The Issue Is Respondent guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction in violation of Section 475.25(1)(b), F.S.? Is Respondent guilty of having failed to account or deliver to any person a deposit in violation of Section 475.25(1)(d), F.S.?
Findings Of Fact Petitioner is the state government licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Section 20.30, Florida Statutes, Chapters 120, 455, and 475, Florida Statutes, and rules promulgated thereunder. Petitioner's Exhibit 5 establishes that Respondent was licensed as a real estate broker from 1978-March 31,1982, having been issued license number 0004238; that she applied for a change of address on July 30, 1985; and that she also was licensed effective April 1, 1986 in accordance with Chapter 475 F.S. Respondent's Answer, served September 4, 1987, states, in pertinent part, "Respondent admits she is a licensed real estate broker." The last license issued was as a broker t/a Mary L. Barrett, Real Estate, 235 S. County Road, Palm Beach, Florida, 33480. Pursuant to oral testimony of Manley P. Caldwell, Jr., an attorney, the following occurred: Respondent owned an apartment building consisting of nine residential units located at 301 Chilean Avenue, Palm Beach, Florida. A condominium conversion was completed February 19, 1983, but recorded thereafter. Respondent sold the property (all nine units) to the condominium corporation, "301 Chilean Corp."; and Respondent took as payment for her property the proceeds of a $300,000 Florida National Bank mortgage on the property. The deeds, sale papers, accountings, corporate papers, conversion documents, and $300,000 mortgage and note by the corporation to Florida National in support of Mr. Caldwell's testimony were not offered in evidence either through Mr. Caldwell, through a records custodian, or by submitting certified copies. Without some authenticated supportive documentation, Mr. Caldwell's testimony as to the nature and dates of this corporate real estate transaction is uncorroborated hearsay. To the degree there is any documentary corroboration, it appears to fix a far later date than that recited by Mr. Caldwell. 1/ Even so, neither Mr. Caldwell's testimony nor any admitted documentary evidence supports the premise that Respondent acted as other than a seller of her own real property in this transaction. There is no evidence she acted as a real estate agent or broker between independent parties. According to Mildred Chrzanowski, previously, on or about May 17, 1982, Respondent had made representations to her that if Mrs. Chrzanowski invested in the residential units, Respondent would form a corporation and convert the building into a condominium project, that Mrs. Chrzanowski would receive a position in the 301 Chilean Corp., that she would get a return of the $30,000 she invested at the "closing" to take place in October, 1982, that she would eventually get back double her investment, and that Respondent would pay back all the money herself if necessary. Five checks were made out by Mrs. Chrzanowski directly to the Respondent and not to any corporation. They also were tendered directly to the Respondent between May 17, 1982 and January 24, 1983. These five checks totalled $30,000 and were intended to purchase stock in the corporation. Some of these checks are endorsed in Respondent's name; some are endorsed for deposit only to the Respondent's name; some are endorsed for deposit only to the corporation. Mrs. Chrzanowski testified that she made out the first five checks to the Respondent because she thought the corporation was not yet formed as of January 24, 1983, the date of the fifth check. However, there is nothing to show these amounts were used for other than the incorporation and condominium conversion. A sixth check, dated January 18, 1984 for $1,360 constituted a loan by Mrs. Chrzanowski to the corporation. Mrs. Chrzanowski testified that she expected to become treasurer of the corporation and through her testimony Petitioner's Exhibit 2 was admitted in the absence of Respondent without objection. This is a copy of a federal corporate income tax return (dated September 20, 1983) for "301 Chilean Corp." and reflecting that the corporation was incorporated June 1, 1982, and "activated" May 11, 1983. It does not recognize Respondent as a stockholder. It names Mr. and Mrs. Chrzanowski, Joanne Barrett, and McKinley Cheshire as stockholders of a total of 83.33 shares of stock. It does not recognize Respondent or anyone else as a corporate officer. Indeed, the copy admitted in evidence is unsigned, and although Mrs. Chrzanowski testified that it was in her care, custody, and control, she apparently did not prepare it or know who had prepared it. The form reflects preparation by a firm of Certified Public Accountants. Mrs. Chrzanowski testified that she never got any accounting books for the corporation, never saw any of its checkbooks or purchases, and was never issued any stock, but that she did attend some unspecified meetings at Florida National Bank. Mrs. Chrzanowski eventually asked Respondent for return of her money. Although one is left with the impression Mrs. Chrzanowski got back $30,000 somehow, it is unclear from her testimony whether Mrs. Chrzanowski got back her $30,000 investment. She is, however, clear in her testimony that she did not recover the $1,360 corporate loan paid by her January 18, 1984 check made out to the corporation, delivered to Respondent, and endorsed for deposit only to the corporation. She is likewise clear that she did not double her $30,000 investment. She is most upset that her money did not double, that Respondent referred her to a lawyer to get the corporate books, and that eventually Respondent did not take her phone calls. Respondent had also promised Dr. McKinley Cheshire that he would serve as the corporate president of "301 Chilean Corp." He testified that he gave Respondent $15,000 plus other monies to support the project, and presumably to buy stock. No documentation of these payments was introduced in evidence, but Dr. Cheshire testified, contrary to the unsigned tax return, that he got no stock and no formal corporate meetings were held. Nonetheless, he also represented that at one meeting, May 10, 1983, at Florida National Bank, he discovered that he would have to sign a personal guarantee. Dr. Cheshire was not asked to identify his signature, but based upon copies of certain individual unit mortgage deeds and notes introduced in evidence through the testimony of Mr. Scatigno (P-7), it may be inferred that Dr. Cheshire signed several notes and mortgages as corporate President and signed a personal guarantee as to one note which was also personally guaranteed by Mr. and Mrs. Chrzanowski on August 22, 1983. Dr. Cheshire eventually recovered $7500 out of the corporation. Although Dr. Cheshire thinks he got his money when someone was trying to "take over" the corporation, there is no clear explanation of how he could have recovered $7500 without any stock transfer. Dr. Cheshire testified that it was orally agreed that Respondent was to act as the manager and sales agent for the condominium units. Mrs. Chrzanowski and Dr. Cheshire concur that in this capacity Respondent showed them that she had made some unit sales. There is no documentation in evidence to show upon what terms Respondent was to act as manager and sales agent or during what period of time. Dr. Cheshire's testimony is inconclusive to support either a finding that he made a request as an individual or as corporate President to Respondent as manager and sales agent for an accounting or for a refund of the money arising from these unit sales. Franco Scatigno is an Italian national. He first met Respondent through his brother and later sought her out as a real estate agent because he was interested in investing money in the United States. His perception is that after their first meeting, Respondent aggressively solicited his business and secured him as a purchaser for several of the individual units at 301 Chilean Avenue. On or about March 27, 1984, Respondent solicited Mr. Scatigno as a purchaser for unit 7, at a sales price of $75,000.00. Mr. Scatigno stated he paid $15,269.37 as a down payment to Respondent. This is the amount reflected in the body of the Agreement for Deed, apparently signed by McKinley Cheshire, President for seller, 301 Chilean Corp., as the down payment. The Agreement for Deed acknowledges this amount of down payment was received by the sellers for that unit. However, none of the copies of checks admitted in evidence (P-3 and P-4) is for that amount. Putting the best light on this discrepancy in Mr. Scatigno's testimony with regard to these figures, and recognizing that Mr. Scatigno sometimes referred to any dollar amount not given in "round thousands" as, "so many thousands and change," the figures still fall short of being wholly reconciled. The money distribution listed on the bottom of this Agreement for Deed for unit 7 totals $15,000. Two cashier's checks in the respective amounts of $8,574.15 for Charles Meyer and $6,425.85 for Mary Barrett (Respondent), totalling $15,000, were issued by Florida National Bank on Franco Scatigno's account on March 26, 1984. An attachment to this Agreement for Deed sets out that Mr. Meyer and Respondent had previously paid $15,000 to 301 Chilean Corp. for this unit. Without a closing statement or something more, it is impossible to conclude that more than $15,000 changed hands on this transaction and without something more, it is only by pure speculation that these amounts can be attributed to the unit 7 transaction. Again, it may be that Respondent was acting not as a real estate professional but as a private seller in this transaction. On or about the same date, Respondent solicited and obtained Mr. Scatigno as the purchaser at a sales price of $33,000 for unit 4 owned by William and Rheta Norman. Mr. Scatigno stated he entrusted a $5,126.77 down payment to Respondent, which is the amount reflected in the applicable Agreement for Deed, but no check exhibit corresponds to this amount either. On or about the same date, Respondent solicited and obtained Mr. Scatigno as the purchaser for unit 3, owned by Joanne Barrett (see supra.), at a sales price of $75,000.00. Mr. Scatigno stated he entrusted a $15,269.37 down payment to Respondent, but again no check exhibit corresponds to that precise amount. A cashier's check in the amount of $15,000 was drawn on Franco Scatigno's account for Joanne Barrett on March 26, 1984. For each of the foregoing three transactions, Mr. Scatigno received an executed Agreement for Deed for the unit involved. Each Agreement for Deed acknowledges receipt by the seller(s) of the respective amounts of down payment related orally by Mr. Scatigno. The Agreements for Deed also each specified, in pertinent part, that the purchaser (Scatigno) would pay to the respective unit's seller(s) a monthly installment equal to the respective seller's/sellers' monthly mortgage debt to the mortgagee, and that the respective seller(s) would, in turn, be responsible for timely paying mortgage payments to the mortgagee. The pay out dates for each transaction/mortgage was specified, the earliest being August 22, 1988. The Agreements for Deed are silent as to who (purchaser or seller) was responsible for recording them or if they were to be recorded at all. No evidence was offered as to the law or responsibility by trade, custom, or professional standard as to whether Respondent, as a real estate professional, was responsible for recording them. Mr. Scatigno testified that he entered into an oral agreement with Respondent to manage these three units plus one other. There is no documentation to show what the terms of this agreement may have been or what its duration was intended to be. With regard to the fourth unit, approximately March 27, 1984, Franco Scatigno agreed to purchase unit 5 from 301 Chilean Corp. A contract for sale (P-4) was drawn up for $90,000 with $15,267.62 as principal and $74,732.38 in mortgage, $2,000 deposit to the corporation, and no broker's commission. Pursuant to this exhibit, on September 1, 1984, the corporation was to be required to deliver an Agreement for Deed to Mr. Scatigno and Mr. Scatigno was to be required to deliver a note due to the corporation. Mr. Scatigno testified contrariwise that he expected to get the Agreement for Deed from Respondent in November 1984. Regardless of what Mr. Scatigno thought was agreed to or what the terms of the contract for sale (P-4) actually provided, it appears to be merely an "offer" by Scatigno without an "acceptance" on the signature line for the seller, 301 Chilean Corp. Mr. Scatigno was of the opinion that he never received the Agreement for Deed for this unit. However, he claims to have paid out money and relied on Respondent to rent the unit, and thereafter, the foreclosure papers on the unit name him as holding an Agreement for Deed thereon. The Administrative Complaint alleges that Mr. Scatigno was misled by Respondent to believe he was getting four Warranty Deeds instead of four Agreements for Deed. The evidence does not support this allegation. The three Agreements for Deed offered and admitted in evidence at formal hearing were signed by Mr. Scatigno and they set out that Warranty Deeds would be transferred to him by the sellers, provided all payments by all parties were fully paid, and at such time as these amounts had been fully paid, pursuant to the respective Agreements, each of which was scheduled to pay out in 1988. Although Mr. Scatigno thinks he never got an Agreement for Deed for unit 5, the bank which eventually foreclosed that unit in 1986 against 301 Chilean Corp. and Mr. Scatigno alleged in the foreclosure pleadings that Mr. Scatigno held an interest in the unit by Agreement for Deed. Respondent is not charged in this instant disciplinary action with failure to deliver a fourth Agreement for Deed. Clearly, Mr. Scatigno, as a foreign national, is not familiar with the legal differences among, and qualities of, Contracts for Sale, recorded and unrecorded Agreements for Deed, and Warranty Deeds. However, the only representations about the legal effect of his Agreements for Deed that Mr. Scatigno related at formal hearing were those made by an unidentified "lawyer" he apparently consulted at the closing. 2/ Mr. Scatigno at one point testified that he was personally required to make the mortgage payments on the four units and at another point testified that Respondent told him to make out blank cashier's checks for the appropriate amounts and thereafter Respondent made out these checks on his behalf to pay the respective unit mortgages. He also testified that Respondent was supposed to have the mortgage or mortgages at the bank switched to his name, but from his testimony it is not possible to be sure whether this latter information was a representation by Respondent directly contrary to the provisions in the Agreements for Deed which Mr. Scatigno is presumed in law to have agreed to when he signed them or whether it was Mr. Scatigno's unilateral perception of what should be done, which perception is not attributable to any representation by the Respondent. Mr. Scatigno stated that Respondent induced him to buy all four units by telling him that once rented, he would realize an investment income of $1200 per month, per unit. Mr. Scatigno maintains that, pursuant to their oral agreement, Respondent was to manage and rent his units. Mr. Scatigno did not suggest that Respondent failed to transmit his payments to the mortgagee bank for so long as he paid through her. Rather, he produced cancelled checks to show that these payments were made until he chose to quit paying them, but he complained that Respondent failed to rent his units as promised. According to Mr. Scatigno, Respondent only rented one of his units on one occasion for two weeks at $400-500 per week, and another unit was rented for a short, unspecified period for $300 per week. Mr. Scatigno never saw any of this money, nor is it clear which units were rented or when. When Respondent did not rent all his units on a regular basis, Mr. Scatigno repeatedly urged her to do so. Thereafter, over a period from late 1984 through April of 1985, he urged her to either rent his units, resell his units, or let him out of his deal. She urged him to continue to pay management costs and the mortgage through her, but eventually, she did not answer either his letters or his phone messages left on her answering machine. Although the time frames testified to by Mr. Scatigno are imprecise, apparently Respondent ceased to communicate with him before he decided to stop paying the mortgage and upkeep on the property. However, Mr. Scatigno elected to stop paying the mortgages because he felt Respondent was not managing his property and also because he "could not continue to pay out $3,000 and change each month with nothing-coming in." The bank then foreclosed upon both Mr. Scatigno and the mortgagors/sellers of the respective units. He thinks he walked away from the foreclosure action without further debt because his Agreements for Deed were never recorded. It was not demonstrated that Respondent retained the rental money that is claimed by Mr. Scatigno. It may be as easily speculated that the Respondent applied it to the management of Mr. Scatigno's units or toward these units' respective mortgages as it may be speculated that she kept it. Foreclosure on all Mr. Scatigno's units and at least one other unit seems to have been completed in January 1986. Respondent is not charged with operating as a real estate professional without a license from March 31,1982 to April 1, 1986. A thorough search of the documentary exhibits reveals no further reconciliation of the discrepancies in the witnesses' testimony, and does not further clarify the ambiguities previously set forth.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Florida Real Estate Commission enter a Final Order dismissing all charges against the Respondent. DONE and RECOMMENDED this 19th day of October, 1988, at Tallahassee, Florida. ELLA JANE P. DAVIS, 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 19th day of October, 1988.
