STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
FLORIDA DEPARTMENT OF )
PROFESSIONAL REGULATION, )
DIVISION OF REAL ESTATE, )
)
Petitioner, )
)
vs. ) CASE NO. 92-7080
)
RAYMOND MANGICAPRA and )
FIRST UNION GROUP, INC., )
)
Respondents. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was conducted in this case on April 6, 1993, in West Palm Beach, Florida, before Stuart M. Lerner, a duly designated Hearing Officer of the Division of Administrative Hearings.
APPEARANCES
For Petitioner: James H. Gillis, Esquire
Senior Attorney
Department of Professional Regulation, Division of Real Estate
Legal Section, Suite N 308 Hurston Building, North Tower
400 West Robinson Street Orlando, Florida 32801-1772
For Respondents: Myron S. Dunay, Esquire
616 East Atlantic Avenue Delray Beach, Florida 33483
STATEMENT OF THE ISSUES
Whether Respondents committed the offenses described in the Administrative Complaint?
If so, what disciplinary action should be taken against them?
PRELIMINARY STATEMENT
On October 21, 1992, the Department of Professional Regulation (hereinafter referred to as the "Department") issued an Amended Administrative Complaint against Raymond Mangicapra and First Union Group, Inc., (hereinafter referred to as "FUGI") charging them each with: two counts (Counts I and XI against Mangicapra, and Counts VI and XVI against FUGI) of "fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in a business transaction in
violation of Subsection 475.25(1)(b), Florida Statutes;" two counts (Counts II and XII against Mangicapra, and Counts VII and XVII against FUGI) of "having failed to account or deliver a deposit in violation of Subsection 475.25(1)(d)1., Florida Statutes;" two counts (Counts III and XIII against Mangicapra, and Counts VIII and XVIII against FUGI) 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 Subsection 475.25(1)(k), Florida Statutes;" two counts (Counts IV and XIV against Mangicapra, and Counts IX and XIX against FUGI) of "depositing or intermingling personal funds with funds being held in escrow or trust or on condition in violation of Rule 21V-14.008(1)(c), Florida Administrative Code and therefore in violation of Subsection 475.25(1)(e), Florida Statutes;" and two counts (Counts V and X against Mangicapra, and Counts X and XX against FUGI) of "having held funds in an interest bearing escrow account without the prior knowledge or consent of all parties in violation of Rule 21V-14.014, Florida Administrative Code and therefore in violation of Subsection 475.25(1)(e), Florida Statutes."
Respondents denied the allegations of wrongdoing advanced in the Amended Administrative Complaint and requested a formal hearing. On November 30, 1992, the Department referred the matter to the Division of Administrative Hearings for the assignment of a hearing officer to conduct the formal hearing Respondent had requested.
Nine witnesses testified at the final hearing held in this matter: Sharon Couglin; Karen Krebs; Carlos Angulo; Stacey White-Hunt; Donna Archer: Denise Preziosi; Vincent Ferri; Jules Minker; and William McChesney. In addition to the testimony of these nine witnesses, a total of 32 exhibits (Petitioner's Exhibits 1-14, 14A, and 15-21 and Respondent's Exhibits 1 through
were offered and received into evidence.
At the conclusion of the evidentiary portion of the hearing, the Hearing Officer, on the record, advised the parties of their right to file post-hearing submittals and established a deadline for the filing of such submittals. On May 13, 1993, and May 17, 1993, respectively, the Department and Respondent filed proposed recommended orders.
The parties' proposed recommended orders contain what are labelled as proposed "findings of fact." These proposed "findings of fact" have been carefully considered and are specifically addressed in the Appendix to this Recommended Order.
FINDINGS OF FACT
Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made:
The Parties
The Department is a state government licensing and regulatory agency.
Raymond Mangicapra is now, and has been at all times material to the instant case, a licensed real estate broker in the State of Florida.
He holds license number 0326800.
FUGI 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.
It holds registration number 0245691.
At all times material to the instant case prior to March 5, 1992, Mangicapra was the broker of record for FUGI.
On March 5, 1992, he resigned as FUGI's broker of record and its president.
Approximately five months later he returned to FUGI in the capacity of a licensed broker-salesman
The Angulo Transaction
On or about April 26 1991, Jose Angulo, his wife Martha Salazar Angulo, and their son Carlos Angulo, signed a written contract (hereinafter referred to as the "Angulo contract") to purchase from Lofts Development Corp. (hereinafter referred to as "LDC"), for $98,300.00, real property located in the Willow Wood subdivision in Palm Beach County upon which a residence was to be constructed.
FUGI, through its then broker of record, Mangicapra, negotiated the sale for LDC.
Mangicapra was also a part-owner of LDC and its qualifying agent. His partner was Vincent Ferri.
Ferri, on behalf of LDC, signed the Angulo contract on May 2, 1991.
