Findings Of Fact Respondent Eugene Lay was registered as a business opportunity broker on March 15, 1982 by the Board of Real Estate (now the Florida Real Estate Commission). His registration was effective from January 5, 1982 until January 1, 1984. He was issued registration number 1800461. On February 12, 1982 Mr. Lay received $3,750 from Christopher Orthodox on a contract for the purchase of a business known as Personal Valet Services, Inc. The $3,750 were to be held in trust by Mr. Lay until the closing of the business purchase transaction. Mr. Lay did not put the money in a trust account but instead spent the money for his own personal business. When it later appeared to Mr. Orthodox that the transaction was not going to close, he demanded the return of his $3,750 deposit. Mr. Lay failed to return it to him and Mr. Orthodox was not able to purchase the business. His $3,750 has never been returned. On February 27, 1982 Mr. Lay obtained from Mr. Orthodox and Loretta Orthodox an additional $9,000 as a deposit to be held in trust pending their obtaining a Small Business Administration loan to purchase a business known as Starlight Creations, Inc. The purchase contract was conditioned upon the ability of the Orthodoxes to secure the loan for $121,500. They were unable to obtain the loan. When it appeared that the purchase transaction would not close, Mr. Orthodox demanded the return of his $9,000. Mr. Lay did not return the money because he had spent it for his own personal business. Subsequent to the Orthodoxes initial demand for the return of their money, Mr. Lay's wife returned $1,000 to them in cash. No further repayments have been made.
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 against Eugene Lay for lack of jurisdiction. DONE and RECOMMENDED this 29th day of February, 1984, in Tallahassee, Florida, MICHAEL PEARCE DODSON 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 29 day of February, 1984.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: At all times pertinent to this proceeding, respondent Alan Kaye was a licensed real estate broker in the State of Florida and respondent KNAC of Miami Realty, Inc. was a corporation registered as a real estate broker in the State of Florida. Respondent Alan Kaye was an officer of and qualifying broker for respondent KNAC of Miami Realty, Inc. Respondents secured a 90-day listing from Christina Trivino for the sale of her residence located at 271 N.W. 148th Street in North Miami, Florida. When that listing expired, respondents obtained an extension. On or about November 28, 1987, respondents solicited and obtained a sales contract for the purchase and sale of the Trivino property. In connection therewith, the purchasers, Marie C. Eduoard and Henry S. Roy, entrusted to the respondents a total earnest money deposit of $6,200.00, and the respondents placed the deposit in the escrow account of respondent KNAC of Miami Realty, Inc. In accordance with the provisions of the sales contract, the purchasers were to pay a total of $62,000 for the property, and assume the existing first mortgage in the principal amount of approximately $45,000. While the contract initially called for the closing to occur on or before February 15, 1988, Ms. Trivino was very anxious to close earlier due to some problems she was having with the Internal Revenue Service. Accordingly, the closing date was changed to occur on or before January 15, 1988. Among the terms of the sales contract was a provision that conditioned the sale upon the purchasers' assumption of the first mortgage in the principal amount of approximately $45,000. Paragraph 8 of the contract provided that If, after diligent effort on the part of the purchaser, the purchaser is unable to obtain said first mortgage, all monies deposited hereunder shall be refunded to purchaser and parties herewith agree to enter into a Release on Deposit Receipt; and this contract shall be declared null and void. At some point in time, it became known to the respondents and the seller Trivino that the bank which held the first mortgage on the subject property would not authorize an assumption of the mortgage by the purchasers without either a $3,000 paydown of the mortgage amount or the completion of qualifying papers by the purchasers. The testimony from Ms. Trivino and Mr. Kaye differ widely with regard to the dates upon which and the manner in which they became aware of this problem, as well as their communications with each other thereafter. Ms. Trivino testified that in early January, 1988, she became concerned about the status of the transaction and began making repeated calls to the respondents which calls were never returned. She admits talking with Todd Kaye, respondent's son, in the respondents' offices on January 5, 1988, whereupon the mortgage problem was discussed. At that time, needing "desperately" to sell the house, Ms. Trivino offered to hold a second mortgage for the purchasers in the amount of approximately $3,000.00. She states that she also spoke with the officials at the bank regarding the mortgage. In spite of numerous unreturned telephone calls, Ms. Trivino did not hear anything further from Mr. Kaye until his letter dated January 29, 1988. That letter informed Ms. Trivino of the mortgage situation and indicated that "there is some doubt whether or not the Buyer has this extra money." Mr. Kaye further informed Ms. Trivino that "for all practical purposes, since the closing has not taken place, due to no one (sic) fault, the contract is void." Ms. Trivino then had her employer, a licensed real estate broker, write a letter dated February 3, 1988, to Mr. Kaye requesting Mr. Kaye to retain the $6,200 deposit pending a determination of the matter. She asserts that she made numerous further attempts to contact Mr. Kaye regarding this matter, but he would not return her calls. According to Mr. Kaye, he delivered the sales contract to a title company in early December, 1987, with the requests that the title company do a title check, that the mortgage holder be contacted, and that a mortgage assumption package for the buyers be obtained. Mr. Kaye states that he was thereafter informed by the title company that the mortgage holder would not allow an assumption of the mortgage without a paydown of about $3,000. Mr. Kaye states that he communicated to the buyers the problem with the mortgage assumption and also communicated Ms. Trivino's offer to take a second mortgage for $3,000. According to Mr. Kaye, the buyers did not want a second mortgage and did not feel that they could qualify for an assumption of the first mortgage because they were unemployed at the time. Instead, they wanted a return of their $6,200 deposit. Mr. Kaye felt that the sales contract had become void because of the inability of the buyers to assume the first mortgage, as provided in Paragraph 8 of the sales contract. Accordingly, he returned the $6,200 deposit to the buyers on January 10, 1988. He did not request Ms. Trivino's consent nor did he notify Ms. Trivino that he had refunded the deposit to the buyers because he felt that Ms. Trivino was fully aware that "the deal was dead."
