The Issue The issue to be resolved in this proceeding concerns whether the Respondent has violated Subsection 475.25(1)(b), Florida Statutes; Subsection 475.25(1)(d)1, Florida Statutes; Subsection 475.25(1)(k), Florida Statutes; Subsection 475.42(1)(a), Florida Statutes; Subsection 475.25(1)(e), Florida Statutes; by being guilty of culpable negligence or breach of trust; by allegedly failing to promptly deliver a deposit; by allegedly failing to maintain trust funds in a proper escrow account; by allegedly depositing or intermingling personal funds with trust funds or escrow funds; by operating as a broker without holding a valid, current license; and by failing to preserve and make available to the agency all books, records, and supporting documents and by allegedly failing to keep an accurate account of all trust-fund transactions.
Findings Of Fact The Petitioner is an agency of the State of Florida charged with licensing and regulating the practice of real estate brokers and salespersons licensed in the State of Florida. It has the duty to prosecute with Administrative Complaints any alleged violations of Chapter 475, Florida Statutes, and related laws and rules, involved in the licensure and regulation of real estate brokers and salespersons. The Respondent, Richard Irwin Ray, is now and was, at all times pertinent to this case, a licensed real estate broker in the State of Florida. He was issued license number 0423296, in accordance with Chapter 475, Florida Statutes. The last license issued to him was as a non-active broker, bearing an address of 10013 Calle de Celestino, Navarre, Florida 32566. The Respondent, at times pertinent hereto, was the licensed and qualifying broker for the now-defunct Navarre Shores Realty, Inc. for the period from October 31, 1985 to approximately November 6, 1989. The Respondent and Navarre Shores Realty, Inc. failed to renew their licenses on March 31, 1989, the expiration date. Instead, the licenses were renewed effective April 5, 1989; and the Respondent continued to do business as a real estate brokerage and broker for several months thereafter through and including the time in which the transaction at issue was entered into. On or about July 27, 1989, Richard Walker, a salesman working for the Respondent's brokerage firm, solicited and obtained an executed contract for the sale and purchase of certain real property owned by Myra Lee Philips, the seller, and Charles W. and Pamela S. Brannon, the proposed buyers. The buyers gave the salesman, Mr. Walker, a $500.00 earnest money deposit called for by the terms of the contract, which terms also provided that the earnest money deposit was to be held in escrow by Navarre Shores Realty, Inc., the Respondent's real estate brokerage firm. Mr. Walker maintains that he turned in the check or submitted it to the broker or to one of his representatives or to someone who was "running the office at the time". He does not recall to whom he actually tendered the check when he received it; however, he recalls making a copy of the check and then making a copy of the check and the front page of the contract, with the check copy overlaid on it, which was the procedure in the office required by the Respondent in order that he could keep a record of sales transactions. In addition to Mr. Walker, the salesman, having no recollection of who, if anyone, he might have given the check to with the Respondent's brokerage firm, the Respondent has no recollection of receiving the check, ever seeing the check nor the manner or means by which the check was handled, as, for instance, whether it was deposited in his firm's escrow account or not. Mr. Charles Brannon, the proposed buyer in the subject transaction, testified that he executed a $500.00 earnest money deposit check in accordance with the terms of the contract referenced above and that the $500.00 check did clear his bank account; that is, it was paid upon being tendered to his bank. The Respondent maintains that he does not know the location of any records he might have, if any, related to this transaction and the subject earnest money deposit check. During the time in question immediately following the transaction date of July 27, 1989 and the time in November of 1989 when the Respondent closed his real estate office, the Respondent apparently had some disagreements with salespersons, including Mr. Walker. During this time period, the Respondent and his secretary, Ms. Galfano, learned that some client and sales transactions files were removed from the Respondent's brokerage office by Mr. Walker and others. Apparently, Ms. Galfano was able to retrieve some of the files; however, the Respondent was unable to, or in any event, failed to provide the Department's investigator, Mr. Bratton, with any records related to the subject transaction, including the escrow account records, which might have revealed whether the earnest money deposit check was deposited in the Respondent's escrow account or not, although the Respondent did advise Mr. Bratton by telephone on two occasions that he was endeavoring to have the bank prepare his escrow account records. The escrow account had been closed by Emerald Coast State Bank because service charges had been applied to it which resulted in its having a negative balance. This may mean that no $500.00 earnest money deposit check had been deposited in that account, and the Respondent does not know what happened to the check once the Brannons executed it and presumably gave it to Mr. Walker. He does not feel that it was ever placed in his escrow account, nor that he ever had any possession of it because the account was closed for having a negative balance due to the debiting of monthly service charges. In any event, the Respondent did not obtain and provide to the Petitioner the escrow account records. The Respondent stated in his testimony that if the buyers, the Brannons, could provide their bank records and produce the cancelled check involved, that would show how the check was cashed and, therefore, whether it was processed through his escrow account. The cancelled check was not produced and admitted into evidence at the hearing. Mr. Brannon, one of the buyers, merely testified that the check had cleared his bank and had been debited from his account upon which the check was written. Check number 3642 in evidence is the $500.00 check drawn on the account of Richard I. or Maryanne Ray, which is the check by which the Respondent paid the seller, Ms. Philips, the earnest money deposit funds which she was due because the transaction failed to close. A receipt for that check was issued to the Respondent by witness, Richard Walker, the Respondent's former salesman. The receipt indicates that the funds in question were received from R. Ray Construction, a/k/a Navarre Shores Realty, Inc. Mr. Walker did not adequately explain why he issued a receipt to the Respondent for the check drawn on his personal account and represented it as being from R. Ray Construction, a/k/a Navarre Shores Realty, Inc. He merely testified that he went to Mr. Ray, who "...was operating out of his personal account with his construction company. I did it because that's what he was known as at the time. OK. I did it in good faith." Mr. Walker does not have any knowledge concerning where the earnest money deposit check from the buyer, the Brannons, was actually deposited, nor whether the Respondent ever received it. Ms. Galfano was the secretary for Navarre Shores Realty, Inc., the Respondent's firm, at the time of the transaction in question and thereafter. Ms. Galfano established that Mr. Walker took some files from the office which contained sales contracts when the Respondent closed the office. She went to his home on a Sunday and persuaded him to give her back the records and took them back to the office. Ms. Galfano opined that certain files had been removed from the office by Mr. Walker because Mr. Walker was in a dispute at the time with one of the sales associates in the office. Navarre Shores Realty, Inc. had been experiencing internal problems with the associates disputing among themselves. In fact, the Respondent lost several associates from his firm due to internal dissension, presumably about credit for clients and contracts. It was because of this that the Respondent decided to close his office. At the time of the transaction between the Philips and the Brannons, Navarre Shores Realty, Inc., through Mr. Walker, had the listing on the property. Prior to that time, the Philips' property had been listed with Mr. Lou Jakes, also a sales associate with Navarre Shores Realty, Inc. The seller, Ms. Philips, later turned the listing over to Mr. Walker because she was upset with Mr. Jakes over upkeep not being properly done on the beach house in question. She called the off ice concerning this and happened to talk to Richard Walker, who persuaded her to change the listing from Lou Jakes over to him. Thus, the subject listing and transaction caused a dispute between Mr. Jakes and Mr. Walker, and Mr. Jakes left the firm as, later, did Mr. Walker. One of them apparently removed the subject records from the brokerage office. Since the transaction in question and the internal dissension in his office involving Mr. Walker and the other associate, the Respondent has had difficulty conversing with Mr. Walker because they are not on good terms. In summary, the evidence establishes at most that Mr. Walker received the earnest money deposit check from the buyers, the Brannons. It was not established that the Respondent ever received or became aware of the delivery of the earnest money deposit check to Mr. Walker. It was not established that it was ever deposited in any of the Respondent's or his corporation's accounts. It was established that the Respondent, partly out of a desire to avoid accusation of any illegality by the Petitioner, voluntarily paid the $500.00 to the seller out of his personal account, although he does not know or has no recollection that the money was ever received by him nor deposited in any of his accounts. The earnest money deposit check was not produced and placed into evidence, which could have shown in whose bank and account the check might have been deposited. Mr. Brannon only testified that the $500.00 check cleared and was debited from his account. It was established that the Respondent either has no records of his escrow account transactions with regard to this real estate transaction or is unaware of their location. It was likewise established, however, that upon request by Mr. Bratton, Petitioner's investigator, for copies of those records, the Respondent did not produce them. The Respondent maintains that he had requested that his banks provide a copy of his account records; however, as of the time of the hearing, he had not provided those to Mr. Bratton. It was also established that the Respondent and his brokerage firm were duly licensed at the time the transaction in question occurred and that some months later, in November of 1989, he closed his office and ceased doing business. It was established that his licensure expired on March 31, 1989 and that there was a six-day lapse of his licensure, with it being renewed on April 5, 1989. In November of 1990, on approximately November 6th, the buyers, the seller, and the Respondent signed a release of deposit agreement whereby the Respondent was to disburse $500.00 to the seller with regard to the subject transaction. See Exhibit 2 in evidence. On or about April 18, 1991, the Respondent made and delivered check number 3642, in the amount of $500.00, drawn on his personal checking account number 1322650, maintained at First National Bank of Santa Rosa, Milton, Florida, payable to Myra Lee Philips, who had been the seller in the subject transaction. Thus, in excess of five months elapsed between the time the Respondent agreed to disburse the $500.00 to Ms. Philips and the time he actually paid Ms. Philips the $500.00.