The Issue The issues in these cases are whether the Florida Real Estate Commission should discipline Judy K. Palmer (Palmer) and her real estate brokerage, ERA Solutions in Real Estate, Inc. (ERA Solutions in Real Estate), for alleged violations of Chapter 475, Florida Statutes (1997).
Findings Of Fact The charges alleged violations arising out of four factual settings. At all times material to the charges, the Respondent, Judy K. Palmer (Palmer), was a licensed Florida real estate broker under license number 0574496. Palmer was the qualifying broker for Palmer Realty of Central Florida, Inc. (Palmer Realty), from January 1996 until Palmer Realty was deactivated. Although the evidence is not clear, it appears that Palmer Realty was deactivated in June 1996. Palmer claims that she did not intend to deactivate Palmer Realty in June 1996 but only had her office inquire as to deactivation procedures. In late 1996 (Palmer testified to late 1997, but she must have misspoken), Palmer entered into negotiations to purchase an ERA franchise. Complications arose, and the transaction was not completed until March 1997. Although it is alleged in the Administrative Complaint against Palmer that Palmer applied for licensure of the Respondent, ERA Solutions in Real Estate, Inc. (ERA Solutions in Real Estate), in March 1997, it appears from the evidence that Palmer actually applied on June 13, 1997. The application was approved, and it appears from the evidence that Palmer became the qualifying broker for ERA Solutions in Real Estate effective on June 13, 1997. At the same time, Palmer conducted business as a principal and officer of a brokerage of mobile homes on leased property, an activity that does not require licensure as a real estate broker or salesperson. Initially, Palmer conducted her business through an entity called Affordable Lifestyle Homes, Inc. (Affordable Lifestyle). At approximately the time she began to conduct her real estate business through ERA Solutions in Real Estate in March 1997, Palmer began to conduct her mobile homes sales business through ERA Solutions, Inc. (ERA Solutions). Palmer testified without contradiction that she was not a broker in the mobile homes sales business. However, because her real estate brokerage was conducted in the same building as her mobile home sales business, customers sometimes confused the two businesses, and mobile home customers sometimes believed that they were doing business with the real estate brokerage and that Palmer also was a broker for the sale of mobile homes on leased property. The Hinkles and Conklin The Administrative Complaint against Palmer alleged violations arising out of the handling of a $1,000 deposit on the purchase of real property in Lakeland, Florida. Actually, no real property was involved. It also was alleged that the deposit was placed in the Affordable Lifestyles escrow account. Actually, the money was placed into an ERA Solutions account; it is not clear from the evidence whether it was an escrow account. It also was alleged that the deposit eventually was returned to the buyer; actually, it eventually was returned to the seller. In early 1997, Joanne Conklin went to the offices of Affordable Lifestyle and Palmer Realty to list and sell a mobile home on leased property that had belonged to Conklin's recently deceased father. The evidence indicated that Conklin dealt with an individual named Bruce Shefler, but it did not seem to be clear to Conklin whether Shefler worked for Affordable Lifestyle or Palmer Realty, or both, or whether there was a difference between the two. Conklin did, however, understand that not all realtors sold mobile homes on leased property and that her choices were limited. Starting approximately March 1997, Conklin began to receive documentation bearing the name of ERA Solutions. Disillusioned with the services she was getting, Conklin complained to Palmer, who tried to satisfy Conklin by switching her property to another mobile home salesperson named Sandi Stone. Still confused as to the relationship between the realty and the mobile homes sales entity, Conklin appears to have assumed incorrectly that Shefler and Stone were realtors. On or about July 15, 1997, Don and Janet Hinkle made an offer to purchase Conklin's mobile home at close to the asking price, with a $1,000 deposit and a September 1, 1997, closing date. Conklin considered this to be the first "major offer," and she was inclined to accept. However, Conklin did not think the deposit was enough to take the property off the market for the September closing date. It is not clear from the evidence what happened at that point. Conklin thought the closing date was being changed to August 16, 1997, to allay her concerns. The face of the contract itself also indicates such a change of the closing date; however, it is not clear whether the change was made before or after the Hinkles signed the contract, or if the change ever was presented to them. Stone accepted the Hinkles' deposit by check made payable to ERA Solutions and placed the money in an ERA Solutions bank account. It was not clear if it was an escrow account. Shortly before August 16, 1997, Stone telephoned Conklin and told her that the Hinkles' financing had been delayed and that closing would have to be delayed until September 1, 1997, after all. Conklin was upset and telephoned the Hinkles directly to inform them that she would require an additional deposit to hold the property off the market until September 1, 1997. The Hinkles in turn became upset because they professed not to have any knowledge of a closing prior to September 1, 1997. They also did not like the way the transaction was proceeding and decided they no longer wanted to buy Conklin's mobile home. When told that the Hinkles would not close the contract, Conklin asked Palmer for the $1,000 deposit. Palmer told Conklin that that the property would go back on the market and that the deposit would be returned to the Hinkles. When the Hinkles asked for the $1,000 deposit, Palmer told them that the deposit would be paid to Conklin and that the Hinkles might also have to pay for the mobile home. Based on this advice, the Hinkles felt that they were at the mercy of Conklin as to the return of the deposit. Palmer did not report to the Florida Department of Business and Professional Regulation, Division of Real Estate (the Division), that the demands had been made for the return of the deposit. The Hinkles complained to the Division that their deposit had not been returned. During the investigation of the Hinkles' complaint, Palmer returned the deposit to them on December 11, 1997. Conklin did not object to the return of the deposit but would have objected to Palmer, ERA Solutions in Real Estate, ERA Solutions or Affordable Lifestyle keeping it. The Snow Contract The Administrative Complaint against Palmer alleged that Palmer continued to conduct business as Palmer Real Estate after it was deactivated by entering into a listing contract with the Snows between November 1996 and March 1997. But the Administrative Complaint alleged in two places that deactivation occurred on June 20, 1997. Palmer Real Estate actually appears to have been deactivated in June 1996, perhaps accidentally. See Finding 2, supra. Palmer and Palmer Real Estate performed the Snow listing contract without any problems and to the satisfaction of the Snows. The Karolishyn Contract The Administrative Complaint against Palmer alleged that Palmer conducted business as ERA Solutions in Real Estate