The Issue The issue presented for decision herein is whether or not Respondent's real estate salesman's license should be disciplined because he engaged in acts and/or conduct amounting to fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust and for failure to account and deliver monies entrusted to him while acting as a salesman in violation of Section 475.25(1)(b) and (d), Florida Statutes.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received including a review of the entire record compiled herein, I hereby make the following relevant factual findings. During times material herein, Respondent was, and is, a licensed real estate salesman in Florida and has been issued license number 0128100. (Petitioner's Exhibit 1) Augustin Leon Padron is a resident of Caracas, Venezuela and is a part- time resident of Miami, Florida. During 1978, Leon was interested in purchasing property in the Miami area so he contacted a distant cousin, the Respondent, to help in the acquisition and management of any property be purchased. On November 9, 1978, Leon executed a power of attorney appointing the Respondent as his attorney-in-fact in regard to the acquisition and management of properties that Leon may purchase. (Petitioner's Exhibit 5) On November 17, 1978, Leon wired to the Pespondent $20,000 to be held for the acquisition of property by Leon. (Petitioner's Exhibit 6) On August 31, 1979, Leon, through the assistance of Respondent, purchased a duplex located at 43-45 NW 44 Avenue, Miami, Florida. Of the $20,000 sent to Respondent by Leon, $17,194.35 was used for the purchase of the duplex, leaving a balance of $2,805.65. (Petitioner's Exhibits 4 and 6) The balance of $2,805.65 was never accounted for by Respondent or delivered to Leon. Pursuant to the power of attorney, Respondent assumed the duties of manager of the duplex for Leon, which duties included the collection of rent, making repairs and the payment of the monthly mortgage to Atlantic Federal Savings and Loan Association in Ft. Lauderdale, Florida. On or about April 1, 1981, Leon gave a $10,000 check to the Respondent for the purpose of making certain repairs and additions to the duplex. (Petitioner's Exhibit 7) Respondent never made repairs or additions as requested and has failed to account for or deliver, to the present time, any of the $10,000, although demands have been made by Leon for the return of the money. On or about May 24, 1981, Leon issued two checks, each in the amount of $10,000. One check was issued to Arango and Galarraga, a law firm, as a deposit towards the purchase of the Kasbah Bar. The second check was issued to the Respondent to he used as a deposit on the purchase of property in Kendall. (Petitioner's Exhibit 8) Both of the above-referred transactions bailed to materialize. On July 7, 1981, the law firm of Arango and Galarraga issued a check payable to Leon in the amount of $10,000 representing a return of the deposit. (Petitioner's Exhibit 9) This check was tendered to the Respondent. Respondent took this check plus the $10,000 deposit as to the Kendall property and had a $20,000 certified check drawn and made payable to Leon. (Petitioner's Exhibit 10) On November 19, 1981, at Leon's request, Respondent issued a check to Leon in the amount of $10,000 representing a part payment of monies owed to Leon by Respondent. (Petitioner's Exhibit 11) Leon attempted to cash this check hut was told that there were insufficient funds in the Respondent's bank account to cover such an amount. (Petitioner's Exhibit 12) Leon has made numerous demands upon Respondent for the payment of the $10,000 but Respondent has failed to pay over to Leon the $10,000 or to make good on the check he issued. During 1980 and 1981, Respondent failed to make at least five (5) mortgage payments causing the mortgage loan on the duplex, referred to above, with Atlantic Federal Savings and Loan Association to become delinquent and foreclosure proceedings were instituted. (Petitioner's Exhibit 3) The evidence is undisputed that Atlantic Federal notified Respondent on at least two occasions that the loan was delinquent and, if not brought current, foreclosure proceedings would result. (Petitioner's Exhibits 15, 16, 17, and Respondent's Exhibit 1) Respondent failed to advise of the nonpayment of the mortgage and the impending foreclosure. Additionally, at no time did Respondent advise Leon that be did not have sufficient funds to make the mortgage payment as scheduled. On November 19, 1981, Leon discovered through the public records of Dade County and Atlantic Federal, that his duplex was about to be foreclosed. Leon brought the mortgage payments current and paid the attorneys fees and costs involved amounting to $5,281.47. (Petitioner's Exhibit 13) Based on the above-referred events, Leon revoked the Respondent's power of attorney effective that day, November 19, 1981. (Petitioner's Exhibit 14) Subsequent to November 19, 1981, Leon attempted to work out arrangements whereby Respondent would repay to Leon all monies owed by Respondent to Leon. These attempts failed and Leon filed suit against Respondent in Dade County Circuit Court for $26,065. On July 24, 1992, Leon secured a final judgment against Respondent for the amount requested, i.e., $26,065 plus interest and costs. (Petitioner's Exhibit 2) To this day, Respondent has failed and refused to satisfy the judgment and Leon has been unsuccessful in his attempted collection on that judgment. Respondent contends that the $10,000 check that gas issued him by Leon was for the payment of services performed on behalf of the Respondent. Evidence in that regard reveals that Respondent was not charging Leon a commission on any real estate transactions. A review of Respondent's testimony herein reveals that in addition to the acquisition and management of the duplex referred to herein which is located at 43-45 NW 44 Avenue in Miami, Respondent only picked up and forwarded goods and merchandise to Respondent in Caracas, Venezuela which had either been purchased by or shipped to Respondent from New York and other places. Apart from the time involved in the reshipping of those goods and merchandise, Respondent only paid nominal shipping charges. It is true that Respondent attempted to negotiate for the sale and purchase of the Kasbah Bar for Leon; however, his efforts in that regard were unsuccessful. Based on all of the evidence herein, including the testimony of Leon and the documentary evidence received, Respondent's contention that Leon owed him in excess of $10,000 is not credible and is rejected. This is especially so in view of the fact that Respondent issued a check in the amount of $10,000 to Leon which was returned for insufficient funds. For all these reasons, Respondent's testimony is incredible and is rejected in those instances wherein it differs from the version offered by the deposition testimony of Augustin Leon Padron.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is hereby RECOMMENDED: That the Respondent, Ignacio Dulzaides', license as a real estate salesman (number 0128100) be revoked. DONE and ORDER of this 11th day March, 1985, in Tallahassee, Florida. JAMES E. BRADWELL 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 11th day of March, 1985.
