Findings Of Fact The Respondent, Steven Hall, at all times pertinent hereto, was a licensed real estate salesman and broker. Upon February 15, 1984, he became licensed as a broker. The Respondent was registered with and employed by J. Arnold Ausley Realty from March 31, 1983 to February 15, 1984. J. Arnold Ausley was a licensed real estate broker and operated as Ausley Properties during times pertinent hereto. The Petitioner is an agency of the State of Florida charged with regulating the licensure and practice of realtors in the State of Florida and enforcing the practice standards for realtors embodied in Chapter 475, Florida Statutes. On February 4, 1984, the Respondent, in his capacity as a licensed salesman for Ausley Properties, arranged a contract between Champak Bhoja and Kishor Patel, as purchasers of a certain piece of real estate owned by one John D. Gilbert. In connection with that contract the Respondent obtained a $2,000 check as a deposit from Mr. Patel. At Mr. Patel's request the Respondent held this check without negotiating it awaiting Patel's instruction that sufficient funds were on deposit to honor the check. The Respondent waited four weeks and received no such instructions from Mr. Patel. The Respondent therefore contacted Patel, who was in Nebraska at the time, to tell him that he felt legally obligated to deposit the check. The check was deposited and was returned for insufficient funds. On March 19, 1984, Mr. Patel gave the Respondent a replacement check in the amount of $2,000. Mr. Hall asked Mr. Patel to make the check out to him since he had in the meantime become a broker and wanted credit for this transaction in his own business. He also informed Mr. Patel that he would need to use the money for his own personal expenses, in the nature of a "loan." Mr. Patel, however, made the check out to the "Ausley Properties Escrow Account." The Respondent and Mr. Patel had been involved in other business ventures together during the course of which Mr. Patel had already lent the Respondent, on different occasions, a total of approximately $4,000. This course of dealing was continued in the present instance, from the Respondent's viewpoint, when the Respondent informed Mr. Patel that he needed the $2,000 for personal expense purposes and would pay it back as a loan. He believed Mr. Patel assented to that arrangement at the time. The sales contract at issue ultimately failed to be consummated due to Mr. Pate1 and Mr. Bhoja not meeting the required contingency regarding debt financing. Approximately fifteen days after the contract's closing date passed, Mr. Patel made a demand upon the Respondent for the return of the $2,000 deposit. The Respondent failed to return it at that time but assured Mr. Patel that he would repay the money and needed more time to obtain the necessary funds. The Respondent had not deposited the check in the Ausley Properties Escrow Account because such an account did not exist, although the Respondent had urged Mr. Ausley on a number of occasions to set up such an account. The Respondent rather cashed the $2,000 check and used the proceeds for his own benefit, as he had informed Patel he would do. He used the money to meet certain operating expenses and personal expenses, being in severe financial straits at the time. Pate1 knew he was experiencing financial difficulties and had lent him the previously mentioned $4,000 to help him with operating expenses and personal expenses during the pendency of the closing of their various other real estate ventures. The Respondent informed Patel he would use the subject $2,000 for similar purposes, however, the record does not clearly reflect that Patel consented to this, as opposed to his intent that the money be placed in an account as his deposit of consideration for the contract. His testimony to this latter effect is borne out by the fact that in spite of the Respondent's request that the check be made out to him personally, instead Patel made it out to the "Ausley Properties Escrow Account." That account did not exist but the method of drafting the check reveals his intent that the money was to be used as a deposit. In any event the Respondent made no misrepresentation to Mr. Patel as to what he intended to do with the money, but at the same time he did not deposit it in an appropriate account to be held as a deposit toward the purchase of the property involved in the sales contract. Patel made numerous demands for the money and each time Respondent acknowledged this and the other debt to Patel and promised to pay. He ultimately began paying back a small portion of the indebtedness to each of his creditors starting out at a rate of $10 per month. Ultimately, the Respondent paid the entire $2,000 predicated on receipt of his 1985 income tax return.
Recommendation Having considered the foregoing findings of fact, conclusions of law, the evidence of record and the candor and demeanor of the witnesses, it is therefore RECOMMENDED that a final order be entered by the Petitioner finding that the Respondent has violated Section 475.25(1)(b),(d,)(e) and (k) only to the extent delineated in the above conclusions of law and that his real estate broker's license be subjected to a six months suspension. DONE and ORDERED this 1st day of August, 1986 in Tallahassee, Florida. P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of August, 1986. COPIES FURNISHED: James R. Mitchell, Esquire Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Steven R. Hall 8880 Old Kings Hwy., Apt. 30-W Jacksonville, Florida 32217 Michael Sheahan, Esquire Two South Orange Avenue Orlando, Florida 32801 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Wings Slocum Benton, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Harold Huff Executive Director Florida Rea1 Estate Commission 400 W. Robinson Street P. O. Box 1900 Orlando, Florida 32802 APPENDIX Petitioner's Proposed Findings of Fact: Accepted Accepted Accepted Accepted Accepted Accepted Rejected, although the evidence establishes that Patel intended the funds to be escrowed. Accepted Accepted Accepted Accepted Accepted Accepted Accepted Rejected as not comporting with the charges in the Administrative Complaint. Respondent's Proposed Findings of Fact:* Accepted Accepted Accepted Accepted Accepted, but irrelevant to the charges. Accepted Accepted Accepted as to the first sentence only. The second sentence concerning Patel's response is not clearly supported by record evidence. Accepted Accepted Accepted * Although Respondent is proposed findings are accepted, some are inculpatory, some are not material and some support the conclusion that no fraudulent conduct was committed.