Findings Of Fact At all times relevant hereto, Respondent was licensed as a real estate broker with the Florida Real Estate Commission and was employed by Hernando County Realty as a broker-salesman. The active broker for Hernando County Realty was Doris M. Wysong. Prior to the contract hereafter discussed, Respondent had only sold three or four properties since she was first licensed as a real estate salesman in 1984. Respondent obtained a listing for several houses being built by a developer and placed a Hernando County Realty sign on one of these properties. The developer, Carl L. Lawson, advertised this house for sale in the newspaper with his telephone number listed to contact. In response to that advertisement, Frank and Josephine Mello called Lawson to see the house. Lawson made an appointment and called Respondent who showed up while Lawson was showing the house to the Mellos. The Mellos liked the house. After leaving the premises, the Mellos decided to buy the property and called Lawson to tell him. Lawson arranged for them to return to sign a contract, and so advised Respondent. At this meeting the following day, on April 7, 1986, Respondent arrived with a contract which she completed. The buyers and seller negotiated a few additional items the buyers wanted and, although Respondent offered to put these items in the contract, both buyers and seller demurred. Buyers and seller agreed that seller could use the down payment to cover the cost of the additional work. Mello made the earnest money deposit payable to Lawson even though the check was clearly marked for deposit, and after making a copy of the check for the office records, Respondent returned the check to Lawson who cashed it. When the contract was signed on April 7, 1966, Mello asked Lawson to lock up the building to keep people from coming in and messing it up. Lawson agreed but Mello visited the property frequently between April 7 and the closing date of May 15, 1986, but never found the house locked. He complained to Lawson about this and about a settling crack that appeared in the garage wall. On Sunday, May 13, 1986, Mello again visited the house to show it to his son and daughter-in-law. They went in and Mel1o saw the crack in the garage wall appeared to be getting bigger. He again telephoned Lawson about this. Monday, May 14, was scheduled for a final inspection. Early that morning, before the time for the inspection, the Mellos went to the property and found Lawson removing some of the debris from the grounds and doing some cleaning. Respondent was also there. When Mr. and Mrs. Mello went into the house to inspect, Mello saw the crack in the garage had not been corrected and he and Lawson got into a violent argument, nearly culminating in fisticuffs. Mrs. Mello returned to her car crying, while Lawson and Mello shouted. At this time, Lawson told Respondent to get the Mellos out of his house and to forget about the contract. To settle the controversy before fisticuffs erupted, Respondent wrote void across the contract and Mello left. Respondent then returned to the real estate office and told her broker, Doris Wysong, what had transpired. Wysong reminded Respondent that she should have had the deposit made out to the realty office and placed it in escrow, but if the transaction didn't close, that she should get Lawson to refund the deposit. The parties didn't cool off sufficiently to complete the transaction, the sale didn't close, and Lawson refused to return the deposit which he had apparently used for the additions requested by Mello. Mello went to the real estate office and talked to Respondent and to Wysong. The latter called her attorney, who advised her not to refund money she never had received. Mello then went to the consumer affairs office in New Port Richey where he was advised to report the incident to the Florida Real Estate Commission. That was subsequently done and this administrative complaint and hearing resulted. Shortly after this incident, Respondent placed her license in an inactive status.
The Issue Whether the license of the Respondents should be suspended or the Respondents should be otherwise disciplined for false advertising and misrepresentations in a real estate transaction.
Findings Of Fact Robert T. Gabor holds License #0029823 as a registered real estate broker and trades as Gabor Realty. Frances Gabor holds License #0029822, is the wife of Respondent Robert T. Gabor, and is associated with him as a real estate salesperson. An administrative complaint filed October 5, 1978, by the Petitioner, Florida Real Estate Commission, alleged that the Respondents were guilty of false advertising and misrepresentation in a real estate transaction. The Respondents requested an administrative hearing. On or about February 26, 1978, the Respondents placed an advertisement in the Sentinel Star in Orlando, Florida, advertising a home for sale as follows: BRANTLEY area FHA VA $26,500. * BUY OWNER * 3/4 ACRE * Immaculate 3 bdrm carpet 894-5828 A couple, Mr. and Mrs. Reese, called the telephone number indicated in said advertisement and went to see the home but decided against buying it. Thereafter, the Respondents placed a different advertisement in the newspaper: BRANTLEY 894-5828 BY OWNER * 3/4 ACRE * FHA * $800. DN $25,000. mtg. 30 yrs $228/mo pays all, 3 bdrm, 1 1/2 bath, 7 yr young. There was no indication in either of the foregoing advertisements for the sale of the house that the owners was real estate salespersons. The advertisements gave the home telephone number of the Respondents, although the Respondents had a real estate office in Orlando known as Gabor Realty which was listed under a different telephone number. The Reese couple read the second advertisement on the same property and again became interested in it. They met the Respondents at the house, viewed the house, and talked with the Respondents. The Reeses and the Respondents then went to a nearby restaurant where a standard contract form was completed and signed while they were seated in the restaurant. Mr. and Mrs. Reese noted at the time the contract was signed that Respondent Robert Gabor signed it as a realtor and Respondent Frances Gabor signed it as a realtor associate. The Reeses were surprised because they had not known they were dealing with real estate salespersons. In spite of their surprise, Mr. and Mrs. Reese did not terminate the negotiations but proceeded to try to work out arrangements so they could buy the house. The contract was contingent upon the buyers' ability to secure a $25,000 FHA mortgage for thirty (30) years. The sellers were to pay the points, and the closing costs were to be divided equally. At the time of the hearing there was an unresolved dispute as to what the closing costs had been orally estimated to be. On or about March 31, 1978, Mr. and Mrs. Reese gave the Respondent, Robert Gabor, an earnest money deposit of $400.00 which was placed in the Respondent's escrow account. The Reeses and the Respondents signed various documents, including the buyer's estimated closing statement and seller's estimated closing statement. One (1) day prior to the scheduled closing date, May 5, 1978, Respondents learned that the transaction might not be closed because of the Reeses' dissatisfaction with the amounts of the downpayment, closing costs and monthly payments, all of which were in excess of the amounts they had first seen advertised and felt they could pay. Mr. Reese attended the closing on the scheduled day, but refused to close and demanded the return of the $400.00 deposit. The Respondents attempted to make an adjustment and offered to amend the agreement whereby the Respondents would pay all closing costs "allowed by law" for them to pay. Upon the refusal by Mr. Reese to close, the Respondents refused to return the $400.00 deposit. Mr. Reese then informed the Respondents that he would file a complaint with the Florida Real Estate Commission. The Respondents, having proceeded to and attended the closing, felt justified in removing the $400.00 earnest deposit from the escrow account and placing it in the personal account of Respondent Robert Gabor. Respondent Frances Gabor accompanied Respondent Robert Gabor during the foregoing transactions but took no active part in the negotiations other than having been present and having signed documents. Mr. and Mrs. Reese knew or should have known that the costs of the home were in excess of the amounts indicated in the advertisements. They had both signed and received written documents indicating costs well in advance of the scheduled closing date. Respondents submitted a memorandum of law on June 6, 1979, and thereafter, on June 25, 1979, moved to dismiss the cause for failure by the Petitioner Commission to submit memorandum of law as requested by the Hearing Examiner. The Motion to Dismiss was denied.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends dismissal of the charges against Respondent Robert T. Gabor and Respondent Frances Gabor. DONE and ORDERED this 6th day of July, 1979, in Tallahassee, Leon County, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Fred Langford, Esquire Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Royce D. Pipkins, Esquire 292 Highway 17 - 92 Post Office Drawer 965 Fern Park, Florida 32730
