STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

)

RECOMMENDED ORDER

A formal hearing was conducted in this proceeding before Daniel Manry, a duly designated Hearing Officer of the Division of Administrative Hearings, on May 18 and September 15, 1995, in Melbourne, Florida.

APPEARANCES

For Petitioner: Steven W. Johnson, Esquire

Senior Attorney

Department of Professional Regulation Division of Real Estate

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

For Respondent: Mary Ann Wilson, pro se

Post Office Box 214 Melbourne, Florida 32902

STATEMENT OF THE ISSUES

The issues for determination in this proceeding are whether Respondent violated Sections 475.25(1)(b), (d), (e), and (k), Florida Statutes, 1/ by committing the acts alleged in two administrative complaints; and, if so, what, if any, penalty should be imposed.

PRELIMINARY STATEMENT

Petitioner filed separate administrative complaints against Respondent on September 28, 1994, and January 23, 1995. Respondent timely requested separate formal hearings. The separate proceedings were consolidated on May 18, 1995, and heard on September 15, 1995.

At the formal hearing, Petitioner presented the testimony of seven witnesses and submitted 24 exhibits for admission in evidence. Respondent testified in her own behalf, called no other witnesses, and submitted two

exhibits for admission in evidence. The identity of the witnesses and exhibits, and the rulings regarding each, are set forth in the transcript of the formal hearing filed on October 3, 1995.

Petitioner timely filed its proposed recommended order ("PRO") on October 17, 1995. Respondent did not file a PRO. Proposed findings of fact in Petitioner's PRO are accepted in this Recommended Order.

FINDINGS OF FACT

1. Petitioner is the governmental agency responsible for issuing licenses to practice real estate and for regulating licensees on behalf of the state. Respondent is a licensed real estate broker under license number 0377781. The last license issued to Respondent was issued as a broker at Wilson Realty International, 1059 Aurora Road, Melbourne, Florida 32935.

1. The Myrie Transaction

   
   

2. On July 22, 1993, Respondent negotiated a property management agreement with Harold E. and Bernia L. Myrie (the "Myries") who are residents of New York. Pursuant to the property management agreement, Respondent agreed to manage a rental house owned by the Myries and located in Florida (the "Myrie property").

   
   

3. On August 20, 1993, Respondent negotiated a lease agreement for the Myrie property with Mr. Eric A. Bogle and Ms. Jearlene Davis, as tenants. The tenants paid Respondent $2,590.60 in rental payments for the period August 20 through November 18, 1993. Respondent failed to deposit the rental payments into her escrow account.

   
   

4. On November 19, 1993, Respondent issued check number 1501 to the Myries in the amount of $562.50. Respondent represented to the Myries that $562.50 was the net amount due them.

   
   

5. The Myries deposited check number 1501. However, the check was returned for insufficient funds.

   
   

6. Respondent replaced check number 1501 with another check for $562.50. There were sufficient funds to cover the second check.

   
   

7. On December 29, 1993, the Myries cancelled their property management agreement with Respondent. They demanded the balance of $2,028.10.

   
   

8. Respondent claimed that $562.50 was the total amount Respondent owed the Myries. Respondent represented that she had incurred expenses for repairs and maintenance to the Myrie property. Respondent never provided an accounting of either the rental proceeds received from the tenants or the alleged expenses for repairs and maintenance. 2/

   
   

9. Respondent failed to produce documents Petitioner needed to conduct an audit of her escrow account. Respondent failed to produce deposit receipts for rent and cancelled checks and written receipts for expenses incurred by Respondent.

   
   

10. After Respondent failed to comply with two requests to produce the records Petitioner needed to conduct an audit, Petitioner subpoenaed Respondent's records on August 1, 1994. 3/ Respondent agreed to produce her

    records for review and audit on August 12, 1994. However, Respondent failed to keep her appointment and never produced the documents subpoenaed by Petitioner. 4/

    
    

11. Respondent misappropriated $2,028.10 paid to her by the tenants and converted those funds to Respondent's personal use. The tenants paid those funds to Respondent in trust for the Myries. The Myries authorized Respondent to collect those funds in trust and to remit the funds to them. Respondent breached the trust of both parties in a business transaction within the meaning of Section 475.25(1)(b).

    
    

12. Respondent misrepresented and concealed her use of escrow funds for personal purposes. Respondent engaged in false

    
    

    pretenses to justify her misappropriation and conversion of the escrow funds.

