The Issue The issues to be determined are whether Respondent violated sections 475.25(1)(e), 475.42(1)(b), and 475.42(1)(d), Florida Statutes (2011), and Florida Administrative Code Rule 61J2- 14.009, as alleged in the Administrative Complaint, and, if so, what penalty should be imposed?
Findings Of Fact The Department is the state agency charged with the licensing and regulation of the real estate industry in the state of Florida, pursuant to section 20.165 and chapters 455 and 475, Florida Statutes. At all times material to this proceeding, Respondent was a licensed real estate sales associate having been issued license number 3101946. During the time relevant to this case, Respondent was a sales associate affiliated with Bahia Real Estate ("Bahia"), a brokerage company owned by Raul and Ricardo Aleman, with offices located in Miami, Orlando, and Tampa, Florida. Respondent was employed in Bahia's Miami location. In 2010, Respondent acted as a sales associate on behalf of Michael Perricone for a real estate transaction involving the purchase of a condominium in the Blue Lagoon Towers ("Blue Lagoon") in Miami which was purchased as an investment. Mr. Perricone's sister, Francesca Palmeri, and her husband, Santo Palmeri, were present at the closing where they met Respondent for the first and only time. During the closing, which lasted approximately one hour, the Palmeris indicated to Respondent that they would be interested in making a similar purchase of investment property if another comparable condominium unit became available at Blue Lagoon. The Palmeris had no further interaction with Respondent until he contacted them at their home in Pueblo, Colorado, in 2011 to advise them of the availability of a condominium for sale at Blue Lagoon. On or about October 6, 2011, Respondent faxed a partially completed Bahia form "'AS IS' Residential Contract for Sale and Purchase" to Mrs. Palmeri for the Palmeris to use in making an offer on a condominium unit located at 5077 Northwest Seventh Street, Miami, Florida. Prior to forwarding the document to Mrs. Palmeri, Respondent wrote on the form the property description, the escrow agent name and address, the initial escrow deposit amount and additional deposit, the time for acceptance, the closing date, and listed himself as the "Cooperating Sales Associate" with "Bahia Realty Group, LLC." The Palmeris decided to offer a $125,000.00 purchase price. Respondent directed Mrs. Palmeri to complete the contract and provide a ten percent escrow deposit. Mrs. Palmeri entered a purchase price of $125,000.00, initialed each page, and signed the form as "Buyer." Respondent provided Mrs. Palmeri with instructions on how to wire the funds for the escrow deposit. On October 7, 2011, Mr. Palmeri wired $12,000.00 to J.P. Morgan Chase, which was then deposited in an account for Bonaventure Enterprises, LLC ("Bonaventure").1/ The Palmeris had no knowledge of Bonaventure, but, based upon the representations of Respondent, they understood the money they were asked to wire to the J.P. Morgan Chase account of Bonaventure was an escrow deposit for the property they intended to purchase at Blue Lagoon. The Palmeris had no discussion with Respondent regarding the reason for sending the escrow deposit to Bonaventure. They assumed that Bonaventure was somehow related to the seller or its title company. The condominium unit in question was bank owned; however, the Palmeris were not informed of this. No evidence was presented that Respondent had an ownership interest in Bonaventure. However, Bonaventure is owned by Respondent's brother and sister-in-law. At all times material hereto, Respondent was the managing member of Bonaventure. Bonaventure is not a licensed real estate broker. Bahia does not maintain an escrow account, and its sales associates are authorized to use title companies of their choice for receipt of escrow deposits. Respondent was aware that he was unable to accept the escrow deposit of the Palmeris in his own name, because, as a licensed real estate sales associate, he is prohibited from receiving the money associated with a real estate transaction in the name of anyone other than his broker or employer. In fact, Respondent was disciplined in 2010 for a similar violation.2/ Respondent claims that the Palmeris entrusted him with their $12,000.00 to hold for possible investments, not necessarily related to real estate transaction, and he was doing it as a favor for them as "friends." Respondent contradicted himself by stating his intention in directing the Palmeris to deposit their money into the Bonaventure account was to help them have cash on hand in Florida in order to meet the Blue Lagoon condominium seller's requirements to make the escrow deposit with the seller's title company within 24 hours after an offer was accepted. The Palmeris had no knowledge of the seller's unique restrictions on the escrow money. Further, Respondent's asserted motive in requesting the $12,000.00 to have cash on hand in Florida is undermined by the fact that, if the Palmeris could wire $12,000.00 to Bonaventure's bank account, they could also wire the funds directly to a title company chosen by the selling bank after acceptance of their offer. Shortly after returning the contract to Respondent and sending the escrow deposit, Mrs. Palmeri discussed increasing the purchase price by $1,000.00 for a total of $126,000.00. Based upon the language of the proposed contract, the Palmeris expected a response to their offer within 24 hours. Immediately thereafter, Respondent told the Palmeris that they were "in negotiations." However, almost a month passed before they heard from Respondent regarding the status of the purchase of the condominium. On or about November 4, 2011, Respondent contacted Mrs. Palmeri and stated that he had "good news." He indicated that the seller would be willing to sell the property for a price of $129,500.00. According to Respondent, the seller requested documentation from the Palmeris' bank indicating their ability to pay. Mrs. Palmeri indicated that this was not an acceptable counter-offer. Respondent suggested that he could negotiate a sales price of $129,000.00, but he needed the Palmeris to send an additional $9,000.00 to put into escrow. Mrs. Palmeri told Respondent that she was no longer interested in the property because their maximum offer was $126,000.00. During the same conversation, Mrs. Palmeri asked for the return of her deposit. Respondent expressed agitation that she was retreating from the possible purchase because he had done "so much work." Respondent clearly anticipated he would receive a commission if the deal was consummated. The Palmeris did not get an immediate return of their escrow deposit. Mrs. Palmeri called Respondent repeatedly and received no answer. She also sent an e-mail to J.P. Morgan Chase trying to find out the status of the deposit and received no reply. Mrs. Palmeri again attempted to contact Respondent on November 18, 2011, and left him a message that he needed to call her regarding the deposit. After receiving no response, she contacted Bahia and spoke with Ricardo Aleman. Mrs. Palmeri explained to Aleman that she had signed a real estate contract with Respondent on October 6, 2011. She no longer wanted to pursue this real estate transaction and wanted the escrow deposit returned. Aleman was unaware that Respondent was negotiating a real estate transaction for the Palmeris or had accepted their deposit money. Aleman contacted Respondent who confirmed by email that the Palmeris were no longer interested in purchasing the condominium at Blue Lagoon. Respondent wrote, "After a month of hard work . . . the client decided to drop. It was a little bit problematic. I lost time and money because the offer was already accepted and she had no reason to negotiate." Respondent assured Aleman he would return the deposit to the Palmeris. In accordance with Bahia's policies and procedures, its sales associates are required to complete a deposit form at the time of receipt of funds for escrow. No such receipt was received by Bahia from Respondent with regard to the transaction involving the Palmeris. However, it was not unusual for Bahia not to receive information regarding real estate transactions conducted by their sales associates until the time of closing. After discussing the matter with Aleman, Respondent advised the Palmeris that he could return their money within ten days. Respondent advised Mrs. Palmeri that he would send her two checks for the total amount--one check which she could cash immediately and a second check which would be postdated. In order to get a return of their deposit, Mrs. Palmeri agreed. On or about November 28, 2011, the Palmeris received two checks, each in the amount of $6,000.00, including one postdated for December 16, 2011. These checks were written on the account of Bonaventure and signed by Respondent.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate, enter a final order imposing on Alfonso Miranda an administrative fine in the amount of $6,000.00 and suspending the real estate sales associate license of Alfonso Miranda for a period of two years. DONE AND ENTERED this 2nd day of April, 2014, in Tallahassee, Leon County, Florida. S MARY LI CREASY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of April, 2014.