Findings Of Fact Scorpio, Inc. was incorporated to do business in this State on September 18, 1973 and was registered as a corporate real estate broker on 4/8/74 with certificate to expire 3/31/75. Laverne Pariso was a registered real estate broker and Active Firm Member for Scorpio, Inc. from 4/8/74 to expiration date of license 3/31/75. Michael W. Karpan was a registered real estate salesman from 10/1/74 to 9/30/76 the expiration date of his registration and was employed by Scorpio, Inc. About the time Scorpio, Inc. was registered as a corporate broker the real estate market was not conducive to the success of housing developments and, since the registration of Scorpio, Inc. was obtained to facilitate sale of the developed property and no development was started, Scorpio, Inc. did no business of the type for which it was registered. No listings were obtained, no sales were made, and no effort was put forth to do either. An escrow account was opened with an initial $50 deposit but during the time the registration was effective no deposits were made to, or withdrawals from, this escrow account. Ardina E. Karpan, the mother of Michael W. Karpan, owns all of the stock of Scorpio, Inc. Laverne Pariso, the APM, left the employ of Scorpio, Inc. in March, 1975 but did not notify the FREC or take steps to place her registration in an inactive status. Applications were made for renewal of the broker's license of neither Pariso nor Scorpio, Inc. when due, 3/31/75. By Corporate Resolution dated February 1, 1974 Scorpio, Inc. authorized the establishment of an escrow account at the Barnett Bank of Miami. An initial deposit of $50 was made to this account on February 6, 1974. The resolution authorizes Laverne Pariso and Michael W. Karpan or Ardina Karpan to sign checks on this account and notes that two signatures are required. The resolution further provided authorized signers "are both Laverne Pariso and Michael William Karpan, Jr., both signature are required". Scorpio, Inc.'s primary business was the management of shareholder's investments and real estate holdings. In May, 1975 Michael Karpan was approached by a business associate, whose daughter was a creditor of Chandelier of the Virginia Playhouse d/b/a Track and Turf Lounge, to assist in the negotiations for the sale of the business in order to pay off the creditors and salvage his daughter's loan. The purchaser was already at hand and Karpan was selected to hold funds advanced pending the closing of the deal. After the principals had agreed on the basic price to be paid for the business an earnest money deposit of $5,000 was given by the buyer to Karpan on or about May 21, 1975 and the agreement was memorialized in a letter of May 21, 1975 from Karpan, on Scorpio, Inc. letterhead to the buyer, Walker (Exhibit 25). Nowhere on this letter is reference made to either Karpan or Scorpio, Inc. being associated with real estate sales. The $5,000 received from Walker was deposited in Scorpio, Inc's escrow account on deposit slip dated May 21, 1975 and the bank statement (Exhibit 10) shows $5,000 deposited in this account 5/30/75. No other agreement between the parties was reduced to writing and signed by the buyer and seller. At no time during the negotiations did Karpan hold himself out to be a real estate salesman or broker or indicate he expected a commission for his services if the sale was consummated. On May 29, 1975 Karpan borrowed $5,000 from the Barnett Bank and used the $5,000 in the escrow account as cash collateral for the loan. The signature of Pariso was not on any paper to authorize the withdrawal of this money from the escrow account. The loan was placed in the regular account of Scorpio, Inc. c/o Michael Karpan and one check dated 5/30/75 in the amount of $3,699 was drawn on the account payable to the Intercontinental Bank of Miami and used to make interest payment owed by the Chandelier of the Virginia Playhouse. $1,301 was delivered to the manager of Track and Turf Lounge by Karpan (Exhibit 4). Karpan contends that the buyer, Walker, authorized him to make whatever payments were necessary out of the $5,000 deposit to insure that the liquor license would not be lost or the Track and Turf Lounge be placed out of business before the deal was consummated. Following the delivery of the $5,000 to Karpan the buyer brought his attorney into the proceedings. The property on which the Track and Turf Lounge is located was owned by D. Mitchell Investments, Inc. The lease arrangements (or lack thereof depending on which witness is more credible) were such that the sale could not be consummated. By letter dated June 12, 1975 the buyer, through his attorney, demanded return of the $5,000 deposit given to Karpan. No evidence was presented as to the date the $1,301 was given to Roy O'Nan, the manager at Track and Turf. The letter evidencing such payment is dated well after the transaction had fallen through and demand for return of the $5,000 had been made. A suit was subsequently filed by Walker and a default judgment was obtained against Scorpio, Inc. after a Motion to Strike Defendant's, Scorpio, Answer because Scorpio, Inc. was delinquent in paying the annual $5.00 filing fee required of Florida corporations, was granted. At the time the transactions here being contested occurred the registration of Laverne Pariso and Scorpio, Inc. had expired. Since Karpan can only work under the supervision of a broker, his license too was not operative. Ms. Pariso renewed her license as a broker-salesman with another realty office in September, 1975 but no evidence was presented that Scorpio, Inc. ever applied for registration renewal. During the period between March and September, 1975 Ms. Pariso did no real estate work. Numerous discrepancies appeared between the testimony and documents. Although the authorization for withdrawing funds from the escrow account provided that the signature of Pariso and Michael Karpan or his mother was required the bank apparently interpreted that to require any two of the signatures and then authorized one first deposit placed in the escrow account after the initial deposit to be withdrawn with only Karpan's signature. Several witnesses alluded to Track and Turf leasing the premises which they occupied but evidence was presented that no lease payments were to be made until 1978. Certainly the inability of the "tenant" to transfer the "lease" was a major factor in the failure of the sale to transpire. The sale here involved was the sale of a business as contrasted to the sale of real property.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, I hereby make the following findings of fact: Phyllis I. Reaves is now and was at all times material to these proceedings, a licensed real estate salesman in the State of Florida having been issued license number 0351816. Annette J. Ruffin is now and was at all times material to these proceedings, a licensed real estate broker having been issued license number 0076385. From May 2, 1983 to October 18, 1984, Respondent Phyllis I. Reaves was licensed and operating as a real estate salesman in the employ of Respondent Annette J. Ruffin, as broker, c/o International Investment Development Center, Belleair, Florida or Century 21 A Little Bit Country, Brandon, Florida. At all time material hereto, Respondent Phyllis I. Reaves was a licensed mortgage broker in the State of Florida. DOAH CASE NO. 85-1008/1138. COUNT I No evidence was presented concerning the allegations in Count I.. COUNT II No evidence was presented concerning the factual allegations of Count II. COUNT III No evidence was presented concerning the allegations of Count III. COUNT IV On June 10, 1983, Respondent Reaves entered into a real estate sales contract with Emmett K. Singleton, as seller to purchase certain real estate through the use of a land trust. The sales contract listed a total purchase price of $67,000. C-21 A Little Bit Country was listed on the contract