Findings Of Fact Respondent Ray T. Kline is and at all times material to the charges in this action was a registered real estate broker holding License No. 0048253. Respondent Vincent Tomasino is and at all times material to the charges in this action was a licensed real estate salesman holding License No. 0353215. Respondent Krishnalall D. Persaud is and all times material to the charges in this action was a licensed real estate salesman holding License No. 0336161. At the time of the hearing the Respondent Persaud had obtained his broker's license. In December, 1980, the Respondents Tomasino and Persaud were employed as salesmen, selling time-share units at Vistana Development. During December they discussed and agreed upon a business plan for marketing time-share units. As a part of that plan-they agreed to form Intercontinental Marketing Services, Ltd. (hereafter referred to as IMS) a corporation which would be used to market time-share condominiums and other real estate. Subsequent to that time they did in fact incorporate on May 4, 1981, as a Delaware corporation and formed another Delaware corporation to handle travel and tour business. The incorporators of these corporations were the Respondents Tomasino and Persaud who were also officers and directors of both corporations. Sometime between December, 1980 and March, 1981 Persuad introduced Respondent Ray Kline to Respondent Tomasino. They discussed Ray Kline becoming the registered broker for IMS. After some discussion, Ray Kline did in fact agree to become the broker for IMS. On January 19, 1981, Respondent Tomasino and Respondent Persaud opened a general corporate account for IMS at the Atlantic Bank of Orlando. (See Petitioner's Exhibit 6) The account required two signatures for all checks and the two persons allowed to sign were Respondents Tomasino and Persaud. This account was not set up as an escrow or trust account and was not used a's an escrow or trust account during the operating life of IMS. At no time was the Respondent Ray T. Kline a signator on this account. In early 1931 the Respondents Persaud and Tomasino began negotiating with the Highlands County Title and Guaranty Land Company (hereafter referred to as Highlands County Title) to become its representative in the Orlando area. Highlands County Title is a subsidiary of Sun-N-Lake Estates which is the owner and developer of Lakeside Villas located near Sebring, Florida. A verbal agreement was reached between Highlands County Title and IMS whereby IMS would market time-share units in Lakeside Villas in the Orlando area. This verbal agreement was later reduced to writing. (See Petitioner's Exhibit 11) On or about March 3, 1981, IMS and Respondent Ray T. Kline entered into a written agreement whereby Ray T. Kline agreed to act as the real estate broker for IMS. (See Respondent Kline's Exhibit 3) Highlands County Title and Sun-N- Lake Estates required a broker be designated for all its sales representatives. Under the written agreement Mr. Kline agreed generally to act as broker and to not interfere with any of the marketing projects of IMS. IMS was to provide Respondent Kline with an office, secretarial assistance, a phone, and real estate leads acquired through IMS advertising. The contract required Kline to maintain an escrow account for his real estate transactions and to pay twenty- five percent of all commissions earned by him on real estate transactions other than his on personal business. There was no requirement in the contract that Ray T. Kline open or maintain an escrow account for real estate transactions handled by IMS. On March 3, 1981, Ray T. Kline changed his broker address to 1121 South Cimarron Boulevard, Winter Park, Florida, the offices of IMS. At the time Mr. Kline moved his license to the IMS office he did not register or reflect a trade name under which he was doing business as a broker. On March 5, 1981, Vincent Tomasino and Krishnalall Persaud placed their salesman licenses with Ray T. Kline as an individual broker employer at 1121 Cimarron Boulevard, Winter Park, Florida. IMS was not registered or qualified with the Board of Real Estate or the Department of Professional Regulation by the Respondents. On March 16, 1981, a written agreement was entered into between IMS and Highlands County Title. The agreement showed Ray T. Kline as broker for IMS and was signed by Vincent Tomasino as director of IMS and Ray T. Kline, Jr. as broker. On March 18, 1981, a supplement to that written agreement was entered into between Ray T. Kline, IMS, and Highlands County Title whereby Highlands County Title agreed to pay advance draws against commissions to IMS. This supplement to the original agreement was signed by Ray T. Kline on behalf of IMS. Mr. Dennis Grage had met and become acquainted with Vincent Tomasino when Mr. Tomasino was selling time-share units at Vistana. In early March, 1981, Vincent Tomasino contacted Mr. Grage to see if he was interested in purchasing time-share units in Lakeside Villas. Shortly after the initial contact Mr. Tomasino took Mr. Grage's wife, Barbara, together with Richard and Benita Drapeau (Mrs. Grage's sister and her husband) on a tour of Lakeside Villas. After the tour Mr. Tomasino and Mr. Grage met regarding the purchase of a unit in Lakeside Villas. Mr. Grage explained to Mr. Tomasino that he could not afford the $600 down payment. Mr. Tomasino then told Mr. Grage that if he would get the Drapeaus and the Brownings to buy a time-share unit in Lakeside Villas, he would pay $500 of the down-payment on a time-share unit for Mr. Grage. After the tour Mr. and Mrs. Drapeau decided to buy four time-share units in Lakeside Villas. However, after returning to their home in New Hampshire they decided to buy only two time- share units and so informed Vincent Tomasino. The Drapeaus then sent two deposit checks of $400 each dated March 30, 1981 and April 11, 1981 to Vincent Tomasino. These checks were made payable to Vincent Tomasino pursuant to his instructions. These two checks were deposits on two time-share units at Lakeside Villas. The March 30, 1981 check was deposited in the IMS corporate account on April 7, 1981. The April 11, 1981 check was endorsed by Vincent Tomasino and forwarded to Sun-N-Lake Estates where it was deposited in the Sun-N-Lake Estates attorney's escrow account. The $400 from the March 30, 1981 deposit check was never forwarded by IMS or Vincent Tomasino to Sun-N-Lake Estates. Pursuant to the agreement with Vincent Tomasino regarding the down payment on a time-share unit, Dennis Grage forwarded a $100 deposit to Mr. Tomasino. The balance of the $600 deposit called for in the contract was to be paid by Vincent Tomasino. Mr. Grage also contacted John and Helen Browning. In March, 1981, Dennis Grage contacted John and Helen Browning at their home in Michigan. He discussed with them the possibility of purchasing a time-share unit at Lakeside Villas. During this conversation the Brownings authorized Mr. Grage to place a $100 deposit on two