Findings Of Fact At all times pertinent to the charges, the Respondent Joyce A. Chandler, was a licensed real estate broker in the State of Florida, holding license number 0348072. Respondent's license was suspended for a period of one year pursuant to a Final Order of the Florida Real Estate Commission on August 4, 1983, which became effective September 3, 1983. To date, the Respondent has failed to take steps necessary to reactivate her license and she remains in a suspended status. Gerald and Mary Anne Jennings were the owners of a home located at 15413 S.W. 105th Avenue, Miami, Florida. There was a first mortgage on the home held by Stockton, Whatley and Davin. In the early part of 1981, the Jennings were experiencing financial difficulties and in an effort to help pay off debts secured a second mortgage in the amount of $15,000.00 from Davide and Associates, Inc. This mortgage from Davide and Associates, Inc., was a wrap-around mortgage making the total obligation (Stockton, Whatley and Davin plus Davide) approximately $44,000.00. In August of 1981, Davide and Associates, Inc. sold the wrap-around mortgage to Mr. and Mrs. Leon Shiff. In January of 1983, the Jennings made a decision to sell their home as they were having difficulty making payments to Shiff. The Jennings contacted Mr. Shiff and informed them of their decision, and Mr. Shiff attempted to secure prospective purchasers for them. On or about January 30, 1983, the Respondent Chandler made an offer to purchase the Jennings home, which offer was rejected by the Jennings. On or about February 2, 1983, the Respondent made a second offer to purchase the Jennings home which offer was accepted. The terms of this February 2, 1983 contract provided that the Respondent was to give sufficient funds to the Jennings to catch up on all mortgage arrearages, tender to the Jennings approximately $4,000.00 in cash, and the Jennings were to take back a third mortgage in the amount of $4,000.00. Respondent, in turn, was to assume the Stockton, Whatley and Davin mortgage and agreed to pay off the Shiff mortgage within 90 days. The Jennings desired to return to West Virginia immediately. Therefore, the Respondent promised and represented to the Jennings that she would secure tenants to occupy the residence while she attempted to obtain the necessary financing and to close the transaction and would use the proceeds from the rental money to make all mortgage payments. On or about February 22, 1983, the Respondent and the Jennings signed yet a third contract. Said contract has not been produced and the location of it is unknown. On this same date, the Respondent had the Jennings sign, in blank, a Warranty Deed. The Respondent represented to the Jennings that the Warranty Deed was nothing more than a Power of Attorney which enabled the Respondent to rent the house and use the rental money to make the mortgage payments while the Respondent sought the financing per the terms of the contract. Based on the Respondent's representations and promises, the Jennings vacated the residence and stopped making mortgage payments. Thereafter, the Respondent secured a Mr. and Mrs. Hill as tenants for the property. Mr. and Mrs. Hill came to the Respondent as tenants from Prudential Life Insurance Company. Mr. and Mrs. Hill had recently experienced damage to their home due to a fire and the Respondent secured rental property for the Hills on behalf of Prudential. In regards to this matter, Prudential paid via a double party check made payable to Robert Hill and Princess International, Inc. $1,950.00. The Respondent goes by the name of P. J. Chandler, Princess Chandler, Princess international and Princess International, Inc. These tenants remained in the Jennings' home for approximately two months. The Respondent made no mortgage payments to either Stockton, Whatley and Davin or to Mr. Shiff for the period of February 1983 to August 1983. Further, the last mortgage payment made was for the January payment delivered to Mr. Shiff by Mrs. Jennings. In order to keep the first mortgage in good standing with Stockton, Whatley and Davin, Mr. Shiff took it upon himself to make these mortgage payments although he was receiving no mortgage payments on the wrap-around from Mr. & Mrs. Jennings or the Respondent. In June of 1983, Mr. Shiff enlisted the aid of Herman Isis, attorney at law, to begin foreclosure proceedings on the residence. In August of 1983, the residence was sold to Shiff at the foreclosure sale. Thereafter, a certificate of title was received by Mr. Shiff in regards to said foreclosure purchase. The Jennings received only $3,248.00 from the Respondent as opposed to the approximate $8,000.00 contract amount. The transaction never closed as promised by the Respondent. Finally, the Respondent failed to make the necessary mortgage payments as represented and promised by her to the Jennings.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Respondent Joyce A. Chandler's license as a real estate broker be revoked. DONE and ORDERED this 22nd day of March, 1985, in Tallahassee, Leon County, 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 22nd day of March, 1985. COPIES FURNISHED: James R. Mitchell, Esquire Department of Professional Regulation, Division of Real Estate 400 W. Robinson Street Post Office Box 1900 Orlando, Florida 32802 Fred Graves, Esquire 315 S.E. Seventh Street Ft. Lauderdale, Florida 33301 Salvatore A. Carpino, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Fred Roche Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Harold Huff Executive Director Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, I hereby make the following findings of fact: Phyllis I. Reaves is now and was at all times material to these proceedings, a licensed real estate salesman in the State of Florida having been issued license number 0351816. Annette J. Ruffin is now and was at all times material to these proceedings, a licensed real estate broker having been issued license number 0076385. From May 2, 1983 to October 18, 1984, Respondent Phyllis I. Reaves was licensed and operating as a real estate salesman in the employ of Respondent Annette J. Ruffin, as broker, c/o International Investment Development Center, Belleair, Florida or Century 21 A Little Bit Country, Brandon, Florida. At all time material hereto, Respondent Phyllis I. Reaves was a licensed mortgage broker in the State of Florida. DOAH CASE NO. 85-1008/1138. COUNT I No evidence was presented concerning the allegations in Count I.. COUNT II No evidence was presented concerning the factual allegations of Count II. COUNT III No evidence was presented concerning the allegations of Count III. COUNT IV On June 10, 1983, Respondent Reaves entered into a real estate sales contract with Emmett K. Singleton, as seller to purchase certain real estate through the use of a land trust. The sales contract listed a total purchase price of $67,000. C-21 A Little Bit Country was listed on the contract as escrow agent of the binder deposit. The property had an existing first mortgage of approximately $33,854. Respondent Reaves agreed to assume the new mortgage and requested that Mr. Singleton obtain a second mortgage in the principal amount of $26,400. Reaves agreed to assume this second mortgage amount while allowing Mr. Singleton to keep the proceeds. Mr. Singleton agreed that the balance of the sales price would be paid via a purchase money mortgage to Respondent Reaves in the principal amount of $9,643.99. Respondent Phyllis I. Reaves executed a Hold Harmless and Indemnity Agreement which read as follows: "Phyllis Reaves does agree to hold Emmett K. Singleton harmless and does idemnify him against any future liability or losses related to the mortgage on subject property at 1912 Hastings Drive, Clearwater, Florida." The sales transaction closed on July 7, 1983, and Respondent Reaves received a real estate brokerage commission in the amount of $1,955. The contract provided that the "listing agent agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." The purchase money mortgage note was actually signed by Michael R. Fisher, as trustee, and not by Respondent Reaves. Respondent Reaves requested that Mr. Singleton give her the mortgage payment booklets and she would assume and pay off the existing and second mortgages. Singleton trusted Reaves and relied upon her statements that she would do as she promised. Respondent Reaves failed to assume and pay the notes and mortgages and thereby caused the seller to become delinquent with the lenders. After closing, Respondent Reaves, acting as the owner, obtained tenants for the property and collected rental payments. Respondent Reaves solicited and obtained $3,000 in connection with a lease/option agreement. The lease/option agreement provided that the sales price of the home would be $78,000 in three years. The rent would remain at $495 per month for three (3) years. The agreement further provided that $3,000 per year would be paid for three (3) years which would reflect a total down payment of $9,000. This down payment was considered the "option consideration." The agreement provided that one third of the option money would be returned if the option were not exercised. The tenants paid Respondent Reaves a total of $3,000 of the option consideration. The renters became concerned when they began to receive notices from Freedom Mortgage Company stating that certain mortgages on the home were overdue. The renters did not exercise the option to buy the home. The renter requested, but did not receive, $1,000 of the $3,000 option consideration back from Respondent Reaves. COUNT V On July 6, 1983, Respondent Reaves entered into a real estate sales contract with Stephen B. Barnes, as seller, to purchase certain real estate through the use of a land trust. The property was not listed", but a broker from Tam-Bay Realty approached Barnes and stated that he had a buyer. The purchase and sale agreement provided for a total purchase price of $91,000. The agreement listed "C-21 A Little Bit Country" as escrow-agent for the binder deposit. In addition, the purchase and sales agreement provided that: "Listing agent Tam-Bay agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." The seller agreed that he would allow Respondent Reaves to assume the existing mortgage of approximately $52,990. Mr. Barnes then agreed to obtain a second mortgage in the amount of $18,925. The seller agreed that the balance of the sales price would be paid via a purchase money mortgage in the principal amount of $16,670.91 to be paid by Respondent Reaves. In addition, Mr. Barnes obtained a home improvement loan in the amount of $4,900. According to the agreements between Respondent Reaves and Mr. Barnes, Mr. Barnes was to keep the money obtained by the second mortgage and the home improvement loan. Respondent Reaves agreed to assume the existing mortgage, the second mortgage and the home improvement loan. Respondent Reaves advised Mr. Barnes to state to the lender that the purpose of the loans were for home improvements. Respondent Reaves executed a hold harmless and indemnity agreement which stated as follows: "Phyllis Reaves does agree to hold Stephen. B. Barnes harmless and does indemnify him against any future liability or losses related to the mortgages on property at 13222 - 88 Place North, Seminole, Florida." The sales transaction closed on August 10, 1983, and Respondent Reaves received a real estate brokerage commission in the amount of $2,513.45 and a mortgage brokerage fee of $946.25. Respondent Reaves failed to assume and pay the notes and mortgages and thereby caused the seller to become delinquent with the lenders. COUNT VI On September 3, 1983 Respondent Reaves entered into a real estate sales contract with Floyd and Christine Erwin, as sellers, to purchase certain real estate through the use of a land trust. The contract concerned Floyd and Christine Erwins' home located at 2805 Candlewood Drive in Clearwater, Florida. The purchase and sale agreement provided for a total purchase price of $53,000. The agreement listed C-21 A Little Bit Country as escrow agent for the binder deposit. The