STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 91-0376

)

GUSTAVO MEJIDO and G.M. )

REALTY, INC., )

)

Respondents. )

)

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 April 16, 1991, in Miami, Florida.

APPEARANCES

For Petitioner: Steven W. Johnson, Esquire

Florida Department of Professional Regulation Real Estate - Legal Section

Hurston Building - North Tower Suite N-308

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

For Respondent: Armando E. Lacasa, Esquire

Bentata Hoet & Associates Zamora Segall Lacasa & Schere 3191 Coral Way

Third Floor

Miami, Florida 33145 STATEMENT OF THE ISSUE

Whether Respondents committed the offenses set forth in the Administrative Complaint and the penalties, if any, that should be imposed.

PRELIMINARY STATEMENT

Petitioner filed an Administrative Complaint against Respondent G.M. Realty, Inc., and its qualifying real estate broker, Respondent Gustavo Mejido. The Administrative Complaint contains certain factual allegations relating to an audit of the escrow/trust account maintained by Respondents and to a discrepancy in said account. The Administrative Complaint also alleges that Respondents

failed to make and sign written monthly reconciliation statements comparing their total trust liability with the reconciled bank balances of all trust accounts as required by the rules of the Florida Real Estate Commission. Based on those factual allegations, Petitioner contends that Respondents violated the provisions of Sections 475.25(1)(b),(e), and (k), Florida Statutes.

Other allegations against Respondents were dismissed with prejudice by Petitioner at the Formal Hearing. Those allegations were that Respondents had failed to make certain radon gas disclosures and that they had failed to make certain real estate agency disclosures.

Respondents admit that there was a discrepancy in the escrow/trust account, contend that the discrepancy was the result of a clerical error, and argue that due to mitigating circumstances no penalty should be imposed.

At the formal hearing, Petitioner called one witness, Hector Sehwerert and introduced three exhibits, each of which was accepted into evidence. Mr.

Sehwerert is an investigator employed by Petitioner. Respondents called as witnesses Manuel Mejido and Gustavo Mejido and introduced two exhibits, which were accepted into evidence. Manuel Mejido, the brother of Respondent Gustavo Mejido, is an accountant who keeps the books and records of the Respondent G.M. Realty, Inc.

No transcript of the proceedings has been filed. Rulings on the parties' proposed findings of fact may be found in the Appendix to this Recommended Order.

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 law of the State of Florida, in particular, Section 20.30, Florida Statutes, and Chapters 120, 455, and 475, Florida Statutes, and the rules promulgated pursuant thereto.

   
   

2. The Respondent Gustavo Mejido is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0059653 in accordance with Chapter 475, Florida Statutes. The last license issued said Respondent as a broker was for the address of the offices of G.M. Realty, Inc.

   
   

3. Respondent, G.M. Realty, Inc., is now and was at all times material hereto a corporation registered as a real estate broker in the State of Florida having been issued license number 0208962 in accordance with Chapter 475, Florida Statutes. The last license issued was at the address of 715 S.W. 73rd Avenue, Miami, Florida.

   
   

4. Respondent Gustavo Mejido was at all times pertinent hereto the qualifying broker for Respondent G.M. Realty, Inc.

   
   

5. On August 30, 1990, Hector Sehwerert, an investigator employed by Petitioner, conducted an office inspection and audit of the office account and of the escrow/trust account maintained by Respondents.

   
   

6. The audit reflected that there was a shortage in the escrow/trust account in the amount of $1,006.68. Respondents' sales escrow/trust liability was $88,220.00 while the balance of the escrow/trust account was $87,213.32.

7. Respondents were unable to immediately explain the cause of the shortage, but on the same day the shortage was detected, Respondent Mejido caused the shortage in the escrow/trust account to be corrected. He caused the sum of $1,006.68 to be transferred from Respondent G.M. Realty's operating account to its escrow/trust account. The undisputed testimony at the formal hearing was that the discrepancy was caused by a clerical mistake.

   
   

8. Respondents failed to reconcile its escrow/trust account for the month of July 1990, and for subsequent months as required by the rules of the Florida Real Estate Commission. While Respondents had utilized its own system of reconciling its books for 14 years without having any other difficulty, this system was defective because the reconciliation did not include a determination of the total amount of escrow liability. Respondents have agreed to use the reconciliation method recommended by the Petitioner in the future.

   
   

9. The licenses of Respondents have not been previously disciplined.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over this matter. Section 120.57(1), Florida Statutes.

    
    

11. Petitioner has the burden of proving by clear and convincing evidence the allegations against Respondent. See Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987); Evans Packing Co. v. Department of Agriculture and Consumer Services, 550 So.2d 112 (Fla. 1st DCA 1989). Evans Packing, supra, 550 So. 2d 112, 116, fn. 5, provides the following pertinent to the clear and convincing evidence standard:

    
    

    That standard has been described as follows: [C]lear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the evidence must be precise and explicit and the witnesses must be lacking in confusion as to the facts

    in issue. The evidence must be of such weight that it produces in the mind of the trier of fact the firm belief of (sic) conviction, without hesitancy, as to the truth of the allegations sought to be established.

