The Issue In this disciplinary proceeding, the issues are whether Respondents, who are licensed real estate brokers, committed acts of dishonest dealing or culpable negligence in a business transaction; failed to account for and deliver trust funds; failed to maintain trust funds in an escrow account as required; intermingled personal funds with trust funds; obstructed or hindered Petitioner's investigator in an official investigation; or committed any of these offenses, as alleged by Petitioner in its Administrative Complaint. If Petitioner proves one or more of the alleged violations, then an additional question will arise, namely whether disciplinary penalties should be imposed on Respondents, or either of them.
Findings Of Fact The Parties Respondent Marlene Montenegro Toirac ("Toirac") is a licensed real estate broker subject to the regulatory jurisdiction of the Florida Real Estate Commission ("Commission"). Respondent Home Center International Corp. ("HCIC") is and was at all times material hereto a corporation registered as a Florida real estate broker subject to the regulatory jurisdiction of the Commission. Toirac is an officer and principal of HCIC, and at all times relevant to this case she had substantial, if not exclusive, control of the corporation. Indeed, the evidence does not establish that HCIC engaged in any conduct distinct from Toirac's in connection with the transactions at issue. Therefore, Respondents will generally be referred to collectively as "Toirac" except when a need to distinguish between them arises. Petitioner Department of Business and Professional Regulation, Division of Real Estate, has jurisdiction over disciplinary proceedings for the Commission. At the Commission's direction, Petitioner is authorized to prosecute administrative complaints against licensees within the Commission's jurisdiction. The Ramirez Transaction On or about September 9, 2003, Toirac, in her individual capacity, entered into a Sale and Purchase Contract (the "Contract") with Andres Ramirez ("Ramirez"), whereby Toirac agreed to sell, and Ramirez to buy, certain real estate then owned by Toirac. The Contract called for Ramirez to make several deposits toward the purchase price. Accordingly, Ramirez tendered to Toirac a total of $14,000 in pre-closing payments. Toirac accepted these payments, which were deposited in HCIC's operating account. At some point, Toirac withdrew Ramirez's deposits from HCIC's operating account, taking the money in cash. She brought the $14,000 in cash to her attorney, Alix Montes, who agreed to hold the money in escrow pending the closing of the sale to Ramirez. Mr. Montes placed the cash in a safe located in his home. The sale to Ramirez fell through after Ramirez failed to obtain acceptable financing and exercised his right to cancel the Contract in consequence thereof. Ramirez requested that his deposits be returned. Within a short time (not more than about two weeks), Toirac gave Ramirez his money back——in cash. The parties dispute whether Toirac properly handled Ramirez's deposits. Petitioner asserts that the $14,000 should have been held in an escrow account maintained at a financial institution such as a bank or title company. Toirac responds that she complied with a "Financing and Deposit Addendum" (the "Addendum") to the Contract. The Addendum, which is part of the Contract that Petitioner offered into evidence (as Petitioner's Exhibit 4), provides in pertinent part as follows: Seller acknowledges that in the event that the Buyer is not approved for a mortgage loan or the terms and conditions of said mortgage loan are not acceptable to Seller, Seller within thirty (30) days from the date Seller receives Buyer's written request for the return of its deposit, shall refund Buyer's deposit in full. Upon Seller's refund of the deposit, this contract will terminate and all parties will be relieved from the obligations and liabilities. Buyer acknowledges that the Seller herein is a licensed Real Estate Broker in the state of Florida and That Home Center International Corp. will not be the "Escrow Agent" in this transaction nor will Home Center International Corp. or any of its affiliates, officers, directors, agents and/or employees will receive a Real Estate Brokerage fee in connection with this transaction. Buyer authorizes Home Center International Corp. to place any and all deposits herein in its operating account. Buyer further authorizes Home Center International Corp, at any time to withdraw and/or transfer Buyer's funds from the operating account. In the event a transfer of any and all funds is effected, such funds shall be held by Alix J. Montes, Esq., Attorney for the Seller. This Addendum supercedes the provisions of paragraph 2 (A)2(B)(1), 16(A)(B)(C), 17, 18, and 19 of the "As Is" Sale and Purchase Contract signed by all parties herein. (In the original, the text is written in all capital letters.) The Addendum is dated September 9, 2003, and bears the purported signatures of Ramirez and Toirac. Petitioner alleged in its Administrative Complaint that Ramirez had denied executing the Addendum. At hearing, however, Petitioner failed to offer any proof——such as Ramirez's testimony or the testimony of an expert disputing the authenticity of Ramirez's purported signature on the Addendum—— to establish this allegation. In contrast, Toirac testified that both she and Ramirez had, in fact, signed the Addendum. As a result, on this record, the undersigned is not clearly convinced that the Addendum is fraudulent. Moreover, the Addendum and Toirac's testimony, taken together, are sufficiently persuasive (in the absence of evidence to the contrary) to prevent the undersigned from being clearly convinced that Toirac mishandled Ramirez's deposits or otherwise dealt dishonestly or improperly with him. The January 2004 Audit On January 20, 2004, Tibizay Morales, who was then employed by Petitioner as an investigator, conducted an audit of Toirac's records. (The impetus for this audit was Petitioner's receipt of a complaint from Ramirez.) During the audit, Toirac reported to Ms. Morales that she no longer maintained an escrow account but instead relied upon her attorney to act as escrow agent for funds entrusted to her. Toirac also told Mr. Morales that Ramirez's deposits initially had been held in HCIC's operating account, before being handed over to Mr. Montes for safekeeping. Toirac was not able, at the time of the audit, to produce bank statements for HCIC's operating account, and apparently a listing agreement that should have been in the broker's file was not there. Toirac agreed to provide the missing documentation. By letter dated January 20, 2004, Toirac informed Ms. Morales that she would forward requested documentation within 10 days. For reasons unknown, Toirac failed to follow through with this, prompting the instant disciplinary action. The Charges In Counts I and VII, Petitioner alleges that Respondents are guilty of culpable negligence or breach of trust in any business transaction, either of which is a disciplinable offense under Section 475.25(1)(b), Florida Statutes. Petitioner's position is that Respondents mishandled Ramirez's deposits and misled him into believing that the money would be held in trust by HCIC as an escrow agent.1 In Counts II and VIII, Petitioner charges Respondents with failing to account for and deliver trust funds, in violation of Section 475.25(1)(d)1., Florida Statutes. Petitioner's position is unclear. What is clear, however, is that Respondents returned Ramirez's deposit money within a