Findings Of Fact On September 19, 1974 Eleanor Van Treese, as agent for Futrell Company, obtained a listing on a residence located at 12250 S. W. 67th Avenue in Miami, Florida from Newton J. Mulford and Elizabeth N. Mulford, the record owners of said property. A copy of this sales management agreement was admitted into evidence as Exhibit number 1. Thereon was shown one existing mortgage with Coral Gables Federal, with a balance of approximately $47,500. At the time the Mulfords executed Exhibit number 1, a second mortgage in the amount of some $25,000 was also recorded against this property and foreclosure proceedings had been instituted. The holder of the second mortgage was James V. O'Connor. George Bender, a Miami attorney, was aware that foreclosure proceedings had been instituted against this property prior to the time that Futrell obtained the listing agreement. He called Mulford to inquire about purchasing the property, but apparently his offer was not high enough to interest Mulford. After the Futrell sign was placed in front of the house, Mrs. Capps met Mrs. George Bender at a social affair. When Mrs. Bender learned that Mrs. Capps was a real estate salesperson working for Futrell Company, she asked if she would show her the Mulford house. In late November or early December Mrs. Bender was shown the house and thereafter her husband also was shown the premises. On January 2, 1975 a final judgment of foreclosure was entered in the Circuit Court of the Eleventh Judicial District of Florida. Therein the court found that James V. O'Connor was the holder of a second mortgage on the premises in the principal sum of $25,000 together with interest accrued thereon from August 15, 1970 in the amount of $12,976.34. The court also awarded O'Connor $500 as a reasonable attorney's fee. The judgment further provided that the defendant, O'Connor, or any of the parties to the suit, may become bidders for purchase of the premises at the forthcoming sale thereof; and that the court would retain jurisdiction of the cause for the purpose of entertaining a Motion for Deficiency Judgment and "settle all other questions under the proceedings not settled by this order." O'Connor thereafter called Eleanor Van Treese to advise her that he had obtained the foreclosure order and that he would bid on the property when the judicial sale was held on the 15th of January. He further advised that he was anxious to turn over the property and get his money out of it. Mrs. Van Treese telephoned Mary Capps on January 10, 1975 to advise her of the information she had received from O'Connor. Not understanding the legal implication thereof Mrs. Capps decided that she should come to Mrs. Van Treese's house and the two of them talk to O'Connor regarding the property. This was done; and, with the two salespersons on the telephone with O'Connor, he read to them the judgment that he had obtained; advised them that he would be bidding on the property on January 15th and expected to purchase same; and that he would consider offers to purchase the property from him. Mrs. Capps, that same evening, called Mrs. Bender to advise that O'Connor was going to bid on the property on January 15th and was interested in selling the property. When Mr. Bender came home, Mrs. Bender and he discussed the purchase of the property and decided to submit an offer. Mrs. Bender so advised Mrs. Capps. The following morning, on Saturday, January 11th, Mr. and Mrs. Bender sent to the Futrell Company office and Mrs. Capps typed an offer to Purchase the property which the Benders executed. This was the deposit receipt and sales purchase agreement dated January 11, 1975 admitted into evidence as Exhibit number 2. While at the office Mr. Bender called another attorney, William A. Friedlander, who he considered to be more knowledgeable in real estate transactions than himself, for legal advice in the premises. Friedlander advised him that it was proper to submit an offer to O'Connor although O'Connor did not have present title and was therefore unable to execute a valid deed for the property until after he purchased the property at the foreclosure sale. Friedlander considered the contract would be based upon a condition subsequent, viz: the acquisition of title by O'Connor, and such contract would be enforceable. Friedlander was also aware that several judgments had been entered against Mulford and that Mulford would be unable to execute a contract and deliver clear title at the amount Bender was offering. This was so because the sum of first mortgage, second mortgage, real estate commission, and other judgments that had been entered against Mulford exceeded the amount Bender was offering to pay for the residence. He advised Bender that, if the foreclosure suit had joined all necessary parties, the deed obtained by O'Connor at the foreclosure sale would be good and O'Connor would be able to give a good and merchantable title. He further advised Bender that a contract with Mulford would have been futile due to the amount of the offer and unworkable due to the short period of time before the foreclosure sale in which to obtain the cash necessary to provide Mulford sufficient funds to pay off all his creditors and the mortgages. At the time the Benders executed the contract for the purchase of the residence in question it was their intention that the offer be presented only to O'Connor. Mary Capps presented this offer by the Benders (Exhibit 2) to O'Connor who accepted same on January 11, 1975. The $6,000 earnest money deposit was delivered by Mrs. Capps to the Secretary of the Futrell Company for deposit in the Futrell Escrow Account. No evidence was presented that the earnest money deposit has ever been refunded to the Benders or that they have requested this earnest money deposit to be refunded. Mr. and Mrs. Mulford were not advised of the existence of the offer to purchase dated January 11, 1975 until long after O'Connor purchased the property at the foreclosure sale.
The Issue Whether Respondent committed the offenses set forth in the two-count Administrative Complaint, dated April 17, 2007, and, if so, what penalty should be imposed.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: The Department of Business and Professional Regulation, Division of Real Estate (the "Department"), is the state agency charged with enforcing the statutory provisions pertaining to persons holding real estate broker and sales associate's licenses in Florida, pursuant to Section 20.165 and Chapters 455 and 475, Florida Statutes. At all times relevant to this proceeding, except where specifically noted, Respondent Mathew Johnson was a licensed Florida real estate sales associate, having been issued license number SL3149081. Respondent first obtained his real estate associate's license in 2003 and worked under the license of broker Jacqueline Sanderson in Orlando. When he married and his wife became pregnant, Respondent believed that he needed a more steady income than his commission-based employment with Ms. Sanderson provided. Respondent left Ms. Sanderson's employ on good terms and commenced work as the marketing manager for the downtown YMCA in Orlando. While working at the downtown YMCA, Respondent met a member of the YMCA named Tab L. Bish ("Mr. Bish"), a broker who owns First Source, Inc., an Orlando real estate sales company (sometimes referred to as "FSI Realty"). Respondent became friendly with Mr. Bish, and expressed an interest in getting back into the real estate business. Mr. Bish offered Respondent a job at First Source. Respondent had allowed his sales associate's license to lapse while he was working at the YMCA. Respondent informed Mr. Bish of that fact, and told Mr. Bish that he required a salaried position in order to support his young family. Respondent testified that Mr. Bish was happy to hire him as an office manager, because Mr. Bish wanted Respondent to perform a marketing role for First Source similar to that he had performed for the YMCA. Respondent started working at First Source in May 2005, as a salaried office manager. Mr. Bish agreed that he initially hired Respondent as an office manager, but only on the understanding that Respondent would take the necessary steps to reactivate his sales associate's license and commence selling property as soon as possible. Respondent took the licensing course again. Mr. Bish believed that Respondent was taking too long to obtain his license, and cast about for something Respondent could do during the interim. In order to make profitable use of Respondent's time, Mr. Bish began to deal in referral fees from apartment complexes. Certain complexes in the Orlando area would pay a fee to brokers who referred potential renters to the apartments, provided these potential renters actually signed leases. Among the apartment complexes offering referral fees was the Jefferson at Maitland, which in 2005 offered a referral fee of half the first month's rent. Mr. Bish placed Respondent in charge of connecting potential