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the Administrative Complaint filed against the respondents be DISMISSED. Respectfully submitted and entered this 15th day of March, 1989, in Tallahassee, Florida. 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 15th day of March, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-4062 The parties' proposed findings of fact have been fully considered and are accepted and/or incorporated in this Recommended Order, with the following exceptions: Petitioner 8. The evidence demonstrates that the amount of the deposit was $6,200 in lieu of $6,000. 13. Partially rejected based upon the seller's testimony that she spoke to Todd Kaye in respondent's offices on or about January 5, 1988. 15. Accepted with the addition of the fact that the respondent communicated this offer to the buyers. Respondent 4. The evidence demonstrates that the amount of the deposit was $6,200 in lieu of $6,000. 8. The date of "early December" is rejected as not established by competent, substantial evidence. 10. Rejected as not established by competent, substantial evidence. COPIES FURNISHED: James H. Gillis, Esquire DPR, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Manuel M. Arvesu, Esquire 100 North Biscayne Blvd. Miami, Florida 33132 Darlene Keller, Executive Director DPR, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 =================================================================
The Issue By an information filed by the Florida Real Estate Commission, respondent Thomas F. Thayer was charged with fraud, dishonest dealing and breach of trust in a business transaction in violation of Florida Statutes s.475.25(1)(a). In essence, the information charges that respondent, as the real estate broker for the Jacobs and in order to obtain a ninety percent loan commitment for the Jacobs, falsely represented to a mortgage corporation that the Jacobs Intended to move into the duplex they planned to purchase and sell their present home.
Findings Of Fact At all relevant times to this proceeding, respondent was a registered real estate broker. Respondent had been an acquaintance of Mr. and Mrs. Richard Jacobs for a period of four to five years. Some two years before the transaction in question, Jacobs had expressed to respondent his desire to purchase property containing a duplex for purposes of a tax shelter. Mr. Jacobs testified that he intended the purchase to be an Investment somewhere in the neighborhood of $5,000.00. There was also evidence that Mr. Jacobs understood that there were tax shelter benefits from living in half the duplex and depreciating the other half. In April of 1974, respondent showed the Jacobs a duplex. At the time, the Jacobs were living in a two bedroom, two bath waterfront home with a swimming pool, valued somewhere in the neighborhood of $60,000.00. The location of the duplex was in a lower rent neighborhood near some railroad tracks. However, the front portion contained three bedrooms, two baths, a thick shag carpet and a built-in bar. There were also two large screened-in patios. The Jacobs were impressed with the duplex, and on April 19, 1974, they signed a deposit receipt contract prepared by respondent to purchase the duplex for $41,000.00. This contract was subject to the Jacobs being able to obtain ninety percent financing at 9.25 percent annual Interest within fifteen days from the date of acceptance by the sellers. The contract also contained certain conditions regarding inspection of the rear apartment; electrical, plumbing, roofing and appliance defects; termite damage and the inclusion of a metal storage shed. Such conditions were included in the contract at the request of Mr. Jacobs. In order to obtain ninety percent financing, it was necessary that the lender be assured that the borrower actually intends to reside on the mortgaged property. This assurance comes about through either an affidavit executed by the borrower at the time of closing and/or the filing with the lender of a sales listing on the present home of the borrower. From this point forward, disputes in the testimony arise. Respondent testified that Mr. Jacobs was aware of the financing requirement that he would have to indicate an intent to sell his present home. Jacobs acknowledged that he was so aware, but testified that he never had any intent to move from his waterfront home to the duplex, and so informed respondent. However, when he went in to make the loan application with the mortgage company, he told its representative that he would be living in the duplex. Respondent then informed the mortgage company that he would be sending them a multiple listing form on the Jacobs' present residence. Jacobs stated at the hearing that he and his wife never intended to reside in the duplex and that he followed respondent's advice regarding the filing of a multiple listing only because he had faith and trust in respondent, who told him such things were done all the time. Respondent testified that the Jacobs never informed him that they did not intend to live in the duplex or that they did not intend to sell their present home. In fact, there was testimony from Mr. Jacobs that between the time of the deposit receipt contract and the first letter approving the mortgage loan commitment, he and his wife were looking at other homes on the water in which to live. The multiple listing form was signed by the Jacobs and delivered to the mortgage company by respondent, but it was never turned in to the multiple listing service. Sometime subsequent to receiving the mortgage loan commitment on May 29, 1974, Jacobs inspected the rear apartment of the duplex and became very upset and disgusted with its condition. Repairs were estimated at $1,000.00 and the sellers only offered to contribute approximately $75.00 toward such repairs. Jacobs then went to an attorney who advised him that it would be illegal to continue with the purchase because of the misrepresentation as to the Jacobs' intent to reside in the duplex. Jacobs then called the mortgage company and told them he did not intend to live in the duplex. Thereafter the mortgage company informed Jacobs that they were unable to obtain a mortgage commitment. Respondent testified that he first became aware that the Jacobs did not intend to live in the duplex the night after Jacobs inspected the rear apartment and spoke with his attorney. In summary, the testimony in this case is conflicting with respect to respondent's knowledge of the Jacobs' intent as to where they would actually reside. In order for respondent to be found guilty of fraud, dishonest dealing and breach of trust in a business transaction, as prohibited by Florida Statutes s 475.25(1)(a), the Real Estate Commission must prove by clear and convincing evidence that respondent actually knew that the Jacobs never intended to reside at the duplex property. That proof is lacking in this case. Here, the substance of the matters in dispute are as readily susceptible of proving respondent's innocence as they are susceptible of proving guilt. Jacobs testified that he originally wanted the duplex as an investment which would provide a tax shelter and that he did not intend to live in it. Yet, he verbally represented to the mortgage company that he did intend to live in the duplex, signed a multiple listing agreement and actually did look at other homes to live in during the period of time between signing the deposit receipt contract and obtaining knowledge of the original loan commitment. There was no evidence that respondent had any knowledge of or was involved in the Jacobs' search for another home in which to live. Jacobs was willing to go through with the purchase of the duplex until he became aware of the extent of damages to the rear apartment. It was at this time