The Issue Whether Respondent's license under Chapter 509, Florida Statutes, should be suspended or revoked, or a civil penalty imposed for alleged violation of Section 83.49(2) and (3) , Florida Statutes, as set forth in Notice to Show Cause. Respondent Glyn G. Dean appeared at the hearing unaccompanied by legal counsel and he was thereafter advised of his rights as a respondent in an administrative proceeding. He indicated that he understood such rights and desired to represent himself at the hearing.
Findings Of Fact Respondent Glyn G. Dean owns and operates the Elegante Apartments, a five-unit apartment building located at 1040 NE 78th Road, Miami, Florida. Respondent holds a license issued by Petitioner to operate a public lodging establishment pursuant to the provisions of Chapter 509, Florida Statutes. (Testimony of Dean, Teller) On January 28, 1978, Respondent rented Apartment 2 to George Tulloch and his wife on a weekly basis. Thereafter on April 1, 1978, Respondent and Tulloch entered into a lease of the apartment for a period of one year at a rental of $275 per month, including $25 a month as a "damage deposit." The lease provided that the lessee would pay for the cost of repairing all damage to the apartment caused by himself or his family and the cost of removing foreign substances from toilets and sinks. At no time did Respondent inform the lessee as to the manner in which he would hold the payments representing security deposits. Payments in the amount of $275 were made by Tulloch each month from April through October 1978. Thereafter, Tulloch paid as follows: November 30, 1978 - $250.00 December 8, 1978 - 80.00 December 24, 1978 - 50.00 January 23, 1979 - 170.00 February 19, 1979 - 75.00 March 10, 1979 - 100.00 (Testimony of B. Tulloch, Respondent, Respondent's Exhibits 1-2, Petitioner's Exhibit 1) In October 1978, there was a ceiling leak in the apartment which caused a bedroom and kitchen to sustain water damage. A section of the kitchen ceiling also fell and struck Mr. Tulloch who later instituted a claim against Respondent under the latter's insurance policy. (Testimony of Tulloch, Dean, supplemented by Respondent's Exhibit 4) The lessee vacated the apartment at the expiration of the lease on March 31, 1979. At that time, he did not provide Respondent with a forwarding address and it was not until late May that Respondent learned of the same. He thereafter sent a certified letter of his intention to make claim against the security deposit which was received by the lessee on May 28, 1979. He sent a further letter of June 22, 1979, which listed various costs for cleaning and damage to the apartment and reflected that after application of a total of $175 representing deposit payments made during the course of the year, Respondent was due $153 from Tulloch. After termination of the lease, she tenant paid Respondent $650 representing back rent due under the lease. Mrs. Tulloch denied at the hearing that she and her husband had caused any damage to the apartment. (Testimony of Dean, B. Tulloch, Petitioner's Exhibits 3-4, Respondent's Exhibit 3)
Recommendation That Petitioner impose an administrative fine of $100 against Respondent Glyn G. Dean pursuant to Sections 83.49(7) and 509.261(2), Florida Statutes, for violation of Section 83.49(2), Florida Statutes. DONE and ENTERED this 13th day of November, 1979, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Dan Brown, Esquire Staff Attorney Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Glyn G. Dean 1040 NE 78th Road Miami, Florida 33138 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF BUSINESS REGULATIONS DIVISIONS OF HOTELS AND RESTAURANTS DIVISION OF HOTELS & RESTAURANTS, DEPARTMENT OF BUSINESS REGULATION, Petitioner, vs. CASE NO. 79-1625 H & R No. 23-1935H-3778 GLYN G. DEAN AND GRADY WILSON t/a ELEGANTE APARTMENTS, Respondent. /
The Issue Whether Respondents committed the offenses described in the Administrative Complaint? If so, what disciplinary action should be taken against them?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: The Parties The Department is a state government licensing and regulatory agency. Raymond Mangicapra is now, and has been at all times material to the instant case, a licensed real estate broker in the State of Florida. He holds license number 0326800. FUGI is now, and has been at all times material to the instant case, a corporation registered as a real estate broker in the State of Florida. It holds registration number 0245691. At all times material to the instant case prior to March 5, 1992, Mangicapra was the broker of record for FUGI. On March 5, 1992, he resigned as FUGI's broker of record and its president. Approximately five months later he returned to FUGI in the capacity of a licensed broker-salesman The Angulo Transaction On or about April 26 1991, Jose Angulo, his wife Martha Salazar Angulo, and their son Carlos Angulo, signed a written contract (hereinafter referred to as the "Angulo contract") to purchase from Lofts Development Corp. (hereinafter referred to as "LDC"), for $98,300.00, real property located in the Willow Wood subdivision in Palm Beach County upon which a residence was to be constructed. FUGI, through its then broker of record, Mangicapra, negotiated the sale for LDC. Mangicapra was also a part-owner of LDC and its qualifying agent. His partner was Vincent Ferri. Ferri, on behalf of LDC, signed the Angulo contract on May 2, 1991. Article II, Section C. of the Angulo contract provided, in part, as follows: Use of Mortgage Loan: Time to Make Application: Purchaser intends to pay for a portion of the Purchase Price by obtaining a permanent mortgage loan ("Mortgage Loan"). Purchaser agrees to make application(s) for such Mortgage Loan from a bona fide lending institution approved by Seller ("Mortgagee") in the amount of [$96,050.00], at applicable interest rates. Purchaser agrees to make application for such Mortgage Loan within five (5) days from execution of this Contract by Purchaser. Purchaser agrees to promptly execute all necessary documents, disclose all information within fourteen (14) days of request and pay all costs as and when requested of it by Mortgagee and/or Seller in conjunction with such application and take all other measures to aid in being approved for a Mortgage Loan, including the making of further applications for a Mortgage Loan. Failure to Obtain Mortgage Loan: Purchaser agrees that in the event Purchaser fails to qualify for such Mortgage Loan or fails to qualify for a Mortgage Loan sufficient in an amount to enable Purchaser to close after duly and promptly complying with all requests of the Mortgagee and/or Seller, Purchaser shall notify Seller of this fact, in writing, whereupon Seller may request that Purchaser make further applications for a Mortgage Loan. In the event that Purchaser fails to qualify for a Mortgage Loan with any Mortgagee after duly and promptly complying with all requests of the Mortgagee and/or the Seller, as provided above, then Seller shall, at its sole discretion, either (a) give a Mortgage Loan to Purchaser at applicable interest rates at the time such Mortgage Loan is closed for the Full Amount; or (b) transfer or otherwise assign a Mortgage Loan obtained by Seller at applicable interest rates at the time such Mortgage Loan is obtained for the Full Amount which Purchaser agrees to assume at closing in lieu of any other Mortgage Loan and for which Purchaser shall reimburse Seller for all loan closing costs, title insurance premiums and escrow balances existing at closing relative to such assumed Mortgage Loan; (c) in the instance where Purchaser is approved for a Mortgage Loan in an amount less than the Full Amount, unless otherwise prohibited by reason of government or lender regulations, take a purchase money second mortgage from Purchaser at applicable