STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE )

)

Petitioner, )

)

vs. ) CASE NO. 95-5352

) HOLLY SANDERS T/A BRICKELL ) BAY REALTY, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal administrative hearing was held in this case before Patricia Hart Malono, Hearing Officer of the Division of Administrative Hearings, on February 7, 1996, in Miami, Florida.

APPEARANCES

The parties were represented at hearing as follows: For Petitioner: Theodore R. Gay, Senior Attorney

Department of Business and Professional Regulation

401 Northwest Second Avenue, Suite N-607 Miami, Florida 33128

For Respondent: Burton R. Levey, Esquire

Two Datran Center

9130 South Dadeland Boulevard, Suite 1619

Miami, Florida 33156 STATEMENT OF THE ISSUE

The issue presented is whether the respondent committed the violations alleged in the Administrative Complaint, and, if so, the penalty which should be imposed.

PRELIMINARY STATEMENT

In a one-count Administrative Complaint dated November 23, 1994, the Department of Business and Professional Regulation, Division of Real Estate ("Department"), charged Holly Sanders t/a Brickell Bay Realty with "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 violation of section 475.25(1)(b), Fla. Stat." The charges in the Administrative Complaint are based on allegations that Ms.

Sanders and Loren L. and Rose Thompson reached an agreement whereby Ms. Sanders

was to purchase a condominium apartment located in Brickell Place Condominium for $185,000 in cash; that Ms. Sanders submitted to the Brickell Place Condominium Association a contract for sale and purchase showing a purchase price of $185,000; that the association approved her purchase of the apartment based on a sales price of $185,000; that Ms. Sanders actually paid $125,000 for the property; that, at closing, Ms. Sanders altered the terms of the contract by obtaining a mortgage from the Thompsons for $75,000 of the purchase price; and that Ms. Sanders delivered to the Brickell Place Condominium Association an altered HUD-1 settlement statement showing a contract sales price of $185,000 but with figures which reflected a $125,000 price.

Ms. Sanders denied the allegations in the Administrative Complaint and timely requested a formal hearing. The case was referred to the Division of Administrative Hearings for assignment of a hearing officer, and the final hearing was scheduled for February 7, 1996.

At hearing, the Department offered the testimony of four witnesses: Joseph

1. Ganguzza, an attorney who began representing Mr. and Mrs. Thompson in April, 1994; Arnold I. Rabin, the building manager of Brickell Place Condominium; Consuelo A. Boet, administrative assistant to Mr. Rabin; and Eileen Moran, an investigator for the Department. Petitioner's Exhibits 1 through 12 were offered and received into evidence. Ms. Sanders offered the testimony of Richard H. Olsen, the attorney who represented Mr. and Mrs. Thompson in the sale of the condominium apartment, and she testified in her own behalf. Respondent's Exhibits 1 through 18 were offered and received into evidence. In rebuttal, the Department offered the testimony of Mr. Ganguzza and Ms. Moran.

   
   

   The transcript of the hearing was filed with the Division, and the parties timely submitted proposed recommended orders. Specific rulings on the parties' proposed findings of fact can be found in the Appendix to this Recommended Order.

   
   

   FINDINGS OF FACT

   
   

   Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made:

   
   

   1. Holly Sanders is licensed by the Department as a real estate broker, having been issued license number 0324563.

      
      

   2. In June, 1992, Ms. Sanders and Loren L. and Rose Thompson entered into an agreement whereby Ms. Sanders would have the exclusive right to rent an apartment owned by Mr. and Mrs. Thompson. This apartment, unit A-2012 in Brickell Place Condominium, Phase II, was located across the hall from the apartment in which Mr. and Mrs. Thompson resided. Ms. Sanders visited Mr. and Mrs. Thompson periodically to discuss matters relating to the rental, and she grew very fond of Mrs. Thompson.

      
      

   3. The tenant leasing apartment A-2012 did not intend to renew the lease when it expired in the summer of 1993. Ms. Sanders offered to purchase the apartment for $125,000, a figure which she based on the value of the property used to calculate the ad valorem tax.1 Ms. Sanders prepared a Contract for Sale and Purchase, dated August 16, 1993, reflecting a contract sales price of

      $125,000, to be paid in cash at closing.

