Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Respondent, Pasquale A. Verona (Verona), is a licensed real estate broker having been issued license number 0389728 by petitioner, Department of Professional Regulation, Division of Real Estate (Division). He is the qualifying broker and an officer of respondent, P. A. Verona and Associates, Inc., which holds broker's license number 0251674. The real estate firm is located at 3828 Seago Lane, Fort Myers, Florida. In May 1988 Donna Jean and Barry C. Minnich were shopping for a residential lot in Carillon Woods, a subdivision in Fort Myers, Florida. After seeing a lot advertised by Verona s firm, Donna Jean telephoned Verona's office and made an appointment to inspect the lot on May 13, 1988. After inspecting the lot, Donna Jean decided to purchase the same and, on the same date, she and Verona orally agreed upon a purchase price of $49,000 with a closing date of May 25, 1988. Verona desired to close on that date since he had a previously planned trip to California with his family beginning on May 26, 1988. The oral agreement was reduced to a written contract and executed by the parties on May 13, 1988. At Verona's request, and at the same time the contract was executed, an addendum was prepared by the Minnichs' attorney which provided, in part, that a $54,000 sales price would be used but that at closing Verona would refund $5,000 to the Minnichs. This refund was to be taken out of Verona's real estate commission and rebated to the buyers. Thus, the net sales price was still $49,000 as originally agreed to by the parties. As earnest money, the Minnichs gave Verona $5,000 which was deposited into Verona' s trust account. The Minnichs immediately made application for a loan with John E. Smith, a vice-president of a local C & S bank. On May 18, 1988 they placed an order for a title commitment with Southwest Title, Inc., a Fort Myers title company designated by the parties to prepare the title insurance and handle the closing. The title company was placed on notice that the contract called for a May 25 closing date. According to Mary Jane Kalpin, a Southwest Title, Inc. employee who worked on this transaction, there were unsatisfied water and sewer assessments on the lot owed by Verona to the City of Fort Myers. However, she said this was not unusual and happened quite frequently in subdivisions such as Carillon Woods. As it turned out, however, the city employee who oversaw these assessments was on vacation the week prior to the May 25 closing date, and Kalpin could not obtain payoff figures from any other city employee. In addition, Kalpin needed Verona to furnish her with a certificate of good standing on the property. 1/ He did not do so by May 25. Therefore, she was unable to prepare a closing package by the contract closing date. On May 23, 1988, C & S issued a loan commitment to the Minnichs. In the meantime, Kalpin had completed her title search and on May 23 she spoke with Verona who advised her the deal must close by May 25. When she responded she could not get payoff figures from the City by that date, Verona told her it was a "dead deal". On or about May 24, Donna Jean spoke with Verona and, after being told of the problems encountered by the title company, reiterated her desire to buy the lot. She requested that Verona extend the time for closing so that the missing items could be obtained. Although Verona denies that he gave such an extension, and nothing was reduced to writing, it is found that Verona orally agreed to an extension of time prior to leaving for California. This is supported by the fact that, after returning from California, Verona's wife delivered a certificate of good standing to the title company on June 9, and the title company representative was under the impression a closing would be held at 1:00 p.m. the same date. However, at Verona's insistence, the closing did not take place. On June 15, Verona sent the Minnichs a letter with a check in the amount of $5,000 which represented the deposit on the property. In his letter, Verona stated that he "realize(d) that the delay in the closing on Lot #6, Carillon Woods is not being caused by anything you have done" and that those things occurred whenever "we place a transaction in the hands of another". He added that he had received another offer in the amount of $58,000 from another party and if the Minnichs were willing to pay a "net figure of $56,000", he would give them the opportunity to purchase the lot. The Minnichs chose not to cash the check but instead advised Verona they intended to seek legal advice on their rights under the original contract. Donna Jean deposited the check around June 22 but learned the next day that Verona had stopped payment on the check. On June 24, 1988 Verona again wrote the Minnichs and advised them to reconsider their threat to take legal action since he had "never lost a real estate dispute". He also advised them that, pursuant to the contract, he was claiming the $5,000 as liquidated damages due to their failure to close by May Finally, he pointed out that the original contract "was terminated on June 15 by letter". On an undisclosed date, but prior to September 1988, Donna Jean spoke with Verona by telephone and requested a refund of her deposit. Her request was denied. The Minnichs then filed a complaint with the Division. On September 2, 1988 Verona advised the Division there was a dispute concerning the deposit and requested the issuance of a disbursement order. On January 11, 1989, the Division, through its counsel, wrote Verona and advised him that, because of disputed facts a disbursement order could not be issued, and he must immediately seek arbitration or file an interpleader action in circuit court. Choosing to utilize arbitration, Verona contacted the Miami office of the American Arbitration Association (AAA) on February 15, 1989 and requested a "package" from which an agreement to arbitrate could be prepared. After receiving a package of documents, Verona sent an agreement with a letter to the Minnichs on February 24, 1989. They did not respond to his offer to arbitrate. On March 6 he sent a follow-up letter again requesting the Minnichs to arbitrate. On March 9 Verona learned that AAA would not arbitrate the dispute. As of that date, Verona was aware of the fact that his only remaining alternative was to file an interpleader action in circuit court. On March 23, 1989 the Division, through its counsel, sent a second letter to Verona advising him that he had apparently ignored the earlier letter and that he must immediately take action to resolve the dispute. On May 5, 1989 Verona sent his attorney, George Knott, a check in the amount of $5,000 with a request that Knott "handle the interplea (sic) action as to the disposition of $5,000 previously held in my real estate firm's escrow account". The suit was eventually filed by Knott in circuit court on September 8, 1989. The suit requested that Verona be awarded the $5,000 deposit plus "damages" and attorney's fees. When asked at hearing why the suit had not been filed earlier, Verona responded that, once the matter was turned over to his attorney, he had no control over the actions of his attorney. He also acknowledged that he has never instructed his attorney to attempt to resolve the matter as quickly as possible. As of the date of hearing (June 20, 1990), the matter was still pending in circuit court. There is no evidence that Verona did not maintain the $5,000 deposit in his firm's escrow account until the money was turned over to his attorney on May 5, 1990. There is also no evidence that respondents have ever been disciplined by the Division.
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) and (e), Florida Statutes (1987) and Rule 21V-10.032, Florida Administrative Code (1987), and that their brokers' licenses be suspended for six months and thereafter be placed on one year's probation. DONE and ENTERED this 24th day of July, 1990, in Tallahassee, Florida. DONALD ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of July, 1990.
The Issue Whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, what action should be taken.