renters with apartment complexes, showing the apartments, following up to determine whether the potential renters signed leases, and submitting invoices for the referral fees. Mr. Bish did not authorize Respondent to collect the payments. Respondent initiated contact with the Jefferson at Maitland and began sending potential renters there. Respondent would submit invoices to the Jefferson at Maitland, payable to First Source, for each referral that resulted in a lease agreement. Respondent estimated that he submitted between 12 and 15 invoices for referral fees to the Jefferson at Maitland during his employment with First Source. Respondent obtained his license and became an active sales associate under Mr. Bish's broker's license on November 16, 2005. Mr. Bish began a process of weaning Respondent away from his salaried position and into working on a full commission basis. Respondent stopped showing apartments under the referral arrangement and began showing properties for sale. The last lease for which First Source was due a referral fee from the Jefferson at Maitland was dated December 5, 2005. In early February 2006, it occurred to Respondent that he had failed to follow up with the Jefferson at Maitland regarding the last group of potential renters to whom he had shown apartments during October and November 2005. Respondent claimed that he "hadn't had the opportunity" to follow up because of the press of his new duties as a sales associate and the intervening holiday season. However, nothing cited by Respondent explained his failure to make a simple phone call to the Jefferson at Maitland to learn whether First Source was owed any referral fees. Respondent finally made the call to the Jefferson at Maitland on February 9, 2006. He spoke to a woman he identified as Jenny Marrero, an employee whom he knew from prior dealings. Ms. Marrero reviewed Respondent's list and found three persons who had signed leases after Respondent showed them apartments: Mike Tebbutt, who signed a one-year lease on October 26, 2005, for which First Source was owed a referral fee of $532.50; Terry Ford, who signed an eight-month lease on November 14, 2005, for which First Source was owed a referral fee of $492.50; and Juan Sepulveda, who signed an eight-month lease on December 2, 2005, for which First Source was owed a referral fee of $415.00. However, there was a problem caused by Respondent's failure to submit invoices for these referral fees in a timely manner. Respondent testified that Ms. Marrero told him that the Jefferson at Maitland had reduced its referral fee from 50 percent to 20 percent of the first month's rent, effective January 2006.2 Ms. Marrero could not promise that these late invoices would be paid according to the 2005 fee structure. According to Respondent, Ms. Marrero suggested that the Jefferson at Maitland's corporate office would be more likely to pay the full amount owed if Respondent did something to "break up" the invoices, making it appear that they were being submitted by different entities. She also suggested that no invoice for a single payee exceed $1,000, because the corporate office would know that amount exceeded any possible fee under the 2006 fee structure. Ms. Marrero made no assurances that her suggestions would yield the entire amount owed for the 2005 invoices, but Respondent figured the worst that could happen would be a reduction in the billings from 50 percent to 20 percent of the first month's rent. On February 9, 2006, Respondent sent a package to the Jefferson at Maitland, via facsimile transmission. Included in the package were three separate invoices for the referral fees owed on behalf of Messrs. Tebbutt, Ford, and Sepulveda. The invoices for Messrs. Tebbutt and Sepulveda stated that they were from "Matt Johnson, FSI Realty," to the Jefferson at Maitland, and set forth the name of the lessee, the lease term, the amount of the "referral placement fee," and stated that the checks should be made payable to "FSI Realty, 1600 North Orange Avenue, Suite 6, Orlando, Florida 32804." The invoice for Mr. Ford stated that it was from "Matt Johnson" to the Jefferson at Maitland. It, too, set forth the name of the lessee, the lease term, and the amount of the referral fee. However, this invoice stated that the check should be made payable to "Matt Johnson, 5421 Halifax Drive, Orlando, Florida 32812." The Halifax Drive location is Respondent's home address. The package sent by Respondent also included an Internal Revenue Service Form W-9, Request for Taxpayer Identification Number and Certification, for Mr. Bish and for Respondent, a copy of Respondent's real estate sales associate license, a copy of Mr. Bish's real estate broker's license, and a copy of First Source, Inc.'s real estate corporation registration. Approximately one month later, in early March 2006, Mr. Bish answered the phone at his office. The caller identifying herself as "Amber" from the Jefferson at Maitland and asked for Respondent, who was on vacation. Mr. Bish asked if he could help. Amber told Mr. Bish that the W-9 form submitted for Respondent had been incorrectly filled out, and that she could not send Respondent a check without the proper information. Mr. Bish told Amber that under no circumstances should she send a check payable to Respondent. He instructed her to make the payment to First Source. Amber said nothing to Mr. Bish about a need to break up the payments or to make sure that a single remittance did not exceed $1,000. Mr. Bish asked Amber to send him copies of the documents that Respondent had submitted to the Jefferson at Maitland. Before those documents arrived, Mr. Bish received a phone call from Respondent, who explained that he submitted the invoice in his own name to ensure that Mr. Bish received the full amount owed by the Jefferson at Maitland. On March 10, 2006, after reviewing the documents he received from the Jefferson at Maitland, Mr. Bish fired Respondent. On March 29, 2006, Mr. Bish filed the complaint that commenced the Department's investigation of this matter.3 At the hearing, Mr. Bish explained that, even if Respondent's story about the need to "break up" the invoices and keep the total below $1,000 were true, the problem could have been easily resolved. Had Mr. Bish known of the situation, he would have instructed the Jefferson at Maitland to make one check payable to him personally as the broker, and a second check payable to First Source, Inc. In any event, there was in fact no problem. By a single check, dated March 15, 2008, First Source received payment from the Jefferson at Maitland in the amount of $1,440, the full sum of the three outstanding invoices from 2005. Respondent testified that he never intended to keep the money from the invoice, and that he would never have submitted it in his own name if not for the conversation with Ms. Marrero. Respondent asserted that if he had received a check, he would have signed it over to Mr. Bish. Respondent and his wife each testified that the family had no great need of $492.50 at the time the invoices were submitted. Respondent's wife is an attorney and was working full time in February 2006, and Respondent was still receiving a salary from First Source. In his capacity as office manager, Respondent had access to the company credit card to purchase supplies. Mr. Bish conducted an internal audit that revealed no suspicious charges. Respondent failed to explain why he did not immediately tell Mr. Bish about the potential fee collection problem as soon as he learned about it from Ms. Marrero, why he instructed the Jefferson at Maitland to send the check to his home address rather than his work address, or why he allowed a month to pass before telling Mr. Bish about the invoices. He denied knowing that Mr. Bish had already learned about the situation from the Jefferson at Maitland's employee. The Department failed to demonstrate that Respondent intended to keep the $492.50 from the invoice made payable to Respondent personally. The facts of the case could lead to the ultimate finding that Respondent was engaged in a scheme to defraud First Source of its referral fee. However, the same facts also may be explained by Respondent's fear that Mr. Bish would learn of his neglect in sending the invoices, and that this neglect could result in a severe reduction of First Source's referral fees. Respondent may have decided to keep quiet about the matter in the hope that the Jefferson at Maitland would ultimately pay the invoices in full, at which time Respondent would explain himself to Mr. Bish with an "all's well that ends well" sigh of relief. Given the testimony at the hearing concerning Respondent's character and reputation for honesty, given that Respondent contemporaneously told the same story to his wife and to Ms. Sanderson that he told to this tribunal, and given that this incident appears anomalous in Respondent's professional dealings, the latter explanation is at least as plausible as the former. Respondent conceded that, as a sales associate, he was not authorized by law to direct the Jefferson at Maitland to make the referral fee check payable to him without the express written authorization of his broker, Mr. Bish. Respondent also conceded that Mr. Bish did not give him written authorization to accept the referral fee payment in his own name. Respondent has not been subject to prior discipline.