The Issue The central issue in this case is whether Respondent is guilty of the violations alleged in the Administrative Complaint; and, if so, what penalty should be imposed.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, I make the following findings of fact: Respondent, Naomi N. Radcliff, is licensed in Florida as a real estate broker (license No. 0369173) and has been at all times material to the Administrative Complaint. On December 2, 1987, Respondent submitted a Request for License or Change of Status form which sought to cancel the license. Thereafter, the Department reclassified Respondent as an inactive broker. In July, 1986, Randy Mangold and his wife entered into a contract to purchase real property located in Indian River Estates. Naomi Radcliff was the real estate agent who handled the transaction on behalf of the Mangolds. The Mangolds' contract provided for occupancy prior to closing with a security deposit for the rental in the amount of $1500. This amount was paid to Respondent. At closing the $1500 security deposit was to be applied to the buyers' closing costs. The Mangolds rented the home for a year and attempted to obtain financing for the purchase. When their mortgage application was denied, they elected to vacate the property. After they vacated the property, the Mangolds requested the return of the $1500 security deposit. Demands were made on Respondent who refused to return the deposit despite the fact that the Mangolds had fully paid all rents owed and had left the house in good condition. Finally, the Mangolds sued Respondent in the St. Lucie County Court and obtained a judgment for the $1500 security deposit. Respondent has not satisfied the judgment. At one point Respondent did give the Mangolds a check for $500 which was returned due to insufficient funds in the account. In December, 1986, Respondent acted as a rental agent for Walter Zielinski, an out-of-state owner. Mr. Zielinski owned two houses in Port St. Lucie, one of which was located at 941 Fenway. In early December, 1986, Respondent advised Mr. Zielinski that the tenants had left the home at 941 Fenway and that the unit was in fairly good condition. Sometime later in the month, Mr. Zielinski discovered the house was empty but that it had been damaged. There were holes in the wall in the utility room approximately two feet in diameter. The flooring in the utility room and kitchen was ripped up. There was a hole in the wall in the master bedroom. More important to Mr. Zielinski, the house was unsecured because the garage door latch was broken and the house was accessible through the garage. After discovering the unit was at risk for additional damage, Mr. Zielinski attempted to contact Respondent but numerous calls to Respondent, her place of work, and to a former employer proved to be unsuccessful. Finally, Mr. Zielinski obtained another real estate agent to represent the 941 Fenway home. The new agent, Cathy Prince, attempted to obtain from Respondent the keys, the security deposit, and the rent money belonging to Mr. Zielinski. In January, 1987, Mr. Zielinski came to Florida from Illinois to take care of the rental problems. Mr. Zielinski incurred expenses totalling $876.74 to repair the damages to 941 Fenway. Also, Mr. Zielinski wanted to collect the rents owed by Respondent for his other property and have the security deposit for the second property transferred to the new agent. Respondent issued a personal check for the security deposit which was returned for insufficient funds. A second personal check paid to Mr. Zielinski for the rent owed was accepted and cleared. According to Mr. Zielinski, Respondent did not maintain an office where he could find her during the latter part of December, 1986 through January, 1987. In March, 1987, the security deposit for Mr. Zielinski's second rental was paid to the new agent. The check was issued by Respondent's mother. Respondent never personally returned any calls to the new agent. In June, 1986, Alyssa and Jeffrey Maloy entered into a contract to purchase a house. Respondent handled the real estate transaction for the Maloys. The closing was to be December 9 or 10, 1986. Respondent held monies that were required to complete the Maloy closing. Respondent attended the closing but the check tendered to the closing agent, Chelsea Title, was drawn on an trust account which had been closed. The closing agent discovered the problem and requested sufficient funds. Respondent left the closing and returned some hours later with new checks drawn on another account. After checking with the bank, it was again discovered that the funds in the account were insufficient to cover the amount needed for closing. Finally, some days later the Respondent's brother delivered a certified check to cover the amount needed to close the Maloy transaction.