interest rates for a term not to exceed five (5) years and Purchaser shall pay all closing costs in connection with such purchase money second mortgage; or (d) return any monies paid hereunder less a sum for engineering and other expenses reasonably incurred in effecting and processing this Contract whereupon this Contract shall be terminated and the parties hereto shall be relieved of all further rights and obligations hereunder. Default by Purchaser: In the event Seller ascertains that Purchaser has failed to qualify for a Mortgage Loan due to Purchaser's failure to duly or promptly comply with all requests of the Mortgagee and/or Seller or due to failure on the part of Purchaser to supply accurate information, then any such event shall constitute default by Purchaser hereunder, entitling Seller to retain all sums paid hereunder as set forth in accordance with Article VI hereof. Notwithstanding anything contained in this Article II to the contrary or notwithstanding a subsequent mortgage disapproval by a Mortgagee, Purchaser specifically agrees that once a mortgage approval is obtained by Purchaser from one Mortgagee, the deposit monies paid by the Purchaser to Seller shall no longer be refundable. . . . Article III, Section D. of the Angulo contract provided, in part, as follows: Subject to the following provisions of this Paragraph, the estimated date of completion for the residence shall be on or about 120 days from mtg approv. . . . . In the event said Residence shall not be completed two (2) years from the date of this Contract as aforesaid, Purchaser shall have the option to cancel this Contract by giving written notice to Seller ("Cancellation Notice") within 5 days after two (2) years from the date of this Contract ("Cancellation Period") and upon such cancellation Seller shall refund to Purchaser his deposit made hereunder. Upon such Refund, all parties to this Contract shall be fully discharged and relieved from the terms and obligations hereof. Liability of Seller is limited to the Refund and in no event shall Seller be liable to Purchaser for any damages which Purchaser may sustain. In the event Purchaser does not send the Cancellation Notice within the Cancellation Period, this Contract shall remain in full force and effect and Purchaser shall not have the right to cancel this Contract unless Seller is otherwise in default of this Contract. Seller shall not be obliged to make, provide or compensate for any accommodations to Purchaser as a result of delayed completion nor shall Seller be liable for any expenses or inconveniences to Purchaser which may directly or indirectly arise from delay of delivery of possession. Article VI, Section A. of the Angulo contract addressed the subject of "Purchaser's Default." It provided, in part, as follows: If Purchaser shall fail to cure such default within such seven (7) day period, Seller shall, and does hereby have the unrestricted option to (1) consider Purchaser in default under this Contract, (2) retain all sums paid to it, whether held in escrow or otherwise, hereunder as agreed upon and liqu[id]ated damages and in full settlement of any claim for damages, and (3) terminate all rights of Purchaser under this Contract. . . . Article VII of the Angulo contract addressed the subject of "Deposit Money." It provided as follows: Seller shall at its option have the right to use the deposit money for any purposes as it deems necessary. Article VIII, Section B. of the Angulo contract provided as follows: Purchaser represents and warrants that this sale of the Property pursuant to this Contract was made by Seller's personnel and Purchaser agrees to indemnify and hold harmless Seller against any claims of real estate brokers for commissions relating to this sale. Article VIII, Section C. of the Angulo contract provided as follows: This Contract may not be assigned, sold or transferred by Purchaser without the prior written consent thereto by Seller, which consent may be withheld in Seller's sole discretion. There was no comparable provision in the contract restricting LDC's right to assign. Article VIII, Section E. of the Angulo contract provided as follows: This Contract shall be binding upon the parties hereto and their respective heirs, executors, legal representatives, successors and, as permitted hereunder, assigns. Addendum E to the Angulo contract, which was signed by the Angulos on April 26, 1991, and by Ferri on May 2, 1991, provided, in part, as follows: The purchaser(s) of a one or two family residential dwelling unit has the right to have all deposit fund[s] (up to 10 percent of the purchase price) deposited in an interest bearing escrow account. This right may be waived in writing by the purchaser(s). Purchaser(s) hereby waive their right to have all deposit funds (up to 10 percent of purchase price) deposited in an interest bearing escrow account. . . . First Union Group, Inc., is the agent for the Seller(s) and will be paid for his services by the Seller(s). . . . The Angulos' initial deposit was a check, which they gave to Mangicapra, made out to FUGI in the amount of $500.00. In conjunction with making this payment, they signed a Reservation Deposit/Contract Deposit Transfer Agreement, which provided, in part, as follows: It is specifically understood that this Earnest Money deposit is to be held in First Union Group, Inc's (hereinafter First Union Group) trust account. Upon acceptance of said reservation/contract between [the Angulos] (buyer) and Lofts Development Corp. (seller), and upon clearance of said deposit, buyer agrees that First Union Group may automatically transfer to seller said Earnest Money and said Earnest Money shall be treated as purchasers['] initial investment deposit. Purchaser agrees that once said reservation/contract between buyer and seller named above is accepted by seller, and there is in effect a purchase agreement, any and all future deposits due per said purchase agreement shall be made payable directly [to] seller. If any future deposits are inadvertently made payable to First Union Group, buyer hereby gives First Union Group the right and authorization to transfer said deposit money to seller. Any deviation to the above must be in writing from buyer at the time of the reservation/contract. . . . The "automatic transfer" of deposit monies from the real estate broker holding these monies to the seller/builder, like that authorized by this signed Reservation Deposit/Contract Deposit Transfer Agreement, was the accepted practice in the area. Mangicapra deposited the $500.00 check he had been given by the Angulos in FUGI's interest-bearing money market escrow account at Capital Bank in Delray Beach, Florida. The deposit was noted on the Angulos's ledger card. Respondents did not have the written permission of all interested parties to place the Angulos' deposit monies in such an interest-bearing account. Respondents received three other earnest money deposits from the Angulos: a check, dated May 30, 1991, payable to FUGI in the amount of $700.00 (hereinafter referred to as the "May 30 check"); a check, dated June 30, 1991, payable to FUGI in the amount of $700.00 (hereinafter referred to as the "June 30 check"); and a check, dated July 30, 1991, payable to FUGI in the amount of $600.00 (hereinafter referred to as the "July 30 check"). The June 30 and July 30 checks were deposited in FUGI's interest- bearing money market escrow account at Capital Bank and the deposits were noted on the Angulos' ledger card. The May 30 check, however, was inadvertently deposited in FUGI's general operating account at Capital Bank, instead of its escrow account, as a result of a bookkeeping error. On or about August 8, 1991, Respondents wrote a check (hereinafter referred to as "check #1395") transferring $4,800.00 from its Capital Bank escrow account to LDC. The $4,800.00 represented