units for them. By letter dated March 9, 1981, Vincent Tomasino acknowledged on behalf of IMS the receipt of the deposit placed by Dennis Grage for the Brownings. The Brownings then asked for more information regarding the time- share units and inquired of Mr. Tomasino as to whom the deposit check should be made payable. They were advised by Mr. Tomasino to make the check payable to IMS. On March 20, 1981, the Brownings sent a $1,000 deposit check to Vincent Tomasino payable to IMS. By letter dated March 23, 1981, Vincent Tomasino acknowledged receipt of the $1,000 deposit and also forwarded two time-share purchase agreements to the Brownings for their signatures. Each of the contracts called for a $500 deposit. On April 7, 1981, the Brownings executed the two purchase agreements and returned them to Vincent Tomasino. The Brownings' $1,000 deposit check was deposited into the IMS corporate account at the Atlantic Bank on or about March 24, 1981. On May 18, 1981, Vincent Tomasino wrote a check to Sun-N-Lake Estates in the amount of $1,000 for the Brownings' deposit. The check was received and deposited for collection by Sun-N-Lake Estates but before it could be paid Vincent Tomasino placed a stop-payment order on the check. The stop-payment order was placed because there were insufficient funds in the account to cover the $1,000 check. The $1,000 deposit was never forwarded to Sun-N-Lake Estates by IMS for Vincent Tomasino. In May, 1981, Vincent Tomasino removed Krishnalall Persuad as a signator on the IMS account at the Atlantic Bank. This occurred primarily as a result of a disagreement over a $1,200 deposit made by Mr. Persaud to an account other than the IMS account. Also during May, 1981, Vincent Tomasino changed the locks on the doors at the IMS offices at 1121 South Cimarron Boulevard, Winter Park, Florida, and did not give Mr. Persaud a key. Prior to May, 1981, the checking account at Atlantic Bank had been controlled by both Mr. Persaud and Mr. Tomasino. From January to May, 1981, checks written on the IMS account were signed and approved by both Tomasino and Persaud. Respondent Persaud knew or reasonably should have known that money being received from purchasers was being deposited in the corporate account. After May, 1981, only Vincent Tomasino signed checks on the IMS account. In June, 1981, the relationship between Mr. Persuad and Mr. Tomasino terminated. Also in June, 1981, the IMS account became overdrawn and in August, 1981, the Atlantic Bank closed the account. Between January and June, 1981, Vincent Tomasino received approximately $7,000 in draws from IMS and Mr. Persaud received approximately $4,900 in draws from IMS. Ray T. Kline received no funds from IMS. When interviewed by a DPR investigator Mr. Persaud denied having received any funds from IMS during its operation. Between January and June, 1981, Vincent Tomasino was the person in charge of the IMS finances. Ray Kline had no control over and did not participate in the finances of IMS. The bookkeeping was done by the office manager and the checkbook was kept by Mr. Tomasino. During this period salesmen were hired and supervised by Tomasino and Persaud, but were not supervised by Respondent Kline. IMS also purchased a tour bus during this period which was used by Mr. Persaud to take potential buyers on tours of Lakeside Villas. Once these tours began, Mr. Persaud was in the office less than he had been the first couple of months of operation. Once there were no more funds in the corporate account the Respondent Tomasino essentially walked away from the corporation and paid only a few small debts. By letter dated June 23, 1981, Vincent Tomasino notified Sun-N-Lake Estates that IMS would no longer sell time- share units at Lakeside Villas. In November, 1981, the relationship between IMS and Sun-N-Lake Estates was formally terminated. Prior to termination, IMS had received advances of $9,000 in excess of commissions due and earned and no reimbursement of those excess funds has been made to Sun-N-Lake Estates. In approximately September, 1981, the Drapeaus as a result of financial problems sent a letter to Sun-N-Lake Estates requesting a refund of their $800 deposit. Sun-N-Lake Estates refunded the $400 which was in escrow and informed the Drapeaus that Sun-N-Lake Estates had never received the other $400 deposit. Robert Wright of Sun-N-Lake Estates was contacted by the Drapeaus. He then contacted Vincent Tomasino who told him that he would speak with Ray Kline and Krishnalall Persaud about the Drapeau problem. Mr. Wright was never contacted again by Mr. Tomasino. Dennis Grage, after learning that the Drapeau's $400 deposit had not been placed in escrow also contacted Vincent Tomasino. He demanded the return of the $400 deposit and Mr. Tomasino stated that someone had run off with the money and that he was trying to get it back. After several unsuccessful contacts with Mr. Tomasino, Mr. Grage contacted Ray Kline. Mr. Kline said he was checking on the problem, but at the time of the formal hearing the Drapeau deposit had not been refunded. Dennis Grage also informed the Brownings of the problems the Drapeaus were encountering. The Brownings then contacted Sun-N-Lake Estates and spoke with Robert Wright who informed them that Sun-N-Lake Estates had never received their $1,000 deposit. Mr. Tomasino informed him that IMS was bankrupt and had no money and that it wasn't his problem. Mr. Browning then contacted Ray Kline who denied any personal responsibility and stated that Tomasino had taken the money and was responsible for its return. Mr. Browning then made demand upon Krishnalall Persaud for the $1,000 deposit and Mr. Persaud denied being an officer or director of IMS and also stated that he had no responsibility to the Brownings. During August and September, 1981, Robert Wright repeatedly discussed the Drapeau and Browning deposits with Respondents Persaud and Kline. On each occasion they denied any responsibility for those deposits. Until contacted by the Brownings and Drapeaus, Ray Kline and Krishnalall Persaud had no knowledge of the deposits of these people and how they were being received. Ray Kline, after being contacted was aware that these deposits were funds that should have been placed in escrow upon receipt by IMS and Tomasino. Neither Tomasino, Kline, nor Persaud attempted to provide an accounting to the Drapeaus or Brownings and the Respondents made no attempt to return their deposits. For at least a two week period in the Spring of 1981, Ray Kline also opened and operated a branch office for IMS at a condominium development. At no time was this branch office registered as required by statute. From the beginning of the relationship between Ray Kline and IMS, by agreement, Kline's involvement was to be very limited. Kline never opened an escrow account for IMS and did not supervise the sales personnel. Ray Kline had little or no involvement in the day-to-day operation of IMS. At no time was IMS registered with the Florida Real Estate Commission or the Department of Professional Regulation. At some point in time in the Spring of 1981, the Respondents discussed opening an escrow account but decided to not open such an account until they had earned commissions. From January through May, 1981, Respondents Tomasino and Persuad hired and supervised salesmen and controlled the operations of IMS.