before it was licensed. On or about March 13, 1997, Palmer, on behalf of ERA Solutions in Real Estate, entered into a listing contract with Beatrice Karolishyn. Palmer and ERA Solutions in Real Estate performed the Karolishyn listing contract without any problems and to the satisfaction of Karolishyn. Alleged Misappropriation of Escrow Funds In addition to the allegations against Palmer arising out of the Conklin/Hinkles transactions, the Administrative Complaint against Palmer and ERA Solutions in Real Estate alleged specific as well as wholesale misappropriation of escrow funds. The Administrative Complaint against Palmer and ERA Solutions in Real Estate alleged that, on or about December 31, 1997, Donald J. (Jack) Miller, a salesperson employed by the Respondents, accepted a $100 deposit from Geneva McCoy on the purchase of a mobile home on leased property. It further alleged that, prior to closing, the Respondents converted the $100 to their own use and that the sellers were unable to fund the purchase of tags and title. The evidence was that, after the McCoy deposit, the sale of Palmer's ERA franchise to another broker was initiated, and there was confusion as to whom McCoy was supposed to write her check for the balance of the purchase. In addition, McCoy wanted title to the mobile home to be taken in the names of both her and her son; title was delayed while information required by the Department of Highway Safety and Motor Vehicles was obtained from her son. There was no evidence that the $100 deposit had anything to do with the delay in obtaining title to the mobile home. On or about February 4, 1998, Palmer's ERA franchise was transferred to another broker. Miller was permitted to, and chose to, join the successor franchisee. At the McCoy closing, Miller discovered that McCoy was $100 short because the deposit had not been made available for the closing. Miller paid the $100 out of his own pocket. The Administrative Complaint against Palmer and ERA Solutions in Real Estate also alleged that, on or about February 10, 1998, Miller accepted a $1,000 deposit from Maxine Reed on the purchase of real property from Barbara L. McCarty. In fact, as reflected in the sales contract and deposit check attached to the Administrative Complaint, and confirmed by the evidence presented at the hearing, the deposit was accepted on or about January 17, 1998. When the McCarty/Reed transaction closed on February 20, 1998, Miller participated in the closing in his new capacity as salesperson for the successor broker. As with the McCoy deal, the deposit was not made available for the closing. In order to proceed with the closing, Miller had to charge back the $1,000 against the broker's sales commission. The evidence was that, after agreeing to sell her ERA franchise to another broker, Palmer attempted to renege and rescind the sale. She took the position that, at the time of the agreement, she was not thinking clearly because she was on medication for continuing emotional difficulties from the sudden and tragic death of her daughter in a car accident in 1994. Palmer sought to rescind the sale and viewed the transaction as a hostile takeover against her will. The evidence did not prove why the McCoy and Reed down payments were not available for their closings. The money apparently remained in the ERA Solutions in Real Estate escrow account. On or about March 18, 1998, after both the sale of the ERA franchise and the closings, Palmer withdrew all funds from her ERA brokerage accounts (including the ERA Solutions in Real Estate and ERA Solutions escrow accounts) and closed the accounts. She used the funds in the account for her own purposes. These funds included the McCoy and Reed deposits. It was Palmer's position that the successor broker was responsible for making the funds available for the closings and that the money in the ERA brokerage accounts rightfully belonged to her. There was no evidence as to the terms of the sale of the ERA franchises or the contemplated handling of the escrow funds. There also was no evidence that either Miller or the successor broker made a claim to the funds. There also were general allegations in the Administrative Complaint against Palmer and ERA Solutions in Real Estate that the Respondents wrote payroll checks out of the ERA Solutions in Real Estate escrow account at Barnett Bank between August 1997 and January 1998. However, those allegations were not proven. There also were general allegations in the Administrative Complaint against Palmer and ERA Solutions in Real Estate that the Respondents "obtained deposits and misappropriated the deposits by improperly disbursing them to the operating account at Barnett Bank and/or by directly converting them to the use of the Respondent Judy K. Palmer." The only evidence of such a direct conversion of escrow funds was that Palmer once wrote a $200 to $400 check out of the escrow account for a personal health insurance premium. However, another broker brought this to Palmer's attention, and Palmer replaced the money, saying she accidentally had picked up the wrong check book. The evidence was that this occurred in December 1996, before Palmer began operating as ERA Solutions in Real Estate. There also were general allegations in the Administrative Complaint against Palmer and ERA Solutions in Real Estate that the Respondents "converted approximately $14,200 in trust funds to the Respondents' general account and/or to Respondent Judy K. Palmer's own use." As reflected in the bank statement attached to the Administrative Complaint, the evidence proved that $14,200 was transferred out of the ERA Solutions in Real Estate escrow account during July 1997, but the evidence did not prove who transferred the funds, where the funds were transferred, or what they were used for. The Administrative Complaint against Palmer and ERA Solutions in Real Estate also alleged that, on or about January 28, 1998, First Union Bank froze all of the Respondents' accounts, including escrow accounts, because of checks (including payroll checks) returned by reason of insufficient funds. The evidence proved that there was not much activity in the escrow account but that there was a substantial problem with deposits in the general accounts and that they were overdrawn by almost $6,500 at the end of January 1998. There also was evidence that, as before, vendors were not being paid and were dunning the brokerage for payment and that checks on the general account were bouncing, including payroll checks.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order revoking the licenses of Judy K. Palmer and ERA Solutions in Real Estate, Inc. DONE AND ENTERED this 17th day of December, 1998, in Tallahassee, Leon County, Florida. J. LAWRENCE JOHNSTON 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 Filed with the Clerk of the Division of Administrative Hearings this 17th day of December, 1998. COPIES FURNISHED: Steven W. Johnson, Senior Attorney Department of Business and Professional Regulation Division of Real Estate Suite N-308A 400 West Robinson Street Orlando, Florida 32801 Judy Palmer Post Office Box 24734 Lakeland, Florida 33802 Lynda L. Goodgame, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 James Kimbler, Acting Division Director Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900
The Issue The issue in this case is whether Respondents negotiated the sale of real property and collected a commission on said sale without the requisite real estate license issued by the State of Florida.