Recommendation Based on 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 suspending the Respondent's real estate broker's license for a period of five years. DONE and RECOMMENDED this 12th day of July, 1988, in Tallahassee, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of July, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-4631 Rulings on Petitioner's proposed findings of fact: Paragraphs 1-3 are accepted. With regard to paragraph 4, with the exception of the date referenced (November, 1986) the paragraph is accepted. Paragraph 5 is rejected a hearsay evidence unsupported by direct evidence of any source. The first sentence of paragraph 6 is accepted. The second sentence calls for speculation based on facts not in the record and is, therefore, rejected. Paragraphs 7-11 are accepted. With regard to paragraph 12, the first four sentences are accepted; with regard to the balance, the Respondent's brother did deliver funds to allow the Maloy transaction to close however the source of the funds is speculation based upon hearsay unsupported by the record. COPIES FURNISHED: Steven W. Johnson, Esquire Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Darlene F. Keller, Executive Director Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 William O'Neil, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Naomi N. Radcliff 1420 Seaway Drive Fort Pierce, Florida 33482
Findings Of Fact Petitioner is the governmental agency responsible for issuing licenses to practice real estate. Petitioner is also responsible for regulating licensees on behalf of the state. Respondent, John P. Wickersham ("Wickersham"), is licensed as a real estate broker under license number 0095775. Respondent, Aladdin Real Estate of Rockledge ("Aladdin"), is a Florida corporation registered as a real estate broker under license number 0213244. Wickersham is the qualifying broker and corporate officer for Aladdin. Respondents maintain their escrow account at the Barnett Bank of Cocoa. On April 28, 1994, Ms. Marie Ventura, Petitioner's investigator, audited Respondents' escrow account. Ms. Ventura concluded that Respondents' escrow account had a liability of $46,287.30 and a reconciled balance of $43,557.26. Ms. Ventura concluded that Respondents' escrow account had a shortage of $2,730.04. Respondents provided Ms. Ventura with additional information. On May 16, 1994, Ms. Ventura concluded that Respondents' escrow account had a liability of $43,546.21 and a reconciled balance of $42,787.26. Ms. Ventura concluded that Respondents' escrow account had an excess of $11.05. Respondents never had a shortage in their escrow account. Respondents maintained an excess of $11.05 in their escrow account since September, 1993. In September, 1993, Respondents converted their method of bookkeeping to a computer system. The computer system failed to disclose an excess of $11.05 due to Respondents' misunderstanding of the appropriate method of labeling inputs to the software system. Respondents discovered and corrected the error prior to the formal hearing. Respondents properly made and signed written monthly reconciliation statements comparing their total escrow liability with the reconciled bank balances of their escrow account. Although Respondents did not use the form suggested in Rule 61J2- 14.012(2), Respondents satisfied the substance of the requirements for record keeping and reporting. Respondents maintained the information required in Rule 61J2-14.012(2) in bank statements, ledger cards, and checkbooks. At the time of the formal hearing, Respondents presented the information in a form that complied with the requirements of Rule 61J2-14.012(2). The shortage determined by Petitioner on April 28, 1994, was caused, in part, by errors made by Petitioner's investigator. It was the investigator's first audit, and the information provided by Respondents was not in an easily discernible form. However, Respondents never withheld any information, and Respondents maintained and provided all information required by applicable law.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent not guilty of violating Section 475.25(1)(b) and Rule 61J2-14.012(2). RECOMMENDED this 18th day of January, 1996, in Tallahassee, Florida. DANIEL MANRY, 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 18th day of January 1996.
