The Issue Whether Respondent committed the violations alleged in the Administrative Complaint issued against him and, if so, what penalty should be imposed.
Findings Of Fact Based on the evidence adduced at the "formal hearing," and the record as a whole, the following findings of fact are made: Respondent is now, and has been since October of 2000, a licensed real estate sales associate in the State of Florida, holding license number 695252. He is currently associated with AAA Realty, Inc., a broker corporation doing business in Broward County, Florida. From March 1, 2001, through June 26, 2001, Respondent was an active real estate sales associate with Allen Real Estate, Inc. (Allen), a broker corporation doing business in St. Lucie County, Florida. From June 27, 2001, through August 13, 2001, Respondent was an active real estate sales associate with Realty Unlimited, Inc. (Unlimited), a broker corporation (affiliated with GMAC Real Estate) with offices in Port St. Lucie and Stuart, Florida. Unlimited is now, and has been at all times material to the instant case, owned by Kevin Schevers, a Florida-licensed real estate broker. Gary Sprauer is a Florida-licensed real estate sales associate. He is currently associated with Unlimited. Like Respondent, Mr. Sprauer began his association with Unlimited on June 27, 2001, immediately after having worked for Allen. Respondent and Mr. Sprauer worked as "partners" at both Allen and Unlimited. They had an understanding that the commissions they each earned would be "split 50-50" between them. On February 7, 2001, Allen, through the efforts of Respondent and Mr. Sprauer, obtained an exclusive listing contract (Listing Contract) giving it, for the period of a year, the "exclusive right to sell," in a representative capacity, commercial property located at 3800 South Federal Highway that was owned by Vincent and Renee Piazza (Piazza Property). Paragraphs 6 and 7 of the Listing Contract addressed the subjects of "compensation," "cooperation with other brokers," and "dispute resolution," respectively, and provided, in pertinent part as follows as follows: COMPENSATION: Seller will compensate Broker as specified below for procuring a buyer who is ready, willing, and able to purchase the Property or any interest in the Property on the terms of this Agreement or on any other terms acceptable to Seller. Seller will pay Broker as follows (plus applicable sales tax): 8% of the total purchase price or $15,000 maximum, no later than the date of closing specified in the sales contract. However closing is not a prerequisite for Broker's fee being earned. * * * (d) Broker's fee is due in the following circumstances: (1) If any interest in the Property is transferred . . . , regardless of whether the buyer is secured by Broker, Seller or any other person. * * * COOPERATION WITH OTHER BROKERS: Broker's office policy is to cooperate with all other brokers except when not in the Seller's best interest, and to offer compensation to: Buyer's agents, who represent the interest of the buyer and not the interest of Seller in a transaction, even if compensated by Seller or Broker Nonrepresentatives Transaction brokers. None of the above (if this box is checked, the Property cannot be placed in the MLS). * * * 10. DISPUTE RESOLUTION: This Agreement will be construed under Florida law. All controversies, claim and other matters in question between the parties arising out of or relating to this Agreement or the breach thereof will be settled by first attempting mediation under the rules of the American Arbitration Association or other mediator agreed upon by the parties. . . . Shortly after they left the employ of Allen and began working for Unlimited, Respondent and Mr. Sprauer showed Nicholas Damiano the Piazza Property. Mr. Damiano thereafter made a written offer to purchase the Piazza Property, which the Piazzas accepted, in writing, on July 4, 2001. The sales price was $165,000.00. Mr. Damiano put down a $10,000.00 deposit, which, in accordance with paragraph 2(a) of the contract between Mr. Damiano and the Piazzas (Sales Contract), was "held in escrow by [Unlimited]." The obligations of Unlimited, as escrow agent, were described in paragraph 6 of the Sales Contract, which provided as follows: ESCROW. Buyer and Seller authorize GMAC, Realty Unlimited Telephone: . . . Facsimile: . . . Address: . . . to receive funds and other items and, subject to clearance, disburse them in accordance with the terms of this Contract. Escrow Agent will deposit all funds received in a non- interest bearing account. If