The Issue The issue is whether Respondents are guilty of misrepresentation or breach of trust and, if so, what penalty should be imposed.
Findings Of Fact In October 1993, Respondent Sylvester (Respondent) took his daughter, whose last name was Rodriguez by marriage, to a real estate sales office that was selling units of a new condominium building. Respondent's daughter was 42 years old at the time. Speaking to the qualifying broker for the selling broker, Respondent advised her that he was a real estate salesperson for Respondent Lyric Realty Group, Inc. and wanted to show a unit to his daughter. Respondent referred to his daughter by name, rather than as his daughter, and did not mention to the broker that his customer was his daughter. Respondent gave the qualifying broker his card and signed his name in a log to protect his interest in the cooperating broker's sales commission. After touring a model unit, Mrs. Rodriguez expressed sufficient interest that Respondent obtained a form contract from the qualifying broker before leaving the premises. Respondent completed the contract, but left negotiations to Respondent Mitulinsky because Respondent was going out of town. Respondent Mitulinsky is the qualifying broker for Respondent Lyric Realty Group, Inc. Her involvement with the transaction was limited to contact with the listing broker, transmitting prices between Mrs. Rodriguez and the seller. Respondent Mitulinsky did not disclose that Mrs. Rodriguez was Respondent's daughter. But the evidence fails to suggest that Respondent Mitulinsky was in any way aware that the seller's broker was ignorant of the relationship between Respondent and Mrs. Rodriguez. The evidence also fails to suggest that the nature and extent of the conversations between Respondent Mitulinsky and the qualifying broker were such as to support an inference of concealment of the relationship by Respondent Mitulinsky. Prior to agreeing upon a final price, the seller's qualifying broker agreed to increase the commission to be paid Respondent Lyric Group Realty, Inc. by one percentage point to three percent. The listing price for the unit was $285,000. Mr. and Mrs. Rodriguez submitted the contract with a price of $240,000. Following verbal negotiations, the seller returned the same contract with a price of $268,000, which the buyers accepted on October 29, 1993. A salesperson employed by the listing broker admits that she knew of the relationship between Respondent and his daughter prior to closing. After the contract was signed but prior to closing, Respondent, Mrs. Rodriguez, a home inspector, and the salesperson visited the unit. As the inspector worked, Mrs. Rodriguez and her father spoke freely, as they had in past visits, with Mrs. Rodriguez referring to Respondent as "dad" and he referring to her by her first name. The salesperson immediately informed her broker, who immediately reported the information to the seller. However, the seller elected to do nothing with the information because he was satisfied with the sales price and net proceeds. Mr. and Mrs. Rodriguez were purchasing the first unit to be sold at the seller's project. This makes the first transaction especially risky for both the seller and the buyers. The purchase price represented the fair market value for the unit. The unit appraised at $271,000 at the time of the sale to Mr. and Mrs. Rodriguez. On January 6, 1994, the parties closed on the unit pursuant to the provisions of the contract. The $16,080 sales commission was split evenly between the listing broker and Respondent Lyric Realty Group, Inc.
Recommendation It is RECOMMENDED that the Division of Real Estate enter a final order dismissing the administrative complaint against all respondents ENTERED on September 30, 1996, in Tallahassee, Florida. ROBERT E. MEALE, 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 September 30, 1996. COPIES FURNISHED: Henry M. Solares, Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Lynda L. Goodgame General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Daniel Villazon, Senior Attorney Department of Business and Professional Regulation 400 West Robinson Street Orlando, Florida 32802 Peter Hobson, Esquire 606 East Madison Street Tampa, Florida 33602
The Issue Whether Respondents committed the offenses alleged in the Administrative Complaint and the penalties, if any, that should be imposed.
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, Chapters 455 and 475, Florida Statutes, and Title 61J2, Florida Administrative Code. At all times pertinent to this proceeding, Respondent, Gerry Sullivan & Associates Realty, Inc., was a corporation registered as a real estate broker in the State of Florida, having been issued license number 0215569 in accordance with Chapter 475, Florida Statutes. The last license issued for that corporation was at the address of 7169 West Broward Boulevard, Plantation, Florida. At all times pertinent to this proceeding, Respondent, Geraldine R. Sullivan, was a licensed real estate broker in the State of Florida, having been issued license number 0086238 in accordance with Chapter 475, Florida Statutes. At all times pertinent to this proceeding, Respondent, Geraldine R. Sullivan, was the qualifying broker and office manager of the corporate Respondent. At all times pertinent to this proceeding, Jim Sullivan and Pamela Sullivan were real estate salespersons in the State of Florida and employed by the corporate Respondent. Jim Sullivan is the son of Geraldine R. Sullivan and the husband of Pamela Sullivan. On June 16, 1997, Elaine P. Martin entered into a listing agreement with the corporate Respondent to sell her condominium for the price of $32,900. The listing agreement provided for the seller (Ms. Martin) to pay a brokerage commission of 6% that would be reduced to 5% if Jim Sullivan or Pamela Sullivan found the buyer without the involvement of another broker. The listing agreement also provided that Ms. Martin would pay a processing fee in the amount of $150.1 The listing agreement did not refer to a transaction fee.2 Ms. Martin did not agree to pay any fees other than the commission and the processing fee. In 1996, the corporate Respondent began a practice of charging sellers in certain transactions a fee, referred to as a transaction fee, that was in addition to the processing fee and the commission. The transaction fee was used by the salesperson to pay the salesperson's "facilitator," a person employed by the salesperson to run errands to facilitate the closing of the transaction. Examples of the type errands performed by the facilitator included meeting persons at the property to perform inspections and delivering documents. The practice of charging a transaction fee was not uncommon in Broward County, but it was not standard practice. Whether a particular seller would be charged a transaction fee depended, in part, on the listing salesperson. Typically, if a salesperson employed by the corporate Respondent did not us a facilitator, no transaction fee would be charged. The minutes of the Florida Real Estate Commission for July 16-17, 1996, contain the following entry: It was decided that as long as there is disclosure to all parties involved, the transaction fees indicated on closing statements is not a violation of F.S. 475. The customary practice of the corporate Respondent in June of 1997 was for its salesperson to complete a "net sheet" at the time the listing agreement is executed. The "net sheet" is a good faith estimate of the seller's expenses and reflects the estimated amount the seller will net from the transaction. The evidence established that Respondent, Geraldine R. Sullivan, and Pamela Sullivan could not locate in the Martin file a net sheet was prepared on or about the time Ms. Martin executed the listing agreement on June 16, 1997. From that evidence, and from the testimony of Ms. Martin, it is found that Jim Sullivan did not complete a net sheet when he and Ms. Martin executed the listing agreement. The listing agreement created a principal/agent relationship between Ms. Martin, as the seller, and the corporate Respondent, as the agent. At all times pertinent to this proceeding, the corporate Respondent and Geraldine R. Sullivan, as the qualifying broker of the corporate Respondent, were the agents of Ms. Martin and owed her the fiduciary duties of an agent. In connection with the subject listing agreement, Ms. Martin executed an Agency Disclosure Statement which set forth the fiduciary duties owed by the agent to the principal, in pertinent part, as being the ". . . fiduciary duties of loyalty, confidentiality, obedience, full disclosure, accounting and the duty to use skill, care and diligence." In addition, the statement set forth that the agent owed the duty of honesty and fair dealing.3 A buyer working through another real estate broker made an offer to purchase the Martin property for the sum of $30,000. The offer, dated June 22, 1997, was presented to Ms. Martin by Pamela Sullivan. Because another real estate broker was involved, the real estate commission was based on 6% of the sales price. On June 22, 1997, Pamela Sullivan discussed the offer with Ms. Martin by telephone and informed her, for the first time, of the transaction fee. Later that day, Pamela Sullivan and Ms. Martin met and Pamela Sullivan prepared a "net sheet" that reflected the seller's estimated closing costs. The transaction fee in the amount of $3004 was reflected on the net sheet as an expense of the seller. As of June 22, 1997, Pamela Sullivan knew or should have known that the file on the Martin transaction