reasonable time after his demand therefor. In Counts III and IX, Petitioner accuses Respondents of having failed to maintain trust funds in the real estate brokerage escrow account until disbursement was properly authorized, in violation of Section 475.25(1)(k), Florida Statutes. In Counts IV and X of its Administrative Complaint, Petitioner accuses Respondents of having intermingled personal funds with funds being held in escrow. Petitioner's position is that by initially depositing Ramirez's deposits in HCIC's operating account, Respondents failed to comply with Florida Administrative Code Rule 61J2-14.008(2), and hence violated Section 475.25(1)(e), Florida Statutes. In Counts V and XI, Petitioner asserts that Respondents obstructed or hindered the enforcement of Chapter 475, Florida Statutes, in violation of Section 475.42(1)(i), Florida Statutes, and therefore in violation of Section 475.25(1)(e), Florida Statutes. Petitioner's position is that Respondents willfully interfered with Morales's investigation by failing to provide documentation as promised.2 Ultimate Factual Determinations Toirac handled Ramirez's deposit money in accordance with the unambiguous terms of the Addendum. Petitioner failed to prove that the Addendum is fraudulent. Thus, the Addendum, when considered in conjunction with Toirac's unrebutted testimony that she and Ramirez signed the instrument, is fatal to Counts I, III, IV, VII, IX, and X of the Administrative Complaint. Respondents are not guilty of the offenses charged therein. Toirac did, in fact, return Ramirez's deposit money within a reasonable time after he demanded a refund. Respondents therefore are not guilty of the offenses charged in Counts II and VII of the Administrative Complaint. When Ms. Morales interviewed Toirac in January 2004 in response to Ramirez's complaint, Toirac admitted most, if not all, of the material facts pertaining to the circumstances under which Ramirez's deposits had been held. Further, the documents that Toirac neglected to provide Ms. Morales, i.e. HCIC's bank records and a listing agreement that had gone missing, were claimed by Toirac to be corroborative of her statements to the investigator. Toirac's failure to produce such documents cost Toirac an opportunity to bolster her credibility——and enabled Petitioner to draw adverse inferences against Toirac, e.g. that the questioned listing agreement did not exist after all.3 Given these facts, the undersigned is not convinced that Respondents obstructed or hindered Petitioner's investigation. Consequently, Respondents are not guilty of the charges set forth in Counts V and VI of the Administrative Complaint.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a final order finding Respondents not guilty of the offenses charged in the Administrative Complaint. DONE AND ENTERED this 14th day of September, 2005, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of September, 2005.
The Issue The issues in this case are whether Respondents violated Subsection 475.25(1)(k), Florida Statutes (1999), by failing to maintain an escrow deposit in a trust account until properly authorized; whether Respondents violated Subsection 475.25(1)(d)1, Florida Statutes, by failing to account for or deliver funds; whether Respondents violated Subsection 475.25(1)(b), Florida Statutes, by committing a breach of trust or culpable negligence in a business transaction; and, if so, whether the proposed penalty is reasonable.
Findings Of Fact Petitioner is the state agency responsible for the regulation and discipline of real estate licensees in the state. Simons is licensed in the state as a real estate broker/officer of Respondent, Home Hunters USA, Inc. (Home Hunters), pursuant to license number BK-0159866. Home Hunters is a corporation registered as a Florida real estate broker pursuant to license number CQ-0146369. On March 21, 1996, Respondents entered into a property management contract (amended contract) with Max and Mary Newman (Newmans). The amended contract authorized Respondents to lease and manage real property owned by the Newmans and located at 1555 Whiskey Creek Drive, Ft. Myers, Florida 33919 (the property). The original contract that Respondents proposed to the Newmans was dated March 11, 1996. The original contract contained a clause that would have obligated the Newmans to pay a sales commission to Respondents in the event Respondents sold the property to a tenant or certain other purchasers. The Newmans deleted that language from the original contract, initialed the deletion, dated the deletion "3/21/96," signed the amended contract on March 21, 1996, and returned the amended contract to Respondents. The deleted language in the amended contract signed by the Newmans provided: Owner agrees to pay Agent a sales commission for the sale of said property to the tenant, or any other the tenant relates or refers. Agent will perform any services normally performed to consummate the sale to the tenant in a professional and diligent manner. Owner shall notify Agent at earliest possible time so that Agent may perform services (prequalify, arrange financing, closing, repairs, etc.). It is the owners [sic] responsibility to pay said fee to Agent upon closing of sale. Petitioner's Exhibit 5 (P-5) at 19 (the second unnumbered page of the exhibit). On or about February 1, 1999, Respondents brokered a lease of the property from the Newmans to Ms. Lilly Gilson (Gilson). Mr. Newman signed the lease agreement on February 14, 1999, and Gilson signed it on February 23, 1999. The lease agreement, in relevant part, obligated the Newmans to pay Respondents a "fee" in the event the "tenant should enter into a lease purchase, lease option, or purchase through their tenancy." The lease agreement states that the fee is for Respondents "serving the sale as a broker" but does not specify the amount of the fee, does not express the fee as a percentage of the purchase price, and does not otherwise specify how the fee is to be determined. Neither of the Respondents is a signatory to the lease agreement. At the time Gilson entered into the lease agreement, Gilson paid a deposit of $650 to Respondents as a security deposit in accordance with the lease agreement. Respondents placed this deposit into a trust account. At some point prior to December 1999, the Newmans entered into a purchase and sale contract to sell the property to Mr. Gary Newman (Buyer). The Buyer is unrelated to the Newmans, but is a relative of Gilson. The Newmans closed on the sale to the Buyer on December 28, 1999. The parties to the sale used other brokers in the transaction over Respondents' objections, and neither of the Respondents served the sale as a broker. The closing statement shows that the Buyer was obligated to pay the $635 security deposit to the Newmans. Subsequent to the closing, Respondents transferred the security deposit from their trust account to their operating account. Simons believed he was entitled to a commission on the sale from the Newmans to Buyer. Respondents had actual knowledge that the Newmans claimed entitlement to the security deposit and disputed Respondents' entitlement to the security deposit. Simons was aware as early as December 11, 1999, that the Newmans did not knowingly consent to pay Respondents a commission on the sale transaction. Respondents failed to notify the Florida Real Estate Commission (Commission) of the dispute concerning entitlement to the security deposit. Respondents did not institute the settlement procedures prescribed in Subsection 475.25(1)(d)1, Florida Statutes (1999).