   4. Mrs. Thompson retained Richard Olsen, an attorney, to represent her and her husband in the transaction.2 On August 19, 1993, Ms. Sanders, Mr. Olsen, and Mr. and Mrs. Thompson met in the Thompsons' apartment.

      
      

   5. At the time, both Mr. and Mrs. Thompson were incapacitated. Mrs. Thompson suffered from multiple sclerosis and was in a wheelchair.3 Mr. Thompson was bedridden; he had suffered a stroke and needed full-time care. Both Mr. and Mrs. Thompson are retired attorneys.

      
      

   6. At the August 19 meeting, Mr. Olsen examined the contract Ms. Sanders had prepared and went over the terms and conditions with Mr. and Mrs. Thompson,4 including the $125,000 contract price and the fact that it was to be a cash transaction. Neither Mr. Thompson nor Mrs. Thompson indicated any dissatisfaction with the terms of the contract.

      
      

   7. After Mr. Olsen went over the contract, Mr. and Mrs. Thompson and Ms. Sanders signed either four or five originals in his presence. Ms. Sanders gave one duplicate original executed contract to Mr. and Mrs. Thompson5 and one duplicate original to Mr. Olsen. She kept the remaining duplicate original executed contracts. Ms. Sanders did not make any photocopies of the contract.

      
      

   8. Ms. Sanders was aware that the condominium association had a right of first refusal on the apartment and that she had to be approved by the association in order to purchase the apartment.6 Ms. Sanders personally delivered an application and one of the duplicate original executed contracts showing a contract price of $125,000 to Consuelo Boet, the administrative assistant in the office of Arnold Rabin, the Brickell Place building manager. Ms. Boet did not examine the documents when they were delivered by Ms. Sanders but put them directly into a file containing other applications pending approval. When all of the required documents for apartment A-2012 had been received, Ms. Boet gave them to Mr. Rabin but, again, did not examine the contract. A Certificate of Approval dated October 18, 1993, indicates that the condominium association approved Ms. Sanders as purchaser of the apartment; the contract sales price was not included in this document.

      
      

   9. Mr. Olsen visited the Thompsons' apartment several times between the time the contract for sale was executed on August 19 and the time the transaction closed on October 20, 1993. The purpose of these visits was to locate the documents relating to Mr. and Mrs. Thompson's purchase of apartment A-2012 in 1988. They had extensive real estate holdings throughout the world, and Mr. Olsen went through many boxes of files trying to locate the title documents needed for the closing.

      
      

   10. Ms. Sanders was present during each visit Mr. Olsen made to the Thompsons' apartment prior to the closing. During one visit, Mr. Olsen was present when Ms. Sanders asked Mrs. Thompson if she would be willing to accept a

       $75,000, one-year mortgage on the property. Mr. Olsen discussed this proposal with Mrs. Thompson and explained to Mrs. Thompson that the mortgage Ms. Sanders was proposing would result in her receiving only $50,000 when the transaction closed and then two payments of $50,000 and $25,000, respectively. Mrs.

       Thompson told him she would accept the mortgage but did not want Ms. Sanders to pay interest. She refused to change her mind even though Mr. Olsen told her that it would not be in her best interest to take a non-interest-bearing note.

       
       

   11. Chicago Title Company was the closing agent for the transaction, and the closing took place at their offices on October 20, 1993. Mr. Olsen was present at the closing on behalf of the Thompsons, who were not able to attend.

       At closing, both Mr. Olsen, on behalf of Mr. and Mrs. Thompson, and Ms. Sanders signed the HUD-1 Settlement Statement, which was computed using a purchase price of $125,000. The cash payable to the Thompsons at closing is shown on the settlement statement as $46,289.48, and the statement reflected a purchase money mortgage for $75,000, as well.

       
       

   12. Ms. Sanders executed a mortgage and note in the amount of $75,000 dated October 20, 1993. These documents were prepared by Mr. Olsen, and he notarized them on October 20. The terms of the mortgage note called for a payment of $50,000 on April 19, 1994, and a payment of $25,000 on October 19, 1994; the note did not bear interest.

