Findings Of Fact At all times relevant hereto John Young was registered as a real estate salesman by the Florida Real Estate Commission. On October 2, 1985 Respondent and William Kelly, D.O. entered into a contract to jointly purchase a condominium from Concord Developers Inc. (Exhibit 1). The contract provided for a down payment of $2,000 with an additional earnest money deposit of $3690 to be paid on or before November 4, 1985. Respondent and Kelly each gave the seller a check for $1000 at the signing of the contract and this $2000 was deposited in escrow with the escrow agent. Kelly met Respondent through Respondent's wife who worked in Kelly's office. At the time Kelly was looking for income tax shelters and this purchase appeared to qualify for that purpose. On November 9, 1985, Kelly made out a check payable to John Young in the amount of $1845 which represented Kelly's half of the additional $3690 earnest money deposit. This check was either cashed by Young or deposited in Young's bank account (Exhibit 2). The additional earnest money deposit was not made to the seller, as required by the contract, Exhibit 1. Young notified Bayside Federal Savings and Loan Association, who was to finance the sale, that the loan application was withdrawn, the transaction was cancelled, and two checks in the amount of $1000 each were returned to the seller by the escrow agent (Exhibit 6). The customary practice of the seller in such a situation was to return the down payment to the buyer by check drawn on the seller's account. While no witness could recall this specific transaction, the usual practice would be to return the deposit to the buyer. In this case, the deposit would normally have been returned to Young. Young acknowledged that he received the return of his $1000 deposit but not the $1000 that represented Kelley's portion of the down payment. When Kelley gave Young the check for $1845 he inquired if it was necessary for him (Kelley) to attend the closing and Young advised him it was not. When Kelley subsequently learned that the transaction did not close, he demanded the return of his money. To date he has received none of the monies he deposited to purchase this property. Evidence was presented that in December 1985, Young closed on a condominium he and his wife had contracted to purchase in this same development, and subsequently moved into this unit. While this indicates Young had the opportunity to convert Kelley's contribution to the purchase of the condominium by Young and his wife, no credible evidence was presented that he did so. The evidence that was presented regarding this transaction was that Young was able to move into that unit with a total cash outlay of less than $500. Young accounted for the $1845 check from Kelley as payment of a bet between him and Kelley on one football game. In rebuttal Kelley testified that not only did he not bet with Young on any matter, but also he has never gambled on a football game in his life. Young's testimony that a $1845 bet was made on a football game is so unbelievable that it taints all of his testimony.
Recommendation That the Real Estate license of John Young be revoked. Entered this 2nd day of June, 1989, in Tallahassee, Florida. K. N. AYERS 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 2nd day of June, 1989. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Post Office Box 1900 Orlando, Florida 32801 Robert H. Dillinger, Esquire 5511 Central Avenue St. Petersburg, Florida 33701 Darlene F. Keller Division Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32802 Bruce D. Lamb General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0729
Findings Of Fact At all times pertinent to the charges, Respondent was a licensed real estate salesman and broker-salesman, license number 0326235. In 1983, Dorothy Nutt and Diane Falstad were the owners of a house located at 608 Hillcrest Street, Orlando, Florida. In December of 1983, Ms. Nutt and Ms. Falstad placed this house for sale with real estate broker Frank Daley. The listing was an exclusive listing except as to the Respondent and another individual, for which no commission would be paid, if a contract submitted by the Respondent was accepted by Nutt and Falstad prior to December 26, 1983. On December 25, 1983, the Respondent, along with his parents, Barbara Okoniewski and Louis Okoniewski, Jr., submitted a written contract to Diane Falstad and Dorothy Nutt for the purchase of the 608 Hillcrest Street property. The contract was accepted by the sellers on December 26, 1983. The contract, as executed by the Respondent and his parents, specified that a $1,000 deposit was to be held in escrow by "Closing Agents." Additionally, Respondent represented to Ms. Falstad that the $1,000 deposit was being maintained in an escrow account. Pursuant to the terms of the contract, Respondent applied for a V.A. mortgage loan, but was later determined to be ineligible. Subsequent thereto, on or about February 8, 1984, application was made with Residential Financial Corporation (RFC), to obtain financing to purchase the 608 Hillcrest Street property. The application was in the name of the Respondent's parents, with Respondent handling the matter on their behalf. Thereafter, the Respondent requested that the loan officer (Charlyne Becker) at RFC not submit the loan application for approval to the underwriters. Pursuant to his request, the application was not submitted for approval. The transaction did not close. Subsequent to the scheduled date of closing both Ms. Falstad and Ms. Nutt made demands of the Respondent for forfeiture of the $1,000 deposit, due to their belief that, he had breached the contract by failing to secure financing. It was not until after the scheduled closing date that the sellers learned the $1,000 was not in escro. To date, Respondent has neither deposited the $1,000 in any trust account nor paid any money to the sellers. Respondent admits through his own testimony, that he did not make the deposit, nor was the deposit placed in any escrow account by his parents. Respondent's testimony, which was not rebutted, established that he and his parents sought to purchase the 608 Hillcrest Street property and that adjacent to it for rental purposes. However, they were advised by the RFC loan officer (Charlyne Becker) that the applications were not likely to be approved by RFC. Respondent did not thereafter pursue any of the loan applications.