escrow funds being held by Respondents in connection with six different transactions. It included $1,800.00 of the $2,500.00 in earnest money deposits that Respondents had received from the Angulos. The transfer of this $1,800.00 to LDC was in accordance with the Reservation Deposit/Contract Deposit Transfer Agreement signed by the Angulos. Upon receiving check #1395, Ferri endorsed it back to FUGI to compensate FUGI for services it had provided LDC and for expenses FUGI had incurred in conjunction with the performance of these services. The endorsed check was deposited in FUGI's interest-bearing money market account at Capital Bank. On or about November 1, 1991, Donna Archer, who was then an employee of FUGI, sent a Verification of Escrow Deposit to Paragon Mortgage Corporation (hereinafter referred to as "PMC"), from whom the Angulos were attempting to obtain a mortgage loan. Archer provided the following erroneous information in this Verification of Escrow Deposit: As Escrow Agent in the [Angulo] transaction, we are now holding the following amount in our escrow account for the above captioned transaction: $2,500.00------- total held in escrow. On or about December 26, 1991, PMC sent the Angulos the following letter advising them that their application for a mortgage loan had been conditionally approved: We are please[d] to inform you that your application for a FHA mortgage in the amount of 95,750.00 has been approved. The following items are contingencies on the loan and must be met prior to closing. Provide independent documentation of YTD income for Martha (i.e. copy of ledger signed by accountant of employer) Amendment of contract to reflect the following, contract to remain current through closing Hazard insurance policy for at least the loan amount Survey with flood certification [C]lear soil treatment guaranty Clear final inspection Proof of 10 year HOW warranty or 2/10 [h]ome buyers warranty At the time this conditional loan commitment was made, the master appraisal of the property was about to expire. Accordingly, an extension of the deadline was sought by PMC. By written agreement, dated April 26, 1992, and signed by Ferri and Jules Minker, the president of Contemporary Community Concepts Corp. (hereinafter referred to as "Contemporary"), LDC, which no longer wished to construct homes in the Willow Wood subdivision, assigned the Angulo contract to Contemporary: In consideration of the sum of $10.00 Ten Dollars lawful money of the United States, I, Vincent A. Ferri, President of Lofts Development Corporation, hereby assign without reservation or limitation and free of encumbrance, the purchase contract between Jose Antonio and Martha Salazar Angulo, his wife and Lofts Development Corporation, dated April 26, 1991 to Contemporary Community Concepts Corporation. The deposit monies indicated and due under the contract in the approximate amount of $1800.00 Eighteen Hundred Dollars, are not transferred by this agreement and remain with Lofts Development Corporation. In fact, the "deposit monies indicated and due under the contract," amounted to $2,500.00, although only $1,800.00 of that amount had been transferred to LDC. In May of 1992, upon attempting to contact Mangicapra to find out why LDC had not yet begun to work on their house, the Angulos discovered that FUGI had closed the office out of which it had been conducting its business. The Angulos brought the matter to the attention of Sharon Couglin of PMC. Couglin wrote a letter to an official at HUD to apprise the agency of the situation. A copy of the letter was sent to the Florida Real Estate Commission. Notwithstanding the Angulos' beliefs to the contrary, FUGI was still in business. It had simply moved to another location in Boynton Beach. (Mangicapra was not at this time, however, associated with FUGI in any way.) Minker contacted FUGI and the Angulos and advised them that the Angulo contract had been assigned to Contemporary. In his discussions with the Angulos, Minker told them that they would be given credit for the earnest money deposits that they had made. The Angulos, in turn, indicated that they wanted Contemporary to proceed with the construction of the house LDC had agreed to build for them. In accordance with the Angulos' stated desires, Contemporary proceeded with the construction of the house. As the house neared completion, the Angulos learned that the conditional mortgage loan commitment they had received was no longer valid because the master appraisal had expired. They thereupon tried to contact FUGI to explore their options. This time they were successful in their efforts to get in touch with a FUGI representative. They spoke with Denise Preziosi, who had replaced Mangicapra as FUGI's broker of record. The Angulos asked Preziosi if they could obtain a refund of their deposit monies in the event they decided that they did not want to go through with their purchase of the house. Preziosi indicated that she did not know the answer to the question and that, in any event, FUGI no longer held any of the Angulos' deposit monies. At the time she made this statement, Preziosi was under the mistaken impression that FUGI had transferred all of these monies to LDC. On or about November 25, 1992, Preziosi sent a letter to Minker, the body of which read, in part, as follows: I am in receipt of a copy of the "Agreement" between Contemporary Community Concepts Corporation and Lofts Development Corporation which Patti faxed to me yesterday. In reading this Agreement, I noticed that the amount stated as a credit to the Angulos is $1800 rather than the $2500 they did in fact pay to Lofts. I understand that you did not nor will not receive any money from Lofts but that you agreed to accept the assignment of the contract and would give them credit for their deposit. In this regard, please amend your records to reflect a credit of $2,500 as deposit monies rather than $1,800. The Angulos made their final color selections for the house in mid- December, 1992. Thereafter Minker obtained a certificate of occupancy for the house. Although Carlos Angulo, in Minker's office, signed a document prepared by Minker agreeing "to complete loan processing for a new loan and to close on [the house] when funds are made available as a result of this application, but not to exceed 60 days," 1/ when Carlos took this document home and presented it to his parents for their signature, they refused to sign it. The Angulos did not "complete loan processing for a new loan." The Angulos have not been refunded any of the $2,500.00 in earnest money deposits they have made, nor have they received any of the interest earned on these deposits. It has not been shown, however, that the Angulos are now, or were at any time previous hereto, entitled to such a refund under the provisions of their contract with LDC. The White-Hunt Transaction On or about May 3, 1990, Stacey White-Hunt signed a written contract (hereinafter referred to as the "White-Hunt contract") to purchase from LDC, for $97,000.00, real property located in the Delray Garden Estates subdivision in Palm Beach County upon which a residence was to be constructed. FUGI, through its then broker of record, Mangicapra, negotiated the sale for LDC. Ferri, on behalf of LDC, signed the White-Hunt contract on May 9, 1990. The White-Hunt contract contained provisions identical in all material respects to Article II, Section C., Article III, Section D., Article VI, Section A., Article VII, and Article VIII, Sections B., C. 2/ and E. of the Angulo contract, as well as Addendum E to the Angulo contract. (These contractual provisions are set out above.) White-Hunt's initial deposit was a check, which she gave to Mangicapra, made out to FUGI in the amount of $500.00. In conjunction with making this payment, she signed a Reservation Deposit/Contract Deposit Transfer