as escrow agent of the binder deposit. The property had an existing first mortgage of approximately $33,854. Respondent Reaves agreed to assume the new mortgage and requested that Mr. Singleton obtain a second mortgage in the principal amount of $26,400. Reaves agreed to assume this second mortgage amount while allowing Mr. Singleton to keep the proceeds. Mr. Singleton agreed that the balance of the sales price would be paid via a purchase money mortgage to Respondent Reaves in the principal amount of $9,643.99. Respondent Phyllis I. Reaves executed a Hold Harmless and Indemnity Agreement which read as follows: "Phyllis Reaves does agree to hold Emmett K. Singleton harmless and does idemnify him against any future liability or losses related to the mortgage on subject property at 1912 Hastings Drive, Clearwater, Florida." The sales transaction closed on July 7, 1983, and Respondent Reaves received a real estate brokerage commission in the amount of $1,955. The contract provided that the "listing agent agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." The purchase money mortgage note was actually signed by Michael R. Fisher, as trustee, and not by Respondent Reaves. Respondent Reaves requested that Mr. Singleton give her the mortgage payment booklets and she would assume and pay off the existing and second mortgages. Singleton trusted Reaves and relied upon her statements that she would do as she promised. Respondent Reaves failed to assume and pay the notes and mortgages and thereby caused the seller to become delinquent with the lenders. After closing, Respondent Reaves, acting as the owner, obtained tenants for the property and collected rental payments. Respondent Reaves solicited and obtained $3,000 in connection with a lease/option agreement. The lease/option agreement provided that the sales price of the home would be $78,000 in three years. The rent would remain at $495 per month for three (3) years. The agreement further provided that $3,000 per year would be paid for three (3) years which would reflect a total down payment of $9,000. This down payment was considered the "option consideration." The agreement provided that one third of the option money would be returned if the option were not exercised. The tenants paid Respondent Reaves a total of $3,000 of the option consideration. The renters became concerned when they began to receive notices from Freedom Mortgage Company stating that certain mortgages on the home were overdue. The renters did not exercise the option to buy the home. The renter requested, but did not receive, $1,000 of the $3,000 option consideration back from Respondent Reaves. COUNT V On July 6, 1983, Respondent Reaves entered into a real estate sales contract with Stephen B. Barnes, as seller, to purchase certain real estate through the use of a land trust. The property was not listed", but a broker from Tam-Bay Realty approached Barnes and stated that he had a buyer. The purchase and sale agreement provided for a total purchase price of $91,000. The agreement listed "C-21 A Little Bit Country" as escrow-agent for the binder deposit. In addition, the purchase and sales agreement provided that: "Listing agent Tam-Bay agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." The seller agreed that he would allow Respondent Reaves to assume the existing mortgage of approximately $52,990. Mr. Barnes then agreed to obtain a second mortgage in the amount of $18,925. The seller agreed that the balance of the sales price would be paid via a purchase money mortgage in the principal amount of $16,670.91 to be paid by Respondent Reaves. In addition, Mr. Barnes obtained a home improvement loan in the amount of $4,900. According to the agreements between Respondent Reaves and Mr. Barnes, Mr. Barnes was to keep the money obtained by the second mortgage and the home improvement loan. Respondent Reaves agreed to assume the existing mortgage, the second mortgage and the home improvement loan. Respondent Reaves advised Mr. Barnes to state to the lender that the purpose of the loans were for home improvements. Respondent Reaves executed a hold harmless and indemnity agreement which stated as follows: "Phyllis Reaves does agree to hold Stephen. B. Barnes harmless and does indemnify him against any future liability or losses related to the mortgages on property at 13222 - 88 Place North, Seminole, Florida." The sales transaction closed on August 10, 1983, and Respondent Reaves received a real estate brokerage commission in the amount of $2,513.45 and a mortgage brokerage fee of $946.25. Respondent Reaves failed to assume and pay the notes and mortgages and thereby caused the seller to become delinquent with the lenders. COUNT VI On September 3, 1983 Respondent Reaves entered into a real estate sales contract with Floyd and Christine Erwin, as sellers, to purchase certain real estate through the use of a land trust. The contract concerned Floyd and Christine Erwins' home located at 2805 Candlewood Drive in Clearwater, Florida. The purchase and sale agreement provided for a total purchase price of $53,000. The agreement listed C-21 A Little Bit Country as escrow agent for the binder deposit. The agreement further provided that the "listing agent agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." Respondent Reaves agreed to assume the existing mortgages of $16,766.29 and $17,457.94. In addition, the sellers agreed to obtain a new mortgage in the principal amount of $4,900 and a $1,500 personal loan. Upon the advice of Respondent Reaves, the sellers stated to the lender that the purpose of the loans were for home improvements. Respondent Reaves and the sellers agreed that the sellers would keep the money obtained by the loans and that Respondent Reaves would assume the mortgages and make all of the required loan payments. The sellers agreed that the balance of the sales price was to be paid via a purchase money mortgage, payable by Respondent Reaves, in the principal amount of $12,375.77. Respondent Reaves executed a hold harmless and indemnity agreement which stated as follows: "Phyllis Reaves does agree to hold Floyd S. Erwin and Christine E. Erwin harmless and does indemnify them against any future liability or losses related to mortgages or liens on the subject property at 2805 Candlewood Drive, Clearwater, Florida." Floyd and Christine Erwin's home was listed with a broker, and the Erwins understood that Reaves was not their agent. Respondent Reaves told the Erwins that she was representing "some investors." The purchase money mortgage note was actually signed by "Michael R. Fisher, as trustee and not personally." Respondent Reaves made some payments on the purchase money mortgage note which was signed by Michael Fisher. The sales transaction closed on September 23, 1983, and Respondent Reaves received a real estate brokerage commission in the amount of $1,555.50. Respondent Reaves failed to assume and pay the mortgages and notes. Respondent Reaves has not made the payments due on the mortgages and notes and has caused the Erwins to become delinquent with their lenders. COUNT VII The evidence presented concerning Count VII consisted solely of documentary evidence. For reasons enumerated in the Conclusions of Law section, infra, the documents alone are insufficient to establish the basis of any offense. Therefore, a discussion of those documents would serve no useful purpose. COUNT VIII On October 16, 1983, Respondent Reaves entered into a real estate sales contract with Patricia and William Willis as sellers, to purchase certain real estate through the use of land trust. The contract concerned the Willis' home located at 417 North Missouri Avenue, Clearwater, Florida. The purchase and sale agreement provided for a total purchase price of $54,000. The agreement listed C-21 A Little Bit Country as escrow agent for the binder deposit. The agreement further provided that the listing agent ". . . agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." Respondent Reaves and the Willis' agreed that Respondent would assume the existing mortgage of $15,396.52. The sellers agreed to obtain the new mortgage in the principal amount of $34,100. The sellers agreed that the balance of the sales price would be paid via a purchase money mortgage in the principal amount of $8,898.45 to be paid by Respondent Reaves. Respondent Reaves agreed to assume the existing mortgage and the new mortgage in the amount of $34,100 and make all of the required loan payments. Respondent Reaves advised the Willis' to state to the lender that the purpose of the $34,100 mortgage loan was for home