The Issue Respondents' alleged violations of Sections 475.25(1)(a) and 475.25(3), Florida Statutes. Respondent Mann appeared at the hearing without counsel. Accordingly, he was advised of his rights at the hearing, including the right to testify as a witness if he so desired.
Findings Of Fact Respondent First Allstate Realty Corporation, Miami, Florida (hereinafter First Allstate) is now and was at all times alleged in the Administrative Complaint a registered real estate broker. Respondent William M. Dorn is now a registered real estate broker and was from September 2, 1975 to December 17, 1975 a registered real estate broker, president and active firm member of First Allstate. Respondent Lawrence Mann is now a registered real estate broker and was from December 17, 1975 until January 19, 1977 registered as the president and active firm member of First Allstate. (Petitioner's Exhibits 1-3) First Allstate was incorporated in Florida on September 3, 1975 with Respondent Dorn as president and Bonnie Weiss as secretary. The latter individual financed the business. The firm's operation consisted of securing listings on real estate located in Florida from out-of-state owners by telephone and correspondence. Larry Grabarnick, who acted as the office manager, hired some four to eight real estate salesmen who each manned a booth in the office during the evening hours to solicit prospective listings by telephone calls. A solicitation "pitch" placed on the wall was used by the salesmen to induce the individual called to list his property with First Allstate. In the course of the telephone call, the salesmen would advise the land owner that there was a $250.00 to $360.00 listing fee charged in advance which was fully refunded when the property was sold and that it would be deducted from the standard real estate commission on the sale. If the prospective client expressed interest in listing property with the firm, a brochure and sample listing agreement were mailed. The brochure depicted First Allstate as a large sales organization that would investigate the status of development and zoning in the area of listed property to recommend a correct selling price, advertise listings in real estate publications and national newspapers, and utilize the services of National Multiple Listing Service in Ft. Lauderdale to achieve wide exposure of the property. A "guarantee of performance" certificate signed by the president of the firm which was provided to persons listing property, promised that First Allstate would advertise the property as it deemed advisable in local newspapers or "other mediums of merit," direct a "concentrated effort to sell same and to use the advance fee to "help defray the cost of preparation for merchandising" the property for sale. Item 5 of the `guarantee" stated as follows: "I understand that this agreement does not guarantee the sale of my property, but that it does guarantee that you will make an earnest and continued effort to sell same until this agreement is terminated." The listing agreement provided that First Allstate would perform the services contained in the "guarantee" and that it would make an "earnest effort" to sell the property. (Testimony of Dorn, Petitioner's Exhibits 7-8 Respondent's Exhibit 1) Although Dorn was ostensibly the supervising broker for the corporation, in fact he was virtually nothing more than a mere figurehead who had "loaned" his license to Weiss in order to establish apparent legitimacy of the business. He did not hire sales personnel, issue their instructions or supervise them. The extent of his activity was to "drop by" the office in the evenings and listen to some of the telephone conversations at random. He had nothing to do with the preparation of the sales literature or the placement of the listings with the National Multiple Listing Service. He was unaware of how the list of property owners was obtained, how the listing price of the property was determined, or what the salesmen were paid. He set no policies and issued no instructions for the operation of the business. All of the corporate records were kept by Weiss and Grabarnick and he did not have access to them. There was not, to his knowledge, any method used to attempt to sell the property other than listing with National Multiple Listing Service, nor were any newspaper advertisements ever published by the firm. Further, he was unaware of any sales that were ever made by First Allstate during the period that he was with the company. His primary function was to sign the listing contracts as broker and the "guarantee of performance document sent to the land owners. For these services, he received between $250.00 and $350.00 a week and was paid a total of $3,475.00 during the period of his employment with the firm. He left First Allstate in December of 1975 be cause he was informed by Weiss that she was going to sell the business because it was not making enough money. At the time he left, he secured a release document from First Allstate bearing the purported signature of the successor broker, Respondent Mann, to identify him against any claims arising from the operations of First Allstate. However, Mann denied signing the release. (Testimony of Dorn, Mann, Petitioner's Exhibit 9) In 1975, Respondent Mann became a salesman for Property Resales Service, Inc., an advance fee firm in Miami that operated similarly to First Allstate. About mid-December, that firm was taken over by Republic National Realty, a firm that conducted similar operations, During this period, Mann made sales over the telephone. First Allstate, which had been purchased by one Joel Steiner about this time, took over Republic National Realty and needed a broker for the First Allstate operation. Accordingly, Mann was made president of First Allstate and two secretaries were listed as officers of the firm. Some fifteen or twenty salesmen who had previously been working for Property Resales Service Inc., and Republic National Realty moved to First Allstate which took over the offices of the other firm. Business was conducted in a manner similar to that in previous months, except that with the increased number of salesmen, some of them served simply as "fronters" who made the initial calls to land owners. In such cases, if the owner was interested in receiving literature, a salesman known as a "driver" made the follow-up phone calls. "Fronters" received $25.00 from the $375.00 listing fee then charged, and a "driver" received one-third of the listing fee. The salesmen operated out of booths in the office generally for a period of four hours in the evening six days a week. The same brochure that First Allstate had used in prior operations was utilized again with a sticker showing Mann's name placed over that of the former broker. Although Mann did not hire sales personnel or have anything to do with setting policies, he did exercise some degree of supervision over the salesmen. Like Dorn, he signed the lifting contracts and the "guarantee of performance" document. He, too, was unaware of any advertising placed by the firm other than in the National Multiple Listing Service but he knew that no sales were made by First Allstate during the time he was with the firm. He further knew that the corporation made no effort to sell thee property other than to use multiple listing. For his services, he received $100.00 a week, but also manned the telephones himself on occasion and secured listings. In such instances, he would inform prospective clients that First Allstate was a big real estate firm and that it was successful in selling property. In this regard, Mann testified at the hearing that "You know, all salesmen lie a little bit." On one occasion in April, 1976, Mann called a Massachusetts resident, informed him that he had a customer for the individual's Florida property, and that he could execute the sale in one or two weeks upon receipt of the advance listing fee. Mann further stated that the fee would be refunded if the transaction did not go through because it was a guaranteed sale. Relying on these representations, the individual sent the fee and about a month later talked to Mann again who said that the deal was being processed and would soon be closed. He heard nothing further and subsequent attempts to call Mann or the firm resulted in information that the telephones had been disconnected. In mid-December, 1975, a salesman for First Allstate telephoned a resident in Rhode Island who owned property in Florida and informed him that he had buyers available and that he thought he could get $10,5,00.00 for a lot that the individual had purchased two years previously for $3,900.00. The salesman indicated that the company had made sales of comparable property and that his lot would be widely advertised and could be sold within a few months. He was further informed that the advance fee of $375.00 was for advertising expenses. He also stated that there were foreign buyers, including South Americans and Japanese, who were looking for property for tax write-offs and investments. After paying the advance fee of $375.00 in reliance on such promises, the owner heard nothing further from the firm. In late May, 1976, after attempting to call First Allstate, he was unable to contact them and finally wrote to the State Attorney General's Office for information. He has beard nothing with respect to the matter since that time from the firm. Another employee of the firm, a "fronter," recalled a salesman telling a prospect that he had a group ready to buy their property and heard other salesmen imply to prospects that the advance fee would be returned if no sale was made of the property. The representations made in the literature of Property Resales, Inc. were used almost yerbatim in the brochures of First Allstate and when the former firm went defunct, their listings were transferred to First Allstate. (Testimony of Mann, Sherman, Reed, Glover, Petitioner's Exhibits 4-6 (Depositions of Kershaw, Andrews, Coppeta) ,Petitioner's Exhibits 10-12, supplemented by Petitioner's Exhibits 13-14)