Findings Of Fact The Respondents, Ernest Page and Page Realty, Inc. are licensed as real estate brokers in the State of Florida, having been issued license numbers 0187380 and 0223391, respectively. From approximately July 28, 1983, to approximately August 11, 1983, the Respondent, Ernest Page, knowingly obtained or used, or endeavored to obtain or use, certain personal property, including typewriters, copy machines, a television receiver, and a stereo receiver, each of which was valued at $100.00 or more, which was the property of Stewart Hudson or Michael Bethea, with the intent to temporarily or permanently deprive the owners thereof, and to appropriate this property to their own use. The Respondent, Ernest Page, had received and was in possession of property that he knew or had reason to know was stolen. The Administrative Complaint tracked the charging language of the information filed against the Respondent, Ernest Page, in the Circuit Court of the 9th Judicial Circuit of Florida. The Respondent, Ernest Page, was found guilty of six counts of grand theft second degree by a jury on January 31, 1984. He was adjudicated guilty by judgment dated March 28, 1984, of six counts of grand theft second degree, which crimes are punishable as third degree felonies. The Respondent, Ernest Page, was sentenced on March 28, 1985.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that real estate broker's license numbered 0187380 and 0223391, held by the Respondents, Ernest Page and Page Realty, Inc., respectively, be revoked. THIS RECOMMENDED ORDER entered this 31st day of May, 1985, in Tallahassee, Leon County, Florida. WILLIAM B. THOMAS 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 31st day of May, 1985. COPIES FURNISHED: James H. Gillis, Esquire 400 West Robinson Street P. O. Box 1900 Orlando, Florida 32801 Edward R. Kirkland, Esquire 126 E. Jefferson Street Orlando, Florida 32801 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff, Executive Director Department of Professional Regulation 400 West Robinson Street P. O. Box 1900 Orlando, Florida 32802
The Issue The issues in this case are as follows: Was Respondent Daniel Oldfather legally responsible for accounting and refund? Were the refund provisions of the receipt form printed in type as required by Rule 21V-10.15, Florida Administrative Code? Was Richard Vanicek due a 75 percent refund? Was Vanicek due a complete refund because of inaccurate information given him? Did Vanicek make written demand for a refund, and was a written demand for the refund necessary?
Findings Of Fact In September of 1979, Sun Rentals and Management, Inc., was a corporate real estate broker holding license number 0208997 and doing business at 2703 East Oakland Park Boulevard in Fort Lauderdale, Florida. At that time, Victor Stevens was a licensed real estate salesperson employed by Sun Rentals. Stevens, as an employee of Sun Rentals, interviewed Richard D. Vanicek concerning Vanicek's rental needs. Vanicek entered into a contract with Sun Rentals (Petitioner's Exhibit number 1) under which he paid Sun Rentals $45 and Sun Rentals was to provide him with rental information on available rentals. Vanicek received a receipt (Petitioner's Exhibit number 3) which provided in pertinent part as follows: ... Notice, pursuant to Florida Law: If the rental information provided under this contract is not current or accurate in any material aspect, you may demand within 30 days of this contract date a return of your full fee paid. If you do not obtain a rental you are entitled to receive a return of 75 percent of the fee paid, if you make demand within 30 days of this contract date. ... It was agreed that the receipt was printed totally in ten-point type. Vanicek attempted to visit one of the listings provided to him by Sun Rentals. He encountered difficulty in locating the listing; however, his lack of familiarity with Fort Lauderdale may have contributed to his difficulties. Vanicek found a rental through his own efforts and requested a refund of 75 percent of his $45 fee by telephone. He made his request first to Stevens, who referred him to Daniel Oldfather pursuant to office policy. As a result of this referral Vanicek spoke with a man at Sun Rentals, who may have been Oldfather, and restated his request for a refund. His request was denied. Daniel Oldfather was the licensed broker/salesman for Sun Rentals during September, 1979. He was the office manager of Sun Rentals at that time. Martin Katz was broker for Sun Rentals in September of 1979 (Transcript; Page 261, L 21). Oldfather was the next man in authority at the office under Katz (Transcript; Page 235, L 6). Katz delegated to Oldfather the authority to make refunds. The rental forms, including the rental receipt form (Petitioner's Exhibit number 3), were submitted to the Board of Real Estate.
Recommendation Having found that Daniel Oldfather was not guilty of any of the allegations in the amended Administrative Complaint, it is recommended that Counts I, II and III against him be dismissed. Having found that Sun Rentals and Management, Inc., is not guilty of the allegations contained in Count III of the amended Administrative Complaint, it is recommended that Count III against Sun Rentals be dismissed. Having found that Sun Rentals is guilty of violating Sections 475.25(1)(d) and 475.453(1), Florida Statutes, it is recommended that the license of Sun Rentals be suspended for 60 days, during which time the officers and directors of said corporation may not engage in the practice of real estate sales or brokerage under their names or in any other corporate name. DONE and ORDERED this 4th day of May, 1982, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, 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 4th day of May, 1982. COPIES FURNISHED: Robert F. Jordan, Esquire Post Office Box 14723 Fort Lauderdale, Florida 33302 James Curran, Esquire 200 SE Sixth Street, Suite 301 Fort Lauderdale, Florida 33301 C. B. Stafford, Executive Director Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802 Samuel Shorstein, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact Respondent, Phillip Harrison Bare, was first licensed as a registered general contractor by the State of Florida in December, 1974, when license number RG 0023484, was issued to him as an individual. This license was renewed on an annual basis until June 30, 1979. Effective July 1, 1979, Respondent's license went into delinquent status. It was suspended for one year by Petitioner, CILB, effective June 22, 1979. In addition to the suspension, the Board imposed a $500.00 fine on Respondent which, to this date, has not been paid. Respondent's license as a registered general contractor has not been revoked or voluntarily surrendered. He has never been licensed as a roofing contractor by the state. A search of the records of CILB also indicates that Southern Improvement and Siding Company, Inc., is not now, nor has it ever been, qualified by Respondent or any other licensee of the CILB. However, during the period 1980 and 1981, Respondent was doing business in the name Southern Improvement and Siding Company, Inc. His license has never been registered in Ocala, Marion County or Lake County. On or about May 21, 1980, Respondent, doing business as Southern Improvement and Siding Company, Inc. entered into a home improvement installment sales contract with Ethorn and Alberta Buie of Ocala, Florida. The contract called for Respondent to remove the existing kitchen cabinets, install new