maintained by her office did not contain a net sheet that was executed at the same time the listing agreement was executed. Prior to signing the contract or the net sheet on June 22, 1997, Ms. Martin placed a question mark next to the line on which the transaction fee was disclosed. Ms. Martin questioned the charge because she did not understand what was being done to earn that fee. Ms. Martin did not accept the explanations Pamela Sullivan gave for the transaction fee. Ms. Martin thereafter had Pamela Sullivan insert the following as a special condition of the contract: The seller reserves the right to have her attorney review the contract at his earliest opportunity. After the special condition was signed, Ms. Martin signed the contract and the net sheet. The net sheet was intended to be informational. By signing the net sheet, Ms. Martin did not intend to agree to pay the $300 transaction fee. Ms. Martin did not agree in writing or verbally to pay the transaction fee. Between June 22 and June 25, 1997, Pamela Sullivan, on behalf of the corporate Respondent, reduced the amount of the claimed transaction fee from $300 to $200. Following the execution of the Sales Contract, Ms. Martin had her attorney review the contract and the net sheet. Ms. Martin informed her attorney by memo dated June 25, 1997, in pertinent part, as follows: . . . We disputed the Transaction Fee of $300.00 and Century 21 lowered it to $200. We asked Pam Sullivan for a break down (sic) on the $200.00 cost. She refused to provide any; stated it was the cost of doing business. Since the housing prices in Broward County have not increased, they charge this extra fee along with their normal commission. . . . Ms. Martin sent a copy of her memo to Pamela Sullivan. Ms. Martin's attorney accepted the sales contract without any changes and informed her that he would address the issue of the transaction fee at the time of the closing. On the day of the closing, Ms. Martin's attorney telephoned Respondent, Geraldine R. Sullivan, to discuss the transaction fee. Geraldine R. Sullivan would not agree to waive the transaction fee after she learned that there was a signed net sheet. She did not realize that there was no net sheet prepared when the listing agreement was first executed. This was the only direct dealing Respondent, Geraldine R. Sullivan, had with this transaction. Between June 25, 1997, the date of Ms. Martin's memo, and July 7, 1997, the date of the closing, neither Ms. Martin nor her attorney voiced additional objection to the transaction fee.5 The transaction closed on July 7, 1997. The sum of $200, representing the amount of the disputed transaction fee, was placed in escrow by the closing agent, where it remained at the time of the formal hearing. All other fees and costs were paid at closing, including a brokerage commission of $1,800 (which was split with the realtor representing the buyer) and a processing fee of $150 (which was retained by the corporate Respondent).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered that finds the corporate Respondent guilty of violating Section 475.25(1)(b), Florida Statutes, and finds Geraldine R. Sullivan not guilty of that charge. It is further RECOMMENDED that the corporate Respondent be reprimanded and fined in the amount of $1,000. DONE AND ENTERED this 4th day of August, 1998, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 Filed with the Clerk of the Division of Administrative Hearings this 4th day of August, 1998
The Issue The issues in this case are whether the Respondent violated Subsections 475.42(1)(a) and 475.25(1)(e), Florida Statutes (2009),1 and, if so, what discipline should be imposed.
Findings Of Fact The Division of Real Estate is the state agency responsible for the regulation of the real estate sales profession in Florida, including licensure of real estate sales associates and enforcement of the statutory provisions within its charge. Ms. Friels is a real estate sales associate who first obtained her license in 2005. Ms. Friels has never had any prior disciplinary action taken against her. Ms. Friels received a renewal notice from the Department of Business and Professional Regulation (the Department), notifying her that her sales associate license was due to expire on March 31, 2009. The notice touted in bold print that the "Department Provides Instant Online Renewal," while also offering a Renewal Notice card to detach and mail in to the Department. The Renewal card option required nothing to be filled in by the licensee unless an address update were necessary (in which case a box could be checked and the address updated on the back of the card), or unless the licensee wanted to opt for inactive status, which could be done by checking a different box. Otherwise, the card could simply be sent in with payment of the $85.00 renewal fee. The card included the following statement in small print: IMPORTANT: SUBMITTING YOUR RENEWAL REQUEST TO THE DEPARTMENT AFFIRMS COMPLIANCE WITH ALL REQUIREMENTS FOR RENEWAL. Ms. Friels had been undergoing a period of great personal challenges and stress in the two-year period leading up to the licensure expiration date and nearly missed the renewal deadline. On the day before her license was to expire, she utilized the "Instant Online Renewal" option after contacting a Department customer representative to make sure that her online renewal payment would be credited immediately so that it would be timely before the March 31, 2009, expiration date. As alleged in the Administrative Complaint, "[o]n . . . March 30, 2009 Respondent paid the renewal fee of $85.00 to renew her real estate license." The Department receipt showed the online payment of the $85.00 fee on March 30, 2009, for the renewal of real estate sales associate License No. SL3141119 held by Marsha Evans Friels. At the time Ms. Friels processed her online license renewal, she had not completed the 14 hours of continuing education she was required to complete during the two-year licensure period ending on March 30, 2009, but Ms. Friels did not realize at that time that she had not complied with the continuing education requirements. Ms. Friels explained that although she was generally aware of the continuing education requirement for licensure renewal, the reason she did not realize that she had not taken the required coursework during this particular two-year period was because she was coping with a series of tragic, personal challenges. The circumstances were compelling, as she explained: In May 2007, Ms. Friels' older sister died of breast cancer; then, in October 2007, Ms. Friels' father died, and Ms. Friels assumed the responsibilities for arranging for his funeral and then probating his estate; and finally, Ms. Friels' youngest sister, who was diagnosed with paranoid schizophrenia and had lived with her father, was left without care, and the responsibilities for caring for her sister and making decisions about her placement fell on Ms. Friels' shoulders. While these circumstances do not excuse a failure to comply with the continuing education requirements during the two-year period, the totality of the circumstances make the oversight understandable and mitigate against Ms. Friels' culpability. Ms. Friels was under the impression that having accessed the Department's "Instant Online Renewal" and successfully remitted payment of the renewal fee in time, she had done all that was needed to renew her license. She received no notice to the contrary. Apparently, however, at some point after Ms. Friels thought she had successfully renewed her license via the Department's Instant Online Renewal service, the Department's records re-characterized the status of Ms. Friels' license as involuntarily inactive, effective on March 31, 2009, "due to non[-]renewal of her real estate sales associate license." Neither Ms. Friels, nor the licensed broker with whom Ms. Friels was associated, received notice that her real estate sales associate license had been changed to inactive status, that Ms. Friels had not satisfied the continuing education requirements at license renewal, or that her "Instant Online Renewal" and payment were ineffective to renew her license. Ms. Friels presented evidence of the Department's practice to issue a Notice of Deficiency or a Continuing Education Deficiency letter, when a real estate sales associate renews a license without having completed the required continuing education hours. No evidence was offered to explain why this practice would not have applied in this case or why no such notice was given to Ms. Friels. Operating under the impression that she had successfully renewed her license and receiving no notice to the contrary, on one occasion, on approximately June 1, 2009, Ms. Friels participated as a real estate sales associate working on a real estate sales contract under the supervision of Ms. Williams, the licensed broker with whom Ms. Friels was associated, who remained actively involved in the transaction. Mr. Brissenden is a real estate appraiser who was asked to perform an appraisal on the property that was the subject of the same contract, which is how he came to learn that Ms. Friels was operating as a sales associate. Mr. Brissenden testified that he happened to be online on the Department's licensing portal checking on some other things when he looked up Ms. Friels' license out of curiosity. He saw that her license was shown to be inactive, and, so, he filed a complaint. Ms. Friels first learned that she had not completed the required continuing education hours in the two-year period before renewal when