that he Informed the mortgage company that he did not have any intention of living in the duplex or selling their house. And, it was at about this same time, according to respondent, that respondent first learned that the Jacobs did not intend to reside in the duplex. There is no clear and convincing evidence in this record that proved that respondent knew that the Jacobs did not plan to live in the duplex at the time respondent forwarded the multiple listing to the mortgage company on April 30, 1974. The most credible evidence tending to show such knowledge on respondent's behalf is the fact that after the multiple listing agreement was signed and delivered to the mortgage company, the house was never actually put up for sale, was not shown to anyone, and the agreement was not filed with the multiple listing service. Yet, this is consistent with the evidence that the Jacobs did not receive word of the loan commitment until after May 29, 1974 (later to be rescinded on July 5, 1974) and the fact that the Jacobs were in the process of looking for yet another home to purchase. It is logical to assume that they were not yet ready to sell their present home with the uncertainties that existed, and this Instructed respondent to delay the selling process. In summary, it is concluded that the Real Estate Commission failed in its burden to prove, by clear and convincing evidence, the misconduct charged; to wit: fraud, dishonest dealing and breach of trust in a business transaction. It is therefore RECOMMENDED that the information charging respondent with a violation of Florida Statute 475.25(1)(a) be dismissed. Respectfully submitted and entered this 30th day of December, 1975, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Louis B. Guttman, III, Esquire Staff Counsel Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 James F. Spindler, Jr., Esquire and James R. Eddy, Esquire EDDY AND SPINDLER, P. A. 700 East Atlantic Boulevard Pompano Beach, Florida 33060
Findings Of Fact At all times pertinent to the charges, the Respondent Joyce A. Chandler, was a licensed real estate broker in the State of Florida, holding license number 0348072. Respondent's license was suspended for a period of one year pursuant to a Final Order of the Florida Real Estate Commission on August 4, 1983, which became effective September 3, 1983. To date, the Respondent has failed to take steps necessary to reactivate her license and she remains in a suspended status. Gerald and Mary Anne Jennings were the owners of a home located at 15413 S.W. 105th Avenue, Miami, Florida. There was a first mortgage on the home held by Stockton, Whatley and Davin. In the early part of 1981, the Jennings were experiencing financial difficulties and in an effort to help pay off debts secured a second mortgage in the amount of $15,000.00 from Davide and Associates, Inc. This mortgage from Davide and Associates, Inc., was a wrap-around mortgage making the total obligation (Stockton, Whatley and Davin plus Davide) approximately $44,000.00. In August of 1981, Davide and Associates, Inc. sold the wrap-around mortgage to Mr. and Mrs. Leon Shiff. In January of 1983, the Jennings made a decision to sell their home as they were having difficulty making payments to Shiff. The Jennings contacted Mr. Shiff and informed them of their decision, and Mr. Shiff attempted to secure prospective purchasers for them. On or about January 30, 1983, the Respondent Chandler made an offer to purchase the Jennings home, which offer was rejected by the Jennings. On or about February 2, 1983, the Respondent made a second offer to purchase the Jennings home which offer was accepted. The terms of this February 2, 1983 contract provided that the Respondent was to give sufficient funds to the Jennings to catch up on all mortgage arrearages, tender to the Jennings approximately $4,000.00 in cash, and the Jennings were to take back a third mortgage in the amount of $4,000.00. Respondent, in turn, was to assume the Stockton, Whatley and Davin mortgage and agreed to pay off the Shiff mortgage within 90 days. The Jennings desired to return to West Virginia immediately. Therefore, the Respondent promised and represented to the Jennings that she would secure tenants to occupy the residence while she attempted to obtain the necessary financing and to close the transaction and would use the proceeds from the rental money to make all mortgage payments. On or about February 22, 1983, the Respondent and the Jennings signed yet a third contract. Said contract has not been produced and the location of it is unknown. On this same date, the Respondent had the Jennings sign, in blank, a Warranty Deed. The Respondent represented to the Jennings that the Warranty Deed was nothing more than a Power of Attorney which enabled the Respondent to rent the house and use the rental money to make the mortgage payments while the Respondent sought the financing per the terms of the contract. Based on the Respondent's representations and promises, the Jennings vacated the residence and stopped making mortgage payments. Thereafter, the Respondent secured a Mr. and Mrs. Hill as tenants for the property. Mr. and Mrs. Hill came to the Respondent as tenants from Prudential Life Insurance Company. Mr. and Mrs. Hill had recently experienced damage to their home due to a fire and the Respondent secured rental property for the Hills on behalf of Prudential. In regards to this matter, Prudential paid via a double party check made payable to Robert Hill and Princess International, Inc. $1,950.00. The Respondent goes by the name of P. J. Chandler, Princess Chandler, Princess international and Princess International, Inc. These tenants remained in the Jennings' home for approximately two months. The Respondent made no mortgage payments to either Stockton, Whatley and Davin or to Mr. Shiff for the period of February 1983 to August 1983. Further, the last mortgage payment made was for the January payment delivered to Mr. Shiff by Mrs. Jennings. In order to keep the first mortgage in good standing with Stockton, Whatley and Davin, Mr. Shiff took it upon himself to make these mortgage payments although he was receiving no mortgage payments on the wrap-around from Mr. & Mrs. Jennings or the Respondent. In June of 1983, Mr. Shiff enlisted the aid of Herman Isis, attorney at law, to begin foreclosure proceedings on the residence. In August of 1983, the residence was sold to Shiff at the foreclosure sale. Thereafter, a certificate of title was received by Mr. Shiff in regards to said foreclosure purchase. The Jennings received only $3,248.00 from the Respondent as opposed to the approximate $8,000.00 contract amount. The transaction never closed as promised by the Respondent. Finally, the Respondent failed to make the necessary mortgage payments as represented and promised by her to the Jennings.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Respondent Joyce A. Chandler's license as a real estate broker be revoked. DONE and ORDERED this 22nd day of March, 1985, in Tallahassee, Leon County, Florida. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of March, 1985. COPIES FURNISHED: James R. Mitchell, Esquire Department of Professional Regulation, Division of Real Estate 400 W. Robinson Street Post Office Box 1900 Orlando, Florida 32802 Fred Graves, Esquire 315 S.E. Seventh Street Ft. Lauderdale, Florida 33301 Salvatore A. Carpino, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Fred Roche Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Harold Huff Executive Director Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802
Findings Of Fact Prior to the commencement of hearing, the parties entered into a stipulation of fact, a copy of which is attached and constitutes the findings of fact in this hearing.
