Findings Of Fact The Respondent, Cluett Realty, Inc., is a licensed corporate real estate broker having been issued license number 0216798 and whose last known address is 4720 Palm Beach Boulevard, Fort Myers, Florida. The Respondent, Ernest H. Cluett II, is a licensed real estate broker having been issued license number 0191613 and at all material times was employed as a licensed real estate broker by Cluett Realty, Inc. In November, 1981, Mary Ann Knopic was shown a home in Cape Coral by the Respondents. She offered the owners $92,500 for the home with a $500.00 earnest money deposit. When the home was sold to another buyer, the Respondents and Knopic agreed that the Respondents would retain the $500.00 and attempt to find another home for the complainant. In December, 1981, the Respondents showed Knopic the Soviero home and Knopic made an offer on the home and secured the offer with an additional $1,500 security deposit. In late February, 1982, the complainant informed the Respondents that she would not close on the Soviero home. The complainant decided not to close because the cost of renovating the home exceeded the original estimate. Under these circumstances, the complainant was willing to lose her $2,000 deposit rather than spend $6,000 to renovate the Soviero home. On June 8, 1982, after the complainant agreed to the February disbursement, she sent the Respondents a letter demanding either a copy of the contract which amended the earnest money amount or a refund of her $1,500. Walter V. Horn, a Respondent, was not properly served and at final hearing the petitioner agreed that he was not a proper party to this proceeding.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That a final order be entered dismissing the Administrative Complaint filed against the Respondents, Cluett Realty, Inc., Ernest H. Cluett II and Walter V. Born. DONE AND ENTERED this 11th day of July, 1984, at Tallahassee, Florida. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 11th day of July, 1984. COPIES FURNISHED: Fred Langford, Esquire Department of Professional Regulation Legal Section Post Office Box 1900 Orlando, Florida Herbert A. Fried, Esquire 1625 Hendry Street, Suite 103 Fort Myers, Florida 33901 Mr. Walter V. Horn 4732 Dee Prado Boulevard Cape Coral, Florida 33904 Harold Huff, Executive Director Division of Real Estate Department of Professional Regulation post Office Box 1900 Orlando, Florida 32802 Fred M. Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue The issue presented for decision herein is whether or not Petitioner meets the qualifications for licensure as a real estate salesman.
Findings Of Fact On June 13, 1988, Petitioner filed an application for licensure as a real estate salesman. In responding to question 14(a) of the application, Petitioner answered that his license, as a real estate broker, had been revoked for non-payment of an administrative fine. (Respondent's exhibit 1). Petitioner attached to his application a copy of a transcript of an administrative hearing held in DOAH Case No. 84-0981. A final order was entered in that case based on a stipulation wherein Petitioner agreed to pay an administrative fine of $500 within 30 days of entry of the final order. Petitioner has not paid the administrative fine as he agreed. Petitioner admitted during hearing that he had not paid the fine and made an offer during the hearing herein to pay that fine in as much as he failed to pay it earlier since he did not have the wherewithal to pay the fine. Petitioner is now employed as a sales representative with Metropolitan Life Insurance Company. 1/ Petitioner's license as a real estate broker was revoked by Respondent based on his failure to pay an administrative fine imposed in an earlier case (DOAH Case No. 86-145, Respondent's exhibit 2).
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: Petitioner's application for licensure as a real estate salesman be DENIED. RECOMMENDED in Tallahassee, Leon County, Florida, this of 27th day of January, 1989. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The Oakland Building 2900 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of January, 1989.
The Issue Whether Respondent, prior to being licensed as a real estate salesman, committed, among other things, fraud and misrepresentation in violation of Section 475.25(1) and negligence in violation of Section 475.25(3), Florida Statutes (1978), by selling promissory notes which he represented were secured by first mortgages, when they were, in fact, secured by subordinate mortgages; and, if so, the appropriate disciplinary penalty which should be imposed by the Board of Real Estate.
