The Issue Whether Respondent committed the violation alleged in the Administrative Complaint, and, if so, what disciplinary action should be taken against him.
Findings Of Fact Based upon the evidence adduced at the final hearing and the record as a whole, including the admissions made by Respondent in the Joint Response to Pre-Hearing Order, the following findings of fact are made: At all times material to the instant case, Respondent was a Florida-licensed real estate salesperson. Since June of 2002, Respondent has been a Florida- licensed real estate broker. Respondent is a convicted felon as a result of a single felony conviction. 3/ In 2000, Respondent was involved in a real estate transaction in which he was the buyer. The property that was the subject of the transaction was located at 119 Hammocks Drive in West Palm Beach, Florida. The transaction was closed through a title company, Cypress Title Company (Cypress). The closing took place on May 15, 2000. Cypress was represented at the May 15, 2000, closing by Susan Anderson, a marketing representative with Cypress who conducted closings (approximately five or six a month) as part of her job responsibilities. Ms. Anderson had two years experience conducting closings at the time of the May 15, 2000, closing. At each closing at which she represented Cypress, Ms. Anderson was responsible for, among other things, collecting the funds necessary to effectuate the closing and making the appropriate disbursements. It was Ms. Anderson's routine practice, before turning a closing file over to Cypress' "post closer" following a closing, to "make sure [that] everything [that needed to be in the file was] there." Prior to the May 15, 2000, closing, Respondent was contacted by "someone from Cypress" and instructed to bring to the closing a cashier's check in the amount of $3,684.64 made payable to himself. Respondent was advised that the $3,684.64 represented an "estimate" of the amount he needed to pay from his own funds to close the transaction. On May 15, 2000, prior to the time of the closing, Respondent went to Bank United, where he had an account, and purchased a cashier's check in the amount of $3,684.64 made payable to himself, as he had been instructed to do. Respondent brought the cashier's check to the closing. At the closing, Respondent endorsed the check with his signature, underneath which he wrote, in accordance with his routine practice when endorsing checks, the number of his account at Bank United. He then handed the cashier's check to Ms. Anderson. The actual amount due from Respondent was $3,670.04, $14.64 less than the amount of the cashier's check. Accordingly, Ms. Anderson gave Respondent a check for $14.64. Following the closing, Ms. Anderson examined the closing file (in accordance with her routine practice). In doing so, it did not "come to [her] attention that the [cashier's] check [that Respondent had brought to the closing] was not there." After conducting such an examination, she gave the closing file to the "post-closer." The cashier's check that Respondent had given to Ms. Anderson at the May 15, 2000, closing was cashed at Bank United on May 17, 2000, by someone other than Respondent or Ms. Anderson. Pursuant to Bank United policy, "[o]nly the payee can cash [a cashier's] check." Bank United tellers are supposed to ask for a "picture ID" when a cashier's check is presented for cashing. There have been tellers at the bank, however, who have not followed this policy and, as a result, have been counseled or disciplined. 4/ Approximately, two months after the May 15, 2000, closing, Cypress' owner approached Ms. Anderson and told her that there was no proceeds check from Respondent in the closing file. Ms. Anderson was asked to contact Respondent to inquire about the matter, which she did. Respondent was initially "very cooperative." He gave Ms. Anderson his "account number [at Bank United] and [the name of a person] to call at the bank." Using the information Respondent had provided, Ms. Anderson was able to obtain a copy of the cashier's check that Respondent had given to Ms. Anderson at the closing and that subsequently had been cashed at Bank United. Kevin Wilkinson, an attorney acting on behalf of Cypress, also contacted Respondent. Mr. Wilkinson's tone, in Respondent's view, was accusatory and threatening. Respondent's response to Mr. Wilkinson's "aggressive[ness]" was to stop cooperating with Cypress.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Commission issue a final order dismissing the instant Administrative Complaint. DONE AND ENTERED this 28th day of January, 2003, in Tallahassee, Leon County, Florida. STUART M. LERNER 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 28th day of January, 2003.
Findings Of Fact Respondent Martha M. Bustillo is a real estate broker licensed in the State of Florida, having been issued license number 0401092. At all times material hereto, she has been the qualifying broker for Respondent Virmar Investments, Inc. Respondent Virmar Investments, Inc., is a real estate brokerage corporation licensed in the State of Florida, having been issued license number 0237551. At no time material hereto has Respondent Olga Venedicto been licensed in the State of Florida as either a real estate broker or as a real estate salesperson. In July of 1992 Thomas F. Sevilla contacted Virmar Investments, looking for a house to buy. Olga Venedicto took his phone call and told him that she would help him. Sevilla went to Venedicto's "office" at Virmar Investment and began working with her. Venedicto gave Sevilla her business card which represented that she is the vice president of Virmar Investments, Inc., and carries the notation "registered real estate brokers." In addition to giving him her card which carried her name, Virmar's name, and the word "brokers" in the plural form rather than the singular form, Venedicto specifically told Sevilla that she was a broker. Venedicto and Bustillo took Sevilla to see a house which he decided to buy. He gave Venedicto his check for $2,000 as a deposit and instructed her and Bustillo to make an offer on that house. Venedicto told him she would put the money in Virmar's escrow account. Instead, the money was deposited in Virmar's operating account. Sevilla did not buy that house, and Venedicto and Bustillo took him to see a second house. Sevilla decided not to make an offer on that house and asked Venedicto to refund his money. It took a month before Sevilla received a check from Venedicto. Although the check was marked "deposit return," the check was not written from Virmar's account but rather was a check from a Mega Group Corp. for only $1,675. When Sevilla attempted to cash that check, it was dishonored three times, with the notation "N. S. F." Finally, the check was honored by the bank. Sevilla had expected to receive his entire $2,000 deposit. Neither Venedicto nor Bustillo had ever told him in advance that they would keep part of his money. Although Respondents' attorney during the final hearing implied that his clients may have kept part of Sevilla's money to pay for a survey and credit report, Sevilla had not agreed in advance to pay for a credit report, and no evidence was offered as to what house Sevilla might have purchased a survey on or for what reason. Further, neither Venedicto nor Bustillo gave him a copy of any survey or credit report nor was he ever shown one or advised that either would be obtained. When Sevilla inquired as to why he was reimbursed the lesser amount, only then did Venedicto tell him that Respondents were keeping part of his money for a credit report. Respondents Bustillo and Virmar authorized and assisted Venedicto in her performance of acts and services requiring licensure as a salesperson relative to the transaction with Sevilla. Rita and Carlos Benitez listed their house for sale with Pedro Realty. Gladys Diaz was the listing agent at Pedro Realty. Respondents Bustillo and Venedicto brought Carlos Martinez and his wife to look at the Benitez house. Gladys Diaz was present at the time. Respondents Bustillo and Venedicto subsequently came to Diaz' office and presented to Diaz and Carlos Benitez an offer on behalf of Mr. and Mrs. Martinez. Respondent Venedicto represented herself to be a realtor and Respondent Bustillo to be Venedicto's partner and broker. Respondent Venedicto discussed the contract and price with Diaz and Benitez while Respondent Bustillo observed Venedicto's presentation. The offer had previously been signed on behalf of Respondent Virmar by Respondent Venedicto