Recommendation Based on the foregoing findings of fact and conclusions of law, the Hearing Officer recommends that the Florida Real Estate Commission take action to cause Holdridge's name to be placed on the list of active brokers and to have current registration papers issued. DONE and ORDERED this 2nd day of May, 1977, in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of May, 1977. COPIES FURNISHED: Frederick H. Wilsen, Esquire 2699 Lee Road Winter Park, Florida 32789 Michael E. Crane, Esquire 521 Landmark Building Naples, Florida 33940 =================================================================
The Issue The issue in the proceeding was whether the Respondents violated various provisions of Florida Statutes regulating the real estate profession by failing to return a $2,000.00 deposit, failing to notify the Florida Real Estate Commission of a deposit dispute, and failing to maintain the deposit in a trust account or other proper depository.
Findings Of Fact The following findings are facts stipulated by the parties in their Prehearing Stipulation filed on March 31, 1986 That Petitioner is a state government licensing and regulatory agency charged [w]ith the responsibility and duty to prosecute Administrative Complaints pursuant to the laws of the State of Florida, in particular Section 20.30, Florida Statutes, Chapters 120, 455 and 475, Florida Statutes, and the rules promulgated thereto. That Respondent C.P. O'Sullivan is now, and was at all times material hereto, a licensed real estate broker in the State of Florida having been issued license number 0144214 in accordance with Chapter 475, Florida Statutes. The last license issued was as a broker, % Preferred Properties of Lee County, Inc., 311 Homestead Road, Lehigh Acres, Florida 33936. That Respondent, Preferred Properties of Lee County, Inc., is now and was at all times material hereto, a corporation licensed as a real estate broker in the State of Florida having been issued license number 0169117 in accordance with Chapter 475, Florida Statutes. The last license issued was at the business address of 311 Homestead Road, Lehigh Acres, Florida 33936. At all times alleged herein, Respondent C.P. O'Sullivan was licensed as a real estate broker and sole qualifying broker and officer of Respondent Preferred Properties of Lee County, Inc. That on or about September 25, 1984, the Respondents solicited and obtained a sales contract entered into by Claretha Pinkney, as purchaser, and Elsie Barning, as seller, of certain residential property. That in connection therewith, the Respondents received in trust from Claretha Pinkney, a $2,000.00 earnest money deposit. The contract was contingent upon Claretha Pinkney obtaining a new mortgage loan. Claretha Andrews Pinkney is a school teacher for the Lee County Board of Education. In July 1984, she moved to the Lee County area from Georgia where she had also been a school teacher. (T. 20, 35). She contacted Respondent, Preferred Properties about her desire to purchase a house and began working with Kay Alcantara, a sales associate with Preferred Properties. (T-21, 85). Ray Alcantara introduced Mrs. Pinkney to C. P. O'Sullivan, who did a pre-qualification in his office. That is, he determined, through a series of questions, what price range to look for. During the pre-qualification, Ms. Pinkney gave her profession and her income, said she was from Georgia and said she owned a house in Georgia, which she rented out. She also said she had minimal liabilities. (T-99-100, 107-108). A house was found at 13 Apache Street in Lehigh Acres, and on September 25, 1984, a contract to purchase the house for $39,900.00 was executed. Mrs. Pinkney made deposits of $500.00 and $1500.00 in accordance with the contract. The contract required that she " make immediate application for a mortgage loan, or loans at a local lending institution at the prevailing rate of interest, in the amount of $35,900.00." The remaining $2,000.00 was to be due at the time of closing. (Petitioner's Exhibit #2). Claretha Pinkney applied for mortgage financing, through Columbus Mortgage Company, a Ft. Lauderdale based mortgage broker. She has relatives on the east coast who in the past had dealt with that company. (T-24-25, Respondent's composite Exhibit 2) The company did not maintain an office in Ft. Myers, but conducted business there through advertising WATTS Telephone number. (Deposition of James Gordon, P. 16). A representative of the company came over for the closings which took place in the office of Tri-County Title Company in Lee County, but the level of business never warranted opening a branch office in Ft. Myers. (Deposition of James Gordon, pp. 15-16, 20). In early November, Nancy Leclair, an employee of Columbus Mortgage Company, told Mrs. Pinkney that the company could not go forward with her application until they had verification that she had funds to close on the sale. (T. 43- 44). Mrs. Pinkney planned on using money from the Retirement System of the Georgia Board of Education but the retirement check had been sent to her prior address and was routed back to the Board of Education before it finally reached her in Florida. (T-23, 27) Mrs. Pinkney asked to have the loan application stay open while she was trying to get the funds from the Georgia Retirement System (T-45). Mrs. Pinkney told Kay Alcantara about the problem with getting the loan approved and the lost retirement check (T-27). Kay Alcantara stayed in touch with both Nancy Leclair and Mrs. Pinkney