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order: Dismissing Count I of the Administrative Complaint against Respondent; and Suspending Respondent's sales associate's license for a period of one year for the violation established in Count II of the Administrative Complaint. DONE AND ENTERED this 21st day of September, 2007, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 21st day of September, 2007.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing the following facts were found: At all times material to these proceedings, Respondent was licensed by the State of Florida as a real estate salesman having been issued license No. 0325539. On September 24, 1984, at Respondent's request, Petitioner placed Respondent's license in an inactive status and on the day of the hearing Respondent's license was still in an inactive status. During the latter part of June or July, 1983, Respondent and his wife Merie Klink talked to George Anna Davis (Davis) in regard to renting or selling her home. Legally described as: Lot 15, Block G, Geneva Heights, as per Plat Book 2, Page 122 of the Public Records of Sarasota County, Florida. The mailing address of the Davis' property is 1804 Edmondson Road, Nokomis, Florida 33555. As a result of this conversation, Davis decided to sell rather than to rent her home and entered into a multiple listing with Venice Area Multiple Listing Service, Inc., with Respondent's broker, Ronald W. Morrison of Century 21 First Realty of Venice, Inc., as the listing Realtor, which was accepted on August 8, 1983. On October 11, 1983, Jan Leather and Janet Adams submitted an offer on the property to Davis which she refused. Davis then made a counter-offer which was refused by Jan Leather and Janet Adams. At the time of the hearing, Davis did not recollect the offer or counter-offer being made. During the term of the listing Respondent mowed the grass, made minor repairs, and generally kept the Davis property clean without any compensation from Davis. On November 2, 1983, Respondent received an offer on the Davis property from Andrew G. Szilay and Lillian Green Szilay (Szilay). The Szilay offer provided for a total purchase price of $23,000, payable $3,000 in cash and $20,000 by note secured by a purchase money mortgage based on 30 year amortization with interest at the rate of 11 percent per annum to balloon in 3 years. There was no provision for the assumption of the John Falls mortgage in the sum of $3,500 by the Szilays and the Szilays assumed that this mortgage would be paid off by Davis at closing and that they would get a clear title. The Szilay offer was communicated to Davis by Respondent on November 2, 1983 and Davis informed Respondent that she needed to talk to her son before making a decision. Respondent called Davis again on November 3, 1983 but she had not made a decision and asked that Respondent call her back on Sunday morning, November 6, 1983 and that she would have made a decision on the offer by that time. During this conversation, Respondent reminded Davis that she had to accept the Szilay offer by noon, November 7, 1983 or it would be withdrawn. On November 4, 1983, Respondent received an offer on the Davis property from Walter E. Armstrong and Lula Mae Armstrong (Armstrong). The Armstrong offer provided for a $22,500 purchase price, payable $5,000 cash, assumption of the John Falls' mortgage in the sum of $3,500 by Armstrong and a $14,000 note secured by a purchase money mortgage to Davis with interest at the rate of 10 percent per annum to balloon in 5 years. Respondent attempted to contact Davis on November 4, and 5, 1983, but was unable to contact Davis until Sunday, November 6, 1983, and at that time informed Davis of the Armstrong offer. The record is clear that Respondent received and informed Davis of the Szilay offer before receiving the Armstrong offer. During the telephone conversation on Sunday, November 6, 1983, Respondent informed Davis of the Armstrong offer and asked Davis to write down the details of both offers so that Respondent could discuss the advantages and disadvantages of each offer with Davis. After some discussion Davis could not make up her mind and asked Respondent to call her back later. Upon calling Davis back later that Sunday, November 6, 1983, Davis advised the Respondent that she preferred the Szilay offer because of the 11 percent interest and the three year balloon feature, as opposed to the 10 percent interest and five year balloon feature of the Armstrong offer. Respondent instructed Davis to send a telegram accepting the Szilay offer. On that same day, Respondent advised Louise Levering the real estate salesperson who was handling the Armstrong offer, that Davis preferred the Szilay offer and why Davis preferred it and that Davis was going to accept the Szilay offer. Later that same day, Armstrong made a counter-offer increasing the interest rate to 11 percent and with the note to balloon at 3 years. The Armstrong counter-offer was communicated by Leverling to Respondent who in turn communicated the Armstrong counter-offer to Davis on the same day (November 6, 1983) which was later confirmed in writing. Again, the Respondent asked Davis to write down the details of each offer and counter-offer and Respondent explained the comparative features of them to Davis. One of the things pointed out to Davis, by Respondent, was that the Szilay offer would require Davis to satisfy the John Falls' mortgage in the sum of $3,500, producing no cash to Davis at the closing, while the Armstrong offer would give her substantial cash at closings which she wanted. At this point, since no telegram had been sent, Davis decided to accept the Armstrong offer instead of the Szilay offer and advised Respondent that she would send a telegram to that effect on Monday, November 7, 1983. On Monday, November 7, 1983, a telephone call to the Century 21 office confirmed that a telegram had been received from Davis accepting the Szilay offer. The telegram was later reduced to writing. Respondent then called Davis to see if there was a mistake and Davis advised Respondent that she had gotten confused. Again Respondent explained both offers to Davis and she agreed that the Armstrong offer would be better for her. On November 8, 1983, Respondent received a telegram from Davis accepting the Armstrong offer. The Armstrong contract was mailed to Davis for signature on November 9, 1983. Norwood Gay the Attorney closing the transaction, corresponded with Davis on November 18, 1983, and in accordance with that correspondence, Davis executed a closing statement, a warranty deed, and an owner's affidavit and forwarded the documents to Norwood Gay for the closing. The transaction closed in a routine manner with exception that an inspection of the improvements on the property revealed visible evidence of wood destroying organism known as dry-rot in various locations around the house. The Respondent notified Davis of this prior to closing, and Davis authorized a repair escrow of $500. The closing took place on December 5, 1983 and Norwood Gay forwarded to Davis the net check less escrow and the other closing documents. Norwood Gay later sent Davis the net of the repair escrow, which she accepted. While Davis in a letter to Petitioner implies that respondent dropped the price of the home by $1,500 and sold it to a close friend, the Armstrongs, the testimony of both the Respondent and his wife and the Armstrongs that they had not known each other before this transaction and had only met the morning of the hearing, went unrebutted. Also, the evidence shows that there was only $500 difference in the purchase price of the two offers. While Davis had previously listed her house with another agency to be sold "as is", the record is clear that this matter was discussed with Davis by the Respondent and that Davis understood that the property would be listed as needing "tender loving care" (TLC). The Respondent received $441.15 as a listing commission on the Armstrong sale. Had the Szilay offer been closed rather than the Armstrong offer, the Respondent would have received approximately $377.00 as a listing commission. The record is clear that Respondent discussed the advantages and disadvantage of both the Szilay and Armstrong offers prior to Davis making a final decision to accept the Armstrong offer. There was no credible evidence that Davis was pressured by the Respondent to accept the Armstrong offer or that the Respondent informed Davis that the Szilays: (a) were unreliable; (b) not financially able to handle the payments, or (c) that they had withdrawn their offer.