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, and the candor and demeanor of the witnesses, it is therefore, RECOMMENDED that a Final Order be entered by the Department of Professional Regulation, Division of Real Estate, finding that the Respondent, Richard Irwin Ray, has violated Subsection 475.25(1)(d)1, Florida Statutes, by failing to promptly deliver a deposit; finding that he is guilty of having failed to preserve and make available to the Petitioner all books, records and supporting documents concerning trust-fund transactions in violation of Rule 21V-14.012(1), Florida Administrative Code, as well as Subsection 475.25(1)(e), Florida Statutes, and that he be accorded the penalty for these violations of a written reprimand and a $250.00 fine. Concerning his violation of Subsection 475.42(1)(a), Florida Statutes, and the consequent derivative violation of Subsection 475.25(1)(e), Florida Statutes, by operating for six days without a license, it is recommended that due to this inadvertent, technical licensure lapse that no penalty be imposed. DONE AND ENTERED this 1st day of July, 1992, in Tallahassee, Leon County, Florida. P. MICHAEL RUFF 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 2nd day of July, 1992. COPIES FURNISHED: Darlene F. Keller, Division Director Division of Real Estate P.O. Box 1900 Orlando, FL 32802-1900 Jack McRay, Esq. General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792 James Gillis, Esq. Department of Professional Regulation Division of Real Estate 400 West Robinson Street P.O. Box 1900 Orlando, FL 32802-1900 Richard Irwin Ray 10013 Calle de Celestino Navarre, FL 32566
The Issue Whether Respondents committed the offenses set forth in the six-count Administrative Complaint dated October 15, 2003; and, if so, what penalty should be imposed.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: The Department of Business and Professional Regulation, Division of Real Estate (the "Department"), is the state agency charged with enforcing the statutory provisions pertaining to persons holding real estate broker and sales associate's licenses in Florida, pursuant to Section 20.165 and Chapters 455 and 475, Florida Statutes (2003). At all times relevant to this proceeding, Respondent Richard R. Page, was a licensed Florida real estate broker/officer, having been issued broker license no. KB-0148248. He was the qualifying broker for Aztec Realty. At all times relevant to this proceeding, Respondent Aztec Realty, was a corporation registered as a Florida real estate broker, having been issued corporate registration no. CQ-0156640. Aztec Realty's business location was 4456 Tamiami Trail, Charlotte Harbor, Florida 33980. Barbara Kiphart was a 13-year employee of the Department who had performed thousands of audits of broker records. After conducting agent interviews on an unrelated matter in the office of Aztec Realty, she informed Mr. Page that she planned to perform an audit of the corporation's escrow accounts. Ms. Kiphart testified that it was routine for the Department to perform such audits when visiting brokers' offices for other reasons. Ms. Kiphart informed Mr. Page that she would need all documents necessary to complete an audit of Aztec Realty's escrow accounts, including bank statements, account reconciliations, and liability lists. Mr. Page referred Ms. Kiphart to Cheryl Bauer, Aztec Realty's financial manager. With Ms. Bauer's assistance, Ms. Kiphart completed the audit on June 12, 2003. Three accounts were examined: the sales escrow account; the security deposit account; and the property management account. The sales escrow account was found to be in balance, with liabilities equal to the bank balance of $382,300.52. The security deposit account was found to have liabilities of $45,533.29 but only $16,429.84 in its bank balance, a shortage of $29,103.45. The property management account was found to have liabilities of $22,545.54 but only $16,594.71 in its bank balance, a shortage of $5,950.83. Ms. Kiphart testified that the security deposit account had not been reconciled in the year 2003, and she had no way of saying when it was last reconciled. She determined the account's balance from Aztec Realty's bank statements, but had to extrapolate the liabilities from a computer printout of security deposits. Ms. Bauer testified that she handles the finances for all aspects of Aztec Realty's real estate sales business, including the sales escrow account, and that she was able to provide all the information Ms. Kiphart needed to audit that account. However, Ms. Bauer had no responsibility for the other two accounts, both of which related to the rental property management side of Aztec Realty's business. She had to obtain information about those accounts from Jill Strong, her newly- hired counterpart in property management. At the time she provided the computer printout on the property management accounts to Ms. Bauer and Ms. Kiphart, Ms. Strong told them that she knew the numbers were inaccurate. Aztec Realty had purchased Tenant Pro, a new rental management software package, in 2001. In the course of approximately 18 months, Aztec Realty had three different employees in Ms. Strong's position. One of these short-term property managers had misunderstood the software for the security deposit account. Opening balances were entered for accounts that had, in fact, already been closed out with the deposits returned. This had the effect of inflating the apparent liabilities in that account. The previous property manager was also unable to print checks on the printer attached to her computer terminal. Ms. Bauer would print the deposit refund checks on her own printer, with the understanding that the property manager was recording these entries against the security deposit account. Ms. Strong discovered that these entries had not been recorded. Thus, monies that had been paid out to owners, renters, and vendors were never recorded anywhere besides a sheet that Ms. Bauer kept for printing out checks, again inflating the account's apparent liabilities. Ms. Strong had been working for Aztec Realty for about one month at the time of the audit. She was still in the process of sorting out the problems in the security deposit account, hence her statement to Ms. Bauer and Ms. Kiphart that she knew the numbers were inaccurate. Subsequent to the Department's audit, Ms. Bauer and Ms. Strong commenced their own audit of the security deposit and property management accounts. Their efforts were complicated by a storm and tornado that struck the area on June 30, 2003. The offices of Aztec Realty suffered over $100,000 in damage, including water damage to the roof that caused the office to be flooded. Records were soaked and Ms. Strong's computer was destroyed. By mid-July 2003, Ms. Bauer and Ms. Strong had completed their corrected audit of the security deposit account. They concluded that the actual shortfall in the account was $13,764.43. That amount was immediately transferred from the real estate operating account to the security deposit account to bring the latter account into balance. The real estate operating account was essentially Mr. Page's personal funds. As to the property management account, also referred to as a "rental distribution" account, Ms. Bauer and Ms. Strong performed a subsequent audit indicating that the account was out of balance on the positive side. They discovered that there were items paid out of the property management account that should have been paid from escrow and vice versa. When the audit brought the accounts into balance, the property management account was approximately $200 over balance. In an audit response letter to Ms. Kiphart dated July 16, 2003, Mr. Page acknowledged that the property management account had been improperly used to pay occasional expenses, but also stated that the practice had been discontinued. At the hearing, Mr. Page conceded that no reconciliations had been performed on the security deposit account or the property management account from at least January 2003 through May 2003. Mr. Page and Ms. Bauer each testified that the corrective actions taken in response to the audit have been maintained and that there have been no accounting problems since June 2003. Aztec Realty has contracted to sell its property management department. The evidence established that no client of Aztec Realty or other member of the public lost money due to the accounting discrepancies described above. Neither Mr. Page nor Aztec Realty has been subject to prior discipline. Mr. Page has worked in the real estate business in the Port Charlotte area for nearly 30 years and is a past president of the local association of realtors. He credibly expressed remorse and testified that, given his position in the community, he was "mortified" at having allowed his company to be placed in this position. Aztec Realty has operated for nearly 30 years and currently has 20 employees and approximately 65 agents.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order: Dismissing Counts II and III of the Administrative Complaint against Mr. Page; Dismissing Counts V and VI of the Administrative Complaint against Aztec Realty; Imposing an administrative fine against Mr. Page in the amount of $1,000 for the violation established in Count I of the Administrative Complaint; and Imposing an administrative fine against Aztec Realty in the amount of $1,000 for the violation established in Count IV of the Administrative Complaint. DONE AND ENTERED this 27th day of July, 2004, in Tallahassee, Leon County, Florida. S 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 27th day of July, 2004.