Findings Of Fact Frederick Hodgdon (Hodgdon) has held Florida real estate broker license 0206805 at all times pertinent to this case. Hodgdon is owner and qualifying broker for Pelican Realty of Marco Island, Inc., (Pelican Realty), through which Hodgdon conducts business and which also is named as a respondent. At all times pertinent, Pelican Realty has held Florida corporate real estate broker license 0223934. July 24 through August 6, 1984, respondents placed the following newspaper advertisement in the Sun-Daze: DO YOU KNOW ... that all Florida real estate brokers are agents for the seller and CANNOT legally propose any lower than listed prices or better terms for the benefit of the buyer? UNLESS ... the broker legally qualifies himself as an agent for the buyer. As a Buyer's Broker Pelican Realty CAN and DOES exactly this and a lot more! Buyers pay no fees or commissions. Call or send for our informative brochure, you will be glad you did. The real estate buyer's best bet for the best price is to have a Buyer's Broker. On February 19, 1986, respondents placed the following newspaper advertisement in the Marco Island Eagle: 1/ BUYER BEWARE! DON'T BUY REAL ESTATE ON MARCO ISLAND. ... before consulting an attorney or carefully reading Paragraph 5) and 7) of the 1985 Revision of the Sales Contract as approved by the Naples Area Board of Realtors and the Marco Island Area Board of Realtors and the Collier County Bar Association contract Revision Committee. The Contract states quote: "The Buyer has inspected the property sold by the Contract and there are no other inspections permitted or required. The property is acceptable in its AS IS condition as of date of this offer. INCREDIBLE! ... What happens to the unwitting Buyer who intends to have termite, structural and seawall inspections AFTER his offer is accepted? He just may have to buy a termite ridden house that needs a new roof and a seawall that is on the verge of collapse. Thats what! ... Taken at face value the Sales contract calls for the buyer to spend several hundred dollars for inspections BEFORE making an offer that may well be turned down. INCREDIBLE! .... Paragraph 7) states quote: "Buyer's decision to buy was based on Buyer's own investigation of the property and not upon any representation, warranty, statement or conduct of the Seller, or broker, or any of Seller's or broker's agents" (Excluding those rare occasions when the seller and his agents remain silent.) INCREDIBLE! ... The above subject sections of Paragraphs 5) and 7) of the 1985 Sales Contract in our opinion may well violate the Realtor's Code of Ethics Article 7) "to treat fairly all parties to the transaction." There is nothing Pelican Realty could say or do to better emphasize the Buyer's need to have an advocate on his side. ... As a Buyer's Broker we recommend striking out any and all terms and conditions of the Sales Contract that are prejudicial to the Buyer's best interests. ... Pelican Realty would appreciate the opportunity to discuss with any interested parties the many advantages of working with a Buyer Broker. Our services are at NO additional expense to the buyer. CALL US FOR FURTHER DETAILS. NOW!! On March 11, 1986, respondents placed the following newspaper advertisement in the Sun-News: CASH BACK FOR THE REAL ESTATE BUYER. THAT'S INCREDIBLE! Pelican Realty GUARANTEES CASH BACK to every buyer on every sale. The bigger the sale, the bigger the cash gift to the buyer. On top of this Pelican Realty (a Buyer's Broker) goes all out to get the lowest possible price for the buyer at NO additional cost to the buyer. Other realtors must get the highest price for the seller. The thousands you SAVE already belong to you. THINK ABOUT IT! Call us for further details NOW! "WE PAY OUR BUYERS TO DO BUSINESS WITH US" There is nothing false or fraudulent about the three advertisements. However, the following statements in the advertisements are deceptive or misleading in form or content: The representation in the July 24 through August 6, 1984, Sun-Daze advertisement that buyers pay no fees or commissions. In form, the buyer perhaps does not pay brokerage fees or commissions. But in substance, the buyer does indirectly pay his broker a brokerage fee or commission when the seller pays fees and commissions out of the proceeds of the sale. The representation in the July 24 through August 6, 1984, Sun-Daze advertisement that a buyer's broker "legally qualifies himself as an agent for the buyer." Although perhaps technically correct, this representation implies separate state regulation and qualification procedures for licensure as a buyer's broker. In fact and in law, any licensed real estate broker can become a buyer's broker simply by entering into an agreement with a buyer to be the buyer's broker. The representation in the March 11, 1986, News-Sun advertisement: "Other realtors must get the highest price for the seller." Read carefully in context, this representation is true--realtors other than those representing a buyer must try to get the highest price for the seller he represents (while being open, honest and fair to the buyer). But, as written, the representation could lead one to believe that the respondents have an ability no other realtors have when, in fact and in law, any realtor or other licensed real estate broker who represents a buyer can try to get the best price for the buyer. Although respondents have offered cash rebates, no client has seen the offer or asked for a rebate. Although respondents have maintained their innocence, they changed the ads to meet the criticism of the Department of Professional Regulation.
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 (1) reprimanding respondents, Frederick Hodgdon and Pelican Realty of Marco Island, Inc., and (2) fining them $500 each for violations of Section 475.25(1)(c), Florida Statutes (1985). RECOMMENDED this 21st day of July, 1987, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of July, 1987.