cabinets with trim, and a new counter top in their home. Work was to begin on or about April 25, and to be completed on or about April 26, 1980. Cash price for the work was $2,800.00. Some additional funds were advanced to the Buie's by Respondent for debt consolidation consisting of $600.00 due and payable on the Buie's van and $1,900.00 for sheet rock which Mr. Buie was to install, which brought the total amount to $5,300.00. The interest charged on the home improvement portion of the contract price was $1,476.60 and on the debt consolidation portion, $1,316.80, for a total of $2,793.40. This figure, when added to the base amount of the contract, brought about a total deferred payment price of $8,093.40 which was to be paid in 60 monthly installments of $134.89 each. This reflected an annual percentage rate of 18 percent interest. On the same date as the contract. Respondent also prevailed upon the Buie's to execute a mortgage on their home as security for the contract price. This mortgage was subsequently assigned eight days later to Mr. E. O. Hodge, Sir. Attached to the assignment of mortgage was a sworn certificate of completion dated April 28, 1980 which reflects that all material and labor called for in the contract were furnished and installed and the work satisfactorily completed. Consistent with the terms of the contract, Respondent ordered cabinets for the Buie kitchen from a local supplier. When they were delivered, however, the seller learned that Respondent was the individual who had purchased the cabinets, and he refused to leave them without payment. Mr. Buie subsequently borrowed $715.00 from the bank to pay for the cabinets which he, himself installed. Respondent performed no work whatever called for under the terms of the contract. All attempts by the Buie's to contact Respondent at his place of business by leaving phone messages on an answering machine were without any success. He never returned calls and never accomplished any work for them. Respondent got the Buies to sign the mortgage and the other papers without explaining to them what these papers were. Though Mrs. Buie denies that either she or her husband ever signed a mortgage for the Respondent, the mortgage in question bears what looks to her "kind of" like her and her husband's signatures. They were not given a copy of the contract, mortgage, or the notice of right of recission by Respondent. They do not recall signing a certificate of completion but Mr. Buie's signature appears thereon. There is, actually, no doubt that Respondent prevailed upon the Buies to signs the documents in question and that the signatures on them are theirs. On May 12, 1980, Respondent, still doing business as Southern Improvement and Siding Co., Inc., entered into a home improvement installment contract with Lillie Terry and Ollise Mitchell to do some work on their home in Citra, Florida. The work to be done consisted of the removal and replacement of the roof; the replacement of all rotten sheeting and facia boards; the replacement of flooring on the front porch; the installation of new front and back doors with locks; the installation of a new screen door at the front; the installation of paneling in two bedrooms; the installation of ceiling tile in the front room and kitchen: the leveling of concrete piers around the house, and the painting of the exterior of the house with one coat of latex paint. The total price for this work was $2,850.00 with interest at 18 percent for 60 months. Deferred payment price was $4,342.80 to be paid in the monthly amount of $72.38. On the same day that the contract was signed, both homeowners were given a notice of right of recission which they acknowledged, and they also executed a mortgage on their property to Southern Improvement and Siding Company, Inc. Several days later, on June 13, 1980, they executed the certificate of completion for the work and thereafter, on June 17, 1980, Respondent assigned the mortgage previously given to Southern to Mr. E. O. Hodge, Sr., identified previously. Work on the house was begun approximately one week after the contract was signed but was not completed nor was much done until late 1980 to mid 1981. The work was done in snatches and after mid 1981 Respondent quit work on their house and never returned. Repeated calls left on his answering machine were unanswered. All the work called for in the contract was done except the paneling in the two bedrooms and the screen door. Neither of these items was accomplished. The work that was done, however, was of poor quality. Though the evidence shows that these ladies signed a certificate of completion, Mr. Mitchell contends she did not know what it was when she signed it, and when she received the letter from Mr. Hodges reflecting that the mortgage had been assigned to him, Respondent was still working on the property. Mr. Hodges had indicated that he would not take an assignment of a mortgage until the work was completed and a certificate of completion furnished him. From the state of the evidence here, it is obvious that Respondent secured certificates of completion before completing the work. On or about May 21, 1980 Mr. LeRoy Pruitt, who can neither read nor write, was contacted by Respondent concerning doing some repair and modification to the Pruitt home in Ocala, Florida. Mr. Bare prepared a proposal on a form bearing the heading American General Corporation of Florida in which he proposed to build an addition to the existing house and do the finishing work thereon. On May 23, 1980, before any work was done, he came back to the Pruitts and secured from them an $800.00 down payment on the proposal, to be applied against the $7,700.00 total cash price of their project. On May 26, he came back and had the Pruitts sign two separate installment contracts with Southern Improvement and Siding Company, Inc. The first contract was to build the 11 by 24 foot addition for a cash price of $5,100.00 from which the down payment of $400.00 was deducted leaving an unpaid cash balance- of $4,700.00. Finance charges of $5,014.00, representing 10 years of interest at 16.75 percent, raised the total price of this contract to $9,714.00. The second contract, for the finishing work, in the amount of $3,400.00, from which $400.00 down payment was deducted was to be paid off over 5 years at an interest rate of 16.75 percent also. The total price on this contract was $4,449.60. The 10 year contract was to be paid at $80.95 per month and the 5 year contract was to be paid at $74.16 per month. That same day, May 26, 1980, Respondent also got the Pruitts to sign two separate mortgage deeds on their property - one for each of the two contracts. Mr. Pruitt signed all these documents because he believed the Respondent to be honest. He believed that all the work was to cost him $9,000.00 instead of the in excess of $14,000.00 total for the two contracts. Respondent didn't start work on the project until two months after the contract was signed. Even when work was begun, Respondent merely framed in the addition, put in the floor and the ceiling, and then quit. Mr. Pruitt had to have someone else finish the job at a cost of an additional $2,000.00. Respondent, at no time, pulled a permit for the construction work he did, or agreed to do, under the contract. The Pruitts received their mortgage payment books for the two mortgages from the assignee of the mortgage before the work was even started. They were surprised to see that the mortgages had been assigned to Mr. E. O. Hodge. Even