Findings Of Fact At all times material hereto, Louis M. Loguercio (Respondent) was licensed in the State of Florida as a real estate salesperson, having been issued license number 0609113. From March 11, 1996, through July 13, 1997, Respondent was a salesperson for CMT Holding Ltd., a partnership trading as The Prudential Florida Realty. Martha Meloni and her husband, Mario Meloni, (Sellers) owned residential property located at 6412 Southwest 127 Court, Miami, Florida. The Sellers' property was listed for sale with Jorge "Ivan" Salomon, a broker operating his own company, Real One Realty Corporation. On May 1, 1997, Carlos Castellanos and his wife, Daritza Jiminez, a/k/a Daritza Jiminez-Castellanos, (Buyers) met Respondent at his office at The Prudential Florida Realty. They were referred to Respondent by one of his clients. The Buyers were from Venezuela and had had no contact with Respondent prior to this transaction. On May 1, 1997, Respondent prepared a draft Residential Sale and Purchase Contract (Contract) for the purchase of the Sellers' property for $150,000 by the Buyers. Respondent drafted the Contract on behalf of the Buyers and prepared the contract while the Buyers were in his office. The terms of the Contract required an initial deposit of $2,000 from the Buyers to be held in escrow by Steven Greenspan Law Office, as "Escrow Agent." The Contract also required a $13,000 additional deposit to be made within ten (10) days of the date of the Contract. While the Buyers were in Respondent's office, they wrote two checks, and signed them, for deposits on the property: one for $2,000 dated May 1, 1997, and one for $13,000 dated May 15, 1997. The checks were made payable to Alan Greenspan, P.A. The Buyers wrote both checks with Respondent's assistance. The Buyers wanted to personally take the $2,000 deposit check to Alan Greenspan, the escrow agent. The Buyers permitted Respondent to photocopy the checks while they were in Respondent's office. Once the checks were photocopied, Respondent returned the checks to the Buyers. Respondent advised the Buyers to deliver the $2,000 check to the escrow agent that day and to mail the second check by the due date. Mr. Greenspan's office was in the same building as the mortgage company that the Buyers were using for the purchase of the property. His office was also in close proximity to Respondent's office. The Buyers failed to deliver the $2,000 deposit check to Mr. Greenspan on May 1, 1997. Respondent did not know that the check had not been given to Mr. Greenspan by the Buyers. Mr. Greenspan received a copy of the Contract. He did not contact any of the parties to the Contract regarding the escrow monies. As an escrow agent, Mr. Greenspan's office handles a large volume of closings and it is possible, according to him, that his staff assumed that the escrow monies had been received. No one in Mr. Greenspan's office verified that the monies had been received. Prior to the due date for the payment of the second deposit of $13,000, Respondent contacted the Sellers' listing agent, Mr. Salomon, and informed him that the Buyers were having problems paying the second deposit. Shortly after the due date for the payment of the second deposit, Mr. Salomon contacted Respondent, who informed Mr. Salomon that the Buyers had the money. Respondent also faxed Mr. Salomon a copy of the two checks for the two deposits, which were written on May 1, 1997. Mr. Salomon faxed a copy of those checks to the Sellers. Respondent did not inform Mr. Salomon that the Buyers had not given the deposit checks to him. Unbeknownst to Respondent, the Buyers had also failed to mail the second deposit of $13,000 to Mr. Greenspan. Mr. Salomon, having received the fax copy of the checks, assumed that the escrow agent had the Buyers' deposits. The Sellers, having received the fax copy of the checks, assumed also that the escrow agent had the Buyers' deposits. Mr. Greenspan became aware that his office did not have the Buyers' deposits in escrow when the mortgage company requested that he provide an escrow letter. He contacted the Sellers' attorney, who faxed a copy of the Buyers' checks. At that time, Mr. Greenspan became concerned regarding the Contract because the Contract made it appear that he, as the escrow agent, had deposits that he did not have. Mr. Greenspan contacted Respondent regarding the absence of the escrow deposits. Respondent was apologetic and responded to Mr. Greenspan that he (Respondent) was sorry that the Buyers had not given him (Mr. Greenspan) the deposits as they had indicated that they would do. After being contacted by Mr. Greenspan, Respondent attempted to contact the Buyers. He was unsuccessful. The Sellers did not become aware that none of the deposits were in escrow until the day before the scheduled closing on the property. In the manner in which Respondent handled the Buyers' deposits, he failed to follow office policy and practice of The Prudential Florida Realty. According to the office policy and practice, the sales associate handling the transaction has the duty to ensure that the buyer's deposit(s) are deposited with the designated person or entity at the designated time or date. Respondent also failed to advise the Sellers' agent, Mr. Salomon, or the escrow agent, Mr. Greenspan, the Sellers' attorney, or the Sellers that the Buyers had not given him any deposits.
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 dismissing the Administrative Complaint against Louis M. Loguercio. DONE AND ENTERED this 29th day of April, 1999, in Tallahassee, Leon County, Florida. ERROL H. POWELL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of April, 1999.
The Issue The issue to be resolved in this proceeding concerns whether the Respondent's Florida Real Estate Broker's License should be the subject of sanctions, based upon the charges alleged in the Administrative Complaint, wherein it is contended that the Respondent has violated Section 475.25(1)(k), Florida Statutes, and Rules 61J2-14.012(2) and (3), Florida Administrative Code, and derivatively, Section 475.25(1)(e), Florida Statutes (1998 and 1999).