regarding the status of the loan and the retirement check. (T-89). Before November 20, Mrs. Pinkney called Kay Alcantara to say that she received a letter from the Georgia School System that her money was forthcoming but that she was eligible to leave the money in the fund and later receive benefits. If she cashed the check, she would lose her benefits. (T-86-87). The funds from the retirement system amounted to approximately $13,000.00 (T-52, 53, Respondent's Exhibit 43). On November 19, 1984, at Kay Alcantara's Suggestion, Mrs. Pinkney met with Kay, Lynn Aspinwall (the office manager) and C. P. O'Sullivan in Mr. O'Sullivan's office. Mrs. Pinkney informed the realtors that she did not wish to go through with the deal, that she didn't want to lose her retirement benefits and did not want to take the money out of the Georgia Retirement System. Mr. O'Sullivan told her that if she didn't want the house she would lose the $2,000.00 deposit and she should think about it overnight. If she still felt the same way, she could come in the next day and sign a release of the deposit. (T-87, 104-105). On November 20, 1984, Mrs. Pinkney returned to the office and signed the agreement forfeiting her binder deposit of $2,000.00. (T-33, Petitioner's Exhibit #4). At no time prior to, or including that date, did she ask to have her deposit returned. (T-105). On the same date, November 20, 1984, Mrs. Pinkney sent a letter to Nancy Leclair at Columbus Mortgage Company enclosing a copy of another contract for sale for an entirely different property and a different realtor. (T-57, 58, Respondents' composite Exhibit #2). This contract is dated November 4, 1984, and is for a single family residence for a total sales price of $34,900.00. Mrs. Pinkney received her Georgia Retirement fund check and on December 3, 1984, deposited it in Sun Bank/Southwest. (Respondent's Exhibit #3). She later returned the money to the retirement fund and her admitted purpose in making the deposit was to show she had sufficient funds to close and to "fake out" the lender, while waiting for some other funds to materialize. (T-62, 65). Two statements of credit denial were eventually issued by Columbus Mortgage Company. The first, dated January 15, 1985, was clearly for the Apache Street property. The second, dated January 20, 1985, describes the transaction as "First Mortgage financing for a purchase of a home." (Respondent's composite Exhibit #2, Petitioner's Exhibit #3). Neither C. P. O'Sullivan nor Preferred Properties were informed by Columbus Mortgage Company that Mrs. Pinkney's loan was turned down. (T-107, 119). Considered as a whole, the evidence in this proceeding strongly supports the inference that Claretha Pinkney reneged on her contract to purchase the Apache Street property not because she was turned down for the loan, but because she found another house that she preferred. That is why she freely signed the release for the $2,000.00. Respondents didn't know this at the time that the release was discussed and prepared; however, they knew of a different, highly credible basis for Mrs. Pinkney's rejection of the property: to qualify for the loan she would have to use her retirement money; she didn't want to use the money and lose her benefits. This knowledge was sufficient for the Respondents' reasonable and justifiable belief that Mrs. Pinkney was not entitled to return of her deposit.
Recommendation Based upon the foregoing, it is, therefore RECOMMENDED: That a final order be entered dismissing all counts of the Administrative Complaint. DONE and ORDERED this 13th day of May, 1986, in MARY W. CLARK, 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 13th day of May, 1986. COPIES FURNISHED: Harold Huff, Executive Director Division of Real Estate 400 W. Robinson Street Orlando, Florida 32802 James Gillis, Esquire Division of Real Estate 400 W. Robinson Street Orlando, Florida 32802 Simon M. Harrison, Esquire Perch ~ Harrison, P.A. 1820 Colonial Blvd., Ft. Myers, Florida 33907 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esquire Department of Professional Regulationff 130 North Monroe Street Tallahassee, Florida 32301 APPENDIX The following constitutes my specific rulings pursuant to subsection 120.59(2), Florida Statutes on all of the proposed Findings of Fact submitted by the parties to this case. Rulings on Petitioner's Proposed Findings of Fact Adopted in Finding of Fact #l.b. Adopted in Finding of Fact #1.c. Adopted in Finding of Fact #l.d. Adopted in Finding of Fact #1.e. Adopted in Finding of Fact #l.f. Adopted in Finding of Fact #l.g. Rejected as contrary to the weight of evidence. The finding that the loan was applied for is, however, adopted in Finding of Fact #5. Adopted in Finding of Fact #11. Adopted in Findings of Fact #7 and 8. Rejected as contrary to the weight of evidence. Rejected as contrary to the weight of evidence. Rejected as contrary to the weight of evidence. Rejected as unnecessary and, as to entitlement to the money, wholly unsupported by competent evidence. Rulings on Proposed Findings of Fact Submitted by the Respondent 1. Rejected as unnecessary. ·2. Adopted in substance in Findings of Fact #1-12 except 2.m and 2.0 which are unsupported by the evidence. The record does not reveal when Mrs. Pinkney attempted to claim the $2,000.00; it does establish that she did not claim the $2,000.00 before or at the time she signed a release. Rejected as a restatement of testimony rather than a finding of fact. Rejected as unnecessary.
