Findings Of Fact The Respondent licensee, Martin County Properties, Inc., was at all times material registered with the Commission as a real estate corporate broker and the Respondent licensee, Jackson L. Smith, was at all times material registered with the Commission as a real estate broker. On May 8, 1974, the G. H. I. Inc., as purchaser, offered to purchase property described as: "132 plus or minus lots, Parcel #1, and 154 plus or minus acres, Parcel #2, in the County of Okeechobee" for a purchases price of $567,600.00 from Nachman Tevlo, et al., seller. Accompanied with this officer, the corporation submitted a $10,000.00 security deposit to be held in trust by the Respondent, Martin County Properties, Inc. In count one of the complaint, it is alleged that the Respondents failed to place that deposit in a trust or escrow account and that on December 31, 1974, Respondent Smith issued a check to the buyer for $7,700.00, which was drawn from its escrow account and that said check was returned for insufficient funds. The complaint alleges that at the time of issuing this check, the Respondent Smith overdrew the firm's escrow account by $402.80 and that by reason thereof, Respondents are guilty of failing to immediately place upon receipt the monies received from persons they dealt with as brokers in an escrow account in violation of Section 475.25(1)(i), Florida Statutes. Robert F. Cochran, Secretary-Treasurer of G.H.I., Inc., the corporate purchaser, acknowledged tendering the deposit in connection with the above referenced transaction. The proposed offer was conditioned on acceptance by two undisclosed partners of which the corporate purchaser had no knowledge of and Respondent Smith was advised to retain the deposit check until such time as the two undisclosed partners accepted the terms of the contract. Respondent Smith was unable to obtain such approval from the undisclosed partners and when the transaction fell through, Respondent returned the original deposit check within one week of the time that he advised the purchasers that the proposed offer was not accepted. Mr. Cochran had no recollection of Respondent Smith ever tendering him a check drawn in the amount of $7,700.00 as alleged in count one of the administrative complaint. (See Commission's Exhibit #1). In count five of the administrative complaint, the Commission alleges in pertinent part that Respondent Smith issued Dwight L. Clemons a check from his trust account drawn in the amount of $4,842.95, which created a deficit in his escrow account of $1,202.20. By such act, it is alleged that the Respondent failed to maintain sufficient monies in his escrow or trust bank account, monies received and entrusted to them by persons dealing with them as brokers until disbursements are properly authorized in violation of Subsection 475.25(1)(i), F.S. Mr. Clemons acknowledged the transaction with Respondent Smith in which he received a return of an escrow deposit in the amount of $4,842.95 which was received in the form of a check which was returned by the bank for "uncollected funds." Mr. Clemons testified that he presented the check to the bank and knowing Respondent Smith, tendered the necessary funds to cover the deficiency and that Respondent Smith returned his money approximately one week later. (See Commission's Exhibit 2). In count six of the administrative complaint, it is alleged that William A. and Agnes Foster, as buyers, made an offer to purchase one half of a duplex in Jensen Beach, Florida, and to secure such offer, they made a security deposit of $1,000.00 to Respondent Smith. It is alleged that Respondent Smith failed to deposit the $1,000.00 in his escrow account and on October 10, 1974, he deposited only $500.00 in his account from this transaction. By reason thereof, it is alleged that the Respondent failed to immediately place in his escrow or trust bank account, upon receipt, monies etc. entrusted to him until disbursements thereof were properly authorized in violation of Subsection 475.25(1)(a), F.S. William Foster acknowledged the subject transaction and his tender of the $1,000.00 deposit. He testified that the seller, Miriam Fell, accepted his offer on or about November 8, 1974, and that the transaction closed without difficulty. However, an examination of Martin County Properties, Inc., trust account statement for the month ending October 1, 1974, reveals that on October 10, 1974, a $500.00 credit was entered on the subject trust account and an examination of the September 4, 1975, check drawn in the amount of $1,000.00 and issued by William A. Foster revealed that the check was deposited in Martin County Properties' trust account on October 10, 1974, the same date that the $500.00 deposit appears on the October trust account statement. Count eight alleges in pertinent part that Respondent Smith received an escrow deposit of $2,500.00 from Jansje Welm, toward the purchase of the "Gideon Property" on Indian River Drive in Jensen Beach. It is further alleged that approximately eight (8) days later, without permission of Jansje Welm, Respondent issued to Martin County Properties, Inc., a check in the sum of $1,000.00 which left a balance in his escrow account of approximately $1,597.00 and that by reason thereof, Respondent Smith is guilty of failing to maintain in an escrow or trust bank account monies received from persons dealing with him as a broker, where such funds should have been kept until properly disbursed or otherwise authorized, in violation of Subsection 475.25(1)(i), F.S. Mrs. Welm testified that she advanced Respondent Smith, a $2,500.00 deposit to secure an offer which she was led to believe consisted of a syndication of approximately six or either others who were interested in purchasing the "Gideon Properties." The transaction did not close and as of the hearing date she had not received a refund or her escrow deposit. An examination of Respondent Martin Counties, Inc., trust account for the month ending December 31, 1974, reveals that a $2,500.00 deposit was made on approximately December 12, 1974, and that for the month ending December 31, 1974, the account was overdrawn by $402.80. This of course covers the time period in which Mrs. Welm had tendered her $2,500.00 deposit toward the "Gideon Properties" and at no time during the period December 6 through December 31, did the statement reveal that Mrs. Welm's deposit was returned. It was noted that a deposit was made during the period December 23 through 27, in the amount of $5,000.00, however, this deposit apparently failed to clear based on insufficient funds. (See, Commission's Exhibit #9). It was also noted that the $2,500.00 check issued by Mrs. Welm was honored by her bank on December 16, 1974, and that during the period in which she drew her check i.e., December 9 through December 23, 1974, the firm's trust account at no time had a balance in excess of $2,297.20. (See, Commission's Exhibit #6). In count ten it is alleged that Respondent Smith also received from his salesman, Jack K. Follrath, a check in the amount of $2,500.00 to be held in escrow toward the purchase of the Gideon Properties. This check was issued by Jerry Warwin and was made payable to the firm's trust fund. It is alleged that on January 8, 1975, Respondent Smith exchanged that check for a cashier's check at the First National Bank and Trust Company which he placed in his personal account. It is further alleged that on March 18, 1975, Warwin's attorney demanded the return of the $2,500.00 which Warwin received on June 18, 1975. By this act it is alleged that the Respondents are guilty of failure to maintain in their escrow account funds entrusted to them in violation of Subsection 475.25(1)(i), F.S.; and are guilty of forming an intent, design or scheme to defraud, appropriate or otherwise convert properties entrusted to them in violation of Subsection 475.25(1)(a), F.S. Warwin testified that while he gave the Respondents no specific instructions to place the money in an escrow account, he was led to understand that the deposit would be escrowed until the sales transaction for the property closed. He testified that after making repeated demands for the return of his deposit, first by himself and ultimately through his attorney, it was returned. Jack Follrath, a salesman for Jackson County Properties, acknowledged receipt of the $2,500.00 check from Jerry Warwin and expressed his opinion that the money was not to be deposited until sufficient escrow deposits were received to effect the closing. The check representing the deposit made by Jerry Warwin was introduced and an examination thereof reveals that it was drawn on January 5, 1975, in the amount of $2,500.00 and was paid by his bank on January 8, 1975. An examination of the firm's trust account statement reveals that on January 8 a $2,500.00 deposit was in fact made, however, on January 13 the account balance was $293.20 which was the same amount remaining in the account as of January 31, 1975. And, of course, at no time during the period of January 8 through January 31, 1975, was Mr. Warwin's $2,500.00 deposit returned. In count eleven, it is alleged in pertinent part that on February 6, 1975, Respondent Smith issued check no. 259 on his trust account made payable to Commercial Trend Development, Inc., for $750.00 and marked "refund - Carter"; that on February 18, 1975, Respondent Smith deposited from the firm's operating account $457.00 in the said trust account and that on February 23, 1975, the check for $750.00 written previously cleared, leaving a total balance of $18.20 in Respondent Smith's trust account. It is alleged that based on the foregoing, Respondents failed to maintain trust funds in their escrow account until such were properly disbursed in violation of Subsection 475.25(1)(i), F.S. Roy Glancy, the real estate salesman who was involved with the Respondent in connection with the Carter transactions, testified that he intended to purchase a piece of property from the Carters which is located in the Dixie Park Subdivision of South Stuart. He acknowledged payment of the $750.00 deposit and indicated that when the transaction did not close, he received a refund of his deposit. It is alleged in count four that on July 15, 1974, Respondent Smith received a deposit of $2,200.00 to be held in trust on the purchase of property known as the "Krueger" property by C & D Contractors, which