agreement further provided that the "listing agent agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." Respondent Reaves agreed to assume the existing mortgages of $16,766.29 and $17,457.94. In addition, the sellers agreed to obtain a new mortgage in the principal amount of $4,900 and a $1,500 personal loan. Upon the advice of Respondent Reaves, the sellers stated to the lender that the purpose of the loans were for home improvements. Respondent Reaves and the sellers agreed that the sellers would keep the money obtained by the loans and that Respondent Reaves would assume the mortgages and make all of the required loan payments. The sellers agreed that the balance of the sales price was to be paid via a purchase money mortgage, payable by Respondent Reaves, in the principal amount of $12,375.77. Respondent Reaves executed a hold harmless and indemnity agreement which stated as follows: "Phyllis Reaves does agree to hold Floyd S. Erwin and Christine E. Erwin harmless and does indemnify them against any future liability or losses related to mortgages or liens on the subject property at 2805 Candlewood Drive, Clearwater, Florida." Floyd and Christine Erwin's home was listed with a broker, and the Erwins understood that Reaves was not their agent. Respondent Reaves told the Erwins that she was representing "some investors." The purchase money mortgage note was actually signed by "Michael R. Fisher, as trustee and not personally." Respondent Reaves made some payments on the purchase money mortgage note which was signed by Michael Fisher. The sales transaction closed on September 23, 1983, and Respondent Reaves received a real estate brokerage commission in the amount of $1,555.50. Respondent Reaves failed to assume and pay the mortgages and notes. Respondent Reaves has not made the payments due on the mortgages and notes and has caused the Erwins to become delinquent with their lenders. COUNT VII The evidence presented concerning Count VII consisted solely of documentary evidence. For reasons enumerated in the Conclusions of Law section, infra, the documents alone are insufficient to establish the basis of any offense. Therefore, a discussion of those documents would serve no useful purpose. COUNT VIII On October 16, 1983, Respondent Reaves entered into a real estate sales contract with Patricia and William Willis as sellers, to purchase certain real estate through the use of land trust. The contract concerned the Willis' home located at 417 North Missouri Avenue, Clearwater, Florida. The purchase and sale agreement provided for a total purchase price of $54,000. The agreement listed C-21 A Little Bit Country as escrow agent for the binder deposit. The agreement further provided that the listing agent ". . . agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." Respondent Reaves and the Willis' agreed that Respondent would assume the existing mortgage of $15,396.52. The sellers agreed to obtain the new mortgage in the principal amount of $34,100. The sellers agreed that the balance of the sales price would be paid via a purchase money mortgage in the principal amount of $8,898.45 to be paid by Respondent Reaves. Respondent Reaves agreed to assume the existing mortgage and the new mortgage in the amount of $34,100 and make all of the required loan payments. Respondent Reaves advised the Willis' to state to the lender that the purpose of the $34,100 mortgage loan was for home improvements. The Willis' applied for the loan but refused to state that the purpose of the loan was for home improvements. Respondent Reaves executed a hold harmless agreement which stated as follows: "Phyllis Reaves does agree to hold Patricia L. Carrah, a/k/a Patricia L. Willis and William Willis harmless and does idemnify them against any future liability for losses related to any mortgages or liens on the subject property " The sales transaction closed on November 23, 1983 and Respondent Phyllis Reaves received a real estate brokerage commission in the amount of $3,213 and a mortgage brokerage fee of $2,216. Respondent Reaves failed to assume the notes and mortgages and thereby caused the sellers to become delinquent with their lenders. COUNT IX No evidence was presented concerning the allegations of Count IX. COUNT X No evidence was presented concerning the allegations of Count X. COUNT XI No evidence was presented concerning the factual allegations of Count XI. COUNT XII No evidence was presented concerning the factual allegations of Count XII. COUNT XIII No evidence was presented concerning the factual allegations of Count XIII. No evidence was presented concerning the factual allegations of Count XIV. COUNT XV on January 13, 1984, Respondent Reaves entered into a real estate sales contract with Clifford and Virginia Miner, as sellers, to purchase certain real estate through the use of a land trust. The contract concerned the Miner's home located at 1247 Burma Avenue, Clearwater, Florida. The purchase and sale agreement provided for a total purchase price of $62,000. The agreement listed "C-21 A Little Bit Country" as escrow agent for the binder deposit. In addition, the agreement provided that the listing agent ". . . agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." Respondent Reaves and the sellers agreed that Respondent Reaves would assume the existing mortgage of $34,424.82. Respondent Reaves advised the sellers to obtain a $20,000 second mortgage that she would also assume. The sellers were to obtain the mortgage and keep the money as their equity, and Respondent Reaves was to assume the mortgage and make the payments. The sellers agreed that the balance of the sales price was to be paid via a purchase money mortgage in the principal amount of $6,865.33, payable by Respondent Reaves. Respondent Reaves promised the sellers that she would make all the required loan payments and assume the mortgages. Respondent Reaves executed a hold harmless agreement which stated as follows: "Phyllis Reaves does agree to hold Clifford S. Miner and Virginia N. Miner, his wife, harmless and does idemnify them against any future liability or losses related to any mortgages or liens on the subject property . . . ." The purchase money mortgage note was actually signed by Michael R. Fisher, "as trustee and not personally." Respondent Reaves told Mr. Miner that the hold harmless agreement provided additional assurance that she would personally assume all of the mortgage and loans. The sales transaction closed on January 31, 1984, and Respondent Phyllis Reaves received a real estate brokerage commission in the amount of $1,823.25 and a mortgage brokerage fee of $949.48. Respondent Reaves failed to assume and pay the notes and caused the Miners to become delinquent with their lenders, requiring them to "catch up" on the delinquent loan. COUNTS XVI, XVII AND XVIII. The evidence presented concerning Count XVI, XVII and XVIII consisted solely of documentary evidence. For reasons enumerated in the Conclusions of Law section of this Recommended Order, the documents alone are insufficient to establish the basis of any offense. Therefore, a discussion of those documents would serve no useful purpose. COUNT XIX During the later part of 1984, an investigator, representing the Department of Professional Regulation, went to speak to Mrs. Ruffin at her "Little Bit of Country" office concerning this case. The investigator requested that he be provided with the records from all of Respondent Reaves' transactions. Respondent Ruffin stated that she was unaware of the particular real estate transactions in question, but that she would check and provide the records at a later date because she was in the process of moving the location of her office. After subpoena was served, Respondent's counsel provided one of the documents in question. COUNT XX Respondent Ruffin employed Respondent Reaves as a salesman. Respondent Ruffin thought of Respondent Reaves as "an independent contractor." Respondent Reaves decided on her own hours and took care of her own transportation. Respondent Ruffin and Respondent Reaves were on an 85%-15% split fee arrangement. Respondent Ruffin knew that Reaves was interested in "buying a lot of property." Respondent Ruffin was basically aware of the method that Respondent Reaves was using to obtain property. Respondent Ruffin did not feel that the method was wrong, however, she did ask Respondent Reaves to leave employment after she received many calls complaining about Respondent Reaves and information that Respondent was in a "tight financial situation." Respondent Ruffin admitted that she had very little time to provide assistance or guidance to Respondent Reaves. DOAH CASE NO. 85-2454 COUNT I There was no evidence presented concerning the factual allegations of Count I. COUNT II There was no evidence concerning the factual allegations of Count II. COUNT III On October 2, 1984, an investigator, representing the Department of Professional Regulation, went to speak with Respondent Ruffin at her office. The investigator requested certain records relating to Respondent Reaves' transactions concerning the charges herein. Respondent Ruffin stated that she was unaware of the particular real estate transactions in question, but that she would check and provide the records at a later date because she was then in the process of moving her office. After a subpoena was served, Respondent Ruffin's attorney provided one of the documents in question. COUNT IV There was no evidence presented concerning the factual allegations of Count IV of DOAH Case No. 85-2454.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that Respondent Phyllis I. Reaves' license as a real estate salesman be revoked; and, RECOMMENDED that Respondent Annette J. Ruffin be issued a written reprimand and assessed an administrative fine of $500.00. DONE and ORDERED this 27th day of March, 1986, in Tallahassee, Florida. W. MATTHEW STEVENSON, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of March, 1986. APPENDIX The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner Adopted in Finding of Fact 1. Adopted in Findings of Fact 2 and 3. Adopted in Findings of Fact 8 and 11. Adopted in Finding of Fact 10. Adopted in Finding of Fact 10. Adopted in Finding of Fact 12. Adopted in Findings of Fact 15 and 16. Partially adopted in Finding of Fact 17. Matters not included therein are rejected as subordinate and/or unnecessary. Adopted in Finding of Fact 18. Adopted in Finding of Fact 20. Adopted in Findings of Fact 20 and 21. Adopted in Finding of Fact 23. Adopted in Finding of Fact 24. Adopted in Finding of Fact 26. Adopted in Findings of Fact 26 and 27. Adopted in Findings of Fact 31 and 32. Adopted in Finding of Fact 34. Adopted in Findings of Fact 37 and 38. Adopted in Findings of Fact 36 and 38. Adopted in Finding of Fact 40. Adopted in Finding of Fact 47. Adopted in Finding of Fact 49. Adopted in Findings of Fact 49 and 50. Adopted in Finding of Fact 55. Rejected as not supported by competent, substantial evidence. Rejected as not supported by competent, substantial evidence. Rejected as not supported by competent, substantial evidence. Rejected as not supported by competent, substantial evidence. Adopted in Finding of Fact 57. Adopted in Finding of Fact 58. COPIES FURNISHED: James H. Gillis, Esquire Division of Real Estate Post Office Box 1900 Orlando, Florida 32801 Gerald Nelson, Esquire 4950 West Kennedy Boulevard Tampa, Florida 33809 E. A. Goodale, Esquire 14320 Indian Rocks Road Largo, Florida 33540 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff, Executive Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802
The Issue Whether Carleen Chalk Lund, an active broker in Lund Realty, Inc. , a licensed corporate broker, failed to account or deliver to Daisy and Kenneth Parnell money in the form of a deposit which had come into her hands and which was not her property or which she was not in law or equity entitled to retain, under the circumstances, and at the time which was agreed upon or which was required by law or, in the absence of an agreed upon time, upon demand of the Parnells, who were entitled to such an accounting or delivery.