       
       

   13. Mr. Olsen had one original set of the closing documents bound in a legal-sized folder; the documents included an original signed closing statement, a copy of the deed, and a copy of the mortgage and note. He delivered this folder to Mrs. Thompson and explained the documents, specifically going over the closing statement with her. Mrs. Thompson expressed no dissatisfaction with the transaction or the amount of money she received at closing. Mr. Olsen believes that, during the time he represented her, Mrs. Thompson was fully aware that the contract sales price was $125,000 and that she had taken a mortgage instead of all cash.

       
       

   14. At some point, the association's Certificate of Approval of Ms. Sanders' purchase and a copy of the HUD-l Settlement Statement were placed in the file maintained by the association for apartment A-2012. Ms. Boet does not recall when the documents came into the office or who provided the copy of the settlement statement. She did not examine the documents at the time she placed them in the association file for apartment A-2012. However, when Mr. Rabin reviewed the file some months after the closing, it contained a copy of an HUD-1 Settlement Statement which had obviously been altered in several places to show a contract sales price of $185,0007 and a copy of a Contract for Purchase and Sale showing a contract price of $185,000.8 The file did not contain a duplicate original executed Contract for Sale and Purchase.

       
       

   15. The greater weight of the evidence in this case supports Ms. Sanders' contentions that the Contract for Sale and Purchase of apartment A-2012 in the Brickell Place Condominium, executed on August 19, 1993, by Loren L. and Rose Thompson, specified a contract sales price of $125,000, to be paid in cash, and that Mrs. Thompson accepted a one-year note and mortgage on the property in the amount of $75,000 and $50,000 in cash in lieu of $125,000 in cash. Furthermore, the uncontradicted evidence establishes that Ms. Sanders delivered a duplicate original executed contract to Ms. Boet as part of her application to the condominium association for approval of her purchase of the apartment. The uncontradicted evidence also establishes that, some months after the October 20, 1993, closing on the apartment, Mr. Rabin reviewed the association's file and found that it contained a copy of a Contract for Sale and Purchase which specified a contract sales price of $185,000 in cash and an HUD-1 Settlement Statement obviously altered to show a contract sales price of $185,000. There is, however, no compelling evidence establishing when the documents were altered or establishing that Ms. Sanders is the person who made the alterations. Therefore, the Department has failed to carry its burden of proving by clear and convincing evidence that Ms. Sanders violated section 475.25(1)(b), Florida Statutes, either with respect to Mr. and Mrs. Thompson or to the Brickell Place Condominium Association.9

       CONCLUSIONS OF LAW

       
       

   16. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of these proceedings. 120.57(1), Fla. Stat.

       
       

   17. When the Department seeks to revoke or suspend a professional license, it has the burden of proving the violations charged in the administrative complaint by clear and convincing evidence. Ferris v. Turlington, 510 So. 2d

       292 (Fla. 1987); see also Department of Banking and Finance, Division of Securities and Investor Protection v. Osborne Stern and Co., 21 Fla. L. Weekly S142, S143 (Fla. March 28, 1996). Clear and convincing evidence, as defined by the court in Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983),

       
       

       requires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the testimony must be precise and explicit and the witnesses 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 conviction, without hesitancy, as to the truth of the alle- gations sought to be established.

       
       

   18. The Department charged in its Administrative Complaint that Ms. Sanders violated that provision of section 475.25(1)(b), Florida Statutes, that authorizes the Florida Real Estate Commission to impose administrative sanctions, including license revocation or suspension, on any licensee 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.

       
       

   19. Based on the findings of fact herein, the Department has failed to carry its burden of proving that Ms. Sanders violated section 475.25(1)(b), as charged in the Administrative Complaint.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the Administrative Complaint filed against Holly Sanders.

DONE AND ENTERED this 9th day of July, 1996, in Tallahassee, Leon County, Florida.

PATRICIA HART MALONO

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 9th day of July, 1996.

ENDNOTES

1/ The Combined Tax Bill for 1993, issued November 5, 1993, shows a valuation of $122,683, and $128,813 is shown as the valuation on the Combined Tax Bill for 1994.