he (Smith) deposited in his escrow account; that on July 16, 1974, without the permission of C & D Contractors, issued check no. 236 from his escrow account in the amount of $900.00 payable to Martin County Properties, Inc., leaving a balance in his escrow account of $1,360.83 as of July 31, 1974, which amount represented the closing balance for the firm's escrow account for the month of July. It is further alleged that on September 6, Respondent Smith issued a check drawn on his trust account to C & D Contractors in the amount of $2,200.00 marked "deposit refund on Krueger Property" which was returned for uncollected funds. Thereafter on September 23, 1974, Respondent Smith paid C & D Contractors by cashier's check, the sum of $2,200.00 which represented the earnest money deposit placed on the Krueger property. Robert Coy, President of Coy and Deggeller Construction Co. of Stuart, Florida, testified that he made an offer to purchase the Krueger properties to Respondent Smith which offer was accompanied by an earnest money deposit of $2,200.00. Mr. Coy testified that his offer was tendered to Respondent Smith on July 16, 1974, and that when he did not receive any notification from Respondent Smith regarding whether or not his offer had been accepted, he demanded the return of the deposit which occurred during early September 1974. Commission's Exhibit #15 reveals that the $2,200.00 deposit above referred to was deposited into Respondent's trust account on the same date on which the check was drawn, i.e., July 16, 1974. (See, Commission's Exhibits #15 and #11). On that same day, a $900.00 check and/or debit was made to the account leaving a balance of $1,360.83. The firm's account statement reveals that this balance ($1,360.83) was constant throughout the period from July 17 to July 31. During the period July 17 through July 31, Mr. Coy did not receive a refund of his $2,200.00 deposit. Mrs. Betty White, the head bookkeeper of Jensen Beach Bank, the banking institution in which the Respondent Martin County Properties, Inc., maintains its trust account, testified that she provided the firm's account statements pursuant to subpoena and that the account's statements were under her custody and control, and that they were kept and maintained during the normal course of the bank's business. While the Respondent's counsel objected to the introduction of copies of the firm's trust account statements, Mrs. White creditably testified that the original of such account statements were forwarded to the firm (depositor) at the end of each month and that the bank has at its disposal, only microfilm of the originals. Based thereon, Respondent's counsel's objection to the introduction of copies was overruled.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is hereby recommended as follows: That the Respondents be found not guilty of the allegations contained in counts one, two, three, seven, nine and eleven of the administrative complaint and, therefore, that they be dismissed. That the Respondents be found guilty of the allegations contained in counts four, five, six, eight, ten, twelve and thirteen of the administrative complaint filed by the Petitioner. That the Respondent Smith's registration with the Florida Real Estate Commission as a real estate broker be revoked. That the Respondent Martin County Properties, Inc.'s, registration as a real estate corporate broker with the Florida Real Estate Commission be revoked. DONE AND ENTERED this 30th day of March 1977 in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of March 1977. COPIES FURNISHED: Frederick H. Wilsen, Esquire 2699 Lee Road Winter Park, Florida 32789 R. J. Randolph, Sr., Esquire R. Jerry Randolph, Jr., Esquire Randolph and Randolph, P.A. 201 East Osceola Street Stuart, Florida 33494
Findings Of Fact The Department is the state agency charged with the licensing and regulation of real estate brokers. Respondent's real estate broker license number 0325307 was active in Florida between October 1985 and November 1987. During this period, the business address registered at the Department for AmBest Realty was: 333-31st Street North #24, St. Petersburg, Florida 33713. Respondent was the qualifying broker for this real estate firm. The real estate office at the above-mentioned address was officially closed by Respondent in November 1987. At this particular time, there had been a decrease in real estate sales throughout the state. Respondent changed careers and became a long haul trucker in order to provide for his family under the then prevailing real estate market conditions. Post Office Box 12811, St. Petersburg, Florida 33733, was acquired by Respondent in November 1987 so that he could continue to receive communications regarding his former real estate practice, if necessary. His current profession as a long haul trucker frequently required his absence from the state for days at a time. The use of the post office box allowed him to review all correspondence regarding AmBest Realty whenever he returned to St. Petersburg, Florida from his trucking route. Respondent did not surrender or account for his license to the Real Estate Commission when he closed or moved his real estate business to his home in November 1987. By statute, Respondent was required to do so within 10 days of the address change or office closure. Notification to the Board should have been done by Respondent on a form provided by the Real Estate Commission for that purpose. Respondent's license ceased to be in force when he closed the real estate office at 333-31st Street North #24, St. Petersburg, Florida. In March 1988, Respondent attempted to allow his broker license to automatically revert to inactive status, pursuant to Section 475.182(3), Florida Statutes [1987]. Although this decision ignored the previous deactivation of the license, it corroborates Respondent's testimony that the office closed in November 1987. When Respondent attempted to place the license in an inactive status in March 1988, it was his intention to reactivate his license within a four-year period if the real estate market recovered from its slump. Respondent notified the Department of his new mailing address at the post office box prior to his attempted placement of the license in an inactive status. Respondent's failure to notify the Board of the change in his business address caused the Board to improperly rely on that business address as the proper location for office inspections and the Department's review of escrow/trust accounts. In August of 1990, an investigator with the Department unsuccessfully attempted to contact the Respondent at the registered business address at 333- 31st Street North #24, St. Petersburg, Florida. The real estate office and a real estate sign were no longer at the location. Respondent was later contacted by the investigator through the home address previously listed on his license that had been replaced in March 1988 by the post office box number. The investigator requested Respondent make his escrow trust account records and supporting documentation available for inspection. Respondent advised that he was unable to comply with the request as his original escrow trust account records had been stolen in a garage burglary in late November 1987. No effort was made by Respondent to reconstruct or to aid in the reconstruction of the missing records. No additional mitigating factors were presented at hearing other than the break-in to the location where Respondent stored his original escrow trust account records.
Recommendation Based upon the foregoing, it is RECOMMENDED: That Respondent, James E. Willis t/a AmBest Realty be found not guilty of Count I of the Administrative Complaint. That Respondent be found guilty of violation of Section 475.25(1)(e), Florida Statutes, as set forth in Count II, based upon his failure to preserve and make available to the Department all escrow trust account records with supporting documentation, as required by Rule 21V-14.012(1), Florida Administrative Code. That the privilege of Respondent Willis to reinstate his real estate broker's license be suspended for three years, subject to a reduction in the suspension term if the escrow trust account records are reconstructed and presented to the Board. DONE and ENTERED this 14th day of January, 1992, in Tallahassee, Leon County, Florida. VERONICA E. DONNELLY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of January, 1992. COPIES FURNISHED: JAMES H GILLIS ESQUIRE DPR - DIVISION OF REAL ESTATE 400 W ROBINSON ST ORLANDO FL 32801 1772 JAMES E WILLIS, AMBEST REALTY PO BOX 12811 ST PETERSBURG FL 33733 2811 DARLENE F KELLER/EXECUTIVE DIRECTOR DPR - DIVISION OF REAL ESTATE 400 W ROBINSON ST ORLANDO FL 32801 1772 JACK McRAY ESQ/GENERAL COUNSEL DEPT OF PROFESSIONAL REGULATION 1940 N MONROE ST TALLAHASSEE FL 32399 0792
The Issue Whether the real estate license of Respondent, Larry L. Morris, should be disciplined for: Advertising property or services in a manner which is fraudulent, false, deceptive, or misleading in form or content in violation of Subsection 475.25(1)(c), Florida Statutes (1998); Failure to prepare required written monthly escrow statement-reconciliations in violation of Rule 61J2-14.012(2) and (3), Florida Administrative Code, and, therefore, in violation of Subsection 475.25(1)(e), Florida Statutes (1998); Using a trade name without proper registration in violation of Rule 61J2-10.034, Florida Administrative Code, and, therefore, in violation of Subsection 475.25(1)(e), Florida Statutes (1998); and Depositing or intermingling personal funds with funds being held in escrow or trust or on condition in violation of Rule 61J2-14.008(1)(c), Florida Administrative Code, and, therefore, in violation of Subsection 475.25(1)(e), Florida Statutes (1998); Whether the real estate license of Respondent, Investment Marketing, Inc., a Florida Corporation, should be disciplined for: Failure to prepare required written monthly escrow statement-reconciliations in violation of Rule 61J2-14.012(2) and (3), Florida Administrative Code, and, therefore, in violation of Subsection 475.25(1)(e), Florida Statutes (1998); and Depositing or intermingling personal funds with funds being held in escrow or trust or on condition in violation of Rule 61J2-14.008(1)(c), Florida Administrative Code, and, therefore, in violation of Subsection 475.25(1)(e), Florida Statutes (1998).
