The Issue Should Petitioner impose discipline on Respondent's health agent (2-40), life agent (2-16), life and health agent (2-18), life including variable annuity and health agent (2-15), and life including variable annuity agent (2-14), licenses issued by Petitioner ?
Findings Of Fact Stipulated Facts Respondent is licensed by Petitioner as a health agent (2-40), a life agent (2-16), life and health agent (2-18), life including variable annuity and health agent (2-15), and life including variable annuity agent (2-14). Additional Facts Respondent has been licensed as a Florida insurance agent since 1979 and has worked in the insurance industry in Florida on a full-time basis beginning in 1988. At present, Respondent does business under his life and health license (2-18). While in business, Respondent formed a corporation with Steven Brown sometime in either 1989 or 1990. Mr. Brown was president of the corporation, and Respondent was the vice- president. It was a closely held corporation, an S corporation. Neither individual served as the supervisor for the other person. At times, they split sales and clients in conducting the business. In the past, Respondent was also licensed under Chapter 517, Florida Statutes, the "Florida Securities and Investor Protection Act" as an "associated person." While acting as an associated person, Respondent was affiliated with Tower Square Securities Inc. (Tower Square) between August 26, 1998, and June 22, 2000. Beyond that affiliation, Respondent was an associated person with Horner, Townsend & Kent (HTK) between June 23, 2000, and July 5, 2001. This license in relation to securities had been issued by the State of Florida, Department of Banking and Finance. The regulatory function for securities has since become the province of the State of Florida, Department of Financial Services, Office of Financial Regulation. Upon the entry of the final order in the case State of Florida, Department of Banking and Finance, Petitioner, vs. Michael Carroll Gainer, Respondent, DBF No. 0655-I-2/02, accepting a stipulation and consent agreement, Respondent's application for registration by the Department of Banking and Finance to become an associated person of High Mark Securities, Inc.(High Mark) was withdrawn by High Mark. As of February 25, 2002, through the stipulation and consent agreement, Respondent agreed that he would not apply for licensure or registration in any capacity pertaining to the Florida Securities and Investor Protection Act for a period of ten years from the date of the entry of the final order in that cause. The matters contemplated by the case before the Department of Banking and Finance were in relation to 21st Century, the company implicated in the present case, found to be involved with unregistered securities. To resolve the disciplinary action before the Department of Banking and Finance, Respondent, through the stipulation and consent agreement, neither admitted nor denied the allegations concerning the nature of the transactions involved with that prosecution; however, Respondent agreed to cease and desist all present and future violations of Chapter 517, Florida Statutes, and the administrative rules promulgated under that chapter. At the time Respondent worked with Tower Square as an associated person, the broker-dealer supervising Respondent and the company itself through other personnel made no mention of industry problems related to promissory notes. While employed at HTK in November 2000, Respondent attended a compliance meeting. This activity included the completion of a questionnaire. Among the questions was one concerning "notes." Respondent indicated that he had experience with "notes." This reference to "notes" made by Respondent was also reported to Tower Square. This episode in November 2000 came at a time outside the period contemplated by the present Amended Administrative Complaint involving "notes" related to 21st Century. Respondent first became aware of 21st Century when he received a telephone call sometime in 1997. A couple of people that Respondent knew told Respondent about the 21st Century business. In the beginning, Respondent was not interested in pursuing opportunities with 21st Century. About a year later, he changed his mind. He made an appointment to visit 21st Century offices sometime in 1998. Through his involvement, Respondent learned that the 21st Century program dealt with a note, a collateralized note. When Respondent went to Tampa, Florida, to check out 21st Century, he met with the company vice-president, Spencer Tyrrell. Respondent toured 21st Century facility, looked at equipment, and had an on-site engineer explain the nature of the 21st Century program. Mr. Tyrrell took Respondent and others to installation sites that 21st Century had completed. In his tour of the 21st Century facilities, Respondent also visited the billing department for the company. They appeared busy. During the trip, Respondent found out that 21st Century was engaged in the business of the sale, installation, maintenance, and servicing of what it referred to as Satellite Master Antenna Television (SMATV) systems to private property owners. To conduct this business, financing was needed for the necessary equipment and installations. As 21st Century put it, the funds loaned for the financing of equipment and installations would be