The Issue The issue in this case is whether Respondent, Lee H. Davis, committed the offenses alleged in an Administrative Complaint issued against him on August 16, 1999.
Findings Of Fact Petitioner, the Department of Business and Professional Regulation, Division of Real Estate (hereinafter referred to as the "Division"), is an agency of the State of Florida. The Division is charged with the responsibility for, among other things, regulating the practice of persons holding real estate brokers' and real estate salespersons' licenses in Florida. Section 20.165, and Chapters 455 and 475, Florida Statutes. Respondent, Lee H. Davis, is and was at all times relevant to this matter licensed as a real estate broker in Florida, issued License Number 0186063. The last license issued was as an involuntary inactive broker, c/o 815 New Waterford Drive, No. 204, Naples, Florida 34104. On or about August 24, 1995, Respondent executed a form 400.5 and submitted it to the Division to register as a salesperson with Sentry Realty and Property Management, Inc. ("Sentry"). At all times relevant to these proceedings, Respondent was registered with the Division as employed by Sentry. On or about September 7, 1995, Respondent facilitated a contract for sale and purchase (the "contract") between Robert Trindle as buyer and John Petracelli as seller/builder for property described as Hallandale Park, Plat Book 12, Page 37, Block 37, Lots 6,7,8, a/k/a approximately 2801 North East 214 Street, North Miami Beach, Florida. Mr. Trindle testified that he intended to purchase a townhouse to be built by Mr. Petracelli as part of a project to include 40 to 50 townhouses. The contract provided that a $3,900 deposit was to be held by "Lee H. Davis Escrow Agent." Mr. Trindle gave Respondent two checks totaling $3,900, as the earnest money deposit on the purchase price of $130,000. The first check, dated October 9, 1995, was for $1,000. The second check, dated November 3, 1995, was for $2,900. The checks were made out to "Lee H. Davis-- Escrow." Also noted on the checks was "Davena Group Inc.," which Mr. Trindle understood to be Respondent's real estate company. Each check was negotiated by Respondent within a week of its receipt. At the time of this transaction, Respondent's registered broker was John Brouillette of Sentry. Respondent did not place the escrow deposit with Mr. Brouillette, who testified that he knew nothing of the transaction at the time it occurred and never saw the contract. Respondent represented to Mr. Trindle that he would maintain the escrow deposit as broker during this transaction. Mr. Trindle did not give Respondent permission to transfer the escrow deposit to the builder/seller, Mr. Petracelli. Correspondence from Respondent indicated that he did turn the escrow deposit over to Mr. Petracelli, without informing Mr. Trindle. Mr. Petracelli never built the promised townhouses. Rather, he left the country, absconding with Mr. Trindle's escrow deposit along with monies provided by other purchasers and/or investors in the project. Mr. Trindle attempted to contact Respondent regarding the status of his escrow deposit, but was unable to reach him prior to the filing of his complaint with the Division. As of the date of the hearing, the earnest money deposit had not been returned to Mr. Trindle.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Petitioner finding that Respondent has violated Subsections 475.25(1)(b), 475.25(1)(d)1, 475.25(1)(e), 475.25(1)(k), and 475.42(1)(d), Florida Statutes, as alleged in the Administrative Complaint issued against Respondent, and that Respondent's real estate license be revoked. DONE AND ENTERED this 13th day of March, 2001, in Tallahassee, Leon County, Florida. ___________________________________ LAWRENCE P. STEVENSON 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 13th day of March, 2001. COPIES FURNISHED: Sunia Y. Marsh, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Suite N-308A Orlando, Florida 32801-1772 Lee H. Davis 815 New Waterford Drive, No. 204 Naples, Florida 34104 Herbert S. Fecker, Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact At all times material here to, Respondent has been a licensed real estate broker under the laws of the State of Florida, having been issued license number 0044295. On or about June 4, 1981, Respondent, representing himself to Doris Colon as the duly appointed, qualified and acting broker for Alvin Katz if, and representing that Alvin Katzif was the owner of certain real property located at 636-638 Southwest Eighth Avenue, Miami, Florida, accepted from Colon a written offer to purchase said property. Colon's offer was accompanied by a deposit of $5,000, receipt of which was acknowledged by Respondent on or about June 6, 1981. That deposit was delivered to the Respondent, as broker, to be held by him in escrow under the terms of the Deposit Receipt. The vendor named in the Deposit Receipt Agreement Alvin Katzif, was unable to sell the property in accordance with the terms expressed in that Deposit Receipt Agreement. Therefore, the sale was never consummated. Approximately one month after signing the Deposit Receipt Agreement, Alvin Katzif advised Respondent that he did not hold title to the property and that there were numerous and diverse claims to the property. Respondent never placed Colon's $5,000 deposit in an escrow account but rather placed the deposit in a personal account. Colon, through counsel, made a demand for the $5,000 earnest money deposit. Respondent failed to provide Colon with an accounting or delivery of her deposit until such time as she obtained a civil judgment against him. At no time did Respondent request an escrow disbursement order or submit the matter to arbitration or seek interpleader. Respondent converted Colon's $5,000 earnest money deposit to his own use. On or about the same day that Colon gave Respondent her $5,000 deposit made payable to him, Respondent gave Colon a check for $10,000 made payable to her. The $10,000 paid to Colon was not a loan to her and had no relation to the Katzif/Colon transaction. Rather, the $10,000 was a deposit toward the purchase