The Issue The issue in this case is whether Respondent is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in a business transaction and, if so, what penalty should be imposed.
Findings Of Fact At all material times, Respondent has been licensed in the State of Florida as a real estate broker-salesman, holding license number 0476966. On May 21, 1990, while employed as a broker-salesman by Active One Realty, Inc., Respondent obtained a contract from Steven Mead to purchase a parcel owned by Dr. Samuel Martin. The contract, which was signed by Mr. Mead on May 21, recites that Active One Realty is holding the earnest money deposit. Dr. Martin signed the contract on May 26, 1990, which was four days prior to the expiration of the time for acceptance. Pursuant to the contract, closing was set for no later than June 2, 1990. A day or two prior to the closing, the buyer decided not to purchase the parcel. When the deadline for closing passed without further communication from the buyer or Respondent, Dr. Martin's listing broker, Robert Martin (no relation) contacted Susan Cobb, who is in charge of Active One Realty, Inc. In response to Mr. Martin's request for information about the closing, Ms. Cobb told him that her office had no record of the contract and was holding no earnest money deposit in connection with the transaction. In fact, Respondent failed to obtain the earnest money deposit from Mr. Mead prior to presenting the contract to Mr. Martin for consideration by the owner. Intending to obtain the deposit later in the day on May 21, Respondent first presented the contract to save time," according to his own testimony. Respondent did not offer to explain why, after not obtaining the deposit later in the day, he failed to inform his employing broker, Mr. Martin, or Dr. Martin of the misrepresentation contained in the contract concerning the earnest money deposit. Respondent has not previously been disciplined. About six months after the events described above, Respondent, in his capacity as a broker-salesman, procured the sale of the subject parcel.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Florida Real Estate Commission enter a final order finding Respondent guilty of violating Section 475.25(1)(b), imposing an administrative fine of $500, and placing his license on probation for one year, during which time he shall complete successfully such additional training in ethical and other matters pertaining to his profession as the Commission shall require; provided, however, that if he fails to complete successfully the additional training that the Commission orders with the one-year period, his license shall be suspended for a period of two years, commencing with the end of the probationary period. ENTERED this 19 day of June, 1991, in Tallahassee Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19 day of June, 1991. COPIES FURNISHED: Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32801 Jack McCray, General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792 Steven W. Johnson, Senior Attorney Department of Professional Regulation P.O. Box 1900 Orlando, FL 32801-1722 Anthony Jesus Torres 1074 Chesterfield Circle Winter Springs, FL 32708
Recommendation Based on the foregoing stipulated facts and conclusions of law as found above, I recommend that the Defendant be issued a private written reprimand. DONE and ENTERED this 25th day of February, 1977, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Robert J. Randolph, Esquire Randolph & Randolph P. O. Box 1546 209 West Ocean Boulevard Stuart, Florida 33494 Frederick H. Wilsen, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789
Findings Of Fact At all times relevant hereto John Young was registered as a real estate salesman by the Florida Real Estate Commission. On October 2, 1985 Respondent and William Kelly, D.O. entered into a contract to jointly purchase a condominium from Concord Developers Inc. (Exhibit 1). The contract provided for a down payment of $2,000 with an additional earnest money deposit of $3690 to be paid on or before November 4, 1985. Respondent and Kelly each gave the seller a check for $1000 at the signing of the contract and this $2000 was deposited in escrow with the escrow agent. Kelly met Respondent through Respondent's wife who worked in Kelly's office. At the time Kelly was looking for income tax shelters and this purchase appeared to qualify for that purpose. On November 9, 1985, Kelly made out a check payable to John Young in the amount of $1845 which represented Kelly's half of the additional $3690 earnest money deposit. This check was either cashed by Young or deposited in Young's bank account (Exhibit 2). The additional earnest money deposit was not made to the seller, as required by the contract, Exhibit 1. Young notified Bayside Federal Savings and Loan Association, who was to finance the sale, that the loan application was withdrawn, the transaction was cancelled, and two checks in the amount of $1000 each were returned to the seller by the escrow agent (Exhibit 6). The customary practice of the seller in such a situation was to return the down payment to the buyer by check drawn on the seller's account. While no witness could recall this specific transaction, the usual practice would be to return the deposit to the buyer. In this case, the deposit would normally have been returned to Young. Young acknowledged that he received the return of his $1000 deposit but not the $1000 that represented Kelley's portion of the down payment. When Kelley gave Young the check for $1845 he inquired if it was necessary for him (Kelley) to attend the closing and Young advised him it was not. When Kelley subsequently learned that the transaction did not close, he demanded the return of his money. To date he has received none of the monies he deposited to purchase this property. Evidence was presented that in December 1985, Young closed on a condominium he and his wife had contracted to purchase in this same development, and subsequently moved into this unit. While this indicates Young had the opportunity to convert Kelley's contribution to the purchase of the condominium by Young and his wife, no credible evidence was presented that he did so. The evidence that was presented regarding this transaction was that Young was able to move into that unit with a total cash outlay of less than $500. Young accounted for the $1845 check from Kelley as payment of a bet between him and Kelley on one football game. In rebuttal Kelley testified that not only did he not bet with Young on any matter, but also he has never gambled on a football game in his life. Young's testimony that a $1845 bet was made on a football game is so unbelievable that it taints all of his testimony.