after Respondent quit work on the project, they continued to make the monthly mortgage payments of $155.05 for both mortgages. On July 13, 1980, Respondent, still acting for Southern Improvement and Siding, Inc., entered into a home improvement installment contract with Susie and Shirley Williams to do repair work on their home in Ocala, Florida. This work was to include removing existing windows and installing aluminum ones; rescreening the front porch; installing an exterior and interior door; putting a ceiling in the bathroom with paneling; replacing some flooring and installing some floor joists; and installing sheet rock in the kitchen. The cash price for this job, which was supposed to have been started on July 21, and been completed on July 30, 1980, was $2,900.00. When interest at 16 percent for 5 years was added, the total price amounted to $4,419.00. On the same day the contract was signed, Respondent furnished to the Williams' a notice of right of recission, and he also secured a mortgage on their property in favor of Southern Improvement and Siding Company, Inc. Though Respondent did not fix the floor joists or flooring, on July 23, 1980, he secured from Susie Williams a certificate of completion. Thereafter, on July 24, 1980, he assigned the Williams mortgage to Mr. Hodge. Somewhat later, on January 7, 1981, Respondent, as owner of Southern Improvement and Siding Company, Inc., entered into a home improvement installment sales contract with John Fields for repairs to his home in Ocala, Florida. These repairs were to include installing a kitchen sink; hooking up a tub and commode; and installing facia boards in both the front and back of the house. The cash price for this work was to be $2,200.00 and it was to be completed by January 15, 1981. However, when an interest rate of 17.6 percent was applied, according to the terms of the contract, for 48 months, the total price of the work was raised to $3,079. 68. On the same day the contract was signed, Mr. Bare secured from Mr. Fields a mortgage on his property to cover the cost of the repairs. Thereafter, Respondent secured the signature of Mr. Fields on an undated Certificate of Completion form, and on January 7, 1981, the date of the contract and mortgage were signed by Mr. Fields, he assigned the mortgage to Mr. E. O. Hodge, Sr. No work was performed under the terms of this contract on the Fields property. On August 4, 1981, Micque Little, signed a mortgage note in favor of Southern Improvement and Siding Company, Inc. in the amount of $2,800.00 with interest at 18 percent, to be paid in monthly installments of $58.86 per month, for the Respondent to some repairs on her house in Okahumpaka, Florida. The work was to include reroofing the house on the north side; installing hot tar and gravel on the addition; repairing the existing plumbing; installing a new bathroom vanity and sink; installing 10 feet of kitchen base cabinets; replacing rotten facia boards; replacing a window pane in the bedroom; and putting a coating on the existing tin roof. On the same date, she signed the Notice Of Recission furnished her by Respondent and an affidavit stating that she understood her first payment was due on September 15, 1981. Though the work was not done to her satisfaction in that the roof still leaks as does the sink, on August, 19, 1981, she signed a certificate of completion. Once she signed the initial mortgage and agreement, she did not see the Respondent again. What work was done by other. At the time she signed the documents for the Respondent, be did not explain them to her nor did he give her time to read them. The terms of the mortgage were explained to her by Mr. Hodges at a later date. She signed the completion certificate for Respondent on his representation that he would get someone out to fix what had to be fixed but he never did this. Little had to pay extra to get someone else to fix the work that Respondent's crew was supposed to have done. Respondent failed to pull a permit for any of the work done or called for in the contract. In August, 1981, while doing business as Southern Improvement and Siding Company, Inc. (Southern), Respondent contracted with Ernest Gram, of Yalaha, Florida, to replace the roof on the Gram residence and install two outside doors and two steps. The contract price for this proposed modification was $8,000.00. Thereafter, Southern removed the old roof as required and installed ruled roofing in its place. The contract entered into by Respondent and Gram called for installation of shingle roofing. Shingle roofing is different than ruled roofing. Respondent at no time installed the doors or the steps as called for in the contract. Respondent failed to pull a permit for any of the work done or called for in the contract. Mr. E. O. Hodges, Sr. of Clermont, Florida started investing with the Respondent in 1973. When he started buying Respondent's mortgages, he found Respondent to be quite reliable based on his personal checking of Respondent's projects. He found Respondent to be timely in getting the work done and on the basis of his own observation, developed a trust in Respondent that made him quit checking out the individual jobs. Mr. Hodge contends that every mortgage that he bought was contingent upon his receiving a certificate of completion and that he would not buy a mortgage without one. He also contends that on most of the mortgages, he did not know that the work was not completed and did not learn of the difficulties until as much as a year after the Respondent walked off the job. Mr. Hodge's testimony, however, is unworthy of belief in that he contends that he personally checked the Fields job in January, 1981 before he bought that mortgage. No work was done by Respondent at all under the Fields contract.
Recommendation Based on the foregoing, it is, therefore: RECOMMENDED THAT Respondent's license as a registered general contractor in the State of Florida be revoked and that he be fined $1,000.00. RECOMMENDED this 6th day of September, 1984, in Tallahassee, Leon County, Florida. ARNOLD H. POLLOCK 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 6 day of September, 1984. COPIES FURNISHED: Douglas A. Shropshire, Esquire Department of Professional Regulation 130 North Monore Street Tallahassee, Florida 32301 Mr. Phillip H. Bare 3920 S.W. Sixth Avenue Ocala, Florida 32674 James Linnan, Executive Director Post Office Box 2 Jacksonville, Florida 32202 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Stephanie Daniels, Esquire 130 North Monroe Street Tallahassee, Florida 32301
The Issue The four count Administrative Complaint presents the following issues: Whether Mr. Burgess is guilty of concealment, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction in violation of Section 475.25(1)(b), Florida Statutes (2007).2 Whether Mr. Burgess operated as a broker without being the holder of a valid and current license as a broker in violation of Section 475.42(1)(a), Florida Statutes and, therefore, in violation of Section 475.25(1)(e), Florida Statutes. Whether Mr. Burgess failed to ensure his brokerage corporation had a current registration with the Department in violation of Florida Administrative Code Rule 61J2-5.019, and, therefore, in violation of Section 475.25(1), Florida Statutes. Whether Mr. Burgess is failed to account or deliver to the Bells any property or assets which has come into his hands and is not his property and which he is not entitled to retain, in violation of Section 475.25(1)(d)1, Florida Statutes.