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
The Issue Whether Respondents committed the offenses described in the Administrative Complaint? If so, what disciplinary action should be taken against them?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: The Parties The Department is a state government licensing and regulatory agency. Raymond Mangicapra is now, and has been at all times material to the instant case, a licensed real estate broker in the State of Florida. He holds license number 0326800. FUGI is now, and has been at all times material to the instant case, a corporation registered as a real estate broker in the State of Florida. It holds registration number 0245691. At all times material to the instant case prior to March 5, 1992, Mangicapra was the broker of record for FUGI. On March 5, 1992, he resigned as FUGI's broker of record and its president. Approximately five months later he returned to FUGI in the capacity of a licensed broker-salesman The Angulo Transaction On or about April 26 1991, Jose Angulo, his wife Martha Salazar Angulo, and their son Carlos Angulo, signed a written contract (hereinafter referred to as the "Angulo contract") to purchase from Lofts Development Corp. (hereinafter referred to as "LDC"), for $98,300.00, real property located in the Willow Wood subdivision in Palm Beach County upon which a residence was to be constructed. FUGI, through its then broker of record, Mangicapra, negotiated the sale for LDC. Mangicapra was also a part-owner of LDC and its qualifying agent. His partner was Vincent Ferri. Ferri, on behalf of LDC, signed the Angulo contract on May 2, 1991. Article II, Section C. of the Angulo contract provided, in part, as follows: Use of Mortgage Loan: Time to Make Application: Purchaser intends to pay for a portion of the Purchase Price by obtaining a permanent mortgage loan ("Mortgage Loan"). Purchaser agrees to make application(s) for such Mortgage Loan from a bona fide lending institution approved by Seller ("Mortgagee") in the amount of [$96,050.00], at applicable interest rates. Purchaser agrees to make application for such Mortgage Loan within five (5) days from execution of this Contract by Purchaser. Purchaser agrees to promptly execute all necessary documents, disclose all information within fourteen (14) days of request and pay all costs as and when requested of it by Mortgagee and/or Seller in conjunction with such application and take all other measures to aid in being approved for a Mortgage Loan, including the making of further applications for a Mortgage Loan. Failure to Obtain Mortgage Loan: Purchaser agrees that in the event Purchaser fails to qualify for such Mortgage Loan or fails to qualify for a Mortgage Loan sufficient in an amount to enable Purchaser to close after duly and promptly complying with all requests of the Mortgagee and/or Seller, Purchaser shall notify Seller of this fact, in writing, whereupon Seller may request that Purchaser make further applications for a Mortgage Loan. In the event that Purchaser fails to qualify for a Mortgage Loan with any Mortgagee after duly and promptly complying with all requests of the Mortgagee and/or the Seller, as provided above, then Seller shall, at its sole discretion, either (a) give a Mortgage Loan to Purchaser at applicable interest rates at the time such Mortgage Loan is closed for the Full Amount; or (b) transfer or otherwise assign a Mortgage Loan obtained by Seller at applicable interest rates at the time such Mortgage Loan is obtained for the Full Amount which Purchaser agrees to assume at closing in lieu of any other Mortgage Loan and for which Purchaser shall reimburse Seller for all loan closing costs, title insurance premiums and escrow balances existing at closing relative to such assumed Mortgage Loan; (c) in the instance where Purchaser is approved for a Mortgage Loan in an amount less than the Full Amount, unless otherwise prohibited by reason of government or lender regulations, take a purchase money second mortgage from Purchaser at applicable interest rates for a term not to exceed five (5) years and Purchaser shall pay all closing costs in connection with such purchase money second mortgage; or (d) return any monies paid hereunder less a sum for engineering and other expenses reasonably incurred in effecting and processing this Contract whereupon this Contract shall be terminated and the parties hereto shall be relieved of all further rights and obligations hereunder. Default by Purchaser: In the event Seller ascertains that Purchaser has failed to qualify for a Mortgage Loan due to Purchaser's failure to duly or promptly comply with all requests of the Mortgagee and/or Seller or due to failure on the part of Purchaser to supply accurate information, then any such event shall constitute default by Purchaser hereunder, entitling Seller to retain all sums paid hereunder as set forth in accordance with Article VI hereof. Notwithstanding anything contained in this Article II to the contrary or notwithstanding a subsequent mortgage disapproval by a Mortgagee, Purchaser specifically agrees that once a mortgage approval is obtained by Purchaser from one Mortgagee, the deposit monies paid by the Purchaser to Seller shall no longer be refundable. . . . Article III, Section D. of the Angulo contract provided, in part, as follows: Subject to the following provisions of this Paragraph, the estimated date of completion for the residence shall be on or about 120 days from mtg approv. . . . . In the event said Residence shall not be completed two (2) years from the date of this Contract as aforesaid, Purchaser shall have the option to cancel this Contract by giving written notice to Seller ("Cancellation Notice") within 5 days after two (2) years from the date of this Contract ("Cancellation Period") and upon such cancellation Seller shall refund to Purchaser his deposit made hereunder. Upon such Refund, all parties to this Contract shall be fully discharged and relieved from the terms and obligations hereof. Liability of Seller is limited to the Refund and in no event shall Seller be liable to Purchaser for any damages which Purchaser may sustain. In the event Purchaser does not send the Cancellation Notice within the Cancellation Period, this Contract shall remain in full force and effect and Purchaser shall not have the right to cancel this Contract unless Seller is otherwise in default of this Contract. Seller shall not be obliged to make, provide or compensate for any accommodations to Purchaser as a result of delayed completion nor shall Seller be liable for any expenses or inconveniences to Purchaser which may directly or indirectly arise from delay of delivery of possession. Article VI, Section A. of the Angulo contract addressed the subject of "Purchaser's Default." It provided, in part, as follows: If Purchaser shall fail to cure such default within such seven (7) day period, Seller shall, and does hereby have the unrestricted option to (1) consider Purchaser in default under this Contract, (2) retain all sums paid to it, whether held in escrow or otherwise, hereunder as agreed upon and liqu[id]ated damages and in full settlement of any claim for damages, and (3) terminate all rights of Purchaser under this Contract. . . . Article VII of the Angulo contract addressed the subject of "Deposit Money." It provided as follows: Seller shall at its option have the right to use the deposit money for any purposes as it deems necessary. Article VIII, Section B. of the Angulo contract provided as follows: Purchaser represents and warrants that this sale of the Property pursuant to this Contract was made by Seller's personnel and Purchaser agrees to indemnify and hold harmless Seller against any claims of real estate brokers for commissions relating to this sale. Article VIII, Section C. of the Angulo contract provided as follows: This Contract may not be assigned, sold or transferred by Purchaser without the prior written consent thereto by Seller, which consent may be withheld in Seller's sole discretion. There was no comparable provision in the