The Issue Whether Respondent, Nicholas Anthony Musashe (Respondent Musashe), is guilty of failure to account or deliver funds and failure to follow procedures as required by Subsection 475.25(1)(d)1., Florida Statutes (2003). Whether Respondent Musashe is guilty of failure to provide written notification to the Florida Real Estate Commission (FREC) within 15 days of the last party's demand as required by Florida Administrative Code Rule 61J2-10.032(1)(a). Whether Respondent Musashe is guilty of culpable negligence or breach of trust in any business transaction in violation of Subsection 475.25(1)(b), Florida Statutes (2003). Whether Respondent, The Jander Group, Inc. (Jander Group), is guilty of failure to account or deliver funds and failure to follow procedures, as required by Subsection 475.25(1)(d)1., Florida Statutes (2003). Whether the Jander Group is guilty of failure to provide written notification to the FREC within 15 days of the last party's demand as required by Florida Administrative Code Rule 61J2-10.032(1)(a). Whether the Jander Group is guilty of culpable negligence or breach of trust in any business transaction in violation of Subsection 475.25(1)(b), Florida Statutes (2003).
Findings Of Fact Petitioner is the state licensing and regulatory agency charged with the responsibility and duty to investigate administrative complaints pursuant to Section 20.165 and Chapters 455 and 475, Florida Statutes (2003), and the rules promulgated thereunder. Respondent Musashe is, and has been at all times material, a licensed real estate broker, having been issued license no. 265400 and license no. 3010224. He is the owner of the Jander Group, which is also a licensed real estate broker, and its business address is located at 1440 Howell Branch Road, Winter Park, Florida 32789. At all times material hereto, Respondent Musashe was licensed and operating as the qualifying broker for the Jander Group. The Jander Group manages rental property exclusively and is not involved in the sale of real estate. Respondent Musashe has been managing rental properties in Florida since 1990. He, through his company, the Jander Group, manages about 500 properties. He enters into contracts with property owners to provide property management services. He meets with the property owners to advise them on improvements to accommodate rentals. He advertises vacant properties; interviews prospective residents; shows properties; takes applications; screens applicants; and, upon ascertaining that the applicant meets the minimum standards, enters into lease agreements with tenants. He also performs the day-to-day functions of collecting rent, accounting, paying bills, accounting to the owner, and paying the owner the rental proceeds. He keeps a percentage of the rent for his services. From time to time, in the property management business, a dispute develops between a tenant and a property owner. This can involve a deposit by a prospective tenant or a security deposit pursuant to a lease. In the early 1990's, the Legislature amended Chapter 83, Florida Statutes (2003), the "Florida Residential Landlord and Tenant Act" (Landlord-Tenant Act). Among other changes, it relieved licensed real estate brokers from the requirements of reporting escrow disputes and instituting settlement procedures as outlined in Subsection 475.25(1)(d), Florida Statutes (2003), when there were deposit disputes between residential landlords and tenants. Thereafter, and until late 2001, the FREC's position on rental property deposit disputes was that such disputes were addressed by the Landlord-Tenant Act and not subject to the provisions of Chapter 475, Florida Statutes (2003). This applied to disputes over security deposits, as well as disputes over deposits by prospective tenants. In late 2001, without notice to brokers and associates or rulemaking, the FREC changed its legal interpretation of Subsections 475.25(1)(d) and 83.49(3)(d), Florida Statutes (2003), with respect to disputes over pre-lease deposits on rental property. In this case and at least one other case, administrative complaints were filed against brokers who, faced with a dispute between a prospective tenant and a property owner, failed to give the FREC notice of the dispute and requested one of the settlement procedures set forth in Subsection 475.25(1)(d), Florida Statutes (2003). In the early to mid-1990s, in his business of managing rental properties, when confronted with disputes between prospective tenants and property owners, Respondent Musashe routinely sent notice to the FREC and requested an escrow disbursement order (EDO) to assist in determining how to settle the dispute in accordance with Subsection 475.25(1)(d), Florida Statutes (2003). The FREC responded that disputes involving rental properties were to be resolved in accordance with the Landlord-Tenant Act and did not issue an EDO. James Mitchell was the legal advisor to the FREC for several years while in the Attorney General's (AG) office in the 1990s; and since that time, is the author of continuing education materials which are approved by the FREC. In his materials, he instructs real estate brokers that disputes involving any type of rental deposits should be handled pursuant to the Landlord-Tenant Act, and not in accordance with the notice and settlement procedures set forth in Subsection 475.25(1)(d), Florida Statutes (2003). Mitchell is not familiar with the particular facts or documents at issue in this case. He did not give an opinion as to whether or not the facts of the present case created a landlord and tenant relationship between Respondents and Tiffnye Castro. During his tenure with the AG's office, Mitchell applied Chapter 83, Florida Statutes (2003), to escrow dispute issues in a manner consistent with the statutes' definition of "tenant" and "rental agreement." Section 83.49, Florida Statutes (2003), applies "whenever money is deposited or advanced by a tenant on a rental agreement or as advanced rent for other than the next immediate rental period." Chapter 83, Florida Statutes (2003), defines, "tenant" as "any person entitled to occupy a dwelling under a rental agreement." On May 10, 2002, Castro signed a rental application with the Jander Group to rent a duplex at 12034 Waldenwoods in Orlando. She gave the Jander Group a check for $25.00 as an application fee and $585.00 as a holding deposit. According to the terms of the application, the holding deposit was to be held by the broker while the application was being processed. If the prospective tenant was deemed