Findings Of Fact Respondent Evers qualified for, and was issued real estate salesman's license no. 0132634 by the Board on June 28, 1974. His license, at his request, has been placed on inactive status since April, 1979. (Testimony of Evers, P.E. 1) During 1972 and 1973, Evers was a mortgage broker and registered security salesman licensed by the Florida Division of Finance and Department of Banking and Finance, Division of Securities. He was employed as a mortgage broker and security salesman by the Washington Development Corporation, with headquarters in St. Petersburg, Florida. (Testimony of Evers, P.E. 2) As a mortgage broker and security salesman, Evers agreed to advertise and sell promissory notes, secured by what purported to be first mortgages, prepared and executed by the Washington Development Corporation ("Corporation"). He was to receive a commission on each completed sale. The Corporation supplied Evers with advertising forms and its promissory notes and mortgage forms. Its salesman, Gary George, taught him how to effectively explain and sell the notes and mortgages, and pointed out the express provision in the mortgage form where the Corporation covenants that the property covered by the mortgage was free and clear of all encumberances except real estate taxes. . . ." George advised Evers to inform prospective purchasers that they would receive a first mortgage, advice which Evers customarily followed. Evers' representations made in connection with sales to Gerald Pendry, Richard C. Tymick, and Eva Baird form the basis for this disciplinary proceeding. [SALE OF NOTE AND MORTGAGE TO GERALD PENDRY] On April 1, 1973, Evers sold to Gerald C. Pendry and his wife a promissory note, with mortgage executed by the Corporation in the amount of $2,000. The mortgage covered Lot 1, Block 18, of the Carlton Village subdivision, Lake County7 Florida. The note obligated the Corporation to pay Pendry 1 percent interest per month, over a period of 24 months. The mortgage, on its face, purported to be a first mortgage. In negotiating the sale with Pendry, Evers expressly represented that the mortgage securing the note was a first mortgage, and such representation induced Pendry to purchase the note. (Testimony of Pendry, Evers, P.E. 4) Subsequently, the Corporation defaulted on its payments; when Pendry brought a foreclosure action against the mortgaged property, he learned that his mortgage was subordinate to a prior and superior mortgage held by Melvin J. Haber. As a result of his subordinate mortgage, Pendry suffered financial loss. (Testimony of Pendry, P.E. 3) [SALE OF NOTE AND MORTGAGE TO RICHARD C. TYMICK] On March 1, 1973, Evers sold to Richard C. Tymick and his wife two promissory notes, one in the amount of $2,500 and the other in the amount of $2,900, each executed and secured by a mortgage given by the Corporation. The mortgages securing the notes covered Lot 8, Block 41, and Lot 12, Block 22, Carlton Village subdivision, Lake County, Florida. The notes obligated the Corporation to pay interest of 1 percent per month over a 48-month period. In negotiating the sale of the two notes, Evers led Tymick to reasonably believe that the notes were secured by first mortgages. (Testimony of Tymick, P.E. 5) The Corporation subsequently defaulted on its payments under the note. When Tymick Instituted a foreclosure proceeding, he learned that his mortgages were subordinate and inferior to a prior mortgage covering the same property held by Melvin Haber. Because of the subordinate nature of his mortgage, Tymick suffered financial loss. (Testimony of Tymick, P.E. 3) [SALE OF NOTE AND MORTGAGE TO EVA BAIRD] On or about October 20, 1972, Evers sold two Corporation promissory notes, secured by mortgages, to Eva R. and Joseph T. Baird. The notes were issued in the total amount of $10,000. The mortgages covered lots located in the Carlton Village subdivision, Lake County, Florida, and Evers affirmatively represented to Eva Baird that they were first mortgages. Without such representation, Eva Baird would not have purchased the promissory notes in question. (Testimony of Eva Biard, P.E. 6) Tie Corporation eventually defaulted on its payments under the notes. It was not until Eva Baird initiated a foreclosure proceeding against the properties that she learned her mortgages were subordinate and inferior to prior mortgages covering the same properties. As a result of her inferior mortgages, she suffered financial loss. (Testimony of Eva Baird) In 1975, the Department of Banking and Finance, Division of Securities, brought a disciplinary action against Evers alleging that he committed fraud by selling the Corporation mortgages and notes to certain persons, including Pendry, Tymick and Baird. After a formal evidentiary hearing, the Department entered a final order dated December 22, 1976, concluding that Evers, by failing to disclose the existence of prior mortgages and ensure that the mortgages were first mortgages (as he represented), committed fraud and a violation of Section 517.301, Florida Statutes. As a result, the Department suspended Evers' security salesman's license for a period of one year. (P.E. 2) At the time he sold the notes and mortgages to Pendry, Tymick and Baird, Evers did not know that the Corporation's mortgages were not, in fact, first mortgages; he believed and wholly relied on Gary George's assurances to him that the mortgages were what they purported to be-first mortgages. He made no attempt to investigate or independently verify the status of these mortgages. Evers, however, had no intent to falsely represent these mortgages to the purchasers; neither did he intend to mislead or deceive them. (Testimony of Evers) [EVIDENCE IN MITIGATION] Evers did not learn that the mortgages in question were not first mortgages until the latter part of 1974. He then made an honest effort to notify and assist those persons who had purchased Corporation notes and mortgages through him. He helped to arrange legal representation for them and defray the cost of having abstracts of title prepared. (Testimony of Evers, R.E. 1-8) Evers suffered considerable financial loss and interruption of Iris livelihood because of his sale of Corporation mortgages and notes. Because he had also purchased a Corporation mortgage which later turned out to be other than a first mortgage, he lost $2,700. Because of the Board's investigation and prosecution of this case, he placed his real estate salesman's license on inactive status to avoid embarrassment to his employer. (Testimony of Evers) There is no evidence to indicate that Evers has been other than a competent and conscientious salesman since obtaining his real estate salesman's license in 1974. A registered real estate salesman who worked with Evers described him as an exceptional salesman who paid close attention to details and made a special effort to keep clients advised of his progress. (Testimony of James Bradfield)