Recommendation Based on the foregoing, it is RECOMMENDED that Petitioner enter a Final Order fining Respondent $500. DONE and ENTERED this 12th day of July, 1985 in Tallahassee, Florida. R. T. CARPENTER, 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 12th day of July, 1985. COPIES FURNISHED: James R. Mitchell, Esq. Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Louis S. Okoniewski 730 Lake View Avenue, N.E. Atlanta, Georgia 30308 Harold Huff. Executive Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esq. General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 ================================================================ =
Findings Of Fact At all times material hereto, Respondent Robert Marriott has been a licensed real estate broker/salesman under the laws of the State of Florida, trading as Marriott Realty. In February of 1980, in his capacity as a real estate broker/salesman, Respondent obtained an offer to purchase commercial property in Miami from Orlando Villacis, a resident of Ecuador, as purchaser, for a total purchase price of $500,000. In conjunction with the offer, Villacis paid a $20,000 earnest money deposit to be held by Marriott Realty in escrow under the terms of the offer. Villacis' deposit check in the amount of $20,000 was deposited into the Marriott Realty escrow account on February 22, 1980. By March 11, 1980, Villacis' $20,000 had been withdrawn, leaving an escrow account balance of $40. This fact was never reported to Villacis. Having heard nothing definite from Respondent with regard to the offer, and because he spent most of his time out of the country, Villacis engaged the services of attorney Rafael Penalver. Prior to July 1980, Penalver contacted the Respondent and inquired as to the status of the offer. Each time, Respondent told him that the seller was still considering the offer. In July of 1980, Respondent told Penalver that the $500,000 offer had been rejected by the seller and recommended that Villacis present an offer for $570,000. Penalver prepared the offer in the amount of $570,000, again calling for a $20,000 earnest money deposit, which Penalver and Villacis assumed was still in the Marriott Realty escrow account. Receiving no response from Respondent on the second offer, Penalver attempted to contact Respondent by telephone on numerous occasions. When Penalver was successful, Respondent told him that the seller was reviewing the offer. In early September 1980, Respondent advised Penalver that the $570,000 offer had been rejected by the seller. By letter dated September 11, 1980, Penalver raised the offer to $600,000, set a deadline of September 19 for the acceptance of the offer, and directed Respondent to return the $20,000 immediately should the offer not be accepted. After September 19, having heard nothing from the Respondent, Penalver called him, at which time Respondent advised that the offer was being considered by the seller. Penalver then wrote a letter dated October 7, 1980, to Respondent demanding that Respondent deposit the $20,000 into Villacis' account. Again hearing nothing from Respondent, Penalver on numerous occasions attempted to contact him by telephone in order to again demand the immediate return of the $20,000 deposit. Being unsuccessful, Penalver wrote the Respondent on November 20, 1980, and January 22, 1981, both times demanding the return of the $20,000 earnest money deposit. After the letter of January 22, 1981, Respondent agreed to meet with Penalver in Penalver's office. On February 2, 1981, the Respondent and his wife met with Penalver. During that meeting, Respondent advised Penalver that the $20,000 was no longer available and that he and his wife had used the money to make mortgage payments and cosmetic improvements on their personal residence. Respondent challenged Penalver to sue him to get the money back. After discussing Respondent's position with Villacis, Penalver filed a civil action for return of the $20,000. In his Answer to the Complaint filed in that litigation, Respondent admitted that he had used the $20,000 deposit for mortgage payments and other personal household expenses and for payment of his IRS tax deficiency. Villacis obtained a Final Judgment in the civil action in the amount of $20,000 plus interest and costs on October 6, 1982. Respondent testified that he did not return the $20,000 earnest money deposit because, in approximately October 1980, Villacis verbally agreed to loan the $20,000 to Respondent. Villacis strongly denied making any offer of a loan to Respondent. The purported loan agreement would have occurred after Penalver had twice written Respondent regarding immediate return of the $20,000 and seven months after the $20,000 had disappeared from the escrow account. Further, after Penalver sent his November demand letter, Respondent wrote Villacis in December of 1980 asking that Villacis consider loaning Respondent the $20,000 in exchange for an unrecorded mortgage on Respondent's personal residence. Clearly, Respondent's testimony is not credible. As of the date of the formal hearing in this cause, the Final Judgment in favor of Villacis and against Respondent remained unpaid and Respondent had still not returned to Villacis the $20,000 earnest money deposit.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding Respondent guilty of the allegations contained within the Administrative Complaint filed against him and revoking his license as a real estate broker/salesman. DONE and RECOMMENDED this 30th day of April, 1984, in Tallahassee, Leon County, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of April, 1984. COPIES FURNISHED: Tina Hipple, Esquire Division of Real Estate 400 West Robinson Street Orlando, Florida 32801 David I. Schlosberg, Esquire 525 North 27th Avenue, Suite 100 Miami, Florida 33125 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff, Executive Director Division of Real Estate 400 West Robinson Street Orlando, Florida 32801
Findings Of Fact Robert & Gilman, Inc. at all times herein involved was registered as a real estate broker by the State of Florida. Delair A. Clark at all times herein involved was registered as a real estate salesman by the State of Florida. Residential property owned by William L. and Frances Crummett was listed with J.B. Steelman, Jr. real estate broker and put on Multiple Listing Service. On June 17, 1972, immediately after the For Sale sign was erected, Respondent, Delair A. Clark, presented an offer to the sellers on this property which was accepted by sellers on the same date presented (Exhibit 9). This contract provided the purchase price of $28,500 with a $300 earnest money deposit, the usual clauses in a form contract for sale and purchase, and two special clauses to wit: "A. Subject to: Buyer being reassigned to central Florida prior to June 22, 1972. In the event the assignment does not materialize by June 23, 1972 deposit will, be returned in full and contract will be null and void. B. Subject to: Buyer obtaining a 90 percent conventional loan for a period of 25 years or an FHA loan for 30 years." By telegram dated 6/20/72 (Exhibit 8) buyer confirmed re-assignment to Orlando, thus satisfying condition A in the contract. Buyers thereafter asked for earlier occupancy than originally called for. Since special arrangements would have to be made by sellers, Mr. Crummett asked for an amendment to the contract to increase the earnest money deposit to $1,000 of which $500 would be non-refundable if contract was not consummated. This amendment was duly executed by the buyers on July 15, 1972 and by the sellers. A copy thereof was admitted into evidence as Exhibit 11 which provides: "SPECIAL CLAUSE" "C. An additional deposit of $700 will be made on July 17, 1972, of which $500 will be non-refundable in the event the referenced contract is not consumated (sic)." This amendment was forwarded to the sellers by Respondent's Roberts & Gilman letter of July 17, 1972 which amendment was executed by the sellers upon receipt and mailed back to Roberts & Gilman. The July 17, 1972 letter was signed by Judy L. Rostatter of the sales