Recommendation That the Real Estate license of John Young be revoked. Entered this 2nd day of June, 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 2nd day of June, 1989. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Post Office Box 1900 Orlando, Florida 32801 Robert H. Dillinger, Esquire 5511 Central Avenue St. Petersburg, Florida 33701 Darlene F. Keller Division Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32802 Bruce D. Lamb General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0729
The Issue The issue in this case is whether Respondent, Lee H. Davis, committed the offenses alleged in an Administrative Complaint issued against him on August 16, 1999.
Findings Of Fact Petitioner, the Department of Business and Professional Regulation, Division of Real Estate (hereinafter referred to as the "Division"), is an agency of the State of Florida. The Division is charged with the responsibility for, among other things, regulating the practice of persons holding real estate brokers' and real estate salespersons' licenses in Florida. Section 20.165, and Chapters 455 and 475, Florida Statutes. Respondent, Lee H. Davis, is and was at all times relevant to this matter licensed as a real estate broker in Florida, issued License Number 0186063. The last license issued was as an involuntary inactive broker, c/o 815 New Waterford Drive, No. 204, Naples, Florida 34104. On or about August 24, 1995, Respondent executed a form 400.5 and submitted it to the Division to register as a salesperson with Sentry Realty and Property Management, Inc. ("Sentry"). At all times relevant to these proceedings, Respondent was registered with the Division as employed by Sentry. On or about September 7, 1995, Respondent facilitated a contract for sale and purchase (the "contract") between Robert Trindle as buyer and John Petracelli as seller/builder for property described as Hallandale Park, Plat Book 12, Page 37, Block 37, Lots 6,7,8, a/k/a approximately 2801 North East 214 Street, North Miami Beach, Florida. Mr. Trindle testified that he intended to purchase a townhouse to be built by Mr. Petracelli as part of a project to include 40 to 50 townhouses. The contract provided that a $3,900 deposit was to be held by "Lee H. Davis Escrow Agent." Mr. Trindle gave Respondent two checks totaling $3,900, as the earnest money deposit on the purchase price of $130,000. The first check, dated October 9, 1995, was for $1,000. The second check, dated November 3, 1995, was for $2,900. The checks were made out to "Lee H. Davis-- Escrow." Also noted on the checks was "Davena Group Inc.," which Mr. Trindle understood to be Respondent's real estate company. Each check was negotiated by Respondent within a week of its receipt. At the time of this transaction, Respondent's registered broker was John Brouillette of Sentry. Respondent did not place the escrow deposit with Mr. Brouillette, who testified that he knew nothing of the transaction at the time it occurred and never saw the contract. Respondent represented to Mr. Trindle that he would maintain the escrow deposit as broker during this transaction. Mr. Trindle did not give Respondent permission to transfer the escrow deposit to the builder/seller, Mr. Petracelli. Correspondence from Respondent indicated that he did turn the escrow deposit over to Mr. Petracelli, without informing Mr. Trindle. Mr. Petracelli never built the promised townhouses. Rather, he left the country, absconding with Mr. Trindle's escrow deposit along with monies provided by other purchasers and/or investors in the project. Mr. Trindle attempted to contact Respondent regarding the status of his escrow deposit, but was unable to reach him prior to the filing of his complaint with the Division. As of the date of the hearing, the earnest money deposit had not been returned to Mr. Trindle.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Petitioner finding that Respondent has violated Subsections 475.25(1)(b), 475.25(1)(d)1, 475.25(1)(e), 475.25(1)(k), and 475.42(1)(d), Florida Statutes, as alleged in the Administrative Complaint issued against Respondent, and that Respondent's real estate license be revoked. DONE AND ENTERED this 13th day of March, 2001, in Tallahassee, Leon County, Florida. ___________________________________ LAWRENCE P. STEVENSON 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 13th day of March, 2001. COPIES FURNISHED: Sunia Y. Marsh, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Suite N-308A Orlando, Florida 32801-1772 Lee H. Davis 815 New Waterford Drive, No. 204 Naples, Florida 34104 Herbert S. Fecker, Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue Whether Respondent violated Section 475.025(1)(b), Florida Statutes, and, if so, what the appropriate penalty is.