Escrow Agent receives conflicting demands or has a good faith doubt as to Escrow Agent's duties or liabilities under this Contract, he/she may hold the subject matter of the escrow until the parties mutually agree to its disbursement or until issuance of a court order or decision of arbitrator determining the parties' rights regarding the escrow or deposit the subject matter of the escrow with the clerk of the circuit court having jurisdiction over the dispute. Upon notifying the parties of such action, Escrow Agent will be released from all liability except for the duty to account for items previously delivered out of escrow. If a licensed real estate broker, Escrow Agent will comply with applicable provisions of Chapter 475, Florida Statutes. In any suit or arbitration in which Escrow Agent is made a party because of acting as agent hereunder or interpleads the subject matter of the escrow, Escrow Agent will recover reasonable attorneys' fees and costs at all levels, with such fees and costs to be paid from the escrowed funds or equivalent and charged and awarded as court or other costs in favor of the prevailing party. The parties agree that Escrow Agent will not be liable to any person for misdelivery to Buyer or Seller of escrowed items, unless the misdelivery is due to Escrow Agent's willful breach of this Contract or gross negligence. Paragraph 12 of the Sales Contract addressed the subject of "brokers" and provided as follows: BROKERS. Neither Buyer nor Seller has utilized the services of, or for any other reason owes compensation to, a licensed real estate broker other than: Listing Broker: Allen Real Estate, Inc. who is a transaction broker and who will be compensated by x Seller _ Buyer _ both parties pursuant to x a listing agreement _ other (specify) Cooperating Broker: GMAC Realty Unlimited who is a transaction broker who will compensated by _ Buyer x Seller _ both parties pursuant to _ an MLS or other offer of compensation to a cooperating broker _ other (specify) (collectively referred to as "Broker") in connection with any act relating to the Property, included but not limited to, inquiries, introductions, consultations and negotiations resulting in this transaction. Seller and Buyer agree to indemnify and hold Broker harmless from and against losses, damages, costs and expenses of any kind, including reasonable attorneys' fees at all levels, and from liability to any person, arising from (1) compensation claimed which is inconsistent with the representation in this Paragraph, (2) enforcement action to collect a brokerage fee pursuant to Paragraph 10, (3) any duty accepted by Broker at the request of Buyer or Seller, which duty is beyond the scope of services regulated by Chapter 475, F.S., as amended, or (4) recommendations of or services provided and expenses incurred by any third party whom Broker refers, recommends or retains for or on behalf of Buyer or Seller. The Damiano/Piazza transaction was originally scheduled to close on July 25, 2001. At the request of the Piazzas, the closing was rescheduled for August 7, 2001. A few days before August 7, 2001, Mr. Sprauer asked Respondent "where the closing was going to take place" and "what title company" would be handling the matter. Respondent replied that the closing was "going to be delayed again because Mr. Damiano . . . was going to have to have some type of cancer surgery." It turned out that the closing was not "delayed again." It took place on August 7, 2001. At the closing were Mr. Damiano, the Piazzas, Respondent, and the closing agent from the title company, First American Title Insurance Company (First American).3 Neither Mr. Schevers, nor Mr. Sprauer, was in attendance. Mr. Sprauer did not even know that the closing was taking place. He was under the impression, based on what Respondent had told him, that the closing had been postponed. Had he not been misinformed, he would have attended the closing. Respondent did not contact Mr. Sprauer following the closing to let him know that, in fact, the closing had occurred. Mr. Schevers, on the other hand, was made aware that closing would be held on August 7, 2001. He was unable to attend because he had "prior commitments." It was Respondent who informed Mr. Schevers of the August 7, 2001, closing date. The morning of August 7, 2001, Respondent went to Unlimited's Stuart office and asked Mr. Schevers for the $10,000.00 Unlimited was holding in escrow in connection with the Damiano/Piazza transaction, explaining that he needed it for the closing that was going to be held later that