Agreement, which was identical in all material respects to the Reservation Deposit/Contract Deposit Transfer Agreement signed by the Angulos. Respondents received one other earnest money deposit from White-Hunt. It was a check payable to FUGI in the amount of $1,000.00. The $500.00 check and the $1,000.00 check were deposited in FUGI's interest-bearing money market escrow account at Capital Bank and the deposits were noted on White-Hunt's ledger card. Respondents did not have the written permission of all interested parties to place White-Hunt's deposit monies in such an interest-bearing account. On or about May 23, 1990, Respondents wrote a check transferring $6,500.00 from its Capital Bank escrow account to LDC. The $6,500.00 represented escrow funds being held by Respondents in connection with various transactions. It included the $1,500.00 in earnest money deposits that Respondents had received from White-Hunt. The transfer of this $1,500.00 to LDC was in accordance with the Reservation Deposit/Contract Deposit Transfer Agreement signed by White-Hunt. White-Hunt sought, but failed to qualify for, a conventional mortgage loan. Thereafter she applied for an FHA mortgage loan. By notice dated October 10, 1991, she was advised that her application had been denied. On February 7, 1992, the law firm representing White-Hunt sent a letter to Respondents, the body of which read as follows: Please be advised that I have been retained by Stacey Hunt with regard to the above- referenced Contract in order to secure a return of her deposit. I have enclosed herein copies of the deposit checks made payable to ERA First Union Group in the total sum of $1,500.00 which were provided to you on April 17, 1990 and May 8, 1990. Since Ms. Hunt has failed to qualify for a mortgage, in accordance with Paragraph (b)(2) of the Contract, this letter shall serve as formal demand for a return of any and all deposits placed with your company and any and all interest accrued thereon. In the event I am not in receipt of a check payable to Ms. Hunt on or before February 14, 1992, I will presume that you have converted these funds and proceed to undertake . . . any and all efforts to have the funds returned including, without limitation, contacting the Florida Real Estate Commission. Preziosi, on behalf of FUGI, responded by letter to the law firm. The body of her letter read as follows: In response to your letter of even date enclosed please find a copy of a Reservation Deposit/Contract Deposit Transfer which was signed on April 17, 1990 by Stacey Hunt. You will note that this agreement states that once a contract between buyer and seller is in effect, any deposit money given to First Union Group, Inc. will be transferred to the seller and treated as the initial investment deposit. Further, all future deposits are to be made payable to the seller. If an additional deposit was received by First Union Group, Inc., it too would be transferred to the seller. In this regard, be advised that on May 23, 1990, $1,500 that was being held by First Union Group, Inc. on behalf of Ms. Hunt was transferred to Lofts Development Corp. as per this agreement. Also enclosed is a copy of the check together with a copy of the escrow cards which represented all deposits transferred via this check. Respondents have not returned any deposit monies to White-Hunt; however, as Preziosi pointed out in her letter, well before White-Hunt had requested a refund from them, Respondents had transferred these monies to LDC in accordance with the Reservation Deposit/Contract Deposit Transfer Agreement White-Hunt had signed.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is hereby recommended that the Commission enter a final order finding Mangicapra guilty of the violations alleged in Counts I, III, IV, V, and XV of the Amended Administrative Complaint to the extent indicated above, suspending Mangicapra's license for a period of 120 days and fining him $3,000.00 for having committed these violations, finding FUGI guilty of the violations alleged in Counts VI, VIII, IX, X, and XX of the Amended Administrative Complaint to the extent indicated above, suspending FUGI's registration for a period of 120 days and fining it $3,000.00 for having committed these violations, and dismissing the remaining allegations set forth in the Amended Administrative Complaint. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 30th day of June, 1993. STUART M. LERNER 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 16th day of April, 1993.
The Issue Whether Respondents violated Sections 475.25(1)(e), (k), Florida Statutes, and Chapter 61J2-14, Florida Administrative Code.
Findings Of Fact Petitioner, Department of Business and Professional Regulation, Division of Real Estate (Division), is a state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to Chapters 455 and 475, Florida Statutes. Respondent, Lynda J. Lobsitz (Lobsitz), is and was at all material times to this proceeding licensed as a real estate broker in accordance with Chapter 475, Florida Statutes, having been issued license number 0377747. Respondent, Jaclo, Inc. (Jaclo), is and was at all times material to this proceeding, a licensed real estate brokerage corporation, having been issued license number 0275422. During May 1997, the Division conducted an office inspection and escrow audit of Respondents' real estate office. On the day of the audit, Respondents maintained an escrow account for rental security deposits, which account had an adjusted trust liability of $85,300.89.1 The adjusted bank balance was $85,185.22, resulting in a shortage of $115.67. Respondents prepared bank reconciliation reports for January, February, March, and April 1997 for the rental security deposit account and for the rental escrow account. Attached to each of the reports was the monthly bank statement for the account and period covered in the bank reconciliation report. The bank statements identified the name of the bank, the name of the account, the account number, the account balances and dates. A list of outstanding checks, identifying the outstanding checks by date and number, was attached to each report. The dates used to reconcile the balances were not included in the bank reconciliation reports. For the January 1997 bank reconciliation report for the rental rents deposits account, there was a difference of $7,616.25. Respondents stated on the report that $7,630.00 was for a check which was returned for endorsement. The report further stated that $13.75 had not been located. For the February 1997 bank reconciliation report for the rental rents deposits account, there was a difference of $1,756.75. The report contained an explanation for the difference and the corrective action taken. For the March 1997 bank reconciliation report for the rental rents deposits account, there was a difference of $500 which was explained with the corrective action noted. For the bank reconciliation report for January 1997 for the rental security deposit and account, there was an overage of $531.33. The report stated that the amount had not been located. For the bank reconciliation for the rental security deposit and account for February, 1997, there was an overage of $2,234.33. The report explained that $1,700 was a bank error deposit; $3.00 was sales tax which was to be transferred to rents account; and the remaining $531.33 could not be located. For the bank reconciliation for the rental security deposit and account for March 1997, there was an overage of $31.33. The explanation and corrective action stated on the report was "Bank wire to incorrect account Mushlin will transfer from rents accounts. $531.33 have not located." For the bank reconciliation report dated April 1997 for the rental security account, there was an overage of $531.33 with the explanation of "Have not located difference."