Recommendation That the certificates of registration of First Allstate Realty Corporation, William M. Dorn, and Lawrence Mann be revoked pursuant to subsection 475.25(3), Florida Statutes. Done and Entered this 24th day of August, 1977, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Richard J. R. Parkinson, Esquire Louis B. Guttmann, III, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 Burnett Roth, Esquire 420 Lincoln Road Miami Beach, Florida 32789 Lawrence Mann 7928 West Drive Miami, Florida 33141
Findings Of Fact Respondent Pinkerton has been a registered real estate broker since May 19, 1976, before which he was a real estate salesman registered with Strout Realty, Inc. On October 29, 1975, respondent entered into an agreement with Transamerica Homes Company (Transamerica) to sell at auction five mobile homes belonging to Transamerica. On November 15, 1975, respondent acted as auctioneer at an auction at which all five mobile homes were sold. After receiving some of the proceeds of the sale, Transamerica's agents asked respondent to remit an additional seven thousand six hundred eighty dollars ($7,680.00). Respondent told Robert P. Wold, Transamerica's authorized representative in Florida, that he did not have that much money because he had borne expenses in connection with the auction that Transamerica should have paid. After telling Transamerica's agents that he did not have sufficient funds to cover such a check, respondent nonetheless drew and mailed a check in the amount of seven thousand six hundred eighty dollars ($7,680.00), in the belief that Mr. Wold wanted him to write the check even though the funds to cover it were not on deposit. When the check was presented to the American Bank of Lakeland, on which it was drawn, petitioner had four thousand nine hundred fifty-three dollars and fifty-three cents ($4,953.53) on deposit, and the bank dishonored the check. After the check was returned for insufficient funds, Mr. William S. Hagar telephoned respondent on behalf of Transamerica to discuss the matter. Respondent said he would send another check in the amount of two thousand five hundred dollars ($2,500.00) within a week, which he did. Another week passed; another telephone call transpired between Mr. Hagar and respondent; and respondent sent a second check in the amount of two thousand five hundred dollars ($2,500.00). Both of the checks respondent had drawn for two thousand five hundred dollars ($2,500.00) were paid upon presentment. On March 13, 1976, respondent wrote Mr. Hagar a letter in which he stated: At this point, due to the many problems involved in the Auction of the Mobile Homes on the 15th of November, 1975 at Skyview Waters in Lakeland, I feel I am entitled to additional compensation. First of all, it is almost unheard of in an auction of this kind for less than 20 percent commission. I was assured [sic] by Mr. Robert Wold of his assistance in preparing the sale. He and Mr. Paul Harris were supposed to provide the arrangements for financing. They did absolutely nothing. They were supposed to assist prospects in locating lots and people to handle moving, setups, driveways and other improvements. By our agreement my only obligation was to be to supervise and provide auctioneer voice. I think you are quite aware that the entire operation was left for me to do at about 1/4 the commission I should have been paid plus the fact that I was forced to split the meager commission I earned with two other people. So, I ended up with less than $1000 gross commission on a sale that should have netted me at least $10,000. On March 16, 1976, Mr. Hagar replied, sending a copy of his letter to the Florida Real Estate Commission: This letter acknowledges receipt of your truly [sic] amazing letter of March 12, 1976. I have reviewed the Auction Agreement which you executed, a copy attached for your information and edification. The language is clear, unambiguous and the obligations of both parties are stated plainly. We have honored our obligations completely and we expect you to honor yours. Paragraph 2) stated you will be ". . . solely responsible in setting up and conducting the auction sale without interference from anyone. . ." Paragraph 3) states you ". . . shall retain Four percent of the bid price received, as commission . . ." for your services. Lastly, Paragraph 6) states there are ". . . no oral representations, agreements or understandings between either of the parties. . . ". * * * We have been patient and forbearing in allowing you the opportunity to make restitution without resorting to the full remedies available under the law to us . . . I assure you that unless we receive your certified check in the amount of $2,680 by March 24, 1976, we shall exercise each and every remedy so available. On March 26, 1976, Mr. Hagar, not having heard from respondent, engaged Florida counsel who eventually succeeded in obtaining a default judgment against respondent in the amount of two thousand six hundred eighty dollars ($2,680.00) plus costs. This judgment had not been satisfied at the time of the hearing in the present proceeding. The foregoing findings of fact should be read in conjunction with the statement required by Stuckey's of Eastman, Georgia v. Department of Transportation, 340 So.2d 119 (Fla. 1st DCA 1976), which is attached as an appendix to the recommended order.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That the administrative complaint be dismissed. DONE and ENTERED this 24th day of April, 1978, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 904/488-9675 APPENDIX Paragraph one of petitioner's proposed findings of fact has been adopted, in substance, insofar as relevant, except that the evidence did not establish when respondent became associated with Strout Realty, Inc. Respondent's letter of March 12, 1976, to Mr. Hagar was written on Strout Realty, Inc. stationery, however. Paragraph two of petitioner's proposed findings of fact has been adopted, in substance, insofar as relevant, except that the check was for only a part of Transamerica's claimed share of the sale proceeds. Respondent did in fact know that he had insufficient funds to cover the check, a fact of which he made no secret. Paragraph three of petitioner's proposed findings of fact has been adopted, in substance, insofar as relevant. Paragraph four of petitioner's proposed findings of fact has been adopted, in substance, insofar as relevant. COPIES FURNISHED: Kenneth M. Meer, Esquire 400 West Robinson Avenue Orlando, Florida 32801 Mr. George W. Pinkerton 2833 East Highway 92 Lakeland, Florida 33801 ================================================================= AGENCY FINAL ORDER ================================================================= FLORIDA REAL ESTATE COMMISSION FLORIDA REAL ESTATE COMMISSION, Petitioner, vs. CASE NO. 77-2292 GEORGE W. PINKERTON, Respondent. /
Findings Of Fact Petitioner is a state governmental licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the Laws of Florida, in particularly, Section 20.30, Chapters 120, 455 and 475, Florida Statutes, and rules and regulations promulgated pursuant thereto. Respondent James F. D'Alvia is now, and was at all times material hereto, a licensed real estate agent in Florida, having been issued license number 0464978. The last license issued was as a salesman, c/o Conti and Associates, Inc., 135 State Street, Oldsmar, Florida 34677. During times material, Respondent James F. D'Alvia, while licensed as a salesman with ERA Real Estate Emporium, 161 West SR 584, Oldsmar, Florida, was under the supervision of John A. Conti, the qualifying broker for ERA Real Estate Emporium. During times material, Respondent leased a condominium unit from Mary Louise Scussle (Scussle) as landlord/owner, Unit B-1, located at 6306 Newtown Circle, Tampa, Florida. On or about December 7, 1986, Respondent D'Alvia sublet the condominium owned by Scussle to Robert G. Loving. In accordance with the sublease agreement between Respondent and Loving, Respondent obtained check number 200 dated December 4, 1986, payable to Respondent in the amount of $250.00 as a security deposit. Respondent thereafter cashed the check received by him on the same day, December 6, 1986. At the time of Respondent's lease of Scussle's condominium, Scussle was anxious to sell as she was sustaining a shortfall from the rent proceeds versus the mortgage payments that Scussle was obliged to pay. About May 2, 1987, sublessee Loving moved from the condominium and was unable to contact Respondent to obtain his security deposit. Respondent was not aware that Loving had made attempts to contact him. The lease agreement entered into by Respondent with Mary Louise Scussle called for Respondent to lease Scussle's condominium for a one-year period. Respondent gave Scussle a security deposit and one month's rent in advance. During December 1987, Respondent advised Scussle of his financial problems and inquired if he could sublet the condominium. Owner Mary Louise Scussle did not object to Respondent's attempt to sublet the property and in fact welcomed his attempt to do so. During times material, Respondent, Mary Louise Scussle and Robert Loving were all aware of the sublease agreement between them and none of the parties to the agreement voiced any objections to the agreement. Sublessee Loving was advised by Respondent D'Alvia that he would receive his security deposit from owner Scussle at the expiration of the lease agreement. Likewise, Respondent Conti was apprised of Respondent D'Alvia's agreement to lease Scussle's condominium. Mary Louise Scussle admits that Respondent advised her and she approved the sublease agreement between Respondent and Loving; however, Scussle's testimony is devoid of and she was not able to recall the specifics of the agreement between Respondent and sublessee Loving. As example, Scussle was unable to recall if Loving or Respondent D'Alvia was the sublessee. While Scussle "thinks" that Respondent D'Alvia was the first tenant and Loving was the sublessee, the passage of time has paled her recall as to specifics. Robert Loving did not appear as a witness to testify in these proceedings.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended Petitioner enter a Final Order dismissing the Administrative Complaint relating to Respondent John F. D'Alvia in its entirety. 2/ RECOMMENDED this 20th day of September, 1990, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL 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 20th day of September, 1990.