Findings Of Fact At all times relevant hereto, O. Dane Streets was licensed by the Florida Real Estate Commission as a real estate broker having been issued License No. 0085710-1 for an address in Lakeland, Florida. In the Spring or early Summer of 1991, Nathan Price, a minister in Orlando, Florida, contacted Respondent to solicit Respondent's participation in representing Price's daughter, Melissa Howard, in purchasing real estate in Orlando. Price and Respondent have been business and social acquaintances for more than 10 years, and Price was helping his daughter and son-in-law in purchasing a home. The Howard's found a house they liked, Respondent obtained the listing information from the listing broker and prepared a contract for sale and purchase (Exhibit 1). As modified and accepted by all parties, this contract provided for a $1000 earnest money deposit to be held in escrow by Respondent's real estate company. In lieu of obtaining the deposit from Price or Howard, Respondent told Howard to give the earnest money deposit to the selling broker as all of the transactions were to be conducted in Orlando. The $1000 earnest money deposit was given to neither Respondent nor the listing broker, ReMax Southwest in Orlando. The failure of Respondent to follow up to insure that the earnest money deposit had been given to the listing broker in this transaction does not reach the status of fraud or dishonest dealing as Respondent had no such intent. Shortly before the August 21, 1991 closing date, Price advised Respondent that the mortgage lender was asking about the earnest money deposit. Respondent immediately obtained a cashier's check dated August 8, 1991 (Exhibit 2) in the amount of $1000 which Price presented at the closing on August 21, 1991. In his testimony, Respondent acknowledged that he erred in not obtaining the earnest money deposit or failing to check to be sure the deposit had been made with the listing broker. Since Respondent is located in Lakeland and the property being purchased is in Orlando when the closing was held, Respondent thought everything would be simplified if the deposit was held by the listing broker. When the listing broker learned that the deposit of $1000 had never been received by Respondent and placed in escrow, a complaint was made to the Florida Real Estate Commission, and these proceedings followed. Respondent has held licenses from the Florida Real Estate Commission for some 20 years, and this is the first time any charges have been brought against his license.
Recommendation It is Recommended that a Final Order be entered finding O. Dane Streets not guilty of violating Section 475.25(1)(b), Florida Statutes, as alleged. ENTERED this 21st day of January, 1992, in Tallahassee, Florida. K. N. AYERS Hearing Officer Division of Administrative Hearings The Desoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of January, 1992. Copies furnished to: Steven N. Johnson, Esquire Darlene F. Keller Division of Real Estate Division Director 400 W. Robinson Street Division of Real Estate Post Office Box 1900 400 W. Robinson Street Orlando, FL 32801-1900 Post Office Box 1900 Orlando, FL 32801-1900 O. Dane Streets Post Office Box 6852 Jack McRay, Esquire Lakeland, FL 33807 Department of Professional Regulation 1940 N. Monroe Street Tallahassee, FL 32399-0792
The Issue The issue presented is whether Respondents are guilty of the allegations contained in the Administrative Complaint filed against them, and, if so, what disciplinary action should be taken against them, if any.
Findings Of Fact At all times material hereto, Respondent Lori Wilk has been a licensed real estate broker in the State of Florida, having been issued license number 0349551. The last license issued was as a broker in care of Stars and Stripes Realty, Inc. At all times material hereto, Respondent Stars and Stripes Realty, Inc., has been a corporation registered as a real estate broker in the State of Florida, having been issued license number 0253076. At all times material hereto, Respondent Wilk has been licensed and operating as a qualifying broker and officer of Respondent Stars and Stripes Realty, Inc. Gwendolyn Taylor-Herbert, as owner, had listed for sale certain real property with Coldwell Banker Residential Real Estate, Inc./Gil Amara. Respondents obtained LPS Investments, Inc., as purchaser pursuant to a sales contract which was accepted by the seller on March 14, 1989. LPS Investments is owned by Leo and Patricia Scarola. Patricia Scarola was a former salesperson for Respondents. That Contract for Sale And Purchase of Real Property provided that a total of $500 as deposit monies was to be held in escrow by Stars and Stripes Realty. Respondent Wilk executed the portion of the Contract which acknowledged receipt of the first $100 of the deposit monies. Respondents' escrow account deposit slips reveal the first $100 was deposited into Respondents' escrow account. No proof of receipt of the additional $400 exists among the escrow account deposit slips admitted in evidence; however, Respondent Wilk's testimony is accepted that Respondents received in trust a total earnest money deposit in the sum of $500. Thereafter, LPS Investments, Inc., refused to close, alleging misrepresentation by the seller of the property. Although the property had been advertised as a "handyman special" and the Contract provided that the property was accepted in an "as is" condition, the Scarolas who never saw the property before they entered into the Contract to purchase it discovered that it would cost more to improve the property than they had guessed. They decided not to close. Rather, Pat Scarola instructed Respondents to transfer the $500 earnest money deposit to another piece of property not involving Gwendolyn Taylor- Herbert. Without the prior knowledge or consent