improvements. The Willis' applied for the loan but refused to state that the purpose of the loan was for home improvements. Respondent Reaves executed a hold harmless agreement which stated as follows: "Phyllis Reaves does agree to hold Patricia L. Carrah, a/k/a Patricia L. Willis and William Willis harmless and does idemnify them against any future liability for losses related to any mortgages or liens on the subject property " The sales transaction closed on November 23, 1983 and Respondent Phyllis Reaves received a real estate brokerage commission in the amount of $3,213 and a mortgage brokerage fee of $2,216. Respondent Reaves failed to assume the notes and mortgages and thereby caused the sellers to become delinquent with their lenders. COUNT IX No evidence was presented concerning the allegations of Count IX. COUNT X No evidence was presented concerning the allegations of Count X. COUNT XI No evidence was presented concerning the factual allegations of Count XI. COUNT XII No evidence was presented concerning the factual allegations of Count XII. COUNT XIII No evidence was presented concerning the factual allegations of Count XIII. No evidence was presented concerning the factual allegations of Count XIV. COUNT XV on January 13, 1984, Respondent Reaves entered into a real estate sales contract with Clifford and Virginia Miner, as sellers, to purchase certain real estate through the use of a land trust. The contract concerned the Miner's home located at 1247 Burma Avenue, Clearwater, Florida. The purchase and sale agreement provided for a total purchase price of $62,000. The agreement listed "C-21 A Little Bit Country" as escrow agent for the binder deposit. In addition, the agreement provided that the listing agent ". . . agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." Respondent Reaves and the sellers agreed that Respondent Reaves would assume the existing mortgage of $34,424.82. Respondent Reaves advised the sellers to obtain a $20,000 second mortgage that she would also assume. The sellers were to obtain the mortgage and keep the money as their equity, and Respondent Reaves was to assume the mortgage and make the payments. The sellers agreed that the balance of the sales price was to be paid via a purchase money mortgage in the principal amount of $6,865.33, payable by Respondent Reaves. Respondent Reaves promised the sellers that she would make all the required loan payments and assume the mortgages. Respondent Reaves executed a hold harmless agreement which stated as follows: "Phyllis Reaves does agree to hold Clifford S. Miner and Virginia N. Miner, his wife, harmless and does idemnify them against any future liability or losses related to any mortgages or liens on the subject property . . . ." The purchase money mortgage note was actually signed by Michael R. Fisher, "as trustee and not personally." Respondent Reaves told Mr. Miner that the hold harmless agreement provided additional assurance that she would personally assume all of the mortgage and loans. The sales transaction closed on January 31, 1984, and Respondent Phyllis Reaves received a real estate brokerage commission in the amount of $1,823.25 and a mortgage brokerage fee of $949.48. Respondent Reaves failed to assume and pay the notes and caused the Miners to become delinquent with their lenders, requiring them to "catch up" on the delinquent loan. COUNTS XVI, XVII AND XVIII. The evidence presented concerning Count XVI, XVII and XVIII consisted solely of documentary evidence. For reasons enumerated in the Conclusions of Law section of this Recommended Order, the documents alone are insufficient to establish the basis of any offense. Therefore, a discussion of those documents would serve no useful purpose. COUNT XIX During the later part of 1984, an investigator, representing the Department of Professional Regulation, went to speak to Mrs. Ruffin at her "Little Bit of Country" office concerning this case. The investigator requested that he be provided with the records from all of Respondent Reaves' transactions. Respondent Ruffin stated that she was unaware of the particular real estate transactions in question, but that she would check and provide the records at a later date because she was in the process of moving the location of her office. After subpoena was served, Respondent's counsel provided one of the documents in question. COUNT XX Respondent Ruffin employed Respondent Reaves as a salesman. Respondent Ruffin thought of Respondent Reaves as "an independent contractor." Respondent Reaves decided on her own hours and took care of her own transportation. Respondent Ruffin and Respondent Reaves were on an 85%-15% split fee arrangement. Respondent Ruffin knew that Reaves was interested in "buying a lot of property." Respondent Ruffin was basically aware of the method that Respondent Reaves was using to obtain property. Respondent Ruffin did not feel that the method was wrong, however, she did ask Respondent Reaves to leave employment after she received many calls complaining about Respondent Reaves and information that Respondent was in a "tight financial situation." Respondent Ruffin admitted that she had very little time to provide assistance or guidance to Respondent Reaves. DOAH CASE NO. 85-2454 COUNT I There was no evidence presented concerning the factual allegations of Count I. COUNT II There was no evidence concerning the factual allegations of Count II. COUNT III On October 2, 1984, an investigator, representing the Department of Professional Regulation, went to speak with Respondent Ruffin at her office. The investigator requested certain records relating to Respondent Reaves' transactions concerning the charges herein. Respondent Ruffin stated that she was unaware of the particular real estate transactions in question, but that she would check and provide the records at a later date because she was then in the process of moving her office. After a subpoena was served, Respondent Ruffin's attorney provided one of the documents in question. COUNT IV There was no evidence presented concerning the factual allegations of Count IV of DOAH Case No. 85-2454.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that Respondent Phyllis I. Reaves' license as a real estate salesman be revoked; and, RECOMMENDED that Respondent Annette J. Ruffin be issued a written reprimand and assessed an administrative fine of $500.00. DONE and ORDERED this 27th day of March, 1986, in Tallahassee, Florida. W. MATTHEW STEVENSON, 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 27th day of March, 1986. APPENDIX The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner Adopted in Finding of Fact 1. Adopted in Findings of Fact 2 and 3. Adopted in Findings of Fact 8 and 11. Adopted in Finding of Fact 10. Adopted in Finding of Fact 10. Adopted in Finding of Fact 12. Adopted in Findings of Fact 15 and 16. Partially adopted in Finding of Fact 17. Matters not included therein are rejected as subordinate and/or unnecessary. Adopted in Finding of Fact 18. Adopted in Finding of Fact 20. Adopted in Findings of Fact 20 and 21. Adopted in Finding of Fact 23. Adopted in Finding of Fact 24. Adopted in Finding of Fact 26. Adopted in Findings of Fact 26 and 27. Adopted in Findings of Fact 31 and 32. Adopted in Finding of Fact 34. Adopted in Findings of Fact 37 and 38. Adopted in Findings of Fact 36 and 38. Adopted in Finding of Fact 40. Adopted in Finding of Fact 47. Adopted in Finding of Fact 49. Adopted in Findings of Fact 49 and 50. Adopted in Finding of Fact 55. Rejected as not supported by competent, substantial evidence. Rejected as not supported by competent, substantial evidence. Rejected as not supported by competent, substantial evidence. Rejected as not supported by competent, substantial evidence. Adopted in Finding of Fact 57. Adopted in Finding of Fact 58. COPIES FURNISHED: James H. Gillis, Esquire Division of Real Estate Post Office Box 1900 Orlando, Florida 32801 Gerald Nelson, Esquire 4950 West Kennedy Boulevard Tampa, Florida 33809 E. A. Goodale, Esquire 14320 Indian Rocks Road Largo, Florida 33540 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff, Executive Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802
