vs.
ELAINE B. SALCH,
Respondent.
) Case No. 02-2721PL
September 24, 2002, in Tallahassee, Florida, before Suzanne F. Hood, Administrative Law Judge with the Division of Administrative Hearings.
For Petitioner: Stacy N. Robinson Pierce, Esquire
For Respondent: Kenneth D. Cooper, Esquire
The issues are as follows: (a) whether Respondent failed to make documents available to Petitioner in violation of Section 475.5015, Florida Statutes; (b) whether Respondent
obstructed or hindered the enforcement of Chapter 475, Florida Statutes, or hindered the performance of any person acting under the authority of that chapter in violation of Sections 475.25(1)(e) and 475.42(1)(i), Florida Statutes; and (c) what penalty, if any, should be imposed on Respondent.
On September 21, 2000, Petitioner Department of Business and Professional Regulation, Division of Real Estate (Petitioner) filed an Administrative Complaint against Respondent Elaine B. Salch (Respondent). Said complaint alleged that Respondent failed to provide records to Petitioner's investigator as requested.
On or about November 1, 2000, Respondent requested an administrative hearing. Petitioner referred this request to the Division of Administrative Hearings on July 8, 2002.
Administrative Law Judge Charles C. Adams issued A Notice of Hearing by Video Teleconference on August 20, 2002. The notice scheduled the hearing of the instant case and a related case (DOAH Case No. 02-2720PL) for September 24, 2002.
During the hearing, Petitioner presented the testimony of two witnesses. Respondent testified on her on behalf but presented no other witnesses.
Petitioner offered Exhibit Nos. P1-P24, which were admitted into evidence. Petitioner's Exhibit Nos. P1-P18 are related
primarily to the DOAH Case No. 02-2720PL and are filed therein. Petitioner's Exhibit Nos. P19-P24 are related primarily to the instant case and are filed herein.
A Transcript of the September 24, 2002, hearing was filed on October 21, 2002. Because the instant case and DOAH
Case No. 2720PL share the hearing Transcript, it is filed in DOAH Case No. 02-2720PL.
Petitioner filed a Proposed Recommended Order in the instant case and DOAH Case No. 02-2720PL on October 31, 2002. Respondent filed a proposed order addressing issues in the instant case and DOAH 02-2720PL on October 24, 2002.
Petitioner is charged with regulating and enforcing the statutory provisions pertaining to persons holding real estate broker and salesperson licenses in Florida.
Respondent is and was, at all times material to this case, a licensed real estate broker, having been issued license No. 0372849. Respondent's license is currently voluntarily inactive because she did not renew it in 1999. At all times material here, Petitioner was an agent and the broker of record for Park Avenue Properties, Inc.
On or about September 11, 1998, Harper Fields, Esquire, filed a complaint with Petitioner. The complaint alleged that Respondent had mismanaged his wife's rental property pursuant to
a property management agreement. The complaint resulted in an investigation and subsequent Administrative Complaint in DBPR Case No. 98-83963. That case became the subject of the Recommended Order in DOAH 02-2720PL, entered contemporaneously with the Recommended Order in the instant case.
By letter dated November 25, 1998, Petitioner informed Respondent that Mr. Fields had filed a complaint against her. The letter stated that Petitioner's investigator, Sidney Miller, would be in contact with Respondent to discuss the complaint in detail.
Respondent sent Mr. Miller a letter dated December 20, 1998. In the letter, Respondent attempted to explain her involvement in the management of the rental property owned by Mrs. Paula Fields.
During the investigation of the complaint, Mr. Miller requested Respondent to furnish him all documentation related to the management of Mrs. Field's rental property. The initial request included documentation about the transaction for the months of February through April 1998, including, but not limited to, monthly statement reconciliations for Respondent's rental escrow account and her operating account, bank statements for these accounts and copies of supporting checks, deposits slips, and transfers. Soon thereafter, Respondent furnished Mr. Miller with some of the requested information. However,
Respondent never provided Mr. Miller with a copy of the property management agreement at issue in DOAH Case No. 02-2720PL.
Mr. Miller also requested information regarding any background check that Respondent conducted before renting Mrs. Field's property to Donnda Williams. Respondent provided
this information to Mr. Miller under cover of a letter received by Mr. Miller on June 16, 1999.
Mr. Miller's review of Respondent's monthly statement reconciliations for her rental escrow account from February through April 1998 revealed negative balances. The monthly statement reconciliations are a more accurate reflection of the transactions that occur in an account than a corresponding bank statement.
Mr. Miller also discerned that Respondent transferred
$1,000 from her rental escrow account to her operating account on February 10, 1998. Additionally, Respondent's February and April bank statements for her rental escrow account and her operating account did not reflect negative balances; but her March 1998 bank statement for the rental escrow account had two overdrafts, one on March 19 and another one on March 20.
Respondent transferred $1,000 on March 2, 1998, and
$8,000 on March 16, 1998, from her rental escrow account to her operating account. The $8,000 transfer resulted in a negative
balance on Respondent's monthly statement reconciliation for her rental escrow account.
