and Michael Chillemi (Count II) violated Section 475.25(1)(b), Florida Statutes, by engaging in an act of "misrepresentation, concealment, false
promises, false pretences, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction," and that Michael Chillemi (Count III) violated Section 475.25(1)(e), Florida Statutes, and Rule 61J2-10.032, Florida Administrative Code, by "failure to notify the Florida Real Estate Commission of a deposit dispute and failure to implement remedial action." Finally, Count IV (mistakenly designated as Count III) charges that Michael Chillemi violated the provisions of Section 475.25(1)(e), Florida Statutes, and Rule 61J2-14.012(2) and (3) based on an audit of June 24, 1993, which petitioner contends revealed that he "failed to reconcile the escrow accounts by comparing the total trust liability with the reconciled bank balances of all trust accounts," and therefore was "guilty of failure to prepare and sign the required written monthly escrow statement-reconciliations."
At hearing, petitioner called Rose M. Bocek and Terry Gills- Addleburg as witnesses, and its exhibits 1-7 were received into evidence. Respondents Christopher Chillemi and Michael Chillemi testified on their own behalf, but offered no additional exhibits.
The transcript of the hearing was filed March 24, 1994, and the parties were accorded ten days from that date within which to file proposed findings of fact. Neither party elected to file such proposals within the allotted time, and as of the date of the entry of this recommended order no proposals have been filed.
Petitioner, Department of Business and Professional Regulation, Division of Real Estate, is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Section 20.165, Florida Statutes, Chapters 120, 455, and 475, Florida Statutes, and the rules promulgated pursuant thereto.
Respondent, Christopher Chillemi (Christopher), is now and was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0136243. The last license issued to Christopher was as a broker- salesperson with Michael F. Chillemi, 3615 Lake Worth Road, Lake Worth, Florida 33460.
Respondent, Michael F. Chillemi (Michael), is now and was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0014678. The last license issued was as a broker t/a Century 21 Chillemi Enterprises, 3615 Lake Worth Road, Lake Worth, Florida 33460.
Counts I-III, the rental transaction
On May 18, 1993, Christopher, while licensed and operating as a broker- salesperson for Michael F. Chillemi, showed a rental unit on which they had a listing, located at 752 Lori Drive, Palm Beach County, Florida, to Ms. Rose M. Bocek.
Ms. Bocek liked the apartment, but since she was currently under a lease at another residence, advised Christopher that she could not take the unit unless the owner agreed to start the lease in August 1993. Christopher advised
Ms. Bocek that he would present her offer to the owner, who lived out of state, and requested a deposit check should the owner agree. Thereupon, Ms. Bocek issued her check, dated May 18, 1993, payable to "C-21 Chillemi Escrow" in the sum of $375.00, as a deposit on the apartment, and delivered it to Christopher. 1/
That evening, Christopher spoke with the owner and he agreed to lease the apartment to Ms. Bocek starting in August 1993. Ms. Bocek's check for $375 was duly deposited into the Century 21 Chillemi Enterprises' escrow account on May 19, 1993.
Notwithstanding that the owner had agreed to lease the premises to her as she had requested, Ms. Bocek called Christopher on May 19, 1993, and told him she had changed her mind and did not want to rent the apartment. Christopher, after checking with the owner, advised Ms. Bocek that, under the circumstances, the owner had advised him not to return her deposit.
After speaking with friends, Ms. Bocek contacted the Florida Real Estate Commission to see if it could assist her in retrieving her money and, on June 24, 1993, an investigator went to Century 21 Chillemi Enterprises' office pursuant to that complaint.
Subsequently, by letter of June 24, 1993, Ms. Bocek made a written demand on Michael Chillemi, Century 21 Chillemi Enterprises, for the return of her $375.00. After speaking with the owner by phone, and receiving his permission, Michael Chillemi did, on June 25, 1993, release from his escrow account and deliver to Ms. Bocek her deposit of $375.00, and by letter of the same date notified the Florida Real Estate Commission of the disposition of the deposit.