qualified, she would receive a lease. During the time that the broker was checking on the tenant's qualifications, the property would be taken off of the rental market. If the tenant did not meet the qualifications for renting the property, the holding deposit would be returned to her. If the prospective tenant qualified, but changed her mind and decided not to rent the property, the property owner was entitled to keep the holding deposit as liquidated damages for holding the property off the rental market. Subsequent to filling out the application, Castro was approved as a tenant. In a dispute over the amount of rent to be charged for the unit, Castro decided not to rent the property and sent a demand letter to Respondent seeking the return of her deposit. On June 20, 2002, the Jander Group sent Castro a letter, in conformance with Subsection 83.49(3), Florida Statutes (2003), giving her notice of its intent to keep her deposit. Respondents accounted for the deposit to both parties in the transaction; and subsequently, delivered the deposit to the property owner. Castro never signed a lease or possessed keys, and she never had the right to occupy the property in question. Respondent predicated the handling of the escrow deposit on the assumption that he had a landlord and tenant relationship with Castro. Respondents never petitioned the FREC for a declaratory statement regarding a dispute over a deposit by a non-tenant on a lease application, rather than a rental agreement. Respondent Musashe elected not to follow Subsection 475.25(1)(d)1., Florida Statutes (2003), requirements for five reasons: his opinion that the issue was contractual; his own reading of the law; his experience with professional education; advice of private counsel; and the statements of law issued by the AG's office regarding EDOs. There is no evidence that Respondent Musashe was ever specifically advised by a state agency that the landlord and tenant procedure in Section 83.49, Florida Statutes (2003), was applicable to earnest money deposits made by a non-tenant as part of an application that did not create a lease obligation. Petitioners presented no evidence relative to paragraphs 15 through 22 and 25 through 32 of the Amended Administrative Complaint.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate, enter a final order dismissing the Amended Administrative Complaint filed against Respondents Nicholas Anthony Musashe and The Jander Group, Inc. DONE AND ENTERED this 11th day of August, 2004, in Tallahassee, Leon County, Florida. S DANIEL M. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 11th day of August, 2004. COPIES FURNISHED: William M. Furlow, Esquire Akerman Senterfitt 106 East College Avenue, Suite 1200 Tallahassee, Florida 32301 Jason W. Holtz, Esquire Department of Business and Professional Regulation 400 West Robinson Street Suite N-801, North Tower Orlando, Florida 32801-1757 Juana Watkins, Acting Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Suite 802, North Orlando, Florida 32801 Leon Biegalski, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
Findings Of Fact At all times material hereto, Respondent Robert Marriott has been a licensed real estate broker/salesman under the laws of the State of Florida, trading as Marriott Realty. In February of 1980, in his capacity as a real estate broker/salesman, Respondent obtained an offer to purchase commercial property in Miami from Orlando Villacis, a resident of Ecuador, as purchaser, for a total purchase price of $500,000. In conjunction with the offer, Villacis paid a $20,000 earnest money deposit to be held by Marriott Realty in escrow under the terms of the offer. Villacis' deposit check in the amount of $20,000 was deposited into the Marriott Realty escrow account on February 22, 1980. By March 11, 1980, Villacis' $20,000 had been withdrawn, leaving an escrow account balance of $40. This fact was never reported to Villacis. Having heard nothing definite from Respondent with regard to the offer, and because he spent most of his time out of the country, Villacis engaged the services of attorney Rafael Penalver. Prior to July 1980, Penalver contacted the Respondent and inquired as to the status of the offer. Each time, Respondent told him that the seller was still considering the offer. In July of 1980, Respondent told Penalver that the $500,000 offer had been rejected by the seller and recommended that Villacis present an offer for $570,000. Penalver prepared the offer in the amount of $570,000, again calling for a $20,000 earnest money deposit, which Penalver and Villacis assumed was still in the Marriott Realty escrow account. Receiving no response from Respondent on the second offer, Penalver attempted to contact Respondent by telephone on numerous occasions. When Penalver was successful, Respondent told him that the seller was reviewing the offer. In early September 1980, Respondent advised Penalver that the $570,000 offer had been rejected by the seller. By letter dated September 11, 1980, Penalver raised the offer to $600,000, set a deadline of September 19 for the acceptance of the offer, and directed Respondent to return the $20,000 immediately should the offer not be accepted. After September 19, having heard nothing from the Respondent, Penalver called him, at which time Respondent advised that the offer was being considered by the seller. Penalver then wrote a letter dated October 7, 1980, to Respondent demanding that Respondent deposit the $20,000 into Villacis' account. Again hearing nothing from Respondent, Penalver on numerous occasions attempted to contact him by telephone in order to again demand the immediate return of the $20,000 deposit. Being unsuccessful, Penalver wrote the Respondent on November 20, 1980, and January 22, 1981, both times demanding the return of the $20,000 earnest money deposit. After the letter of January 22, 1981, Respondent agreed to meet with Penalver in Penalver's office. On February 2, 1981, the Respondent and his wife met with Penalver. During that meeting, Respondent advised Penalver that the $20,000 was no longer available and that he and his wife had used the money to make mortgage payments and cosmetic improvements on their personal residence. Respondent challenged Penalver to sue him to get the money back. After discussing Respondent's position with Villacis, Penalver filed a civil action for return of the $20,000. In his Answer to the Complaint filed in that litigation, Respondent admitted that he had used the $20,000 deposit for mortgage payments