Findings Of Fact Scorpio, Inc. was incorporated to do business in this State on September 18, 1973 and was registered as a corporate real estate broker on 4/8/74 with certificate to expire 3/31/75. Laverne Pariso was a registered real estate broker and Active Firm Member for Scorpio, Inc. from 4/8/74 to expiration date of license 3/31/75. Michael W. Karpan was a registered real estate salesman from 10/1/74 to 9/30/76 the expiration date of his registration and was employed by Scorpio, Inc. About the time Scorpio, Inc. was registered as a corporate broker the real estate market was not conducive to the success of housing developments and, since the registration of Scorpio, Inc. was obtained to facilitate sale of the developed property and no development was started, Scorpio, Inc. did no business of the type for which it was registered. No listings were obtained, no sales were made, and no effort was put forth to do either. An escrow account was opened with an initial $50 deposit but during the time the registration was effective no deposits were made to, or withdrawals from, this escrow account. Ardina E. Karpan, the mother of Michael W. Karpan, owns all of the stock of Scorpio, Inc. Laverne Pariso, the APM, left the employ of Scorpio, Inc. in March, 1975 but did not notify the FREC or take steps to place her registration in an inactive status. Applications were made for renewal of the broker's license of neither Pariso nor Scorpio, Inc. when due, 3/31/75. By Corporate Resolution dated February 1, 1974 Scorpio, Inc. authorized the establishment of an escrow account at the Barnett Bank of Miami. An initial deposit of $50 was made to this account on February 6, 1974. The resolution authorizes Laverne Pariso and Michael W. Karpan or Ardina Karpan to sign checks on this account and notes that two signatures are required. The resolution further provided authorized signers "are both Laverne Pariso and Michael William Karpan, Jr., both signature are required". Scorpio, Inc.'s primary business was the management of shareholder's investments and real estate holdings. In May, 1975 Michael Karpan was approached by a business associate, whose daughter was a creditor of Chandelier of the Virginia Playhouse d/b/a Track and Turf Lounge, to assist in the negotiations for the sale of the business in order to pay off the creditors and salvage his daughter's loan. The purchaser was already at hand and Karpan was selected to hold funds advanced pending the closing of the deal. After the principals had agreed on the basic price to be paid for the business an earnest money deposit of $5,000 was given by the buyer to Karpan on or about May 21, 1975 and the agreement was memorialized in a letter of May 21, 1975 from Karpan, on Scorpio, Inc. letterhead to the buyer, Walker (Exhibit 25). Nowhere on this letter is reference made to either Karpan or Scorpio, Inc. being associated with real estate sales. The $5,000 received from Walker was deposited in Scorpio, Inc's escrow account on deposit slip dated May 21, 1975 and the bank statement (Exhibit 10) shows $5,000 deposited in this account 5/30/75. No other agreement between the parties was reduced to writing and signed by the buyer and seller. At no time during the negotiations did Karpan hold himself out to be a real estate salesman or broker or indicate he expected a commission for his services if the sale was consummated. On May 29, 1975 Karpan borrowed $5,000 from the Barnett Bank and used the $5,000 in the escrow account as cash collateral for the loan. The signature of Pariso was not on any paper to authorize the withdrawal of this money from the escrow account. The loan was placed in the regular account of Scorpio, Inc. c/o Michael Karpan and one check dated 5/30/75 in the amount of $3,699 was drawn on the account payable to the Intercontinental Bank of Miami and used to make interest payment owed by the Chandelier of the Virginia Playhouse. $1,301 was delivered to the manager of Track and Turf Lounge by Karpan (Exhibit 4). Karpan contends that the buyer, Walker, authorized him to make whatever payments were necessary out of the $5,000 deposit to insure that the liquor license would not be lost or the Track and Turf Lounge be placed out of business before the deal was consummated. Following the delivery of the $5,000 to Karpan the buyer brought his attorney into the proceedings. The property on which the Track and Turf Lounge is located was owned by D. Mitchell Investments, Inc. The lease arrangements (or lack thereof depending on which witness is more credible) were such that the sale could not be consummated. By letter dated June 12, 1975 the buyer, through his attorney, demanded return of the $5,000 deposit given to Karpan. No evidence was presented as to the date the $1,301 was given to Roy O'Nan, the manager at Track and Turf. The letter evidencing such payment is dated well after the transaction had fallen through and demand for return of the $5,000 had been made. A suit was subsequently filed by Walker and a default judgment was obtained against Scorpio, Inc. after a Motion to Strike Defendant's, Scorpio, Answer because Scorpio, Inc. was delinquent in paying the annual $5.00 filing fee required of Florida corporations, was granted. At the time the transactions here being contested occurred the registration of Laverne Pariso and Scorpio, Inc. had expired. Since Karpan can only work under the supervision of a broker, his license too was not operative. Ms. Pariso renewed her license as a broker-salesman with another realty office in September, 1975 but no evidence was presented that Scorpio, Inc. ever applied for registration renewal. During the period between March and September, 1975 Ms. Pariso did no real estate work. Numerous discrepancies appeared between the testimony and documents. Although the authorization for withdrawing funds from the escrow account provided that the signature of Pariso and Michael Karpan or his mother was required the bank apparently interpreted that to require any two of the signatures and then authorized one first deposit placed in the escrow account after the initial deposit to be withdrawn with only Karpan's signature. Several witnesses alluded to Track and Turf leasing the premises which they occupied but evidence was presented that no lease payments were to be made until 1978. Certainly the inability of the "tenant" to transfer the "lease" was a major factor in the failure of the sale to transpire. The sale here involved was the sale of a business as contrasted to the sale of real property.