derived from investors, whose investment would be secured by a collateral mortgage on the equipment and the income derived from its installation, as confirmed by a UCC-1 filing and corporate promissory note. It was anticipated that Respondent and others like him would be involved in the promotion and obtaining of funding for 21st Century to pursue its business through the investment vehicle that has been described. In addition to visiting the company and sites where the SMATV systems had been installed, Respondent spoke to an attorney associated with 21st Century. He also spoke with someone whom was responsible for holding investment money, qualified money, in an escrow account. Respondent spoke with someone whom he understood was performing an audit on the business as a member of an accounting firm. Respondent spoke to several other 21st Century company officers, not to include Mr. Tyrrell. The attorney that Respondent spoke to was Byron Nenos, who acted as a disbursement agent for 21st Century. Respondent discussed with Mr. Nenos any difficulties that the attorney was aware of that had been experienced in the provision of quarterly interest payments to the investors in the SMATV systems. At that time, no problems were revealed by Mr. Nenos on this topic. The escrow company responsible for maintaining the qualified money was Retirement Accounts, Incorporated, who acted as trustee of the investment funds. The trustee would release money to 21st Century to further its purposes. The investor would receive a quarterly statement concerning the investment and would be billed an administrative charge by the escrow firm. Respondent was familiar with Retirement Accounts, Incorporated by reputation, in that he understood that this was a nationwide firm. Respondent also checked with the Better Business Bureau to ascertain any complaints that had been made against 21st Century with that organization. He was told that complaints had not been received. Respondent invested $16,000.00 in the 21st Century SMATV systems for his own purposes under the terms that have been described. Respondent received subsequent memos from the company concerning the subscriber base for the 21st Century product. Respondent was introduced to S.R. around 1998. Respondent sold S.R. mutual funds and a tax sheltered annuity. The application for the tax sheltered annuity was made in May 1998 with the funds distribution to begin in August 1998. The investment in the mutual funds took place around September 1998. The subject of 21st Century as an investment for S.R. was brought up in the fall of 1998. S.R. told Respondent that she had a lot of money in CDs and would like to do something different with that money and wanted to know if Respondent had anything to offer other than mutual funds. Respondent suggested a government securities fund. S.R. remained interested in some other possible alternative investment opportunity. Respondent brought up the 21st Century investment. He provided material to S.R. for her review concerning 21st Century. S.R. made no decision concerning 21st Century until December 1998. In this connection, Respondent arranged for S.R. to visit the 21st Century headquarters and/or talk with persons at 21st Century by telephone. S.R. did not avail herself of those opportunities. To this point, Respondent was unaware of any problems with the 21st Century investment. Ultimately, S.R. decided to invest $50,000.00 in 21st Century and that was arranged by Respondent in December 1998. When S.R. invested her money in 21st Century, Respondent understood that this was extra money coming due from a CD or similar investment. In deciding upon an investment in 21st Century, Respondent and S.R. went through details concerning her financial position. S.R. was the first person that Respondent sold the 21st Century product. In his dealings with S.R., Respondent explained that the 21st Century investment was not secured. The risk would be that if S.R. needed the money she would invest within the five year period contemplated by the terms of her agreement with 21st Century, she would not be able to get the money. The inability to reacquire the principal within the period of the investment was not a concern to S.R., as she remarked to Respondent. The investment by S.R. was, as Respondent describes it, "collateralized." By this he meant that the investment was in association with one facility or community, in which there were sufficient numbers of investors within a subscriber base for the equipment to make the site profitable. The UCC-1 reference meant that the state-maintained website would allow confirmation that the client's name was listed in relation to the property that was being invested in. S.R.'s name was on the property she invested in, according to the Secretary of State's records under the UCC-1. In connection with the UCC-1 filing, Respondent had financed another business on his own and filed the UCC-1 for equipment. With the experience in mind, Respondent perceived the UCC-1 filing as being associated with collateral related to the equipment involved with 21st Century. Respondent eventually found out that there was a limit on the value of equipment as collateral, in that it was over-collateralized limiting the return on investment. Respondent understood that he was selling a promissory note to S.R. for 60 months. Respondent