who represented to Diaz that the signature on the offer was that of Respondent Venedicto. Mr. Benitez signed the document, and Diaz then took the offer to Mrs. Benitez to obtain her signature. Mrs. Benitez also signed the offer, thereby completing the contract. Thereafter, delays ensued because Mr. and Mrs. Martinez were not in a financial position to be able to purchase the home. Respondent Venedicto contacted Mrs. Benitez and attempted to re-negotiate the contract. During those negotiations which were not successful, Respondent Venedicto represented herself to Mrs. Benitez as being a licensed real estate agent. In response to Mrs. Benitez' inquiries, Respondent Venedicto gave Benitez her business card carrying the names of Venedicto and Virmar and the notation "registered real estate brokers." As to the portion of the transaction involving Mrs. Benitez, all of her contact with the three Respondents in this cause was with Respondent Venedicto. Venedicto gave Benitez advice regarding proceeding with the sale and handled the negotiations. Prior to September 24, 1992, Hector F. Sehweret, an investigator for the Department of Business and Professional Regulation, requested that Respondents Bustillo and Virmar produce certain records for inspection by him. He spoke with Respondent Bustillo on a number of occasions to no avail. He offered to give her time to gather the records if necessary, but she never did. On September 24, 1992, he served Respondent Bustillo with a subpoena for those records. She still failed to produce them. Thereafter, she would not return his phone calls, and when he came to the office of Virmar Investments, Respondent Bustillo would hide from him. Neither Respondent Bustillo nor Respondent Virmar have ever produced the records subpoenaed. Further, no explanation has been given for the failure of Respondents Bustillo and Virmar to produce their records. Although the attorney for Respondents implied during the final hearing that the records may have been destroyed by Hurricane Andrew, there is no evidence to support that implication; rather, the evidence is uncontroverted that the building housing the real estate office of Respondents Virmar and Bustillo was not damaged by Hurricane Andrew. Ileana Hernandez is a realtor and a mortgage broker licensed in the State of Florida. She met Respondents Bustillo and Venedicto during a real estate transaction. In November of 1991 Respondents Bustillo and Venedicto contacted Hernandez regarding obtaining money in exchange for a second mortgage on certain real property. At the time, Respondents did not tell Hernandez the identity of the owner of the property, but Hernandez was given the address of the property and was advised that the market value of the property was approximately $79,000. Hernandez was subsequently advised that Respondent Venedicto (a/k/a Olga Bichara) was the owner of the property. It was agreed that Respondent Venedicto would execute and record the promissory note and mortgage in the amount of $15,500. Hernandez, who knew that Respondent Bustillo was the president of Terra Title, gave her a personal check payable to Terra Title in the amount of $15,000 on November 26, 1991. Respondent Venedicto, who had promised Hernandez that the promissory note and second mortgage would be recorded, never recorded those documents. Further, Respondents never delivered the original copy of the promissory note and mortgage to Hernandez despite her repeated demands. Hernandez later discovered that Respondent Venedicto was not the sole owner of the property which she had attempted to mortgage but jointly owned the property with her son. Accordingly, Respondent Venedicto's signature would not be sufficient to perfect a mortgage on the property. Hernandez also discovered that the mortgage, represented by Bustillo and Venedicto to be a second mortgage, was not. There were already two mortgages on the property. Had Hernandez known the true ownership and the true encumbrances on the property, she would not have loaned Venedicto the $15,000 because that raised the total amount of mortgages on the property to be in excess of the value of the property. Three checks which were subsequently written by Respondent Bustillo from the operating accounts of Respondent Virmar and of Mega Group Corp. were dishonored by the bank with the notation "N. S. F." As a result of those checks, Hernandez obtained default final judgments against Respondent Virmar and against Mega Group Corp., which final judgments are still unsatisfied. Prior to that time, however, Respondents Venedicto and Bustillo approached Hernandez regarding their need to borrow $35,000 to be re-paid in 30 days in conjunction with some real estate development in which Respondents Venedicto and Bustillo were involved. Respondent Venedicto and Respondent Bustillo each individually represented that Hernandez would have her money back in 30 days. Respondent Bustillo told Hernandez that Respondent Venedicto was in business with Bustillo and was selling real estate in Mexico. Bustillo asked Hernandez to make the check payable to Bustillo's company Terra Title. Hernandez went to the offices of Respondent Virmar and handed her personal check made payable to Terra Title to Respondent Venedicto. When the 30 days had passed with no payments to Hernandez, she went to Virmar Investments and made Respondent Venedicto sign a promissory note for $35,000. By the time of the final hearing in this cause, Hernandez had recovered only $15,000 of the $35,000 loan made to Respondent Venedicto and had recovered only the principal amount of the money supposed to have been secured by a second mortgage on real property. Hernandez is still owed $20,000 in principal alone.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered revoking the license of Respondent Martha M. Bustillo, revoking the license of Respondent Virmar Investments, Inc., and requiring Respondent Olga Venedicto to pay an administrative penalty in the amount of $5,000 within 30 days from the entry of the Final Order. DONE and ENTERED this 31st day of January, 1994, at Tallahassee, Florida. LINDA M. RIGOT 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 31st day of January, 1994. APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 93-3328, 93-3329, and 93-3330 Petitioner's proposed findings of fact numbered 2-18, 20-29, and 31-33 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 findings of fact but rather as constituting argument of counsel, conclusions of law, or recitation of the testimony. Petitioner's proposed finding of fact numbered 19 has been rejected as not being supported by the weight of the evidence in this cause. Petitioner's proposed finding of fact numbered 30 has been rejected as being unnecessary to the issues involved herein. Respondents' proposed findings of fact numbered 1, 4, 5, 8, 9, 18, 25, 26, 28, 37, 42, 49-52, 55, 57, 62, 63, 69, 71, and 73 have been adopted either verbatim or in substance in this Recommended Order. Respondents' proposed findings of fact numbered 2, 6, 11-17, 19-22, 30- 36, 43, 46-48, 53, 54, 56, 58, 60, 67 and 68 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, conclusions of law, or recitation of the testimony. Respondents' proposed findings of fact numbered 7, 10, 23, 29, 61, 64, 65, 70, 72, and 75 have been rejected as not being supported by the weight of the evidence in this cause. Respondents' proposed findings of fact numbered 3, 24, 27, 38-41, 44, and 45 have been rejected as being unnecessary to the issues involved herein. Respondents' proposed findings of fact numbered 59, 66, 74, and 76-78 are rejected as being irrelevant to the issues under consideration in this cause. COPIES FURNISHED: Steven W. Johnson, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street, Suite N-308A Orlando, Florida 32802-1900 Ofer M. Amir, Esquire Amir & Associates, P.A. 8751 West Broward Boulevard, Suite 500 Plantation, Florida 33324 Darlene F. Keller, Division Director Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32802-1900 Jack McRay, Acting General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Tallahassee, Florida 32399-0792
The Issue The issues are whether Respondents K. D. Trinh Investments, Inc., Strong Financial Services, Inc., and Loren Reynolds sold unregistered securities in Florida, in violation of Sections 517.07 and 517.12, Florida Statutes, and engaged in fraudulent transactions with concealment and falsification of facts, in violation of Section 517.301(1)(a), Florida Statutes. If so, an additional issue is what penalty should be imposed.