    
    

13. Respondent's failure to account for escrow funds paid to her in the Myrie transaction and her failure to produce records needed by Petitioner to audit Respondent's account is culpable negligence. When considered in their totality, the acts committed by Respondent in the Myrie transaction constitute fraud and dishonest dealing by trick, scheme, or device within the meaning of Section 475.25(1)(b).

    
    

14. Respondent failed to timely account or deliver rental trust funds within the meaning of Section 475.25(1)(d). Respondent failed to preserve and make available to Petitioner all books, records, and supporting documents and failed to keep an accurate account of all trust fund transactions within the meaning of Florida Administrative Code Rule 61J2-14.012(1). 5/ Respondent failed to maintain trust funds in her real estate brokerage escrow account until disbursement was authorized within the meaning of Section 475.25(1)(k).

2. The Timoll Transaction

1. In June, 1993, Respondent negotiated a property management agreement with Lawrence and Sheila Timoll (the "Timolls") who were residents of New York. Pursuant to the property management agreement, Respondent agreed to manage a rental house owned by the Timolls and located in Florida. (the "Timoll property").

   
   

2. On July 14, 1993, Respondent procured tenants for the Timoll property. William and Sambri Dulmage (the "Dulmages") executed a one year lease. Pursuant to the terms of the lease, the Dulmages agreed to pay a security deposit of $625 and rent at the monthly rate of $600.

   
   

3. Respondent received $4,800 from the Dulmages as payment of rent, a security deposit, and expenses associated with the Timoll property. Respondent never delivered any part of the $4,800 to the Timolls.

   
   

4. Respondent represented to the Timolls that they were not entitled to any of the $4,800 because the Dulmages had vacated the property and stopped paying rent. Respondent also represented that she had incurred expenses for repairs and maintenance to the Timoll property. 6/

   
   

5. The Dulmages in fact occupied the Timoll property for the duration of the lease and timely paid all amounts in accordance with the terms of the lease.

   The Timolls knew that the Dulmages were complying with the lease and arranged for the rent to be paid directly to the Timolls in February, 1994.

   
   

6. With three minor exceptions, 7/ Respondent did not incur expenses for maintenance and repairs to the Timoll property. 8/ From July 14, 1993, through February 22, 1994, the Timolls made repeated demands for Respondent to deliver the rent and security deposit, and to account for the expenses allegedly incurred by Respondent.

   
   

7. Respondent produced property accounting forms describing expenses for maintenance and repairs to the Timoll property. With three minor exceptions, the accounting forms provided by Respondent contained fabricated expenses for maintenance and repairs. 9/

   
   

8. Respondent misappropriated $4,419.45 10/ paid to her by the Dulmages and converted those funds to Respondent's personal use. Those funds were paid to Respondent in trust for the Timolls. The Timolls authorized Respondent to collect those funds in trust and to remit the funds to them. Respondent breached the trust of both parties in a business transaction within the meaning of Section 475.25(1)(b).

   
   

9. Respondent misrepresented and concealed her use of escrow funds for personal purposes. Respondent engaged in false pretenses to justify her misappropriation and conversion of escrow funds.

   
   

10. Respondent's failure to account for the escrow funds paid to her in the Timoll transaction and her failure to produce records needed by Petitioner to audit Respondent's account constitutes culpable negligence. When considered in their totality, the acts committed by Respondent in the Timoll transaction constitute fraud and dishonest dealing by trick, scheme, or device within the meaning of Section 475.25(1)(b).

    
    

11. Respondent failed to timely account or deliver rental trust funds within the meaning of Section 475.25(1)(d). Respondent failed to preserve and make available to Petitioner

all books, records, and supporting documents and failed to keep an accurate account of all trust fund transactions within the meaning of Rule 61J2- 14.012(1). Respondent failed to maintain trust funds in her real estate brokerage escrow account until disbursement was authorized within the meaning of Section 475.25(1)(k).

3. The Veil Transaction

1. On November 29, 1993, Respondent entered into a short term lease agreement between Respondent, as the landlord, and Herman J. and Joyce Veil (the "Veils") as tenants (the "Veil transaction"). The Veils lived out of state. They paid Respondent a deposit of $1,919.36 to secure the seasonal rental of Unit 511, Ocean Walk Condominiums ("unit 511").

