Findings Of Fact At all times relevant hereto John Young was registered as a real estate salesman by the Florida Real Estate Commission. On October 2, 1985 Respondent and William Kelly, D.O. entered into a contract to jointly purchase a condominium from Concord Developers Inc. (Exhibit 1). The contract provided for a down payment of $2,000 with an additional earnest money deposit of $3690 to be paid on or before November 4, 1985. Respondent and Kelly each gave the seller a check for $1000 at the signing of the contract and this $2000 was deposited in escrow with the escrow agent. Kelly met Respondent through Respondent's wife who worked in Kelly's office. At the time Kelly was looking for income tax shelters and this purchase appeared to qualify for that purpose. On November 9, 1985, Kelly made out a check payable to John Young in the amount of $1845 which represented Kelly's half of the additional $3690 earnest money deposit. This check was either cashed by Young or deposited in Young's bank account (Exhibit 2). The additional earnest money deposit was not made to the seller, as required by the contract, Exhibit 1. Young notified Bayside Federal Savings and Loan Association, who was to finance the sale, that the loan application was withdrawn, the transaction was cancelled, and two checks in the amount of $1000 each were returned to the seller by the escrow agent (Exhibit 6). The customary practice of the seller in such a situation was to return the down payment to the buyer by check drawn on the seller's account. While no witness could recall this specific transaction, the usual practice would be to return the deposit to the buyer. In this case, the deposit would normally have been returned to Young. Young acknowledged that he received the return of his $1000 deposit but not the $1000 that represented Kelley's portion of the down payment. When Kelley gave Young the check for $1845 he inquired if it was necessary for him (Kelley) to attend the closing and Young advised him it was not. When Kelley subsequently learned that the transaction did not close, he demanded the return of his money. To date he has received none of the monies he deposited to purchase this property. Evidence was presented that in December 1985, Young closed on a condominium he and his wife had contracted to purchase in this same development, and subsequently moved into this unit. While this indicates Young had the opportunity to convert Kelley's contribution to the purchase of the condominium by Young and his wife, no credible evidence was presented that he did so. The evidence that was presented regarding this transaction was that Young was able to move into that unit with a total cash outlay of less than $500. Young accounted for the $1845 check from Kelley as payment of a bet between him and Kelley on one football game. In rebuttal Kelley testified that not only did he not bet with Young on any matter, but also he has never gambled on a football game in his life. Young's testimony that a $1845 bet was made on a football game is so unbelievable that it taints all of his testimony.
Recommendation That the Real Estate license of John Young be revoked. Entered this 2nd day of June, 1989, in Tallahassee, Florida. K. N. AYERS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of June, 1989. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Post Office Box 1900 Orlando, Florida 32801 Robert H. Dillinger, Esquire 5511 Central Avenue St. Petersburg, Florida 33701 Darlene F. Keller Division Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32802 Bruce D. Lamb General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0729
Findings Of Fact At all times relevant hereto, respondent, George Sherbon, was a licensed real estate broker having been issued broker's license number 0348688 by petitioner, Department of Professional Regulation, Division of Real Estate (Division). When the events herein occurred, respondent was employed as a salesman for V. P. Stone, Inc., a real estate firm located at 5905 Gulf Boulevard, St. Petersburg Beach, Florida. On April 1, 1987, Paul D. and Anna Martin entered into a listing agreement with Century 21 Spinning Wheel Ent., Inc. (Century 21) to sell their home at 2543 58th Terrace South, St. Petersburg, Florida. The listing agent was Cheryl Coudry, now known as Cheryl Hutton, a licensed salesperson with Century 21. On September 11, 1987 respondent solicited and obtained a contract for sale on the Martin property executed by Frank Dicenzo, a resident of Pittsburgh, Pennsylvania, who had a daughter living in the St. Petersburg area. Dicenzo had responded to an advertisement run by Sherbon in a Pittsburgh newspaper. After a week or so of negotiations, the parties eventually agreed to a sales price of $92,500, and the final contract was executed on September 20, 1987. The contract called for Dicenzo to make an initial $100 deposit when the contract was executed and an additional deposit of $19,900 by September 25, 1987, or a total deposit of $20,000. Dicenzo gave respondent the initial $100 which was deposited into the escrow account of V. P. Stone, Inc. The contract provided further that the sale would be contingent on Dicenzo obtaining a $72,500 first mortgage. Finally, in accordance with Dicenzo's request, the contract provided that Dicenzo could take occupancy of the premises four weeks after the loan was approved. It is noted that Dicenzo initially asked for occupancy by October 16, 1987. On September 18, Sherbon introduced Dicenzo to Tony Black, a loan officer at Savings of America, a local lending institution, for the purpose of Dicenzo making a loan application. On September 24, or the day before the additional deposit was due, Dicenzo became ill with what he described as a bleeding ulcer and decided to return to Pittsburgh and stay at his mother's home. Before he left, Dicenzo did not make the additional deposit as required by the contract. According to Dicenzo, he placed no great significance on the September 25 due date and felt that if the deposit was made "within a reasonable time," it would be okay. Respondent was aware of the September 25 deadline and attempted to get a check for the $19,900 deposit from Dicenzo's daughter but was unsuccessful. Respondent contends he kept trying to contact Dicenzo