Findings Of Fact Respondent K. D. Trinh Investments, Inc. (Trinh) has never been registered with the Division of Securities and Investor Protection (Division) as a dealer or investment advisor and its securities have never been registered with the Division pursuant to Chapter 517, Florida Statutes. Neither Respondent Strong Financial Services, Inc. (Strong) nor Respondent Loren Reynolds (Reynolds) has ever been registered with the Division as a dealer or investment advisor. Respondent Alexander Legault (Legault) was the president and general manager of Trinh at all material times. On March 14, 1986, a grand jury in the Eastern District of Louisiana, United States District Court, returned an indictment against Legault for wire fraud, mail fraud, and conspiracy to commit wire and mail fraud. The indictment alleges that Legault attempted to defraud several institutions in connection with a food brokerage scheme. The investments in the present case also involve food brokerage operations, according to the information supplied potential investors. In March 1994, Charles Mortimer of Lake Mary, Florida, attended a seminar in Leesburg, Florida, devoted to three investment opportunities. Mr. Mortimer learned of the seminar through mail flyers or newspaper announcements. Mr. Mortimer expressed interest at the seminar in a cremation society and the Trinh notes. Reynolds appeared at the seminar and presented these investment opportunities. The next month, Mr. Mortimer met Reynolds in Lady Lake, Florida, and Reynolds sold Mr. Mortimer one of the Trinh notes. Mr. Mortimer thereafter purchased through Reynolds several more notes for a total investment of $55,000. At no time prior to making these investments did Reynolds disclose to Mr. Mortimer that Legault was under indictment in New Orleans for criminal fraud and was avoiding prosecution in Canada. Mr. Mortimer would not have invested in the Trinh notes had he known this material fact. However, the record does not indicate whether Reynolds knew that Legault was under indictment or had escaped to Canada. Nor does the record reveal sufficient background information to support the finding that Reynolds reasonably should have known this fact. Mr. Mortimer received a total of $600 on this investment. He has lost the remaining $54,400. Earl Wilson learned of Trinh through Reynolds, who was Mr. Wilson’s tax advisor in 1994 and had been since 1986. Reynolds recommended that Mr. Wilson and his wife should invest a recent inheritance in Trinh notes. Between his initial investment in 1994 and his final investment on April 25, 1995, Mr. Wilson and his wife invested a little over $200,000 in Trinh notes. They lost the entire investment. William Dinges first learned of Trinh at a seminar that he attended in 1993. He purchased a $140,000 note in 1995. He lost his entire investment.
Recommendation It is RECOMMENDED that the Department of Banking and Finance enter a final order ordering Respondents K. D. Trinh Investments, Inc. and Loren Reynolds to cease and desist from any further violations of Chapter 517 and dismissing the amended administrative complaint against Respondent Strong Financial Services, Inc. ENTERED in Tallahassee, Florida, on June 4, 1997. ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings on June 4, 1997. COPIES FURNISHED: Susan Steinberg Sandler Assistant General Counsel Office of Comptroller West Central Florida Regional Office 1313 Tampa Street, Suite 615 Tampa, Florida 33602-3394 K. D. Trinh Investments, Inc. 1194 Hanna Street East Windsor, Ontario Canada N8X2P4 Loren Reynolds Strong Financial Services, Inc. 241 B Ridgewood Avenue Holly Hill, Florida 32117 Harry Hooper General Counsel Department of Banking and Finance Room 1302, The Capitol Tallahassee, Florida 32399-0500
The Issue The issue for determination is whether Respondents committed the offenses set forth in the Administrative Complaint and, if so, what penalty should be imposed.
Findings Of Fact At all times material hereto, SA Lee was licensed by the State of Florida as a real estate salesperson, having been issued license number SL-0640485 on July 15, 1996. Further, Respondent SA Lee was a real estate salesperson in association with Respondent Realty, a real estate broker corporation. At all times material hereto, Respondent SE Lee was licensed by the State of Florida as a real estate broker, having been issued license number BK-0594787. Further, Respondent SE Lee was the qualifying broker and officer of Respondent Realty. At all times material hereto, Respondent Realty was licensed by the State of Florida as a real estate broker corporation, having been issued license number CQ-0272573. In 1996, Brian Mulally (buyer) wanted to buy certain residential property located at 4397 Vicliff Road, West Palm Beach, Florida. Maryann Duchesne and Margaret Reppucci were the sellers of the property. Medallion Realty was the listing broker for the property. Paula Castro was the real estate salesperson representing Medallion Realty. The sellers authorized Medallion Realty and Ms. Castro to represent them, to be their agents in the sale of their property. Respondent SA Lee, as sales agent for Respondent Realty, notified the buyer that she was not representing him. The buyer knew at all times that Respondent SA Lee was not his representative in the purchase of the property. In a "Disclosure" document dated September 4, 1996, the buyer acknowledged that Respondent SA Lee was not representing him and that the sellers were compensating Respondent SA Lee.1 The sellers did not authorize Respondent SA Lee to represent them in the sale of their property and were not aware of the Disclosure document. Respondent SA Lee and Respondent Realty were not representing the sellers or the buyer. However, an inference is drawn and a finding of fact is made that Respondent SA Lee and Respondent Realty were working together with Medallion Realty in the sale of the property and that Respondent SA Lee and Respondent Realty were sub-agents of Medallion Realty.2 The buyer and sellers executed a Contract for Sale and Purchase (Contract) of the property, with the buyer executing the Contract on September 30, 1996, and the sellers on October 1, 1996. The effective date of the Contract was October 1, 1996. The Contract provided, among other things, that Respondent Realty would hold deposits in escrow; that the buyer's first deposit would be $100; that the buyer's second deposit of $1,900 would be made within five days of October 1, 1996; that, within five days of October 1, 1996, the buyer would make application for a mortgage loan; that, within 15 days of October 1, 1996, the buyer would obtain a written commitment for a mortgage loan; that the closing date was October 31, 1996; and that Medallion Realty and Respondent Realty were the listing broker and cooperating broker, respectively. The buyer was to obtain the money for the second deposit from a family member. He had planned a trip around the time of the execution of the Contract, during which he would obtain the money for the second deposit. When the buyer returned from his trip, he did not have the money for the second deposit. The buyer informed Respondent SA Lee of his failure to return with the money for the second deposit. Shortly thereafter, Respondent SA Lee and Ms. Castro had a telephone conversation regarding the property. During their conversation, Respondent SA Lee informed Ms. Castro that the buyer had not made the second deposit but that he was still going to obtain the money for the second deposit. The disclosure to the sellers' agent, Ms. Castro, of the buyer's failure to remit the second deposit was before the due date for the deposit, which was on or before October 6, 1996. Ms. Castro continued to make inquiries to Respondent SA Lee as to the payment of the second deposit by the buyer. Respondent SA Lee informed Ms. Castro that she was trying to get the deposit from the buyer who was advising her (Respondent SA Lee) that he was getting the money for the deposit. Ms. Castro was continuously aware that the buyer had not remitted the second deposit to Respondent SA Lee. Respondent SA Lee and Ms. Castro wanted the real estate transaction to proceed. Respondent SA Lee's communication with the sellers was through Ms. Castro. Respondent SA Lee did not have access to a telephone number for the sellers. The sellers obtained the services of a closing agent, who was