Findings Of Fact The Defendant was at all material times registered with the Florida Real Estate Commission as a real estate broker. (See: Plaintiff's Exhibit 7). During June, July, and August, 1973, the Defendant acted as a real estate broker in negotiating a real property transaction between Michael Scott Symons and Bonnie Jo Symons as buyers, and William C. McDonald as seller. The Symons made an initial offer to purchase certain real estate owned by McDonald for $50,000. The Symons agreed to assume a first mortgage, to execute a purchase money second mortgage, and to pay $5,000 in cash. This offer was made in the form of a contract to purchase which was executed by the Symons on June 19, 1973. (See Plaintiff's Exhibit 1). At the time that this contract was executed, it was expressly understood between the Symons and the Defendant that $2,000 of the $5,000 which was to be paid by the Symons to McDonald at the time of closing would be in the form of a 1967 Pontiac automobile. The automobile would be delivered to McDonald at the time of closing along with $3,000 in cash. The day after the contract was executed, the Symons delivered the automobile to the Defendant along with the evidence of title that they had in their possession. McDonald rejected the Symons' first offer. He did not wish to take the automobile as a part of the down payment. The Defendant notified the Symons that McDonald had rejected their offer. The Defendant then informed the Symons that he would take the automobile as a part of the commission which would be due to him from McDonald, and that they should offer to purchase the property for $50,000, with the automobile serving as a part of the Defendant's commission. He advised the Symons that for tax reasons McDonald would want the purchase price to be reflected as $48,000, with the automobile not appearing as a part of the transaction even though it would be taken by the Defendant as a portion of his commission. The Symons then made a second offer to purchase the property in the form of a contract to purchase. (See: Plaintiff's Exhibit 3). The purchase price was reflected as $48,000. The Symons agreed to assume an existing first mortgage, an to execute a purchase money second mortgage. Five thousand ninety dollars would be paid by the buyers to the seller at the time of closing. When they executed this agreement, the Symons delivered a $1,000 deposit to the Defendant. (See: Plaintiff's Exhibit 4). The Defendant loaned the Symons $600 in order that they could make this deposit. The Symons gave the Defendant a note for this amount. (See: Defendant's Exhibit 1). When he presented the Symons' second offer to McDonald, the Defendant did not advise McDonald that the automobile would play any part in the transaction. McDonald was not told that the automobile would serve as a portion of the Defendant's commission or that the buyers thought that they were making an offer for $50,000 which included the automobile as a part of the Defendant's commission. McDonald ultimately accepted the Symons offer as reflected in Plaintiff's Exhibit 3. Some time during August, 1973, Mr. Symons and Mr. McDonald had a conversation during which Symons learned that McDonald was not aware that the automobile was playing any part in the transaction, and McDonald learned that the automobile was st 11 a factor in the transaction. The Symons then opted to withdraw from the transaction. (See: Plaintiff's Exhibit 5, Defendant's Exhibit 3). Mr. Symons acknowledged that he was at least in part at fault for withdrawing from the contract, and he, anticipated that his $1,000 deposit would be forfeited. Prior to the time that Symons and McDonald communicated with one another about their respective understandings of the transaction, the Defendant used the Pontiac automobile as a trade-in on another automobile. The Defendant was credited $600 as a trade-in allowance. This automobile transaction was undertaken in the name of Nancy Lee Mann. Ms. Mann was dating the Defendant at that time, and acted as a straw person in the transaction in order to allow the Defendant to obtain financing of a new automobile. (See: Plaintiff's Composite Exhibit 6, and Defendant's Exhibit 2). After the transaction between the Symons and McDonald failed to close, the Defendant distributed $500 to McDonald and $700 to the Symons. (See: Defendant's Exhibits 9 and 12). He also returned the $600 note to the Symons. The automobile was no longer in the possession of the Defendant. The Symons had delivered $1,000 and the automobile to the Defendant. The Defendant had loaned them $600 in order to make the $1,000 deposit. When the transaction failed to close, the Symons received $700 and the promissory note. The Symons apparently agreed, albeit reluctantly to forfeit the $1,000 deposit. They thus received $1,300 for their automobile, which was the approximate market value of the automobile. When the transaction failed to close McDonald received $500, which represented half of the Symons' forfeited deposit. During the course of the transaction, the Defendant received $1,000 and the automobile. Six hundred dollars of the $1,000 was actually his own money. He ultimately disbursed $1,200. He was therefore out-of-pocket $800 on the transaction, but he retained the automobile for which he had already received $600 as a trade-in allowance on another automobile. During June and July, 1974, the Defendant negotiated a real estate transaction involving Richard and Ruth Ann Barnum, Calvin W. and Helen M. Bruce, and himself. The Barnums were seeking to sell their residence through another real estate broker. Their listing was placed on a Multiple Listing Service. On June 19, 1974, the Defendant located a potential purchaser of the Barnums property, Edward E. and Lisabeth L. Sharpe. The Sharpes offered to purchase the property for $25,000. The offer was made in the form of a contract to purchase which was executed on June 19, 1974. The Barnums refused the offer and informed the Defendant that they would accept $26,000. The Barnums crossed out references to $25,000 on the contract that the Sharpes had executed and wrote in $26,000. The Sharpes rejected the $26,000 offer. The Defendant then decided to purchase the property from the Barnums for $26,000. He erased the Sharpes' names from the contract and inserted his own name. (See: Defendant's Exhibit 11). The contract reflects that it was made on June 19, 1974, but it was actually executed by the Defendant on June 20, 1974. The Defendant told the Barnums that he was purchasing the home for himself, and that he might move his father into the home or rent it. The transaction between the Barnums and the Defendant closed on July 2, 1974. (See: Plaintiff's Exhibits 10, 11, 12) Prior to June 19, 1974, the Defendant had acted as a real estate broker in seeking to find a home for purchase by Calvin W. and Helen M. Bruce. He had shown the Bruces through at1east a half dozen homes, but the Bruces were not satisfied with any of them. Some time prior to June 23, 1974, the Defendant left a message for the Bruces at their motel in Fort Myers. The Bruces were not in town and received the message to see the Defendant when they returned. On June 23rd, the Bruces returned to Fort Myers, contacted the Defendant, and were shown the Barnum's home. Mr. Pepper showed them no other homes on that date. The Bruces liked the home and agreed to purchase it from the Defendant for $27,500. The Contract to Purchase was executed on June 24, 1974. The Bruces were not informed that the Defendant had agreed to purchase the home only four days previously, nor that the transaction between the Defendant and the Barnums had not yet closed. The transaction between the Defendant and the Bruces closed on July 2, 1974 only hours after the transaction between the Barnums and the Defendant closed. As a part of the purchase price that he paid the Barnums, the Defendant gave the Barnums a second mortgage in the amount of $5,000. As a part of the purchase price paid by the Bruces to the Defendant, the Bruces agreed to execute a second mortgage to the Defendant in the amount of $5,750. The Defendant at no time advised the Bruces that they were taking the property subject to his second mortgage to the Barnums. The Bruces did not learn of this second mortgage until approximately one year after the transaction closed. After the two transactions closed, the Defendant-received very little cash, but he did receive a small profit. On December 20, 1966, the Florida Real Estate Commission suspended the Defendant's registration as a real estate broker for a period of 60 days, based upon the Defendant's being found guilty of violating Florida Statutes Sections 745.25(1)(a) , (c), (See: Plaintiff's Exhibit 8). On June 3, 1974, the Florida Real Estate Commission suspended the registration of the Defendant as a real estate broker for a period of 90 days, based upon the Defendant being found guilty of a violation of Florida Statutes Section 475.25(1)(a). (See: Plaintiff's Exhibit 9).