2/ Ms. Sanders had contacted him and asked if he did real estate closings. He told her he had not done any in quite a while but was familiar with them. He later received a telephone call from Mrs. Thompson, and she asked him to represent her in the sale of a condominium.

3/ Mr. Olsen observed that, during his representation of Mrs. Thompson from August until October 1993, "there was nothing wrong with her mental facilities [sic] that he could tell."

4/ After Mr. Olsen explained the terms of the contract to Mrs. Thompson, she asked him to explain the terms to her husband, who was bedridden. Mr. Olsen went into the bedroom where he found Mr. Thompson with two nurses. He introduced himself and explained the terms of the contract to Mr. Thompson.

5/ Joseph Ganguzza, an attorney retained in April, 1994, to represent the Thompsons, testified that Mrs. Thompson did not have an original executed Contract for Sale and Purchase for the transaction, she had only a copy of the contract in her file. Mr. Ganguzza and his law firm have represented the Brickell Place Condominium Association for many years, and he was introduced to Mr. and Mrs. Thompson by Arnold Rabin, the building manager for Brickell Place.

6/ The Declaration of Condominium for Brickell Place gives the condominium association the right of first refusal to purchase a condominium subject to a contract for purchase and sale. The usual procedure is as follows: Prospective purchasers must complete an application, provide credit references and a copy of the contract, and submit to an interview with the association's representative, in this case, the building manager. The building manager then makes a recommendation and sends the file to the association president, who ultimately approves or disapproves the prospective purchaser's application. An estoppel letter is issued if the application is approved, and a Certificate of Approval is prepared, which the purchaser presents at closing.

7/ All of the other figures shown on the closing statement in the association file were clearly calculated using a $125,000 purchase price.

8/ Mr. Rabin looked at the file because he had been told by a realtor with offices in the Brickell Place Condominium building that he had seen a newspaper report that apartment A-2012 had been sold for $125,000 and that, in the realtor's opinion, the fair market value of the apartment was between $185,000 and $195,000. Mr. Rabin discussed this apparent discrepancy between the sales price and the fair market value with William Hartman, a friend and confidant of Mr. and Mrs. Thompson who had come to Miami to oversee their affairs, including their extensive real estate holdings.

9/ The evidence the Department presented to support its contention that Mrs. Thompson and Ms. Sanders negotiated a sales price of $185,000 for apartment A- 2012, that apartment A-2012 had a fair market value in 1993 of approximately

$185,000, and that Mrs. Thompson never agreed to accept a mortgage from Ms. Sanders rather than all cash is hearsay. This hearsay evidence does not supplement or explain any other evidence and there is no showing that it would be admissible over objection in a civil action.

To support its contention that the contract sales price was $185,000, the Department presented a copy of the Contract for Sale and Purchase Mr. Ganguzza claimed to have made from the copy of the contract contained in Mrs. Thompson's files, which was admitted into evidence as Exhibit B to Petitioner's Exhibit 8, and a copy of the Contract for Sale and Purchase produced by Mr. Rabin from the association's file, which was admitted into evidence as Petitioner's Exhibit 10. To support her contention that the contract sales price was $125,000, Ms.

Sanders presented an executed original of the contract showing a contract sales price of $125,000, which was received into evidence as Respondent's Exhibit 9 and which Ms. Sanders identified as a duplicate original contract signed August 19, 1993.

An examination of these three documents reveals that the signatures and dates written on the second and third pages of the documents are different on each of the three documents. Close examination also reveals that the first page of the copy of the contract which Mr. Ganguzza obtained from Mrs. Thompson's file, Exhibit B to Petitioner's Exhibit 8, and the first page of the copy of the contract which Mr. Rabin produced from his files, Petitioner's Exhibit 10, are identical; both show a contract sales price of $185,000, both have identical dots and random marks commonly produced by copy machines, and both have a hole punched in the exact same position at the top of the document. The only reasonable conclusion is that the first page of the contract taken from Mrs.

Thompson's file is a copy of the first page of the contract in Mr. Rabin's file.

APPENDIX

To comply with the requirements of section 120.59(2), Florida Statutes, the following rulings are made on the proposed findings of fact submitted by the parties:

Petitioner's proposed findings of fact.