proceeded with the assumption that it was exempt from the requirement to be registered as a security based upon conversations with attorney Nenos, the disbursement agent for 21st Century. This was not the true status of the promissory note. Respondent told S.R. that her investment with 21st Century was a relatively low risk. S.R. considered that her investment was a capital investment. As Respondent recalls, problems began with 21st Century when it was late on its interest payment for the third quarter 2000. This was in relation to the five-year loan agreement program that S.R. participated in, calling for a monthly fixed and guaranteed interest payment of 13 percent, plus an additional 25 percent of the annual profits generated by installation of the SMATV systems, both disbursements paid in quarterly installments. When the problems commenced, Respondent told S.R. that he was available if she needed his assistance and committed himself to provide information to her that he received concerning the difficulties experienced by 21st Century. Later Respondent also offered to assist S.R. in relation to bankruptcy proceedings that had been commenced in relation to 21st Century and its creditors that are ongoing. In a deposition, S.R. explained her understanding of the transaction with 21st Century through Respondent. She understood it as an opportunity in which four times a year she would receive a check, which represented interest payments and at the end of five years the principal investment would be returned. S.R. expected to receive 13 percent annual return on the investment. Respondent told S.R. that he had also invested in 21st Century. S.R. recalls Respondent arranging for an on-site visit at the 21st Century business location which she was unable to meet because of her schedule. Respondent told S.R. about his visit to the facility and that by its appearance it seemed very solid, a growing opportunity. S.R. never spoke directly with anyone in management or otherwise at 21st Century. As she explained, S.R.'s investment came from an inheritance left to her by her mother, who had died in 1998. The $50,000.00 investment by S.R. constituted about 25 percent of her available cash. Petitioner's Exhibit numbered 8 is a copy of the brochure Respondent provided to S.R. explaining 21st Century and the investment opportunity. The brochure describes the nature of the sale, installation, maintenance and servicing of SMATV systems to private owners and the need for financing of the equipment and installations. The brochure highlights the investment opportunity where it states: Real Opportunities in Communications 21st Century Satellite Communications, Inc. is offering on a limited and selected basis, the following opportunity to participate in its SMATV installation programs. For both qualified and non-qualified funds, the Company is offering a 5 year Loan Agreement program, whereby individuals can receive an attractive income on funds loaned to the Company. Loan repayments consist of a monthly fixed and guaranteed interest payment of 13 percent, plus an additional 25 percent of the annual profits generated by a spread of installations, all payable in quarterly installments. (Important Note: Profits are a direct result of the number of subscribers per installation, hence profits are calculated over a series of installations, rather than any one location). For qualified monies, accumulations would grow on a tax deferred basis, providing interest on the principal, together with interest on the accumulating interest! Each Loan Agreement is backed up by the Uniform Commercial Code, which provides a lien on both the equipment and income derived therefrom. . All Lenders receive a Promissory Note backed by the assets of 21st Century Satellite Communications, Inc. . Each installation will be subject to an annual accounting.. The average installation is between 500 to 600. Companies are currently offering $1,000 to $1,500 to purchase a subscriber. Even a small installation of 400 subscribers could be sold for $400,000 (twice the original investment). It is anticipated that installations will average between 400 to 1,000 subscribers. Consistent with its obligation 21st Century paid S.R. four checks for interest due and then it ceased making payments. On October 12, 2000, through its vice-president and CFO, Gabe Panepinto, 21st Century wrote to S.R. restating the status of the account pertaining to the note and the interest rate. S.R. confirmed by her signature the status of the account on the form at the bottom of the letter for return to the company. On October 12, 2000, a letter was generally written to the men and women who invested with 21st Century by its chairman Robert S. Byrch, explaining the financial problems experienced by that company. It described several options to the investors, to include S.R., where it said: As a noteholder, your choices are simple. You may either do nothing and retain your promissory note, or you may tender your note to the Company and request that your note be converted into equity in accordance with the instructions and subject to the conditions set forth in the Exchange Offer Memorandum. The terms of the preferred stock are not yet finalized but will be specified in the Exchange Offer Memorandum. On November 13, 2000, in correspondence from Mr. Byrch as chairman of the board for 