   
   

2. On March 1, 1994, the Veils traveled to Melbourne and discovered that unit 511 was not available. Respondent never provided the Veils with a rental unit of any kind.

   
   

3. The Veils demanded the return of their deposit. On March 11, 1994, Respondent issued check number 1127 in the amount of $1,394.01.

4. Respondent represented to the Veils that $1,394.01 was the total amount due. Respondent deducted $525.35 for motel charges allegedly incurred by Respondent to provide the Veils with temporary lodging for 11 days while Respondent attempted to procure an alternate rental for the Veils.

   
   

5. The deduction of $525.35 was not authorized by the Veils. The Veils did not agree to pay for their own motel room. In addition, the motel charges deducted by Respondent included charges for two nights paid by the Veils.

   
   

6. After Respondent issued check number 1127 for $1,394.01, Respondent ordered the bank to stop payment on the check. The bank erroneously cashed the check and subsequently requested the Veils to return the proceeds. The Veils refused.

   
   

7. Respondent misappropriated $525.35 paid to her by the Veils and converted those escrow funds to Respondent's personal use. Those funds were paid to Respondent in trust for the Veils' seasonal condominium. Respondent breached that trust in a business transaction within the meaning of Section 475.25(1)(b).

   
   

8. Respondent misrepresented and concealed her use of escrow funds belonging to the Veils. Respondent engaged in false pretenses to justify her misappropriation and conversion of the escrow funds.

   
   

9. Respondent's failure to account for escrow funds paid to her in the Veil transaction and her failure to produce records needed by Petitioner to audit Respondent's accounts constitutes culpable negligence. When all of the facts and circumstances surrounding the Veil transaction are considered, Respondent's attempt to stop payment of her check to the Veils constitutes dishonest dealing by trick, scheme, or device within the meaning of Section 475.25(1)(b).

   
   

10. Respondent failed to timely account or deliver rental trust funds within the meaning of Section 475.25(1)(d). Respondent failed to preserve and make available to Petitioner all books, records, and supporting documents and failed to keep an accurate account of all trust fund transactions within the meaning of Rule 61J2-14.012(1). Respondent failed to maintain trust funds in her real estate brokerage escrow account until disbursement was authorized within the meaning of Section 475.25(1)(k).

4. The Sella Transaction

1. On February 14, 1994, Respondent procured a construction contract between Militano Construction, Inc. (the "seller"), and Mr. Lino Sella, (the "buyer"). The buyer lived in Italy and required an interpreter for his negotiations with Respondent.

   
   

2. On February 14, 1994, the buyer entrusted Respondent with an escrow deposit of $12,250. The buyer authorized Respondent to administer funds entrusted to her because the buyer was in Italy. 11/

   
   

3. On February 15, 1994, Respondent cashed the check for the escrow deposit. Respondent obtained a cashier's check for $12,250 made payable to "Wilson Realty." Respondent then endorsed the cashier's check for her personal use. 12/

4. In July, 1994, the buyer authorized Respondent to release the escrow deposit to the seller upon issuance of a certificate of occupancy ("CO") by the City of Indian Harbour

   
   

   Beach, Florida (the "city"). The city issued the CO on September 1, 1994.

   
   

5. After the city issued the CO, the seller repeatedly made verbal demands for Respondent to deliver the escrow deposit. On September 9, 1994, the seller wrote a letter to Respondent demanding the escrow deposit.

   
   

6. On September 13, 1994, the buyer physically inspected the house, found that it was acceptable, and again authorized disbursement of the escrow deposit. The seller again demanded the escrow deposit.

   
   

7. Respondent never delivered the escrow deposit. Respondent never accounted for the deposit to the seller, the buyer, or Petitioner.

   
   

8. The seller was unable to pay approximately $9,000 to subcontractors used to construct the buyer's house. The subcontractors recorded mechanics' liens against the Sella property and precluded the seller from delivering good and sufficient title to the buyer.

   
   

9. The seller's failure to provide the buyer with good and sufficient title precluded the seller from satisfying its obligations under the terms of the contract with the buyer and caused the seller to breach the contract. The buyer incurred legal expenses in an attempt to quiet title to his house. The seller incurred legal expenses in an attempt to recover the escrow deposit from Respondent.