Article II, Section C. of the Angulo contract provided, in part, as follows:
Use of Mortgage Loan: Time to Make Application: Purchaser intends to pay for a portion of the Purchase Price by obtaining a permanent mortgage loan ("Mortgage Loan"). Purchaser agrees to make application(s) for such Mortgage Loan from a bona fide lending institution approved by Seller ("Mortgagee") in the amount of [$96,050.00], at applicable interest rates. Purchaser agrees to make application for such Mortgage Loan within five
(5) days from execution of this Contract by Purchaser. Purchaser agrees to promptly execute all necessary documents, disclose all information within fourteen (14) days of request and pay all costs as and when requested of it by Mortgagee and/or Seller
in conjunction with such application and take all other measures to aid in being approved for a Mortgage Loan, including the making of further applications for a Mortgage Loan.
Failure to Obtain Mortgage Loan: Purchaser agrees that in the event Purchaser fails to qualify for such Mortgage Loan or
fails to qualify for a Mortgage Loan sufficient in an amount to enable Purchaser to close after duly and promptly complying with all requests of the Mortgagee and/or Seller, Purchaser shall notify Seller of this fact, in writing, whereupon Seller may request that Purchaser make further applications for a Mortgage Loan. In the event that Purchaser fails to qualify for a Mortgage Loan with any Mortgagee after duly and promptly complying with all requests of the Mortgagee and/or the Seller, as provided above, then Seller shall, at its sole discretion, either (a) give a Mortgage Loan to Purchaser at applicable interest rates at the time such Mortgage Loan is closed for the Full Amount; or (b) transfer or otherwise assign a Mortgage Loan obtained by Seller at applicable interest rates at the time such Mortgage Loan is obtained for the Full Amount which Purchaser agrees to assume at closing in lieu of any other Mortgage Loan and for which Purchaser shall reimburse Seller for all loan closing costs, title insurance premiums and escrow balances existing at closing relative to such assumed Mortgage Loan; (c) in the instance where Purchaser is approved for a Mortgage Loan in an amount less than the Full Amount, unless otherwise prohibited by reason of government or lender regulations, take a purchase money second mortgage from Purchaser at applicable interest rates for a term not to exceed five (5) years and Purchaser shall pay all closing costs in connection with such purchase money second mortgage; or (d) return any monies paid hereunder less a sum for engineering and other expenses reasonably incurred in effecting and processing this Contract whereupon this Contract shall be terminated and the parties hereto shall be relieved of all further rights and
obligations hereunder.
Default by Purchaser: In the event Seller ascertains that Purchaser has failed to qualify for a Mortgage Loan due to
Purchaser's failure to duly or promptly comply with all requests of the Mortgagee and/or Seller or due to failure on the part of Purchaser to supply accurate information, then any such event shall constitute default by Purchaser hereunder, entitling Seller to retain all sums paid hereunder as set forth in accordance with Article VI hereof.
Notwithstanding anything contained in this Article II to the contrary or
notwithstanding a subsequent mortgage disapproval by a Mortgagee, Purchaser specifically agrees that once a mortgage approval is obtained by Purchaser from one Mortgagee, the deposit monies paid by the Purchaser to Seller shall no longer be refundable. . . .
Article III, Section D. of the Angulo contract provided, in part, as follows:
Subject to the following provisions of this Paragraph, the estimated date of completion for the residence shall be on or about 120 days from mtg approv. . . . . In the event said Residence shall not be completed two (2) years from the date of this Contract as aforesaid, Purchaser shall have the option to cancel this Contract by giving written notice to Seller ("Cancellation Notice") within 5 days after two (2) years from the date of this Contract ("Cancellation Period") and upon such cancellation Seller shall refund to Purchaser his deposit made hereunder. Upon such Refund, all parties to this Contract shall be fully discharged and relieved from the terms and obligations hereof. Liability of Seller is limited to the Refund and in no event shall Seller be liable to Purchaser for any damages which Purchaser may sustain. In the event Purchaser does not send the Cancellation Notice within the Cancellation Period, this Contract shall remain in full force and effect and Purchaser shall not have the right to cancel this Contract unless Seller is otherwise in default of this Contract. Seller shall not be obliged to make, provide or compensate for any accommodations to Purchaser as a result of delayed completion nor shall Seller be liable for any expenses or inconveniences to Purchaser which may directly or indirectly arise from delay of delivery of possession.
Article VI, Section A. of the Angulo contract addressed the subject of "Purchaser's Default." It provided, in part, as follows:
If Purchaser shall fail to cure such default within such seven (7) day period, Seller shall, and does hereby have the unrestricted option to (1) consider Purchaser in default under this Contract, (2) retain all sums paid to it, whether held in escrow or otherwise, hereunder as agreed upon and liqu[id]ated damages and in full settlement of any claim for damages, and (3) terminate all rights of Purchaser under this Contract. . . .
Article VII of the Angulo contract addressed the subject of "Deposit Money." It provided as follows:
Seller shall at its option have the right to use the deposit money for any purposes as it deems necessary.