contract restricting LDC's right to assign. Article VIII, Section E. of the Angulo contract provided as follows: This Contract shall be binding upon the parties hereto and their respective heirs, executors, legal representatives, successors and, as permitted hereunder, assigns. Addendum E to the Angulo contract, which was signed by the Angulos on April 26, 1991, and by Ferri on May 2, 1991, provided, in part, as follows: The purchaser(s) of a one or two family residential dwelling unit has the right to have all deposit fund[s] (up to 10 percent of the purchase price) deposited in an interest bearing escrow account. This right may be waived in writing by the purchaser(s). Purchaser(s) hereby waive their right to have all deposit funds (up to 10 percent of purchase price) deposited in an interest bearing escrow account. . . . First Union Group, Inc., is the agent for the Seller(s) and will be paid for his services by the Seller(s). . . . The Angulos' initial deposit was a check, which they gave to Mangicapra, made out to FUGI in the amount of $500.00. In conjunction with making this payment, they signed a Reservation Deposit/Contract Deposit Transfer Agreement, which provided, in part, as follows: It is specifically understood that this Earnest Money deposit is to be held in First Union Group, Inc's (hereinafter First Union Group) trust account. Upon acceptance of said reservation/contract between [the Angulos] (buyer) and Lofts Development Corp. (seller), and upon clearance of said deposit, buyer agrees that First Union Group may automatically transfer to seller said Earnest Money and said Earnest Money shall be treated as purchasers['] initial investment deposit. Purchaser agrees that once said reservation/contract between buyer and seller named above is accepted by seller, and there is in effect a purchase agreement, any and all future deposits due per said purchase agreement shall be made payable directly [to] seller. If any future deposits are inadvertently made payable to First Union Group, buyer hereby gives First Union Group the right and authorization to transfer said deposit money to seller. Any deviation to the above must be in writing from buyer at the time of the reservation/contract. . . . The "automatic transfer" of deposit monies from the real estate broker holding these monies to the seller/builder, like that authorized by this signed Reservation Deposit/Contract Deposit Transfer Agreement, was the accepted practice in the area. Mangicapra deposited the $500.00 check he had been given by the Angulos in FUGI's interest-bearing money market escrow account at Capital Bank in Delray Beach, Florida. The deposit was noted on the Angulos's ledger card. Respondents did not have the written permission of all interested parties to place the Angulos' deposit monies in such an interest-bearing account. Respondents received three other earnest money deposits from the Angulos: a check, dated May 30, 1991, payable to FUGI in the amount of $700.00 (hereinafter referred to as the "May 30 check"); a check, dated June 30, 1991, payable to FUGI in the amount of $700.00 (hereinafter referred to as the "June 30 check"); and a check, dated July 30, 1991, payable to FUGI in the amount of $600.00 (hereinafter referred to as the "July 30 check"). The June 30 and July 30 checks were deposited in FUGI's interest- bearing money market escrow account at Capital Bank and the deposits were noted on the Angulos' ledger card. The May 30 check, however, was inadvertently deposited in FUGI's general operating account at Capital Bank, instead of its escrow account, as a result of a bookkeeping error. On or about August 8, 1991, Respondents wrote a check (hereinafter referred to as "check #1395") transferring $4,800.00 from its Capital Bank escrow account to LDC. The $4,800.00 represented escrow funds being held by Respondents in connection with six different transactions. It included $1,800.00 of the $2,500.00 in earnest money deposits that Respondents had received from the Angulos. The transfer of this $1,800.00 to LDC was in accordance with the Reservation Deposit/Contract Deposit Transfer Agreement signed by the Angulos. Upon receiving check #1395, Ferri endorsed it back to FUGI to compensate FUGI for services it had provided LDC and for expenses FUGI had incurred in conjunction with the performance of these services. The endorsed check was deposited in FUGI's interest-bearing money market account at Capital Bank. On or about November 1, 1991, Donna Archer, who was then an employee of FUGI, sent a Verification of Escrow Deposit to Paragon Mortgage Corporation (hereinafter referred to as "PMC"), from whom the Angulos were attempting to obtain a mortgage loan. Archer provided the following erroneous information in this Verification of Escrow Deposit: As Escrow Agent in the [Angulo] transaction, we are now holding the following amount in our escrow account for the above captioned transaction: $2,500.00------- total held in escrow. On or about December 26, 1991, PMC sent the Angulos the following letter advising them that their application for a mortgage loan had been conditionally approved: We are please[d] to inform you that your application for a FHA mortgage in the amount of 95,750.00 has been approved. The following items are contingencies on the loan and must be met prior to closing. Provide independent documentation of YTD income for Martha (i.e. copy of ledger signed by accountant of employer) Amendment of contract to reflect the following, contract to remain current through closing Hazard insurance policy for at least the loan amount Survey with flood certification [C]lear soil treatment guaranty Clear final inspection Proof of 10 year HOW warranty or 2/10 [h]ome buyers warranty At the time this conditional loan commitment was made, the master appraisal of the property was about to expire. Accordingly, an extension of the deadline was sought by PMC. By written agreement, dated April 26, 1992, and signed by Ferri and Jules Minker, the president of Contemporary Community Concepts Corp. (hereinafter referred to as "Contemporary"), LDC, which no longer wished to construct homes in the Willow Wood subdivision, assigned the Angulo contract to Contemporary: In consideration of the sum of $10.00 Ten Dollars lawful money of the United States, I, Vincent A. Ferri, President of Lofts Development Corporation, hereby assign without reservation or limitation and free of encumbrance, the purchase contract between Jose Antonio and Martha Salazar Angulo, his wife and Lofts Development Corporation, dated April 26, 1991 to Contemporary Community Concepts Corporation. The deposit monies indicated and due under the contract in the approximate amount of $1800.00 Eighteen Hundred Dollars, are not transferred by this agreement and remain with Lofts Development Corporation. In fact, the "deposit monies indicated and due under the contract," amounted to $2,500.00, although only $1,800.00 of that amount had been transferred to LDC. In May of 1992, upon attempting to contact Mangicapra to find out why LDC had not yet begun to work on their house, the Angulos discovered that FUGI had closed the office out of which it had been conducting its business. The Angulos brought the matter to the attention of Sharon Couglin of PMC. Couglin wrote a letter to an official at HUD to apprise the agency of the situation. A copy of the letter was sent to the Florida Real Estate Commission. Notwithstanding the Angulos' beliefs to the contrary, FUGI was still in business. It had simply moved to another location in Boynton Beach. (Mangicapra was not at this time, however, associated with FUGI in any way.) Minker contacted FUGI and the Angulos and advised them that the Angulo contract had been assigned to Contemporary. In his discussions with the Angulos, Minker told them that they would be given credit for the earnest money deposits that they had made. The Angulos, in turn, indicated that they wanted Contemporary to proceed with the construction of the house LDC had agreed to build for them. In accordance with the Angulos' stated desires, Contemporary