The Issue The central issue in this case is whether Respondent is guilty of the violations alleged in the Administrative Complaint; and, if so, what penalty should be imposed.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, I make the following findings of fact: Respondent, Naomi N. Radcliff, is licensed in Florida as a real estate broker (license No. 0369173) and has been at all times material to the Administrative Complaint. On December 2, 1987, Respondent submitted a Request for License or Change of Status form which sought to cancel the license. Thereafter, the Department reclassified Respondent as an inactive broker. In July, 1986, Randy Mangold and his wife entered into a contract to purchase real property located in Indian River Estates. Naomi Radcliff was the real estate agent who handled the transaction on behalf of the Mangolds. The Mangolds' contract provided for occupancy prior to closing with a security deposit for the rental in the amount of $1500. This amount was paid to Respondent. At closing the $1500 security deposit was to be applied to the buyers' closing costs. The Mangolds rented the home for a year and attempted to obtain financing for the purchase. When their mortgage application was denied, they elected to vacate the property. After they vacated the property, the Mangolds requested the return of the $1500 security deposit. Demands were made on Respondent who refused to return the deposit despite the fact that the Mangolds had fully paid all rents owed and had left the house in good condition. Finally, the Mangolds sued Respondent in the St. Lucie County Court and obtained a judgment for the $1500 security deposit. Respondent has not satisfied the judgment. At one point Respondent did give the Mangolds a check for $500 which was returned due to insufficient funds in the account. In December, 1986, Respondent acted as a rental agent for Walter Zielinski, an out-of-state owner. Mr. Zielinski owned two houses in Port St. Lucie, one of which was located at 941 Fenway. In early December, 1986, Respondent advised Mr. Zielinski that the tenants had left the home at 941 Fenway and that the unit was in fairly good condition. Sometime later in the month, Mr. Zielinski discovered the house was empty but that it had been damaged. There were holes in the wall in the utility room approximately two feet in diameter. The flooring in the utility room and kitchen was ripped up. There was a hole in the wall in the master bedroom. More important to Mr. Zielinski, the house was unsecured because the garage door latch was broken and the house was accessible through the garage. After discovering the unit was at risk for additional damage, Mr. Zielinski attempted to contact Respondent but numerous calls to Respondent, her place of work, and to a former employer proved to be unsuccessful. Finally, Mr. Zielinski obtained another real estate agent to represent the 941 Fenway home. The new agent, Cathy Prince, attempted to obtain from Respondent the keys, the security deposit, and the rent money belonging to Mr. Zielinski. In January, 1987, Mr. Zielinski came to Florida from Illinois to take care of the rental problems. Mr. Zielinski incurred expenses totalling $876.74 to repair the damages to 941 Fenway. Also, Mr. Zielinski wanted to collect the rents owed by Respondent for his other property and have the security deposit for the second property transferred to the new agent. Respondent issued a personal check for the security deposit which was returned for insufficient funds. A second personal check paid to Mr. Zielinski for the rent owed was accepted and cleared. According to Mr. Zielinski, Respondent did not maintain an office where he could find her during the latter part of December, 1986 through January, 1987. In March, 1987, the security deposit for Mr. Zielinski's second rental was paid to the new agent. The check was issued by Respondent's mother. Respondent never personally returned any calls to the new agent. In June, 1986, Alyssa and Jeffrey Maloy entered into a contract to purchase a house. Respondent handled the real estate transaction for the Maloys. The closing was to be December 9 or 10, 1986. Respondent held monies that were required to complete the Maloy closing. Respondent attended the closing but the check tendered to the closing agent, Chelsea Title, was drawn on an trust account which had been closed. The closing agent discovered the problem and requested sufficient funds. Respondent left the closing and returned some hours later with new checks drawn on another account. After checking with the bank, it was again discovered that the funds in the account were insufficient to cover the amount needed for closing. Finally, some days later the Respondent's brother delivered a certified check to cover the amount needed to close the Maloy transaction.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Department of Professional Regulation, Florida Real Estate Commission enter a Final Order suspending the Respondent's real estate broker's license for a period of five years. DONE and RECOMMENDED this 12th day of July, 1988, in Tallahassee, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of July, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-4631 Rulings on Petitioner's proposed findings of fact: Paragraphs 1-3 are accepted. With regard to paragraph 4, with the exception of the date referenced (November, 1986) the paragraph is accepted. Paragraph 5 is rejected a hearsay evidence unsupported by direct evidence of any source. The first sentence of paragraph 6 is accepted. The second sentence calls for speculation based on facts not in the record and is, therefore, rejected. Paragraphs 7-11 are accepted. With regard to paragraph 12, the first four sentences are accepted; with regard to the balance, the Respondent's brother did deliver funds to allow the Maloy transaction to close however the source of the funds is speculation based upon hearsay unsupported by the record. COPIES FURNISHED: Steven W. Johnson, Esquire Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Darlene F. Keller, Executive Director Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 William O'Neil, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Naomi N. Radcliff 1420 Seaway Drive Fort Pierce, Florida 33482
The Issue Whether or not Respondents' registration as real estate brokers should be suspended for an alleged violation of Section 475.25(1)(i), Florida Statutes.
Findings Of Fact On or about the middle of March, 1974, Anne Land, a saleswoman for Respondent real estate brokers, met one Timothy B. Howe who had responded to an advertisement in the newspaper concerning the purchase or lease of a home at 185 West Sunrise Avenue, Coral Gable, Florida. After viewing the premises, Mr. Howe decided to lease the property and his attorney prepared a lease in the total sum of $7,200 for one years rent. This proposal was submitted to the owner of the house, Mrs. Joanne Kealy, but upon the advice of counsel, she declined the proposal. Several days later, Howe decided to purchase the home. He signed a standard sales contract, dated March 26, 1974, which provided for a total purchase price of $72,500.00, payable under the following terms: "The sum of $1,800.00 by check hereby deposited in escrow with Magruder Realty, Inc., as escrow agent, in part payment of the purchase price and as a security deposit for the faithful performance of this contract by Purchaser, and the remainder of the purchase price shall be paid as follows: Upon acceptance of this contract the purchaser to deposit with Magruder Realty, Inc., an additional $5,400.00. Purchaser to assume existing mortgage for approx. $38,816.00 with Coral Gables Federal Svgs and Loan Association and the seller to give to the purchaser a second mortgage for balance of approx. $26,500.00 at 8 1/2 percent for 12 years or less with no pre-paid clause penalty..." The contract was signed by Land as witness and also in behalf of the seller and also as an escrow agent of Magruder Realty, Inc. The document was not acknowledged before a notary public (testimony of Lands Petitioner's Exhibit 1). Land contacted the owner who was out of state at the time and asked her to indicate her acceptance of the offer by telegram. The owner did so on March 29, 1974. The evidence is conflicting as to the circumstances surrounding the disposition of the deposit check for $1,800.00. Land testified that she gave the check to Joseph P. Magruder on March 26 or 27 as was her practice in handling deposits, but said nothing about holding the check. Mr. Magruder, on the other hand, testified that at the time she gave him the check, she said Mr. Howe desired the check be held until the total down payment of $7,200.00 was received from a trust account, and that he therefore put the check in the transaction folder and gave the folder back to her to retain. His statement of the reason for not depositing the check in an escrow account immediately is supported by subsequent events and by the fact that the check was not actually deposited until a subsequent date, which was contrary to his normal office practice (testimony of Land, Magruder, O'Brien; Exhibit 2). Subsequent conversations between Land and Howe during the latter part of March and early April were to the effect that Howe's mother was sending funds for the balance of the down payment. On April 4, Land talked to Howe by telephone and he asked for the escrow account number of Magruder Realty, Inc., in order that his mother could send the additional $5,400.00 and/or $7,200.00. Land asked Respondent O'Brien, who was in the office at the time, for the firm's escrow account number and passed it on to Howe. On the same day, Land went on vacation in North Carolina and did not return to the office until April 15th. At that time, Magruder informed her that the additional funds had not been received from Howe and that although he had tried to reach him on the telephone he had been unsuccessful. Because of the difficulty in reaching Howe as to payment of the balance of the down payment, Magruder deposited the $1,800.00 check in his escrow bank account on April 17, 1974. It was not honored by the Howe's bank because Cristina I. Howe, his wife, had issued a stop payment order on the check on April 15. On March 26, 1974, the date the check was drawn, the Howe bank account was overdrawn by 26 (testimony of Land, Magruder, O'Brien, Garcia; Petitioner's Exhibits 2 & 6; Respondent's Exhibit 1). Although Respondents claimed that the Florida Real Estate Commission had disposed of the instant allegation by its letter of censure dated February 10, 1975, which referenced file CD15240, it was determined by the Hearing Officer that this letter involved other transactions and not the one under consideration at the hearing (Petitioner's Composite Exhibit 5).