Article VIII, Section B. of the Angulo contract provided as follows:
Purchaser represents and warrants that this sale of the Property pursuant to this Contract was made by Seller's personnel and Purchaser agrees to indemnify and hold harmless Seller against any claims of real estate brokers for commissions relating to this sale.
Article VIII, Section C. of the Angulo contract provided as follows:
This Contract may not be assigned, sold or transferred by Purchaser without the prior written consent thereto by Seller, which consent may be withheld in Seller's sole discretion.
There was no comparable provision in the contract restricting LDC's right to assign.
Article VIII, Section E. of the Angulo contract provided as follows:
This Contract shall be binding upon the parties hereto and their respective heirs, executors, legal representatives, successors and, as permitted hereunder, assigns.
Addendum E to the Angulo contract, which was signed by the Angulos on April 26, 1991, and by Ferri on May 2, 1991, provided, in part, as follows:
The purchaser(s) of a one or two family residential dwelling unit has the right to have all deposit fund[s] (up to 10 percent of the purchase price) deposited in an interest bearing escrow account. This right
may be waived in writing by the purchaser(s).
Purchaser(s) hereby waive their right to have all deposit funds (up to 10 percent of purchase price) deposited in an interest bearing escrow account. . . .
First Union Group, Inc., is the agent for the Seller(s) and will be paid for his services by the Seller(s). . . .
The Angulos' initial deposit was a check, which they gave to Mangicapra, made out to FUGI in the amount of $500.00. In conjunction with
making this payment, they signed a Reservation Deposit/Contract Deposit Transfer Agreement, which provided, in part, as follows:
It is specifically understood that this Earnest Money deposit is to be held in First Union Group, Inc's (hereinafter First Union Group) trust account. Upon acceptance of said reservation/contract between [the Angulos] (buyer) and Lofts Development Corp. (seller), and upon clearance of said deposit, buyer agrees that First Union Group may automatically transfer to seller said Earnest Money and said Earnest Money shall be treated as purchasers['] initial investment deposit.
Purchaser agrees that once said reservation/contract between buyer and seller named above is accepted by seller, and there is in effect a purchase agreement, any and all future deposits due per said purchase agreement shall be made payable directly [to] seller. If any future deposits are inadvertently made payable to First Union Group, buyer hereby gives First Union Group the right and authorization to transfer said deposit money to seller. Any deviation to the above must be in writing from buyer at the time of the reservation/contract. . . .
The "automatic transfer" of deposit monies from the real estate broker holding these monies to the seller/builder, like that authorized by this signed Reservation Deposit/Contract Deposit Transfer Agreement, was the accepted practice in the area.
Mangicapra deposited the $500.00 check he had been given by the Angulos in FUGI's interest-bearing money market escrow account at Capital Bank in Delray Beach, Florida. The deposit was noted on the Angulos's ledger card. Respondents did not have the written permission of all interested parties to place the Angulos' deposit monies in such an interest-bearing account.
Respondents received three other earnest money deposits from the Angulos: a check, dated May 30, 1991, payable to FUGI in the amount of $700.00 (hereinafter referred to as the "May 30 check"); a check, dated June 30, 1991, payable to FUGI in the amount of $700.00 (hereinafter referred to as the "June
30 check"); and a check, dated July 30, 1991, payable to FUGI in the amount of
$600.00 (hereinafter referred to as the "July 30 check").
The June 30 and July 30 checks were deposited in FUGI's interest- bearing money market escrow account at Capital Bank and the deposits were noted on the Angulos' ledger card.
The May 30 check, however, was inadvertently deposited in FUGI's general operating account at Capital Bank, instead of its escrow account, as a result of a bookkeeping error.
On or about August 8, 1991, Respondents wrote a check (hereinafter referred to as "check #1395") transferring $4,800.00 from its Capital Bank escrow account to LDC.
The $4,800.00 represented escrow funds being held by Respondents in connection with six different transactions. It included $1,800.00 of the
$2,500.00 in earnest money deposits that Respondents had received from the Angulos. The transfer of this $1,800.00 to LDC was in accordance with the Reservation Deposit/Contract Deposit Transfer Agreement signed by the Angulos.
Upon receiving check #1395, Ferri endorsed it back to FUGI to compensate FUGI for services it had provided LDC and for expenses FUGI had incurred in conjunction with the performance of these services. The endorsed check was deposited in FUGI's interest-bearing money market account at Capital Bank.
On or about November 1, 1991, Donna Archer, who was then an employee of FUGI, sent a Verification of Escrow Deposit to Paragon Mortgage Corporation (hereinafter referred to as "PMC"), from whom the Angulos were attempting to obtain a mortgage loan. Archer provided the following erroneous information in this Verification of Escrow Deposit:
As Escrow Agent in the [Angulo] transaction, we are now holding the following amount in our escrow account for the above captioned transaction:
$2,500.00------- total held in escrow.
On or about December 26, 1991, PMC sent the Angulos the following letter advising them that their application for a mortgage loan had been conditionally approved:
We are please[d] to inform you that your application for a FHA mortgage in the amount of 95,750.00 has been approved. The following items are contingencies on the loan and must be met prior to closing.