Findings Of Fact The Respondent, John A. Nangle, is now and was at all times material to this matter, a licensed real estate salesman having been issued license number 0340127. He was employed in this capacity by Delray Realty, Inc. until January 4, 1982, when such employment terminated. Respondent did not thereafter become employed by another broker, but instead placed his license on inactive status. After heaving Delray Realty, Inc., Respondent negotiated a sales contract for the sale of a condominium unit from Marion Mowday to Anthony J. and Donna C. Amato, which closed on January 13, 1982. Respondent received $1,500.00 in compensation directly from the purchasers for his efforts in arranging this transaction.
Recommendation Based on the foregoing, it is RECOMMENDED: That Petitioner enter a Final Order suspending Respondent's license for a period of three years. DONE and ENTERED this 28th day of June, 1983, in Tallahassee, Florida. R. T. CARPENTER, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of June, 1983. COPIES FURNISHED: Fred Langford, Esquire Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802 Mr. John A. Nangle 860 North West 8th Avenue Delray, Florida 33444 Harold Huff, Executive Director Division of Real Estate Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802 William M. Furlow, Esquire Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802 Fred M. Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue At issue herein is whether respondents' real estate licenses should be disciplined for-the alleged violations set forth in the administrative complaint. Based upon all of the evidence, the following facts are determined:
Findings Of Fact At all times relevant hereto, respondent, Juan Rios, was a licensed real estate broker having been issued license number 0155126 by petitioner, Department of Professional Regulation, Division of Real Estate. Respondent, Victoria R. Rios, is a licensed real estate broker-salesman having been issued license number 0331183 by petitioner. The Rios are husband and wife and presently reside at 855 80th Street, #1, Miami Beach, Florida. On December 13, 1982, Juan Rios obtained a six-month multiple listing agreement to sell a house located in Hacienda Estates at 11451 S.W. 33rd Lane, Miami, Florida. The agreement was executed by Rios "As Realtor" and by the property owner, Mercedes Garcia. At Mercedes' request, the Rios placed an initial sales price of $145,000 on the home. On December 15, a similar agreement was executed by Rios and Garcia on condominium unit 9B, Laguna Club Condominium, 10710 N. W. 7th Street, Miami, Florida. That property was also owned by Garcia. Although the agreement introduced into evidence does not contain Rios' signature, at final hearing Juan Rios acknowledged that he had executed such an agreement. The listing agreements provided that if the properties were leased during the term of the agreements, the listing realtor would receive a brokerage fee of 10% for such leasing. The agreement also provided that the realtors were not responsible for vandalism, theft or damage of any nature to the property. Garcia is a native and resident of Venezuela, where she owns a radio station. The two properties in question were previously owned by her father. When the father died, apparently sometime in 1982, Mercedes inherited the house and condominium. The Rios were friends of the father, and agreed to list and manage the properties as a favor to the deceased. Mercedes left the country after the agreements were signed, and has apparently not returned. Although she is the complainant who initiated this matter, she did not appear at final hearing. The house at 11451 S. W. 33rd Lane had been vandalized prior to the listing agreement being signed. According to documents introduced into evidence, the property has also been the subject of subsequent vandalisms, the nature and extent of which are unknown. A tenant was eventually procured by Mercedes' aunt in February, 1983 at a monthly rate of $800. The tenant, a Mrs. Ramirez, paid some $4,800 in rents and deposits before she was killed at the home in June, 1983. The Rios spent some $2,644.36 of the $4,800 on repairs to the vandalism and for general maintenance. They also retained a 10% commission for their services, or $480. That left $1,675.64 owed to Mercedes. No lease was apparently ever signed by Ramirez, or at least none was given to the Rios by the relative who procured the tenant. The home was eventually sold to Mercedes' aunt for $85,000.1 None of the rental monies were placed in the Rios' trust account. The condominium unit was rented in June, 1983. The tenant, Oscar Ruiz, had answered an advertisement run by the Rios in a local newspaper. Although Ruiz executed a lease to rent the unit at a monthly rate of $500, the Rios did not have a copy of same, and claimed none was kept in their records. According to the Rios, Ruiz continued to rent the unit through April, 1984, or for eleven months. Total monies collected by the Rios from Ruiz, including a $500 security deposit, were $6,000, of which $3,364.86 was spent for maintenance, utilities, two mortgage payments, and a $500 payment to the owner (Mercedes). An additional $40.33 was spent on a plumbing bill, and $600 was retained as a commission by the Rios. This left $2,724.53 owed to Mercedes. None of the rental monies were placed in the Rios' trust account. In the spring of 1984, Mercedes retained the services of an attorney in Miami to seek her monies due from the Rios. Up to then, she had received no income or accounting on the two properties. The attorney wrote the Rios on several occasions beginning in April 1984, asking for a copy of the lease on the condominium unit, the security deposit, an accounting of the funds, and all other documents relating to the two, properties. He received his first reply from the Rios on May 3, 1984 who advised him that they had attempted to reach Mercedes by telephone on numerous occasions but that she would never return their calls. They explained that rental proceeds had been used to repair vandalism damage and structural defects. When the attorney did not receive the satisfaction that he desired, he filed a civil action against the Rios on October 10, 1984. On October 26, 1984 the Rios sent Mercedes a letter containing an accounting on the two properties reflecting that she was owed $4,400.17 by the Rios. To pay this, they sent a $140 "official check," and a promissory note for the balance to be paid off in 40 monthly installments at 10% interest. They explained that their real estate business had closed, and due to financial problems, they were unable to pay off the monies due any sooner. They also asked that she instruct her attorney to drop the suit. Mercedes rejected this offer and has continued to pursue the civil action. It is still pending in Dade County Circuit Court. At final hearing, the Rios characterized their involvement with Mercedes as a "professional mistake," and one undertaken out of friendship for Mercedes' father. They acknowledged they did not use a trust account on the transactions and that they had used the $4,400 in rental money due Mercedes for their own use. They considered the excess rent proceeds to be compensation for other "services" performed by them on behalf of Mercedes. However, there is no evidence of any such agreement between the parties reflecting that understanding.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is Recommended that Juan and Victoria Rios be found guilty as charged in Counts II and III, and be found guilty of culpable negligence and breach of trust in Count I. It is further recommended that Juan Rios' license be suspended for one year and that Victoria Rios' license be suspended for three months. DONE and ORDERED this 20th day of January, 1986, in Tallahassee, Florida. DONALD R. ALEXANDER, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of January, 1986
The Issue At issue is whether Respondent committed the violations set forth in the Administrative Complaint dated April 2, 2002, and, if so, what penalty should be imposed.