of a duplex owned by Colon in which Respondent was then living as a tenant and which he desired to purchase from Colon. That transaction was completed, and the closing took place on August 12, 1981. The closing statement reflects credit given to Respondent of $10,000 toward the purchase price of the duplex he bought from Colon. The duplex Colon sold to Respondent is located at 2931-41 Southwest Sixth Street, Miami, Florida. When Respondent gave Colon his $10,000 deposit toward the purchase price of the duplex which he bought from her, he took her to friends of his at Intercontinental Bank, where she opened an account. She then wrote the $5,000 check out of that account, which check was the deposit which accompanied her offer on the property she wished to purchase from Katzif. In other words, the only relationship between the $10,000 check given to Colon by Respondent and the $5,000 check given to Respondent by Colon is that the fact that Respondent gave Colon a $10,000 down payment on the duplex he was purchasing from her gave Colon the opportunity to make an offer on the Katzif property using $5,000 of the $10,000 as a deposit on the offer to Katzif.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding Respondent guilty of the allegations contained in the Administrative Complaint and revoking his real estate broker license number 0044295. DONE and RECOMMENDED this 10th day of August, 1983, in Tallahassee, Leon County, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of August, 1983. COPIES FURNISHED: Bruce D. Lamb, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Martin I. Carlin, Esquire 3000 Biscayne Boulevard, Suite 402 Miami, Florida 33137 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff, Executive Director Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 William M. Furlow, Esquire Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802
The Issue Whether the Respondent's real estate license in Florida should be disciplined because the Respondent committed fraud, misrepresentation, dishonest dealing by trick, scheme or device, culpable negligence or breach of trust in a business transaction in violation of Subsection 475.25(1)(b), Florida Statutes. Whether the Respondent's real estate license should be disciplined because the Respondent failed to account and deliver funds in violation of Subsection 475.25(1)(b), Florida Statutes.
Findings Of Fact Petitioner is a state 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 the rules promulgated pursuant thereto. Respondent Joyce A. Wolford is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0313643 in accordance with Chapter 475, Florida Statutes. The last license issued was as a broker, t/a Blue Ribbon Realty, 1400 N. Semoran Boulevard, Orlando, Florida 32807. As To Counts I and II Diane Ortiz was employed by Respondent Joyce Wolford to perform various duties, including operating the computer and taking messages. During her employment with Respondent, Diane Ortiz completed a contract for sale and purchase of certain real property which was signed by Jane Evers as buyer. In conjunction with the Evers contract, Ortiz did receive an earnest money deposit in the form of a cashier's check for the sum of $1000 and made payable to Blue Ribbon Realty. The earnest money deposit check given by Evers was turned over to Respondent by Ortiz. The endorsement on the Evers deposit check was Blue Ribbon Realty. The sale was contingent on Evers' assumption of the existing mortgage. The mortgagee did not approve Evers, and the transaction did not close. Evers contacted Ortiz and Respondent on several occasions and demanded return of her $1,000 deposit. Evers met personally with Respondent and demanded return of the $1,000 deposit. Evers sent a written demand for the return of the deposit by certified mail to Respondent on August 9, 1989. Despite Evers repeated demands for return of the $1000 deposit, Respondent has not returned any money to Evers. Jane Evers filed a lawsuit against Respondent Joyce Wolford in the County Court for Orange County, Florida, for the sum of $1,000 and court costs. A Final Judgment in the civil lawsuit was rendered for Jane Evers against Joyce Wolford for $1,000 principal plus $73 in court costs on March 15, 1990. Respondent has not satisfied the Final Judgment awarded to Evers or any portion thereof. As To Counts III and IV Anthony Pellegrino did enter a contract to purchase certain real property known as Lakefront Motel near Clermont, Florida. Respondent Joyce Wolford did negotiate the contract. Pellegrino did give Respondent a $5,000 earnest money deposit in the form of a cashier's check to secure the contract for purchase of Lakefront Motel. The cashier's check given as a deposit by Pellegrino was endorsed to Blue Ribbon Realty account #0880510063. The Lakefront transaction did not close, and Pellegrino demanded that Respondent return the $5,000 earnest money deposit on several occasions. Respondent has not returned the $5,000 deposit or any portion thereof to Pellegrino. The $5,000 earnest money deposit for the Lakefront contract was transferred to a mortgage company for a transaction involving a condominium that Pellegrino sought to purchase. Said condominium transaction did not close. In neither case did Respondent request the Florida Real Estate Commission to issue an escrow disbursement order. On July 2, 1990, the Florida Real Estate Commission entered a Final Order in the case of Department of Professional Regulation v. Joyce Wolford, finding Respondent guilty of failure to account and deliver a commission to a salesman and imposing a reprimand and an administrative fine of $1000.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Respondent be found guilty of having violated Subsections 475.25(1)(b) and (d), Florida Statutes (1989), as charged in Counts I, II, III and IV of the Administrative Complaint. It is further recommended that Respondent's real estate license be suspended for two years, imposing an administrative fine in the amount of $1,000 and, upon completion of the suspension period, placing Respondent on probation for a period of two years with such conditions as the Commission may find just and reasonable. DONE AND ENTERED this 8th day of October, 1990, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of October, 1990. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's proposed findings of fact: Accepted in substance: Paragraphs 1,2,3,4,5,6,9,10,11,12,13,14,15,16,1,7,18,19,20,21,22,24 (in part), 25 Rejected as cumulative or irrelevant: 7,8,23,24 (in part) Respondent's proposed findings of fact: Accepted in substance: Paragraph 1 Rejected as against the greater weight of the evidence: Paragraph 2,3 COPIES FURNISHED: Janine B. Myrick, Esquire Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32801 Raymond Bodiford, Esquire 47 East Robinson Street Orlando, FL 32801 Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32801 Kenneth Easley General Counsel Department of Professional Regulation Northwood Centre 1940 North Monroe Street Suite 60 Tallahassee, FL 32399-0750
Findings Of Fact The Respondent, Robert Watson, Jr., is a real estate broker-salesman, having been issued license Number 0093690. He resides and has his business in Jacksonville, Florida. On or about September 1, 1978, the Respondent negotiated and drafted a contract for sale of a certain piece of residential real estate, the purchaser for which was one Mr. Lacy Cole. The Respondent was Mr. Cole's broker in that transaction. The Respondent informed Mr. Cole that he would have to pay a two- hundred-dollar deposit as prospective buyer pursuant to the deposit receipt, sales contract agreement drafted by the Respondent. Mr. Cole did not pay the entire two-hundred-dollar deposit, but he did pay the Respondent sixty-five dollars. The closing was held October 20, 1978, at which time Mr. Cole's attorney directed the Respondent to pay Mr. Cole a two-hundred-dollar refund as the contract for sale provided that financing would be through the Veterans Administration and that in such a Veterans Administration sponsored transaction the buyer is precluded from paying closing costs. Mr. Cole cashed the two- hundred-dollar check in good faith and later was informed that the Respondent had stopped payment on it, which resulted in Mr. Cole having to make the check good. The Respondent has failed to recompense Lacy Cole for the sixty-five- dollar deposit he had already paid pursuant to the contract for sale drafted by the Respondent. Mr. Watson has also never repaid the two hundred dollars which Mr. Cole had to expend in order to provide payment on the two-hundred-dollar check on which the Respondent had stopped payment. In response to the Petitioner's demonstration that the Respondent had obligated Mr. Cole for a two-hundred-dollar "binder or closing costs" which he was not obligated to pay under Veterans Administration policy, the Respondent stated that he wrote the contract with the two-hundred-dollar binder with the understanding that Cole would pay a portion of it at the first of each month until it was paid and that he only received a total of sixty-five dollars from Cole. The seller agreed to sell the property to Mr. Cole anyway. The Respondent maintained that he merely told Mr. Cole at the closing that he would write him a two-hundred-dollar check and deliver it to him at closing with the understanding that Cole would deliver it back to him immediately afterward to keep from confusing the attorney." The Respondent, however, failed to refute the showing by the Petitioner that the Respondent attempted to obligate that purchaser to pay two hundred dollars in "closing costs" which he was not legally obligated to pay and for which the seller of the property was responsible in the first place. The Respondent adduced no evidence contrary to that of Petitioner which established that, after being informed by the attorney that Mr. Cole was not responsible for any deposit or closing costs, the Respondent still retained the sixty-five dollars paid him as earnest money by Mr. Cole and, further, that after stopping payment on Cole's refund check, causing Mr. Cole to incur two hundred dollars additional expense for which he was not obligated, the Respondent failed to recompense Cole. There is thus no question that the Respondent misrepresented to his client, Mr. Cole, the obligations and expenses Mr. Cole would have to incur in order to purchase the property and thus, in effect, wrongfully obtained two hundred sixty-five dollars from Mr. Cole. On or about September 16, 1978, Mrs. Joanne Wesley deposited a ten- dollar check with the Respondent as a partial deposit for a down payment on a home. On or about September 20, 1978, she deposited an additional one-hundred- dollar check with the Respondent as further deposit on the same contract for sale and purchase which the Respondent had at that time not yet drafted. The Respondent never made an appropriate deposit of the above referenced checks in his escrow account, but, instead, cashed them for his personal use. On or about October 25, 1978, the contract for sale and purchase was finally drafted by the Respondent. On approximately December 4, 1978, Mrs. Wesley deposited with the Respondent an additional check for eight hundred fifty dollars as the final installment of her deposit money with regard to the proposed purchase of the home. On December 29, 1978, Mrs. Wesley learned that she had failed to qualify for FHA financing with regard to the above-referenced contract and, after looking at another home which was not to her liking offered to her by the Respondent as a "replacement dwelling," finally requested the refund of her total deposit of nine hundred sixty dollars. The Respondent then requested Mrs. Wesley to wait until January 2, 1979, for that refund and on January 2, 1979, tendered to her four hundred dollars cash as partial reimbursement. On January 3, 1979, the Respondent tendered to her an additional three hundred dollars cash and drew and delivered to her his escrow check, post-dated to January 10, 1979, in the amount of two hundred fifty dollars. That escrow account check was returned for insufficient funds. On February 1, 1979, Mrs. Wesley's attorney made demand on the Respondent for payment of the two