Mr. Miller addressed his concerns relating to Respondent's rental escrow account in writing on June 25, 1999, and verbally on June 29, 1999. Mr. Miller requested Respondent to explain the March 1998 transfers and the negative balances reflected in the monthly statement reconciliations for the rental escrow account in the months of February through April 1998.
Mr. Miller's June 25, 1998, letter requested additional information, stating as follows:
I will also need the deposit slips and reconciliation for the rental escrow account for January 1998 along with copies of the bank statements, reconiliation's [sic] and deposits slips for any other account you maintained in January 1998. In addition please provide me with copies of the reconciliation's [sic] for the escrow account and the rental escrow account from May 1998 through the month you closed these accounts. If you maintained any other real estate escrow accounts for the period of January 1998 to this date, provide me with the same information.
Respondent received Mr. Miller's June 25, 1999, letter. However, she hired an attorney and forwarded to him the records that she believed were responsive to Mr. Miller's request. Mr. Miller did not learn that Respondent had hired an attorney until he talked to her on June 29, 1999.
On or about June 29, 1999, Petitioner explained to Mr. Miller that she had been in the State of Washington caring for a sick relative during parts of January, February, and March 1998. She did not have her rental escrow account checkbook with her when disbursements were due from that account. Therefore, Respondent made the disbursements from her operating account. She made the transfers from her rental escrow account to her operating account to facilitate making the payments in this manner.
Upon learning that counsel represented Respondent, Mr. Miller contacted the attorney by telephone. The purpose of the call, in part, was to request the attorney to file a letter of representation. Because the attorney was unavailable,
Mr. Miller left a message requesting the attorney to return the call. The attorney did not respond to the message.
After not receiving any further information from Respondent or her attorney, Mr. Miller sent Respondent a letter dated November 1, 1999. The letter requested the status of the records requested in Mr. Miller's June 25, 1999, letter. Respondent received the November 1, 1999, and forwarded it to her attorney.
In a letter dated November 29, 1999, Respondent's attorney acknowledged that he had received Mr. Miller's November 1, 1999, letter. The attorney stated that he had
instructed Respondent to furnish Mr. Miller with copies of the cashed checks for the two transfers that Mr. Miller was inquiring about. The November 29, 1999, letter from Respondent's attorney did not otherwise address the information requested by Mr. Miller's June 25, 1999, letter.
In correspondence dated January 22, 2000, Respondent's attorney explained that Respondent had issued the attached copies of checks while she was in the State of Washington during her father's illness only to avoid delay in payment. Attached to the letter were copies of checks, front and back, of Respondent's operating account for her business, Park Avenue Properties, Inc. The copies of checks were issued in February through April 1998. Respondent had furnished Mr. Miller with copies of these checks in June 1999. The January 22, 2000, letter from Respondent's attorney was otherwise not responsive to Mr. Miller's June 25, 1999, letter.
Specifically, there were no copies of deposit slips and reconciliation for the rental escrow account for January 1998. There were no documents or reference to the same information for any other accounts that Respondent maintained in 1998. There were no copies of the reconciliations for the rental escrow account from May 1998 through January or February 1999 when Respondent closed her accounts.
During the hearing, Respondent admitted that the information furnished to Mr. Miller under cover of the January 22, 2000, letter was not responsive to the request in Mr. Miller's June 25, 1999, letter. At no time during the investigation did Respondent explain that the documents reflected paid personal expenses, as well as expenses paid on behalf of clients out of the same account.
In a letter dated April 6, 2000, Mr. Miller sent yet another request for records and information to Respondent's attorney. This letter requested an explanation regarding certain transfers between Respondent's accounts on March 6, April 6, and April 14, 1998. Mr. Miller needed copies of the cancelled checks and better copies of the bank statement for January 1998 for the rental escrow account. Mr. Miller also requested the bank statements, reconciliations, deposit slips and cancelled checks for the rental escrow, and operating accounts for February 1998.
The April 6, 2000, letter again requested information previously requested in June 1999. This information included the following: (a) deposit slips for the rental escrow account in January 1998, along with copies of the bank statements, reconciliations, and deposit slips for any other accounts that Respondent maintained in January 1998; (b) copies of the reconciliations for the operating account and the rental escrow
account from May 1998 through the month that Respondent closed the accounts; and (c) the same information for any other real estate escrow accounts that Respondent maintained from January 1998 to June 25, 1999.
Mr. Miller's April 6, 2000, letter was sent to Respondent's attorney by certified mail. The return receipt indicates that the attorney's office received the letter on April 10, 2000.
In a letter dated October 26, 2000, Respondent's attorney sent Petitioner's counsel a letter. According to the letter, Respondent had provided copies of all the checks and the explanation behind the transactions. The letter states that the attorney had not heard from Mr. Miller after the attorney sent the January 2000 letter.
On or about June 3, 2002, Respondent's attorney sent Petitioner's counsel some 351 pages of documents, indicating that they included all documents requested by Mr. Miller and that they were responsive to all discovery requests. However, clear and convincing evidence indicates that the documents were not responsive to Mr. Miller's June 25, 1999, and April 6, 2000, record requests. During the hearing, Respondent agreed that the documents were not responsive to Mr. Miller's requests for records related to Respondent's rental escrow account from May 1998 through the time she closed the account.