Provide independent documentation of YTD income for Martha (i.e. copy of ledger signed by accountant of employer)
Amendment of contract to reflect the following, contract to remain current through closing
Hazard insurance policy for at least the loan amount
Survey with flood certification
[C]lear soil treatment guaranty
Clear final inspection
Proof of 10 year HOW warranty or 2/10 [h]ome buyers warranty
At the time this conditional loan commitment was made, the master appraisal of the property was about to expire. Accordingly, an extension of the deadline was sought by PMC.
By written agreement, dated April 26, 1992, and signed by Ferri and Jules Minker, the president of Contemporary Community Concepts Corp. (hereinafter referred to as "Contemporary"), LDC, which no longer wished to construct homes in the Willow Wood subdivision, assigned the Angulo contract to Contemporary:
In consideration of the sum of $10.00 Ten Dollars lawful money of the United States, I, Vincent A. Ferri, President of Lofts Development Corporation, hereby assign without reservation or limitation and free
of encumbrance, the purchase contract between Jose Antonio and Martha Salazar Angulo, his wife and Lofts Development Corporation, dated April 26, 1991 to Contemporary Community Concepts Corporation.
The deposit monies indicated and due under the contract in the approximate amount of $1800.00 Eighteen Hundred Dollars, are not transferred by this agreement and remain with Lofts Development Corporation.
In fact, the "deposit monies indicated and due under the contract," amounted to
$2,500.00, although only $1,800.00 of that amount had been transferred to LDC.
In May of 1992, upon attempting to contact Mangicapra to find out why LDC had not yet begun to work on their house, the Angulos discovered that FUGI had closed the office out of which it had been conducting its business. The Angulos brought the matter to the attention of Sharon Couglin of PMC. Couglin wrote a letter to an official at HUD to apprise the agency of the situation. A copy of the letter was sent to the Florida Real Estate Commission.
Notwithstanding the Angulos' beliefs to the contrary, FUGI was still in business. It had simply moved to another location in Boynton Beach. (Mangicapra was not at this time, however, associated with FUGI in any way.)
Minker contacted FUGI and the Angulos and advised them that the Angulo contract had been assigned to Contemporary. In his discussions with the Angulos, Minker told them that they would be given credit for the earnest money deposits that they had made. The Angulos, in turn, indicated that they wanted Contemporary to proceed with the construction of the house LDC had agreed to build for them.
In accordance with the Angulos' stated desires, Contemporary proceeded with the construction of the house.
As the house neared completion, the Angulos learned that the conditional mortgage loan commitment they had received was no longer valid because the master appraisal had expired.
They thereupon tried to contact FUGI to explore their options. This time they were successful in their efforts to get in touch with a FUGI representative. They spoke with Denise Preziosi, who had replaced Mangicapra as FUGI's broker of record.
The Angulos asked Preziosi if they could obtain a refund of their deposit monies in the event they decided that they did not want to go through with their purchase of the house.
Preziosi indicated that she did not know the answer to the question and that, in any event, FUGI no longer held any of the Angulos' deposit monies.
At the time she made this statement, Preziosi was under the mistaken impression that FUGI had transferred all of these monies to LDC.
On or about November 25, 1992, Preziosi sent a letter to Minker, the body of which read, in part, as follows:
I am in receipt of a copy of the "Agreement" between Contemporary Community Concepts Corporation and Lofts Development Corporation which Patti faxed to me yesterday. In reading this Agreement, I noticed that the amount stated as a credit to the Angulos is $1800 rather than the $2500 they did in fact pay to Lofts. I understand that you did not nor will not receive any money from Lofts but that you agreed to accept the assignment of the contract and would give them credit for their deposit.
In this regard, please amend your records to reflect a credit of $2,500 as deposit monies rather than $1,800.
The Angulos made their final color selections for the house in mid- December, 1992.
Thereafter Minker obtained a certificate of occupancy for the house.
Although Carlos Angulo, in Minker's office, signed a document prepared by Minker agreeing "to complete loan processing for a new loan and to close on [the house] when funds are made available as a result of this application, but not to exceed 60 days," 1/ when Carlos took this document home and presented it to his parents for their signature, they refused to sign it.
The Angulos did not "complete loan processing for a new loan."
The Angulos have not been refunded any of the $2,500.00 in earnest money deposits they have made, nor have they received any of the interest earned on these deposits. It has not been shown, however, that the Angulos are now, or were at any time previous hereto, entitled to such a refund under the provisions of their contract with LDC.
The White-Hunt Transaction
On or about May 3, 1990, Stacey White-Hunt signed a written contract (hereinafter referred to as the "White-Hunt contract") to purchase from LDC, for
$97,000.00, real property located in the Delray Garden Estates subdivision in Palm Beach County upon which a residence was to be constructed.
FUGI, through its then broker of record, Mangicapra, negotiated the sale for LDC.
Ferri, on behalf of LDC, signed the White-Hunt contract on May 9, 1990.