hundred fifty dollars outstanding, represented by the invalid check. On approximately February 3, 1979, the Respondent ultimately paid the two hundred fifty dollars due Mrs. Wesley. Thus, at that point the Respondent had refunded nine hundred fifty dollars of the nine hundred sixty dollars in deposit money due Mrs. Wesley. The entire refund had become due on December 29, 1978, when it was learned that she could not qualify for FHA financing with regard to the proposed purchase, which qualification for financing was a condition precedent to performance of the contract. In his defense the Respondent stated that he attempted to arrange the purchase of another dwelling for Mrs. Wesley upon learning that she could not qualify for financing on the subject property and that he retained her deposit money in his escrow account for that reason and ultimately repaid it to her, although after over a month's delay. The Respondent contended that he had opened the subject account as a business account when he was doing appraisal work and had not considered it to be an escrow account and "did not know when they switched it over to escrow." The Respondent did acknowledge that he had used this escrow account as his business account and commingled personal and business operating funds in it and made withdrawals from time to time for business and personal reasons. With further regard to the Cole transaction, the Respondent contended that he felt it was customary for a veteran to pay two hundred dollars closing costs and even when he learned the veteran was not obligated to pay closing costs in such a transaction, that he still felt it was "customary as earnest money" even though the seller obviously was obligated to pay closing costs. The Respondent also testified that as of the time of the hearing and for an indeterminant period of tinge before the hearing, he had terminated active practice of real estate brokerage and was mostly performing appraisal work. There is thus no question that the Respondent informed Mr. Cole that he was obligated to pay two hundred dollars "earnest money" or "closing costs" and that his actions forced Mr. Cole to incur the two-hundred-sixty-five dollar expense described above, even after the Respondent was informed by the closing attorney that the purchaser was not obligated for those expenses. There is no question with regard to the Wesley transaction that he delayed an inordinate amount of time in refunding her deposit money after the condition of financial qualification for the purchase did not occur, and, further, that he commingled these purchaser deposit funds in his escrow account with personal and business funds and used a portion of them for personal purposes.
Recommendation Having considered the foregoing findings of fact and conclusions of law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is RECOMMENDED that the license of Robert Watson, Jr., as a real estate broker in the State of Florida be REVOKED. DONE AND ENTERED this 1st day of February, 1982, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of February 1982. COPIES FURNISHED: Barry S. Sinoff, Esquire 2400 Independent Square One Independent Drive Jacksonville, Florida 32202 Robert Watson, Jr. 9527 Abedare Avenue Jacksonville, Florida 32208 Frederick B. Wilsen, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Samuel Shorstein, Secretary Department of professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 C. B. Stafford, Executive Director Board of Real Estate Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802
Findings Of Fact At all times material hereto, Respondent Robert Marriott has been a licensed real estate broker/salesman under the laws of the State of Florida, trading as Marriott Realty. In February of 1980, in his capacity as a real estate broker/salesman, Respondent obtained an offer to purchase commercial property in Miami from Orlando Villacis, a resident of Ecuador, as purchaser, for a total purchase price of $500,000. In conjunction with the offer, Villacis paid a $20,000 earnest money deposit to be held by Marriott Realty in escrow under the terms of the offer. Villacis' deposit check in the amount of $20,000 was deposited into the Marriott Realty escrow account on February 22, 1980. By March 11, 1980, Villacis' $20,000 had been withdrawn, leaving an escrow account balance of $40. This fact was never reported to Villacis. Having heard nothing definite from Respondent with regard to the offer, and because he spent most of his time out of the country, Villacis engaged the services of attorney Rafael Penalver. Prior to July 1980, Penalver contacted the Respondent and inquired as to the status of the offer. Each time, Respondent told him that the seller was still considering the offer. In July of 1980, Respondent told Penalver that the $500,000 offer had been rejected by the seller and recommended that Villacis present an offer for $570,000. Penalver prepared the offer in the amount of $570,000, again calling for a $20,000 earnest money deposit, which Penalver and Villacis assumed was still in the Marriott Realty escrow account. Receiving no response from Respondent on the second offer, Penalver attempted to contact Respondent by telephone on numerous occasions. When Penalver was successful, Respondent told him that the seller was reviewing the offer. In early September 1980, Respondent advised Penalver that the $570,000 offer had been rejected by the seller. By letter dated September 11, 1980, Penalver raised the offer to $600,000, set a deadline of September 19 for the acceptance of the offer, and directed Respondent to return the $20,000 immediately should the offer not be accepted. After September 19, having heard nothing from the Respondent, Penalver called him, at which time Respondent advised that the offer was being considered by the seller. Penalver then wrote a letter dated October 7, 1980, to Respondent demanding that Respondent deposit the $20,000 into Villacis' account. Again hearing nothing from Respondent, Penalver on numerous occasions attempted to contact him by telephone in order to again demand the immediate return of the $20,000 