day. Before complying with Respondent's request, Mr. Schevers contacted First American and asked that he be faxed a copy of the United States Department of Housing and Urban Development Settlement Statement (HUD Statement) that First American had prepared for the closing. As requested, First American faxed a copy of the HUD Statement to Mr. Schevers. Upon reviewing the document, Mr. Schevers "immediately noticed that [it indicated that] the entire commission [of $7,000.00] was going to Allen." Mr. Schevers "then proceeded to call First American" and asked why Unlimited was not "reflected on this settlement statement." Mr. Schevers was told that a First American representative "would get right on it and get back to [him]." Mr. Schevers did not wait to hear back from First American before handing an "escrow check" in the amount of $10,000.00 to Respondent. He instructed Respondent, however, to "not give anybody this check unless that statement [the HUD Statement] [was] changed and reflect[ed] [Unlimited's]" share of the commission earned from the sale of the Piazza Property. He further directed Respondent to telephone him if this change was not made. Respondent did not follow the instructions Mr. Schevers had given him. He delivered the $10,000.00 "escrow check" to the closing agent at the closing, even though the HUD Statement had not been changed to reflect Unlimited's sharing of the commission. At no time during the closing did Mr. Schevers receive a telephone call from Respondent. According to the HUD Statement that Mr. Damiano, the Piazzas, and the closing agent signed at the closing, Allen received a commission of $7,000.00 "from seller's funds at settlement." The document makes no mention of any other commission having been paid as part of the closing. On or about August 9, 2001, Respondent received a "commission check" from Allen. The check was made payable to Respondent and was in the amount of $3,000.00. Under the "DOLLARS" line on the check, the following was typed: 4200 Total Comm[4] 1200 ADVANCE[5] Typed next to "MEMO" on the bottom left hand corner of the check was "DAMIANO-PIAZZA 165,000 S&L." It has not been shown that the "commission check" Respondent received from Allen was for anything other than the commission Allen owed Respondent for services performed when Respondent was still employed by Allen. Mr. Schevers' consent to Respondent's receiving this $3,000.00 "commission check" was neither sought nor given. Less than a week after the closing, having spotted Mr. Damiano mowing grass on a vacant lot that Mr. Damiano owned, Mr. Sprauer walked up to him and asked "how his surgery [had gone]." Mr. Damiano "acted very surprised [like] he didn't know what [Mr. Sprauer] was talking about." Mr. Damiano's reaction to his inquiry led Mr. Sprauer to believe "that the closing had probably taken place." He "immediately contacted [Mr. Schevers] and asked him to check into it." Mr. Schevers subsequently learned from First American that Allen "had gotten all of the [commission] check" at the closing. Mr. Schevers then telephoned Respondent. This was the first communication he had had with Respondent since before the closing. Respondent told Mr. Schevers that "he got the check" and "he would be right over with it." Respondent, however, did not keep his promise. After his telephone conversation with Respondent, Mr. Schevers discovered that Allen "had cut [Respondent] a check and [Respondent] had gone immediately and deposited it." This discovery prompted Mr. Schevers to place another telephone call to Respondent. This telephone conversation ended with Mr. Schevers telling Respondent "he was terminated." Mr. Schevers thereafter notified Petitioner in writing that Respondent was no longer associated with Unlimited. He also filed with Petitioner a complaint against Respondent alleging that Respondent had "acted inappropriately" in connection with the Damiano/Piazza transaction. Mr. Schevers had expected Unlimited to receive, for the role it played in the Damiano/Piazza transaction, "50 percent of the total commission," or $3,500.00, in accordance with the provisions of the "multiple listing service for St. Lucie County."6 He holds Respondent responsible, at least in part, for Unlimited's not receiving these monies.7 At the time of the Damiano/Piazza transaction, Unlimited had contracts with its sales associates which provided that the associates would receive "70 percent of the net" of any commission Unlimited earned as a result of the associates' efforts. Had Unlimited received a commission as a result of the Damiano/Piazza transaction, it would have "split" it with Respondent and Mr. Sprauer as required by the contracts it had with them.8