   
   

10. Respondent misappropriated a $12,250 escrow deposit in the Sella transaction and converted that escrow deposit for personal use. The escrow deposit was given to Respondent in trust. Respondent breached that trust in a business transaction within the meaning of Section 475.25(1)(b).

    
    

11. Respondent misrepresented and concealed her use of the escrow deposit in the Sella transaction. Respondent's failure to account for the escrow deposit and her failure to produce records needed by Petitioner to audit Respondent's escrow account constitutes culpable negligence. When considered in their totality, the acts committed by Respondent in the Sella transaction constitute fraud and dishonest dealing by trick, scheme, or device within the meaning of Section 475.25(1)(b).

    
    

12. Respondent failed to timely account or deliver trust funds within the meaning of Section 475.25(1)(d). Respondent failed to preserve and make available to Petitioner all books, records, and supporting documents and failed to keep an accurate account of all trust fund transactions within the meaning of Rule 61J2-14.012(1). Respondent failed to maintain trust funds in her real estate brokerage escrow account until disbursement was authorized within the meaning of Section 475.25(1)(k).

5. The Stanley Transaction

1. In March, 1994, Respondent procured a construction contract between Atlantic Construction, Inc. (the "seller"), and Trevor and Carol Stanley (the "buyers") who are residents of New York. The buyers entrusted Respondent with an escrow deposit of $7,800.

2. The buyers were unable to qualify for a mortgage and terminated the agreement in accordance with the terms of the construction contract. The buyers agreed to forfeit $500 of the escrow deposit to Respondent as real estate commission.

   
   

3. On July 12, 1994, the buyers demanded that Respondent return $7,300 of their escrow deposit. Respondent claimed the entire $7,800 escrow deposit and neither delivered the $7,300 agreed to by the buyers nor accounted for any of the escrow deposit.

   
   

4. Petitioner was unable to audit Respondent's escrow account. The bank where the escrow account was maintained closed the account because the account was overdrawn. The bank charged off $3,483.45 in overdrawn funds.

   
   

5. Respondent misappropriated a $7,300 escrow deposit in the Stanley transaction and converted the escrow deposit to Respondent's personal use. Those funds were given to Respondent in trust. Respondent breached that trust in a business transaction within the meaning of Section 475.25(1)(b).

   
   

6. Respondent misrepresented and concealed her use of escrow funds in the Stanley transaction. Respondent's failure to account for the escrow deposit and her failure to produce records needed by Petitioner to audit Respondent's account constitutes culpable negligence. When considered in their totality, the acts committed by Respondent in the Stanley transaction constitute

   
   

   fraud and dishonest dealing by trick, scheme, or device within the meaning of Section 475.25(1)(b).

   
   

7. Respondent failed to timely account or deliver trust funds within the meaning of Section 475.25(1)(d). Respondent failed to preserve and make available to Petitioner all books, records, and supporting documents and failed to keep an accurate account of all trust fund transactions within the meaning of Rule 61J2-14.012(1). Respondent failed to maintain trust funds in her real estate brokerage escrow account until disbursement was authorized within the meaning of Section 475.25(1)(k).

6. Respondent's Conduct

1. Respondent evidenced a gross disregard for the rights and property of others, applicable laws, and the legal process. 13/ Respondent's conduct demonstrated culpable intent to commit the offenses for which she is charged.

   
   

2. Respondent has made no attempt at restitution to any of the five clients she harmed, and has made no attempt to pay the overdraws charged off by the bank. Respondent has made no attempt to pay the Sella subcontractors or otherwise remove any cloud on the title to the Sella property.

   
   

3. Respondent ignored valid subpoenas issued by Petitioner. Respondent engaged in dilatory acts and misrepresentations. Respondent delayed this proceeding through repeated false pretenses that she was represented by counsel who was unable to appear for previously scheduled formal hearings.

   
   

4. Respondent participated in this proceeding for a frivolous purpose. There was a complete absence of a justiciable issue of law or fact in Respondent's defense.

5. Respondent's defense was baseless and a sham. It was no more than a stonewall defense presented for the purpose of delay.

   
   

6. Respondent failed to show any of the facts asserted in her defense. She called no witnesses and submitted no material exhibits for admission in evidence.

   
   

7. Respondent's cross examination of Petitioner's witnesses nominally attempted to create issues but failed to produce any competent and substantial evidence to support those issues. Respondent repeatedly attempted to establish issues either by unsworn representations or by arguing with witnesses during cross examination.