The White-Hunt contract contained provisions identical in all material respects to Article II, Section C., Article III, Section D., Article VI, Section A., Article VII, and Article VIII, Sections B., C. 2/ and E. of the Angulo contract, as well as Addendum E to the Angulo contract. (These contractual provisions are set out above.)
White-Hunt's initial deposit was a check, which she gave to Mangicapra, made out to FUGI in the amount of $500.00. In conjunction with making this payment, she signed a Reservation Deposit/Contract Deposit Transfer Agreement, which was identical in all material respects to the Reservation Deposit/Contract Deposit Transfer Agreement signed by the Angulos.
Respondents received one other earnest money deposit from White-Hunt. It was a check payable to FUGI in the amount of $1,000.00.
The $500.00 check and the $1,000.00 check were deposited in FUGI's interest-bearing money market escrow account at Capital Bank and the deposits were noted on White-Hunt's ledger card. Respondents did not have the written permission of all interested parties to place White-Hunt's deposit monies in such an interest-bearing account.
On or about May 23, 1990, Respondents wrote a check transferring
$6,500.00 from its Capital Bank escrow account to LDC.
The $6,500.00 represented escrow funds being held by Respondents in connection with various transactions. It included the $1,500.00 in earnest money deposits that Respondents had received from White-Hunt. The transfer of this $1,500.00 to LDC was in accordance with the Reservation Deposit/Contract Deposit Transfer Agreement signed by White-Hunt.
White-Hunt sought, but failed to qualify for, a conventional mortgage loan.
Thereafter she applied for an FHA mortgage loan. By notice dated October 10, 1991, she was advised that her application had been denied.
On February 7, 1992, the law firm representing White-Hunt sent a letter to Respondents, the body of which read as follows:
Please be advised that I have been retained by Stacey Hunt with regard to the above- referenced Contract in order to secure a return of her deposit. I have enclosed herein copies of the deposit checks made payable to ERA First Union Group in the total sum of
$1,500.00 which were provided to you on April 17, 1990 and May 8, 1990. Since Ms. Hunt has failed to qualify for a mortgage, in accordance with Paragraph (b)(2) of the Contract, this letter shall serve as formal demand for a return of any and all deposits
placed with your company and any and all interest accrued thereon. In the event I am not in receipt of a check payable to Ms. Hunt on or before February 14, 1992, I will presume that you have converted these funds and proceed to undertake . . . any and all efforts to have the funds returned including, without limitation, contacting the Florida Real Estate Commission.
Preziosi, on behalf of FUGI, responded by letter to the law firm. The body of her letter read as follows:
In response to your letter of even date enclosed please find a copy of a Reservation Deposit/Contract Deposit Transfer which was signed on April 17, 1990 by Stacey Hunt. You will note that this agreement states that once a contract between buyer and seller is in effect, any deposit money given to First Union Group, Inc. will be transferred to the seller and treated as the initial investment deposit. Further, all future deposits are to be made payable to the seller. If an additional deposit was received by First Union Group, Inc., it too would be transferred to the seller.
In this regard, be advised that on May 23, 1990, $1,500 that was being held by First Union Group, Inc. on behalf of Ms. Hunt was transferred to Lofts Development Corp. as per this agreement. Also enclosed is a copy of the check together with a copy of the escrow cards which represented all deposits transferred via this check.
Respondents have not returned any deposit monies to White-Hunt; however, as Preziosi pointed out in her letter, well before White-Hunt had requested a refund from them, Respondents had transferred these monies to LDC in accordance with the Reservation Deposit/Contract Deposit Transfer Agreement White-Hunt had signed.
CONCLUSIONS OF LAW
The Florida Real Estate Commission (hereinafter referred to as 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.
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).
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).
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).
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).
The Amended Administrative Complaint issued in the instant case charges that Respondents each committed five separate violations of Section 475.25(1), Florida Statutes, in connection with the Angulo transaction and an additional five separate violations in connection with the White-Hunt transaction.
Count I alleges that Respondent Mangicapra violated Section 475.25(1)(b), Florida Statutes, in connection with the Angulo transaction.
Count VI advances an identical allegation against Respondent FUGI. Count XI alleges that Mangicapra also violated Section 475.25(1)(b), Florida Statutes, in connection with the White-Hunt transaction. Count XVI advances an identical allegation against FUGI.
Section 475.25(1)(b), Florida Statutes, authorizes the Commission to discipline a licensed broker who "[h]as been guilty of fraud, misrepresentation, 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." "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.
The evidence clearly and convincingly establishes that Respondents violated Section 475.25(1)(b), Florida Statutes, as alleged in Counts I and VI of the Amended Administrative Complaint, by negligently depositing, in derogation of their responsibilities, the Angulos' May 30, 1991, check in FUGI's general operating account, instead of an escrow account. 3/
The Department has failed to establish by even a preponderance of the evidence that Respondents engaged in any conduct in violation of Section 475.25(1)(b), Florida Statutes, in connection with the White-Hunt transaction. Accordingly, Counts XI and XVI of the Amended Administrative Complaint should be dismissed.