Findings Of Fact Clear and convincing evidence establishes the following findings of fact: The parties agree that Mr. Burgess is now, and has been at all times material to this case, a Florida licensed real estate broker, holding license number 701456. Mr. Burgess's business relationship with Willis C. and Nell F. Bell (the Bells) began in 2002 and 2003. In those years he served as realtor in selling a duplex and buying a house located at 42 East Drive, North Miami Beach, Florida. Later the Bells paid Mr. Burgess $1,000 to assist with re-financing the house. In the following years, Mr. Burgess borrowed money from the Bells. The Bells knew little about real estate and the real estate business. They trusted and relied upon Mr. Burgess, and he knew that. Mr. Burgess entered into a contract with the Bells to sell a townhouse located at 648 Northeast Second Street, Homestead, Florida. The contract is titled “Exclusive Right of Sale Listing Agreement” and dated October 3, 2006. The contract identifies Mr. Burgess as an “Authorized Listing Associate or Broker.” It gives Mr. Burgess the exclusive right to sell the Bells’ property and obligated him to market and sell the property. The contract identifies the sale price as $310,000.00. The contract term is October 3, 2006 to April 3, 2007. The first sentence of the contract identifies the parties as the Bells (Sellers) and Mr. Burgess and World Realty (Brokers). Mr. Burgess signed it as “Authorized Listing Associate or Broker.” The signature area identifies the Brokerage Firm Name as Beachfront Realty, Inc. The Bells purchased the Homestead townhouse at Mr. Burgess’s urging. He convinced the Bells that buying the Homestead townhouse was a good real estate investment. Mr. Burgess also loaned the Bells $3,000 or $3,500 to help them purchase the property. Mr. Burgess did not succeed in finding buyers for the property. Mr. Burgess proposed to the Bells that they rent the property. He repeatedly offered to locate a tenant for them. For some time the Bells resisted the idea because of concerns about wear and tear and possible damage to a new townhouse. Finally they agreed. Mr. Burgess identified a tenant, Ms. Kenya Horne. He repeatedly told the Bells that Ms. Horne’s occupation and lease of the townhouse were dependent on approval to participate in a government rent support program. Mr. Burgess prepared and the Bells executed a lease with Ms. Horne for the period beginning October 8, 2007 and ending September 30, 2008. It provided for lease payments of $1,300.00 per month and a security deposit of $1,300.00. Mr. Burgess signed the lease as a witness. But the Bells told Mr. Burgess that they did not want Ms. Horne to take possession of the townhouse until they met and approved her. Mr. Burgess agreed. He repeatedly assured the Bells that he would not give Ms. Horne possession of the property until they had met and approved of her. Also Mr. Burgess repeatedly advised the Bells that Ms. Horne had not moved into the property because she could not obtain needed approval for rent assistance. These assurances were false. Despite his repeated assurances and statements, Mr. Burgess gave the tenant possession of the property. She lived there four or five months. During the same time period, while the tenant occupied the property, Mr. Burgess was telling the Bells that Ms. Horne had not obtained rent assistance and that renting the property to her was not going to work. He never told the Bells that the tenant moved in. And he never gave the Bells any rental payments or a deposit or made any arrangements for them to receive rental payments or a deposit. Uneasy about matters, the Bells traveled with Laurence Linder, a friend who was a real estate broker and insurance salesman, to Homestead to inspect the townhouse. They found that the property had been occupied and damaged. The damage included holes in several walls and fire damage in the kitchen. The stove and microwave were destroyed. The carpet was damaged. The Bells called Mr. Burgess from the townhouse and asked him how the property was. Mr. Burgess did not know that the Bells were at the townhouse. He told them it was in fine shape. When the Bells told Mr. Burgess that they were in the townhouse, he broke down and cried and admitted he had let somebody live there without telling them. When the Bells confronted Mr. Burgess with his actions and the damage, Mr. Burgess admitted deceiving the Bells about the tenant and her occupation of the townhouse. He promised to make restitution for the damage. Mr. Burgess signed a document titled Remedy of Rental. In it he agreed to do the following: Pay the City of Homestead’s final outstanding utility bill of $1,700 on or before March 14, 2008. Pay the Bells $4,600 to repair damage and an additional $2,000. Pay the Bells $5,200.00, the rental amount from October 2007 to January 2008, on or before April 11, 2008. Pay all amounts by certified or cashiers check. Mr. Burgess did not make any of the payments agreed to in the Remedy of Rental.
Findings Of Fact The Respondent, Home Owners Direct Sales, Inc., is now and was at all times alleged herein a registered real estate entity. Respondent, Roger L. Davis is now a registered real estate broker and from July 30, 1976 to the present time, has been a registered real estate broker, President and active firm member of Respondent, Home Owners Direct Sales, Inc. Respondent Davis, by and through agents of Respondent Home Owners Direct Sales, Inc., solicited from property owners in the Dade, Broward and Palm Beach County areas the payment of a fee in return for listings to sell their property in a magazine which was published by Home Owners Direct Sales, Inc. The complaint alleges that in its solicitation efforts, Respondents advised property owners that the magazine would be published monthly and contain the property owners listing; that such representations were false and known to be false when made; that subscribers relied upon such representations which prompted them to simultaneously pay a listing fee; that none of said fees received subsequent to July 1, 1976 were held or maintained in a trust account and that by reason thereof, the Respondents are guilty of fraud, misrepresentation, concealment, false pretenses, false promises, etc. within the meaning of Subsection 475.25(1)(a), Florida Statutes, and Respondent Home Owners Direct Sales, Inc. by and through President Davis is additionally guilty of collecting an advance fee without depositing 75 percent thereof in a trust account in violation of Subsection 475.452, Florida Statutes, all in violation of Subsection 475.25(1)(d), Florida Statutes. The complaint alleges further that the Respondents, as a means to assure the receipt of said deferred payments, recorded the deferred payment contract amount as liens against the real property interest of those who chose this method of payment for the service to be performed by Home Owners Direct Sales, Inc. Based thereon, the complaint alleges that the Respondents have placed upon the public records of the county, a lien which purports to affect the title of, or encumber, real property for the purpose of collecting a commission or to coerce the payment of money to the broker in violation of Subsection 475.42(1)(j) Florida Statutes, and derivatively in violation of Subsection 475.25(1)(d), Florida Statutes. Further, the complaint alleges that approximately 207 contracts were recorded in Broward County as liens of which there presently remains outstanding approximately 187 liens against the real property interests of those who chose the deferred payment method of compensation to Respondent Home Owners Direct Sales, Inc.; that Respondent has failed to take any steps to remove said liens from the public records and that by reason thereof, Respondent Home Owners Direct Sales, Inc. by and through its President, Roger L. Davis, is guilty of false pretenses, dishonest dealing, trick, scheme or device in a business transaction in violation of Subsection 475.25(1)(a), Florida Statutes. The complaint also alleges