Findings Of Fact Petitioner is a state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Chapter 475, Florida Statute, and rules promulgated pursuant thereto. Respondent Dean O. Vanderwoude is now a real estate broker and was at all times material hereto a real estate salesman in Florida having been issued license number 0432878 in accordance with Chapter 475, Florida Statutes. On August 15, 1988, Respondent passed an examination to be licensed as a broker and was licensed as a broker on September 1, 1988. At all times material hereto, Respondent was licensed as a salesman and operated under the direction, control, or management of a licensed real estate broker, Anne M. Graffunder, and P.M.M. Properties under a 100 percent commission agreement whereby Respondent rented office space from his broker Graffunder. Respondent was affiliated with Graffunder and P.M.M. Capital, Inc., from approximately November 4, 1986, to October 16, 1987. When Respondent became affiliated with P.M.M., he had been licensed less than one year having first been affiliated with Security Realty Florida from December 20, 1985, to November 4, 1986. Under Graffunder's supervision, Respondent received little assistance in the form of guidance or instructions as to the methods and manner of presenting purchase contracts to sellers, little or no office support in the form of clerical assistance or technical training in the methods of handling escrow funds, no malpractice insurance coverage in the form of errors or omission's policy and no sales/training seminars. On approximately April 6, 1987, Respondent obtained a sales listing from Gary Alan Dahl (Dahl), a real estate investor, concerning real property, the record owner of which was Joe Belcik who had granted to Dahl equitable title to the property by Quit Claim Deed yet unrecorded. (Petitioner's Exhibit 2). The real property located at 2785 Adrian Avenue, Largo, Florida, had been purchased by Belcik from Dahl who had previously purchased the property from the Veteran's Administration. Respondent was aware of the condition of the title to the property listed by him for sale as he reviewed an abstract of the property. On April 6, 1987, prospective purchasers David and Donna A. Kiser (herein purchasers) viewed the real property at 2785 Adrian Avenue, Largo, Florida, and contacted Respondent at a telephone number observed on a "for sale" sign posted on the property. On that date, the purchasers executed a written offer to purchase the property, which offer was prepared by Respondent. (Petitioner's Exhibit 3). In conjunction with the offer to purchase, the purchasers tendered an earnest money deposit to Respondent, by cashier's check number 703917, dated April 10, 1987, in the amount of $100.00 made payable to P.M.M. Properties. The cashier's check was deposited into the escrow account of P.M.M. Capital, Inc., Sun Bank of Tampa Bay account number 265-014-3405 on April 15, 1987. The transaction closed on April 22, 1987. Following the closing, Graffunder issued a check number 140 written on the escrow account of P.M.M. Capital, Inc., Sun Bank/Southeast, account number 265-014-3405, dated April 22, 1987, made payable to Respondent in the amount of $100.00. The check was received by Respondent with Dahl's full permission and consent. Respondent represented to the purchasers that the seller, Dahl, had accepted their offer and desired to close the transaction immediately. Toward that end, Dahl came to Pinellas County from Sarasota County and executed all documentation necessary to effectuate the transfer on or before April 15, 1987. On April 15, 1987, Respondent met with the purchasers and had them sign all closing documents. This included execution of a closing statement and the Kisers requested an extension in order to obtain the $4,900.00 closing proceeds from Mrs. Kiser's father. On April 22, 1987, Mrs. Kiser presented the closing proceeds check and the transaction was finalized. That proceeds check and the $100.00 deposit check were both placed in Graffunder's operating account and pursuant to instructions from Dahl, Respondent received the closing proceeds as agent for Dahl. Dahl and the purchasers completed the closing by executing an Agreement for Deed on April 15, 1987. That agreement provides, in pertinent part, that the purchaser's would pay Dahl the total purchase price of $65,000.00 which included a down payment of $5,000.00 and monthly payments of $557.07 commencing May 1, 1987, and continuing for twenty-nine (29) months at which time the remaining principal balance of $60,073.18 would be payable in the form of a balloon payment. Dahl agreed to carry fire insurance for the full insurable value of the property and the purchasers were to have their names added to the policy as additional insureds. Additionally, both parties agreed that a Memorandum of Interest would be filed in the records of Pinellas County at the time of entering into the Agreement for Deed. Finally, the Agreement for Deed represented that there was a first mortgage in favor of Chrysler First and stated the condition that should the purchasers fail to make payments required of them within thirty (30) days after the same becomes due, the seller may, at his option, declare the contract null and void and all monies paid may be retained as full satisfaction and/or liquidated damages. Respondent did not provide the purchasers a warranty deed until approximately June 27, 1988, when he first became aware that Dahl had not given one to the Kisers. Respondent acknowledges that given the opportunity to reconstruct that transaction, he would have ensured that the seller provided a Warranty Deed to the purchasers as agreed in the Agreement for Deed. Respondent did not follow-up to ensure that a Memorandum of Interest was filed in the public records of Pinellas County as the parties agreed. Within months following the Riser's purchase of the subject property from Dahl, they became disenchanted with the property and ceased making payments under the agreement for Deed causing a large arrearage to accumulate and a subsequent mortgage foreclosure action was initiated.