21st Satellite, directed to the investors, S.R. among them, the investors were told that the company was in default on its obligation under its note program to make quarterly interest payments. The letter referred to the intent to change the nature of the investment opportunity from one of a noteholder to a stockholder in the company. On November 14, 2000, S.R., among other investors, received a letter from Mr. Nenos pertaining to 21st Century. The correspondence referred to an October 27, 2000, letter sent to 21st Century notifying the company of the default status of the promissory notes held by S.R. and other investors and a demand for payment made by Mr. Nenos. The correspondence from Mr. Nenos told the investors that 21st Century had not paid its obligation and advised the investors that they should seek legal counsel to enforce the terms of the promissory notes and to protect their interest in the collateral. On December 7, 2000, in a letter by Spencer G. Tyrrell, Director, and Robert S. Byrch, Chairman for 21st Century, they asked the investors to communicate: Whether you would be willing to convert your note, or a portion of your note, to preferred stock; or Whether you would be willing to modify the terms of the original note; or Whether you are unwilling to convert your note or modify the terms of the existing note. On September 20, 2001, Respondent wrote S.R. with an enclosure from a Glenn Liberatore that was being submitted to the creditors committee, taken to be in relation to 21st Century. It gave a telephone number for S.R. to call and comment to Mr. Liberatore on this topic. A personal handwritten note was attached to this correspondence which said, "S. please call me or write to let me know you are o.k. - I haven't heard from you in a while." In what appears to be correspondence dated November 30, 2001, Respondent again wrote S.R. on the subject of having received official notice regarding 21st Century's reorganization through Chapter 11, offering to assist S.R. in processing her claim in that proceeding. Respondent indicated that he was filing a claim and encouraged S.R. to do the same. To that end, S.R. has retained counsel to protect her interest in the bankruptcy proceedings.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is RECOMMENDED: That a final order be entered finding violations of Section 621.611 (7) and (13), Florida Statutes (1997), dismissing the other alleged violations and suspending Respondent's insurance licenses for six months. DONE AND ENTERED this 2nd day of June, 2006, in Tallahassee, Leon County, Florida. S 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 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of June, 2006.
Findings Of Fact Glen H. Miller is a registered real estate broker holding license #0060204 issued by the Florida Real Estate Commission. Miller was the registered real estate broker in a transaction between David and Marsha Ewan, and Roy and Marilyn Cutrell. Miller prepared a contract for sale and purchase of real estate, Exhibit #5, for Roy and Marilyn Cutrell as buyers and presented it to Marsha and David Ewan, as sellers. The terms regarding the mortgage to be assumed in Paragraph B in Section 2 were based upon information given Miller by the Ewans when the property was listed. It is uncontroverted that as of the date the contract was prepared Miller had no knowledge that Ewan had refinanced the house and the mortgage terms had changed. This contract was presented in the presence of the Cutrells to the Ewans on January 20 or 21, 1977. There is a controversy as to when the Cutrells became aware the mortgage terms were different from those stated in the contract. The Ewans testified that they told the Cutrells the terms were different after the contract had been signed by both parties but not in Miller's presence. The Cutrells stated that they learned the mortgage terms were different when they inquired about the mortgage to Fidelity Federal Savings and Loan, holders of the mortgage. This occurred on January 24, 1977. In either event, both parties agree that Miller had no knowledge of the change in the terms of the mortgage until January 24. Miller prepared and presented a new contract to the Ewans and Cutrells which correctly reflected the mortgage data. The Cutrells represented to Miller and the Ewans that they did not consider the mortgage terms important and did not desire to sign the revised contract. The Ewans did not insist upon the revised contract. Subsequently, the Cutrells failed to deliver the additional deposit of $14,000 on February 1, 1977. Their reasons for failure to do so had nothing to do with the amount of the mortgage or the terms thereof. The Cutrells were advised by Miller's wife, a real estate salesman, that they would be in default if they did not deliver the $14,000 additional deposit and if they defaulted they would lose their initial $1,000 deposit. The Cutrells did not contest the forfeiture of their initial deposit and advised that they did not wish to complete the transaction. On February 4, 1977, a check was prepared by the broker to the Ewans in the amount of $700. The Ewans picked this check up on February 7, 1977. The remaining $300 was retained in the escrow account at all times. The Cutrells first demanded the return of the deposit orally on February The subsequently made written demands on February 23, 1977. Between the oral demand and the written demand, the broker reported the controversy existing with the Cutrells to the Florida Real Estate Commission, which eventually resulted in these charges being brought.