Because Mr. Miller was unable to review the records he requested, he was unable to perform an audit of Respondent's accounts. Mr. Miller needed records covering a six-month period in order to audit Respondent's accounts. Without the records, Mr. Miller was unable to determine whether problems in Respondent's rental escrow account occurred at other times.
Respondent testified during the hearing that she had provided Mr. Miller with all of the records in her possession. Her testimony in this regard is not persuasive. Respondent admitted that Chapter 475, Florida Statutes, required her to keep all of her records for four or five years.
The instant case is not the only time that Respondent has been the subject of a disciplinary proceeding. She admitted during the hearing that Petitioner previously had cited her and "smacked her on the wrist" for not disbursing funds in a timely fashion.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding. Sections 120.569 and 120.57(1), Florida Statutes.
Petitioner has the burden of proving by clear and convincing evidence that Respondent violated Sections 475.25(1)(b) and 475.25(1)(k), Florida Statutes. Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987); Florida Department of
Transportation v. J.W.C. Company, Inc., 396 So. 2d 778 (Fla. 1st DCA 1981); Balino v. Department of Health and Rehabilitative
Services, 348 So. 2d 349 (Fla. 1st DCA 1997).
Section 475.25(1)(e), Florida Statutes, authorizes Petitioner to discipline any licensee that violates any provision of Chapter 475, Florida Statutes.
Section 475.5015, Florida Statutes, states as follows:
Each broker shall keep and make available to the department such books, accounts, and records as will enable the department to determine whether such broker is in compliance with the provisions of this chapter. Each broker shall preserve at least one legible copy of all books, accounts, and records pertaining to her or his real estate brokerage business for at least 5 years from the date of receipt of any money, fund, deposit, check, or draft entrusted to the broker or, in the event no funds are entrusted to the broker, for at least 5 years from the date of execution by any party of any listing agreement, offer to purchase, rental property management agreement, rental or lease agreement, or any other written or verbal agreement which engages the services of the broker. . . .
Section 475.42(1)(i), Florida Statutes, states as
follows:
No person shall obstruct or hinder in any manner the enforcement of this chapter or the performance of any lawful duty by any person acting under the authority of the chapter . . . .
In this case, the evidence is clear and convincing evidence that Respondent failed to provide Mr. Miller with
certain requested records related to Respondent's accounts despite repeated demands. Mr. Miller had reason to believe that Respondent was not in compliance with the statutory requirements and needed these records to make that determination.
Specifically, Mr. Miller made specific requests directly to Respondent on June 25, June 29, and November 1, 1999. Mr. Miller made another request that Respondent was aware of to Respondent's attorney on April 6, 2000.
Through her attorney, Respondent provided Mr. Miller with some of the requested documents on January 22, 2000, and again on June 3, 2002. These documents were duplicates of records that Respondent had previously provided to Mr. Miller. They were not responsive to the requests that Mr. Miller made on June 25, 1999, and several times thereafter. Additionally, Respondent never did furnish Mr. Miller with a copy of the property management agreement that was the subject of DOAH Case No. 02-2720PL. Therefore, Respondent violated Section 475.5015, Florida Statutes.
Respondent's failure to provide the requested records under the circumstances of this case is clear and convincing evidence that she obstructed and hindered Mr. Miller's efforts to enforce the provisions of Chapter 475, Florida Statutes. Instead, Respondent repeatedly forwarded duplicate records to Mr. Miller. Most notably, Respondent never sent Mr. Miller
records relating to her rental escrow account for January 1998 or documents related to all of her accounts for May 1998 through January or February 1999 when she closed her accounts.
Accordingly, Respondent violated Sections 475.25(1)(e) and 475.42(1)(i), Florida Statutes.
The penalties that may be imposed on Respondent include the following: (a) revocation of license;
suspension of license for a period not to exceed 10 years;
imposition of administrative fine of up to $1,000 for each count or offense; (d) imposition of investigative costs;
(e) issuance of a reprimand; and (f) imposition of probation subject to terms. See Section 475.25(1), Florida Statutes, and Rule 61J2-24.001, Florida Administrative Code.
There are no mitigating circumstances relating to the offenses in this case. On the other hand, Respondent's prior discipline must be considered in aggravation.
Respondent's license is already voluntarily inactive, having failed to renew her license in 1999. In consideration of the severity of the offenses, Petitioner should revoke Respondent's license.
That the Florida Department of Business and Professional Regulation, Division of Real Estate, enter a final order revoking Respondent's license.
DONE AND ENTERED this 15th day of November, 2002, in Tallahassee, Leon County, Florida.
SUZANNE F. HOOD
Filed with the Clerk of the Division of Administrative Hearings this 15th day of November, 2002.
Kenneth D. Cooper, Esquire
Stacy N. Robinson Pierce, Esquire Department of Business and
Nancy P. Campiglia, Chief Attorney Division of Real Estate Department of Business and
Hardy L. Roberts, III, General Counsel Department of Business and
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.
