STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA DEPARTMENT OF )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 91-7797

)

MARSH A. FERREIRA and )

M A F REALTY, INC., )

)

Respondents. )

)

RECOMMENDED ORDER

The instant case is before Stuart M. Lerner, a duly designated Hearing Officer of the Division of Administrative Hearings, who, pursuant to the request of the parties, issues this Recommended Order based upon a stipulated record and without having conducted a formal hearing.

APPEARANCES

For Petitioner: Theodore R. Gay, Esquire

Department of Professional Regulation

401 Northwest Second Avenue Suite N-607

Miami, Florida 33128

For Respondents: Sharon R. Bock, Esquire

1898 Coral Way

Miami, Florida 33145 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 October 30, 1991, the Department of Professional Regulation (Department) issued a six-count Administrative Complaint against Respondents. Numbered paragraphs two through six contained the following factual allegations upon which the Administrative Complaint was based:

   
   

   1. Respondent Marsh A. Ferreira is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0523079 in accordance

      with Chapter 475, Florida Statutes. The last license issued was as a broker c/o M A F Realty, Inc. 4143A S.W. 74th Court, Miami, Florida 33155.

      
      

   2. The Respondent M A F 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 0263255 in accordance with Chapter 475, Florida Statutes. The last license issued was at the

      address of 4143A S.W. 74th Court, Miami, Florida 33155.

      
      

   3. At all times material hereto, the Respondent Marsh A. Ferreira was licensed and operating as qualifying broker and officer of Respondent M A F Realty, Inc.

      
      

   4. On or about July 31, 1991, Petitioner's Investigator Hector F. Schwerert conducted an

      office inspection/audit and discovered the following:

      
      

      1. Respondent M A F Realty, Inc. sales escrow account #20207038305 had an approximate shortage of $8,359.31, calculated as $8,500 in broker's total trust liability, but only $140.69 as reconciled bank balance.

      2. During the inspection and audit, Respondent Marsh A. Ferreira stated that the shortage was due to the fact that on many occasions he had unintentionally used his sales escrow account #20207038305 for operational purposes.

      3. Since October 1, 1989, the Respondents have 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 Commission. . . .

         
         

   5. On or about August 1, 1991, Respondent Marsh [A. Ferreira] corrected the shortage by depositing

$10,000 in the sales escrow account #20207038305 of Respondent M A F Realty, Inc. maintained at the Ocean Bank in Miami, Florida. . . .

It was further alleged in the Administrative Complaint that, in engaging in the conduct described in the Administrative Complaint, Respondents each acted in violation of Sections 475.25(1)(b), 475.25(1)(k), and 475.25(1)(e), Florida Statutes, and Rule 21V-14.012(2) and (3), Florida Administrative Code.

Respondents denied the allegations of wrongdoing advanced in the Administrative Complaint and requested a formal hearing. On December 4, 1991, the matter was referred to the Division of Administrative Hearings for the assignment of a Hearing Officer to conduct the hearing Respondent had requested.

The final hearing in the instant case was originally scheduled for April 17, 1992. On April 2, 1992, Petitioner filed a motion requesting that the final hearing be continued on the ground that the parties had reached a settlement of their dispute, but needed additional time to reduce their agreement to writing

and to present it to the Florida Real Estate Commission (Commission). The motion was granted and the parties' settlement agreement was presented to the Commission on May 19, 1992. The Commission declined to approve the agreement, however. On July 21, 1992, the Commission rejected a second settlement agreement into which the parties had entered.

Thereafter, the final hearing in this matter was rescheduled for September 10, 1992. On September 8, 1992, Petitioner requested a continuance on the ground that the parties had entered into a third settlement agreement. The motion was granted, but the agreement was never presented to the Commission.

The parties, however, did agree that an evidentiary hearing in this case was unnecessary and, on January 25, 1993, they filed a motion requesting that the Hearing Officer issue a Recommended Order based upon the "agreed set of facts" appended to the motion. By order issued February 8, 1993, the Hearing Officer granted the parties' motion and gave the parties until March 11, 1993, to file proposed recommended orders. The parties timely filed their proposed recommended orders on March 11, 1993.