Findings Of Fact Frederick Hodgdon (Hodgdon) has held Florida real estate broker license 0206805 at all times pertinent to this case. Hodgdon is owner and qualifying broker for Pelican Realty of Marco Island, Inc., (Pelican Realty), through which Hodgdon conducts business and which also is named as a respondent. At all times pertinent, Pelican Realty has held Florida corporate real estate broker license 0223934. July 24 through August 6, 1984, respondents placed the following newspaper advertisement in the Sun-Daze: DO YOU KNOW ... that all Florida real estate brokers are agents for the seller and CANNOT legally propose any lower than listed prices or better terms for the benefit of the buyer? UNLESS ... the broker legally qualifies himself as an agent for the buyer. As a Buyer's Broker Pelican Realty CAN and DOES exactly this and a lot more! Buyers pay no fees or commissions. Call or send for our informative brochure, you will be glad you did. The real estate buyer's best bet for the best price is to have a Buyer's Broker. On February 19, 1986, respondents placed the following newspaper advertisement in the Marco Island Eagle: 1/ BUYER BEWARE! DON'T BUY REAL ESTATE ON MARCO ISLAND. ... before consulting an attorney or carefully reading Paragraph 5) and 7) of the 1985 Revision of the Sales Contract as approved by the Naples Area Board of Realtors and the Marco Island Area Board of Realtors and the Collier County Bar Association contract Revision Committee. The Contract states quote: "The Buyer has inspected the property sold by the Contract and there are no other inspections permitted or required. The property is acceptable in its AS IS condition as of date of this offer. INCREDIBLE! ... What happens to the unwitting Buyer who intends to have termite, structural and seawall inspections AFTER his offer is accepted? He just may have to buy a termite ridden house that needs a new roof and a seawall that is on the verge of collapse. Thats what! ... Taken at face value the Sales contract calls for the buyer to spend several hundred dollars for inspections BEFORE making an offer that may well be turned down. INCREDIBLE! .... Paragraph 7) states quote: "Buyer's decision to buy was based on Buyer's own investigation of the property and not upon any representation, warranty, statement or conduct of the Seller, or broker, or any of Seller's or broker's agents" (Excluding those rare occasions when the seller and his agents remain silent.) INCREDIBLE! ... The above subject sections of Paragraphs 5) and 7) of the 1985 Sales Contract in our opinion may well violate the Realtor's Code of Ethics Article 7) "to treat fairly all parties to the transaction." There is nothing Pelican Realty could say or do to better emphasize the Buyer's need to have an advocate on his side. ... As a Buyer's Broker we recommend striking out any and all terms and conditions of the Sales Contract that are prejudicial to the Buyer's best interests. ... Pelican Realty would appreciate the opportunity to discuss with any interested parties the many advantages of working with a Buyer Broker. Our services are at NO additional expense to the buyer. CALL US FOR FURTHER DETAILS. NOW!! On March 11, 1986, respondents placed the following newspaper advertisement in the Sun-News: CASH BACK FOR THE REAL ESTATE BUYER. THAT'S INCREDIBLE! Pelican Realty GUARANTEES CASH BACK to every buyer on every sale. The bigger the sale, the bigger the cash gift to the buyer. On top of this Pelican Realty (a Buyer's Broker) goes all out to get the lowest possible price for the buyer at NO additional cost to the buyer. Other realtors must get the highest price for the seller. The thousands you SAVE already belong to you. THINK ABOUT IT! Call us for further details NOW! "WE PAY OUR BUYERS TO DO BUSINESS WITH US" There is nothing false or fraudulent about the three advertisements. However, the following statements in the advertisements are deceptive or misleading in form or content: The representation in the July 24 through August 6, 1984, Sun-Daze advertisement that buyers pay no fees or commissions. In form, the buyer perhaps does not pay brokerage fees or commissions. But in substance, the buyer does indirectly pay his broker a brokerage fee or commission when the seller pays fees and commissions out of the proceeds of the sale. The representation in the July 24 through August 6, 1984, Sun-Daze advertisement that a buyer's broker "legally qualifies himself as an agent for the buyer." Although perhaps technically correct, this representation implies separate state regulation and qualification procedures for licensure as a buyer's broker. In fact and in law, any licensed real estate broker can become a buyer's broker simply by entering into an agreement with a buyer to be the buyer's broker. The representation in the March 11, 1986, News-Sun advertisement: "Other realtors must get the highest price for the seller." Read carefully in context, this representation is true--realtors other than those representing a buyer must try to get the highest price for the seller he represents (while being open, honest and fair to the buyer). But, as written, the representation could lead one to believe that the respondents have an ability no other realtors have when, in fact and in law, any realtor or other licensed real estate broker who represents a buyer can try to get the best price for the buyer. Although respondents have offered cash rebates, no client has seen the offer or asked for a rebate. Although respondents have maintained their innocence, they changed the ads to meet the criticism of the Department of Professional Regulation.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Florida Real Estate Commission enter a final order (1) reprimanding respondents, Frederick Hodgdon and Pelican Realty of Marco Island, Inc., and (2) fining them $500 each for violations of Section 475.25(1)(c), Florida Statutes (1985). RECOMMENDED this 21st day of July, 1987, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of July, 1987.
