STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 92-1344

) CLYDE J. SPINDLER, t/a ALLMAC ) REALTY, ROBERT F. MCCARTHY ) and JACQULYN B. MCCARTHY, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the above matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Donald R. Alexander, on May 27, 1992, in Brooksville, Florida.

APPEARANCES

For Petitioner: Stephen W. Johnson, Esquire

P. O. Box 1900

Orlando, Florida 32802-1900

For Respondent: Clyde J. Spindler, Jr., pro se (Spindler) 12156 Fairway Avenue

Brooksville, Florida 34613

For Respondent: Robert F. McCarthy, pro se (R.F. McCarthy) 5331 Commercial Way

Spring Hill, Florida 34606

For Respondent: Jacqulyn B. McCarthy, pro se (J.B. McCarthy) 5331 Commercial Way

Spring Hill, Florida 34606 STATEMENT OF THE ISSUES

The issue is whether respondents' real estate licenses should be disciplined for the reasons cited in the administrative complaint.

PRELIMINARY STATEMENT

In a nine-count administrative complaint filed on January 27, 1992, petitioner, Department of Professional Regulation, Division of Real Estate, charged that respondents, Clyde J. Spindler, licensed as a real estate broker, and Robert F. McCarthy and Jacqulyn B. McCarthy, husband and wife and licensed as a real estate broker and salesperson, respectively, had violated certain

provisions within Chapter 475, Florida Statutes (1991). More specifically, petitioner alleged that on January 15, 1991, the Florida Real Estate Commission entered an order suspending Robert F. McCarthy's broker license for three years effective March 7, 1991. The same order suspended for three years the corporate broker license of the firm known as Allmac Realty, for which McCarthy was broker of record. The complaint alleged further that on January 15, 1991, Clyde J. Spindler verbally accepted the property rights to the trade name of Allmac Realty from Robert and Jacqulyn McCarthy and that Spindler thereafter commenced operating the firm. The complaint goes on to allege that Robert McCarthy registered as a broker-salesman with his former firm on March 6, 1991. The complaint also alleges that during the course of a Division audit on October 7, 1991, an investigator learned that Spindler was not a signatory on his firm's escrow accounts, had failed to prepare and sign monthly reconciliation statements as required by Division rules and that Jacqulyn McCarthy had paid herself a commission from a rental check before depositing the check into the firm's escrow account. Finally, the complaint alleges that Spindler acknowledged that he visited the firm only two or three times per week and did not actively engage in the real estate business. According to the complaint, this conduct constituted a violation of Subsections 475.25(1)(b), (e) and (k), Florida Statutes (1991), and two agency rules.

Respondents disputed the above allegations and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes (1991), to contest the proposed agency action. The matter was referred by petitioner to the Division of Administrative Hearings on February 28, 1992, with a request that a Hearing Officer be assigned to conduct a hearing. By notice of hearing dated April 15, 1992, a final hearing was scheduled on May 27, 1992, in Brooksville, Florida.

On April 13, 1992, the case was transferred from Hearing Officer James E. Bradwell to the undersigned.

At final hearing, petitioner presented the testimony of Marjorie G. May, a Division investigator, Robyn Leddington, an assistant service manager for Sun Bank and Trust Company, and each respondent. Also, it offered petitioner's exhibits 1-5. All exhibits were received into evidence. Each of the respondents testified on their own behalf. Also, respondent Robert F. McCarthy offered respondent's exhibits 1 and 2 which were received into evidence.

There is no transcript of hearing. Proposed findings of fact and conclusions of law were filed by petitioner on June 8, 1992. A ruling on each proposed finding of fact is made in the Appendix attached to this Recommended Order.

FINDINGS OF FACT

Based upon all of the evidence, the following findings of fact are determined:

1. Respondent, Clyde J. Spindler, is a licensed real estate broker having been issued license number 0185572 by petitioner, Department of Professional Regulation, Division of Real Estate (Division). Spindler is the broker of record for a real estate firm known as Allmac Realty, 5331 Commercial Way, Spring Hill, Florida. When the events herein occurred, respondent, Robert F. McCarthy, held broker license number 0415199 issued by the Division. Respondent, Jacqulyn B. McCarthy, is a licensed real estate salesperson having been issued license number 0482611 by the Division.

2. On January 15, 1991, the Florida Real Estate Commission (Commission) entered a final order suspending Robert F. McCarthy's broker license for three years, effective March 7, 1991. At that time, McCarthy operated a real estate firm known as Allmac Realty, Inc., t/a Allmac Realty, at 4040 Commercial Way, Spring Hill, Florida. The same order suspended the corporate broker's license for three years. At the time the order was entered, Jacqulyn McCarthy was a salesperson in her husband's firm.