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding that Respondents violated Sections 475.25(1)(e), Florida Statutes, issuing a reprimand for the Respondents, requiring that Respondent Jaclo, Inc., pay an administrative fine of $100, and requiring that Respondent Lynda J. Lobsitz take a seven-hour broker management course. DONE AND ENTERED this 14th day of July, 1998, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 14th day of July, 1998.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the posthearing memorandum and the entire record compiled herein, I hereby make the following relevant findings of fact: Respondent, Alfred Rifflard, Jr., during times material herein, was a licensed real estate broker-salesman and is the holder of license number 0338064. Respondent, Thomas L. Narog, during times material herein, was a licensed real estate salesman and is the holder of license number 0309097. On approximately May 24, 1982, Respondent Narog represented to John F. Wodalski that Respondent Rifflard, as an investor, was interested in purchasing certain real property owned by Wodalski. Based on discussions with seller Wodalski, Wodalski and Respondent Alfred Rifflard entered into a deposit receipt and contract for sale and purchase of the Wodalski property. The purchaser is listed on the deposit receipt contract as Alfred Rifflard and/or assigns." (Petitioner's Exhibit 3) The negotiations for the sale of the subject property were conducted at the bar of a country club where both Respondent Naroq and seller Wodalski were employed. Respondent Rifflard was aware that the subject property had been on the market for approximately eighteen months. Seller Wodalski expressed (to Respondent Narog) disenchantment that he was unable to move the property as he had planned to purchase other properties with the proceeds received from the sale of the subject property. Respondent Narog attempted to sell the Wodalski property to enable him (Wodalski) to purchase the other property. During the negotiations for the sale of the subject property, Respondent Wodalski tendered a copy of his business card to seller Wodalski. That business card reflected that Respondent Rifflard was a licensed real estate salesman. Following the execution of the deposit receipt contract by Respondent Rifflard, Respondent Rifflard showed the property to approximately three prospective purchasers in an effort to sell the property prior to the purported closing date. Federal Land Title Corporation of Ft. Lauderdale, Florida was commissioned to handle the closing of the property from seller Wodalski to Respondent Rifflard and/or his assigns. This is confirmed by a letter dated August 19, 1982 to seller Wodalski wherein loan processor Kathy Bradley advised the seller that she expected to expedite the closing of the Wodalski property. (Petitioner's Exhibit 4) Upon receiving the above-referred letter from Federal Land Title Corporation, seller Wodalski demanded a tender of the $1,000 earnest money deposit which is referred to in the deposit receipt contract executed by Respondent Rifflard. At that time, Respondent Narog was told that no monies could be disbursed to him prior to closing. Seller Wodalski called off the closing based on his claim that another broker advised him that it was illegal for an undisclosed licensed real estate salesman to purchase property in his name. Based on the testimony of Respondents Rifflard and Narog including the testimony of the Petitioner's investigator, Anthony Nicola, who investigated the subject complaint, it is specifically found herein that the Respondents disclosed the fact that Rifflard was a licensed real estate salesman at the time the deposit receipt contract was executed herein. In making this finding, consideration was given to seller Wodalski's testimony to the effect that he was busy 2/ at the time that he entered the deposit receipt contract and that it was indeed possible that Respondent Rifflard tendered a business card to him at the time he entered the subject contract. Paragraph two of the deposit receipt contract reveals that the method of payment includes a $1,000 deposit, in the form of a note, which would be returned to the buyer at closing. It is undisputed by the Respondents that no earnest money deposit note in the amount of $1,000 was given the buyer's attorney to be held in trust until the closing was completed. The Respondents acknowledged that it was an error on their part to fail to execute the earnest money deposit as Respondent Rifflard agreed in the subject deposit receipt contract. Further, Respondent Rifflard urges that his failure to execute a note was an oversight on his part.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is hereby RECOMMENDED: That the Respondents, Alfred Rifflard, Jr. and Thomas L. Narog, be privately reprimanded by the Petitioner, Division of Real Estate, based on their failure to place in deposit, to be held in trust, a $1,000 earnest money deposit in connection with the transaction surrounding the deposit receipt and contract for sale and purchase entered into by Alfred Rifflard, Jr., as purchaser of certain real property owned by John Wodalski. RECOMMENDED this 31st day of January, 1984, 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 31st day of January, 1984.
Findings Of Fact In early July, 1972, Donald R. and Pamela S. Leininger (buyer) entered into a contract to purchase a residence through Sun Up Realty with its salesman, Bernard Zapel. The real property involved and Sun Up Realty were owned by Defendant, Norman N. Zipkin either as sole proprietor or as sole shareholder of the corporation in whose name the property was held. Disclosure of the role of Defendant as owner-seller was not an issue in these proceedings. Buyer executed two contracts for the purchase of the property both dated July 9, 1972. The first contract acknowledged receipt of $100 as a deposit with a down payment to be made of $1750 with the buyer obtaining a mortgage of $33,250. Noted on this contract are two additional payments of $650 and $1,000. All of these deposits were payable to and deposited in Sun Up Realty's Escrow Account. The second deposit receipt contract was also dated July 9, 1972 and receipt of $1750 was thereon acknowledged by seller. The sale price of $35,000 applied to both contracts. The second contract provided as terms and conditions of sale that the buyer would make an additional deposit of $1700 before closing and that buyer was to apply for, qualify, and obtain a mortgage insured by FHA. Papers to so qualify were sent to the bank but buyer never qualified for the loan. The Administrative Complaint indicates that the first document executed by the buyer provided for an FHA insured mortgage; the evidence presented was as noted above. Apparently to allow buyer additional time to qualify for the loan Defendant leased the premises to buyer pursuant to lease agreement (Exhibit 5). Although Defendant testified buyer paid him nothing while he occupied the house pursuant to this lease agreement, in his deposition (Exhibit 1) buyer presented a receipt for one month's rent paid to the seller for the premises. Buyer never qualified for the mortgage because the lending agency was never satisfied from whence the additional $1700 down payment was to come. Although no evidence was presented on this point it appears that this additional deposit was required for buyer to reach a 10 percent down payment on the price of the residence. The July 9, 1972 deposit receipt contract that was in effect with respect to this transaction provides in pertinent part: "2. An additional sum of seventeen hundred dollars ($1700) shall be deposited with Escrow Agent before closing. In the event such sum is not so deposited, Seller at his option may cancel and terminate this agreement." "3. Buyer to apply for, qualify for, and obtain a Mortgage insured by the FHA Section in an amount not less than $31,550. In the event the Buyer fails to qualify for said mortgage, all said deposit shall be returned immediately, less the cost of the credit report. "14. It is mutually agreed that the trans action shall be closed and the Buyer shall pay the balance of the first payment and execute any and all papers necessary to be executed by him for the completion of this purchase within days from the aforementioned abstract of title, or such time as shall reasonably be required by seller to make such title good, otherwise the herein named Escrow Agent is hereby directed by both Seller and Buyer to divide the monies being held by said Escrow Agent, under the terms under this Contract between the Seller and Broker herein named as hereinafter provided." "It is further agreed that in case of default by the Buyers, the Seller may at his option take legal action at law and/or in equity to enforce this Contract, in which event, the Buyer shall pay reasonable attorney fees and court costs; or else the Seller may at his option retain one half of the deposit herein paid as considera tion for the release of the Buyer by the Seller from any and all further obligations under this Contract to the Seller, which release shall be implied from such act of retention by the Seller." Buyer quit the premises in October, 1972 and thereafter demanded return of his deposit from seller. By letter from buyer's attorney (Exhibit 6) dated March 19, 1973 demand was made for return of the deposit. By letter dated March 23, 1973 (Exhibit 7) Seller denied the refund of the deposit on grounds that the buyer had breached the contract as the Buyer had qualified for and been approved for a mortgage by the Collateral Mortgage Co. The money was withdrawn from the escrow account and paid to the seller. Defendant is an attorney, mortgage broker, general contractor, developer and real estate broker. For the past decade he has devoted most of his energies toward real estate development. This is the first time charges have been preferred against him by the Florida Real Estate Commission.
The Issue Whether the license #16-7170-H of Robert A. Rinehart should be suspended or revoked, or whether a civil penalty should be assessed.