Findings Of Fact Petitioner is the state agency charged with the responsibility and duty of prosecuting Administrative Complaints filed against real estate practitioners pursuant to the laws of the State of Florida. Respondent Rene Larralde, Jr., is a citizen of the State of Florida. At no time relevant to this proceeding did Larralde hold a Florida-issued license as a real estate sales associate or real estate broker. Respondent Maxous, Inc., is a Florida for-profit corporation formed on August 10, 2004. Larralde is president and registered agent of Maxous. Respondent Glinda G. Hatfield has held licenses as a Florida real estate broker and a Florida real estate associate. As of the date of the incident relevant to this proceeding, Hatfield's real estate broker's license was in an inactive status. Hatfield had failed to meet one of the continuing education requirements for renewal of her license that year. She was not aware of that fact until notification by the state relevant to the issues in this proceeding. Upon receiving notice, Hatfield took the necessary measures to have her license re-instated to active status. Hatfield assisted Larralde in forming Maxous. It was Hatfield's responsibility, as the licensed real estate broker in the new entity, to make sure Maxous was duly registered with the state as a real estate broker. Hatfield went to the Melbourne Association of Realtors to register the business once it had been incorporated. Hatfield did not understand that the business also had to be registered through the Florida Real Estate Commission in Tallahassee. Not being aware of that requirement, Hatfield never registered Maxous with the state. Rather, she paid the fees associated with registration of the company with the local real estate association and made the erroneous presumption that the company could then operate as a licensed real estate broker in the state. On or about February 27, 2008, certain parties entered into a Contract for Sale and Purchase (the "Contract") of property located at 1033 June Drive, Melbourne, Florida (the "Property"). Maxous was designated as the listing broker in the Contract. On April 21, 2008, the sale of the Property closed, as evidenced by a HUD Settlement Statement. The Settlement Statement indicates a real estate commission in the amount of $5,964.18 for the sale. The Settlement Statement indicates $2,982.09 (one half of the commission) is to be paid to Maxous and the other half of the commission to be paid to Exit One Realty. Exit One Realty was the listing agent for the Property, but had not been made aware of the impending sale. As the sole listing agent, Exit One Realty would normally expect to receive the entire broker's commission at the time of closing. However, Exit One Realty was not even aware of the sale of the Property until it received its commission. It appears that Maxous, through the person of Larralde, held itself out as the listing broker and assumed ownership of the commission on the sale of the Property. Larralde did, however, designate Exit One Realty as another broker in the sale who was entitled to half of the commission. At the time of the transaction involving the Property, Maxous was not registered with the State of Florida as a real estate broker. Larralde was not licensed as a real estate sales associate. In order to consummate this sale (and others like it), Larralde had established Maxous. It was apparently Larralde's intent, although he did not appear at the final hearing, to use Hatfield's status as a licensed broker to legitimize Maxous' status as a brokerage firm. Hatfield was amenable to that arrangement. Hatfield was designated as the vice-president of Maxous when the company was formed. As previously noted, Hatfield went to the Melbourne Association of Realtors for the purpose of registering Maxous as a brokerage entity. Hatfield paid the necessary fees to the association for the registration of Maxous with the local real estate association, and, upon inquiry from that office, felt that she had done everything necessary to allow Maxous to operate as a broker. Thus, at the time of the aforementioned transaction, Maxous was not a legitimate broker in the State of Florida. Hatfield assumed she was the registered broker for Maxous; assumed Maxous was duly registered with the state; and assumed that her broker's license was current. In matter of fact, none of those assumptions proved true. Clearly Hatfield did not attempt to circumvent or avoid the requirements for real estate brokers. Rather, she was mistaken about what had to be done regarding registration with the Florida Real Estate Commission. She did not know that her license had been deemed inactive for failure to complete a continuing education class. Neither Larralde, nor anyone else testified at final hearing as to what their knowledge was concerning these matters. It cannot be determined whether Larralde knew Maxous was not a registered brokerage firm and that the transaction relating to the Property was improper. However, Larralde did share the commission with Exit One Realty. It is clear from Hatfield's testimony at final hearing that she did not intend to defraud anyone or to do anything illegal or improper. However, her actions were improper nonetheless. It is not clear from the testimony whether Hatfield received any of the commission provided to Larralde. However, to her credit, Hatfield, upon learning of the violations set forth above, unilaterally ceased doing business as a real estate agent or broker. She acknowledged her mistake and took immediate action to make sure she would not make any further mistakes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Petitioner, Department of Business and Professional Regulation, Division of Real Estate: (1) imposing a fine in the amount of $5,000 against Respondent, Rene Larralde; (2) imposing a fine of $5,000 against Respondent, Maxous, Inc; (3) imposing a fine of $250 against Respondent, Glinda G. Hatfield; (4) requiring Hatfield to pay the costs of the investigation in this matter; and (5) suspending Hatfield's real estate license for a period of one year. DONE AND ENTERED this 24th day of November, 2009, in Tallahassee, Leon County, Florida. R. BRUCE MCKIBBEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 24th day of November, 2009. COPIES FURNISHED: Amy Toman, Hearing Officer Office of the General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Reginald Dixon, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Patrick J. Cunningham, Esquire Department of Business and Professional Regulation 400 West Robinson Street Hurston Building-Suite 801 North Orlando, Florida 32801 Joseph G. Colombo, Esquire 2351 West Eau Gallie Boulevard, Suite 1 Melbourne, Florida 32935
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint issued against him and, if so, what penalty should be imposed.
Findings Of Fact Based on the evidence adduced at the "formal hearing," and the record as a whole, the following findings of fact are made: Respondent is now, and has been since October of 2000, a licensed real estate sales associate in the State of Florida, holding license number 695252. He is currently associated with AAA Realty, Inc., a broker corporation doing business in Broward County, Florida. From March 1, 2001, through June 26, 2001, Respondent was an active real estate sales associate with Allen Real Estate, Inc. (Allen), a broker corporation doing business in St. Lucie County, Florida. From June 27, 2001, through August 13, 2001, Respondent was an active real estate sales associate with Realty Unlimited, Inc. (Unlimited), a broker corporation (affiliated with GMAC Real Estate) with offices in Port St. Lucie and Stuart, Florida. Unlimited is now, and has been at all times material to the instant case, owned by Kevin Schevers, a Florida-licensed real estate broker. Gary Sprauer is a Florida-licensed real estate sales associate. He is currently associated with Unlimited. Like Respondent, Mr. Sprauer began his association with Unlimited on June 27, 2001, immediately after having worked for Allen. Respondent and Mr. Sprauer worked as "partners" at both Allen and Unlimited. They had an understanding that the commissions they each earned would be "split 50-50" between them. On February 7, 2001, Allen, through the efforts of Respondent and Mr. Sprauer, obtained an exclusive listing contract (Listing Contract) giving it, for the period of a year, the "exclusive right to sell," in a representative capacity, commercial property located at 3800 South Federal Highway that was owned by Vincent and Renee Piazza (Piazza Property). Paragraphs 6 and 7 of the Listing Contract addressed the subjects of "compensation," "cooperation with other brokers," and "dispute resolution," respectively, and provided, in pertinent part as follows as follows: COMPENSATION: Seller will compensate Broker as specified below for procuring a buyer who is ready, willing, and able to purchase the Property or any interest in the Property on the terms of this Agreement or on any other terms acceptable to Seller. Seller will pay Broker as follows (plus applicable sales tax): 8% of the total purchase price or $15,000 maximum, no later than the date of closing specified in the sales contract. However closing is not a prerequisite for Broker's fee being earned. * * * (d) Broker's fee is due in the following circumstances: (1) If any interest in the Property is transferred . . . , regardless of whether the buyer is secured by Broker, Seller or any other person. * * * COOPERATION WITH OTHER BROKERS: Broker's office policy is to cooperate with all other brokers except when not in the Seller's best interest, and to offer compensation to: Buyer's agents, who represent the interest of the buyer and not the interest of Seller in a transaction, even if compensated by Seller or Broker Nonrepresentatives Transaction brokers. None of the above (if this box is checked, the Property cannot be placed in the MLS). * * * 10. DISPUTE RESOLUTION: This Agreement will be construed under Florida law. All controversies, claim and other matters in question between the parties arising out of or relating to this Agreement or the breach thereof will be settled by first attempting mediation under the rules of the American Arbitration Association or other mediator agreed upon by the parties. . . . Shortly after they left the employ of Allen and began working for Unlimited, Respondent and Mr. Sprauer showed Nicholas Damiano the Piazza Property. Mr. Damiano thereafter made a written offer to purchase the Piazza Property, which the Piazzas accepted, in writing, on July 4, 2001. The sales price was $165,000.00. Mr. Damiano put down a $10,000.00 deposit, which, in accordance with paragraph 2(a) of the contract between Mr. Damiano and the Piazzas (Sales Contract), was "held in escrow by [Unlimited]." The obligations of Unlimited, as escrow agent, were described in paragraph 6 of the Sales Contract, which provided as follows: ESCROW. Buyer and Seller authorize GMAC, Realty Unlimited Telephone: . . . Facsimile: . . . Address: . . . to receive funds and other items and, subject to clearance, disburse them in accordance with the terms of this Contract. Escrow Agent will deposit all funds received in a non- interest bearing account. If Escrow Agent receives conflicting demands or has a good faith doubt as to Escrow Agent's duties or liabilities under this Contract, he/she may hold the subject matter of the escrow until the parties mutually agree to its disbursement or until issuance of a court order or decision of arbitrator determining the parties' rights regarding the escrow or deposit the subject matter of the escrow with the clerk of the circuit court having jurisdiction over the dispute. Upon notifying the parties of such action, Escrow Agent will be released from all liability except for the duty to account for items previously delivered out of escrow. If a licensed real estate broker, Escrow Agent will comply with applicable provisions of Chapter 475, Florida Statutes. In any suit or arbitration in which Escrow Agent is made a party because of acting as agent hereunder or interpleads the subject matter of the escrow, Escrow Agent will recover reasonable attorneys' fees and costs at all levels, with such fees and costs to be paid from the escrowed funds or equivalent and charged and awarded as court or other costs in favor of the prevailing party. The parties agree that Escrow Agent will not be liable to any person for misdelivery to Buyer or Seller of escrowed items, unless the misdelivery is due to Escrow Agent's willful breach of this Contract or gross negligence. Paragraph 12 of the Sales Contract addressed the subject of "brokers" and provided as follows: BROKERS. Neither Buyer nor Seller has utilized the services of, or for any other reason owes compensation to, a licensed real estate broker other than: Listing Broker: Allen Real Estate, Inc. who is a transaction broker and who will be compensated by x Seller _ Buyer _ both parties pursuant to x a listing agreement _ other (specify) Cooperating Broker: GMAC Realty Unlimited who is a transaction broker who will compensated by _ Buyer x Seller _ both parties pursuant to _ an MLS or other offer of compensation to a cooperating broker _ other (specify) (collectively referred to as "Broker") in connection with any act relating to the Property, included but not limited to, inquiries, introductions, consultations and negotiations resulting in this transaction. Seller and Buyer agree to indemnify and hold Broker harmless from and against losses, damages, costs and expenses of any kind, including reasonable attorneys' fees at all levels, and from liability to any person, arising from (1) compensation claimed which is inconsistent with the representation in this Paragraph, (2) enforcement action to collect a brokerage fee pursuant to Paragraph 10, (3) any duty accepted by Broker at the request of Buyer or Seller, which duty is beyond the scope of services regulated by Chapter 475, F.S., as amended, or (4) recommendations of or services provided and expenses incurred by any third party whom Broker refers, recommends or retains for or on behalf of Buyer or Seller. The Damiano/Piazza transaction was originally scheduled to close on July 25, 2001. At the request of the Piazzas, the closing was rescheduled for August 7, 2001. A few days before August 7, 2001, Mr. Sprauer asked Respondent "where the closing was going to take place" and "what title company" would be handling the matter. Respondent replied that the closing was "going to be delayed again because Mr. Damiano . . . was going to have to have some type of cancer surgery." It turned out that the closing was not "delayed again." It took place on August 7, 2001. At the closing were Mr. Damiano, the Piazzas, Respondent, and the closing agent from the title company, First American Title Insurance Company (First American).3 Neither Mr. Schevers, nor Mr. Sprauer, was in attendance. Mr. Sprauer did not even know that the closing was taking place. He was under the impression, based on what Respondent had told him, that the closing had been postponed. Had he not been misinformed, he would have attended the closing. Respondent did not contact Mr. Sprauer following the closing to let him know that, in fact, the closing had occurred. Mr. Schevers, on the other hand, was made aware that closing would be held on August 7, 2001. He was unable to attend because he had "prior commitments." It was Respondent who informed Mr. Schevers of the August 7, 2001, closing date. The morning of August 7, 2001, Respondent went to Unlimited's Stuart office and asked Mr. Schevers for the $10,000.00 Unlimited was holding in escrow in connection with the Damiano/Piazza transaction, explaining that he needed it for the closing that was going to be held later that day. Before complying with Respondent's request, Mr. Schevers contacted First American and asked that he be faxed a copy of the United States Department of Housing and Urban Development Settlement Statement (HUD Statement) that First American had prepared for the closing. As requested, First American faxed a copy of the HUD Statement to Mr. Schevers. Upon reviewing the document, Mr. Schevers "immediately noticed that [it indicated that] the entire commission [of $7,000.00] was going to Allen." Mr. Schevers "then proceeded to call First American" and asked why Unlimited was not "reflected on this settlement statement." Mr. Schevers was told that a First American representative "would get right on it and get back to [him]." Mr. Schevers did not wait to hear back from First American before handing an "escrow check" in the amount of $10,000.00 to Respondent. He instructed Respondent, however, to "not give anybody this check unless that statement [the HUD Statement] [was] changed and reflect[ed] [Unlimited's]" share of the commission earned from the sale of the Piazza Property. He further directed Respondent to telephone him if this change was not made. Respondent did not follow the instructions Mr. Schevers had given him. He delivered the $10,000.00 "escrow check" to the closing agent at the closing, even though the HUD Statement had not been changed to reflect Unlimited's sharing of the commission. At no time during the closing did Mr. Schevers receive a telephone call from Respondent. According to the HUD Statement that Mr. Damiano, the