of the seller or of the listing broker, Respondents transferred the Scarolas' earnest money deposit to another transaction for the benefit of the purchaser (LPS Investments, Inc.) and not involving the same seller. This was done without even considering whether the seller or the seller's agent might have an interest in the deposit. At no time prior to the time that the Respondents' transferred the deposit to a different property did the Respondents give the listing broker or the seller an opportunity or notice to make a demand upon the Respondents for the deposit. After the transfer, and after the contract failed to close, the seller and the seller's agent made a demand that the $500 deposit be accounted for and delivered. It was not. On June 1, 1989, Respondents obtained an offer from Herb Sider, as purchaser, for the property owned by Gwendolyn Taylor-Herbert. That offer was accepted by the seller. The Contract for Sale and Purchase of Real Property provided that a total deposit of $1,000 was to be held in escrow by Stars and Stripes Realty. Respondent Wilk executed that portion of the Contract acknowledging that the first $100 of the earnest money deposit had been received by Respondents. That representation was false. Sider never gave Respondents the earnest money deposit specified in the Contract, and Respondents failed to advise anyone that the representation in the Contract was false. Although Respondent Wilk testified that she would "normally" keep $100 of Sider's money in her escrow account to be applied to the various contracts that he entered into through her, there is no evidence that there was $100 in Respondents' escrow account at the time or that it was available to be applied to this Contract. Rather, Respondent Wilk's testimony is accepted that she never received either the initial $100 or the additional $900 deposit monies from Sider for this property. Herb Sider refused to close. The seller, Gwendolyn Taylor-Herbert, agreed to lower the sales price, and a modified contract was executed between Taylor-Herbert and Sider. Thereafter, Sider again refused to close. At no time did Respondents notify anyone that they did not have an earnest money deposit in escrow for the Taylor-Herbert/Sider transaction. Diane Quigley, branch manager of Coldwell Banker Residential Real Estate, Inc., sent a letter dated July 11, 1989, to the Respondents transmitting release of deposit receipt forms and instructing Respondents to release the $500 earnest money deposit of LPS Investments, Inc., and the $1,000 earnest money deposit of Herb Sider to the seller Gwendolyn Taylor-Herbert. Respondents ignored that demand letter. By letter dated August 25, 1989, Quigley again wrote to Respondents demanding the release of the Sider and the LPS Investments, Inc., deposits to the seller. That letter referred to the July 11th letter which Respondents had ignored and the numerous phone calls placed by Quigley to Respondents which had not been returned. On September 13, 1989, Respondents for the first time notified Petitioner of possible conflicting demands. That letter misrepresented the facts of the situation and suggested that the seller and buyer might still be able to strike a deal. On October 3, 1989, Respondents again wrote to the Florida Real Estate Commission advising that "there is now a conflicting demand" on the deposits relative to the Gwendolyn Taylor-Herbert property. Respondents' letters reveal a lack of understanding of the basics of a real estate contract. Neither letter advised the Commission that Respondents did not have any of the monies in escrow at any rate. On December 27, 1988, Respondent Wilk made an offer to purchase real property from Bel-Properties, Inc., which offer provided that $100 earnest money deposit would be held in escrow by Stars and Stripes Realty, Inc., and an additional $2,050 earnest money deposit would be placed in the Stars and Stripes escrow account within 72 hours of acceptance. Respondent Wilk executed the portion of the Contract for Sale and Purchase of Real Property acknowledging that the initial $100 deposit had been received. That representation was false. The Contract which she prepared listed as the buyer "Lori Wilk, a lisenced [sic] real estate broker, and/or assigns." The offer was accepted by the seller on December 30, 1988. In connection with that offer, Respondent Wilk represented that she was the purchaser when, in fact, she was acting on behalf of the actual purchaser HBS Investments, Inc., a corporation owned, controlled, and operated by Herb Sider. Immediately upon the acceptance of Respondent Wilk's offer, she assigned the sales contract to HBS Investments, Inc. At no time did Respondent Wilk or HBS Investments, Inc., place the $2,150 earnest money deposit in the escrow account of Stars and Stripes Realty, Inc., as represented by Respondent Wilk to the seller and as required by the Contract. Further, at no time did Respondents advise the seller that they did not have an earnest money deposit in the Stars and Stripes escrow account. On November 28, 1988, Respondent "Wilk, a lisenced [sic] real estate broker, and/or assigns" made an offer to purchase real property from Darlene Farris. Farris accepted that offer on December 6, 1988. That Contract for Sale and Purchase of Real Property provided that an initial deposit of $100 had been placed in the escrow account of Stars and Stripes Realty and that an additional earnest money deposit of $1,900 would be placed in escrow within 72 hours of acceptance. Respondent Wilk executed the portion of the Contract acknowledging that she had received the initial $100 earnest money deposit. That representation was false. In fact, Respondent Wilk never placed any of the $2,000 earnest money deposit in her escrow account and never advised the seller or the seller's listing