also their attorney. On or about October 11, 1996, approximately five days after the due date for the second deposit, the sellers' attorney, acting as closing agent, contacted Ms. Castro regarding the second deposit. Ms. Castro informed the sellers' attorney that she would contact Respondent SA Lee and get back with her (the sellers' attorney). On or about October 15, 1996, approximately nine days after the due date for the second deposit, the sellers' attorney, in her role as the closing agent, contacted Respondent SA Lee and requested an escrow letter regarding the second deposit. Obtaining the escrow letter would allow the beginning of the preparation of the closing documents. Respondent SA Lee informed the sellers' attorney that she would contact Ms. Castro and that Ms. Castro would in turn contact the sellers' attorney. Respondent SA Lee contacted Ms. Castro. No escrow letter was forwarded to the sellers' closing agent because no second deposit had been made by the buyer. Even without the escrow letter, the closing agent began the preparation of the closing documents. Thereafter, the sellers' attorney, acting as closing agent, contacted Respondent SA Lee several times regarding the remittance of the second deposit, but Respondent SA Lee never gave the sellers' closing agent a forthright response; Respondent SA Lee never informed the sellers' closing agent that the buyer had not remitted the second deposit.3 Respondent continued to communicate with Ms. Castro regarding the second deposit. The sellers' closing agent was not informed until around October 28 or 29, 1996, that the buyer had not remitted the second deposit. Other problems, regarding the real estate transaction, in addition to the remittance of the second deposit, erupted between the buyer and the sellers. At that time Ms. Castro allowed the sellers' attorney to step-in and handle all matters regarding the transaction. The evidence indicates that this change occurred sometime between October 15 and October 30, 1996. When the sellers' attorney began to handle all matters regarding the real estate transaction, Respondent SA Lee should have, but did not, inform the sellers' attorney that the buyer had not remitted the money for the second deposit. The second deposit was eventually remitted by the buyer on or about October 30, 1996. The buyer forwarded the money directly to the sellers' attorney per Respondent SA Lee's instructions. For several reasons, including the buyer's failure to timely remit the second deposit, the closing did not occur on October 31, 1996, as provided in the Contract. The closing on the property occurred on November 27, 1996. Sometime after the closing of the real estate transaction, Respondent SE Lee ceased to be the qualifying broker for Respondent Realty. Sharon E. Lee became the qualifying broker and officer for Respondent Realty. No evidence was presented by the Department of Business and Professional Regulation, Division of Real Estate (Petitioner) as to Respondent SE Lee's failure to properly supervise the activities of Respondent SA Lee or Respondent Realty. No evidence was presented as to whether Respondent SA Lee or Respondent Realty had a history of disciplinary action taken against them.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate enter a final order and therein: Dismiss Count III against Stephen E. Lee. Find Sherry Ann Lee guilty of Counts I and II. Find C. Mist Realty, Inc. guilty of Count IV. Impose upon Sherry Ann Lee an administrative fine of $1,000, payable under the terms and conditions deemed appropriate, and the completion of a 45-hour post-licensure course. Reprimand C. Mist Realty, Inc. DONE AND ENTERED this 16th day of June, 2000, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 16th day of June, 2000.
The Issue The issue to be determined is whether Respondent violated Section 475.25(1)(b), Florida Statutes (2006), as alleged in the Administrative Complaint and if so, what penalties should be imposed?
Findings Of Fact Petitioner is the agency responsible for licensing and regulation of real estate brokers, pursuant to Section 20.165 and Chapters 455 and 475, Florida Statutes. At all times relevant to these proceedings, Respondent Maria V. King, has been a licensed Florida real estate broker, issued license number 662452 in accordance with Chapter 475, Florida Statutes. Her address with the DBPR is 900 Cesery Boulevard, Suite 107, Jacksonville, Florida 32211. Charles Wettstein was the listing broker for the property located at 3216 Randall Street, Jacksonville, Florida 32205 (subject property) for the owner/seller, Abdul R. Elsharif. The subject property was listed on the MLS for $269,900. A representative of Developing Entrusted Capital Counseling, LLC (DECC or buyer), came to the Respondent’s office and indicated that she wanted to purchase the subject property. On or about December 2, 2006, Respondent, on behalf of DECC, forwarded an offer to Wettstein for the property with a purchase price of $410,000. The offer was contingent on the following conditions: (1) buyer to choose closing agent; (2) an appraised value of $410,000; (3) satisfactory WDO and 4 point inspection; (4) assignable contract; and (5) an acceptance of a (legal) addendum between the buyer and seller only. In the cover letter sent by Respondent to Wettstein, Respondent states that there will be an assignment fee comprising the difference between the appraised value and sale price ($410,000 and $269,900). The cover letter also states that the MLS will need to be changed to the contract price of $410,000, which is usually done after an appraisal of the property, and that the appraisal would be paid for by the buyer and done immediately after the contract is signed. Respondent advised the buyer's representative that she was offering much more than the listing price for the property. Respondent testified that the buyer represented to her that the buyer was aware of the listing price, but that she had done her homework and she knew what she was doing in offering the price of $410,000. Respondent also testified that the proposed addendum to the contract and the assignment documents were given to her by the buyer. The buyer represented to Respondent that she had legal counsel who had advised her regarding the assignment and other stipulations in the contract. All documents given to her by the buyer, including the addendum to the contract, were not concealed from the seller and were in fact, submitted with the offer to the listing agent, Wettstein. Respondent was not involved in obtaining a mortgage for the buyer or doing an appraisal of the subject property, and did not intend to perform either function. Respondent did not benefit from this transaction, other than the potential commission based upon a sale price of $410,000, as opposed to the listed price of $269,900. Respondent had concerns about the purchase price but was following the instructions of her buyer. Respondent sent all documents, including the addendum and the assignment documents, to the seller because she was aware that he had an attorney who would be looking at the information sent. Respondent informed the buyer that she would submit all documents to the listing agent and her reasons for doing so. She also informed the buyer that she would only do the contract for the purchase of the subject property. Respondent did not think that the subject property would appraise for $410,000 as required by the conditions of the contract. In other words, Respondent doubted the actual sale would go through. The offer communicated by the Respondent to Wettstein, was presented to the seller and rejected. A mortgage loan was not obtained and an appraisal was not completed on the subject property in connection with the offer by DECC. Any appraisal of the subject property would have been arranged by the lending institution as opposed to Respondent, and would not have been performed by Respondent. Respondent was aware that the MLS for Duval County documents a history of the MLS listing prices. Respondent testified that based on her understanding of Duval County policy, the listing price of the subject property can only be increased if a legal, legitimate appraisal is submitted or seen by MLS. Therefore, if the subject property appraised for $410,000, and the listing price was changed as a result, the MLS would show the property’s previous listing price of $269,900.