   
   

3. Although the suspension order was not served on McCarthy until February 21, 1991, he learned on January 15, 1991, that his license was going to be suspended. After McCarthy disclosed this fact to Spindler the same day, Spindler agreed to operate a real estate firm using the name of Allmac Realty. Thereafter, Spindler registered as a broker effective February 18, 1991, for a new firm known as Allmac Realty at 5331 Commercial Way, Spring Hill, Florida. Upon the advice of his attorney, on March 4, 1991, Robert McCarthy made application with the Division for registration as a broker-salesman with the new Allmac Realty. Because he believed that this action was legal, Robert McCarthy had no intent to circumvent the action taken by the Commission. Apparently unaware of the suspension order, the Division approved the registration effective March 6, 1991, or the day before the suspension of the broker's license became effective. Also, his wife, Jacqulyn McCarthy, placed her license with the new firm the same date.

   
   

4. The broker of record of a firm is required to review, sign and date each monthly reconciliation statement of the firm. Robert McCarthy, who held a valid broker's license until March 1991, did so for the January and February 1991 statements. This responsibility was then given to Spindler for all subsequent statements.

   
   

5. After receiving a complaint from the Hernando County Board of Realtors, a Division investigator, Marjorie F. May, visited Allmac Realty's office on October 7, 1991, to conduct a routine audit. As a result of her audit, May learned that Robert McCarthy was using his license with the firm even though it had been suspended since March 7, 1991. She also learned that Jacqulyn McCarthy, a salesperson, was the only signatory on the firm's escrow account while the broker of record (Spindler) was not. Rule 21V-14.010(1) requires that the broker of record be a signatory on the account. By failing to be a signatory on the account, Splinder contravened this rule. It should be noted that after being told of this omission, Spindler immediately corrected this deficiency. It should also be noted that Spindler was a signatory on two other firm accounts and was under the impression that he had properly signed for all necessary bank accounts.

   
   

6. The audit further revealed that on August 30, 1991, a prospective tenant gave Jacqulyn McCarthy a $375.00 check as a security deposit on a rental house. Before McCarthy was able to deposit the check in the firm's escrow account, the tenant advised Jacqulyn that she was not going to rent the property and asked that the check be returned. McCarthy promptly returned the check to the client. However, during the time interval between receiving the check and the subsequent request for refund, McCarthy wrote herself a $200.00 check from the firm's operating account as her share of the commission for securing the rental. There is no evidence that any imbalance in the escrow account occurred as a result of this transaction. There is also no evidence that McCarthy violated any Division rule by failing to immediately deposit the check in the firm's escrow account since the check was returned to the client the same day that it was written.

7. During her examination of the firm's monthly statements, May discovered that even though Spindler had signed the monthly statements, he had failed to date the same. This omission contravened a requirement in Rule 21V-14.012(2), Florida Administrative Code, that he "date the monthly statement- reconciliation". However, this was an oversight on Spindler's part and was not an intentional violation of the rule.

   
   

8. There was no intent on the part of Robert McCarthy to circumvent Division rules or the prior order of suspension. Indeed, he acted on his counsel's advice and, after learning that his continued participation as a salesman was improper, immediately stopped all real estate activities. At that point in time, and after being notified by McCarthy, the Division also cancelled the previously issued broker-salesman registration.

   
   

9. Spindler has been a real estate broker since 1977 and is now semi- retired. He visits Allmac's offices two or three times per week but does not actively solicit listings or sales. This is because of his practice not to compete with salespersons in his firm. However, he is advised of all decisions that must be made on behalf of the firm and is an active participant in those decisions. There is insufficient evidence to support a finding that Robert McCarthy was the de facto broker of the firm after Spindler registered as its broker of record.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties hereto pursuant to Subsection 120.57(1), Florida Statutes (1991).

    
    

11. Because respondents' real estate licenses are at risk, petitioner is obligated to prove the allegations in the complaint by clear and convincing evidence. Ramsey v. Department of Professional Regulation, Division of Real Estate, 574 So.2d 291 (Fla. 5th DCA 1991).

    
    

12. Respondents are charged with violating Subsections 475.25(1)(b), (e) and (k), Florida Statutes (1991). Those subsections authorize disciplinary action to be taken against a licensee if 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 transaction; has aided, assisted, or conspired with any other person engaged in any such misconduct and in furtherance thereof; or has formed an intent, design, or scheme to engage in any such misconduct, design, or scheme to engage in any such misconduct and committed an overt act in furtherance of such intent, design, or scheme.

    * * *

    (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.