proceeded with the construction of the house. As the house neared completion, the Angulos learned that the conditional mortgage loan commitment they had received was no longer valid because the master appraisal had expired. They thereupon tried to contact FUGI to explore their options. This time they were successful in their efforts to get in touch with a FUGI representative. They spoke with Denise Preziosi, who had replaced Mangicapra as FUGI's broker of record. The Angulos asked Preziosi if they could obtain a refund of their deposit monies in the event they decided that they did not want to go through with their purchase of the house. Preziosi indicated that she did not know the answer to the question and that, in any event, FUGI no longer held any of the Angulos' deposit monies. At the time she made this statement, Preziosi was under the mistaken impression that FUGI had transferred all of these monies to LDC. On or about November 25, 1992, Preziosi sent a letter to Minker, the body of which read, in part, as follows: I am in receipt of a copy of the "Agreement" between Contemporary Community Concepts Corporation and Lofts Development Corporation which Patti faxed to me yesterday. In reading this Agreement, I noticed that the amount stated as a credit to the Angulos is $1800 rather than the $2500 they did in fact pay to Lofts. I understand that you did not nor will not receive any money from Lofts but that you agreed to accept the assignment of the contract and would give them credit for their deposit. In this regard, please amend your records to reflect a credit of $2,500 as deposit monies rather than $1,800. The Angulos made their final color selections for the house in mid- December, 1992. Thereafter Minker obtained a certificate of occupancy for the house. Although Carlos Angulo, in Minker's office, signed a document prepared by Minker agreeing "to complete loan processing for a new loan and to close on [the house] when funds are made available as a result of this application, but not to exceed 60 days," 1/ when Carlos took this document home and presented it to his parents for their signature, they refused to sign it. The Angulos did not "complete loan processing for a new loan." The Angulos have not been refunded any of the $2,500.00 in earnest money deposits they have made, nor have they received any of the interest earned on these deposits. It has not been shown, however, that the Angulos are now, or were at any time previous hereto, entitled to such a refund under the provisions of their contract with LDC. The White-Hunt Transaction On or about May 3, 1990, Stacey White-Hunt signed a written contract (hereinafter referred to as the "White-Hunt contract") to purchase from LDC, for $97,000.00, real property located in the Delray Garden Estates subdivision in Palm Beach County upon which a residence was to be constructed. FUGI, through its then broker of record, Mangicapra, negotiated the sale for LDC. Ferri, on behalf of LDC, signed the White-Hunt contract on May 9, 1990. The White-Hunt contract contained provisions identical in all material respects to Article II, Section C., Article III, Section D., Article VI, Section A., Article VII, and Article VIII, Sections B., C. 2/ and E. of the Angulo contract, as well as Addendum E to the Angulo contract. (These contractual provisions are set out above.) White-Hunt's initial deposit was a check, which she gave to Mangicapra, made out to FUGI in the amount of $500.00. In conjunction with making this payment, she signed a Reservation Deposit/Contract Deposit Transfer Agreement, which was identical in all material respects to the Reservation Deposit/Contract Deposit Transfer Agreement signed by the Angulos. Respondents received one other earnest money deposit from White-Hunt. It was a check payable to FUGI in the amount of $1,000.00. The $500.00 check and the $1,000.00 check were deposited in FUGI's interest-bearing money market escrow account at Capital Bank and the deposits were noted on White-Hunt's ledger card. Respondents did not have the written permission of all interested parties to place White-Hunt's deposit monies in such an interest-bearing account. On or about May 23, 1990, Respondents wrote a check transferring $6,500.00 from its Capital Bank escrow account to LDC. The $6,500.00 represented escrow funds being held by Respondents in connection with various transactions. It included the $1,500.00 in earnest money deposits that Respondents had received from White-Hunt. The transfer of this $1,500.00 to LDC was in accordance with the Reservation Deposit/Contract Deposit Transfer Agreement signed by White-Hunt. White-Hunt sought, but failed to qualify for, a conventional mortgage loan. Thereafter she applied for an FHA mortgage loan. By notice dated October 10, 1991, she was advised that her application had been denied. On February 7, 1992, the law firm representing White-Hunt sent a letter to Respondents, the body of which read as follows: Please be advised that I have been retained by Stacey Hunt with regard to the above- referenced Contract in order to secure a return of her deposit. I have enclosed herein copies of the deposit checks made payable to ERA First Union Group in the total sum of $1,500.00 which were provided to you on April 17, 1990 and May 8, 1990. Since Ms. Hunt has failed to qualify for a mortgage, in accordance with Paragraph (b)(2) of the Contract, this letter shall serve as formal demand for a return of any and all deposits placed with your company and any and all interest accrued thereon. In the event I am not in receipt of a check payable to Ms. Hunt on or before February 14, 1992, I will presume that you have converted these funds and proceed to undertake . . . any and all efforts to have the funds returned including, without limitation, contacting the Florida Real Estate Commission. Preziosi, on behalf of FUGI, responded by letter to the law firm. The body of her letter read as follows: In response to your letter of even date enclosed please find a copy of a Reservation Deposit/Contract Deposit Transfer which was signed on April 17, 1990 by Stacey Hunt. You will note that this agreement states that once a contract between buyer and seller is in effect, any deposit money given to First Union Group, Inc. will be transferred to the seller and treated as the initial investment deposit. Further, all future deposits are to be made payable to the seller. If an additional deposit was received by First Union Group, Inc., it too would be transferred to the seller. In this regard, be advised that on May 23, 1990, $1,500 that was being held by First Union Group, Inc. on behalf of Ms. Hunt was transferred to Lofts Development Corp. as per this agreement. Also enclosed is a copy of the check together with a copy of the escrow cards which represented all deposits transferred via this check. Respondents have not returned any deposit monies to White-Hunt; however, as Preziosi pointed out in her letter, well before White-Hunt had requested a refund from them, Respondents had transferred these monies to LDC in accordance with the Reservation Deposit/Contract Deposit Transfer Agreement White-Hunt had signed.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is hereby recommended that the Commission enter a final order finding Mangicapra guilty of the violations alleged in Counts I, III, IV, V, and XV of the Amended Administrative Complaint to the extent indicated above, suspending Mangicapra's license for a period of 120 days and fining him $3,000.00 for having committed these violations, finding FUGI guilty of the violations alleged in Counts VI, VIII, IX, X, and XX of the Amended Administrative Complaint to the extent indicated above, suspending FUGI's registration for a period of 120 days and fining it $3,000.00 for having committed these violations, and dismissing the remaining allegations set forth in the Amended Administrative Complaint. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 30th day of June, 1993. STUART M. LERNER 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 16th day of April, 1993.