Findings Of Fact Steven R. Myer is a registered real estate broker and at the time relative to the complaint was a registered real estate salesman. Jerome Myer, the brother of Steven Myer, became interested in purchasing real property described as Lot 31, Block 7, Royal Palm South, Section 2, Broward County. Jerome Myer entered into negotiations with Mort Lynn as representative for Mark Builders, Inc., owners of the property. As a result of negotiations between Jerome Myer and Mort Lynn, Jerome Myer negotiated the purchase of the aforesaid property for $51,600. Mort Lynn advised Jerome Myer that because he (Jerome Myer) had not been in Florida for a long time, he would more easily obtain mortgage financing if he and his brother Steven Myer joined in the contract for the purchase of the aforesaid property. Thereafter, Steven and Jerome Myer contracted to purchase the aforesaid property for $51,600. When Jerome Myer applied for mortgage financing on the aforesaid property at Chase Federal Savings and Loan, he was advised that his credit was good enough that his brother, Steven Myer, would not have to be included in the transaction. At this point the brothers, Steven and Jerome, agreed that Steven Myer would not participate in the transaction, and that Jerome Myer would obtain title to the property in his name alone. Jerome Myer notified Mort Lynn of Mark Builders of his intentions in this regard and contacted his attorney regarding whether it would be necessary for Steven Myer to assign his interest in the Contract for Purchase to him. The attorney advised Jerome Myer that this was unnecessary unless for some reason Jerome questioned his brother's integrity. Because Jerome was close to Steven and did not have any doubts about his brother's involvement in the transaction, an assignment was not made. Jerome Myer was contacted by Cloys and Vena Kerbo subsequent to a home being built on the aforesaid property. The Kerbos were interested in seeing the home; and because Jerome Myer was unable to leave his work at the time, he asked his brother Steven to show the Kerbos the home. Steven showed the Kerbos the home but the Kerbos did not evidence an interest in the home. Steven advised the Kerbos that as salesman for Berg Agency he knew of other homes which he could show them; and pursuant toe their request, they were shown homes brokered by Berg Agency. Jerome's home was not brokered by the Berg Agency for whom Steven was a salesman. Subsequently, the Kerbos contacted Jerome Myer and a price fob the home was eventually negotiated. Jerome Myers acquired blank forms for a contract to buy and a deposit receipt from an office supply house and his wife typed the agreement between the Kerbos and Jerome on these forms as dictated by Jerome. The executed Contract to Buy and deposit receipt, Exhibit 1, was executed by the Kerbos and Jerome Myer. While the Kerbos and Jerome Myer met at the office of Berg Agency to execute the contract, neither Steven Myer nor Berg Agency participated in the transaction. Cloys Kerbo made and delivered a check in the amount of $1,000 to Jerome Myer as an earnest money deposit on the aforesaid Contract to Buy. This check was deposited by Jerome Myer into his personal account. Beyond the initial showing of the home to the Kerbos, there is no evidence that Steven Myer participated in the negotiation of, preparation of, or execution of the Contract for Purchase between the Kerbos and his brother, Jerome Myer. All negotiations and preparation of the Contract for Purchase were handled by Jerome Myer as owner of the property in question.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that the Florida Real Estate Commission take no action against the registration of Steven Myer. DONE and ORDERED this 26th day of October, 1976 in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Manuel E. Oliver, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 George R. Moraitis, Esquire Post Office Box 11104 Suite 208 2631 East Oakland Park Boulevard Fort Lauderdale, Florida 33339 ================================================================= AGENCY FINAL ORDER ================================================================= FLORIDA REAL ESTATE COMMISSION UPTON B. MACKALL, Plaintiff, vs. PROGRESS DOCKET NO. 2845 BROWARD COUNTY STEVEN R. MYER, DOAH CASE NO. 76-1451 Defendant. /
Findings Of Fact Richard D. Reichman is a registered real estate salesman holding license number 0072680. In February, 1975 he was employed by The Berg Agency, Inc., a registered real estate broker. Exhibits 2 and 2a, photocopies of registered letters with return receipts showing complaint and notice of hearing were mailed to Respondent's last address listed with the Real Estate Commission, were admitted into evidence. Accordingly proper service was obtained upon the Respondent. Some two years ago in May, 1974 Mr. and Mrs. Schutte listed their home for sale through Respondent, Reichman, when he was working for Anaconda Realty. That listing expired; and when Respondent asked them to renew the listing in September, 1974, they declined and had no further contact with the Respondent until February, 1975. Shortly after February 10, 1975 the Schuttes received a form letter from the Berg Agency, Inc. dated February 10, 1975 thanking them for listing their property with Berg. A copy of this letter with the listing agreement attached was submitted into evidence as Exhibit 5. The original listing agreement was admitted into evidence as Exhibit 4. Realizing that they had not listed their property with anyone and that the signatures on the listing agreement were not theirs, Mrs. Schutte called the Chamber of Commerce, Better Business Bureau, Margate Police, and the Florida Real Estate Commission before being called by Berg. A man who identified himself as a member of the ethics committee advised Berg of the Schuttes complaint and Berg called Mrs. Schutte. Berg called back the following day to advise the Schuttes that Reichman had been fired. Reichman visited the Schuttes a few days later to ask if they would sign an agreement not to prosecute him, which they declined. At this time Respondent told them that his quota had not been met so he "forged a few" agreements. At this time the Berg Agency had its salesman on a draw against future commissions, depending upon the man's performance. Reichman acknowledged to the office manager at Berg after his forgery had been discovered that he was afraid he would be taken off the draw if he didn't bring in a lot of listings and acknowledged that he had prepared Exhibit 4 and forged the signatures thereon.