    * * *

    1. 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 with a title company, banking institution, credit union,

       or savings and loan association 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 the state, wherein the funds shall be kept until disbursement thereof is properly authorized; or has failed, if a salesperson,

       to immediately place with his registered employer any money, fund, deposit, check, or draft entrusted to him by any person dealing with him as agent of his registered employer.

       
       

       Respondents are also charged with violating Rules 21V-14.010(1) and 21V- 14.012(2) and (3), Florida Administrative Code. Those rules read in relevant part as follows:

       
       

       21V-14.010 Real Estate Brokers.

       1. Every licensed real estate broker who shall receive from his salesperson, principal, prospect, or other person interested in any real estate transaction, any deposit, fund, money, check, draft, personal property, or item of value shall immediately place the same in a solvent bank, savings and loan association, trust company, credit union or title company having trust powers, in an escrow or trust account. The broker is ultimately responsible for the dollars in

          said escrow account; therefore, the broker must be a signatory on all escrow accounts. If the deposit is in securities, intended by the depositor to be converted into cash, the conversion shall be made at the earliest practical time, and the proceeds shall be immediately deposited in said account.

          * * * 21V-14.012 Broker's Records.

          * * *

       2. 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 source of the funds. The broker shall review, sign and date the monthly statement-reconciliation.

       3. 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.

    
    

    In summary, the administrative complaint alleges that Spindler violated subsections 475.25(1)(b), (e) and (k) and rules 21V-14.010 and 21V-14.012(2) and

    (3) (Counts I, VII, VIII and IX), Robert McCarthy violated subsections 475.25(1)(b) and (e) (Counts II, IV and V), and Jacqulyn McCarthy violated subsections 475.25(1)(b) and (e) (Counts III and VI). These charges will be examined separately below.

    
    

13. Initially, it is noted that as to the charge that each respondent violated subsection 475.25(1)(b), "an intentional act must be proved before a violation may be found." Munch v. Department of Professional Regulation, Division of Real Estate, 592 So.2d 1136 (Fla. 1st DCA 1992). Accord: Morris v. Department of Professional Regulation, 474 So.2d 841, 843 (Fla. 5th DCA 1985). Since there is no clear and convincing evidence to support a finding of wrongful intent and scienter on the part of respondents, the charges in Counts I, II and III must fail.

    
    

14. Respondent Robert McCarthy is charged in Counts IV and V with having operated as a broker without being the holder of a valid and current license as a broker and with having operated as a broker while licensed as a salesman in violation of Subsections 475.42(1)(a) and (b), Florida Statutes, respectively. While it is unclear as to which, if any, factual allegations in the complaint underpin these charges, they are presumed to be based on petitioner's belief that McCarthy (and not Spindler) served as broker of Allmac from March 1991 until October 1991. However, there is less than clear and convincing evidence to support this contention and accordingly these charges should also be dismissed.

    
    

15. In Count VII, Jacqulyn McCarthy is charged with having operated as a broker while licensed as a salesman in violation of subsection 475.42(1)(a), which in turn constitutes a violation of subsection 475.25(1)(e). As clarified

    during the hearing, this charge is based on the fact that McCarthy was the only signatory on the firm's escrow account from March until October 1991. In light of the requirement in Rule 21V-14.010(1) that the broker is ultimately responsible for all funds in the escrow account and thus "the broker must be a signatory on all escrow accounts," it is concluded that McCarthy was acting as a broker in this respect during a seven month period. Accordingly, this charge has been established.

    
    

16. Spindler is next charged with having violated subsection 475.25(1)(k) by failing to "maintain trust funds in the real estate brokerage escrow bank account or some other proper depository until disbursement thereof was properly authorized." This charge is predicated on the fact that Jacqulyn McCarthy did not deposit a $375 deposit check into the firm's escrow account. However, the evidence shows that before McCarthy had an opportunity to deposit the check, the client requested that the check be returned. In addition, the $200 commission check was drawn from the firm's operating account and not the escrow account.

    In view of this, it is concluded that no violation occurred and Count VII should be dismissed.

    
    

17. Finally, Spindler is charged in Counts VIII and IX with having violated two rules by failing to date the monthly statement-reconciliation and failing to be a signatory on the escrow account. By clear and convincing evidence, these charges have been proven and thus a violation of subsection 475.25(1)(e) has occurred.

    
    

18. Rule 21V-24.001 sets forth disciplinary guidelines for a violation of statutes and rules. As is relevant here, where a violation of subsection 475.25(1)(e) has been proven, the rule suggests a recommended penalty of up to eight years suspension or revocation. For a violation of subsection 475.42(1)(a), the rule calls for a penalty ranging up to three years suspension or revocation. Given the fact that most, if not all, of the violations were minor in nature or were unintentional, respondents Spindler and Jacqulyn McCarthy should have their licenses placed on probation for one year. All charges against Robert McCarthy should be dismissed.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is recommended that a final order be entered finding Clyde J. Spindler guilty as charged in Counts VIII and IX and Jacqulyn McCarthy guilty as charged in Count

VI. All other counts should be dismissed. It is further recommended that the licenses of those two respondents be placed on probation for a period of one year.