Findings Of Fact Respondent Donald E. Swagler is now and was at all times material a licensed real estate broker or broker/salesman in the State of Florida, having been issued license number 0139756, in accordance with Chapter 475, Florida Statutes. At all times alleged in the Administrative Complaint, respondent Donald Swagler was licensed and operating as a qualifying broker for and an officer of respondent Swagler Realty, Inc., which is now and was at all times material a corporation licensed as a real estate broker in the State of Florida, having been issued license number 0169035, in accordance with Chapter 475, Florida Statutes. At all times material, Fern Z. Taylor was a licensed real estate broker with an office in Bonita Springs, approximately a twenty-minute drive south from the offices of Swagler Realty Company in Ft. Myers. On April 10, 1980, Andrew W. Kuchmaner was working part-time as a licensed real estate salesman in the employ (as that term is defined in Section 475.01(2), Florida Statutes) of Swagler Realty Company. Kuchmaner was a new salesman and had not yet had occasion to present a buyer's purchase offer to a client seller. During the early months of 1980, Kuchmaner was also working in the employ of, and receiving a salary from, Jim Walter Homes Company. Philip R. and Susan B. Workman first met Kuchmaner in January or February 1980 while visiting a Jim Walter's Homes sales office in Ft. Myers where he was working in his capacity as a Jim Walter Homes salesman. Kuchmaner advised the Workmans to find and purchase a lot for the Jim Walter home they had selected, and then they could purchase the Jim Walter home. Jim Walter Homes Company requires lot ownership prior to building one of their homes. Prior to selecting a lot, the Workmans had already decided on the Jim Walter home they were going to purchase, and Kuchmaner was going to do the paperwork for Jim Walter. Throughout the first quarter of 1980, the Workmans searched for a lot on which to construct their home in the Bonita Springs area of southern Lee County. During their search, the Workmans came upon a vacant lot with a sign saying it was for sale by Fern Z. Taylor. Upon seeing her real estate for sale sign, the Workmans went to Fern Taylor's office to inquire about the property and seek her assistance in their purchase of a lot in the Bonita Springs area. Fern Taylor advised the Workmans that, in addition to the lot they had already seen bearing her sign, she had Dust that morning listed and had for sale another lot in the Bonita Springs area which they would be interested in seeing. Earlier that same morning, Taylor took a long distance telephone call from a Charles A. Bennett, a resident of Arizona. Bennett said he had a lot he wanted to sell and gave Taylor the price ($7,000) and a description--Lot 20, Block E, Rosemary Park No. 2, in Bonita Springs. Bennett had not seen the property in some time and gave no landmarks or street address for Taylor's guidance. Back in 1925, Rosemary Park No. 2 was subdivided into eight blocks of 24 140' x 50' lots each and two larger blocks containing 16 larger 162' x 300' lots each. One of the smaller lots bore the legal description: "Lot 20, Block E of Rosemary Park No. 2 according to the Plat thereof recorded in Plat Book 6 at Page 30, of the Public Records of Lee County. This is the lot Bennett owned and was trying to sell. It is located on First Street. In 1926, Rosemary Park No. 2 was re-subdivided. The two larger blocks of the prior subdivision were re-subdivided into eight blocks of 24 140' x 50' lots each. Unfortunately, in a stroke of singular lack of vision, the new blocks and lots were designated with the same letters and numbers already assigned to the smaller blocks and lots in the original 1925 subdivision. As a result, there is another lot in Rosemary Park No. 2 designated as Lot 20, Block E: Lot 20, Block E, Rosemary Park, resubdivision of the East 1/2 of No. 2, according to the plat thereof, as recorded in Plat Book 8, Page 32, in the Public Records of Lee County, Florida. This other Lot 20, Block E, is owned by the Fyfes of Maine and is on Fifth Street. Taylor, who was quite busy, quickly checked a plat book in her office to locate the lot and the tax rolls to attempt far to verify Bennett's ownership and left to put her sign on the lot she thought Bennett owned and was trying to sell. Through a combination of the confusing legal description, the incomplete description and paucity of information Bennett gave Taylor, and Taylor's admitted negligence, Taylor put her for sale sign on the Fyfes' lot on Fifth Street instead of on Bennett's lot on First Street. Taylor had no listing agreement with the Fyfes, and the Fyfes' property was not for sale. Fern Taylor drew a map for the Workmans providing them with directions to this purportedly newly listed lot on which she had placed her "For Sale" sign. In reliance on Fern Taylor's map and representations as to her listing agreement, the Workmans drove to the Fifth Street lot and viewed the property as well as Fern Taylor's "For Sale" sign. Approximately one week after seeing the Fifth Street lot, the Workmans summoned Andrew Kuchmaner to Bonita Springs to view the lot and give them his opinion as to how the Jim Walter home they had previously selected would sit on the lot. The Workmans had their minds pretty well made up that they wanted to purchase the Fifth Street lot before summoning Kuchmaner. Kuchmaner never took the Workmans to any property but, upon their request, traveled to Bonita Springs to meet them and was thereupon shown the Fifth Street lot. While viewing the Fifth Street lot, Kuchmaner advised the Workmans that the Jim Walter's home they had selected would sit nicely on that lot. He also told the Workmans for the first time that he had a real estate license and would be glad to help them out with placing an offer for the lot on their behalf. The Workmans used Kuchmaner to make their $6,000 offer on the lot to save time because it was late in the afternoon and they lived in North Ft. Myers. When Fern Taylor first met Kuchmaner, he had been represented to her by the Workmans as a Jim Walter salesman. Kuchmaner went to Taylor's office and requested she prepare the contract because he would have to go all the way back to Ft. Myers to write it up. Taylor provided Kuchmaner with the legal description "Lot 20, Block E, Rosemary Park #2" and advised him he would have to write his own contract. Kuchmaner also proposed to Taylor that they not tell Swagler or Swagler Realty about the sale so they could divide Swagler's quarter of the 10 percent commission ($150 of the total $600 commission). Taylor refused and told Swagler what had happened. Swagler had an angry confrontation with Kuchmaner and was about to fire him, but Kuchmaner begged for a second chance and promised not to try to cut Swagler out of a commission again. Swagler relented and kept Kuchmaner on as a salesman. Kuchmaner filled out a contract on a Swagler Realty form and brought it to Donald Swagler for his review. He advised Swagler that he had gotten the legal description from Fern Taylor and had been to see the property. Swagler generally does not sell property in the Bonita Springs area and is not familiar with the area. He relied on Taylor to provide an accurate legal description of the property being sold. Kuchmaner hand delivered the contract offering to purchase the Bennett parcel to Taylor. Taylor checked the contract before she sent it to Bennett to see that the legal was the same that she had, and it was. She also checked it again when it was sent back from Bennett. Fern Taylor had received and checked the contract, title insurance binder, seller's closing statement and a copy of the warranty deed from Bennett to Workman prior to the closing The Workmans had the property they thought they were purchasing surveyed by William R. Allen, a registered and licensed land surveyor. He received the request to survey the property from Susan Workman. Over the phone, she advised Mr. Allen she had purchased a lot in Rosemary Park, Specifically lot far 20, block E. Mr. Allen informed Mrs. Workman that there are two Block E's in Rosemary Park and that they should be careful. He inquired as to which street she had purchased property on and was told, "We're on Fifth Street." Allen surveyed the Fifth Street lot and certified his survery, using the actual legal description of the Fifth Street (Fyfes') lot. Allen never saw any document with the legal description of the Bennett lot. Fern Taylor did not know that the Workmans had ordered a survey and did not see a copy of the survey until well after the closing. Although she attended the closing, she saw no discrepancies among the documents cursorily reviewed at the closing. Neither did the Workmans or the closing agent. The evidence was not clear whether there was a copy of the survey among the documents at the closing. The lender (Jim Walter Homes) and the title insurance company got a copy of the survey before closing. Neither of their professionals noticed that the legal description on the survey (the Fyfe lot) did not match the legal description on the deed and other documents (the Bennett lot). When a real estate broker has placed his sign ("For Sale") on a parcel of property, it is a reasonable conclusion that he is authorized to sell that parcel. It is customary for a broker to rely on the listing broker to provide a correct legal description for the property they have listed. At no time before the closing did Swagler or Kuchmaner have reason to suspect that the Workmans were purchasing a parcel of property different from the parcel they believed they were purchasing. Neither Swagler nor Kuchmaner were at the closing of the Workmans' purchase. But their presence would not have made any difference. It is not the real estate broker's or salesman's lob to scrutinize the documents being signed to make sure the legal descriptions on all the documents match (unless he has reason to believe the legal descriptions might be wrong.) He has the right to rely on the other professionals--the listing broker (especially since Fern Taylor was familiar with the Bonita Springs area and Swagler was not), the lender's attorney, the title company, the closing agent and, if any, the surveyor and the buyer's attorney. Fern Taylor and perhaps others were culpably negligent. Swagler and Kuchmaner were not. What happened to the Workmans is not their fault.