Respondents' recommended order contained, in numbered paragraphs 2, 3, 4, 6, 7, and 11, factual assertions not based upon the parties' "agreed set of fact." Accordingly, on April 2, 1993, the Hearing Officer issued an order which provided in pertinent part as follows:

[W]ithin 20 days of the date of this order, Petitioner shall advise Respondents and the Hearing Officer in writing if it disputes any of the factual assertions made in the aforementioned paragraphs of Respondents' proposed recommended order. If Petitioner indicates that it does not dispute any of these factual assertions, the Hearing Officer will take these facts into consideration in making his recommendation in the instant case, notwithstanding that they may not have been included in the parties' original "agreed set of facts." Furthermore, Petitioner will have the opportunity to file, within 30 days of the date of this order, an amended or supplemental proposed recommended order that addresses these additional facts.

On April 9, 1993, the Department filed its response to the Hearing Officer's order. In its response, the Department indicated that it did not dispute any of the factual assertions contained in numbered paragraphs 2, 3, 4, 6, 7, and 11 of Respondents' proposed recommended order and that it "agree[d] that they may be considered by the Hearing Officer." The Department further indicated that it was waiving the opportunity to file an amended or supplemental proposed recommended order.

FINDINGS OF FACT

The following are the facts which the parties agree should be considered in resolving the legal issues raised in the instant case:

1. The Department is a state government licensing and regulatory agency.

   
   

2. Respondent Marsh A. Ferreira is now, and has been since 1990, a licensed real estate broker in the State of Florida.

   
   

3. He holds license number 0523079.

4. Since becoming a licensed broker, the only complaint that has been made against him in connection with the practice of his profession is the complaint that is the subject of the instant case.

   
   

5. At all times material to the instant case, Respondent Ferreira was licensed and operating as a qualifying broker and officer of Respondent M A F Realty, Inc. (Realty).

   
   

6. Realty is now, and has been at all times material to the instant case, a corporation registered as a real estate broker in the State of Florida under license number 0263255. The license reflects that Realty's address is 4143A

   S.W. 74th Court, Miami, Florida 33155.

   
   

7. Like Respondent Ferreira, Realty has an unblemished disciplinary record to date.

   
   

8. On or about July 31, 1991, Hector Schwerert, an investigator with the Department, conducted an office inspection/audit of Realty during business hours.

   
   

9. The inspection/audit was routine. It was not prompted by any complaint against Respondents.

   
   

10. Schwerert gave no advance warning of his visit. Nonetheless, Respondents gave him their full cooperation and did not seek to postpone or delay the inspection/audit.

    
    

11. Schwerert's inspection/audit revealed the following:

    
    

    1. Realty's sales escrow account #20207038305 had an approximate shortage of $8,359.31. Its total trust liability was $8,500.00, but there was only $140.69 in the account.

       
       

    2. Respondent Ferreira was the sole employee of Respondent. He, and he alone, had access to

       the escrow account, as well as Realty's operating account. On occasion, he would "unintentionally confuse the checkbooks" of the two accounts and inadvertently use monies in the escrow account for operational purposes and monies in the operating account for escrow purposes. It was this "unintentional confusion" that caused the shortage in the escrow account.

       
       

    3. During the period from January, 1990, when Realty was incorporated, to the date of the inspection/audit, Respondent Ferreira, on behalf of Realty, prepared and signed written escrow account statements/reconciliations on a monthly basis. On two, and only two, of these statements/reconciliations, the escrow account balance did not equal the amount of Realty's trust liability and there was no explanation given for the discrepancy, nor any indication that corrective action would be taken.

1. On August 1, 1991, immediately upon realizing that he had inadvertently deposited trust funds in Realty's operating account instead of its escrow account, Respondent Ferreira withdrew $10,000.00 from the operating account and deposited it into the escrow account to eliminate the shortage in the escrow account.