Recommendation Based upon the findings of fact and conclusions of laws recited herein, it is RECOMMENDED that the Commission enter a final order finding the Respondent not guilty of the violations as charged in Count I and Count II of the Administrative Complaint and that Count I and Count II of the Administrative Complaint be DISMISSED. Respectfully submitted and entered this 12th day of July, 1985, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 12th day of July, 1985. COPIES FURNISHED: Arthur Shell, Esquire 400 West Robinson Street Orlando, Florida 32802 William R. Hereford, Esquire 1233 South Tamiami Trail Sarasota, Florida 33579 Mr. Harold Huff Executive Director Department of Professional Regulation Division of Real Estate Post Office Box 1900 400 West Robinson Street Orlando, Florida 32801 Mr. Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Fl 32301
The Issue The issue is whether Celebration Acres, Inc., or its surety, Florida Farm Bureau General Insurance Company, is liable for funds due Mike's Green Thumb, Inc., for the sale of agricultural products.
Findings Of Fact Petitioner is a Florida corporation with its principal place of business in Delray Beach, Florida, where it engages in the production of nursery stock. Mr. Michael Raimondi testified at the hearing on Petitioner's behalf. Respondent is a Florida corporation located in Coral Springs, Florida. At the time of the transactions which are the subject of this proceeding, Respondent was licensed as a dealer in agricultural products supported by Surety Bond Number BD 0692212 (the Bond) in the amount of $16,000. Respondent engages in the business of landscaping. Mr. David Urs testified at the hearing on Respondent's behalf. Co-Respondent is a corporation, licensed to do business in the state of Florida as an insurer. As surety, it provided the Bond for Respondent. The conditions and provisions of the Bond are to assure proper accounting and payment to producers for agricultural products purchased by Respondent. From October of 1993 through February of 1994, Petitioner sold nursery plants of its own production to Respondent at a sale price in the total amount of $14,562.35. The parties have done business together for over six (6) years. During that time, they have not established a course of performance or course of dealing regarding the terms of payment. In fact they have consistently argued over this point through out their business relationship. Respondent did not always send Petitioner a purchase order. When Petitioner received purchase orders, they consistently stated at the top that the terms of payment would be "net 30." However, on some occasions, the Respondent also stamped the purchase orders with the following additional payment terms: Terms of payment are per contract between general contractor and Celebration Acres, Inc.; and (b) Material sold by this purchase order once installed by Celebration Acres, Inc. belongs to the owner of the property where installed. Payment is due to supplier when payment is received by Celebration Acres, Inc. Suppliers are encouraged to protect themselves by sending a notice to owner. Regardless of whether Petitioner received a purchase order, it always sent Respondent an invoice stating that payment was due thirty (30) days after the date of invoice. The parties agree that subject invoices reflect the correct sale price for plants delivered and accepted. On or before October 11, 1993, Respondent bought 1343 Liriope and 132 Indian Hawthorne from Petitioner for a total sale price of $4,419.25. The express terms of payment for this sale was net in 30 days as set forth in Purchase Order No. 157 and Invoice No. 6504. Mr. Urs, Respondent's witness, testified that Purchase Order No. 157 is incomplete and that Respondent sent Petitioner a subsequent purchase order containing the additional payment terms referenced above in paragraph six (6). Mr. Urs' testimony is contrary to the more compelling testimony of Mr. Raimondi, Petitioner's witness. Respondent admits that it owes and has not paid Petitioner $4,419.25 for Invoice No. 6504. Payment for this invoice is past due. On or before December 16, 1993, Respondent sent Petitioner Purchase Order No. 193 for 200 Variegated Liriope. This purchase order contains the additional payment terms referenced above in paragraph six (6), i.e., payment was due pursuant to the terms of the contract between Respondent and the City of Oakland Park. Pursuant to this order, Petitioner delivered and Respondent accepted 230 plants as described in Respondent's Invoice Nos. 7528 and 7713 for a total sale price of $379.50. Respondent admits that it owes and has not paid Petitioner $379.50 for Invoice Nos. 7528 and 7713. Record evidence indicates that Respondent has completed its work for the City of Oakland Park. Additionally, there is no pending dispute over that contract; Respondent expected payment by May 26, 1994. Petitioner has met its burden of proof regarding Invoice Nos. 7528 and 7713. Respondent presented no evidence to show that payment is not due. Accordingly, payment for Invoice Nos. 7528 and 7713 is past due. On or about November 29, 1993, Respondent sent Petitioner Purchase Order No. 175 requesting shipment of various kinds of nursery stock. Respondent stamped this invoice with the terms referenced above in paragraph six (6). After receiving the order, Petitioner sent Respondent Invoice Nos. 7236 and 7408 reflecting a total sale price in the amount of $5,490.50. At the formal hearing, Respondent produced a copy of a Final Release of Lien signed by Petitioner's representative indicating that Petitioner received payment for Invoice Nos. 7236 and 7408. The release appears to bear an imprint of Petitioner's corporate seal. Petitioner asserts that Respondent never paid for Invoice Nos. 7236 and 7408. Mr. Raimondi, Petitioner's representative, occasionally signed a release before receiving funds so that a general contractor would pay Respondent, who promised, in turn, to pay Petitioner. Respondent faxed the subject release to Mr. Raimondi who signed it and faxed it back to Respondent. Someone at Respondent's office notarized Mr. Raimondi's signature. Respondent presented no evidence to show whether Petitioner ever received payment for Invoice Nos. 7236 and 7408. Respondent admits that it would occasionally request the execution of a release before paying Petitioner for plant material. Mr. Urs, Respondent's representative, testified that Respondent may have paid Petitioner in one of two ways: (a) by Respondent's check (company or certified); or (b) by the general contractor's check payable jointly to Respondent and Petitioner. The testimony of Mr. Urs, Respondent's representative, concerning the parties' execution of releases in general, and the subject release in particular, is contrary to the more compelling testimony of Mr. Raimondi, Petitioner's representative. Petitioner has met its burden of proving that payment for Invoice Nos. 7236 and 7408 is past due. On or about January 27, 1994, Respondent sent Petitioner Purchase Order Nos. 232 and 234 for assorted nursery plants. Both purchase orders contain the additional payment terms referred to in paragraph six (6) above. In response to these orders, Petitioner sent Respondent Invoice Nos. 8026 and 8027 for $660.75 and $612.35 respectively. Respondent admitted at the formal hearing that it owed Petitioner for Invoice Nos. 8026 and 8027 and that payment was past due. On or about February 14, 1994, Petitioner sent Respondent Invoice No. 8244 for 1500 Fern Sword listing the sale price in the amount of $3,000. Neither party produced a corresponding purchase order for this invoice and Petitioner did not recall receiving one. Mr. Urs, Respondent's representative, testified that Respondent owed Petitioner for Invoice No. 8244, but that payment is not due because Respondent has not received payment from the general contractor or the owner, Palm Beach County. Petitioner admits it has been in contact with the general contractor's bond company in an attempt to collect the debt. However, there is no persuasive record evidence that Petitioner ever agreed to defer payment until the general contractor or owner paid Respondent. Petitioner has met its obligation of proving that payment for Invoice No. 8244 is past due.