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 respondents, Donald E. Swagler and Swagler Realty Company, in this case. RECOMMENDED this 9th day of February, 1987 in Tallahassee, Leon County, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of February, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-3502 These rulings on proposed findings of fact are made in compliance with Section 120.59(2), Florida Statutes (1985). Petitioner's Proposed Findings of Fact. 1.-4. Accepted and incorporated. 5. Rejected as contrary to facts found. (Kuchmaner did not "solicit" or "obtain" them.) 6.-14. Accepted and incorporated. 15. Rejected as contrary to facts found. (Taylor's "investigation" or "attempt" to ascertain the legal description was deficiently and negligently performed.) 16.-17. Accepted and incorporated. First sentence, rejected as incomplete ("compare the deed" with what?); second sentence, rejected because it was not proved Taylor had access to a copy of the survey before the closing. Rejected as unnecessary and potentially misleading. (A Final Judgment was entered; Taylor paid the portion against her; the other defendants have not paid the portions against them.) Rejected. Swagler Realty Company was a defendant in the case; Donald E. Swagler was not. 21.-24. Accepted and incorporated. Rejected as not proved whether they "failed," "refused" or "neglected." (The fact is that neither has paid the Workmans any money in satisfaction of the portion of the Final Judgment against Swagler Realty Company.) Accepted but unnecessary. B. Respondents' Proposed Findings Of Fact. 1. Accepted but unnecessary. 2.-10. Accepted and incorporated. 11. Accepted but unnecessary. 12.-23. Accepted and incorporated. 24.-28. Accepted and incorporated. 29. Accepted but unnecessary. 30.-36. Accepted but cumulative. 37.-42. Accepted and incorporated, along with additional findings. 43. Accepted but unnecessary. COPIES FURNISHED: James H. Gillis, Esquire Division of Real Estate Post Office Box 1900 Orlando, Fl 32802 J. Michael Hussey, Esquire 3443 Hancock Bridge Parkway Suite 501 North Ft. Myers, Fl 33903 Van B. Poole Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Fl 32301 Wings S. Benton, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Fl 32301 Harold Huff Executive Director Division of Real Estate Post Office Box 1900 Orlando, Fl 32802
The Issue Whether disciplinary action should be taken against Respondents for alleged violation of Subsections 475.25(1)(a), (c), (d), and (i), F.S., Section 475.25(3), F.S., and Rules 21V-10.07 and 21V-12.06, F.A.C., as set forth in the Administrative Complaint, dated September 29, 1977. At the commencement of the hearing, counsel for the Petitioner announced that Respondent Walter L. Medlin is no longer registered with the Real Estate Commission, and that therefore he should be dismissed as a party Respondent. The request was granted by the Hearing Officer. Walter L. Medlin, as authorized representative of International Land and Investment Corporation, and Donna L. Allen, were advised of their rights in an administrative proceeding and they acknowledged that they understood the same.
Findings Of Fact Respondent International Land and Investment Corporation, Kissimmee, Florida, is registered with Petitioner as a corporate real estate broker and was so registered during the year 1975. At that time, Walter L. Medlin was registered with Petitioner as a real estate broker and also as president and active firm member of International Land and Investment Corporation. Respondent Thomas F. Wells, Kissimmee, Florida, is registered with Petitioner as a real estate broker and was so registered in 1975. Respondent Donna L. Allen, is registered with Petitioner as a real estate salesman and was so registered in 1975 with the firm of International Land and Investment Corporation. (Petitioner's Exhibits 2-4) During the month of August, 1975, Mrs. Mildred E. Bartlett, then residing in Hialeah, Florida, and her son, John B. Pate, visited Kissimmee, Florida, to make inquiries concerning the purchase of residential property in the area. At the time, Mrs. Bartlett was attempting to sell her residence in South Florida and was financially unable to purchase another residence until a sale had been effected. (Testimony of Bartlett, Pate) Respondent Wells showed Mrs. Bartlett and her son Lots 10 and 12 of a platted subdivision in Osceola County known as Neptune Shores. The two lots had homes constructed thereon which were approximately 75 percent completed. Prior to 1973, Wells and Medlin had purchased the property comprising the Neptune Shores Subdivision, and Wells had dedicated the plat of same on May 15, 1973, as the owner thereof. Lots 10 and 12 were thereafter sold to one Art Raska, who constructed the unfinished homes thereon, but thereafter defaulted on a mortgage on the property. The mortgage was foreclosed by the First Merritt Mortgage Corporation, Merritt Island, Florida, who thereby became the owner of a portion of the subdivision, including Lots 7, 10, and 12. International Land and Investment Corporation purchased a number of the lots at that time. At no time during Mrs. Bartlett's discussions with Wells and Medlin did they reveal their past and present interests in the Neptune Shores Subdivision, although she was furnished a copy of the plat. (Testimony of Bartlett, Pate, Raines, Medlin, Petitioner's Exhibit 5) Mrs. Bartlett expressed interest to Wells in purchasing Lots 10 and 12 as homes for herself and son, but told him that she would have no money to purchase the property until she sold her present house, and that therefore any purchase agreement would have to be contingent upon such a sale. Wells told her that he would check into the matter and ascertain the selling price. After returning home, Mrs. Bartlett received a telephone call from Wells during which he informed her that he would need $1,500.00 as earnest money in order that he could tell the mortgage company that he had an interested party and was holding money in his escrow account. On or about September 9, Wells wrote to her and enclosed an unsigned option contract between First Merritt Mortgage Corporation and herself which recited that for a consideration of $2,000.00 the purchaser could purchase Lots 10 and 12 for an additional sum of $44,000.00 on or before January 15, 1976. It further provided as follows: Seller will agree to cooperate with purchasers efforts to complete construction. This contract will be null and void and deposit returned if purchaser is unable to obtain the necessary permits by October 10, 1975. Evidence of a Certificate of Occupancy granted by Osceola County on either Lot 10 or Lot 12 shall extend the option period until March 1, 1976. The letter accompanying the proposed option agreement stated: "Please sign these if everything is in order and make the checks out to Thomas F. Wells, Broker, so I can deposit to an escrow account rather than have the mortgage company hold your money." The letter further stated that a "Judge owned Lots 14 and 15 for which he had paid $9,600.00 each, and that the price of Lot 11 would be $8,000.00. Although Mrs. Bartlett and her son contemplated completion of construction on the two houses which they intended to use for future residences, they had no intention of performing such work until they had purchased the property. After receipt of the option agreement, Mrs. Bartlett informed Wells that she did not want an option contract whereby she could lose her deposit if she were unable to purchase the property, but wished to have a contract of purchase and sale contingent upon the sale of her present residence. Wells told her that he would send her another contract with different wording, but did not do so. (Testimony of Bartlett, Pate, Petitioner's Exhibit 6, Respondent's Exhibit 1) During succeeding weeks, Wells urged Mrs. Bartlett to have the unfinished homes completed in order that she could qualify for a mortgage loan on Lost 10 and 12. Although she discussed this possibility with Wells, she ascertained through discussions with local financial consultants that this would be impossible due to her financial situation and that of her son. On September 21, 19975, Mrs. Bartlett and her son met with Wells and Medlin in Kissimmee. At the meeting, Mrs. Bartlett gave Medlin $200.00 for an option to purchase Lots 8, 9, and 11 in the Neptune Shores Subdivision for $6,600.00, $7,400.00 and $7,700.00, respectively, from