   
   

8. Respondent's sworn testimony at the formal hearing was not credible and was unpersuasive. No competent and substantial evidence supported her testimony. Any evidence that Respondent adduced during her testimony, her cross examination of other witnesses, and in her exhibits was immaterial.

   
   

9. Respondent's conduct in this proceeding constituted a reckless waste of quasi-judicial resources as well as a waste of the time and money of Petitioner and its witnesses. Many of those witnesses had already lost time and money as a result of Respondent's conduct before this proceeding began.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings ("DOAH") has jurisdiction over the subject matter and parties in this proceeding. The parties were duly noticed for the formal hearing.

    
    

11. Petitioner has the burden of proof in this proceeding. Petitioner must show by clear and convincing evidence that Respondent committed the acts alleged in the administrative complaints and the reasonableness of any penalty to be imposed. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

12. The charges against Respondent are contained in 20 counts in two administrative complaints. There are 11 counts in the Administrative Complaint filed in DOAH Case No. 94-6038. There are 9 counts in the Administrative Complaint filed in DOAH Case No. 95-1302.

    
    

13. During the formal hearing, Petitioner dismissed Counts V and VI in Case No. 94-6038. Petitioner also dismissed Counts VIII and IX in Case No. 95-1302.

    
    

14. Counts I-IV in Case No. 94-6038 charge Respondent with violations regarding the Myrie transaction. Counts VII-IX involve the Timoll transaction. Counts X and XI involve the Veil transaction.

    
    

15. Counts I-IV in Case No. 95-1302 charge Respondent with violations regarding the Sella transaction. Counts V-VII involve the Stanley transaction.

    
    

16. Petitioner satisfied its burden of proof for each of the counts not dismissed by Petitioner during the formal hearing. Petitioner showed by clear and convincing evidence that Respondent violated Sections 475.25(1)(b), (d), (e), and (k) in five separate transactions.

    
    

17. Respondent violated Section 475.25(1)(b) by committing fraud; misrepresentation; concealment; false pretenses; dishonest dealing by trick, scheme, or device; and breach of trust in a business transaction. Respondent

violated Section 475.25(1)(d) by failing to timely account or deliver trust funds. Respondent violated Section 475.25(1)(e) by failing to keep an accurate account of all trust fund transactions in violation of Rule 61J2- 14.012(1).

Respondent violated Section 475.25(1)(k) by failing to maintain trust funds in a real estate brokerage escrow account until authorized to disburse those funds.

7. Penalty

1. Section 475.25(1), in relevant part, authorizes Petitioner to revoke Respondent's license. See also, Rule 61J2- 24.001(3)(c), (f), and (l). Revocation of a license should be aimed at the dishonest and unscrupulous. Cf. Dryer v. Florida Real Estate Commission, 370 So.2d 95, 100 (Fla. 4th DCA 1979); Brod v. Jernigan, 188 So.2d 575, 581 (Fla. 2d DCA 1966); Rivard v. McCoy, 212 So.2d 672, 674-676 (Fla. 1st DCA 1968).

   
   

2. Revocation is appropriate in this proceeding. Respondent was dishonest and unscrupulous. She breached the

   
   

   trust of five separate clients in five separate business transactions.

   
   

3. Respondent misappropriated and converted for her own use $26,522.90 in escrow funds belonging to others. 14/ She attempted to justify her acts through fraud, misrepresentation, false pretenses, concealment, trick, scheme, and device. Respondent failed to account to five clients for their money and failed to produce records that Respondent was required by law to maintain and that would have enabled Petitioner to audit Respondent's records.

   
   

4. Revocation is the maximum penalty generally authorized for violations of Sections 472.25(1)(b), (e), and (k). Rules 61J2-24.001(3)(c), (f), and (l). Suspension is the maximum penalty generally authorized for violation of Section 475.25(1)(d). Rule 61J2-24.001(3)(e).

   
   

5. Rule 61J2-24.001(4)(a) authorizes Petitioner to deviate from the maximum penalties generally authorized in Rule 61J2- 24.001(3) whenever Petitioner shows by clear and convincing evidence that there are aggravating circumstances present in a particular case. Petitioner showed by clear and convincing evidence that there are aggravating circumstances present in this proceeding.