Count II alleges that Mangicapra violated Section 475.25(1)(d)1, Florida Statutes, in connection with the Angulo transaction. Count VII advances an identical allegation against FUGI. Count XII alleges that Mangicapra also violated Section 475.25(1)(d)1, Florida Statutes, in connection with the White- Hunt transaction. Count XVII advances an identical allegation against FUGI.
Section 475.25(1)(d)1, Florida Statutes authorizes the Commission to discipline a licensed broker who "[h]as failed to account or deliver to any person, including a licensee under this chapter, at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery, any personal property such as . . . [a] deposit . . . , which has come into his hands and which he is not in law or equity entitled to retain under the circumstances."
The Department has failed to establish by even a preponderance of the evidence that Respondents engaged in any conduct in violation of Section 475.25(1)(d)1, Florida Statutes, in connection with either the Angulo transaction or the White-Hunt transaction. Accordingly, Counts II, VII, XII and XVII of the Amended Administrative Complaint should be dismissed. Respondents' failure to refund White-Hunt's $1,500.00 in earnest money deposits did not constitute a violation Section 475.25(1)(d)1, Florida Statutes, inasmuch as White-Hunt demanded such a refund from Respondents only after Respondents had already delivered these deposit monies to LDC in accordance with the Reservation Deposit/Contract Deposit Transfer Agreement that White-Hunt had signed and therefore, at the time of White-Hunt's demand for a refund, these monies were no longer in Respondents' possession. For the same reason, Respondents did not violate Section 475.25(1)(d)1, Florida Statutes, by failing to refund the
$1,800.00 of the Angulos' earnest money deposits that Respondents had already delivered to LDC in accordance with the Reservation Deposit/Contract Deposit Transfer Agreement that the Angulos had signed. With respect to the $700.00 of the Angulos' earnest money deposits that Respondents retained, no showing has been made that the Angulos have been at any time material hereto entitled to a refund of these funds under the provisions of their contract with LDC. Respondents' failure to provide them with such a refund therefore did not constitute a violation of Section 475.25(1)(d)1, Florida Statutes.
Count III alleges that Mangicapra violated Section 475.25(1)(k), Florida Statutes, in connection with the Angulo transaction. Count VIII advances an identical allegation against FUGI. Count XIII alleges that Mangicapra also violated Section 475.25(1)(k), Florida Statutes, in connection with the White-Hunt transaction. Count XVIII advances an identical allegation against FUGI.
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."
The evidence clearly and convincingly establishes that Respondents violated Section 475.25(1)(k), Florida Statutes, as alleged in Counts III and VIII of the Amended Administrative Complaint, by depositing the Angulos' May 30, 1991, check in FUGI's general operating account, instead of an escrow account. 4/
The Department has failed to establish by even a preponderance of the evidence that Respondents engaged in any conduct in violation of Section 475.25(1)(k), Florida Statutes, in connection with the White-Hunt transaction. As required by Section 475.25(1)(k), Florida Statutes, Respondents placed White- Hunt's earnest money deposits in its escrow account at Capital Bank, where they remained until they were transferred to LDC in accordance with the Reservation Deposit/Contract Deposit Transfer Agreement that White-Hunt had signed. Accordingly, Counts XIII and XVIII of the Amended Administrative Complaint should be dismissed.
Count IV alleges that Mangicapra violated Rule 21V-14.008(1)(c), Florida Administrative Code, and, therefore, Section 475.25(1)(e), Florida Statutes, in connection with the Angulo transaction. Count IX advances an identical allegation against FUGI. Count XIV alleges that Mangicapra also violated Rule 21V-14.008(1)(c), Florida Administrative Code, and, therefore, Section 475.25(1)(e), Florida Statutes, in connection with the White-Hunt transaction. Count XIX advances an identical allegation against FUGI.
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]."
Among the rules "made or issued under the provisions of [Chapter 475, Florida Statutes]" is Rule 21V-14.008, Florida Administrative Code, subsection (1)(c) of which provides as follows:
"Trust" or "escrow" account shall be construed to mean an account in a bank or trust company, title company having trust powers, credit union, or a savings and loan association within the State of Florida. Only funds described in this rule shall be deposited in trust or escrow accounts. No personal funds of any person shall be deposited or intermingled with any funds being held in escrow, trust or on condition.
The evidence clearly and convincingly establishes that Respondents violated Rule 21V-14.008(1)(c), Florida Administrative Code, and, therefore, Section 475.25(1)(e), Florida Statutes, as alleged in Counts IV and IX of the Amended Administrative Complaint, by depositing the Angulos' May 30, 1991, check in FUGI's general operating account, instead of an escrow account. 5/
The Department has failed to establish by even a preponderance of the evidence that Respondents engaged in any conduct in violation of Rule 21V- 14.008(1)(c), Florida Administrative Code, in connection with the White-Hunt transaction. As required by Rule 21V-14.008(1)(c), Florida Administrative Code, Respondents placed White-Hunt's earnest money deposits in an escrow account at Capital Bank and did not intermingle them with funds not being held in trust or escrow. These deposit monies remained in this escrow account until they were
transferred to LDC in accordance with the Reservation Deposit/Contract Deposit Transfer Agreement that White-Hunt had signed. Accordingly, Counts XIV and XIX of the Amended Administrative Complaint should be dismissed.
