STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 98-1459

)

LOUIS M. LOGUERCIO, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case by video teleconference on December 4, 1998, at sites located in Miami and Tallahassee, Florida, before Errol H. Powell, a duly designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Geoffrey T. Kirk, Esquire

Department of Business and Professional Regulation

Division of Real Estate

400 West Robinson Street Orlando, Florida 32802

For Respondent: Heather A. Rutecki, Esquire

Rutecki & Rutecki, P.A.

100 Southeast 2nd Street, 34th Floor Miami, Florida 33131

STATEMENT OF THE ISSUE

Whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, what action should be taken.

PRELIMINARY STATEMENT

The Department of Business and Professional Regulation, Division of Real Estate (Petitioner) filed a two-count Administrative Complaint against Louis M. Loguercio (Respondent). Petitioner charged Respondent with the following: Count I-- violating Subsection 475.25(1)(b), Florida Statutes, by being 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; and Count II--violating Subsection 475.25(1)(d)1, Florida Statutes, by being guilty of failure to account or deliver funds. Respondent disputed the allegations of fact and requested a hearing pursuant to Subsection 120.57(1), Florida Statutes. On March 25, 1998, the matter was referred to the Division of Administrative Hearings.

At hearing, Petitioner presented the testimony of five witnesses and entered four exhibits (Petitioner's Exhibits numbered 1-3 and 5) into evidence.1 Respondent testified in his own behalf, presented the testimony of one witness, and entered no exhibits into evidence. Official recognition was taken of Section 475.25, Florida Statutes, and Rule 61J2, Florida Administrative Code.

A transcript of the hearing was ordered. At the request of the parties, the time set for filing post-hearing submissions was set for more than ten (10) days following the filing of the

transcript. The parties filed their post-hearing submissions on January 19, 1999. The parties' post-hearing submissions have been considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. At all times material hereto, Louis M. Loguercio (Respondent) was licensed in the State of Florida as a real estate salesperson, having been issued license number 0609113. From March 11, 1996, through July 13, 1997, Respondent was a salesperson for CMT Holding Ltd., a partnership trading as The Prudential Florida Realty.

2. Martha Meloni and her husband, Mario Meloni, (Sellers) owned residential property located at 6412 Southwest 127 Court, Miami, Florida. The Sellers' property was listed for sale with Jorge "Ivan" Salomon, a broker operating his own company, Real One Realty Corporation.

3. On May 1, 1997, Carlos Castellanos and his wife, Daritza Jiminez, a/k/a Daritza Jiminez-Castellanos, (Buyers) met Respondent at his office at The Prudential Florida Realty. They were referred to Respondent by one of his clients. The Buyers were from Venezuela and had had no contact with Respondent prior to this transaction.

4. On May 1, 1997, Respondent prepared a draft Residential Sale and Purchase Contract (Contract) for the purchase of the Sellers' property for $150,000 by the Buyers. Respondent drafted

   the Contract on behalf of the Buyers and prepared the contract while the Buyers were in his office.

5. The terms of the Contract required an initial deposit of

   
   

   $2,000 from the Buyers to be held in escrow by Steven Greenspan Law Office, as "Escrow Agent." The Contract also required a

   $13,000 additional deposit to be made within ten (10) days of the date of the Contract.

6. While the Buyers were in Respondent's office, they wrote two checks, and signed them, for deposits on the property: one for $2,000 dated May 1, 1997, and one for $13,000 dated May 15, 1997. The checks were made payable to Alan Greenspan, P.A. The Buyers wrote both checks with Respondent's assistance.

7. The Buyers wanted to personally take the $2,000 deposit check to Alan Greenspan, the escrow agent. The Buyers permitted Respondent to photocopy the checks while they were in Respondent's office. Once the checks were photocopied, Respondent returned the checks to the Buyers. Respondent advised the Buyers to deliver the $2,000 check to the escrow agent that day and to mail the second check by the due date.