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Commission issue a final order dismissing the Administrative Complaint issued against Respondent in the instant case in its entirety. DONE AND ENTERED this 7th day of July, 2004, in Tallahassee, Leon County, Florida. STUART M. LERNER 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 7th day of July, 2004.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, I make the following: The Defendant, Leroy Wilson, is a registered real estate broker with the Commission and during January 1, 1975 to November 5, 1975, Defendant was registered as trading as Overpass Real Estate. On April 27, 1975, Defendant was the owner of residential property located at 291 N.W. 29th Terrace, Ft. Lauderdale, Florida. On April 28, 2/ Robert English and his wife Mazie English in response to a "for sale" sign posted at 291 N.W. 29th Terrace, Ft. Lauderdale, Florida, went to the real estate brokerage office maintained by the Defendant at room 201 Romark Building, 3521 West Broward Boulevard, Ft. Lauderdale, Florida. Defendant and Mr. and Mrs. English discussed and negotiated a deposit receipt contract dated April 28, 1975, between the Englishes as purchasers and Defendant as seller for the purchase and sale of property owned by Defendant located at 291 N.W. 29th Terrace. Mrs. English testified that they put up an earnest money deposit of $300 acknowledged by Defendant, however, Defendant executed the deposit receipt contract reflecting an earnest money deposit of $600. (See FREC Exhibit number 2). Mrs. English testified that part of the terms of the contract was that she would apply for a mortgage loan but when it was determined that her daughter who was to participate with her in the purchase, was not able to stay with her, she and her husband decided not to apply for a mortgage loan. She explained to Defendant and he agreed to return the $300 deposit that she had submitted along with the deposit receipt contract. When the Englishes demanded the return of their deposit, Defendant advised them that "it was the law that the deposit must be kept for 6 weeks, and thereafter, he would have to keep the deposit another ten days." After the expiration of the six week period, the Englishes called the Defendant's office and was advised that he no longer lived there and other efforts by the Englishes to contact the Defendant were fruitless. Thereafter on or about August 20, 1975, the Englishes filed a complaint with the Commission. Approximately two days after the Commission initiated its investigation, the Defendant returned the $300 deposit to the Englishes. (See FREC Exhibit number 3). N.B. Wolf an employee of Gulf Atlantic Mortgage Brokers testified that she was familiar with the document received into evidence as Exhibit number 2 which is the deposit receipt contract entered into by the Defendant and the Englishes. She testified that she did not recall ever having taken a credit application for the Englishes to apply for a mortgage loan. Roy E. Conner, the operations officer for Plantation First National Bank testified that he caused to be gathered the bank records as they relate to the escrow account maintained by the Defendant at that bank. An examination of those bank records revealed that the Defendant's escrow bank account maintained at Plantation First National Bank had a shortage of $5 as of September 16 and that on August 14, his escrow bank account showed a balance of $65 when it should have reflected a balance of $300 in earnest money deposits. See FREC Exhibit number 4 received into evidence. Pruyn investigated Defendant's brokerage office on September 16, at 2951 N.W. Avenue, Ft. Lauderdale, Florida. Based on an official inspection, Pruyn noted a number of inadequacies in that there were no letterheads, no desks, no chairs, no business mail, no diary of witnesses or any official sign as required and set forth in Commission Rule 21V-10.07 and 10.09, Florida Administrative Code and Section 475.22, Florida Statutes. See FREC Exhibit number 5 received into evidence. As previously stated, the Defendant did not appear at the hearing nor did he have a representative present to present any defense to the charges made by the Commission in the administrative complaint.
The Issue The central issue in this case is whether Respondent is guilty of the violations alleged in the administrative complaint dated January 19, 1989; and, if so, what penalty should be imposed.