Findings Of Fact Petitioner is a state agency responsible for the licensing, regulation and discipline of real estate appraisal licensees in Florida. At all times material to this case, Respondent was a Florida state-certified residential real estate appraiser. Persons holding such licenses are required by law to assure that the state is apprised of the licensee's physical address. The purpose of the law is to assure that state regulators, as well as clients who may have issues regarding appraisals performed by the licensee, are able to contact the appraiser in a timely manner. At all times material to the charges against him, Respondent registered with Petitioner the address of 5299 West 28th Avenue, Hialeah Gardens, Florida 33016 as his current address. On or about February 2, 1996, Respondent developed and communicated an appraisal report for residential property located at 28204 Southwest 43 Court, Homestead, Florida 33033 (subject property). On or about August 12, 1999, Petitioner received a complaint concerning this appraisal. In furtherance of its legal obligation to investigate such complaints, Petitioner promptly wrote to Respondent at his registered address. The letter was not returned, and thus a legal presumption arises that it was received by the person(s) residing on the premises. That person was Respondent's mother. At the time the letter was sent and received at Becerra's registered address, Becerra himself was living in Colorado. Because Becerra had never notified Petitioner of the change of address; (there is no evidence as to whether Becerra's mother did or did not forward or otherwise deal with her son's mail) the state was thwarted in its efforts to determine the bona fides of the complaint. Eventually, Becerra came back into compliance with his obligation to provide the state with an accurate address. On January 29, 2002, state investigator Brian Piper (Piper) arranged to meet Becerra at his new location, 665 West 35th Street, Hialeah, Florida, a private residence where Becerra maintained a home office. Becerra knew that the purpose of Piper's visit was to investigate the 1999 complaint regarding his appraisal of the subject property in particular, and Becerra's appraisal business in general. Under Florida law, real estate appraisers must maintain a file with all documents pertaining to an appraisal for at least five years after the date of the issuance of the appraisal, and for at least two years after final disposition of any judicial proceeding in which testimony concerning the appraisal was given, whichever period expires last. Thus, by the time Piper met with Becerra regarding the February 2, 1996 appraisal, Becerra was no longer legally obligated to have documents relating to that appraisal in his possession. He was, however, required to cooperate with Piper's investigation. Instead, he was hostile, suspicious, and secretive in his dealings with Piper. Becerra would have been within his rights to say, unambiguously, that the file concerning this appraisal, or any 1996 appraisal for that matter, had been discarded in the ordinary course of business sometime after the five-year statutory record keeping period expired. Becerra did not make such a representation. Instead, he suggested to Piper that his documents were maintained on a computer, and/or at another location. As an afterthought, he raised the possibility that the documents no longer existed. Piper asked, as he was entitled to do, questions regarding Becerra's practices regarding the development and maintenance of records concerning appraisals. Becerra refused to answer. Frustrated in his efforts to determine whether the complaint regarding the 1996 appraisal was valid, Piper sought to exercise on behalf of the state its right to conduct a spot- audit of Becerra's books and records related to pending appraisals. Observing what appeared to be appraisal request forms taped to the wall of the Becerra's office, Piper sought access to the files concerning these appraisals. Becerra refused to cooperate and demanded that Piper leave his home/office. Becerra did not then and did not at hearing claim that Piper had requested information or made demands that he was not lawfully entitled to request or make. Instead, he contended that because more than five years had elapsed between the date of the appraisal and the time the state was able to find Becerra to ask him to produce the documents, Becerra cannot be disciplined for failing to produce the documents. The evidence established that Piper and DBPR acted at all times reasonably and in accordance with their legal duty to investigate specific complaints and to, more generally, monitor the operations of state-licensed appraisers to assure that they are performing their jobs in accordance with Florida law and the public interest. The evidence further established that Becerra's failure to fulfill his statutory duty to keep the state informed of his whereabouts was the sole reason the state had been unable to directly inform Becerra of its need to review the documents, and to conduct appropriate investigations into the quality of the February 2, 1996, appraisal; and, later, into the management of his appraisal business at the time of Piper's visit to Becerra's home office on January 29, 2002. A comparison of the February 2, 1996, appraisal for the subject property with public records which were available at the time the appraisal was rendered revealed several discrepancies. For example, the appraisal reported an incorrect folio number for the subject property, an error which Becerra admits. In addition, the appraisal contained inaccurate information regarding the then-owner of the property and the square footage of the house. It also omitted reference to a previous sale, and made no mention of the fact that the subject property was located in a gated