processing department. A copy of the check received from the buyers was not enclosed although the letter stated it was enclosed. Prior to receipt of this amendment Crummett was advised by Richter, the buyer, that he had mailed a $700 check to Roberts & Gilman made payable to Crummett. Crummett was also advised by Respondent Clark that the check had been received. Since closing was scheduled to be held within a couple of days Crummett requested Clark to hold the check and he would endorse same at closing. Crummett never saw the original check for $700. On the day originally scheduled for the closing (circa July 18, 1972) Crummett received a telephone call from Respondent Clark to the effect that the appraisal on the property had come in some $3,000 below the asking price and inquiring if Crummett would accept $26,000 for his property. The latter advised he would not and, after some heated words, Crummett hung up. At this time it was evident to Respondent Clark and the sellers that the sale would not be consummated. Clark put a memo in the file dated July 28, 1972 saying: "Return checks of $700 + $300 in estrow (sic) to Richter. Seller advised we had no contract." A few weeks later, on August 3, 1972, after making several phone calls to Roberts & Gilman without success, Crummett had the listing broker, J.B. Steelman, write a letter (Exhibit 7) to Gilman making demand for the $500 deposit refund. By letter dated August 11, 1972 (Exhibit 6) Roberts and Gilman replied that they considered the contract had been terminated by the seller and saw no "justification by the seller to claim any escrow that has been returned to the buyer". This letter was signed "Dan T. Gilman /b.c." Several months later, in the spring of 1973, Crummett went to the office of Roberts and Gilman and obtained a photostatic copy of the check dated 7/15/72 that had been made by J.A. Richter in the amount of $700. This was admitted into evidence as Exhibit 12. At the hearing Dan G. Gilman, President of Roberts & Gilman, Inc. denied any recollection of any part of this transaction or ever having heard of the incident prior to the investigator from the FREC coming to inquire about the incident. At the time of this transaction the realtor's office was very busy with several branch offices and some 120 salesmen handling transactions in eight or ten counties in central Florida. He has no recollection of dictating Exhibit 12 or anything about the incident but his secretary at that time was Beverly Cass. It was standard practice for a broker to review every contract before trust account money was disbursed or refunded. His initial testimony that numerous people in the office had authority to sign his name to letters going out of the office was recanted when he was recalled as a witness after the close of the Commission's case. He then stated he never authorized anyone to sign his name to a document having legal implication. Clark testified that the first time he ever saw Exhibit 11, the amendment to the contract, was when shown to him by the investigator for the FREC. Likewise he claims never to have seen or received the $700 check signed by Richter. With respect to the return of the deposit to Richter, (after being shown Exhibit 13) his recollection of the cancellation of the contract was that Richter was not re-assigned to the Orlando area. This was the only contract ever handled by Clark which involved the return of an escrow deposit. He has no recollection of talking to any member of the realty firm regarding clearing the return of the escrow deposit to Richter. Exhibit 5 is a photocopy of the check by which the $300 earnest money deposit was returned to Richter. It is obvious that the contract for the sale of the residential property herein involved was amended to provide for an additional deposit from the buyers and a clause which required the buyer to forfeit one half of his deposit in the event the transaction was not consummated. It is incomprehensible that such an amendment to the contract could be made without the knowledge of the salesman or the broker. It therefore appears that the Defendants either: (1) are not telling the truth; (2) have faulty memories; (3) allowed the duties normally performed by brokers to be carried out by secretaries; or (4) operated a realty company in a slipshod manner without due regard to the duties and responsibilities imposed upon brokers and salesman by the real estate license law.
The Issue The issue presented is whether Respondents are guilty of the allegations contained in the Administrative Complaint filed against them, and, if so, what disciplinary action should be taken against them, if any.
Findings Of Fact At all times material hereto, Respondent Lori Wilk has been a licensed real estate broker in the State of Florida, having been issued license number 0349551. The last license issued was as a broker in care of Stars and Stripes Realty, Inc. At all times material hereto, Respondent Stars and Stripes Realty, Inc., has been a corporation registered as a real estate broker in the State of Florida, having been issued license number 0253076. At all times material hereto, Respondent Wilk has been licensed and operating as a qualifying broker and officer of Respondent Stars and Stripes Realty, Inc. Gwendolyn Taylor-Herbert, as owner, had listed for sale certain real property with Coldwell Banker Residential Real Estate, Inc./Gil Amara. Respondents obtained LPS Investments, Inc., as purchaser pursuant to a sales contract which was accepted by the seller on March 14, 1989. LPS Investments is owned by Leo and Patricia Scarola. Patricia Scarola was a former salesperson for Respondents. That Contract for Sale And Purchase of Real Property provided that a total of $500 as deposit monies was to be held in escrow by Stars and Stripes Realty. Respondent Wilk executed the portion of the Contract which acknowledged receipt of the first $100 of the deposit monies. Respondents' escrow account deposit slips reveal the first $100 was deposited into Respondents' escrow account. No proof of receipt of the additional $400 exists among the escrow account deposit slips admitted in evidence; however, Respondent Wilk's testimony is accepted that Respondents received in trust a total earnest money deposit in the sum of $500. Thereafter, LPS Investments, Inc., refused to close, alleging misrepresentation by the seller of the property. Although the property had been advertised as a "handyman special" and the Contract provided that the property was accepted in an "as is" condition, the Scarolas who never saw the property before they entered into the Contract to purchase it discovered that it would cost more to improve the property than they had guessed. They decided not to close. Rather, Pat Scarola instructed Respondents to transfer the $500 earnest money deposit to another piece of property not involving Gwendolyn Taylor- Herbert. Without the prior knowledge or consent of the seller or of the listing broker, Respondents transferred the Scarolas' earnest money deposit to another transaction for the benefit of the purchaser (LPS Investments, Inc.) and not involving the same seller. This was done without even considering whether the seller or the seller's agent might have an interest in the deposit. At no time prior to the time that the Respondents' transferred the deposit to a different property did the Respondents give the listing broker or the seller an opportunity or notice to make a demand upon the Respondents for the deposit. After the transfer, and after the contract failed to close, the seller and the seller's agent made a demand that the $500 deposit be accounted for and delivered. It was not. On June 1, 1989, Respondents obtained an offer from Herb Sider, as purchaser, for the property owned by Gwendolyn Taylor-Herbert. That offer was accepted by the seller. The Contract for Sale and Purchase of Real Property provided that a total deposit of $1,000 was to be held in escrow by Stars and Stripes Realty. Respondent Wilk executed that portion of the Contract acknowledging that the first $100 of the earnest money deposit had been