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a Final Order finding that Respondents violated Subsections 475.25(1)(b), (d), and (k), Florida Statutes (1999), by committing the acts alleged in the Administrative Complaint; imposing a fine of $1,000 against each licensee; and suspending Respondents' licenses concurrently for 30 days. DONE AND ENTERED this 4th day of December, 2003, in Tallahassee, Leon County, Florida. S DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 4th day of December, 2003. COPIES FURNISHED: Christopher J. DeCosta, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite 801-N Orlando, Florida 32801 Larry A. Simons Home Hunters USA, Inc. 1415 Colonial Boulevard, Suite 3 Fort Myers, Florida 33907 Nancy P. Campiglia, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 Nancy P. Campiglia, Acting Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street, Suite 802-N Orlando, Florida 32801-1772
Findings Of Fact At all times relevant hereto, respondent, George Sherbon, was a licensed real estate broker having been issued broker's license number 0348688 by petitioner, Department of Professional Regulation, Division of Real Estate (Division). When the events herein occurred, respondent was employed as a salesman for V. P. Stone, Inc., a real estate firm located at 5905 Gulf Boulevard, St. Petersburg Beach, Florida. On April 1, 1987, Paul D. and Anna Martin entered into a listing agreement with Century 21 Spinning Wheel Ent., Inc. (Century 21) to sell their home at 2543 58th Terrace South, St. Petersburg, Florida. The listing agent was Cheryl Coudry, now known as Cheryl Hutton, a licensed salesperson with Century 21. On September 11, 1987 respondent solicited and obtained a contract for sale on the Martin property executed by Frank Dicenzo, a resident of Pittsburgh, Pennsylvania, who had a daughter living in the St. Petersburg area. Dicenzo had responded to an advertisement run by Sherbon in a Pittsburgh newspaper. After a week or so of negotiations, the parties eventually agreed to a sales price of $92,500, and the final contract was executed on September 20, 1987. The contract called for Dicenzo to make an initial $100 deposit when the contract was executed and an additional deposit of $19,900 by September 25, 1987, or a total deposit of $20,000. Dicenzo gave respondent the initial $100 which was deposited into the escrow account of V. P. Stone, Inc. The contract provided further that the sale would be contingent on Dicenzo obtaining a $72,500 first mortgage. Finally, in accordance with Dicenzo's request, the contract provided that Dicenzo could take occupancy of the premises four weeks after the loan was approved. It is noted that Dicenzo initially asked for occupancy by October 16, 1987. On September 18, Sherbon introduced Dicenzo to Tony Black, a loan officer at Savings of America, a local lending institution, for the purpose of Dicenzo making a loan application. On September 24, or the day before the additional deposit was due, Dicenzo became ill with what he described as a bleeding ulcer and decided to return to Pittsburgh and stay at his mother's home. Before he left, Dicenzo did not make the additional deposit as required by the contract. According to Dicenzo, he placed no great significance on the September 25 due date and felt that if the deposit was made "within a reasonable time," it would be okay. Respondent was aware of the September 25 deadline and attempted to get a check for the $19,900 deposit from Dicenzo's daughter but was unsuccessful. Respondent contends he kept trying to contact Dicenzo in Pittsburgh during the next five week period but was unable to reach him. Dicenzo acknowledged he knew that Sherbon was trying to contact him but still made no effort to talk to Sherbon. Instead, he simply told his daughter he would take care of the matter when he returned to Florida in late October. Whether this message was conveyed to Sherbon is not of record. Sherbon prepared contemporaneous notes concerning the transaction and used these to refresh his recollection at hearing. He pointed out that such notes were kept on all real estate transactions. According to his notes, he telephoned Coudry and Black on September 24 concerning Dicenzo's illness and the fact that he was having difficulty obtaining the additional deposit from Dicenzo. Although Black recalled talking with Sherbon, he denied that Sherbon told him that there was no deposit and said such information was a material item that would have prompted him to stop processing the application until the deposit could be verified. Likewise, Coudry, who could not recall many aspects of the transaction, did recall speaking with Sherbon but remembered Sherbon simply telling her that he was in the process of showing Dicenzo various commercial properties and would be obtaining the deposit at that time. Their testimony is deemed to be more credible and persuasive and is hereby accepted. Coudry assumed that Sherbon had received the additional deposit since she was never specifically told otherwise by Sherbon. Accordingly, she did not contact the Martins until several weeks after the September 25 due date. Coudry did not learn that no deposit had been collected until mid-January 1988 when Anna Martin disclosed to her this fact. In the meantime, although the Martins knew the contract was contingent on Dicenzo obtaining a loan, they nonetheless assumed that Dicenzo would have no problem securing a loan and that such a loan would be approved in a week or so. Also, they knew the contract called for possession of the property by Dicenzo four weeks after the loan was approved. Because of these assumptions, and having received no advice from Coudry that the full deposit had not been made on September 25 as required by the contract, the Martins made application around September 28 to buy another home in a nearby modular home park and asked that the application be expedited. Unfortunately for the Martins, they were far more successful than Dicenzo in securing prompt approval of their loan application. Once approved, and after a closing was held, the Martins had the utilities hooked up, erected a storage shed, and incurred other expenses. Also, they began making mortgage payments on the second house. On October 24, 1987 the Martins telephoned Sherbon and told him their listing with Century 21 had expired. During the conversation, Sherbon did not mention that Dicenzo had failed to make the $19,900 deposit. Dicenzo's application with Savings of America was denied on October 30, 1987 because of Dicenzo's "ratio of ... expenses to ... total income." By this time, Dicenzo had returned to Florida and had spoken with Sherbon. At respondent's urging, Dicenzo reapplied to the same institution and was turned down a second time on November 12, 1987. In addition, at Coudry's suggestion, Dicenzo had already visited another lender in October but refused to pay a $250 application fee and consequently did not file an application. Also, through Sherbon, Dicenzo was given the name of a mortgage lender suggested by the Martins but, after three visits, decided not file an application. Information regarding the second Savings of America denial was conveyed to Coudry around mid-November but, for whatever reason, she did not contact Sherbon regarding the status of the contract. It is noteworthy that at that time Sherbon did not tell Coudry that Dicenzo had still failed to make an additional deposit as required by the contract. Despite the loan application denials, Sherbon encouraged Dicenzo to keep trying to arrange financing so that the deal could go through. Dicenzo agreed to do so but, as noted in the following finding of fact, at that point Dicenzo considered the contract to be "null and void." Sherbon's efforts to find financing continued until mid-January 1988. When the loan application was denied on November 12, Dicenzo construed the contract to be void since the financing contingency was not met. According to Dicenzo, he did not believe the property was tied up while his contract was pending, felt no obligation to make the $19,900 deposit because it meant he would have to transfer funds from a money market account he purportedly maintained in Pittsburgh, and felt no moral obligation to the Martins even though by then they had committed themselves to a second home. The Martins were advised by telephone on the evening of November 12 of the second turn down of Dicenzo's loan application. By then, however, they were already committed to the second purchase. They claimed they did not learn of Dicenzo's failure to make the $19,900 deposit until mid-January 1988 when Sherbon visited their home and disclosed this fact. This is also borne out by a letter from the Martins' attorney to Dicenzo on December 1, 1987 advising Dicenzo that the contract was void and a claim might be made on his deposit for damages. When the Martins learned that only $100 had been deposited, they filed a complaint with the Division. That prompted this proceeding. Because of the failed contract, the Martins were unable to maintain two mortgage payments and were ultimately forced to give up the second home at a substantial monetary loss. They have since returned to their first home. The evidence shows that in the real estate trade, it is not customary or proper for the buyer's realtor to personally contact the seller. Rather, the practice and custom is for the buyer's agent to advise the listing broker of all pertinent developments and the listing broker then relays any necessary information to the seller. Thus, Sherbon had no responsibility to personally advise the Martins of any information pertaining to the contract. Rather, this responsibility rested with Coudry. Respondent contended he kept Coudry abreast of all developments concerning Dicenzo and that he assumed Coudry would advise the Martins that no deposit had yet been collected. To the extent this version of events conflicts with previous findings, it is not accepted. Sherbon expressed sympathy for the Martins' plight but maintained he was not at fault. There is no evidence that Sherbon has been subjected to prior disciplinary action by the Division.
