STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF BUSINESS AND )
PROFESSIONAL REGULATION, )
DIVISION OF REAL ESTATE, )
)
Petitioner, )
)
vs. ) Case No. 02-3677PL
)
SHIRLEY K. BEMENDERFER, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, the final hearing was held in this case on November 14, 2002, in Fort Pierce, Florida, before Larry J. Sartin, a duly-designated Administrative Law Judge of the Division of Administrative Hearings.
APPEARANCES
For Petitioner: Lorenzo Level, Esquire
Department of Business and Professional Regulation
Division of Real Estate
400 West Robinson Street, Suite N802 Orlando, Florida 32801
For Respondent: James R. Mitchell, Esquire
Baker & Hostetler LLP
200 South Orange Avenue, Suite 2300 Orlando, Florida 32801
STATEMENT OF THE ISSUE
The issue in this case is whether the Respondent, Shirley
Bemenderfer, committed the violations alleged in an
Administrative Complaint issued by the Petitioner, Department of Business and Professional Regulation, Division of Real Estate, on December 31, 2001, and, if so, the penalty that should be imposed.
PRELIMINARY STATEMENT
Petitioner issued an Administrative Complaint on
December 31, 2001, against Respondent, alleging in Count I that Respondent "is guilty of culpable negligence, or breach of trust in any business transaction in violation of Section 475.25(1)(b), Florida Statutes"; in Count II that Respondent "is guilty of failure to account or deliver funds in violation of Section 475.25(1)(d)1, Florida Statutes"; in Count III that Respondent "is guilty of failure to maintain trust funds in a real estate brokerage escrow bank account or some other proper depository until disbursement thereof was properly authorized in violation of Section 475.25(1)(k), Florida Statutes"; in
Count IV that Respondent "is guilty of failure to properly prepare the required written monthly escrow statement- reconciliation in violation of Rule 61J2-14.012(2) and (3), Florida Administrative Code and is, therefore, in violation of Section 475.25(1)(e), Florida Statutes"; and in Count V that Respondent "is guilty of having been found guilty for a second time of any misconduct that warrants [her] suspension or has been found guilty of a course of conduct or practices which
shows that [she] is so incompetent, negligent, dishonest, or untruthful that the money, property, transactions, and rights of investors, or those with whom [she] may sustain a confidential relation, may not be entrusted to [her] in violation of Section 475.25(1)(o), Florida Statutes."
Respondent timely filed a request for a formal hearing to contest paragraphs 5, 7, 8, 12, 14, 15, and 16 of the Administrative Complaint. Respondent's request was filed with the Division of Administrative Hearings for assignment of an administrative law judge. The request was designated case number 02-3677PL and was assigned to the undersigned. The final hearing of this matter was scheduled for November 14, 2002, by Notice of Hearing entered October 1, 2002.
Prior to the commencement of the final hearing, the parties filed a Joint Pre-Hearing Stipulation which contains, among other things, an admission by Respondent to the facts alleged in paragraphs 1, 2, 3, 4, 6, 9, 10, 11, 13, and 17 of the Administrative Complaint. Those admitted facts have been accepted in this Recommended Order, to the extent relevant.
At the final hearing, Petitioner presented the testimony of Dawn Luchik, an investigator for Petitioner. Petitioner's Exhibits, numbered 1 through 11, were admitted. Respondent testified in her own behalf and Respondent's Exhibits numbered 1
through 3 were admitted, for the limited purposes reflected in the one-volume Transcript of the proceedings.
Official recognition was taken of Chapters 120, 455, and 475, Florida Statutes; Chapter 61J2, Florida Administrative Code; and Florida decisional law pertaining to those provisions.
The Transcript was filed with the Division of Administrative Hearings on December 9, 2002. By Corrected Notice of Filing Transcripts entered December 11, 2002, the parties were informed that their proposed recommended orders were to be filed on or before January 8, 2003. Both parties filed proposed recommended orders on January 8, 2003, and their proposal's have been fully considered in entering this Recommended Order.