in Pittsburgh during the next five week period but was unable to reach him. Dicenzo acknowledged he knew that Sherbon was trying to contact him but still made no effort to talk to Sherbon. Instead, he simply told his daughter he would take care of the matter when he returned to Florida in late October. Whether this message was conveyed to Sherbon is not of record. Sherbon prepared contemporaneous notes concerning the transaction and used these to refresh his recollection at hearing. He pointed out that such notes were kept on all real estate transactions. According to his notes, he telephoned Coudry and Black on September 24 concerning Dicenzo's illness and the fact that he was having difficulty obtaining the additional deposit from Dicenzo. Although Black recalled talking with Sherbon, he denied that Sherbon told him that there was no deposit and said such information was a material item that would have prompted him to stop processing the application until the deposit could be verified. Likewise, Coudry, who could not recall many aspects of the transaction, did recall speaking with Sherbon but remembered Sherbon simply telling her that he was in the process of showing Dicenzo various commercial properties and would be obtaining the deposit at that time. Their testimony is deemed to be more credible and persuasive and is hereby accepted. Coudry assumed that Sherbon had received the additional deposit since she was never specifically told otherwise by Sherbon. Accordingly, she did not contact the Martins until several weeks after the September 25 due date. Coudry did not learn that no deposit had been collected until mid-January 1988 when Anna Martin disclosed to her this fact. In the meantime, although the Martins knew the contract was contingent on Dicenzo obtaining a loan, they nonetheless assumed that Dicenzo would have no problem securing a loan and that such a loan would be approved in a week or so. Also, they knew the contract called for possession of the property by Dicenzo four weeks after the loan was approved. Because of these assumptions, and having received no advice from Coudry that the full deposit had not been made on September 25 as required by the contract, the Martins made application around September 28 to buy another home in a nearby modular home park and asked that the application be expedited. Unfortunately for the Martins, they were far more successful than Dicenzo in securing prompt approval of their loan application. Once approved, and after a closing was held, the Martins had the utilities hooked up, erected a storage shed, and incurred other expenses. Also, they began making mortgage payments on the second house. On October 24, 1987 the Martins telephoned Sherbon and told him their listing with Century 21 had expired. During the conversation, Sherbon did not mention that Dicenzo had failed to make the $19,900 deposit. Dicenzo's application with Savings of America was denied on October 30, 1987 because of Dicenzo's "ratio of ... expenses to ... total income." By this time, Dicenzo had returned to Florida and had spoken with Sherbon. At respondent's urging, Dicenzo reapplied to the same institution and was turned down a second time on November 12, 1987. In addition, at Coudry's suggestion, Dicenzo had already visited another lender in October but refused to pay a $250 application fee and consequently did not file an application. Also, through Sherbon, Dicenzo was given the name of a mortgage lender suggested by the Martins but, after three visits, decided not file an application. Information regarding the second Savings of America denial was conveyed to Coudry around mid-November but, for whatever reason, she did not contact Sherbon regarding the status of the contract. It is noteworthy that at that time Sherbon did not tell Coudry that Dicenzo had still failed to make an additional deposit as required by the contract. Despite the loan application denials, Sherbon encouraged Dicenzo to keep trying to arrange financing so that the deal could go through. Dicenzo agreed to do so but, as noted in the following finding of fact, at that point Dicenzo considered the contract to be "null and void." Sherbon's efforts to find financing continued until mid-January 1988. When the loan application was denied on November 12, Dicenzo construed the contract to be void since the financing contingency was not met. According to Dicenzo, he did not believe the property was tied up while his contract was pending, felt no obligation to make the $19,900 deposit because it meant he would have to transfer funds from a money market account he purportedly maintained in Pittsburgh, and felt no moral obligation to the Martins even though by then they had committed themselves to a second home. The Martins were advised by telephone on the evening of November 12 of the second turn down of Dicenzo's loan application. By then, however, they were already committed to the second purchase. They claimed they did not learn of Dicenzo's failure to make the $19,900 deposit until mid-January 1988 when Sherbon visited their home and disclosed this fact. This is also borne out by a letter from the Martins' attorney to Dicenzo on December 1, 1987 advising Dicenzo that the contract was void and a claim might be made on his deposit for damages. When the Martins learned that only $100 had been deposited, they filed a complaint with the Division. That prompted this proceeding. Because of the failed contract, the Martins were unable to maintain two mortgage payments and were ultimately forced to give up the second home at a substantial monetary loss. They have since returned to their first home. The evidence shows that in the real estate trade, it is not customary or proper for the buyer's realtor to personally contact the seller. Rather, the practice and custom is for the buyer's agent to advise the listing broker of all pertinent developments and the listing broker then relays any necessary information to the seller. Thus, Sherbon had no responsibility to personally advise the Martins of any information pertaining to the contract. Rather, this responsibility rested with Coudry. Respondent contended he kept Coudry abreast of all developments concerning Dicenzo and that he assumed Coudry would advise the Martins that no deposit had yet been collected. To the extent this version of events conflicts with previous findings, it is not accepted. Sherbon expressed sympathy for the Martins' plight but maintained he was not at fault. There is no evidence that Sherbon has been subjected to prior disciplinary action by the Division.