she received a letter advising her that she was being investigated for operating as a sales associate without an active license. Immediately upon learning that she had a continuing education deficiency, Ms. Friels took the 14-hour continuing education course and successfully completed the required hours. This course included the "Real Estate Core Law" component required by Florida Administrative Code Rule 61J2-3.009(2)(a). The course material, which according to rule, must be submitted to the Florida Real Estate Commission for review and approval, included the following: In the event a license is renewed without the required continuing education course having been completed, the licensee will be sent a deficiency letter. This letter will inform the licensee that the required continuing education was not completed prior to renewal. Ms. Friels' license was reinstated to "active" status on October 16, 2009, following her completion of the 14-hour course credited to her prior renewal cycle. Ms. Friels cooperated with the investigation and submitted a letter with supporting documentation explaining that she did not realize she had not completed the continuing education course during the prior two years and detailing her personal circumstances that led to her oversight. At the completion of the investigation, the investigator contacted Ms. Friels to deliver a Uniform Disciplinary Citation, on December 11, 2009. By this document, the investigator sets forth her determination that there was probable cause to believe Ms. Friels had violated Subsection 475.42(1)(b), Florida Statutes, and that the Department had set the penalty at a $500.00 fine (plus no additional amount for costs). Ms. Friels had the choice of accepting the citation, in which case it would become a final order, or disputing the citation, in which case the charges would be prosecuted as a disciplinary action pursuant to Section 455.225, Florida Statutes. Ms. Friels testified that while she accepted responsibility for not completing the required continuing education and was willing to resolve this matter by paying the $500 fine in December 2009, she was unwilling to accept the citation's charge of violating Subsection 475.42(1)(b), Florida Statutes. That subsection establishes the following as a violation: A person licensed as a sales associate may not operate as a broker or operate as a sales associate for any person not registered as her or his employer. Ms. Friels perceived this charge as more serious, in effect, charging her with operating outside the scope of her sales associate license by operating in a broker capacity. Throughout this proceeding, Ms. Friels remained sensitive to the suggestion that she had operated as more than a real estate sales associate and went to great pains to establish that she did not exceed the bounds of a licensed real estate sales associate and that she was acting under the supervision of the licensed broker with whom she was associated. The subsequently-issued Administrative Complaint charged Ms. Friels with a violation of Subsection 475.42(1)(a), Florida Statutes, not Subsection 475.42(1)(b), Florida Statutes, as charged in the Uniform Disciplinary Citation. By this time, however, when Ms. Friels attempted to resolve the dispute, the Division of Real Estate would not agree to the penalty originally proposed in the Citation (with the incorrect statutory charge), but instead proposed additional terms, including payment of $521.40 in investigation costs on top of the $500 fine, plus attendance at two meetings of the Florida Real Estate Commission. Ms. Friels objected to the increased financial consequences since in her view, the reason why the dispute was not resolved by the citation was because the wrong statutory violation was charged. Before the evidentiary hearing, counsel for the Division of Real Estate acknowledged that this case involves, at most, a "minor violation of licensing law." After the evidentiary portion of the hearing, counsel reiterated the Division's position that "this is a minor licensing violation and we're looking for a very minor penalty." Inexplicably, the Proposed Recommended Order submitted by the Petitioner proposed a significantly elevated recommended penalty. The Petitioner proposed an increased fine of $1,000, plus a 30-day suspension, plus costs of investigation, plus "fees pursuant to Section 455.227(3), Florida Statutes,"3 despite assurances at the close of the hearing that the Petitioner was only looking for a "very minor penalty" consistent with what had been previously offered. The appropriate penalty for a violation of licensing law cannot be determined without first reviewing the record evidence on mitigating and aggravating circumstances in accordance with Florida Administrative Code Rule 61J2-24.001(4). Here, no aggravating circumstances were established or even argued while there are multiple mitigating circumstances. There was no evidence of any harm to the consumers or public as a result of Ms. Friels' oversight in not completing her continuing education by her license renewal date or as a result of her participating as a real estate sales associate in a transaction in June 2009. The fact that there was only one count in the Administrative Complaint is a mitigating circumstance to be considered. Likewise, the fact that Ms. Friels has no disciplinary history is another mitigating circumstance weighing in favor of leniency below the normal penalty ranges established in rule. Consideration of the financial hardship to the Respondent as a result of imposition of a fine or suspension of a license, adds to the weight of mitigating circumstances. Ms. Friels testified to the hardship she has endured as a result of personal circumstances beyond her control. Ms. Friels was forthright and sincere in accepting responsibility for her oversight and acted immediately to rectify the continuing education deficiency as soon as she received notice of it. Under the circumstances, imposition of a fine or suspension of her license would result in unnecessary financial hardship. Finally, under the catch-all language in Florida Administrative Code Rule 61J2-24.001(4)(b) ("mitigating circumstances may include, but are not limited to . . ."), consideration must be given to the Respondent's compelling personal circumstances that make her oversight understandable and mitigate further against imposing a penalty in the normal range. The circumstances here were far from normal, and imposing a penalty as if they were normal would be unduly harsh.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Petitioner, Department of Business and Professional Regulation, Division of Real Estate, finding that the Respondent, Marsha Evans Friels, violated Subsection 475.42(1)(a), Florida Statutes (and, thereby, Subsection 475.25(1)(e), Florida Statutes); issuing a reprimand as the sole penalty; and waiving the permissive assessment of costs allowed by Subsection 455.227(3)(a), Florida Statutes. DONE AND ENTERED this 24th day of September, 2010, in Tallahassee, Leon County, Florida. S ELIZABETH W. MCARTHUR 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 24th day of September, 2010.
The Issue Whether Respondent, as Mayor of the City of Oviedo, violated Sections 112.313(8) and 112.313(6), Florida Statutes, and, if so, what penalty should be imposed.
Findings Of Fact Respondent, David Knickerbocker (Knickerbocker) served as the elected mayor of the City of Oviedo (City), Seminole County, Florida, from September 1991 to September 1993. The mayor of the City attends and participates in City Council (Council) meetings but does not have a vote in Council matters. Knickerbocker is and has been at all times material to this case, a state-registered real estate broker and part-owner of Oviedo Realty, doing business as Century 21 Oviedo Realty, in Oviedo Florida. The property involved in this case consists of three tracts of commercial/industrial zoned property on Evans Street within the city limits of Oviedo. The three tracts consist of two vacant parcels of property (Tracts I and III), which flank a center parcel of property (Tract II) upon which a warehouse structure has been built. In 1984 Knickerbocker was the real estate agent involved in the sale of Tract II to Rudy Vuckovic. In 1985, Mr. Vuckovic constructed a large warehouse-type building on Tract II. Knickerbocker was also the real estate agent involved when Mr. Vuckovic purchased the adjacent vacant lots, Tracts I and III, in 1984 and 1986, respectively, from Harry O. Hall for the price of $45,000 each. From October, 1991 until January, 1993, Knickerbocker's company, Century 21 Oviedo Realty, Inc., listed for sale, Tracts I, II, and III. From December 1992 until the end of May 1993, Duke Realty also listed for sale Tracts I, II, and III. As of June 7, 1993, the three parcels of property had not been sold. Mr. Vuckovic telephoned Knickerbocker the morning of June 7, 1993, to say that he needed to obtain contracts for sale of Tracts I and III that week. He agreed to pay ten percent commission to Knickerbocker if Knickerbocker sold the lots for him. Vuckovic's asking price for each lot was $35,000. At the regular public meeting of the Council on Monday evening, June 7, 1993, city manager Eugene Williford (Williford) requested and obtained the Council's authorization to explore the possibility of purchasing an 8,000 square feet building on Evans Street for use as a public works facility. The Evans Street building which the City Manager was discussing on June 7, 1993 was the large warehouse-type building that Mr. Vuckovic had constructed