and other personal household expenses and for payment of his IRS tax deficiency. Villacis obtained a Final Judgment in the civil action in the amount of $20,000 plus interest and costs on October 6, 1982. Respondent testified that he did not return the $20,000 earnest money deposit because, in approximately October 1980, Villacis verbally agreed to loan the $20,000 to Respondent. Villacis strongly denied making any offer of a loan to Respondent. The purported loan agreement would have occurred after Penalver had twice written Respondent regarding immediate return of the $20,000 and seven months after the $20,000 had disappeared from the escrow account. Further, after Penalver sent his November demand letter, Respondent wrote Villacis in December of 1980 asking that Villacis consider loaning Respondent the $20,000 in exchange for an unrecorded mortgage on Respondent's personal residence. Clearly, Respondent's testimony is not credible. As of the date of the formal hearing in this cause, the Final Judgment in favor of Villacis and against Respondent remained unpaid and Respondent had still not returned to Villacis the $20,000 earnest money deposit.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding Respondent guilty of the allegations contained within the Administrative Complaint filed against him and revoking his license as a real estate broker/salesman. DONE and RECOMMENDED this 30th day of April, 1984, in Tallahassee, Leon County, Florida. LINDA M. RIGOT, 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 30th day of April, 1984. COPIES FURNISHED: Tina Hipple, Esquire Division of Real Estate 400 West Robinson Street Orlando, Florida 32801 David I. Schlosberg, Esquire 525 North 27th Avenue, Suite 100 Miami, Florida 33125 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff, Executive Director Division of Real Estate 400 West Robinson Street Orlando, Florida 32801
Findings Of Fact Respondent Amy Ostrau is a registered real estate salesman having been issued License No. 0144468 by the Board of Real Estate. The last known address of the Respondent is c/o Ann Ford, Inc., 7370 Northwest 5th Street, Ft. Lauderdale, Florida 33317. The Respondent, at all material times alleged herein, was a registered real estate salesman employed by Ann Ford Realty, Inc. On or about March 29, 1980, Respondent obtained a written deposit receipt and contract for sale and purchase from a prospective purchaser, H. Steven Hill. The contract indicated that the selling broker Ann Ford, Inc., broker, held an initial deposit of $500.00. (Respondent's Exhibit 1) The $500.00 deposit check was received by Respondent from a friend of Hill because Hill did not have a check available at that time. Respondent placed the deposit check in her office file and it remained there until Friday, April 11, 1980 when a second deposit check, in the amount of $17,750.00, was presented by the buyer. At this time, the first deposit check was returned to Hill by the Respondent. Respondent presented the second deposit check to her broker and it was then deposited by mail into the broker's escrow account on April 15, 1980. The check evidently was credited to the broker's account on April 15, 1980. (The response to request for admissions refers to the pertinent month as August, which is obviously in error.) On or about April 17, 1980, and as a result of a request by Hill, a building inspection was conducted on the house. The inspection disclosed several deficiencies in the house and the estimated repair cost for the deficiencies exceeded the amount specified in the contract for repairs. Payment of the second deposit check in the amount of $17,750.00 was stopped on April 21, 1980 by Hill, and, as a result, there was no earnest money deposit remaining in the escrow account. Respondent's husband, an attorney, Norman M. Ostrau, represented the purchaser, H. Steven Hill, in the transaction. Respondent was asked by Hill to hold the $500.00 earnest money deposit check until the contract was accepted and signed by the sellers. Pursuant to these instructions, Respondent failed to turn over the deposit check to her employer immediately upon receipt of the same. A civil action for damages is pending in the Broward County Circuit Court brought on behalf of the sellers of the property against the buyer and broker, with counterclaim by the buyer. (Respondent's Exhibit 2)
Recommendation That the Board of Real Estate suspend the license of Respondent, Amy Ostrau, for a period of thirty (30) days pursuant to Subsection 475.25(1)(k), Florida Statutes. DONE and ENTERED this 4th day of March, 1982, in Tallahassee, Florida. THOMAS C. OLDHAM 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 4th day of March, 1982. COPIES FURNISHED: Michael J. Cohen, Esquire 2715 East Oakland Park Boulevard, Suite 101 Fort Lauderdale, Florida 33307 Michael Rifkin, Esquire OSTRAU & RIFKIN 8751 West Broward Blvd. Suite 302 Plantation, Florida 33324 Mr. C. B. Stafford Executive Director Board of Real Estate Post Office Box 1900 Orlando, Florida 32801 Frederick H. Wilsen, Esquire Assistant General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue Whether Respondents committed the offenses set forth in the six-count Administrative Complaint dated October 15, 2003; and, if so, what penalty should be imposed.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: The Department of Business and Professional Regulation, Division of Real Estate (the "Department"), is the state agency charged with enforcing the statutory provisions pertaining to persons holding real estate broker and sales associate's licenses in Florida, pursuant to Section 20.165 and Chapters 455 and 475, Florida Statutes (2003). At all times relevant to this proceeding, Respondent Richard R. Page, was a licensed Florida real estate broker/officer, having been issued broker license no. KB-0148248. He was the qualifying broker for Aztec Realty. At all times relevant to this proceeding, Respondent Aztec Realty, was a corporation registered as a Florida real estate broker, having been issued corporate registration no. CQ-0156640. Aztec Realty's business location was 4456 Tamiami Trail, Charlotte Harbor, Florida 33980. Barbara Kiphart was a 13-year employee of the Department who had performed thousands of audits of broker records. After conducting agent interviews on an unrelated matter in the office of Aztec Realty, she informed Mr. Page that she planned to perform an audit of the corporation's escrow accounts. Ms. Kiphart testified that it was routine for the Department to perform