The Issue The issue in this case is whether the allegations of the Administrative Complaints are correct and, if so, what penalties should be imposed.
Findings Of Fact At all times material to this case, Respondent Tailormade Management, Inc. ("Tailormade"), was a corporation registered as a licensed real estate broker in the State of Florida, license #0259180, located at 12811 Kenwood Lane, #218, Fort Myers, FL 33907. The president of Tailormade was R. C. Hendrickson ("Hendrickson"), an unlicensed person. At all times material to this case, Respondent Comprehensive Management, Inc. ("Comprehensive"), was a corporation registered as a licensed real estate broker in the State of Florida, license #0268646, located at 12811 Kenwood Lane, #218, Fort Myers, FL 33907. Until approximately January 30, 1991, the president of Comprehensive was Hendrickson. On or about January 30, 1991, Hendrickson resigned and relinquished her ownership and control to her son, Jay Coffing, an unlicensed person. The rental escrow account for each company was maintained by Hendrickson and the company bookkeeper. On direction of Hendrickson, the bookkeeper did not disclose information regarding rental escrow accounts to the licensed broker-salespersons. All accounts were reconciled by the bookkeeper who would provide the reconciliation data to the broker. The licensed broker- salespersons did not actually reconcile any accounts, but relied on the bookkeeper's data. At all times material to this case, Linda Futch ("Futch") was a licensed real estate broker in the State of Florida, license #0334770. The most recent license issued to Futch was as a broker-salesperson for Rawlings Realty, Inc., 1642 Colonial Boulevard, Fort Myers, FL 33907-1150. From approximately February 20, 1989 through approximately November 16, 1989, Futch was licensed and operating as qualifying broker and officer for Tailormade. On October 10, 1989, Hendrickson issued check #RE-1895 in the amount of $10,000 from the Tailormade rental escrow account to the Tailormade operating account. A check notation indicated that the funds were "advance management fees". Hendrickson admitted to the company bookkeeper that the funds were to be used to pay the outstanding balance owed to the previous co-owner of Tailormade, from whom Hendrickson had purchased the business. At no time during the period Futch acted as qualifying broker and officer for Tailormade did Futch prepare or sign written monthly escrow account statement reconciliations. Futch did not balance escrow liabilities with the escrow assets. Futch failed to make appropriate entries in monthly reconciliation statements which would note whether a shortage existed and whether corrective action had been taken. Futch maintained no records and was unable to provide any account documentation to the Petitioner's investigator. Futch resigned as Tailormade broker-salesperson effective November 16, 1989. Futch was apparently succeeded by Bette K. Potts. In November of 1990, Jeffrey C. Cooner met with a representative of Tailormade and leased a condominium unit, providing a deposit totaling $1,125 of which $350 was a pet and security deposit. Cooner eventually vacated the unit, 2/ and attempted to obtain a refund of the security deposit. By such time, the Tailormade office was vacant and closed. Cooner has received neither an accounting nor a refund of all or part of the security deposit paid to Tailormade. According to the bookkeeper, as of December, 1990, approximately $35,000 of rental escrow funds had been removed from the Tailormade rental escrow account by Hendrickson and had not been replaced. At all times material to this case, Janet Lynn Coffing ("Coffing"), Jay Coffing's wife, was a licensed real estate broker in the State of Florida, license #0268647. Coffing's most recent license was as a broker in limbo, listing her home address as 5410 Ashton Circle, Fort Myers, Florida, 33907-7828. From approximately February 21, 1991 through approximately May 28, 1991, Coffing was licensed and operating as qualifying broker and officer for Tailormade. From approximately February 14, 1991 through approximately June 14, 1991, Coffing was licensed and operating as qualifying broker and officer for Comprehensive. Coffing was aware, almost immediately after taking over as qualifying broker and officer for the companies that the escrow funds were short. She spoke to Hendrickson (her mother-in-law) and Jay Coffing about the situation, but apparently received no assistance from them. Coffing utilized operating funds to cover escrow shortages when escrow refunds were necessary, and continued to do so until all funds were depleted. On March 18, 1991, Charles W. Pease met with a representative of Comprehensive and leased a condominium unit at 13040 Tall Pine Circle in Fort Myers, Florida, providing two checks totaling $1,650 of which $500 was a security deposit. Upon vacating the unit, 3/ Pease attempted to obtain a refund of the security deposit but the Comprehensive office was vacant and closed. Pease has received neither an accounting nor a refund of all or part of the security deposit paid to Comprehensive. At some time in 1991, 4/ Debra and Kevin Campbell met with Coffing and leased a condominium unit located at 5418 Harbor Castle Drive. At the time the lease agreement was signed, the Campbells paid a $500 security deposit to Tailormade through Coffing. Upon vacating the unit, the Campbells attempted to obtain a refund of the security deposit but were unable to locate Coffing, and the Tailormade office was vacant and closed. The Campbells have received neither an accounting nor a refund of all or part of the security deposit paid to Tailormade. At no time during the period Coffing acted as qualifying broker and officer for either Tailormade or Comprehensive, did Coffing prepare or sign written monthly escrow account statement reconciliations. Coffing did not balance escrow liabilities with the escrow assets. Coffing failed to make appropriate entries in monthly reconciliation statements which would note whether a shortage existed and whether corrective action had been taken. Coffing maintained no records and was unable to provide account documentation to the Petitioner's investigator. On several occasions beginning on July 2, 1991, an investigator from the Department of Professional Regulation visited office location identified as the registered offices of the Respondent Tailormade and Comprehensive companies. The offices were vacant and closed. The investigator contacted Hendrickson and Jay Coffing, and attempted to obtain information from them, but was unable to maintain contact with them. The companies are apparently not operational.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Professional Regulation, Division of Real Estate, enter a Final Order determining Linda Futch guilty of the violations set forth herein and providing for a fine of $1,000, and a suspension of 90 days, to be followed by a probationary period of two years. During the probationary period, Futch shall complete 60 hours of continuing education, including a 30 hour management course for real estate brokers, and shall provide to the Florida Division of Real Estate all written monthly escrow account reconciliation statements for which she is responsible. That the Department of Professional Regulation, Division of Real Estate, enter a Final Order determining Janet Lynn Coffing guilty of the violations set forth herein and providing for a fine of $1,000, and a suspension of 180 days to be followed by a probationary period of three years. During the probationary period Coffing shall complete 60 hours of continuing education, including a 30 hour management course for real estate brokers, and shall provide to the Florida Division of Real Estate all written monthly escrow account reconciliation statements for which she is responsible. That the Department of Professional Regulation, Division of Real Estate enter a Final Order revoking the licensure of Respondents Tailormade Management, Inc., and Comprehensive Management, Inc. DONE and ENTERED this 15th day of July, 1992, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 15th day of July, 1992.