community. Transactions cited in the appraisal as comparable sales were not, in fact, comparable. The appraisal left out the impacts of Hurricane Andrew upon the property; those impacts were, at the time of the appraisal, significant. While the evidence is sufficient to establish that the appraisal was not a model of accuracy and attention to detail, the absence of Becerra's records, coupled with the fact that several pages of the appraisal were missing from the (anonymous) complaint which precipitated the investigation, render it impossible to determine whether Becerra did, in fact, fail to fulfill the minimum standards expected in an appraisal prepared by a Florida licensee. By the time the state was able to locate Becerra and conduct its investigation, the statutory period for which documents pertaining to the appraisal had expired, and it was no longer possible to determine whether Becerra had fulfilled his legal duty to maintain the file for five years. Additionally, it was no longer possible to determine whether there were credible explanations for the discrepancies and apparent errors in the appraisal of the subject property, or whether he had in fact performed the appraisal negligently. Becerra unlawfully failed and refused to cooperate with the state's reasonable inquiry into his current appraisal cases.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED that a Final Order be entered finding Respondent guilty of violating Section 475.624(1), Florida Statutes, by reason of his violations of Sections 475.623 and 425.626(1)(f), Florida Statutes, imposing a fine of $5,000 and permanently revoking respondent's real estate appraisal license. DONE AND ENTERED this 10th day of July, 2003, in Tallahassee, Leon County, Florida. S FLORENCE SNYDER RIVAS 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 10th day of July, 2003. COPIES FURNISHED: Sergio A. Becerra 665 West 35th Street Hialeah, Florida 33012 Juana Carstarphen Watkins, Esquire Department of Business and Professional Regulation Hurston Building, North Tower, Suite N308 400 West Robinson Street Orlando, Florida 32801 Frank Gregoire, Chairman Real Estate Appraisal Board Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
The Issue In this disciplinary proceeding, the issues are: (1) whether Respondents, who are licensed real estate brokers, failed within a reasonable time to satisfy a civil judgment relating to a real estate commission; (2) whether Respondents failed to maintain trust funds in an escrow account as required; and (3) whether disciplinary penalties should be imposed on Respondents, or either of them, if Petitioner proves one or more of the violations charged in its Administrative Complaint.
Findings Of Fact The Parties Respondent Marlene Montenegro Toirac ("Toirac") is a licensed real estate broker subject to the regulatory jurisdiction of the Florida Real Estate Commission ("Commission"). Respondent Home Center International Corp. ("HCIC") is and was at all times material hereto a corporation registered as a Florida real estate broker subject to the regulatory jurisdiction of the Commission. Toirac is an officer and principal of HCIC, and at all times relevant to this case she had substantial, if not exclusive, control of the corporation. Indeed, the evidence does not establish that HCIC engaged in any conduct distinct from Toirac's in connection with the transactions at issue. Therefore, Respondents will generally be referred to collectively as "Toirac" except when a need to distinguish between them arises. Petitioner Department of Business and Professional Regulation, Division of Real Estate, has jurisdiction over disciplinary proceedings for the Commission. At the Commission's direction, Petitioner is authorized to prosecute administrative complaints against licensees within the Commission's jurisdiction. The Veloso Judgment Toirac and Elena Veloso ("Veloso") did business together and wound up as opponents in court. Veloso got the better of Toirac, obtaining, on June 5, 2001, a judgment in the amount of $4,437.60 against her and HCIC from the Dade County Court. The judgment liquidated a real estate commission that Veloso claimed the defendants owed her. On June 12, 2001, Toirac filed a Motion to Set Aside Final Judgment, wherein she asked the county court to (a) vacate its judgment in favor of Veloso, on the ground that the defendants had not been served with process and (b) consolidate Veloso's county-court proceeding with an action then pending in circuit court, which Toirac had brought against Veloso.1 As of the final hearing in this case, Toirac's motion, after four years, had not been heard or decided. As of the final hearing in this case, Toirac had not satisfied the judgment in favor of Veloso. The Escrow Account Shortfall On January 24, 2002, Tibizay Morales, who was then employed by Petitioner as an investigator, conducted an audit of Toirac's records. (The impetus for this audit was Petitioner's receipt, on or about June 20, 2001, of a complaint from Veloso.) Pursuant to the audit, Ms. Morales determined that the balance in Toirac's escrow account was $4,961.05. Ms. Morales determined further that Toirac's trust liability, i.e. the total amount of money that she should have been holding in escrow on her clients' behalf, was $12,242.00. Thus, there existed a shortfall of $7,280.95 in Toirac's escrow account. Toirac was not able, at the time of the audit, to explain the shortfall. A few weeks later, however, by letter dated February 13, 2002, Toirac informed Ms. Morales that the shortfall had been caused by the issuance, "in error," of a check in the amount of $7,345.00, which was drawn on HCIC's escrow account and payable (evidently) to HCIC; HCIC had deposited the funds into its operating account, thereby creating, according to Toirac, an "overage" of $7,345.00 in the latter. To correct