Recommendation Conclusion: The Board is without statutory authority and jurisdiction to discipline the Respondent for misconduct which occurred prior to his being licensed as a real estate salesman. The Amended Administrative Complaint, and the charges therein, should he dismissed. Recommendation: That the Board dismiss its Amended Administrative Complaint. Background By Amended Administrative Complaint filed January 18, 1979, the Petitioner Hoard of Real Estate ("Board") charged Respondent Dovard J. Evers ("Evers") with three counts of violating Sections 475.25(1)(a) and 475.25(3), Florida Statutes (1978), by selling notes which he represented were secured by first mortgages when, in fact, they were secured by second mortgages. The alleged misconduct occurred during 1972 and 1973, before Evers qualified for and received his real estate salesmans license. On February 6, 1979, Evers timely requested a Section 120.57 hearing to dispute the allegations in the Board's Administrative Complaint and filed a Motion to Quash Complaint. After oral arguments, Evers' Motion to Quash was denied by the Board on March 14, 1979. It was not until February 13, 1980, that Evers' request for a hearing was forwarded to the Division of Administrative Hearings for assignment of a Hearing Officer. The final hearing was initially set for April 15, 1980. On April 11, 1980, upon motion of the Board and without objection by Evers, the hearing was continued in order to allow the Board to reconsider its decision to prosecute this complaint. Subsequently, final hearing was reset for July 7, 1980. At hearing, the Board called Gerald Pendry, Richard C. Tymick, and Eva Baird as its witnesses and offered Petitioner's Exhibits No. 1-6, 1/ inclusive, each of which was received into evidence. Respondent Evers called James Bradfield as his witness and testified in his own behalf. Evers offered Respondent's Exhibits No. 1-10, 1/ inclusive, each of which was received. At the outset, the Board dropped Count IV and moved to amend its complaint by adding an allegation that Evers' alleged misconduct was of such a nature that had the Board been aware of it at the time Evers applied for his real estate salesman's license the application would have been denied. The proposed amendment fell within the scope of the complaint, and the motion was granted. Evers also renewed his previous motion to quash the amended complaint on the ground that he was not a licensed real estate salesman at the time of the alleged misconduct; the motion was denied. At close of hearing, the parties requested the opportunity to submit memoranda of law by July 23, 1980, which request was granted. The parties further agreed that the thirty-day time period for filing the recommended order in this case would begin on July 23, 1980. Based upon the evidence submitted at hearing, the following facts are determined:
Findings Of Fact At all times relevant hereto, Petitioner was licensed as a real estate broker by the Florida Real Estate Commission. In May 1988, he was working as a broker-salesman with G.V. Stewart, Inc., a corporate real estate broker whose active broker is G.V. Stewart. On April 20, 1989, Respondent submitted a Contract for Sale and Purchase to the University of South Florida Credit Union who was attempting to sell a house at 2412 Elm Street in Tampa, Florida, which the seller had acquired in a mortgage foreclosure proceeding. This offer reflected a purchase price of $25,000 with a deposit of $100 (Exhibit 2). The president of the seller rejected the offer by striking out the $25,000 and $100 figures and made a counter offer to sell the property for $29,000 with a $2000 deposit (Exhibit 2). On May 9, 1989, Respondent submitted a new contract for sale and purchase for this same property which offer reflected an offering price of $27,000 with a deposit of $2000 held in escrow by G.V. Stewart (Exhibit 3). This offer, as did Exhibit 2, bore what purported to be the signature of William P. Murphy as buyer and G. Stewart as escrow agent. In fact, neither Murphy nor Stewart signed either Exhibit 2 or Exhibit 3, and neither was aware the offers had been made at the time they were submitted to the seller. This offer was accepted by the seller. This property was an open listing with no brokerage firm having an exclusive agreement with the owner to sell the property. Stewart's firm had been notified by the seller that the property was for sale. Respondent had worked with Stewart for upwards of ten years and had frequently signed Stewart's name on contracts, which practice was condoned by Stewart. Respondent had sold several parcels of property to Murphy, an attorney in Tampa, on contracts signed by him in the name of Murphy, which signatures were subsequently ratified by Murphy. Respondent considers Murphy to be a Class A customer for whom he obtained a deposit only after the offer was accepted by the seller and Murphy confirmed a desire to purchase. Respondent has followed this procedure in selling property to Murphy for a considerable period of time and saw nothing wrong with this practice. At present, Respondent is the active broker at his own real estate firm.