broker that no earnest money deposit had been made. On or about February 2, 1989, Respondents solicited and obtained Willy Pearson as a tenant for the Farris property. Respondents represented to Pearson that the lessor was HBS Investments, Inc. Respondent Wilk prepared a Memorandum to Enter Into a Lease acknowledging the receipt of $550 as a deposit from Pearson, although Respondent Wilk only received $250 from Pearson. When Respondent Wilk received half of the rental deposit, she gave Pearson both a receipt and immediate possession of the property. Respondents obtained the tenant without the prior knowledge and consent of Darlene Farris, owner of the property. Further Respondents did not notify Farris or Farris' broker that Respondents had rented Farris' property until sometime after Respondents had received the $250 deposit from Pearson and had given him possession of Farris' property. Neither Respondent Wilk nor HBS Investments, Inc., ever closed on the Farris property. Further, Respondent Wilk never obtained authority from Darlene Farris to obtain or place a tenant in Farris' property.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered finding Respondents guilty of the allegations contained in the Administrative Complaint filed against them and revoking the licenses of Respondents Lori Wilk and Stars and Stripes Realty, Inc. RECOMMENDED this 8th day of May, 1991, in Tallahassee, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of May, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-2468 Petitioner's proposed findings of fact numbered 2-21 and 23-28 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed finding of fact numbered 1 has been rejected as not constituting a finding of fact but rather as constituting a conclusion of law. Petitioner's proposed finding of fact numbered 22 has been rejected as being irrelevant to the issues under consideration in this cause. Respondents' proposed findings of fact numbered 2-9, 19, and 23 have been adopted either verbatim or in substance in this Recommended Order. Respondents' proposed finding of fact numbered 1 has been rejected as not constituting a finding of fact but rather as constituting a conclusion of law. Respondents' proposed findings of fact numbered 10, 15, and 27 have been rejected as being contrary to the weight of the credible evidence in this cause. Respondents' proposed findings of fact numbered 11, 12, 14, 16-18, 20-22, 24, 25, 28, and 30 have been rejected as not been supported by the weight of the credible, competent evidence in this cause. Respondents' proposed findings of fact numbered 13, 26, and 29 have been rejected as being irrelevant to determination of the issues involved in this cause. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation Division of Real Estate Legal Section - Suite N-308 Hurston Building - North Tower 400 West Robinson Street Post Office Box 1900 Orlando, FL 32802-1900 Monte K. Rassner, Esquire Rassner, Malove, Rassner, Kramer & Gold Plaza 7000, Suite 500 7000 Southwest 62nd Avenue South Miami, FL 33143 Darlene F. Keller, Division Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street P.O. Box 1900 Orlando, FL 32802-1900 Jack McRay, General Counsel Department of Professional Regulation Northwood Centre, Suite 60 1940 North Monroe Street Tallahassee, FL 32399-0792
Findings Of Fact In early July, 1972, Donald R. and Pamela S. Leininger (buyer) entered into a contract to purchase a residence through Sun Up Realty with its salesman, Bernard Zapel. The real property involved and Sun Up Realty were owned by Defendant, Norman N. Zipkin either as sole proprietor or as sole shareholder of the corporation in whose name the property was held. Disclosure of the role of Defendant as owner-seller was not an issue in these proceedings. Buyer executed two contracts for the purchase of the property both dated July 9, 1972. The first contract acknowledged receipt of $100 as a deposit with a down payment to be made of $1750 with the buyer obtaining a mortgage of $33,250. Noted on this contract are two additional payments of $650 and $1,000. All of these deposits were payable to and deposited in Sun Up Realty's Escrow Account. The second deposit receipt contract was also dated July 9, 1972 and receipt of $1750 was thereon acknowledged by seller. The sale price of $35,000 applied to both contracts. The second contract provided as terms and conditions of sale that the buyer would make an additional deposit of $1700 before closing and that buyer was to apply for, qualify, and obtain a mortgage insured by FHA. Papers to so qualify were sent to the bank but buyer never qualified for the loan. The Administrative Complaint indicates that the first document executed by the buyer provided for an FHA insured mortgage; the evidence presented was as noted above. Apparently to allow buyer additional time to qualify for the loan Defendant leased the premises to buyer pursuant to lease agreement (Exhibit 5). Although Defendant testified buyer paid him nothing while he occupied the house pursuant to this lease agreement, in his deposition (Exhibit 1) buyer presented a receipt for one month's rent paid to the seller for the premises. Buyer never qualified for the mortgage because the lending agency was never satisfied from whence the additional $1700 down payment was to come. Although no evidence was presented on this point it appears that this additional deposit was required for buyer to reach a 10 percent down payment on the price of the residence. The July 9, 1972 deposit receipt contract that was in effect with respect to this transaction provides in pertinent part: "2. An additional sum of seventeen hundred dollars ($1700) shall be deposited with Escrow Agent before closing. In the event such sum is not so deposited, Seller at his option may cancel and terminate