deposit. Being unsuccessful, Penalver wrote the Respondent on November 20, 1980, and January 22, 1981, both times demanding the return of the $20,000 earnest money deposit. After the letter of January 22, 1981, Respondent agreed to meet with Penalver in Penalver's office. On February 2, 1981, the Respondent and his wife met with Penalver. During that meeting, Respondent advised Penalver that the $20,000 was no longer available and that he and his wife had used the money to make mortgage payments and cosmetic improvements on their personal residence. Respondent challenged Penalver to sue him to get the money back. After discussing Respondent's position with Villacis, Penalver filed a civil action for return of the $20,000. In his Answer to the Complaint filed in that litigation, Respondent admitted that he had used the $20,000 deposit for mortgage payments and other personal household expenses and for payment of his IRS tax deficiency. Villacis obtained a Final Judgment in the civil action in the amount of $20,000 plus interest and costs on October 6, 1982. Respondent testified that he did not return the $20,000 earnest money deposit because, in approximately October 1980, Villacis verbally agreed to loan the $20,000 to Respondent. Villacis strongly denied making any offer of a loan to Respondent. The purported loan agreement would have occurred after Penalver had twice written Respondent regarding immediate return of the $20,000 and seven months after the $20,000 had disappeared from the escrow account. Further, after Penalver sent his November demand letter, Respondent wrote Villacis in December of 1980 asking that Villacis consider loaning Respondent the $20,000 in exchange for an unrecorded mortgage on Respondent's personal residence. Clearly, Respondent's testimony is not credible. As of the date of the formal hearing in this cause, the Final Judgment in favor of Villacis and against Respondent remained unpaid and Respondent had still not returned to Villacis the $20,000 earnest money deposit.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding Respondent guilty of the allegations contained within the Administrative Complaint filed against him and revoking his license as a real estate broker/salesman. DONE and RECOMMENDED this 30th day of April, 1984, in Tallahassee, Leon County, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of April, 1984. COPIES FURNISHED: Tina Hipple, Esquire Division of Real Estate 400 West Robinson Street Orlando, Florida 32801 David I. Schlosberg, Esquire 525 North 27th Avenue, Suite 100 Miami, Florida 33125 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff, Executive Director Division of Real Estate 400 West Robinson Street Orlando, Florida 32801
Findings Of Fact On May 18, 1978, the Respondents, C. H. Chapman and Chapman Realty Corporation (hereafter Respondents or Chapman) through a registered real estate salesman in the employ of the Respondents, negotiated and obtained a sales contract between Gerry and Ada Ball, as buyers or purchasers and Joseph Winston, as seller, for the sale of property located at 305 Ben Avon Drive, Tampa, Florida. Pursuant to the terms of the sales contract, the Respondents' salesman received a $1,000.00 deposit from the purchasers which was placed in the Respondents' trust account on May 5, 1978. Prior to the date of the scheduled closing, the purchasers inspected the property and requested the seller to make certain repairs and/or replacements to rectify defects which included wood borer damage, structural roof problems and an inoperable pool heater. The seller refused to make the repairs and/or replacements demanded and the offer was formally withdrawn by the purchasers on July 28, 1978, via letter to Chapman Realty requesting return of their $1,000.00 earnest money deposit. Prior to formal withdrawal of the offer, verbal demands were made by Mr. Hall upon Chapman Realty for the return of his deposit. The demand for repairs and/or replacements and withdrawal of the offer was predicated on a provision of the sales contract which provided: Buyers themselves, or at their expense may have property inspected to ensure that there are no structural, electrical or plumbing defects. If any are found, buyers have the right to withdraw their offer and have all of their earnest deposit refunded to them. Thereafter, Respondent Chapman disbursed the $1,000.00 as follows: $350.00 via check dated September 6, 1978, made payable to Robert A. Carbonell, an attorney-at-law in Florida. $500.00 via check dated January 9, 1979, made payable to purchasers Hall. $150.00 via check dated January 10, 1979, made payable to Robert A. Carbonell. Prior to any disbursal the Respondent Chapman discussed with Mr. Hall the possibility of placing the escrowed funds with the Clerk of the Circuit Court. Respondent Chapman contacted his attorney, Robert Carbonell, regarding the conflicting demands of the parties. Mr. Carbonell was introduced to Mr. Hall by the Respondent over the telephone. The Respondent met with Mr. Carbonell on a regular basis since Mr. Carbonell was employed by the Respondent to handle real estate transactions involving Chapman Realty. Respondent was never authorized by the purchasers to pay a fee to Mr. Carbonell directly from the $1,000.00 deposit held in trust. The $500.00 was paid directly by the Respondent to Attorney Carbonell from the Chapman Realty escrow account without oral or written authorization of the seller or the purchasers and in the absence of a settlement agreement between the Hall's and Mr. Winston. Although Mr. Carbonell and the Respondent Chapman believed that Mr. Carbonell was representing Mr. Hall, neither Mr. Hall nor the seller, Mr. Winston, were under the same impression. Both Mr. Hall and Mr. Winston believed that Mr. Carbonell was representing the Respondents rather than Mr. Hall. Such an impression was reasonable in light of Mr. Carbonell's regular employment by the Respondent, the absence of a written agreement between Mr. Hall and Mr. Carbonell coupled with the lack of discussion or agreement concerning fees and the potential conflicting positions which existed between the parties and the Respondents. If any fee were due to Attorney Carbonell for his efforts in securing the return of the $1,000.00 deposit, this was a matter between Mr. Carbonell and Mr. Hall. Neither Mr. Carbonell nor the Respondent Chapman discussed the amount of the fee with the Halls. Mr. Carbonell arrived at the amount he thought was reasonable, $500.00, and Respondent Chapman diverted such amount to Mr. Carbonell from the Respondent's escrow account.