on Tract II. In his brief presentation, the City Manager attempted to minimize the information he divulged publicly, being careful not to compromise the City's future bargaining position. During the Council's public discussion of Tract II, there was no mention made by Williford, Knickerbocker, or anyone else of Mr. Vuckovic's two vacant lots, Tracts I and III, nor was there any indication that Williford was interested in pursuing the purchase of those two lots. Knickerbocker did not mention during the meeting that he had knowledge concerning any of the three tracts. After the June 7 Council meeting concluded, Knickerbocker, Williford, and Councilman Hampton walked out together to the parking lot behind city hall. Having judged the credibility of the witnesses, I find that the three men did discuss the purchase of Tracts I, II, and III. Williford advised Knickerbocker that if the City purchased Tracts I and III, that one of the lots could be used as a compound for confiscated vehicles and the other lot could be used for storing materials. The possible means of financing the vacant lots and the building on Tract II was also discussed. The information concerning the City's interest in purchasing Tracts I and III were divulged to Knickerbocker because of his position as mayor. The post-meeting discussion between Knickerbocker and Williford about Tracts I, II and III took place in the presence of Councilman Hampton but was not a duly noticed public hearing open to the public and recorded as a public meeting. No other persons were present. At no time during the evening of June 7, 1993, did Knickerbocker tell the city manager or any city council member that Mr. Vuckovic was desperate to quickly sell Tracts I and III. Within a few days after June 7, 1993, Knickerbocker tried unsuccessfully to find investors who would be interested in purchasing Tracts I and III. On Thursday, June 10, Knickerbocker called Williford to tell him that Orange Bank now owned Tract II and that Milton West of Orange Bank would be contacting Mr. Williford to discuss selling the building to the City. During his June 10 conversation with Williford, Knickerbocker did not tell Williford that Mr. Vuckovic owned Tracts I and III nor did Knickerbocker tell Williford that Mr. Vuckovic was in a hurry to sell those two lots. On Thursday, June 10, 1993, Knickerbocker told his mother, Dorothy Knickerbocker, that Mr. Vuckovic had two vacant lots adjacent to Tract II that he needed to sell in a hurry and that the two lots were a "very good buy." Knickerbocker further told his mother that the City was interested in purchasing the building between the two lots. No evidence was presented that Knickerbocker directly divulged to his mother that the city was interested in purchasing Tracts I and III. Shortly after his conversation with his mother on June 10, 1993, Knickerbocker called Mr. Vuckovic and negotiated a purchase price of $31,000 each for Tracts I and III. Knickerbocker had agreed with his mother that he would forego his commission on the sale of the property. Knickerbocker drafted two contracts for sale of Tracts I and III, and on Saturday, June 12, 1993, delivered those contracts to his mother for her signature and then to Mr. Vuckovic for his signature. Both signed the contracts in Knickerbocker's presence. On Monday, June 14, 1993, Knickerbocker advised Williford that his mother and brother, Tom Knickerbocker, had contracted to buy Tracts I and III. Prior to his June 14 conversation with the city manager, Knickerbocker had not told the city manager of his family's interest in purchasing Tracts I and III. The night of Monday, June 14, 1993, Knickerbocker asked Councilman Hampton, a surveyor, to survey Tracts I and III. Knickerbocker did not tell Mr. Hampton at that time that Mrs. Knickerbocker and her son, Tom, were buying the property. On Wednesday, June 16, 1993, Knickerbocker delivered the two contracts for sale to Attorney Joseph Scuro so he could take them to closing on June 30, 1993, the closing specified on the contracts. In attempting to bring the sale to closure, Attorney Scuro learned of some significant encumbrances on the property and encountered difficulty in contacting the attorneys of other parties who had interests in the property. Mr. Scuro advised Knickerbocker of the problems that he was having in closing the property sale. On July 9, 1994, Attorney Scuro left a message at Knickerbocker's office that he was withdrawing from representing Knickerbocker's mother in the purchase of Tracts I and III. On July 22, 1994, Mr. Scuro talked with Knickerbocker concerning his withdrawal of representation of Knickerbocker's mother. He advised Knickerbocker that there were problems with encumbrances on the vacant lot and that the contracts to purchase the lots in which the city was interested had become a political issue. At that time, Knickerbocker advised Mr. Scuro that Mrs. Knickerbocker had decided not to buy the two lots. On or about Thursday evening, July 22, Knickerbocker telephoned Williford at his house and told him that his mother had withdrawn her offer to purchase Tracts I and III. On Friday, July 23, 1993, Knickerbocker telephoned the Florida Commission on Ethics (Commission) office in Tallahassee and sought an opinion from the Commission's staff. He talked with Public Information Officer, Helen Jones and advised her, among other things, that he had told his mother and brother not to buy the lots because of appearances. Knickerbocker also contacted the State Attorney's Office for the Eighteenth Judicial Circuit and asked a prosecutor there if it would be possible for the State Attorney to conduct an investigation of his conduct relative to Tracts I and III. On Monday, August 2, 1993, during a regularly scheduled public meeting, the Council approved the contract the city manager had negotiated for the purchase of Tract II.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order and Public Report be entered finding that David Knickerbocker violated Sections 112.313(6) and 112.313(8), Florida Statutes; imposing a civil penalty of $2,000 per allegation ($4,000 total); and issuing a public censure and reprimand. DONE AND ENTERED this 27th day of October, 1994, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 27th day of October, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-1786EC To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact: Advocate's Proposed Findings of Fact. Paragraphs 1-31 (Stipulated Findings of Fact): Accepted. Paragraphs 1-2: Accepted in substance. Paragraph 3: The first sentence is accepted in substance. The second sentence is accepted. Paragraph 4: Accepted in substance. Paragraph 5: Accepted in substance to the extent that Knickerbocker initiated the discussion initially concerning the building, which led to a discussion of all three tracts. Paragraphs 6-7: Accepted in substance. Paragraph 8: The first sentence is accepted in substance. The second sentence is rejected as constituting argument. Paragraph 9: The first sentence is accepted in substance. The last two sentences are rejected as constituting argument. Paragraph 10: The first sentence is accepted in substance. The second sentence is rejected as constituting argument. Paragraph 11: The first sentence is accepted in substance. The second sentence is subordinate to the facts actually found. Paragraphs 12-17: Accepted in substance. Paragraph 18: The second sentence is rejected as constituting argument. The remainder of the paragraph is rejected as subordinate to the facts actually found. Paragraphs 19-21: Accepted in substance. Paragraphs 22-23: Rejected as constituting argument. Paragraph 24: The first sentence is accepted in substance. The remainder is rejected as constituting argument. Paragraph 25: The last sentence is rejected as constituting argument. Respondent's Proposed Findings of Fact. Paragraphs 1-2: Accepted in substance. Paragraph 3: Rejected as subordinate to the facts actually found. Paragraph 4: The first sentence is accepted. The second sentence is accepted in substance. The last sentence is rejected as unnecessary. Paragraph 5: Rejected as subordinate to the facts actually found. Paragraph 6: Accepted in substance. Paragraph 7: Accepted. Paragraphs 8-10: Accepted in substance. Paragraphs 11-12: Rejected as unnecessary and subordinate to the facts found. Paragraph 13: Accepted in substance. Paragraph 14: Rejected as subordinate to the facts actually found. Paragraphs 15-17: Accepted in substance. Paragraph 18: The first sentence is accepted in substance. The remainder is rejected as subordinate to the facts actually found. Paragraph 19: Rejected as irrelevant. Paragraph 20: Accepted in substance. Paragraph 21: Rejected as constituting argument. Paragraph 22: The first sentence is accepted in substance. The remainder is accepted in substance to the extent that these may have been things that Knickerbocker considered but rejected to the extent that it implies that he was unaware of the City's interest in purchasing the vacant lots. It is obvious the City's interest in the vacant lots would have an impact on the value of the lots. Paragraphs 23-24: Accepted in substance. Paragraph 25: Rejected to the extent that it is representative of the entire conversation between Hampton, Williford, and Knickerbocker. All three men discussed the interest in the purchase of the vacant lots by the city and the financing of such a purchase. Paragraph 26: The first two sentences are accepted in substance. The last sentence is rejected as unnecessary. Paragraph 27: Rejected as constituting argument and