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the license of Vincent Tomasino be revoked and that an administrative fine of five hundred dollars ($500) be imposed upon him; That the license of Ray T. Kline be suspended for a period of two (2) years and an administrative fine of one thousand dollars ($1,000) be imposed upon him; and That the license of Krishnalall Persaud be suspended for a period of two (2) years and an administrative fine of five hundred dollars ($500) be imposed upon him. It is further RECOMMENDED that upon a showing by the Respondents to the Commission prior to entry of the final order that restitution has been made to Mr. and Mrs. Drapeau and Mr. and Mrs. Browning, the fines of Respondents Tomasino, Kline and Persaud be reduced to two hundred fifty dollars ($250), five hundred dollars ($500), and two hundred fifty dollars ($250), respectively. DONE and ENTERED this 22nd day of September, 1983, in Tallahassee, Florida. MARVIN E. CHAVIS, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of September, 1983.
Findings Of Fact Respondent Eugene Lay was registered as a business opportunity broker on March 15, 1982 by the Board of Real Estate (now the Florida Real Estate Commission). His registration was effective from January 5, 1982 until January 1, 1984. He was issued registration number 1800461. On February 12, 1982 Mr. Lay received $3,750 from Christopher Orthodox on a contract for the purchase of a business known as Personal Valet Services, Inc. The $3,750 were to be held in trust by Mr. Lay until the closing of the business purchase transaction. Mr. Lay did not put the money in a trust account but instead spent the money for his own personal business. When it later appeared to Mr. Orthodox that the transaction was not going to close, he demanded the return of his $3,750 deposit. Mr. Lay failed to return it to him and Mr. Orthodox was not able to purchase the business. His $3,750 has never been returned. On February 27, 1982 Mr. Lay obtained from Mr. Orthodox and Loretta Orthodox an additional $9,000 as a deposit to be held in trust pending their obtaining a Small Business Administration loan to purchase a business known as Starlight Creations, Inc. The purchase contract was conditioned upon the ability of the Orthodoxes to secure the loan for $121,500. They were unable to obtain the loan. When it appeared that the purchase transaction would not close, Mr. Orthodox demanded the return of his $9,000. Mr. Lay did not return the money because he had spent it for his own personal business. Subsequent to the Orthodoxes initial demand for the return of their money, Mr. Lay's wife returned $1,000 to them in cash. No further repayments have been made.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Florida Real Estate Commission enter a Final Order dismissing the Administrative Complaint against Eugene Lay for lack of jurisdiction. DONE and RECOMMENDED this 29th day of February, 1984, in Tallahassee, Florida, MICHAEL PEARCE DODSON 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 29 day of February, 1984.
Findings Of Fact On November 29, 1983 Petitioner filed with Respondent an application for licensure as a real estate salesman. By letter dated February 28, 1984 Respondent denied Petitioner's application as follows: The reason for the Commission's action is based on your answer to Questions 6, 7, 14 and 15 of the licensing application and/or your criminal record and disciplinary actions, and on your having unlawfully acted as a real estate salesman or real estate broker in the State of Florida. Specifically, your denial is based upon your May 1975 arrests and convictions for five counts of the sale of unregistered securities five counts of fraudulent sale of securities, five counts of grand larceny, petty larceny, ten counts of conspiracy to commit a felony, and also on disciplinary actions involving your Insurance License, Mortgage Brokers License and Securities License. In 1970 or 1971 Petitioner started Summit Investments, a conpany engaged in selling contracts for deed for developers to investors at a discount. The State of Florida determined that these contracts were mortgages and not securities, and, therefore, all persons selling them must be licensed mortgage brokers. Petitioner accordingly obtained a mortgage broker's license. In 1972 eight mortgage brokers formed S.E.I., Inc., and Petitioner became the president. Everyone selling contracts for deed for that company was licensed under the Mortgage Brokerage Act. Clinton E. Taylor, an investigator for the State of Florida Department of Banking and Finance, Division of Securities, as part of his regular job duties, frequented Petitioner's offices at S.E.I., Inc. to check the advertising and sales pitches being used by the persons selling what the State had classified as mortgages. Taylor monitored Petitioner's operation at Summit Investments and at S.E.I., Inc. for a number of years without receiving any consumer complaint and without finding any basis for any enforcement action against Petitioner. In 1974, a recession year, five persons to whom S.E.I. had made sales did not receive their interest income and therefore filed complaints with the State of Florida Department of Banking and Finance. In May 1975 state criminal charges were filed against Petitioner as president of S.E.I., against the developer, and against the selling broker, basically alleging that what had previously been classified as mortgages were in fact unregistered securities. After trial, Petitioner was adjudicated guilty of five counts of sale of unregistered securities; five counts of fraudulent sale of securities; five counts of petty larceny; five counts of conspiracy to commit a felony, to-wit: fraudulent sale of securities; and five counts of conspiracy to commit a misdemeanor, to-wit: petty larceny. Petitioner was initially sentenced to a total of ten years of incarceration, $20,000.00 in fines, and 15 years of probation. In 1976 Petitioner plead no contest to a federal charge of mail fraud in Tampa, Florida in order to obtain a sentence which would run concurrent with that arising out of his state conviction. In 1977 Petitioner plead no contest to a charge in Palm Beach County of selling unregistered securities. Both of these charges were related to the same incidents forming the basis for the 1975 criminal charges. Based upon the conviction of Petitioner in the 1975 state case, his mortgage broker's license, his securities license, and his insurance license were revoked. By the time of the final hearing in this cause Petitioner had served 16 months in the State prison system and had been released; restitution had been made to the five people who caused the criminal charges to be filed from payment by Petitioner of the fines assessed against him; Petitioner had finished serving his amended probation period; and Petitioner's civil rights had been restored by the State of Florida. From September 1980 to November 1983 Petitioner earned his livelihood selling businesses. Be applied for a real estate license in both 1982 and 1983 and was denied both times. Petitioner seeks a real estate license in order that he can return to selling businesses.