FINDINGS OF FACT
Petitioner, the Department of Business and Professional Regulation, Division of Real Estate (hereinafter referred to as the "Department"), is the state agency charged with the duty to prosecute administrative complaints pursuant to Section 20.125, and Chapters 120, 455, and 475, Florida Statutes (2000).
At the times material to this proceeding, Shirley K. Bemenderfer is and was a licensed Florida real estate broker. Ms. Bemenderfer's license number is 9995621. For her last issued license, Ms. Bemenderfer was an active broker at
1801 Okeechobee Road, Fort Pierce, Florida 34950. She operated
under the trade name of Florida Properties of Fort Pierce. Ms. Bemenderfer has held a real estate license for 30 years.
On December 9, 1999, Dawn Luchik, an investigator for the Department, conducted an audit of Ms. Bemenderfer's property management escrow account. The property management escrow account maintained by Ms. Bemenderfer was a single account by which she recorded the receipts and disbursements of all property owners for whom she maintained property (hereinafter collectively referred to as the "Property Owners").
Using information provided by Ms. Bemenderfer,
Ms. Luchik compared the "Trust Liability," or the net amount of funds entrusted to Ms. Bemenderfer by the Property Owners, with the net amount of money in the bank account in which
Ms Bemenderfer actually deposited the funds.
Based upon information initially provided by
Ms. Bemenderfer, the Property Owners relevant to this proceeding consisted of individuals identified as Thomas, James C. Kelley, Pulliam, Esquivel, and Samaro. Based upon Ms. Bemenderfer's property management escrow account (hereinafter referred to as the "Escrow Account"), the balances for the Property Owners as of December 9, 1999, were as follows:
Thomas $2,565.49
Kelley 97.43
Pulliam 414.52
Esquivel 1,600.00
Samaro (179.86)
Total $4,497.58
Information provided by Ms. Bemenderfer indicated that the total balance as of December 9, 1999, for the bank account in which the funds of the Property Owners were maintained (hereinafter referred to as the "Bank Account") totaled
$9,650.44.
A number of checks which were written and reflected in the Escrow Account had not yet cleared the Bank Account and, therefore, these checks were totaled and added back to the Escrow Account balance as of December 9, 1999. Those checks (hereinafter referred to as the "Outstanding Checks"), according
to the information | provided by Ms. | Bemenderfer, included the |
following 1/: | ||
Payee | Check Number | Amount |
Bemenderfer | 5213 | $125.00 |
Thomas | 52?? | 405.00 |
Paigon | 5231 | 70.00 |
Samaro | 4811 | 630.36 |
Samaro | 4969 | 795.77 |
Samaro | 4576 | 137.46 |
Total | $3,414.86 |
The amount of the Outstanding Checks, $3,414.86, was added to the Escrow Account total, $4,497.58, to arrive at what the Bank Account total should have reflected: $7,912.44.
A comparison of the Bank Account balance of $9,650.44 with the adjusted Escrow Account of $7,912.44, reflected a large discrepancy between the two accounts of $1,738.00. Because the accounts did not balance, Ms. Luchik discussed the matter further with Ms. Bemenderfer to give her an opportunity to explain the cause of the discrepancy. In an effort to explain the discrepancy, Ms. Bemenderfer gave Ms. Luchik additional information concerning the portion of the Escrow Account attributable to Samaro.
Based upon the modified information provided by Ms. Bemenderfer to Ms. Luchik, Ms. Bemenderfer's records
indicated that the Samaro portion of the Escrow Account had a positive balance of $119.96 rather than the negative balance of ($179.86) initially reported by Ms. Bemenderfer. The modified balance was caused by a number of payments from the account which Ms. Bemenderfer reported had been made prior to
December 9, 1999. Additionally, the new information reflected that three checks previously deducted from the Samaro account had been added back because they had never been cashed by Samaro. Those checks (hereinafter referred to as the "Three Samaro Checks") consisted of the following:
Payee Check Number Amount
Samaro 4811 630.36
Samaro 4969 795.77
Samaro 4576 137.46
Total $1,563.59
Ms. Luchik modified her calculations to reflect the new positive balance in the Samaro portion of Escrow Account, but failed to remove the Three Samaro Checks from the total of the Outstanding Checks reflected in Finding of Fact 7. Using the modified Samaro account balance, Ms. Luchik determined that the total amount of the Escrow Account was $4,797.40.