Findings Of Fact The Petitioner is an agency of the State of Florida charged with regulating and enforcing the statutory provisions pertaining to real estate licensure and practice in the State of Florida. It is charged with the duty to prosecute Administrative Complaints against perceived violations and violators of the Florida Real Estate Practice Act, Chapter 475, Florida Statutes, and the rules promulgated pursuant thereto, as well as in the manner envisioned in Chapter 455, Florida Statutes, and Chapter 120, Florida Statutes. The Respondent, at all times pertinent hereto, has been a licensed Florida real estate broker, holding License 0596898. The Respondent was last licensed as an inactive broker due to non-renewal. He has not been charged or found guilty of any violations of the statutes and rules pertaining to real estate licensure and practice in the past. His last known address is 212-B Sudduth Place, Parker, Florida 32404. The Petitioner's investigator John Hentz conducted an office inspection and an audit of the Respondent's escrow accounts and broker's trust accounts on April 2, 1999. The audit was conducted at the office of the Respondent, trading as George H. Smith Real Estate. The Respondent maintained an account with Bay Bank of Panama City entitled "Rental escrow account." This was actually the "owners' distribution escrow account." The account number is 2603100501. An audit of that escrow account revealed a total trust account liability of $16,861.51, meaning the total amounts of escrows the Respondent and his firm were liable to pay out if the account was entirely paid-out to those for whom it was held in trust. The reconciled bank balance, however, was for $4,001.82. This resulted in an apparent shortage of $12,858.69. The Respondent and his company also maintained an account entitled "escrow rental deposit account." This account was maintained at Regions Bank of Panama City. The account will be described as the "security deposit escrow account." The security deposit escrow account bears account number 55-022- 9270. An audit of that account revealed that the total trust liability for that account was $22,525.00. The reconciled bank balance for that account was $21,277.50. This resulted in an apparent shortage in the amount of $1,247.50. Mr. Hentz established that the audit disclosed that the Respondent failed to prepare written monthly reconciliation statements for both of the accounts from at least May of 1998 forward. The Respondent, however, asserted that he had prepared a written reconciliation for the February 1999 time period, but admitted that he had not provided the required explanation on the reconciliation form. The evidence also shows that the Respondent began operating as the managing or operating broker of George H. Smith Real Estate sometime in the period March through May of 1999. The records maintained by the Petitioner show that the qualifying broker was George H. Smith, the Respondent's father. George H. Smith and the Respondent provided the Petitioner with the corrective documentation registering the Respondent as the operating broker, however. Mr. Hentz obtained the broker's records from the Respondent during the course of his audit, including, but not limited to, bank statements, lists of balances for the owners' accounts, and the security deposit accounts, as well as a list of clients and a record of outstanding checks. Mr. Hentz reviewed the Respondent's "owner balance" list and the "checks pending" list for the owner's distribution account for the period up to February 28, 1999. Through this procedure he was able to determine the broker's trust liability for the account. Mr. Hentz calculated the broker's trust liability of $16,861.51, by adding the positive balance as identified on the Respondent's owner balance sheet as the amount of money that should be held on behalf of the property owners for the properties the Respondent managed. He then added the list of any outstanding checks or deposits. Mr. Hentz then compared the broker trust liability to the actual bank balance of $4,001.82 for the owners distribution account in order to determine whether the account was in balance and concluded that it was not. The difference between the broker liability and the bank balance reflected a shortage of at least $12,858.69. this indicated the amount of funds the Respondent did not properly maintain in the owners' distribution escrow account. Mr. Hentz also admitted that he should not have subtracted one particular negative balance and that the shortage should have actually been $532.00 greater than what was stated on the audit form. Mr. Hentz stated that the properties listed on the owners' sheet for John Green and Avalon Real Estate should only have been added in the calculations as a positive balance, and not any negative balance, since the same client owned the properties for both accounts with George H. Smith Real Estate. Mr. Hentz was not of the opinion, and found no evidence, that the Respondent had taken and used any of the funds for his personal use. Rather, the shortage reflected, in essence, a situation where the brokerage had used certain owners' funds to cover other owners' expenses, when the owners with the expenses had accounts which did not contain sufficient funds to cover their own rental property management expenses. Typically these situations occurred where the owners who had expenses, such as repair work for their properties, were slow in issuing checks to the Respondent's brokerage to cover such repairs or other expenses or, in infrequent instances, where the checks issued by the owners to the Respondent's brokerage did not clear because of insufficient funds. This situation occasioned more delay in rectifying shortages caused in the brokerage-maintained account because of the necessity of obtaining reimbursement from the owners issuing insufficient checks for their expense assessments. There was no intentional conversion of funds in the owners' distribution escrow account or in the security deposit escrow account for the Respondent's own use or for any improper use or use detrimental to any client's interest. Mr. Hentz followed the same steps in auditing the security deposit escrow account. The audit revealed that the Respondent's tenant list balanced and therefore, the broker trust liability for the account as of February 28, 1999, to be $22,525.00. There were no outstanding checks or deposits. The bank statement indicated that the security deposit escrow account balance as of that date was actually $21,277.50, resulting in a shortage of $1,247.50. Mr. Hentz was unable to recall if the Respondent provided an explanation for that shortage in the security deposit account, however, he testified that the former broker and owner, George H. Smith, immediately took corrective action the same day by depositing funds in the escrow account to cover the shortage. Mr. Hentz also established that during the audit the Respondent told him that the shortage in the owners distribution account resulted from owners' failure to reimburse George H. Smith Real Estate for expense payments made on behalf of the properties owned by those property owners, or for payments an owner or tenant may have made to George H. Smith Real Estate that were returned for insufficient funds. George H. Smith admitted in his testimony that a broker should not use funds from an escrow account to "loan money" to another owner but rather should use the a brokerage's own funds and that a monthly reconciliation statement review should identify any shortages for correction. The Respondent admitted in his testimony that the audit revealed that the escrow accounts were not in accordance with properly maintaining trust and liability. The Respondent also asserted that the information provided to Mr. Hentz at the time of the audit may not have accurately provided the status of each account, as to the owner balance sheet, but he did not provide any documentation to dispute the allegations. The Respondent admitted that he was unable to provide an explanation on the reconciliation statements when the trust liability did not actually match the balance on the bank statement.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, the evidence of record and the candor and demeanor of the witnesses, it is, therefore, RECOMMENDED that a final order be entered by the Florida Real Estate Commission finding the Respondent guilty of violating Section 475.25(1)(k), Florida Statutes; Rules 61J2-14.012(2) and (3), Florida Administrative Code; and, derivatively, Section 475.25(1)(e), Florida Statutes. In light of the facts found and conclusions reached hereinabove concerning the Respondent's candor in admitting responsibility for the shortages, that the brokerage took immediate corrective action, that no client was harmed and that the Respondent did not use any funds involved in the shortages for personal use or fraudulent purposes, it is recommended that a one-year suspension, with a co-extensive year of probation, be imposed, together with a $1,000.00 fine. It is further recommended that the suspension be abated and, if during the one-year of probation the Respondent successfully completes a 30-hour broker management course, that the suspension be cancelled. DONE AND ENTERED this 6th day of November, 2001, in Tallahassee, Leon County, Florida. P. MICHAEL RUFF 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 Clerk of the Division of Administrative Hearings this 6th day of November, 2001. COPIES FURNISHED: Sunia Y. Marsh, Esquire Department of Business and Professional Regulation 400 West Robinson Street Suite N-308A Orlando, Florida 32801-1772 Andre Carlos Smith 212-B Sudduth Place Parker, Florida 32404 Buddy Johnson, Division 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 32399-2202