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, I recommend that the Department of Agriculture and Consumer Services enter a Final Order directing Respondent and/or its surety and Co-Respondent to pay Petitioner $14,562.35. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 22 day of December 1994. SUZANNE F. HOOD, Hearing Officer 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 21st day of October, 1994. COPIES FURNIHSED: Florida Farm Bureau General Insurance Company (Legal Dept.) Post Office Box 147030 Gainesville, Florida 32614 Michael Raimondi, President Mike's Green Thumb, Inc. Post Office Box 6279 Delray Beach, Florida 33445 David S. Urs, Vice President Celebration Acres, Inc. 3300 University Dr. #514 Coral Springs, Florida 33065 Richard Tritschler, Esquire Dept. of Agriculture & Consumer Services The Capitol PL-10 Tallahassee, Florida 32399-0810 The Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL - 10 Tallahassee, Florida 32399-0810
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, I hereby make the following findings of fact: The outdoor advertising sign which is the subject of this proceeding is located on the west side of Northwest 27th Avenue (SR #9), approximately 116 feet south of Northwest 26th Street in Miami, Florida. The sign is visible to traffic on SR #9. State Road 9 is a highway on the state highway system. The outdoor advertising sign which is the subject of this proceeding is owned by Casa Hidalgo Pawn Shop, Inc., which is located at 2424 Northwest 27th Avenue in Miami, Florida. Mr. Anthony Hidalgo owns and operates Casa Hidalgo Pawn Shop. Mr. William Kenney, District 6 outdoor advertising administrator for the Department of Transportation, routinely patrols the highways and roads of Miami to make sure that unauthorized signs are not located within the highway right-of- way. Approximately one week prior to March 3, 1986, Mr. Kenney was on a routine patrol and discovered a sign on the west side of Northwest 27th Avenue (SR #9) approximately 116 feet south of Northwest 26th Street. In that location on 27th Avenue, the State's right-of-way extends from the back side of the sidewalk on one side of the street to the back side of the sidewalk on the opposite side of the street. The sign was located on the highway right-of-way reserved to the state. The sign read as follows: "2424 NORTHWEST 27TH AVENUE - PAWN SHOP INSTANT CASH - CASA DE EMPENO." The sign was displayed on the road right-of-way directly in front of Casa Hidalgo Pawn Shop. Mr. Kenney went into the Casa Hidalgo Pawn Shop and spoke with Anthony Hidalgo. Mr. Kenney told Mr. Hidalgo that the sign was on the highway right-of-way and had to be removed. Kenney left one of his cards with Hidalgo and told Hidalgo to call him if he had any questions. On March 3, 1986, Kenney returned to Northwest 27th Avenue and found that the sign was in the same location, but displayed on the rear bed of a pick-up truck which was parked in the right-of-way. At that point, Mr. Kenney placed a Notice of Violation sticker on the sign.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that a Final Order be issued by the Department of Transportation requiring that the sign in the instant case be permanently removed from the right-of-way and assessing a fine of $75 against Casa Hidalgo Pawn Shop, Inc. DONE and ORDERED this 6th day of October, 1986 in Tallahassee, Leon County, Florida. W. MATTHEW STEVENSON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32304 904/488-9675 FILED with the Clerk of the Division of Administrative Hearings this 6th day of October, 1986. COPIES FURNISHED: Charles G. Gardner, Esquire Department of Transportation Haydon Burns Bldg. Tallahassee, Florida 32301-8064 Anthony Hidalgo Casa Hidalgo, Inc. 2424 N.W. 27th Avenue Miami, Florida 33142 A. J. Spalla, Esquire General Counsel Department of Transportation Haydon Burns Bldg. Tallahassee, Florida 32301 Mr. Thomas E. Drawdy Secretary Department of Transportation Haydon Burns Bldg. Tallahassee, Florida 32301
The Issue The issue is whether Respondents' real estate licenses should be disciplined on the ground that Respondents violated a rule and various provisions within Chapter 475, Florida Statutes, as alleged in the Administrative Complaint filed by Petitioner on May 20, 1998.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: When the events herein occurred, Respondents, Mercedes M. Powers and Patricia A. Fleck, were both licensed as real estate brokers, having been issued license numbers 0151412 and 0027277, respectively, by Petitioner, Department of Business and Professional Regulation, Division of Real Estate (Division). Fleck served as qualifying broker for Patricia A. Fleck Real Estate, 5466 Spring Hill Drive, Spring Hill, Florida, while Powers was employed as a broker-salesperson at the same firm. Douglas K. Rogers, a Spring Hill resident, was interested in purchasing a lot in a Spring Hill subdivision and observed a "for sale" sign on Lot 7 at 12287 Elmore Drive. The lot was owned by Wayne and Faith Ryden, who resided in North Hero, Vermont. Rogers contacted the Rydens by telephone in mid or late March 1997 to ascertain the price of the lot. Rogers had also seen a nearby lot for sale carrying a sign from Respondents' firm. On March 23, 1997, he telephoned Powers and inquired about another lot in the same subdivision. Powers contacted the owners but learned that they did not want to sell. After relaying this advice to Rogers, she told him that she had a listing on Lot 6; however, Rogers was not interested in Lot 6 and merely indicated he would "get back" to her later. On April 3, 1997, Rogers again telephoned Powers and told her he was interested in purchasing Lot 7, which was owned by the Rydens. Powers invited Rogers to come to her office where she would call the sellers. Powers then "ran the public record" and learned that the Rydens owned the lot. On Friday, April 4, 1997, in the presence of Rogers, Powers telephoned Mrs. Ryden and spoke with her for three or four minutes. In response to an inquiry from Mrs. Ryden, Powers indicated that if the Rydens listed the property with her, she would represent the sellers; otherwise, she would represent the buyer in the transaction. Based on Mrs. Ryden's response, Powers was led to believe that the Rydens wanted Powers to represent them in the transaction. Accordingly, she explained the arrangement to Rogers, and he voluntarily signed an Agency Disclosure form which acknowledged that he understood, and agreed with, that arrangement. With Powers' assistance, that same day Rogers executed a contract for the sale and purchase of Lot 7 for a price of $8,500.00. The contract called for the sellers to accept the offer no later than April 7, 1997, or three days later, and that the contract would close by May 15, 1997, unless extended by the parties. The contract further called for Rogers to provide a $200.00 cash deposit, which was "to be placed in escrow by 4-7-97." The contract, listing agreement, and expense report were all sent by overnight mail to the Rydens the same day. Because Rogers did not have sufficient cash for a deposit with him, he advised Powers that he would return with a check the following Monday, or April 7. Notwithstanding the language in the contract, he gave Powers specific instructions that when he delivered a check, she was to hold it until the Rydens signed the contract, and then deposit the money. This is confirmed by a contemporaneous note made by Powers which read: "Mr. Rogers will bring check Monday. Then to hold until Rydens sign contract, then deposit it." Rogers testified that he delivered check no. 3497 in the amount of $200.00 to a receptionist in Respondents' office approximately two hours after he executed