The Issue The issues in the case are whether the allegations of the Administrative Complaint are correct, and, if so, what penalty should be imposed.
Findings Of Fact At all times material to this case, Respondent Clifford Altemare (Mr. Altemare) was a licensed real estate broker, holding Florida license BK-3062479. At all times material to this case, Respondent Altema Consulting Co., LLC (ACC), was a licensed real estate brokerage, holding Florida license CQ-1024239. Clifford Altemare was the owner, qualifying broker, and officer for ACC. On August 21, 2006, Mr. Altemare signed an agreement to represent for sale hotel property owned by Sweet Hospitality, LLC. The agreement stated that Mr. Altemare would receive an unidentified commission based on the sales price. On December 12, 2006, Mr. Altemare received an escrow deposit of $25,000 from Rakesh Rathee, who signed an agreement to purchase the hotel. The $25,000 deposit was transferred by wire from Rakesh Rathee into a corporate operating account of ACC. Mr. Altemare failed to place the $25,000 escrow deposit into an ACC escrow account. Apparently, because the seller decided not to sell the property, the proposed sale did not close, and the buyer demanded the return of the $25,000 deposit. There is no credible evidence that the seller has made any claim upon the deposit. Mr. Altemare has refused to return the $25,000 deposit to Rakesh Rathee. At the hearing, Mr. Altemare asserted that the deposit has not been returned to the buyer because of uncertainty as to whom the deposit should be refunded. There was no credible evidence offered at the hearing to support the assertion that someone other than Rakesh Rathee should received a refund of the $25,000 deposit.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate, enter a final order, stating that the Respondents violated Subsections 475.25(1)(b), (d), and (e), Florida Statutes (2006), and Florida Administrative Code Rule 61J2-14.010 and imposing a $15,000 administrative fine and a five-year suspension of licensure. DONE AND ENTERED this 12th day of May, 2010, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of May, 2010. COPIES FURNISHED: Patrick J. Cunningham, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite N801 Orlando, Florida 32801 Clifford Altemare Altema Consulting Co., LLC 1047 Iroquois Street Clearwater, Florida 33755 Reginald Dixon, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Thomas W. O'Bryant, Jr., Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street, Suite N802 Orlando, Florida 32801
The Issue The issue presented is whether Respondents are guilty of the allegations contained in the Administrative Complaint filed against them, and, if so, what disciplinary action should be taken against them, if any.
Findings Of Fact At all times material hereto, Respondent Richard Shindler has been a licensed real estate salesman in the State of Florida, having been issued License No. 0395044. The last license issued was as a salesman with Global Real Estate & Management, Inc. At all times material hereto, Respondent Global Real Estate & Management, Inc., has been a corporation registered as a real estate broker in the State of Florida, having been issued License No. 0223589. At all times material hereto, Mark H. Adler was licensed and operated as the qualifying broker and officer of Global Real Estate & Management, Inc. Adler's license is currently under suspension by agreement with Petitioner as a result of the activities complained of in the Administrative Complaint filed in this cause. At no time has Respondent Shindler been a director or officer of Respondent Global Real Estate & Management, Inc. At all times material hereto, Respondent Shindler has been the sales manager for Respondent Global Real Estate & Management, Inc. As the sales manager, Respondent Shindler sometimes helped other salesmen structure financing and helped them with other problems. Respondent Shindler was not responsible for the collection of funds from individual salesmen. Each individual salesman was responsible for collecting funds from any real estate transaction and giving those funds to Respondent Global's bookkeeper for deposit. As sales manager, Shindler was a signatory on the escrow account in order to make disbursements for small transactions mainly involving rental properties. In addition, Respondent Shindler was responsible for the hiring and firing of office personnel. However, he had no control over the contracts of other salesmen. On March 13, 1989, Respondent Shindler, as a private purchaser, made two purchase offers for two pieces of property owned by the same sellers. The purchase offers were for $115,000 and $80,000, respectively, and required that Respondent Shindler place $6,000 and $5,000, respectively, into Respondent Global's escrow account as a deposit on the purchase of the properties. Respondent Global and real estate broker Jay Hirsch were to receive commissions on the sale of the properties. Those offers to purchase disclosed in writing that Respondent Shindler was also a licensed real estate salesman. Although both offers to purchase were accepted by the sellers, the transactions involving the purchase of these properties did not close due to Respondent Shindler's inability to obtain financing, which was a contingency of the contracts. In October, 1989, demands for the release of the escrowed monies were made by the sellers and by the sellers' broker Jay Hirsch. They made demand upon Respondent Global's attorney. Additionally, Jay Hirsch made demand on Mark Adler by telephone and then by demand letter to Adler, who, as the qualifying broker for Respondent Global, was responsible for the release of the escrowed funds. Subsequent to the demands made by the sellers and their broker, Respondent Global filed a complaint for interpleader. The escrowed deposits were eventually disbursed pursuant to a settlement among the parties claiming an interest in the escrowed deposits. In March, 1990, Petitioner began an investigation of the Respondents and Adler. Investigators Castro and Rehm both participated in the investigation. Investigator Castro believed Respondent Shindler to be the office manager of Respondent Global. During the initial interview with Respondent Shindler, he produced records which indicated that a deposit of $14,265.69 had been made on January 13, 1989, into Respondent Global's escrow account. This check had been given by Respondent Shindler to Global's bookkeeper for deposit. This deposit represented proceeds from the sale of property owned by Respondent Shindler's brother Paul, and was placed in escrow in anticipation of the offers to purchase made by Respondent Shindler on the two properties involved in this cause. Investigator Rehm examined the escrow account bank records and determined that for a two-month period the escrow account balance had dropped below the minimum $11,000 balance required by the two contracts in question herein alone. Initially, Respondent Shindler advised the investigators that the bank where the escrow account was maintained had represented that it had debited the escrow account as a result of a lien placed on that account by the Internal Revenue Service. Upon further investigation, Respondent Shindler advised the investigators that the bank itself had withdrawn $3,200 from Global's escrow account to cover a shortage in Respondent Global's operating account. At all times material hereto, both Adler and Respondent Shindler were signatories on the escrow account. As part of its investigation, Petitioner served a subpoena on Maria Aguerra, Respondent Global's bookkeeper, requesting from Adler, or Respondent Shindler, or the custodian of records for Respondent Global Real Estate, all contracts, leases, agreements, monthly bank statements, deposit slips, and cancelled checks for all accounts for the period of January 1, 1989, through March 22, 1990. Some of the requested documents were initially unavailable because they had previously been sent to the Florida Real Estate Commission. Although Adler testified that he was initially unaware that a subpoena had been served, he was given a 30-day extension to produce the records when he met with investigators Castro and Rehm on May 1, 1990. Although Adler had both the responsibility for and control over the records of Respondent Global, he was not fully familiar with the records, and the bookkeeping was in disarray. At all times material hereto, Adler, as the broker for Respondent Global, was responsible for operating the Global office, for overseeing Global's escrow account, for reviewing contracts, and for being aware of the day-to-day events in the Global office. In addition, as the broker, Adler was required to be an officer of the corporation, to be a signatory on the escrow account, to have prepared and to sign the monthly escrow account reconciliations, and to respond to Petitioner if there were complaints or requests for production of documents. Adler, as the broker for Respondent Global, did not reconcile and sign escrow account statements on a monthly basis since he was not aware of the requirement that he do so. However, Adler did testify that he was aware of his responsibility for escrowed funds. At no time did Respondent Shindler have the responsibility to maintain Global's escrow account or to reconcile the escrow account on a monthly basis. At no time did Respondent Shindler represent that he was the broker for Respondent Global or that he was a broker. Respondent Shindler did not state to investigator Rehm that he was acting as the broker for Global or that Adler had simply lent Adler's license to Shindler to use. At no time did Adler and Respondent Shindler enter into an agreement whereby Shindler would act as the broker for Global using Adler's broker's license, and Adler was never paid any monies for any use of his broker's license. Adler testified that his involvement with Global's business had declined as he had pursued his growing interest in performing appraisals.