that Ronald Kavin, during times material, was a registered real estate salesman in the employ of Home Owners Direct Sales, Inc.; that pursuant to the terms of his (Kavin) employment agreement, Respondent Home Owners Direct Sales, Inc. by and through its President, Roger L. Davis, paid the sums of $250 and $150 by checks dated September 16 and 29, 1976, respectively to salesman Kavin which were returned for nonsufficient funds. Based thereon, the complaint alleges that the Respondents are guilty of dishonest dealing in violation of Subsection 475.25(1)(a), Florida Statutes. Based thereon, the complaint concludes that the Respondents are guilty of a course of conduct or practices which show that they are so dishonest and untruthful that the money, property transactions and rights of investors and those with whom they may sustain a confidential relation may not be safely entrusted to them, all in violation of Subsection 475.25(3), Florida Statutes. An examination of the record compiled herein reveals that sometime during the month of March, 1975, a corporate brokerage agreement was entered into between Jeff Davey, James McKay and Marylin Benjamin. As a means of doing business, the parties utilized a previously established Florida corporation, Macoda, Inc. James McKay was President of the corporation and Jeff Davey and Marylin Benjamin were Vice Presidents with Benjamin also serving as active broker. Jeff Davey was the son-in-law of President McKay who advanced the initial funds for capitalizing the corporation. Jeff Davey was charged with publishing and distributing the magazine, ensuring that signs were placed on the property of owners who utilized the service, and taking photos of such properties. Messr. McKay envisioned establishing a profitable, ongoing venture for his son-in-law and daughter. As originally conceived, the corporation planned to publish a magazine which would illustrate real property that was available for sale by owners in Dade, Broward and Palm Beach counties. The procedure simply stated involved putting the sellers of property in contact with buyers so that a viewing time could be arranged between them. Further negotiations between seller and prospective buyer were usually handled solely between them without any input or assistance from the personnel of Respondent Home Owners Direct Sales, Inc. During the early days of the corporate venture, monies collected from advertisers and all publication expenses, office expenses and salaries were handled by Jeff Davis and/or James McKay. In the early months of the operation, Messrs. Davey and McKay, pursuant to guidance and counseling from their accountants and lawyers, collateralized the listing fee contracts and used them as receivables to defray the steadily mounting negative cash flow resulting from the business operations. Sometime in December, 1975, Jeff Davey left the country for personal reasons. Thereafter, Messr. McKay took a more active role in the publication of the magazine and took sole charge of financial matters and policy decisions. The best guesstimate is that during this period, the venture was operating at a deficit of approximately $200,000 and was committed to substantial fixed overhead expenses. Mr. McKay who was retired and wealthy, contacted Respondent Roger L. Davis, who was then the publisher of a business and financial opportunity magazine and engaged his services to try to sell the business. Respondent Davis advertised the business in his financial opportunity publication for the asking price of $50,000. After several months of screening prospects, it became apparent to Respondent Davis that he would be unsuccessful in his efforts to locate a prospective buyer for the business and so advised the owner, Messr. McKay. During June or July of 1976, Respondent Davis offered to purchase the business for the outstanding obligations which amounted to approximately $12,000. At the outset of his assumption, Messr. Davis satisfied outstanding obligations of approximately $7,000 which were due to the printer. That amount also represented outstanding bills for rent, phone, salaries and other current expenses. Respondent Davis testified that when he purchased the business in June, 1976, the books were in a shambles and it was extremely difficult to determine what receivables the corporation was due and what obligations were due and owing. His testimony which was corroborated by his ex-wife, Ann Davis, reveals that he (Davis) made an honest good faith effort to satisfy all outstanding obligations with the limited funds available. He was able to obtain extensions from the printer so that approximately 15,000 copies of the magazine's November issue was printed. Respondent Davis found difficulty in physically laying out the magazine due to his lack of experience in layout work. By this time, Davis had exhausted all of his available revenues from the service and he had no funds to hire personnel to perform those functions. He contacted several property owners who had a listing agreement with Respondent Home Owners Direct Sales, Inc. after he took over its operations and was able to determine that approximately 50 - 60 property owners had in fact sold their houses and therefore no longer needed the service. He also testified that he was not responsible for filing the liens on the property of owners who utilized the deferred payment plan with Respondent Home Owners Direct Sales, Inc. He related several instances wherein he, when confronted by a property owner and was advised that an outstanding lien was affecting the title to their property, gave a release or satisfaction for the lien. When Respondent Davis took over the operations of the business, he retained the services of Ronald Kavin for office and sales manager in overall charge of initiating sales. His overall responsibilities included training salesmen, making appointments for sales persons and assuring that they kept appointments. Approximately September 16, 1976, Messr. Kavin approached Respondent Davis for $250 which he needed to pay a garage repair bill. Messr. Davis credibly testified that he advised Messr. Kavin that although he had no money, he would issue him a check which should not be deposited until he assured him that sufficient funds were on deposit in the bank to cover the check. Approximately two weeks later, Messr. Kavin again approached Messr. Davis for $150 to defray expenses which he had incurred in his duties as office manager. Again Respondent Davis explained that while he had no money, he expected to obtain some money shortly from an investor whom he had arranged financing for some property which he owned and that he (Kavin) should not attempt to negotiate the check until he had prior clearance from Davis that he had sufficient monies on deposit in the bank. Messr. Kavin attempted to negotiate both checks which were returned for nonsufficient funds.
Recommendation Based on the foregoing findings and conclusions, I hereby recommend that the registration of the Respondent corporation, Home Owners Direct Sales, Inc. and the license and registration of Respondent Roger Davis be placed on probation for a period of one year. RECOMMENDED this 22nd day of May, 1978, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Louis B. Guttmann, III, Esquire Florida Real Estate Commission 400 West Robinson Avenue Post Office Box 1900 Orlando, Florida 32802 Roger L. Davis, Esquire c/o "A" Inc. 1980 North Atlantic Boulevard Cocoa Beach, Florida 32931 ================================================================= AGENCY FINAL ORDER ================================================================= FLORIDA REAL ESTATE COMMISSION FLORIDA REAL ESTATE COMMISSION, An agency of the state of Florida, Plaintiff, PROGRESS DOCKET NO. 3218 BROWARD COUNTY DOAH CASE NO. 77-2065 HOME OWNERS DIRECT SALES INC. and ROGER L. DAVIS, Respondents. /
The Issue The issue is whether Respondent violated Section 475.25(1)(e) and (1)(m), Florida Statutes, and Florida Administrative Code Rule 61J2-2.027(2), and, if so, what discipline should be imposed.