Findings Of Fact Upon consideration of oral and documentary evidence received at the hearing, the following relevant findings of fact are made: Petitioner, Department of Business and Professional Regulation, Division of Real Estate, is the State of Florida agency which licenses and regulates real estate professionals pursuant to Section 20.165, Florida Statutes (1998), and Chapters 120, 455, and 475, Florida Statutes (1998), and the rules in the Florida Administrative Code promulgated pursuant thereto. Respondent, Larry L. Morris (hereinafter "Morris"), is now, and was at all times material hereto, a licensed real estate broker in the State of Florida holding License No. 0061891. Respondent, Investment Marketing, Inc., a Florida Corporation (hereinafter "Investment Marketing"), is now, and was at all times material hereto, a licensed real estate broker holding License No. 0233721. At all times material hereto, Morris was an officer of Investment Marketing and its qualifying broker. Morris has agreed by stipulation that he is a real estate broker and subject to the jurisdiction of Petitioner during the period of the acts alleged in the Administrative Complaint filed in this case. In 1989, a company that Morris had an interest in, Sunset Harbour Condominium Development Company, purchased 57 condominium units in the 72-unit Sunset Harbour Condominium (hereinafter "Condos"). Subsequent to the initial purchase of 57 units, Sunset Harbour Condominium Development Company acquired 10 additional units which were in foreclosure. Sunset Harbor Condominium Development Company subsequently sold all units it owned in Condos. Morris continues to own one unit in Condos. Respondents managed Condos and were sales and rental agents for Condos pursuant to a verbal agreement with the Sunset Harbour Condominium Association. When Condos was acquired, Morris either personally or through an entity in which he had ownership, acquired a tract of land contiguous to Condos on which Sunset Harbour Villas (hereinafter "Villas") was developed by Morris in 1987-1989. Respondents were rental and sales agents for Villas. Condos had the following amenities which are relevant to this case: a swimming pool, a gazebo, and a 200-foot fishing pier. Villas has the following amenities which are relevant to this case: a swimming pool and a clubhouse. Morris testified that he hoped to "integrate the amenities between the two condominium properties." According to Morris, "the Board of Directors has the right to do that [a cross-use of amenities] on a year-to-year basis." Morris had brochures printed in 1997 for Villas which advertised the following amenities: Two swimming pools; Clubhouse; Gazebo; and, a 200-foot pier. Morris testified that when he realized that there would be no integration or cross-use of the amenities of Condos and Villas which made the brochure inaccurate, he redacted, using a "magic marker," the inappropriate amenities from the brochure. In 1997 or 1998, during the construction start-up of Villas, David Woodard obtained an unredacted copy of the brochure at Morris' office. Woodard did not see any redacted brochures. In January 1999, Benjamin Clanton, a Division of Real Estate Investigator, obtained an unredacted copy of the brochure from Morris' office. He also saw redacted brochures in the office. Gene Daughtry, an employee of Investment Marketing, testified that [at some non-specified date] he redacted about 2500 out of 3000 - 4000 brochures and that he never gave a prospective buyer a brochure which had not been redacted. On January 27, 1999, Mr. Clanton performed an audit on Respondents' security account (escrow/trust account). Morris made the requisite information available to him although the escrow liability lists had to be reconstructed. Mr. Clanton discovered that the monthly reconciliations had been done improperly. The trust liability account balance was $3,400.31; the reconciled bank balance was $4,320.31. There was $920.50 in excess funds in the escrow account. On February 10, 1999, Morris wrote Mr. Clanton a letter in which he stated that the excess funds "came from monies that were paid to Investment Marketing for utility bills, etc., that were paid for owners to keep their utilities from being disrupted, and Investment Marketing was never reimbursed. The other overage amounts came from unpaid rental commissions." Morris acknowledged that the monthly escrow reconciliations were not done exactly right and testified that, "I'm guilty." On April 26, 1994, Florida Department of Business and Professional Regulation, Division of Real Estate, filed an Administrative Complaint against Larry L. Morris and Investment Marketing, Inc., which alleged that escrow account irregularities had been discovered during a February 4, 1994, audit (Case Nos. 94-80988, 94-81264). On July 14, 1994, Florida Department of Business and Professional Regulation, Division of Real Estate, and Larry L. Morris and Investment Marketing, Inc., entered into a stipulation which stated inter alia: Respondents neither admit nor deny the allegations contained in the Administrative Complaint, nor that if true, they support a finding of a violation of the Real Estate License Law. Respondents shall not in the future violate Chapters [sic] 455, Florida Statutes, or the Real Estate License Law, or Rules promulgated pursuant thereto. Respondent Larry L. Morris shall be fined $3,000. The fine shall be made payable to the Department of Business and Professional Regulation, Division of Real Estate, within thirty (30) days from the date of filing of the Final Order, or the Respondent's licenses, registrations, certificates, and permits shall be suspended until such fine is paid. This suspension period shall not exceed ten years. Respondent Larry L. Morris shall provide original evidence of having satisfactorily completed a 30- hour broker management post-licensure education course within one year. These education hours are in addition to the hours required to maintain your real estate license. Should these education hours not be completed within the required one-year period all Respondent's licenses, registrations, certificates, and permits shall be suspended until satisfactory evidence that such education hours are successfully completed and that the original grade report from the real estate school has been received by the Florida Division of Real Estate. Respondents Larry L. Morris and Investment Marketing, Inc., shall be reprimanded. * * * The action reflected in the Final Order shall be published in the FREC News and Report as follows: Destin: Larry L. Morris; broker: Reprimanded; fined $3,000; 30 hr. bk. mgmt. course within 1 yr.: Investment Marketing, Inc.: Reprimanded: failed to maintain sufficient funds in escrow account; failed to properly prepare the required written monthly escrow statement-reconciliations. On December 3, 1998, the following advertisement appeared in the Pensacola News-Journal classified advertising section: NAVARRE BEACH Waterfront and Waterview Condos for Sale and Lease. Sale prices starting at $68,900. Long and short term rentals also available. Pool, fishing pier, gazebo, and clubhouse Sunset Villas Development Co. 800-939-1887 Morris testified that he believed the name Sunset Villas Development Company was registered with the Florida Real Estate Commission. Morris testified that the errors made in the December 3, 1998, ad were made by the Pensacola News-Journal. The newspaper failed to include "Investment Marketing, Inc.", but included Investment Marketing's broker's phone number. Morris maintains that this ad is for both Villas and Condos. Subsequent to the January 27, 1999, audit, Morris made changes in his bookkeeping procedures. Mr. Clanton conducted a later audit which revealed appropriate escrow account management.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Petitioner enter a final order finding Morris guilty of violating Subsection 475.25(1)(c), Florida Statutes (1998); Rule 61J2-14.012(2) and (3), Florida Administrative Code, and, therefore, Subsection 475.25(1)(e), Florida Statutes (1998); Rule 61J2-14.008(1)(c), Florida Administrative Code (1998); and, therefore, Subsection 475.25(1)(e), Florida Statutes (1998); finding that Morris did not violate Rule 61J2-10.034, Florida Administrative Code, and, therefore, Subsection 475.25(1)(e), Florida Statutes (1998); dismissing Count IV of the Administrative Complaint; finding Investment Marketing guilty of violating Rule 61J2-14.012(2) and (3), Florida Administrative Code, and, therefore, Subsection 475.25(1)(e), Florida Statutes (1998), and Rule 61J2-14.008(1)(c), Florida Administrative Code, and, therefore, Subsection 475.25(1)(e), Florida Statutes (1998); imposing a penalty of $1,000 per count, resulting in $3000.00 for Morris and $2,000.00 for Investment Marketing; suspending Morris' license for one year; and reprimanding Investment Marketing. DONE AND ENTERED this 21st day of February, 2001, in Tallahassee, Leon County, Florida. JEFF B. CLARK 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 21st day of February, 2001. COPIES FURNISHED: Nancy P. Campiglia, Esquire Department of Business and Professional Regulation 400 West Robinson Street Hurston Tower, Suite N308 Orlando, Florida 32801-1772 Steven W. Johnson, Esquire 1801 East Colonial Drive, Suite 101 Orlando, Florida 32803-4820 Herbert S. Fecker, Division Director Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Hardy L. Roberts, III, General Counsel Department of business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact On December 30, 1993, the Department received an application to organize a proposed new trust company to be located in Miami, Dade County, Florida, and to be called Columbus Trust Company (Columbus). Four individuals to be associated with Columbus are foreign nationals: Arturo Vinueza and Mario Yepes are proposed board of directors members; and Catalina Landes and Pedro Ycaza are major stockholders of Columbus. All other directors and stockholders of Columbus are citizens of the United States. They are: Charles C. Hardwick, III, Michael Hollihan, and Timothy S. Reed. All of the individuals listed in paragraphs 2 and 3 attended the public hearing. Mr. Vinueza is the proposed chief executive officer for Columbus. He is a graduate of the University of Miami and has more than thirteen years of banking and trust experience. Mr. Vinueza has served as manager or managing director of Citibank, N.A., Quito, Ecuador; Banco Popular International, Nassau; The Jersey Private Bank and Trust, Nassau; and Banco Popular del Ecuador, Miami Agency. Charles C. Hardwick, III, a proposed director, is a graduate of the University of Colorado, College of Law. He has more than twelve years of experience in international finance. Timothy S. Reed, a proposed director, is a graduate of Dartmouth College, and is a career banker, having retired from Citibank, N.A., New York, after more than thirty years of continuous service. He has served as general manager of Banco Popular del Ecuador, Miami Agency, for the past three years. Michael Hollihan, a proposed director who will serve as chief investment officer, has a degree in economics from the University of Wisconsin. He has completed graduate course work in economics at the University of South Carolina, and has been engaged in the business of international trade, finance and investments for more than twenty years. Mr. Hollihan was previously employed by Banco Central del Ecuador. For the past four years he has served as President of JPBT Advisors, Inc. in Miami. Mario Yepes, a proposed director, also has a degree in economics and was a teacher at the university of Colombia. He worked for a number of years for Bank of America, both in Miami and in Venezuela. Catalina Echevaria Landes, a major stockholder, is a business woman and interior designer. She has her own business located in Miami. Pedro Ycaza, a major stockholder, has a degree in business from a university in Ecuador. He worked for various banks in Ecuador for a number of years before joining Banco Popular in 1986. The Applicants seek to organize Columbus to provide trust services and investment management services to individuals having business or personal interests in the Miami area, and to JPBT Advisors, Inc. JPBT Advisors, Inc. advises certain mutual funds specializing in international investments. The Applicants propose to expand such services gradually to include private banking and investment management services to international investors residing or doing business in Miami and Dade County, Florida. The existing business of JPBT Advisors, Inc., which has annual revenues of approximately $3 million, will contribute to the income of Columbus during its initial period of operations as the bank develops its personal trust and investment management business. The proposed board of directors consists of individuals having many years of banking and business experience in the areas of international finance and asset management. Both Mr. Vinueza, the proposed chief executive officer, and Mr. Reed, a proposed outside director, have had direct experience as officers of financial institutions within the past three years and are presently employed in such capacities. The initial capital for Columbus will be $2 million. The initial capitalization of Columbus is adequate in relation to is proposed business activities. The corporate name of Columbus is reserved with the Department of State. Columbus will have suitable quarters in the Barnett Bank building located at 701 Brickell Avenue, Miami. Columbus' application was prepared by Richard Hunt, a financial consultant, who has been engaged in the business of providing such consulting services to organizing financial institutions for more than 25 years. The economic study and demographic analysis of the market for fiduciary services in Dade County, prepared by Mr. Hunt, concluded that the organization of Columbus will serve the convenience and advantage of its expected clients. The local conditions in Miami are favorable to Columbus' business plan. DONE AND ENTERED this 7th day of March, 1995, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH 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 7th day of March, 1995. APPENDIX TO REPORT OF PUBLIC HEARING, CASE NO. 94-6306 All proposed findings of fact were submitted by stipulation of the Department and Columbus. COPIES FURNISHED: Hon. Robert F. Milligan Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 Harry Hooper, General Counsel Department of Banking and Finance The Capitol-Room 1302 Tallahassee, Florida 32399-0350 Rod Jones Shutts and Bowen 20 North Orange Avenue, Suite 1000 Orlando, Florida 32801 Albert T. Gimbel Chief Banking Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 Jeffrey D. Jones Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE DIVISION OF BANKING IN RE: Application for Authority to Organize a State Chartered Trust Administrative Proceeding Company to be located at Number: 3328-B-11/94 701 Brickell Avenue, Miami, DOAH Case Number: 94-6306 Dade County, Florida (Columbus Trust Company) / FINDINGS OF FACT, CONCLUSIONS OF LAW AND FINAL ORDER Having considered the facts and information contained in the application for authority to organize and operate Columbus Trust Company (Applicant), 1 have determined that the Applicant has met all six (6) statutory criteria set forth in Section 658.21, Florida Statutes, or can meet those criteria by complying with specific conditions. Accordingly, the application is approved, subject to the conditions specified herein.