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered: Dismissing Counts II, III, VII, VIII, and IX of the Administrative Complaint filed herein; Finding Respondent Global Real Estate & Management, Inc., guilty of the allegations contained in Count V of the Administrative Complaint; and Ordering Respondent Global Real Estate & Management, Inc., to pay a fine in the amount of $500 by a date certain. RECOMMENDED in Tallahassee, Leon County, Florida, this 20th day of March, 1991. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of March, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-4522 Petitioner's proposed findings of fact numbered 2-5, 7-9, 11-12c, 13, 14, and 16 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed finding of fact numbered 1 has been rejected as not constituting a finding of fact but rather as constituting a conclusion of law. Petitioner's proposed finding of fact numbered 6 has been rejected as being unnecessary for determination of the issues herein. Petitioner's proposed findings of fact numbered 10, 15, and 17 have been rejected as not being supported by the weight of the credible evidence in this cause. Petitioner's proposed finding of fact numbered 12d has been rejected as being irrelevant to the issues under consideration herein. Respondents' proposed findings of fact numbered 1-22 have been adopted either verbatim or in substance in this Recommended Order. The transcript of proceedings, together with Petitioner's Exhibits numbered 3, 5, and 8-14 and Respondents' Exhibit numbered 1 which were admitted in evidence. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation Division of Real Estate - Legal Section 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Harold M. Braxton, Esquire 9100 South Dadeland Boulevard Suite 400 - One Datran Center Miami, Florida 33156 Jack McRay General Counsel Department of Professional Regulation Northwood Centre, Suite 60 1940 North Monroe Street Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801
Findings Of Fact Petitioner is a state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Chapter 475, Florida Statute, and rules promulgated pursuant thereto. Respondent Dean O. Vanderwoude is now a real estate broker and was at all times material hereto a real estate salesman in Florida having been issued license number 0432878 in accordance with Chapter 475, Florida Statutes. On August 15, 1988, Respondent passed an examination to be licensed as a broker and was licensed as a broker on September 1, 1988. At all times material hereto, Respondent was licensed as a salesman and operated under the direction, control, or management of a licensed real estate broker, Anne M. Graffunder, and P.M.M. Properties under a 100 percent commission agreement whereby Respondent rented office space from his broker Graffunder. Respondent was affiliated with Graffunder and P.M.M. Capital, Inc., from approximately November 4, 1986, to October 16, 1987. When Respondent became affiliated with P.M.M., he had been licensed less than one year having first been affiliated with Security Realty Florida from December 20, 1985, to November 4, 1986. Under Graffunder's supervision, Respondent received little assistance in the form of guidance or instructions as to the methods and manner of presenting purchase contracts to sellers, little or no office support in the form of clerical assistance or technical training in the methods of handling escrow funds, no malpractice insurance coverage in the form of errors or omission's policy and no sales/training seminars. On approximately April 6, 1987, Respondent obtained a sales listing from Gary Alan Dahl (Dahl), a real estate investor, concerning real property, the record owner of which was Joe Belcik who had granted to Dahl equitable title to the property by Quit Claim Deed yet unrecorded. (Petitioner's Exhibit 2). The real property located at 2785 Adrian Avenue, Largo, Florida, had been purchased by Belcik from Dahl who had previously purchased the property from the Veteran's Administration. Respondent was aware of the condition of the title to the property listed by him for sale as he reviewed an abstract of the property. On April 6, 1987, prospective purchasers David and Donna A. Kiser (herein purchasers) viewed the real property at 2785 Adrian Avenue, Largo, Florida, and contacted Respondent at a telephone number observed on a "for sale" sign posted on the property. On that date, the purchasers executed a written offer to purchase the property, which offer was prepared by Respondent. (Petitioner's Exhibit 3). In conjunction with the offer to purchase, the purchasers tendered an earnest money deposit to Respondent, by cashier's check number 703917, dated April 10, 1987, in the amount of $100.00 made payable to P.M.M. Properties. The cashier's check was deposited into the escrow account of P.M.M. Capital, Inc., Sun Bank of Tampa Bay account number 265-014-3405 on April 15, 1987. The transaction closed on April 22, 1987. Following the closing, Graffunder issued a check number 140 written on the escrow account of P.M.M. Capital, Inc., Sun Bank/Southeast, account number 265-014-3405, dated April 22, 1987, made payable to Respondent in the amount of $100.00. The check was received by Respondent with Dahl's full permission and consent. Respondent represented to the purchasers that the seller, Dahl, had accepted their offer and desired to close the transaction immediately. Toward that end, Dahl came to Pinellas County from Sarasota County and executed all documentation necessary to effectuate the transfer on or before April 15, 1987. On April 15, 1987, Respondent met with the purchasers and had them sign all closing documents. This included execution of a closing statement and the Kisers requested an extension in order to obtain the $4,900.00 closing proceeds from Mrs. Kiser's father. On April 22, 1987, Mrs. Kiser presented the closing proceeds check and the transaction was finalized. That proceeds check and the $100.00 deposit check were both placed in Graffunder's operating account and pursuant to instructions from Dahl, Respondent received the closing proceeds as agent for Dahl. Dahl and the purchasers completed the closing by executing an Agreement for Deed on April 15, 1987. That agreement provides, in pertinent part, that the purchaser's would pay Dahl the total purchase price of $65,000.00 which included a down payment of $5,000.00 and monthly payments of $557.07 commencing May 1, 1987, and continuing for twenty-nine (29) months at which time the remaining principal balance of $60,073.18 would be payable in the form of a balloon payment. Dahl agreed to carry fire insurance for the full insurable value of the property and the purchasers were to have their names added to the policy as additional insureds. Additionally, both parties agreed that a Memorandum of Interest would be filed in the records of Pinellas County at the time of entering into the Agreement for Deed. Finally, the Agreement for Deed represented that there was a first mortgage in favor of Chrysler First and stated the condition that should the purchasers fail to make payments required of them within thirty (30) days after the same becomes due, the seller may, at his option, declare the contract null and void and all monies paid may be retained as full satisfaction and/or liquidated damages. Respondent did not provide the purchasers a warranty deed until approximately June 27, 1988, when he first became aware that Dahl had not given one to the Kisers. Respondent acknowledges that given the opportunity to reconstruct that transaction, he would have ensured that the seller provided a Warranty Deed to the purchasers as agreed in the Agreement for Deed. Respondent did not follow-up to ensure that a Memorandum of Interest was filed in the public records of Pinellas County as the parties agreed. Within months following the Riser's purchase of the subject property from Dahl, they became disenchanted with the property and ceased making payments under the agreement for Deed causing a large arrearage to accumulate and a subsequent mortgage foreclosure action was initiated.