such audits when visiting brokers' offices for other reasons. Ms. Kiphart informed Mr. Page that she would need all documents necessary to complete an audit of Aztec Realty's escrow accounts, including bank statements, account reconciliations, and liability lists. Mr. Page referred Ms. Kiphart to Cheryl Bauer, Aztec Realty's financial manager. With Ms. Bauer's assistance, Ms. Kiphart completed the audit on June 12, 2003. Three accounts were examined: the sales escrow account; the security deposit account; and the property management account. The sales escrow account was found to be in balance, with liabilities equal to the bank balance of $382,300.52. The security deposit account was found to have liabilities of $45,533.29 but only $16,429.84 in its bank balance, a shortage of $29,103.45. The property management account was found to have liabilities of $22,545.54 but only $16,594.71 in its bank balance, a shortage of $5,950.83. Ms. Kiphart testified that the security deposit account had not been reconciled in the year 2003, and she had no way of saying when it was last reconciled. She determined the account's balance from Aztec Realty's bank statements, but had to extrapolate the liabilities from a computer printout of security deposits. Ms. Bauer testified that she handles the finances for all aspects of Aztec Realty's real estate sales business, including the sales escrow account, and that she was able to provide all the information Ms. Kiphart needed to audit that account. However, Ms. Bauer had no responsibility for the other two accounts, both of which related to the rental property management side of Aztec Realty's business. She had to obtain information about those accounts from Jill Strong, her newly- hired counterpart in property management. At the time she provided the computer printout on the property management accounts to Ms. Bauer and Ms. Kiphart, Ms. Strong told them that she knew the numbers were inaccurate. Aztec Realty had purchased Tenant Pro, a new rental management software package, in 2001. In the course of approximately 18 months, Aztec Realty had three different employees in Ms. Strong's position. One of these short-term property managers had misunderstood the software for the security deposit account. Opening balances were entered for accounts that had, in fact, already been closed out with the deposits returned. This had the effect of inflating the apparent liabilities in that account. The previous property manager was also unable to print checks on the printer attached to her computer terminal. Ms. Bauer would print the deposit refund checks on her own printer, with the understanding that the property manager was recording these entries against the security deposit account. Ms. Strong discovered that these entries had not been recorded. Thus, monies that had been paid out to owners, renters, and vendors were never recorded anywhere besides a sheet that Ms. Bauer kept for printing out checks, again inflating the account's apparent liabilities. Ms. Strong had been working for Aztec Realty for about one month at the time of the audit. She was still in the process of sorting out the problems in the security deposit account, hence her statement to Ms. Bauer and Ms. Kiphart that she knew the numbers were inaccurate. Subsequent to the Department's audit, Ms. Bauer and Ms. Strong commenced their own audit of the security deposit and property management accounts. Their efforts were complicated by a storm and tornado that struck the area on June 30, 2003. The offices of Aztec Realty suffered over $100,000 in damage, including water damage to the roof that caused the office to be flooded. Records were soaked and Ms. Strong's computer was destroyed. By mid-July 2003, Ms. Bauer and Ms. Strong had completed their corrected audit of the security deposit account. They concluded that the actual shortfall in the account was $13,764.43. That amount was immediately transferred from the real estate operating account to the security deposit account to bring the latter account into balance. The real estate operating account was essentially Mr. Page's personal funds. As to the property management account, also referred to as a "rental distribution" account, Ms. Bauer and Ms. Strong performed a subsequent audit indicating that the account was out of balance on the positive side. They discovered that there were items paid out of the property management account that should have been paid from escrow and vice versa. When the audit brought the accounts into balance, the property management account was approximately $200 over balance. In an audit response letter to Ms. Kiphart dated July 16, 2003, Mr. Page acknowledged that the property management account had been improperly used to pay occasional expenses, but also stated that the practice had been discontinued. At the hearing, Mr. Page conceded that no reconciliations had been performed on the security deposit account or the property management account from at least January 2003 through May 2003. Mr. Page and Ms. Bauer each testified that the corrective actions taken in response to the audit have been maintained and that there have been no accounting problems since June 2003. Aztec Realty has contracted to sell its property management department. The evidence established that no client of Aztec Realty or other member of the public lost money due to the accounting discrepancies described above. Neither Mr. Page nor Aztec Realty has been subject to prior discipline. Mr. Page has worked in the real estate business in the Port Charlotte area for nearly 30 years and is a past president of the local association of realtors. He credibly expressed remorse and testified that, given his position in the community, he was "mortified" at having allowed his company to be placed in this position. Aztec Realty has operated for nearly 30 years and currently has 20 employees and approximately 65 agents.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order: Dismissing Counts II and III of the Administrative Complaint against Mr. Page; Dismissing Counts V and VI of the Administrative Complaint against Aztec Realty; Imposing an administrative fine against Mr. Page in the amount of $1,000 for the violation established in Count I of the Administrative Complaint; and Imposing an administrative fine against Aztec Realty in the amount of $1,000 for the violation established in Count IV of the Administrative Complaint. DONE AND ENTERED this 27th day of July, 2004, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of July, 2004.