Findings Of Fact Respondent is and at all material times has been a licensed real estate broker in the State of Florida. He holds license number 0404010. On or about October 14, 1985, Respondent, as seller, entered into a purchase and sale contract with William and Lois Ehmke, as buyers, with respect to Respondent's condominium known as Unit 502 of Blind Pass Lagoon Condominiums located at 9825 Harrell Avenue, Treasure Island, Florida. The Ehmke contract called for a purchase price of $85,000, which included $15,000 as an earnest money deposit. The contract form provided a paragraph for the closing date, but this was left blank. The only special clause in the contract provided that: The Buyer(s) shall pay $550.00 monthly beginning the date said unit is occupied by buyer and until buyers home in Deluth, Minn. is sold. At the time of closing upon Condo Unit 502, Phase 3, the buyers' shall reimburse the Seller the difference between $550.00 and actual costs to carry the unit per month. ($755.00 plus 90.00 maintenance, or $300.pr [i.e., $300 per month]. The Ehmkes duly paid Respondent the $15,000 deposit and moved into the condominium, which they occupied continuously from October, 1985, through December, 1986. The Ehmkes paid Respondent $550 per month for each month of their occupancy. When making the deal, the Ehmkes were aware that the average time that a house remained unsold on the market in Deluth was 210 days. They knew that the market was very slow because of a sluggish local economy. They expected their house to be sold in about 210 days. After 210 days passed and the house had not sold after the Ehmkes' good faith efforts to sell it, the Ehmkes asked Respondent to refund their $15,000 deposit. Respondent refused. Negotiations resulted in Respondent returning to the Ehmkes $10,000 of the deposit in July, 1987. Respondent did not stand in a confidential or fiduciary relationship with the Ehmkes. William Ehmke had owned and operated a restaurant in Deluth and, after meeting Respondent, initiated discussions with Respondent concerning Mr. Ehmke's desire to purchase property in Florida. Respondent showed the Ehmkes other properties and informed them from the start that Respondent and his daughter owned the condominium unit in question. The mortgage payments, insurance, taxes, and maintenance fees on the condominium unit were about $850 per month in October, 1985. During the period that the Ehmkes occupied the condominium unit, the maintenance fees went up by $30 per month and there was a $1200 special assessment. All of these expenses were borne by Respondent. However, Mr. Ehmke was aware that every month he was losing $300 of his deposit toward these expenses. The fair rental value of the condominium unit from December 1 through April 30 each year is $1400 to $1600 per month. By the time that the Ehmkes vacated the unit, Respondent had paid at least $3000 in monthly expenses over the rent received and the $1200 the special assessment. He had also lost at least $3000 in premium seasonal rentals. Mr. Ehmke has since received his real estate salesman's license. He admits that the $5000 retained by Respondent does not cover Respondent's out-of- pocket expenses. He also admits that he has no complaints about the transaction in retrospect. Frank Myles owns all of the stock of Myles, Inc., which owned Unit 202 of Blind Pass Lagoon Condominiums in Treasure Island. Having been neighbors with Respondent for two years and also involved part-time in real estate sales, Mr. Myles mentioned to Respondent that he was trying to sell his unit. After their conversation, Respondent delivered to Mr. Myles a contract for the purchase and sale of his unit. The contract was executed by all parties on July 29, 1986. The buyers were Ralph and Margaret Magno, who had recently purchased another unit in the same complex through Respondent as the broker. The purchase price was $94,000 to be paid cash at closing, as Mr. Myles had said he desired. The contract contained no contingencies, such as for financing, which was also consistent with Mr. Myles' previous instructions to Respondent. The contract called for a closing on or before August 25, 1986, and provided that time was of the essence. The Magnos paid an earnest money deposit of $8000 to Pat Jano and Associates, "reg. real estate broker." The form language of the contract provided that Respondent was to "hold said earnest money or deposit and act as escrow agent until closing of deal ..." The contract elsewhere provided that if the purchaser failed to perform any of his obligations, then he "shall forfeit said earnest money or deposit; and the same shall be retained by the Seller as liquidated damages, and the escrow agent is hereby authorized by the purchaser to pay over to the Seller the earnest money or deposit." In the event of a default by the purchaser, the earnest money would be divided equally between Respondent and the seller. On or about August 13 or 14, 1986, the Magnos discovered that the financing terms that they had arranged with a third-party lender could no longer be obtained. Respondent promptly notified Mr. Myles of the problem. Mr. Myles and Respondent tried unsuccessfully to resolve the problem with the lender, which ultimately declined to make the loan. When first informed of the buyers' financing problems, Mr. Myles told Respondent that the two of them should push the sellers through to closing. (Tr. 82.) Immediately after this conversation with Respondent, Mr. Myles stepped aside so that his lawyer could handle what had become a "shaky" deal. (Tr. 84.) On August 16, 1986, Respondent refunded all of the earnest money to the Magnos by delivering to Mr. Magno a check drawn on Respondent's escrow account in the amount of $8000 and payable to Mr. Magno. Respondent returned the deposit without the prior knowledge of Mr. Myles or consent of Myles, Inc. (Tr. 73 and 8.) Mr. Myles' lawyer sent a letter dated August 20, 1986, to Respondent informing him that Myles, Inc. intended to proceed to closing and would not consent to the release of the earnest money deposit to the Magnos. Mr. Myles appeared at the closing at the time and place specified in the contract. The Magnos did not appear. Myles, Inc. never received its share of the forfeited deposit. Myles, Inc., through Mr. Myles, stated in a letter dated May 13, 1987, that it was "no longer" pursuing any legal action against Respondent and that no suits were filed and no further action would be taken. During a lengthy meeting with Petitioner's investigator, Respondent never suggested that he had had Myles' permission to return the Magnos' deposit. Rather, he said only that he had returned the deposit out of "loyalty" to the Magnos. At the hearing, Respondent testified that he told Mr. Myles that Respondent was going to return the deposit to the Magnos and Mr. Myles' only reaction was that "those are the breaks." (Tr. 129.) This apparent inconsistency between the testimony of Mr. Myles and Respondent, both of whom were credible witnesses, is reconciled by the finding that Mr. Myles never consented to the release of the earnest money, but Respondent misunderstood their conversation in this regard. Since October 16, 1986, Respondent's principal place of business has been 7345 Bay Street, St. Petersburg, Florida. Respondent failed to maintain a sign at this location from October 16, 1986, through January 8, 1987. He was having a sign prepared by a third party during that time.