The Issue The issues for determination in this proceeding are whether Respondent violated Sections 475.25(1)(b), (d), (e), and (k), Florida Statutes, 1/ by committing the acts alleged in two administrative complaints; and, if so, what, if any, penalty should be imposed.
Findings Of Fact 1. Petitioner is the governmental agency responsible for issuing licenses to practice real estate and for regulating licensees on behalf of the state. Respondent is a licensed real estate broker under license number 0377781. The last license issued to Respondent was issued as a broker at Wilson Realty International, 1059 Aurora Road, Melbourne, Florida 32935. The Myrie Transaction On July 22, 1993, Respondent negotiated a property management agreement with Harold E. and Bernia L. Myrie (the "Myries") who are residents of New York. Pursuant to the property management agreement, Respondent agreed to manage a rental house owned by the Myries and located in Florida (the "Myrie property"). On August 20, 1993, Respondent negotiated a lease agreement for the Myrie property with Mr. Eric A. Bogle and Ms. Jearlene Davis, as tenants. The tenants paid Respondent $2,590.60 in rental payments for the period August 20 through November 18, 1993. Respondent failed to deposit the rental payments into her escrow account. On November 19, 1993, Respondent issued check number 1501 to the Myries in the amount of $562.50. Respondent represented to the Myries that $562.50 was the net amount due them. The Myries deposited check number 1501. However, the check was returned for insufficient funds. Respondent replaced check number 1501 with another check for $562.50. There were sufficient funds to cover the second check. On December 29, 1993, the Myries cancelled their property management agreement with Respondent. They demanded the balance of $2,028.10. Respondent claimed that $562.50 was the total amount Respondent owed the Myries. Respondent represented that she had incurred expenses for repairs and maintenance to the Myrie property. Respondent never provided an accounting of either the rental proceeds received from the tenants or the alleged expenses for repairs and maintenance. 2/ Respondent failed to produce documents Petitioner needed to conduct an audit of her escrow account. Respondent failed to produce deposit receipts for rent and cancelled checks and written receipts for expenses incurred by Respondent. After Respondent failed to comply with two requests to produce the records Petitioner needed to conduct an audit, Petitioner subpoenaed Respondent's records on August 1, 1994. 3/ Respondent agreed to produce her records for review and audit on August 12, 1994. However, Respondent failed to keep her appointment and never produced the documents subpoenaed by Petitioner. 4/ Respondent misappropriated $2,028.10 paid to her by the tenants and converted those funds to Respondent's personal use. The tenants paid those funds to Respondent in trust for the Myries. The Myries authorized Respondent to collect those funds in trust and to remit the funds to them. Respondent breached the trust of both parties in a business transaction within the meaning of Section 475.25(1)(b). Respondent misrepresented and concealed her use of escrow funds for personal purposes. Respondent engaged in false pretenses to justify her misappropriation and conversion of the escrow funds. Respondent's failure to account for escrow funds paid to her in the Myrie transaction and her failure to produce records needed by Petitioner to audit Respondent's account is culpable negligence. When considered in their totality, the acts committed by Respondent in the Myrie transaction constitute fraud and dishonest dealing by trick, scheme, or device within the meaning of Section 475.25(1)(b). Respondent failed to timely account or deliver rental trust funds within the meaning of Section 475.25(1)(d). Respondent failed to preserve and make available to Petitioner all books, records, and supporting documents and failed to keep an accurate account of all trust fund transactions within the meaning of Florida Administrative Code Rule 61J2-14.012(1). 5/ Respondent failed to maintain trust funds in her real estate brokerage escrow account until disbursement was authorized within the meaning of Section 475.25(1)(k). 2. The Timoll Transaction In June, 1993, Respondent negotiated a property management agreement with Lawrence and Sheila Timoll (the "Timolls") who were residents of New York. Pursuant to the property management agreement, Respondent agreed to manage a rental house owned by the Timolls and located in Florida. (the "Timoll property"). On July 14, 1993, Respondent procured tenants for the Timoll property. William and Sambri Dulmage (the "Dulmages") executed a one year lease. Pursuant to the terms of the lease, the Dulmages agreed to pay a security deposit of $625 and rent at the monthly rate of $600. Respondent received $4,800 from the Dulmages as payment of rent, a security deposit, and expenses associated with the Timoll property. Respondent never delivered any part of the $4,800 to the Timolls. Respondent represented to the Timolls that they were not entitled to any of the $4,800 because the Dulmages had vacated the property and stopped paying rent. Respondent also represented that she had incurred expenses for repairs and maintenance to the Timoll property. 6/ The Dulmages in fact occupied the Timoll property for the duration of the lease and timely paid all amounts in accordance with the terms of the lease. The Timolls knew that the Dulmages were complying with the lease and arranged for the rent to be paid directly to the Timolls in February, 1994. With three minor exceptions, 7/ Respondent did not incur expenses for maintenance and repairs to the Timoll property. 8/ From July 14, 1993, through February 22, 1994, the Timolls made repeated demands for Respondent to deliver the rent and security deposit, and to account for the expenses allegedly incurred by Respondent. Respondent produced property accounting forms describing expenses for maintenance and repairs to the Timoll property. With three minor exceptions, the accounting forms provided by Respondent contained fabricated expenses for maintenance and repairs. 9/ Respondent misappropriated $4,419.45 10/ paid to her by the Dulmages and converted those funds to Respondent's personal use. Those funds were paid to Respondent in trust for the Timolls. The Timolls authorized Respondent to collect those funds in trust and to remit the funds to them. Respondent breached the trust of both parties in a business transaction within the meaning of Section 475.25(1)(b). Respondent misrepresented and concealed her use of escrow funds for personal purposes. Respondent engaged in false pretenses to justify her misappropriation and conversion of escrow funds. Respondent's failure to account for the escrow funds paid to her in the Timoll transaction and her failure to produce records needed by Petitioner to audit Respondent's account constitutes culpable negligence. When considered in their totality, the acts committed by Respondent in the Timoll transaction constitute fraud and dishonest dealing by trick, scheme, or device within the meaning of Section 475.25(1)(b). Respondent failed to timely account or deliver rental trust funds within the meaning of Section 475.25(1)(d). Respondent failed to preserve and make available to Petitioner all books, records, and supporting documents and failed to keep an accurate account of all trust fund transactions within the meaning of Rule 61J2- 14.012(1). Respondent failed to maintain trust funds in her real estate brokerage escrow account until disbursement was authorized within the meaning of Section 475.25(1)(k). 3. The Veil Transaction On November 29, 1993, Respondent entered into a short term lease agreement between Respondent, as the landlord, and Herman J. and Joyce Veil (the "Veils") as tenants (the "Veil transaction"). The Veils lived out of state. They paid Respondent a deposit of $1,919.36 to secure the seasonal rental of Unit 511, Ocean Walk Condominiums ("unit 511"). On March 1, 1994, the Veils traveled to Melbourne and discovered that unit 511 was not available. Respondent never provided the Veils with a rental unit of any kind. The Veils demanded the return of their deposit. On March 11, 1994, Respondent issued check number 1127 in the amount of $1,394.01. Respondent represented to the Veils that $1,394.01 was the total amount due. Respondent deducted $525.35 for motel charges allegedly incurred by Respondent to provide the Veils with temporary lodging for 11 days while Respondent attempted to procure an alternate rental for the Veils. The deduction of $525.35 was not authorized by the Veils. The Veils did not agree to pay for their own motel room. In addition, the motel charges deducted by Respondent included charges for two nights paid by the Veils. After Respondent issued check number 1127 for $1,394.01, Respondent ordered the bank to stop payment on the check. The bank erroneously cashed the check and subsequently requested the Veils to return the proceeds. The Veils refused. Respondent misappropriated $525.35 paid to her by the Veils and converted those escrow funds to Respondent's personal use. Those funds were paid to Respondent in trust for the Veils' seasonal condominium. Respondent breached that trust in a business transaction within the meaning of Section 475.25(1)(b). Respondent misrepresented and concealed her use of escrow funds belonging to the Veils. Respondent engaged in false pretenses to justify her misappropriation and conversion of the escrow funds. Respondent's failure to account for escrow funds paid to her in the Veil transaction and her failure to produce records needed by Petitioner to audit Respondent's accounts constitutes culpable negligence. When all of the facts and circumstances surrounding the Veil transaction are considered, Respondent's attempt to stop payment of her check to the Veils constitutes dishonest dealing by trick, scheme, or device within the meaning of Section 475.25(1)(b). Respondent failed to timely account or deliver rental trust funds within the meaning of Section 475.25(1)(d). Respondent failed to preserve and make available to Petitioner all books, records, and supporting documents and failed to keep an accurate account of all trust fund transactions within the meaning of Rule 61J2-14.012(1). Respondent failed to maintain trust funds in her real estate brokerage escrow account until disbursement was authorized within the meaning of Section 475.25(1)(k). 