The Issue The issues are whether Respondents committed the offenses set forth in the Administrative Complaint, and if so, what disciplinary action should be taken.
Findings Of Fact Based on the evidence presented at the hearing, the undersigned makes the following findings of fact: At all times material to this proceeding, Mrs. Bashant held a Florida real estate salesperson license, number 0551150, which was involuntarily inactive. At all times material to this proceeding, Mr. Bashant held a Florida real estate broker license, number 0419768, which was involuntarily inactive. At all times material to this proceeding, Mr. Bashant was the broker of record for The Real Estate Group, Inc., a corporation which was no longer in business and which had no escrow accounts. The corporation's license to do business as a real estate agency has been inactive since May 12, 1993. Florida's Department of State, Division of Corporations, administratively dissolved the corporation on August 13, 1993. On December 8, 1993, Mr. Bashant executed a written offer to purchase a house belonging to John and Carolyn DelPrete (Sellers). The Bashants wanted to buy the house, located at 194 North East Blairwood Terrace, Jensen Beach, Martin County, Florida, as their personal residence. Mr. Bashant gave the written offer to Stacy Mathias (Mathias), who was the Sellers' exclusive listing agent. The offer called for an initial cash deposit of $1,000 and an additional payment of $9,000 in the form of a promissory note, payable at closing. The $1,000 cash deposit was to be held in trust by the Real Estate Group, Inc. This first offer reflects that the buyers rather than the sellers would pay for title insurance. Mr. Bashant never intended to make a $1,000 cash deposit in any escrow account or to make and deliver a $9,000 promissory note at closing. Instead, he only intended to execute and deliver a $10,000 promissory note at closing. He executed a $10,000 promissory note but did not deliver it to anyone until he gave it to his attorney in January of 1994. Sometime between December 8, 1993 and December 14, 1993, Mathias presented the offer to the Sellers. They would not agree to accept the $9,000 promissory note at closing. The Sellers also wanted to make certain other changes and additions to the contract. Mathias prepared a second draft of the original offer which required an initial cash deposit of $1,000 to be held in escrow by The Real Estate Group, Inc. It also required an additional $9,000 cash deposit to be placed in escrow within ten (10) days after the effective date of the contract. The second draft of the offer did not include any language referring to a promissory note payable at closing. In the second draft, seller was responsible for providing title insurance. After receiving the second draft of the contract, the Bashants added and initialed a change in paragraph II(b) stating that a $9,000 promissory note would be paid at closing. The Bashants also made and initialed three other changes: (a) They added the master bedroom bedspread to the list of personalty in paragraph I(c); (b) They added "+ or -" to the finance amount in paragraph II(e); and (c) They added "+ or -" to the finance amount in IV(a). The Bashants signed and returned the contract to Mathias. They did not date their signatures. Mathias presented the contract to the Sellers who initialed the changes in paragraphs II(e) and IV(a). However, the Sellers struck through the language adding the master bedroom bedspread in paragraph I(c) and the promissory note language in paragraph II(b). The Sellers changed the party responsible for providing title insurance to buyer rather than seller and changed the time for acceptance from December 14, 1993 to December 15, 1993. On December 14, 1993, the Sellers initialed their changes and deletions, signed the contact, and returned it to Mathias. Mathias called Mr. Bashant on the telephone to discuss each of the changes. She specifically told Mr. Bashant that the Sellers would not accept a promissory note at closing. Mr. Bashant responded that he had no problem eliminating the promissory note language because he had just sold some cars and had the money to make the cash deposits. He agreed to initial the changes and pick up the contract. On December 15, 1993, Mathias delivered the contract to the Bashants. They initialed the change crossing out the bedspread in paragraph I(c). They did not initial the change eliminating the promissory note language in paragraph II(b), the change requiring the buyer to pay for title insurance in paragraph V, or the change setting December 15, 1993, as the time for acceptance in paragraph III. The Bashants added and initialed a provision requiring the Seller to pay $500 towards the cost of the title insurance in paragraph V. On December 16, 1993, the Bashants returned the contract to Mathias. Mathias told the Sellers about the last change requiring them to pay $500 towards title insurance. The Sellers would not agree to this provision. Therefore, Mathias agreed to pay $500 towards the cost of the title insurance to save the sale. With that understanding, the Sellers initialed the final change in the title insurance provision. Mathias never reduced to writing the agreement that she would pay $500 towards the cost of title insurance; however, she informed Mr. Bashant of her responsibility and he expressed no objection. The contract was contingent on the Bashants obtaining financing and being able to construct a 15' by 30' pool on the property. As of December 16, 1993, Mathias and the Sellers assumed that the contract was bilateral. Mathias never specifically