Ms. Luchik them made the following calculation: Escrow Account Balance $4,797.40
Plus Outstanding Checks 3,414.86 Adjusted Escrow Account Balance $8,212.26 Compared to Bank Account Balance 9,650.44 Overage $1,438.18
The overage, or the amount of funds in the Bank Account in excess of the amount recorded in the Escrow Account, was reflected in an Office Inspection & Escrow/Trust Account Audit Form issued by Ms. Luchik on December 9, 1999.
Ms. Bemenderfer signed the Office Inspection & Escrow/Trust Account Audit Form. Ms. Bemenderfer was unable to explain why there was an overage.
The evidence at hearing proved that Ms. Luchik's calculation of the overage on December 9, 1999, was incorrect. In fact, based upon the information provided to Ms. Luchik by Ms. Bemenderfer during the audit, the overage was actually much higher than determined by Ms. Luchik. The discrepancy was caused by a simple mathematical error in Ms. Luchik's calculations. Ms. Luchik correctly added the Three Samaro Checks back to the Escrow Account to reflect the corrected portion of the account attributable to Samaro but she had already added those same three checks back to the Escrow Account as part of the Outstanding Check balance. Therefore, the amount of the Three Samaro Checks was added to the Escrow Account twice, inflating the balance of the Escrow Account by the amount of the Three Samaro Checks, or $1,563.59.
When the Three Samaro Checks are correctly removed from the Outstanding Check amount, the actual overage on December 9, 1999, based upon the information provided by Ms. Bemenderfer was actually much higher than determined by Ms. Luchik:
Escrow Account Balance $4,797.40 Plus Outstanding Checks:
Amount Used by Ms.
Luchik $3,414.86 Reduced by the Three
Samaro Checks 1,563.59 1,851.27
Adjusted Escrow Account Balance $6,648.67 Compared to Bank Account Balance 9,650.44
Overage $3,001.77
Based upon the best information available to the Department as of December 9, 1999, Ms. Bemenderfer appeared to have $3,001.77 in her Bank Account in excess of the amount of money she was holding in the Escrow Account for the Property Owners. The evidence failed to prove where the purported excess money came from or who it belonged to. The evidence also failed to prove that the excess amount was in any way caused by
Ms. Bemenderfer for any reason other than her simple negligence or incompetence.
The December 9, 1999, audit also discovered, based upon records provided by Ms. Bemenderfer, that Ms. Bemenderfer's records of the individual Property Owner's accounts which make up the Escrow Account, often reflected a negative balance. A negative balance indicates that amounts have been expended on behalf of an individual Property Owner in excess of funds received for that individual Property Owner. Ms. Bemenderfer was unable to explain the negative balances.
At the request of Ms. Bemenderfer, Ms. Luchik returned to conduct a second audit of her accounts on April 12, 2000. At this time, Ms. Bemenderfer had closed the Bank Account, account number 664413 (hereinafter referred to as the "Original Bank
Account"), and opened a new one, account number 1498797 (hereinafter referred to as the "New Bank Account").
As to the Original Bank Account, Ms. Bemenderfer reported that there was no trust fund liability in the Escrow Account. The balance of the Original Bank Account, however, reflected a shortage in the account as of April 11, 2000, of
$473.44, apparently reflecting that she had theoretically disbursed $473.44 more than she had received on behalf of the Property Owners.
Apparently realizing she had a negative balance in the Original Bank Account, Ms. Bemenderfer deposited $500.00 in the account on the day of the audit, April 12, 2000. Therefore, instead of reflecting a shortage of $473.44 when Ms. Luchik began the audit, the Original Bank Account reflected an overage in the account of $26.56. This amount was reflected by
Ms. Luchik in an Office Inspection & Escrow/Trust Account Audit Form completed on April 12, 2000. Ms. Bemenderfer was unable to explain why there was a $473.44 shortage in the Original Bank Account, what the $500.00 deposit she made was attributable to, or why the account ended up with a $26.56 overage.