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered approving Petitioner's application for licensure as a real estate salesman, subject to successful completion of the licensure examination. RECOMMENDED and ORDERED this 6th day of November, 1984 in Tallahassee, 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 6th day of November, 1984. COPIES FURNISHED: Mr. David R. Edstrom 5748 Northeast 16th Avenue Fort Lauderdale, Florida 33334 Lawrence S. Gendzier, Esquire Department of Professional Regulation 400 West Robinson Street Suite 212 Orlando, Florida 32801
The Issue Whether petitioner's application for registration as a real estate salesman, pursuant to Chapter 475, Florida Statutes, should be approved.
Findings Of Fact Petitioner field applications for registration as a real estate salesman with respondent on October 10, 1977. Question 16 of the application reads as follows: 16. Have you, in this state, operated, attempted to operate, or held yourself out as being entitled to operate, as a real estate salesman or broker, within one year next prior to the filing of this application without then being the holder of a valid current registration certificate authorizing you to do so? The petitioner answered "no" to Question 16. On December 8, 1977, respondent Florida Real Estate Commission issued an order denying the application based on its determination that the applicant had operated, attempted to operate or held himself out as a real estate broker or salesman within the one year period prior to filing his application. Petitioner thereafter requested a hearing in the matter. (Exhibit 1) Petitioner is the president of Marketing Institute Corporation of the Americas, Ltd. of San Jose, Costa Rica. (MICA) The firm operates as a real estate sales organization under the laws of Costa Rica, and is owned by Insco S.A., a Costa Rican holding company. (Testmony of McIntire, Figueredo) In 1975, petitioner became associated with William W. Landa, president of Costa del Sol, a condominium project in Miami, Florida. His function was to produce sales of condominium units as a result of sales efforts in Latin America. Part of the informal arrangement was the petitioner occupied a rental villa at the condominium project. His success in producing sales was limited and, as a result, the association was terminated sometime in 1976. In a letter to Lands, dated January 21, 1977, petitioner sought an accounting of expenses incurred in the operation and stated that he had produced three purchasers for which commissions were payable at the rate of "10% for foreign sales and 5% on domestic sales." Although no explanation of the terms "foreign sales" and "domestic sales" was presented, Landa testified at the hearing that petitioner did not sell in Florida for Costa del Sol. (Testimony of Landa, Figueredo, Exhibits 2-3) On December 1. 1976, the receiver in bankruptcy of the estates of Grandlich Development Corporation and Fisher Development Corporation, Fred Stanton Smith, president of the Keyes Company, Miami, Florida, Wrote petitioner and offered to pay his firm a 10% commission on "all sales closed by you of all Commodore Club Condominiums sold to your prospects." The commission was to be payable to MICA through its agent in the United States, Transcontinental Properties, Inc. of Miami, Florida, a corporate broker, The Commodore Club is a condominium project located at Key Biscayn, Florida. Hemisphere Equity Investors, Inc. was the registered broker for the sales of the condominiums and kept sales agents on the premises. Smith instructed Hemisphere to cooperate with foreign brokers in the sales of the properties. Petitioner proceeded under this arrangement to obtain and refer prospective foreign purchasers to Transcontinental who arranged to show the condominium units to the clients and consummate any resulting sales. Although petitioner had desk space in the Transcontinental office from September, 1976, to August, 1977, he was not supposed to show properties to clients or be involve in any real estate sales functions. In September, 1976, the president of Transcontinental placed a telephone call to respondent's legal office at Winter Park, Florida and ascertained that commissions could be paid to a foreign broker. However, he was informed by the Commission representative that it was a "gray" area and, although the foreign representative could serve as an interpreter for foreign clients during transactions in the United States, he could not perform any of the sales functions himself in Florida. Sales were made in this manner and commission checks were paid to petitioner's firm during the period January - September, 1977. (Testimony of Smith, McIntire, Figueredo, Exhibits 4, 5, 12, 13, 15) On July 1, 1976, Alexander Sandru purchased a condominium at the Commordore Club through the Keyes Company as broker. He was a friend of petitioner's from Caracas, Venezuela, and the latter had recommended his purchase of the condominium. However, petitioner was not in the United States at the time Sandru viewed the property and purchased it. Petitioner claimed a commission on the sale and it was paid to his firm through Transcontinental's predecessor company. A dispute arose over the payment of the commission because a saleswoman of Hemisphere Equity Investors, Inc. had shown the property to Sandru and assumed that she would earn the commission on any resulting sale. (Testimony of Lundberg, Nelson, Murragy, Exhibits 8-11) On several occasions in 1976 and 1977, petitioner accompanied Latin American individuals to the Commodore Club where a representative of Hemisphere showed them various condominium units. During this time, petitioner would inquire concerning maintenance charges and the like and transmit such information to the individuals in Spanish. Several of these persons were connected with petitioner's foreign firm and were not prospective purchasers. (Testimony of Lundberg, Figueredo, Exhibit 7) On January 30, 1977, Insco S.A. entered into a purchase agreement for a Commodore Club condominium unit. Petitioner signed the agreement on behalf of his firm MICA as broker for the transaction. However, the deal was never consummated. (Testimony of Figeredo, Exhibit 14)
Recommendation That Petitioner's application for registration as a real estate salesman under Chapter 475, Florida Statutes, be denied. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 22nd day of March, 1978. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: John Huskins, Esquire Florida Real Estate Commission 400 West Robinson Avenue Orlando, Florida 32801 Richard J. Mandell, Esquire 748 Seybold Building Miami, Florida 33132