received by Respondents. That representation was false. Sider never gave Respondents the earnest money deposit specified in the Contract, and Respondents failed to advise anyone that the representation in the Contract was false. Although Respondent Wilk testified that she would "normally" keep $100 of Sider's money in her escrow account to be applied to the various contracts that he entered into through her, there is no evidence that there was $100 in Respondents' escrow account at the time or that it was available to be applied to this Contract. Rather, Respondent Wilk's testimony is accepted that she never received either the initial $100 or the additional $900 deposit monies from Sider for this property. Herb Sider refused to close. The seller, Gwendolyn Taylor-Herbert, agreed to lower the sales price, and a modified contract was executed between Taylor-Herbert and Sider. Thereafter, Sider again refused to close. At no time did Respondents notify anyone that they did not have an earnest money deposit in escrow for the Taylor-Herbert/Sider transaction. Diane Quigley, branch manager of Coldwell Banker Residential Real Estate, Inc., sent a letter dated July 11, 1989, to the Respondents transmitting release of deposit receipt forms and instructing Respondents to release the $500 earnest money deposit of LPS Investments, Inc., and the $1,000 earnest money deposit of Herb Sider to the seller Gwendolyn Taylor-Herbert. Respondents ignored that demand letter. By letter dated August 25, 1989, Quigley again wrote to Respondents demanding the release of the Sider and the LPS Investments, Inc., deposits to the seller. That letter referred to the July 11th letter which Respondents had ignored and the numerous phone calls placed by Quigley to Respondents which had not been returned. On September 13, 1989, Respondents for the first time notified Petitioner of possible conflicting demands. That letter misrepresented the facts of the situation and suggested that the seller and buyer might still be able to strike a deal. On October 3, 1989, Respondents again wrote to the Florida Real Estate Commission advising that "there is now a conflicting demand" on the deposits relative to the Gwendolyn Taylor-Herbert property. Respondents' letters reveal a lack of understanding of the basics of a real estate contract. Neither letter advised the Commission that Respondents did not have any of the monies in escrow at any rate. On December 27, 1988, Respondent Wilk made an offer to purchase real property from Bel-Properties, Inc., which offer provided that $100 earnest money deposit would be held in escrow by Stars and Stripes Realty, Inc., and an additional $2,050 earnest money deposit would be placed in the Stars and Stripes escrow account within 72 hours of acceptance. Respondent Wilk executed the portion of the Contract for Sale and Purchase of Real Property acknowledging that the initial $100 deposit had been received. That representation was false. The Contract which she prepared listed as the buyer "Lori Wilk, a lisenced [sic] real estate broker, and/or assigns." The offer was accepted by the seller on December 30, 1988. In connection with that offer, Respondent Wilk represented that she was the purchaser when, in fact, she was acting on behalf of the actual purchaser HBS Investments, Inc., a corporation owned, controlled, and operated by Herb Sider. Immediately upon the acceptance of Respondent Wilk's offer, she assigned the sales contract to HBS Investments, Inc. At no time did Respondent Wilk or HBS Investments, Inc., place the $2,150 earnest money deposit in the escrow account of Stars and Stripes Realty, Inc., as represented by Respondent Wilk to the seller and as required by the Contract. Further, at no time did Respondents advise the seller that they did not have an earnest money deposit in the Stars and Stripes escrow account. On November 28, 1988, Respondent "Wilk, a lisenced [sic] real estate broker, and/or assigns" made an offer to purchase real property from Darlene Farris. Farris accepted that offer on December 6, 1988. That Contract for Sale and Purchase of Real Property provided that an initial deposit of $100 had been placed in the escrow account of Stars and Stripes Realty and that an additional earnest money deposit of $1,900 would be placed in escrow within 72 hours of acceptance. Respondent Wilk executed the portion of the Contract acknowledging that she had received the initial $100 earnest money deposit. That representation was false. In fact, Respondent Wilk never placed any of the $2,000 earnest money deposit in her escrow account and never advised the seller or the seller's listing broker that no earnest money deposit had been made. On or about February 2, 1989, Respondents solicited and obtained Willy Pearson as a tenant for the Farris property. Respondents represented to Pearson that the lessor was HBS Investments, Inc. Respondent Wilk prepared a Memorandum to Enter Into a Lease acknowledging the receipt of $550 as a deposit from Pearson, although Respondent Wilk only received $250 from Pearson. When Respondent Wilk received half of the rental deposit, she gave Pearson both a receipt and immediate possession of the property. Respondents obtained the tenant without the prior knowledge and consent of Darlene Farris, owner of the property. Further Respondents did not notify Farris or Farris' broker that Respondents had rented Farris' property until sometime after Respondents had received the $250 deposit from Pearson and had given him possession of Farris' property. Neither Respondent Wilk nor HBS Investments, Inc., ever closed on the Farris property. Further, Respondent Wilk never obtained authority from Darlene Farris to obtain or place a tenant in Farris' property.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered finding Respondents guilty of the allegations contained in the Administrative Complaint filed against them and revoking the licenses of Respondents Lori Wilk and Stars and Stripes Realty, Inc. RECOMMENDED this 8th day of May, 1991, in Tallahassee, Florida. LINDA M. RIGOT 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 8th day of May, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-2468 Petitioner's proposed findings of fact numbered 2-21 and 23-28 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed finding of fact numbered 1 has been rejected as not constituting a finding of fact but rather as constituting a conclusion of law. Petitioner's proposed finding of fact numbered 22 has been rejected as being irrelevant to the issues under consideration in this cause. Respondents' proposed findings of fact numbered 2-9, 19, and 23 have been adopted either verbatim or in substance in this Recommended Order. Respondents' proposed finding of fact numbered 1 has been rejected as not constituting a finding of fact but rather as constituting a conclusion of law. Respondents' proposed findings of fact numbered 10, 15, and 27 have been rejected as being contrary to the weight of the credible evidence in this cause. Respondents' proposed findings of fact numbered 11, 12, 14, 16-18, 20-22, 24, 25, 28, and 30 have been rejected as not been supported by the weight of the credible, competent evidence in this cause. Respondents' proposed findings of fact numbered 13, 26, and 29 have been rejected as being irrelevant to determination of the issues involved in this cause. COPIES FURNISHED: 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 Post Office Box 1900 Orlando, FL 32802-1900 Monte K. Rassner, Esquire Rassner, Malove, Rassner, Kramer & Gold Plaza 7000, Suite 500 7000 Southwest 62nd Avenue South Miami, FL 33143 Darlene F. Keller, Division Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street P.O. Box 1900 Orlando, FL 32802-1900 Jack McRay, General Counsel Department of Professional Regulation Northwood Centre, Suite 60 1940 North Monroe Street Tallahassee, FL 32399-0792