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law the Hearing Officer recommends that the Florida Real Estate Commission take no action against the registration of Glen H. Miller as a registered real estate broker. DONE and ORDERED this 13th day of April, 1979, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 ADDENDUM The Hearing Officer has read and considered the Proposed Findings of Fact and Conclusions of Law submitted by Petitioner, Florida Real Estate Commission. The facts presented in the Recommended Order are based on Substantial and competent evidence contained in the record. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings COPIES FURNISHED: Mark A. Grimes, Esquire Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32801 Harvey R. Klein, Esquire 333 NW 3rd Avenue Ocala, Florida 32670
The Issue The issues in this case are as follow: Did Respondent violate Section 475.25(1)(b), Florida Statutes, by representing to Laverne Hahn that he would rent his house to her if she sold her house, representing to Ms. Hahn that he would deliver certain papers to her attorney, and representing to Ms. Hahn that the closing on her house would not occur until after February 15, 1981? Did Respondent violate Section 475.25(1)(d), Florida Statutes, by failing to deliver survey, abstract and title insurance policy documents to Ms. Hahn or her attorney?
Findings Of Fact At all times relevant hereto, the Respondent, Allan R. Heuton, held real estate salesman license #0313305 Assued by the Board of Real Estate (now Florida Real Estate Commission). At all times relevant hereto, Respondent was registered as a salesman with Hugh Anderson Real Estate, Inc., at 2631 East Oakland Park Boulevard, Fort Lauderdale, Florida 33339. Respondent listed with his employer, Hugh Anderson Real Estate, Inc., Laverne Hahn's offer to sell her residence and advised Ms. Hahn at that time that upon the sale of her residence she could rent his residence for a period of six months at the rate of $300 per month. In reliance on Respondent's statement, Ms. Hahn proceeded to sell her residence and made no other arrangements for a place to live, expecting to move into Respondent's house upon closing as per their agreement. (Petitioner's Exhibit 2, Pages 5 and 8.) Respondent testified to the events surrounding the transaction which gave rise to the Administrative Complaint. The Board presented the deposition of Ms. Hahn taken in Lakeland, Florida. Respondent admitted that he had advised Ms. Hahn it was not unusual to have closings delayed 60 days, and did offer and stood ready to rent his house to Ms. Hahn. Respondent testified that he did not recall picking up any documents from Ms. Hahn, but that had he done so it was his normal business practice to immediately deliver the documents to the attorney handling the closing. Ms. Hahn's deposition reflects that she could not locate the Respondent although she attempted to contact him through his broker's office. This was the reason she could not rent his house. Respondent testified that Ms. Hahn never asked to rent his house. Respondent testified that on January 14, 1981, the day after his birthday, he was suddenly taken ill and had to have emergency surgery in the early morning hours of that day. Respondent's testimony was corroborated by the testimony of Sheilah Kirk, who testified that she visited Respondent in the hospital on January 14 or 15, 1981, and that he was recovering from surgery at that time. Respondent testified that he was hospitalized for more than one week. Respondent testified that he was visited by the manager of the brokerage office for which he worked. It is hardly credible that Ms. Hahn could not find a man who was sick in a hospital for more than one week and whose whereabouts were known to his brokerage office. Wherefore, the Hearing Officer disregards the deponent's testimony and accepts the Respondent's testimony as the more credible concerning the rental of his house Ms. Hahn's deposition reflects that Respondent told her she would not have to move out until February of 1981. Respondent admits he told Ms. Hahn that closings were frequently delayed 60 days or more. The contract for sale originally provided for closing on December 29, 1980, a time which was changed to January 15, 1981, by persons unknown on a date unknown. The contract was signed by Ms. Hahn, who is presumed to have known its terms. Notwithstanding Respondent's statements as to delayed closings, Ms. Hahn had no basis for using such statement as a basis for planning in light of the contract which she signed. Again, Respondent's testimony is deemed to be more credible in light of the closing date provided in the contract for sale. A further conflict exists between Ms. Hahn's deposition and Respondent's testimony regarding the allegation that Respondent picked up certain documents from her but failed to deliver them. Respondent's statement that he had no recollection of the events, but that his regular practice was to deliver such documents immediately, and that since the time in question he has not discovered any such documents in his papers, is deemed credible.