recitation of testimony. Paragraph 28: Rejected as constituting recitation of testimony. Paragraph 29: Having judged the credibility of the witnesses the first sentence is rejected. The first portion of the second sentence is accepted in substance. The second portion of the second sentence is rejected as constituting argument. Paragraphs 30-32: Rejected as constituting argument. Paragraphs 33-34: Rejected as unnecessary. Paragraph 35: The first sentence is accepted in substance. The remainder is rejected as subordinate to the facts actually found. Paragraph 36: Rejected as unnecessary. Paragraphs 37-38: Accepted in substance. Paragraph 39: Rejected as subordinate to the facts actually found. Paragraph 40: Rejected as constituting argument. Paragraph 41: Accepted in substance. Paragraph 42: The first sentence is rejected as unnecessary. The remainder is accepted in substance. Paragraph 43: Rejected as recitation of testimony. Paragraphs 44-45: Accepted in substance. Paragraph 46: The first sentence is rejected as unnecessary. The second sentence is accepted in substance. The last sentence is rejected as unnecessary. Paragraph 47: The first sentence is accepted in substance. The second sentence is rejected as constituting argument. Paragraph 48: Rejected as unnecessary. Paragraph 49: Rejected as constituting recitation of testimony. Paragraph 50: Rejected as constituting argument. Paragraph 51: Accepted in substance. Paragraph 52: Rejected as subordinate to the facts actually found. Paragraphs 53-55: Accepted in substance. Paragraph 56: Accepted in substance to the extent that one of the reasons that Mrs. Knickerbocker did not go through with the transaction was because of the encumbrances on the property, but rejected to the extent that it implies that was the only reason. Tom Knickerbocker testified that his mother told him that one of the reasons she was not going to continue with the purchase was that it did not look good with Knickerbocker running for mayor. Paragraph 57: The first sentence is accepted in substance. The second sentence is accepted in substance as to what Knickerbocker told Scuro but not to the extent that it implies that that was the only reason she did not continue with the purchase. Paragraph 58: Accepted in substance. Paragraphs 59-60: Rejected as unnecessary. Paragraph 61: Having judged the credibility of the witnesses, it is rejected. Paragraph 62: The first sentence is accepted in substance that Knickerbocker told Scuro that he was unaware of the City's interest in the vacant lots but rejected to the extent that the statement was true. The second sentence is accepted in substance. Having judged the credibility of the witness, I reject the last two sentences. Paragraph 63: The first two sentences are accepted in substance as to what Knickerbocker told Williford, but rejected to the extent that it implies that what Knickerbocker told Williford about being unaware of the City's interests in the lots was true. The remainder is rejected as constituting argument. Paragraphs 64-65: Rejected as unnecessary. Paragraph 66: The first sentence is accepted in substance. The second sentence is accepted to the extent that Ms. Jones relayed the opinion of the attorney who had reviewed her typed notes of the conversation and that the attorney's opinion was based on those notes. It should be noted that the attorney did opine that there would probably be no problem with Section 112.313(8) as long as the information used came from public records or public meetings and that the attorney did not give an opinion concerning Section 112.313(6). Paragraph 67: The first sentence is accepted in substance. The second sentence is rejected as not supported by competent substantial evidence. Paragraph 68: The first sentence is accepted in substance. The second sentence is subordinate to the facts actually found. Paragraph 69: Rejected as constituting argument. Paragraph 70: Rejected as subordinate to the facts found. COPIES FURNISHED: Carrie Stillman Complaint Coordinator Commission on Ethics Post Office Box 15709 Tallahassee, Florida 32317-5709 Marty E. Moore, Esquire Office of the Attorney General Department of Legal Affairs The Capitol, PL-01 Tallahassee, Florida 32399-1050 Michael L. Gore, Esquire 20 North Orange Avenue, Suite 1000 Orlando, Florida 32801 Bonnie Williams Executive Director Florida Commission On Ethics Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Phil Claypool, Esquire General Counsel Ethics Commission 2822 Remington Green Circle, Suite 101 Post Office Drawer 15709 Tallahasee, Florida 32317-5709
Findings Of Fact At all times pertinent to these proceedings, Respondent, Private Money Mortgage Company (PMMC), was a mortgage brokerage business in the State of Florida holding License Number HB592732699 that had been issued by Petitioner. At all times pertinent to these proceedings, Frank Donahue was a licensed mortgage broker in the State of Florida holding License Number HA267474770 that had been issued by Petitioner. The Department of Banking and Finance, the Petitioner in these proceedings, is the agency of the State of Florida charged with the responsibility of enforcing the provisions of Chapter 494, Florida Statutes. In 1985, Mr. and Mrs. A. Charles Cinelli bought a house in Palm Beach County, Florida, and moved from upstate New York to Palm Beach County, Florida. Respondent, Frank Donahue, assisted Mr. and Mrs. Cinelli in obtaining financing for the home the Cinellis purchased in Palm Beach, County. In connection with this 1985 transaction, Mr. Donahue forwarded to the Cinellis an "Exclusive Broker Agreement", which they executed and returned to him. Because this 1985 transaction involved a purchase, Mr. Donahue ordered an appraisal for this property and charged its cost as a part of the Cinelli's closing costs. Subsequent to that transaction, Mr. Donahue and his wife, Brenda, saw Mr. and Mrs. Cinelli at occasional social events. Franklin T. Smith is a certified public accountant who performed professional services for Mr. and Mrs. Cinelli and for Mr. and Mrs. Donahue. Mr. Smith referred the Cinellis to Mr. Donahue in 1985 and advised the Cinellis during the transaction that is the subject of this proceeding. Prior to December 2, 1988, Mr. Cinelli contacted several mortgage brokers in the Palm Beach County area to discuss the possibility of obtaining a mortgage on certain real property located in upstate New York. Mr. Cinelli contacted Mr. Donahue by telephone and discussed with him his desire to raise capital to begin a business in Florida. Mr. Cinelli estimated that he would require approximately $1,000,000 to start this business. Mr. Cinelli told Mr. Donahue that he and Mrs. Cinelli owned certain commercial real property in upstate New York and that State Farm Insurance Company held an option to purchase this property for the sum of $1,450,000. Mr. Cinelli did not want to wait to learn whether State Farm intended to exercise this option to purchase and he discussed with Mr. Donahue the possibility of obtaining the desired capital by securing a mortgage on this property. Mr. Donahue advised Mr. Cinelli that he could expect to secure a mortgage for approximately $700,000 (which was approximately 50% of the amount of the option contract) and that he would need a current appraisal. Mr. Donahue also informed Mr. Cinelli that he would require the sum of $2,500 as a non-refundable deposit to begin seeking such a commitment. On or about December 2, 1988, Mr. Cinelli provided Mr. Donahue with a copy of the option agreement with State Farm and with a copy of the agreement dated September 21, 1988, which extended the time within which State Farm could exercise its option for an additional six months. Mr. Cinelli reiterated to Mr. Donahue that the option price was for $1,450,000 and that he wanted to mortgage the property for $1,000,000. Mr. Cinelli also provided Mr. Donahue with the name, address, and telephone number of Mr. Wayne Lupe, who was represented by Mr. Cinelli to be his MAI appraiser in Schenectady, New York. On December 15, 1988, Mr. Donahue sent to Mr. Cinelli a letter which attached an "Exclusive Broker Agreement" that had been executed by Mr. Donahue on December 15, 1988. This was the same "Exclusive Broker Agreement" form that Mr. Donahue had used for the 1985 Cinelli transaction. The body of the letter provided as follows: Enclosed please find a copy of my exclusive brokers agreement detailing the probable terms of the loan which you are seeking. This agreement is the same agreement which you signed when you purchased your current resi- dence. The agreement calls for both you & Joan to sign and return along with a nonrefundable deposit in the amount of $2500.00 to Private Money Mortgage Corp. The above noted deposit shall be credited towards your closing costs at the time of closing, if a commitment is offered. I have spoken to several of my investors about your concerns and I am awaiting confirmation of their substantial interests prior to ordering the appraisal. I will contact you as soon as I have received the return of this agreement along with your deposit in order to fill you in on our efforts to secure you the most competitive loan on your desired terms. The Exclusive Broker Agreement reflected that the amount of the mortgage would be $700,000 and disclosed that the total estimated costs that would be incurred in securing the mortgage was $78,346, which included a broker's fee of $35,000 and an estimated appraisal fee of $3,500. The Exclusive Broker Agreement, signed by Mr. Donahue on December 15, 1988, contained the following provision: DEPOSIT: In consideration of the sum of $2,500, receipt of which is hereby acknowledged, and in compliance with Chapter 494, Florida Statutes, Broker accepts this application and agrees to exert his/her best effort to obtain a commitment for loan in accordance with the terms and conditions set forth herein. This deposit shall be credited toward closing costs at the time of closing the permanent loan or commitment, less Broker's expenses. Among the "Standards" which were incorporated as terms and conditions of the Exclusive Broker Agreement was the following: Deposit. Client simultaneously with execution of this agreement has deposited with broker the amounts stated in this agreement in order to secure the obligations owed by client to broker in the event of default of client as provided in the agreement and to reimburse broker of any and all expenses, including telephone charges, lodging, and administrative fees for credit checks and processing appraisals and the like, including upon any cancellation by client, reimbursement for broker's time expended incurred by broker, whether or not a loan commitment is obtained by broker. Mr. Cinelli was concerned that he would be incurring substantial fees and costs if Mr. Donahue obtained a commitment and Mr. Cinelli decided not to accept it. Mr. Smith advised Mr. Cinelli that the estimated expenses were not abnormally high, but he suggested that his liability should be limited. In response to those concerns, Mr. Donahue prepared and delivered between December 15, 1988, and the end of the year an addendum to the Exclusive Broker Agreement that would have limited Mr. Cinelli's liability to the sum of $7,500. That addendum provided, in pertinent part, as follows: It is hereby understood and agreed by the parties that in the event a loan commitment is offered to the applicants & they decide to refuse this commitment, the applicants liability will be limited to the sum of Five Thousand Dollars plus the original deposit of $2,500.00 for a total amount of $7,500.00. It is further understood that said commitment must bear approximately the same terms and conditions as the attached agreement. Mr. and Mrs. Cinelli gave Mr. Smith the sum of $2,500 in cash to deliver to Mr. Donahue, but there is conflicting testimony as to when this money was delivered to Mr. Smith for delivery to Mr. Donahue. Mr. Cinelli testified that the money was delivered before the Exclusive Broker Agreement dated December 15, 1988, was prepared. Mr. Donahue testified that the money was delivered after both the Exclusive Broker Agreement and the addendum thereto had been delivered to Mr. Cinelli. Mr. Donahue also testified that the statement contained in the Exclusive Broker Agreement that he signed on December 15, 1988, acknowledging his receipt of the $2,500 deposit was false. He did not explain why the addendum referred to the sum of $2,500 as "the original deposit". Mr. Smith did not recall when he delivered this money to Mr. Donahue, but he did recall having delivered the cash the same day he received it from the Cinellis. While his testimony is that he received the $2,500 during his initial meeting with Mr. and Mrs. Cinelli (which would be before Mr. Cinelli received the Exclusive Broker Agreement) this testimony lacks credibility because of Mr. Smith's lack of certainty as to dates. In addition, this testimony conflicts with the letter Mr. Smith wrote to Mr. Donahue at Mr. Donahue's request on August 28, 1989, which clearly indicates that the $2,500 was not paid until after the addendum to the Exclusive Broker Agreement had been prepared. This conflict is resolved by finding that the greater weight of the evidence establishes that the sum of $2,500 was delivered by Mr. Smith to Mr. Donahue after Mr. Cinelli had received both the Exclusive Broker Agreement and the addendum thereto. Mr. Donahue did not provide the Cinellis with any type of written agreement, other than his letter of December 15, 1998, the Exclusive Broker Agreement, and the addendum when he received the cash from Mr. Smith. There was no written receipt for these funds, nor was there any written memorandum of understanding between Mr. Donahue and the Cinellis as to whether payment for the appraisal that Mr. Donahue and Mr. Cinelli had discussed would be made from the $2,500. Mr. Cinelli was of the belief that $2,000 of the $2,500 deposit would be earmarked for the payment of the appraisal. Mr. Donahue was of the belief that the $2,500 was a non-refundable retainer and he treated that sum as an earned fee. There was no meeting of the minds between Mr. Cinelli and Mr. Donahue as to the nature of the $2,500 deposit, other than it was non-refundable. Specifically, there was no agreement as to what costs, if any, would be paid from that deposit. Mr. Donahue's normal business practice in transactions involving a refinance of property is different than his practice in transactions involving a purchase of property. In purchase transactions (such as the 1985 Cinelli transaction), Mr. Donahue arranges for the appraisals and treats the costs of the appraisal as an expense to be paid by the purchaser at closing. In refinance transactions (such as the 1988 Cinelli transaction), it is his practice to require his customer to deal directly with the appraiser in ordering and paying the costs of the appraisal. Respondents failed to establish that in the subject transaction, Mr. Donahue made it clear that Mr. Cinelli would be responsible for ordering and paying the cost of the appraisal. Mr. Cinelli believed that $2,000 of the $2,500 he later gave Mr. Donahue would be earmarked for the payment of the appraisal. Neither Mr. Donahue's letter of December 15, 1998, the Exclusive Broker Agreement, nor the addendum clearly resolved the dispute. There was a dispute between Mr. Donahue and Mr. Cinelli as to who ordered the appraisal. Mr. Cinelli denied that he ordered the appraisal and that his calls to his appraiser, Mr. Lupe, was only to advise him of Mr. Donahue's forthcoming call. Mr. Donahue denied that he ordered the appraisal and that his contacts with Mr. Lupe were after Mr. Cinelli had ordered the appraisal. Mr. Donahue contends that his contacts with the appraiser were merely to give the appraiser instructions as to the information that should be reflected by the appraisal. This dispute is resolved by finding that Mr. Cinelli ordered the appraisal through Mr. Lupe and that Mr. Donahue advised Mr. Lupe as to the information that should be reflected by the appraisal. It was determined from conversations between Mr. Donahue and Mr. Lupe that Mr. Lupe was not qualified to perform the appraisal and that Mr. Lupe would engage Albert L. Friedman, MAI and William J. McEvoy of Capitol Real Estate and Appraisal Company of Schenectady, New York, on Mr. Cinelli's behalf to perform the work. Messrs. Friedman and McEvoy prepared the appraisal and certified the same to Mr. Cinelli on March 13, 1989. The appraised value of the property was $2,100,000. As of the date of the formal hearing, the appraiser's bill of $2,000 had not been paid. Capitol Real Estate and Appraisal Company had billed both Mr. Donahue and Mr. Cinelli and an attorney representing Capitol Real Estate and Appraisal Company had written Mr. Cinelli a demand letter. It was the dispute over the payment of the appraiser's fee that prompted the complaint the Cinellis filed against Respondents. The Cinellis did not execute the Exclusive Broker Agreement and the addendum because they wanted to wait on the appraisal to see if the appraised value would permit them to borrow more than $700,000 and because they were not satisfied with the amount of the projected costs of consummating the transaction. Mr. Cinelli misled Mr. Donahue as to his intentions to execute these agreements. Mr. Donahue made several requests to the Cinellis that they execute the Exclusive Broker Agreement and addendum and return them to him. Despite the absence of an executed brokerage agreement, Mr. Donahue exerted considerable effort to seek a commitment consistent with the Exclusive Broker's Agreement and succeeded in securing such a commitment in April 1989. No part of the $2,500 Mr. Donahue received from Mr. Smith on behalf of the Cinellis was placed in escrow by Mr. Donahue. Respondents have made no accounting of the $2,500 and have paid no part of the appraisal bill. Mr. Donahue claims the deposit as a non-refundable earned fee, despite the absence of a written agreement to that effect. The Cinellis sold the subject property to State Farm in June 1989.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered by Petitioner which finds: that Respondents violated the provisions of Rule 3D-40.006(5), Florida Administrative Code, by accepting the $2,500 deposit from the Cinellis without a written agreement as to the disposition of those funds; that Respondents violated the provisions of Section 494.055(1)(e), Florida Statutes, and Rule 3D-40.006(6)(a), Florida Administrative Code, by failing to place said deposit in escrow; and that Respondents violated the provisions of by Section 494.055(1)(f), Florida Statutes, by failing to account for said deposit. It is further recommended that an administrative fine be levied against Respondents in the total amount of $1,000.00 for said violations. It is further recommended that the final order place the licenses of Respondents on probation for a period of one year with three special conditions of probation. The first special condition of probation would require Respondents to pay Capitol Real Estate and Appraisal Company the sum of $2,000 within sixty days of the Final Order. The second special condition of probation would terminate Respondents' probation upon timely compliance with the first special condition of probation. The third special condition of probation would prohibit Respondents from conducting any business as mortgage brokers within the State of Florida for a period of six months should Respondents fail to timely comply with the first condition of probation. RECOMMENDED in Tallahassee, Leon County, Florida, this 9th day of January, 1991. 