International Land Investment Corporation by various dates in 1976. The option agreement, which was dated September 21, 1975, reflected a typewritten signature for Mrs. Bartlett, but she did not sign the same after being informed by Medlin that it was unnecessary for her to sign it. He scratched out her name on the contract and signed it himself as president of the corporation. The document was witnessed by Wells and Pate. Mrs. Bartlett was told by Medlin that he would hold the three lots in reserve for her in the event she wished to purchase them at a later date. Mrs. Bartlett had brought with her the proposed option contract previously sent to her by Wells, which provided for a $2,000.00 payment for the option to purchase Lots 10 and 12. She did not sign the contract, but gave him a check for $1,500.00 which Wells put in his escrow account on September 22. Mrs. Bartlett believed that this money was protected since it was to be placed in escrow; however, she acknowledged the fact that the $200.00 which she had given as an option on the other lots was an acceptable risk and that she did not mind losing that amount if the larger purchase of Lots 10 and 12 was not successful. Wells and Medlin both testified that Mrs. Bartlett was well aware that she was also risking the $1,500.00 and that she was concerned only about her ability to protect herself from being compelled to purchase the property in the event her present home did not sell or if she was unable to obtain mortgage financing on the new purchase. It is found from the evidence that their testimony is not credible in this respect. (Testimony of Bartlett, Pate, Medlin, Wells, Respondent's Exhibit 2) Medlin had previously contacted an official of the First Merritt Mortgage Corporation, but learned that it was not interested in taking Lots 10 and 12 off the market for an option agreement. He then negotiated a contract of sale and purchase of Lots 7, 10, and 12 from First Merritt Mortgage Corporation for a total price of $46,000.00 with an earnest money deposit of $4,000.00. It provided for closing on or before January 15, 1976. The contract was dated September 19, 195 and executed on that date by D. L. Allen on behalf of International Land and Investment Corporation. It was witnessed by Wells and Medlin. On September 23, 1975, it was executed by First Merritt Mortgage Corporation. The corporation also required that Medlin agree to guarantee performance by the buyer and he therefore signed the agreement in an individual capacity. The contract provided that no real estate commission would be paid on the transaction. Mrs. Bartlett was not informed at the September 21st meeting that these contract negotiations were pending. In late September, Wells told Mrs. Bartlett that the mortgage company wanted more earnest money and that an additional $2,500.00 would be necessary for this purpose. Mrs. Bartlett gave him a check for that amount, but later depleted her account before it cleared the bank because Wells had not provided her with a purchase contract. Wells showed Mrs. Bartlett a proposed option agreement D. L. Allen and herself which provided for a payment of $4,000.00 for the right to purchase Lots 10 and 12 on or before January 15, 1976, for the total sum of $46,000.00. It further provided as follows: "As a part of the consideration for the Seller having executed this Option: the Buyer agrees to diligently pursue the completion of the houses located on said property. All repairs or improvements will be made at no cost to the Seller and will provide the Seller with Lien Waiver at the completion of each improvement. All repairs or improvements will become the property of the Seller in the event this transaction is not completed." There was no signature block on the agreement for the purported purchaser of the option. Mrs. Bartlett had been told by Wells and Medlin at the September 21st meeting that "Mr." Allen was a "big investor" who would guarantee her commitments. In fact, Allen was Respondent Donna L. Allen who was then employed by International Land and Investment Corporation. On September 30, Wells wrote a check in the amount of $4,000.00 to Walter F. Medlin, Trustee, and on the same date Medlin wrote a check to First Merritt Mortgage Company in a like amount. Medlin's check was erroneously dated October 30, 1975. On October 3rd, the option contract was signed by D. C. Allen, and mailed to Mrs. Bartlett by Wells. On October 6, Wells' bank notified him that Mrs. Bartlett's check for $2,500.00 had been returned for insufficient funds. After various telephone conversations and a visit by Wells to Mrs. Bartlett's home, another check for $2,500.00 was sent to Wells on October 21, which he had converted to a cashier's check on October 24. The $2,500.00 represented funds that had been borrowed by Pate and given to his mother to transmit to Wells. Both Bartlett and Pate were under the impression that the additional payment would be placed in Wells' escrow account and retained until a sales contract was executed. (Testimony of Bartlett, Pate, wells, Medlin, Petitioner's Exhibit 1) In November, 1975, Mrs. Bartlett telephoned Wells and told him that she wanted a return of her money. Wells told her that he would have to consult with D. L. Allen because he had turned the money over to that individual in payment of the option that had been taken on the property. Thereafter, Allen executed an "amendment" to the agreement which was prepared by Medlin and witnessed by Medlin and Wells. The document stated in part that if the "buyer," on or before November 25, 1975, could not provide sufficient evidence as to the availability of funds to close the transaction on or before January 15, 1976, the option would terminate and funds paid by the buyer to Allen would be refunded out of proceeds of closing upon the sale of the property by Allen to a third party. By letter of November 21, 1975, Allen wrote to Bartlett referring to the option amendment and stating in part: "In view of your recent conversation with Mr. Tom Wells in which you indicated that you had no intention of accepting that Ammendment [sic] and considering that I have not received a copy of the Ammendment [sic] signed by you indicating your acceptance, I am hereby cancelling my offer to ammend [sic] the original Option. I also wish to remind you that in the event that you do not exercise that Option and comply with each and every part of that agreement there will be 'no liability to refund the money paid therefor.'" By a mailgram sent on November 24, 1975, Bartlett advised Wells that he had until November 28 to return the $4,000.00 being held in escrow which she had requested in a November 20 telephone conversation, or she would report the matter to the district attorney's office and the Real Estate Commission. Wells responded with a letter which stated that her deposit on the option contract was given to the seller as consideration for executing the option, and that he was willing to "make every effort I can to negociate [sic] the matter with Allen. Negociations [sic] seemed to be the only possible course of action for recovery of your money." On November 26, 1975, Allen wrote to Bartlett wherein she stated that since Bartlett had executed the option agreement whereby she had agreed to "deligently [sic] pursue" the completion of the houses located on the property, she had breached the terms of the option contract. It further stated that since she had made demands for reimbursement of the $4,000.00 payment, that such action could only be interpreted as abandonment of the agreement, and that she (Allen) therefore declared the option contract null and void and was retaining the $4,000.00 as partial consideration for having executed the agreement. This letter was also prepared by Medlin for Allen's signature. (Testimony of Bartlett, Wells, Medlin, Kimmig, Petitioner's Exhibit 1) Wells and Medlin had previously agreed that they would split a 10 percent commission on any sale of Lots 10 and 12. After executing the purchase agreement on the property with First Merritt Mortgage Corporation, it was agreed between Wells and Medlin that Wells would receive $1,000.00 as a real estate commission. Allen had originally funded the $4,000.00 deposit to be made on the property by Medlin. Medlin had told her that she would receive Lot 7 if the deal was completed; however, he intended to give her only an "interest" in the lot. She received her original $4,000.00 back in October, 1975, when she signed the option agreement. The reasonable market value of Lot 7 was $6,000.00 to $8,000.00. The purported purchase of the property by International Land and Investment Corporation was not consummated on or before January 15, 1976, and the $4,000.00 was forfeited. Mrs. Bartlett never received return of the $4,000.00 which she had transmitted to Wells. (Testimony of Bartlett, Wells, Medlin, Raines, Kimmig)