Findings Of Fact At all times material here to, Respondent has been a licensed real estate broker under the laws of the State of Florida, having been issued license number 0044295. On or about June 4, 1981, Respondent, representing himself to Doris Colon as the duly appointed, qualified and acting broker for Alvin Katz if, and representing that Alvin Katzif was the owner of certain real property located at 636-638 Southwest Eighth Avenue, Miami, Florida, accepted from Colon a written offer to purchase said property. Colon's offer was accompanied by a deposit of $5,000, receipt of which was acknowledged by Respondent on or about June 6, 1981. That deposit was delivered to the Respondent, as broker, to be held by him in escrow under the terms of the Deposit Receipt. The vendor named in the Deposit Receipt Agreement Alvin Katzif, was unable to sell the property in accordance with the terms expressed in that Deposit Receipt Agreement. Therefore, the sale was never consummated. Approximately one month after signing the Deposit Receipt Agreement, Alvin Katzif advised Respondent that he did not hold title to the property and that there were numerous and diverse claims to the property. Respondent never placed Colon's $5,000 deposit in an escrow account but rather placed the deposit in a personal account. Colon, through counsel, made a demand for the $5,000 earnest money deposit. Respondent failed to provide Colon with an accounting or delivery of her deposit until such time as she obtained a civil judgment against him. At no time did Respondent request an escrow disbursement order or submit the matter to arbitration or seek interpleader. Respondent converted Colon's $5,000 earnest money deposit to his own use. On or about the same day that Colon gave Respondent her $5,000 deposit made payable to him, Respondent gave Colon a check for $10,000 made payable to her. The $10,000 paid to Colon was not a loan to her and had no relation to the Katzif/Colon transaction. Rather, the $10,000 was a deposit toward the purchase of a duplex owned by Colon in which Respondent was then living as a tenant and which he desired to purchase from Colon. That transaction was completed, and the closing took place on August 12, 1981. The closing statement reflects credit given to Respondent of $10,000 toward the purchase price of the duplex he bought from Colon. The duplex Colon sold to Respondent is located at 2931-41 Southwest Sixth Street, Miami, Florida. When Respondent gave Colon his $10,000 deposit toward the purchase price of the duplex which he bought from her, he took her to friends of his at Intercontinental Bank, where she opened an account. She then wrote the $5,000 check out of that account, which check was the deposit which accompanied her offer on the property she wished to purchase from Katzif. In other words, the only relationship between the $10,000 check given to Colon by Respondent and the $5,000 check given to Respondent by Colon is that the fact that Respondent gave Colon a $10,000 down payment on the duplex he was purchasing from her gave Colon the opportunity to make an offer on the Katzif property using $5,000 of the $10,000 as a deposit on the offer to Katzif.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding Respondent guilty of the allegations contained in the Administrative Complaint and revoking his real estate broker license number 0044295. DONE and RECOMMENDED this 10th day of August, 1983, in Tallahassee, Leon County, Florida. LINDA M. RIGOT, 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 10th day of August, 1983. COPIES FURNISHED: Bruce D. Lamb, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Martin I. Carlin, Esquire 3000 Biscayne Boulevard, Suite 402 Miami, Florida 33137 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff, Executive Director Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 William M. Furlow, Esquire Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802
Findings Of Fact At the time of this hearing, and at all times pertinent to the allegations of the administrative complaint, Concannon was registered with FREC as a real estate broker holding license certificate No. 0016471. On March 31, 1978, a contract for sale and purchase of certain realty was executed by Mark and Barbara Casto as sellers and Samuel and Louise Theriault as buyers. The contract provided that Concannon was to hold deposit monies in escrow. The deposit was to be made in three (3) installments of $100.00 on March 31, 1978 $400.00 by April 30, 1978, and $500.00 by May 30, 1978, for a total cash deposit of $1,000.00. Further cash payment on closing was to be made in the approximate amount of $8,700.00. The buyers made the first two payments in accordance with the contract for sale and purchase and Concannon retained the sum of the two payments, $500.00, in his escrow account until the transaction ultimately closed. The $500.00 payment due by May 30, 1978, was never made. On May 10 1978, buyers and sellers executed an addendum to the original contract which addendum provided that the buyers would convey two real estate lets to the sellers in part payment for the real estate covered in the original contract, at a value of $2,500.00. At the time the addendum to contract was executed, the interests of the sellers were being represented by Mr. John H. Cumiskey, who was on associate of New Century Realty, the listing broker for the subject property. Concannon, through the offices of Century 21 realty, was the selling broker participating in a multiple listing opportunity. At about this time, the buyers appeared to be having difficulty in securing sufficient cash to close the transaction as originally written. To help alleviate the situation, the addendum was made and in addition, 95 percent financing was obtained so that cash requirements were further reduced. Prior to closing, the lots which were the subject of the addendum were actually sold to another party and the proceeds from that sale were placed in Cumiskey's escrow account. Because of the financial problems which were being encountered, there was some concern on the part of the seller, the listing broker, and the selling broker, that the transaction might not close. Cumiskey offered to take over the transaction in order to smooth it out and to ensure that all want as planned. Concannon agreed to this arrangement, but no change was made in the contract for sale and purchase or its addendum reflecting a change of responsibility for escrow deposits. Subsequently, May 30, 1978, came and went without the final deposit payment of $500.00 being made by the buyers. Cumiskey erroneously assumed that the final deposit had been made with Concannon. Meanwhile, Concannon having been assured by Cumiskey that all necessary funds for closing had been secured, erroneously assumed that the final $500.00 had been paid to Cumiskey. At no time did Concannon seek to verify whether the final payment was made nor did he inform the sellers of the status of that payment. Rather, the nonpayment of the final deposit was not brought to the sellers' attention until the day scheduled for closing, June 15, 1978. On that date, the buyers were presented with a statement reflecting the amount of cash they would be required to produce at the closing. The statement includes a notation that an additional deposit of $500.00 is required. On learning of this, the buyers claimed not to have the additional $500.00 and refused to close unless the price for the property was reduced by a like amount. Cumiskey advised the sellers of the buyers' position and the sellers agreed to reduce their selling price by $500.00. On this basis the transaction subsequently closed. There was no evidence upon which to base a finding that Concannon was guilty of intentional wrong doing.