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)(b), Florida Statutes (1987) to the extent noted in the conclusions of law and that his broker's license be suspended for three months. All other charges should be dismissed. DONE and RECOMMENDED this 26th day of April, 1989, in Tallahassee, 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 26th day of April, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-4688 Petitioner: 1-2. Covered in finding of fact l. Rejected as being unnecessary. Covered in finding of fact 2. 5-7. Covered in finding of fact 3. Covered in finding of fact 5. Covered in finding of fact 10. Covered in finding of fact 7. Rejected since respondent owed a duty to Coudry, and not the Martins, to keep her abreast of all pertinent matters. Covered in findings of fact 7 and 12. Covered in findings of fact 7 and 8. Covered in finding of fact 8. Covered in findings of fact 6 and 10. Rejected as being subordinate to other findings. Covered in finding of fact 11. 18-19. Covered in finding of fact 6. Respondent: Respondent's proposed order contains sections entitled "admitted facts", "unrebutted facts" and "uncontested facts". They are ruled upon in that order. Admitted facts: Covered in finding of fact l. Covered in finding of fact 3. Covered in finding of fact 2. Covered in finding of fact 3. Covered in finding of fact 3. Covered in background. Unrebutted facts: Covered in finding of fact 7. Covered in finding of fact 15. Covered in finding of fact 10. 4-6. Covered in finding of fact 6. 7-8. Covered in finding of fact 5. Covered in finding of fact 11. Covered in finding of fact 12. Rejected since Sherbon learned of the loan denial even though he did not receive a written copy of the turn-down letter. Covered in finding of fact 13. Covered in finding of fact 8. Rejected since the testimony of Anna Martin is accepted as being more credible on this factual issue. Uncontested facts: Rejected as being cumulative. Partially covered in findings of fact 6, 7 and 16. The remainder is rejected as being cumulative, argument of counsel or not supported by the more credible evidence. COPIES FURNISHED: James H. Gillis, Esquire Post Office Box 1900 Orlando, Florida 32802 Daniel B. Schuh, Esquire 248 Mirror Drive St. Petersburg, Florida 33701 Darlene Keller, Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Kenneth E. Easley, Esquire 130 North Monroe Street Tallahassee, Florida 32399-0750 =================================================================
Findings Of Fact The Respondent is a registered real estate broker holding license number 0198128, issued by the Department of Professional Regulation, Board of Real Estate, on October 25, 1979. In May and June of 1979, the Respondent was licensed as a real estate salesman, and was registered as an associate of United Farm Agency of Florida, Inc., a corporate broker with offices in Ocala. On May 8, 1979, the Respondent showed real property located at 4045 S.E. Fort King Street in Ocala, to John and Misty Pace who were interested in purchasing it. This property was owned by George Starnes, and it had been listed for sale with Ann Martin, a broker with offices in Ocala. The prospective purchasers asked the Respondent to prepare a written offer to purchase the subject property for $47,500, on terms as specified therein. This offer was prepared and dated May 8, 1979. As an earnest money deposit, a check for $500, payable to United Farm Agency, was delivered to the Respondent in accordance with the terms of the offer. On the evening of May 8 the Respondent also delivered to the listing broker his own personal offer to purchase the subject property for $48,500, together with his own check for $1,000. Subsequently, both the Paces' offer and the Respondent's offer were presented to the seller, who accepted the offer of the Respondent, and the contract was signed. The Paces' check for $500 was returned to them without having been negotiated. The Respondent explained to the Paces that their offer was rejected because the seller had accepted a higher offer. However, the Respondent did not inform the Paces that the higher offer was his own. The transaction was closed on June 26, 1979. The Respondent's association with United Farm Agency of Florida, Inc., had been terminated on June 1, 1979, and on the closing date he was no longer a salesman for this broker. However, the attorney who closed the transaction issued to the Respondent a check for $1,455 made payable to United Farm Agency, for one-half of the brokerage commission on the sale. This check was never delivered to United Farm Agency. Instead it was deposited into the joint account held by the Respondent and his wife, after being endorsed "Deposit only, Judi L. Leamy." The Respondent did not inform United Farm Agency that he had received the commission check; United Farm Agency never consented to the negotiation of this check by the Respondent.