Recommendation It is RECOMMENDED that William H. McCoy's license as a real estate broker be suspended for one year. However, if before the expiration of the year's suspension Respondent can prove, to the satisfaction of the Real Estate Commission, that he fully understands the duty owed by a broker to the seller and the elements of a valid contract, the remaining portion of the suspension be set aside. ENTERED this 29th day of November, 1989, in Tallahassee, Florida. K. N. AYERS 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 29th day of November, 1989. COPIES FURNISHED: John Alexander, Esquire Kenneth E. Easley 400 West Robinson Street General Counsel Orlando, Florida 32802 Department of Professional Regulation William H. McCoy 1940 North Monroe Street 4002 South Pocahontas Avenue Suite 60 Suite 106 Tallahassee, Florida 32399-0792 Tampa Florida 33610 Darlene F. Keller Division Director 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 =================================================================
Findings Of Fact At all times relevant hereto, respondent, Ezell Realty, Inc., was a licensed corporate real estate broker having been issued license number 0231943 by petitioner, Department of Professional Regulation, Division of Real Estate. Respondent, Winfield Ezell, Sr., held real estate broker's license number 0309739 issued by petitioner and was the sole qualifying broker and officer of Ezell Realty, Inc. The firm is located at 1512 West Gore Street, Orlando, Florida. Grover Crawford was an acquaintance of Ezell who was interested in purchasing certain rental property on Coretta Way in Orlando, Florida. When he was unable to purchase the property Crawford told Ezell to let him know if anything else became available in that area. Ezell happened to own a rental house at 1121 Coretta Way which he had just purchased several months earlier in a foreclosure proceeding, and the two eventually began discussions concerning a possible sale. At all times relevant thereto, the house was rented to tenants, and Crawford intended the property to remain as investor-owned property rather than owner-occupied property. Ezell initially agreed to sell the property for $70,000 and the two entered into a contract on January 8, 1983, using this sales price. However, the lender's appraisal of the residence came in far below this figure, and the parties eventually agreed on a sales price of $55,450. A second contract for sale and purchaser was executed on June 22, 1983. Although the contract provided that Crawford would pay a cash deposit of $2,300 to be held in escrow by Ezell Realty, none was paid since Ezell was given $2,300 by the tenants of the house to make needed repairs to the property prior to the sale. This arrangement was agreeable with Crawford. The contract also required the seller (Ezell) to pay all closing coats. Therefore, Crawford was not required to pay any "up front" costs in order to buy the property. Under the terms of the second contract, Crawford was to obtain FHA financing on the property in the amount of $53,150. This type of financing is the most desirable from an investor standpoint since the mortgage can be easily transferred to another buyer for a small transfer fee without lender approval. After executing the first contract on January 8, 1983, Ezell and Crawford executed an "Addendum to Contract For Sale and Purchase" on the same date which provided in pertinent part: This contract is for the sole purpose of having the buyer obtain an assumable FHA mortgage for the seller and reconveying title to the seller. The seller hereby irrevocably assumes the said FHA mortgage from the buyer immediately after closing and the buyers hereby agree to that assumption. For this, Crawford was to receive $1,000. The parties agreed that this addendum would apply to the second contract executed on June 22, 1983. At the suggestion of Ezell, Crawford made application for a $53.150 FHA loan with Residential Financial Corporation (RFC) in Maitland, Florida, a lending institution which Ezell had done business with on a number of prior occasions. However, Ezell was not present at any meetings between Crawford and RFC. When Crawford applied for the mortgage, he indicated the property would be used for investment purposes and would not be owner-occupied. For some reason, RFC assumed the property would be owner-occupied and structured the-loan in that manner. Because of this, Crawford's down payment was slightly less than 5% of the value of the property with the remainder being financed by the institution. Had RFC treated the loan as an investor-loan, the down payment would have been increased to around 15%. Neither Crawford or Ezell advised RFC of the Addendum to the contract which required Crawford to reconvey the property to Ezell for $1,000 once the FHA mortgage was obtained. Had RFC known of this it would not have approved the loan. There was no competent evidence that such an agreement was illegal or violated any federal laws or contravened any real estate industry standard or ethical consideration. The loan was eventually approved, and a closing held on September 22, 1983. After closing, Crawford retained the property in his name with Ezell making all payments from the rent proceeds. This was consistent with an oral agreement between the two that such an arrangement would last for an indefinite period as long as the payments were current. When Crawford later received several notices from the lender stating that mortgage payments were in arrears, he hired an attorney and demanded that Ezell fulfill the terms of the Addendum. He also filed a complaint against Ezell with petitioner which precipitated the instant proceeding. After the closing, Ezell had intended for the tenants to assume the mortgage since they had expressed an interest in buying the property. However, such a sale never materialized. In July, 1984, the property was reconveyed to Ezell, and Ezell paid Crawford $1,000 as required by the Addendum.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the administrative complaint be dismissed, with prejudice. DONE and ORDERED this 7th day of August, 1985, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing 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 7th day of August, 1985. COPIES FURNISHED: Arthur R. Shell, Jr., Esq. P. O. Box 1900 Orlando, FL 32802 Julius L. Williams, Esq. P. O. Box 2629 Orlando, FL 32802 ================================================================ =
The Issue Whether the application of the Respondent, Robert A. Whittemore, III, for registration should have been denied.