Based upon the best information available to the Department as of April 12, 2000, Ms. Bemenderfer appeared to have $26.56 in the Original Bank Account in excess of the amount of money she had received and disbursed to the Property Owners
from the Escrow Account. The evidence also proved that the excess was caused by a deposit of $500.00 made by
Ms. Bemenderfer. Finally, the evidence failed to prove that the overage or shortage was in any way caused by Ms. Bemenderfer for any reason other than her simple negligence or incompetence.
The April 12, 2000, audit also determined that there was a $124.91 overage in the New Bank Account, which
Ms. Bemenderfer was unable to explain.
Based upon the best information available to the Department as of April 12, 2000, Ms. Bemenderfer appeared to have $124.91 in her New Bank Account in excess of the amount of money she was holding in the Escrow Account for the Property Owners. The evidence failed to prove where the purported excess money came from or who it belonged to. The evidence also failed to prove that the excess amount was in any way caused by
Ms. Bemenderfer for any reason other than her simple negligence or incompetence.
Monthly reconciliation statements which
Ms. Bemenderfer completed were also reviewed by Ms. Luchik (hereinafter referred to as the "Reconciliations"). There are numerous overages and shortages reflected in the Reconciliations. Ms. Bemenderfer failed to provide an written explanation in the Reconciliations for the overages or shortages and she failed provide a written explanation in the
Reconciliations for the correction action that would be taken to eliminate the overages or shortages.
In conclusion, Ms. Bemenderfer failed to maintain her Escrow Accounts in a reasonable, understandable fashion as of December 9, 1999, and April 12, 2000. Her accounts simply do not balance. Ms. Bemenderfer's accounts as of December 9, 1999, and April 12, 2000, reflect the negligent and incompetent manner in which the accounts had been maintained. The evidence failed to prove, however, any intentional wrong on her part or that Ms. Bemenderfer benefited in any way from the manner in which the accounts were maintained.
On May 19, 1999, the Florida Real Estate Commission adopted a stipulation signed by Ms. Bemenderfer in settlement of an Administrative Complaint issued against her on April 21, 1998. In the April 21, 1998, Administrative Complaint it was alleged an audit conducted in 1997 had revealed an overage of
$1,731.36 in Ms. Bemenderfer's bank account, that she had failed to prepare Reconciliations, and that there were shortages in the account of Ron Cason, even though the overall account balance showed an overage. Pursuant to the terms of the stipulation, Ms. Bemenderfer admitted the factual allegations of the Administrative Complaint, agreed that those allegations constituted the violations alleged, and agreed to pay a
$1,000.00 fine and costs, serve a one-year probation period, and attend a seven-hour escrow management course.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and of the parties thereto pursuant to Sections 120.569 and 120.57(1), Florida Statutes (2000).
In the Administrative Complaint, the Department seeks to impose penalties against Ms. Bemenderfer including suspension or revocation of her license and/or the imposition of an administrative fine. The Department, therefore, has the burden of proving the allegations of the Administrative Complaint by clear and convincing evidence. Department of Banking and Finance, Division of Securities and Investor Protection v.
Osborne Stern and Co., 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987) ); and Nair v. Department of Business & Professional Regulation, 654 So. 2d 205, 207 (Fla. 1st DCA 1995).
In Evans Packing Co. v. Department of Agriculture and Consumer Services, 550 So. 2d 112, 116, n. 5 (Fla. 1st DCA 1989), the court defined "clear and convincing evidence" as follows:
[C]lear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses
testify must be distinctly remembered; the evidence 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 the firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established. Slomowitz v. Walker, 429 So.
2d 797, 800 (Fla. 4th DCA 1983).