4. The Sella Transaction On February 14, 1994, Respondent procured a construction contract between Militano Construction, Inc. (the "seller"), and Mr. Lino Sella, (the "buyer"). The buyer lived in Italy and required an interpreter for his negotiations with Respondent. On February 14, 1994, the buyer entrusted Respondent with an escrow deposit of $12,250. The buyer authorized Respondent to administer funds entrusted to her because the buyer was in Italy. 11/ On February 15, 1994, Respondent cashed the check for the escrow deposit. Respondent obtained a cashier's check for $12,250 made payable to "Wilson Realty." Respondent then endorsed the cashier's check for her personal use. 12/ In July, 1994, the buyer authorized Respondent to release the escrow deposit to the seller upon issuance of a certificate of occupancy ("CO") by the City of Indian Harbour Beach, Florida (the "city"). The city issued the CO on September 1, 1994. After the city issued the CO, the seller repeatedly made verbal demands for Respondent to deliver the escrow deposit. On September 9, 1994, the seller wrote a letter to Respondent demanding the escrow deposit. On September 13, 1994, the buyer physically inspected the house, found that it was acceptable, and again authorized disbursement of the escrow deposit. The seller again demanded the escrow deposit. Respondent never delivered the escrow deposit. Respondent never accounted for the deposit to the seller, the buyer, or Petitioner. The seller was unable to pay approximately $9,000 to subcontractors used to construct the buyer's house. The subcontractors recorded mechanics' liens against the Sella property and precluded the seller from delivering good and sufficient title to the buyer. The seller's failure to provide the buyer with good and sufficient title precluded the seller from satisfying its obligations under the terms of the contract with the buyer and caused the seller to breach the contract. The buyer incurred legal expenses in an attempt to quiet title to his house. The seller incurred legal expenses in an attempt to recover the escrow deposit from Respondent. Respondent misappropriated a $12,250 escrow deposit in the Sella transaction and converted that escrow deposit for personal use. The escrow deposit was given to Respondent in trust. Respondent breached that trust in a business transaction within the meaning of Section 475.25(1)(b). Respondent misrepresented and concealed her use of the escrow deposit in the Sella transaction. Respondent's failure to account for the escrow deposit and her failure to produce records needed by Petitioner to audit Respondent's escrow account constitutes culpable negligence. When considered in their totality, the acts committed by Respondent in the Sella transaction constitute fraud and dishonest dealing by trick, scheme, or device within the meaning of Section 475.25(1)(b). Respondent failed to timely account or deliver trust funds within the meaning of Section 475.25(1)(d). Respondent failed to preserve and make available to Petitioner all books, records, and supporting documents and failed to keep an accurate account of all trust fund transactions within the meaning of Rule 61J2-14.012(1). Respondent failed to maintain trust funds in her real estate brokerage escrow account until disbursement was authorized within the meaning of Section 475.25(1)(k). 5. The Stanley Transaction In March, 1994, Respondent procured a construction contract between Atlantic Construction, Inc. (the "seller"), and Trevor and Carol Stanley (the "buyers") who are residents of New York. The buyers entrusted Respondent with an escrow deposit of $7,800. The buyers were unable to qualify for a mortgage and terminated the agreement in accordance with the terms of the construction contract. The buyers agreed to forfeit $500 of the escrow deposit to Respondent as real estate commission. On July 12, 1994, the buyers demanded that Respondent return $7,300 of their escrow deposit. Respondent claimed the entire $7,800 escrow deposit and neither delivered the $7,300 agreed to by the buyers nor accounted for any of the escrow deposit. Petitioner was unable to audit Respondent's escrow account. The bank where the escrow account was maintained closed the account because the account was overdrawn. The bank charged off $3,483.45 in overdrawn funds. Respondent misappropriated a $7,300 escrow deposit in the Stanley transaction and converted the escrow deposit to Respondent's personal use. Those funds were given to Respondent in trust. Respondent breached that trust in a business transaction within the meaning of Section 475.25(1)(b). Respondent misrepresented and concealed her use of escrow funds in the Stanley transaction. Respondent's failure to account for the escrow deposit and her failure to produce records needed by Petitioner to audit Respondent's account constitutes culpable negligence. When considered in their totality, the acts committed by Respondent in the Stanley transaction constitute fraud and dishonest dealing by trick, scheme, or device within the meaning of Section 475.25(1)(b). Respondent failed to timely account or deliver trust funds within the meaning of Section 475.25(1)(d). Respondent failed to preserve and make available to Petitioner all books, records, and supporting documents and failed to keep an accurate account of all trust fund transactions within the meaning of Rule 61J2-14.012(1). Respondent failed to maintain trust funds in her real estate brokerage escrow account until disbursement was authorized within the meaning of Section 475.25(1)(k). 6. Respondent's Conduct Respondent evidenced a gross disregard for the rights and property of others, applicable laws, and the legal process. 13/ Respondent's conduct demonstrated culpable intent to commit the offenses for which she is charged. Respondent has made no attempt at restitution to any of the five clients she harmed, and has made no attempt to pay the overdraws charged off by the bank. Respondent has made no attempt to pay the Sella subcontractors or otherwise remove any cloud on the title to the Sella property. Respondent ignored valid subpoenas issued by Petitioner. Respondent engaged in dilatory acts and misrepresentations. Respondent delayed this proceeding through repeated false pretenses that she was represented by counsel who was unable to appear for previously scheduled formal hearings. Respondent participated in this proceeding for a frivolous purpose. There was a complete absence of a justiciable issue of law or fact in Respondent's defense. Respondent's defense was baseless and a sham. It was no more than a stonewall defense presented for the purpose of delay. Respondent failed to show any of the facts asserted in her defense. She called no witnesses and submitted no material exhibits for admission in evidence. Respondent's cross examination of Petitioner's witnesses nominally attempted to create issues but failed to produce any competent and substantial evidence to support those issues. Respondent repeatedly attempted to establish issues either by unsworn representations or by arguing with witnesses during cross examination. Respondent's sworn testimony at the formal hearing was not credible and was unpersuasive. No competent and substantial evidence supported her testimony. Any evidence that Respondent adduced during her testimony, her cross examination of other witnesses, and in her exhibits was immaterial. Respondent's conduct in this proceeding constituted a reckless waste of quasi-judicial resources as well as a waste of the time and money of Petitioner and its witnesses. Many of those witnesses had already lost time and money as a result of Respondent's conduct before this proceeding began.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent guilty of violating Sections 475.25(1)(b), (d)1., (e), and (k); and Rule 61J2- 14.012(1); revoking Respondent's real estate license; and imposing a fine of $20,000. RECOMMENDED this 15th day of November, 1995, in Tallahassee, Florida. DANIEL S. MANRY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of November 1995.
The Issue The issues are whether Respondents committed fraud, in violation of Section 475.25(1)(b), Florida Statutes; failed to prepare monthly trust account reconciliations, in violation of Rule 61J2-14.012(2) and (3), Florida Administrative Code; failed to account for or deliver funds, in violation of Section 475.25(1)(d)1, Florida Statutes; and failed to preserve books and accounts, in violation of Rule 61J2-14.012(1), Florida Administrative Code.