Findings Of Fact The Florida Real Estate Commission presented evidence of the service of the Notice of Hearing upon Madison B. Graves, Esquire, 612 East Carson, Las Vegas, Nevada, 89101, as Counsel for Barbara Orcutt, by certified mail return receipt requested. Barbara Orcutt is presently a non-active broker; however, Barbara Orcutt was at the time in question in the Administrative Complaint a registered real estate broker with Gold Palm Realty Corporation, 1701 S. Federal Hwy., Boca Raton, Florida, 33632. Sigurd N. Hersloff was the owner of real estate described as 819 Lake Drive, Boca Raton, Florida. Hersloff contacted Jacqueline M. Winter, an associate broker with Gold Palm Realty, and advised her of his intent to sell said real property. Winter, in turn, mentioned the fact that Hersloff desired to sell his home to the Respondent, Barbara Orcutt. Orcutt stated to Winter that she (Orcutt) knew of a potential buyer for Hersloff's real property. David F. Young was advised by Orcutt of the availability for purchase of Hersloff's real property. Orcutt showed Hersloff's property to David F. Young, and subsequently David F. Young made an offer for purchase of Hersloff's real property for a purchase price of $76,200 putting up a $500 earnest money deposit. This proposal was presented to Hersloff in the presence of Winter. Hersloff was concerned and annoyed that Orcutt had received only $500 as an earnest money deposit. Hersloff told Orcutt that he did not consider $500 earnest money deposit sufficient compensation for taking his property off the market and advised Orcutt that Young would have to pay a full 10 percent of the $76,200 purchase price as earnest money deposit. Orcutt advised Hersloff that Young could not pay an earnest money deposit. Hersloff advised Orcutt that if Young could not pay the $7,620 earnest money deposit that he would accept a promissory note for the difference between the $500 and the $7,620. Orcutt left Hersloff and Winter presumably to return to Young to present Hersloff's objection to the contract for purchase. Orcutt later returned and spoke with Hersloff and Winter. She represented to Hersloff and Winter that she had obtained a promissory note from Young made out to Gold Palm Realty Corp. and that same would be deposited in Gold Palm Realty Corporation's escrow account together with Young's $500 earnest money deposit. Upon this representation Hersloff executed the contract for purchase presented by Orcutt in Young's behalf. The contract for purchase provided in part that Hersloff was to hold a second mortgage in the amount of $15,000 for a period of four months from the date of closing, said second mortgage to bear no interest. Young, who was in the process of selling real property in another state, became concerned that he might not be able to repay the second mortgage to Hersloff within the four months as stated in the contract. He spoke with Orcutt and asked her if she could obtain an extension of two months within which to pay the second mortgage. Orcutt represented to Young at that time that she did not anticipate that Hersloff would have any objection to such an extension. Subsequently in a conversation between Hersloff and Young, Hersloff determined that contrary to Orcutt's representation, she had not obtained a promissory note from Young. Young, at that time, learned that Orcutt had not mentioned a possible extension of the mortgage to Hersloff. On November 11, 1974, the Parties closed the transaction.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that the registration of Barbara Orcutt as a non- active broker be suspended for a period of two years. DONE and ORDERED this 22nd day of October, 1976 in Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Louis B. Guttman, III, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 Madison B. Graves, Esquire 612 East Carson Las Vegas, Nevada 89101
The Issue This case is presented in the form of an Administrative Complaint brought by the Petitioner against the Respondent. The Administrative Complaint, in its general terms, accuses the Respondent of improperly refunding deposit money to prospective purchasers of real estate in the face of a conflicting demand on that deposit money made by the prospective seller. These actions purportedly violate Subsection 475.25(1)(d), Florida Statutes.
Findings Of Fact Following the service of the Administrative Complaint discussed in the Issues statement to this Recommended Order, the Respondent indicated his disagreement with the matters set forth in that Administrative Complaint, to the extent of disputing allegations of fact contained in that document. In the face of this factual controversy, a Subsection 120.57(1), Florida Statutes, hearing was requested by the Respondent and the Petitioner forwarded the matter to the Division of Administrative Hearings for consideration. Subsequently, a formal hearing was held on January 28, 1982. In the course of the hearing, Petitioner presented two (2) witnesses, Ernest Olinger and Patsy N. Baucant. The Petitioner also offered three (3) items of evidence which were received. Respondent testified and offered two (2) items of evidence which were admitted. The petitioning agency is an agency of State government which has, among other functions, the licensure of real estate brokers and salesmen and the requirement to take disciplinary action when those brokers or salesmen are suspected of violating the regulatory provisions related to their right to operate as real estate salesmen and brokers. This duty on the part of the Petitioner forms the basis for the accusations placed against the Respondent. At all times pertinent to this Administrative Complaint, Respondent was licensed and continues to be licensed as a real estate broker, having been issued License No. 00085431 by the Board of Real Estate in the State of Florida. The address of record for the Respondent, which is on file with the petitioning agency is: c/o G. W. Stone, Inc., 1001 Fourth Street North, St. Petersburg, Florida. The Respondent maintains two offices, one at the 1001 Fourth Street North address and the other located at 14701 Gulf Boulevard, Madeira Beach, Florida. During the period in question by the Administrative Complaint, Respondent was a broker in charge of and operated from the office at Madeira Beach which is part of the corporate arrangement, G. W. Stone, Inc. Respondent was one of the member-brokers of G. W. Stone, Inc. Respondent's son, Robert D. Stone, was a broker in charge of and operated from the Fourth Street North office in the relevant period. On or about July 12, 1979, Ernest Olinger who was associated with G. W. Stone, Inc., in the position of real estate salesman, obtained a sales listing of a premises at 6823 Seventeenth Lane, North Meadow Lane, St. Petersburg, Florida, owned by one Patsy N. Baucant. At that time, Olinger was working out of the Fourth Street North office of the corporation. (Sometime between July 12, 1979, and October 9, 1979, Olinger was dismissed from this employment with that corporation and accepted a position with Bayfront Real Estate, Inc., in Pinellas County, Florida. Nonetheless, he continued to be associated with the Baucant listing.) On October 9, 1979, another salesman employed by G. W. Stone, Inc., negotiated and obtained a contract for purchase of the Baucant property by Val Etter and Rita Locke. The terms and conditions of that purchase may be found in the sales agreement and deposit receipt which is Petitioner's Exhibit No. 2, admitted into evidence. This contract was signed by Etter and Locke and the seller, Baucant; with R. Holmes Campbell, the real estate salesman who negotiated and obtained the contract, witnessing the Etter, Locke and Baucant signatures and Olinger witnessing the signature by Baucant. Etter and Locke paid $1,000.00 for earnest money deposit on account in contemplation of the purchase. By the terms of the contract, the property conveyance was contingent upon transferring to the "purchaser" the existing mortgage at Sun Bank and Trust Company of St. Petersburg, Florida, at the prevailing assumption rate. In keeping with this provision of the contract, both Locke and Etter applied for the assumption of the mortgage. Etter was approved and Locke was disapproved on the loan application. A copy of the loan disapproval related to Locke may be found as an attachment to Petitioner's Exhibit No. 1, admitted into evidence. Campbell then spoke to Olinger and advised Olinger that Locke and Etter had dissolved their living arrangement, which was an arrangement not based upon a formal marriage. Campbell also told Olinger that the closing of the property would have to be done in Etter's name, to the exclusion of Locke, and a closing date was established for November 30, 1979. Olinger went to the closing on the date scheduled and was the only individual in attendance. The property never was closed. Within a period of a few days following the scheduled date for closing, Baucant asked Olinger about the deposit money and was told that he did not handle those matters, in that it was not his function and that she should contact the Respondent. Baucant did in fact call the Respondent in the presence of Olinger. Baucant, in the course of that conversation, made known her desire to have the deposit money and asked what he intended doing with it. Stone's response was to the effect that at that time he, "did not know." Baucant called the Respondent a couple of days later and he indicated that he had given the money to Rita Locke. Stone had in fact returned the $1,000.00 earnest money deposit to Rita Locke by payment from the escrow account of G. W. Stone, Inc. This took place on December 7, 1979. A copy of that check may be found as Petitioner's Exhibit No. 3, admitted into evidence. When confronted with his reasoning for disbursing this money, Respondent indicated to Baucant that Locke and Etter had a personal argument. The money had been disbursed to Locke following demands by Etter and Locke made to Campbell who in turn advised the Respondent of the demand for refund of the earnest money. From the facts presented, it is determined that Stone disbursed the earnest money deposit to Locke at a time when he knew that Baucant had a competing claim on that deposit money. In the course of the hearing, Respondent denied that he had any conversation with Baucant concerning the topic of requests for the earnest money deposit in question. He made this denial on the basis of his failure to recollect such conversations. He did indicate that he had a policy to return deposits to prospective purchasers in circumstances such as set forth in the contract. In Stone's estimation, based upon what he knew of the matters, he returned the money to Locke because she was entitled to receive it.
The Issue Whether petitioner should take disciplinary action against respondent for the reasons alleged in the administrative complaint?