this agreement." "3. Buyer to apply for, qualify for, and obtain a Mortgage insured by the FHA Section in an amount not less than $31,550. In the event the Buyer fails to qualify for said mortgage, all said deposit shall be returned immediately, less the cost of the credit report. "14. It is mutually agreed that the trans action shall be closed and the Buyer shall pay the balance of the first payment and execute any and all papers necessary to be executed by him for the completion of this purchase within days from the aforementioned abstract of title, or such time as shall reasonably be required by seller to make such title good, otherwise the herein named Escrow Agent is hereby directed by both Seller and Buyer to divide the monies being held by said Escrow Agent, under the terms under this Contract between the Seller and Broker herein named as hereinafter provided." "It is further agreed that in case of default by the Buyers, the Seller may at his option take legal action at law and/or in equity to enforce this Contract, in which event, the Buyer shall pay reasonable attorney fees and court costs; or else the Seller may at his option retain one half of the deposit herein paid as considera tion for the release of the Buyer by the Seller from any and all further obligations under this Contract to the Seller, which release shall be implied from such act of retention by the Seller." Buyer quit the premises in October, 1972 and thereafter demanded return of his deposit from seller. By letter from buyer's attorney (Exhibit 6) dated March 19, 1973 demand was made for return of the deposit. By letter dated March 23, 1973 (Exhibit 7) Seller denied the refund of the deposit on grounds that the buyer had breached the contract as the Buyer had qualified for and been approved for a mortgage by the Collateral Mortgage Co. The money was withdrawn from the escrow account and paid to the seller. Defendant is an attorney, mortgage broker, general contractor, developer and real estate broker. For the past decade he has devoted most of his energies toward real estate development. This is the first time charges have been preferred against him by the Florida Real Estate Commission.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, arguments of counsel and the parties, and the entire record compiled herein, the following relevant facts are found.2 John B. Roberts, a/k/a John B. Roberts, Sr., is registered as a real estate broker; is licensed as a broker salesman and has been issued License No. 0145010. (Petitioner's Exhibit 1.) As such, Respondent is subject to the licensing provisions contained in Chapter 475, Florida Statutes. During times material, Respondent was the active firm member broker of, and for, Gemco Realty Corporation which was, at that time, situated with an office at 3200 North Federal Highway, Boca Baton, Florida. On or about March 26, 1979, Respondent negotiated a Contract for Sale and Purchase wherein Jerald H. Malis agreed to purchase, for $190,000.00, Tract 87, Block 71, Palm Beach Farms Co., Plat No. 3, also known as 8298 Bridal Path, as recorded in Plat Book Pages 45/54 of the Public Records of Palm Beach County, Florida, from Louise and Marvin Norris. The stated property was listed for sale with Patterson and Workman, Inc., corporate brokers with offices located in Boca Raton, Florida. According to the subject contract, Respondent was to retain a $25,000.00 escrow deposit and the transaction was scheduled for closing on June 15, 1979. Marlene Patterson Rooks, a real estate broker since 1972, and a part owner of the brokerage firm, Patterson and Workman, Inc., represented the Norrises in the subject transaction. On numerous occasions from the time that the contract was entered through the scheduled closing dates, Ms. Rooks made inquiry of Respondent to ascertain whether the $25,000.00 earnest money deposit was in fact in escrow as required per contract. These inquiries were prompted based on an interoffice policy of Patterson and Workman, Inc., to verify escrow deposits when it is the listing agent and is selling through a brokerage office that it has not had prior dealings with. After repeated requests, including a personal visit to Respondent's office by Ms. Patterson, Respondent tendered to Ms. Patterson, a deposit receipt for what appears to be a $22,500.00 deposit which is, according to Respondent, a verification of the $25,000.00 earnest money deposit receipt. Respondent contends that the remaining difference was in fact placed in an escrow account of Creative Home Designs.3 Ms. Patterson had doubts as to whether the $22,500.00 deposit actually represented the $25,000.00 deposit which is the subject of this transaction inasmuch as the deposit receipt pre-dated the execution date of the subject contract by approximately one week. (See Petitioner's Exhibits 11 and 12). When Ms. Patterson was told that the subject transaction failed to close, she later received a mailgram declaring that the subject contract had been cancelled. (Respondent's Exhibit 5). Ms. Patterson immediately requested that a portion of the deposit monies be retained since, in her opinion, said commission monies had been earned by the listing agency. (Respondent's Exhibit 6). Eleanor Britter, a loan officer for First Federal of Broward, processed a loan application for the purchaser, Jerald H. Malis. The loan application was approved by First Federal at an interest rate of 11 1/2%. (See Petitioner's Composite Exhibit 13, and Respondent's Exhibit 7). On August 23, 1978, Gemco Realty Corporation's active firm member broker and owner was Michael Eisenrod. During this period, Deborah Parnell was a registered real estate salesperson associated with Gemco Realty. On August 23, 1978, salesperson Parnell negotiated a Contract of Purchase and Sale whereby Lou Demarco, Inc., a