Recommendation Based on the foregoing findings of fact and conclusions of law it is RECOMMENDED: The Petitioner enter a final order finding that an administrative fine of $500.00 be imposed upon Respondent and his license number 0432878 be placed on probation for a period of sixty (60) days with the condition that the fine be payable to Petitioner within thirty (30) days of entry of the final order. RECOMMENDED this 29th day of June, 1989 in Tallahassee, Leon County, Florida. JAMES E. BRADWELL 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 29th day of June, 1989. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Brian E. Johnson, Esquire Brian E. Johnson, P.A. 7190 Seminole Boulevard Seminole, Florida 34642 Kenneth Easley, Esquire General Counsel Department of Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0729 Darlene F. Keller, Division Director Division of Real Estate Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802 =================================================================
The Issue The issue in this proceeding is whether the Respondents' real estate brokers licenses should be suspended, revoked or otherwise disciplined.
Findings Of Fact Respondent, Barbara Odom, is a licensed real estate broker in the State of Florida, holding license number 0189819. Ms. Odom is the owner of and the qualifying broker for Respondent, Odom Realty, Inc., located in Pensacola, Florida. Respondent, Odom Realty, Inc. is a corporation registered as a real estate brokerage company in the State of Florida, holding license number 0226080. Ms. Odom has been licensed since 1982 and has been the owner of Odom Realty, Inc., since 1983. Rita Leonard has been the corporation's bookkeeper since Ms. Odom's acquisition of the company. Previous to her employment with Odom Realty, Ms. Leonard was the financial manager in charge of a large bank's accounting and bookkeeping department. Ms. Leonard was and is highly qualified as an accountant/bookkeeper. In addition to Ms. Leonard's bookkeeping services, Ms. Odom also has Odom Realty's books and records, including the various escrow account books and records, annually audited and reviewed by her CPA. Early in the company's history Ms. Odom entered into the rental property management business. Initially, Ms. Leonard was paying clients' repair bills on that client's rental property out of the corporation's operating account. The CPA questioned whether it was appropriate to pay those bills out of the corporation's operating account and indicated that the bills should be paid out of the corporation's rental property management escrow account, #11823890431. The CPA was not sure what the appropriate bookkeeping practice should be and indicated that Ms. Leonard should check with the Florida Real Estate Commission to discover what the appropriate procedure was. Ms. Leonard called the Florida Real Estate Commission to inquire about the proper method of paying clients' repair bills. Her impression of that conversation was that client repair bills should be paid out of the escrow account regardless of whether the individual had the money in the account. After this conversation with the Florida Real Estate Commission, Ms. Leonard began paying all the clients' repair bills out of the rental property management escrow account. All such client bills were paid promptly upon the repair bill's presentation, whether or not the individual client had the money available in the escrow account. Each client was later billed for the amount not covered by the balance in that individuals' escrow account. The client billings occurred on at least a monthly basis and the majority of the rental clients remitted their payments on a monthly basis. Occasionally, one of Respondent's clients was permitted to carry a negative balance for more than a month. These carry- overs occurred in the off-season and were paid when rentals picked back up during the areas main tourist season. As a consequence of this practice, some of Respondents' clients would have negative escrow balances on their individual escrow ledger account. Respondents were under the impression that such a practice was all right as long as the corporation had money available to cover those negative balances. In fact, the corporation always had such money available, although the actual transfers of funds were never made from the corporation's operating account to the rental property management escrow account. Respondents believed this practice was tantamount to loaning the respective clients money to cover the client's negative balance until that client corrected the deficit. No client ever complained about this practice. In fact, most of Respondents' clients wanted the repair bills paid promptly so that good repair service could be maintained on that client's property. On March 15, 1990, Elaine Brantley, Petitioner's investigator, conducted an audit of all of Respondents' escrow accounts. The only account she found a problem with was the rental property management account. During that investigation, Ms. Brantley found that Respondents had a trust liability of $10,081.71 and a bank balance of $9,480.97, leaving a shortage of $600.74. Respondents, the same day and prior to Ms. Brantley leaving, transferred the amount of the shortage from the corporation's operating account to the escrow account. Ms. Brantley then explained to Ms. Odom and her bookkeeper her opinion of how the Commission wanted escrow accounts maintained. Since that time, Respondents have maintained the escrow accounts in the manner prescribed by Ms. Brantley and no longer follow their policy of maintaining negative balances on the individual ledger sheets of their clients. They now make the actual transfer of funds from the operating account to the escrow account prior to paying any bill which would take an individual client over the amount of money that client has in the escrow account. The Respondents' books and records for the rental property management account were meticulously kept and both total and individual reconciliations were completed on a monthly basis by Respondents. All the records, including the monthly reconciliations reflected the appropriate negative balances if a particular client should have such a balance. As a consequence of this method of bookkeeping, there were no discrepancies, as opposed to a total shortage, between the total reconciliations and the escrow account's bank statement. Likewise, there were no discrepancies on the individual ledger accounts. There were no discrepancies because everything was added and subtracted out according to the records being kept and the bookkeeping method used in maintaining those records. Importantly, Respondents' CPA never criticized or commented on Respondents' method of accounting and maintenance of negative balances in Respondents' escrow account. As indicated earlier, the temporary negative balances were maintained for the convenience of the customer in order to obtain better service from repairmen. In reality, Respondents' clients probably never thought about the intricacies and inner workings of the trust account in which that client's money was maintained. Given the desires of Respondents' customers, such payments and the maintenance of a negative balance on behalf of that individual client were impliedly authorized by those respective customers. However none of the clients expressly authorized Respondents to use that client's money to pay another client's repair bills. The clients' general desires on getting prompt payment of repair bills is, by itself, insufficient to establish express authorization for one client to use another client's escrow money. Without such express authority Respondents made improper disbursements from the property management escrow account in violation of Section 475.25 (1)(k), Florida Statutes. However, because of the client's general desires regarding their repair bills, the record keeping utilized by Respondents, the manner of billing and the obvious lack of any intent to defraud on the part of Respondents, there was no evidence of any fraud, misrepresentation, trick, scheme or device, or breach of trust or culpable negligence on the part of Respondents in the maintenance of their property management escrow account.
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 that Respondents are guilty of one violation of Section 475.25(1)(k), Florida Statutes, and issuing a letter of guidance to Respondents for the violation. It is further recommended that the Florida Real Estate Commission enter a final Order dismissing the Counts of the Administrative Complaint charging Respondents with violations of Section 475.25(1)(b), Florida Statutes. RECOMMENDED this 28th day of December, 1990, in Tallahassee, Leon County, Florida. DIANE CLEAVINGER 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 28th day of December, 1990.
The Issue The issue in this case is whether Respondent is guilty of the violations alleged in the Administrative Complaint filed by Petitioner and, if so, whether Respondent's real estate license should be suspended, revoked or otherwise disciplined.