    Slomowitz v. Walker, 429 So.2d 797, 800 (Fla. 4th DCA 1983).

    
    

12. 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 adminis- trative 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, misrepresen- tation, 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; has violated a duty imposed upon him by law or by the terms of a listing contract, written, oral, express, or implied, in a real estate trans- action ...

       * * *

       (e) Has violated any of the provisions of this chapter or any lawful order or rule made or issued under the provisions of this chapter or chapter 455.

       * * *

       (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 ...

       
       

13. There was no evidence that the discrepancy in the escrow/trust account was the product of anything other than a clerical error. There was no showing of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing, culpable negligence, or breach of trust. Consequently, it is concluded that Petitioner failed to establish that Respondents violated the provisions of Section 475.25(1)(b), Florida Statutes.

    
    

14. Rule 21V-14.012(2) and (3), Florida Administrative Code, provides, in pertinent part, as follows:

    
    

    1. A broker shall cause to be made at least monthly a written statement comparing the broker's total liability with the reconciled bank balance(s) of all trust accounts. The broker's trust liability is hereby defined as the sum total of all deposits received, pending and being held by the broker at any point in time. The minimum information to be included in the monthly statement-reconciliation shall be the date the reconciliation was undertaken, the date used to reconcile the balances, the name of the bank(s), the name(s) of the account(s), the account number(s), the account balance(s) and dates, deposits in transit, outstanding checks identified by date and

       check number, and any other items necessary to reconcile the bank account balance(s) with the balance per the broker's checkbook(s) and

       other trust account books and records disclosing the date of receipt and the source of the funds. The broker shall review, sign and date the monthly statement-reconciliation.

    2. Whenever the trust liability and the bank balances do not agree, the reconciliation shall contain a description or explanation for the difference(s) and any corrective action taken

    reference shortages or overages of funds in the account(s). ...

    
    

15. Petitioner has established, by clear and convincing evidence, that Respondents failed to follow the procedures specified by Rule 21V-14.012(2) and (3), Florida Administrative Code, in maintaining its escrow/trust account, and that such failure constitutes violations of Section 475.25(1)(e) and (k), Florida Statutes.

    
    

16. Rule 21V-24.001, Florida Administrative Code, provides for certain disciplinary guidelines pertinent to this proceeding. For a violation of Section 475.25(1)(e), Florida Statutes, the recommended range of penalty is "up to 8 years suspension or revocation". For a violation of Section 475.25(1)(k), Florida Statutes, the recommended range of penalty is "a minimum of a 90 day suspension and $1,000 fine up to revocation".

    
    

17. Because of the existence of mitigating circumstances, it is recommended that penalties less severe than those contained in the guidelines be imposed. Aggravating or mitigating circumstances are provided in Rule 21V- 24.001(4)(b), Florida Administrative Code, in pertinent part as follows:

    
    

    (4)(b) Aggravating or mitigating circum- stances may include, but are not limited to, the following:

    1. The severity of the offense.

    2. The degree of harm to the consumer or public.

    3. The number of counts in the Administrative Complaint.

    4. The number of times the offenses previously have been committed by the licensee.

    5. The disciplinary history of the licensee.

    
    

18. Respondents contend that the recommended penalties be mitigated because this is not a serious offense. This contention is rejected because of the importance of escrow/trust accounts and because of the need to follow accepted procedures in maintaining these accounts. Nevertheless, the recommended penalties should be mitigated because Respondent Mejido took immediate steps to ensure that no harm would come to any member of the public, there was no evidence that this type error had previously occurred, and these Respondents have not been previously disciplined.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered which finds that Respondents have violated the provisions of Section 475.25(1)(e) and (k), Florida Statutes, and which issues a letter of reprimand to said Respondents for such violations.

RECOMMENDED in Tallahassee, Leon County, Florida, this 16th day of May, 1991.

CLAUDE B. ARRINGTON

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 16th day of May, 1991.

COPIES FURNISHED:

Steven W. Johnson, Esquire Florida Department of

Professional Regulation Real Estate - Legal Section

Hurston Building - North Tower Suite N-308

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

Armando E. Lacasa, Esquire 3191 Coral Way

Third Floor

Miami, Florida 33145

Darlene F. Keller Division Director Division of Real Estate

Department of Professional Regulation

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

Jack McRay General Counsel

Department of Professional Regulation

1940 North Monroe Street Suite 60

Tallahassee, Florida 32399-0792

APPENDIX TO THE RECOMMENDED ORDER, CASE NO. 91-0376

The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioner.

1. The proposed findings of fact in paragraphs 1-6a. are adopted in material part by the Recommended Order.

2. The proposed findings of fact in paragraph 6b. are rejected as being unnecessary to the conclusions reached or as being subordinate to the findings made.

3. The proposed findings of fact in the first sentence of paragraph 7 are rejected as being contrary to the finding that the month audited was July 1990, not August 1990. The remaining proposed findings are rejected as being the recitation of testimony or as being subordinate to the findings made.

The following rulings are made on the proposed findings of fact submitted on behalf of the Respondent.

1. The proposed findings of fact submitted by Respondents are adopted in material part by the Recommended Order.

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: 91-000376

Orders for Case No: 91-000376