Findings Of Fact Documents introduced into evidence revealed that the Respondent Jeremiah C. Clarke is a registered real estate broker and Clarke Real Estate is an entity registered as a partnership broker and authorized to act as such with the Commission. On or about September 15, 1975, Jerry Kent, a salesman with Respondent, Clark Real Estate, obtained an oral open listing from Esther Braverman on a condominium unit denominated as "Apartment B-804, 1111 Crandon Boulevard, Key Biscayne, Florida." Pursuant thereto, salesman Kent showed the condominium unit to Jacques Benoist and Jeanine Benoist, his wife, who executed a deposit receipt contract to purchase a condominium unit on September 27, 1975. Esther Braverman, the seller, executed the contract during October of 1975. The deposit receipt contract provided for a $10,000 earnest money deposit to be held in the escrow account of the law firm of Snider, Young, Barrett, and Tannenbaum, P.A., attorneys for seller Braverman. Said deposit was made on September 27, 1975, by delivering a check to attorney Bruce L. Hollander, a member of the firm, who deposited the deposit in the firm's escrow account. (See Commission's Exhibit No. 9). The deposit receipt contract also obligated the seller, Esther Braverman, to pay Respondent Jeremiah C. Clark a commission of $7,875. Specifically, the contract provides that "I, or we, agree to pay to the above assigned broker a commission for finding the above signed purchaser for the above described property, the sum of $7,875 . . . ." Closing took place on January 19, 1976, at the offices of Washington Federal Savings and Loan Association, Miami Beach, Florida, from whom the Benoists had obtained financing for the purchase. At the closing on January 19, 1976, Esther Braverman signed and delivered a warranty deed made out to Jacques Benoist and Janine Benoist, transferring the property to the Bravermans. The warranty deed was recorded with the clerk of the Dade County Circuit Court by the lending institution, Washington Federal Savings and Loan Association. (See Respondent's Exhibits 1 and 2) At the closing, Jeremiah Clark was given a check representing the commission to Clarke Real Estate in the amount of $7,875. Thereafter, Jerry Clarke was requested by the lending institution to hold the funds in escrow until the bank dispursed the mortgage proceeds. He was then told that the mortgage proceeds would be paid within the following week. Respondent Clarke agreed, pursuant to a request from the seller's attorney, Bruce Hollander, to hold the commission check until January 27, 1976, without depositing same. Mr. Clarke held the commission check until January 29, 1976, as agree. On that day, he dispursed the proceeds to salesman Jerry Kent and the balance was credited to Clarke Real Estate. The mortgage funds were never disbursed because the lending institution could not obtain a quit-claim deed from the seller, Esther Braverman's former husband and therefore in the lending institution's opinion, the defect was not discovered until after the closing. On May 6, 1976, attorney Hollander acting for his law firm and the seller sent Respondent Jeremiah C. Clarke and Respondent Clarke Real Estate a letter stating that the mortgage proceeds had not been disbursed by the lending institution and requested a demand for the commission check. The Commission takes the position that the closing which occurred on January 19, was an escrow closing and that the Respondent Jeremiah Clarke was not authorized to disburse the proceeds from the commission check until notification that the mortgage proceeds were disbursed by the lending Institution. The Respondents, on the other hand, took the position that their only obligation was to find a purchaser who was ready, willing and able to complete the transaction, which acts were consummated by their salesman, Jerry Kent. Based on my examination of the document introduced herein, and the testimony adduced during the hearing, the undersigned concludes that the Respondent's position that it was entitled to receive the commission monies here in dispute has merit. Although the Commission takes the position that an escrow closing occurred, an escrow has been defined as a written instrument which by its term imports a legal obligation and which is deposited by the grantor, promisor, or obligor, or his agent with a stranger or third party to be kept by the depository until the performance of a condition or a happening of a certain event and then to be delivered over to the grantee, promisee, or obligee. It cannot be seriously contended herein that the Respondent Clarke was acting as an escrow for himself when consideration is given to the above definition of an escrow. See Love v. Brown Development Company, 131 So. 144. It is further essential to an escrow that delivery of the instrument be to a stranger or to a third person, that is, to one who is not a party to the instrument, or a person so free from any personal or legal identity with the parties to the instrument as to leave them free to discharge his duty as a depository to both parties without involving a breach of duty to either. For example, a deed delivered to a grantee cannot be regarded as held in escrow. Here, Respondent Clarke was in no way acting for anyone other than himself or as agent for his salesman, Jerry Kent, both of whom had a direct stake in the commission proceeds. Additionally, upon examination of the deposit receipt contract, the broker became entitled to the commission proceeds when the buyer (purchaser) was found. Additionally, and as an aside, it was noted that the lending institution in fact recorded its mortgage the day following the closing This would lead any examiner of the public records to believe that the lending institution was satisfied with the title as conveyed on the closing date. It was further noted that the Respondents had no indication that there was a problem with the title until approximately five months following the closing. Finally, the undersigned received a letter from attorney Lipcon dated August 1, 1975, advising that the civil case which was pending before the Dade County Circuit Court involving similar issues as posed herein before the commission had been fully and finally settled. There was a stipulation for dismissal signed by attorneys for each of the parties including the attorney for the firm that made the complaint against the Respondents stating in essence that the monies paid to Respondent Clarke and which was retained by him as full and final settlement of his brokerage commission were to be retained by Respondent Clarke as final payment of his commission in connection of the sale of the subject condominium. For all of these reasons, I shall recommend that the complaint filed herein be dismissed in its entirety.