Findings Of Fact On May 18, 1978, the Respondents, C. H. Chapman and Chapman Realty Corporation (hereafter Respondents or Chapman) through a registered real estate salesman in the employ of the Respondents, negotiated and obtained a sales contract between Gerry and Ada Ball, as buyers or purchasers and Joseph Winston, as seller, for the sale of property located at 305 Ben Avon Drive, Tampa, Florida. Pursuant to the terms of the sales contract, the Respondents' salesman received a $1,000.00 deposit from the purchasers which was placed in the Respondents' trust account on May 5, 1978. Prior to the date of the scheduled closing, the purchasers inspected the property and requested the seller to make certain repairs and/or replacements to rectify defects which included wood borer damage, structural roof problems and an inoperable pool heater. The seller refused to make the repairs and/or replacements demanded and the offer was formally withdrawn by the purchasers on July 28, 1978, via letter to Chapman Realty requesting return of their $1,000.00 earnest money deposit. Prior to formal withdrawal of the offer, verbal demands were made by Mr. Hall upon Chapman Realty for the return of his deposit. The demand for repairs and/or replacements and withdrawal of the offer was predicated on a provision of the sales contract which provided: Buyers themselves, or at their expense may have property inspected to ensure that there are no structural, electrical or plumbing defects. If any are found, buyers have the right to withdraw their offer and have all of their earnest deposit refunded to them. Thereafter, Respondent Chapman disbursed the $1,000.00 as follows: $350.00 via check dated September 6, 1978, made payable to Robert A. Carbonell, an attorney-at-law in Florida. $500.00 via check dated January 9, 1979, made payable to purchasers Hall. $150.00 via check dated January 10, 1979, made payable to Robert A. Carbonell. Prior to any disbursal the Respondent Chapman discussed with Mr. Hall the possibility of placing the escrowed funds with the Clerk of the Circuit Court. Respondent Chapman contacted his attorney, Robert Carbonell, regarding the conflicting demands of the parties. Mr. Carbonell was introduced to Mr. Hall by the Respondent over the telephone. The Respondent met with Mr. Carbonell on a regular basis since Mr. Carbonell was employed by the Respondent to handle real estate transactions involving Chapman Realty. Respondent was never authorized by the purchasers to pay a fee to Mr. Carbonell directly from the $1,000.00 deposit held in trust. The $500.00 was paid directly by the Respondent to Attorney Carbonell from the Chapman Realty escrow account without oral or written authorization of the seller or the purchasers and in the absence of a settlement agreement between the Hall's and Mr. Winston. Although Mr. Carbonell and the Respondent Chapman believed that Mr. Carbonell was representing Mr. Hall, neither Mr. Hall nor the seller, Mr. Winston, were under the same impression. Both Mr. Hall and Mr. Winston believed that Mr. Carbonell was representing the Respondents rather than Mr. Hall. Such an impression was reasonable in light of Mr. Carbonell's regular employment by the Respondent, the absence of a written agreement between Mr. Hall and Mr. Carbonell coupled with the lack of discussion or agreement concerning fees and the potential conflicting positions which existed between the parties and the Respondents. If any fee were due to Attorney Carbonell for his efforts in securing the return of the $1,000.00 deposit, this was a matter between Mr. Carbonell and Mr. Hall. Neither Mr. Carbonell nor the Respondent Chapman discussed the amount of the fee with the Halls. Mr. Carbonell arrived at the amount he thought was reasonable, $500.00, and Respondent Chapman diverted such amount to Mr. Carbonell from the Respondent's escrow account.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Respondents', C. H. Chapman and Chapman Realty Corporation licenses to practice real estate be suspended until restitution is made to Gerry and Ada A. Hall, as follows: $500.00 plus interest at 12 percent accrued since July 28, 1978, and Interest on $500.00 accrued at 12 percent for the period from July 28, 1973 until January 9, 1979. Respondents' licenses to be reinstated upon submission and acceptance by the Board of Real Estate of satisfactory evidence of payment. DONE and ORDERED this 7th day of April, 1981, in Tallahassee, Florida. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of April, 1981. COPIES FURNISHED: Frederick H. Wilsen, Esquire Staff Attorney Department of Professional Regulation Staff Attorney 2009 Apalachee Parkway Tallahassee, Florida 32301 Dale W. Vash, Esquire DIXON, LAWSON & BROWN 620 Twiggs Street Tampa, Florida 33602
Findings Of Fact By Receipt for Deposit Offer to Purchase and Contract for Sale dated April 26, 1971 Michael J. and Mary Martha Solomon deposited with David J. Watson, Respondent herein, a $5,000 earnest money deposit on a house and tract of land in Polk County. This receipt for deposit became a contract for sale when executed by the seller and contained two special clauses that were disputed at the hearing. The first is "This contract is subject to a change in county zoning. The change is from residential to rural conservation for the purpose of keeping horses." The second special clause which purportedly led to the rescission of the contract is "Seller to convey all pumps, air conditioners, and septic tank in good condition." Michael Solomon (hereafter referred to as Solomon) apparently in response to an advertisement, entered Respondent's office to inquire about the property herein involved. Solomon was interested in purchasing the house which was advertised (Exhibit #6) provided he could buy additional land which he intended to develop as lakefront lots. His father, Dr. Solomon, expected to retire soon and move to Florida, and Solomon thought the house would be suitable for his parents who would provide a substantial part of the purchase money at the time of closing. Since his father raised Arabian horses as a hobby he wanted to be sure that he would be able to keep horses on the property. Respondent Watson, being a somewhat inexperienced broker, suggested the zoning change to rural conservation, and the special clause relating to zoning change was put in the contract. Prior to executing the contract Solomon and his wife inspected the premises and, on one occasion prior to the week in which one day was set for closing, Dr. Solomon flew down from Pennsylvania to look over the property. The testimony of the buyers and others involved in this transaction is in irreconcilable conflict with respect to the details leading to rescission of the contract by the buyers. Well prior to the date set for closing Respondent, while Solomon was in his office, called the County Zoning Department to inquire about the zoning on the property involved in the contract. He then learned that the zoning of the property was R-1 (Residential) and that horses could be kept on the property for personal use so long as the stables for feeding and housing were located not less than 100-feet from the residence. This was communicated to the buyer and he accepted this explanation. An official of the County Zoning Department confirmed at the hearing that the property was so zoned and that horses could be maintained on the premises for personal use. He also stated that an administrative determination could permit horses to be raised on the premises as a business venture; however, this issue was not raised at any time by any of the parties to the contract. Although the buyers testified that they requested the Respondent (or his salesman) to obtain in writing from the county zoning officials confirmation that horses could be kept on the property, neither the broker nor the salesman recall any issue being made of the zoning provision prior to the rescission of the contract. In view of the fact that the sale price of the entire parcel would amount to some $250,000 resulting in a commission to the brokers office of approximately $20,000 it is not conceivable that he would have risked losing such a commission by failure to ask the zoning officials for written confirmation that horses could be kept on the property if the buyers had so