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty of violating Subsection 475.25(1)(b), Florida Statutes (1987) to the extent noted in the conclusions of law and that his broker's license be suspended for three months. All other charges should be dismissed. DONE and RECOMMENDED this 26th day of April, 1989, in Tallahassee, Florida. DONALD R. ALEXANDER 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 26th day of April, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-4688 Petitioner: 1-2. Covered in finding of fact l. Rejected as being unnecessary. Covered in finding of fact 2. 5-7. Covered in finding of fact 3. Covered in finding of fact 5. Covered in finding of fact 10. Covered in finding of fact 7. Rejected since respondent owed a duty to Coudry, and not the Martins, to keep her abreast of all pertinent matters. Covered in findings of fact 7 and 12. Covered in findings of fact 7 and 8. Covered in finding of fact 8. Covered in findings of fact 6 and 10. Rejected as being subordinate to other findings. Covered in finding of fact 11. 18-19. Covered in finding of fact 6. Respondent: Respondent's proposed order contains sections entitled "admitted facts", "unrebutted facts" and "uncontested facts". They are ruled upon in that order. Admitted facts: Covered in finding of fact l. Covered in finding of fact 3. Covered in finding of fact 2. Covered in finding of fact 3. Covered in finding of fact 3. Covered in background. Unrebutted facts: Covered in finding of fact 7. Covered in finding of fact 15. Covered in finding of fact 10. 4-6. Covered in finding of fact 6. 7-8. Covered in finding of fact 5. Covered in finding of fact 11. Covered in finding of fact 12. Rejected since Sherbon learned of the loan denial even though he did not receive a written copy of the turn-down letter. Covered in finding of fact 13. Covered in finding of fact 8. Rejected since the testimony of Anna Martin is accepted as being more credible on this factual issue. Uncontested facts: Rejected as being cumulative. Partially covered in findings of fact 6, 7 and 16. The remainder is rejected as being cumulative, argument of counsel or not supported by the more credible evidence. COPIES FURNISHED: James H. Gillis, Esquire Post Office Box 1900 Orlando, Florida 32802 Daniel B. Schuh, Esquire 248 Mirror Drive St. Petersburg, Florida 33701 Darlene Keller, Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Kenneth E. Easley, Esquire 130 North Monroe Street Tallahassee, Florida 32399-0750 =================================================================
The Issue Whether the Defendants, Leon Zwick and Elias Zwick together with a broker, Roberto E. Mitrani, received $10,000 earnest money deposit for a sale of Lot 12, Block 120, Lenox Manor Subdivision, Plat Book 7, page 15, Dade County, Florida, and thereafter released $9,000 of said deposit to the seller, retaining $1,000 for personal use in violation of Chapter 475, Florida Statutes; whether said money was disbursed without proper authority; whether the co-broker, Robert E. Mitrani, was not notified of the return of $9,000 deposit money or the retention of $1,000 of the deposit money. Whether Defendants failed to maintain in an escrow account all moneys prior to the culmination of the subject transaction. Whether the licenses of one or both of the Defendants should be revoked.
Findings Of Fact The Defendant, Leon Zwick, and the Defendant, Elias Zwick, are registered real estate broker and real estate salesman, respectively. The Defendants in cooperation with a broker, Roberto E. Mitrani, negotiated a contract dated September 1, 1972, as broker and salesman, respectively, for the sale of Lot 12, Block 120, Lenox Manor Subdivision, Plat Book 7, page 15, as recorded in the public records of Dade County, Florida, known as Jeffrey Apartments to Marco T. Gonzalez or assigns, as the purchaser, by E. M. Bornfriend, Sara Bornfriend and Pauline Bornfriend, as sellers. The Defendants received total earnest money deposit in the amount of $10,000, but the contract time expired and the sale was not consummated. On or about October 18, 1972, the Defendant, Leon Zwick, did pay over and release $9,000 of the $10,000 earnest money deposit to Mariana De Gonzalez, as attorney in fact for Marco T. Gonzalez, and both Leon Zwick and Elias Zwick executed a mutual release for the entire $10,000 earnest money deposit. The release stated and the Defendants admitted that $1,000 was retained by the Defendants for their personal use, said release being executed without the knowledge or consent of the sellers. Mariana De Gonzalez, was represented by an attorney, Melvin J. Richard, and the sellers were represented by an attorney, Howard N. Galbut. A letter dated October 12, 1972, complaining of the transaction with the Defendants, written by Melvin J. Richard to the Florida Real Estate Commission, was delivered to the Real Estate Commission but had not been answered and a letter of October 19, 1972 was then written in which it was stated that the matter had been settled and the complaint was withdrawn. The Plaintiffs filed an Information against the Defendants on April 25, 1975. The Hearing Officer further finds; That the Defendant broker Zwick and the Defendant salesman Zwick violated the terms of the subject contract by failing to return the money on deposit at the expiration of the time designated in the contract; That the retained $1,000 was used to pay the attorney for the Defendants, Martin Limlich, upon whose advice they relied when they retained $1,000 of the $10,000 deposit they should have returned forthwith in full to the purchasers; That the Defendants are guilty of failure to maintain a proper escrow account by not keeping the $10,000 deposit in escrow as required by Chapter 475, Florida Statutes; That the testimony of the co-broker, Roberto E. Mitrani, is inconclusive; and That Defendant Leon Zwick has previously been found guilty by the Florida Real Estate Commission of conduct warranting revocation.