Recommendation Based on the foregoing, it is recommended that a final order be entered dismissing Counts I, II and IV of the Administrative Complaint and finding Respondent guilty of the allegations set forth in Counts III and V of the Administrative Complaint. It is recommended that the Final Order impose an administrative fine of $1000 with respect to Count III and a reprimand with respect to Count V. ENTERED this 20th day of May, 1988, in Tallahassee, Florida. ROBERT E. MEALE 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 20th day of May, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-4391 Treatment Accorded Petitioner's proposed Findings 1,3-5. Adopted. 2,6. Rejected as unnecessary and irrelevant. The location of Respondent's "principal office and each branch office" is relevant under Section 475.22 to determine where he was required to maintain a sign. The statute does not refer to the office registered with Petitioner. 7-8,16. Adopted. 9-.14. Adopted. 15,17. Rejected as unnecessary. 18. Rejected as unnecessary and irrelevant for the reason set forth for rejecting the proposed findings in paragraphs 2 and 6. Treatment Accorded Respondent's Proposed Findings Rejected as legal argument, except that Respondent and the Ehmkes entered into a contract. Last sentence - rejected as unnecessary and irrelevant. Remainder rejected as contrary to the greater weight of the evidence. Rejected as unnecessary, except that the blast sentence is adopted as to the sign being made. COPIES FURNISHED: Steven W. Johnson, Esquire Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Brian E. Johnson, Esquire 7190 Seminole Boulevard Seminole, Florida 34642 Darlene F. Keller Executive Director Division of Real Estate 400 West Robinson Street Orlando, Florida 32801 William O'Neil General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750
The Issue The central issue in this case is whether Respondent is guilty of the violations alleged in the administrative complaint dated January 19, 1989; and, if so, what penalty should be imposed.
Findings Of Fact Based upon the prehearing stipulation filed by the parties, the testimony of the witnesses, and the documentary evidence received at the hearing, the following findings of fact are made: The Department is the state agency charged with the responsibility of regulating and disciplining real estate licensees. The Respondent, Charles P. Grimes, is, and has been at all times material to the allegations of the administrative complaint, licensed as a real estate broker in the State of Florida, license number 0034301. In November, 1980, a contract for sale and purchase of real estate was drafted between Dorothy Langham Scott, seller, and Phillip Crawford, buyer. The contract, which was subsequently executed by both parties, provided that a deposit in the amount of $18,500 was to be held in escrow by Respondent. A separate brokerage agreement between Respondent and the seller, executed November 30, 1980, provided that Respondent would receive a brokerage fee of ten percent of the total gross sales price. The brokerage agreement specified that "should the buyer default and not close the transaction in accordance with the Contract, the Broker shall not be entitled to any commission." The agreement further provided that Respondent would "use reasonable diligence and his best efforts to see that the transaction is closed in accordance with the executed Contract." The contract described in paragraph 3 did not close. Subsequently, the seller sued Respondent in the Circuit Court in Palm Beach County, Case no. 82-1974 CA (L) 01 B. On August 13, 1985, an amended final judgment was entered which provided, in part: The facts adduced at trial indicate that Crawford and Scott entered into a contract for the purchase and sale of certain real property, located in Putnam County and that for no apparent reason Crawford defaulted on the contract. The evidence is clear and convincing and unrefuted. Crawford has admitted several letters which he says were communicated to the attorney for Scott. However, the substantial weight of the evidence will not support his repudiation of the contract. Accordingly, it is clear that as between Scott and Grimes, the real estate agent who was allegedly holding the deposit under the provisions of the deposit receipt contract, Scott is entitled to a judgment for $18,500.00, plus its costs and attorney's fees. John L. Burns, an attorney who represented the seller, Scott, during the contract negotiations in November, 1980- January, 1981, received a letter from Respondent on December 12, 1980. That letter, dated December 5, 1980, provided: "I have enclosed the signed contract and have received the deposit check from Dr. Crawford." On or about January 29, 1981, Mr. Burns received a letter from Respondent which indicated that the contract would close in March, 1981. Respondent did not advise the seller that the deposit on the Crawford/Scott contract was not in escrow. Respondent erroneously assumed that a deposit from the buyer (which had been deposited on another contract for sale and purchase) could be applied to the contract. That deposit, in the amount of $20,000.00, was not transferred and was not used to satisfy the amended judgment entered in Scott's favor.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department of Professional Regulation, Florida Real Estate Commission, enter a final order finding the Respondent guilty of the violation of Section 475.25(1)(b), Florida Statutes, imposing an administrative fine in the amount of $1000.00, suspending his license for a period of 60 days, and placing the Respondent on probation for a period of two years. It is recommended that the Respondent be found not guilty of the other alleged violations. DONE and ENTERED this 18th day of December, 1989, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of December, 1989. APPENDIX TO CASE NO. 89-2517 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE DEPARTMENT: Paragraphs 1 through 4 are accepted. With regard to paragraph 5, it is accepted that on or about November 30, 1980, Respondent was attempting to procure the contract described; however, the exact date the parties executed the contract is not known. The contract was ultimately executed by both parties but did not close. Consequently, the proposed fact, as written, is not supported by the record. Paragraphs 6 and 7 are accepted. With regard to paragraph 8, it is accepted that the contract did not close and that a court of competent jurisdiction determined that the deposit should be awarded the seller; otherwise, the paragraph is rejected as outside the scope of this record. Paragraph 9 is accepted but is irrelevant. Paragraph 10 is accepted. Paragraph 11 is rejected as irrelevant. Paragraph 12 is accepted. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: None submitted. COPIES FURNISHED: James H. Gillis Senior Attorney Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Glenn M. Blake Blake & Torres, P.A. 200 South Indian River Drive Suite 101 Fort Pierce, Florida 34950 Darlene F. Keller Division Director Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 =================================================================
The Issue The central issue in this case is whether Respondent is guilty of the violations alleged in the Administrative Complaint; and, if so, what penalty should be imposed.