Recommendation From the foregoing findings of fact and conclusions of law, it is RECOMMENDED that license number 0198128 held by the Respondent, Darrell J. Leamy, be revoked. THIS RECOMMENDED ORDER entered on this 8th day of July, 1981. WILLIAM B. THOMAS, 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 8th day of July, 1981. COPIES FURNISHED: John Huskins Assistant General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Darrell J. Leamy c/o Norman Oates RR 8, Box 452 Unit 2 L-136 Leesburg, Florida 32748
Findings Of Fact The Respondent, Robert Watson, Jr., is a real estate broker-salesman, having been issued license Number 0093690. He resides and has his business in Jacksonville, Florida. On or about September 1, 1978, the Respondent negotiated and drafted a contract for sale of a certain piece of residential real estate, the purchaser for which was one Mr. Lacy Cole. The Respondent was Mr. Cole's broker in that transaction. The Respondent informed Mr. Cole that he would have to pay a two- hundred-dollar deposit as prospective buyer pursuant to the deposit receipt, sales contract agreement drafted by the Respondent. Mr. Cole did not pay the entire two-hundred-dollar deposit, but he did pay the Respondent sixty-five dollars. The closing was held October 20, 1978, at which time Mr. Cole's attorney directed the Respondent to pay Mr. Cole a two-hundred-dollar refund as the contract for sale provided that financing would be through the Veterans Administration and that in such a Veterans Administration sponsored transaction the buyer is precluded from paying closing costs. Mr. Cole cashed the two- hundred-dollar check in good faith and later was informed that the Respondent had stopped payment on it, which resulted in Mr. Cole having to make the check good. The Respondent has failed to recompense Lacy Cole for the sixty-five- dollar deposit he had already paid pursuant to the contract for sale drafted by the Respondent. Mr. Watson has also never repaid the two hundred dollars which Mr. Cole had to expend in order to provide payment on the two-hundred-dollar check on which the Respondent had stopped payment. In response to the Petitioner's demonstration that the Respondent had obligated Mr. Cole for a two-hundred-dollar "binder or closing costs" which he was not obligated to pay under Veterans Administration policy, the Respondent stated that he wrote the contract with the two-hundred-dollar binder with the understanding that Cole would pay a portion of it at the first of each month until it was paid and that he only received a total of sixty-five dollars from Cole. The seller agreed to sell the property to Mr. Cole anyway. The Respondent maintained that he merely told Mr. Cole at the closing that he would write him a two-hundred-dollar check and deliver it to him at closing with the understanding that Cole would deliver it back to him immediately afterward to keep from confusing the attorney." The Respondent, however, failed to refute the showing by the Petitioner that the Respondent attempted to obligate that purchaser to pay two hundred dollars in "closing costs" which he was not legally obligated to pay and for which the seller of the property was responsible in the first place. The Respondent adduced no evidence contrary to that of Petitioner which established that, after being informed by the attorney that Mr. Cole was not responsible for any deposit or closing costs, the Respondent still retained the sixty-five dollars paid him as earnest money by Mr. Cole and, further, that after stopping payment on Cole's refund check, causing Mr. Cole to incur two hundred dollars additional expense for which he was not obligated, the Respondent failed to recompense Cole. There is thus no question that the Respondent misrepresented to his client, Mr. Cole, the obligations and expenses Mr. Cole would have to incur in order to purchase the property and thus, in effect, wrongfully obtained two hundred sixty-five dollars from Mr. Cole. On or about September 16, 1978, Mrs. Joanne Wesley deposited a ten- dollar check with the Respondent as a partial deposit for a down payment on a home. On or about September 20, 1978, she deposited an additional one-hundred- dollar check with the Respondent as further deposit on the same contract for sale and purchase which the Respondent had at that time not yet drafted. The Respondent never made an appropriate deposit of the above referenced checks in his escrow account, but, instead, cashed them for his personal use. On or about October 25, 1978, the contract for sale and purchase was finally drafted by the Respondent. On approximately December 4, 1978, Mrs. Wesley deposited with the Respondent an additional check for eight hundred fifty dollars as the final installment of her deposit money with regard to the proposed purchase of the home. On December 29, 1978, Mrs. Wesley learned that she had failed to qualify for FHA financing with regard to the above-referenced contract and, after looking at another home which was not to her liking offered to her by the Respondent as a "replacement dwelling," finally requested the refund of her total deposit of nine hundred sixty dollars. The Respondent then requested Mrs. Wesley to wait until January 2, 1979, for that refund and on January 2, 1979, tendered to her four hundred dollars cash as partial reimbursement. On January 3, 1979, the Respondent tendered to her an additional three hundred dollars cash and drew and delivered to her his escrow check, post-dated to January 10, 1979, in the amount of two hundred fifty dollars. That escrow account check was returned for insufficient funds. On February 1, 1979, Mrs. Wesley's attorney made demand on the Respondent for payment of the two hundred fifty dollars outstanding, represented by the invalid check. On approximately February 3, 1979, the Respondent ultimately paid the two hundred fifty dollars due Mrs. Wesley. Thus, at that point the Respondent had refunded nine hundred fifty dollars of the nine hundred sixty dollars in deposit money due Mrs. Wesley. The entire refund had become due on December 29, 1978, when it was learned that she could not qualify for FHA financing with regard to the proposed purchase, which qualification for financing was a condition precedent to performance of the contract. In his defense the Respondent stated that he attempted to arrange the purchase of another dwelling for Mrs. Wesley upon learning that she could not qualify for financing on the subject property and that he retained her deposit money in his escrow account for that reason and ultimately repaid it to her, although after over a month's delay. The Respondent contended that he had opened the subject account as a business account when he was doing appraisal work and had not considered it to be an escrow account and "did not know when they switched it over to escrow." The Respondent did acknowledge that he had used this escrow account as his business account and commingled personal and business operating funds in it and made withdrawals from time to time for business and personal reasons. With further regard to the Cole transaction, the Respondent contended that he felt it was customary for a veteran to pay two hundred dollars closing costs and even when he learned the veteran was not obligated to pay closing costs in such a transaction, that he still felt it was "customary as earnest money" even though the seller obviously was obligated to pay closing costs. The Respondent also testified that as of the time of the hearing and for an indeterminant period of tinge before the hearing, he had terminated active practice of real estate brokerage and was mostly performing appraisal work. There is thus no question that the Respondent informed Mr. Cole that he was obligated to pay two hundred dollars "earnest money" or "closing costs" and that his actions forced Mr. Cole to incur the two-hundred-sixty-five dollar expense described above, even after the Respondent was informed by the closing attorney that the purchaser was not obligated for those expenses. There is no question with regard to the Wesley transaction that he delayed an inordinate amount of time in refunding her deposit money after the condition of financial qualification for the purchase did not occur, and, further, that he commingled these purchaser deposit funds in his escrow account with personal and business funds and used a portion of them for personal purposes.