Findings Of Fact Petitioner is charged with the responsibility of administering and enforcing the provisions of Chapter 494, Florida Statutes, including the duty to sanction those licensed under the Mortgage Brokerage Act (the Act) for violations of the Act. At all times pertinent to this proceeding, Respondent Joan N. Harnagel (Ms. Harnagel), was a registered mortgage broker in the State of Florida, holding license No. HA 517383319. There was no evidence that Ms. Harnagel's registration has been previously disciplined by Petitioner. Respondent Meridian Mortgage Group, Inc. (Meridian) first became a licensed mortgage broker in the State of Florida in September, 1988, with Respondent Joan N. Harnagel (Ms. Harnagel) serving as its vice-president and principal mortgage broker. Between September, 1988, and August, 1992, Meridian was a mortgage brokerage business in the State of Florida and held license No.HB 880000176-00. Meridian has held no active license as a Florida mortgage broker since August, 1992. There was no evidence that Meridian's registration has been previously disciplined by Petitioner. In September 1988, Meridian bought a Florida mortgage brokerage company named Bay Pointe Mortgage. At the time of this purchase, Ms. Harnagel was the principal mortgage broker and was responsible for the daily operations of Bay Pointe as its general manager. Upon Meridian's purchase of Bay Pointe, Ms. Harnagel served as Meridian's principal mortgage broker in Florida and continued her responsibility for the daily operation of Meridian's activities in Florida. Until July 15, 1989, Ms. Harnagel had no ownership interest in Meridian. The owners of Meridian between September 1988 and July 15, 1989, were Majorie Mohr and Larry Mohr of Carmel, Indiana. On July 15, 1989, Ms. Harnagel assumed ownership of Meridian and continued to serve as its principal mortgage broker and general manager responsible for daily operations. At all times pertinent to this proceeding, Ms. Harnagel was the principal mortgage broker of Meridian and was responsible for its daily operations, which included the hiring and firing of employees, the ordering of appraisals and credit reports for customers, and the preparation of good faith estimates. Petitioner conducted an examination of the Respondents Harnagel and Meridian for the period inclusive of January 1, 1989, through April 30, 1990. As a result of the investigation, Petitioner prepared and forwarded to Respondents a report of its investigation. Subsequently thereto, Petitioner prepared and served on Respondents an "Administrative Complaint, Notice of Intent to Issue Order to Cease and Desist, Intent to Revoke Licenses and Notice of Rights" which is the charging document for this proceeding. 1/ PAR PLUS VIOLATIONS There is a difference between a mortgage broker's origination fee and a lender's discount fee. A mortgage broker's origination fee is a fee charged by the mortgage broker for finding a loan for the applicant. A discount fee is a fee charged by the lender to a borrower for doing the paperwork on a loan and is usually expressed as a percentage of the amount borrowed. A discount may be considered as prepaid interest to the lender to cover the lender's expenses in making the loan. In the typical transaction that does not involve "par plus", the mortgage broker's origination fee is paid to the mortgage broker by the borrower at closing either by separate check or out of the proceeds of the closing. A "par plus" transaction is one in which the mortgage broker's origination fee is paid to the mortgage broker by the lender instead of by the borrower. Petitioner's Exhibit 1 is a composite exhibit and pertains to a transaction involving borrowers Oscar and Arlene Carlsen. Petitioner's Exhibit 2 is a composite exhibit and pertains to a transaction involving borrowers J. Richard and Sara Pooler. The first page of each exhibit is the good faith estimate that was completed by Ms. Harnagel. The good faith estimate is normally given to a borrower when the borrower first comes to the mortgage broker's office and applies for a loan. The purpose of the good faith estimate is to make full disclosure of what fees are going to be charged to the borrower. The second and third pages of Petitioner's Exhibit 1 and Exhibit 2 constitute the Settlement Statements for each transaction and was prepared by the respective closing agents for these transactions. The Settlement Statement should reflect all costs that were paid by the buyer and the seller in the transaction being financed. The Carlsen transaction was a "par plus" transaction since Meridian's mortgage brokerage fee was paid by the lender. The Pooler transaction was also a "par plus" transaction since Meridian's mortgage brokerage fee was paid by the lender. By failing to respond to requests for admissions, Respondents admitted 2/ that in the Carlsen transaction and in the Pooler transaction neither Meridian nor Ms. Harnagel disclosed to the borrowers Meridian's participation in a "par plus" program. Both the Carlsen and the Pooler transactions closed in December 1989. ESCROW FUND VIOLATIONS - RESIDENTIAL 3/ Respondents received the following sums from the following borrowers on the following dates: BORROWER AMOUNT DATE K. Carrol $525.00 06-07-89 R. Williams $400.00 11-28-89 J. Gentile $270.00 06-30-89 C. Saffer $270.00 05-15-89 J. Mark $270.00 02-22-89 G. Norton $275.00 07-14-89 F. Sloss $275.00 03-02-89 W. Nachman $275.00 02-27-89 E. Ward $270.00 04-26-89 H. Rosen $310.00 04-24-89 J. Morris $825.00 06-30-89 S. Lewis $270.00 03-24-89 E. Fuller $485.00 05-01-89 G. Fleming $270.00 03-30-89 J. Bishop $270.00 03-28-89 P. Bifulco $270.00 04-10-89 E. Zulueta $270.00 05-26-89 L. MacCalister $325.00 06-21-89 T. Nangle $275.00 01-26-89 I. Rybicki $270.00 03-31-89 I. Rybicki $275.00 03-07-89 The foregoing sums were received by Respondents from borrowers to pay for credit reports and appraisals. Respondents should have placed these funds in the escrow account Meridian maintained at Sun Bank. Instead of being used for the intended purpose, these funds were placed in Meridian's operating account at Sun Bank and were used to pay Meridian's overhead. At all times pertinent hereto Respondent Harnagel was the principal mortgage broker for Meridian and knew that these sums were not being placed in escrow, knew that the funds should have been placed in escrow, and knew that these funds were not being expended for credit reports and appraisal reports. Ms. Harnagel asserts that the practice of placing these funds in Meridian's operating account was dictated by Meridian's out-of-state owners. Ms. Harnagel knew this practice violated the Mortgage Brokerage Act and asserts that she repeatedly informed the Mohrs of this problem. Notwithstanding her acknowledged violation of the Act, she continued to collect these fees and continued to place these fees in Meridian's operating account. The great majority of these transactions occurred prior to Ms. Harnagel assuming ownership of Meridian on July 15, 1989. As a result of these practices, Meridian became indebted to at least two appraisal companies, Duffy and Associates (Duffy) and Diamond Realty and Appraisal Company (Diamond). Neither