Findings Of Fact The parties stipulated to facts set forth in paragraphs 1-8, below. Stipulated Facts The Petitioner is the Division of Real Estate of the Department of Professional Regulation. As such, Petitioner acts as the licensing and regulatory agency for real estate broker licensees. The Respondent is Harriet M. Arndt, holder, at all times pertinent to these proceedings, of license number 0002216 issued by Petitioner. Her address of record is One South Ocean Boulevard, Suite 322, Boca Raton, Florida 33431. On January 28, 1987, Respondent received in trust an earnest money deposit in the amount of $39,000 from a buyer for a piece of property listed with another realtor, Merrill Lynch Realty, Inc. At closing of the sales transaction on February 25, 1987, Respondent delivered a check drawn on her trust account in the amount of $15,600 and made payable to Merrill Lynch Realty, Inc. This payment represented payment of one half of the $31,200 real estate brokerage commission. The check was subsequently returned to Merrill Lynch Realty, Inc. due to "non-sufficient funds." On March 27, 1987, Respondent delivered a cashier's check in the amount of $15,600 to Merrill Lynch Realty, Inc., to replace the February 25, 1987, check. The Respondent's real estate brokerage trust account was overdrawn from January 8, 1987 through March 4, 1987, by amounts ranging from $12,991.39 to $14,306.53 on various days during that period. The Respondent failed to maintain the $39,500 earnest money deposit in her trust account from February 2, 1987 until February 25, 1987, because the trust account's daily balance was less than that amount during that period. The Respondent subsequently failed to maintain the $15,660 due to Merrill Lynch Realty Inc., in the trust account from February 25, 1987, through March 25, 1987, because the trust account's daily balance was less than $15,600. From March 19, 1987, through October 29, 1987, Petitioner's investigator requested Respondent to produce for inspection and copying those books and papers relating to Respondent's trust account which are maintained in connection with Respondent's real estate activities. The Respondent failed to make the requested trust account books and records available at any time. Other Facts The Respondent offered mitigating testimony establishing that she was initially licensed in 1978 and has never been censured by Petitioner for any professional violations. She is 57 years of age and her real estate license is her sole source of support. Further, Respondent has borrowed money from her children to make up the deficit in her trust account. The testimony of Respondent also established that she was introduced to a gentleman named Robert H. Lajoie by another realtor in December of 1986. Subsequently, on or about December 8, 1986, Respondent entered into a nefarious arrangement with Lajoie. Under terms of the arrangement, Lajoie gave Respondent a check for $25,500 as a deposit to purchase a property listed with Respondent. In turn, Respondent gave Lajoie back a cash deposit of $10,000 from her trust fund in connection with a contract between the two of them whereby Respondent was to purchase a property of Lajoie's. The closing of the sale of Lajoie's property to Respondent would not take place until May, 1987. Lajoie returned to his native Canada shortly after receiving the $10,000 cash payment from Respondent and died. Shortly thereafter, payment on Lajoie's $25,500 check to Respondent was stopped. The Respondent is not sure whether this action was taken by Lajoie prior to his death or by his estate subsequent to that event. It is Respondent's contention that the loss of the $10,000 cash deposit to Lajoie resulted in a negative net balance in her trust account and eventually all of her financial difficulties in this case. The Respondent was sent an overdraft notice by her bank on January 8, 1987, stating that her trust account was overdrawn by $13,500 and that a check for $25,500 had been returned. Subsequent overdraft notices dated January 13, 1987 and January 21, 1987, were received by Respondent noting the rejection of two of Respondent's checks; one in the amount of $294.90 and the other in the amount of $34.35. The notice of January 13, 1987, indicated a hold on the account in the amount of $2,862.94 against the account's balance of $3,006.19. The January 21, 1987, notice continued this hold on the account's balance of $2,891.45. The Respondent related a series of personal matters at hearing that had prevented her from keeping appointments with Petitioner's investigators to inspect her records. She agreed to make access to those records immediately available.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered finding Respondent guilty of the offenses charged in the administrative complaint, imposing an administrative fine of $1,000 and suspending her license for a period of six months. DONE AND RECOMMENDED this 22nd day of July, 1988, in Tallahassee, Leon County, Florida. DON W. 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 22nd day of July, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-1472 The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings 1-2. Included in finding 1. 3-8. Included in findings 3-8 respectively. Respondent's Proposed Findings 1. Included in finding 2. 2-5. Included finding 10. Included in finding 3. Included in finding 4, 5, and 10. Included in finding 8 and 12. 9-10. Rejected. 11. Included in finding 9. COPIES FURNISHED: Steve W. Johnson, Esquire Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802 Robert E. Gordon, Esquire 2601 Tenth Avenue North Suite 314 Lake Worth, Florida 33461-3197 William O'Neil, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Darlene F. Keller, Acting Director Department of Professional Regulation Division of Real Estate 130 North Monroe Street Tallahassee, Florida 32399-0750
Findings Of Fact Kenneth M. Olson, Jr., is a registered real estate broker with the FREC and Active Firm Member of Olson and Associates Real Estate, Inc., a corporate broker registered with the FREC. A copy of the Administrative Complaint was forwarded to the last address of Defendants registered with the FREC by certified mail numbers 4747 and 4748 and the notice of hearing was forwarded to the same address by certified mail numbers 4613 and 4614. Accordingly the Hearing Officer had jurisdiction over the Defendants and the offenses. By contract dated September 17, 1975 (Exhibit 6) Joseph J. Pillucere contracted to purchase real property from Paul L. Nave. The contract provided, inter alia, for a $500 earnest money deposit, $9500 down payment at closing with purchaser to assume existing first mortgage of approximately $28,000; and the seller taking back a purchase money second mortgage in the amount of $17,000. Thereafter, at the time scheduled for closing, the purchaser failed to produce the additional down payment required, execute the second mortgage and assume the existing first mortgage. After receiving conflicting demands from buyer and seller for the return of the earnest money deposit Defendant requested an advisory opinion from the FREC in accordance with Section 475.25(1)(c) FS. On May 13, 1976 an advisory opinion (Exhibit 5) was given by FREC to the Defendant, with copies to both parties to the contract, advising Defendant that the earnest money deposit should-be disbursed to the seller. The deposit has been disbursed to neither party to the contract.