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED: That the Florida Real Estate Commission enter a Final Order dismissing the Administrative Complaint in its entirety. DONE AND ENTERED this 24th day of February, 2010, in Tallahassee, Leon County, Florida. S LISA SHEARER NELSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 24th day of February, 2010. COPIES FURNISHED: Daniel Villazon, Esquire Daniel Villazon, P.A. 1420 Celebration Boulevard, Suite 200 Celebration, Florida 34747 Patrick J. Cunningham, Esquire Department of Business and Professional Regulation 400 West Robinson Street Hurston Building-North Tower, Suite N801 Orlando, Florida 32801 Thomas W. O'Bryant, Jr., Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Hurston Building-North Tower, Suite N801 Orlando, Florida 32801 Reginald Dixon, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact Respondent, Carl A. Perry, is licensed by Petitioner as a real estate salesman. At all times material hereto, he was employed by F.E.C. Real Estate Corporation. On September 23, 1979, Respondent negotiated and procured a contract whereby Ronald Joeckel and his wife were to buy and Lynn C. Burdeshaw and his wife were to sell certain real property owned by the Burdeshaws and located in Pompano Beach, Florida. In order to secure that Deposit Receipt Contract, the Joeckels gave Respondent on that date a $100 deposit. The Deposit Receipt Contract required an additional deposit of $1,900, and on October 11, 1979, Respondent received a $1,900 check from the Joeckels. The check was dated October 20, 1979. Respondent did not give this check to his employer until November 23, 1979. When F.E.C. Real Estate Corporation deposited the check for $1,900 in its trust account, the check was dishonored by the bank upon which it was drawn for the reason that the Joeckels did not have sufficient funds to cover the check. Instead of advising the Burdeshaws that the Joeckels' $1,900 check was dishonored, Respondent contacted Ronald Joeckel on several occasions. Joeckel each time advised Respondent that he would cover the check, and Respondent relied upon that information and believed that the Joeckels would fulfill their contract for the purchase of the Burdeshaws' property. Respondent was in error; the Joeckels breached the Deposit Receipt Contract, and the Burdeshaws sold their property to another purchaser soon thereafter. Respondent's employer, F.E.C. Real Estate Corporation, was not the listing broker for the Burdeshaws' property. Shell Coast Realty held that listing. Other than this Administrative Complaint, Respondent has had no other complaint made against him.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED THAT: A final order be entered reprimanding Respondent, Carl A. Perry, for his conduct, admonishing Respondent, Carl A. Perry, to abstain from similar conduct, and placing him on probation for a period of one year. RECOMMENDED this 21st day of December, 1981, in Tallahassee, 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 21st day of December, 1981. COPIES FURNISHED: William R. Scherer, Esquire Grimmett, Conrad, Scherer & James, P.A. 707 Southwest. Third Avenue Post Office Box 14723 Fort Lauderdale, Florida 33302 Mr. Carl A. Perry c/o F.E.C. Real Estate Corporation 4634 North Federal Highway Lighthouse Point, Florida 33064 Mr. Samuel R. Shorstein Secretary, Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Frederick H. Wilsen, Esquire Assistant General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Carlos B. Stafford Executive Director Board of Real Estate Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802 =================================================================
The Issue The issue is whether Respondents' real estate licenses should be disciplined on the ground that Respondents allegedly violated a rule and various provisions within Chapter 475, Florida Statutes, as charged in the Administrative Complaint.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: When the events herein occurred, Respondents, Edward D. Armbruster and Colleen Michele Armbruster, were licensed real estate brokers having been issued license numbers 0002159 and 0362890, respectively, by Petitioner, Department of Business and Professional Regulation, Division of Real Estate (Division). Respondents served as qualifying brokers and officers of Respondent, Armbruster Realty, Inc., a corporation registered as a real estate broker and located at 1031 West Nelson Avenue, DeFuniak Springs, Florida. The corporation holds license number 0211855, also issued by the Division. On July 10, 1996, Gerald and Joyce Singleton, who had just relocated to California, entered into a contract with James B. and Joyce Patten to sell their single-family residence located on Madison Street in the City of Freeport, Florida, for a price of $78,000.00. The contract called for the Pattens to pay $1,000.00 as an earnest money deposit, to be held in escrow by Respondents. The contract further provided that "[c]losing shall be within 30 days (more or less) after acceptance of this contract," and that "[i]n the event that buyer defaults and deposit is forfeited, it is agreed said deposit shall be divided equally between seller and broker." The transaction was handled by Geraldine Dillon (Dillon), a salesperson in Respondents' office, who is now retired. Because the Pattens had recently moved to Walton County from Washington State, and they were temporarily living with a relative in a mobile home, the time for closing was of the essence. Accordingly, the Pattens inserted into the contract a provision requiring that a closing be held within "30 days (more or less)." This meant that a closing should be held on or about August 10, 1996, give or take a few days. The parties acknowledge that property boundary problems were somewhat common in certain areas of Freeport, including the area where the subject property was located. To satisfy the bank and title company, a surveyor was engaged to prepare a survey of the property. However, the parties agree that the surveyor noted problems with the boundaries of the lot. When a second surveyor would not undertake the survey because of similar boundary problems, Joyce Patten, who was the principal negotiator for the couple, notified Dillon that they did not wish to close because of potential title problems and wanted a refund of their deposit. Notwithstanding this concern, Dillon advised Joyce Patten that a third surveyor would be hired, at the seller's expense, and he could "certify" the property. Although Joyce Patten expressed concern that the bank might not accept a third survey after two earlier ones had failed, and she did not want to pay for another survey, she did not instruct Dillon to stop the process. Accordingly, Dillon engaged the services of Tommy Jenkins, a local surveyor, to perform another survey. After a certified survey was obtained by Jenkins on August 12, 1996, which Respondents represent without contradiction satisfied the lender and title company, a closing was scheduled within the next few days. This closing date generally conformed to the requirement that a closing be held by August 10, 1996, "more or less." The seller, who by now had relocated to California, flew to Florida for the closing, and the title company prepared a closing statement and package. Just before the closing, however, Respondents learned through a representative of the title company that the Pattens were "cancelling the closing," apparently in violation of the contract. Shortly after the aborted closing, Joyce Patten requested that Dillon return their deposit. By this time, the Pattens had already entered into a second contract to buy another home in the same area and closed on that property before the end of August. Respondents were never informed of this fact by the Pattens. On August 21, 1996, Colleen Armbruster prepared a rather lengthy letter to the Pattens (with a copy to the sellers) in which she acknowledged that they had orally requested from Dillon that their escrow deposit be returned. The letter has been received in evidence as Petitioner's Exhibit 4. Armbruster stated that she was "perplexed" that they were demanding a refund of their earnest money deposit, given the fact that the seller had "met the terms and conditions of the sale." Armbruster outlined the three reasons in the contract which would allow the Pattens to withdraw without forfeiting their deposit, but noted that none were applicable here. Accordingly, she advised them that the seller would be consulted as to his wishes regarding the deposit, and that the Pattens should contact her if they had any questions. Through oversight, however, she did not include a notice to the Pattens that they must respond to her letter within a stated period of time reaffirming their demand for the trust funds, or the deposit thereafter would be disbursed pursuant to the contract. By failing to include this specific language, and sending the letter by regular rather than certified mail, return receipt requested, Respondents committed a technical, albeit minor, violation of an agency rule. Even so, the Pattens acknowledged receiving the letter, and there is no reason to believe that they did not understand its import, especially the requirement that they contact the broker if they disagreed with the proposed disbursement of the money. It can be reasonably inferred that the Pattens did not respond because they "figured [they weren't] going to be able to get [their] money back" due to their failure to perform. On September 13, 1996, the seller's attorney advised the Pattens by letter that the seller considered the deposit forfeited pursuant to paragraph 15(a) of the contract, which pertains to the "Default" provisions. The Pattens never responded to either letter, and they also failed to respond to telephone calls made by Respondents or their agents regarding this matter. In view of the Pattens' lack of response or reaffirmance of their demand, and the fact that they had already closed on another property, Respondents logically and fairly assumed that the Pattens were in agreement with the disbursement procedures outlined in Coleen Armbruster's letter of August 21. Accordingly, on September 17, 1996, Edward Armbruster, who had not been involved in this transaction to date, in good faith signed two disbursement checks giving $697.50 to the seller and retaining the balance for his firm. This division was consistent with the terms of the contract. In making this disbursement, there was no intent on the part of Respondents to trick, deceive, breach their trust, or in any way unlawfully deprive the Pattens of their deposit. Respondents did not notify the Florida Real Estate Commission (Commission) that they had received conflicting demands for a deposit, nor institute any other procedures regarding the deposit, since they no longer had any good faith doubt as to whom was entitled to their trust funds. This was because the Pattens had failed to respond to letters and telephone calls regarding the sellers' claim to the deposit. There is no evidence that Respondents have ever been the subject of prior disciplinary action during their lengthy tenure as licensees. At the same time, it is noted that Respondents acted in good faith throughout the process and genuinely believed that there was no dispute. It should also be recognized that, for at least part of the time, the Pattens were working two contracts simultaneously without advising the realtors.