Findings Of Fact The Respondent, Robert A. Rinehart, trading as 629 Apartments, was at all times pertinent to this cause licensed as a public lodging establishment, holding license control #16-7170-H. A notice to show cause and notice of hearing' was served upon Respondent Rinehart, notifying him that certain evidence had been presented which, if true, was good and sufficient reason to cause his license to be suspended or revoked or to have a fine assessed against him. The Notice to Show Cause indicated also that an administrative hearing would be held to which the Respondent would receive notice, and was dated December 5, 1978. No answer was filed to the Notice to Show Cause. The Notice of Hearing was mailed April 26, 1979, and was returned. The Respondent did not appear at the administrative hearing or send a representative to testify in his behalf. It is found that the address to which the Notice of Hearing was sent was the same address as provided on the existing license held by Respondent, which is active until December 1, 1980. This address is the same address as indicated on the standard form apartment lease entered into evidence as Petitioner's Exhibit 2. The Respondent is under obligation to keep the Petitioner Division advised of his current address to be shown on his official records in the Division of Hotels and Restaurants, Department of Business Regulation, State of Florida. In December of 1976, Respondent Rinehart rented, or permitted his agent to rent, an apartment in 629 Apartments to Carol Miller. Ms. Miller was required to pay a security deposit in the sum of $100.00 shortly after renting the apartment, and later paid an additional security deposit of $35.00 upon acquiring a pet. Subsequently Ms. Miller moved from the apartment after personally notifying Respondent Rinehart of her intent to vacate the rented premises at a time in excess of thirty (30) days before the intended date of her departure. Ms. Miller then again informed Respondent of her intent to move and requested that he give her an address where he could be contacted and to also return her security deposits, however Respondent did not do so. Ms. Miller moved from the licensed premises in September of 1978, and has not received her security deposits, nor has there been a claim submitted by Respondent Rinehart for the deposit. Entered into evidence was a typed rental agreement and a receipt for various sums of monies growing out of the rental agreement with Respondent Rinehart. The testimony of Carol Miller, together with the evidence submitted, is sufficient to show that Respondent Rinehart in fact received security deposits from Ms. Miller as a tenant and failed to return said security deposits to her or to make a claim against them. A proposed recommended order was submitted by the Petitioner Division, and this instrument was considered in the writing of this Order. To the extent the proposed findings of fact have not been adopted in, or are inconsistent with, factual findings in this Order they have been specifically rejected as being irrelevant or not having been supported by the evidence.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that a civil penalty be assessed in the amount of $250.00 to be imposed upon the Respondent, Robert A. Rinehart t/a 629 Apartments. DONE and ORDERED this 31st day of August, 1979, in Tallahassee, Leon County, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Mary Jo M. Gallay, Esquire Robert A. Rinehart t/a Department of Business 629 Apartments Regulation 629 NE 5th Avenue 725 South Bronough Street Fort Lauderdale, Florida Tallahassee, Florida 32301
Findings Of Fact The Respondent, Robert Watson, Jr., is a real estate broker-salesman, having been issued license Number 0093690. He resides and has his business in Jacksonville, Florida. On or about September 1, 1978, the Respondent negotiated and drafted a contract for sale of a certain piece of residential real estate, the purchaser for which was one Mr. Lacy Cole. The Respondent was Mr. Cole's broker in that transaction. The Respondent informed Mr. Cole that he would have to pay a two- hundred-dollar deposit as prospective buyer pursuant to the deposit receipt, sales contract agreement drafted by the Respondent. Mr. Cole did not pay the entire two-hundred-dollar deposit, but he did pay the Respondent sixty-five dollars. The closing was held October 20, 1978, at which time Mr. Cole's attorney directed the Respondent to pay Mr. Cole a two-hundred-dollar refund as the contract for sale provided that financing would be through the Veterans Administration and that in such a Veterans Administration sponsored transaction the buyer is precluded from paying closing costs. Mr. Cole cashed the two- hundred-dollar check in good faith and later was informed that the Respondent had stopped payment on it, which resulted in Mr. Cole having to make the check good. The Respondent has failed to recompense Lacy Cole for the sixty-five- dollar deposit he had already paid pursuant to the contract for sale drafted by the Respondent. Mr. Watson has also never repaid the two hundred dollars which Mr. Cole had to expend in order to provide payment on the two-hundred-dollar check on which the Respondent had stopped payment. In response to the Petitioner's demonstration that the Respondent had obligated Mr. Cole for a two-hundred-dollar "binder or closing costs" which he was not obligated to pay under Veterans Administration policy, the Respondent stated that he wrote the contract with the two-hundred-dollar binder with the understanding that Cole would pay a portion of it at the first of each month until it was paid and that he only received a total of sixty-five dollars from Cole. The seller agreed to sell the property to Mr. Cole anyway. The Respondent maintained that he merely told Mr. Cole at the closing that he would write him a two-hundred-dollar check and deliver it to him at closing with the understanding that Cole would deliver it back to him immediately afterward to keep from confusing the attorney." The Respondent, however, failed to refute the showing by the Petitioner that the Respondent attempted to obligate that purchaser to pay two hundred dollars in "closing costs" which he was not legally obligated to pay and for which the seller of the property was responsible in the first place. The Respondent adduced no evidence contrary to that of Petitioner which established that, after being informed by the attorney that Mr. Cole was not responsible for any deposit or closing costs, the Respondent still retained the sixty-five dollars paid him as earnest money by Mr. Cole and, further, that after stopping payment on Cole's refund check, causing Mr. Cole to incur two hundred dollars additional expense for which he was not obligated, the Respondent failed to recompense Cole. There is thus no question that the Respondent misrepresented to his client, Mr. Cole, the obligations and expenses Mr. Cole would have to incur in order to purchase the property and thus, in effect, wrongfully obtained two hundred sixty-five dollars from Mr. Cole. On or about September 16, 1978, Mrs. Joanne Wesley deposited a ten- dollar check with the Respondent as a partial deposit for a down payment on a home. On or about September 20, 1978, she deposited an additional one-hundred- dollar check with the Respondent as further deposit on the same contract for sale and purchase which the Respondent had at that time not yet drafted. The Respondent never made an appropriate deposit of the above referenced checks in his escrow account, but, instead, cashed them for his personal use. On or about October 25, 1978, the contract for sale and purchase was finally drafted by the Respondent. On approximately December 4, 1978, Mrs. Wesley deposited with the Respondent an additional check for eight hundred fifty dollars as the final installment of her deposit money with regard to the proposed purchase of the home. On December 29, 1978, Mrs. Wesley learned that she had failed to qualify for FHA financing with regard to the above-referenced contract and, after looking at another home which was not to her liking offered to her by the Respondent as a "replacement dwelling," finally requested the refund of her total deposit of nine hundred sixty dollars. The Respondent then requested Mrs. Wesley to wait until January 2, 1979, for that refund and on January 2, 1979, tendered to her four hundred dollars cash as partial reimbursement. On January 3, 1979, the Respondent tendered to her an additional three hundred dollars cash and drew and delivered to her his escrow check, post-dated to January 10, 1979, in the amount of two hundred fifty dollars. That escrow account check was returned for insufficient funds. On February 1, 1979, Mrs. Wesley's attorney made demand on the Respondent for payment of the two hundred fifty dollars outstanding, represented by the invalid check. On approximately February 3, 1979, the Respondent ultimately paid the two hundred fifty dollars due Mrs. Wesley. Thus, at that point the Respondent had refunded nine hundred fifty dollars of the nine hundred sixty dollars in deposit money due Mrs. Wesley. The entire refund had become due on December 29, 1978, when it was learned that she could not qualify for FHA financing with regard to the proposed purchase, which qualification for financing was a condition precedent to performance of the contract. In his defense the Respondent stated that he attempted to arrange the purchase of another dwelling for Mrs. Wesley upon learning that she could not qualify for financing on the subject property and that he retained her deposit money in his escrow account for that reason and ultimately repaid it to her, although after over a month's delay. The Respondent contended that he had opened the subject account as a business account when he was doing appraisal work and had not considered it to be an escrow account and "did not know when they switched it over to escrow." The Respondent did acknowledge that he had used this escrow account as his business account and commingled personal and business operating funds in it and made withdrawals from time to time for business and personal reasons. With further regard to the Cole transaction, the Respondent contended that he felt it was customary for a veteran to pay two hundred dollars closing costs and even when he learned the veteran was not obligated to pay closing costs in such a transaction, that he still felt it was "customary as earnest money" even though the seller obviously was obligated to pay closing costs. The Respondent also testified that as of the time of the hearing and for an indeterminant period of tinge before the hearing, he had terminated active practice of real estate brokerage and was mostly performing appraisal work. There is thus no question that the Respondent informed Mr. Cole that he was obligated to pay two hundred dollars "earnest money" or "closing costs" and that his actions forced Mr. Cole to incur the two-hundred-sixty-five dollar expense described above, even after the Respondent was informed by the closing attorney that the purchaser was not obligated for those expenses. There is no question with regard to the Wesley transaction that he delayed an inordinate amount of time in refunding her deposit money after the condition of financial qualification for the purchase did not occur, and, further, that he commingled these purchaser deposit funds in his escrow account with personal and business funds and used a portion of them for personal purposes.