The audit of June 24, 1993
While at the premises of Century 21 Chillemi Enterprises on June 24, 1993, petitioner's investigator conducted an audit inspection of Michael Chillemi's escrow account. That audit revealed that although Michael's escrow account balanced perfectly with the sums he should have in escrow, as it had on every prior audit of his office accounts, Michael did not have a written monthly statement-reconciliation document or form upon which was included the date the reconciliation was undertaken, the date used to reconcile the balances, the name of the bank, the name of the account, the account number, the account balance and date, deposits in transit, outstanding checks identified by date and check number, and which was signed and dated by the broker, as required by Rule 61J2- 14.012, Florida Administrative Code. Rather, Michael's practice was to utilize the back of his bank statement, together with a list of all pending contracts (which included the names of the parties, the date the transaction was to close, and the amount in escrow) and his check stubs, to reconcile his trust liability. These sources of information supplied the basic information required by Rule 61J2- 14.012, Florida Administrative Code, but the method employed to account for his trust liability did not result in one document reflecting the required information, and the reconciliation Michael did was not dated and signed. But for such failing, Michael's banking and accounting practices were deemed sound by petitioner's investigator.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings. Sections 120.57(1) and 120.60(7), Florida Statutes.
At issue in this proceeding is whether Christopher's conduct violated the provisions of Section 475.25(1)(b), Florida Statutes, and whether Michael's conduct violated the provisions of Section 475.25(1)(b) and (e), Florida Statutes, and Rules 61J2-10.032 and 61J2-14.012(2) and (3), Florida Administrative Code. In cases of this nature, the petitioner bears the burden of proving its charges by clear and convincing evidence. See Ferris v. Turlington, 510 So.2d 292 (Fla. 1987). The nature of clear and convincing evidence has been described in Slomowitz v. Walker, 429 So.2d 797, 800 (Fla. 4th DCA 1983), as follows:
We therefore hold that clear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remember- ed; the testimony must be precise and explicit and the witness must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or convic- tion, without hesitancy, as to the truth of the allegations sought to be established.
See also Smith v. Department of Health and Rehabilitative Services, 522 So.2d 956 (Fla. 1st DCA 1988), which quotes with approval the above-quoted language from Slomowitz.
In establishing the foregoing standard, the court in Ferris v. Turlington, supra, noted at page 293:
. . . the revocation of a professional li- cense is of sufficient gravity and magnitude to warrant a standard of proof greater than a mere preponderance of the evidence . . . The correct standard for the revocation of a pro- fessional license such as that of a lawyer, real estate broker, or, as in this instance, a teacher, is that the evidence must be clear and convincing. We agree with the district court in Reid v. Florida Real Estate Commis- sion, 188 So.2d 846, 851 (Fla. 2d DCA 1966),
that:
The power to revoke a license should be exercised with no less careful circum- spection than the original granting of it. And the penal sanctions should be directed only toward those who by their conduct have forfeited their right to the privilege, and then only upon clear and convincing proof of substantial causes justifying the forfeiture.
And, in Brod v. Jernigan, 188 So.2d 575 (Fla. 2d DCA 1966), the court noted, at page 581:
Chapter 475 vests in the Florida Real Estate Commission a broad discretionary power and authority to supervise the privileged business of real estate broker and to deal firmly with those engaged in it, even to the point of ta- king away their means of livelihood by revo- cation or suspension of license. But such potent administrative weapons must always be reasonably and cautiously, and even sparingly, utilized. The administrative process of the Commission should be aimed at the dishonest and unscrupulous operator, one who cheats, swindles, or defrauds the general public in handling real estate transactions. (Emphasis added)
Pertinent to this case, Section 475.25(1), Florida Statutes, provides that the Florida Real Estate Commission may:
. . . place a licensee . . . on probation; may suspend a license . . . for a period not
exceeding 10 years; may revoke a license . . . may impose an administrative fine not to ex- ceed $1,000 for each count or separate offense; and may issue a reprimand, and any or all of the foregoing, if it finds that the
licensee . . .
* * *
(b) Has been guilty of . . . misrepresen- tation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction. . . .
* * *
(e) Has violated any of the provisions of
. . . any . . . rule made . . . under the provisions of this chapter or chapter 455.