Recommendation That the registration of International Land and Investment Corporation as a corporate real estate broker be suspended for a period of two years, pursuant to Section 475.25(1)(a), Florida Statutes. That the registration of Thomas F. Wells as a real estate broker be suspended for a period of two years pursuant to subsections 475.25(1)(a), (c) and (i), Florida Statutes. That the registration of Donna L. Allen as a real estate salesman be suspended for a period of six months, pursuant to Section 475.25(1)(a), Florida Statutes. DONE AND ORDERED this 20th day of December, 1978, in Tallahassee, Florida. Thomas C. Oldham Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: S. Ralph Fetner, Jr. Esquire Staff Attorney Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802 International Land and Investment Corporation Walter L. Medlin Post Office Box 2252 Orlando, Florida 32802 Frank G. Finkbeiner, Esquire 341 N. Magnolia Avenue Orlando, Florida 32801 Donna L. Allen c/o Monarch Realty of Osceola Inc. 521 Vince Street Kissimmee, Florida 32741
Findings Of Fact The Department of Business and Professional Regulation, Division of Real Estate (Petitioner), is the state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints filed pursuant to Chapters 455 and 475, Florida Statutes, and the rules promulgated pursuant thereto. At all times material hereto, Robert A. Schwartz (Respondent) was a Florida licensed real estate broker, having been issued license number 0481297, with an address of American Real Estate Properties, Inc., 13833 Wellington Trace, West Palm Beach, Florida. Respondent was initially licensed on or about May 23, 1988. At all times material hereto, Respondent was the qualifying broker and officer of American Real Estate Properties, Inc. (American Real Estate). On or about May 18, 1992, Respondent met with Ms. Renate Schuetze in West Palm Beach. 4/ Ms. Schuetze was from the State of New York and was interested in buying lots, building homes on the lots and renting the homes. Respondent had been referred to Ms. Schuetze by her friend, Ms. Mary Ann Runer. A few years ago, on behalf of Ms. Runer and using monies provided by her, Respondent had purchased a lot in West Palm Beach, overseen the contracting and construction of her home on the lot and rented out the home. All for which he charged Ms. Runer a fee. Ms. Schuetze wanted Respondent to do the same for her. On that same day, after meeting with Respondent, visiting prospective lots and model homes with him and discussing his process and procedure, Ms. Schuetze gave Respondent a check for $15,120 made payable to American Real Estate and returned to New York. Although Ms. Schuetze noted on the check that the money was for a deposit on one of the model homes, the monies were actually for a deposit of $2,000 on two certain lots ($1,000 each) and Respondent's fee of $13,000 ($6,500 per house) 5/ for performing the same service for her that he had performed for Ms. Runer. Ms. Schuetze wanted to pay Respondent his fee in advance instead of waiting until the homes had been built and rented. This was the first time that Respondent had received his fee in advance. The following day, on May 19, 1992, Respondent deposited the $15,120 into the operating account of American Real Estate which did not have an escrow account. Furthermore, Respondent had no intentions of opening an escrow account. However, the day before, on May 18, 1992, Respondent wrote two checks for $1,000 each to Miki S. Murray Realty (Murray Realty) for a deposit on two certain lots on behalf of Ms. Schuetze, leaving a balance of $13,120 from the monies given by her to Respondent. The deposits held the lots for Ms. Schuetze. On May 19, 1992, Murray Realty completed a document entitled "Reservation Deposit" for each of the lots. The document represented an acknowledgment of a deposit and the terms associated therewith. Murray Realty sold the lots and the homes to be constructed as a package deal. Each Reservation Deposit indicated, among other things, a lot deposit of $1,000 on a certain lot, the location of the lot, the purchase price of the house to be constructed on the lot, the representative for the builder/seller (Murray Realty), and the buyer who was indicated as Respondent. Also, each Reservation Deposit indicated that the deposit was an "earnest money deposit," that the contract was to be entered into on June 10, 1992, and that the deposit could be returned for any reason on or before June 10, 1992. Murray Realty required no further monies until after the signing of a contract for purchase from which construction draws would come from an account specifically setup for that purpose. This was not the first time that Respondent had entered into such a transaction with Murray Realty. Respondent used the same transaction for Ms. Runer. From on or about May 12, 1992, through on or about June 1, 1992, Respondent wrote checks from American Real Estate's operating account, totalling $10,403.01, from the remaining $13,120 given to Respondent by Ms. Schuetze. The expenditures were for Respondent's own use and benefit; none were associated with the services requested by Ms. Schuetze. On or about June 1, 1992, Respondent sent a completed contract for sale and purchase of the lots and homes and a blank buyer-broker contract, by express mail, to Ms. Schuetze for her signature. The contract for sale and purchase reflected that a "deposit" of $15,120 had been paid to American Real Estate, as seller, toward the purchase price and that the deposit was being held in "escrow." The blank buyer-broker agreement contained spaces for Respondent to insert an agreed upon fee but these were also left blank. Prior to sending these documents, Respondent had discussed the contracts with her and informed her that he was sending them to her. At the same time, on or about June 1, 1992, Ms. Schuetze wrote to Respondent requesting the return of her "deposit" of $15,120 within three days, indicating that she had decided not to sign a contract for the purchase of the homes. After she received the contracts, Ms. Schuetze returned them to Respondent unsigned. At no time prior to June 1, 1992, had Respondent presented to Ms. Schuetze for her signature a buyer-broker contract or a contract for sale and purchase. At no time pertinent hereto has Ms. Schuetze executed a buyer-broker contract or a contract for sale and purchase. Not having received a response to her letter of June 1, 1992, on or about June 8, 1992, Ms. Schuetze again made a demand by way of a letter for return of the $15,120 within three days. On or about June 11, 1992, at the request of Ms. Schuetze, Murray Realty returned her deposit of $2,000 on the two lots. At that time, Respondent had not contacted Murray Realty regarding her request, and he was unaware that Murray Realty had returned the deposit. Shortly thereafter, but also in the month of June 1992, Respondent agreed to return the $13,120, less the value of services he had already rendered, to Ms. Schuetze but requested additional time in which to so do since he had spent the money. She agreed to give Respondent additional time. On or about December 4, 1992, Respondent gave a statement to Petitioner in which he agreed to return, within 12 months, the $13,120 less 10 percent for the services that he believed that he had already rendered, leaving a balance of $11,808 to be returned. At the time of hearing on October 13, 1993, Respondent had failed to refund any of the money to Ms. Schuetze. Respondent has no history of disciplinary action.
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 Count II of the amended administrative complaint; and SUSPENDING the broker's license of Robert A. Schwartz for five years. Provided, however, that the duration of his suspension may be lessened upon the return to Ms. Schuetze of the $13,120. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 26th day of May 1994. ERROL H. POWELL 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 26th day of May 1994.