requested. Shortly before the day set for the closing Solomon's parents arrived and inspected the house. Apparently Mrs. Solomon was not satisfied with the house so Solomon requested a formal inspection the following day. Conditions found at this inspection rest in the eye of the beholder. The buyers all testified the house had been vandalized, paint was thrown in the garage, screens had been ripped off, windows broken, the basement was flooded, the sprinkler system and the air conditioner were inoperative. Others who visited the premises acknowledged that paint had been spilled on the concrete floor of the garage when a paint can had been turned over, but none had ever seen water in the basement, there was no evidence of vandalism, and all equipment was operable. Respondent produced a bill for repairs to the air conditioner, dated prior to the preclosing inspection, which showed charges only for installing new filters. Neither the Respondent nor anyone other than the buyers recall any complaint by the buyers during this inspection. They did recall that the elder Mrs. Solomon did not like the house. The salesman could not point out the location of the septic tank but there was no evidence that it was not functioning properly. At a preclosing conference held in the office of the attorney representing both parties to this transaction the elder Solomons became quite upset regarding the cost of title insurance on the property and indicated then that they would not close as scheduled. Apparently there are only two law offices in Auburndale and one of the lawyers in Auburndale is one of the four sellers of the property. The buyers accepted the attorney in the other office as their attorney with knowledge that he was representing both parties. The evening before the date set for closing Michael Solomon called Respondent Watson to tell him that his mother hated tide house and that he would be unable, to close. Watson advised him that he would forfeit his deposit if he didn't go through with the contract as the sellers were not the type to refund any of the deposit. Clause 11 of the contract provides that the seller may elect to retain the deposit as liquidated damages if he does not choose to sue for specific performance. At the termite inspection conducted prior to closing, termite infestation was noted and treated at the expense of the seller. N indication was raised by any witness that this issue affected the of the contract. After the date set for the closing had passed, Michael Solomon never requested return of his earnest money deposit from Respondent. Approximately one year later mesdames Solomon requested Respondent Watson to return the deposit and he advised them he was unable to do so. Some six weeks after the July 15, 1971 closing date the attorney- seller demanded that Respondent disburse funds due sellers pursuant to Clause 11 of the contract and offered to file suit against ham unless he did so. Respondent contacted the attorney representing sellers and buyers in this transaction for legal advice regarding his responsibilities. He was advised to disburse the funds. He obtained authorization: from the sellers to pay for the air conditioner repairs and for some work done in the yard at the request of Solomon. By checks dated September 7, 1971 Respondent disbursed $502.45 to each of the four sellers. This represented their share of the deposit less expenses.
The Issue The issue for determination at the final hearing was whether the Respondent violated the real estate licensing law, as alleged in the Administrative Complaint, by failing to account and deliver a deposit; failing to maintain a deposit in a real estate brokerage escrow account or some other proper depository until disbursement thereof was properly authorized; and/or being guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, and/or breach of trust in a business transaction.
Findings Of Fact Based on 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: Respondent is now, and was at all times material hereto, a licensed real estate broker in the State of Florida having been issued license number 0360741. The last license issued was as a broker, c/o Consolidated American Realty Services, Inc., in Tampa, Florida. From June 6, 1983, through June 25, 1984, Respondent was licensed and operating as a real estate broker under the trade name, "Benjamin Realty," in Tampa, Florida. For sometime prior to June 2, 1984, Eileen Cumbie attempted to sell a lot owned by her located at 1102 26th Avenue, Tampa, Florida. On June 2, 1984, the Respondent contacted Ms. Cumbie and informed her that he had a client interested in purchasing the property. Ms. Cumbie informed the Respondent that as long as she netted a certain amount, she would be willing to sell the property. Ms. Cumbie allowed the Respondent to put together a contract for the sale of the lot. In connection therewith, the Respondent prepared a sales contract with Danilo Castellanos, as purchaser, and Eileen W. Cumbie, as seller, for the purchase and sale of the property. Pursuant to the purchase and sales agreement, the Respondent received in trust from Mr. Castellanos a $500 earnest money deposit via check dated June 2, 1984. On June 5, 1984, the Respondent deposited the check into his real estate brokerage account maintained at the Central Bank of Tampa, 2307 W. Rennedy Boulevard, Tampa, Florida. Mr. Castellanos entered into the contract for the benefit of his son and daughter-in-law who resided in New Jersey but were planning to relocate to the Tampa area. Mr. Castellanos' daughter-in-law went to look at the lot on June 10, 1984 and decided that she did not like the area in which it was located. The closing of the transaction was set for June 15, 1984. On approximately June 13, 1984, Mr. Castellanos' daughter- in-law informed the Respondent that they were no longer interested in purchasing the property. Ms. Cumbie was out of town during the time of the scheduled closing, but had prepared and signed all of the paperwork in advance. When she returned after June 15, 1984, she called Respondent to find out how the closing went. The Respondent informed her that the buyers failed to go through with the transaction. The contract provided in part as follows: ". . . If the buyer fails to perform this contract within the time specified herein, time being of the essence of this agreement, the deposit made by the buyer shall be disposed of in the following manner: To the Broker an amount equal to his earned commission, but not to exceed 1/2 of the deposit which shall discharge the sellers obligation to him for that service; remainder to the seller to be credited to him against his damages accrued by reason of the breach of contract. " After the transaction failed to close, Ms. Cumbie requested that Respondent give a portion of the deposit to her. The Respondent told Ms. Cumbie that he would give her the entire deposit because she had paid for the survey and a few other items to facilitate the closing of the transaction. Over the next several months, the Respondent, on several occasions, promised to deliver a check to Ms. Cumbie. However, the Respondent never delivered any such check to Ms. Cumbie. Because the Respondent failed to provide Ms. Cumbie with a share of the earnest money deposit, she initiated a civil action in the County Court of Hillsborough County. On October 15, 1985, Ms. Cumbie was awarded a final judgment in the amount of $250 against Respondent for her share of the forfeited earnest money deposit. As of the date of the final hearing, the Respondent had not satisfied the judgment and Ms. Cumbie had not received any proceeds from the forfeited earnest money deposit. Shortly after the transaction failed to close, the purchasers requested that the Respondent return the earnest money deposit to them. However, the Respondent informed them that they were not entitled to the return of the earnest money deposit. The earnest money deposit was never returned to the purchasers. On July 31, 1984, the balance in Respondent's escrow account was $568.83. However, on September 1, 1984, the balance in the Petitioner's escrow account fell to S18.83. From October 31, 1984 to January 1, 1986, the balance in the Petitioner's escrow account remained $3.83.