Findings Of Fact The Respondent, Robert A. Whittemore, III, filed an application for registration as a real estate salesman with the Petitioner Commission on April 18, 1978. The application was denied, and Respondent by letter requested an administrative hearing to "prove that I do meet with the qualifications" for licensure. Respondent was sent notice of hearing on two (2) occasions by mail, and the notices were not returned. He did not appear to testify and sent no representative to testify in his behalf. Respondent had been licensed as a real estate broker in New York, New York, which license expired on October 31, 1973. The application submitted by Repondent showed that he was convicted of conspiracy in the third degree by the Supreme Court in the State of New York on August 19, 1976, and of falsely reporting an incident in the third degree on December 5, 1976, and sentenced on June 16, 1976. Thereafter a certificate of relief from disabilities on his real estate license was issued by a justice of the Supreme Court, State of New York, on October 20, 1977. Said certificate was submitted by Respondent at the time of his application for registration. No memorandum of law was submitted by either party involved in this administrative hearing.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that Respondent's application for registration be denied. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 30th day of August, 1979. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of August, 1979. COPIES FURNISHED: Frederick H. Wilsen, Esquire Florida Board of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Mr. Robert A. Whittemore, III 5501 North Ocean Boulevard Ocean Ridge Palm Beach, Florida 33435
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that no action be taken against the real estate license of Keith Allen. DONE and ORDERED this 2nd day of September, 1977, in Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Frederick H. Wilsen, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 Allan M. Parvey, Esquire Goldberg, Rubinstein & Buckley, P.A. Post Office Box 2366 Fort Myers, Florida 33902
Findings Of Fact At all times relevant hereto, respondent, Elliot Rosen Realty, Inc. was a licensed corporate real estate broker having been issued license number 0218821 by petitioner, Department of Professional Regulation Division of Real Estate. Respondent Elliot Rosen held real estate broker's license number 0075258 issued by petitioner and was the qualifying officer of Elliot Rosen Realty, Inc. Respondents Stanleigh M. Franklin and Maria C. Franklin were licensed real estate salesmen in Rosen's office having been issued license numbers 0318042 and 0370308, respectively. The firm is located at 8120 Coral Way, Miami, Florida 33155. On an undisclosed date Robert W. and Carol A. Bush listed for sale with Elliot Rosen Realty, Inc., a residential property located at 8295 Southwest 153rd Street, Miami. The initial asking price was $119,000, but this was later reduced to $112,000. In April 1984, Joseph and Maria Yanes were in the process of selling their home and were consequently seeking to purchase a new residence. Both are educated persons, and Mr. Yanes has a college degree. Mr. Yanes read a real estate advertisement which advertised the Bush's property. They contacted Rosen Realty, Inc. and spoke with Maria Franklin. After inspecting the house with Maria, the Franklins met with the Yanes on April 15, 1985, for the purpose of preparing and executing an offer to purchase the house. Joseph Yanes made clear to Stanleigh Franklin that his primary concern was obtaining a mortgage with monthly payments that did not exceed $1000 per month. Otherwise, he would not be able to purchase the property. Stanleigh was familiar with a new mortgage loan program offered by a local lender (American International Mortgage Company) known as the "7.5 magnet mortgage" which offered a monthly payment for the first three years at a 7.5 percent interest rate. Stanleigh computed the principal and interest payments under this plan to be $711.55 per month. When estimated taxes and insurance were added in the total payment came to approximately $850 per month. He also advised that a mortgage insurance premium would be charged each month, which he estimated to be $50 to $60 per month. This still totaled less than the $960 or $970 which the Yanes stated their existing mortgage to be. The Yanes were told that because of the low interest rate (7.5 percent) during the first 36 months, there would be negative amortization