Section 475.25, Florida Statutes (1999), provides that disciplinary action may be taken against a real estate broker if it is found that the broker has committed certain enumerated offenses. In this matter, it has been alleged that
Ms. Bemenderfer committed the offenses described in Section 475.25(1)(b), (d)1, (k), and (o), Florida Statutes, which provide, in pertinent part:
(b) Has been guilty of . . . culpable negligence, or breach of trust in any business transaction in this state . . . .
. . . .
(d)1 Has failed to account or deliver funds to any person . . . .
. . . .
(k) Has failed, if a broker, to immediately place, upon receipt, any money, fund, deposit, check, or draft entrusted to her or him by any person dealing with her or him as a broker in escrow with a title company, banking institution, credit union, or savings and loan association located and doing business in this state, or to deposit such funds in a trust or escrow account maintained by her or him with some bank, credit union, or savings and loan
association located and doing business in this state, wherein the funds shall be kept until disbursement thereof is properly authorized . . . .
. . . .
(o) Has been found guilty, for a second time, of any misconduct that warrants her or his suspension or has been found guilty of a course of conduct or practices which show that she or he is incompetent, negligent, dishonest, or untruthful that the money, property, transactions, and rights of investors, or those with whom she or he may sustain a confidential relation, may not safely be entrusted to her or him.
It has also been alleged that Ms. Bemenderfer violated Section 475.25(1)(e), Florida Statutes, which includes the offense of having "violated any of the provisions of
[Chapter 475] or any lawful order or rule made or issued under the provisions of [Chapter 475] or chapter 455." In particular, the Department has alleged that Ms. Bemenderfer violated Rule 61J2-14.012(2) and (3), Florida Administrative Code. That Rule establishes requirements concerning a broker's responsibility to complete Reconciliations.
Being penal in nature, Section 475.25, Florida Statutes, “must be construed strictly, in favor of the one against whom the penalty would be imposed.” Munch v. Department of Professional Regulation, Div. of Real Estate, 592 So. 2d 1136, 1143 (Fla. 1st DCA 1992).
Among other arguments raised by Ms Bemenderfer in her proposed recommended order, she has argued that the Department failed to prove the factual allegations of the Administrative Complaint. In particular, Ms. Bemenderfer has argued:
The Administrative Complaint alleged that the overage as of December 9, 1999, was $1,438.18 while the evidence proved that the overage was actually $3,001.77; and
The Administrative Complaint alleged that on April 12, 2000, there was a shortage of $473.44 between the Old Bank Account and the Escrow Account when the evidence proved that there was a overage of $26.50.
There is no dispute that disciplinary action taken against a broker may be based only on those offenses specifically alleged in the administrative complaint. See
Cottrill v. Department of Insurance, 685 So. 2d 1371 (Fla. 1st DCA 1996); Delk v. Department of Professional Regulation, 595 So. 2d 966, 967 (Fla. 5th DCA 1992); Kinney v. Department of State, 501 So. 2d 129, 133 (Fla. 5th DCA 1987); and Hunter v.
Department of Professional Regulation, 458 So. 2d 842, 844 (Fla. 2nd DCA 1984).
With regard to the findings of the December 9, 1999, audit, Ms. Bemenderfer relies on the allegations of paragraph 5 of the Administrative Complaint:
5. The audit revealed an overage of
$1438.18 in the property management escrow account. A copy of the Audit report is attached hereto and incorporated herein as Exhibit 2.
Ms. Bemenderfer argues, that since the overage alleged is $1,438.18, and not $3,001.77, the Department has failed to prove its allegation concerning the December 9, 1999, audit. This argument is rejected for two reasons.
First, while Ms. Bemenderfer has suggested that the Administrative Complaint must be read in a very "precise" and "limited" manner, she had ignored the most "precise" and "limited" reading of paragraph 5 of the Administrative Complaint: it actually only required the Department to prove that its "audit revealed an overage of $1438.18 in the property management escrow account." The evidence in fact proved this allegation; as a result of the audit on December 9, 1999, the Department found that the overage was $1,438.18, just as alleged. The actual overage of $3,001.77 was not proved until hearing.