the contract. He also says he got the receptionist to make a copy of the face of the check, which has been received in evidence as Petitioner's Exhibit 5. If in fact a check was actually delivered to a receptionist that day, that person lost the check and never advised Powers or Fleck (or anyone else) that one had been delivered. Indeed, until June 6, 1997, Respondents were not aware that one was purportedly delivered, and they never saw a copy of the face of the check until they received the Administrative Complaint, with attached exhibits, in May 1998. The original check has never surfaced, and it was never presented for payment to the bank. Under these circumstances, it was impossible for Respondents to deposit the check in the firm's escrow account, as required by rule and statute. According to a Division investigator, there have been other instances where a realtor denies receiving a deposit from the buyer. It can be fairly inferred from his testimony that when this occurs, if the realtor's denial is accepted as being true, the realtor will not be held accountable. At no time did Respondents ever intend to violate any rule or statute governing the deposit of escrow funds; had they known that a check had been delivered to the firm, it would have been handled in an appropriate manner. The contract technically expired on April 7, 1997, when the Rydens had not yet accepted the offer. However, on April 8, 1997, Powers again contacted Mrs. Ryden by telephone since Powers had not received a reply. Based on that conversation, which led Powers to believe that the Rydens may not have received the first set of documents, Powers re-sent by overnight mail copies of the contract, agency disclosure, and expense sheet to the Rydens with a request that they either accept or refuse the contract, but in either event, to return the contract and let her know their decision. The Rydens, however, never extended her the courtesy of a reply. It is fair to infer from the evidence that by now, Rogers had again contacted the Rydens by telephone about purchasing the lot in a separate transaction so that the parties would not have to pay a realtor's commission. Rogers telephoned Powers once or twice in April or May 1997 to ask if the contract had ever been returned by the Rydens. He made no mention of his check. Those inquiries are somewhat puzzling since Rogers was well aware of the fact that the parties intended to negotiate a separate agreement. In any event, on the reasonable belief that the contract had never been accepted, and no deposit had ever been made by Rogers, Powers did nothing more about the transaction until June 6, 1997, when Rogers telephoned her at home that evening asking for "his check." By then, he had a separate binding contract with the Rydens for the sale of the lot; he had already stopped payment on the check a week earlier; and he knew that it had never been deposited. Powers advised Rogers that if in fact his check was at the office, he could drop by the next day at 10:30 a.m. and get it from the broker. Rogers came to the office the next morning, but he arrived at around 8:45 a.m., or well before Powers expected him. In Powers' absence, the on-duty receptionist was unsuccessful in locating his file (which was in Powers' office) and the check. On June 14, 1997, Rogers sent a complaint to the Division. That complaint triggered this proceeding. It is fair to infer that Rogers filed the complaint to gain leverage in the event Respondents ever brought an action against him to recover their lost real estate commission. Unknown to Respondents, on June 10, 1997, the sale was completed, and the Rydens executed and delivered a warranty deed to Rogers and his wife conveying the property in question. For all their efforts in attempting to accommodate Rogers, Respondents were deprived of a real estate commission through the covert acts of the buyer and seller, and they were saddled with the legal costs of defending this action. In terms of mitigating and aggravating factors, it is noted that Fleck was never involved with this transaction until the demand for the check was made in June 1997. There is no evidence that Powers has ever been disciplined by the Real Estate Commission on any prior occasion. On an undisclosed date, however, Fleck received a fine and was required to complete a 30-hour broker management course for failing to adequately supervise a "former rental manager" and failing to "timely notify FREC of deposit dispute." Neither Rogers or the Rydens suffered any harm by virtue of the deposit check being lost, and the parties completed the transaction on their own without paying a commission. During the course of the investigation, Respondents fully cooperated with the Division's investigator.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the Administrative Complaint, with prejudice. DONE AND ENTERED this 14th day of May, 1999, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of May, 1999. COPIES FURNISHED: Herbert S. Fecker, Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900 Ghunise Coaxum, Esquire Division of Real Estate 400 West Robinson Street Suite N-308 Orlando, Florida 32801-1772 Charlie Luckie, Jr., Esquire Post Office Box 907 Brooksville, Florida 34605-0907 William M. Woodyard, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact Thomas Carter, Jr., holds a real estate license in Florida, No. 0469236, and held this license at the times relevant to the charges in this case. His last license was as a broker at Palatka Realty, Inc., in Palatka, Florida. From sometime in October or November 1988, until January 31, 1989, Carter was affiliated with Palatka Realty, Inc. The financial arrangements between Carter and Palatka Realty are unclear. Walter C. Messer, Jr., president of and qualifying broker for Palatka Realty, testified that Carter was to pay one-half of the office overhead and keep all of the commissions he generated or pay no overhead and get one-half of the commissions he generated. However, Messer told a DPR investigator that Carter was to pay Palatka Realty $500 for rent, utilities and advertising, or $750 per month for total office expenses, and that the commissions were to be split in half between Palatka Realty and Carter. Carter testified that there was to be no sharing of commissions and that Carter and Messer were to share expenses with Messer presenting copies of office bills to Carter for payment. Carter said he was to pay $350 per month for office expenses. However, Carter told the DPR investigator that he was to pay $350 per month plus half of additional advertising expenses and that the commissions were to be split in half. It is clear that Messer and Carter had no written agreement and no clearly delineated verbal agreement regarding spliting of expenses and commissions. Both now remember the "terms" of their agreement in the manner which best benefits their respective positions. Neither's version is reliable or credible. Additionally, Carter never paid Messer anything for office expenses. Carter claims that he never paid because Messer demanded more money than they had agreed on and never showed him the bills to support the demands. Messer claims Carter never saw the bills because Carter failed to show up every time they had arranged to look at the bills. On January 26, 1989, Carter negotiated a sales contract between buyers Platt and seller Phillips. Carter received a $1000 earnest money deposit check from the Platts payable to Palatka Realty to secure the sales contract. The contract was signed by Carter and stated that the realtor was Palatka Realty, Inc., and that Palatka Realty represented the seller. On January 31, 1989, Carter submitted a resignation from Palatka Realty, Inc. Prior to the closing of the Platt-Phillips transaction, Messer gave Carter a $1000 Palatka Realty check, which represented the deposit, for presentation to the closing agent. At the time of the Platt-Phillips closing, Messer believed the commission should be remitted to Palatka Realty for