Findings Of Fact At all times relevant hereto, Respondent Charles Randolph Lee was the holder of a Florida real estate license number 0455641 in accordance with Chapter 475, Florida Statutes. The license issued was as a broker, c/o Show-N-Save of West Palm Beach, Inc., 1800 Forest Hill Blvd., West Palm Beach, Florida 33406. Christopher and Lee Ann Germano made a written offer to purchase Lot 41, Block 72, Sugar Pond Manor, Palm Beach County, Florida (the "construction site") from Charles and Ruby Collins (the "owners") by executing a Contract for Sale and Purchase of the construction site on April 14, 1987, and submitting a check for $500 payable to and held in escrow by Hank Keene Real Estate Escrow Account. 1/ On April 15, 1987, the Germanos executed an Agreement for Construction of a house that was to be constructed on the construction site by J. Long Construction, Inc. A check payable to J. Long Construction, Inc., in the amount of $3,755, was submitted by the Germanos with the Agreement for Construction, which was expressly contingent upon the Germanos' purchase of the construction site. The check to J. Long Construction, Inc., was an escrow check to be held in escrow for the Germanos until contingencies in the Agreement for Construction, including the purchase of the construction site, either failed to occur or were satisfied. Carol Pearson and Terry Gallagher, the sales agent for Hank Keene Real Estate, were present with the Germanos in a model home of J. Long Construction, Inc., when the Germanos wrote the check, and it was their collectively stated intent that the check was to be held in escrow pending the completion of the purchase of the construction site. The check for $3,755 was labeled by the maker as an escrow down payment for construction of the house. 2/ J. Long Realty, Inc., and Hank Keene Real Estate were acknowledged in the Agreement for Construction as the exclusive brokers in the transaction with commissions to be paid respectively in the amounts of 3.5 and 1.5 percent. 3/ The Agreement for Construction was executed by J. Long Construction, Inc., on April 15, 1987. The Agreement for Construction was null and void if not executed by both parties on or before April 19, 1987. The Germanos executed the Agreement on April 15, 1987. Their copy of the Agreement is not executed by J. Long Construction, Inc. However, the original Agreement, bearing a date of April 15, 1987, shows the signature of the president of J. Long Construction. The original Agreement was admitted by stipulation as Respondent's Exhibit 2. Insufficient evidence was presented to establish that the original was executed at any other time or by any one other than the purported signatory. 4/ Respondent began functioning as the broker for J. Long Realty, Inc., on or about April 16, 1987, 5/ at the request of the previous broker who resigned due to illness on April 15, 1987. The Contract for Sale and Purchase of the construction site was rejected by the owners on April 16, 1989. 6/ The rejection was communicated to the Germanos telephonically by Terry Gallagher on the same day. 7/ The fact that the purchase of the construction site had failed to occur was communicated to Respondent on April 20, 1987, and return of the check to J. Long Construction, Inc., in the amount of $3,755, was requested at that time. Mr. Germano telephoned Mr. Pearson on April 20, 1989, advised him that the offer to purchase the construction site had been rejected by the owners, and requested return of the check. Mr. Pearson testified that upon receiving a telephone call from Mr. Germano, Mr. Pearson communicated those facts to Respondent. Mr. Pearson further testified that Respondent stated there would be no problem but required the request for refund and reasons to be stated in writing. Respondent first knew of the transaction when he received a telephone call from Mr. Germano asking for a return of the check. Respondent further testified that he opened the file, saw the check, and deposited it. The check was deposited on April 21, 1987, to the account of J. Long Construction, Inc. 8/ Respondent testified that the check was not deposited to any account of J. Long Realty, Inc. 9/ J. Long Construction, Inc., had no escrow account at the time of the deposit. Testimony by Ms. Fischer, and Petitioner's Exhibits 7 and 9 established that J. Long Construction, Inc., had no escrow account at the time of the deposit. There was no evidence that Respondent was an officer or director of J. Long Construction, Inc., or that Respondent was authorized to sign on the account to which the check was deposited. Petitioner's Exhibit 9 established that Respondent was authorized to sign on the account of J. Long Realty, Inc., and on the account of J. Long Companies, Inc. Neither the name or account number of either of those accounts corresponded to the name or account number of the account to which the check was deposited. 10/ Respondent functioned in the capacity of accountant, bookkeeper, and employee of J. Long Construction, Inc., prior to functioning as the broker of J. Long Realty, Inc. Respondent and Mr. Long reviewed each contract submitted by sales agents. Respondent received written notice on April 27, 1987, and on May 1, 1987, that the Germanos' offer to purchase the construction site had been rejected by the owners. Jean Keene, Broker, Hank Keene Real Estate, advised J. Long Construction, Inc., by letter dated April 24, 1989, that the Germanos' offer had been rejected and that the $500 in escrow had been returned to the Germanos. 11/ The Germanos also wrote a letter to J. Long Construction (sic) on April 24, 1987, asking for return of the deposit because their offer to purchase the construction site had not been accepted by the owners. The Germanos' letter was by return receipt which was dated May 1, 1987. A letter dated May 11, 1987, from Robert E. Zensen, President, Zensen Homes, Inc., formerly J. Long Construction, Inc., 12/ advised the Germanos that they were in default under the Agreement for Construction. The letter stated the "default has been established by the contingency not being met," but in the next paragraph required documentation that the contingency had not been met. 13/ On May 8, 1987, Carol Pearson removed his license from J. Long Realty, Inc. 14/ Evidence suggests some acrimony between Mr. Pearson and Respondent concerning the conduct of business transactions at J. Long Realty, Inc. 15/ Mr. Pearson testified that deposits were not being returned to customers who were entitled to return of their deposits. On May 16, 1987, Mary E. Bartek, citing ill health, resigned from J. Long Realty, Inc., as Broker-Salesman and as shareholder, and resigned her position as Vice-President, director, shareholder, officer, or agent from J. Long Companies. 16/ On June 15, 1987, Respondent resigned as "Broker of Record" for J. Long Realty, Inc. 17/ The Germanos made numerous requests to Respondent to return their check in the amount of $3,755. Mr. Pearson received at least 3 or 4 calls from the Germanos. Each time Respondent and Mr. Long agreed that the Germanos were entitled to have their check; except the last time when Mr. Long told Mr. Pearson to "forget about it." Mr. Pearson testified that it was his impression that Mr. Long prevented Respondent from returning the check. The Germanos made numerous requests to Mr. Pearson for return of their check. Each time Mr. Pearson stated that Respondent had said he would return the check. On one occasion, Lee Germano met with Respondent to request that the money be returned, but the money was not returned.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent be found guilty of: culpable negligence and breach of trust in violation of Subsection 475.25(1)(b); failure to account and deliver nonescrowed property upon demand of the person entitled to such property in violation of Subsection 475.25(1)(d); and failure to place a check in escrow in violation of Subsection 475.25(1)(k). Since this was apparently Respondent's first offense, involving a single act, it is recommended that Respondent be reprimanded. Since the offense involved the misuse of funds, disregard of the entitlement to funds, and Respondent offered no evidence of restitution, it is recommended that Respondent be fined $1,000 for each violation. In order to enhance Respondent's regard for the entitlement to funds in business transactions and in order to facilitate due care in his future transactions, it is recommended that Respondent be placed on probation for a period not to exceed one year. The conditions of probation may include any of those prescribed in Florida Administrative Code Rule 21V-24.001(2)(a) except those that would require the Respondent to submit to reexamination and to be placed on broker-salesman status. In the event that Respondent fails to pay any fines imposed or to complete the terms of any probation imposed, it is recommended that Respondent's license be suspended for two years. DONE and ENTERED this 19th day of June 1989, in Tallahassee, Florida. DANIEL MANRY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of June, 1989.