Findings Of Fact Carleen Chalk Lund and Norman Wayne Lund are registered real estate brokers holding current registration from the Florida Real Estate Commission and are active brokers in Lund Realty, Inc., a corporate broker registered with the Florida Real Estate Commission. On or about January 4, 1975, Daisy and Kenneth Parnell, the buyers, signed an offer to purchase the following real property from David and Wilma Hammer: East 184.5 ft. of NW 1/4 of SW 1/4 of Sec 6, Twp. 26 S, Range 29 E, N Osceola County. Said offer was accepted by the sellers. Subsequently, the buyers sent a telegraphic money order in the amount of $2,200 to Lund Realty, Inc. Therefore said money was deposited in the escrow account of Lund Realty, Inc. $2,000 as deposit on the Hammer's property and $200 to be used for closing costs. The following provisions of the Contract for Purchase between the buyers and the sellers are specifically noted and referenced: In accordance with provisions of paragraph 4, the contract was to be closed and the deed delivered on or before January 31, 1975. In accordance with the provisions of paragraph 6, the seller was to convey title to the aforesaid property to the buyer by agreement for deed. In accordance with the provisions of paragraph 7, the costs, if any, of preparation of closing documents and closing fee shall be borne equally by the seller and buyer. In accordance with the provisions of paragraph 9, all closing costs were to be divided equally between the buyer and seller including title insurance. In accordance with paragraph G of said standards, if the buyer failed to perform any of the covenants of the contract within the time specified, the deposit paid by the buyer might be retained by or for the account of the seller as consideration for the execution of the contract and in full settlement of any claims for camages and all parties would be relieved of all obligations under the contract and each party would execute a separate release of the other at that time. In accordance with the provisions of paragraph P of the standards, in the event that the buyer failed to perform and the aforesaid deposit was retained, the amount of the deposit was to have been divided equally between the realtor and the seller provided that the amount to be retained and received by the realtor would not exceed the full amount of the commission and that any excess would be paid to the seller. In accordance with the provisions of the paragraph "Commission to Realtor", the seller acknowledged the employment of Lund Realty, Inc. and agreed to pay Lund Realty a commission in accordance with the commission agreement. On January 25, 1975, copies of the articles of agreement, closing statement, and title insurance cost disclosure were sent by Chelsea Title and Guaranty Company to Mrs. Daisy Parnell at 88 North Pasack Road, Spring Valley, New York, 10977. The letter accompanying the aforementioned documents indicated that the sellers had executed the closing papers on that date. Said letter further indicated that as soon as the papers were signed by the recipient, that Dee A Burttram, manager of Chelsea Title and Guaranty Company, would record the articles of agreement and insure title to property. These papers were net signed and returned to Chelsea Title, and on February 14, 1975 a subsequent letter was addressed from Dee A. Burttram to airs. Daisy Parnell at the aforestated address indicating that Chelsea Title had not received the documents forwarded to Mrs. Parnell and offering further information if they had not been completed. See Composite Exhibit 10. Between January 25 and February 28, 1975 efforts were made by Lund Realty, Inc. to contact airs. Daisy Parnell without success. On February 28, 1975 it was determined that Frank Townsend, Attorney at Law practicing in Kissimmee, had been engaged by Sidney Schwartz, Attorney at Law practicing in New York, to review the contract entered into by Mrs. Daisy Parnell. According to his testimony, Frank Townsend recommended to Schwartz that Mrs. Parnell not go through with the contract until certain discrepancies in the contract were clarified. The discrepancies involved were the conflict between the provision of paragraph 2 stating that $8,000 purchase money note and mortgage to the seller while paragraph 6 indicated that the seller would convey title by an agreement for deed; the lack of a scribner's statement note on the papers to be filed with the Court; and a discrepancy between the amount of monthly payment as stated in the Contract for Sale and Purchase and the Agreement for Deed. However, by his letter of March 5, 1975 to Mrs. Daisy Parnell, Townsend refers only to problems involving the use of the Agreement for Deed which he concluded was not a problem if the sellers insisted on that form of conveyance, and the fact that the Agreement for Deed is unacceptable because it is unrecordable (an apparent reference to the fact that a scribner's notation was not made on the Agreement for Deed). By his letter of April 3, 1975 to Mr. Sidney Schwartz, Mr. Townsend indicates that he had completed all back ground work on the transaction and had advised Mr. Murray W. Over street, attorney for Mr. and Mrs. Hammer three weeks prior that he (Townsend) was ready to provide a note and mortgage in exchange for a Warranty Deed and had requested that Overstreet arrange a closing date. Mr. Townsend closes indicating that he had again contacted Mr. Overstreet reminding him that the Parnells wished to close. Several things are apparent from Townsend's letters of March 5 and April 3, 1975. It is apparent from the letter to Mrs. Parnell from Townsend dated March 5, 1975 that substantial concern existed on the part of Schwartz that the use of an Agreement for Deed in the transaction would provide to Mrs. Parnell less protection than she would have in a situation in which a note and mortgage was used. However, as stated above, Townsend pointed out that the use of an Agreement for Deed under the Florida Law would afford Mrs. Parnell the same protection as a mortgage. It is also clear from the April 3 letter that all problems related to the Parnell-Hammer transaction had been resolved, that they were ready to close but insisted upon a note and mortgage in exchange for a warranty deed, and their position had bean communicated to counsel for the Hammers. The demand for the use of a note and mortgage by the Parnells is contrary to the provisions of the Contract for Sale and Purchase between these parties entered into on January 4, 1975 and as of April 3, 1975 was the only reason for the Parnell's refusing to close. On April 3, 1975, Mr. Murray Overstreet attorney for Mr. and Mrs. Hammer, advised Frank N. Townsend, attorney for Mrs. Parnell, that the Hammers considered their Contract for Sale and Purchase with Mrs. Parnell to be null and void because the transaction was to be closed on or before January 31, 1975 and that as of April 3, 1975 the matter had not been completed. Mr. Overstreet further advised that his clients made no claim on the deposit made to Lund Realty and that said deposit might be returned to the buyers. A copy of this letter was sent to Lund Realty, Inc. Pursuant to the provisions of paragraph G of the Contract for Sale and Purchase referenced above, upon default of the buyer, the deposit paid by the buyer could be retained by or for the account of the sellers as consideration for the execution of the contract and in full settlement of any claims for damage. Under the provisions of paragraph P of said contract, said deposit would be divided equally between the realtor and seller; provided, however, that the amount retained or received by the realtor was not to exceed the full amount of the commission, in this instance $600. On April 4, 1975 in response to the copy of the letter from Overstreet to Townsend in which the Hammers declared the Contract for Purchase and Sale null and void, Lund Realty, Inc. wrote Frank Townsend advising him that the expenses for sales commission, cancellation fee, and termite inspection should be considered before any escrow funds were disbursed and requesting that Lund Realty be advised as to how Mrs. Parnell would like to handle the charges. Clearly, Lund Realty considered the Parnells to be in default and asserted a claim for commission. No evidence was received regarding any response from Townsend to the letter of Lund Realty, Inc. dated April 4, 1975. On May 14, 1975 Lund Realty wrote Mrs. Daisy Parnell sending her a check in the amount of $1,466, the amount of her deposit less expenses incurred by her for sales commission, cancellation fee, termite inspection, and insurance. The amounts of each of the expenses and copies of statements were enclosed. Although the check in question was retained by Mrs. Parnell, Lund Realty received a letter from Sidney Schwartz dated May 23, 1975 which states in pertinent part as follows: "I am led to believe that the seller in the proposed transaction did not perfect title and waived and/or released its interest in the contract. If this be so, the entire down pay ment of Mrs. Parnell must be returned to her imme- diately. Please inquire into this matter. You no doubt are aware that Mrs. Parnell has retained Florida counsel, namely, Frank N. Townsend, Esquire, Post Office Box 847, Kissimmee, Florida. This is further to advise that in the event there has been a wrongful retention of any of Mrs. Parnell's funds, complaints shall be lodged with all appropriate authorities including licen- sing authorities in the State of Florida." The next contact between the parties was a letter to Lund Realty from Frank Townsend dated June 19, 1975. In that letter, Mr. Townsend stated as follows: "This confirms our request in accordance with Mr. Overstreet's letter wherein no demand is made for any funds on behalf of the Hammers, the return of all funds deposited with you by the Parnells is specifically requested." A second follow-up letter was addressed to Lund Realty on July 14,1975 requesting a response to the aforementioned letter of June 19, 1975. It is clear that the basis for demand of return of the deposit receipt in its entirety was based on the statements in Overstreet's letter to Townsend dated April 3, 1975, that the Hammers made no claim to the deposit to Lund Realty, Inc. This position of the Hammers was subsequently clarified by Mr. Hammer in his letter of August 12 (Exhibit 7) and by Mr. Overstreet, who at the hearing, testified that the Hammers never intended to waive the amount of the commission and the cost. Lund Realty was entitled to its commission and the Hammers would have had a cause of action against the Parnells under the contract for the entire amount of the deposit. However, the existence of a dispute over claims to all or portions of the escrow funds developed slowly, and was based on whether the Hammers waived their rights to all or any portion of the escrow funds. In September 1975 Lund Realty requested an advisory opinion of the Florida Real Estate Commission regarding its duties. The conclusion of that advisory opinion was that disbursement should be made to the Parnells, and that the claims that Lund, Chelsea Title and any other individuals should be filed in a court of competent jurisdiction. The advisory opinion was silent, however, on Hammer's subsequent claim for the commission and cost from the deposit. As of the date of hearing, the $2,200 was on deposit in the escrow account of Lund Realty, Inc.