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 9th day of January, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-4708 The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioner. The proposed findings of fact in paragraphs 1, 3-10, and 13 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraphs 2 and 11 are adopted in part by the Recommended Order, and are rejected in part as being contrary to the findings made. The proposed findings of fact in paragraph 12 are adopted in part by the Recommended Order, and are rejected in part as being argument. The following rulings are made on the proposed findings of fact submitted on behalf of the Respondent. The proposed findings of fact in paragraphs 1-3 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraphs 4-6, 14, and 17 are rejected as being subordinate to the findings made. The proposed findings of fact in paragraph 7 are adopted in part by the Recommended Order. The characterization of the Cinellis having a "long standing relationship" with Mr. Donahue is rejected as being ambiguous and unnecessary to the conclusions reached. The proposed findings of fact in paragraph 8 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraphs 9-11 are adopted in part by the Recommended Order, but are rejected to the extent that they are subordinate to the findings made. The proposed findings of fact in paragraphs 12 and 13 are rejected as being recitation of testimony or as being subordinate to the findings made. The proposed findings of fact in paragraph 15 are rejected as being subordinate to the findings made or as being contrary to the findings made or to the conclusions reached. The proposed findings of fact in paragraph 16 are adopted in part by the Recommended Order, and are rejected in part as being unnecessary to the conclusions reached. COPIES FURNISHED: Deborah Guller, Esquire Office of the Comptroller 111 Georgia Avenue, Suite 211 West Palm Beach, Florida 33401-5293 Marie A. Mattox, Esquire Douglass, Cooper, Coppins & Powell Post Office Box 1674 Tallahassee, Florida 32302-1674 Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350 William G. Reeves General Counsel The Capitol Plaza Level, Room 1302 Tallahassee, Florida 32399-0350
The Issue The issue in this case is whether Respondent violated Section 475.25(1)(b), Florida Statutes (1999), by committing a breach of trust in a business transaction. (All Chapter and Section references are to Florida Statutes (1999) unless otherwise stated.)
Findings Of Fact Petitioner is the state agency responsible for the regulation and discipline of real estate licensees in the state. Respondent is licensed in the state as a real estate sales person pursuant to license number 0349967. Petitioner issued the last license to Respondent in care of 100% Real Estate, Inc., 1810 Lee Road, Orlando, Florida 32810. On August 6, 1998, Dr. and Mrs. Richard M. Cowins (the "Cowins") entered into a Contract for Sale and Purchase (the "Contract") of their residence located at 9151 Cypress Point Drive. The Contract listed Respondent as the agent for J.C. Services Ltd., or Assigns ( the "Buyer"). The Contract established the date of closing as September 8, 1998. On August 7, 1998, Respondent executed an Addendum to the Contract for Sale and Purchase. The Addendum, in relevant part, stated that Respondent was the agent for the Buyer, required a home inspection, and gave the Buyer the right to cancel the contract and obtain a refund of the $5,000 escrow deposit if the home inspection report was not satisfactory to the Buyer. On August 7, 1998, Respondent executed a single agency disclosure form stating that Respondent was the agent for the Cowins as sellers. Respondent delivered the single agent disclosure form to the Cowins on August 7, 1998. The record does not disclose why Respondent executed a single agency disclosure form for the Cowins and signed the Contract and Addendum as the agent for the Buyer. The Cowins entered into a contract for the purchase of a replacement residence. The Cowins placed $10,000 in escrow for the purchase of the replacement residence. Two inspection reports were completed for the Cowins' residence. Both inspection reports required repairs to windows and the roof. The Cowins made the repairs. Respondent requested an extension of the closing on behalf of the Buyer but did not give the Cowins a reason for the requested extension. The Cowins refused to extend the closing without a reason and demanded the funds in escrow. Respondent attempted to place the escrow funds into an interpleader proceeding but was unable to do so because Respondent refused to disclose the identity of the Buyer. Respondent refunded the escrow of $5,000 to the Buyer. The Cowins forfeited the $10,000 they had placed in escrow on the replacement residence because they were unable to close without the sale proceeds for the sale of their residence.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a Final Order finding Respondent guilty of violating Section 475.25(1)(b), imposing a fine of $1,000, and suspending Respondent's license for one year. DONE AND ENTERED this 1st day of November, 2000, in Tallahassee, Leon County, Florida. DANIEL MANRY 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 1st day of November, 2000. COPIES FURNISHED: Herbert S. Fecker, Division Director Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Barbara D. Auger, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Ghunise L. Coaxum, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street, Suite N-308 Orlando, Florida 32801 Jean Prol 4630 South Kirkman Road Orlando, Florida 32811
The Issue Should Respondent's license as Florida real estate salesperson be disciplined for the alleged violations of certain provisions of Chapter 475, Florida Statutes, as set forth in the Administrative Complaint filed herein, and, if so, what penalty should be imposed?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: The Department is the agency of the State of Florida vested with the statutory authority to administer the disciplinary provisions of Chapter 475, Florida Statutes. Respondent, at all times relevant to this proceeding, was licensed as a real estate salesperson in the State of Florida, having been issued license number SL-0669595, and subject to the provisions of Chapter 475, Florida Statutes. At all times relevant to this proceeding, Respondent worked as a real estate salesperson in the ReMax real estate office owned by a Lydia Trotter. At all times relevant to this proceeding, Respondent worked under the control and direction of Lydia Trotter, a real estate broker. On July 30, 1999, Respondent entered into a contract with Oye Jeon to sell her a certain parcel of real estate for the purchase price of $99,000.00 and received a deposit in the amount of $30,000.00 from Oye Jeon. Respondent failed to inform Oye Jeon that he did not own the property and did not have a contract to purchase the property from Mr. McClelland, the owner of the parcel of property. Respondent paid a finder's fee in the amount of $10,000.00 to Mr. and Mrs. Song for finding a buyer (Oye Jeon) for this parcel of property. At all times relevant to this proceeding, neither Mr. Song nor Mrs. Song was licensed as a broker, broker salesperson, or salesperson under the laws of the State of Florida. Respondent did not own or have a contract to purchase the parcel of property in question from Mr. McClelland, the owner of the property, at the time Respondent entered into the contract to sell this parcel of property to Oye Jeon on July 30, 1999. Respondent eventually purchased this parcel of property from Mr. McClelland (apparently after the contract with Oye Jeon was entered into) but has never honored the contract with Oye Jeon or returned her $30,000.00 deposit. Respondent has never deposited the $30,000.00 received from Oye Jeon with his broker, Lydia Trotter.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law and a review of the Disciplinary Guidelines set out in Rule 61J2-24.001, Florida Administrative Code, it is RECOMMENDED that the Department enter a final order finding Respondent, Seyed R. Miran, guilty of violating Subsections 475.25(1)(b), (e), (h), and (k), Florida Statutes, and revoking his real estate salesperson's license. DONE AND ENTERED this 22nd day of May, 2003, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 22nd day of May, 2003. COPIES FURNISHED: James P. Harwood, Esquire Department of Business and Professional Regulation 400 West Robinson Street Suite N308 Orlando, Florida 32801-1772 Seyed R. Miran 8505 North Orleans Avenue Tampa, Florida 33604 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 Nancy P. Campiglia, Acting Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Suite 802, North Orlando, Florida 32801-1772
The Issue The issue posed for decision herein is whether or not the Petitioner is subject to the Florida corporate income tax for tax years 1972, 1973, 1974 and 1975 plus accrued penalties and interest since July 7, 1977, the date Petitioner was mailed a proposed notice, of deficiency by the Respondent, Department of Revenue.