Findings Of Fact Respondent is 58 years old. He is employed full-time as a real estate sales associate. Respondent holds an active real estate sales associate license. His license number is SL706350. The license was issued to Respondent based upon his sworn application for licensure submitted on or about March 14, 2001. Question No. 9 on the license application asked whether Respondent had “ever been convicted of a crime, found guilty, or entered a plea of guilty or nolo contendere (no contest), even if [he] received a withhold of adjudication.” The following explanation is provided as part of the question: This question applies to any violation of the laws of any municipality, county, state or nation, including felony, misdemeanor and traffic offenses (but not parking, speeding, inspection, or traffic signal violations), without regard to whether you were placed on probation, had adjudication withheld, were paroled, or pardoned. If you intend to answer “NO” because you believe those records have been expunged or sealed by court order pursuant to Section 943.058, Florida Statutes, or applicable law of another state, you are responsible for verifying the expungement or sealing prior to answering “NO.” (Emphasis supplied) Immediately following Question No. 9 is the following statement in all capital letters: YOUR ANSWER TO THIS QUESTION WILL BE CHECKED AGAINST LOCAL, STATE AND FEDERAL RECORDS. FAILURE TO ANSWER THIS QUESTION ACCURATELY MAY RESULT IN THE REVOCATION OF YOUR LICENSE OR THE DENIAL OF A REAL ESTATE LICENSE. IF YOU DO NOT FULLY UNDERSTAND THIS QUESTION, CONSULT WITH AN ATTORNEY OR THE DIVISION OF REAL ESTATE. Respondent checked the box marked “NO” for Question No. 9 on the application that he submitted. Respondent’s negative answer to Question No. 9 was a material misstatement of his criminal record. On March 27, 1972, Respondent pled guilty to attempted robbery in the third degree in the Erie County Court in New York. The offense was a felony. On May 5, 1972, Respondent was sentenced to five years of probation for that offense. Respondent’s probation was revoked on January 14, 1974, and he was sentenced to “the care and custody of the NY State Narcotic Addiction Control Commission for an indefinite period of 60 months.” The latter sentence ran concurrently with a sentence imposed for another offense, the substance of which is not reflected in the record. On August 3, 1992, the Erie County Court issued a Certificate of Relief From Disabilities to Respondent, which relieved him of “all disabilities and bars to employment, excluding the right to be eligible for public office.” The certificate expressly states that it “shall NOT be deemed nor construed to be a pardon,” and it is limited to the “crime or offense specified [t]herein.” The Certificate of Relief From Disabilities makes no mention of expungement or sealing of the records related to the enumerated offense. The only offense enumerated in the Certificate of Relief From Disabilities is the third degree attempted robbery conviction with a sentence date of May 5, 1972. No other offenses are mentioned. On February 18, 1993, the New York Executive Department, Board of Parole, issued a Certificate of Good Conduct to Respondent. The certificate referenced three offenses: the third degree attempted robbery conviction discussed above; a second degree robbery conviction with a sentence date of May 8, 1975; and a federal distribution of heroine conviction with a sentence date of May 1, 1978. The purpose of the Certificate of Good Conduct was to “remove all legal bars and disabilities to employment, license and privilege except those pertaining to firearms . . . and except the right to be eligible for public office.” The certificate states that it “shall be considered permanent.” The Certificate of Good Conduct makes no mention of expungement or sealing of the records related to the enumerated offenses. Respondent testified that his negative answer to Question No. 9 was based upon his understanding of the legal effect of the Certificate of Relief from Disabilities and the Certificate of Good Conduct. Specifically, Respondent testified that although he understood that the certificates did not “remove” his criminal history or expunge his records, it was his understanding that the certificates provided him a “safe harbor” to answer “no” to Question No. 9 because all legal bars to employment had been removed by the certificates. Respondent’s understanding regarding the legal effect of the certificates and his obligation to disclose his prior offenses based upon the certificates was based, in part, on advice he received from an attorney in New York. Respondent knew that the Department would learn of his criminal history through the background check based upon the fingerprint card that he submitted with his license application, and he credibly testified that he did not intend to mislead the Department regarding his criminal history through his negative answer to Question No. 9. Respondent was unaware at the time he submitted his license application that the Department and/or the Florida Real Estate Commission (Commission) processed applications in which no criminal history was disclosed differently than applications in which a criminal history is disclosed.2 Respondent’s understanding regarding the legal effect of the certificates was erroneous. Respondent acknowledged as much in his testimony at the final hearing (Tr. 54) and in his PRO (at ¶29). The record does not establish precise legal effect of the certificates,3 but it is inferred that the certificates restore the civil rights that Respondent lost due to his felony convictions. It is also inferred that the reason that the Certificate of Good Conduct does not mention Respondent’s misdemeanor offenses (See Endnote 5) even though it was issued after those offenses is because misdemeanor convictions typically do not result is the loss of civil rights as is the case with felony convictions.4 Neither of the certificates expunge or seal any of Respondent’s criminal records and, contrary to his understanding at the time, the certificates did not excuse Respondent from disclosing his criminal offenses in response to Question No. 9 on the license application. The evidence clearly and convincingly establishes that Respondent was convicted of third degree attempted robbery, a felony, in 1972; that the offense was not sealed or expunged; and that Respondent failed to disclose that conviction on his license application when he answered “no” to Question No. 9.5 The evidence does not clearly and convincingly establish that Respondent intentionally misrepresented or fraudulently concealed his criminal history from the Department by answering “no” to Question No. 9.6 To contrary, the evidence establishes that Respondent’s negative answer to Question No. 9 was based upon his good faith, albeit erroneous belief, that he was not required to disclose his prior criminal offenses in light of the Certificate of Relief from Disabilities and/or the Certificate of Good Conduct. It has been 34 years since Respondent’s third degree attempted robbery conviction, which is the basis of the Administrative Complaint. It has been more than 18 years since Respondent’s last criminal offense, which was a misdemeanor petit larceny offense. All of Respondent’s criminal offenses occurred in the state of New York. He has remained out of trouble with the law since he came to Florida in 2000. Respondent has not been the subject of any disciplinary action, other than this proceeding, since receiving his license. Respondent did not present the testimony of any character witnesses, but he credibly testified that he has completely turned his life around since the time of his criminal offenses in New York. Respondent served in the U.S. Air Force Security Service in Viet Nam. He was honorably discharged. Respondent was licensed as a mental health counselor in New York and Virginia prior to coming to Florida and obtaining his real estate sales associate license. Respondent testified that he was required to disclose his criminal background and undergo a background check in order to obtain those licenses; that he did not disclose his criminal background on the license applications based upon his understanding of the certificates described above; that his criminal background was not an issue to the licensing agencies in New York and Virginia, even though it was not disclosed on his license applications; and that this experience (along with the advice he received from the attorney in New York) led him to believe that his criminal records were sealed and need not be disclosed. Respondent offered no evidence to corroborate this self-serving testimony, and it is given very little weight because it is unknown how, if at all, the disclosure requirements and licensure regimes for mental health counselors in New York and Virginia compare with the disclosure requirements and licensure regime for real estate sales associates in Florida.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Commission issue a final order that: finds Respondent not guilty of violating Section 475.25(1)(m), Florida Statutes (Count I of the Administrative Complaint); finds Respondent guilty of violating Florida Administrative Code Rule 61J2-2.027(2) and, hence, Section 475.25(1)(e), Florida Statutes (Count II of the Administrative Complaint); imposes an administrative fine of $1,000; suspends Respondent’s license for 30 days; places Respondent on probation for one year after the end of the suspension period; and imposes the costs related to the investigation and prosecution of this case, excluding costs associated with an attorney’s time. DONE AND ENTERED this 21st day of December, 2006, in Tallahassee, Leon County, Florida. S T. KENT WETHERELL, II 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 of December, 2006.