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 finding Respondents guilty of a technical violation of Rule 61J2-10.032(1), Florida Administrative Code, and Section 475.25(1)(e), Florida Statutes, and that they be given a reprimand. All other charges should be dismissed. DONE AND ENTERED this 28th day of July, 1998, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 Filed with the Clerk of the Division of Administrative Hearings this 28th day of July, 1998. COPIES FURNISHED: Henry M. Solares, Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900 Christine M. Ryall, Esquire 400 West Robinson Street Suite N-308 Orlando, Florida 32801-1772 Edward D. Armbruster Colleen M. Armbruster Post Office Box 635 DeFuniak Springs, Florida 32433 Lynda L. Goodgame, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue Is Worldwide Investment Group, Inc. (Worldwide) entitled to apply to the State of Florida, Department of Environmental Protection (the Department) for funds to reimburse Worldwide for costs associated with petroleum clean-up at 500 Wells Road, Orange Park, Florida, Facility ID#108736319? See Section 376.3071(12), Florida Statutes.
Findings Of Fact The Property Howard A. Steinberg is a Certified Public Accountant, (CPA) licensed to practice in Florida. In addition to his work as a CPA, Mr. Steinberg has other business interests. Among those interests is Worldwide, a corporation which Mr. Steinberg formed for the purpose of acquiring certain assets, or properties, from Home Savings Bank and American Homes Service Corporation (Home Savings Bank). Worldwide became a corporation in July 1996. Mr. Steinberg is the sole shareholder of that corporation and has been since the inception of the corporation. In addition to controlling all of the assets within Worldwide, Mr. Steinberg is the sole officer of the corporation. The corporation has no other employees. Worldwide has its office in Hollywood, Florida, in the same physical location as Mr. Steinberg's accounting firm of Keystone, Steinberg and Company, C.P.A. Under its arrangement with Home Savings Bank, Worldwide acquired property known as Save-A-Stop at 500 Wells Road, Orange Park, Florida. Mr. Steinberg engaged the law firm of Burnstein and Knee, to assist Worldwide in the purchase of the Save-A-Stop property. The Save-A-Stop property is a commercial parcel that has experienced environmental contamination from petroleum products. To address that problem the firm of M. P. Brown & Associates, Inc., (Brown) was paid for services in rendering environmental clean-up of that site. Substantial work had been done by Brown to remediate the contamination before Worldwide purchased the property from Home Savings Bank. Home Savings had paid Brown for part of the costs of clean-up before Worldwide acquired the Save- A-Stop property. After the purchase, Mr. Steinberg paid Brown to finish the clean-up. Application for Reimbursement Mr. Steinberg, as owner of Worldwide, understood that the possibility existed that Worldwide could be reimbursed for some of the clean-up costs by resorting to funds available from the Department. On July 29, 1997, Bonnie J. Novak, P.G., Senior Environmental Geologist for Brown, wrote to Mr. Steinberg to provide a cost estimate for preparing a reimbursement application in relation to the Save-A-Stop property. The cost to prepare the application was $1,870.00. On August 27, 1996, Mr. Steinberg accepted the offer that had been executed by Brown by Mr. Steinberg signing a contract, and by calling for Brown to prepare an application, to be presented to the Department for reimbursement of costs expended in the clean-up. In furtherance of the agreement between Worldwide and Brown, $935.00 was paid as part of the costs of preparation of the application. This payment was by a check mailed on August 27, 1996. The balance of the fee was to be paid upon the completion of the preparation of the application. In 1996, outside the experience of his businesses, Mr. Steinberg was having difficulties in his marriage. To address the situation, Mr. Steinberg filed a Petition for Dissolution of Marriage. That Petition was filed in April 1996, at which time Mr. Steinberg assumed custody of the children of that marriage, with no right for their mother to unaccompanied visits. After filing for dissolution, Mr. Steinberg relied on others to assist him in dealing with his personal and business life. From December 1996 through January 6, 1997, Mr. Steinberg was particularly influenced by the upheaval in his personal life. It caused him to request extension of deadlines from the Internal Revenue Service for the benefit of his clients whom he served as a CPA. During December, Mr. Steinberg was only in his office for approximately 10 percent of the normal time he would have spent had conditions in his personal life been more serene. On January 6, 1997, the conditions in Mr. Steinberg's personal life took a turn for the worse when his wife committed suicide. In December 1996, attorney Jerrold Knee, who had assisted Mr. Steinberg as counsel in purchasing the Save-A-Stop property, spoke to someone at Brown concerning the status of the preparation of the application for reimbursement of funds expended in the clean-up. He was told that the application was being worked on. Mr. Knee was aware that the deadline for filing the application was December 31, 1996. Mr. Steinberg was also aware of the December 31, 1996, deadline for submitting the application. In that connection, Mr. Knee was familiar with the difficulties that Mr. Steinberg was having in Mr. Steinberg's marriage in 1996. Mr. Knee knew that Mr. Steinberg was infrequently in the office attending to business. Mr. Knee surmised that Mr. Steinberg was relying upon Mr. Knee to make certain that the application was timely submitted, and Mr. Knee felt personally obligated to assist Mr. Steinberg in filing the application, given the knowledge that Mr. Steinberg was not in the office routinely during December 1996. His sense of responsibility did not rise to the level of a legal obligation between lawyer and client. Although Mr. Knee was aware of the pending deadline for submitting the application for reimbursement, and had inquired about its preparation by Brown, and had discussed it with Mr. Steinberg, Mr. Knee never specifically committed to making certain that the reimbursement application was filed on time. As it had committed to do, Brown prepared the reimbursement application for the Save-A-Stop site. The application was for the total amount of $58,632.85, not including preparation charges and CPA Fees. Written notification of the preparation of the application was provided to Mr. Steinberg on December 12, 1996. The correspondence reminded Mr. Steinberg that the application needed CPA approval, an invoice and registration, and a signed certification affidavit. Most importantly, the notification reminded Mr. Steinberg that an original and two copies of the application must be sent to a person within the Department prior to December 31, 1996. The notification specifically indicated the name of that individual within the Department and set forth that person's address. The notification arrived in Mr. Steinberg's office during the week of December 12, 1996. That notification was not opened until late January or early February 1997. Mr. Steinberg opened the letter at that time. During December 1996 Mr. Steinberg was responsible for opening the mail received in his office. No other person was expected to open that mail for the benefit of Worldwide. Untimely Application On February 6, 1997, Worldwide submitted its application for reimbursement for clean-up at the Save-A-Stop location. That application was received by the Department on February 7, 1997. The Department has consistently interpreted the statutory deadline for submitting reimbursement applications in accordance with Section 376.3071(12), Florida Statutes, (Supp. 1996) to be absolute. Consequently, on February 11, 1997, the Department