   
   

2. Since the July 31, 1991, inspection/audit Respondent Ferreira has taken a 30-hour broker's course in which he received an above average score and has met his continuing education requirements. 1/

   
   

   CONCLUSIONS OF LAW

   
   

3. The Commission is statutorily empowered to take disciplinary action against a State of Florida-licensed broker based upon any of the grounds enumerated in Section 475.25(1), Florida Statutes. Such disciplinary action may include one or more of the following penalties: license denial; license revocation; license suspension for a period not exceeding ten years;

   imposition of an administrative fine not to exceed $1,000 for each count or separate offense; issuance of a reprimand; and placement of the licensee on probation. Section 475.25(1), Fla. Stat.

   
   

4. Where the disciplinary action sought is the revocation or suspension of the broker's license, the proof of guilt must be clear and convincing. See Ferris v. Turlington, 510 So.2d 292 (Fla. 1987); Pic N' Save v. Department of Business Regulation, 601 So.2d 245 (Fla. 1st DCA 1992); Munch v. Department of Professional Regulation, 592 So.2d 1136 (Fla. 1st DCA 1992); Newberry v. Florida Department of Law Enforcement, 585 So.2d 500 (Fla. 3d DCA 1991). "The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or 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).

   
   

5. Where the discipline does not involve the loss of licensure, the broker's guilt need be established by only a preponderance of the evidence. See Allen v. School Board of Dade County, 571 So.2d 568, 569 (Fla. 3d DCA 1990).

   
   

6. Regardless of the disciplinary action taken, it may be based only upon the violations specifically alleged in administrative complaint. See Kinney v. Department of State, 501 So.2d 129, 133 (Fla. 5th DCA 1987); Hunter v. Department of Professional Regulation, 458 So.2d 842, 844 (Fla. 2d DCA 1984).

   
   

7. Furthermore, in determining whether Section 475.25(1), Florida Statutes, has been violated in the manner charged in the administrative complaint, one "must bear in mind that it is, in effect, a penal statute. . . This being true the statute must be strictly construed and no conduct is to be regarded as included within it that is not reasonably proscribed by it. Furthermore, if there are any ambiguities included such must be construed in favor of the . . . licensee." Lester v. Department of Professional and Occupational Regulations, 348 So.2d 923, 925 (Fla. 1st DCA 1977).

   
   

8. The Administrative Complaint issued in the instant case charges Respondents with each committing three separate violations of Section 475.25(1), Florida Statutes.

   
   

9. Counts One, Three and Five of the Administrative Complaint allege that Respondent Ferreira violated Sections 475.25(1)(b), 475.25(1)(k), and

   475.25(1)(e), Florida Statutes, respectively. Counts Two, Four and Six of the Administrative Complaint advance identical allegations against Realty.

   
   

10. Section 475.25(1)(b), Florida Statutes, authorizes the Commission to discipline a licensed broker who "[h]as been guilty of . . . culpable negligence, or breach of trust in any business transaction in this state or any other state, nation, or territory." "It is immaterial to the guilt of the licensee that the victim or intended victim of the misconduct sustained no damage or loss; that the damage or loss has been settled and paid after discovery of the misconduct; or that such victim or intended victim was a customer or a person in confidential relation with the licensee or was an identified member of the general public." Section 475.25(1)(b), Fla. Stat.

    
    

11. Section 475.25(1)(k), Florida Statutes, authorizes the Commission to discipline a licensed 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, wherein the funds shall be kept until disbursement thereof is properly authorized."

    
    

12. Section 475.25(1)(e), Florida Statutes, authorizes the Commission to discipline a licensed broker who "[h]as violated any . . rule made or issued under the provisions of [Chapter 475, Florida Statutes]." The rule provisions Respondents are alleged to have violated are subsections (2) and (3) of Rule 21V-14.012, Florida Administrative Code. This rule was adopted pursuant to the

    authority granted in Chapter 475, Florida Statutes, and it 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 date(s), 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). Whenever a trust bank account record reflects a service charge or fee for a non-sufficient check being returned or whenever an account has a negative balance, the reconciliation shall disclose the cause(s) of the returned check or negative balance and the corrective action taken.

       
       

13. The facts to which the parties have stipulated in the instant case clearly and convincingly establish that Respondents committed each of the violations charged in the Administrative Complaint.