Findings Of Fact The Department is the agency charged with the responsibility to prosecute violations of Chapter 475, Florida Statutes, allegedly committed by real estate brokers and brokerages who are licensed in Florida. At all times material to these proceedings, Respondent Ursoleo was a licensed real estate broker, having been issued license number 0090870 through the Division of Real Estate. Respondent Jewell was a corporation registered as a real estate broker, having been issued license number 0258744. Both licenses were issued to the following address: 1154 Estero Boulevard, Fort Myers Beach, Florida 33931. Respondent Ursoleo was the active broker for Respondent Jewell, and held the office of president within the corporation. On July 10 and 11, 1989, the Respondents' accounting records were reviewed in a random, routine audit conducted by the Division of Real Estate as part of its regulatory functions. During the review, the investigator reported that financial shortages existed in two accounts kept by the corporate broker in a fiduciary capacity. A deficiency of $4,569.81 was allegedly located in the rental escrow account, and a deficiency of $1,218.83, was allegedly located in the Bigelow Shopping Center management account. The Rental Escrow Account The rental escrow account is an account that contains monies held in a fiduciary capacity by the real estate broker on behalf of a number of separate clients who own rental property in Lee County, Florida. Respondent Jewell, through its qualifying broker and corporate officer Respondent Ursoleo, manages these properties for a commission or management fee. As part of the management duties, the Respondents collect rents, maintain the property, and render periodic accountings to the clients regarding the rents collected, property repair and maintenance expenses, and other financial matters involving the properties. Each client has an independent agreement with Respondent Jewell regarding how his property is handled and how his escrow account funds are to be managed. However, the primary purpose of each account is to deduct expenses from the rents deposited prior to disbursing the balance of the rents to the property owners. Mr. James Alexander owns twenty-eight rental units which he co-manages with the Respondents. Between $8,000.00 to $9,000.00 from these properties are deposited into Respondents' rental escrow account each month. Due to a twenty- year business relationship regarding these properties, Mr. Alexander allows the Respondents to use his escrowed funds for whatever personal or business use is desired by the Respondents. Mr. Alexander is aware that some of his escrowed funds have been used for Respondent Ursoleo's personal business, real estate brokerage bills, and to advance other rental property owners the necessary funds for property maintenance and repairs. The only conditions placed upon the Respondents' use of the money for purposes beyond the needs of Mr. Alexander's properties are as follows: 1) Monthly accountings to Mr. Alexander of the amount of money due to him must be correct; and 2) The money used for the other purposes must be replaced in one month's time in order to be available for disbursement to Mr. Alexander. During the time period between June and July 1989, $13,145.26 of Mr. Alexander's funds were in the escrow account and were available for use by the Respondents. Mr. James Hall, an attorney in Indiana, is president of San Carlos Lodge, Inc., the owner of a mobile home park in Lee County, Florida. This park has been managed by the Respondents for thirteen years. Because the lot rents within the park are due at various times, and because some renters pay in advance, the Respondents' rental escrow account always contains funds belonging to San Carlos Lodge, Inc. In June and July 1989, $4,675.53 remained in the rental escrow account on behalf of the corporation after the monthly accountings and rental disbursements were made by the Respondents to Mr. Hall. Pursuant to its escrow agrement, San Carlos, Inc. allowed the Respondents to use the money as Respondent Ursoleo saw fit, without reservation. The only restrictions placed upon the use of the funds were: 1) Monies received on behalf of the corporation must be acknowledged as corporate funds; and 2) Funds removed must be returned to the rental escrow account within a one-month period for disbursement purposes. Between April and July 1989, Frank Helmerich owed the rental escrow account $5,756.28 for advances made from the account in order to manage and maintain his rental properties. All of these funds were not repaid within the one-month period required by the Respondents' clients, Mr. Alexander and San Carlos Lodge, Inc. Some repayment was made with rents collected on behalf of Mr. Helmerich, but the exact amount of timely reimbursement was not presented at hearing. The Respondents' rental escrow account records do not reflect that the funds advanced to Mr. Helmerich for rental property management expenses were removed from the funds earmarked for Mr. Alexander's escrow or San Carlos Lodge, Inc.'s escrow. In addition, the account records do not show that the funds specifically removed from either account were replaced with Respondent's Ursoleo's personal funds in the amount of $5,000.00, or with rental funds received on behalf of Mr. Helmerich. Under the escrow agreement between Mr. Helmerich and the Respondents, rental income could be used to repay any and all rental property expenses. Bigelow Shopping Center Management Account The account maintained by Respondents Jewell and Ursoleo, as agent for Bigelow Shopping Center, is an operating account for the business of managing, renting, maintaining and preserving the shopping center on behalf of its owner, the Huntingburg Corporation. Mr. Olinger, an officer and shareholder of the corporation who is a banker by profession, testified that the "deficiency" in the checking account occurred because two checks from the same shopping center tenant bounced. As the funds were never received by the corporation, they were never escrowed. A review of the mathematical calculations on page 4 of Petitioner's Exhibit No. 1 and Petitioner's Exhibit No. 5 reveal that the investigator for the Division of Real Estate consistently made the same mathematical errors when she calculated the sum of the funds held in escrow in the Bigelow Shopping Center account. The entries on line 3 and line 13 in the "Total in Escrow" column in Petitioner's Exhibit No. 1, are negative numbers because the two checks bounced. If the investigator insisted upon adding these two numbers, which totaled $1,444.50, into the "Total in Escrow" column, she should have also subtracted them out because they were negative numbers. Instead of $11,311.50, the total escrow on the front page of the Management Account Inspection relating to the Bigelow Shopping Center bank account for July 11, 1989, should have been $9,867.00. The actual bank balance for the Bigelow Shopping Center reported by the bank to the investigator on July 11, 1989, was $10,886.37. The total of outstanding checks was $793.70. When the outstanding checks are subtracted from the reported bank balance, the difference is $10,092.67. As the escrowed amount of funds was $9,867.00, and the actual bank balance after the deduction of outstanding checks was $10,092.67, there was no deficiency in this account. Mitigation Once the deficiency was located in the rental escrow account maintained by Respondent Jewell, the Respondent Ursoleo immediately transferred $5,000.00 of his personal funds into the account on July 11, 1989. The Respondents have revamped the bookkeeping procedures within the brokerage offices. The individual escrow agreements with Mr. Alexander and San Carlos Lodge, Inc. are no longer used by the Respondents to make short term loans to other clients who also own rental property in Lee County, such as Mr. Helmerich. The Respondents have reviewed the Department's rules relating to the maintenance of escrow accounts, and are prepared to comply with the law in the narrowest, strictest sense. Mr. Alexander and San Carlos Lodge, Inc., did not incur any actual monetary harm as a result of the temporary deficiency of funds in the rental escrow account. The clients were never in fear that the funds would not be returned to them upon demand. The Respondents' accountings to these clients have always been accurate. The Respondents have a long-standing reputation for honesty and reliability in their business dealings that involve financial entrustments. The Respondent Ursoleo has been an active Florida realtor for thirty- seven years. There was no evidence presented of a prior disciplinary history.