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, I make the following findings of fact: Respondent, Naomi N. Radcliff, is licensed in Florida as a real estate broker (license No. 0369173) and has been at all times material to the Administrative Complaint. On December 2, 1987, Respondent submitted a Request for License or Change of Status form which sought to cancel the license. Thereafter, the Department reclassified Respondent as an inactive broker. In July, 1986, Randy Mangold and his wife entered into a contract to purchase real property located in Indian River Estates. Naomi Radcliff was the real estate agent who handled the transaction on behalf of the Mangolds. The Mangolds' contract provided for occupancy prior to closing with a security deposit for the rental in the amount of $1500. This amount was paid to Respondent. At closing the $1500 security deposit was to be applied to the buyers' closing costs. The Mangolds rented the home for a year and attempted to obtain financing for the purchase. When their mortgage application was denied, they elected to vacate the property. After they vacated the property, the Mangolds requested the return of the $1500 security deposit. Demands were made on Respondent who refused to return the deposit despite the fact that the Mangolds had fully paid all rents owed and had left the house in good condition. Finally, the Mangolds sued Respondent in the St. Lucie County Court and obtained a judgment for the $1500 security deposit. Respondent has not satisfied the judgment. At one point Respondent did give the Mangolds a check for $500 which was returned due to insufficient funds in the account. In December, 1986, Respondent acted as a rental agent for Walter Zielinski, an out-of-state owner. Mr. Zielinski owned two houses in Port St. Lucie, one of which was located at 941 Fenway. In early December, 1986, Respondent advised Mr. Zielinski that the tenants had left the home at 941 Fenway and that the unit was in fairly good condition. Sometime later in the month, Mr. Zielinski discovered the house was empty but that it had been damaged. There were holes in the wall in the utility room approximately two feet in diameter. The flooring in the utility room and kitchen was ripped up. There was a hole in the wall in the master bedroom. More important to Mr. Zielinski, the house was unsecured because the garage door latch was broken and the house was accessible through the garage. After discovering the unit was at risk for additional damage, Mr. Zielinski attempted to contact Respondent but numerous calls to Respondent, her place of work, and to a former employer proved to be unsuccessful. Finally, Mr. Zielinski obtained another real estate agent to represent the 941 Fenway home. The new agent, Cathy Prince, attempted to obtain from Respondent the keys, the security deposit, and the rent money belonging to Mr. Zielinski. In January, 1987, Mr. Zielinski came to Florida from Illinois to take care of the rental problems. Mr. Zielinski incurred expenses totalling $876.74 to repair the damages to 941 Fenway. Also, Mr. Zielinski wanted to collect the rents owed by Respondent for his other property and have the security deposit for the second property transferred to the new agent. Respondent issued a personal check for the security deposit which was returned for insufficient funds. A second personal check paid to Mr. Zielinski for the rent owed was accepted and cleared. According to Mr. Zielinski, Respondent did not maintain an office where he could find her during the latter part of December, 1986 through January, 1987. In March, 1987, the security deposit for Mr. Zielinski's second rental was paid to the new agent. The check was issued by Respondent's mother. Respondent never personally returned any calls to the new agent. In June, 1986, Alyssa and Jeffrey Maloy entered into a contract to purchase a house. Respondent handled the real estate transaction for the Maloys. The closing was to be December 9 or 10, 1986. Respondent held monies that were required to complete the Maloy closing. Respondent attended the closing but the check tendered to the closing agent, Chelsea Title, was drawn on an trust account which had been closed. The closing agent discovered the problem and requested sufficient funds. Respondent left the closing and returned some hours later with new checks drawn on another account. After checking with the bank, it was again discovered that the funds in the account were insufficient to cover the amount needed for closing. Finally, some days later the Respondent's brother delivered a certified check to cover the amount needed to close the Maloy transaction.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Department of Professional Regulation, Florida Real Estate Commission enter a Final Order suspending the Respondent's real estate broker's license for a period of five years. DONE and RECOMMENDED this 12th day of July, 1988, in Tallahassee, Florida. JOYOUS D. PARRISH 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 12th day of July, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-4631 Rulings on Petitioner's proposed findings of fact: Paragraphs 1-3 are accepted. With regard to paragraph 4, with the exception of the date referenced (November, 1986) the paragraph is accepted. Paragraph 5 is rejected a hearsay evidence unsupported by direct evidence of any source. The first sentence of paragraph 6 is accepted. The second sentence calls for speculation based on facts not in the record and is, therefore, rejected. Paragraphs 7-11 are accepted. With regard to paragraph 12, the first four sentences are accepted; with regard to the balance, the Respondent's brother did deliver funds to allow the Maloy transaction to close however the source of the funds is speculation based upon hearsay unsupported by the record. COPIES FURNISHED: Steven W. Johnson, Esquire Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Darlene F. Keller, Executive Director Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 William O'Neil, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Naomi N. Radcliff 1420 Seaway Drive Fort Pierce, Florida 33482
The Issue The issue for consideration was whether Respondents violated specified subsections of Section 475.25 Florida Statutes with regard to alleged misuse of escrow funds.
Findings Of Fact At all times relevant hereto Respondent Mary L. Cluett was a licensed real estate broker in the State of Florida, having been issued license number 0197523 in accordance with Chapter 475, Florida Statutes. The last license issued to Mary L. Cluett was as a broker, c/o Cluett Realty, Inc., 4720 Palm Beach Boulevard, Fort Myers, Florida 33905. (pre-hearing stipulation, Paragraph 2). Respondent Cluett Realty, Inc. is now, and was at all times relevant, licensed as a real estate broker in the state of Florida, having been issued license number 0021798 in accordance with Chapter 475, Florida Statutes. The last license issued to Cluett Realty, Inc. was at the address of 4720 Palm Beach Boulevard, Ft. Myers, Florida 33905. (pre-hearing stipulation, paragraph 2). The qualifying broker for Cluett Realty, Inc. is Ernest H. Cluett, husband of Mary L. Cluett. Mary Cluett is the vice-president of the corporation. On October 17, 1984, Charles and Pamela Darr signed a multiple listing agreement with Cluett Realty, Inc. to sell their home at 598 New York Drive, Ft. Myers. (Petitioner's Exhibit #2). On February 4 and 5, 1985, the Darrs and Irving and Beverly Lockner signed a contract for sale and purchase of the New York Drive house. The terms provided for purchase price of $44,000.00; a $500.00 deposit in the form of a promissory note to be redeemed by February 26, 1985; the assumption of an existing mortgage; a second mortgage in the amount of $3,000.00 and a balance to close in the amount of $2500.00. The closing date was set for "March 14, 1985, or as soon as possible". (Petitioner's Exhibit #5). The Darrs and Lockners were told on March 14, 1985 that the paperwork was not ready for closing. The Darrs had already moved out of the house and into a leased apartment and the Lockners had travelled from their home in Baltimore with furnishings to move in. Reluctantly, Pamela Darr agreed to let the Lockners move in that day and pay rent for the rest of the month. It was understood by Ms. Darr that the closing would be on April 1st. (tr. 27,28,29) On March 14, 1985, Mrs. Lockner gave Cluett Realty $1500.00. The receipt signed by Helen Weise, an employee of Cluett Realty, is marked "escrow deposit on property, 398 New York Avenue". (Petitioner's Exhibit #1). On March 22, 1985, Beverly Lockner gave Cluett Realty $500.00; the receipt signed by Mary L. Cluett is marked "Escrow, Darr/Lockner". (Petitioner's Exhibit #3) On April 15, 1985, the Lockners gave Mary Cluett another $500.00 in the form of two checks: one for $362.64 from MSC, Inc. to Irving Lockner ( a paycheck), and a personal check to Cluett Realty from Beverly Lockner in the amount of $137.36 (tr. 17,18, Petitioner's Exhibit #4, Beverly Lockner testimony p. 17) The $2500.00 was placed in the Cluett Realty, Inc. escrow account. (tr-19) The Lockner/Darr transaction closed on June 10, 1985, (Prehearing Stipulation, Paragraph 2) In the meantime, on March 26, 1985 and April 25, 1985 Mary Cluett paid the Darr's mortgage payments for April and May with checks drawn on the Cluett Realty, Inc. escrow account in the amount of $425.38 each, payable to United Mortgage Company. (Prehearing Stipulation, paragraph 2) Beverly Lockner did not give Mary Cluett permission to use the escrow money for the Darr's mortgage. She did not know the money was being taken out until she found Mary Cluett's handwritten