Florida corporation, and Lou Demarco individually, agreed to sell Lot 38, Block 4, Boca Raton, Bath and Tennis Club, also known as 2000 N.W. 29th Road, Boca Raton, Palm Beach County, Florida; and to build thereon a house for purchaser de Buitrago on which contract de Buitrago gave a $15,000.00 earnest money deposit to Gemco Realty Corporation. That deposit was placed into the escrow account of Gemco Realty Corporation. (Credited Testimony of Eisenrod.) On September15, 1978, Respondent then a registered real estate salesman, became associated with Gemco Realty Corporation. In November, 1978, Respondent became registered as a real estate broker and on February 19, 1979, Respondent purchased Gemco Realty Corporation from its owner-broker, Michael Eisenrod, and became the corporation's only active firm member-broker. (Petitioner's Exhibit 3.) At the time of the purchase, the stated $15,000.00 deposit on the Demarco contract was in the escrow account of Gemco Realty. At this time, the Demarco contract had not closed. The Demarco contract ultimately failed to close and the parties to the contract agreed to disburse the $15,000.00 deposit as follows: $12,500.00 to purchasers; $1,100.00 to salesperson Deborah Parnell; and $1,400.00 to Michael Eisenrod, the former active firm member-broker and owner of Gemco Realty Corporation. (Petitioner's Exhibit 8). Confirmation of this disbursement agreement was acknowledged by Respondent in his letter dated June 20, 1979, to Respondent's lawyer, John Downing of Fort Lauderdale, Florida. Pursuant to the terms outlined in the referenced letter, Respondent was to deliver to attorney Downing, his escrow check in the amount of $13,600.00 which represented the total disbursement to the purchaser and salesperson Parnell.4 Respondent has not returned the deposit monies referred to from the Demarco contract to date. Rebecca Ritter, the head bookkeeper for Royal Beach Trust Company of Palm Beach, Florida, appeared and acknowledged that Respondent had escrow accounts at Royal Beach Trust Company during the period January, 1979, through July 30, 1979. (See Petitioner's Exhibit 15). During times material herein, Respondent was the only active firm member of and for Gemco Realty Corporation. During this period, Respondent has his trust and escrow accounts in general accounts in the following banking institutions: First Bank and Trust Company of Boca Raton, Florida; Boca Raton National Bank, Boca Raton, Florida; and Royal Trust Bank of Palm Beach, Boca Raton, Florida. On April 30, 1979, Respondent issued, on its trust account at First Bank and Trust Company of Boca Raton, checks numbered 0548 and 0549, each in the amount of $50,000.00, payable to Creative Home Designs, Inc. Neither check was honored when presented for payment and the reason being that the checks were returned due to "uncollected funds." (Petitioner's Exhibit 7). Also, on April 12, 1979, Respondent issued on its trust account at First Bank and Trust Company of Boca Raton, Florida, its check No. 0592 in the amount of $3,000.00 payable to Lou Demarco, Inc., and Nicholas Brooks. This check was also not honored when presented for payment for reason "uncollected funds." Respondent's defense to these allegations are that he had in fact made the $22,500.00 deposit in a timely manner and that an additional deposit was on hand in the deposit of another company that he owned, Creative Home Designs, in the amount of $2,500.00. He contends that Ms. Patterson requested evidence to ascertain that the escrow deposit was in fact made and that such evidence was provided her. Respondent further contends that when purchaser Malis considered the contract to purchase cancelled, he merely related Malis' request to Ms. Patterson and that he presented Malis a refund in the form of a $25,000.00 check which Malis never processed. Respondent contends further that an accounting of the escrow accounts from Gemco Realty indicated that the accounts were in shambles when he purchased the operation and that there was less than the $15,000.00 deposit on hand when he assumed ownership of the corporate escrow accounts. Respondent acknowledged that several checks were returned inasmuch as he was attempting to separate the new escrow deposits from the old in an effort to get a true accounting of the escrow accounts. Respondent expressed his opinion that the $15,000.00 escrow deposit respecting the Demarco transaction was never placed in the escrow account. Further, Respondent contends that to the extent that monies were made on the Demarco transaction, that that payment was partially repaid in the form of a $3,000.00 check which represented a partial payment. (Respondent's Exhibit 4). Respondent also acknowledged that he agreed to the disbursement of deposit funds from the Demarco transaction as set forth herein but that they buyer later refused to close the transaction and forfeited, in Respondent's opinion, his deposit. According to Respondent, he then attempted to get the earnest money deposits returned to the purchasers. Respondent opined that the buyer forfeited the escrow deposit tendered to Gemco Realty. Finally, Respondent contends generally that the Gemco accounts were incorrect and that he was "duped" into accepting Messr. Eisenrod's accounting as of the date that he assumed, control of the Gemco Realty Corporation's escrow accounts. Respondent also allowed that he had on deposit,, two (2) $50,000.00 checks which were returned and as a result also created checks that he had written to also be dishonored when presented for payment.5
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Respondent's license to practice real estate as a broker be revoked. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 24th day of June, 1981. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of June, 1981.