Findings Of Fact At all pertinent times, respondent Richard L. Faircloth has held a real estate salesman's license, No. SL 0407933, issued by petitioner Department of Professional Regulation, Division of Real Estate, authorizing him to work, since July 16, 1990, as a salesman for Discount Realty-Fla., Inc., a corporate broker in Alachua, Florida, whose "qualifying broker" is respondent's wife, Lise H. Faircloth. Petitioner's Exhibit No. 1. On December 1, 1990, Alvin and Betty J. Wilson came to Mr. Faircloth's office in Alachua to sign a form deposit receipt and purchase and sale agreement, Petitioner's Exhibit No. 2, by which they offered to purchase a house on Northwest 18th Terrace in Gainesville; and they gave Mr. Faircloth five hundred dollars in cash, as earnest money. Mr. Faircloth did not recall at hearing whether he put the money in his pocket at that point, but the money was never deposited in an escrow or trust account. After Mr. and Mrs. Wilson left, Mr. Faircloth communicated their offer by telephone to a representative of the house's owner. The offer was declined. When he telephoned the Wilsons with the news, he asked them to come back to his office. With their return later that day, a conversation lasting about an hour and a half began, at the end of which the Wilsons authorized respondent and his broker to retain the earnest money deposit for use in the event respondent located another house they decided to make an offer to purchase. For the same purpose, Mrs. Wilson later wrote respondent a check in the amount of $1,500, which was duly deposited in the broker's escrow account. Shortly thereafter, respondent drew a check on the escrow account in Mr. Wilson's favor in the amount of $200 (so he could pay an electric bill), but the bank refused to cash it. Funds in the escrow account were insufficient, because the Wilsons' $1,500 check had bounced. Mr. Faircloth also wrote a check the Wilsons used as a deposit when they rented a truck to move into a duplex they rented from him. The deposit check was ultimately returned to respondent, without being cashed. (When the Wilsons moved, respondent regained possession of the dog he had earlier given the Wilsons' son. He was never reimbursed $78 he expended for the care and feeding of this dog, after it had become the Wilsons' property.) The Wilsons paid $450 a month, in advance, while they rented the duplex, and nobody ever asked for a security deposit. When Mrs. Wilson received a check from Beneficial National Bank (who lent money against an anticipated tax refund) in the amount of $1,466, Petitioner's Exhibit No. 5, she endorsed it in favor of respondent or the broker and, as far as the evidence showed, this money was put in escrow (although $200 might have been deducted beforehand.) In any event, respondent transferred $200 to the Wilsons more or less contemporaneously. Altogether, the Wilsons entrusted respondent with $1,776 ($500 + $1466 - $200 = $1,766) for possible use as earnest money. After Mr. and Mrs. Wilson bought a house respondent had shown them in December of 1990, but through another broker's office, without availing themselves of Mr. Faircloth's assistance in closing the transaction, they asked him to return the money they had given him. He gave them a check signed by his wife, drawn on a Discount Realty-Fla., Inc. account in the amount of $1,316, on which was written "return of deposit less 450 00/100 security." Petitioner's Exhibit No. 6. The check was dated April 17, 1991. At hearing, Mr. Faircloth testified that the $1,316 check to the Wilsons represented a $50 overpayment. He conceded that $450 had been improperly deducted from the moneys the Wilsons paid, as a claimed security deposit. But he contended that he and the Wilsons had agreed to a non- refundable, $500 "finder's fee" during their second visit on December 1, 1990. In fact, the Wilsons never agreed to any finder's fee, non-refundable or otherwise. At the time it was received, respondent and his wife gave two receipts for the Wilsons' $500. Each reflected that it was to be deposited as earnest money, and no subsequent writing indicated any different agreement between the parties. As late as April of 1991, respondent's conduct, notably delivery of the $1,316 check to the Wilsons, was inconsistent with the putative agreement about a finder's fee he testified to at hearing.
Recommendation It is, accordingly, RECOMMENDED: That petitioner suspend respondent's license for one year. DONE and ENTERED this 14 day of August, 1992, in Tallahassee, Florida. Copies furnished to: Janine Myrick, Esquire P.O. Box 1900 Orlando, FL 33802 Richard L. Faircloth Post Office Box 1859 Alachua, FL 32615 Jack McRay, General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792 ROBERT T. BENTON, II 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 14 day of August, 1992. Darlene F. Keller, Division Director Division of Real Estate 400 W. Robinson Street P.O. Box 1900 Orlando, FL 32802-1900
The Issue Whether the Respondent, Alvin I. Siegel, should be suspended or otherwise disciplined for failure to properly disburse funds or to retain said funds in an escrow account.
Findings Of Fact Respondent Alvin I. Siegel is a registered real estate broker with License #0080637, trading under the registered trade name of Cambridge Realty in South Miami, Florida. An administrative complaint dated February 7, 1979, was filed by the Petitioner Commission, alleged that the Respondent has been guilty of failure to account for or deliver monies which had come into his hands and which were not his own property. Respondent Siegel requested an administrative hearing. On or about February 16, 1973, Sylvia M. Ramirez executed a purchase and sale contract and receipt for deposit for a house located in Dade County, Florida. The house was owned by Deanna P. Cooper. Ms. Ramirez had deposited $1,325.00 as earnest money deposit in the escrow account of broker Respondent Siegel. The contract provided that if the purchaser could not obtain a mortgage, the deposit would be refunded: that if the purchaser breached the contract, the deposit would be forfeited and divided equally by the seller and the broker; and that if the seller defaulted, the brokerage commission would be paid only upon a successful suit for specific performance by the purchaser. Respondent Siegel was notified of the date of closing the same day of the closing, July 20, 1973, but did not attend because of prior commitments. Later that day, the seller, Ms. Cooper, presented a closing statement to the Respondent stating that the transaction had closed and that she wanted the excess of the deposit over the commission owed to broker Siegel. He disbursed to her $235.00, which was the excess of the deposit over and above the commission. Respondent Siegel learned later that the checks issued at the closing were cancelled. Demands were made upon Respondent Siegel by both the seller, Ms. Cooper, and the purchaser, Ms. Ramirez, for the deposit money. The seller, Ms. Cooper, demanded one-half of the deposit as a forfeiture, and the purchaser, Ms. Ramirez, demanded that the money should be refunded to her. No suit for specific performance was instituted. Respondent Siegel refused to pay the seller, Ms. Cooper, the difference between the amount he had disbursed at the time she submitted the closing statement to him and one-half the deposit (i.e. $427.50). A lawsuit was filed by Sylvia Ramirez on December 4, 1973, demanding return of the deposit. The would-be seller, Ms. Cooper, was joined as a party Respondent, so that the rights of all parties could finally be determined. Respondent Siegel was advised by his attorney not to disburse monies to any of the parties, and he followed his attorney's advice. The lawsuit ended in dismissal in January of 1977, and no demand has been made upon Respondent Siegel since that date by either Ms. Cooper or Ms. Ramirez. Respondent Siegel has agreed to rely on the advise of the Petitioner Commission, and has stated that he is ready to disburse the necessary funds but is in doubt as to his duty. Both parties submitted memoranda of law and recommendations. These instruments were considered in the writing of this Order.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that this complaint be dismissed without prejudice. DONE AND ORDERED this 29th day of June 1979 in Tallahassee, Florida. COPIES FURNISHED: Kenneth M. Meer, Esquire Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings ROOM 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 Lawrence C. Rice, Esquire 6075 Sunset Drive, Suite 203 Miami, Florida 33143 Mr. Alvin I. Siegel c/o Cambridge Realty 6313 Sunset Drive South Miami, Florida 33143
