174.

   
   

3. Respondent Shihada Real Estate, Inc., is now and, at all times material hereto, has been a corporation registered as a real estate broker in the State of Florida, having been issued license number 0239797. The last license issued was at the address of 959 S.W. 87th Avenue, Miami, Florida 33174.

   
   

4. At all times material hereto, Respondent David Shihada was licensed and operating as the qualifying broker for Respondent Shihada Real Estate, Inc.

   
   

5. From May 3, 1990 to May 10, 1990, Petitioner's investigator, Hector F. Sehwerert, conducted an audit of Respondents' escrow accounts.

   
   

6. This audit revealed that Respondents' pending sales escrow account #0103005236-06 had a total current liability of $22,050, with a current bank balance of $20,596.56, thereby reflecting a shortage of $1,453.44.

   
   

7. In a sworn affidavit dated May 10, 1990, Respondent David Shihada stated that the shortage was a bank "mistake".

   
   

8. On or about May 10, 1990, the Respondents deposited sufficient funds, by check numbered 1931, to cover the $1,453.44 shortage in their escrow account.

   
   

9. On or about May 8, 1990, Gabriel Sanchez, Respondents' salesman who is also an officer at Westchester Bank where Respondents maintain their escrow account, signed a sworn affidavit stating that he had just completed an attempted reconciliation of the aforementioned escrow account from May 1989 to May 2, 1990. Sanchez was unable to find any shortage in Respondents' escrow account. He will be doing monthly reconciliations for the Respondents from May 1990 forward.

   
   

10. From May 31, 1989 to May 2, 1990, the Respondents failed to complete and sign written monthly reconciliation statements comparing their total trust liability with the reconciled bank balance of all trust accounts as required by the rules of the Florida Real Estate Commission.

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the parties, and the subject matter in this cause. Section 120.57(1), Florida Statutes. Since this is a case in which Petitioner is seeking to discipline the licenses of Respondents, the charges set forth in the Administrative Complaint must be proven by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

12. The Administrative Complaint filed by Petitioner against Respondents in this action alleges that their actions, as described above, constitute violations of the following provisions of Chapter 475, Florida Statutes: (1) Section 475.25(1)(b) - culpable negligence and breach of trust in a business transaction; (2) Section 475.25(1)(e) - failure to notify the Florida Real Estate Commission of an escrow dispute; and Section 475.25(1)(k) - failure to immediately place funds in escrow and to follow rules adopted by the Florida Real Estate Commission concerning records to be maintained of escrow accounts.

    
    

13. The facts stipulated to by the parties establish that the Respondents failed to maintain monthly reconciliation records of their escrow account which would have substantiated their claim of a bank error. The fact that there was a

    $1,453.44 discrepancy in their escrow account, when audited by the Petitioner's investigator, is not in dispute. The Respondents, however, immediately deposited funds to cover this shortage and have initiated procedures to insure that monthly reconciliations of their escrow account will be performed by Gabriel Sanchez.

    
    

14. The continued failure of the Respondents to maintain reconciliation records for their escrow account from May, 1989 to May 1990, constitutes culpable negligence in violation of Section 475.25(1)(b) since this was a continuing failure on their part to carry out a basic responsibility of licensed real estate brokers. This violation was not merely technical in nature.

    
    

15. In recommending an appropriate penalty for Respondents' violation in this matter, the disciplinary guidelines set forth in Rule 21V-24.001(3) have been considered, as well as the mitigating and aggravating factors set forth in Rule 21V-24.001(4), Florida Administrative Code.

RECOMMENDATION

Based upon the foregoing, it is recommended that a Final Order be issued concluding that Respondents' actions as found above constitute a violation of Section 475.25(1)(b), Florida Statutes, and further:

1. Imposing an administrative fine in the total amount of $500;

   
   

2. Placing the Respondents' real estate licenses on probation for a period of one year, provided that the Respondents shall not be required to retake any state licensure examination as a result of this proceeding, and provided further that Respondent David Shihada shall provide quarterly escrow account activity reports, including evidence of compliance with Rule 21V-14.012, Florida Administrative Code, as well as evidence of successful completion of the sixty hour post-licensure examination course for brokers in addition to other continuing education required to be completed by licensees in order to maintain their active and current licensure status;

   
   

3. Requiring the Respondent David Shihada to appear before the Florida Real Estate Commission at the last meeting of the Commission preceding termination of his period of probation; and

   
   

4. Dismissing Counts III through VI of the Administrative Complaint.

DONE AND ENTERED this 21st day of November 1990 in Tallahassee, Florida.

DONALD D. CONN

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

Filed with the Clerk of the Division of Administrative Hearings this 21st day of November 1990.

APPENDIX

(DOAH CASE NO. 90-4939)

Rulings on Petitioner's Proposed Findings of Fact:

1. Adopted in Finding 1.

2. Adopted in Finding 2.

3. Adopted in Finding 3.

4. Adopted in Finding 4.

5. Adopted in Finding 5.

6. Adopted in Finding 6.

7. Adopted in Finding 7.

8. Adopted in Finding 8.

9-10. Adopted in Finding 9.

11. Adopted in Finding 10.

COPIES FURNISHED:

James H. Gillis, Esquire Division of Real Estate

P. O. Box 1900 Orlando, FL 32802-1900

John H. Duhig, Esquire 702 City National Bank

25 West Flagler Street Miami, FL 33130-1770

Kenneth E. Easley, Esquire 1940 North Monroe Street Tallahassee, FL 32399-0792

Darlene F. Keller, Director Division of Real Estate

P. O. Box 1900 Orlando, FL 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: 90-004939

Orders for Case No: 90-004939