The Issue Whether Respondent failed to deliver a deposit to the person entitled to said delivery in violation of Section 475.25(1)(c), Florida Statutes. Respondent appeared at the hearing without legal counsel and was advised of his rights to same at his own expense. He elected to represent himself at the hearing. He was further advised as to his rights under the Administrative Procedure Act including the right to testify on his own behalf if he so desired. He indicated his understanding of his rights. It was stipulated by the parties that Joseph Sopotnick, Joseph Sopotnick, Jr., and Joe Sopotnick are one and the same person.
Findings Of Fact At all pertinent times under consideration in these proceedings, Respondent was a registered real estate broker (Stipulation of parties, Exhibit 2) In March 1974, Alvin K. Whittington of Marietta, Georgia, upon the recommendation of his job supervisor, who had dealt with Respondent in the past, called the Respondent on the telephone concerning the possibility of purchasing land in Florida. Although the Respondent indicated that he had none available at that time, he called Whittington later on in the day and told him that he had certain property which was for sale and inquired as to when he could come down to Florida to look it over. Whittington informed him that he did not know when he would be able to visit Florida and Respondent advised him to send a deposit in order to hold the land since there was a contractor interested in the same property. Whittington told him that he did not like the idea of placing a deposit on property that he had not seen and inquired as to whether or not he could secure a return of the deposit if, after he had seen the land he did not wish to purchase it. Respondent told him "That's no problem. You can get your deposit back". He advised him to send the deposit and that he would hold it until he came to Florida. Accordingly, Whittington sent a check for $360.00, dated March 20, 1974, to the Respondent which indicated on its face that it was a "deposit on Fla. shore lots - N.W. corner Needle Palm & 18th". The check was signed by Mrs. Whittington on a joint account with her husband. The sum of $360.00 represented 10 percent of a purchase price of $3600.00. After talking to Whittington, Respondent on March 20 wrote to the owners of the property, advised that a deposit check would be forthcoming and enclosed a standard sales contract for the sellers to execute and return to him. This was accomplished and Respondent then forwarded the contract to the Whittingtons for execution and return which they received on April 1st. Mr. Whittington thereupon called the Respondent and told him that he could not sign the contract without seeing the property. On April 12th, he and his wife went to Florida, met with the Respondent, looked over the lots in question, and informed the Respondent that he would call him the following Monday as to whether or not he wished to make the purchase. On April 15th, Whittington called the Respondent, informed him that he did not wish to purchase the property and requested return of his deposit. Respondent informed him he could not return it and that disposition of the deposit would be a matter to be determined by the seller. Thereafter, on April 19th, Respondent wrote to the Whittingtons informing them that after careful consideration, he intended to treat the matter as a forfeiture of deposit situation, and unless he heard from them to the contrary he would disburse the deposit to the seller under the terms of the contract. However, he stated in the letter that he would apply the full deposit to any purchase that the Whittingtons might thereafter wish to make. After receipt of this letter, Whittington again called the Respondent concerning the situation at which time Respondent informed him that he would try to get 1/3 of the deposit returned if Whittington would send him a letter indicating that he would accept such an amount. Nothing further was heard from the Respondent and the deposit was never refunded (Testimony of Mr. & Mrs. Whittington, Composite Exhibit 1, Exhibits 3, 4). On or about July 2, 1974, Respondent remitted 1/2 of the deposit to sellers and retained 1/2 for himself (Stipulation of parties) Respondent testified that Whittington had insisted he accept the deposit and send the contract to the seller to insure that he would be able to purchase the property, and that the proposed deal was not contingent upon the buyer's satisfaction with the property. He denied telling Whittington he could get his deposit back. He also testified that after the Whittingtons viewed the property in Florida, he asked Whittington about the contract and the latter said that he had not brought it with him but would send it within a few days. That when he thereafter called upon his return to Georgia, he informed Respondent that he did not wish to make the purchase because his wife was about to have a baby. Respondent contended at the hearing that he was never sure that Whittington wanted his deposit back, however, conceded that Composite Exhibit 1f was his letter to the sellers advising that the Whittingtons had requested the return of the deposit. Respondent asserted that it was his impression that if a deposit had been made in good faith, it was proper to consider that there was a binding contract even though the depositor had not signed a sales contract. He further indicated that if he was wrong in this respect he would return the deposit. At no time did the Respondent ever discuss the transaction with the sellers. He was unaware of the provisions of Section 475.25(1)(c), by which a registrant may seek advice from the real estate commission if he entertains, in good faith, doubt concerning his duty to account and deliver a deposit. Respondent has been in the real estate business for twelve years (Testimony of Respondent, Composite Exhibit 1f).
Recommendation That Respondent's registration as a real estate broker be suspended for a period of 60 days. That the period of suspension in excess of 30 days be vacated if the Respondent returns the $350.00 deposit to Mr. & Mrs. Alvin K. Whittington prior to the expiration of the aforesaid period of 30 days from the original date of suspension. DONE and ENTERED this 20th day of February, 1976, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675
The Issue The issue in this case is whether the Florida Real Estate Commission should discipline Respondent, Michael J. James (James), for the reasons set forth in the Administrative Complaint filed against him by Petitioner, Department of Professional Regulation, Division of Real Estate (Department). Count I of the Administrative Complaint alleges that James is guilty of fraud, misrepresentation, concealment, false promises, false pretense, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction in violation of Section 475.25(1)(b), Florida Statutes (1983), in connection with his handling of an escrowed real estate purchase deposit. Count II of the Administrative Complaint alleges that James failed to account and deliver the $5,000 deposit to the rightful owners in violation of Section 475.25(1)(d), Florida Statutes (1983). Finally, Count III of the Administrative Complaint alleges that James, while licensed as a salesman, operated as a broker or as a salesman for someone not registered as his employing broker in violation of Sections 475.42(1)(b) and 475.25(1)(a), Florida Statutes (1983).