during that period of time. In other words, the principal amount owed would actually increase rather than decrease during the first three years since interest on the note was accruing at a higher rate (13 percent). Finally, Franklin advised the Yanes that a 5 percent down payment was required with this type of mortgage and that their deposit should equal this amount to qualify for the loan. The Yanes did not indicate any dissatisfaction with this type of financing, or that they did not understand how the plan worked, particularly with respect to the negative amortization. They agreed to make an offer of $107,000 on the property, to give a $500 deposit that day, and an additional $4850 later on which equated to 5 percent of the purchase price. The contract itself made no reference to the 7.5 percent financing, but provided only that the buyers would obtain a new first mortgage for the balance owed on the $107,000 purchase price. Throughout these negotiations, there was no misrepresentation of facts by Franklin concerning the mortgage or amount of deposit required. The Yanes' offer was quickly presented by the Franklins to the sellers who accepted the offer within the next few days. The Yanes then gave an additional $4850 deposit around May 1 which was deposited in Rosen's escrow account. On May 7, they filed a loan application with American International Mortgage Company and gave a check in the amount of $185 to have an appraisal made and a credit report prepared. At that time, the loan officer explained to Joseph Yanes in detail how the magnet mortgage program worked and that there would be negative amortization under this plan. The meeting lasted for an hour and a half and Yanes did not express surprise at how the mortgage worked, or that he did not understand its concept. An appraisal was then made, and a credit check run on Mr. Yanes. However, the lender was unable to confirm any credit information on Mrs. Yanes because her employer refused to return the employment verification form. On June 20, 1984, the lender sent a denial notice to the Yanes because of its inability to obtain information regarding Mrs. Yanes. The Yanes made no other efforts to obtain financing on the property. After they executed the contract to purchase, the Yanes engaged counsel in early May to represent them at closing. Their attorney (Lisa Wilson) called all pertinent parties, including the Franklins and Rosen to learn the details of the mortgage. After having the details explained to them again, the Yanes advised counsel that they wished to cancel the contract. On May 23, 1984, Wilson sent a certified letter to Stanleigh Franklin advising that because the financing arrangements had been misrepresented to her clients they were cancelling the contract. She also demanded a return of their deposit plus interest. Just prior to the receipt of the certified letter, Joseph Yanes also telephoned Stanleigh Franklin and demanded a return of his deposit. This was the first time Franklin suspected the deal had gone awry. Shortly after this, the Yanes contacted petitioner to file a complaint against respondents. When Mr. Bush learned that the Yanes were not honoring the contract, upon advice of counsel, Bush made a claim on the $5,350 deposit for breach of contract. Faced with conflicting demands for the deposit, Rosen contacted petitioner to determine how the deposit should be disbursed. The matter was eventually referred by petitioner to its local office in Miami for investigation in October 1984. On November 27, 1984, counsel for petitioner advised Rosen that because of the pending complaint of the Yanes, petitioner could not issue an escrow disbursement order. However, he was told of the remaining two alternatives for resolving the dispute prescribed in Subsection 475.25(1)(d), Florida Statutes. A complaint for interpleader was later filed in circuit court by agreement of counsel for the Yanes, Bush, and Rosen. That complaint is still pending. Rosen, as broker, was never personally involved in the transaction until a complaint with petitioner was filed. He stood to gain no commission on the sale since the Franklins were working on a "100 percent basis" and were to receive the entire commission. Rosen has been licensed for some thirty-one years and has had no prior disciplinary action in all that time.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the administrative complaint be DISMISSED with prejudice. DONE and ORDERED this 5th day of June, 1985, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of June, 1985.