Secondly, and more importantly, Ms. Bemenderfer is ignoring the total allegations of the Administrative Complaint pertaining to this issue:
The audit revealed an overage of
$1438.18 in the property management escrow account. A copy of the Audit report is
attached hereto and incorporated herein as Exhibit 2.
Respondent was unable to explain the reason for the overage.
. . . .
8. Respondent provided two conflicting accountings of one owner's individual account. One accounting displayed an overage of $119.96. the other accounting, dated one day earlier than the first accounting, revealed a shortage of $179.86.
. . . .
While not as precise as they may have been, these allegations suggest what the facts have ultimately shown: Ms. Bemenderfer has not been able to maintain her Escrow Account in such a way that it balances with her Bank Account.
With regard to the findings of the April 12, 2000, audit, Ms. Bemenderfer relies on the allegations of paragraph 12 of the Administrative Complaint:
12. The second audit revealed a $473.44 shortage in the old property management account.
Ms. Bemenderfer argues, that since he evidence proved there was an overage of $26.56, rather than a shortage, the Department has failed to prove its allegation concerning the April 12, 2000, audit. This argument is also rejected.
Although not as precisely alleged as it could have been, the Department added the following additional allegation of fact concerning the April 12, 2000, audit:
13. After the second audit, Respondent later deposited $500 in that account resulting in an overage of $26.56. . . .
The evidence proved that there was an overage of
$26.56 on the date of the audit, which was caused by an unexplained deposit by Ms. Bemenderfer the same day of $500.00. That deposit eliminated the $473.44 shortage alleged in the Administrative Complaint. These facts are not, however, materially inconsistent with the allegations of the Administrative Complaint. The audit did, in fact, reveal a shortage, but for an unexplained deposit by Ms. Bemenderfer, of
$473.44; and, although it occurred the same day rather than after the second audit, the $26.56 overage proved at hearing is also alleged in the Administrative Complaint.
Count I: Culpable Negligence or Breach of Trust; Section 475.25(1)(b), Florida Statutes
In the Department's proposed recommended order, it has been argued that Ms. Bemenderfer is guilty of culpable negligence or breach of trust simply because Ms. Bemenderfer, as part of the settlement of the Administrative Complaint issued against her on April 21, 1998, she admitted to the facts alleged and agreed that those facts supported the violations alleged.
The Department goes on to argue that the facts she admitted, which are similar to the facts in this case, were alleged to constitute culpable negligence or breach of trust, just as in this case. Therefore, the Department concludes that
Ms. Bemenderfer was "on actual notice that [the facts of this case] constituted [the same] violations [alleged in this case]." This argument is rejected.
Whether Ms. Bemenderfer agreed previously as part of a settlement that certain facts rise to the level of culpable negligence or breach of trust does not support a conclusion that the facts admitted actually come within the statutory violation. In fact, they do not.
What the facts have established in this case is that Ms. Bemenderfer simply does not know how to keep her books in such a way that they balance and that she has not been very precise in filling out the monthly Reconciliations. The evidence proves that Ms. Bemenderfer has been incompetent and simply negligent when it comes to balancing her books.
Simple negligence, which has been proved in this case, does not, however, rise to the level of culpable negligence or breach of trust. In Munch, 592 So. 2d at 1143-1144, the court made the following observations about the first clause of Section 475.25(1)(b), Florida Statutes, which contains the terms "culpable negligence" and "breach of trust":
It is clear that Section 475.25(1)(b) is penal in nature. As such, it must be construed strictly, in favor of the one against whom the penalty would be imposed.
. . . Reading the first clause of Section 475.25(1)(b) . . . and applying to the words used their usual and natural meaning, it is apparent that it is contemplated that an intentional act be proved before a violation may be found. See Rivard v. McCoy, 212 So. 2d 672 (Fla. 1st DCA), cert. denied, 219 So. 2d 703 (Fla. 1968). [Emphasis in the original].