the problem, Toirac had arranged for the transfer of $7,345.00 from HCIC's operating account to its escrow account, which was accomplished on or about February 1, 2002. The Charges In counts I and IV, Petitioner charges Respondents with failing to account for and deliver trust funds, in violation of Section 475.25(1)(d)1., Florida Statutes.2 Petitioner's position is that Respondents failed within a reasonable time to satisfy the county-court judgment in favor of Veloso. In counts III and V, Petitioner accuses Respondents of having failed to maintain trust funds in the real estate brokerage escrow account until disbursement was properly authorized, in violation of Section 475.25(1)(k), Florida Statutes. Petitioner's position is that the escrow account shortfall identified on January 24, 2002, is proof that funds held in escrow had been disbursed without proper authorization. Ultimate Factual Determinations There is no dispute (for Toirac admitted at final hearing) that the judgment debt owed by Respondents to Veloso relates to a real estate commission. It is also undisputed that, as of the final hearing, the county-court judgment had not been satisfied. The undersigned determines that Respondents have failed to satisfy the civil judgment in Veloso's favor within a reasonable time.3 Therefore, the undersigned finds Respondents guilty of violating Section 475.25(1)(d)1., Florida Statutes.4 It is determined that the erroneous transfer, via check, of funds from HCIC's escrow account to its operating account constituted an unauthorized disbursement of funds entrusted to Toirac by others who had dealt with her as a broker. While this might have resulted from the simple mistake of an incompetent bookkeeper, as Toirac maintains, nevertheless the disbursement was unauthorized and substantial——amounting to approximately 60 percent of Toirac's total trust liability. Therefore, the undersigned finds Respondents guilty of violating Section 475.25(1)(k), Florida Statutes. In view of the foregoing, Petitioner has established the charges set forth in counts I, III, IV, and V of its Administrative Complaint, by clear and convincing evidence.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a final order that: (a) finds Respondents guilty as charged in counts I, III, IV, and V of the Administrative Complaint; (b) suspends Respondents' respective real estate licenses for 90 days; and (c) imposes an administrative fine of $2,500 against Respondents, jointly and severally; and (d) places Respondents on probation for a period of at least 3 years, subject to such lawful conditions as the Commission may specify. DONE AND ENTERED this 14th day of September, 2005, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM 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 14th day of September, 2005.
Findings Of Fact The following pertinent facts are found based upon the unrefuted testimony and evidence adduced by the Petitioner, the Respondent having failed to appear to put on its case. The Respondent, George May, is a licensed real estate broker, having been issued license number 18515. His principal place of business is located at 2300 West Oakland Park Boulevard, Fort Lauderdale, Florida. At all times pertinent to this case the Respondent was the active firm member for Commercial Equity Corporation, a corporate broker, with offices at the same address. The Respondent was also the principal officer and stockholder of Eight Villas Corporation. On July 15, 1977, Mrs. Graciela Holden approached the Respondent regarding her desire to sell an apartment complex she owned. She ultimately gave the Respondent a listing for the sale of her property described as: Lot 789, Block 19, Lauderdale-by-the-Sea according to a plat thereof recorded in plat book six, page two of the public records of Broward County, Florida, together with improvements thereon consisting of an apartment complex. Mrs. Holden had had previous real estate transactions with Commercial Equity Corporation and the Respondent, hence her reliance on the Respondent's services in this situation. She found herself in severe financial difficulty at this time and was becoming ever more delinquent on her mortgage payments on the subject property. She discussed with the Respondent the advisability and means by which she might sell that apartment complex. The Respondent recommended to her that she sell the property. On September 9, 1977, she entered into a deposit-receipt sales contract for the sale of the apartment complex to Enfo Inc., a Florida corporation. The Respondent negotiated and arranged for the contract and sale on behalf of Mrs. Holden. During the negotiation of the proposed sale the Respondent explained the details of the contract to Mrs. Holden and counseled her on the advisability of and method by which the sale could be consummated. During these negotiations and counseling sessions he became aware of her delinquent mortgage payments on the subject premises. After agreeing to the terms and conditions and entering into the contract, the seller and purchaser agreed to close the sale of the property on September 30, 1977. Errors became apparent in the preparation of certain mortgage assumption documents on the part of the purchaser, however, and therefore the mortgagee required re-submission of proper forms for assumption of the outstanding mortgage by the purchaser, which resulted in the scheduled closing being cancelled and the time for closing extended for two to three days. During the course of the negotiations with Enfo Inc., and after the contract was signed the seller and purchaser separately made requests through the Respondent to meet with each other. The Respondent, however, informed each on a number of occasions that the other party to the transaction did not wish such a meeting. In effect, then, the Respondent failed to