Findings Of Fact At all material times, Respondent Maria L. Nuevo (Respondent) was a licensed real estate broker, holding license number 3006548. Respondent was first licensed, as a real estate salesperson, in Florida in 1984 and became a broker in 1986. Respondent is president of, and qualifying broker for, Respondent Realco Realty, Inc. (Realco Realty), which is a corporation registered as a real estate broker, holding license number 1011738. In late August or early September 2000, Respondent prepared a Residential Sales and Purchase Contract (Contract) on behalf of Omar Canizares, as buyer, to purchase a residence at 10620 Southwest 139th Street in Miami (Property). The Contract provided for a purchase price of $260,000 and a deposit of $1000 to be held by Realco Realty. Respondent presented the Contract to Zoila de Castro, a real estate broker who was representing Antonio and Lorraine Lambo, and Mrs. Lambo. The record is poorly developed on these points, but it appears that Mr. and Mrs. Lambo jointly owned the Property and that both of them never signed the Contract. Respondent left the Contract with Mrs. Lambo because Mr. Lambo was out of town. A few days later, Ms. de Castro returned the Contract to Respondent, intending to convey a counteroffer that raised the purchase price to $265,000 and the deposit to $5000--to be paid within three days after the inspection. However, the Contract delivered by Ms. de Castro to Respondent is notable for two omissions--a signature of one of the Lambos and a deadline for Canizares' acceptance of the counteroffer. Ms. de Castro's testimony that she delivered to Respondent the only original contract with signatures of both Lambos is discredited for two reasons. First, Respondent would likely use the better version of the Contract--i.e., the one with both sellers' signatures--when providing a copy to the appraiser. Second, Ms. de Castro appears to have maintained, at best, an imperfect grasp of all that was transpiring in this attempted transaction and may be claiming to have delivered a fully signed contract--though still without a deadline for Mr. Canizares' acceptance--in order to place herself in a better light. At this point in the transaction, the lack of an enforceable agreement between Mr. Canizares and the Lambos should have been obvious to the Lambos' real estate broker, but it was not. The testimony depicts a series of unanswered letters and unsatisfied demands, as the Lambos initially tried to get the deal to close and eventually tried only to get the deposits, which they believed now totalled $5000. In fact, neither Respondent held any deposit. Although relieved from the obligation to collect another $4000 in deposit, due to the failure of the parties to come to an agreement, Respondents had misrepresented to the Lambos and Ms. de Castro that they held the initial $1000 deposit. Although Petitioner has failed to prove other fraudulent acts by either Respondent toward the Lambos or Ms. de Castro, Petitioner has proved another fraudulent act by Respondents in connection with this transaction. Exploiting Ms. de Castro's lack of diligence, Respondents appear to have shopped the Contract. On September 22, 2000, Respondent ordered an appraisal on a form showing the purchase price as $325,880. At the request of the appraiser, Respondent sent to the appraisal a copy of an altered Contract, which provided for a purchase price of $310,100 and reflected total deposits of $5000. The Lambos-Canizares sale never closed, and the Lambos never received any money representing the deposit that they claimed to be owed. Respondents opened an escrow account in September 2000, but had never performed written monthly escrow reconciliation for their trust account through the date of the audit in February 2001. Additionally, at the time of the audit, Respondents were unable to produce any documentation pertaining to their real estate practice. However, Respondents later produced banking records and reconciliations for January and February 2001, which were undoubtedly prepared after the February 2001 audit.
Recommendation It is RECOMMENDED that the Florida Real Estate Commission enter a final order revoking the real estate broker licenses of Maria L. Nuevo and Realco Realty, Inc. DONE AND ENTERED this 29th day of May, 2003, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE 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 29th day of May, 2003. COPIES FURNISHED: Nancy P. Campiglia, Acting Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street, Suite 802, North Orlando, Florida 32801 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202 Christopher J. DeCosta Senior Attorney Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street, Suite N-809 Orlando, Florida 32801 Michael H. Wolf Michael H. Wolf & Associates, LLC. 3832 North University Drive Sunrise, Florida 33322
The Issue In this disciplinary proceeding, the issues are whether Respondents, who are licensed real estate brokers, failed to preserve and make available certain records relating to trust accounts and real estate transactions, and/or obstructed or hindered Petitioner's investigators in an official investigation, 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 Nestor G. Mendoza ("Mendoza") is a licensed real estate broker subject to the regulatory jurisdiction of the Florida Real Estate Commission ("Commission"). Respondent Diamonds Realty of Miami Beach, Inc. ("Diamonds Realty") 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. Mendoza is an officer and principal of Diamonds Realty, and at all times relevant to this case he had substantial, if not exclusive, control of the corporation. Indeed, the evidence does not establish that Diamonds Realty engaged in any conduct distinct from Mendoza's in connection with the charges at issue. Therefore, Respondents will generally be referred to collectively as "Mendoza" except when a need to distinguish between them arises. Petitioner Department of Business and Professional Regulation ("Department"), Division of Real Estate, has jurisdiction over disciplinary proceedings for the Commission. At the Commission's direction, the Department is authorized to prosecute administrative complaints against licensees within the Commission's jurisdiction. On January 15, 2008, Veronica Hardee, who was then employed by the Department as an investigator, conducted an audit of Mendoza's records at Mendoza's real estate brokerage office, which was located in Miami Beach. Ms. Hardee was accompanied by her supervisor, Brian Piper. Ms. Hardee knew Mendoza because, in the latter part of 2007, she had investigated a consumer complaint against him, which arose from a transaction that had taken place in the fall of that year. In the course of that investigation, which focused on the period from August 20, 2007 through November 30, 2007, Mendoza had provided Ms. Hardee with business records, including bank statements and documents relating to the brokerage's escrow account. Ms. Hardee's previous investigation had not resulted in charges of wrongdoing being brought against Mendoza. During the audit, Ms. Hardee asked to review some of Mendoza's business records. She testified about this on direct examination as follows: Q. All right. Did you tell [Mendoza] what he would need to bring——or what he could expect from an audit? A. I don't remember, but usually procedure [sic], I would tell them we need to see older escrow accounts, older operating accounts, deposit slips, deposit checks, anything that has to do with their financial matters. Final Hearing Transcript ("TR.") 40-41 (emphasis added). On cross examination, Ms. Hardee elaborated: Q. (BY MR. MENDOZA) . . . I remember quite well that you did not ask me for the whole year of——for instance, of 2004, you never asked me for whole year, you asked me for a certain month; is that correct? * * * THE WITNESS: During the investigation I requested certain documents, yes. You're correct, I asked you for certain months, you had different issues with the Department that I was looking at. . . . * * * You didn't provide all the months requested and we came to the audit, you didn't provide——at that time, we asked you to see all of your accounts, it just wasn't for the investigation, we wanted to see your escrow account so you should have had for——I don't remember the——we wanted 1-15-08, we would have done from January of '08 to six months prior, let's just say. I don't remember what dates we gave you at the time. But then you would have a file with those documents in your escrow reconciliation statement, with all of your checks, all of your deposits with the bank statement attached, you know, organized. But it wasn't so and you said that you wanted to organize it properly and that's why we allowed you to organize it. So the question, did you provide me documents, yes, you provided me documents in the investigation but not all of the documents requested. TR. 58-60 (emphasis added). The undersigned attempted to elicit from Ms. Hardee a more detailed description of the materials requested during the audit, giving rise to the following exchange: THE HEARING OFFICER: Okay. And can you describe for me what it was in particular that you did request on that day in January of 2008? What did you ask [Mendoza] for? THE WITNESS: Yeah. We asked him for his escrow documents, reconciliation statements, such as the one that you see in [Petitioner's Composite] Exhibit 3. We asked about those months that were missing. We asked him——I don't know if we asked him for six months or one year. I don't remember the time frame we gave him, but pretty much when we go in to do an audit, we get the last six months, usually the months that are particularly discussed, the checks or the deposits that we're looking into for an investigation. * * * So pretty much that's what we asked, all of his escrow operating account that we had for the company, which includes the reconciliation statement, bank statement, deposit checks, as the statute statues here. THE HEARING OFFICER: Okay. You're standard procedure would have been you say in an audit like this, to have asked for the last six months of records right? So you're nodding your head, that's a yes? THE WITNESS: Yes. In this case we asked for the months that I was missing and plus I wanted to do a whole——we were going to do a whole audit. I don't remember right now if I asked him for six months or twelve months, I don't remember that part, but usually we ask for all the documents. THE HEARING OFFICER: And if I could just ask you to clarify do there's no mistake about this, when you say the months that are missing, what months are you referring to? THE WITNESS: I'm sorry, November of '04 and December of '04. TR. 73-75 (emphasis added). The Department did not, at the time of the audit, reduce its request for records to writing, which is unfortunate for the Department because, as the above-quoted testimony shows, Ms. Hardee's memory of specifically what Mendoza had been asked to produce was spotty. Although Ms. Hardee did identify two particular months——November and December of 2004——for which contemporaneous records were sought, this detail is practically random (because no context was given to explain the description of these periods, which predated the audit by more than three years, as "missing" months) and, in any event, fails to make the testimony as a whole explicit or distinctly remembered. The undersigned finds that Ms. Hardee's testimony was insufficiently precise to constitute clear and convincing evidence concerning the particular items that the Department wanted to see. Even if Ms. Hardee's testimony were sufficient on the previous point, however, the proof regarding Mendoza's alleged failure to produce records, which is a separate issue, is less compelling. Ms. Hardee's testimony was that Mendoza made available some but not all of the documents she and Mr. Piper wanted to see. (Actually, a fairer characterization of Mendoza's relative compliance, accepting Ms. Hardee's testimony as true, would be that he produced most of the documents requested, namely six-to-12 or 13 months' worth, failing only to make available documents associated with the last two or three months of 2004.) Mendoza then requested, and was given, additional time to assemble the rest of the materials. For some reason, Mendoza never contacted the Department thereafter to produce the items he could not locate on January 15, 2008, which caused the Department to initiate the instant proceeding. The undersigned largely credits Ms. Hardee's testimony regarding this overview of the events, with the qualification that Mendoza's compliance, while less than 100 percent, was nevertheless substantial. (He might, after all, have produced satisfactorily as much as 13 months' worth of documents, according to Ms. Hardee's testimony.) Given that Mendoza