Paragraphs 1, 2, 5, and 11: Adopted and incorporated in substance but not

verbatim in paragraphs 1 through 3, 8, and 11 of the Recommended Order.

Paragraphs 3, and 6 through 8: Rejected because not supported by the greater weight of the credible evidence.

Paragraphs 4, 10, 13, and 14: Accepted as true but not incorporated in the Recommended Order because unnecessary to resolve the issues presented.

Paragraph 9: The proposed finding of fact that the closing statement in the association files had been altered to reflect a purchase price of $185,000 is adopted and incorporated in substance but not verbatim in paragraph 14 of the Recommended Order; the implication in the proposed finding of fact that the altered closing statement in the association file was provided by Ms. Sanders is rejected because not supported by the greater weight of the credible evidence.

Paragraph 12: Accepted as true but not incorporated in the Recommended Order because unnecessary to resolve the issues presented, except to the extent adopted and incorporated in substance but not verbatim in paragraph 4 of the Recommended Order.

Paragraph 15: The proposed finding of fact in the first sentence is adopted and incorporated in substance but not verbatim in paragraph 2 of the Recommended Order; the proposed finding of fact in the second sentence is accepted as true but not incorporated in the Recommended Order because unnecessary to resolve the issues presented.

Respondent's proposed findings of fact.

Paragraphs 1, 2, 6, 7, 13, 14, and 16: Adopted and incorporated in

substance but not verbatim in paragraphs 1, 2, 6, 10, 11, and 13 of the Recommended Order.

Paragraphs 15, 17, 22 through 24, and 27: Rejected because unnecessary to resolve the issues presented.

Paragraph 3: Adopted and incorporated in substance but not verbatim in paragraphs 6 and 7 of the Recommended Order except that the references to and summaries of the evidence are rejected.

Paragraphs 4 and 5: The proposed findings of fact that Mr. Olsen began representing Mr. and Mrs. Thompson and that he received a call from Mrs.

Thompson are adopted and incorporated in substance but not verbatim in paragraph

5 of the Recommended Order; the remaining proposed findings of fact are rejected as not supported by credible evidence.

Paragraph 8: Rejected because not supported by the weight of the evidence.

Paragraph 9: The proposed findings of fact in the first and second sentences are accepted as true but not incorporated in the Recommended Order because unnecessary to resolve the issues presented; the proposed findings of fact in the third sentence are adopted and incorporated in substance but not verbatim in paragraph 11 of the Recommended Order; the proposed finding of fact in the fourth sentence is rejected because refer to the evidence.

Paragraphs 10 through 12, 20, 25, and 26: Accepted as true but not included in the Recommended Order because either unnecessary to resolve the issues presented or subordinate to the facts as found, except that the proposed finding of fact in paragraph 26 that $185,000 is "way above market value" is rejected as not supported by the credible evidence.

Paragraph 18: The proposed finding of fact that Ms. Sanders managed the apartment in question and that the tenants were not going to renew the lease on that apartment are adopted and incorporated in substance but not verbatim in paragraphs 2 and 3 of the Recommended Order; the remaining proposed findings of fact are rejected because either unnecessary to resolve the issues presented or not supported by credible evidence.

Paragraph 19: Rejected because either unnecessary to resolve the issues presented or not supported by credible evidence.

Paragraph 21: The proposed finding of fact in the first sentence is rejected because not supported by credible evidence; the remaining proposed findings of fact are adopted and incorporated in substance but not verbatim in paragraphs 7 and 8 of the Recommended Order.

COPIES FURNISHED:

Theodore R. Gay, Senior Attorney Department of Business and

Professional Regulation

401 Northwest Second Avenue, Suite N-607 Miami, Florida 33128

Burton R. Levey, Esquire Two Datran Center

9130 South Dadeland Boulevard, Suite 1619

Miami, Florida 33156

Henry M. Solares, Division Director Department of Business and

Professional Regulation

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

Lynda L. Goodgame, General Counsel Department of Business and

Professional Regulation Northwood Centre

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 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: 95-005352

Orders for Case No: 95-005352