Recommendation Having considered the foregoing findings of fact and conclusions of law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is RECOMMENDED that the license of Robert Watson, Jr., as a real estate broker in the State of Florida be REVOKED. DONE AND ENTERED this 1st day of February, 1982, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of February 1982. COPIES FURNISHED: Barry S. Sinoff, Esquire 2400 Independent Square One Independent Drive Jacksonville, Florida 32202 Robert Watson, Jr. 9527 Abedare Avenue Jacksonville, Florida 32208 Frederick B. Wilsen, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Samuel Shorstein, Secretary Department of professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 C. B. Stafford, Executive Director Board of Real Estate Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802
Findings Of Fact In September of 1976, Mr. and Mrs. Robert B. Kenney went to 8521 Madonna Place in Sarasota, Florida, in response to a newspaper advertisement. There they found respondent, who showed them through the house at that address, saying she was a friend of the owners who were offering it for sale. Respondent told the Kenneys that she was a registered real estate salesperson employed by Marjorie McCrory Real Estate, and gave them her card. But she said there would be no commission on any sale, because the owners were her friends and had helped her with babysitting. On October 2, 1976, the Kenneys entered into a written agreement with Mr. and Mrs. Robert C. Tritschler, owners of the house respondent had shown them. By this con tract, which was received in evidence as petitioner's exhibit No. 3, the Kenneys agreed to buy the house in the event that they were able to sell their mobile home within thirty days' time and in the event that they were able to obtain financing for 80 percent of the agreed purchase price. The Kenneys were unable to obtain such financing and were also unable to sell their mobile home within thirty days of the signing of the contract. On October 5, 1976, the Kenneys drew a check to respondent's order in the amount of one thousand dollars ($1,000.00), on which was written "Earnest Money-Escrow." The check was delivered to respondent. On October 6 1976, respondent endorsed the check arid deposited it in a savings account. Afterwards, she showed the Kenneys her newly acquired pass book, on which was written "Sherry Gayer, Escrow Account for Robert L. Kenney." After the Kenneys' efforts to meet the conditions of the contract proved unavailing, they demanded the return of the money they had given respondent. Her refusal resulted in litigation which was settled when the Kenneys agreed to accept five hundred dollars ($500.00), plus the interest that had accrued on the entire one thousand dollars ($1 000.00) while it had been on deposit in respondent`s account. The other five hundred dollars ($500.00) went to the Tritschlers, in accordance with the terms of the settlement agreement.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner suspend respondent's license for sixty (60) days. DONE and ENTERED this 10th day of March, 1978, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 904/488-9675 COPIES FURNISHED: Mr. Joseph A. Doherty, Esquire Florida Real Estate Commission 400 West Robinson Avenue Orlando, Florida 32801 Ms. Sherry L. Gayer 2116-59th Street Sarasota, Florida 33580
The Issue The issue presented is whether Respondents are guilty of the allegations contained in the Administrative Complaint filed against them, and, if so, what disciplinary action should be taken against them, if any.
Findings Of Fact At all times material hereto, Respondent Lori Wilk has been a licensed real estate broker in the State of Florida, having been issued license number 0349551. The last license issued was as a broker in care of Stars and Stripes Realty, Inc. At all times material hereto, Respondent Stars and Stripes Realty, Inc., has been a corporation registered as a real estate broker in the State of Florida, having been issued license number 0253076. At all times material hereto, Respondent Wilk has been licensed and operating as a qualifying broker and officer of Respondent Stars and Stripes Realty, Inc. Gwendolyn Taylor-Herbert, as owner, had listed for sale certain real property with Coldwell Banker Residential Real Estate, Inc./Gil Amara. Respondents obtained LPS Investments, Inc., as purchaser pursuant to a sales contract which was accepted by the seller on March 14, 1989. LPS Investments is owned by Leo and Patricia Scarola. Patricia Scarola was a former salesperson for Respondents. That Contract for Sale And Purchase of Real Property provided that a total of $500 as deposit monies was to be held in escrow by Stars and Stripes Realty. Respondent Wilk executed the portion of the Contract which acknowledged receipt of the first $100 of the deposit monies. Respondents' escrow account deposit slips reveal the first $100 was deposited into Respondents' escrow account. No proof of receipt of the additional $400 exists among the escrow account deposit slips admitted in evidence; however, Respondent Wilk's testimony is accepted that Respondents received in trust a total earnest money deposit in the sum of $500. Thereafter, LPS Investments, Inc., refused to close, alleging misrepresentation by the seller of the property. Although the property had been advertised as a "handyman special" and the Contract provided that the property was accepted in an "as is" condition, the Scarolas who never saw the property before they entered into the Contract to purchase it discovered that it would cost more to improve the property than they had guessed. They decided not to close. Rather, Pat Scarola instructed Respondents to transfer the $500 earnest money deposit to another piece of property not involving Gwendolyn Taylor- Herbert. Without the prior knowledge or consent of the seller or of the listing broker, Respondents transferred the Scarolas' earnest money deposit to another transaction for the benefit of the purchaser (LPS Investments, Inc.) and not involving the same seller. This was done without even considering whether the seller or the seller's agent might have an interest in the deposit. At no time prior to the time that the Respondents' transferred the deposit to a different property did the Respondents give the listing broker or the seller an opportunity or notice to make a demand upon the Respondents for the deposit. After the transfer, and after the contract failed to close, the seller and the seller's agent made a demand that the $500 deposit be accounted for and delivered. It was not. On June 1, 1989, Respondents obtained an offer from Herb Sider, as purchaser, for the property owned by Gwendolyn Taylor-Herbert. That offer was accepted by the seller. The Contract for Sale and Purchase of Real Property provided that a total deposit of $1,000 was to be held in escrow by Stars and Stripes Realty. Respondent Wilk executed that portion of the Contract acknowledging that the first $100 of the earnest money deposit had been received by Respondents. That representation was false. Sider never gave Respondents the earnest money deposit specified in the Contract, and Respondents failed to advise anyone that the representation in the Contract was false. Although Respondent Wilk testified that she would "normally" keep $100 of Sider's money in her escrow account to be applied to the various contracts that he entered into through her, there is no evidence that there was $100 in Respondents' escrow account at the time or that it was available to be applied to this Contract. Rather, Respondent Wilk's testimony is accepted that she never received either the initial $100 or the additional $900 deposit