denied the Worldwide application because it had been filed beyond the December 31, 1996, deadline recognized by the statute. Worldwide contested that proposed agency action by requesting a hearing to examine the issue of the timing of the application submission. Consequences of Untimely Application In Florida, petroleum taxes are deposited for the benefit of the Inland Protection Trust Fund. The Florida Legislature allows monies to be appropriated from those deposited funds. In that budgetary process, the Governor's office serves as liaison in requesting the Legislature to appropriate monies from the Inland Protection Trust Fund in relation to the costs of cleanup of sites contaminated by petroleum products. To assist the Governor's office, the Department identifies the need for covering the costs of the clean-up and makes a recommendation to the Governor to provide to the Legislature concerning the amount to be appropriated for the clean-up. In the history of the clean-up program, in 1995, problems were experienced with fraudulent and inflated claims calling for reimbursement for the cost of clean-up. This led to a debt of approximately $550,000,000.00. There was a concern that that debt could not be repaid in a reasonable time frame. In response, the Department, as authorized by the Legislature in action taken in 1996, negotiated a bond transaction through the Inland Protection Financing Corporation. With the advent of the bond issue, $343,000,000.00, not to include the cost of funding the bond, was made available to pay for petroleum clean-up. That bond issue was designed to fund the payment of reimbursement applications that had been received before the end of the life of the petroleum clean-up reimbursement program in place. During the 1996 session, in which the Legislature approved the bond issue, the Legislature also made changes to the petroleum clean-up program. The changes were fundamental in that applicants were no longer reimbursed for clean-up work that had been performed. With the advent of the legislative changes, petroleum clean-up, under a system calling for payment from the fund, could only be conducted if an applicant was pre-approved to conduct the clean- up. As part of that process of gaining funds pursuant to the bond issue, the Department performed an analysis, as authorized by the Legislature, to determine that amount necessary to pay existing obligations that had accrued under the petroleum clean-up reimbursement program that predated the Legislative change in 1996. To ascertain the existing obligation, the Department totaled the known dollar amount associated with the existing reimbursement applications and a portion of unreviewed reimbursement applications that had been received. The Department adjusted the sum to be paid in association with applications that had not been reviewed to that point, having in mind prior experience in which only 82 percent of claims had been allowed. The overriding concern by the Department was that it needed to determine whether the bond issue would be sufficient to defease the backlog of applications for reimbursement previously filed. Information concerning the reimbursement obligations was made known to the Florida Supreme Court in bond validation proceedings held before that court. The Inland Protection Finance Corporation was also made aware of the reimbursement obligations. In 1997, the Department gave further information to the Inland Protection Financing Corporation, indicating that the amount of bond was sufficient for reimbursement obligations. The Department in association with the terms of the bond transaction agreed that the bond proceeds would not be used to fund claims that were received after January 3, 1997. The deadline for submitting applications had been extended until January 3, 1997, by virtue of a statutory amendment found at Section 376.3071(12), Florida Statutes, (1997). Therefore, consistent with the statutory change, the Department had allowed applications submitted after December 31, 1996, but before January 4, 1997, to be considered on their merits. The December 31, 1996, deadline had existed under Section 376.3071(12), Florida Statutes (Supp. 1996). The statutory change occurred because a number of applications that were filed pursuant to the December 31, 1996, deadline set forth in Section 376.3071(12), Florida Statutes (Supp. 1996) did not meet that deadline. The reason for this failure was due to weather conditions that caused overnight couriers, Federal Express and United Parcel Service, to be unable to deliver parcels to the Tallahassee, Florida, airport. These applications, as other applications, were sent to the Department at a Tallahassee, Florida, address. Based on the inability of the two couriers to deliver applications under the timeline anticipated, the Department did not receive that group of applications until January 2, 1997. Subsequently, the applications were accepted as timely based upon the amendment found in Section 376.371(12), Florida Statutes (1997) which extended the filing deadline until January 3, 1997. As a policy consideration, the Department believes it must strictly enforce the deadline for submission of reimbursement applications, as extended by the Legislature, to avoid the future accrual of debt for applications submitted after January 3, 1997, which the Department cannot reasonably anticipate. Apropos of the present case, the Department does not believe that it is well-advised to allow even a single claim for reimbursement, if that claim was received after January 3, 1997. To date, 64 applications have been received by the Department subsequent to December 31, 1996. All but six of those applications were received no later than January 3, 1997. Two of that six applications for reimbursement are still pending before the Department. Historically 22,000 applications for petroleum clean-up have been received by the Department since 1986. At the time of the hearing, 9,000 applications were pending before the Department. In December 1996, 3,000 applications were received calling for reimbursement of costs. At the time of hearing, approximately $340,000,000 in reimbursement claims had not been satisfied. Petitioner makes its claim to be excepted from the deadline for submitting its application based upon the doctrine of equitable tolling.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is, RECOMMENDED that a Final Order be entered denying the application of Worldwide to participate in the reimbursement program for clean-up expenses as untimely. DONE AND ENTERED this 7th day of May, 1998, in Tallahassee, Leon County, Florida. CHARLES C. ADAMS 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 Filed with the Clerk of the Division of Administrative Hearings this 7th day of May, 1998. COPIES FURNISHED: P. Tim Howard, Esquire P. Tim Howard and Associates, P.A. 1424 East Piedmont Drive, Suite 202 Tallahassee, Florida 32312 Jeffrey Brown, Esquire Department of Environmental Protection Douglas Building, Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Kathy Carter, Agency Clerk Department of Environmental Protection Douglas Building, Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 F. Perry Odom, General Counsel Department of Environmental Protection 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Virginia B. Wetherell, Secretary Department of Environmental Protection 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000
The Issue The issues in this case are whether Respondents violated Subsection 475.25(1)(k), Florida Statutes (1999), by failing to maintain an escrow deposit in a trust account until properly authorized; whether Respondents violated Subsection 475.25(1)(d)1, Florida Statutes, by failing to account for or deliver funds; whether Respondents violated Subsection 475.25(1)(b), Florida Statutes, by committing a breach of trust or culpable negligence in a business transaction; and, if so, whether the proposed penalty is reasonable.