asked the Bashants to initial the deleted promissory note language, the change in the time for acceptance, or the change in the party responsible for providing title insurance. Mr. Bashant told Mathias he would provide her with copies of the checks that he had deposited in escrow. He did nothing to correct the false impression that he had made the cash deposits. Sometime during December of 1993, the Sellers returned a cash deposit to potential buyers who had a preexisting right of first refusal to buy the Sellers' home. The record does not reveal a specific reason for the couple's decision not to exercise their option to purchase the Sellers' home. On December 23, 1993, Mrs. Bashant took several members of her family to see the Sellers' home. Mr. Bashant was not present at the time they made the visit. Shortly after January 1, 1994, the Bashants picked up a survey of the Seller's home from Mathias's office. The Bashants needed the survey to assist them in determining whether they could construct a 15' by 30' pool on the property. On January 4, 1994, Mr. Bashant faxed a message to Mathias stating that the pool could not be built as suggested by the Sellers because of a 25' buffer on the back side of the property. The message stated that Mr. Bashant would check on alternatives but that he wanted Mathias to be aware of the problem. Mr. Bashant also asked Mathias to send him a copy of the "bilateral contract." On or before January 5, 1994, Mathias talked to Mr. Bashant who said he would pick up a copy of the "bilateral contract" and give her a copy of the checks he had deposited in escrow. Later that day, a friend of the Bashants, Al Fontaine, picked up a copy of the contract for Mr. Bashant. Mr. Fontaine informed Mathias that he did not have the deposit check copies but that Mr. Bashant would furnish them. On January 13, 1994, Mr. Bashant told Mathias he would apply to the county for a variance to construct the pool. Mathias informed Mr. Bashant that another real estate agent, Carol Pierson, had clients who were interested in buying the property. Mr. Bashant replied that he was willing to step aside if someone else wanted to purchase the property. Carol Pierson took her clients to view the house. These clients were former prospective buyers who had recently received a settlement and were interested in purchasing a home immediately. They knew about the contract between the Bashants and the Sellers. Either no one ever informed the prospective buyers that the Bashants were willing to step aside or they were not interested in buying the house. In any event, they never made an offer. On January 19, 1994, Mathias sent Mr. Bashant a letter informing him that the prospective buyers had not made an offer. She assumed Mr. Bashant was working on the variance for the pool and reminded him that he had not produced copies of the checks deposited in escrow. On January 22, 1994, Mathias sent Mr. Bashant another letter demanding evidence that he had deposited the funds into the escrow account. Mathias advised Mr. Bashant that she intended to file a complaint with the Florida Real Estate Commission (Commission) failing the production of such evidence. On January 24, 1994, Mathias received a letter from Mr. Bashant stating that he understood the contract to be void when Carol Pierson's clients viewed the house. He informed Mathias of his attorney's opinion that the contract was null and void because of certain dates and signatures. Mr. Bashant enclosed a copy of a letter from Coral Gables Federal denying approval of the loan due to insufficient income. On January 27, 1994, the Sellers' attorney sent letters to the Bashants and The Real Estate Group, Inc., demanding a closing date or $10,000. On February 8, 1994, the Bashants' attorney responded claiming that contract contingencies had not been met and that the parties never agreed to the form of deposit. After Mathias filed a complaint with the Commission, Jonathan Platt, Petitioner's investigator, called the Bashants. He spoke with Mrs. Bashant who referred him to her husband. Mr. Bashant admitted that The Real Estate Group, Inc., was inactive and that naming it as the escrow agent was his mistake. He admitted that he had not deposited any funds in escrow. The record does not contain clear and convincing evidence that the Sellers lost potential buyers as a result of dealing with the Bashants. For some unspecified reason, one couple declined to exercise their option to buy and requested a refund of their deposit; however, no one contacted this couple when it became apparent that the sale to the Bashants would not close. Carol Pierson's clients looked at the house but, for some unknown reason, did not make an offer. Mathias never told Ms. Pierson that her clients could not make an offer or that the Bashants were willing to step aside. 34 During the period from December 16, 1993 through January 24, 1994, Mr. Bashant misrepresented and concealed his intentions concerning the contract. He never intended to deposit funds in escrow but he let Mathias believe he had made the deposits. The contract was improperly executed because the parties had not agreed in writing on the form of the escrow deposits. However, Mr. Bashant knowingly made false promises and operated under false pretenses by telling Mathias he would furnish her with copies of checks that did not exist. Mrs. Bashant signed the contract but never had any discussions with Mathias concerning the terms. There is no record evidence that Mrs. Bashant was aware of or participated in her husband's representations and promises to Mathias. On May 31, 1991, the Commission entered a final order against Mr. Bashant and the Real Estate Group, Inc. The Commission reprimanded Mr. Bashant's license, fined him, and placed him on one (1) year of probation for violation of Sections 475.25(1)(b), 475.25(1)(e), and 475.25(1)(k), Florida Statutes (1989). The basis of this disciplinary action included Mr. Bashant's failure to maintain trust funds and depositing and intermingling personal funds with trust funds.