Recommendation Based on the foregoing findings of fact and conclusions of law it is RECOMMENDED: The Petitioner enter a final order finding that an administrative fine of $500.00 be imposed upon Respondent and his license number 0432878 be placed on probation for a period of sixty (60) days with the condition that the fine be payable to Petitioner within thirty (30) days of entry of the final order. RECOMMENDED this 29th day of June, 1989 in Tallahassee, Leon County, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of June, 1989. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Brian E. Johnson, Esquire Brian E. Johnson, P.A. 7190 Seminole Boulevard Seminole, Florida 34642 Kenneth Easley, Esquire General Counsel Department of Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0729 Darlene F. Keller, Division Director Division of Real Estate Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802 =================================================================
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 The issues in this case include whether Respondent is guilty of having committed culpable negligence in a business transaction or failed to maintain trust funds in a proper account until disbursement was authorized and, if so, the appropriate penalty.
Findings Of Fact Respondent has been a licensed real estate broker in the State of Florida since 1983 and holds license number 0405933. His most current license was as a broker trading as Realty Trend. Respondent started Realty Trend in 1985 for the primary purpose of managing rental properties. Although he had little or no training or experience in accounting, Respondent retained considerable responsibility for the day-to- day bookkeeping associated with his business, though at times he employed a bookkeeper. Respondent maintained one account for sales transactions, in which he participated as the broker, and one account for property management activity. Respondent participated in few sales transactions and is phasing out of that part of the business. All escrow monies held by Respondent were kept in interest-bearing accounts. Although Respondent retained the interest, he disclosed this fact to the parties through the sales contract. Within about 18 months, Respondent had acquired about 100 properties to manage. Respondent decided to automate the bookkeeping and purchased a computer program that would write checks, track income and expenses, generate reports, and generally handle all aspects of bookkeeping. The program was designed to assist in property management operations. Emphasizing service to property owners, Respondent had always tried to send his checks for rent collected the past month between the tenth and fifteenth of each month. By August, 1989, Respondent had been warned by Petitioner that he had to allow two or three weeks for tenant's checks to clear and determine what emergency maintenance expenses might be incurred. Through a combination of ignorance about bookkeeping, his responsibilities as a broker holding escrow monies, and the property management computer program, Respondent mishandled his trust account. His repeated bookkeeping errors and failure to take corrective action allowed a sizable shortage to accumulate by the time Petitioner conducted a routine office audit on November 17, 1989. Respondent cooperated fully with the audit and promptly provided Petitioner's investigator with a box full of bank statements. His account was reaudited on January 8, 1990. Poor bookkeeping prevents a precise determination of the shortage, but it exceeds $10,000. It is difficult to understand how Respondent's books became so confused as to become nearly worthless. There was no evidence of fraudulent intent. It appears as likely that Respondent overpaid property owners as that he overpaid himself. Respondent's ongoing ignorance of his serious trust account shortages or, in the alternative, repeated failure to solve recognized trust account shortages represents culpable negligence. Even by the time of hearing, Respondent candidly admitted that he could not provide an accurate figure for the shortage and had not yet been able to repay the deficiency, although he intended to do so.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Florida Real Estate Commission enter a final order reprimanding Respondent; imposing an administrative fine of $500; requiring Respondent to complete an approved 60-hour course; suspending his license for a period of six months, commencing retroactive to the date on which Respondent cease operations due to the emergency suspension; and placing his license on probation for a period of three years following the conclusion of the suspension, during which time Respondent shall file escrow account reports with the Commission or other person designated by the Commission at such intervals as the Commission requires. DONE and ORDERED this 8 day of October, 1990, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8 day of October, 1990. COPIES FURNISHED: Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32801 Attorney Steven W. Johnson Division of Real Estate Florida Real Estate Commission 400 W. Robinson St. Orlando, FL 32801-1772 Thomas I. McIntosh 13542 N. Florida Ave. Tampa, FL 33613 Attorney Neil F. Garfield Envirwood Executive Plaza, Suite 200 5950 West Oakland Park Blvd. Lauderhill, FL 33313 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792
The Issue The issue for consideration was whether Respondents violated specified subsections of Section 475.25 Florida Statutes with regard to alleged misuse of escrow funds.