Recommendation Having considered the foregoing findings of fact and conclusions of law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is RECOMMENDED that the license of Robert Watson, Jr., as a real estate broker in the State of Florida be REVOKED. DONE AND ENTERED this 1st day of February, 1982, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of February 1982. COPIES FURNISHED: Barry S. Sinoff, Esquire 2400 Independent Square One Independent Drive Jacksonville, Florida 32202 Robert Watson, Jr. 9527 Abedare Avenue Jacksonville, Florida 32208 Frederick B. Wilsen, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Samuel Shorstein, Secretary Department of professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 C. B. Stafford, Executive Director Board of Real Estate Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802
Findings Of Fact The Petitioner is a State government agency charged with licensing and regulating the practice of real estate sales and brokerage in the State of Florida. Its authority under Chapter 475, Florida Statutes, includes the duty to prosecute Administrative Complaints against licensees who have allegedly violated the various provisions of Chapter 475 enumerated above. The Respondent, Key Realty Management, Inc., is and was at all times material hereto a corporation licensed as a real estate broker in the State of Florida, having been issued License Number 0222667 in accordance with Chapter 475, Florida Statutes. Respondent Dan Lee Issacs is an officer of and qualifying broker for the Respondent, Key Realty Management, Inc., and holds License Number 0203152. On or about September 26, 1985, Richard A. Cook, an investigator employed by the Petitioner, conducted a routine audit of the Respondents' real property rental management trust account numbered 1201145156 maintained at Barnett Bank at 315 South Calhoun Street, Tallahassee, Florida. The audit consumed about one and one-half days. The audit revealed that as of September 26, 1985, the Respondents had received in trust from their tenants, in their capacity as real estate brokers, damage and security deposits in the amount of approximately $76,566.46. The balance of record in that account at the time of the audit was only $44,232.30. Approximately $32,334.16 were thus unaccounted for. The Petitioner's investigator, Mr. Cook, admitted in his testimony that there was no basis for him to believe that the subject funds unaccounted for had been diverted to the Respondents' own use, embezzled or otherwise improperly employed. He also acknowledged that there was no evidence of intentional misconduct in these particulars. Mr. Cook further conceded in his testimony that this prosecution stems from an increased emphasis by his agency on enforcing the requirements, concerning accounting for escrow monies, expressed in the statutory provisions pled in the Administrative Complaint in the last two years. His testimony reveals that the motivation for this prosecution, at least in part, results from that policy change. No other witness was presented by the Petitioner. The Respondent presented the testimony of Gary Erdman, an accountant and computer consultant. The witness was in charge of the Respondents' accounting, records keeping and management and computer programming. He designed their computer system, which kept up with their rental property management records, receipts and disbursements. During November 1984 to January 1985, the Respondents' business was in the process of converting to a new computer management, data storage and processing system. They were a very busy firm, with a large number of clients and properties which they managed. They thus ran out of space on their old computer system. Mr. Erdman was unable to transfer all the old data and program of the firm to the new system and had to re-program the new system. Some information was lost and never was entered in the new system. Additionally, on July 16, 1985, a problem of an accidental nature, possibly due to lightning, damaged the hard computer data storage disk of the firm and some data, which contained the record of receipts and disbursements regarding the missing $32,334.16, was lost. There was no soft disk or other backup system for this data, so it was irretrievably lost. Mr. Erdman had to start trying to reconstruct the lost data at the same time he was having to keep up, on a day-to-day basis, with his records keeping and accounting responsibilities. The reconstruction process, therefore, took a substantial period of time. Through this witness, the Respondents introduced their Exhibit 1, which was the claim or notice of loss to their insurance carrier as probative of and corroborative of Mr. Erdman's testimony regarding the July 16, 1985 accidental data loss. From that point it took two months after July 16, 1985, to learn from the manufacturer of the hard disk how much of the data had been lost. The Respondents had sent the hard disk to that manufacturer for repair and damage assessment. July and August of every year is the busiest time in the Respondents' rental management business. Possibly because of this they were unaware of the accounting problem regarding the $32,334.16 until it was discovered by Mr. Cook. The Respondents were very cooperative with Mr. Cook and apparently were unaware of the problem until he discovered it. They immediately transferred funds to cover the deficit in the subject escrow account so that no client or entity entitled to the funds therein suffered any loss. No misrepresentation was made to any client, person or entity entitled to any funds in their escrow account concerning the use, location, depository or entitlement to any escrow funds. The Respondents have now corrected the problem with their computer system and have also voluntarily changed their accounting procedures and deposit procedures so that not only loss and damage security deposits, but also rental income itself goes directly to their trust account first, before any disbursement to the landlords entitled to net rentals above the Respondents' fees and costs. Formerly, everything was deposited initially in the Respondents' operating account and then withdrawn and deposited in the escrow account, as to the security and loss and damage deposit receipts. Under the new system, however, they are able to more readily track every monetary receipt and more readily and properly account for it. This change was voluntarily made only a week or two after Mr. Cook's first visit wherein he alerted them to the problem. Additionally, Respondents' Exhibit 2 reflects that apparently there was an excess of $50,000 in the subject bank account as evidenced by a bank reconciliation record contained in that exhibit, which Mr. Cook had not seen at the time of his investigation and prior to the hearing. Thus, the subject $32,334.16 may be somewhat overstated. Further, it was established with this exhibit that, as of October 23, 1985, one month after Mr. Cook's inspection, the subject trust account had a balance of $73,973.56. It was shown by the Respondent that at the time of Mr. Cook's inspection the office staff was overloaded and that transfers to the trust account were running behind schedule. Some of the deficit was merely due to non-timely deposits to the trust account, rather than funds being mistakenly placed in a different account or used for other purposes by mistake, it not having been established that any intentional wrong-doing occurred concerning the trust account and escrow account violations charged. In any event, it has been established that the Respondents' new computer system of accounting and record management has alleviated the problem discovered by Mr. Cook. The Respondents have never encountered such a problem with their deposits either before or after this instance as of the time of hearing. It was established by the Respondent, Dan Issacs, who testified, that neither he nor his firm was co-mingling rental income with funds required to be retained in their trust account but rather were simply unaware of the apparent requirement that rental receipts must first be deposited in the trust account. In any event, it was established conclusively that no funds were diverted for the Respondents' own use or benefit and that all monies are now properly on deposit and are otherwise accounted for and were within a matter of several weeks after the audit and inspection. Additionally, all computer-retained records are now subjected to back-up record keeping at the present time.