Findings Of Fact Petitioner is the state agency responsible for the regulation and discipline of real estate licensees in the state. Simons is licensed in the state as a real estate broker/officer of Respondent, Home Hunters USA, Inc. (Home Hunters), pursuant to license number BK-0159866. Home Hunters is a corporation registered as a Florida real estate broker pursuant to license number CQ-0146369. On March 21, 1996, Respondents entered into a property management contract (amended contract) with Max and Mary Newman (Newmans). The amended contract authorized Respondents to lease and manage real property owned by the Newmans and located at 1555 Whiskey Creek Drive, Ft. Myers, Florida 33919 (the property). The original contract that Respondents proposed to the Newmans was dated March 11, 1996. The original contract contained a clause that would have obligated the Newmans to pay a sales commission to Respondents in the event Respondents sold the property to a tenant or certain other purchasers. The Newmans deleted that language from the original contract, initialed the deletion, dated the deletion "3/21/96," signed the amended contract on March 21, 1996, and returned the amended contract to Respondents. The deleted language in the amended contract signed by the Newmans provided: Owner agrees to pay Agent a sales commission for the sale of said property to the tenant, or any other the tenant relates or refers. Agent will perform any services normally performed to consummate the sale to the tenant in a professional and diligent manner. Owner shall notify Agent at earliest possible time so that Agent may perform services (prequalify, arrange financing, closing, repairs, etc.). It is the owners [sic] responsibility to pay said fee to Agent upon closing of sale. Petitioner's Exhibit 5 (P-5) at 19 (the second unnumbered page of the exhibit). On or about February 1, 1999, Respondents brokered a lease of the property from the Newmans to Ms. Lilly Gilson (Gilson). Mr. Newman signed the lease agreement on February 14, 1999, and Gilson signed it on February 23, 1999. The lease agreement, in relevant part, obligated the Newmans to pay Respondents a "fee" in the event the "tenant should enter into a lease purchase, lease option, or purchase through their tenancy." The lease agreement states that the fee is for Respondents "serving the sale as a broker" but does not specify the amount of the fee, does not express the fee as a percentage of the purchase price, and does not otherwise specify how the fee is to be determined. Neither of the Respondents is a signatory to the lease agreement. At the time Gilson entered into the lease agreement, Gilson paid a deposit of $650 to Respondents as a security deposit in accordance with the lease agreement. Respondents placed this deposit into a trust account. At some point prior to December 1999, the Newmans entered into a purchase and sale contract to sell the property to Mr. Gary Newman (Buyer). The Buyer is unrelated to the Newmans, but is a relative of Gilson. The Newmans closed on the sale to the Buyer on December 28, 1999. The parties to the sale used other brokers in the transaction over Respondents' objections, and neither of the Respondents served the sale as a broker. The closing statement shows that the Buyer was obligated to pay the $635 security deposit to the Newmans. Subsequent to the closing, Respondents transferred the security deposit from their trust account to their operating account. Simons believed he was entitled to a commission on the sale from the Newmans to Buyer. Respondents had actual knowledge that the Newmans claimed entitlement to the security deposit and disputed Respondents' entitlement to the security deposit. Simons was aware as early as December 11, 1999, that the Newmans did not knowingly consent to pay Respondents a commission on the sale transaction. Respondents failed to notify the Florida Real Estate Commission (Commission) of the dispute concerning entitlement to the security deposit. Respondents did not institute the settlement procedures prescribed in Subsection 475.25(1)(d)1, Florida Statutes (1999).
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a Final Order finding that Respondents violated Subsections 475.25(1)(b), (d), and (k), Florida Statutes (1999), by committing the acts alleged in the Administrative Complaint; imposing a fine of $1,000 against each licensee; and suspending Respondents' licenses concurrently for 30 days. DONE AND ENTERED this 4th day of December, 2003, in Tallahassee, Leon County, Florida. S DANIEL MANRY 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 4th day of December, 2003. COPIES FURNISHED: Christopher J. DeCosta, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite 801-N Orlando, Florida 32801 Larry A. Simons Home Hunters USA, Inc. 1415 Colonial Boulevard, Suite 3 Fort Myers, Florida 33907 Nancy P. Campiglia, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 Nancy P. Campiglia, Acting Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street, Suite 802-N Orlando, Florida 32801-1772
The Issue Whether petitioner should take disciplinary action against respondent for the reasons alleged in the administrative complaint?
Findings Of Fact The parties stipulated that respondent Richard B. Watson holds a license issued by petitioner and has since 1976. He holds license No. 0163723, and has, at all pertinent times, worked as a broker-salesman for Liz Caldwell Realty, Inc., 126- 128 Eglin Parkway Southeast in Fort Walton Beach, Florida. Petitioner's Exhibit No. 1. On June 13, 1983, Lloyd H. Waldorff executed an employment contract under which Liz Caldwell Realty, Inc. was to have the exclusive right to sell the 25 units Waldorff Properties of Ft. Walton proposed to build as "phase two" of its La Mar West Townhouse Project in Mary Ester, Florida. Petitioner's Exhibit No. 6. Nobody signed the written agreement on behalf of the broker, but Mr. Waldorff's testimony that Ms. Caldwell or somebody in the agency "accepted" it was uncontradicted, and fully consonant with the other evidence adduced. Mr. Waldorff or his organization needed agreements from prospective buyers to purchase units when built, in order to induce a lender to lend money for construction of phase two. One Saturday, probably in mid-July of 1983, Ms. Caldwell presented him with 18 such agreements. It seemed peculiar to Mr. Waldorff, getting 18 purchase agreements at once; and he was also struck by the number of Californians and other non- Floridians among the putative purchasers. But he had nevertheless signed the agreements himself before Ms. Caldwell gave them to Mr. Watson for attestation; and he later furnished all of the purchase agreements to Security Federal Savings and Loan Association of Panama City in support of an eventually successful application for a $1,100,000.00 construction loan. (T.90) Mr. Waldorff signed the purchase agreements in a back room within the Liz Caldwell Realty, Inc. offices. At hearing he remembered that a woman was present. He did not recall respondent's being there. Seventeen of the 18 agreements furnished the lender were purportedly signed by persons to whose signatures, except in one instance, respondent Watson attested. Petitioner's Exhibit No. 4. On 16 of the 17 purchase agreements on which he signed as a witness to putative purchasers' signatures, respondent also signed as a witness to Mr. Waldorff's signature in a blank provided under the heading "signed in the presence of:". Petitioner's Exhibit No. 4. Respondent was aware at the time that Mr. Waldorff, whom he considers a friend, needed such agreements in order to obtain financing. As time for closing on the purchase agreements approached, Mr. Waldorff testified, he became suspicious, and asked Ms. Caldwell to see her escrow account statements, but she put him off. Eventually he asked her if the purchase agreements were "bogus," and she answered by nodding affirmatively. It was at this point, Mr. Waldorff said, that he notified the lending institution of their falsity, and asked for an extension of time in which to repay the construction loan. But the weight of the evidence established that the purchase agreements were shams from their inception and that Mr. Waldorff knew it before he obtained the loans. On September 9, 1985, Paul R. Bratton, III, an investigator for DPR, asked Mr. Watson about the purchase, agreements on which he had witnessed purported parties' signatures. In this interview, Mr. Watson said, with respect to some of the contracts which he had signed as a witness, "that he did not see the buyers or the sellers sign the contract." (T.63) In a deposition he gave in the course of related civil litigation, respondent Watson testified that it was "(p)retty much," Petitioner's Exhibit No. 5, p.10, "standard procedure" for him to witness signatures which he had not seen being affixed. In response to the question, "Does that mean also you wouldn't know whether these people exist in real life or not?", Mr. Watson answered, "It could be. ..." Id. as 15. Mr. Waldorff told Mr. Watson he was going to use the 18 purchase agreements, all but one of which respondent had signed as a witness, to secure a construction loan even though they were "bogus." Petitioner's Exhibit No. 5. This conversation antedated the loan closing. Id.