Findings Of Fact Based upon the prehearing stipulation filed by the parties, the testimony of the witnesses, and the documentary evidence received at the hearing, the following findings of fact are made: The Department is the state agency charged with the responsibility of regulating and disciplining real estate licensees. The Respondent, Charles P. Grimes, is, and has been at all times material to the allegations of the administrative complaint, licensed as a real estate broker in the State of Florida, license number 0034301. In November, 1980, a contract for sale and purchase of real estate was drafted between Dorothy Langham Scott, seller, and Phillip Crawford, buyer. The contract, which was subsequently executed by both parties, provided that a deposit in the amount of $18,500 was to be held in escrow by Respondent. A separate brokerage agreement between Respondent and the seller, executed November 30, 1980, provided that Respondent would receive a brokerage fee of ten percent of the total gross sales price. The brokerage agreement specified that "should the buyer default and not close the transaction in accordance with the Contract, the Broker shall not be entitled to any commission." The agreement further provided that Respondent would "use reasonable diligence and his best efforts to see that the transaction is closed in accordance with the executed Contract." The contract described in paragraph 3 did not close. Subsequently, the seller sued Respondent in the Circuit Court in Palm Beach County, Case no. 82-1974 CA (L) 01 B. On August 13, 1985, an amended final judgment was entered which provided, in part: The facts adduced at trial indicate that Crawford and Scott entered into a contract for the purchase and sale of certain real property, located in Putnam County and that for no apparent reason Crawford defaulted on the contract. The evidence is clear and convincing and unrefuted. Crawford has admitted several letters which he says were communicated to the attorney for Scott. However, the substantial weight of the evidence will not support his repudiation of the contract. Accordingly, it is clear that as between Scott and Grimes, the real estate agent who was allegedly holding the deposit under the provisions of the deposit receipt contract, Scott is entitled to a judgment for $18,500.00, plus its costs and attorney's fees. John L. Burns, an attorney who represented the seller, Scott, during the contract negotiations in November, 1980- January, 1981, received a letter from Respondent on December 12, 1980. That letter, dated December 5, 1980, provided: "I have enclosed the signed contract and have received the deposit check from Dr. Crawford." On or about January 29, 1981, Mr. Burns received a letter from Respondent which indicated that the contract would close in March, 1981. Respondent did not advise the seller that the deposit on the Crawford/Scott contract was not in escrow. Respondent erroneously assumed that a deposit from the buyer (which had been deposited on another contract for sale and purchase) could be applied to the contract. That deposit, in the amount of $20,000.00, was not transferred and was not used to satisfy the amended judgment entered in Scott's favor.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department of Professional Regulation, Florida Real Estate Commission, enter a final order finding the Respondent guilty of the violation of Section 475.25(1)(b), Florida Statutes, imposing an administrative fine in the amount of $1000.00, suspending his license for a period of 60 days, and placing the Respondent on probation for a period of two years. It is recommended that the Respondent be found not guilty of the other alleged violations. DONE and ENTERED this 18th day of December, 1989, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of December, 1989. APPENDIX TO CASE NO. 89-2517 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE DEPARTMENT: Paragraphs 1 through 4 are accepted. With regard to paragraph 5, it is accepted that on or about November 30, 1980, Respondent was attempting to procure the contract described; however, the exact date the parties executed the contract is not known. The contract was ultimately executed by both parties but did not close. Consequently, the proposed fact, as written, is not supported by the record. Paragraphs 6 and 7 are accepted. With regard to paragraph 8, it is accepted that the contract did not close and that a court of competent jurisdiction determined that the deposit should be awarded the seller; otherwise, the paragraph is rejected as outside the scope of this record. Paragraph 9 is accepted but is irrelevant. Paragraph 10 is accepted. Paragraph 11 is rejected as irrelevant. Paragraph 12 is accepted. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: None submitted. COPIES FURNISHED: James H. Gillis Senior Attorney Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Glenn M. Blake Blake & Torres, P.A. 200 South Indian River Drive Suite 101 Fort Pierce, Florida 34950 Darlene F. Keller Division Director Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 =================================================================
The Issue Whether the Respondent is guilty of fraud in violation of Section 475.25(1)(b), Florida Statutes. Whether the Respondent is guilty of having failed to account and deliver trust funds in violation of Section 475.25(1)(d), Florida Statutes. Whether the Respondent is guilty of having failed to immediately place upon receipt deposits received in trust and to maintain said trust funds in the real estate brokerage trust account until disbursement thereof was properly authorized in violation of Section 475.25(1)(k), Florida Statutes. Whether the Respondent is guilty of having failed to make available to the Petitioner or its authorized representative all bank statements for all escrow accounts including cancel led checks, all check books and pending contracts and all documents pertaining to all escrow accounts and for having failed to make available such books and accounts to the Petitioner or its authorized representative at a reasonable time during regular business hours, as required by Rule 21V-14.012, Florida Administrative Code, and therefore in violation of Section 475.25(1)(e), Florida Statutes. Whether the Respondent is guilty of having failed or refused to appear at the time and place designated on the Subpoena Duces Tecum, served October 10, 1988, with respect to an official investigation of alleged violations of Chapter 475, Florida Statutes, in violation of Section 475.42(1)(h), Florida Statutes, and Section 475.25(1)(e), Florida Statutes.