   
   

6. The offenses committed by Respondent are severe within the meaning of Rule 61J2-24.001(4)(b)1. They involve a significant amount of money, egregious harm, and are the result of ongoing, continuing, and repeated acts.

   
   

7. Respondent's offenses were not committed in a single isolated incident. Respondent engaged in a pattern and practice of dishonesty and unscrupulous acts against five separate clients, in five separate transactions, from June, 1993, through September, 1994.

   
   

8. The similarity of the facts in each transaction evidences Respondent's culpable intent. In all five transactions, Respondent misappropriated and converted escrow funds belonging to others. All of the victims of Respondent's offenses resided out of state. In the Myrie and Timoll transactions, Respondent fabricated expenses in an attempt to justify her misappropriation and conversion of escrow funds. In the Sella and Stanley transactions, Respondent claimed that she was authorized by the clients to use escrow funds for personal purposes.

9. The offenses committed by Respondent caused great harm to consumers and the public for purposes of Rule 61J2- 24.001(4)(b)2. The amount of money misappropriated and converted by Respondent was significant. Respondent's conduct created overdraws that her bank had to charge off, created a cloud on the title to Mr. Sella's house, caused the seller to breach its contractual obligation to deliver good and sufficient title to the buyer, and caused the buyer, subcontractors, and seller to incur legal expenses in multiple legal actions.

   
   

10. The aggravating circumstances present in this proceeding provide a basis for imposing a penalty greater than the maximum

    
    

    penalty generally prescribed in Rule 61J2-24.001(3). See, Rule 61J2- 24.001(4)(a). A fine should be imposed in addition to revoking Respondent's license.

    
    

11. Section 475.25(1) authorizes Petitioner to impose a fine of up to

    $1,000 for each count or separate offense committed by Respondent. Respondent violated four statutes in five separate transactions. A fine of $1,000 is authorized for each of the 20 violations committed by Respondent. When all of the facts and circumstances are considered, a fine of $20,000 is appropriate. 15/

    
    

12. Respondent will not incur financial hardship, within the meaning of Rule 61J2-24.001(4)(b)7, as a result of the imposition of a $20,000 fine. Respondent unjustly enriched herself through the misappropriation and conversion of $26,522.90 belonging to others. Respondent received sufficient funds to pay the fine.

    
    

13. Respondent has not provided even partial restitution to any of the five clients she harmed. Respondent has not attempted to redress the harm she caused to others as a result of her offenses.

    
    

14. Aggravating circumstances are not limited to the circumstances enumerated in Rule 61J2-24.001(4)(a). See, Rule 61J2-24.001(4)(b). Respondent's conduct in this proceeding is an aggravating circumstance that underscores the appropriateness of a $20,000 fine.

    
    

15. Respondent evidenced a gross disregard for the rights and property of others, applicable laws, and the legal process. Respondent ignored valid subpoenas issued by Petitioner.

    
    

    Respondent engaged in dilatory acts, including the delay of this proceeding through false representations.

    
    

16. Respondent participated in this proceeding for a frivolous purpose. Respondent failed to present any justiciable issue of law or fact in her defense. Respondent's defense was a reckless waste of quasi judicial resources as well as the time and money of Petitioner and its witnesses.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent guilty

of violating Sections 475.25(1)(b), (d)1., (e), and (k); and Rule 61J2- 14.012(1); revoking Respondent's real estate license; and imposing a fine of

$20,000.

RECOMMENDED this 15th day of November, 1995, in Tallahassee, Florida.

DANIEL S. MANRY

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 15th day of November 1995.

ENDNOTES

1/ All section and chapter references are to Florida Statutes (1993) unless otherwise stated.

2/ In testimony during the formal hearing, Respondent offered various explanations for the acts she is charged with in this proceeding. Respondent testified or represented to the undersigned that she paid for maintenance and repairs by cashing escrow checks and paying workers in cash; and that she did not have receipts for expenses deducted from clients' escrow funds because either the repairs were done by friends who did not give her receipts or that the receipts she did have had been lost or misplaced in other files. In two of the transactions, Respondent claimed that she was entitled to the escrow funds as commissions and that her clients were either dishonest, had threatened her, or had taken advantage of her and that she was a victim of her clients.

Respondent also claimed that she was entitled to use the money for personal purposes because the clients signed authorizations for Respondent to administer their funds to pay builders, title insurance, closing costs, and expenses that she thought were appropriate. Respondent's testimony was not credible and was not substantiated by other competent and substantial evidence.