Recommendation The position and actions of the various individuals should also be considered in this case in arriving at a penalty because none of the parties have completely "clean hands." The Parnells precipitated the breach by insistence on a note and mortgage; the Hammers have made no attempt to clarify the situation by paying the commission and cost; and the attorneys kept Lund Realty completely in the dark about what was transpiring. The Lunds are the only ones involved in the transaction who have tried to carry out their obligation. Further, they also are the only ones who stand to lose financially without seeking judicial relief. While they have held the money, it has remained in escrow since the dispute arose. Based on the foregoing Findings of Fact, Conclusions of Law, and other factors bearing on the case, the Hearing Officer would recommend that the Florida Real Estate Commission place Carleen Chalk Lund on probation for one year. DONE and ORDERED this 28th day of January 1977 in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Manuel E. Oliver, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 Carleen Chalk Lund 612 West Vine Street Kissimmee, Florida 32741
The Issue The issue in this case is whether the Petitioner’s application for licensure as a mortgage broker should be approved.
Findings Of Fact Petitioner resides in Riverwoods, Illinois. He has four children, and is married to Sharon Wheat-Hester. Petitioner received his undergraduate degree from Wake Forest University in North Carolina. Petitioner also received a master’s degree and doctorate degree in theology from Share-A- Prayer and Word Theological School in Whitewater, Wisconsin. Petitioner is currently employed as the director of a ministry called Marketplace Movement Network. The ministry provides advice to businesses on Chritian business ethics. In that regard, Petitioner has published one book on the subject of Christian ethics in business. Petitioner is also the President and shareholder of Hester International, Inc., a Florida Corporation that since 1995, provides mortgage brokerage services in the State of Illinois and several other states. The corporation’s principal office is located in Illinois. The business has an established client list and referral list. Additionally, Petitioner is currently licensed as a mortgage broker in the Illinois, California, North Carolina and Hawaii. He has not had any disciplinary action taken against him in those states. On January 25, 1996, prior to the present license application at issue here, Petitioner sought licensure as a mortgage broker in Florida with the Florida Department of Banking and Finance, Respondent’s predecessor agency. On the 1996 application Petitioner answered “no” to a question that asked whether he had ever had a license revoked. Petitioner’s 1996 application was denied for a material misrepresentation or omission. Petitioner did not challenge the 1996 denial. On February 16, 2004, also prior to the present application, Petitioner again applied for a mortgage broker license. On this application, question number six asked: Have you had a license, or the equivalent, to practice any profession or occupation denied, revoked, suspended, or otherwise acted against which involved fraud, dishonest dealing, or any other act of moral turpitude? Yes No A “Yes” answer to question six required the applicant to attach details, provide a copy of allegations, and also supply documentation of the final disposition of the case. In response to question number six, Petitioner appeared to have marked both the answers “yes” and “no”, but then circled “yes.” On the second page of the application, Petitioner explained his answer to question number six, stating that he had had a real estate license ten years ago and that he had been involved with a dispute for $2,500 and lost the case. The explanation further stated that Petitioner was moving to Illinois at the time, so he voluntarily surrendered his license. On April 1, 2004, without investigating the facts to refresh his memory, Petitioner provided the requested signed letter of explanation. Subsequently, he withdrew his February application because he did not have time to deal with the ongoing questions the agency had regarding his application. Around July 13, 2004, after discussing the February 2004 application with Respondent, Petitioner submitted a revised Application for Licensure as a Mortgage Broker in the State of Florida. In response to question six, Petitioner marked “no” based on his memory that his real estate agent’s license had been “voluntarily surrendered.” Petitioner also submitted character reference letters. Additionally, Petitioner discussed with Respondent any proof of rehabilitation since the “voluntary surrender” of his real estate license. On page two of the July application, Petitioner wrote that his “only blemish” was a voluntary surrender of a real estate license in 1992. Petitioner stated, “[t]his was ‘not’ an act of moral turpitude or fraud.” In a deficiency letter dated July 28, 2004, the Office requested additional information from the Petitioner, including a signed statement explaining his side of the occurrence. On September 30, 2004, the Office received the same statement the Petitioner had previously forwarded to the Office for his February 2004 application. Petitioner again did not avail himself of the opportunity to discover the true facts surrounding the claimed surrender of his license. In the second paragraph of this explanatory letter Petitioner stated that the disciplinary action that led to surrender of his real estate license arose out of a transaction involving one of his customers who rented property to a third- party renter. Petitioner stated that the rental transaction between his customer and the third-party renter occurred in the lobby of Petitioner’s office without his knowledge or help. According to Petitioner’s, somewhat confusing, explanatory letter, the customer did not have the right to rent the house, but collected $2,500 from the renter and then left the state. Later, Petitioner discovered that the customer had closed in escrow and gained temporary occupancy of the home, thereby enabling the customer to ostensibly rent the home. Petitioner further explained that the renter sued him for the $2,500 and prevailed because the transaction took place in Petitioner’s lobby. Petitioner stated he lost the case because his attorney, Scott Hester (also his brother), was unavailable to make the closing argument and Petitioner had to do his own summation. In fact, Petitioner’s brother never represented Petitioner in the renter’s case because he did not have time to undertake the case. Petitioner did not supply the names of the people referenced in the letter because he did not remember them. As will be seen, at the time of the explanatory letter, Petitioner’s memory of the facts surrounding his license surrender is, at best, faulty. On April 19, 2005, the Office issued its Denial Letter, denying Petitioner’s application for licensure as a mortgage broker. As grounds for denial under Section 494.041(2)(c), (g), (i) and (q), Florida Statutes, the letter stated in relevant part: The Office’s background investigation and information you provided revealed the following: You answered Question #6 on your application as “no”, when it asks if you have had a license, or the equivalent, to practice any profession or occupation denied, revoked, suspended, or otherwise acted against which involved fraud, dishonest dealing, or any other act of moral turpitude. On or about May 7, 1996, the Florida Department of Banking and Finance, Division of Finance, denied your application for a license as a mortgage broker for making a material misstatement of fact on their application. On or about December 8, 1992, after the State of Florida, Department of Professional Regulation, Division of Real Estate conducted an investigation, you surrendered your license with that agency and entered into a written agreement stating that you agreed to have your license revoked. Accordingly, the Real Estate Commission did revoke your license in their meeting of January 19, 1993 effective December 8, 1992. The Investigative Report attached to the Final Order to revoke reveals that you were sued for dishonest conduct and subsequently, on March 25, 1992, ordered to pay Johannes Fruhwirt $7,800 plus post- judgment interest. This order was by the County Court of Broward County as a result of a Final Judgment, Case #9103333 CC53 and a Writ of Execution. The investigation revealed that Hester left the State of Florida without leaving word of his whereabouts. Apparently, that judgment was never satisfied. On May 14, 1991 you promised to pay $3000 to Leonard Schoenfeld when closing occurred on a home Mr. Schoenfeld was purchasing. Closing occurred shortly afterward, and you have never made that payment. On or about July 17, 1995, the State of Illinois received an Application Form to Operate as a Residential Mortgage Licensee in the name of Hester International, Inc. on which you were listed as 50% owner. You signed the “Verification” portion of that form and your signature was notarized on June 20, 1995 indicating that you verified as being true all data entered onto that form. However, you responded “N/A” to Part III, Question #10 which asks that you list all licenses which you or your firm have applied for and been denied and/or any and all licenses issued to you or your firm which were subsequently suspended or revoked. You therefore failed to disclose the revocation of your license with the Florida Division of Real Estate that occurred in 1992. On the same application filed with the State of Illinois, in response to Part III, question 19(m), you did not disclose that a judgment had been entered against you on grounds of fraud, misrepresentation, or deceit. The renewal for Hester International Inc., with the State of Illinois, states under the section labeled, “Averment of License” in item “s” that the licensee will advise the Commissioner in writing of any changes to the information submitted on the most recent application for license within 30 days of said change. The State of Illinois reports that you never disclosed the denial of a mortgage broker license in 1996 with the State of Florida . (i) On November 18, 2004 in an electronic filing for corporation reinstatement for Hester International, Inc., you certified that as Registered Agent you maintained an office at 6278 N. Federal Highway, Suite #305 in Ft. Lauderdale, Florida. In fact, that address is a mail drop leased to one Carl Thames, CPA. The signage required by Section 