Recommendation Based on the Findings of Fact and Conclusions of Law as found above, it is hereby recommended that the complaints filed herein be dismissed in their entirety. Recommended this 23rd day of August, 1977, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304
The Issue Whether the Respondents' real estate licenses in Florida should be disciplined based upon the charge that the Respondents are guilty of failing to maintain the required entrance sign on or about the entrance to the principal office in violation of Subsection 475.22, Florida Statutes and Rule 21V-10.024, Florida Administrative Code and are therefore in violation of Subsection 475.25(1)(e), Florida Statutes. Whether the Respondents' real estate licenses in Florida should be disciplined based upon the charge that Respondents are guilty of failing to register a branch office in violation of Subsection 475.24, Florida Statutes, and Rule 21V-10.023, Florida Administrative Code, and therefore are in violation of Subsection 475.25(1)(e), Florida Statutes. Whether the Respondents' real estate licenses in Florida should be disciplined based upon the charge that the Respondent Max S. Long, Jr., is guilty of failing to be a signatory on all escrow accounts in violation of Rule 21V-14.010, Florida Administrative Code and therefore is in violation of Subsection 475.25(1)(e), Florida Statutes. Whether the Respondents' real estate licenses in Florida should be disciplined based upon the charge that the Respondents' are guilty of failing to maintain trust funds in the real estate brokerage escrow bank account or some other proper depository until disbursement thereof was properly authorized in violation of Subsection 475.25(1)(k), Florida Statutes. Whether the Respondents' real estate licenses in Florida should be disciplined based upon the charge that Respondents' are guilty of culpable negligence or breach of trust in any business transaction in violation of Subsection 475.25(1)(b), Florida Statutes.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Petitioner is a state licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to the laws of the State of Florida, in particular, Section 20.30, Florida Statutes, Chapters 120, 455, and 475, Florida Statutes and the rules promulgated pursuant thereto. Respondent Max S. Long, Jr. was at all times material hereto a licensed real estate broker in the State of Florida having been issued license numbers 0253744, 0253742, and 0258199 in accordance with Chapter 475, Florida Statutes. The last license issued was as a broker for Stonegate Realty, Inc., 2325 Ulmerton Road, Clearwater, Florida 34620 and Queens Harbour Realty, Inc., 711 San Pablo Road North, Jacksonville, Florida 32225. Respondent Long has been a licensed salesperson since 1974 and a licensed broker since 1978. The Respondent Stonegate Property Management Corporation was at all times material hereto a corporation registered as a real estate broker in the State of Florida having been issued license number 0240617 in accordance with Chapter 475, Florida Statutes. The last license issued was at the address of 2325 Ulmerton Road, Clearwater, Florida 34620. The Respondent Stonegate Realty, Inc. was at all times material hereto a corporation registered as a real estate broker in the State of Florida, having been issued license number 0182660 in accordance with Chapter 475, Florida Statutes. The last licensed issued was at the address of 2325 Ulmerton Road, Clearwater, Florida 24620. The Respondent Queens Harbour 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 0257554 in accordance with Chapter 475, Florida Statutes. The last license issued was at the address of 711 San Pablo Road North, Jacksonville, Florida 32225. On or about October 17, 1989, DPR investigator Marjorie G. Maye (hereinafter Maye) conducted an inspection and audit of Respondents' offices and escrow accounts in Clearwater. Maye discovered that the Respondents did not display an office entrance sign for the corporations. Since the inspection Respondents have erected the proper sign which has been displayed continuously since that date. Respondents were operating an unregistered branch office located at 13280 Broadhurst Loop S.W., Ft. Myers, Florida. Respondents did not register the office because the salesperson was an employee of the developer and sold only property at that project. Since the inspection Respondents have properly registered the branch office. At the time of the inspection and audit Respondent Long was not a signatory on Respondents' escrow accounts. Since the inspection, Respondent Long has been added as a signatory to the escrow accounts. At the time of the audit Respondents' escrow account titled Queens Harbour Realty - Escrow account number 0089798317 maintained at C & S Bank of Pinellas County on September 30, 1989, had a current liability of $54,010.66, a reconciled bank balance of $8,537.99 thus indicating a shortage of approximately $45,472.67. Ultimately, the Respondents reduced the shortage to zero and the accounts balanced. At the time of the inspection and audit, Ed Perry, CPA, was employed by Respondent Queens Harbour in the accounting department and was in charge of the Queens Harbour Realty - Escrow account which was maintained out of Clearwater, Florida. George Patterson and Ed Perry, CPAs, and other individuals were signatories on this escrow account. The escrow accounts were used for deposits on real estate sales and leases. The funds were disbursed at sale or upon termination of the lease. Some of the funds received by Respondents were not required to be held in escrow. Eventually the deposits from several projects were placed in the escrow accounts. Disbursements were made from the escrow accounts even though the funds were not required to be deposited in the escrow account. This resulted in confusion as to the exact amounts of funds required to be maintained in the escrow accounts and which funds were available for distribution. Shortages in the escrow accounts were a result of intercompany loans and disbursements, as well as, from the co-mingling of funds. These were made at the direction of George Patterson. On or about October 13, 1989, Ed Perry, CPA and George Patterson, supervisor of the accounting department, signed a $6,000.00 check from Respondents' escrow account which was used for the purchase of a vehicle for Queens Harbour Yacht and Country Club. When this error was discovered the $6,000.00 was re-deposited to the escrow account. Respondent