appraisal company had been fully repaid as of the time of the formal hearing. Duffy and Associates is owed a total of $4,000 by Respondents for work that was performed on the order of Respondents. At least six of the appraisals for which Duffy has not been paid were ordered after Ms. Harnagel assumed ownership of Meridian. In each of these transactions Respondents collected the amount necessary to pay for the appraisal, but, instead of paying for the appraisals, spent the amounts as part of the operating account on overhead expenses. Ms. Harnagel paid Diamond the sum of $1,500 as partial payment of the accumulated debt to Diamond. At the time of the formal hearing, Respondents owed Diamond the sum of $1,675 plus interest and attorney's fees. THE COMMERCIAL LENDER: VICTORY ENTERPRISES TRUST The proposed lender for each of the four commercial transactions at issue in this proceeding was an entity referred to as "Victory Enterprises Trust". The principals of this trust were Thomas Telford, Harold McDonnard, Harold Meridon, and a man identified as Mr. Carpenter. COMMERCIAL TRANSACTION ONE: GOLDEN HILLS Golden Hills is one of the four commercial projects that was at issue in this proceeding. A group of individuals including Robert Hastings, Doug Ollenberger, and Jeffery Kollenkark formed a partnership to purchase, refurbish, and develop a golf course and its surrounding property known as Golden Hills. This partnership, initially known as EBBCO Partnership and later incorporated under the name of Fore Golf Management, Inc., discussed with Ms. Harnagel the financing that would be required for the project. Ms. Harnagel suggested to this borrower a possible joint venture with a potential lender, the Victory Enterprises Trust, and requested a deposit in the amount of $12,000. Ms. Harnagel did not identify her lender to the borrower. This borrower deposited with Meridian the sum of $12,000 on or about September 28, 1989, with conditions that may be summarized as follows: The money was to be placed in Meridian's escrow account. The money was to be "100 percent refundable" if the joint venture partner did not fund the project or if terms of funding were not acceptable. Signatures from both parties to the joint venture would be required to release the funds from escrow. This money was not to be considered an application fee, but as a deposit for closing costs of the proposed joint venture. Any funds remaining were to be returned to Fore Golf Management, Inc. At no time did the Golden Hills borrowers authorize Ms. Harnagel to remove any of the funds from her trust account. On October 2, 1989, Ms. Harnagel wrote Robert Hastings a letter that included the following: Friday, September 29, 1989, Sun Bank received the Twelve Thousand Dollars ($12,000.00) and deposited in MERIDIAN MORTGAGE GROUP, INC. TRUST ACCOUNT. These monies are used for prudent expenses needed to bring FORE GOLF MANAGEMENT, INC. an acceptable commitment. THE MONIES ARE REFUNDABLE if the commitment is not acceptable. (Emphasis in the original) On February 1, 1990, Mr. Hastings wrote Ms. Harnagel a letter that included the following: ... For about five months we have been attempting to put together a deal on Golden Hills. You have had our $12,000.00 since 9/29/89. To date no commitment has been brought to us. We do not mind continuing to try, but we do not wish to continue with this indefinitely. It is our wish that you suggest a time frame within which the project is completed and funded, or unless extended in writing by both parties, all agreements are null and void and all monies are refunded. On March 3, 1991, the Golden Hills borrowers demanded that Respondents return the $12,000 deposit, noting that the Golden Hills property had been sold to another entity approximately six months previously and that no commitment from Respondents or their lender had been forthcoming. Thereafter, the Golden Hills borrowers sent Dr. Kollenkark to Florida from California in an effort to collect the deposit from Respondents. On March 11, 1991, Ms. Harnagel wrote to Dr. Kollenkark a letter that provided, in part, as follows: The Trust does not want to return the monies as they felt they bought a commitment but that you were unable to obtain a viable contract. As I have said to you when we were told in December, 1990 that Golden Hills had definitely been sold. I told you that I would pay the $13,000 and get the money through the legal department. The reference to the Trust in Ms. Harnagel's letter of March 11, 1991, is to the Victory Enterprises Trust. The reference to the sum of $13,000 was an error and should have been $12,000. There was no evidence as to whether the deposit was transferred from Meridian's trust account to the proposed lender as implied by the letter of March 11, 1991. Ms. Harnagel testified that the money was transferred to Meridian's operating account and expended on Meridian's operating expenses. Ms. Harnagel admitted that the sum deposited by the Golden Hills borrowers should be refunded, but that she has been unable to do so. Her position that using the money to fund her operating expenses was authorized by the agreement with the Golden Hills borrowers is rejected as being contrary to the evidence. Although the record establishes that Ms. Harnagel expended considerable time and effort to secure funding for the Golden Hills borrowers, the record is equally clear that she was not entitled to use the deposit to fund her overhead expenses. COMMERCIAL TRANSACTION TWO: GENESIS CORPORATION The second commercial transaction involved the funding of two hotel projects with the Genesis Corporation as Respondents' borrower. By letter dated December 15, 1989, the Genesis Corporation deposited with Meridian the sum of $1,500. Paragraph two of the transmittal letter is as follows: 2. The Funding must be to Genesis Corp. satisfaction. The Application Fee of $1,500. is refundable, if Genesis Corp. is not Completely Satisfied with the Funding. The principals of Genesis Corporation did not provide certain financial statements requested by Respondents. Consequently, Respondents were unable to secure financing for the two hotel projects. After the request for the financial statements was made, Respondents did not hear further from the Genesis Corporation. Respondents expended the deposit made by the Genesis Corporation for its operating expenses. COMMERCIAL TRANSACTION THREE: RIVER RUN The third commercial transaction involved River Run Limited Partnership (River Run), which proposed to develop a golf course in North Carolina. As part of the transaction, Meridian required the borrower to pay an advance fee of $10,000.00 to be placed in Meridian's trust account. This deposit was subject to the following conditions: The deposited fee may be used by the lender (an unidentified trust) or by MERIDIAN MORTGAGE GROUP, INC. in conjunction with the lender to conduct an inspection of the property and for other prudent and reasonable expenses necessary to bring the BORROWER an acceptable loan commitment. For all monies spent a full accounting of such expenses will be made to BORROWER. If no loan commitment is offered within fifteen (15) days of the last signature date of this agreement, the