Recommendation Accordingly, it is recommended: That Respondent Ursoleo be found guilty of having violated Rule 21V- 14.012, Florida Administrative Code, and Section 475.25(1)(k), Florida Statutes, as set forth in Count IX of the Administrative Complaint. That Respondent Ursoleo be issued a written reprimand and be fined $500.00. That all other charges filed against Respondent Ursoleo in the Administrative Complaint filed October 18, 1989, be dismissed. That Respondent Jewell be found guilty of having violated Rule 21V- 14.012, Florida Administrative Code, and Section 475.25(1)(k), Florida Statutes, as set forth in Count X of the Administrative Complaint. That Respondent Jewell be issued a written reprimand and be fined $500.00. That all other charges filed against Respondent Jewell in the Administrative Complaint filed October 18, 1989, be dismissed. RECOMMENDED this 30th day of May, 1990, in Tallahassee, Florida. VERONICA E. DONNELLY Hearing Officer Division of Administrative Hearings 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of May, 1990. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-6378 Petitioner's proposed findings of fact are addressed as follows: Accepted. See HO #1. Accepted. See HO #2. Accepted. See HO #2. Rejected finding that all of the funds in the rental escrow account were security deposits. See HO #3. Accepted. See HO #3. Rejected. Contrary to fact. Accepted, except for the date of transfer. See HO #15. Rejected. See HO #13. Reject conclusion. See HO #13 and #14. Rejected. Irrelevant. Accepted. Se HO #5 thru HO #9. Accepted. Accepted. Accepted. Rejected. Improper argument and improper conclusion. Reject the first sentence. Contrary to the exhibits and Respondent Ursoleo's testimony that a general account existed. Accept the second sentence. Respondent's proposed findings of fact are addressed as follows: Accepted. See HO #1. Accepted. See HO #2. Accepted. See HO #2. Accepted. See HO #2. Accept Respondent Ursoleo was not aware of a shortage in the rental escrow account. Accept that the money was immediately replaced. See HO #15. Reject that the prior office manager was solely responsible for the deficiency. The proof provided at hearing demonstrated that the book- keeper may have failed to deposit the $862.50. Rejected. Legal argument as opposed to factual finding. Rejected. Legal argument as opposed to factual finding. Rejected. Legal argument. Rejected. Legal argument. All legal arguments were considered in the Conclusions of Law in the Recommended Order. COPIES FURNISHED: Steven W. Johnson, Esquire DPR - Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Leslie T. Arenholz, Esquire 19110 San Carlos Boulevard Post Office Box 2656 Fort Myers Beach, Florida 33932 Darlene F. Keller, Executive Director, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Kenneth E. Easley, Esquire General Counsel Department of Professional Regulation 1940 North Monroe, Suite 60 Tallahassee, Florida 32399-0792
The Issue Whether the Respondent committed the violations alleged in the Administrative Complaint and, if so, what penalty should be imposed.
Findings Of Fact The Petitioner is the state agency charged with the responsibility of regulating real estate licensees in the State of Florida. At all times material to the allegations of this case, Respondent was licensed as a real estate broker, license number 0333239, doing business at 120 East Oakland Park Boulevard, Suite 105, Fort Lauderdale, Florida, as Vaca Realty. On or about February 12, 1996, Respondent obtained a contract for sale and purchase on a property owned by Daryl Cohen. The purchasers, Donald H. Wilker and Patricia C. Wilker, executed the contract and tendered an initial deposit of $100. Respondent held the listing on the Cohen home and upon receipt of the signed contract, placed the initial deposit as well as a second deposit in the amount of $1,900 into the Vaca Realty operating account. The $2,000 deposit was never placed into a real estate escrow account or other proper depository. The contract between the Wilkers and Cohen was scheduled to close April 1, 1996. Prior to closing, the Wilkers notified Respondent that they were canceling the contract due to the condition of the roof. The parties were unable to agree as to the condition of the roof and the buyers announced their intention to not accept the home with the defects depicted in the roof inspection they had received. On April 2, 1996, Respondent sent a release of deposit form to the Wilkers, which they refused to execute. Such release would have authorized Respondent to release the deposit with $1,000 going to the Seller, Mr. Cohen, and $1,000 going to Vaca Realty. Thereafter, the Respondent was aware that the parties retained legal counsel with regard to the contract dispute. Despite her knowledge of the ongoing disagreement, Respondent did not notify the Florida Real Estate Commission regarding the deposit issue. On or about August 23, 1996, the Seller executed a Release and Cancellation of Contract form that directed Respondent to disburse $1,500 to the Wilkers and $500 to Daryl Cohen. This agreement had been signed by the Wilkers on August 13, 1996. Notwithstanding the terms of the foregoing agreement, on September 18, 1996, Respondent issued two checks from her operating account: one to the Wilkers in the amount of $1,500 and the other to Cohen in the amount of $250. Respondent is currently on a suspension as a result of a Final Order entered in DBPR Case No. 94-82411, which was affirmed by the Fourth District Court of Appeals, Case No. 97-1069, on December 17, 1997, mandate issued January 5, 1998.