Piazzas, and the closing agent signed at the closing, Allen received a commission of $7,000.00 "from seller's funds at settlement." The document makes no mention of any other commission having been paid as part of the closing. On or about August 9, 2001, Respondent received a "commission check" from Allen. The check was made payable to Respondent and was in the amount of $3,000.00. Under the "DOLLARS" line on the check, the following was typed: 4200 Total Comm[4] 1200 ADVANCE[5] Typed next to "MEMO" on the bottom left hand corner of the check was "DAMIANO-PIAZZA 165,000 S&L." It has not been shown that the "commission check" Respondent received from Allen was for anything other than the commission Allen owed Respondent for services performed when Respondent was still employed by Allen. Mr. Schevers' consent to Respondent's receiving this $3,000.00 "commission check" was neither sought nor given. Less than a week after the closing, having spotted Mr. Damiano mowing grass on a vacant lot that Mr. Damiano owned, Mr. Sprauer walked up to him and asked "how his surgery [had gone]." Mr. Damiano "acted very surprised [like] he didn't know what [Mr. Sprauer] was talking about." Mr. Damiano's reaction to his inquiry led Mr. Sprauer to believe "that the closing had probably taken place." He "immediately contacted [Mr. Schevers] and asked him to check into it." Mr. Schevers subsequently learned from First American that Allen "had gotten all of the [commission] check" at the closing. Mr. Schevers then telephoned Respondent. This was the first communication he had had with Respondent since before the closing. Respondent told Mr. Schevers that "he got the check" and "he would be right over with it." Respondent, however, did not keep his promise. After his telephone conversation with Respondent, Mr. Schevers discovered that Allen "had cut [Respondent] a check and [Respondent] had gone immediately and deposited it." This discovery prompted Mr. Schevers to place another telephone call to Respondent. This telephone conversation ended with Mr. Schevers telling Respondent "he was terminated." Mr. Schevers thereafter notified Petitioner in writing that Respondent was no longer associated with Unlimited. He also filed with Petitioner a complaint against Respondent alleging that Respondent had "acted inappropriately" in connection with the Damiano/Piazza transaction. Mr. Schevers had expected Unlimited to receive, for the role it played in the Damiano/Piazza transaction, "50 percent of the total commission," or $3,500.00, in accordance with the provisions of the "multiple listing service for St. Lucie County."6 He holds Respondent responsible, at least in part, for Unlimited's not receiving these monies.7 At the time of the Damiano/Piazza transaction, Unlimited had contracts with its sales associates which provided that the associates would receive "70 percent of the net" of any commission Unlimited earned as a result of the associates' efforts. Had Unlimited received a commission as a result of the Damiano/Piazza transaction, it would have "split" it with Respondent and Mr. Sprauer as required by the contracts it had with them.8
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Commission issue a final order dismissing the Administrative Complaint issued against Respondent in the instant case in its entirety. DONE AND ENTERED this 7th day of July, 2004, in Tallahassee, Leon County, Florida. STUART M. LERNER 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 7th day of July, 2004.
The Issue Whether Respondent, Andrey Barhatkov, committed the violations alleged in the Administrative Complaint, and, if so, what discipline should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, the following Findings of Facts are made: Petitioner is a 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 20.165 and Chapters 120, 455, and 475, Florida Statutes, and the rules promulgated pursuant thereto. Respondent is, and was at all times material hereto, a licensed Florida real estate sales associate issued License No. 660647 in accordance with Chapter 475, Florida Statutes. The last license issued to Respondent was as a sales associate with All American Realty, Inc., 227 North John Young Parkway, Kissimmee, Florida 34741. On or about July 5, 2005, Respondent prepared a residential sale and purchase contract on behalf of a buyer and faxed the contract to Jerome Fortson, who is not a licensed Florida real estate sales associate, broker associate, or broker, for Mr. Fortson to present to the buyer and obtain the buyer's signature. Having obtained the buyer's signature, Mr. Fortson later appeared on behalf of the buyer at the closing. Respondent was not present at the closing. Respondent admitted that he had Mr. Fortson show the real estate property to the buyer, that he had an arrangement with Mr. Fortson to show properties for him, and that Mr. Fortson was to report back to him for follow-up. Respondent acknowledged that Mr. Fortson was a mortgage broker and that they had an informal business referral agreement wherein Mr. Fortson would arrange financing for buyers that he had shown properties. In the course of this activity, Mr. Fortson, who represented himself as a sales representative for the buyer, contacted the listing agent for information regarding the property and showed the property. Respondent never met the buyer. The real estate agent representing the seller was not aware of Respondent's involvement in the transaction until he requested his share of the commission.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Petitioner, Department of Business and Professional Regulation, Division of Real Estate, enter a final order finding that: (1) Respondent, Andrey Barhatkov, violated Subsections 455.227(1)(j) and 475.42(1)(e), Florida Statutes; Respondent's license as a real estate salesperson be suspended for one year, followed by one year of probation; Respondent be fined $2,000; (4) Respondent be required to attend such remedial ethics and educational courses as are determined appropriate by Petitioner; and (5) Respondent be required to pay the costs of the investigation and prosecution of this case. DONE AND ENTERED this 25th day of June, 2009, in Tallahassee, Leon County, Florida. S JEFF B. CLARK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 25th day of June, 2009. COPIES FURNISHED: Thomas W. O'Bryant, Jr., Director Division on Real Estate Department of Business and Professional Regulation 400 West Robinson Street Hurston Building, Suite N802 Orlando, Florida 32801 Ned Luczynski, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Andrey Barhatkov 408 Pinewood Drive Davenport, Florida 33896 Patrick J. Cunningham, Esquire Department of Business and Professional Regulation 400 West Robinson Street Hurston Building, Suite N801 Orlando, Florida 32801
The Issue The issue posed for decision herein is whether or not the Respondent, based on conduct set forth hereinafter in detail, unlawfully withdrew and transferred monies from an escrow account and is therefore guilty of fraud, dishonest dealing by trick, scheme or device, or breach of trust and conversion within the purview of Subsection 475.25(1)(b), Florida Statutes (1979) At the final hearing, Petitioner called Donald Lloyd, Respondent, Donald Reda and Kenneth Viviano as its witnesses. Petitioner offered Exhibits 1 through 7 which were received into evidence. Respondent called no witnesses and offered Respondent's Exhibits 1 through 4 which were received into evidenced.