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Respondents', C. H. Chapman and Chapman Realty Corporation licenses to practice real estate be suspended until restitution is made to Gerry and Ada A. Hall, as follows: $500.00 plus interest at 12 percent accrued since July 28, 1978, and Interest on $500.00 accrued at 12 percent for the period from July 28, 1973 until January 9, 1979. Respondents' licenses to be reinstated upon submission and acceptance by the Board of Real Estate of satisfactory evidence of payment. DONE and ORDERED this 7th day of April, 1981, in Tallahassee, Florida. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of April, 1981. COPIES FURNISHED: Frederick H. Wilsen, Esquire Staff Attorney Department of Professional Regulation Staff Attorney 2009 Apalachee Parkway Tallahassee, Florida 32301 Dale W. Vash, Esquire DIXON, LAWSON & BROWN 620 Twiggs Street Tampa, Florida 33602
The Issue An Administrative Complaint dated June 20, 1997, alleges that the Respondents, Dessie B. Castell and A. Plus Service Network Realty, Inc., violated certain provisions of Chapter 475, Florida Statutes, and Rule 61J2-10.032(1), Florida Administrative Code, by failing to notify the Florida Real Estate Commission within 15 business days of a good faith doubt as to appropriate disbursement of trust funds in an escrow account, and by failing to maintain those trust funds until disbursement was properly authorized. The issues for determination are whether those violations occurred and, if so, what discipline should be imposed upon the licensees.
Findings Of Fact Respondent Dessie B. Castell is, and was at all material times, a licensed real estate broker in Florida, having been issued license number 0342283 in accordance with Chapter 475, Florida Statutes. Ms. Castell is owner, president and qualifying broker of A. Plus Service Network Realty, Inc., which corporation is registered and licensed in accordance with Chapter 475, Florida Statutes, at 901 Mock Avenue, Orlando, Florida. Ms. Castell negotiated a contract for sale and purchase of a home at 638 18th Street in Orlando, Florida. Rosemary Jackson was the proposed buyer and Valerie Crane, trustee, was the seller. At the time of the contract dated June 26, 1996, Ms. Castell had already been working with Rosemary Jackson and held a $500.00 escrow deposit from Ms. Jackson in her broker’s escrow account. Also, at the time of the contract on June 26, 1996, Ms. Jackson had been pre-qualified for an FHA loan through ESD Lending Corporation, Inc. The contract for sale and purchase between Ms. Jackson and Ms. Crane established July 2, 1996, as the closing date. Ms. Jackson liked the house and needed to move in quickly. The contract failed to close on July 2, 1996. Both Ms. Jackson and Ms. Castell understood that the ESD lending Corporation did not have an approved appraisal required by FHA for the loan. There was an appraisal done on the property for a previous prospective buyer and Ms. Crane furnished that appraisal to ESD before July 2, 1996. Ms. Crane’s own testimony was confused and conflicting as to whether the appraisal she furnished was approved. Ms. Jackson’s and Ms Castell’s testimony was clear and credible that they were never informed that the appraisal was approved, and Ms. Castell did not receive the HUD settlement papers required for closing. Soon after July 2, 1996, someone came to Ms. Jackson’s workplace identifying himself as a representative of Ms. Crane and offering to extend the closing and to provide a refrigerator and some other items. Ms. Jackson was suspicious of this person as she felt that he was trying to circumvent the mortgage company staff with whom she had been dealing. Ms. Jackson had looked at another house earlier that she did not like as well as the house offered by Ms. Crane; but since she needed to move quickly, Ms. Jackson told Ms. Castell to transfer her escrow deposit to a contract on this prior house. Ms. Castell did that on July 5, 1996, and that contract closed shortly thereafter. On July 6, 1996, Ms. Crane faxed to Ms. Castell a letter offering to add the refrigerator and to extend closing to the next Friday. The letter asked that the offer be accepted by 5:00 p.m. on that same day, the 6th or if not accepted, that the $500.00 deposit be released to Ms. Crane. When she received no response, Ms. Crane sent another letter to Ms. Castell on July 13, 1996, demanding the $500.00 escrow deposit, reiterating that Ms. Jackson forfeited her deposit when she did not close on the property after qualifying for the loan and reminding Ms. Castell of her obligation as escrow agent pursuant to Section 475.25, Florida Statutes, in the event of a dispute over the deposit. Ms. Crane sent a copy of her letter to the Florida Real Estate Commission. Ms. Castell and her company did not notify the Florida Real Estate Commission regarding a dispute over the $500.00 escrow deposit. She felt that it was Ms. Crane’s failure to provide an approved appraisal that caused the contract to expire on July 2, 1996, and thereafter, that she and the buyer were entitled to transfer the funds to another contract.