    
    

14. In determining what disciplinary action should be taken against them for these violations, it is necessary to consult Rule 21V-24.001, Florida

    Administrative Code, which contains the disciplinary guidelines adopted by the Commission. Cf. Williams v. Department of Transportation, 531 So.2d 994, 996 (Fla. 1st DCA 1988)(agency is required to comply with its disciplinary guidelines in taking disciplinary action against its employees).

    
    

15. Subsection (3) of Rule 21V-24.001, Florida Administrative Code, provides that the normal range of penalties for violations of Sections 475.25(1)(b), 475.25(1)(k), and 475.25(1)(e), Florida Statutes, are as follows:

    
    

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

    
    

    Section 475.25(1)(k)- A minimum of a 90 day suspension and $1,000 fine up to revocation;

    
    

    Section 475.25(1)(e)- Up to 8 years suspension or revocation.

    
    

16. Subsection (4)(a) of Rule 21V-24.001, Florida Administrative Code, provides that the Commission may impose a penalty outside the normal range where there are mitigating or aggravating circumstances.

    
    

17. The mitigating or aggravating circumstances that may warrant such a deviation are described in subsection (4)(b) of Rule 21V-24.001, Florida Administrative Code as follows:

    
    

    Aggravating or mitigating circumstances 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.

    6. The status of the licensee at the time the offense was committed.

    7. The degree of financial hardship incurred by a licensee as a result of the imposition of a fine or suspension of the licensee.

    8. Violation of the provision of Chapter 475, Florida Statutes, where in a letter of guidance as provided in Section 455.225(3), Florida Statutes, previously has been issued to the license.

    
    

18. In its proposed recommended order, the Department proposes that the Hearing Officer recommend that the Commission enter a final order:

    
    

    1. Imposing an administrative fine against the Respondents in the amount of $3,000 [$1,5000 per Respondent];

    2. Reprimanding the Respondents; and

    3. Placing the Respondent Marsh A. Ferreira on probation for a period of one (1) year beginning on the filing date of the Final Order, and

    requiring the Respondent, during such probationary period to provide satisfactory evidence to: Florida Department of Professional

    Regulation, Division of Real Estate, Legal Section, Hurston Building, North Tower, Suite N-308, 400 West Robinson Street, Orlando, Florida 32801-1772, of having completed a 30-hour real estate

    brokerage management postlicensure education course, the 30 hours being in addition to any other education required of the Respondent to remain current and active as a real estate broker in the State of Florida.

    
    

19. Having considered the facts of the instant case in light of the provisions of Rule 21V-24.001 set forth above, the Hearing Officer agrees with the Department that this is the disciplinary action the Commission should take against Respondents, notwithstanding that this disciplinary action may be less severe than that the Commission, pursuant to subsection (3) of Rule 21V-24.001, Florida Administrative Code, would normally take against those who violate Sections 475.25(1)(b), 475.25(1)(k), and 475.25(1)(e), Florida Statutes. 2/

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law it is hereby recommended that the Commission enter a final order finding Respondents guilty of the violations alleged in the Administrative Complaint and imposing upon them, for having committed these violations, the penalties proposed by the Department in its proposed recommended order, which are recited above.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 16th day of April, 1993.

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 16th day of April, 1993.

ENDNOTES

1/ The foregoing Findings of Fact incorporate in substance all of the findings of fact that the parties have proposed in their respective proposed recommended orders.

2/ The unintentional nature of the violations, the swift corrective action taken, the cooperative spirit exhibited by Respondents during the inspection/audit, and Respondents' heretofore unblemished disciplinary record

are mitigating circumstances that militate in favor of the imposition of penalties less severe than otherwise would be warranted.

COPIES FURNISHED:

Theodore R. Gay, Esquire Department of Professional

Regulation

401 Northwest Second Avenue Suite N-607

Miami, Florida 33128

Sharon R. Bock, Esquire 1898 Coral Way

Miami, Florida 33145

Darlene F. Keller, Division Director Division of Real Estate

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

Jack McRay, Esquire General Counsel

Department of Professional Regulation

1940 North Monroe Street Tallahassee, Florida 32399-0792

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 of time 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: 91-007797

Orders for Case No: 91-007797