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: Petitioner is a state licensing and regulatory agency charged with 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 pursuant thereto. At all times pertinent to this proceeding, Respondent Charles A. McKee was a licensed real estate broker in Florida having been issued license no. 0335079 in accordance with Chapter 475, Florida Statutes. The last license issued to Respondent was c/o McKee Realty, 10157 S. Federal Hwy., Port St. Lucie, Florida 34952-5607 (the "Federal Highway Office"). On November 23, 1992, the Florida Real Estate Commission (the "Commission") entered a Final Order finding Respondent guilty of failing to timely notify the Commission of an escrow deposit dispute and, based on that violation, assessing a fine of $500 against Respondent and placing him on probation for one year with a requirement that he complete a 30 hour broker management course. Respondent's former wife, Loretta McKee, is also a licensed real estate broker, and she was a partner with Respondent in McKee Realty. McKee Realty began operating as a Century 21 franchise in approximately 1986 at the Federal Highway Office. McKee Realty maintained four separate bank accounts: a general operating account; a general escrow account; a property management operating account; and a property management escrow account. Both Respondent and Loretta McKee were signatories on all of the accounts. In January of 1993, Respondent and Loretta McKee separated. Divorce proceedings were initiated in June. During the summer of 1993, Respondent and Loretta McKee engaged in mediation in an effort to resolve the property issues between them, including the distribution of the business. While the parties were attempting to finalize a property settlement agreement, they divided their time in the office. As part of their negotiations, Respondent and Loretta McKee discussed an arrangement whereby Respondent would continue the property management portion of the business and his former wife would take over the general real estate business. Sometime in the fall of 1993, Respondent transferred all of the funds in the McKee Realty general operating account and both property management accounts to a new "property management escrow account" which he opened. Respondent transferred the funds and opened the new escrow account without the knowledge or consent of Loretta McKee, one of the brokers for McKee Realty. As a result of Respondent's actions, approximately twenty checks written to clients by McKee Realty on the old accounts were returned for insufficient funds. On November 16, 1993, Respondent, without the knowledge or consent of broker Loretta McKee (his wife), removed the property management files and office equipment from the McKee Realty Federal Highway Office and took them to the new office opened by Respondent at 1926 Port St. Lucie Boulevard in Port St. Lucie. Many of the files he removed were open or pending and his actions resulted in a great deal of confusion and uncertainty for clients. On January 10, 1994, Petitioner's Investigator Terry Addleburg inspected Respondent's new office located at 1926 Port St. Lucie Boulevard and audited the escrow/trust accounts. The audit confirmed that on November 12, 1993, Respondent closed the Century 21 McKee Realty property management escrow account #2274025969 maintained at Barnett Bank of Port St. Lucie. Respondent then reopened a new escrow account bearing the name Century 21 McKee Realty Property Management Escrow Account #3388673741 at Barnett Bank. The audit also revealed that Respondent intermingled trust funds by combining $24,227.30 from the Century 21 McKee Realty property management operating account #2274025951 with money deposited in the new property management escrow account #338867341. The new property management escrow account had a total trust liability of $44,299.35 and a reconciled bank balance of $43,498.43 indicating a shortage of approximately $800.92. Petitioner's auditor also noted that Respondent had failed to maintain the required office entrance sign at the 1926 Port St. Lucie Boulevard location. In addition, Respondent failed to register this location with the Petitioner until after Petitioner's auditor pointed out that the location had to be registered. The evidence established that a Century 21 franchise is purchased for a specific location. A franchisee is not permitted to open a new location unless it is purchased and cleared through the franchisor. Respondent opened his new office and placed a Century 21 sign on the door of that location without the authority of the franchisor. Accordingly, it is concluded that Respondent incorrectly represented he was a Century 21 franchisee at the 1926 SE Port St. Lucie Boulevard location.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding Respondent guilty of the allegations alleged in Counts I, II and III of the Administrative Complaint and dismissing Count IV. As a penalty for the violations, an administrative fine of $1,500 should be imposed against Respondent, his real estate license should be suspended for 1 year followed by a two year probationary period with such terms and conditions as may be imposed by the Commission. DONE and ENTERED this 4th day of October, 1994, at Tallahassee, Florida. J. STEPHEN MENTON 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 4th day of October, 1994. APPENDIX TO RECOMMENDED ORDER Only Petitioner submitted a proposed recommended order. The following rulings are made with respect to the proposed findings of fact submitted by Petitioner. Petitioner's proposed findings of fact Adopted in substance in Findings of Fact 1. Adopted in substance in Findings of Fact 2. Adopted in substance in Findings of Fact 10. Adopted in substance in Findings of Fact 11. Adopted in substance in Findings of Fact 12. Adopted in substance in Findings of Fact 8. Adopted in substance in Findings of Fact 8 and 9. Adopted in substance in Findings of Fact 14. Adopted in substance in Findings of Fact 13. Adopted in substance in Findings of Fact 15. Adopted in substance in Findings of Fact 3. COPIES FURNISHED: Steven W. Johnson, Esquire Department of Business and Professional Regulation Division of Real Estate Hurston North Tower #308A 400 West Robinson Street Orlando, Florida 32801 Charles A. McKee, pro se 772 SW Hibiscus Street Port St. Lucie, Florida 34983 Darlene F. Keller, Director Division of Real Estate 400 West Robinson Street Orlando, Florida 32802-1900 Jack McRay, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue The issue for consideration was whether Respondents violated specified subsections of Section 475.25 Florida Statutes with regard to alleged misuse of escrow funds.