Findings Of Fact Respondent, Michael J. James (James), has been at all relevant times a licensed real estate salesman having been issued license number 0361739. On or about November 6, 1983, James solicited and obtained two $2,500 earnest money deposits from Skarian M. Kakkanatt and K. Thomas Idiculla, as purchasers, who entered into two different sales contract offers to purchase two separate motel properties, one in Kissimmee and the other in Osceola County. The total deposits of $5,000 were placed in the escrow account of International Marketing and Manufacturing Services, Inc. (International), by its registered broker, Harold C. Jacobsen, who was also James' registered employing broker. On or about November 14, 1983, being dissatisfied with the inspection of the financial records of the two motel operations, the purchasers, sent a telegram to International and all interested parties providing notice that the two sales contract offers were cancelled under the terms of the contracts and that all monies deposited by the purchasers should be refunded. On December 8, 1983, the purchasers reiterated their demand for a refund of all deposits by letter to James. Between November 1983 and April 1984, Jacobsen became increasingly seriously ill. To a greater and greater extent, James assumed Jacobsen's responsibilities to International under the increasingly general supervision of Jacobsen. Jacobsen and James agreed that International was entitled to the deposit under the contracts as brokerage commission, rationalizing that the purchasers were not entitled to cancel the contracts because their two checks in the amount of $22,500 each for additional deposits were returned unpaid because of insufficient funds. Jacobsen and James therefore agreed to disburse the $5,000 from escrow and did so over the course of time through January 1984. The contracts negotiated by James on behalf of International for the purchase of the two motel properties clearly entitled the purchasers to inspect the financial records of the two motel operations and to cancel the contracts on or before November 15, 1983. Payment of the deposits was not a condition precedent to their entitlement to cancel. Having exercised their option to cancel, the purchasers were no longer obligated to make any deposits. The contracts having been cancelled, no brokerage commission was due to International. While Jacobsen was James' employing broker, both c James and Jacobsen worked for International. International, in turn, was wholly owned by American Paper Company, which was wholly owned by James. Under Jacobsen's employment contract with International, Jacobsen was entitled to only 2% of any broker's commission earned by James. The balance of such broker's commissions would go to International or, in effect, to James. James, therefore, had a greater pecuniary interest in the $5,000 deposit than Jacobsen. Between November 1983 and April 1984, James hoped the purchasers would not vigorously assert their rights to the $5,000 deposit. The purchasers resided in New York, and assertion of their rights was not easy. James obtained from the selling broker a waiver of any interest of the seller or the selling broker to the deposit. By April 1984, it became evident to James that the purchasers were indeed going to assert their rights to the deposit. Concerned that the escrowed deposit already had been disbursed, James decided to redeposit $5,000 in escrow, using a $5,000 broker's commission he had earned on behalf of International on another sale. By this time, Jacobsen was only coming into the office approximately once a week to sign checks and look over sales contracts and bank records. By this time, James was handling the matter of the deposit on his own, with Jacobsen's consent and trust. On May 8, 1984, James notified the Department of Professional Regulation that a dispute had arisen with the purchasers concerning the $5,000 deposit but that James would be filing an interpleader action on behalf of International according to the instructions of Jacobsen. On or about May 14, 1984, James filed against the purchasers a complaint for interpleader in the Osceola County Circuit Court on behalf of International seeking half of the $5,000 deposit. James signed the complaint and used a signature stamp to ascribe Jacobsen's signature as broker for International. Jacobsen had authorized James to use the signature stamp in his absence because of his illness. James had the $5,000 deposit transferred into the depository of the Circuit Court in and for Osceola County, Florida, when the complaint was filed. On June 11, 1984, Jacobsen died. On June 23, 1984, James filed a voluntary dismissal of the interpleader action, in part because of Jacobsen's death. The clerk of the court returned the $5,000 deposit to International on June 22, 1984. On June 25, 1984, James reopened International's escrow account at the Community National Bank in Kissimmee by depositing the 55,000 in that account. On or about July 11, 1984, James requested an escrow disbursement order from the Department of Professional Regulation regarding the disposition of the $5,000. Between June 25 and July 27, 1984, the Community National Bank deducted amounts from the escrow account to reimburse the bank for overdrafts on James' personal checking account. James complained about this, and some of the amounts were reinstated in the escrow account. However, the bank requested that James remove all accounts. On July 27, 1984, James withdrew the balance of the account and redeposited the $4,809.48 balance in International's real estate escrow account with the Barnett Bank of Kissimmee on or about August 31, 1984. However, James soon began writing checks on the account, and by September 10, 1984, the balance was down to $2,775. On September 10, 1984, James reiterated his request to the Department for an escrow disbursement order and indicated that he was scheduled to meet with one of the purchasers to resolve the deposit dispute. On September 12, 1984, the Florida Real Estate Commission advised James that it would not be issuing an escrow disbursement order. On September 24, 1984, the Department's investigator, Charles E. Kimmig, Sr., wrote James to inquire whether a settlement had been reached with the purchasers. Respondent did not reply to Kimmig's letter. By October 3, 1984, James had spent all but $298.11 of the escrow account. James never has returned to the purchasers any of the $5,000 deposit to which they are entitled.