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is therefore, RECOMMENDED that the registration of Fortunato Benjamin- Pabon as a real estate broker be revoked. DONE and ORDERED this 18th day of June, 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 18th day of June, 1986. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Department of Professional Regulation 400 W. Robinson Street Orlando, Florida 32801 Fortunato Benjamin-Pabon 2729 N. Ridgewood Avenue, #1 Tampa, Florida 33602 Harold Huff, Executive Director Department of Professional Regulation Division of Real Estate P. O. Box 1900 Orlando, Florida 32802 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The Respondent was at all times material to this proceeding a licensed real estate broker in the state of Florida having been issued license number 0035275. The last license issued was as a broker, d/b/a Silver Springs Real Estate, Corp., 4121 East Silver Springs Boulevard, Ocala, Florida 32671. On or about August 3, 1984, the Respondent obtained Teri L. Lochman (Lochman) as a tenant of certain residential property belonging to Gail and Valerie Cox (Cox) that was involved in a sale to A. Pillot. In connection with this sale, a lease had been prepared between A. Pillot as Lessor and A. Alongi as Lessee. Lochman signed this lease as Lessee, and in connection with this lease, paid Respondent $1,600.00 representing $700.00 for the first month's rent, $700.00 for the last month's rent and $200.00 security deposit. These funds were paid by Lochman to Respondent in two separate checks in the amount of $500.00 and $1,100.00 dated August 5, 1984 and August 13, 1984, respectively. The Pillot/Cox escrow account, which had previously been established in Respondent's escrow ledger, was credited with these funds and the funds deposited in Respondent's real estate brokerage trust bank account, No. 805 0006583, in the Sun Bank of Ocala (Trust Account), on August 9, 1984 and August 17, 1984, respectively. Upon attempting to move into the home she had rented, Lochman discovered that Cox was still in possession because the sale had not gone through. At this point, August 17, 1984, Lochman and Cox signed an agreement which would allow Lochman to reside in the home rent free for two weeks while Cox was out of town in return for acting as a security guard. Sometime after the August 17, 1987 agreement was executed by Lochman and Cox, Lochman and Cox signed a handwritten month to month lease of the premises requiring Lochman to pay Cox $700.00 for the first month's rent, $700.00 for the last month's rent and a $200.00 damage deposit. This payment was conditioned upon Lochman receiving her refund from the Respondent. There was no credible evidence that Respondent agreed to release Cox from any previous agreement with Respondent wherein Respondent acted as agent for Cox in obtaining Lochman as a tenant or the handling of Cox's property, i.e. mowing grass or preparing house for rent. Additionally, there was no credible evidence that Respondent agreed to Lochman dealing directly with Cox. Respondent was at all times relevant to this proceeding acting as agent for Cox, and therefore, demanded from Cox her commission for obtaining Lochman as a tenant and reimbursement for other services rendered before returning Lochman's rental deposit. There is no credible evidence that the Respondent agreed to return Lochman's rental deposit without first obtaining her commission or reimbursement for other services rendered from Cox. There is no credible evidence to show that Cox paid Respondent her commission or reimbursed Respondent for other services rendered or that Cox made a demand on Respondent to pay the Lochman rental deposit to Lochman. There is credible evidence that Lochman made a demand on Respondent for the return of her rental deposit and that Respondent refused to return Lochman's rental deposit because there was a dispute between Respondent and Cox concerning Respondent's commission and reimbursement for other services rendered. Lochman did not pay Cox the rent for the month of September, 1984, therefore, she contends that Respondent only owes her $900.00 of the rental deposit. Upon Respondent's refusal to pay her the balance of the rental deposit, Lochman obtained a default judgment for $900.00 in civil court, however, and although the record is not clear, the default judgment may have been set aside. (See transcript, page 15, lines 9-13). The evidence is clear that check no. 257 drawn on the Trust Account in the amount of $1,465.00, paid on April 18, 1985, included $1,278.00 from the Pillot/Cox escrow account and depleted the funds in the Pillot/Cox escrow account. However, there was no evidence presented to show that the Lochman rental deposit was paid to Respondent. Likewise, there was no evidence presented to show that Cox did not receive the Lochman rental deposit. There was no evidence presented to show the payee on Check No. 257, or any other check, drawn on the Trust Account. There was no evidence presented to show that Respondent commingled trust funds and personal funds in the Trust Account in regard to deposits and withdrawals. There was insufficient credible evidence to show that Lochman was entitled to delivery of $900.00 or any funds from the Trust Account. There was no evidence that Respondent notified the Real Estate Commission (Commission) of the conflicting demands on the Lochman rental deposit or followed any of the procedures set forth in the statutes to resolve such a conflict.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record and the candor and demeanor of the witnesses, it is, therefore, RECOMMENDED that the Commission enter a Final Order finding the Respondent guilty of failing to notify the Commission of the conflicting demands on the trust funds and failing to follow the procedures set forth for resolving such conflict in violation of Section 475.25(1)(d), Florida Statutes and that Respondent's real estate broker's license be suspended for a period of six (6) months, stay the suspension, place the Respondent on probation for a period of six (6) months under the condition that the issue of conflicting demands on the trust funds be resolved within sixty (60) days and under any other conditions the Commission feels appropriate, and assess an administrative fine of $300.00 to be paid within sixty (60) days of the date of the Final Order. It is further RECOMMENDED that the Final Order DISMISS Counts I, III, IV and V of the Administrative Complaint filed herein. Respectfully submitted and entered this 1st day of May, 1987, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 1st day of May, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-2387 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 in this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner 1.-2. Adopted in Finding of Fact 1. 3. Adopted in Findings of Fact 8 and 9. 4.5 Rejected as not supported by substantial competent evidence in the record. Additionally, Petitioner has treated certain facts in this case as background in unnumbered paragraphs which I have numbered 6-10. Adopted in Finding of Fact 2 as clarified. Adopted in Finding of Fact 4 except for the phrase that Respondent agreed to the return of the rental deposit which is rejected as not being supported by substantial competent evidence in the record. I did not find Lochman's testimony credible in this regard. Adopted in Findings of Fact 8 and 9 as clarified. Adopted in Finding of Fact 10 as clarified. This paragraph is a statement of Lochman's testimony and not presented as a fact, therefore, is rejected. Rulings on Proposed Findings of Fact Submitted by the Respondent For the reasons set forth in the Background portions of this Recommended Order, there has been no rulings of Respondent's Proposed Findings of Fact. COPIES FURNISHED: Van Poole, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff Executive Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32801 James H. Gillis, Esquire Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Jeffrey J. Fitos, Esquire Valley Forge Military Academy Wayne, Pennsylvania 19087