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 suspending Respondent's license for six months, require Respondent to complete additional courses in escrow management, and direct that Respondent's escrow account be audited, at Respondent's expense, for at least one year after the reinstatement of her license. DONE AND ENTERED this 30th day of June, 1998, in Tallahassee, Leon County, Florida. J. D. Parrish Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 30th day of June, 1998. COPIES FURNISHED: Henry M. Solares Division Director Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Lynda L. Goodgame General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Laura McCarthy, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32801-1772 Lloyd H. Falk, Esquire 600 Southwest 4th Avenue Fort Lauderdale, Florida 33315
The Issue Whether Respondents committed the offenses as alleged in the Administrative Complaint and the penalties, if any, which should be imposed.
Findings Of Fact Petitioner is a regulatory agency of the State of Florida charged with the responsibility of investigating and prosecuting complaints against real estate professionals, including real estate brokers and their qualified corporations. Respondent Edward J. Zibro is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0359349 in accordance with Chapter 475, Florida Statutes. Respondent Ed Zibro Realty, Inc. is now and was at all times material hereto a corporation registered as a real estate broker in the State of Florida having been issued license number 0251315 in accordance with Chapter 475, Florida Statutes. Respondent Edward J. Zibro is now and was at all times material hereto an officer of and qualifying broker for Respondent Ed Zibro Realty, Inc. The Respondents' offices are now and were at all times material hereto located at 2803 East Commercial Boulevard, Suite 202, Fort Lauderdale, Florida. Respondents and Pamela L. Mereider, d/b/a/ Earthrise Realty, Inc. (Mereider) submitted to arbitration through the Fort Lauderdale Area Board of Realtors, Inc. a dispute involving the right of Mereider to share in a commission check which had been deposited in Respondents' escrow account. By an award entered December 4, 1987, Respondents were ordered by the arbitration board to pay Mereider the sum of $1,800.00 within ten days of the date of the award. Respondents had not paid the award at the time of the final hearing. On February 15, 1989, the County Court in and for Broward County, Florida, issued a final judgment ordering the Respondents to pay to Mereider the sum of $1,800.00 plus arbitration costs of $100.00 and court costs of $58.00. This final judgment was based on the arbitration award dated December 4, 1987, which the Court found to be binding on the parties. Respondents had not satisfied the final judgment at the time of the final hearing in this proceeding. On November 13, 1987, Respondents, as agents for the seller, obtained a contract for the purchase of Crystal Lakes Chevron Station by Werner Hatzelhoffer (Hatzelhoffer). Hatzelhoffer, as buyer, placed an $11,000.00 deposit in trust with Respondents. On or about March 16, 1988 Hatzelhoffer's bank was notified that his application for financing this transaction through the Small Business Administration had been rejected. Hatzelhoffer did not obtain financing and the transaction did not close. On August 17, 1988, Hatzelhoffer requested in writing that Respondents return the $11,000.00 deposit with interest. Based on the terms of the contract executed by the parties, Respondents and the seller of the property disputed that Hatzelhoffer was entitled to a refund of the deposit. Hatzelhoffer later requested the return of the deposit money by telephone and went to Respondent's office in person to demand the refund of the deposit. On October 25, 1988, Hatzelhoffer's attorney made written demand of Respondents for the return of Hatzelhoffer's deposit. On April 21, 1989, Respondent Edward J. Zibro advised Petitioner for the first time of the conflicting demands on the escrow deposit and requested an escrow disbursement order from Petitioner. Petitioner opened an escrow disbursement case and, on May 2, 1989, Gerri E. Barnoske, a complaint analyst for Petitioner, requested in a letter certain information from Respondents relating to the escrow dispute. Respondents did not receive this letter. On June 2, 1989, Ms. Barnoske wrote to Respondents a second time. This second letter advised that the previously requested information had not been received and that failure to cooperate could result in disciplinary proceedings being brought. The second letter also advised Respondents to let Petitioner know if the matter had been settled. The dispute involving Mr. Hatzelhoffer's deposit was amicably resolved on May 30, 1989. On May 8, 1989, the seller and his wife executed an agreement which released any claim they may have had to the escrowed funds and which authorized Respondents to negotiate a settlement with Hatzelhoffer. Respondents were also authorized by the release instrument executed by the seller on May 8, 1989, to retain as their commission for the failed transaction any sums they could get Hatzelhoffer to agree was due the seller. As a result of the settlement, Hatzelhoffer was reimbursed $6,500.00 and Respondents retained $4,500.00. Upon receiving Ms. Barnoske's letter dated June 2, 1989, Respondent Edward J. Zibro advised Ms. Barnoske that he had not received her letter dated May 2, 1989. He further advised that the escrow dispute had been settled and enclosed a statement signed by Mr. Hatzelhoffer on May 30, 1989, which acknowledged that the matter had been resolved. On June 22, 1989, Petitioner filed an Administrative Complaint against Respondents which contained four counts. Count I and Count II charged Respondent Edward J. Zibro and Respondent Ed Zibro Realty, Inc., respectively, with having failed to account and deliver a share of a commission in violation of Section 475.25(1)(d), Florida Statutes, based on the dealings with Mereider. Count III and Count IV charged Respondent Edward J. Zibro and Respondent Ed Zibro Realty, Inc., respectively, with having failed to account and deliver a deposit in violation of Section 475.25(1)(d), Florida Statutes, based on the dealings with Hatzelhoffer. Respondents denied the allegations of the Administrative Complaint and timely requested a formal hearing. This proceeding followed.