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, and the candor and demeanor of the witnesses, it is, therefore RECOMMENDED that the Administrative Complaint filed against Dan Lee Issacs and Key Realty Management, Inc. be dismissed in its entirety. DONE and ENTERED this 13th day of May, 1987, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of May, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-2911 Petitioner's Proposed Findings of Fact: Accepted. Rejected as irrelevant. 3-5. Accepted. Accepted, except as to specific amounts which are found in the Recommended Order. Accepted, but not dispositive. Rejected as not in accordance with the greater weight of the evidence. Accepted. COPIES FURNISHED: James H. Gillis, Esquire Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Elwin R. Thrasher, Jr., Esquire Post Office Box 4351 Tallahassee, Florida 32315 Van Poole, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Joseph A. Sole, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Harold Huff, Executive Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802
Findings Of Fact In the beginning of the hearing, proof was made that the Respondent, William W. Buchanan, was a licensed real estate salesman in the State of Florida, in an active capacity from June 18, 1973 thru March 31, 1976. This proof was established through Petitioner's Exhibit no. 1, which is a certification and copies of the real estate registration document. The Respondent, while employed by Joe Z. Lovingood, Inc., his corporate broker employer, took checks from the corporate check book. Three of the checks that were taken from that checkbook were forged by making the Respondent the payer and showing the signature of Joe Z. Lovingood. These checks were dated May 7, 1974, and May 31, 1974. There were two checks of May 7, 1974 for $600 and 2,500 respectively and the May 31, 1974 check was for $500. The Petitioner's Exhibit no. 2 is a xerox copy of the aforementioned checks. The originals of the checks were not produced because they are in the care and custody of the State Attorney's Office for Sarasota County, Florida. The owner of Joe Z. Lovingood, Inc., Mr. Joe Z. Lovingood, did not allow these acts, nor allow any employee within his employ to authorize the Respondent to take the checks from the check book to make the checks payable to the Respondent nor to forge Mr. Lovingood's signature. Furthermore, neither Mr. Lovingood nor any employee of his corporation who was acting upon his authority allowed the Respondent to negotiate these checks, although the Respondent did negotiate them and expend the funds for his own personal use. The exhibits which show the Respondent's negotiation of the checks are Petitioner's Exhibits no. 3 and no. Petitioner's Exhibit no. 3 is a copy of a bank statement of the Joe Z. Lovingood corporation which indicates debits placed against the corporate bank account in the amount of the aforementioned checks. The Petitioner's composite Exhibit no. 4 shows copies of the forged checks with the endorsement signature on the back together with deposit credits, found in the bank statement on the Respondent's account. In addition, the testimony of the bank official of the Respondent's bank indicated a partial cash withdrawal from the amount of the $600 and $500 checks which were negotiated through the Respondent's bank. Joe Z. Lovingood, Joan Lovingood, his wife, and Harold Merritt, the former accountant for Joe Z. Lovingood, Inc., established that the Respondent had told them about taking the checks from the corporate checkbook, and forging the signature of Joe Z. Lovingood after practicing to sign the signature. They also testified that the Respondent told them that he had intercepted bank statements at the post office in order to cover up the theft of the checks and subsequent forgery. After the discovery of Mr. Buchanan's acts, Mr. Lovingood notified the Petitioner. In addition after consultation with his legal adviser and the prosecutors of the jurisdiction, he determined to give the Respondent an opportunity to reimburse Joe Z. Lovingood, Inc. To accomplish this end, Mr. Lovingood co-signed a note in the amount of $3,000 which the Respondent took out in order to improve Mr. Buchanan's financial position. The Respondent agreed to pay back the $3,600 that he had taken from the corporation together with interest and also to repay the $3,000 loan with interest. A statement of his agreement can be found in his letter of July 8, 1974, addressed to Joe Z. Lovingood, as President of Joe Z. Lovingood, Inc., which is Petitioner's Exhibit no. 5 and in his letter of July 8, 1974, addressed to the National Bank of Sarasota which is Petitioner's Exhibit no. 6. Through the date of the hearing, these funds had not been paid to the National Bank of Sarasota. In August of 1974, the Respondent entered into discussion with one Walter E. Lingard about the purchase of real estate. Out of the conversation a deposit was made in the amount of $200 and a receipt for deposit, offer to purchase and contract for sale was entered into by the Respondent and Mr. Lingard. Mr. Lingard was approached by Mr. Buchanan on the question of the purchase of property and informed him that a better piece of property was available in another location and the $200 deposit would be allowed as a partial deposit on the substituted parcel. The contract document on the first parcel contemplated for purchase is Petitioner's Exhibit no. 9. Petitioner's Exhibit no. 10 is a copy of the check from Mr. Lingard and Petitioner's Exhibit no. 11 is a copy of the contract pertaining to the substituted parcel of land. The deposit check was written to William Buchanan at the request of William Buchanan who told Mr. Lingard that he would see that it was placed with his employer, Joe Z. Lovingood, Inc. In September of 1974, the Respondent entered into a conversation with one Hans Hellmann. The nature of this conversation concerned the investment of Mr. Hellmann's money in a real estate purchase. To this end, Mr. Hellmann deposited $2,500 with the Respondent through a check made out to William W. Buchanan. Again, this check was made out to Mr. Buchanan at his request with an assurance to Mr. Hellmann that the deposit would be placed with Joe Z. Lovingood, Inc. The Petitioner's Exhibit no. 7, is a copy of a contract document and Petitioner's Exhibit no. 8 is a copy of the deposit check. Neither Mr. Joe Z. Lovingood nor any employee within his corporation knew of the negotiations, contracts or deposit checks which had been entered into between Mr. Lingard and the Respondent and Mr. Hellmann and the Respondent. Mr. Lovingood found out about these matters when his office was contacted about the status of one of the contracts. Joe Z. Lovingood, Inc. did not receive the deposit checks, at any time. The proceeds of the deposit checks that have been mentioned, were appropriated to the use of the Respondent, without the knowledge and authority of Mr. Joe Z. Lovingood or any employee within his corporation. Restitution for the amounts of the deposit checks has never been made to Mr. Lingard or Mr. Hellmann. The details of the contracts and the fact that the money was appropriated to Mr. Buchanan's use, were related by the Respondent, to Mr. Joe Z. Lovingood, his wife and Mr. Merritt.
Recommendation It is recommended that the registration of the registrant, William W. Buchanan, be revoked. DONE and ORDERED this 18th day of June, 1976, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: William W. Buchanan 503 North Brink Avenue Sarasota, Florida 33577 Charles C. Felix Associate Counsel Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789