Recommendation Based upon the Findings of Fact and Conclusions of Law stated above the Hearing Officer would recommend that the Florida Real Estate Commission issue a letter of admonition to Leroy Wilson clarifying his responsibilities and the maintenance of his financial affairs and proper business office when operating as a broker. DONE and ORDERED this 22nd day of June, 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: Manuel E. Oliver, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 Henry Latimer, Esquire Mavrides and Latimer 5353 Southwest 40th Avenue Fort Lauderdale, Florida 33314
Findings Of Fact Robert & Gilman, Inc. at all times herein involved was registered as a real estate broker by the State of Florida. Delair A. Clark at all times herein involved was registered as a real estate salesman by the State of Florida. Residential property owned by William L. and Frances Crummett was listed with J.B. Steelman, Jr. real estate broker and put on Multiple Listing Service. On June 17, 1972, immediately after the For Sale sign was erected, Respondent, Delair A. Clark, presented an offer to the sellers on this property which was accepted by sellers on the same date presented (Exhibit 9). This contract provided the purchase price of $28,500 with a $300 earnest money deposit, the usual clauses in a form contract for sale and purchase, and two special clauses to wit: "A. Subject to: Buyer being reassigned to central Florida prior to June 22, 1972. In the event the assignment does not materialize by June 23, 1972 deposit will, be returned in full and contract will be null and void. B. Subject to: Buyer obtaining a 90 percent conventional loan for a period of 25 years or an FHA loan for 30 years." By telegram dated 6/20/72 (Exhibit 8) buyer confirmed re-assignment to Orlando, thus satisfying condition A in the contract. Buyers thereafter asked for earlier occupancy than originally called for. Since special arrangements would have to be made by sellers, Mr. Crummett asked for an amendment to the contract to increase the earnest money deposit to $1,000 of which $500 would be non-refundable if contract was not consummated. This amendment was duly executed by the buyers on July 15, 1972 and by the sellers. A copy thereof was admitted into evidence as Exhibit 11 which provides: "SPECIAL CLAUSE" "C. An additional deposit of $700 will be made on July 17, 1972, of which $500 will be non-refundable in the event the referenced contract is not consumated (sic)." This amendment was forwarded to the sellers by Respondent's Roberts & Gilman letter of July 17, 1972 which amendment was executed by the sellers upon receipt and mailed back to Roberts & Gilman. The July 17, 1972 letter was signed by Judy L. Rostatter of the sales processing department. A copy of the check received from the buyers was not enclosed although the letter stated it was enclosed. Prior to receipt of this amendment Crummett was advised by Richter, the buyer, that he had mailed a $700 check to Roberts & Gilman made payable to Crummett. Crummett was also advised by Respondent Clark that the check had been received. Since closing was scheduled to be held within a couple of days Crummett requested Clark to hold the check and he would endorse same at closing. Crummett never saw the original check for $700. On the day originally scheduled for the closing (circa July 18, 1972) Crummett received a telephone call from Respondent Clark to the effect that the appraisal on the property had come in some $3,000 below the asking price and inquiring if Crummett would accept $26,000 for his property. The latter advised he would not and, after some heated words, Crummett hung up. At this time it was evident to Respondent Clark and the sellers that the sale would not be consummated. Clark put a memo in the file dated July 28, 1972 saying: "Return checks of $700 + $300 in estrow (sic) to Richter. Seller advised we had no contract." A few weeks later, on August 3, 1972, after making several phone calls to Roberts & Gilman without success, Crummett had the listing broker, J.B. Steelman, write a letter (Exhibit 7) to Gilman making demand for the $500 deposit refund. By letter dated August 11, 1972 (Exhibit 6) Roberts and Gilman replied that they considered the contract had been terminated by the seller and saw no "justification by the seller to claim any escrow that has been returned to the buyer". This letter was signed "Dan T. Gilman /b.c." Several months later, in the spring of 1973, Crummett went to the office of Roberts and Gilman and obtained a photostatic copy of the check dated 7/15/72 that had been made by J.A. Richter in the amount of $700. This was admitted into evidence as Exhibit 12. At the hearing Dan G. Gilman, President of Roberts & Gilman, Inc. denied any recollection of any part of this transaction or ever having heard of the incident prior to the investigator from the FREC coming to inquire about the incident. At the time of this transaction the realtor's office was very busy with several branch offices and some 120 salesmen handling transactions in eight or ten counties in central Florida. He has no recollection of dictating Exhibit 12 or anything about the incident but his secretary at that time was Beverly Cass. It was standard practice for a broker to review every contract before trust account money was disbursed or refunded. His initial testimony that numerous people in the office had authority to sign his name to letters going out of the office was recanted when he was recalled as a witness after the close of the Commission's case. He then stated he never authorized anyone to sign his name to a document having legal implication. Clark testified that the first time he ever saw Exhibit 11, the amendment to the contract, was when shown to him by the investigator for the FREC. Likewise he claims never to have seen or received the $700 check signed by Richter. With respect to the return of the deposit to Richter, (after being shown Exhibit 13) his recollection of the cancellation of the contract was that Richter was not re-assigned to the Orlando area. This was the only contract ever handled by Clark which involved the return of an escrow deposit. He has no recollection of talking to any member of the realty firm regarding clearing the return of the escrow deposit to Richter. Exhibit 5 is a photocopy of the check by which the $300 earnest money deposit was returned to Richter. It is obvious that the contract for the sale of the residential property herein involved was amended to provide for an additional deposit from the buyers and a clause which required the buyer to forfeit one half of his deposit in the event the transaction was not consummated. It is incomprehensible that such an amendment to the contract could be made without the knowledge of the salesman or the broker. It therefore appears that the Defendants either: (1) are not telling the truth; (2) have faulty memories; (3) allowed the duties normally performed by brokers to be carried out by secretaries; or (4) operated a realty company in a slipshod manner without due regard to the duties and responsibilities imposed upon brokers and salesman by the real estate license law.