Findings Of Fact At all times relevant hereto, respondent, Ruth Simowitz, held real estate salesman license number 0072273 issued by petitioner, Department of Professional Regulation, Division of Real Estate (Division). When the events herein occurred, she was employed by Coldwell Banker Real Estate, Inc. in North Miami Beach, Florida. She has been licensed for more than fifteen years. Respondent, Thelma A. Jordon, held real estate salesman license number 0002486 also issued by the Division. She has been licensed for some twelve years, and was a salesman for Associates Realty Corporation in Miami, Florida when the events herein occurred. David J. Alden, a native of the United Kingdom, first moved to Florida in May, 1978. He purchased a house at 14615 Southwest South River Drive in Miami, Florida. The listing agent for the sellers was Simowitz. When Alden decided to sell his house in 1981 or 1982, he chose Simowitz as his listing agent. After the listing expired some six months later, he took the house off the market for a period of time. In April, 1985, Alden again listed the property with Simowitz. Shortly before June 13, 1985, Simowitz telephoned Alden and said she had prospective buyers who wished to inspect the house. She asked if they could visit the house within the next few days. Alden agreed to this. On June 13, Jordon, who worked for a different firm, brought two prospective buyers named Nevell and Marilyn Johnson to inspect the Alden property. The Johnsons found it to their liking, and had Jordon prepare a contract with a purchase price of $95,000, conditioned upon their obtaining a conventional first mortgage in the amount of $76,000 at an interest rate of 10.5 percent. Both Jordon and Simowitz presented the offer to Alden on the morning of June 16. They told Alden he could net approximately $39,000 from the sale after subtracting out his share of the closing costs. This was confirmed in a "Seller's Estimated Net Proceeds" prepared by Jordon and given to Alden on June 18. It reflected approximate cash to seller at time of closing in the amount of $39,798. Although Alden and his wife were not happy with the price offered by the Johnsons, after mulling over the matter, they decided to accept the offer and signed the contract on June 18. After the contract was accepted, Jordon arranged an appointment for the Johnsons on June 20 with State Wide Mortgage Corporation, a mortgage brokerage firm in Hollywood, Florida. After learning from a mortgage broker named Dean Lakin that conventional loans could not be obtained at less than a 12 percent interest rate, which was in excess of that provided in the contract, Nevell Johnson decided to make application for a VA loan which he could obtain at a lower interest rate (11 1/2 percent). To do this, it was necessary that he and his wife get Alden's consent to execute a new contract with a provision that VA financing would be used. A new "Good Faith Estimate of Settlement Services" was prepared by Lakin while the Johnsons were in his office, and it reflected that the discount points ($2,280) on the VA loan would be paid by the buyers. Believing that no additional charges would be borne by Alden under the new financing, Jordon prepared a new contract which the Johnsons executed on June It contained the same purchase price, but specifically authorized VA financing. Jordon then called Simowitz, advised her of the change in financing, and suggested Simowitz make an appointment with the Aldens to discuss the change. On June 20 Simowitz telephoned Alden and said the buyer was a veteran and could obtain a lower interest rate with a VA loan. She asked if she and Jordon could meet with him and discuss the matter. Respondents and Alden met the same day. At that time, Alden said he would accept the new offer only if he could get the same net proceeds as had been previously promised and did not have to pay the discount points which he understood the seller would normally pay on a VA loan. Respondents assured him that the buyer would incur this charge. That representation was based upon the advice given Jordon by Lakin. The contract itself provided that "mortgage closing costs, including mortgage title insurance, notice documentary stamps, intangible taxes, origination fee, recording fees, closing fees, surety, etc., to be paid by BUYER." Relying upon respondents' representation, Alden executed the second contract on June 20, 1985. Alden had no further contact with Jordon after that date. Alden returned to the United Kingdom in August, 1985. Prior to leaving, Alden and his wife visited the offices of Consumer's Title Agency, Inc. (CTA), the title company handling the closing. At the request of CTA, Mrs. Alden executed several documents including a power of attorney form which gave Simowitz power of attorney "to execute any and all documents necessary to complete the sale of" Alden's home. Simowitz did not learn this until shortly before the closing. The closing took place on September 23, 1985. Both respondents attended the closing and Simowitz signed various documents on Alden's behalf. Respondents were given a settlement sheet which reflected that Alden, and not the Johnsons, would pay the points on the loan. Simowitz was surprised but did not object or otherwise attempt to rectify the matter. Jordon was also surprised but said nothing. Alden returned to Florida on October 1, 1985, and visited Simowitz's office to ask for his proceeds. She told him the title company was sending his check and it should arrive in England any day. She said nothing about him being charged for points. On October 4 Alden returned to England and found his check from the title company in the mail. Upon seeing that his proceeds were only $33,505.48, he immediately telephoned Simowitz who then told him that the buyers' attorney insisted at closing that Alden pay the points. Thereafter, Alden filed a complaint with petitioner, and contacted his Miami attorney seeking advice. After consultation, Alden's counsel made a written demand on Associates Realty Corporation and Coldwell Banker Real Estate, Inc. for approximately $4,500 in closing costs paid by Alden. After their firms received the demand, Simowitz and Jordon promptly agreed to reimburse Alden $3,927 of the $4,500 in dispute. The remainder represented termite repair charges ($575) and document preparation fees ($100) which the sellers were clearly obligated to pay under the contract. Alden accepted this amount in satisfaction of his claim and received payment from respondents on February 15, 1986. Respondents conceded they made an "honest mistake" in representing to Alden that the buyer would pay the points on a VA loan. They did so because they relied upon incorrect advice given by a mortgage broker. Although both were long-time licensees, neither was aware that federal law requires that the seller incur these charges. They contend they said nothing at closing because they desired to avoid litigation by the buyers against the Aldens which would further complicate the matter. When such advice was given to Alden on June 20 there was no intent by respondents to deceive or trick Alden into signing the contract. Neither licensees has been the subject of prior disciplinary action.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that both respondents be found guilty of breach of trust, concealment and culpable negligence, and they be given public reprimands and each pay a $250 administrative fine, to be paid within thirty days after date of Final Order. DONE and ORDERED this 1st day of August, 1986, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of August, 1986. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Post Office Box 1900 Orlando, Florida 32802 Gordon W. Taylor, Esquire 14837 N.W. 7th Avenue Miami, Florida 33168 Wings A. Benton General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold H. Huff, Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802
The Issue The issues are whether Respondent is guilty of failing to account for and deliver a share of a real estate commission, as required by Section 475.25(1)(d)1., Florida Statutes, and, if, so, what penalty should be imposed.