8. Mr. Greenspan's office was in the same building as the mortgage company that the Buyers were using for the purchase of the property. His office was also in close proximity to Respondent's office.

9. The Buyers failed to deliver the $2,000 deposit check to Mr. Greenspan on May 1, 1997. Respondent did not know that the check had not been given to Mr. Greenspan by the Buyers.

10. Mr. Greenspan received a copy of the Contract. He did not contact any of the parties to the Contract regarding the escrow monies. As an escrow agent, Mr. Greenspan's office handles a large volume of closings and it is possible, according to him, that his staff assumed that the escrow monies had been received. No one in Mr. Greenspan's office verified that the monies had been received.

11. Prior to the due date for the payment of the second deposit of $13,000, Respondent contacted the Sellers' listing agent, Mr. Salomon, and informed him that the Buyers were having problems paying the second deposit. Shortly after the due date for the payment of the second deposit, Mr. Salomon contacted Respondent, who informed Mr. Salomon that the Buyers had the money. Respondent also faxed Mr. Salomon a copy of the two checks for the two deposits, which were written on May 1, 1997. Mr. Salomon faxed a copy of those checks to the Sellers. Respondent did not inform Mr. Salomon that the Buyers had not given the deposit checks to him.

12. Unbeknownst to Respondent, the Buyers had also failed to mail the second deposit of $13,000 to Mr. Greenspan.

13. Mr. Salomon, having received the fax copy of the checks, assumed that the escrow agent had the Buyers' deposits.

14. The Sellers, having received the fax copy of the checks, assumed also that the escrow agent had the Buyers' deposits.

15. Mr. Greenspan became aware that his office did not have the Buyers' deposits in escrow when the mortgage company requested that he provide an escrow letter. He contacted the Sellers' attorney, who faxed a copy of the Buyers' checks. At that time, Mr. Greenspan became concerned regarding the Contract because the Contract made it appear that he, as the escrow agent, had deposits that he did not have.

16. Mr. Greenspan contacted Respondent regarding the absence of the escrow deposits. Respondent was apologetic and responded to Mr. Greenspan that he (Respondent) was sorry that the Buyers had not given him (Mr. Greenspan) the deposits as they had indicated that they would do.

17. After being contacted by Mr. Greenspan, Respondent attempted to contact the Buyers. He was unsuccessful.

18. The Sellers did not become aware that none of the deposits were in escrow until the day before the scheduled closing on the property.

19. In the manner in which Respondent handled the Buyers' deposits, he failed to follow office policy and practice of The Prudential Florida Realty. According to the office policy and practice, the sales associate handling the transaction has the

    duty to ensure that the buyer's deposit(s) are deposited with the designated person or entity at the designated time or date.

20. Respondent also failed to advise the Sellers' agent, Mr. Salomon, or the escrow agent, Mr. Greenspan, the Sellers' attorney, or the Sellers that the Buyers had not given him any deposits.

    CONCLUSIONS OF LAW

    
    

21. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and the parties thereto pursuant to Section 120.569 and Subsection 120.57(1), Florida Statutes.

22. License revocation proceedings are penal in nature. The burden of proof is on the Petitioner to establish by clear and convincing evidence the truthfulness of the allegations of the Administrative Complaint. Department of Banking and Finance, Division of Securities and Investor Protection v. Osborne Stern and Company, 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

23. Section 475.25, Florida Statutes (1995), provides in pertinent part:

    1. The commission may deny an application for licensure, registration, or permit, or renewal thereof; may place a licensee, registrant, or permittee on probation; may suspend a license, registration, or permit for a period not exceeding 10 years; may revoke a license, registration, or permit; may impose an administrative fine not to exceed $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, registrant, permittee, or applicant:

       
       

       * * *

       
       

       (b) Has 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 has 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.