48.091(2), Florida Statutes, does not appear, and you and Hester International, Inc. are unknown at this location. In pre-hearing interrogatories, the Office asked Petitioner to provide more information about the transaction involving the transaction that had led to the revocation of his real estate license, including the identity of those individuals. Even though the importance of accuracy was apparent since Petitioner was now in litigation, Petitioner, again, without investigating the facts and relying solely on his improving memory answered the interrogatories posed to him. In his answers, Petitioner identified the “customer” who had collected the money as Leonard Schoenfeld and the “renter” as Johannes Fruhwirt. Petitioner went on, in his answers, to describe the transaction with Mr. Schoenfeld and Mr. Fruhwirt. This description is similar to the explanation offered in the explanatory letters supplied for his earlier applications. In his response to Requests for Admissions, Petitioner denied that in May of 1991 he acted as a real estate broker in the auction of a home located at 14884 Equestrian Way in Wellington, Palm Beach County, Florida, and that he had been unable to deliver a mortgage at an agreed interest rate. Petitioner also denied that he had agreed to pay $3,000 for closing costs as deferred interest payments. Despite these denials, Petitioner admitted that he had signed an agreement to pay $3,000 to Mr. Schoenfeld. Petitioner explained these denials by claiming that these funds were never due because the agreement to pay $3,000 was contingent on closing. Since the real estate deal never closed, the $3,000 was never due. At his July 15, 2005, deposition, Petitioner essentially reaffirmed the inaccurate account of events in his interrogatory answers. At the deposition, Petitioner was asked to review documents related to the Schoenfeld transaction. Those documents included: (1) a copy of the May 14, 1991, agreement wherein he agreed to pay Mr. Schoenfeld $3,000, (2) a handwritten letter wherein he agreed to pay Mr. Schoenfeld the money that he owed him, and (3) a warranty deed on property purchased by Mr. Schoenfeld. When he was shown the May 14, 1991, agreement, Respondent testified that he did not know why he would have agreed to pay Mr. Schoenfeld $3,000. Even when he was shown the deed on the property and even though he had notarized the signatures on that deed, Petitioner maintained that the deal never closed and he never owed the $3000. At hearing, Petitioner’s various and growing explanations during discovery significantly differ from his testimony. Petitioner testified that throughout his various explanations he had confused and combined several individuals into one transaction. Even though he knew that the true facts of these transactions were important to consideration of his application and in answering discovery in this case, Petitioner did not make any real attempt to refresh his memory of these transactions until shortly before the hearing. In fact, the Schoenfeld and Fruhwirt transactions involved different real estate deals and had nothing to do with each other. The Schoenfeld transaction occurred in 1991 and involved the sale of real property located at 14884 Equestrian Way in Wellington, Florida. Mr. Schoenfeld was Petitioner’s customer. As part of the transaction, Petitioner guaranteed he could get a mortgage at a certain rate. After failing to get Mr. Schoenfeld a mortgage at a certain rate, Petitioner agreed to pay Mr. Schoenfeld $3,000 upon closing. When Petitioner failed to pay Mr. Schoenfeld the $3,000 on closing, he asked Mr. Schoenfeld if he could make payments of $200 a month. In a letter to Mr.Schoenfeld, Petitioner confirmed that he would pay Mr. Schoenfeld the amount that was owed. Petitioner made two payments and then stopped making payments. In a letter dated July 1, 1991, Mr. Schoenfeld complained about his dealings with Petitioner to the Division of Real Estate. A few days before Mr. Schoenfeld’s deposition on July 25, 2005, Petitioner paid Mr. Schoenfeld $2,600. Mr. Schoenfeld accepted the payment since the money was still owed to him. However, the payment had been delayed for 14 years and did not include interest for those years. Petitioner testified that he made the payment because, once he remembered the details of the transaction, he felt morally obligated to pay Mr. Schoenfeld what he had promised. However, fulfillment of this obligation also occurred with this litigation pending and after denials that any money was due Mr. Schoenfeld. In short, Petitioner did not pay Mr. Schoenfeld the money that was due him for 14 years until Petitioner was forced to acknowledge the true facts of the Schoenfeld transaction in this litigation. The Fruhwirt transaction involved a man named Mark Ritter who was a client of Petitioner. Mr. Fruhwirt met with Mark Ritter at a house he wanted to rent. Eventually, Mr. Ritter sent him to Petitioner to complete a lease agreement. Mr. Ritter did not know about leases and said Petitioner was a friend whose real estate office could set up the lease contract. Mr. Fruhwirt met Petitioner at his real estate office. Since it was lunchtime, they went to a nearby Burger King to finalize the lease. While at Burger King, Mr. Fruhwirt paid Petitioner $2,850 on the lease. Petitioner’s testified that he did not receive any money from Mr. Fruhwirt and did not accompany Mr. Fruhwirt to Burger King. Petitioner testified that Mr. Ritter and Mr. Fruhwirt met in his lobby and both went to Burger King to finalize the lease arrangement. However, given Petitioner’s past faulty memory, Petitioner’s testimony is not credible. At some point, Mr. Fruhwirt moved into the house. Subsequently, Mr. Fruhwirt received a letter from an attorney representing the real owner demanding that he vacate the premises. Mr. Fruhwirt then discovered that Mr. Ritter was not the owner and had to hire an attorney to sort out his continued occupancy of the property. Eventually Mr. Fruwhirt bought this property. Mr. Fruhwirt sued Petitioner and the real estate office for the recovery of the $2,850 he had paid to rent the house. Petitioner was found liable, but the real estate office was found not liable because the transaction happened off its premises at Burger King. On March 25, 1992, the Broward County Court entered a judgment of $7,800 against Petitioner, finding that Petitioner had “breached his duty to disclose that Mark Ritter was not the owner of the involved property.” After Mr. Fruhwirt obtained the judgment, Petitioner declared bankruptcy. Mr. Fruhwirt pursued an adversary action in Petitioner’s bankruptcy proceedings. Subsequently, the Bankruptcy Court cited “11 U.S.C. 523 A(2) and 11 U.S.C. 523 A(4)” and refused to discharge the judgment debt. The Bankruptcy Court’s Order refusing to discharge the debt clearly conflicts with Dr. Hester’s repeated implications and statements that this debt was discharged in bankruptcy. Unable to collect from Petitioner, Mr. Fruhwirt filed with the Florida Real Estate Recovery Fund. The fund paid $2,850 to Mr. Fruhwirt and suspended Petitioner’s license. Mr. Fruhwirt used the money to defray some of his legal expenses. To date, Petitioner has not paid Mr. Fruhwirt any money on the judgment. The Fruwhirt transaction led to the revocation of Petitioner’s real estate license and, on January 19, 1993, the Florida Real Estate Commission entered a final order revoking Petitioner’s real estate license. Despite Petitioner’s testimony that he never received a copy of the documents, the certificate of service for the final order indicates it was sent to Petitioner at 1101 Hidden Cove, Salem, SC 29676, which was the address where Petitioner was living at that time. Again, Petitioner’s testimony is not credible. The Final Order referenced a December 8, 1992, agreement in which Petitioner agreed that his license would be revoked. In the December 8, 1992 agreement, entitled “Affidavit for the Voluntary Surrender of License, Registration, Certificate/Permit for Revocation,” signed by Petitioner, he agreed to the revocation of his license and to not apply for a new real estate license for ten years from the effective date of revocation. In particular, the December 8, 1992 agreement stated, “[t]he effective date of the revocation shall be upon signing this document.” Notwithstanding the clear language revoking the license, at the hearing, Petitioner maintained that because he had voluntarily surrendered his license, he did not believe his license had been revoked. In referring to the agreement he had signed, he testified that the agreement said, “that my license will be inactive, not revoked” and denied ever seeing the other documents revoking his license. This testimony is simply not credible and demonstrates Petitioner’s propensity to see or remember things in a way that is more flattering to him, irrespective of reality. The affidavit signed by Petitioner clearly stated that Petitioner’s license would be and was revoked upon signing. In 1995, Hester International applied to operate as a residential mortgage licensee in Illinois. The application identified Petitioner as the vice president and Sharon Hester as the president. Page one of the application indicated the application had to be executed “by two officers or all directors if the applicant/licensee is a corporation.” The application was signed by Petitioner and his wife. Petitioner did not disclose to Illinois that a judgment had been entered against him in Florida or that his real estate license had been revoked or suspended. Question 10 in Part III of the Application asked: “LIST ALL LICENSES WHICH YOU OR YOUR FIRM HAVE APPLIED FOR AND BEEN DENIED AND/OR ANY AND ALL LICENSES ISSUED TO YOU OR YOUR FIRM WHICH WERE SUBSEQUENTLY SUSPENDED OR REVOKED.” Petitioner responded “N/A.” (Id.). Question 19(m) in Part III of the Application asked: UNDER PENALTY OF PERJURY, I(WE) STATE THAT ALL OF THE FOREGOING IS TRUE AND CORRECT TO THE BEST OF MY (OUR) KNOWLEDGE AND FURTHER STATE THAT AS THE APPLICANT/LICENSEE: . . . (m) Has not committed a crime against the law of this State, any other state or the United States, involving moral turpitude, fraudulent or dishonest dealing, and that no final judgment has been entered against it in a civil action upon grounds of fraud, misrepresentation or deceit which has not previously been reported to the Commissioner. The evidence did not demonstrate that the emphasized clauses in question 10 or the “I(WE)” in 19(m) direct such questions to individuals signing the application. One reasonable interpretation of the language is that the questions are directed to the business entity