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Department of Business and Professional Regulation enter a final order dismissing the administrative complaint in this case. RECOMMENDED this 16th day of February, 1998, in Tallahassee, Leon County, Florida. MARY CLARK 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 16th day of February, 1998. COPIES FURNISHED: Laura McCarthy, Esquire Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Dean F. Mosley, Esquire McCrary & Mosley Suite 211 47 East Robinson Street Orlando, Florida 32801 Henry M. Solares, Division Director Department of Business and Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Lynda L. Goodgame, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact Respondent Amy Ostrau is a registered real estate salesman having been issued License No. 0144468 by the Board of Real Estate. The last known address of the Respondent is c/o Ann Ford, Inc., 7370 Northwest 5th Street, Ft. Lauderdale, Florida 33317. The Respondent, at all material times alleged herein, was a registered real estate salesman employed by Ann Ford Realty, Inc. On or about March 29, 1980, Respondent obtained a written deposit receipt and contract for sale and purchase from a prospective purchaser, H. Steven Hill. The contract indicated that the selling broker Ann Ford, Inc., broker, held an initial deposit of $500.00. (Respondent's Exhibit 1) The $500.00 deposit check was received by Respondent from a friend of Hill because Hill did not have a check available at that time. Respondent placed the deposit check in her office file and it remained there until Friday, April 11, 1980 when a second deposit check, in the amount of $17,750.00, was presented by the buyer. At this time, the first deposit check was returned to Hill by the Respondent. Respondent presented the second deposit check to her broker and it was then deposited by mail into the broker's escrow account on April 15, 1980. The check evidently was credited to the broker's account on April 15, 1980. (The response to request for admissions refers to the pertinent month as August, which is obviously in error.) On or about April 17, 1980, and as a result of a request by Hill, a building inspection was conducted on the house. The inspection disclosed several deficiencies in the house and the estimated repair cost for the deficiencies exceeded the amount specified in the contract for repairs. Payment of the second deposit check in the amount of $17,750.00 was stopped on April 21, 1980 by Hill, and, as a result, there was no earnest money deposit remaining in the escrow account. Respondent's husband, an attorney, Norman M. Ostrau, represented the purchaser, H. Steven Hill, in the transaction. Respondent was asked by Hill to hold the $500.00 earnest money deposit check until the contract was accepted and signed by the sellers. Pursuant to these instructions, Respondent failed to turn over the deposit check to her employer immediately upon receipt of the same. A civil action for damages is pending in the Broward County Circuit Court brought on behalf of the sellers of the property against the buyer and broker, with counterclaim by the buyer. (Respondent's Exhibit 2)
Recommendation That the Board of Real Estate suspend the license of Respondent, Amy Ostrau, for a period of thirty (30) days pursuant to Subsection 475.25(1)(k), Florida Statutes. DONE and ENTERED this 4th day of March, 1982, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of March, 1982. COPIES FURNISHED: Michael J. Cohen, Esquire 2715 East Oakland Park Boulevard, Suite 101 Fort Lauderdale, Florida 33307 Michael Rifkin, Esquire OSTRAU & RIFKIN 8751 West Broward Blvd. Suite 302 Plantation, Florida 33324 Mr. C. B. Stafford Executive Director Board of Real Estate Post Office Box 1900 Orlando, Florida 32801 Frederick H. Wilsen, Esquire Assistant General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue The issue is whether Respondents' real estate licenses should be disciplined on the ground that Respondents allegedly violated a rule and various provisions within Chapter 475, Florida Statutes, as charged in the Administrative Complaint.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: When the events herein occurred, Respondents, Edward D. Armbruster and Colleen Michele Armbruster, were licensed real estate brokers having been issued license numbers 0002159 and 0362890, respectively, by Petitioner, Department of Business and Professional Regulation, Division of Real Estate (Division). Respondents served as qualifying brokers and officers of Respondent, Armbruster Realty, Inc., a corporation registered as a real estate broker and located at 1031 West Nelson Avenue, DeFuniak Springs, Florida. The corporation holds license number 0211855, also issued by the Division. On July 10, 1996, Gerald and Joyce Singleton, who had just relocated to California, entered into a contract with James B. and Joyce Patten to sell their single-family residence located on Madison Street in the City of Freeport, Florida, for a price of $78,000.00. The contract called for the Pattens to pay $1,000.00 as an earnest money deposit, to be held in escrow by Respondents. The contract further provided that "[c]losing shall be within 30 days (more or less) after acceptance of this contract," and that "[i]n the event that buyer defaults and deposit is forfeited, it is agreed said deposit shall be divided equally between seller and broker." The transaction was handled by Geraldine Dillon (Dillon), a salesperson in Respondents' office, who is now retired. Because the Pattens had recently moved to Walton County from Washington State, and they were temporarily living with a relative in a mobile home, the time for closing was of the essence. Accordingly, the Pattens inserted into the contract a provision requiring that a closing be held within "30 days (more or less)." This meant that a closing should be held on or about August 10, 1996, give or take a few days. The parties acknowledge that property boundary problems were somewhat common in certain areas of Freeport, including the area where the subject property was located. To satisfy the bank and title company, a surveyor was engaged to prepare a survey of the property. However, the parties agree that the surveyor noted problems with the boundaries of the lot. When a second surveyor would not undertake the survey because of similar boundary problems, Joyce Patten, who was the principal negotiator for the couple, notified Dillon that they did not wish to close because of potential title problems and wanted a refund of their deposit. Notwithstanding this concern, Dillon advised Joyce Patten that a third surveyor would be hired, at the seller's expense, and he