Recommendation Having found that the allegations against the Respondent, Allan R. Heuton, were not proven, it is recommended that the Administrative Complaint against Respondent be dismissed. DONE and ORDERED this 22nd day of July, 1982, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of July, 1982. COPIES FURNISHED: Bruce D. Lamb, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Allan R. Heuton 6891 Forrest Street Hollywood, Florida 33024 C. B. Stafford, Executive Director Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Samuel Shorstein, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact At all times pertinent to the charges, Respondent Shanker S. Agarwal was a real estate broker in the State of Florida, having been issued License No. 0312860. At all times pertinent to the charges, Respondent Agarwal was the owner, president, and sole qualifying broker for Respondent Super Realty, Inc., a corporation registered as a real estate broker, having been issued License No. 0231636. The Respondents were properly and appropriately served with the Administrative Complaint herein and have had sufficient notice of formal proceedings in this cause, commensurate with the applicable statutes and rules governing disciplinary proceedings. On or about March 13, 1985, Jeanette and David Miller tendered an offer to purchase real estate owned by the Veterans Administration (VA). On March 18, 1985, the VA accepted their offer. Upon making the offer to purchase, Mrs. Miller entrusted to the Respondents an escrow deposit of $500. Upon the offer being accepted, and pursuant to the terms of the contract, Mrs. Miller entrusted an additional escrow deposit of $9,500 to the Respondents. The transaction was scheduled for closing on June 26, 1985. The VA prepared a deed for closing which was sent to the Respondents. At the scheduled date and time of closing, Mrs. Miller appeared prepared to pay by certified checks in her possession, the balance she understood would be due so as to effect the transfer of the new property. However, prior to actually signing the closing papers at the scheduled date and time of closing, she discovered that an extra $6,000 had been added to the closing documents. That amount involved a mortgage with a balloon payment to Respondent Agarwal's wife and one or more mortgages or liens placed upon Mrs. Miller's present home. The closing documents which would have been the best evidence of fraud were not offered at hearing but adequate evidence of their unavailability was made and I accept the unrefuted testimony of Mrs. Miller concerning what she read on the closing documents at the time in question. Mrs. Miller questioned these items in the closing package. Then questioned, Respondent Agarwal first stated that Mrs. Miller should sign and he would explain when they got back to his office. When she persisted, Agarwal flew into a rage. He berated and cursed Mrs. Miller in the presence of several third parties gathered for the closing. When he called her a "bitch," Mrs. Miller was reduced to tears. Mr. Agarwal then stormed out of the room in which the closing was to be conducted. The closing was never consummated. Although still anxious to purchase the house in question, the Millers, through an attorney, demanded from Respondent Agarwal the return of their $10,000, which they understood had been placed in escrow. They sought the help of an attorney because they were unable to get any response from Agarwal despite numerous telephone calls. However, they did not ever demand the deed from Respondents. On August 5, 1986, during the investigation of this matter by the Petitioner, Investigator Anthony Nicola served upon Respondent Agarwal's wife, Pushpa Agarwal, who was present at the offices of Respondent Super Realty, Inc., a subpoena intended for and addressed to "Mr. Shanker Agarwal, c/o Super Realty, Inc." This subpoena was a Department of Professional Regulation subpoena duces tecum number A-004804 issued in Department of Professional Regulation Case No. 0153241 requesting production of "Escrow Account records relative to $500.00 deposit received from Jeanette & David Miller on March 13, 1985." It required production of these papers at another address on August 6, 1986, at 9:00 a.m. The Respondents did not respond to the subpoena. On or about October 17, 1985, the VA, upon learning of the aborted transaction, directed the Respondents to send $500 to the VA, along with a return of the deed. The VA further instructed the Respondents to return the balance of $9,500 to the Millers. The $500 demanded by the VA was in the nature of a penalty or forfeiture for having tied up the property for the intervening months since the closing had been scheduled. Respondent Agarwal notified the VA on November 16, 1985 that because there were conflicting demands on the money, he could not