distribution to Palatka Realty and Carter. On March 23, 1989, the Platt-Phillips transaction was closed by Sharri B. Hunter, closing agent for Lawyers Title Insurance Corporation. Ms. Hunter reviewed the settlement statement and determined that the sales commission should be paid to Palatka Realty. Carter, who attended the closing, instructed Ms. Hunter to make the sales commission check payable to him personally. Ms. Hunter told Carter that she would need a letter from Palatka Realty, Inc., authorizing disbursement of the commission to Carter personally. When Ms. Hunter requested an authorization letter, Carter told her he was "Palatka Realty." Ms. Hunter typed a statement dated March 23, 1989, which stated: "I, Thomas C. Carter, Jr., Vice president of Palatka Realty, Inc., authorize Lawyers Title Insurance Corporation to disburse the real estate commission check to Thomas C. Carter, Jr." Carter read and signed the statement as vice president of Palatka Realty, Inc. Ms. Hunter signed and notarized the statement. Based on this sworn statement, Ms. Hunter disbursed the entire sales commission of $4490 to Carter personally. On March 23, 1989, Carter was not employed by or affiliated in any way with Palatka Realty, Inc., having resigned on January 31, 1989. Subsequent to the closing of the Platt-Phillips transaction, Messer discovered the sales commission had been paid to Carter personally. On March 29 or 30, 1989, Messer sent a letter to Carter by certified United States Mail demanding the return of the Platt-Phillips commission and the document file relating to the transaction. On April 11, 1989, Messer sent a letter to F. Linton Stone of Lawyers Title Insurance Corporation advising that the Platt-Phillips commission was wrongfully paid to Carter and demanding that one-half of the commission be paid to Palatka Realty, Inc. Lawyers Title Insurance Corporation ultimately admitted liability for the commission and remitted one-half of the commission to Palatka Realty, Inc. Carter never paid one-half of the commission to Palatka Realty or Lawyers Title Insurance Corporation, and he never returned the document file to Palatka Realty.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Professional Regulation, Division of Real Estate, enter a Final Order and therein: Find Thomas Carter, Jr., guilty of violating Sections 475.25(1)(b) and (d), Florida Statutes. Impose an administrative fine of $500 per count for a total administrative fine of $1000. Suspend Carter's real estate license for a period not to exceed one (1) year. RECOMMENDED this 28th day of August, 1990, in Tallahassee, Florida. DIANE K. KIESLING Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of August, 1990. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-5415 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Department of Professional Regulation, Division of Real Estate Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 2-4(1-3); 5-19(5-19); 21(3); 22(3); 23(4); 24(3); and 30-32(20-22). Proposed findings of fact 1, 29, and 33 are unnecessary or irrelevant. Proposed findings of fact 25-28 are subordinate to the facts actually found in this Recommended Order. COPIES FURNISHED: Janine B. Myrick Senior Attorney Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 James A. Bazley Attorney at Law 418 Kingsley Avenue Post Office Box 815 Orange Park, Florida 32067-0815 Darlene F. Keller, Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32802 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792
The Issue Whether petitioner should take disciplinary action against respondent for the reasons alleged in the administrative complaint?
Findings Of Fact The parties stipulated that respondent Richard B. Watson holds a license issued by petitioner and has since 1976. He holds license No. 0163723, and has, at all pertinent times, worked as a broker-salesman for Liz Caldwell Realty, Inc., 126- 128 Eglin Parkway Southeast in Fort Walton Beach, Florida. Petitioner's Exhibit No. 1. On June 13, 1983, Lloyd H. Waldorff executed an employment contract under which Liz Caldwell Realty, Inc. was to have the exclusive right to sell the 25 units Waldorff Properties of Ft. Walton proposed to build as "phase two" of its La Mar West Townhouse Project in Mary Ester, Florida. Petitioner's Exhibit No. 6. Nobody signed the written agreement on behalf of the broker, but Mr. Waldorff's testimony that Ms. Caldwell or somebody in the agency "accepted" it was uncontradicted, and fully consonant with the other evidence adduced. Mr. Waldorff or his organization needed agreements from prospective buyers to purchase units when built, in order to induce a lender to lend money for construction of phase two. One Saturday, probably in mid-July of 1983, Ms. Caldwell presented him with 18 such agreements. It seemed peculiar to Mr. Waldorff, getting 18 purchase agreements at once; and he was also struck by the number of Californians and other non- Floridians among the putative purchasers. But he had nevertheless signed the agreements himself before Ms. Caldwell gave them to Mr. Watson for attestation; and he later furnished all of the purchase agreements to Security Federal Savings and Loan Association of Panama City in support of an eventually successful application for a $1,100,000.00 construction loan. (T.90) Mr. Waldorff signed the purchase agreements in a back room within the Liz Caldwell Realty, Inc. offices. At hearing he remembered that a woman was present. He did not recall respondent's being there. Seventeen of the 18 agreements furnished the lender were purportedly signed by persons to whose signatures, except in one instance, respondent Watson attested. Petitioner's Exhibit No. 4. On 16 of the 17 purchase agreements on which he signed as a witness to putative purchasers' signatures, respondent also signed as a witness to Mr. Waldorff's signature in a blank provided under the heading "signed in the presence of:". Petitioner's Exhibit No. 4. Respondent was aware at the time that Mr. Waldorff, whom he considers a friend, needed such agreements in order to obtain financing. As time for closing on the purchase agreements approached, Mr. Waldorff testified, he became suspicious, and asked Ms. Caldwell to see her escrow account statements, but she put him off. Eventually he asked her if the purchase agreements were "bogus," and she answered by nodding affirmatively. It was at this point, Mr. Waldorff said, that he notified the lending institution of their falsity, and asked for an extension of time in which to repay the construction loan. But the weight of the evidence established that the purchase agreements were shams from their inception and that Mr. Waldorff knew it before he obtained the loans. On September 9, 1985, Paul R. Bratton, III, an investigator for DPR, asked Mr. Watson about the purchase, agreements on which he had witnessed purported parties' signatures. In this interview, Mr. Watson said, with respect to some of the contracts which he had signed as a witness, "that he did not see the buyers or the sellers sign the contract." (T.63) In a deposition he gave in the course of related civil litigation, respondent Watson testified that it was "(p)retty much," Petitioner's Exhibit No. 5, p.10, "standard procedure" for him to witness signatures which he had not seen being affixed. In response to the question, "Does that mean also you wouldn't know whether these people exist in real life or not?", Mr. Watson answered, "It could be. ..." Id. as 15. Mr. Waldorff told Mr. Watson he was going to use the 18 purchase agreements, all but one of which respondent had signed as a witness, to secure a construction loan even though they were "bogus." Petitioner's Exhibit No. 5. This conversation antedated the loan closing. Id.
The Issue Whether subsections (1) and (2) of Florida Administrative Code Rule 12A-1.074 enlarge, modify or contravene the specific provisions of law implemented, or are arbitrary or capricious, and thus constitute an invalid exercise of delegated legislative authority.