Findings Of Fact At all times relevant hereto Respondent Mary L. Cluett was a licensed real estate broker in the State of Florida, having been issued license number 0197523 in accordance with Chapter 475, Florida Statutes. The last license issued to Mary L. Cluett was as a broker, c/o Cluett Realty, Inc., 4720 Palm Beach Boulevard, Fort Myers, Florida 33905. (pre-hearing stipulation, Paragraph 2). Respondent Cluett Realty, Inc. is now, and was at all times relevant, licensed as a real estate broker in the state of Florida, having been issued license number 0021798 in accordance with Chapter 475, Florida Statutes. The last license issued to Cluett Realty, Inc. was at the address of 4720 Palm Beach Boulevard, Ft. Myers, Florida 33905. (pre-hearing stipulation, paragraph 2). The qualifying broker for Cluett Realty, Inc. is Ernest H. Cluett, husband of Mary L. Cluett. Mary Cluett is the vice-president of the corporation. On October 17, 1984, Charles and Pamela Darr signed a multiple listing agreement with Cluett Realty, Inc. to sell their home at 598 New York Drive, Ft. Myers. (Petitioner's Exhibit #2). On February 4 and 5, 1985, the Darrs and Irving and Beverly Lockner signed a contract for sale and purchase of the New York Drive house. The terms provided for purchase price of $44,000.00; a $500.00 deposit in the form of a promissory note to be redeemed by February 26, 1985; the assumption of an existing mortgage; a second mortgage in the amount of $3,000.00 and a balance to close in the amount of $2500.00. The closing date was set for "March 14, 1985, or as soon as possible". (Petitioner's Exhibit #5). The Darrs and Lockners were told on March 14, 1985 that the paperwork was not ready for closing. The Darrs had already moved out of the house and into a leased apartment and the Lockners had travelled from their home in Baltimore with furnishings to move in. Reluctantly, Pamela Darr agreed to let the Lockners move in that day and pay rent for the rest of the month. It was understood by Ms. Darr that the closing would be on April 1st. (tr. 27,28,29) On March 14, 1985, Mrs. Lockner gave Cluett Realty $1500.00. The receipt signed by Helen Weise, an employee of Cluett Realty, is marked "escrow deposit on property, 398 New York Avenue". (Petitioner's Exhibit #1). On March 22, 1985, Beverly Lockner gave Cluett Realty $500.00; the receipt signed by Mary L. Cluett is marked "Escrow, Darr/Lockner". (Petitioner's Exhibit #3) On April 15, 1985, the Lockners gave Mary Cluett another $500.00 in the form of two checks: one for $362.64 from MSC, Inc. to Irving Lockner ( a paycheck), and a personal check to Cluett Realty from Beverly Lockner in the amount of $137.36 (tr. 17,18, Petitioner's Exhibit #4, Beverly Lockner testimony p. 17) The $2500.00 was placed in the Cluett Realty, Inc. escrow account. (tr-19) The Lockner/Darr transaction closed on June 10, 1985, (Prehearing Stipulation, Paragraph 2) In the meantime, on March 26, 1985 and April 25, 1985 Mary Cluett paid the Darr's mortgage payments for April and May with checks drawn on the Cluett Realty, Inc. escrow account in the amount of $425.38 each, payable to United Mortgage Company. (Prehearing Stipulation, paragraph 2) Beverly Lockner did not give Mary Cluett permission to use the escrow money for the Darr's mortgage. She did not know the money was being taken out until she found Mary Cluett's handwritten note left on her door which indicated that closing would be on May 6, 1985 and showed that two payments totalling $850.76 had been deducted from the $2500.00 escrow account. She called Ms. Cluett and had a confrontation about the deductions. Beverly Lockner intended that the $2500.00 be used for the closing balance. When the transaction finally closed on June 10, she had insufficient funds to close so she gave Cluett Realty a third mortgage and borrowed $500.00 from Pamela Darr. (Beverly Lockner testimony, pp. 6,7,9,16 23-26) The Darrs did not give Mary Cluett permission to use the escrow money to pay the mortgage, although Ms. Darr was concerned that the mortgage be paid. On March 14th, Pamela Darr was aware that the April mortgage payment would be taken out of the escrow account when she picked up a form, alleged signed by the Lockners, with a notation at the bottom about the payment. Pamela Darr went to Mary Cluett's office at 5:30 on that day to pick up the form. (tr. 25, 118, 119, 122, Respondent's Exhibit #1) The form in question provides as follows: [Cluett Realty, Inc. letterhead] March 14, 1985 To Whom It May Concern: We Irving N. and Beverly T. Lockner buyers, of property situated 598 New York Dr., Ft. Myers, Fl. inspected the above property on March 14, 1985 (date) and have found the property to be to our satisfaction and accept property "as is" and taking possession as Owners today. Sellers are not responsible for any maintenance on the house of any kind. (SIGNED) [Beverly Lockner Signature] (Buyer) [Irving Lockner Signature] (Buyer) WITNESS: [Mary Cluett Signature] DATE: [dated 3-14-85] NOTE: OUT OF THE ONE THOUSAND FIVE HUNDRED ($1,500,00) DOLLARS deposited with CLUETT REALTY ESCROW ACCOUNT THE FIRST MONTH'S PAYMENT OF $425.38 shall be made. (Respondent's Exhibit #1) The testimony of Mary Cluett and that of her employee, Helen Weise, differ substantially from Beverly Lockner's testimony regarding Respondent's Exhibit #1. Mary Cluett claims that the form was completed and signed by the Lockners in her office on March 14, 1985, and that after a phone call from Pamela Darr the note at the bottom was added before the Lockners signed. (tr- 68) She claims that by agreeing to the notation, the Lockners's clearly knew about the intended use of the escrow money for the mortgage. Beverly Lockner distinctly remembers the form. She claims that when Mary Cluett came to the house on New York Drive on March 14th, she took the blank form from her case and told the Lockners they needed to sign it that day in order to take over the house. Mrs. Lockner signed her husband's name as he had gone out to the yard. The blanks on the form were not typed in, nor was the note on the bottom. This was one of several blank forms in Mrs. Cluett's case. (testimony of Beverly Lockner, p. 6, 11-13) Helen Weise claims she typed the entire form, all but the letterhead, in the office while the Lockners were there. (tr-88) This testimony is inconsistent with the appearance of the exhibit. Mary Cluett's testimony about this form and about the purpose of the escrow money from Beverly Lockner is not plausible. For example, she claims that when the Lockners came in with the $1500.00 on March 14th the purpose was to pay the note for $500.00 referenced on the Contract for Purchase and Sale and to provide money for the mortgage payments. However, on the 14th of March, while no one knew for certain when the closing would be, it was anticipated that it would take place on April 1st. In that case only one mortgage payment would have been necessary. The amounts and timing of Mrs. Lockner's payments into the escrow account are consistent with her testimony that she was putting aside the funds necessary for closing. Assuming, for argument's sake that Mrs. Lockner did know about and approve the first payment, there is no evidence that she knew about or acceded to the second payment prior to its deduction from the escrow account. Respondent's Exhibits #2, 3, and 4 are dated May 28, 1985, May 6, 1985, and May 11, 1985, respectively. Each are notations on Cluett Realty, Inc. stationery showing the April and May deductions from the escrow account, the account number of the mortgage to be assumed, the balance required for closing and other information related to closing. Mary Cluett testified that these were delivered to Mrs. Lockner's house and copies were sent to the Darrs at the New York Avenue address as she did not know the Darr's apartment address. Pamela Darr denies receiving any of these notices. Beverly Lockner said she received only the one dated May 6th. (testimony of Beverly Lockner, P. 9) Ernest Cluett testified that the notice dated May 6, 1985 was delivered on that same date.(tr- 101) By then the second payment from the escrow account had already been made. From the testimony and evidence it is apparent that considerable confusion existed regarding the Darr/Lockner transaction. Both buyer and seller thought the deal would close on March 14th. They learned that day that it would not close and hasty arrangements were made for the Lockners to occupy the house since they had moved their belongings from Baltimore. No firm financial arrangements were made, other than an oral agreement for the Lockners to pay a pro-rated rent for the remainder of March. The closing did not take place on April 1st or the several subsequent dates that it was set, until June 10th. Meanwhile, the mortgage payments were due and no arrangements had been made for their payment. Mary Cluett prepared the March 14th form to satisfy Pamela Darr that the payments would be made, but neglected to clear the arrangement with Beverly Lockner. Mrs. Lockner figured the payments were not her responsibility because the house was not hers; the failure to close as scheduled on March 14th was not her fault. She blamed Mary Cluett for not notifying the parties sooner since she would not have left Baltimore. (testimony of Beverly Lockner, pp. 18-22)