turn over the money or deed to the VA until the Circuit Court resolved the demands. However, neither the VA nor the Millers are aware of any legal action instigated by Respondent. Mrs. Miller, however, had instituted suit against the Respondents to recover her $10,000. No notification of doubt or conflicting demands on deposit in escrow was received by the Florida Real Estate Commission from the Respondents pursuant to Section 475.25(1)(d), Florida Statutes. To the date of formal hearing, the Respondents had never accounted for or delivered to either the VA or the Millers any part of the $10,000 nor the deed. Further, the Respondents never advised the Millers that the VA had directed them how to disburse the funds. The Millers testified they had become aware of the disbursement recommended by the VA through calls placed to the VA by them and their lawyer, that such a disbursement would have been acceptable to them, and that such a disbursement by Respondents would have resolved any dispute they had with Respondents had that disbursement been made by Respondents. Mrs. Miller testified that her lawsuit has been protracted and is yet to be resolved because Respondent Agarwal's outbursts of temper and assorted motions have resulted in rotation of three judges and in Mrs. Miller having to obtain new legal counsel, however he is aware that the VA and the Millers agree to the disbursement proposed by the VA. Respondent Agarwal also threatened to turn Mrs. Miller over to the Internal Revenue Service. Mrs. Miller does not know what this threat was intended to mean or what it was supposed to accomplish. Petitioner elected to put on no evidence in support of Counts IX and X of the Administrative Complaint.
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 only on Counts I through TV of the Administrative Complaint, exacting a penalty of revocation of both licenses therefore, and dismissing Counts V through X of the Administrative Complaint. DONE AND RECOMMENDED this 28th day of July, 1987, in Tallahassee, Leon County, Florida. ELLA JANE P. DAVIS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of July, 1987. COPIES FURNISHED: James R. Mitchell, Esquire Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Shanker S. Agarwal c/o Super Realty, Inc. 6147 Washington Street Hollywood, Florida 33023 Harold Huff, Executive Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Honorable Van B. Poole Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Joseph A. Sole, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750
Findings Of Fact Respondent Shankar S. Agarwal is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0312860. The last license issued was as a broker. Respondent Super Realty, Inc., is now and was at all times material hereto a licensed real estate corporation in the State of Florida having been issued license number 0231630. The last license issued was as a broker located in Hollywood, Florida. At all times material hereto, Respondent Shankar S. Agarwal was licensed and operating as a qualifying broker and officer for Respondent Super Realty, Inc. Respondents advertised for sale by newspaper advertisement a VA repossessed property being a four unit apartment building in Fort Lauderdale, Florida. In April, 1985, Warren and Judith Fieldhouse responded to Respondents' ad, and Respondent Agarwal arranged to meet the Fieldhouses at the property. At the property, the Fieldhouses informed Respondents that they wished to purchase a property as an investment and required that any property purchased by them result in income to them as opposed to resulting in a loss for them. Respondent Agarwal specifically represented to the Fieldhouses that the rental character of the neighborhood had been assessed by the Respondents, that Respondents were qualified to appraise the rental character, and that each unit could be rented for $300 or more per month. Respondent Agarwal further represented that the rent for the property would therefore exceed its expenses. The Fieldhouses decided that they wished to purchase the property based upon Respondents' representations. Respondent Agarwal required the Fieldhouses to give him a check for $1,000 a while still at the property before he would return with them to the office of Super Realty, Inc., to draft a purchase contract. Respondent Agarwal and the Fieldhouses went to Super Realty, Inc., where a purchase contract was drafted by Respondent Agarwal and signed by the Fieldhouses. Respondent Agarwal refused to give to the Fieldhouses a copy of that contract. Respondent Agarwal further advised the Fieldhouses that they were to obtain the required liability insurance on the property from his insurance agency and that they were not to use their own insurance agency. The Fieldhouses refused to comply with Agarwal's direction to them. Changes were subsequently