The evidence in this case simply failed to prove that Ms. Bemenderfer had any intention of not being able to balance her Bank Account and Escrow Account.
Based upon the foregoing, it is concluded that the evidence failed to prove that Ms. Bemenderfer is guilty of culpable negligence, or breach of trust in any business transaction in violation of Section 475.25(1)(b), Florida Statutes.
Count II: Failure to Account or Deliver Funds; Section 475.25(1)(d)1, Florida Statutes
In its Proposed Recommended Order, the Department has correctly conceded that the evidence failed to prove clearly and convincingly that Ms. Bemenderfer is guilty of having failed to account or deliver funds to any person in violation of Section 475.25(1)(d)1, Florida Statutes.
Based upon the foregoing and the evidence presented, it is concluded that the evidence failed to prove that
Ms. Bemenderfer is guilty of failure to account or deliver funds in violation of Section 475.25(1)(d)1, Florida Statutes.
Count III: Failure to Maintain Trust Funds; Section 475.25(1)(k), Florida Statutes
While the evidence proved that Ms. Bemenderfer failed to properly keep track of funds under her control, no evidence was presented to prove the proper balance of the accounts. It cannot, therefore, be concluded that the amount of funds
Ms. Bemenderfer had in her Bank Account was not the correct amount of trust funds she was required to maintain. Without such proof, and in light of the fact that the evidence only proved that Ms. Bemenderfer may have had more cash in her account than necessary, it cannot be concluded that she has failed to maintain funds entrusted to her.
Based upon the foregoing, it is concluded that the evidence failed to prove that Ms. Bemenderfer is guilty of failure to maintain trust funds in violation of Section 475.25(1)(b), Florida Statutes.
Count IV: Failure to Properly Prepare Monthly Escrow Statement-Reconciliations; Section 475.25(1)(e), Florida Statutes and Rule 61J2-14.012(2) and (3), Florida Administrative Code
In her Proposed Recommended Order, Ms. Bemenderfer has correctly conceded that the evidence proved clearly and convincingly that she is guilty of having violated Section 475.25(1)(e), Florida Statutes, by having failed to complete
Reconciliations in compliance with Rule 61J2-14.012(2) and (3), Florida Administrative Code.
Based upon the foregoing and the evidence presented, it is concluded that the evidence proved that Ms. Bemenderfer is guilty of failure to properly prepare the monthly escrow statement-reconciliations in violation of Rule 61J2-14.012(2) and (3), Florida Administrative Code, which constitutes a violation of Section 475.25(1)(e), Florida Statutes.
Count V: Found Guilty for a Second Time of Misconduct Warranting Suspension or Found Guilty of a Course of Conduct or Practices Which Shows Incompetence, Negligence, Dishonesty, or Untruthfulness; Section 475.25(1)(o), Florida Statutes
To be found guilty of engaging in a harmful course of conduct in violation of Section 475.25(1)(o), Florida Statutes, a licensee must be shown to have committed wrongful acts in connection with more than one transaction. Kopf v. Florida Real Estate Commission, 379 So. 2d 1327, 1329 (Fla. 3d DCA 1980). Such a showing was made here.
Ms. Bemenderfer has been found to be guilty of the same type of violations pursuant both to the April 21, 1998, Administrative Complaint and in this case. While the violations do not involve dishonesty or untruthfulness, the violations do involve incompetence and negligence. Her course of conduct suggests that the money, property, transactions, and rights of
investors, or those with whom she may sustain a confidential relation, may not safely be entrusted to her.
Based upon the foregoing, it is concluded that the evidence has proved that Ms. Bemenderfer is guilty, for a second time, of a course of conduct or practices which show that she is so incompetent or negligent that the money, property, transactions, and rights of investors, or those with whom she may sustain a confidential relation, may not safely be entrusted to her in violation of Section 475.25(1)(o), Florida Statutes.
Penalty
A range of disciplinary guidelines for violations of Chapters 455 or 475, Florida Statutes, has been adopted in Rule 61J2-24.001, Florida Administrative Code.