entire application fee will be refunded unless otherwise agreed to by both parties to this agreement. Should an offer be made by the lender that, for any reason, is unacceptable to the BORROWER, the BORROWER shall have the right to reject such an offer and the entire application fee shall be refunded to the BORROWER. In such an event, the BORROWER shall be obligated to notify MERIDIAN MORTGAGE GROUP, INC. within five (5) working days of receipt of such offer that the offer is rejected, otherwise the deposited funds will be forfeited and will become the property of MERIDIAN MORTGAGE GROUP, INC. The foregoing agreement between Meridian and River Run was extended so that Meridian was given until November 15, 1989, to obtain the financing. The $10,000 deposit to Meridian was paid on behalf of River Run by Nate Bowman. No financing for River Run was secured by Respondents. Mr. Bowman demanded a refund of the deposit and subsequently obtained judgment against Respondents for the $10,000 deposit. As of the formal hearing, Respondents had not satisfied the Bowman judgment or otherwise refunded the deposit to River Run. Ms. Harnagel asserted that the following circumstances were the reason that the River Run transaction did not close: The trust that was to be the lender asked for financial statements that were not provided. There was a lawsuit between certain of the partners of River Run. A financial officer would not relinquish certain tax returns for one of the partners of River Run. There was a concern about River Run's ability to repay the money. Ms. Harnagel stated that of the $10,000 that was deposited into Meridian's trust account, she only retained the sum of $3,500 and that the balance went to the lending trust. The $3,500 that was retained by Ms. Harnagel was expended. There was no accounting for these expenditures. Likewise, there was no accounting for the sums paid to the lending trust. COMMERCIAL TRANSACTION FOUR: CHAPEL HILL The fourth commercial transaction involved a group of borrowers represented by Michael Grdina, an attorney in Ohio, who desired to obtain financing for the construction of a series of projects that will be referred to as the Chapel Hill complex. Subsequent to a telephone conversation between Mr. Grdina and Ms. Harnagel, Ms. Harnagel sent a letter dated November 16, 1989. This letter reflected that Respondents represented a Trust and that the Trust was interested in participating in a joint venture with Mr. Grdina's clients. The letter contained certain requirements imposed by the Trust and provided, in part, as follows: A Seventy-Five Hundred ($7,500.00) application fee be placed in MERIDIAN MORTGAGE GROUP, INC. TRUST ACCOUNT. These monies are used for prudent expenses needed to bring Chapel Hill Commerce Center an acceptable commitment. If the commitment is not acceptable the monies are refundable. In response to that letter of November 16, 1989, Mr. Grdina wrote Ms. Harnagel a letter on behalf of his clients and enclosed a check for the sum of $7,500. Mr. Grdina's letter became the agreement between the parties as to the status of the $7,500 deposit paid to Respondents by Mr. Grdina. That letter omitted the language in Ms. Harnagel's letter of November 16, 1989, pertaining to the use of the deposit "for prudent business expenses". Mr. Grdina's letter of December 1, 1989, provided, in part, as follows: By wire transfer to Meridian's trust account the entities [Mr. Grdina's clients] have placed with you a Seven Thousand Five Hundred Dollars ($7,500.00) refundable good faith deposit. If an entity accepts a proposal for funding from sources identified by you, and such entity does not close the transaction for reason other than the fault of the lender, the good faith deposit will be forfeited as liquidated damages for expenses and fees incurred in the transaction. The initial agreement between Harnagel and Grdina contemplated that Harnagel's Trust would provide financing for Grdina's clients. By letter dated February 23, 1990, Mr. Grdina accepted the offer that the transaction be modified so that the Trust would secure 100 percent of the loan by a lending institution by depositing with the lending institution certificates of deposit. As additional consideration to the Trust, the Trust would become entitled to 25 percent equity participation in the construction project. The letter of February 23, 1990, did not modify the status of the deposit paid by Mr. Grdina on behalf of his clients. The loan to Mr. Grdina's clients did not close because the lending institution with whom Ms. Harnagel and Victory Trust dealt would not fund the loan. Thereafter, Mr. Grdina demanded return of the $7,500 deposit. As of the date of the formal hearing, that deposit has not been refunded. Although Ms. Harnagel argues that she was entitled to keep the deposit, that argument is without merit since none of the conditions precedent to her entitlement to the deposit occurred. CUSTOMER OVERCHARGE Respondents admitted that two customers were charged brokerage fees, origination fees, and/or discount fees which were greater than those disclosed on the Good Faith Estimates. On the Morris transaction, a fee of $450.80 was estimated, but the fee actually assessed at closing was $2,240, an overcharge of $1,790. On the Rosen transaction a fee of $1,773 was estimated, but the actual fee assessed was $1,871.50, for an overcharge of $98.50. Both overcharges resulted from charges imposed by a lending institution and neither overcharge resulted in inappropriate payments to Respondents. WALL STREET JOURNAL ADVERTISEMENT Respondents placed an advertisement in the Wall Street Journal on February 16, 1990. This advertisement did not contain the address of Meridian as required by law. The deletion of Meridian's address was the fault of the Wall Street Journal. INVESTIGATION OF LENDING SOURCE Ms. Harnagel testified without contradiction that she made efforts to verify the reliability of the Victory Enterprises Trust and its principals. She learned of this potential lender through an advertisement the Trust had placed in the Miami Herald. Neither the Trust or the principals were required to be licensed in Florida. Her efforts included having her attorney and her bank officer make inquiries to verify the reliability of the proposed lender. Petitioner argues that Respondents should have made further inquiry after the loan to the Golden Hills borrowers was not forthcoming from this lender. Petitioner has failed to establish by clear and convincing evidence that Respondents breached any standards imposed upon them to investigate the reliability of lenders so as to prove that Respondents are incompetent.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that all licenses and registrations issued either to Joan N. Harnagel or Meridian Mortgage Group, Inc., be revoked. It is further recommended that an administrative fine be imposed against Joan N. Harnagel in the amount of $25,000. It is further recommended that a separate administrative fine be imposed against Meridian Mortgage Group, Inc., in the amount of $25,000. DONE AND ENTERED this 22nd day of July, 1993, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 22nd day of July, 1993.