Findings Of Fact At all material times, Petitioner has been a licensed real estate broker, holding license number 0314643. Petitioner does business under the name, Blue Ribbon Realty. Petitioner employs several real estate salesmen in her brokerage business. Virginia M. Poole is a licensed real estate salesman. During 1988, she was looking for a house to buy. At the time, she was working in a hotel as a cashier. While working at the hotel, Ms. Poole met Mary Asian, who was also working at the hotel. At the same time, Ms. Asian was and remains a real estate salesman working at Blue Ribbon Realty. In a period of several weeks, Ms. Asian showed Ms. Poole several houses and presented at least one offer with a small deposit. One day while driving on her own, Ms. Poole came across a house that appealed to her. At or prior to this time, Ms. Poole had placed her salesman's license with Blue Ribbon Realty. Ms. Poole negotiated a sales contract with the seller. The contract was signed by Ms. Poole and the seller on November 10, 1988. By a separate commission agreement signed the same date, the seller agreed to pay Respondent a commission equal to 3% of the sales price. The closing took place on December 14, 1988. The closing agent duly paid Respondent the sum of $2172, which represents 3% of the purchase price. Respondent cashed the check and received the proceeds thereof. Under the agreement between Ms. Poole and Respondent, Ms. Poole was to be paid one-half of all commissions that she earned for Blue Ribbon Realty. At the closing, Ms. Poole asked about her share of the commission. Refusing to pay anything to Ms. Poole, Respondent told her, "You get it any way you can." Respondent believed that Ms. Asian, not Ms. Poole, was due the salesman's share of the commission, which by agreement was one-half of the sum paid to Blue Ribbon Realty. Ms. Poole, who never listed or sold any properties for the two or three months that her license was placed with Respondent, had placed her license with another broker over ten days in advance of the December 14 closing. Under the agreement between Respondent and her salesmen, no commission was due any salesman who left Blue Ribbon Realty more than ten days prior to a closing. The reason for this policy was that much work had to be done in the ten days preceding a closing, and it was unfair to require others to perform the work while paying the salesman's share of the commission to a departed salesman. After repeated attempts to obtain payment of the $1086 due her, Ms. Poole filed a legal action against Respondent in Orange County Court. The defenses raised by Respondent apparently proved unavailing. On April 12, 1989, Ms. Poole received a final judgment in the total amount of $1197.44, including interest and costs. Although the filing date does not appear from the face of the exhibit, a Notice of Appeal was served on Ms. Poole on June 30, 1989. Subsequent attempts to recover on the judgment were unsuccessful. At this point, Ms. Poole filed a complaint with Petitioner. Respondent never requested the Florida Real Estate Commission to issue an escrow disbursement order determining who was entitled to the disputed half of the commission, never sought an adjudication of the dispute by court through interpleader or other procedure, and never submitted the matter to arbitration with the consent of the parties. The only thing that Respondent has done in this regard is to deposit the contested sum in the trust account of her attorney, apparently pending the resolution of the appeal.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that Petitioner enter a Final Order finding Respondent guilty of failing to account or deliver a share of a commission to one of her salesmen, issuing a written reprimand, and imposing an administrative fine in the amount of $1000. ENTERED this 23 day of May, 1990, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 23 day of May, 1990. COPIES FURNISHED: Steven W. Johnson, Senior Attorney Division of Real Estate P.O. Box 1900 Orlando, FL 32802 Attorney Raymond O. Bodiford P.O. Box 1748 Orlando, FL 32802 Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32801 Kenneth Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792