Count V alleges that Mangicapra violated Rule 21V-14.014, Florida Administrative Code, and, therefore, Section 475.25(1)(e), Florida Statutes, in connection with the Angulo transaction. Count X advances an identical allegation against FUGI. Count XV alleges that Mangicapra also violated Rule 21V-14.014, Florida Administrative Code, and, therefore, Section 475.25(1)(e), Florida Statutes, in connection with the White-Hunt transaction. Count XX advances an identical allegation against FUGI.
Rule 21V-14.014, Florida Administrative Code, is another of the rules "made or issued under the provisions of [Chapter 475, Florida Statutes]." It provides as follows:
A licensed real estate broker is not prohibited from placing escrow money, entrusted to him by any person dealing with him as a broker, in an interest bearing account. The placement of escrow monies in an interest bearing account, and designation of the party who is to receive the interest, must be done with the written permission of all the interested parties. Said escrow account must be in a title company, banking institution, credit union, or savings and loan association located and doing business in Florida. The placement of escrow money must be in only these four types of institutions and not in stock or bond brokerage houses.
In order to disburse principal and interest to the designated party at the time agreed, the broker must first transfer said principal and interest to a non-interest bearing account from which he must then disburse. In the event the broker is designated by all parties to receive the interest, only the principal is to be transferred to the non-interest bearing escrow account for further disbursement. The interest is to be transferred directly to the broker's operating account.
As an alternative to paragraph (2) above, the broker may establish an individual interest bearing escrow account for a specific transaction or sum of money. On the date agreed upon for disbursement of the principal and interest, the broker shall close the account with checks issued to the appropriate person(s) or corporation(s) for the principal and interest.
The evidence clearly and convincingly establishes that Respondents violated Rule 21V-14.014, Florida Administrative Code, and, therefore, Section 475.25(1)(e), Florida Statutes, as alleged in Counts V, X, XV and XX of the Amended Administrative Complaint, by placing the Angulos' and White-Hunt's
deposit monies in an interest bearing escrow account without the written permission of all interested parties.
In determining what disciplinary action should be taken against Respondents for having committed the violations found above, 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).
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.
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.
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:
The severity of the offense.
The degree of harm to the consumer or public.
The number of counts in the Administrative Complaint.
The number of times the offenses previously have been committed by the licensee.
The disciplinary history of the licensee.
The status of the licensee at the time the offense was committed.
The degree of financial hardship incurred by a licensee as a result of the imposition of a fine or suspension of the licensee.
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.
Having considered the facts of the instant case in light of the provisions of Rule 21V-24.001, Florida Administrative Code, set forth above, the Hearing Officer concludes that the Commission should discipline Mangicapra for having committed the violations (alleged in Counts I, III, IV, V and XV of the Amended Administrative Complaint) found above by suspending his license for a period of 120 days and requiring him to pay an administrative fine in the amount of $3,000.00, and it should discipline FUGI for having committed the violations (alleged in Counts VI, VIII, IX, X and XX of the Amended Administrative Complaint) found above by suspending its registration for a period of 120 days and requiring it to pay an administrative fine in the amount of $3,000.00.
Based upon the foregoing Findings of Fact and Conclusions of Law it is hereby recommended that the Commission enter a final order finding Mangicapra guilty of the violations alleged in Counts I, III, IV, V, and XV of the Amended Administrative Complaint to the extent indicated above, suspending Mangicapra's license for a period of 120 days and fining him $3,000.00 for having committed these violations, finding FUGI guilty of the violations alleged in Counts VI, VIII, IX, X, and XX of the Amended Administrative Complaint to the extent indicated above, suspending FUGI's registration for a period of 120 days and fining it $3,000.00 for having committed these violations, and dismissing the remaining allegations set forth in the Amended Administrative Complaint.
DONE AND ENTERED in Tallahassee, Leon County, Florida, this 30th day of June, 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/ Minker, in turn, agreed "to fund expenses related to the new application."
2/ The White-Hunt contract, like the Angulo contract, contained no provision restricting LDC's right to assign.
3/ To the extent that Counts I and VI allege that Respondents engaged in other conduct in connection with the Angulo transaction that also constituted a violation of Section 475.25(1)(b), Florida Statutes, such allegations lack sufficient evidentiary support.
4/ To the extent that Counts III and VIII allege that Respondents engaged in other conduct in connection with the Angulo transaction that also constituted a
violation of Section 475.25(1)(k), Florida Statutes, such allegations lack sufficient evidentiary support.