Recommendation Based on the foregoing findings of fact and conclusions of law it is RECOMMENDED that Department of Professional Regulation, Florida Real Estate Commission enter a final order which finds as follows: Respondent Edward J. Zibro guilty of violating the provisions of Section 475.25(1)(d), Florida Statutes, as alleged in Count I of the Administrative Complaint; Respondent Ed Zibro Realty, Inc. guilty of violating the provisions of Section 475.25(1)(d), Florida Statutes, as alleged in Count II of the Administrative Complaint; Respondent Edward J. Zibro guilty of violating the provisions of Section 475.25(1)(d), Florida Statutes, as alleged in Count III of the Administrative Complaint; and Respondent Ed Zibro Realty, Inc. guilty of violating the provisions of Section 475,25(1)(d), Florida Statutes, as alleged in Count IV of the Administrative Complaint. IT IS FURTHER RECOMMENDED that the final order entered by Petitioner assess administrative fines against Respondents as follows: Against Edward J. Zibro in the amount of $500.00 for the violation of Count I of the Administrative Complaint. Against Ed Zibro Realty, Inc. in the amount of $500.00 for the violation of Count II of the Administrative Complaint. Against Edward J. Zibro in the amount of $500.00 for the violation of Count III of the Administrative Complaint. Against Ed Zibro Realty, Inc. in the amount of $500.00 for the violation of Count IV of the Administrative Complaint. IT IS FURTHER RECOMMENDED that the final order entered by Petitioner suspend the licenses and registration of the Respondents for a period of six months or until such time as the administrative fines are paid and the final judgement in favor of Pamela L. Mereider, d/b/a Earthrise Realty, Inc. is satisfied, whichever occurs first. DONE AND ENTERED this 29th day of November, 1989, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 904/488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of November, 1989. APPENDIX TO THE RECOMMENDED ORDER IN CASE 89-4205 The following rulings are made on the proposed findings of fact submitted by Petitioner: The proposed findings of fact in paragraph 1 are adopted in material part by paragraph 1 of the Recommended Order. The proposed findings of fact in paragraph 2 are adopted in material part by paragraphs 2 and 4 of the Recommended Order. The proposed findings of fact in paragraph 3 are adopted in material part by paragraphs 3 and 4 of the Recommended Order. The proposed findings of fact in paragraph 4 are adopted in material part by paragraph 3 of the Recommended Order. The proposed findings of fact in paragraph 5 are adopted in material part by paragraph 5 of the Recommended Order. The proposed findings of fact in paragraph 6 are adopted in material part by paragraph 5 of the Recommended Order. The proposed findings of fact in paragraph 7 are adopted in material part by paragraph 5 of the Recommended Order. The proposed findings of fact in paragraph 8 are adopted in material part by paragraph 6 of the Recommended Order. The proposed findings of fact in paragraph 9 are adopted in material part by paragraph 6 of the Recommended Order. The proposed findings of fact in paragraph 10 are adopted in material part by paragraph 7 of the Recommended Order. The proposed findings of fact in paragraph 11 are rejected as being unnecessary to the result reached. The proposed findings of fact in paragraph 12 are adopted in material part by paragraph 7 of the Recommended Order. The proposed findings of fact in paragraph 13 are adopted in material part by paragraph 8 of the Recommended Order. The proposed findings of fact in paragraph 14 are adopted in material part by paragraph 8 of the Recommended Order. The proposed findings of fact in paragraph 15 are adopted in material part by paragraph 9 of the Recommended Order. The proposed findings of fact in paragraph 16 are adopted in material part by paragraph 9 of the Recommended Order. The proposed findings of fact contained in the first sentence of paragraph 17 are adopted in material part by paragraph 11 of the Recommended Order. The proposed findings of fact contained in the second sentence of paragraph 17 are rejected as being subordinate to the findings made in Paragraph 11 of the Recommended Order. The proposed findings of fact in paragraph 18 are adopted in material part by paragraphs 10 and 12 of the Recommended Order. The proposed findings of paragraph 19 are rejected as being unnecessary to the results reached. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation 400 West Robinson Street Orlando, Florida 32801 Edward Zibro Ed Zibro Realty, Inc. 2803 East Commercial Boulevard Suite 202 Fort Lauderdale, Florida 33308 Darlene F. Keller Division Director Department of Professional Regulation 400 West Robinson Street Orlando, Florida 32801 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact At all times relevant hereto, Phyllis A. Crosby, Respondent, was registered as a real estate broker by the Florida Board of Real Estate, and was qualifying broker for Crosby Realty Corporation, a corporate real estate broker (Exhibit 4). Crosby had actual knowledge of the hearing scheduled to be heard September 3, 1986, and failed to appear. William Nolte and Marilyn Nolte owned a duplex in Tampa, Florida that they desired to sell. They talked with Wade Black and Dale Peterson, real estate salesmen with American Realty Company, and agreed to give American Realty Company an exclusive right of sale agreement, a listing agreement to list the property for rent before sale, and to pay a $100 commission for each tenant. The exclusive listing agreement dated February 26, 1985 was attached to Exhibit 2, deposition of Marilyn Nolte, as Exhibit 2. Pursuant to these agreements, tenants for each of the apartments were obtained and a buyer for the property was subsequently found. In March 1985, Crosby purchased American Realty's assets which included the Nolte agreements. Salesmen licenses of Black and Peterson were transferred to Crosby Realty. Rental and deposit checks from the two tenants, totalling $1,130.00, were obtained by Black and/or Peterson and delivered to Respondent. This money was never deposited into Respondent's escrow account. The Noltes demanded remittance of the $1,130.00 minus $200 (commission), or $930.00 from Respondent on numerous occasions and made numerous phone calls to the Crosby Realty Company office to obtain this money without success. On March 13, 1985, a buyer for the Nolte property was secured by Tam- Bay Realty, and the property was sold with the closing taking place June 9, 1985. Prior to the closing, Nolte wrote to the American Title Company, who closed the transaction, regarding the $930.00 owed Nolte by Respondent and this $930.00 was deducted from the commission paid Respondent. At the closing, Respondent appeared, took the check representing Crosby Realty's Commission less the $930.00 deducted to pay Nolte, and left before the final papers were signed. No commission for the rentals of the sale was ever paid by Respondent to Black or Peterson. Respondent, during 1985, had three accounts in the Citrus Park Bank in Tampa. One was the Crosby escrow account, one was the Crosby Realty general account, and one was the Phyllis A. Crosby personal expense account. Numerous overdrafts were drawn on the general account and personal expenses account and the bank notified the Respondent that these overdraft charges would be deducted from her escrow account as a set-off to keep the bank from losing money because of these overdraft charges. During June 1985, the bank debited the escrow account $88.50 (debit memo Exhibit 1), the July statement contained a debit memo of $283.00, and in August, debit memos of $126.76 and $62.88 appeared. In September 1985, Citrus Park Bank closed all of Respondent's accounts. On April 29, 1985, Respondent leased office space and a townhouse from Carlton Properties in Tampa. She signed a three-year lease effective May 1, 1985, which provided for two months free rent for the office, with tenant to make a security deposit in the amount of $817.79 (which equals one month rent) due June 1, 1985. This deposit was never made and she was evicted in July. The townhouse lease provided for two weeks free rent with the security deposit due May 15, 1985. Respondent made this payment and one additional payment, but the check for the second payment was returned marked insufficient funds. She was evicted July 22, 1985. Respondent leased office space on July 9, 1985, from Ayers-Siera Insurance Association in the Carrolwood Village Center for a broker's office. She gave the lessor a check for $842.00 for the August rent and a security deposit. She moved into the office space and the check, written on the Crosby Realty general account, bounced. It was returned for collection twice, marked insufficient funds. When run through a third time, the check was returned marked "account closed." Eviction proceedings were instituted and Respondent's furniture was moved out of the office by the Sheriff in early October. The lessor has never received any monies from Respondent. In September or early October 1985, Respondent entered into a three year lease agreement with Paramount Triangle to lease office space commencing November 1, 1985. She moved her offices into that space and occupied the premises until April or May 1986 when she departed. During the period that Respondent occupied this office space, only one rental check from her was honored by the bank. Numerous checks given to Paramount Triangle for rent were not honored by the bank. Finally, the last check from Respondent dated March 6, 1986, which Paramount Triangle tried to deposit, was returned showing the account on which the check was drawn was closed on March 4, 1986. Pamela Glass was employed as a secretary by Respondent from July 6, 1986 through August 6, 1986. During this period, Respondent refused to accept certified mail and became very angry with Glass when she once signed for a certified letter addressed to Respondent. Glass received numerous phone calls from people complaining about not being paid for billing sent to Respondent. When her pay was not forthcoming at the end of the month, Glass quit. Glass also testified, without contradiction, that Respondent held accounts for utilities under various aliases she used for this purpose. Frank Maye, investigator for Petitioner, failed to get escrow account records from Respondent when requested and made appointments with her to audit her escrow accounts which were not kept by Respondent. Failing to obtain the records from Respondent, Maye subpoenaed the records from the bank.