communicate requests by either party to the other regarding their desires to have meetings to discuss terms and conditions of the proposed sale and in representing to each party that the other did not wish such a meeting, the Respondent knowingly made a false representation which was shown by the Petitioner to be material in effecting the ultimate abrogation of the contract. On September 30, 1977, the original date for closing, the Respondent advised the purchaser that the purchaser was in default on the contract because closing would not be on that previously agreed upon day and therefore the seller was declaring the contract void. Also on September 30, 1977, the Respondent informed his client, Mrs. Holden, that the purchaser did not wish to close the transaction and effect the sale. Shortly thereafter the Respondent informed Mrs. Holden that she would now likely lose the premises to mortgage foreclosure since she was three months delinquent on her mortgage payments and since she no longer had a contract of sale for the premises, on the strength of which the bank might forebear from foreclosure proceedings. The Respondent then advised Mrs. Holden that he would present her with a "new deal" to help her out of her financial predicament. On the following day, October 1, 1977, the Respondent again reminded Mrs. Holden that her loss of the premises by foreclosure was imminent and offered her a proposition whereby she would convey the subject apartment complex to the Respondent. Her equity in the premises was apparently calculated by the Respondent to be approximately $22,000. The Respondent, by way of exchange, would convey to her a single family home situated at 841 Southwest 13th Court, Pompano Beach, Florida, which he owned and in which he represented to her he had an equity of $22,000. The Respondent additionally assured Mrs. Holden that he would assist her with the mortgage payments on that house until she was able to obtain some financial stability and regular employment. The Respondent persuaded Mrs. Holden to believe that his offer was in her best interests and that in order to keep from "losing everything" she should act on his offer, which she did. As a result of these representations by the Respondent, Mrs. Holden executed a deed of conveyance of her apartment complex to Eight Villas Corporation that same day. That deed was recorded by the Respondent the next day. The Respondent in turn executed and gave to Mrs. Holden a quit-claim deed to the house known as 841 Southwest 13th Court, Pompano Beach, Florida. The Petitioner's evidence was unrefuted and demonstrates that the Respondent's statement to the purchaser, Enfo Inc., on September 30, 1977, to the effect that the purchaser was in default on the contract and that therefore the contract was going to be cancelled by the seller was made without the knowledge or consent of Mrs. Holden. Mrs. Holden at all times pertinent hereto wished to consummate and close the transaction with Enfo Inc., in order to relieve her financial problems and was not concerned with a slight delay in the original closing date. Similarly, the Respondent's statement to Mrs. Holden that the purchaser, Enfo Inc., did not wish to consummate the transaction and was therefore defaulting on the contract was also false and known by him at the time to be false. At all times pertinent hereto Enfo Inc., desired to close the transaction and had so advised the Respondent. Mrs. Holden believed the Respondent's representations in this regard and relied on his representations and guidance in her conduct of the proposed transaction with Enfo Inc., as well as the transaction with the Respondent himself. The value of the Respondent's Pompano Beach house for which he gave Mrs. Holden a quit claim deed was considerably less than Mrs. Holden's equity and value in the subject apartment complex. The conveyance of the apartment complex from Mrs. Holden to the Respondent's Eight Villas Corporation was induced by the representations of the Respondent, as the alter ego of the corporation, which he knew to be false at the time he made them. The Respondent thus fraudulently advised Mrs. Holden that it was in her best interest to transfer her property to him in exchange for one of lesser value and also falsely advised and misled her when he told her that unless she transferred her property to him in exchange for the house that she would lose the apartment complex and everything else she owned. The Respondent's real estate license which is the subject of this proceeding has already been revoked and the time for appeal of the Petitioner's final order has expired in DOAH Cases numbered 81-237 and 81-1149.
Recommendation In consideration of the foregoing findings of fact and conclusions of law it is therefore recommended that Case No. 81-1503 be dismissed with prejudice. DONE AND ENTERED this 3rd day of March, 1982, in Tallahassee, Florida. P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of March, 1982. COPIES FURNISHED: Theodore Silver, Esquire 9445 Bird Road, Second Floor Miami, Florida 33165 Mr. George May Suite 202 2300 West Oakland Park Boulevard Fort Lauderdale, Florida 33311
The Issue The issues in this case are whether the respondents, Dorothea L. Prisament and Warricks Real Estate , Inc., should be disciplined on charges filed in a six-count Administrative Complaint, three counts for each respondent, and alleging that the respondents: (1) were culpably negligent in allowing their escrow account to have a negative balance, in violation of Section 475.25(1)(b), Florida Statutes (1989); (2) failed to maintain trust funds in a properly maintained escrow account, in violation of Section 475.25(1)(k), Florida Statutes (1989); and (3) failed to maintain a proper office sign, in violation of F.A.C. Rule 21V-10.024 and Sections 475.25(1)(e) and 475.22, Florida Statutes (1989).