Findings Of Fact Based on the evidence adduced at the hearing herein; the documentary evidence received; the Respondent's memorandum in support of the assessed deficiency; the Petitioner's memorandum in response thereto; and the entire record compiled herein, the following relevant facts are found.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Respondent enter a Final Order herein denying Petitioner's protest of the proposed deficiency and penalties as set forth hereinabove. RECOMMENDED this 14th day of March, 1983, in Tallahassee, Florida. JAMES E. BRADWELL, 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 14th day of March, 1983.
The Issue The issue in this proceeding is whether the Respondent, the Department of Insurance, acted illegally, arbitrarily, fraudulently, or dishonestly in rejecting all bids for lease #460:0119 and not awarding subject lease to Petitioner.
Findings Of Fact The Department of Insurance established a requirement to lease 5371 square feet of office space in Daytona Beach, Florida, and a "Request for Space Need" was approved by the Department of Management Services on February 11, 1998. The Department of Insurance subsequently issued a Request for Proposal (RFP) for lease #460:0119 (Respondent's Exhibit 1). A non-mandatory pre-bid conference was held on June 1, 1998, in Daytona Beach and two prospective bidders, Petitioner and Nova Village Market partnership attended. The RFP provided that proposals which did not meet all mandatory requirements of the RFP would be rejected as non- responsive. The RFP provided for evaluation criteria are awards factors. The awards factors totaled 100 points with no minimum point total required. Ten of the points were allotted for moving costs defined as the costs of relocating communications, networks, furniture and other equipment. This factor gave the current landlord an automatic 10-point advantage since there would be no relocation costs. Moving costs provisions tend to discourage the presentation of bids because the bidders have to overcome an automatic 10-point advantage provided the current landlord. The RFP also provided that all proposals could be rejected, however, such "rejection shall not be arbitrary, but be based on strong justification." None of the conditions of the RFP were questioned or challenged by interested parties. Two responses were received by the Department of Insurance in response to the RFP and these were opened in Respondent's Tallahassee office on July 8, 1998, by Mr. Kip Wells of the Department. One was received from the current landlord, Nova Village Partnership, hereafter Nova, and the other from the Petitioner. The Nova proposal was deemed non-responsive. Neither Nova nor Petitioner contested the determination that Nova's proposal was non-responsive. Only one responsive proposal, the Petitioner's proposal, remained. On July 9, 1998, the Department representative, Mr. Kip Wells, called Petitioner to schedule an appointment for 9:00 a.m., on July 10, 1998, to visit and evaluate the proposed facility. No persons from the Department appeared at the scheduled appointment. At 10:45 a.m., on July 10, 1998, Kip Wells called Petitioner to say that since Petitioner's proposal was the only responsive proposal received, and that "all bids" were being rejected. Mr. Wells testified at hearing. His reason for rejecting the remaining bid was: When I saw that it was obvious the current landlord was not going to be very cooperative, I decided that one choice was not enough. If we were going to have to make a move, we needed more than one thing to choose from. So, I immediately - - since I had already set up with local people in Daytona to tell them that I was coming down to evaluate the bids, I sent them an E-mail and told them that I would not be meeting the following day to evaluate the bids. Mr. Wells decided to reissue the RFP without any moving costs criteria, and redistribute those 10 points among the other award factors. Petitioner filed a Notice of Intent to Protest and then a Formal Protest, both in a timely fashion. There is no state policy prohibiting the award of a lease to a sole bidder on a RFP. The "Leasing Policy" of the Department of Insurance states that "The Lease Administrator, with assistance from the Division employees, will establish bid or quote specifications. These specifications will include special needs for the Division(s) as well as the evaluation criteria upon which to evaluate the proposals." Neither the Department's Lease Policy (Petitioner Exhibit 3) nor the State's Real Property Leasing Manual (Petitioner's Exhibit 4) give the Lease Administrator the authority to reject or evaluate bid responses. Neither does he have a vote in the bid evaluation process. His responsibility is to coordinate the process. Randall Baker, Manager of Private Sector Leasing of the Bureau of Property Management of the Department of Management Services (hereinafter DMS), testified. The DMS prepares a manual as a guideline for user agencies to assist in the leasing of property. The DMS manual is not binding on agencies and DMS has no review oversight; however, their comments on agencies' leases are reviewed by the state auditing authorities and failure to follow the guidelines can result in audit criticism. Baker confirmed that the agency's written procedures as outlined in the RFP were consistent with the DMS guidelines. The DMS manual states as follows regarding the receipt of only one responsive proposal: When only one responsive proposal is received it may be considered and accepted providing the following conditions are documented: Adequate competition was solicited. The rate is within established rental rate guidelines. The proposal meets stated requirements. The proposal was processed as though other proposals were received. The Petitioner's bid was responsive to the RFP and the lease rate bid by the Petitioner was less than the average rate for state leases in the Daytona area and less than the amount budgeted by the Department for this lease. The lease rate by the Petitioner was reasonably priced and competitive. Although the agency failed to complete the process as envisioned, see paragraph 20 below, this was in no way the fault of Petitioner. The Department's leasing policy requires that the lowest and best response to an RFP be determined through cost analysis and evaluation by an evaluation committee. Mr. Wells did not forward Petitioner's bid to or discuss with the evaluation committee Petitioner's bid, but unilaterally rejected it. It was clear from Mr. Wells' testimony that this was his individual decision and was based upon his personal belief that it was the best thing to do.1 At hearing, the stated justification for rejecting "all bids" was that it gave the Department the opportunity to delete the requirement of moving costs from the awards factors; however, the evidence does not indicate that the moving cost provision result in non-competitive bids. The sole responsive bidder was within the local lease price range and within budget. Neither the Respondent nor DMS has established a policy prohibiting the acceptance of a sole responsive bid if there is competition solicited. The Department of Insurance has accepted a sole bid on at least one project in the past. There was no evidence that the RFP was not an open and fair competition. The evidence shows that it was properly advertised, that all conditions were known, and that all interested parties had an equal opportunity to participate. In sum, there was adequate competition in submitting the bids. Mr. Baker testified regarding the policy of DMS. The DMS policy is that if there is one responsive bidder, there has been competitive bidding. The RFP provides that the Respondent may reject all bids if it has strong justification. See paragraph 5 above. Mr. Baker also provided examples of "strong justification for rejecting proposals." His examples include facilities which are proposed outside the required geographic area, prices considerably in excess of state guidelines and agency budgets, specification changes due to modification of the agency's program requirements, and "intervening external forces." No evidence establishing a strong justification for rejecting the Petitioner's bid was presented. Without completing the process and evaluating the Petitioner's bid, the agency never considered whether the bid was in the state's best interest. However, this was not the fault of the Respondent, and the agency's failure to follow its procedures should not inure to its benefits. Further, Because there was no minimum score required on the evaluation criteria of the RFP, there is no need to evaluate Petitioner's proposal because it is the only responsive proposal. For all the reasons stated above, the rejection of Petitioner's bid was contrary to the terms of the RFP, contrary to state policy, and arbitrary.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is, RECOMMENDED: That a Final Order be entered which finds that: Respondent's actions in rejecting Petitioner's responsive bid were arbitrary; The Respondent did not follow the requirements set forth in the Department of Insurance Leasing Policy, nor the Department of Management Services Real Property Leasing Manual, or the Request for Proposal itself; That no adverse interest to the State or the Department would have occurred had Petitioner's responsive bid been accepted; and therefore, Petitioner's claim shall be upheld as the lowest cost and best proposal for RFP #460:0119, and that the Department of Insurance shall award Petitioner Lease #460:0119. DONE AND ENTERED this 30th day of October, 1998, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN 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 Filed with the Clerk of the Division of Administrative Hearings this 30th day of October, 1998.