made by Respondents to the Fieldhouses' purchase contract. Although those changes were approved telephonically by the Fieldhouses, Respondents never obtained the Fieldhouses signatures approving the changes in the contract. A closing was scheduled by Respondents at the office of Super Realty, Inc., on May 22, 1985. The Fieldhouses inspected the property just before the closing and found that the property's "as is" condition on the day of closing was worse than its "as is" condition on the day that they first saw it and entered into the contract for the purchase and sale of the property. Appliances were missing, and damage was done to the structure. The Fieldhouses objected to the condition of the property on the date of closing. Yet, the closing began. Respondent Agarwal began handing the Fieldhouses individual documents to sign. When he handed them a required financial disclosure statement, the Fieldhouses realized that the mortgage plus insurance and taxes payments would exceed the rental income which Respondents had represented could be projected from the units, that the amount of payments and other representations initially made by the Respondents were not incorporated into the closing documents, and the rental income for the property would not exceed the property's monthly expenses. The Fieldhouses refused to continue with the closing. They demanded copies of the documents that they had signed, but Respondents refused to give them copies of those documents. They demanded a refund from Respondents of their $1,000 deposit, but Respondents refused to refund their money to them. Although the Fieldhouses had signed a note and mortgage on the property before they refused to continue forward with the closing, they gave Respondents no monies toward the purchase of the property to increase the $1,000 earnest money deposit to the required down payment for the property. Respondents knew that the Fieldhouses did not pay the required cash to close on the property, the additional consideration required under the contracts. After the closing, the Fieldhouses made additional demands on Respondent for the return of their $1,000. Respondents refused to return that money to them and further refused to discuss the matter with them further. Respondents submitted the Fieldhouse closing documents to the Veterans Administration claiming a sales commission due to the Respondents in the amount of $5,740, even though Respondents knew that the sales transaction had never closed. Since the Veterans Administration had experienced difficulties with Respondents' complying with their rules and regulations on previous occasions, the VA took the position that the Respondents were not entitled to a commission since no sale had taken place and that the Respondents should refund to the Fieldhouses their $1,000. Respondents sued the Veterans Administration for a sales commission. At the time that Respondents sued for a commission, they knew that they were entitled to no commission since there was no sale. When the Veterans Administration filed an Answer to Respondents' Complaint indicating that it intended to fully defend Respondents' false claim, Respondents voluntarily dismissed their litigation against the Veterans Administration. The VA now has possession of the Fieldhouses' $1,000 deposit which it intends to return to the Fieldhouses. Although Mr. Fieldhouse was a licensed real estate salesman during the time period material hereto, he had not actively worked as a real estate salesman. Therefore, the Fieldhouses relied upon the Respondents as licensees to responsively perform the sales transaction and further relied upon Respondents' representations regarding the property's income and expenses. Respondents never advised the Florida Real Estate Commission that demands had been made for the return of the $1,000 which Respondents held in escrow until such time as they voluntarily forwarded the money to the Veterans Administration despite the Fieldhouses' demands for its return to them.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED that a Final Order be entered dismissing Counts V and VI of the Administrative Complaint, finding Respondents guilty of the remaining allegations in the Administrative Complaint, and revoking Respondents' real estate broker licenses. DONE and RECOMMENDED this 21st day of April 1987, in Tallahassee, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of April, 1987. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Shankar S. Agarwal 6912 Stirling Road Hollywood, Florida 33024 Super Realty, Inc. c/o Shankar S. Agarwal 6912 Stirling Road Hollywood, Florida 33024 Van Poole, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Joseph A. Sole, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Harold Huff, Executive Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802