The Issue Whether the Respondents committed the violations alleged in the Administrative Complaint dated February 19, 2003, and, if so, the penalty that should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Division is the government licensing and regulatory agency with the responsibility and duty to investigate and prosecute persons holding licenses and registrations as real estate brokers and real estate broker corporations. See § 475.021, Fla. Stat. The Florida Real Estate Commission has the authority to impose discipline on persons licensed pursuant to Chapter 475, Part I, Florida Statutes. See § 475.25, Fla. Stat. Mr. Kauderer is, and was at all times material to this proceeding, a licensed Florida real estate broker, having been issued license number 592835 in accordance with Chapter 475, Part I. The last license issued to Mr. Kauderer was as an active broker at New Riviera Realty, Inc., 500-15th Street #1, Miami Beach, Florida 33139. New Riviera Realty is, and was at all times material to this proceeding, a corporation registered as a Florida real estate broker, having been issued registration number 1011414 in accordance with Chapter 475. The last registration issued was at the address of 500-15th Street #1, Miami Beach, Florida 33139. From April 1 through December 12, 1999, Mr. Kauderer's real estate broker's license was involuntarily inactive due to non-renewal; from December 13, 1999, through July 9, 2000, upon the late renewal of his broker's license, Mr. Kauderer was an inactive broker. Since July 10, 2000, Mr. Kauderer's real estate broker's license has been active, and he has been designated as qualifying broker and officer of New Riviera Realty. From January 1, 1999, through March 31, 1999, New Riviera Realty was an active real estate broker corporation; from April 1, 1999, through April 1, 2000, New Riviera Realty's registration was involuntarily inactive due to non-renewal; on April 2, 2000, New Riviera Realty's registration was cancelled due to continued non-renewal and no qualified broker. New Riviera Realty has been an active real estate broker corporation since July 10, 2000, with Mr. Kauderer acting as the active corporate broker/officer. Mr. Kauderer's primary business is property development, and he owns and operates a number of businesses in addition to New Riviera Realty. Mr. Kauderer, as the qualifying broker, opened a corporate escrow account in the name of New Riviera Realty on or about February 1, 2000, with a deposit of $200.00. On April 30, 2001, John Esposito, an investigator for the Division, arrived unannounced at the offices of New Riviera Realty to investigate a complaint that is not the subject of this proceeding. Mr. Esposito also intended to conduct an audit of New Riviera Realty's escrow account at the April 30, 2001. After questioning Mr. Kauderer about matters unrelated to this proceeding, Mr. Esposito told Mr. Kauderer that he needed to look at all of the New Riviera Realty files in which money was being held for disbursement to third parties, including the contracts for the sale and purchase of property. Mr. Esposito also asked for bank statements, checks, deposit slips, and reconciliation statements for New Riviera Realty's escrow account for the previous six months. Mr. Kauderer did not provide Mr. Esposito with any documents, files, or records on April 30, 2001. Rather, Mr. Kauderer advised Mr. Esposito that all of New Riviera Realty's records were kept by Mr. Kauderer's accountant and that he would need to obtain the records for Mr. Esposito's review at a later time. During Mr. Esposito's April 30, 2001, visit to Mr. Kauderer's office, Mr. Kauderer told Mr. Esposito that he had closed the New Riviera Realty escrow account on April 17, 2001, because New Riviera Realty's real estate broker corporation registration was inactive, and he advised Mr. Esposito that he did not intend to re-open the escrow account. Mr. Kauderer also told Mr. Esposito on April 30, 2001, that he had not prepared reconciliation statements for the New Riviera Realty account.4 Mr. Esposito told Mr. Kauderer that Mr. Kauderer should obtain the records from his accountant and that he, Mr. Esposito, would return within 30 days "to address all issues." Mr. Esposito then questioned Mr. Kauderer about his other businesses. At some point after the April 30, 2001, visit, Mr. Kauderer asked for an extension of time to gather the relevant documents, and Mr. Esposito granted the request. Mr. Esposito and Mr. Kauderer spoke several times on the telephone subsequent to April 30, 2001, and Mr. Esposito reiterated during this time that he wanted Mr. Kauderer to produce all files in which New Riviera Realty, as a real estate broker corporation, was holding money in escrow for distribution to third parties; bank statements for the escrow account; deposit slips; and reconciliation statements. Mr. Esposito originally requested these materials for the six months prior to April 30, 2001, but he later told Mr. Kauderer to provide these documents for the 12 months prior to April 30, 2001. Mr. Kauderer obtained the documents that were in the possession of his accountant, and he sent documents to Mr. Esposito by facsimile transmittal on both August 10 and 13, 2001; Mr. Kauderer included in these documents bank statements for the escrow account for year 2000 and for the period extending from December 31, 2000, through April 17, 2001, as well as a debit memo dated April 17, 2001, showing the closing transaction on the New Riviera Realty escrow account. The transaction reflected on the debit memo was the deduction of $35.61 from the account, which was the balance of the account at the time it was closed. At or about the time he sent the documents to Mr. Esposito by facsimile transmittal, Mr. Kauderer notified Mr. Esposito that he had prepared an envelope for Mr. Esposito that Mr. Esposito could pick up at Mr. Kauderer's office. The envelope contained documents that Mr. Esposito had requested for the audit, including reconciled copies of the bank statements Mr. Kauderer had provided Mr. Esposito by facsimile transmittal. Mr. Kauderer left the envelope with a member of his office staff, with instructions to give the envelope to Mr. Esposito whenever he came by the office. Mr. Esposito showed up at Mr. Kauderer's office without an appointment at around 9:00 a.m. on September 11, 2001. When he arrived, Mr. Esposito learned for the first time of the attacks on the World Trade Center and the Pentagon. Mr. Kauderer had an appointment at 10:00 a.m. outside the office. Before leaving for his appointment, Mr. Kauderer spoke with Mr. Esposito and told Mr. Esposito that one of his staff had an envelope with the materials that Mr. Esposito had requested for the New Riviera Realty audit. Mr. Esposito spent approximately two hours at Mr. Kauderer's office on September 11, 2001. He recalls that, during the time he spent at Mr. Kauderer's office on September 11, 2001, he reviewed two real estate contracts and two cancelled $10,000.00 checks that Mr. Kauderer made available to him that day. One contract was a Contract for Sale and Purchase dated February 7, 2000, that represents an offer by Regents Park Property, Inc., to purchase real property from Carmen Contero for $200,000.00. Mr. Kauderer is the owner of Regents Park Property, Inc., and he prepared and signed the contract in his capacity as the president of the corporate buyer. The contract specifies an initial deposit of $20,000.00, which Mr. Kauderer included because he thought such a deposit would assure Ms. Contero that the offer was a bona fide offer to purchase the property. In addition to signing the contract as the President of Regents Park Property, Inc., Mr. Kauderer signed the contract as the "escrow agent" and included the name of New Riviera Realty under his signature. By signing as the "escrow agent," Mr. Kauderer affirmed that, on February 7, 2000, he received a deposit on the contract of $20,000.00, which was to be deposited in New Riviera Realty's escrow account. The bank account of Regents Park Property, Inc., was maintained at the Ocean Park Bank in Miami Beach, Florida. New Riviera Realty's escrow account was maintained at the same bank. On or about February 7, 2000, Mr. Kauderer caused $20,000.00 to be transferred from the account of Regents Park Property, Inc., to the escrow account of New Riviera Realty. Paragraphs 34 and 35 of the Contract for Sale and Purchase, which are headed "Brokerage Fee" and "Brokers," respectively, were crossed out. Neither Mr. Kauderer nor New Riviera Realty was to get a commission for the sale of the property to Regents Park Property, Inc. On the part of the form entitled Transaction Broker Notice, Mr. Kauderer disclosed on the Transaction Broker Notice attached to the contract that "The President of Regents Park Property, Inc., is a licensed real estate broker." The property that is the subject of the contract was the house that Mr. Kauderer was renting and in which he resided at the time. Mr. Kauderer prepared the contract because he had been told by Ms. Contero's daughter that Ms. Contero might want to sell the house and move in with her daughter. Mr. Kauderer spoke informally with Ms. Contero before he presented the contract to her, and she told him that her daughter was incorrect, that she did not want to sell the house. As a result, Mr. Kauderer did not present the contract to Ms. Contero. Because Mr. Kauderer did not present the contract to Ms. Contero, he returned the $20,000.00 deposit to Regents Park Property, Inc. Mr. Kauderer wrote two $10,000.00 checks, one dated March 18, 2000, and one dated March 23, 2000, drawn on the New Riviera Realty escrow account. The second contract that Mr. Esposito reviewed on September 11, 2001, was a Contract for Purchase and Sale dated February 28, 2000, that reflects an offer by Robert Gonzalez- Sanchez to purchase a condominium unit from 1606 Jefferson Associates, Inc., identified in the contract as the Seller/Developer. The contract provided for a $1,000.00 deposit to be held by the Royal Title & Escrow Company, Inc. The contract was signed by Mr. Gonzalez-Sanchez as Buyer and by Mr. Kauderer as the President of 1606 Jefferson Associates, Inc. A form Disclosure Notice to Purchaser Concerning Closing Costs and Employment of Sales Representative was attached to the contract, which was signed by Mr. Kauderer, as President of 1606 Jefferson Associates, Inc., and by Mr. Gonzalez-Sanchez and was dated March 3, 2000. Two other addenda were attached to the Purchase and Sale Agreement, both were signed by Mr. Gonzalez-Sanchez and by Mr. Kauderer, as President of 1606 Jefferson Associates, Inc., and were dated March 3, 2000. New Riviera Realty was not mentioned in the contract and had nothing to do with the transaction. Mr. Kauderer closed New Riviera Realty's escrow account on April 17, 2001, because the $200.00 with which he had opened the account had been exhausted by fees. The only activity that took place in the New Riviera Realty escrow account, with the exception of the assessment of monthly fees by the bank, was the transfer of $20,000.00 from the account of Regents Park Property, Inc., to the escrow account and the two checks Mr. Kauderer wrote on the account returning the $20,000.00 deposit to Regents Park Property, Inc. Summary The evidence presented by the Division is not sufficient to establish with the requisite degree of certainty that either Mr. Kauderer or New Riviera Realty operated as a broker without holding a current broker's license. The Division offered into evidence only two documents purporting to evidence real estate transactions in which Mr. Kauderer and New Riviera Realty operated as real estate brokers. One document was a partially executed form Contract for Sales and Purchase that was dated February 7, 2000; Mr. Kauderer signed the document in his capacity as president of the purported Buyer, not in his capacity as a real estate broker. This document was never presented to the Seller, and, even if it had been, it is clear on the face of the document that neither Mr. Kauderer nor New Riviera Realty was expecting a broker's fee or acting as a broker in the transaction. Mr. Kauderer was acting as the Buyer, and New Riviera Realty was acting solely as escrow agent for the $20,000.00 deposit. The document dated February 28, 2000, is a fully executed contract for the sale and purchase of a condominium apartment. Mr. Kauderer signed this document as the president of 1606 Jefferson Associates, Inc., the Seller/Developer. New Riviera Realty was not mentioned anywhere in the document, and Mr. Kauderer was not required to be licensed as a real estate broker or salesperson to act on behalf of the Seller/Developer as its president. The evidence presented by the Division is not sufficient to establish with the requisite degree of certainty that either Mr. Kauderer or New Riviera Realty obstructed or hindered Mr. Esposito in carrying out the audit of New Riviera Realty's escrow account. Although Mr. Kauderer did not have the documents Mr. Esposito required at his office on April 30, 2001, when Mr. Esposito arrived unannounced to conduct his audit, Mr. Kauderer agreed to obtain the documents from his accountant and provide them to Mr. Esposito, and Mr. Kauderer timely provided bank statements and deposit slips to Mr. Esposito for the New Riviera Realty escrow account for the years 2000 and 2001 in facsimile transmittals in August 2001. These documents were also made available for Mr. Esposito inspection on September 11, 2001, at Mr. Kauderer's office, together with two contracts and the two checks drawn on New Riviera Realty's escrow account. The evidence presented by the Division is not sufficient to establish with the requisite degree of certainty that either Mr. Kauderer or New Riviera Realty failed to preserve or make available to Mr. Esposito all of the records and documents relating to New Riviera Realty's escrow account. The activity in the escrow account was limited to the deposit and subsequent withdrawal of the $20,000.00 that Mr. Kauderer deposited in anticipation of presenting an offer to purchase Ms. Contero's property in his capacity as President of Regents Park Property, Inc. The signature card showing that the escrow account was opened on or about February 1, 2000, bank statements for 2000 and 2001, deposit slips, cancelled checks relating to the account, and the debit memo establishing that the escrow account was closed on April 17, 2001, were made available to Mr. Esposito. The evidence presented by the Division is sufficient to establish that Mr. Kauderer failed to keep monthly reconciliation statements for the New Riviera Realty escrow account.
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 Counts I, II, and IV of the Administrative Complaint against Mr. Kauderer; Dismissing Counts V, VI, VII, and VIII of the Administrative Complaint against New Riviera Realty; Imposing an administrative fine against Mr. Kauderer in the amount of $100.00; and Requiring Mr. Kauderer to complete the four-hour Instructional Program for Broker Management of Escrow Accounts within six months of the entry of the Commission's final order. DONE AND ENTERED this 21st day of November, 2003, in Tallahassee, Leon County, Florida. S PATRICIA HART MALONO 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 November, 2003.
The Issue The issue for determination at the final hearing was whether the Respondent violated the real estate licensing law, as alleged in the Administrative Complaint, by failing to account and deliver a deposit; failing to maintain a deposit in a real estate brokerage escrow account or some other proper depository until disbursement thereof was properly authorized; and/or being guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, and/or breach of trust in a business transaction.