Findings Of Fact Based on the stipulated facts and the uncontested affidavit of H. French Brown, IV, the following findings of facts are made. The rule provisions at issue in this proceeding are subsections (1) and (2) of Florida Administrative Code Rule 12A- 1.074, hereinafter referenced as "the Rule." The Rule provides: 12A-1.074 Trade-Ins. Where used articles of tangible personal property, accepted and intended for resale, are taken in trade, or a series of trades, at the time of sale, as a credit or part payment on the sale of new articles of tangible personal property, the tax levied by Chapter 212, F.S., shall be paid on the sales price of the new article of tangible personal property, less credit for the used article of tangible personal property taken in trade. A separate or independent sale of tangible personal property is not a trade- in, even if the proceeds from the sale are immediately applied by the seller to a purchase of new articles of tangible personal property. Where used articles of tangible personal property, accepted and intended for resale, are taken in trade, or a series of trades, at the time of sale, as a credit or part payment on the sale of used articles, the tax levied by Chapter 212, F.S., shall be paid on the sales price of the used article of tangible personal property, less credit for the used articles of tangible personal property taken in trade. A separate or independent sale of tangible personal property is not a trade-in, even if the proceeds from the sale are immediately applied by the seller to a purchase of new articles of tangible personal property.1/ The Rule states that it is intended to implement the following statutory provisions: Sections 212.02(15), 212.02(16), 212.07(2), 212.07(3), and 212.09, Florida Statutes. Section 212.02, Florida Statutes, provides, in relevant part: 212.02 Definitions -- The following terms and phrases when used in this chapter have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning: * * * "Sale" means and includes: (a) Any transfer of title or possession, or both, exchange, barter, license, lease, or rental, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property for a consideration. . . . "Sales price" means the total amount paid for tangible personal property, including any services that are a part of the sale, valued in money, whether paid in money or otherwise, and includes any amount for which credit is given to the purchaser by the seller, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service cost, interest charged, losses, or any other expense whatsoever. . . Trade-ins or discounts allowed and taken at the time of sale shall not be included within the purview of this subsection. . . Section 212.07(2), Florida Statutes, set forth the method and manner by which a dealer is to charge and collect sales tax. Section 212.07(3), Florida Statutes, sets forth penalties for a dealer who fails to collect sales tax. Neither of these provisions affects the matters at issue in this proceeding. part: Section 212.09, Florida Statutes, provides, in relevant 212.09 Trade-ins deducted; exception.-- Where used articles, accepted and intended for resale, are taken in trade, or a series of trades, as a credit or part payment on the sale of new articles, the tax levied by this chapter shall be paid on the sales price of the new article, less the credit for the used article taken in trade. Where used articles, accepted and intended for resale, are taken in trade, or a series of trades, as a credit or part payment on the sale of used articles, the tax levied by this chapter shall be paid on the sales price of the used article less the credit for the used article taken in trade. [2/] GameStop is a Minnesota corporation that is authorized to do business in the State of Florida, and a registered dealer for purposes of collecting and remitting sales and use tax to the Department. GameStop is a publicly held international retailer of new and used video game hardware, software, and accessories, with over 6,000 stores worldwide, including stores in Florida. One of GameStop's customary business practices is to accept from its customers used gaming software, hardware, and accessories that the GameStop store manager determines is in resalable or re-furbishable condition. In return for the used articles, a GameStop customer may choose among three options: Option 1: The customer may receive cash in exchange for the used items. Option 2: The customer may apply the value assigned to the item by the store manager as part payment toward the immediate purchase of another new or used item from GameStop. Option 3: The customer may receive a credit for the value of the used item, which may be used only toward the purchase of new or used items from GameStop at some time in the future. If the GameStop customer elects Option 1, he receives 20 percent less value in the cash exchange than he would have received pursuant to the part payment offered by Option 2 or the credit toward a future purchase offered by Option 3. For a customer who chooses Option 3, GameStop tracks outstanding credits by issuing to the customer an "EdgeCard." When the customer returns to a GameStop store and requests to apply credits toward the purchase of a new or used item, the GameStop salesperson can swipe the electronic strip on the back of the EdgeCard and learn the credit amount available to the customer. The EdgeCard system merely tracks the amount of ongoing credits available to the customer. It does not record any request made by the customer to reserve or identify a specific item toward which the credits will later be used. The credits on an EdgeCard never expire. Once the customer has chosen Option 3, he may go to a GameStop store or access the GameStop website at any time thereafter and apply the credit on his account toward the purchase of new or used items from GameStop. GameStop also offers traditional gift cards that are purchased via cash or credit card rather than in exchange for used articles. Purchases made using a gift card or gift certificate are taxable for the full purchase price.3/ When a customer uses a gift card to purchase an item at a GameStop store, GameStop does not reduce the taxable sales price by the amount of the credit or value stored on the gift card and used in the purchase. GameStop assigns no redeemable cash value to the EdgeCard or to traditional gift cards. GameStop does not allow a gift card to be used to store credits obtained through the exchange of used items, reserving that function exclusively to the EdgeCard. The value of a GameStop gift card can be redeemed only through the purchase of new or used items from GameStop. Credits can be added to an EdgeCard only by turning over used articles to GameStop. A customer may not purchase credits. A credit on an EdgeCard can only be redeemed by the subsequent purchase of new or used items from GameStop. The GameStop customer who selects Option 3 first submits his used game or item of hardware to the GameStop store, which assigns it a dollar value and credits that amount to the customer's EdgeCard account in exchange for the item. At some later date, the customer returns to the GameStop store and trades the credit stored on the EdgeCard for some used or new item. The customer may build up credits on the EdgeCard with any number of transactions over any length of time before trading in the credits for an item from GameStop. The customer is not required to identify the item toward which he wishes to apply his EdgeCard credits until the time he actually trades the credits for the item. The Edge Card system replaced GameStop's former practice of requiring a customer who chose to obtain a credit for the submission of used articles to retain a cash register receipt showing the amount of the credit. This "paper credit" would then be redeemable toward the purchase of another item at a later date. There is no expiration date on an EdgeCard, a gift card, or a paper credit. GameStop does not replace the credits on a lost EdgeCard or a lost gift card. For purposes of accounting, GameStop carries unredeemed EdgeCard credits on its books for a period of three years as customer liabilities. GameStop does the same for unredeemed value on gift cards. GameStop continues to honor unredeemed EdgeCard credits and gift card values that are more than three years old, but no longer carries them on its books as customer liabilities. Prior to 2007, for the purpose of collecting sales tax from its customers, GameStop deducted the value of EdgeCard or any paper credits used in the purchase of new or used items from the purchase price for the purpose of calculating sales tax due. GameStop has remitted to the Department tax for the entire sales price of new or used items purchased from approximately January 2007 through August 31, 2007, in response to an audit by the Department, without reducing the taxable sales price by the value of any EdgeCard or paper credits used. GameStop has a return policy that allows a customer who is not satisfied with an item purchased from GameStop to return the item within a certain period of time and under certain conditions. When a customer returns an item in compliance with GameStop's return policy, the customer receives full retail value back, including the amount of the tax paid on the original purchase. A customer who returns an item in compliance with GameStop's return policy can elect to receive the return value in the form of cash, as a reimbursement to the customer's credit card, or as value stored on a GameStop merchandise card. The GameStop merchandise card does not record credits received via the return of used articles. The Department states that its historical administration and interpretation of the Rule and the statutes it implements do not strictly limit trade-in credits to a simultaneous exchange situation, or to transactions occurring within any particular time frame. However, the Department states that it does require the customer to identify the merchandise to be purchased with the EdgeCard credits at the time the credits are acquired. The Department does not consider the transaction to constitute a "trade-in" unless the item to be purchased with the EdgeCard credits has been specifically identified by the customer at the time the customer first returned a used item to GameStop.