could "certify" the property. Although Joyce Patten expressed concern that the bank might not accept a third survey after two earlier ones had failed, and she did not want to pay for another survey, she did not instruct Dillon to stop the process. Accordingly, Dillon engaged the services of Tommy Jenkins, a local surveyor, to perform another survey. After a certified survey was obtained by Jenkins on August 12, 1996, which Respondents represent without contradiction satisfied the lender and title company, a closing was scheduled within the next few days. This closing date generally conformed to the requirement that a closing be held by August 10, 1996, "more or less." The seller, who by now had relocated to California, flew to Florida for the closing, and the title company prepared a closing statement and package. Just before the closing, however, Respondents learned through a representative of the title company that the Pattens were "cancelling the closing," apparently in violation of the contract. Shortly after the aborted closing, Joyce Patten requested that Dillon return their deposit. By this time, the Pattens had already entered into a second contract to buy another home in the same area and closed on that property before the end of August. Respondents were never informed of this fact by the Pattens. On August 21, 1996, Colleen Armbruster prepared a rather lengthy letter to the Pattens (with a copy to the sellers) in which she acknowledged that they had orally requested from Dillon that their escrow deposit be returned. The letter has been received in evidence as Petitioner's Exhibit 4. Armbruster stated that she was "perplexed" that they were demanding a refund of their earnest money deposit, given the fact that the seller had "met the terms and conditions of the sale." Armbruster outlined the three reasons in the contract which would allow the Pattens to withdraw without forfeiting their deposit, but noted that none were applicable here. Accordingly, she advised them that the seller would be consulted as to his wishes regarding the deposit, and that the Pattens should contact her if they had any questions. Through oversight, however, she did not include a notice to the Pattens that they must respond to her letter within a stated period of time reaffirming their demand for the trust funds, or the deposit thereafter would be disbursed pursuant to the contract. By failing to include this specific language, and sending the letter by regular rather than certified mail, return receipt requested, Respondents committed a technical, albeit minor, violation of an agency rule. Even so, the Pattens acknowledged receiving the letter, and there is no reason to believe that they did not understand its import, especially the requirement that they contact the broker if they disagreed with the proposed disbursement of the money. It can be reasonably inferred that the Pattens did not respond because they "figured [they weren't] going to be able to get [their] money back" due to their failure to perform. On September 13, 1996, the seller's attorney advised the Pattens by letter that the seller considered the deposit forfeited pursuant to paragraph 15(a) of the contract, which pertains to the "Default" provisions. The Pattens never responded to either letter, and they also failed to respond to telephone calls made by Respondents or their agents regarding this matter. In view of the Pattens' lack of response or reaffirmance of their demand, and the fact that they had already closed on another property, Respondents logically and fairly assumed that the Pattens were in agreement with the disbursement procedures outlined in Coleen Armbruster's letter of August 21. Accordingly, on September 17, 1996, Edward Armbruster, who had not been involved in this transaction to date, in good faith signed two disbursement checks giving $697.50 to the seller and retaining the balance for his firm. This division was consistent with the terms of the contract. In making this disbursement, there was no intent on the part of Respondents to trick, deceive, breach their trust, or in any way unlawfully deprive the Pattens of their deposit. Respondents did not notify the Florida Real Estate Commission (Commission) that they had received conflicting demands for a deposit, nor institute any other procedures regarding the deposit, since they no longer had any good faith doubt as to whom was entitled to their trust funds. This was because the Pattens had failed to respond to letters and telephone calls regarding the sellers' claim to the deposit. There is no evidence that Respondents have ever been the subject of prior disciplinary action during their lengthy tenure as licensees. At the same time, it is noted that Respondents acted in good faith throughout the process and genuinely believed that there was no dispute. It should also be recognized that, for at least part of the time, the Pattens were working two contracts simultaneously without advising the realtors.
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 finding Respondents guilty of a technical violation of Rule 61J2-10.032(1), Florida Administrative Code, and Section 475.25(1)(e), Florida Statutes, and that they be given a reprimand. All other charges should be dismissed. DONE AND ENTERED this 28th day of July, 1998, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 28th day of July, 1998. COPIES FURNISHED: Henry M. Solares, Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900 Christine M. Ryall, Esquire 400 West Robinson Street Suite N-308 Orlando, Florida 32801-1772 Edward D. Armbruster Colleen M. Armbruster Post Office Box 635 DeFuniak Springs, Florida 32433 Lynda L. Goodgame, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondents be found guilty of violating Subsection 475.25(1)(d), Florida Statutes, and that each be given a public reprimand. It is further RECOMMENDED that the portion of the administrative complaint alleging that Respondents violated Subsection 475.25(1)(b), Florida Statutes, be DISMISSED. DONE and ENTERED this 21st day of September, 1982, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of September, 1982.