Findings Of Fact Based on 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: Respondent is now, and was at all times material hereto, a licensed real estate broker in the State of Florida having been issued license number 0360741. The last license issued was as a broker, c/o Consolidated American Realty Services, Inc., in Tampa, Florida. From June 6, 1983, through June 25, 1984, Respondent was licensed and operating as a real estate broker under the trade name, "Benjamin Realty," in Tampa, Florida. For sometime prior to June 2, 1984, Eileen Cumbie attempted to sell a lot owned by her located at 1102 26th Avenue, Tampa, Florida. On June 2, 1984, the Respondent contacted Ms. Cumbie and informed her that he had a client interested in purchasing the property. Ms. Cumbie informed the Respondent that as long as she netted a certain amount, she would be willing to sell the property. Ms. Cumbie allowed the Respondent to put together a contract for the sale of the lot. In connection therewith, the Respondent prepared a sales contract with Danilo Castellanos, as purchaser, and Eileen W. Cumbie, as seller, for the purchase and sale of the property. Pursuant to the purchase and sales agreement, the Respondent received in trust from Mr. Castellanos a $500 earnest money deposit via check dated June 2, 1984. On June 5, 1984, the Respondent deposited the check into his real estate brokerage account maintained at the Central Bank of Tampa, 2307 W. Rennedy Boulevard, Tampa, Florida. Mr. Castellanos entered into the contract for the benefit of his son and daughter-in-law who resided in New Jersey but were planning to relocate to the Tampa area. Mr. Castellanos' daughter-in-law went to look at the lot on June 10, 1984 and decided that she did not like the area in which it was located. The closing of the transaction was set for June 15, 1984. On approximately June 13, 1984, Mr. Castellanos' daughter- in-law informed the Respondent that they were no longer interested in purchasing the property. Ms. Cumbie was out of town during the time of the scheduled closing, but had prepared and signed all of the paperwork in advance. When she returned after June 15, 1984, she called Respondent to find out how the closing went. The Respondent informed her that the buyers failed to go through with the transaction. The contract provided in part as follows: ". . . If the buyer fails to perform this contract within the time specified herein, time being of the essence of this agreement, the deposit made by the buyer shall be disposed of in the following manner: To the Broker an amount equal to his earned commission, but not to exceed 1/2 of the deposit which shall discharge the sellers obligation to him for that service; remainder to the seller to be credited to him against his damages accrued by reason of the breach of contract. " After the transaction failed to close, Ms. Cumbie requested that Respondent give a portion of the deposit to her. The Respondent told Ms. Cumbie that he would give her the entire deposit because she had paid for the survey and a few other items to facilitate the closing of the transaction. Over the next several months, the Respondent, on several occasions, promised to deliver a check to Ms. Cumbie. However, the Respondent never delivered any such check to Ms. Cumbie. Because the Respondent failed to provide Ms. Cumbie with a share of the earnest money deposit, she initiated a civil action in the County Court of Hillsborough County. On October 15, 1985, Ms. Cumbie was awarded a final judgment in the amount of $250 against Respondent for her share of the forfeited earnest money deposit. As of the date of the final hearing, the Respondent had not satisfied the judgment and Ms. Cumbie had not received any proceeds from the forfeited earnest money deposit. Shortly after the transaction failed to close, the purchasers requested that the Respondent return the earnest money deposit to them. However, the Respondent informed them that they were not entitled to the return of the earnest money deposit. The earnest money deposit was never returned to the purchasers. On July 31, 1984, the balance in Respondent's escrow account was $568.83. However, on September 1, 1984, the balance in the Petitioner's escrow account fell to S18.83. From October 31, 1984 to January 1, 1986, the balance in the Petitioner's escrow account remained $3.83.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is therefore, RECOMMENDED that the registration of Fortunato Benjamin- Pabon as a real estate broker be revoked. DONE and ORDERED this 18th day of June, 1986, in Tallahassee, Florida. W. MATTHEW STEVENSON, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of June, 1986. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Department of Professional Regulation 400 W. Robinson Street Orlando, Florida 32801 Fortunato Benjamin-Pabon 2729 N. Ridgewood Avenue, #1 Tampa, Florida 33602 Harold Huff, Executive Director Department of Professional Regulation Division of Real Estate P. O. Box 1900 Orlando, Florida 32802 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue Whether Respondent's real estate broker's license should be disciplined for dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction contrary to Subsection 475.25(1)(b), Florida Statutes and for having failed to maintain deposits received in a trust or escrow bank account maintained by the Respondent until disbursement thereof was properly authorized contrary to Subsection 475.75(1)(k), Florida Statutes. Due to the Respondent's failure to receive the Notice of Hearing the Hearing Officer continued the date of final hearing to November 15, 1984, in Clearwater, Florida and notice was provided to the Respondent's last known official address. At the hearing, held November 15, 1984, the Department called Vivian C. Firmin, Sandy MacWatters, Angela Damalos, James Damalos, Rosie Hazealeferiou, Paul Hazealeferiou, Georgia White and Alan E. Shevy as witnesses. Petitioner's Exhibits 1 through 12 were received into evidence. The Respondent failed to appear and no witnesses were called on behalf of the Respondent nor exhibits submitted into evidence on behalf of the Respondent. Proposed findings of fact not included in this order were considered irrelevant to the issues, immaterial to the results reached or were not supported by competent and substantial evidence.
Findings Of Fact At all times pertinent to the charges, the Respondent, Mark D. Gabisch was a licensed real estate broker in the State of Florida, license number 0189069. (Petitioner's Exhibit #12). Georgia M. White, a licensed real estate salesman in the State of Florida was employed by the Respondent until September 1, 1983. On July 27, 1983, Ms. White obtained a written offer for the purchase of real property from James and Angela Damalos and Paul and Rosie Hazealeferiou as purchasers. (Petitioner's Exhibit #7). The terms of the contract called for a $500.00 earnest money deposit. On July 27, 1983, Mr. and Mrs. Damalos and Mr. and Mrs. Hazealeferiou each issued a check to the Respondent's escrow account in the amount of $250.00 for a total deposit of $500.00. (Petitioner's Exhibits #1 and 9). The $500.00 deposit was placed in the Respondent's escrow bank account (Petitioner's Exhibit #4). The contract for Sale and Purchase was presented to the sellers by Ms. White and the contract was rejected and no counter-offer was made. This information was passed on to the purchasers by Ms. White and the purchasers requested the return of their deposit. On August 11, 3.983, the Respondent issued from his escrow bank account Check No. 102 in the amount of $250.00 payable to Mr. and Mrs. Hazealeferiou. On the same day the Respondent issued from his escrow bank account Check No. 103 in the amount of $250.00 payable to Mr. and Mrs. Damalos. (Petitioner's Exhibits #2, 3, 8 and 10). Checks 102 and 103, identified in paragraph 6 above, were deposited by the purchasers, dishonored by the bank upon presentment, and returned stamped "insufficient funds." (Petitioner's Exhibits #2, 3, 5, 8 and 10). Mrs. Damalos contacted Ms. White and informed her that the escrow checks had been returned for insufficient funds. Ms. White, on her own accord, contacted Respondent and eventually the purchasers received their deposit back in cash. The Respondent, in a letter to Mr. Alan Shevy, Investigator with the Department of Professional Regulation, admitted that he had misused the escrow funds and acknowledged his guilt in the matter. (Petitioner's Exhibit #11).
Recommendation Based on the foregoing Finds of Fact and Conclusions of Law it is hereby RECOMMENDED: That the Respondent's Mark D. Gabisch, license as a real estate broker, be suspended for a period of six months and that he pay an administrative fine of $1,000.00. DONE and ORDERED this 20th day of December, 1984 in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of December, 1984. COPIES FURNISHED: Mr. Mark D. Gabisch 1443 Otten Clearwater, Florida 33515 James R. Mitchell, Esquire Department of Professional Regulation Division of Real Estate 400 West Robinson Street P.O. Box 1900 Orlando, Florida 32802 Mr. Harold Huff Executive Director Department of Professional Regulation Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Mr. Fred Roche Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