Findings Of Fact At all times relevant hereto Respondent Mary L. Cluett was a licensed real estate broker in the State of Florida, having been issued license number 0197523 in accordance with Chapter 475, Florida Statutes. The last license issued to Mary L. Cluett was as a broker, c/o Cluett Realty, Inc., 4720 Palm Beach Boulevard, Fort Myers, Florida 33905. (pre-hearing stipulation, Paragraph 2). Respondent Cluett Realty, Inc. is now, and was at all times relevant, licensed as a real estate broker in the state of Florida, having been issued license number 0021798 in accordance with Chapter 475, Florida Statutes. The last license issued to Cluett Realty, Inc. was at the address of 4720 Palm Beach Boulevard, Ft. Myers, Florida 33905. (pre-hearing stipulation, paragraph 2). The qualifying broker for Cluett Realty, Inc. is Ernest H. Cluett, husband of Mary L. Cluett. Mary Cluett is the vice-president of the corporation. On October 17, 1984, Charles and Pamela Darr signed a multiple listing agreement with Cluett Realty, Inc. to sell their home at 598 New York Drive, Ft. Myers. (Petitioner's Exhibit #2). On February 4 and 5, 1985, the Darrs and Irving and Beverly Lockner signed a contract for sale and purchase of the New York Drive house. The terms provided for purchase price of $44,000.00; a $500.00 deposit in the form of a promissory note to be redeemed by February 26, 1985; the assumption of an existing mortgage; a second mortgage in the amount of $3,000.00 and a balance to close in the amount of $2500.00. The closing date was set for "March 14, 1985, or as soon as possible". (Petitioner's Exhibit #5). The Darrs and Lockners were told on March 14, 1985 that the paperwork was not ready for closing. The Darrs had already moved out of the house and into a leased apartment and the Lockners had travelled from their home in Baltimore with furnishings to move in. Reluctantly, Pamela Darr agreed to let the Lockners move in that day and pay rent for the rest of the month. It was understood by Ms. Darr that the closing would be on April 1st. (tr. 27,28,29) On March 14, 1985, Mrs. Lockner gave Cluett Realty $1500.00. The receipt signed by Helen Weise, an employee of Cluett Realty, is marked "escrow deposit on property, 398 New York Avenue". (Petitioner's Exhibit #1). On March 22, 1985, Beverly Lockner gave Cluett Realty $500.00; the receipt signed by Mary L. Cluett is marked "Escrow, Darr/Lockner". (Petitioner's Exhibit #3) On April 15, 1985, the Lockners gave Mary Cluett another $500.00 in the form of two checks: one for $362.64 from MSC, Inc. to Irving Lockner ( a paycheck), and a personal check to Cluett Realty from Beverly Lockner in the amount of $137.36 (tr. 17,18, Petitioner's Exhibit #4, Beverly Lockner testimony p. 17) The $2500.00 was placed in the Cluett Realty, Inc. escrow account. (tr-19) The Lockner/Darr transaction closed on June 10, 1985, (Prehearing Stipulation, Paragraph 2) In the meantime, on March 26, 1985 and April 25, 1985 Mary Cluett paid the Darr's mortgage payments for April and May with checks drawn on the Cluett Realty, Inc. escrow account in the amount of $425.38 each, payable to United Mortgage Company. (Prehearing Stipulation, paragraph 2) Beverly Lockner did not give Mary Cluett permission to use the escrow money for the Darr's mortgage. She did not know the money was being taken out until she found Mary Cluett's handwritten note left on her door which indicated that closing would be on May 6, 1985 and showed that two payments totalling $850.76 had been deducted from the $2500.00 escrow account. She called Ms. Cluett and had a confrontation about the deductions. Beverly Lockner intended that the $2500.00 be used for the closing balance. When the transaction finally closed on June 10, she had insufficient funds to close so she gave Cluett Realty a third mortgage and borrowed $500.00 from Pamela Darr. (Beverly Lockner testimony, pp. 6,7,9,16 23-26) The Darrs did not give Mary Cluett permission to use the escrow money to pay the mortgage, although Ms. Darr was concerned that