Recommendation Based upon the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Florida Real Estate Commission hold Respondent, Michael J. James, guilty of Counts I and II of the Administrative Complaint in this case and revoke his real estate salesman's license, to be automatically reinstated after a one year suspension if James makes restitution to Skarian M. Kakkanatt and K. Thomas Idiculla within one year in the amount of $5,000 plus simple interest at the rate of 12% per year from November 14, 1983. RECOMMENDED this 18th day of April, 1986, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of April, 1986. COPIES FURNISHED: Arthur R. Shell, Esq. Department of Professional Regulation 400 W. Robinson Street Orlando, Florida 32801 Michael J. James P. O. Box 3801 Longwood, Florida 32750 Harold Huff, Executive Director Division of Real Estate Department of Professional Regulation 400 W. Robinson Street Orlando, Florida 32801 Salvatore A. Carpino, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact At all times relevant hereto, Respondent John V. Nink, Jr., was registered as a real estate broker (Exhibit 1). Exhibit 1 contains no license record for Respondents Leslie M. Nink and Greater Bay Realty, Inc. In Contract for Sale and Purchase executed April 22, 1985 (Exhibit 2), Sprinkle and Anders (sellers) agreed to sell a tract of land to Tampa Technology, Inc. (TTI) for $270,000 with $7500 down payment held by Greater Bay Realty and the contract was witnessed by John V. Nink. This contract was subject to six conditions shown on "Addendum A" to the contract, the only significant one being condition 6 which provides the contract is subject to buyer receiving approval for change in zoning to allow the construction of 56 units on the site. TTI is owned by Donald P. Fisher and John M. Cherry who have been partners in numerous real estate developments in the Hillsborough County area for more than 10 years. Fisher holds a license as a real estate broker and signed Exhibit 2 as President of TTI. Both of these complaining witnesses have been involved in the purchase and development of numerous tracts of land and are fully aware of the obligations of real estate contracts. Although denied by Fisher, Respondent provided Fisher with a copy of the deed admitted into evidence as Exhibit 6. Respondent had obtained an option to purchase this tract of land but was unable to finance the property on his own. To assist in the financing, he entered into an agreement with Sprinkle and Anders whereby they would provide financing and receive 75 percent interest in the property. Under the terms of this agreement, the property was deeded to Nink and simultaneously a deed from Nink to Sprinkle, Anders and Nink was executed. This is the deed admitted into evidence as Exhibit 6 and which was provided to Fisher when Exhibit 2 was executed. When TTI applied to the county for rezoning they learned only 52 units would be approved for building on the site to be purchased in Exhibit 2. At this time the contract was voidable by the buyer but they did not desire to void the contract. Instead, they proceeded with the rezoning and attempted to raise the acquisition and development financing needed to consummate the purchase and commence construction. Some six months after first approaching the zoning authorities, TTI was successful in getting this property rezoned to authorize construction of 52 dwellings on this property. TTI's owners requested the contract remain in effect to give them additional time to locate financing. By these acts, TTI waived the contract provision that the property be rezoned to authorize construction of 56 dwellings. The principals in TTI have had numerous business relations with Leslie Nink over the past 10 years. They were aware that the Ninks were minority owners of the property for which TTI contracted to purchase and they continued to pursue the acquisition of this property until in early 1987 they concluded that they were unable to raise the necessary financing. On February 19, 1987, TTI sent a letter to John Nink requesting refund of the $7500 escrow deposit, and on March 10, 1987, a similar letter was sent to Leslie Nink (Exhibit 5). Upon receipt of Exhibit 5, John Nink contacted the Florida Real Estate Commission to request adjudication of the escrow deposit of $7500 to determine if the seller or buyer was entitled to the deposit.
The Issue The issues for determination in this proceeding are whether Respondent violated Sections 475.25(1)(b), (d), and (e), Florida Statutes, 1/ through culpable negligence or breach of trust in a business transaction; by failing to account or deliver trust funds; and by failing to timely notify the Florida Real Estate Commission of a deposit dispute or to implement remedial action; and, if so, what, if any, penalty should be imposed.
Findings Of Fact Petitioner is the governmental agency responsible for issuing licenses to practice real estate and for regulating licensees on behalf of the state. Respondent is a licensed real estate broker under license number 0037920. The last license issued to Respondent was issued as a broker at Heath Realty, 4864 S. Orange Avenue, Orlando, Florida. On May 18, 1993, Mr. Anthony Rodgers and Ms. Jill Rodgers (the "buyers") entered into a contract to purchase real property from Ms. Norma A. Cash (the "seller"). The buyers entrusted Respondent with a total earnest money deposit of $1,000. The transaction failed to close. On July 8, 1993, Respondent timely notified Petitioner in writing that there were conflicting demands for the earnest money deposit and a good faith doubt regarding the deposit. However, Respondent failed to institute one of the settlement procedures described in Section 475.25(1)(d)1. until legal proceedings between the buyer and seller were amicably settled approximately seven months later. Respondent failed to institute a prescribed settlement procedure in a timely manner even though Petitioner advised Respondent in letters dated July 26, 1993, and September 9, 1993, of the action Respondent should take. On February 9, 1994, Respondent finally requested an escrow disbursement order in accordance with Section 475.25(10(d)1. The escrow deposit was paid to the seller pursuant to the agreement of the parties.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent not guilty of violating Sections 475.25(1)(b), 475.25(1)(d)1., but guilty of violating Section 475.42(1)(e) and Florida Administrative Code Rule 61J2-10.032. It is further recommended that the Final Order place Respondent on probation for a period of one year and, during the period of probation, require Respondent to complete courses in broker management not to exceed eight credit hours. RECOMMENDED this 8th day of February, 1995, in Tallahassee, Florida. DANIEL S. MANRY 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 8th day of February 1995.