Findings Of Fact Petitioner is a state government 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. 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 0125817 in accordance with Chapter 475, Florida Statutes. The last license issued to the Respondent was as a broker with a business address of 1605 Main Street. Suite 810, Sarasota, Florida 34236 and a home address of 3409 Prudence Drive, Sarasota, Florida 34235. From on or about November, 1984 to on or about May, 1988, the Respondent was employed by the Boathouse on Longboat, Ltd., a Florida limited partnership, to sell condominium boat storage berths for the limited partnership in which Respondent was a limited partner. On April 15, 1988, Harold Kornhaus, made a offer to purchase a storage space in the amount of $19,500.00. The offer by Harold Kornhaus was not for a specific size storage berth but the berth was to be a specific size. An agent of the Respondent named Michael Tewksbury took the offer from Harold Kornhaus and stated he was obligated to present the offer to the Respondent. The Kornhaus offer was delivered to the Respondent who never presented it to the general partner, Barry R. Lewis. The Respondent changed the Kornhaus offer by changing the first page and indicating another seller, named Currier but otherwise left all other pages as drawn by Tewksbury. The Respondent represented individual limited partners at the expense of the partnership entity by having one of the limited partners, Currier, purchase a storage space at a reduced amount and then reselling that space at a profit to a purchaser, Kornhaus. The Respondent and /or his agent Tewksbury handled the transaction, and received a commission. In another transaction involving the Huntsman to Bradt contract written on April 28, 1988, the Respondent wrote an escrow check at closing on April 28, for $1,950.00, which check was dishonored due to insufficient funds on account. Herbert Jacobs, chairman of Ajax Paving Industries, Inc., of Florida, a renter of space at the Boathouse of Longboat, decided to buy a storage space for his company. The Respondent arranged to sell a storage space to William Pettibon, who was a limited partner. The contract selling William Pettibon a storage space was written on February 1, 1988, for storage space #2325. On April 1, 1988, the Respondent arranged to sell Pettibon's unit #2325 to Herbert Jacobs, chairman of Ajax Paving Industries, Inc. On April 28, 1988, the limited partnership records show the bank balance in the Respondent's escrow account should have been $44,436 when in fact there was a negative balance of $1,120.82. Naples Federal Savings and Loan Association loaned approximately $987,500.00 to the limited partnership. One of the conditions of the loan was that Respondent's escrow account pertaining to all sales contracts, deposits, etc., for the limited partnership be placed with Naples Federal. On February 26, 1987, Respondent wrote a letter to William T. Kirtley, attorney for the limited partnership, and stated that the total balance in the Boathouse escrow account was $82, 109.85. The Respondent could not make a proper accounting of his escrow account on that date, and misrepresented to Mr. Kirtley that he had in excess of $80,000 in his escrow account. On December 22, 1987, the Respondent wrote check No. 151 from the escrow account to Mr. Edward Lerian "Larry" Ay, Jr., in the amount of $11,500. Mr. Ay was a contracted buyer of a boat storage unit and had made a personal loan to the Respondent in the amount of $10,000 in December, 1986. The $11,500 check from the Respondent to Mr. Ay was repayment of the loan, plus $1,500 in interest. Mr. Ay thought that he was loaning money to the Boathouse of Longboat, Ltd., the limited partnership, but such was not the case. The Respondent had no valid reason for writing Mr. Ay a check from the escrow account. The Respondent did not have the prior consent of the general partner for either the loan or the use of escrowed funds. On October 27, 1987, Respondent wrote two checks from the escrow account to David Buyher in respective amounts of $5,317.50 and $187.50. The checks represented repayment of a loan, with interest, made to Respondent by Buyher in 1986. Respondent was without authority to use escrow funds for said purposes. On February 26, 1988, the Respondent wrote check number 203 from the limited partnership escrow account in the amount of $616.73 to the "Mountain Chalet" in Snowmass Village, Colorado. The funds were used for the personal lodging and other services of the Respondent and was done without authority. On March 28, 1988, Respondent wrote check No. 236 in the amount of $10,873.11 to himself. On April 28, 1988 Respondent wrote check No. 258 in the amount of $14,600 also to himself. The two checks referred to above were used to obtain