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Commission enter a Final Order finding that: (1) Respondent Diana L. Bashant is not guilty of violating any Florida statute; and (2) Respondent Gregory J. Bashant is guilty of violating Sections 475.24(1)(b) and 475.24(1)(o), Florida Statutes. It is further recommended that the Commission require Respondent Gregory J. Bashant to pay an administrative fine of $2,000 and revoke his license. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 19th day of December,1994. SUZANNE F. HOOD, Hearing Officer 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 19th day of December 1994. APPENDIX The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact (FOF) submitted by the parties to this case. Petitioner's Proposed Findings of Fact 1-2. Accepted in FOF 1-2 except for subordinate information. 3-4. Accepted in FOF 4-5 except for subordinate information. 5. Accepted in FOF 3. 6-7. Accepted as modified in FOF 6. Accepted in FOF 7-8. Accepted in FOF 11 except as to placement in sequence of events 10-13. Accepted in substance in FOF 12-16. 14-25. Accepted in substance in FOF 19-32. Rejected. Accepted as modified in FOF 34. Accepted in FOF 36. Considered as an argument concerning the credibility of a witness. Respondent's Proposed Findings of Fact 1-2. Accepted in FOF 1-2. Accepted in substance in FOF 4-5. Accepted as subordinate information. There is no competent substantial evidence that Mr. Bashant ever presented a copy of Respondent's Exhibit 1 to Mathias. Rejected; no persuasive competent substantial evidence. Accepted in FOF 3. Accepted as subordinate information. Accept that Mr. Bashant prepared Petitioner's Exhibit 1 in FOF 4-5; balance of proposed finding not supported by persuasive competent substantial evidence. 9-13. Accepted in substance in FOF 8-13. Accepted in FOF 22-23. Accepted in substance in FOF 20. Accepted in FOF 21. Accepted in substance in FOF 24-25. Accepted in substance in FOF 24-25 except there is no persuasive competent substantial evidence that Mr. Bashant disclosed a financial problem at that time. 19-20. Accepted in substance in FOF 24-25. 21-22. Accepted in FOF 28 except for accuracy of January 29 date. Accepted in FOF 30. Accepted in FOF 35. COPIES FURNISHED: Theodore R. Gay, Esquire Senior Attorney Department of Business and Professional Regulation 401 North West 2nd Avenue, N607 Miami, Florida 33128 William D. Anderson, Esquire Anderson & Galante Post Office Box 288 Stuart, Florida 34995 Darlene F. Keller Division Director Division of Real Estate Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Jack McRay General Counsel Department of Business and Professional Regulation Suite 60 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue Whether Respondent should increase its deposit pursuant to Section 624.411(3), Florida Statutes?
Findings Of Fact Petitioner is an insurance company domiciled in West Virginia which does business in several states, including Florida. Petitioner has been in existence for over 80 years and has conducted business in Florida for the past 30 or 40 years. Petitioner currently has approximately $540,000 on deposit in Florida, pursuant to Section 624.411(3), Florida Statutes. Florida has adopted the Uniform Insurer's Liquidation Act. Amounts held on deposit pursuant to Section 624.411, Florida Statutes, are held for the protection of all policyholders and creditors of the company who are located in a state which has adopted the Uniform Insurer's Liquidation Act. Petitioner has approximately $2,6000,000 on deposit in all states, of which approximately $1,300,000 is held for the protection of all policyholders. Amounts held on deposit in Florida can earn interest which is paid over to the Petitioner, and the deposits are held without cost to the Petitioner. Petitioner may at any time exchange the type of security or investment vehicle held on deposit as long as the market value of the replacement securities is equal to or exceeds the amount required to be on deposit. Amounts held on deposit, however, are not available to Petitioner for its operations and cannot be used to pay claims. Also, if the Petitioner wants to reduce the amount on deposit, it must receive approval from Respondent. For the calendar years ending 1983 through 1987, Petitioner's financial situation, as reflected in the financial reports filed with Respondent was as follows: YEAR CAPITAL & SURPLUS AND NET WORTH GAINS (LOSSES) FROM OPERATIONS 1983 $7.08 Million $1.51 Million 1984 7.43 2.30 1985 9.22 (0.63) 1986 8.13 (1.36) 1987 5.37 (3.22) Additionally, under the method of accounting used by the Respondent to evaluate the financial standing of insurance companies, Petitioner's Capital and Surplus and Net Worth would be lower than that reflected in the financial reports. Respondent's Review Procedures In determining the maximum amount of deposit which may be required under Section 624.411(3), Florida Statutes, Respondent uses a formula which allocates a portion of an insurance company's total obligations to Florida by multiplying the total obligations by a fraction the numerator of which is direct writings in Florida for the latest reporting period and the denominator of which is the total direct