The Issue Whether Respondents committed the offenses set forth in the six-count Administrative Complaint dated October 15, 2003; and, if so, what penalty should be imposed.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: The Department of Business and Professional Regulation, Division of Real Estate (the "Department"), is the state agency charged with enforcing the statutory provisions pertaining to persons holding real estate broker and sales associate's licenses in Florida, pursuant to Section 20.165 and Chapters 455 and 475, Florida Statutes (2003). At all times relevant to this proceeding, Respondent Richard R. Page, was a licensed Florida real estate broker/officer, having been issued broker license no. KB-0148248. He was the qualifying broker for Aztec Realty. At all times relevant to this proceeding, Respondent Aztec Realty, was a corporation registered as a Florida real estate broker, having been issued corporate registration no. CQ-0156640. Aztec Realty's business location was 4456 Tamiami Trail, Charlotte Harbor, Florida 33980. Barbara Kiphart was a 13-year employee of the Department who had performed thousands of audits of broker records. After conducting agent interviews on an unrelated matter in the office of Aztec Realty, she informed Mr. Page that she planned to perform an audit of the corporation's escrow accounts. Ms. Kiphart testified that it was routine for the Department to perform such audits when visiting brokers' offices for other reasons. Ms. Kiphart informed Mr. Page that she would need all documents necessary to complete an audit of Aztec Realty's escrow accounts, including bank statements, account reconciliations, and liability lists. Mr. Page referred Ms. Kiphart to Cheryl Bauer, Aztec Realty's financial manager. With Ms. Bauer's assistance, Ms. Kiphart completed the audit on June 12, 2003. Three accounts were examined: the sales escrow account; the security deposit account; and the property management account. The sales escrow account was found to be in balance, with liabilities equal to the bank balance of $382,300.52. The security deposit account was found to have liabilities of $45,533.29 but only $16,429.84 in its bank balance, a shortage of $29,103.45. The property management account was found to have liabilities of $22,545.54 but only $16,594.71 in its bank balance, a shortage of $5,950.83. Ms. Kiphart testified that the security deposit account had not been reconciled in the year 2003, and she had no way of saying when it was last reconciled. She determined the account's balance from Aztec Realty's bank statements, but had to extrapolate the liabilities from a computer printout of security deposits. Ms. Bauer testified that she handles the finances for all aspects of Aztec Realty's real estate sales business, including the sales escrow account, and that she was able to provide all the information Ms. Kiphart needed to audit that account. However, Ms. Bauer had no responsibility for the other two accounts, both of which related to the rental property management side of Aztec Realty's business. She had to obtain information about those accounts from Jill Strong, her newly- hired counterpart in property management. At the time she provided the computer printout on the property management accounts to Ms. Bauer and Ms. Kiphart, Ms. Strong told them that she knew the numbers were inaccurate. Aztec Realty had purchased Tenant Pro, a new rental management software package, in 2001. In the course of approximately 18 months, Aztec Realty had three different employees in Ms. Strong's position. One of these short-term property managers had misunderstood the software for the security deposit account. Opening balances were entered for accounts that had, in fact, already been closed out with the deposits returned. This had the effect of inflating the apparent liabilities in that account. The previous property manager was also unable to print checks on the printer attached to her computer terminal. Ms. Bauer would print the deposit refund checks on her own printer, with the understanding that the property manager was recording these entries against the security deposit account. Ms. Strong discovered that these entries had not been recorded. Thus, monies that had been paid out to owners, renters, and vendors were never recorded anywhere besides a sheet that Ms. Bauer kept for printing out checks, again inflating the account's apparent liabilities. Ms. Strong had been working for Aztec Realty for about one month at the time of the audit. She was still in the process of sorting out the problems in the security deposit account, hence her statement to Ms. Bauer and Ms. Kiphart that she knew the numbers were inaccurate. Subsequent to the Department's audit, Ms. Bauer and Ms. Strong commenced their own audit of the security deposit and property management accounts. Their efforts were complicated by a storm and tornado that struck the area on June 30, 2003. The offices of Aztec Realty suffered over $100,000 in damage, including water damage to the roof that caused the office to be flooded. Records were soaked and Ms. Strong's computer was destroyed. By mid-July 2003, Ms. Bauer and Ms. Strong had completed their corrected audit of the security deposit account. They concluded that the actual shortfall in the account was $13,764.43. That amount was immediately transferred from the real estate operating account to the security deposit account to bring the latter account into balance. The real estate operating account was essentially Mr. Page's personal funds. As to the property management account, also referred to as a "rental distribution" account, Ms. Bauer and Ms. Strong performed a subsequent audit indicating that the account was out of balance on the positive side. They discovered that there were items paid out of the property management account that should have been paid from escrow and vice versa. When the audit brought the accounts into balance, the property management account was approximately $200 over balance. In an audit response letter to Ms. Kiphart dated July 16, 2003, Mr. Page acknowledged that the property management account had been improperly used to pay occasional expenses, but also stated that the practice had been discontinued. At the hearing, Mr. Page conceded that no reconciliations had been performed on the security deposit account or the property management account from at least January 2003 through May 2003. Mr. Page and Ms. Bauer each testified that the corrective actions taken in response to the audit have been maintained and that there have been no accounting problems since June 2003. Aztec Realty has contracted to sell its property management department. The evidence established that no client of Aztec Realty or other member of the public lost money due to the accounting discrepancies described above. Neither Mr. Page nor Aztec Realty has been subject to prior discipline. Mr. Page has worked in the real estate business in the Port Charlotte area for nearly 30 years and is a past president of the local association of realtors. He credibly expressed remorse and testified that, given his position in the community, he was "mortified" at having allowed his company to be placed in this position. Aztec Realty has operated for nearly 30 years and currently has 20 employees and approximately 65 agents.
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 Counts II and III of the Administrative Complaint against Mr. Page; Dismissing Counts V and VI of the Administrative Complaint against Aztec Realty; Imposing an administrative fine against Mr. Page in the amount of $1,000 for the violation established in Count I of the Administrative Complaint; and Imposing an administrative fine against Aztec Realty in the amount of $1,000 for the violation established in Count IV of the Administrative Complaint. DONE AND ENTERED this 27th day of July, 2004, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of July, 2004.