5/ To the extent that Counts IV and IX allege that Respondents engaged in other conduct in connection with the Angulo transaction that also constituted a violation of Rule 21V-14.008(1)(c), Florida Administrative Code, and, therefore, Section 475.25(1)(e), Florida Statutes, such allegations lack sufficient evidentiary support.
APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-7080
The following are the Hearing Officer's specific rulings on the "findings of facts" proposed by the parties in their post-hearing submittals:
The Department's Proposed Findings
1-6. Accepted and incorporated in substance, although not necessarily repeated verbatim, in this Recommended Order.
To the extent that this proposed finding states that, pursuant to the terms of the contract, the "house was to be built within two to three months after purchasers' credit was approved," it has been rejected because it is not supported by persuasive competent substantial evidence. Otherwise, it has been accepted and incorporated in substance.
To the extent that this proposed finding states that the total purchase price was $96,000.00, it has been rejected because it is not supported by persuasive competent substantial evidence. Otherwise, it has been accepted and incorporated in substance.
9-14. Accepted and incorporated in substance.
15. Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.
16-23. Accepted and incorporated in substance.
Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.
First sentence: To the extent that this proposed finding suggests that on May 14, 1992, FUGI was not in business, it has been rejected because it is not supported by persuasive competent substantial evidence. Otherwise, it has been accepted and incorporated in substance; Second sentence: Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.
To the extent that this proposed finding states that the Angulos inquired of a FUGI representative whether it would be possible for them to obtain a refund of their deposit monies if they decided that they no longer wanted the house and it further states that Jose and Martha Angulo refused to sign the document referred to in Finding of Fact 45, it has been accepted and incorporated in substance. Otherwise, it has been rejected because it is not supported by persuasive competent substantial evidence.
Accepted and incorporated in substance.
To the extent that this proposed finding suggests that Respondents have retained all (rather than just $700.00) of the Angulos' deposit monies, it has been rejected because it is not supported by persuasive competent substantial evidence. Otherwise, it has been accepted and incorporated in substance.
29-30. Accepted and incorporated in substance.
31. First sentence: Accepted and incorporated in substance; Second sentence: Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.
32-34. Accepted and incorporated in substance.
35. Rejected because it is not supported by persuasive competent substantial evidence.
36-39. Accepted and incorporated in substance.
Respondents' Proposed Findings
1-9. Accepted and incorporated in substance.
10. Last sentence: Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer; Remaining sentences: Accepted and incorporated in substance.
11-15. Accepted and incorporated in substance.
16-17. Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.
18-20. Accepted and incorporated in substance.
COPIES FURNISHED
James H. Gillis, Esquire Senior Attorney
Department of Professional Regulation, Division of Real Estate
Legal Section, Suite N 308 Hurston Building, North Tower
400 West Robinson Street Orlando, Florida 32801-1772
Myron S. Dunay, Esquire 616 East Atlantic Avenue
Delray Beach, Florida 33483
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.
| Issue Date | Proceedings |
|---|---|
| Apr. 06, 1994 | Final Order filed. |
| Apr. 06, 1994 | Final Order filed. |
| Nov. 12, 1993 | ORDER(Commission orders that Respondent Mangicapra pay the fine by 02/01/94) filed. |
| Nov. 12, 1993 | Final Order filed. |
| Sep. 30, 1993 | Letter to SML from Raymond Magicapra (re: ltr inadvertently sent to James Gillis) w/supporting attachment filed. |
| Sep. 22, 1993 | Letter to R. Mangicapra from SML sent out. |
| Sep. 20, 1993 | Letter to SML from R. Mangicapra (re: motion for extension of time to pay fine per agency Final Order) filed. |
| Sep. 03, 1993 | Final Order filed. |
| Jun. 30, 1993 | Recommended Order sent out. CASE CLOSED. Hearing held 4/6/93. |
| Jun. 17, 1993 | Motion to Perpetuate Testimony of Witness w/Petitioner`s Exhibit filed. |
| May 13, 1993 | Peititioner`s Proposed Recommended Order filed. |
| May 03, 1993 | Transcript filed. |
| Apr. 06, 1993 | CASE STATUS: Hearing Held. |
| Mar. 12, 1993 | (ltr form) Request for Subpoenas filed. (From Kelly Brown-Johnson) |
| Dec. 23, 1992 | Notice of Hearing sent out. (hearing set for April 6-7, 1993; 9:30am; West Palm Beach) |
| Dec. 14, 1992 | Ltr. to DSM from M. Dunay re: response to Initial Order; Respondents` Answer to Amended Administrative Complaint filed. |
| Dec. 14, 1992 | Compliance with Order (filed by J. Gillis) filed. |
| Dec. 03, 1992 | Initial Order issued. |
| Nov. 30, 1992 | Agency referral letter; Amended Administrative Complaint; Administrative Complaint; Supporting Documents; Election of Rights filed. |
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 17, 1993 | Agency Final Order | |
| Jun. 30, 1993 | Recommended Order | Broker violated law by placing escrow monies in interest bearing escrow account without permission and placing other monies in non-escrow account. |