For a violation of Section 475.25(1)(e), Florida Statutes, the suggested penalty ranges from an eight-year suspension to revocation and a $1,000.00 fine. Rule 61J2- 24.001(1)(f), Florida Administrative Code. For a violation of Section 475.25(1)(o), Florida Statutes, the suggested penalty ranges from a $500.00 fine and a one-year suspension to revocation. Rule 61J2-24.001(1)(p), Florida Administrative Code.
The Department in its Proposed Recommended Order has suggested a 90-day suspension of Ms. Bemenderfer's license. This recommendation was based upon the Department's conclusion
that four of the five counts of the Administrative Complaint had been proved. In her Proposed Recommended Order, Ms. Bemenderfer has suggested an administrative fine of $500.00 and six months' probation, during which time, Ms. Bemenderfer would be required to complete a four-hour escrow management course prescribed by the Florida Real Estate Commission and attend one Florida Real Estate Commission meeting.
Rule 61J2-24.001(4), Florida Administrative Code, provides for a consideration of aggravating or mitigating circumstances demonstrated by clear and convincing evidence by the petitioner or respondent in a proceeding before the Division of Administrative Hearings. If demonstrated, the guidelines of the rule may be deviated from. Advance notice of intent to present evidence of aggravating or mitigating circumstances is required to be given no less than seven days before the formal hearing.
The aggravating or mitigating circumstances that may be considered include, but are not limited to, the following:
The severity of the offense.
The degree of harm to the consumer or public.
The number of counts in the Administrative Complaint.
The number of times the offenses previously have been committed by the licensee.
The disciplinary history of the licensee.
The status of the licensee at the time the offense was committed.
The degree of financial hardship incurred by a licensee as a result of the imposition of a fine or suspension of the license.
Violation of the provision of Chapter 475, Florida Statutes, where in a letter of guidance as provided in s. 455.225(3), Florida Statutes, previously has been issued to the licensee.
Neither party gave notice of intent to present evidence of aggravating or mitigating circumstances in this case.
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the a final order be entered finding that Shirley K. Bemenderfer violated Section 475.25(1)(e) and (o), Florida Statutes; requiring that she pay an administrative fine of $500.00; and that she be placed on probation for one year during the first three months of which she shall successfully complete at least a four-hour escrow management course prescribed by the Florida Real Estate Commission.
DONE AND ENTERED this 29th day of January, 2003, in Tallahassee, Leon County, Florida.
LARRY J. SARTIN
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 January, 2003.
ENDNOTE
1/ The payee, check number, and the amount of the checks are taken from Petitioner's Exhibit 7. The names of some of the payees and check numbers have been estimated due to the poor quality of the exhibit. Any inaccuracy in the name of the payee or check numbers has no baring on the relevant facts of this case.
COPIES FURNISHED:
Lorenzo Level, Esquire Department of Business and
Professional Regulation Division of Real Estate
400 West Robinson Street, Suite N802 Orlando, Florida 32801
James R. Mitchell, Esquire Baker & Hostetler LLP
200 South Orange Avenue, Suite 2300 Orlando, Florida 32801
Nancy P. Campiglia, Chief Attorney Department of Business and
Professional Regulation Division of Real Estate
400 West Robinson Street, Suite 802, North Orlando, Florida 32801
Buddy Johnson, Director Division of Real Estate Department of Business and
Professional Regulation
400 West Robinson Street, Suite 802, North Orlando, Florida 32801
Hardy L. Roberts, III, General Counsel Department of Business and
Professional Regulation 1940 North Monroe Street
Tallahassee, Florida 32399-2202
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.
| Issue Date | Document | Summary |
|---|---|---|
| May 29, 2007 | Mandate | |
| May 09, 2007 | Opinion | |
| Oct. 03, 2005 | Agency Final Order | |
| Jan. 29, 2003 | Recommended Order | Respondent`s negligent bookkeeping constituted violation of records requirements of Rule 61J2-14.012(2) and (3), Florida Administrative Code, but not culpable negligence or failure to maintain trust funds. |