note left on her door which indicated that closing would be on May 6, 1985 and showed that two payments totalling $850.76 had been deducted from the $2500.00 escrow account. She called Ms. Cluett and had a confrontation about the deductions. Beverly Lockner intended that the $2500.00 be used for the closing balance. When the transaction finally closed on June 10, she had insufficient funds to close so she gave Cluett Realty a third mortgage and borrowed $500.00 from Pamela Darr. (Beverly Lockner testimony, pp. 6,7,9,16 23-26) The Darrs did not give Mary Cluett permission to use the escrow money to pay the mortgage, although Ms. Darr was concerned that the mortgage be paid. On March 14th, Pamela Darr was aware that the April mortgage payment would be taken out of the escrow account when she picked up a form, alleged signed by the Lockners, with a notation at the bottom about the payment. Pamela Darr went to Mary Cluett's office at 5:30 on that day to pick up the form. (tr. 25, 118, 119, 122, Respondent's Exhibit #1) The form in question provides as follows: [Cluett Realty, Inc. letterhead] March 14, 1985 To Whom It May Concern: We Irving N. and Beverly T. Lockner buyers, of property situated 598 New York Dr., Ft. Myers, Fl. inspected the above property on March 14, 1985 (date) and have found the property to be to our satisfaction and accept property "as is" and taking possession as Owners today. Sellers are not responsible for any maintenance on the house of any kind. (SIGNED) [Beverly Lockner Signature] (Buyer) [Irving Lockner Signature] (Buyer) WITNESS: [Mary Cluett Signature] DATE: [dated 3-14-85] NOTE: OUT OF THE ONE THOUSAND FIVE HUNDRED ($1,500,00) DOLLARS deposited with CLUETT REALTY ESCROW ACCOUNT THE FIRST MONTH'S PAYMENT OF $425.38 shall be made. (Respondent's Exhibit #1) The testimony of Mary Cluett and that of her employee, Helen Weise, differ substantially from Beverly Lockner's testimony regarding Respondent's Exhibit #1. Mary Cluett claims that the form was completed and signed by the Lockners in her office on March 14, 1985, and that after a phone call from Pamela Darr the note at the bottom was added before the Lockners signed. (tr- 68) She claims that by agreeing to the notation, the Lockners's clearly knew about the intended use of the escrow money for the mortgage. Beverly Lockner distinctly remembers the form. She claims that when Mary Cluett came to the house on New York Drive on March 14th, she took the blank form from her case and told the Lockners they needed to sign it that day in order to take over the house. Mrs. Lockner signed her husband's name as he had gone out to the yard. The blanks on the form were not typed in, nor was the note on the bottom. This was one of several blank forms in Mrs. Cluett's case. (testimony of Beverly Lockner, p. 6, 11-13) Helen Weise claims she typed the entire form, all but the letterhead, in the office while the Lockners were there. (tr-88) This testimony is inconsistent with the appearance of the exhibit. Mary Cluett's testimony about this form and about the purpose of the escrow money from Beverly Lockner is not plausible. For example, she claims that when the Lockners came in with the $1500.00 on March 14th the purpose was to pay the note for $500.00 referenced on the Contract for Purchase and Sale and to provide money for the mortgage payments. However, on the 14th of March, while no one knew for certain when the closing would be, it was anticipated that it would take place on April 1st. In that case only one mortgage payment would have been necessary. The amounts and timing of Mrs. Lockner's payments into the escrow account are consistent with her testimony that she was putting aside the funds necessary for closing. Assuming, for argument's sake that Mrs. Lockner did know about and approve the first payment, there is no evidence that she knew about or acceded to the second payment prior to its deduction from the escrow account. Respondent's Exhibits #2, 3, and 4 are dated May 28, 1985, May 6, 1985, and May 11, 1985, respectively. Each are notations on Cluett Realty, Inc. stationery showing the April and May deductions from the escrow account, the account number of the mortgage to be assumed, the balance required for closing and other information related to closing. Mary Cluett testified that these were delivered to Mrs. Lockner's house and copies were sent to the Darrs at the New York Avenue address as she did not know the Darr's apartment address. Pamela Darr denies receiving any of these notices. Beverly Lockner said she received only the one dated May 6th. (testimony of Beverly Lockner, P. 9) Ernest Cluett testified that the notice dated May 6, 1985 was delivered on that same date.(tr- 101) By then the second payment from the escrow account had already been made. From the testimony and evidence it is apparent that considerable confusion existed regarding the Darr/Lockner transaction. Both buyer and seller thought the deal would close on March 14th. They learned that day that it would not close and hasty arrangements were made for the Lockners to occupy the house since they had moved their belongings from Baltimore. No firm financial arrangements were made, other than an oral agreement for the Lockners to pay a pro-rated rent for the remainder of March. The closing did not take place on April 1st or the several subsequent dates that it was set, until June 10th. Meanwhile, the mortgage payments were due and no arrangements had been made for their payment. Mary Cluett prepared the March 14th form to satisfy Pamela Darr that the payments would be made, but neglected to clear the arrangement with Beverly Lockner. Mrs. Lockner figured the payments were not her responsibility because the house was not hers; the failure to close as scheduled on March 14th was not her fault. She blamed Mary Cluett for not notifying the parties sooner since she would not have left Baltimore. (testimony of Beverly Lockner, pp. 18-22)
Recommendation The Hearing Officer would recommend that the Florida Real Estate Commission place L. B. Slater on probation for a period of one year for the failure of Slater to properly maintain the records of his escrow account. DONE and ORDERED this 12th day of October, 1976, in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Richard J.R. Parkinson, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 L. B. Slater 1940 Harrison Street Hollywood, Florida 33020
Findings Of Fact At all times pertinent to these proceedings, Kalunian was registered as a real estate broker with FREC holding Certificate Number 0045958. Kalunian's registration with FREC was suspended by FREC in an emergency suspension order dated September 21, 1978. On or about July 18, 1978, Harry and Joan Soden, as buyers, entered into a contract with Warren and Barbara Grund, as sellers, for the sale and purchase of real property. In connection with that sale, the buyers entrusted the sum of $2,000.00 with Kalunian as an escrow money deposit. The closing for this transaction was scheduled for October 1, 1978, and at no time prior to the scheduled closing did the parties to the transaction authorize the disbursement of the escrow money deposit. On or about June 23, 1978, John and Wanda Carlantonio, as buyers, entered into a contract with Ralph and Margarie Steigerwald, as sellers, for the sale and purchase of real property. In connection with that contract, the buyers entrusted the sum of $7,000.00 with Kalunian as an escrow money deposit. The closing for this transaction took place on September 15, 1978. However, at the time of the closing, the $7,000.00 escrow money deposit was not accounted for. At no time prior to the closing did the parties to the transaction authorize a disbursement of the escrow money deposit. On or about July 8, 1978, Diane Maholland, as buyer, entered into a contract with Rita Auletta, as seller, for the sale and purchase of real property. In connection with that contract the buyer entrusted the sum of $9,500.00 with Kalunian as an escrow money deposit. The closing of the transaction took place on September 6, 1978. However, at the time of the closing, the $9,500.00 escrow money deposit was not accounted for. At no time prior to the closing did the oarties to the transaction authorize a disbursement of the escrow money deposit. On July 31, 1978, the balance in Kalunian's escrow account was $501.13. On August 6, 1978, a letter from Kalunian was discovered in Kalunian's office. In that letter, Kalunian admitted that he had converted funds from his trust account for his own use.