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received, posthearing memoranda and the entire record complied herein, I hereby make the following relevant findings of fact. By its administrative complaint filed herein on July 29, 1981, Petitioner seeks to take disciplinary action against the Respondent as licensee and against his license as a real estate salesman. During times material herein, Respondent was a licensed real estate salesman and has been issued license No. 0188032. During times material herein, Century 21, Lloyds of Lauderdale, Inc., was a Florida licensed real estate corporate broker with its offices located at 3300 NE 33rd Street, Fort Lauderdale, Florida corporate entity was licensed under that name on October 12, 1979. The predecessor entity was known as Lloyds' of Lauderdale, Inc., and had its escrow account at Gulfstream Bank H.A., formerly known as Gulfstream American Bank and Trust Company H.A., formerly known as American National Bank and Trust Company of Fort Lauderdale, which account number was 005-1-00160-3. Upon obtaining the change of name, i.e. Century 21, Lloyds of Lauderdale, Inc., the successor entity maintained the same escrow account number at the same bank and continued using the checks on that account bearing its former name, Lloyds of Lauderdale, Inc. During times material herein, Respondent was a salesman associated with Century 21 and was an authorized signatory on the above-referred escrow account. Respondent was also a stockholder, officer and director of Century 21, Lloyds of Lauderdale, Inc. Respondent was also the owner of an unrelated business known as Brewer's Care Center, which in turn operated a motel located in Georgia. During times material, Respondent owned a one-third (1/3) interest in Century 21, Lloyds of Lauderdale, Inc. On February 3, 1981, Respondent issued a check, No. 79-228, drawn on the Century 21, Lloyds of Lauderdale, Inc., escrow account, payable to Brewer's Care Center in the amount of $11,903.12. Approximately fifteen days later, on February 18, 1981, Respondent issued another check, No. 79-223, drawn on the above-referenced escrow account payable to Brewer's Care Center in the amount of $2,500. On March 3, 1981 Respondent verbally authorized the Gulfstream Bank to withdraw $399.66 from the referenced escrow account to pay interest on loan No. 59-004-00-058-3866-4. Also, on March 18, 1981 Respondent verbally authorized the withdrawal of $799.32 to be applied against the same loan. Neither of the above-referenced checks or verbal loan authorizations were, in any wise, connected with any real estate transactions from which monies were held in escrow by the Respondent. The verbal withdrawals and checks, either authorized or drawn by the Respondent, reduced the escrow account by a sum of approximately $15,602.10 and depleted the account to such an extent that Century 21, Lloyds of Lauderdale, Inc. was unable to meet demands for the return of the escrow funds held in trust (See Petitioner's Composite Exhibit No. 1). Respondent took the position that the monies represented by the payments of the two checks made payable to Brewer's Care Center were repayments of loans and that he was unaware that the accounts which the checks were drawn against were, in fact, escrow accounts. In this regard, evidence reveals that the Respondent suffered a heart attack during November of 1980 and his health regressed to the degree that he was placed in the intensive care unit at a hospital in Cleveland, Ohio for an extended period of time. At the conclusion of the Petitioner's case in chief, Respondent's counsel filed an ore tenus motion to continue the subject hearing until the following day. The undersigned afforded Respondent's counsel an opportunity to submit, for the record, his basis for the continuance. However, that motion was denied based on the numerous continuances which had been previously granted by the undersigned to Respondent's counsel (See Order dated November 16, 1982 - Copy attached).
The Issue Is Respondent guilty of operating as a real estate salesperson, without being the holder of a valid and current license as a real estate salesperson, in violation of Section 475.42(1)(a), Florida Statutes, and thereby in violation of Section 475.25(1)(e), Florida Statutes?
Findings Of Fact Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of Florida related to the practice of real estate. Authority for the conduct of Petitioner's duties is found in Section 20.165, Florida Statutes; Chapters 120, 455, and 475, Florida Statutes; and associated rules. At present, Respondent holds a license as a real estate salesperson, license no. SL0631299, issued by Petitioner. From January 3, 1997, until February 13, 1998, Respondent was employed as an active salesperson in association with Marita Ann Dorr, Inc. (the Dorr firm), a broker corporation trading as Home Town Property Management. During that time Marita Dorr served as Respondent's employing broker. The Dorr firm was located at 109 West Lakeview Street, Lady Lake, Florida 32159. Respondent's duties during the time she was affiliated with the Dorr firm was that of an independent contractor real estate salesperson engaged in the sale of real estate at Sandlewood Condominiums, in Wildwood, Florida. In that time period, Respondent was also acting as the manager of Sandlewood Condominiums, which involved bookkeeping, supervision of maintenance, and serving as a receptionist. On February 13, 1998, Ms. Dorr informed Respondent that Respondent was terminated as a real estate salesperson affiliated with the Dorr firm. On that same date Ms. Dorr executed a form 400.5 which reflected the request for change of status in Respondent's license, noting that Respondent was terminated from employment with the Dorr firm. That form was received by Petitioner on February 13, 1998. In addition, Ms. Dorr wrote to Respondent on February 13, 1998, to enclose the executed form 400.5 noting the termination of Respondent's employment of the Dorr firm. On February 17, 1998, Respondent received the letter and a copy of the request for change of status of her license under form 400.5. From February 14, 1998, through March 22, 1998, Respondent did not have a current active license to practice real estate as a salesperson because Respondent was not associated with a real estate broker. Mr. Michael D. Remmel was interested in possibly purchasing a condominium unit at the Sandlewood Condominiums and had a conversation with Respondent concerning the possible purchase. His initial contact with Respondent predated her termination as a real estate salesperson affiliated with the Dorr firm. On February 17, 1998, after being told that she was terminated and receiving the letter from Ms. Dorr with the attached form 400.5, concerning the termination, Respondent again had contact with Mr. Remmel about the possible purchase of a condominium unit. Mr. Remmel initiated that purchase contract. On February 17, 1998, Mr. Remmel made an offer to purchase a unit in the Sandlewood Condominiums by executing a contract for sale and purchase as buyer. Respondent helped complete the contract form in its details by filling out the form, with the exception of Mr. Remmel's signature. The form noted that Home Town Property Management was the cooperating broker. A copy of the contract for sale and purchase is found as Petitioner's Exhibit No. 1. At the time that Respondent assisted Mr. Remmel in preparing the contract for sale and purchase, Respondent acknowledged to Mr. Remmel that she had been terminated as a salesperson and that her salesperson's real estate license was no longer active. Respondent told Mr. Remmel that she would have to call Ms. Dorr and find out if she could make the offer to the listing broker for the unit Mr. Remmel wished to purchase. Before writing the contract, Respondent spoke to Ms. Dorr. In the conversation Ms. Dorr commented on the fact that the form 400.5 had already been submitted to Petitioner and Respondent acknowledged receiving the copy of the form. Ms. Dorr reminded Respondent that Respondent should not be writing or soliciting real estate business. Respondent replied that she understood that but contended that Respondent was not soliciting the business. Respondent referred to the fact that Mr. Remmel was in the office and wanted to make an offer. Respondent asked Ms. Dorr if Ms. Dorr wanted Respondent to write up the contract and put Ms. Dorr's name on the bottom of it. Ms. Dorr responded "yes." Respondent asked what date to place. Ms. Dorr said to put "today's date." Notwithstanding Ms. Dorr's remarks Respondent recognized that she had not been rehired formally by Ms. Dorr and that, in the eyes of Petitioner, Respondent's real estate salesperson license was still inactive based upon the fact that Respondent did not have a named qualifying broker. Respondent acknowledges that she should have known better than to write the contract but that she wrote the contract because Ms. Dorr told her to. The property that Mr. Remmel made an offer on was listed with Myra Paxton, the broker for Paxton Realty. During the course of the transaction that took place between Respondent and Mr. Remmel concerning the property, Respondent called Ms. Paxton on February 17, 1998, and told Ms. Paxton that a copy of the contract was being faxed to Ms. Paxton. Respondent asked Ms. Paxton if Ms. Paxton wanted to write the contract or wanted Respondent to write it. Ms. Paxton reminded Respondent that Ms. Paxton was not Respondent's broker and could not tell Respondent what Respondent should do. Respondent then called Ms. Paxton again and told Ms. Paxton that "Marita," which name is inferred as a reference to Ms. Dorr, had told Respondent to write the contract under Ms. Dorr's authority and to bring it to Ms. Dorr. On February 17, 1998, Respondent faxed Ms. Paxton a copy of the contract for sale and purchase.