monies from Sider for this property. Herb Sider refused to close. The seller, Gwendolyn Taylor-Herbert, agreed to lower the sales price, and a modified contract was executed between Taylor-Herbert and Sider. Thereafter, Sider again refused to close. At no time did Respondents notify anyone that they did not have an earnest money deposit in escrow for the Taylor-Herbert/Sider transaction. Diane Quigley, branch manager of Coldwell Banker Residential Real Estate, Inc., sent a letter dated July 11, 1989, to the Respondents transmitting release of deposit receipt forms and instructing Respondents to release the $500 earnest money deposit of LPS Investments, Inc., and the $1,000 earnest money deposit of Herb Sider to the seller Gwendolyn Taylor-Herbert. Respondents ignored that demand letter. By letter dated August 25, 1989, Quigley again wrote to Respondents demanding the release of the Sider and the LPS Investments, Inc., deposits to the seller. That letter referred to the July 11th letter which Respondents had ignored and the numerous phone calls placed by Quigley to Respondents which had not been returned. On September 13, 1989, Respondents for the first time notified Petitioner of possible conflicting demands. That letter misrepresented the facts of the situation and suggested that the seller and buyer might still be able to strike a deal. On October 3, 1989, Respondents again wrote to the Florida Real Estate Commission advising that "there is now a conflicting demand" on the deposits relative to the Gwendolyn Taylor-Herbert property. Respondents' letters reveal a lack of understanding of the basics of a real estate contract. Neither letter advised the Commission that Respondents did not have any of the monies in escrow at any rate. On December 27, 1988, Respondent Wilk made an offer to purchase real property from Bel-Properties, Inc., which offer provided that $100 earnest money deposit would be held in escrow by Stars and Stripes Realty, Inc., and an additional $2,050 earnest money deposit would be placed in the Stars and Stripes escrow account within 72 hours of acceptance. Respondent Wilk executed the portion of the Contract for Sale and Purchase of Real Property acknowledging that the initial $100 deposit had been received. That representation was false. The Contract which she prepared listed as the buyer "Lori Wilk, a lisenced [sic] real estate broker, and/or assigns." The offer was accepted by the seller on December 30, 1988. In connection with that offer, Respondent Wilk represented that she was the purchaser when, in fact, she was acting on behalf of the actual purchaser HBS Investments, Inc., a corporation owned, controlled, and operated by Herb Sider. Immediately upon the acceptance of Respondent Wilk's offer, she assigned the sales contract to HBS Investments, Inc. At no time did Respondent Wilk or HBS Investments, Inc., place the $2,150 earnest money deposit in the escrow account of Stars and Stripes Realty, Inc., as represented by Respondent Wilk to the seller and as required by the Contract. Further, at no time did Respondents advise the seller that they did not have an earnest money deposit in the Stars and Stripes escrow account. On November 28, 1988, Respondent "Wilk, a lisenced [sic] real estate broker, and/or assigns" made an offer to purchase real property from Darlene Farris. Farris accepted that offer on December 6, 1988. That Contract for Sale and Purchase of Real Property provided that an initial deposit of $100 had been placed in the escrow account of Stars and Stripes Realty and that an additional earnest money deposit of $1,900 would be placed in escrow within 72 hours of acceptance. Respondent Wilk executed the portion of the Contract acknowledging that she had received the initial $100 earnest money deposit. That representation was false. In fact, Respondent Wilk never placed any of the $2,000 earnest money deposit in her escrow account and never advised the seller or the seller's listing broker that no earnest money deposit had been made. On or about February 2, 1989, Respondents solicited and obtained Willy Pearson as a tenant for the Farris property. Respondents represented to Pearson that the lessor was HBS Investments, Inc. Respondent Wilk prepared a Memorandum to Enter Into a Lease acknowledging the receipt of $550 as a deposit from Pearson, although Respondent Wilk only received $250 from Pearson. When Respondent Wilk received half of the rental deposit, she gave Pearson both a receipt and immediate possession of the property. Respondents obtained the tenant without the prior knowledge and consent of Darlene Farris, owner of the property. Further Respondents did not notify Farris or Farris' broker that Respondents had rented Farris' property until sometime after Respondents had received the $250 deposit from Pearson and had given him possession of Farris' property. Neither Respondent Wilk nor HBS Investments, Inc., ever closed on the Farris property. Further, Respondent Wilk never obtained authority from Darlene Farris to obtain or place a tenant in Farris' property.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered finding Respondents guilty of the allegations contained in the Administrative Complaint filed against them and revoking the licenses of Respondents Lori Wilk and Stars and Stripes Realty, Inc. RECOMMENDED this 8th day of May, 1991, in Tallahassee, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of May, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-2468 Petitioner's proposed findings of fact numbered 2-21 and 23-28 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed finding of fact numbered 1 has been rejected as not constituting a finding of fact but rather as constituting a conclusion of law. Petitioner's proposed finding of fact numbered 22 has been rejected as being irrelevant to the issues under consideration in this cause. Respondents' proposed findings of fact numbered 2-9, 19, and 23 have been adopted either verbatim or in substance in this Recommended Order. Respondents' proposed finding of fact numbered 1 has been rejected as not constituting a finding of fact but rather as constituting a conclusion of law. Respondents' proposed findings of fact numbered 10, 15, and 27 have been rejected as being contrary to the weight of the credible evidence in this cause. Respondents' proposed findings of fact numbered 11, 12, 14, 16-18, 20-22, 24, 25, 28, and 30 have been rejected as not been supported by the weight of the credible, competent evidence in this cause. Respondents' proposed findings of fact numbered 13, 26, and 29 have been rejected as being irrelevant to determination of the issues involved in this cause. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation Division of Real Estate Legal Section - Suite N-308 Hurston Building - North Tower 400 West Robinson Street Post Office Box 1900 Orlando, FL 32802-1900 Monte K. Rassner, Esquire Rassner, Malove, Rassner, Kramer & Gold Plaza 7000, Suite 500 7000 Southwest 62nd Avenue South Miami, FL 33143 Darlene F. Keller, Division Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street P.O. Box 1900 Orlando, FL 32802-1900 Jack McRay, General Counsel Department of Professional Regulation Northwood Centre, Suite 60 1940 North Monroe Street Tallahassee, FL 32399-0792
The Issue The issue presented is whether a broker and active firm member for a corporate real estate broker can be held accountable for the wrongful handling of escrow funds by non-registered persons after the broker has resigned his employment and notified the Florida Real Estate Commission (FREC) of his resignation when another active firm member is not qualified by the corporation prior to the effective date of the broker's resignation.