Findings Of Fact Dorothea L. Prisament and Warricks Real Estate, Inc., are now, and were at all times material hereto, licensed as real estate brokers in the State of Florida. Dorothea L. Prisament was the active real estate broker for the corporate broker, Warricks Real Estate. On or about August 16, 1989, investigator Marjorie G. May conducted an office inspection and audit of the escrow accounts of the respondents. Ms. May also reviewed the outer office of the respondents. The entrance sign did not have the name of Dorothea L. Prisament on it; however, the sign did have Warricks Real Estate correctly identified and identified as a licensed real estate broker. Ms. May advised Ms. Prisament of the fact that Ms. Prisament's name needed to be on the sign and identified as a real estate broker. Ms. Prisament had a new sign made which fully complies with the statutes and rules. There was no evidence introduced at hearing to show that the escrow account of the respondents had a shortage in any amount; directly to the contrary, both the Department of Professional Regulation investigator and Ms. Prisament agreed that there was no shortage in the account.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, and in light of the fact both that the respondents' violation was a very minor and technical one which was immediately corrected and that the respondents had to undergo the costs of defense of this case and suffer the mental duress of defending this case, it is recommended that the Florida Real Estate Commission enter a final order dismissing Counts I through IV of the Administrative Complaint and reprimanding the respondents for a minor and technical violation under Counts V and VI. RECOMMENDED this 20th day of July, 1990, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 20th day of July, 1990. COPIES FURNISHED: Janine A. Bamping, Esquire Department of Professional Regulation, Division of Real Estate Post Office Box 1900 400 West Robinson Street Orlando, Florida 32801 Salvatore A. Carpino, Esquire One Urban Centre, Suite 750 4830 West Kennedy Boulevard Tampa, Florida 33609 Darlene F. Keller Director, Division of Real Estate 400 West Robinson street Post Office Box 1900 Orlando, Florida 32801 Kenneth E. Easley, Esquire General Counsel Department of Professional Regulation Northwood Centre 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0729
Findings Of Fact At all times relevant hereto, respondent, Ezell Realty, Inc., was a licensed corporate real estate broker having been issued license number 0231943 by petitioner, Department of Professional Regulation, Division of Real Estate. Respondent, Winfield Ezell, Sr., held real estate broker's license number 0309739 issued by petitioner and was the sole qualifying broker and officer of Ezell Realty, Inc. The firm is located at 1512 West Gore Street, Orlando, Florida. Grover Crawford was an acquaintance of Ezell who was interested in purchasing certain rental property on Coretta Way in Orlando, Florida. When he was unable to purchase the property Crawford told Ezell to let him know if anything else became available in that area. Ezell happened to own a rental house at 1121 Coretta Way which he had just purchased several months earlier in a foreclosure proceeding, and the two eventually began discussions concerning a possible sale. At all times relevant thereto, the house was rented to tenants, and Crawford intended the property to remain as investor-owned property rather than owner-occupied property. Ezell initially agreed to sell the property for $70,000 and the two entered into a contract on January 8, 1983, using this sales price. However, the lender's appraisal of the residence came in far below this figure, and the parties eventually agreed on a sales price of $55,450. A second contract for sale and purchaser was executed on June 22, 1983. Although the contract provided that Crawford would pay a cash deposit of $2,300 to be held in escrow by Ezell Realty, none was paid since Ezell was given $2,300 by the tenants of the house to make needed repairs to the property prior to the sale. This arrangement was agreeable with Crawford. The contract also required the seller (Ezell) to pay all closing coats. Therefore, Crawford was not required to pay any "up front" costs in order to buy the property. Under the terms of the second contract, Crawford was to obtain FHA financing on the property in the amount of $53,150. This type of financing is the most desirable from an investor standpoint since the mortgage can be easily transferred to another buyer for a small transfer fee without lender approval. After executing the first contract on January 8, 1983, Ezell and Crawford executed an "Addendum to Contract For Sale and Purchase" on the same date which provided in pertinent part: This contract is for the sole purpose of having the buyer obtain an assumable FHA mortgage for the seller and reconveying title to the seller. The seller hereby irrevocably assumes the said FHA mortgage from the buyer immediately after closing and the buyers hereby agree to that assumption. For this, Crawford was to receive $1,000. The parties agreed that this addendum would apply to the second contract executed on June 22, 1983. At the suggestion of Ezell, Crawford made application for a $53.150 FHA loan with Residential Financial Corporation (RFC) in Maitland, Florida, a lending institution which Ezell had done business with on a number of prior occasions. However, Ezell was not present at any meetings between Crawford and RFC. When Crawford applied for the mortgage, he indicated the property would be used for investment purposes and would not be owner-occupied. For some reason, RFC assumed the property would be owner-occupied and structured the-loan in that manner. Because of this, Crawford's down payment was slightly less than 5% of the value of the property with the remainder being financed by the institution. Had RFC treated the loan as an investor-loan, the down payment would have been increased to around 15%. Neither Crawford or Ezell advised RFC of the Addendum to the contract which required Crawford to reconvey the property to Ezell for $1,000 once the FHA mortgage was obtained. Had RFC known of this it would not have approved the loan. There was no competent evidence that such an agreement was illegal or violated any federal laws or contravened any real estate industry standard or ethical consideration. The loan was eventually approved, and a closing held on September 22, 1983. After closing, Crawford retained the property in his name with Ezell making all payments from the rent proceeds. This was consistent with an oral agreement between the two that such an arrangement would last for an indefinite period as long as the payments were current. When Crawford later received several notices from the lender stating that mortgage payments were in arrears, he hired an attorney and demanded that Ezell fulfill the terms of the Addendum. He also filed a complaint against Ezell with petitioner which precipitated the instant proceeding. After the closing, Ezell had intended for the tenants to assume the mortgage since they had expressed an interest in buying the property. However, such a sale never materialized. In July, 1984, the property was reconveyed to Ezell, and Ezell paid Crawford $1,000 as required by the Addendum.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the administrative complaint be dismissed, with prejudice. DONE and ORDERED this 7th day of August, 1985, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, FL 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of August, 1985. COPIES FURNISHED: Arthur R. Shell, Jr., Esq. P. O. Box 1900 Orlando, FL 32802 Julius L. Williams, Esq. P. O. Box 2629 Orlando, FL 32802 ================================================================ =