Findings Of Fact Petitioner is the governmental agency responsible for issuing real estate licenses and regulating licensees on behalf of the state. Respondent, Gregory T. Franklin ("Franklin"), is licensed in the state as a real estate broker; license number 0314387. The last license issued was as a real estate broker, c/o Equity Realty of South Florida, Inc., t/a Equity Realty, 5809 Southeast Federal Highway #200, Stuart, Florida 34997. Respondent, Equity Realty of South Florida, Inc. ("Equity"), is a corporation registered as a real estate broker; license number 0229264. Respondent, Franklin, is the qualifying broker for Respondent, Equity. On or about January 26, 1990, Mr. Robert Warren (the "buyer") entered into a contract to purchase real estate from Ms. J. Zola Miller and Ms. Adrianne Miller Hill (the "sellers"). The buyer gave Respondent an earnest money deposit in the amount of $1,000. On or about April 17, 1990, a second contract was executed by the buyer and sellers. The buyer gave Respondents a second earnest money deposit in the amount of $24,000. Both earnest money deposits were timely deposited to Respondents' escrow account, number 0194101404, Florida Bank, Stuart, Florida. The buyer and sellers had difficulty in closing the contract due to disagreements concerning conditions in the contract. At the buyer's request, Respondents used the earnest money in the amount of $25,606.04 to purchase a certificate of deposit ("CD") in the name Robert Warren Century 21 Equity Realty Escrow Account #050-215-76, located at the First Marine Bank of Florida, Palm City, Florida ("First Marine"). Respondents received the sellers' verbal approval, but not written approval, for the purchase of the CD. Respondents notified the Florida Real Estate Commission (the "Commission") on August 28, 1990, that there were conflicting demands for the $25,000 earnest money deposit. Respondents stated their intent to claim a portion of the earnest money as an earned commission and stated that they were preparing to file an interpleader action to resolve the parties' dispute over the earnest money deposit. The Commission acknowledged Respondents' notification. Negotiations between the buyer and sellers continued until December 12, 1990. At that time, the parties reached an impasse, and each made written requests for the escrow deposit. Respondents maintained the earnest money in the CD until February 8, 1991. On February 8, 1991, Respondents were notified by First Marine that the buyer was attempting to obtain the escrow monies directly from First Marine. Respondents opened a CD in the name of Robert Warren Escrow Account for Equity Realty by Gregory Franklin, Account #200-517-7320, First Union Bank of Florida, Stuart, Florida. When the CD matured on May 15, 1991, the amount of the deposit was $25,989.57. On May 15, 1991, Respondents removed the earnest moneys and invested them in CD #10696954 at Community Savings Bank. On June 19, 1991, Respondents withdrew $500, paid a penalty of $6.21, and closed the CD. The remaining balance was used to open CD #10707413 at Community Savings Bank. On June 21, 1991, Respondents withdrew $600 and paid a penalty in the amount of $8.67. Respondents used half of the $600 withdrawal to pay an attorney to initiate a civil interpleader action without the knowledge or consent of either the buyer or seller. On August 23, 1991, Respondents closed the CD and withdrew the balance. On August 23, 1991, Respondents opened CD 310725647 in the name of Equity Realty, Inc., with the balance at Community Savings Bank. On October 30, 1991, Respondents made a withdrawal in the amount of $175. On November 23, 1991, the CD was renewed. The account was closed on November 27, 1991, with a balance of $25,456.94, and deposited into the court registry. The interpleader action was ultimately resolved pursuant to a settlement agreement between the parties. Respondents obtained the consent of both parties, though not the written consent of both parties, before placing the escrowed funds into an interest bearing account on August 15, 1990. The uncontroverted testimony of Respondent, Franklin, concerning this issue was credible and persuasive. Neither the sellers nor the buyer ever revoked their consent. Respondents deposited the earnest moneys into an interest bearing account without designating who was to receive the interest from such an account without the consent of both parties. Respondents took appropriate action to resolve the conflicting demands made upon the earnest moneys deposited with Respondents but failed to take such action in a timely manner.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondents guilty of placing escrow funds in an interest bearing account without designating who is to receive the interest in violation of Florida Administrative Rule 21V- 14.014. It is further recommended that Petitioner should issue a written reprimand to Respondents and require Respondent, Franklin, during the next 12 months, to document to the satisfaction of Petitioner that he has completed 14 hours of the Brokerage Management Course. RECOMMENDED this 22nd day of January, 1993, in Tallahassee, Florida. DANIEL MANRY 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 22nd day of January, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-3323 Petitioner's Proposed Findings Of Fact. 1.-6. Accepted in Finding 1. 7.-8. Accepted in Finding 2. 9.-11. Accepted in Finding 3. Accepted in Finding 4. Accepted in Finding 5. Accepted in Finding 3. Accepted in Finding 6. Accepted in Finding 7. 17.-20. Accepted in Finding 8. 21.-22. Accepted in Finding 9. 1.-6. Accepted in Finding 1. 7.-8. Accepted in Finding 2. 9.-11. Accepted in Finding 3. 12. Accepted in Finding 4 13. Accepted in Finding 5. 14. Accepted in Finding 3. 15. Accepted in Finding 6. 16. Accepted in Finding 7 17.-20. Accepted in Finding 8. 21.-22. Accepted in Finding 9. 23.-24. Accepted in Findings 10.-11. Respondents' Proposed Findings Of Fact. 23.-24. Accepted in Findings 10.-11. COPIES FURNISHED: Darlene F. Keller, Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Jack McRay, Esquire General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 James H. Gillis, Esquire Department of Professional Regulation, Division of Real Estate Legal Section - Suite N 308 Hurston Building North Tower 400 West Robinson Street Orlando, Florida 32801-1772 Gregory T. Franklin, pro se %Equity Realty of South Fla., Inc. 5809 S.E. Federal Highway, #200 Stuart, Florida 34997 APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-3323 All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.