cashiers checks to be used at real estate closings. Respondent was fired as the real estate broker for the Boathouse of Longboat, Ltd., in May, 1988. In August and September, 1988, during Petitioner's investigation, several appointments were made with the Respondent to review the Respondent's escrow account which appointments the Respondent cancelled. On the day of the fifth appointment, the Respondent called and cancelled. The Respondent stated he would not permit the account to be reviewed without a subpoena. On or about October 10, 1988, the Respondent was served with a Subpoena Duces Tecum commanding him to produce for inspection and copying at 1605 Main Street, Suite 810, Sarasota, Florida 34236 on October 10, 1988, at 10:00 a.m., for the Department of Professional Regulation "all bank statements for all escrow accounts including cancelled checks from September 1, 1987 to the present time. All checks books and pending contracts and all other documents appertaining to all escrow accounts." Respondent did not comply with the Subpoena Duces Tecum on October 10, 1988. On or about October 14, 1988, a Subpoena Duces Tecum was properly served on Thomas E. Finley, First Vice President or the Custodian of Records, Naples Federal Savings and Loan Association, 5801 Pelican Bay Boulevard, Naples, Florida 33941-3004 commanding that such Custodian of Records appear at the Petitioner's Office of Investigative Services on October 18, 1988, at 11:00 a.m., and have with him "all bank statements and checks from June 1, 1987, through June 30, 1988, appertaining to the escrow account of Michael H. Diffley, account number 1600070019531." Naples Federal Savings and Loan Association provided the May 31, 1988, statement of Respondent's aforementioned account.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Professional Regulation, Florida Real Estate Commission, enter a Final Order which finds as follows: Respondent Michael H. Diffley guilty of fraud, violating the provisions of Subsection 475.25(1)(b), Florida Statutes, as alleged in Count I of the Administrative Complaint; Respondent Michael H. Diffley guilty of having failed to account and deliver funds, violating the provisions of Subsection 475.25(1)(d), Florida Statutes. Respondent Michael H. Diffley guilty of having failed to maintain funds in trust, violating the provisions of Subsection 475.25(1)(k), Florida Statutes; Respondent Michael H. Diffley guilty of violating the provisions of Rule 21V-14.012, Florida Administrative Code, for having failed to preserve and make available to the Department account records kept in accord with good accounting prac- tices, and therefore guilty of violating Subsection 475.25(1)(e), Florida Statutes; and Respondent Michael H. Diffley guilty of having violated Subsection 475.42(1)(h), Florida Statutes, by having failed to appear at the time and place required by subpoena, and therefore violated Subsection 475.25(1)(e), Florida Statutes. It is further recommended that the Final Order entered by the Florida Real Estate Commission revoke the Respondent's real estate license for the above- stated violations of Chapter 475, Florida Statutes. It is further recommended that the Final Order entered by the Florida Real Estate Commission impose an administrative fine in the amount of $1,000 for each of five (5) counts of the Administrative Complaint for a total administrative fine in the amount of $5,000 to be paid within thirty (30) days of the Final Order of the Florida Real Estate Commission. DONE AND ENTERED this 8th day of January, 1990, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of January, 1990. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Proposed Findings of Fact submitted by the Petitioner: Paragraphs 1 through 39- accepted in substance, except for paragraph 5 which is rejected as unnecessary and paragraph 31 which is in the nature of argument. Proposed Findings of Fact submitted by the Respondent: Paragraphs 1 and 2 - rejected as argumentative. COPIES FURNISHED: James H. Gillis, Esquire Senior Attorney Department of Professional Regulation Post Office Box 1900 Orlando, FL 32302 Kenneth M. Meer, Esquire 423 Country Club Drive Winter Park, FL 32789 Darlene F. Keller Division Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32802 Kenneth E. Easley General Counsel Department of Professional Regulation Northwood Centre 1940 North Monroe Street Suite 60 Tallahassee, FL 32399-0792