       * * *

       
       

       (d)1. Has 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 money, fund, deposit, check, draft, abstract of title, mortgage, conveyance, lease, or other document or thing of value However,

       if the licensee, in good faith, entertains doubt as to what person is entitled to the accounting and delivery of the escrowed property, or if conflicting demands have been made upon the licensee for the escrowed property, which property she or he still maintains in her or his escrow or trust account, the licensee shall promptly notify the commission of such doubts or conflicting demands and shall promptly:

       1. Request that the commission issue an escrow disbursement order determining who is entitled to the escrowed property;

       2. With the consent of all parties, submit

          the matter to arbitration;

       3. By interpleader or otherwise, seek adjudication of the matter by a court; or

       4. With the written consent of all parties, submit the matter to mediation. The department may conduct mediation or may contract with public or private entities for mediation services. However, the mediation process must be successfully completed within

       90 days following the last demand or the licensee shall promptly employ one of the other escape procedures contained in this section. Payment for mediation will be as agreed to in writing by the parties. The department may adopt rules to implement this section.

       
       

       If the licensee promptly employs one of the escape procedures contained herein, and if she or he abides by the order or judgment resulting therefrom, no administrative complaint may be filed against the licensee for failure to account for, deliver, or maintain the escrowed property.

       
       

24. Petitioner failed to demonstrate that Respondent violated Subsection 475.25(1)(b), Florida Statutes. The said Subsection contemplates an intentional act by the licensee for a violation to have occurred. Munch v. Department of Professional Regulation, Division of Real Estate, 592 So. 2d 1136 (Fla. 1st DCA 1992). The evidence fails to establish that Respondent knew or should have known that the Buyers had not given the two checks for the required deposits to Mr. Greenspan, the escrow agent. Scienter may be established by circumstantial evidence, Walker v. Department of Business and Professional Regulation, 705 So. 2d 652, 654 (Fla. 5th DCA 1998), or by showing that the accused was reckless or careless as to the truth of the matter asserted, Ocean Bank of Miami v. Inv-Uni Investment Corp., 599 So. 2d 694,

    697 (Fla. 3rd DCA 1992); however, the evidence in the case at hand falls short. Respondent was shown to have violated the office policy and practice of the The Prudential Florida Realty; however, a violation of office policy and practice does not equate to a violation of the statutory provision, Subsection 475.25(1)(b), Florida Statutes. Petitioner failed to show that Respondent had a duty to disclose that the Buyers had not given him the check(s) for the deposit(s).

25. Petitioner failed to demonstrate that Respondent violated Subsection 475.25(1)(d), Florida Statutes. Petitioner asserts that the case at hand is not the typical failure to account or deliver case in that a typical case involves a licensee who has a duty to account or deliver but fails to do so when required. Petitioner's assertion is correct. Petitioner argues that Respondent "interjected himself into the Buyers' delivery or non-delivery of the required escrow deposits" and, therefore, Respondent had a duty to ensure that the deposits were delivered to the escrow agent. The undersigned is not persuaded by Petitioner's argument. The evidence is insufficient to show that Respondent owed such a duty as a result of his actions or non-action.

RECOMMENDATION

Based on 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 against Louis

M. Loguercio.

DONE AND ENTERED this 29th day of April, 1999, in Tallahassee, Leon County, Florida.

ERROL H. POWELL

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 29th day of April, 1999.

ENDNOTE

1/ Petitioner's Exhibits numbered 4 and 6 were rejected.

COPIES FURNISHED:

Geoffrey T. Kirk, Esquire Department of Business and

Professional Regulation Division of Real Estate

400 West Robinson Street Orlando, Florida 32802

Heather A. Rutecki, Esquire Rutecki & Rutecki, P.A.

100 Southeast 2nd Street, 34th Floor Miami, Florida 33131

William Woodyard, General Counsel Department of Business and

Professional Regulation Northwood Center

1940 North Monroe Street Tallahassee, Florida 32399-0792

Herbert S. Fecker, Division Director Division of Real Estate

Department of Business and Professional Regulation

Post Office Box 1900 Orlando, Florida 32802-1900

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of 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: 98-001459

Orders for Case No: 98-001459