First, with regard to Christopher, the sole charge in the administrative complaint (Count I) is that his conduct with regard to Ms. Bocek violated the provisions of Section 475.25(1)(b), Florida Statutes. Such charge has not, however, been sustained. Indeed, there is nothing of record that would raise even the slightest credible suggestion that Christopher's conduct evidenced a "misrepresentation, concealment, false promise, false pretense, dishonest dealing by trick, scheme or device, culpable negligence or breach of trust in any business transaction." Rather, Christopher conducted himself most appropriately, and assured that the deposit check was immediately delivered to his broker and deposited to his broker's escrow account as required by law. Rules 61J2-14.008, 61J2-14.009, and 61J2-14.010, Florida Administrative Code.
At that point, whether and upon what terms the deposit should be released from escrow was the responsibility of the broker, Michael Chillemi.
Second, with regard to the charge in the administrative complaint (Count II) that Michael's conduct violated the provisions of Section 475.25(1)(b), Florida Statutes, there is likewise not one scintilla of credible proof that his conduct with regard to Ms. Bocek could be characterized as a "misrepresentation, concealment, false promise, false pretense, dishonest dealing by trick, scheme, or device, culpable negligence or breach of trust in any business transaction." Indeed, the only meaningful issues presented in this case are Counts III and IV of the administrative complaint which allege that Michael violated the provisions of Section 475.25(1)(e), Florida Statutes, by failing to comply with Rules 61J2-10.032 and 61J2-14.012(2) and (3), Florida Administrative Code.
Pertinent to Count III, Rule 61J2-10.032 places certain notice requirements upon a real estate broker who receives conflicting demands for any trust funds being maintained in the broker's escrow account, as well as certain mandated remedial actions. The rule prescribes the following:
A real estate broker, upon receiving conflicting demands for any trust funds being maintained in the broker's escrow account, must provide written notification to the Com- mission within 15 business days of the last party's demand and the broker must institute one of the settlement procedures as set forth in s. 475.25(1)(d)1., Florida Statutes, within
15 business days after the date the notifica- tion is received by the Division. A broker, who has a good faith doubt as to whom is en- titled to any trust funds held in the broker's escrow account, must provide written notifica- tion to the Commission within 15 business days after having such doubt and must institute one of the settlement procedures as set forth in
s. 475.25(1)(d)1., Florida Statutes, within 15 business days after the date the notification is received by the Division.
. . . Upon final disposition of the matter, the broker shall notify the Commission within 10 business days of the final account and disbursement of the trust funds.
Here, while Michael did not provide the Commission with written notice of the conflicting demands he received to the deposit within 15 business days of May 19, 1993, he did resolve the demands to the deposit amicably, and refunded the deposit to Ms. Bocek within one day of receipt of her written demand of June 24, 1993, and so notified the Commission, as required by law. Accordingly, while Michael failed to comply strictly with rule 61J2-10.032, Florida Administrative Code, and therefore may be deemed in violation of Section 475.25(1)(e), Florida Statutes, his failing warrants, at most, a reprimand.
Pertinent to Count IV (mistakenly denoted as Count III in the administrative complaint), Rule 61J2-14.012, Florida Administrative Codes, provides:
At least monthly, a broker shall cause to be made 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 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 name of the bank(s), the name(s) of the ac- count(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.
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 in reference to 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. (Emphasis added)
Here, there is no proof that Michael violated subsection (3), of Rule 61J2-14.012, Florida Administrative Code. Indeed, as noted in the findings of fact, Michael's escrow account on June 24, 1993, as it had on every previous audit, balanced precisely with his trust liability. Rather, the only substance to petitioner's charge here is a perceived violation of subsection (2) of Rule 61J2-14.012, Florida Administrative Code, for Michael's failure to have signed and dated a monthly statement-reconciliation in a form preferred by the petitioner.
While petitioner has apparently adopted as a guideline a form that it prefers its brokers use for their monthly statement-reconciliation, Rule 61J2- 14.012(2), Florida Administrative Code, prescribes no specific "form" and no form has been adopted by rule. Accordingly, the issue is not whether Michael utilized the petitioner's preferred form, but whether the method adopted by Michael conformed with the minimum requirements of Rule 61J2-14.012(2), Florida Administrative Code. In this regard it must be concluded that the method employed by Michael did not conform with the requirements of the rule since he did not prepare a "written statement" that included the minimum information required by the rule within one document and, moreover, did not sign and date