Findings Of Fact Respondent is now and was at all times material to this action a licensed real estate broker in the State of Florida, holding license number 0064475. Respondent operated his own real estate brokerage firm under his license. The firm was located in Niceville, Florida. In addition to his real estate brokerage business Respondent maintained and managed his personal real estate investments. Several of these personal investments included rental property which Respondent would later sell. One such piece of property was located at 104 Perdido Circle, Niceville, Florida, and is the property involved in this action. Prior to July 6, 1985, the Respondent, as seller and not as a broker, advertised for sale the Perdido property. Sometime around July 6, 1985, Robert L. Mitchell and June F. Mitchell looked at the Perdido property. Frank Ray, a salesman for John Brooks Realty, an unrelated real estate firm showed the property to the Mitchells. They liked the property and wanted to buy it. Frank Ray made arrangements for himself and the Mitchells to meet with Respondent in order to discuss the terms of the potential purchase contract. They met on July 6, 1985. The meeting lasted approximately an hour to an hour and a half. During the lengthy meeting Respondent went over the purchase terms contained in the contract of sale. The Mitchells main concern was to have immediate occupancy of the house. Special terms were developed for renting the property. At some point during the meeting the down payment came under discussion. Originally, the Mitchells had planned on a $1500 down payment which was acceptable to Respondent. However, as the meeting progressed the Mitchells decided they would like to reduce the amount of the down payment. Respondent informed the Mitchells that the only way he could decrease the $1500 down payment was to make the money a non-refundable option payment. Respondent then marked out the $1500 down payment figure contained in the purchase contract and inserted a $1200 figure. Respondent concurrently added the language "option payment" next to the $1200 figure. The remainder of the contract was discussed and the Mitchells signed the amended document. The Mitchells then wrote a check to Respondent, personally, in the amount of $1200. The note section of the check the Mitchells wrote contained the language "house down payment." The exact discussion on the down payment/option is not clear. What is clear from the evidence is that neither party had a meeting of the minds over what the $1200 check was. The Mitchells being very inexperienced in real estate thought it was a down payment. Although it is doubtful the Mitchells understood the legal meaning of the term "down payment." Respondent thought it was a non- refundable option payment. Absolutely no evidence of fraud or misrepresentation on the part of Respondent was demonstrated. Likewise, there was no evidence that Respondent in any way used his knowledge or expertise in the real estate market improperly. The final result of the negotiations was that the Mitchells had entered into what on its face purports to be a rental contract with an option to buy. However, since there was no meeting of the minds over the option, the option was eventually unenforceable. Since there was no meeting of the minds regarding the $1200 the money was not properly escrowable property. In essence the $1200 was neither a down payment nor an option payment. This lack of escrowability is borne out by the sales contract which calls for another escrow agent. 1/ The Mitchells took possession of the property for approximately three months. The Mitchells failed to obtain financing. The contract was conditioned upon the Mitchells obtaining financing, and the transaction failed to close. A dispute arose between the parties concerning the down payment/option money. When the dispute could not be resolved by the parties, the Mitchells filed a lawsuit against Nevin H. Nordal demanding a refund of the $1200 "house down payment." As a result of the Mitchell's lawsuit the County Court, in Okaloosa County, Florida, Summary Claims Division, by Amended Final Judgment dated January 20, 1987, awarded the sum of $1,028,87. The judgment figure is the balance of the $1200 after deduction of a counterclaim of $171.13 for cleaning the house after the Mitchells evacuated the property. Additionally, the Respondent was required to pay costs in the sum of $57 for a total of $1,087.87 due the Mitchells. The judgment amount is bearing interest at a rate of 12 percent per annum. The County Court judgment contains no findings of fact as to the Judge's reasoning on the judgment award. The Mitchells have repeatedly demanded of the Respondent that he pay the judgment. He has repeatedly refused to pay the judgment. Respondent did account to the Mitchells for the money when he told them he had deposited the check and had spent the funds.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is therefore RECOMMENDED that the Administrative Complaint failed against Respondent, Nevin H. Nordal, be dismissed. DONE and ENTERED this 4th day of March, 1989, 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 4th day of March, 1989.