Findings Of Fact The Parties Petitioner, the Division of Real Estate, Department of Business and Professional Regulation, (the "division" or the "department,") created by Section 20.165, Florida Statutes, and, in part, comprised of the Florida Real Estate Commission, provides "[a]ll services concerning [Chapter 475, Florida Statutes], including ... recordkeeping services, examination services, legal services, and investigative services, and those services in Chapter 455 [general provisions in regard to the state's regulation of professions and occupations] necessary to perform the duties of [Chapter 475, Florida Statutes]." Section 475.021, Florida Statutes. Chapter 475, Florida Statutes, is the law which regulates real estate brokers. Respondent, Maria E. Vaca t/a Vaca Realty, is now, and at all times material to this case, has been a real estate broker licensed by the State of Florida. The number of her license, originally issued in June 1, 1981, is 0333239. Her license, current through September 30, 1997, shows the location of her brokerage to be 120 E. Oakland Park Boulevard 105, Fort Lauderdale, Florida, 33334. Books, Accounts and Records to be Available Section 475.5015, Florida Statutes, requires that "[e]ach broker shall keep and make available to the department such books, accounts and records as will enable the department to determine whether such broker is in compliance with the provisions of this chapter." Rule 61J2-14.012(1), Florida Administrative Code, implements Section 475.5015, Florida Statutes. The rule provides: A broker who receives a deposit as previously defined shall preserve and make available to the BPR, or its authorized representative, all deposit slips and statements of account rendered by the depository in which said deposit is placed, together with all agreements between the parties to the transaction. In addition, the broker shall keep an accurate account of each deposit transaction and each separate bank account wherein such funds have been deposited. All such books and accounts shall be subject to inspection by the BPR or its authorized representatives at all reasonable times during regular business hours. Attempts at an Audit In March of 1994, the department decided to conduct an audit of Respondent's escrow account. Two of the department's investigators, Monroe Berger and Margaret Hoskins, with fifteen years of experience at the department between them, scheduled a meeting with Ms. Vaca for April 11, 1994, in order to conduct the audit. Ms. Vaca, indicating that her records were in storage, cancelled the meeting. A second meeting was scheduled for April 20, 1994, in order to allow Ms. Vaca to retrieve the records. Ms. Vaca failed to attend the meeting. Instead, she transmitted by facsimile to Investigator Hoskins copies of nine bank statements under the name of "Vaca Realty Trust Account," for what appears to be the period from June 5, 1993 through April 5, 1994. (Generally monthly statements, one of the statements appears to be for the first quarter of 1994, from January 6 through April 5, 1994.) There were no reconciliation statements attached to the bank statements. The bank statements provided were insufficient to conduct an audit of the escrow account. On April 21, 1994, another meeting was scheduled with Ms. Vaca for April 29, 1994. In addition, Investigator Berger sent Ms. Vaca a letter confirming the April 29, 1994, meeting and asking Ms. Vaca to bring with her specific records necessary to allow the audit to be conducted. Investigator Berger wrote: This is to confirm our telephone conversation of 4-21-94. It is unfortunate that some personal problems have caused you to cancel the two previous appointments with Investigator Hoskins. In any event we are looking forward to seeing you on 4-29-94 at 1:00PM, at which time you will provide your office records for the last year. They will include but not be limited to (i) Trust liability reconciliations, (ii) Bank statements with cancelled check vouchers and deposit slips and (iii) files relating to both closed and open transactions. Petitioner's Exhibit No. 2. Ms. Vaca failed to appear for the April 29, 1994, meeting. Again, another meeting was schedule, this one for May 2, 1994. Ms. Vaca failed to appear for the May 2, 1994 meeting. On September 22, 1994, Investigator Berger and his supervisor, Don Piersol, went to Ms. Vaca's office to conduct the audit. Ms. Vaca did not have her escrow account records on hand. She agreed, however, to bring them to a meeting scheduled for October 10, 1994. At the October 10, 1994 meeting, Ms. Vaca provided a check book but she did not provide any trust liability reconciliations or deposit slips for the previous year's transactions. Without these records an audit cannot be conducted. In addition, Ms. Vaca did not provide all files relating to open and closed transactions for the previous year, which also are necessary to conduct an audit. Ms. Vaca remembers missing only one, (perhaps two) of the meetings scheduled by the department and that because of the emergency hospitalization of her father. Certainly, her father's illness excuses abrupt cancellation of a meeting. This record is clear, however; Ms. Vaca repeatedly failed to produce the required records. Production at Hearing At hearing, Ms. Vaca produced six bank statements for what appears to be the period of the first week of September 1993 through May 5, 1994. (Five of these statements match five of the nine statements faxed to the department in April of 1994. Again, the statements are for one month's time, with the exception of the quarterly statement for the first quarter of 1994.) Attached to each of the six bank statements is a Real Estate Trust Account Monthly Statement Reconciliation form including a "Brokers Trust Liability Reconciliation." Had the reconciliation statements been provided earlier, there still would not have been enough records provided for an audit to be conducted. Deposit slips and cancelled check vouchers, records necessary to conduct the audit, have never been provided the department. Nor has Ms. Vaca to date produced all the files of transactions, open or closed, conducted during the year prior to whenever an audit has been attempted. As of the date of hearing, Ms. Vaca continued to fail to appreciate what records should be provided the department, records she was clearly on notice of as deemed necessary to an audit by the department at least since Mr. Berger's letter in April of 1994. This record does not disclose any legitimate reason for Ms. Vaca's repeated failure to produce the requested records. As of the date of hearing, an audit had still not been conducted of Ms. Vaca's escrow accounts because the department has never been given access to the records necessary to conduct the audit.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Commission suspend the license of Maria E. Vaca t/a Vaca Realty for six months and that at the end of the suspension Ms. Vaca be placed on probation for as long as it takes to attend and complete a seven-hour course in management of escrow accounts. In addition, probation should be conditioned upon production of the records the Department needed to conduct the audit attempted in 1994. DONE AND ENTERED this 27th day of September, 1996, in Tallahassee, Leon County, Florida. DAVID M. MALONEY, 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 27th day of September, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 96-2347 1. Paragraphs 1 through 16, insofar as material, are adopted, with the exception of the statement in paragraph 8 that respondent sent by facsimile "six copies of her escrow account bank statements to Investigator Hoskins." (e.s.) Respondent sent copies of nine bank statements by facsimile. COPIES FURNISHED: Henry M. Solares Division Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32801-1900 Lynda L. Goodgame General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Daniel Villazon, Esquire Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32801-1900 Ms. Maria E. Vaca 1731 Southeast 13th Street Fort Lauderdale, Florida 33316