the mortgage be paid. On March 14th, Pamela Darr was aware that the April mortgage payment would be taken out of the escrow account when she picked up a form, alleged signed by the Lockners, with a notation at the bottom about the payment. Pamela Darr went to Mary Cluett's office at 5:30 on that day to pick up the form. (tr. 25, 118, 119, 122, Respondent's Exhibit #1) The form in question provides as follows: [Cluett Realty, Inc. letterhead] March 14, 1985 To Whom It May Concern: We Irving N. and Beverly T. Lockner buyers, of property situated 598 New York Dr., Ft. Myers, Fl. inspected the above property on March 14, 1985 (date) and have found the property to be to our satisfaction and accept property "as is" and taking possession as Owners today. Sellers are not responsible for any maintenance on the house of any kind. (SIGNED) [Beverly Lockner Signature] (Buyer) [Irving Lockner Signature] (Buyer) WITNESS: [Mary Cluett Signature] DATE: [dated 3-14-85] NOTE: OUT OF THE ONE THOUSAND FIVE HUNDRED ($1,500,00) DOLLARS deposited with CLUETT REALTY ESCROW ACCOUNT THE FIRST MONTH'S PAYMENT OF $425.38 shall be made. (Respondent's Exhibit #1) The testimony of Mary Cluett and that of her employee, Helen Weise, differ substantially from Beverly Lockner's testimony regarding Respondent's Exhibit #1. Mary Cluett claims that the form was completed and signed by the Lockners in her office on March 14, 1985, and that after a phone call from Pamela Darr the note at the bottom was added before the Lockners signed. (tr- 68) She claims that by agreeing to the notation, the Lockners's clearly knew about the intended use of the escrow money for the mortgage. Beverly Lockner distinctly remembers the form. She claims that when Mary Cluett came to the house on New York Drive on March 14th, she took the blank form from her case and told the Lockners they needed to sign it that day in order to take over the house. Mrs. Lockner signed her husband's name as he had gone out to the yard. The blanks on the form were not typed in, nor was the note on the bottom. This was one of several blank forms in Mrs. Cluett's case. (testimony of Beverly Lockner, p. 6, 11-13) Helen Weise claims she typed the entire form, all but the letterhead, in the office while the Lockners were there. (tr-88) This testimony is inconsistent with the appearance of the exhibit. Mary Cluett's testimony about this form and about the purpose of the escrow money from Beverly Lockner is not plausible. For example, she claims that when the Lockners came in with the $1500.00 on March 14th the purpose was to pay the note for $500.00 referenced on the Contract for Purchase and Sale and to provide money for the mortgage payments. However, on the 14th of March, while no one knew for certain when the closing would be, it was anticipated that it would take place on April 1st. In that case only one mortgage payment would have been necessary. The amounts and timing of Mrs. Lockner's payments into the escrow account are consistent with her testimony that she was putting aside the funds necessary for closing. Assuming, for argument's sake that Mrs. Lockner did know about and approve the first payment, there is no evidence that she knew about or acceded to the second payment prior to its deduction from the escrow account. Respondent's Exhibits #2, 3, and 4 are dated May 28, 1985, May 6, 1985, and May 11, 1985, respectively. Each are notations on Cluett Realty, Inc. stationery showing the April and May deductions from the escrow account, the account number of the mortgage to be assumed, the balance required for closing and other information related to closing. Mary Cluett testified that these were delivered to Mrs. Lockner's house and copies were sent to the Darrs at the New York Avenue address as she did not know the Darr's apartment address. Pamela Darr denies receiving any of these notices. Beverly Lockner said she received only the one dated May 6th. (testimony of Beverly Lockner, P. 9) Ernest Cluett testified that the notice dated May 6, 1985 was delivered on that same date.