Findings Of Fact After Respondent Kout was unsuccessful in his judicial review of the Board's Order suspending his real estate salesman's license, the Board confirmed his sixty-day suspension commencing November 20, 1978. The license that was suspended had expired on September 30, 1978, and had not been renewed. During November, 1978, Kout submitted an incomplete application which was returned, corrected and resubmitted; the Hoard received this on January 10, 1978, and subsequently issued a license with an effective date of November 20, 1978. The Board's computer, records notwithstanding, did not know of the suspension until March, 1978, and did not know of the issuance of the license until August, 1978, when the Keyes Company forwarded Kout's affidavit that his Registration Certificate had been stolen. Keyes was informed that the license was suspended as no renewal had been received. Application was made and Kout's license reissued. Until his license was stolen, along with his wallet, Kout carried the license issued in January, 1979, and assumed he had been reinstated on January 19, 1979, at the end of the sixty-day suspension. Conclusions The Board contends that under the above facts, Kout operated without a valid current real estate license between November 20, 1978, and August 21, 1979, and specifically during June, 1979, regarding the Bentkowski sale, discussed under Count I, as required by Section 474.42(1)(a), Florida Statutes (1977 and 1979)(misdemeanor), and therefore contrary to Sections 457.25(1)(a), Florida Statutes (1977), and 474.25(1)(b) Florida Statutes (1979)(revocation/suspension for violating the real estate law). There is no doubt that confusion existed between the Board's records and computer as to what the current status of Kout's license was during the period in question. However, absent rebutting evidence by the Board of the testimony of Kout, the allegations of the Board are not supported by the evidence.
Recommendation It is , therefore, RECOMMENDED: That Count I and Count II of the Petition of the Board of Real Estate be dismissed with prejudice. DONE and ORDERED this 28th day of August, 1980, in Tallahassee, Florida. HAROLD E. SMITHERS Hearing Officer Division of Administrative Hearings Room 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed this 28th day of August with the Clerk of the Division of Administrative Hearings. COPIES FURNISHED: Ms. Nancy Kelley Wittenberg Secretary, Department of Professional Regulation 2009 Apalachee Parkway Tallahassee, Florida 32301 Mr. C.B. Stafford Executive Director Board of Real Estate Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802 Frederick H. Wilsen, Esquire Staff Attorney Department of Professional Regulation Board of Real Estate 2009 Apalachee Parkway Tallahassee, Florida 32301 David M. Rogerio, Esquire Blackwell, Walker, Gray, Powers, Flick and Hoehl 2400 AmeriFirst Building One Southeast Third Avenue Miami, Florida 33131
The Issue The issue presented is whether Respondent Jim Walter Homes and its affiliates engaged in an unlawful housing practice in their dealings with Petitioner Curtis Jefferson.
Findings Of Fact Respondent Jim Walter Homes builds homes for people on lots those people already own, and its mortgage company Mid- State Homes, Inc., finances those homes. Such was the arrangement between Petitioner and Respondent. In October 1998 Petitioner, a black man, and his fiancée Jennifer Mitchell executed a promissory note and mortgage on the home built for them by Respondent. That note and mortgage were subsequently sold to Mid-State Homes, Inc., and then to Mid-State Trust VIII. Petitioner and his fiancée, who both owned the home, began making payments, but from the beginning, the payments were frequently late. Respondent continued to work with Petitioner and his fiancée, preferring to receive the mortgage payments to foreclosing on the mortgage. Petitioner and his fiancée also failed to pay property taxes and to maintain insurance on the home. Petitioner and his fiancée failed to make the January 1, 2002, mortgage payment and did not make payments thereafter. In April Mid-State Trust VIII sent a letter to Petitioner and his fiancée demanding that the mortgage payments and late charges be brought current so Petitioner and his fiancée could avoid the filing of a foreclosure action and the sale of their home. Due to their failure to cure their default, Mid-State Trust VIII filed a foreclosure action against Petitioner and his fiancée on June 4, 2002. A Final Judgment of Foreclosure on Default was entered by the circuit court on November 13, 2002. The Final Judgment scheduled the home to be sold at public auction on December 13, 2002. On December 12 Petitioner filed bankruptcy proceedings, which prevented the public sale of the home from taking place due to the automatic stay afforded by the bankruptcy laws. Petitioner's fiancée did not file bankruptcy proceedings. A payment plan was approved by the United States bankruptcy judge whereby Petitioner would make payments to the trustee in bankruptcy for the mortgage payments in arrears and would make payments to Mid-State Trust VIII for the current and future mortgage payments. Petitioner failed to comply with the payment plan ordered by the bankruptcy judge. In December 2003 Mid-State Trust filed in the bankruptcy court a motion for relief from the automatic stay and filed an amended motion for relief in January 2004. The amended motion alleged that Petitioner had failed to comply with the court-ordered payment plan, that Petitioner still had possession of the property, and that Petitioner had no equity in the home since the amount due Mid-State Trust for the mortgage, late charges, foreclosure costs and attorney's fees, and interest now exceeded the value of the property. Mid-State asked to be allowed to go forward with the sale of the home. On January 14, 2004, the United States bankruptcy judge dismissed Petitioner's bankruptcy proceeding. On February 26, 2004, the home, which was still occupied by Petitioner and his fiancée, was sold at public auction. Although Petitioner attempted to stop the sale again by filing a second bankruptcy petition, the sale occurred earlier in the day than the petition was filed. The bankruptcy judge dismissed Petitioner's second petition. Again, Petitioner's fiancée did not file for bankruptcy. On June 18 a certificate of title was issued to the purchaser. Petitioner still did not vacate the home which he and his fiancée no longer owned and on which he was making no mortgage payments and paying no rent. On June 28, 2004, an Order for Issuance of a Writ of Possession was entered by the circuit court. On June 30 a Writ of Possession was entered by the clerk of the circuit court commanding the sheriff to remove all persons from the property. On July 2 the sheriff served the writ. Still, Petitioner and his fiancée failed to vacate the home. On July 15 a representative of the purchaser arrived at the home and told Petitioner he had two hours to vacate or the sheriff would come and remove him and his possessions. Still, Petitioner did not vacate until he was removed by the sheriff. No employee or agent of Respondent or its affiliates ever told Petitioner or in any way indicated that his mortgage payments would not be accepted because he was black or because of his disability. Respondent has foreclosed against other similarly- situated persons who have failed to make their mortgage payments. Petitioner is unable to work as a truck driver due to his sleep apnea, diabetes, and hypertension.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding that Respondent did not violate the Fair Housing Act and dismissing Petitioner's Petition for Relief filed in this cause. DONE AND ENTERED this 1st day of September, 2005, in Tallahassee, Leon County, Florida. S LINDA M. RIGOT 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 1st day of September, 2005. COPIES FURNISHED: Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Cecil Howard, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Curtis Jefferson 1603 Elberta Drive Tallahassee, Florida 32304 William M. Furlow, III, Esquire Akerman Senterfitt 106 East College Avenue, Suite 1200 Tallahassee, Florida 32301