is alleged to have failed only to produce specific documents relating to the particular period from October through December 2004, the undersigned infers that he produced everything else that the Department wanted to see. The Department did not, however, at the time of the audit (or later), prepare an inventory of the records Mendoza made available (or failed to produce), take copies of the materials Mendoza produced, or otherwise reduce to writing the particulars of his noncompliance (e.g. by sending him a letter, soon after the audit, reminding him of the obligation to produce the materials that were not accessible on January 15, 2008, and listing or describing those materials). The absence of a contemporaneous written record of Mendoza's alleged failure to make documents available at the audit is unfortunate for the Department because, on the question of what Mendoza did and did not produce, Ms. Hardee testified as follows: THE HEARING OFFICER: All right. And when you went back in January of 2008 to see the ——Mr. Mendoza at his office and audit his books and records, he produced nothing to you and your supervisor whatsoever on that date in response to the things that you requested to see? THE WITNESS: He may have provided certain documents but were incomplete. I do not remember which documents he provided. * * * I'm not saying he didn't provide me with anything. He didn't provide us with all of the documents we requested. TR. 71-72 (emphasis added). In sum, the evidence against Mendoza consists of the testimony of Ms. Hardee, who in a nutshell says that, while she cannot clearly remember exactly what the Department asked Mendoza to produce, she knows that she requested documents relating to November and December of 2004, and that, while she cannot remember what documents Mendoza made available, she is sure he did not produce everything associated with the fourth quarter of 2004. Assuming for argument's sake that the Department requested the specific documents Mendoza is charged with failing to produce (which is not entirely clear), and accepting that Mendoza did not produce everything that the Department asked to see, the Department's evidence is still too conclusory to support disciplinary action, in view of Ms. Hardee's testimony that the temporal scope of the Department's request for documents was not limited to the three-month period comprising the fourth quarter of 2004 and indeed might have covered 15 months or more. Because, as found above, Mendoza did produce a substantial, albeit indeterminate, amount of documentation, and because there is no clear proof regarding the contents of the records that Mendoza made available, the undersigned is unable to find, based on clear and convincing evidence as the law requires, that Mendoza failed to produce the documents he has been accused of failing to produce. The Charges In Counts I and V of the Administrative Complaint, the Department alleges that Mendoza and Diamonds Realty are guilty of failing to preserve and make available to the Department all deposit slips and bank statements associated with the broker's trust account(s), in violation of Florida Administrative Code Rule 61J2-14.012(1), which is a disciplinable offense under Section 475.25(1)(e), Florida Statutes. In Counts II and VI, it is alleged that Mendoza and Diamonds Realty failed to prepare written monthly statements comparing the broker's total trust liability to the bank balance(s) in the broker's trust account(s), in violation of Florida Administrative Code Rule 61J2-14.012(2)-(3). This alleged violation is a disciplinable offense under Section 475.25(1)(e), Florida Statutes. In Counts III and VII, the Department accuses Mendoza and Diamonds Realty of having failed to preserve and make available to the Department books, accounts, and records pertaining to the brokerage business, in violation of Section 475.5015, Florida Statutes. This alleged violation constitutes a disciplinable offense under Section 475.25(1)(e), Florida Statutes. In Counts IV and VIII of its Administrative Complaint, the Department asserts that Respondents obstructed or hindered the enforcement of Chapter 475, Florida Statutes, in violation of Section 475.42(1)(i), Florida Statutes, which is a disciplinable offense under Section 475.25(1)(e), Florida Statutes. Ultimate Factual Determinations As found and explained above, the evidence is insufficient to prove, clearly and convincingly, that Respondents failed to make available the specific records they are alleged to have withheld. At most the evidence establishes that Respondents were unable, on January 15, 2008, to produce an imprecisely identified (and not clearly proved) subset of the universe of documents that the Department's investigators sought to examine during the audit. This is insufficient to prove, much less clearly and convincingly to demonstrate, that Respondents failed to keep or preserve any particular documents. There is no persuasive evidence that Respondents obstructed or hindered the Department's audit. To the contrary, the evidence shows that Mendoza cooperated with the Department's investigators and substantially complied with their demands. Ultimately, therefore, it is found that Respondents are not guilty of the offences charged in Counts I through VIII 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 Mendoza and Diamonds Realty not guilty of the offenses charged in the Administrative Complaint. DONE AND ENTERED this 30th day of June, 2009, in Tallahassee, Leon County, Florida. 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 30th day of June, 2009. COPIES FURNISHED: Patrick J. Cunningham, Esquire Department of Business and Professional Regulation 400 West Robinson Street Hurston Building-North Tower, Suite N801 Orlando, Florida 32801 Nestor G. Mendoza Diamonds Realty of Miami Beach 12501 Southwest 26th Street Miami, Florida 33175 Thomas W. O'Bryant, Jr., Director Division of Real Estate 400 West Robinson Street, Suite 802, North Orlando, Florida 32801 Reginald Dixon, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact At all times relevant hereto, respondent, Annette J. Ruffin, held real estate broker license number 0076385 issued by petitioner, Department of Professional Regulation, Division of Real Estate. When the events herein occurred, respondent was owner and broker for Century 21 A Little Bit Country at 915 Lithia Pinecrest Road, Brandon, Florida. She is presently employed by U. S. Homes Corporation in Tampa, Florida. James and Shirley Yaksic wished to sell their residence at 3512 Plainview Drive in Brandon, Florida. They listed their property with Century 21 Solid Gold Properties II, Inc. in Brandon in December, 1983. Deborah Cassidy was a salesman at respondent's office, and knew her parents, J. R. and Helen Anderson, were in the market for a new home. With Cassidy's assistance, the Andersons executed a contract on February 16, 1984, to purchase the Yaksics' residence. The contract called for a purchase price of $65,000 with a down payment of $10,000, including a $500.00 cash deposit which was given to respondent's firm several days after the contract was executed. The deposit was placed in Ruffin's escrow account on February 28, 1984. The Andersons were also required to seek VA financing on the balance owed. After the contract was accepted by the Yaksics on February 17, Helen Anderson made application on February 23 for a $55,000 VA loan with Norwest Mortgage, Inc., a lending institution in Tampa. Florida. Since her husband was in New York State, only Helen signed the loan application agreeing to allow verification of all representations made in the application. While filling out the loan application at Norwest, Helen Anderson learned that the Veterans Administration allowed applicants to apply for loans equal to 100% of the value of the property. Since the Andersons preferred to make no down payment, Helen Anderson wrote Norwest in early March requesting that their loan application be increased from $55,000 to $65,000. She also noted that she did not sign the "disclosure statement" on behalf of her husband since "it would be incorrect." In response to this Letter, Norwest wrote the Andersons in early April requesting a number of items needed to process the application as well as an amendment to the contract reflecting that the sellers agreed to 100% financing by the buyers. The Andersons did not respond to this inquiry. In addition, they never, advised the sellers that they had changed their loan application to 100% financing, and that the sellers would be required to pay more discount points at closing. Because no amendment to the contract was ever filed, Norwest processed the application for a $55,000 loan. Due to insufficient income and excessive obligations, the application was denied. The Andersons were so notified by letter dated May 3, 1984. After Helen Anderson received the denial letter she telephoned respondent's office manager on several occasions to seek a refund of her deposit. This information was apparently conveyed to Ruffin by the office manager. About the same time the sellers were advised by the listing salesman that the Andersons did not intend to close. On May 5, the sellers wrote a letter to Solid Gold requesting that it notify the selling broker to not "release the binder to the buyers as we are entitled to this money." For some reason, a copy of this letter was not mailed to respondent until May 31, and she received it in early June. Even though Ruffin may have been orally advised in early May of the Yaksics' intended claim by the listing office, she had no concrete evidence of this intention until she received their letter in early June. On June 29, 1984, Helen Anderson wrote respondent's office manager a letter requesting a return of her deposit no later than July 9. She also indicated the letter was being sent pursuant to instructions received from petitioner. On July 2, Ruffin replied by letter stating that "we cannot release your deposit as the house was off the market for such a long time," and that Norwest had advised her that the Andersons "did not bring in a lot of the information until it was too late." After Helen Anderson filed a complaint with the Department of Professional Regulation (DPR), DPR wrote respondent a letter dated July 19, 1984, stating in part that Anderson had been refused her deposit and that its records did not show that respondent had notified DPR of conflicting demands for that money. On July 30, 1984, respondent replied to DPR's inquiry and gave her version of the circumstances surrounding the transaction. After receiving no reply to this letter, she wrote a second letter in late December, 1984 to the Division of Real Estate (Division) requesting advice on the deposit matter. The Division sent a her form for requesting an escrow disbursement order on January 4, 1985 which was returned by respondent within a few weeks. An escrow disbursement order was eventually issued by the Division on April 19, 1985 directing her to refund the deposit to the Andersons. She did so on May 5, 1985. In conjunction with its investigation, DPR obtained copies of respondent's escrow account bank statements during the period when the Andersons' deposit was retained by Ruffin. Although the $500.00 deposit should have been maintained in that account from February, 1984 until disbursement in May, 1985, her account dropped below $500.00 on sixteen separate days during this period of time, and continuously from February 28 through April 30, 1985. Respondent, who has been a broker since 1977, maintained a record of all escrow deposits and expenditures in a ledger book which reflected when the Anderson money was deposited and when it was paid out. Although she inferred the problem may have been attributable to her bookkeeper, no adequate explanation was given as to why her bank balances dropped below $500.00 on a number of occasions. She acknowledged that she learned of the conflicting demands in May, 1984, but felt that she could still "solve" the credit problem of the Andersons. She stated that she intended to give notice to the Division of the conflicting claims on the deposit and needed no encouragement from the Division to do so. There is no evidence that respondent has ever been disciplined on any other occasion since first receiving her salesman license around twelve years ago.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty as set forth in the Conclusions of Law portion of this order. All other charges should be DISMISSED. It is recommended that respondent's broker license be suspended for ninety days and that she be fined $500.00. DONE and ORDERED this 5th day of September, 1985, in Tallahassee, Florida. DONALD R. ALEXANDER Bearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, FL 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of September, 1985.