(tr- 101) By then the second payment from the escrow account had already been made. From the testimony and evidence it is apparent that considerable confusion existed regarding the Darr/Lockner transaction. Both buyer and seller thought the deal would close on March 14th. They learned that day that it would not close and hasty arrangements were made for the Lockners to occupy the house since they had moved their belongings from Baltimore. No firm financial arrangements were made, other than an oral agreement for the Lockners to pay a pro-rated rent for the remainder of March. The closing did not take place on April 1st or the several subsequent dates that it was set, until June 10th. Meanwhile, the mortgage payments were due and no arrangements had been made for their payment. Mary Cluett prepared the March 14th form to satisfy Pamela Darr that the payments would be made, but neglected to clear the arrangement with Beverly Lockner. Mrs. Lockner figured the payments were not her responsibility because the house was not hers; the failure to close as scheduled on March 14th was not her fault. She blamed Mary Cluett for not notifying the parties sooner since she would not have left Baltimore. (testimony of Beverly Lockner, pp. 18-22)
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order revoking the license of Respondent, Annette J. Ruffin, to be a real estate broker. RECOMMENDED this 27th day of May, 1987, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of May, 1987.
Findings Of Fact In September of 1976, Mr. and Mrs. Robert B. Kenney went to 8521 Madonna Place in Sarasota, Florida, in response to a newspaper advertisement. There they found respondent, who showed them through the house at that address, saying she was a friend of the owners who were offering it for sale. Respondent told the Kenneys that she was a registered real estate salesperson employed by Marjorie McCrory Real Estate, and gave them her card. But she said there would be no commission on any sale, because the owners were her friends and had helped her with babysitting. On October 2, 1976, the Kenneys entered into a written agreement with Mr. and Mrs. Robert C. Tritschler, owners of the house respondent had shown them. By this con tract, which was received in evidence as petitioner's exhibit No. 3, the Kenneys agreed to buy the house in the event that they were able to sell their mobile home within thirty days' time and in the event that they were able to obtain financing for 80 percent of the agreed purchase price. The Kenneys were unable to obtain such financing and were also unable to sell their mobile home within thirty days of the signing of the contract. On October 5, 1976, the Kenneys drew a check to respondent's order in the amount of one thousand dollars ($1,000.00), on which was written "Earnest Money-Escrow." The check was delivered to respondent. On October 6 1976, respondent endorsed the check arid deposited it in a savings account. Afterwards, she showed the Kenneys her newly acquired pass book, on which was written "Sherry Gayer, Escrow Account for Robert L. Kenney." After the Kenneys' efforts to meet the conditions of the contract proved unavailing, they demanded the return of the money they had given respondent. Her refusal resulted in litigation which was settled when the Kenneys agreed to accept five hundred dollars ($500.00), plus the interest that had accrued on the entire one thousand dollars ($1 000.00) while it had been on deposit in respondent`s account. The other five hundred dollars ($500.00) went to the Tritschlers, in accordance with the terms of the settlement agreement.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner suspend respondent's license for sixty (60) days. DONE and ENTERED this 10th day of March, 1978, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 904/488-9675 COPIES FURNISHED: Mr. Joseph A. Doherty, Esquire Florida Real Estate Commission 400 West Robinson Avenue Orlando, Florida 32801 Ms. Sherry L. Gayer 2116-59th Street Sarasota, Florida 33580