Findings Of Fact Telfair is a registered real estate broker holding registration 0087817 issued by the FREC. Telfair was employed by LTP as the firm's sole broker and active firm member. LTP was a registered corporate broker. Telfair was not a corporate officer of LTP. The monies at issue in this case were deposited to the escrow account of LTP, pursuant to pending real estate contracts. These monies were maintained properly in the escrow account at all times during the period that Telfair was an active firm member. On February 14, 1975, Telfair gave notice to Frank Carcaise, President of LTP, that he was going to resign effective March 1, 1975. A copy of Telfair's letter of resignation to Carcaise as an active firm member and broker for LTP was forwarded to the FREC. On March 1, 1975, Telfair did resign, severed his relationship with LTP, removed himself from the business premises, together with his property. Prior to that date, he had advised Carcaise of the necessity to obtain a broker to serve as an active firm member for LTP, but Telfair was never replaced by Carcaise. As of the date of Telfair's resignation, there were sufficient funds on deposit in the LTP escrow account to meet all obligations against the account. On June 4, 1975, Carcaise directed the corporate bookkeeper, in writing, to issue a check transferring the escrow funds to Gateway Consultants. The bookkeeper, who had refused to issue any checks without written direction, called Telfair and asked him what she should do. Telfair suggested that she report this matter to the FREC, and Telfair volunteered to accompany her to Orlando to the FREC offices. On June 5, 1975, the bookkeeper, and Telfair met with Mr. Jones of the FREC legal staff and advised him of the removal of the escrow funds and showed him the corporate books which the bookkeeper had brought with her. Jones advised them that there was nothing which could be done because no demand had been made for the funds, and there had been no failure to deliver the funds by LTP. The funds were transferred, demand was subsequently made for the escrow funds by LTP's client, and they were not paid. Subsequently, the FREC brought the instant complaint against Telfair.
Recommendation Based upon the foregoing findings of fact and conclusions of law, the Hearing Officer recommends that no action be taken against Robert M. Telfair by the Florida Real Estate Commission. DONE and ENTERED this 6th day of October, 1977, in Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Bruce I. Kamelhair, Esq. Florida Real Estate Commission 2699 Lee Road Winter Park, FL 32789 Joseph A. Scarlett, Esq. 210 East New York Avenue DeLand, FL 32720
Recommendation The Hearing Officer, based upon the foregoing Findings of Fact and Conclusions of Law, recommends that the Real Estate Commission accept the application of Harry A. Yeargin. DONE and ORDERED this 16th day of September, 1976 in Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Randy James Schwartz, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 W. O. Birchfield, Esquire 3000 Independent Square Jacksonville, Florida 32202
The Issue The issue in this case is whether Respondents are guilty of mishandling an escrow deposit.
Findings Of Fact Respondent Vu is and was at all material times a licensed real estate broker, holding Florida license number 0394778. He is and was at all material times the qualifying broker for Respondent American Homes and Investment Realty, Inc., which holds Florida license number 0250718. Respondent Vu owns Respondent American Homes. In 1990, Mr. and Mrs. Serge Delisfort contacted Respondents about purchasing a residence. The Delisforts eventually signed a contract to purchase a home and paid the $500 earnest money deposit to Respondents. Later learning that they would be liable to pay an annual homeowners' fee of $72, the Delisforts told Respondent Vu that they did not want to complete the purchase. The listing broker, which was not either Respondent, omitted mention of the homeowners' fee from the listing information supplied Respondents and the Delisforts. The sellers refused to release the deposit. Confronted with the dispute, Respondent Vu promptly requested an escrow disbursement order from the Florida Real Estate Commission on March 29, 1991. Due to the presence of a factual or legal dispute, the Florida Real Estate Commission informed Respondents, in a 47-word letter dated October 16, 1991, that it could not issue an escrow disbursement order. The October 16 letter warns Respondents to "immediately choose one of the other two alternatives available to you under ss. 475.25(1)(d), Florida Statutes, to settle this dispute, i.e., arbitration or a civil court." Instead, Respondents did nothing. The Delisforts periodically contacted Respondent Vu and asked if he could release their deposit. The sellers sold their house to another party and moved to Puerto Rico. The Delisforts contacted another broker and purchased a different house through the new broker. Eventually, the Delisforts contacted the Florida Real Estate Commission and asked its help in obtaining the deposit. An investigator for the Division of Real Estate interviewed Respondent Vu on March 1, 1994. Explaining the reason for the delay, Respondent Vu, possibly confused, stated that the buyers had left Orlando for awhile. In fact, the buyers had remained in Orlando. At the suggestion of the investigator, Respondent Vu contacted both parties, and they agreed to split the deposit equally. Respondent Vu prepared the paperwork, which the parties signed on March 11, 1994. At that time, Respondents paid each party $250. The Delisforts have since listed their home for sale by Respondents. While improperly holding the $500 deposit, Respondent Vu was preoccupied by the illnesses and deaths of his parents, who remained in Vietnam. Despite the possibility of trouble upon his return to Vietnam, Respondent Vu traveled to Vietnam at least once during this time to care for one or both of his parents. Respondents failed to implement timely the remedies established by law and identified by the Florida Real Estate Commission in its letter of October 26, 1991. Respondent Vu acted two and one-half years later, only after one of Petitioner's investigators contacted him. It is no excuse that the costs of arbitration or court would have consumed a large part of the amount in dispute. Confronted with that prospect, the sellers or the Delisforts would probably have settled the matter. If not, that would have been their problem, not Respondents'. The fact is that Respondents failed to discharge their obligations by presenting the dispute for resolution in a timely fashion. Nonetheless, the amount involved is modest. Neither party had a clear claim to the funds, nor was either party exceptionally troubled by Respondents' casual handling of the matter. The Delisforts contacted the Florida Real Estate Commission, but did not realize that they were in effect filing a complaint against Respondents, in whom they entrusted the sale of their current home. A final order issued July 18, 1988, involves Respondents' mishandling of a salesperson's commission. The husband of the salesperson owed Respondent Vu some money, and both men agreed that the debtor's wife would work off the debt by selling real estate at Respondent American Homes. However, the debtor's wife was of a different mind. After earning her first commission, she refused to allow Respondents to credit it against her husband's debt. When Respondent Vu ignored her demand for payment, she filed a complaint, which resulted in the final order and Respondents' proper payment of the commission.
Recommendation It is hereby RECOMMENDED that the Florida Real Estate Commission enter a final order finding both Respondents guilty of violating Section 475.25((1)(d)1, reprimanding both Respondents, and requiring Respondent Vu to take a thirty-hour broker management course. ENTERED on February 22, 1995, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings on February 22, 1995. COPIES FURNISHED: Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32802-1900 Steven W. Johnson, Senior Attorney Department of Business and Professional Regulation Division of Real Estate Legal Section--Suite N-308 Hurston Bldg., North Tower 400 West Robinson Street Orlando, FL 32802-1772 Dau Viet Vu 1048 Pine Hills Rd. Orlando, FL 32808