Long, became the broker for Stonegate Realty at the request of his cousin, Fred Bullard, the President of the Bullard Group, and a majority shareholder in Queens Harbour Realty, Inc. He was not aware of and did not sign any of the checks representing the inter-company loans or for the purchase of the vehicle. He derived no benefit from these loans. Respondent Max S. Long, Jr. understood at all times material to the allegations in the Administrative Complaint that an escrow account is one used to hold funds belonging to third parties and that he, as the real estate broker, acted in a fiduciary capacity to those third parties. Respondent Long relied completely on the corporation's in-house accountants to properly prepare the accounting for the escrow funds. Since the DPR investigation, there have been no shortages in the escrow account, monthly reconciliation reports are prepared and signed by Respondent Long, and the escrow accounts are routinely reviewed by Respondent Long. Respondent Long has had no prior disciplinary proceedings before the Commission.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, and the evidence of the record, including the contents of the several exhibits received into evidence, it is, therefore: RECOMMENDED that the Respondents be found guilty of having violated Subsections 475.25(1)(b), (e) and (k), Florida Statutes, (1989), as charged in the Administrative Complaint. It is further RECOMMENDED that Respondents shall jointly pay a penalty of $500 and that Respondent Long's real estate licenses be suspended for a period of one year, followed by a one year period of probation upon such conditions as the Florida Real Estate Commission shall reasonably impose. DONE and ENTERED this 21st day of August, 1991, in Tallahassee, Florida. DANIEL M. KILBRIDE 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 21st day of August, 1991. APPENDIX TO RECOMMENDED ORDER The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's proposed findings of fact. Accepted in substance: paragraphs 15, 16, 17, 18, 19, 20. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, Respondents' proposed findings of fact. Accepted in substance: paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 10, 11, 12, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 41, 42. Rejected as irrelevant: 9, 13, 40. COPIES FURNISHED: Janine B. Myrick, Esquire Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Kelli Hanley Crabb, Esquire Post Office Box 4110 St. Petersburg, Florida 33743 Darlene F. Keller Division Director 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Jack L. McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, I make the following: The Defendant, Leroy Wilson, is a registered real estate broker with the Commission and during January 1, 1975 to November 5, 1975, Defendant was registered as trading as Overpass Real Estate. On April 27, 1975, Defendant was the owner of residential property located at 291 N.W. 29th Terrace, Ft. Lauderdale, Florida. On April 28, 2/ Robert English and his wife Mazie English in response to a "for sale" sign posted at 291 N.W. 29th Terrace, Ft. Lauderdale, Florida, went to the real estate brokerage office maintained by the Defendant at room 201 Romark Building, 3521 West Broward Boulevard, Ft. Lauderdale, Florida. Defendant and Mr. and Mrs. English discussed and negotiated a deposit receipt contract dated April 28, 1975, between the Englishes as purchasers and Defendant as seller for the purchase and sale of property owned by Defendant located at 291 N.W. 29th Terrace. Mrs. English testified that they put up an earnest money deposit of $300 acknowledged by Defendant, however, Defendant executed the deposit receipt contract reflecting an earnest money deposit of $600. (See FREC Exhibit number 2). Mrs. English testified that part of the terms of the contract was that she would apply for a mortgage loan but when it was determined that her daughter who was to participate with her in the purchase, was not able to stay with her, she and her husband decided not to apply for a mortgage loan. She explained to Defendant and he agreed to return the $300 deposit that she had submitted along with the deposit receipt contract. When the Englishes demanded the return of their deposit, Defendant advised them that "it was the law that the deposit must be kept for 6 weeks, and thereafter, he would have to keep the deposit another ten days." After the expiration of the six week period, the Englishes called the Defendant's office and was advised that he no longer lived there and other efforts by the Englishes to contact the Defendant were fruitless. Thereafter on or about August 20, 1975, the Englishes filed a complaint with the Commission. Approximately two days after the Commission initiated its investigation, the Defendant returned the $300 deposit to the Englishes. (See FREC Exhibit number 3). N.B. Wolf an employee of Gulf Atlantic Mortgage Brokers testified that she was familiar with the document received into evidence as Exhibit number 2 which is the deposit receipt contract entered into by the Defendant and the Englishes. She testified that she did not recall ever having taken a credit application for the Englishes to apply for a mortgage loan. Roy E. Conner, the operations officer for Plantation First National Bank testified that he caused to be gathered the bank records as they relate to the escrow account maintained by the Defendant at that bank. An examination of those bank records revealed that the Defendant's escrow bank account maintained at Plantation First National Bank had a shortage of $5 as of September 16 and that on August 14, his escrow bank account showed a balance of $65 when it should have reflected a balance of $300 in earnest money deposits. See FREC Exhibit number 4 received into evidence. Pruyn investigated Defendant's brokerage office on September 16, at 2951 N.W. Avenue, Ft. Lauderdale, Florida. Based on an official inspection, Pruyn noted a number of inadequacies in that there were no letterheads, no desks, no chairs, no business mail, no diary of witnesses or any official sign as required and set forth in Commission Rule 21V-10.07 and 10.09, Florida Administrative Code and Section 475.22, Florida Statutes. See FREC Exhibit number 5 received into evidence. As previously stated, the Defendant did not appear at the hearing nor did he have a representative present to present any defense to the charges made by the Commission in the administrative complaint.