applying for the license. In short, the I(WE) language is simply language in a form meant to cover multiple types of business entities ranging from sale proprietorships to corporations. Therefore, Petitioner was not required by Illinois to disclose matters which involved him personally. To date, Illinois has not filed any disciplinary action against Petitioner or Hester International. Thus, the failure to disclose personal judgments or license actions to Illinois in a corporate application for licensure does not support a finding of dishonesty or denial of Respondent’s application at issue here. At some point, Hester International’s corporate status had to be reinstated in Florida. Petitioner reinstated the company’s corporate status in November of 2004. Petitioner filed as registered agent at 6278 North Federal Highway #305, Fort Lauderdale, Florida. Petitioner had not lived at this address for some 15 years, but had lived there for seven years with his girlfriend. The evidence showed that Petitioner simply forgot to change the registered agent’s address and was not acting dishonestly. Once he discovered his mistake, Petitioner amended his filing to reflect the appropriate address. Again, these facts do not form a basis to deny Petitioner’s license application. Finally, Petitioner testified that until Spring 2005, he and his wife were 50/50 owners of Hester International, Inc., as reflected on the application and license renewals in Illinois. In September 2004, Ms. Hester submitted Hester International, Inc.’s application for Florida licensure as a mortgage broker business. The Hester International business application was submitted after the Office had denied Petitioner’s license application in 1996 and was scrutinizing his July 2004 application. In the application, Ms. Hester identified herself as 100 percent owner of the Hester International. Petitioner did review this application, but he intentionally did not take part in its filing. The purported change in ownership was not adequately explained at hearing and appears to have been done in order to forestall any problems with licensure of the corporation due to Petitioner’s participation in the corporation. While the change of ownership is troubling, given Petitioner’s history, and also adds to the evidence that Petitioner is less than forthright in his memory and past business dealings, the change of ownership for the corporation’s licensure application does not, by itself, support a denial of Petitioner’s application. On the other hand, too many inconsistencies exist between Petitioner’s hearing testimony and his earlier accounts to conclude that Respondent can be trusted to hold a mortgage brokerage license. At worst, the evidence shows that Petitioner is not truthful or acts with integrity. At best, the evidence shows that Respondent has the ability to convince himself of facts that do not quite fit the truth, but are more flattering to him. Under either scenario, Petitioner’s appreciation of honesty, truthfulness and integrity are suspect. Neither Petitioner’s letters supporting his good character, nor his success in his ministry demonstrates sufficient rehabilitation to overcome what appears to be long-time evasive behavior. Therefore, Petitioner’s application for licensure as a mortgage broker should be denied.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED: A Final Order be entered denying Petitioner’s application for licensure as a mortgage broker. DONE AND ENTERED this 4th day of November, 2005, in Tallahassee, Leon County, Florida. S DIANE CLEAVINGER 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 4th day of November, 2005. COPIES FURNISHED: C. Scott Hester, Esquire 13843 Longs Landing Road East Jacksonville, Florida 32225 Robert H. Schott, Esquire Gregg Morton, Esquire Department of Financial Services 200 East Gaines Street Fletcher Building, Suite 526 Tallahassee, Florida 32399-0376 Carlos G. Muniz, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0307 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue Whether respondents' real estate licenses should be revoked, suspended, or otherwise disciplined on charges of false promises, misrepresentation, culpable negligence, and breach of trust in a business transaction.
Findings Of Fact Respondent Terry L. Baker is now and was at all times material to the charges a licensed real estate broker holding license no. 204679. (P-1) He also was president, secretary, and treasurer of respondent Terry L. Baker and Associates, Inc., a licensed real estate brokerage corporation (lic. no. 213974) located at 1418 West Edgewood Avenue, Jacksonville, Florida. There are no other officers, directors, or members of this brokerage corporation; respondent owns 100 percent of the capital stock. (P-1) Respondent was, and continues to be, the active broker for this real estate brokerage corporation. (P-1) On July 21, 1982, respondent assisted in the negotiation and closing of a real estate sales transaction between Dolores B. Hawkins, as seller, and James W. and Patricia L. Dobson, as purchasers. The real estate involved was a residential lot and dwelling unit located at 7065 Bishop Hatcher Drive East, Jacksonville, Florida, and was, at the time, the subject of a mortgage foreclosure proceeding. (Testimony of Hawkins, Baker; P-2, P-6) The real estate sales contract was signed by the seller and buyers on July 21, 1982. At that time, respondent submitted a written estimate of the seller's closing costs. This estimate, signed by both respondent and the seller, showed that the seller would net $1,598.25 from the transaction. It was specifically noted that this net figure did not include an Atlantic Bank payment. This payment was a recognized obligation of the seller and was required to obtain the release of a record judgment lien held by the bank. Ms. Hawkins, the seller, understood that this payment was her obligation and was not included in the $1,598.25 figure. The written estimate also included seller's cost of approximately $2,000 for attorney's fees and back mortgage payments. The attorney's fees were related to the legal costs associated with the mortgage foreclosure proceeding. An existing mortgage balance, to be assumed by the buyers, was listed as approximately $19,000. (Testimony of Hawkins, Baker; P-3) On two separate occasions prior to closing, respondent told seller Hawkins that there had been an increase in the charge for attorney's fees associated with the mortgage foreclosure. (Testimony of Hawkins, respondent) Prior to closing, respondent loaned seller Hawkins $220 to help her pay her apartment rent. They agreed that the loan would be repaid out of the proceeds from the sale of her property. (Testimony of Hawkins, Baker; P-4) At closing on August 17, 1982, respondent presented the seller with a Seller's Closing Statement listing various charges to the seller, including the loan repayment of $220, the payment to Atlantic Bank (for release of lien) of $425, attorney's fees of $638.50, and an assumed mortgage of $19,847.51. The net amount due the seller was $675.82. The buyers paid the balance due at closing and the seller delivered the warranty deed to respondent for recording. A couple of days later, respondent, in turn, wrote a check for $675.82 and delivered it to the seller as net proceeds from the sale. Payment of respondent's commission was shared by the seller and buyers at closing. Respondent received the warranty deed at closing and the parties to the transaction expected him to have it recorded. He accepted this duty and undertook to perform it. However, he did not record the warranty deed on the public records until October 4, 1982--almost three months later--after repeated requests by the mortgage service company for a copy of the recorded deed. The delay was caused by respondent's waiting to receive a release of the Atlantic Bank lien so that he could record the two instruments at the same time. But after repeated requests for a copy of the recorded deed, he finally recorded it even though he had not yet received the release of lien. (Testimony of Baker, Hawkins, Dobson) Contrary to the Department's contention, respondent's delay in recording the deed does not constitute culpable negligence, false promises, misrepresentation, or breach of trust in a business transaction. His lack of diligence in recording the deed is, instead, an act of simple negligence. His carelessness exposed the buyers to unnecessary risk. During this delay of almost three months, the seller, while record titleholder, could have reconveyed the property or subjected it to additional encumbrances. Respondent, in delaying recordation almost three months, failed to exercise that degree of care which a reasonable man, in the same situation and with similar experience, would not have omitted. His failure to exercise due care does not, however, demonstrate willful, wanton, or reckless disregard for the rights of others. The Department also charges that respondent did not have--at time of closing--the lien of Atlantic Bank satisfied. Prior to closing, the respondent- -on behalf of the seller--negotiated the outstanding debt with attorneys for Atlantic Bank: He was told that the bank would accept fifty cents on the dollar, or $425. Thereafter, respondent collected this amount as a charge to the seller at closing. (Testimony of respondent) Respondent, however, did not have an executed release of lien form, or the judgment lien satisfied, at closing. He asserts--without contradiction-- that the bank's attorney at first offered to prepare the release, but later asked respondent to do so. By the time of closing, respondent had been either unable to obtain the release from the attorney, or he had been unable to obtain and complete the form on his own. When asked why he proceeded to close the transaction although the release had not been obtained, he states that both buyers and seller consented to the closing because the property was facing foreclosure. Respondent's assertion that the parties consented to closing, in the absence of a release of lien, is unrefuted and accepted as fact. No evidence was presented that, in light of the parties' consent, closing of the transaction was improper.
Recommendation Based on the foregoing, it is RECOMMENDED: That the administrative complaint, and all charges contained therein, be dismissed for failure of proof. DONE and ENTERED this 23rd day of September, 1983, in Tallahassee, Florida. R. L. CALEEN, JR. 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 23rd day of September, 1983.
The Issue The issue in this case is whether Respondents are guilty of mishandling an escrow deposit.