The Issue Whether Respondents violated provisions of Part 1 of Chapter 475, Florida Statutes, and Florida Administrative Code, Subpart 61J2.
Findings Of Fact The Florida Department of Business and Professional Regulation, Division of Real Estate, and the Florida Real Estate Commission, regulate the sale of real estate in the State of Florida. The Department issues licenses to applicants certified to be qualified by the Florida Real Estate Commission. Ms. Wilf is currently licensed with the Department as a qualifying broker with Sharon L. Wilf Paradise Properties, Inc. She holds Broker License No. 0547485. Sharon L. Wilf Paradise Properties, Inc., is a licensed brokerage corporation located at 9535 Highway 98 East, Destin, Florida 32550. At all times relevant Ms. Wilf had substantial if not exclusive control over Sharon L. Wilf Paradise Properties, Inc. Pursuant to a complaint on September 7, 2000, the Department detailed Diana Woods to conduct an office inspection of Ms. Wilf's real estate practice. Ms. Woods contacted Ms. Wilf telephonically in December of 2000. Ms. Wilf said that she would be available in February 22, 2001, for an audit and inspection of Respondents' records. At the appointed time, however, Ms. Wilf was in Texas. On April 5, 2001, Ms. Wilf told Ms. Woods she was still in Texas. A visit was then scheduled for April 12, 2001, but at the appointed time Ms. Wilf was not there. Ms. Woods tried for April 18, 2001, but Ms. Wilf said that she was really busy and that her books were off-site and in the custody of her bookkeeper on that date. Ms. Wilf also asserted that her mother had suffered a stroke and asked for another date. Ms. Wilf agreed that Ms. Woods could inspect on May 8, 2001. On Sunday, May 6, 2001, Ms. Wilf called Ms. Woods to tell her that she was leaving for Texas and Louisiana on May 7, 2001. Ms. Woods went to Ms. Wilf's office on May 8, 2001, and no one was there. In a letter dated May 11, 2001, Ms. Woods gave Ms. Wilf three dates to be available for an inspection and demanded that she choose one. Ms. Wilf agreed to May 24, 2001. Ms. Wilf was present on that date when Ms. Woods arrived. However, Ms. Wilf's books and records were disorganized and incomplete. Ms. Woods returned on May 29, 2001, and examined Ms. Wilf's books and records. As a result of the inspection it was determined that as of May 29, 2001, Ms. Wilf's trust account showed a liability of $57,000 but there was $58,164.63 present in the account. This meant that she had an overage in the account of $1,164.63. Ms. Wilf could not provide an explanation as to why the account was out of balance. A review of Ms. Wilf's Monthly Reconciliation Statement Real Estate Trust Account (Reconciliation Statement) for the period February 1, 2000, to February 29, 2000, indicated that her trust account was short $14,096.40. Ms. Wilf explained this by saying she had mistakenly written two commission checks on that account. No corrective action was indicated. The Reconciliation Statement for the period April 1, 2000, to April 28, 2000, revealed a shortage of $26,381.20, in her trust account. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period April 29, 2000, to May 31, 2000, revealed a shortage of $137.28. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period July 1, 2000, to July 31, 2000, revealed a shortage of $8,492.58. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period September 1, 2000, to September 30, 2000, revealed a shortage of $5,443.05. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period October 1, 2000, to October 31, 2000, revealed a shortage of $2,407.71. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period November 1, 2000, to November 30, 2000, revealed a shortage of $1,828.96. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period March 1, 2001, to March 31, 2001, revealed an overage of $7,827.74. There was no explanation for the overage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period March 1, 2000, to March 31, 2000, reflected a total shortage of $19,150.16, on the second page. This figure had a line drawn through it. On the third page, the document indicates an overage in an amount that cannot be determined due to handwriting that is indecipherable. It may be $1,847, or $1,849 and some cents. There was no explanation for the figures provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period June 1, 2000, to June 30, 2000, revealed an overage of $19,712.72. There was no explanation for the overage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period December 31, 2000, to January 31, 2001, revealed an overage of $3,452.13. The reason for the overage was, "? overpaid commission." No corrective action was indicated. The Reconciliation Statement for the period February 1, 2001, to February 28, 2001, revealed an overage of $9,556.31. There was no explanation for the overage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period May 1, 2001, to May 31, 2001, revealed an overage of $1,161.62. There was no explanation for the overage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period June 1, 2001, to June 30, 2001, revealed an overage of $1,158.63. On the explanation page Ms. Wilf cited as a reason, "Overage from May 25, 2001 audit," and for corrective action taken, stated, "Plan to make correction July." The Reconciliation Statement for the period January 1, 2002, to January 31, 2002, revealed a shortage of $1,551.88. On the explanation page Ms. Wilf cited as a reason, "Force debit from Nov. 19-$6541.63-11-45 acct maint," and for corrective action taken, stated, "The force debit should have come from GOA acct. maint shouldn't be deducted bank to correct." The Reconciliation Statement for the period March 1, 2002, to March 29, 2002, revealed a shortage of $2,544.43. On the explanation page Ms. Wilf cited as a reason, "Debit from bank still not done," and for corrective action taken, stated, "Bank to correc-had Tracy call. The $10,000 from Embry-issued stop payment-see bank statement." The Reconciliation Statement for the period March 30, 2002, to April 30, 2002, revealed a shortage of $4,331.43. On the explanation page Ms. Wilf cited as a reason, "Same force debit-unauthorized debit of 10,000 on 4/4/02." No corrective action was indicated. The Reconciliation Statement for the period May 1, 2002, to May 31, 2002, revealed a shortage of $1,553.43. The reason given for the shortage was, "same." No corrective action was indicated. The Reconciliation Statement for the period June 1, 2002, to June 30, 2002, revealed a shortage of $1,555.43. The reason given for the shortage was, "Same. Should not have $2.00 fee." No corrective action was indicated. The Reconciliation Statement for the period June 29, 2002, to July 31, 2002, revealed a shortage of $1,553.43. The reason given for the shortage was, "Same." A Final Default Judgment in Favor of Plaintiff Anchors, Foster, McInnis & Keeff, P.A., and Against Sharon L. Wilf, Paradise Properties, Inc., in the amount of $12,951.33 was filed with the Clerk of Court of Okaloosa County on September 21, 2001. On November 19, 2001, a Writ of Garnishment was entered by the clerk for the identical amount, indicating that the judgment was unsatisfied at that time. Compass Bank debit memos indicate that some of the debt, in the amounts of $25, $75, and $6,591.63, on November 19, 2001, was extracted from Ms. Wilf's account pursuant to the garnishment. In a document entitled "vacant land contract," the sellers listed on the contract, Morris Lou Sobh and Georgia Sobh, sold property to Montana Land Company. James E. Clausel was the person who was authorized to sign for Montana Land Company. The signatures of the two sellers were cut from another document and pasted onto the "vacant land contract." Mr. Clausel was unaware that the signatures were not actual signatures. Ms. Woods contacted the Sobhs' on November 2, 2002, and they related to her that Ms. Wilf was not authorized to supply their signatures. Ms. Woods' testimony is hearsay which is insufficient to prove that the signatures supplied were not authorized. Moreover, Ms. Wilf stated under oath that she talked to the Sobhs' at or about the time the signatures were supplied, and she stated that they authorized her to supply the signatures. The evidence presented by the Department is insufficient to overcome Ms. Wilf's first-hand testimony. The Department provided Ms. Wilf's check no. 2459, in the amount of $17,400, payable to Lutz Brockstadt, and asserted that this represented the payment of a commission to a person not having a real estate license. However, Ms. Wilf testified that this represented rental revenue. Moreover, an Internal Revenue Service 1099-MISC indicates that the funds represented rental income. The evidence presented by the Department fails to meet the required burden of proof by clear and convincing evidence. Accordingly, it is not found that Ms. Wilf paid a commission to a person not holding a real estate license. The Department alleged that Ms. Wilf transferred $10,000 from her escrow account to her operating account on April 4, 2002. The evidence tending to prove this included a bank document dated April 4, 2002, reflecting the charge. The word "Tracy" is on the document, which indicates that it was accomplished by Tracy, whose full name is Tracy Tubb, and who was Ms. Wilf's bookkeeper. Whether or not Ms. Wilf authorized the act is unknown, although telephone records indicate long distance telephone calls were made to Ft. Walton on April 3 and 4, 2002, by Ms. Wilf. Ms. Tubb told Ms. Woods that she effected the transfer on Ms. Wilf's instructions. The evidence, on the whole, is insufficient to demonstrate that $10,000 was actually transferred by or at the direction of Ms. Wilf.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the licenses of Respondents Sharon L. Wilf and Sharon L. Wilf Paradise Properties, Inc. be revoked and that a $3,000 civil penalty be assessed jointly and severally against Respondents. DONE AND ENTERED this 8th day of January, 2004, in Tallahassee, Leon County, Florida. S HARRY L. HOOPER 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 8th day of January, 2004. COPIES FURNISHED: James P. Harwood, Esquire Department of Business and Professional Regulation Division of Real Estate Hurston Building, North Tower, Suite N802 400 West Robinson Street Orlando, Florida 32801 Sharon L. Wilf 9535 Highway 98, East Destin, Florida 32550 Jason Steele, Director Division of Real Estate Department of Business and Professional Regulation Hurston Building, North Tower Suite N802 400 West Robinson Street Orlando, Florida 32801 Nancy Campiglia, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