The Issue The issue is whether respondent's license as a real estate broker should be disciplined for the reasons stated in the amended administrative complaint.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: At all times relevant hereto, respondent, Yolanda Jean Ramsey, was a licensed real estate broker having been issued license number 0012364 by petitioner, Department of Professional Regulation, Division of Real Estate (Division). When the events herein occurred, respondent operated a real estate firm under the name of Ramsey Realty located at 19940 Gulf Boulevard, Indian Shores, Florida. Her husband, Drew Ramsey, was a condominium developer but he was not a licensed realtor. Sandra A. Hawley (Hawley) was a licensed salesperson for Ramsey Realty from April 1981 until she was terminated by respondent on January 6, 1982. She was employed by respondent pursuant to an oral agreement and was to receive a 3% commission on all closed sales. This description of Hawley's compensation arrangement was not contradicted by respondent. Drew Ramsey was then developing several condominium projects in Pinellas County, and Hawley's sales activities were focused on the sale of those condominiums through Ramsey Realty. Hawley was described by respondent as being the best salesperson in the firm. From April 1981 through December 1981, Hawley recalled that her W-2 statement reflected $76,000 in commissions actually received. By the time she was terminated, Hawley represented that she had either closed on units or had firm contracts on other units to earn an additional $279,000 in commissions. Although respondent did not agree she owed Hawley any money due to various setoffs, the $279,000 figure was not credibly contradicted, particularly since respondent's records relating to those sales were allegedly destroyed or lost by respondent at about the time certain civil litigation was begun by Hawley. On January 6, 1982, respondent was terminated by respondent for cause. According to respondent, Hawley was delinquent in making payments to her husband for several condominium units Hawley had bought for investment purposes, and on one occasion, Hawley had not turned over to Ramsey Realty a deposit on a resale of a unit. She was also accused of bouncing checks. After she left Ramsey Realty, Hawley made demand for commissions still owed. Between January and June 1982 she was paid approximately $40,000 by respondent but received nothing after that. She eventually sued respondent in circuit court for the unpaid commissions and obtained a final judgment against respondent on December 10, 1987 for $76,000 plus interest, or a total of $118,618.88. To date, Hawley has been unable to obtain payment of the judgment. At hearing respondent acknowledged that a judgment pertaining to Hawley's unpaid commissions was entered against her and that no appeal of that judgment was taken. According to Ramsey, she has refused to pay Hawley based upon her attorney's advice. Respondent's principal defense against paying the commissions is that Hawley allegedly owes her and her husband substantial amounts of money which offset the earned commissions. Testimony at hearing revealed that these matters have been the subject of extensive and lengthy civil litigation between Hawley and the Ramseys. Hawley represented that she has prevailed in all court actions, and this was not contradicted by respondent. However, none of the judgments and mandates (if an appeal was taken) were made a part of this record. The principal offset relates to a lease-purchase agreement entered into by Hawley and her son, James Monette, Jr., and Drew Ramsey in June 1981 whereby Hawley and her son agreed to lease, with an option to purchase, a restaurant/bar known as The End Zone located on Dale Mabry Avenue in Tampa, Florida. On June 18, 1981 Hawley and her son executed a promissory note in the amount of $170,000 payable to Drew Ramsey and to be secured "by an assignment of commissions of even date herewith". The note also provided that "certain commissions earned by Sandra A. Hawley as a real estate salesperson for Ramsey Realty ... shall be applied as prepayments on account hereof." This was confirmed in a letter sent by Hawley to respondent on June 18, 1981. The letter authorized Ramsey to "pay one-half of all commissions which I have earned or will earn from working as a real estate person for Ramsey Realty to Drew Ramsey on account of the indebtedness under the Note until it is paid in full." The letter further provided that if Drew felt "insecure" about the note, Yolanda was authorized to "assign such greater percentage of (her) commissions to Drew Ramsey on account of the indebtedness until it is paid in full." Hawley admitted signing the promissory note but pointed out that she had earned enough commissions to easily pay off the note. She contended that the transaction was a ploy to allow Ramsey to retain all of her commissions and thereby deprive her of adequate capital to successfully operate the restaurant. Hawley further asserted that the transaction was later declared null and void in one of the civil actions between the parties because of certain fraudulent representations made by Drew in inducing her to enter into the agreement. However, the final judgment, which is the best evidence of the outcome of the suit, is not of record. On October 1, 1981, an agreement and promissory note was executed by Hawley wherein she promised to pay Drew Ramsey and his partner, George Karpay, $58,162.90 plus 18% interest for monthly payments owed Ramsey and Karpay on five condominium units Hawley had previously purchased from them. The note was secured by Hawley's commissions earned at Ramsey Realty. Hawley acknowledged that the signature on the documents was her own but contended that the documents had been altered after she signed them. On October 1, 1981, Hawley also executed an assignment of commissions whereby she agreed to authorize Ramsey Realty to disburse all commissions earned to Drew Ramsey and Karpay until the promissory note described in finding of fact 9 was satisfied. Again, Hawley acknowledged that the signature appeared to be her own but she contended the document was altered after it was signed. According to respondent, the commissions earned by Hawley were not held in the firm's escrow account. Instead, while Hawley was still an employee, such moneys were disbursed by the title company at closing directly to Ramsey Realty, and then Ramsey wrote a check to Hawley as commission compensation. After Hawley was terminated, the manner in which Ramsey received Hawley's earned commissions and their subsequent disposition are not of record. However, respondent represented, without contradiction, that they were not held in the firm's escrow account.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty of violating subsection 475.25(1)(d) and that her broker's license be suspended for three years. The other charge should be dismissed. DONE AND ORDERED this 14th day of December, 1989, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 14th day of December, 1989.