RECOMMENDED this 10th day of June, 1992, in Tallahassee, Florida.

DONALD R. ALEXANDER

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 10th day of June, 1992.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-1344

Petitioner:

1-4. Accepted in finding of fact 1. 5-6. Accepted in finding of fact 2. 7-8. Accepted in finding of fact 3.

1. Accepted in findings of fact 3 and 8.

2. Accepted in finding of fact 5. 10a. Accepted in finding of fact 5. 10b. Accepted in finding of fact 7. 10c. Accepted in finding of fact 6.

3. Accepted in finding of fact 9.

4. Accepted in finding of fact 3.

COPIES FURNISHED:

Darlene F. Keller, Director Division of Real Estate

P. O. Box 1900

Orlando, FL 32802-1900

Jack L. McRay, Esquire 1940 North Monroe Street Suite 60

Tallahassee, FL 32399-0792

Steven W. Johnson, Esquire

1. O. Box 1900

   Orlando, FL 32802-1900

   
   

   Mr. Clyde J. Spindler 12156 Fairway Avenue

   Brooksville, FL 34613

   
   

   Mr. Robert F. McCarthy 5331 Commercial Way Spring Hill, FL 34606

   
   

   Ms. Jacqulyn B. McCarthy 5331 Commercial Way Spring Hill, FL 34606

   NOTICE OF RIGHT TO SUBMIT EXCEPTIONS:

   
   

   All parties have the right to submit written exceptions to the 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 consult with the agency that will issue the final order in this case concerning their 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.

   
   

   =================================================================

   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. 9184425 9184426

   9184427

   CLYDE J. SPINDLER DOAH NO. 92-1344 ALMAC REALTY

   ROBERT F. McCARTHY and JACQULYN B. McCARTHY

   /

   
   

   FINAL ORDER

   
   

   On July 21, 1992, the Florida Real Estate Commission heard this case to issue a Final Order.

   
   

   Hearing Officer Donald R. Alexander of the Division of Administrative Hearings presided over a formal hearing on May 27, 1992. On June 10, 1992 he issued a Recommended Order, a copy of which is attached hereto as Exhibit A and made a part hereof.

   
   

   The Petitioner filed Exceptions to the Recommended Order. A copy of said Exceptions is attached hereto as Exhibit B and made a part hereof. The Petitioner took exception to the Hearing Officer's penalty and recommendation of placing the licensees on probation, with no provisions or requirements.

   
   

   After hearing arguments of counsel and completely reviewing the record, the Commission adopts the Hearings Officer's Findings of Fact, Conclusions of Law and Penalty, except as contained in the Petitioner's Exceptions. The Commission concludes that to impose probation without provisions is a meaningless penalty. Accordingly, the Florida Real Estate Commission ORDERS that Clyde J. Spindler and Jacqulyn McCarthy be placed on probation for a period of one (1) year, subject to the following terms and conditions:

   1. The licensees shall notify the Division of Real Estate of any changes in address or employment.

      
      

   2. The licensees shall not violate any provisions of Chapter 475, Florida Statutes, or Rules adopted by the Commission.

      
      

   3. The licensees shall not be convicted or found guilty of a crime in any jurisdiction.

      
      

   4. Licensee Clyde J. Spindler shall enroll in and satisfactorily complete a 30-hour management course for brokers within one (1) year of the filing date of this Order.

      
      

   5. Licensee Jacqulyn McCarthy shall enroll in and satisfactory complete a 45-hour post-licensure course for salespersons within one (1) year of the filing date of this Order.

The Commission further ORDERS that all counts against Respondent Robert F. McCarthy be dismissed.

This Order shall be effective 30 days from date of filing with the Clerk of the Department of Professional Regulation. However, any party affected by this Order has the right to seek judicial review, pursuant to s.120.68, Florida Statutes, and to Rule 9.110, Florida Rules of Appellate Procedure.

Within 30 days of the filing date of this Order, review proceedings may be instituted by filing a Notice of Appeal with the Clerk of the Department of Professional Regulation at 400 West Robinson Street, Suite 309, Orlando, Florida 32801. At the same time, a copy of the Notice of Appeal, with applicable filing fees, must be filed with the appropriate District Court of Appeal.

Docket for Case No: 92-001344

Orders for Case No: 92-001344