Findings Of Fact At all times relevant hereto, Respondent, Rodney G. Green, held real estate broker license number 0113068 issued by Petitioner, Department of Professional Regulation, Division of Real Estate (Division). Respondent, Charter Realty, Inc. (Charter), is a corporation licensed as a broker and is the holder of license number 0224926 also issued by Petitioner. When the events herein occurred, Green was the sole qualifying broker and officer of Charter Realty, Inc. The offices of Charter are located at 800 Westwood Square, Suite C, Oviedo, Florida. Respondent Green is also the owner of Rodney G. Green, Inc., a building and development company. Its office is located in the same building as Charter, where they share a common reception area. Each entity has a separate telephone number. Around June, 1984, Rodney Green was attempting to sell seven commercial lots known as Green's Commercial Addition to Oviedo located in Oviedo, Florida. Green was the owner of the seven lots. He had a large For Sale sign on the property which carried the name and telephone number of both Charter and Rodney G. Green, Inc. Green had an understanding with associates in his real estate office that if a prospective buyer called on the Charter telephone line concerning the lots, he would give a sales commission to the associate who answered the call if a sale materialized. Otherwise, he intended to sell the lots through his development company and not through the real estate firm. Hassan Soltani, an electrical engineer, wished to buy a commercially zoned lot in Oviedo on which to construct a building for his newly formed corporation, Bio-Med Engineering, Inc. After seeing Green's property, he telephoned the offices of Charter Realty, Inc. Green's wife answered the call, advised him that Green personally owned the property, that Charter was not involved in the transaction, and that it would be sold by Rodney G. Green, Inc. rather than Charter. She referred him to Green who reiterated this same advice to Soltani. On or about June 21, 1985, Soltani executed a contract to purchase Lot 7 of Green's Commercial Addition. The contract provided for a $35,000 sales price, a $1,750 deposit, and a closing date of July 27, 1984. When he executed the contract, Soltani advised Green that the lot would be purchased by a partnership made up of Soltani, Claire M. Marachel and John T. Tobin, Jr., the latter two employees at Soltani's firm. Soltani also told Green that the partnership had $20,000 cash counting the $1,750 deposit, and would obtain the remaining $15,000 prior to closing by selling a $20,000 stock certificate held by Marachel. Based on this representation, Green did not provide any contingency clauses in the contract for borrower financing. The only contingency clause was one requiring Green to "fill Northeast corner of lot to within one foot of existing grade." It is noted that Green accepted the Soltani offer over that of another buyer because no financing would be required on the Soltani contract. About a week before closing, Soltani telephoned Green to inquire when the lot would be filled. Green thereafter had the lot filled in accordance with the contract. On July 27, the date of closing, Soltani advised Green that Marachel had had difficulty in getting the stock certificate transferred to her from the stock broker, and they needed an extension of time to close on the contract. Green did not wish to extend the closing date because he had a closing on other property across the street and needed cash immediately. Soltani offered to increase the cash deposit to $20,000 which could be used by Green to close on the other property in return for an extension of the closing date to August 15, 1984. Soltani also agreed to seek bank financing from a local bank recommended by Green. Green accepted these terms and all parties executed an amendment to the contract extending the closing date to August 15, 1984. Soltani also gave Green an additional $18,250 as deposit on the land. The deposit was placed in the bank account of Rodney G. Green, Inc. and was temporarily used by Green to close on the other property. There was still no contingency clause in the contract for buyers' financing. In early August, Green made Soltani and his partners an appointment with a loan officer at a local bank. The loan officer agreed to loan Soltani $15,000 conditioned upon all three partners filing financial statements and a partnership agreement, and Marachel liquidating her stock and purchasing a $20,000 certificate of deposit at Barnett. When the August 15 deadline was not met, Green orally agreed to another extension of time on the closing date since Soltani continued to express an interest in purchasing the property. Around the first September, Soltani told Green he was not going to furnish the bank with the requested documents and asked if Green would provide owner financing on the $15,000 balance. Green responded he could not. At a later date, Soltani called Green's office twice requesting to talk to Green and to obtain a refund of his deposit. Green's wife answered both times and told Soltani he would have to speak to Green. Green attempted to return the calls but was unsuccessful in reaching Soltani. Soltani then sent Green a letter on October 4, 1984 demanding a return of his deposit no later than October 11, 1984. He also filed a complaint with Petitioner on or about October 18, 1984. Before Green could respond to the letter, an investigator from Petitioner's office visited Green for the purpose of auditing his escrow account. The investigator found that the $20,000 deposit was not in Charter's escrow account and advised Green to place it in the account at once. Green did so on October 23, 1984, and two days later refunded the entire deposit to Soltani, Marachel and Tobin. He did so to avoid "problems" with Petitioner, but considered Soltani to have breached the contract by failing to close on the specified closing date. The instant disciplinary action was instituted a few months later.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the administrative complaint herein be DISMISSED, with prejudice. DONE and ORDERED this 3rd day of July, 1985, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, FL 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of July, 1985. COPIES FURNISHED: Arthur R. Shell, Jr., Esq. P. O. Box 1900 Orlando, FL 32802 Margaret A. Wharton, Esq. P. O. Box 1172 Oviedo, FL 32765