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED: That a final order be entered finding Respondent in violation of Sections 475.42(1)(a) and 475.25(1)(e), Florida Statutes, and issuing a letter of reprimand. DONE AND ENTERED this 10th day of November, 1999, in Tallahassee, Leon County, Florida. CHARLES C. ADAMS 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 November, 1999. COPIES FURNISHED: Daniel Villazon, Esquire Division of Real Estate Department of Business and Professional Regulation Suite N-308 400 West Robinson Street Orlando, Florida 32801 Kevin Palley, Esquire Kevin Palley, P.A. Suite B-2 520 Southeast Fort King Street Ocala, Florida 34471 Barbara D. Auger, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Herbert S. Fecker, Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Orlando, Florida 32801
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.
The Issue The issue in this case is whether Petitioner, a licensed Florida real estate sales associate, violated provisions of Subsections 475.25(1)(b), 475.25(1)(d)1., 475.25(1)(e), 475.42(1)(b), and 475.42(1)(d), Florida Statutes (2007),1 and, if so, what discipline should be imposed.
Findings Of Fact Petitioner, Department of Business and Professional Regulation, Division of Real Estate (the Department), is the state agency responsible for licensing and monitoring real estate sales associates within the state. It is charged also with the duty to prosecute administrative complaints for violations of the law by real estate sales associates. Respondent, Caroline Mohan (Ms. Mohan), is a licensed real estate sales associate who holds License No. 3087231. She was registered as a sales associate with Coral Shores Realty (Coral Shores) in Fort Lauderdale, Florida, from September 12, 2005, to March 28, 2008. At all times relevant to the charges against her, Ms. Mohan was the Coral Shores sales associate who was the listing agent for Anthony Mannarino, the seller of property located at 10530 Versailles Boulevard, Wellington, Florida (the "subject property"). At closing, Coral Shores was to have received at 2.5 percent commission and pay a portion of the commission to Ms. Mohan. Dawn Campbell and Garth Smith (the buyers) entered into a Residential Sale and Purchase Contract (the Contract) to purchase the subject property from Mr. Mannarino. Pursuant to the contract, the buyers were to deposit $10,000 in an escrow account in two $5,000 installments. The Contract was signed on or about March 12, 2007. The transactions took place electronically and Mr. Smith sent Ms. Mohan a photocopy of a $5,000 check that he was supposed to have deposited, under the terms of the contract, in the account of Closings Unlimited Title Company (Closings Unlimited), but he never sent the check to Closings Unlimited. The seller asked Ms. Mohan to have the buyer use a different escrow agent, Southeast Land Title (Southeast), and so the buyer wired $5,000.00 to Southeast, but the Contract was not amended to reflect the name of the new escrow agent. A $5,000 deposit was sent to Southeast by the buyers, but they never paid the $5,000 balance due on the deposit. Mr. Smith testified the he could not make the second payment because he gave $5,000 in cash to an employee to deposit in his account so that he could make a wire transfer, but the employee took the money. On April 3, 2007, Southeast faxed a notice to Coral Shores, with an attached letter to the buyers, informing them of its intention to respond to a demand (presumably by the seller) to release the $5,000 held in escrow related to the subject property. As a result of a complaint filed by Dorothy Hoyt, a representative of Southeast, the matter was investigated and an Administrative Complaint filed against Respondent. The Administrative Complaint alleges that Ms. Mohan personally received funds, fraudulently failed to account for those funds, and acted, without the proper license, as a broker by accepting the deposit. The Department's investigator testified that he was never able to determine if the escrow deposit was deposited at any bank, lending institution or with Dorothy Hoyt of Southeast Land Title of Boca Raton. He "believe[s] there was a wire for one deposit made, but [he] did not receive confirmation of that." Regarding his conversations with Ms. Hoyt, the investigator reported "she did state that . . . she had received - eventually received $5,000.00 and was still waiting [for] another $5,000.00 in order to have the full $10,000.00 deposit." In his report, the Department's investigator claimed that Respondent was terminated from employment by her Coral Shores broker, Ronald Cika, as a result of her misconduct in handling transactions related to the subject property. That claim was contradicted by Mr. Cika and by Ms. Mohan. Their testimony was supported by the contents of e-mails between his office and Respondent that show that she became inactive as a realtor while traveling overseas with an offer to reactivate with the same broker upon her return. Mr. Cika testified that he is aware of a lawsuit filed by Dawn Campbell related to a different address on the same street, 10526 Versailles Boulevard, but that he is not aware of any issues related to 10530 Versailles Boulevard, the subject property. Jannet Rodriguez, owner of Closings Unlimited, testified that she was never contacted and never opened a file to serve as either an escrow or closing agent for the subject property at 10530 Versailles Boulevard. She, too, is involved only in issues related to 10526 Versailles Boulevard.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED that a final order be entered by Petitioner, Department of Business and Professional Regulation, Division of Real Estate, dismissing the complaint against Respondent, Caroline Mohan. DONE AND ENTERED this 12th day of June, 2009, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of June, 2009.