3/ Petitioner subpoenaed records for three of the five transactions at issue in this proceeding.

4/ The subpoena required Respondent to produce her records on August 5, 1994. Respondent also agreed to produce records through her attorney. However, Respondent subsequently terminated her attorney's representation. Respondent produced only a de minimis amount of records, and Petitioner was unable to obtain the records needed to conduct an audit of Respondent's escrow account.

5/ Unless otherwise stated, all references to rules are to rules promulgated in the Florida Administrative Code on the date of this Recommended Order.

6/ Respondent claimed she was authorized to pay for the repairs pursuant to a clause that authorized her make payments for repairs. Even Respondent had actually incurred expenses for maintenance and repairs, the amount of those expenses far exceeded the amount authorized in the agreement.

7/ It was uncontroverted that Respondent was entitled to reimbursement for expenses in the aggregate amount of $380.55 paid for: a garage door opener ($234.99); two ceiling fans ($115); and repair of a frozen pump in the dishwasher ($30.56).

8/ For a discussion of the explanations offered by Respondent, see, n. 2, supra.

9/ The exceptions are detailed in n. 7, supra.

10/ The total amount received by Respondent ($4,800) is reduced for expenses incurred by Respondent in the aggregate amount of $380.55, i.e., a garage door opener ($234.99); two ceiling fans ($115); and repair of a frozen pump in the dishwasher ($30.56). The net amount due the Timolls was $4,419.45.

11/ The authorization to administer funds authorized Respondent to expend escrow funds to pay builders, title insurance, closing costs, and other appropriate expenses.

12/ Respondent did not operate under the trade name "Wilson Realty." Nor was the trade name "Wilson Realty" registered with Petitioner.

13/ The findings in paras. 55-63 regarding aggravating circumstances are made for the purpose of determining the appropriateness of the penalty that should be imposed in this proceeding. Conclusions concerning that issue are discussed in paras. 76-87, infra. Cf. Whitten v. Progressive Casualty Insurance, Co., 410 So.2d 501, 505 (Fla. 1982); Allen v. Estate of Dutton, 384 So.2d 171 (Fla. 5th

DCA 1980); Kisling v. Woolridge, 397 So.2d 747, 748 (Fla. 5th DCA 1981); White

v. The Montebello Corporation, 397 So.2d 326 (Fla. 5th DCA 1981); Hernandez v. Leiva, 391 So.2d 292 (Fla. 3d DCA 1980) (discussing factors similar to those considered in paras. 57-63 and 76-87 for the purpose of determining the appropriateness of attorney fees).

14/ The amount misappropriated and converted by Respondent ($26,522.90) is the sum of the amount misappropriated and converted in each of the following transactions: Myrie ($2,028.10); Timoll ($4,419.45); Veil ($525.35); Sella ($12,250); and Stanley ($7,300). The total amount misappropriated and converted is not reduced by any commissions to which Respondent otherwise would have been entitled under the stated terms of the various contracts. Respondent breached the stated terms of those contracts by her illegal acts, including the misappropriation and conversion of escrow funds entrusted to her. Therefore, Respondent is not entitled to any commissions stated in the contracts she breached. Assuming arguendo that Respondent performed services for which she may be entitled to compensation under a theory of quantum meruit, no evidence was presented to show either the nature of the services Respondent actually performed, if any, or the scope and duration of those services.

15/ Rule 61J2-24.001(4)(b)3. also defines aggravating circumstances to include the number of counts in an administrative complaint. A total of 20 counts were

originally filed against Respondent. Petitioner dismissed four of those counts during the formal hearing. The remaining 16 counts are significant for purposes of Rule 61J2-24.001(4)(b)3.

COPIES FURNISHED:

Darlene S. Keller, Division Director Division of Real Estate

Department of Business and Professional Regulation

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

Lynda Goodgame, Esquire General Counsel

Department of Business and Professional Regulation

Northwood Center

1940 North Monroe Street Tallahassee, FL 32399-0792

Steven W. Johnson, Esquire Senior Attorney

Department of Business and Professional Regulation

Division of Real Estate

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

Mary Ann Wilson, pro se

P.O. Box 214

Melbourne, Florida 32902

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 94-006038

Orders for Case No: 94-006038