Findings Of Fact Respondent Vu is and was at all material times a licensed real estate broker, holding Florida license number 0394778. He is and was at all material times the qualifying broker for Respondent American Homes and Investment Realty, Inc., which holds Florida license number 0250718. Respondent Vu owns Respondent American Homes. In 1990, Mr. and Mrs. Serge Delisfort contacted Respondents about purchasing a residence. The Delisforts eventually signed a contract to purchase a home and paid the $500 earnest money deposit to Respondents. Later learning that they would be liable to pay an annual homeowners' fee of $72, the Delisforts told Respondent Vu that they did not want to complete the purchase. The listing broker, which was not either Respondent, omitted mention of the homeowners' fee from the listing information supplied Respondents and the Delisforts. The sellers refused to release the deposit. Confronted with the dispute, Respondent Vu promptly requested an escrow disbursement order from the Florida Real Estate Commission on March 29, 1991. Due to the presence of a factual or legal dispute, the Florida Real Estate Commission informed Respondents, in a 47-word letter dated October 16, 1991, that it could not issue an escrow disbursement order. The October 16 letter warns Respondents to "immediately choose one of the other two alternatives available to you under ss. 475.25(1)(d), Florida Statutes, to settle this dispute, i.e., arbitration or a civil court." Instead, Respondents did nothing. The Delisforts periodically contacted Respondent Vu and asked if he could release their deposit. The sellers sold their house to another party and moved to Puerto Rico. The Delisforts contacted another broker and purchased a different house through the new broker. Eventually, the Delisforts contacted the Florida Real Estate Commission and asked its help in obtaining the deposit. An investigator for the Division of Real Estate interviewed Respondent Vu on March 1, 1994. Explaining the reason for the delay, Respondent Vu, possibly confused, stated that the buyers had left Orlando for awhile. In fact, the buyers had remained in Orlando. At the suggestion of the investigator, Respondent Vu contacted both parties, and they agreed to split the deposit equally. Respondent Vu prepared the paperwork, which the parties signed on March 11, 1994. At that time, Respondents paid each party $250. The Delisforts have since listed their home for sale by Respondents. While improperly holding the $500 deposit, Respondent Vu was preoccupied by the illnesses and deaths of his parents, who remained in Vietnam. Despite the possibility of trouble upon his return to Vietnam, Respondent Vu traveled to Vietnam at least once during this time to care for one or both of his parents. Respondents failed to implement timely the remedies established by law and identified by the Florida Real Estate Commission in its letter of October 26, 1991. Respondent Vu acted two and one-half years later, only after one of Petitioner's investigators contacted him. It is no excuse that the costs of arbitration or court would have consumed a large part of the amount in dispute. Confronted with that prospect, the sellers or the Delisforts would probably have settled the matter. If not, that would have been their problem, not Respondents'. The fact is that Respondents failed to discharge their obligations by presenting the dispute for resolution in a timely fashion. Nonetheless, the amount involved is modest. Neither party had a clear claim to the funds, nor was either party exceptionally troubled by Respondents' casual handling of the matter. The Delisforts contacted the Florida Real Estate Commission, but did not realize that they were in effect filing a complaint against Respondents, in whom they entrusted the sale of their current home. A final order issued July 18, 1988, involves Respondents' mishandling of a salesperson's commission. The husband of the salesperson owed Respondent Vu some money, and both men agreed that the debtor's wife would work off the debt by selling real estate at Respondent American Homes. However, the debtor's wife was of a different mind. After earning her first commission, she refused to allow Respondents to credit it against her husband's debt. When Respondent Vu ignored her demand for payment, she filed a complaint, which resulted in the final order and Respondents' proper payment of the commission.
Recommendation It is hereby RECOMMENDED that the Florida Real Estate Commission enter a final order finding both Respondents guilty of violating Section 475.25((1)(d)1, reprimanding both Respondents, and requiring Respondent Vu to take a thirty-hour broker management course. ENTERED on February 22, 1995, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings on February 22, 1995. COPIES FURNISHED: Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32802-1900 Steven W. Johnson, Senior Attorney Department of Business and Professional Regulation Division of Real Estate Legal Section--Suite N-308 Hurston Bldg., North Tower 400 West Robinson Street Orlando, FL 32802-1772 Dau Viet Vu 1048 Pine Hills Rd. Orlando, FL 32808
Findings Of Fact Frederick Hodgdon (Hodgdon) has held Florida real estate broker license 0206805 at all times pertinent to this case. Hodgdon is owner and qualifying broker for Pelican Realty of Marco Island, Inc., (Pelican Realty), through which Hodgdon conducts business and which also is named as a respondent. At all times pertinent, Pelican Realty has held Florida corporate real estate broker license 0223934. July 24 through August 6, 1984, respondents placed the following newspaper advertisement in the Sun-Daze: DO YOU KNOW ... that all Florida real estate brokers are agents for the seller and CANNOT legally propose any lower than listed prices or better terms for the benefit of the buyer? UNLESS ... the broker legally qualifies himself as an agent for the buyer. As a Buyer's Broker Pelican Realty CAN and DOES exactly this and a lot more! Buyers pay no fees or commissions. Call or send for our informative brochure, you will be glad you did. The real estate buyer's best bet for the best price is to have a Buyer's Broker. On February 19, 1986, respondents placed the following newspaper advertisement in the Marco Island Eagle: 1/ BUYER BEWARE! DON'T BUY REAL ESTATE ON MARCO ISLAND. ... before consulting an attorney or carefully reading Paragraph 5) and 7) of the 1985 Revision of the Sales Contract as approved by the Naples Area Board of Realtors and the Marco Island Area Board of Realtors and the Collier County Bar Association contract Revision Committee. The Contract states quote: "The Buyer has inspected the property sold by the Contract and there are no other inspections permitted or required. The property is acceptable in its AS IS condition as of date of this offer. INCREDIBLE! ... What happens to the unwitting Buyer who intends to have termite, structural and seawall inspections AFTER his offer is accepted? He just may have to buy a termite ridden house that needs a new roof and a seawall that is on the verge of collapse. Thats what! ... Taken at face value the Sales contract calls for the buyer to spend several hundred dollars for inspections BEFORE making an offer that may well be turned down. INCREDIBLE! .... Paragraph 7) states quote: "Buyer's decision to buy was based on Buyer's own investigation of the property and not upon any representation, warranty, statement or conduct of the Seller, or broker, or any of Seller's or broker's agents" (Excluding those rare occasions when the seller and his agents remain silent.) INCREDIBLE! ... The above subject sections of Paragraphs 5) and 7) of the 1985 Sales Contract in our opinion may well violate the Realtor's Code of Ethics Article 7) "to treat fairly all parties to the transaction." There is nothing Pelican Realty could say or do to better emphasize the Buyer's need to have an advocate on his side. ... As a Buyer's Broker we recommend striking out any and all terms and conditions of the Sales Contract that are prejudicial to the Buyer's best interests. ... Pelican Realty would appreciate the opportunity to discuss with any interested parties the many advantages of working with a Buyer Broker. Our services are at NO additional expense to the buyer. CALL US FOR FURTHER DETAILS. NOW!! On March 11, 1986, respondents placed the following newspaper advertisement in the Sun-News: CASH BACK FOR THE REAL ESTATE BUYER. THAT'S INCREDIBLE! Pelican Realty GUARANTEES CASH BACK to every buyer on every sale. The bigger the sale, the bigger the cash gift to the buyer. On top of this Pelican Realty (a Buyer's Broker) goes all out to get the lowest possible price for the buyer at NO additional cost to the buyer. Other realtors must get the highest price for the seller. The thousands you SAVE already belong to you. THINK ABOUT IT! Call us for further details NOW! "WE PAY OUR BUYERS TO DO BUSINESS WITH US" There is nothing false or fraudulent about the three advertisements. However, the following statements in the advertisements are deceptive or misleading in form or content: The representation in the July 24 through August 6, 1984, Sun-Daze advertisement that buyers pay no fees or commissions. In form, the buyer perhaps does not pay brokerage fees or commissions. But in substance, the buyer does indirectly pay his broker a brokerage fee or commission when the seller pays fees and commissions out of the proceeds of the sale. The representation in the July 24 through August 6, 1984, Sun-Daze advertisement that a buyer's broker "legally qualifies himself as an agent for the buyer." Although perhaps technically correct, this representation implies separate state regulation and qualification procedures for licensure as a buyer's broker. In fact and in law, any licensed real estate broker can become a buyer's broker simply by entering into an agreement with a buyer to be the buyer's broker. The representation in the March 11, 1986, News-Sun advertisement: "Other realtors must get the highest price for the seller." Read carefully in context, this representation is true--realtors other than those representing a buyer must try to get the highest price for the seller he represents (while being open, honest and fair to the buyer). But, as written, the representation could lead one to believe that the respondents have an ability no other realtors have when, in fact and in law, any realtor or other licensed real estate broker who represents a buyer can try to get the best price for the buyer. Although respondents have offered cash rebates, no client has seen the offer or asked for a rebate. Although respondents have maintained their innocence, they changed the ads to meet the criticism of the Department of Professional Regulation.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Florida Real Estate Commission enter a final order (1) reprimanding respondents, Frederick Hodgdon and Pelican Realty of Marco Island, Inc., and (2) fining them $500 each for violations of Section 475.25(1)(c), Florida Statutes (1985). RECOMMENDED this 21st day of July, 1987, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of July, 1987.