Findings Of Fact Respondent Shaughnessy is a licensed real estate broker in Florida, holding license number 0079279 at all material times. He has been a real estate broker for 18 years. Respondents Conifer Consulting Group, Inc. and Conifer Realty Group, Inc. are corporations registered as real estate brokers, holding license numbers 0271201 and 0271202, respectively. In January 1992, Mr. Shaughnessy answered a want ad seeking a sales manager for single-family and condominium sales for Respondent Conifer Consulting Group, Inc. Mr. Shaughnessy received an interview with Scott Spence, the minority owner of both Conifer corporations. Following a successful interview, Mr. Shaughnessy interviewed with Bruce Houran, the majority owner of the Conifer corporations. Mr. Spence was the marketing director of the Conifer corporations. A civil engineer, Mr. Houran had provided the money for the businesses and relied on Mr. Spence's expertise in a wide variety of business matters, including the real estate operations. Following a successful interview with Mr. Houran, Mr. Shaughnessy had a final interview with Mr. Spence and Mr. Houran. At the conclusion of the third interview, the three men agreed that Mr. Shaughnessy would join the Conifer corporations as a sales manager, devoting his efforts to managing the sole salesperson working for the Conifer corporations at Bocilla Island Club in Bokeelia. In return for his efforts, the Conifer corporations agreed to pay Mr. Shaughnessy the sum of $350 weekly plus certain expenses. During the course of the interviews, Mr. Shaughnessy mentioned that he was a licensed real estate broker. The Conifer corporations were employing Ms. McClaran as their registered broker, but she had in reality only lent her license to the Conifer corporations in return for a portion of the sales and rental commissions. Following the interviews, and outside the presence of Mr. Shaughnessy, Mr. Houran expressed interest to Mr. Spence in replacing Ms. McClaran with Mr. Shaughnessy. Pursuant to this plan, Mr. Houran sent a letter to Ms. McClaran, with a copy to Mr. Spence but not Mr. Shaughnessy, terminating her employment with the Conifer corporations. The letter states that they have hired Mr. Shaughnessy as a "sales manager with a Broker's license" and adds that he will be providing his license to the Conifer corporations. Pursuant to the employment contract with Ms. McClaran, the letter gives her 90 days' notice, and she continued to earn commissions on sales contracts executed during that time. Unfortunately, no one told Mr. Shaughnessy that he was the new broker for the Conifer groups. Ms. McClaran's name continued to appear on the door to the real estate offices, even after the 90 days had expired. The Conifer corporations never had business cards printed up showing Mr. Shaughnessy as the broker, nor did Mr. Shaughnessy or anyone else hold Mr. Shaughnessy out as the broker for the companies. In late October 1992, the Conifer real estate salesperson contacted the Florida Real Estate Commission to inquire as to the status of her pending application to become a broker. She learned that the Conifer corporations were no longer properly licensed, as their license had expired in March 1992. The salesperson contacted Mr. Houran and told him about what she had learned. Mr. Houran called Mr. Shaughnessy and informed him of the licensing situation. Mr. Shaughnessy immediately began the process of placing his broker's license with Conifer Realty Group, Inc. (Mr. Houran decided not to continue to involve Conifer Consulting Group, Inc. in real estate activities.) Mr. Houran appointed Mr. Shaughnessy as an officer of Conifer Realty Group, Inc. on October 23, 1994. On November 4, 1992, Mr. Shaughnessy filed with Petitioner a Request for Change of Status to effect the necessary change. Only when Mr. Shaughnessy filed the paperwork with Petitioner did his rate of compensation change. His old pay rate of $350 weekly was replaced by a new arrangement in which he received an equity interest in future developments created by either Conifer corporation. In late October or early November 1992, Mr. Shaughnessy also began the process of creating an escrow account for Conifer Realty Group, Inc. Previously, all escrow monies had been deposited in the general operating account of the corporation. No one performed monthly reconciliations of escrow monies, although no monies were ever lost. Working as quickly as possible to transfer sales and rental escrow monies into the new account, Mr. Shaughnessy received the first bank statement for the account around December 6, 1992, performed the required reconciliation, and determined that the escrow account was in good order and balanced. By the time of an inspection from one of Petitioner's investigators on December 4, 1992, there was no sign on the door of the real estate office at Bocilla Island Club. However, at that time, neither Conifer corporation had any relationship with the developer of the units, nor was either Conifer corporation conducting business of any sort out of this office. The salesperson who had discovered the problem had resigned, had formed a new company, had assumed Conifer's responsibilities for sales and rentals, and was using the old office at the Bocilla Island Club. Until the time of the filing with Petitioner in November, Mr. Shaughnessy was never aware, nor could he have reasonably been aware, that his broker's license was to be used to qualify the Conifer corporations. Communications had broken down between Mr. Houran and Mr. Spence or Mr. Spence and Mr. Shaughnessy. In any event, Mr. Shaughnessy never agreed to place his license with either Conifer corporation until October 1992. At all material times during which Mr. Shaughnessy's broker's license was placed with the Conifer corporations, the escrow account was maintained and properly reconciled. There is no evidence that the signage was improper at anytime, except possibly in connection with the real estate office operated by the former salesperson. However, the Conifer corporations are liable for the substantial period of time during which they operated without an escrow account. Although no money was lost or unaccounted for, management's casual attitude toward serious legal responsibilities is manifest in the sloppy way that the Conifer companies handled the transition between brokers and the improper relationship that they earlier maintained with Ms. McClaran. As a result of her involvement in the matter, Ms. McClaran, who was an inexperienced broker and personal friend of Mr. Spence, had her broker's license suspended for 90 days. It is a matter of some mitigation that Mr. Spence is no longer involved with either Conifer corporation and that Mr. Houran reasonably expected that his noninvesting co-owner would provide something of value to the companies--namely, his expertise in real estate matters, including licensing. The absence of injury to the public, although irrelevant to the issue of liability, is another factor in mitigation, as is the quick action taken by the corporations, through Mr. Shaughnessy and at Mr. Houran's direction, to correct the situation as soon as it was brought to their attention.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the Administrative Complaint against William P. Shaughnessy; finding Conifer Realty Group, Inc. and Conifer Consulting Group, Inc. guilty of failing to maintain an escrow account and operating as a broker without holding a valid and current license as a broker; imposing an administrative fine of $4000 against the Conifer companies, jointly and severally; and issuing a reprimand against both companies. ENTERED on April 20, 1994, in Tallahassee, Florida. ROBERT E. MEALE 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 on April 20, 1994. APPENDIX Rulings on Petitioner's Proposed Findings 1-8: adopted or adopted in substance. 9: rejected as unsupported by the appropriate weight of the evidence. 10-12: adopted or adopted in substance. 13: rejected as unsupported by the appropriate weight of the evidence and subordinate except for fact that there was no escrow account, which is adopted. 14-15: adopted or adopted in substance. 16: to the extent of implication that the office was that of a Respondent, rejected as unsupported by the appropriate weight of the evidence. Rulings on Respondent's Proposed Findings 1-8 and 10: adopted or adopted in substance. 9: the state of mind of Respondents, as well as their degree of culpability, has been addressed in the recommended order. COPIES FURNISHED: Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Steven W. Johnson BPR, Division of Real Estate 400 West Robinson Street N308 Orlando, Florida 32802 Leonard P. Reina Forsyth, Brugger 600 Fifth Avenue, South #210 Naples, Florida 33940