writings of the company for the same reporting period. Applying this formula to the financial data provided by Petitioner in its 1987 Annual statement or to the data in the March 31, 1988 Quarterly statement filed with the Respondent results in a determination that Respondent may require Petitioner to maintain the maximum deposit allowed by Section 624.411(3), Florida Statutes, if Respondent determines that good cause exists and that such an amount is warranted. In determining the amount of the deposit which should be required, Respondent looks at the following guidelines: (1) Solvency of the company, (2) Liquidity of the company, (3) Number of consumer complaints against the company, (4) Volume and concentration of Florida business conducted by the company, (5) history of regulatory compliance of the company, and (6) overall attitude of the company. Petitioner is solvent and liquid, under a strict interpretation of what these words mean, but both its solvency and liquidity have declined over the past year. Petitioner has taken steps which it believes will reverse the recent financial decline it has suffered. On the other hand, if Petitioner sustains the same loses it sustained last year, it may be insolvent by the end of this year.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent issue a Final Order finding that Petitioner does not need to increase its deposit pursuant to Section 624.411(3), Florida Statutes, at this time. DONE and ORDERED this 29th day of September, 1988, in Tallahassee, Florida. JOSE A. DIEZ-ARGUELLES 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 29th day of September, 1988. APPENDIX The parties submitted proposed findings of fact which are addressed below. Paragraph numbers in the Recommended Order are referred to as "RO ." Petitioner's Proposed Findings of Fact Proposed Finding of Fact Number Ruling and RO Accepted. RO1 and 8. Accepted as part of the record in this proceeding, but not as a Finding of Fact. First two sentences accepted. RO3 and 4. Third sentence rejected as not a finding of fact. Accepted. RO2. 5.-6. Rejected as irrelevant. First two sentences accepted generally. RO14. Last sentence rejected as not a finding of fact. Accepted. See Conclusions of Law section of the RO. First sentence accepted generally. RO10-11, and Conclusions of Law section of RO. Rest of paragraph rejected as argument; but see Conclusions of Law Section of RO. Accepted generally. See Conclusions of Law section of RO. ,12.,13. Rejected as argument. Rejected as irrelevant and argument. Whether the company will increase its profits is as speculative as the department's assertion that the company will be insolvent. The fact that the company made a profit for the first quarter of 1988 is not supportive of the prior sentence. See financial data for the first quarter of 1987 and compare with data for all of 1987. ,16.,17. Rejected as irrelevant, argument, and not findings of fact. Respondent's Proposed Findings of Fact Proposed Finding Ruling and RO of Fact Number Accepted generally. RO1. Rejected as not a finding of fact. Mr. Kummer, however, was accepted as an expert. Accepted. RO2. ,5.,6.,7. Accepted. RO4 and 6. 8.,9.,10.,11., Accepted. RO8. Accepted as set forth in RO9. The true net worth of the company cannot be conclusively established. Rejected as argument. Rejected as not a finding of fact. Accepted for proposition that net worth has declined. RO8. Cannot determine where 44 percent figure comes from. Accepted generally. RO14. Not a finding of fact. ,19. Accepted generally. RO10,11. Rejected as irrelevant. See ruling on Petitioner's proposed finding of fact 14. Rejected as argument. COPIES FURNISHED: William M. Furlow, Esquire 800 Barnett Bank Building 315 South Calhoun Street Tallahassee, Florida 32301 Gabriel Mazzeo, Esquire Michael C. Goodwin, Esquire Department of Insurance 413-B Larson Building Tallahassee, Florida 32301 Honorable William Gunter State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32300-0300 Don Dowdell General Counsel The Capitol, Plaza Level Tallahassee, Florida 32300-0300 =================================================================
The Issue The issue is whether Helena Mason or James Maher is entitled to the proceeds from the sale of the contents in a safe deposit box remitted as unclaimed property to the Department of Financial Services, Division of Unclaimed Property (Department).
Findings Of Fact The Department is charged with the responsibility and duty of delivering or paying over to a claimant property paid or delivered to the Department under the provisions of the Unclaimed Property Act, codified in chapter 717, Florida Statutes (2017). Unclaimed property is property that has been abandoned or lost by its owner for an extended period of time. Over the last 15 years or so, the Department has processed approximately 5,000,000 claims and paid $3.1 billion to the claimants. Claims concerning the contents of safe deposit boxes make up approximately five percent of the total claims processed by the Department. On December 27, 1996, Mr. Maher opened a safe deposit box account with SunTrust Bank in Orlando. The account was opened in the names of James Maher "or" Helena Mason, a friend who had resided with him for several years. Mr. Maher added her name to the account because he was unmarried, had no heirs, and did not want the contents of the safe deposit box to escheat to the State. Mr. Maher paid all fees on the box until 2010 when he stopped because of financial problems. The relationship between the two has ended. An "or" account means that either person listed on the account legally may claim all or part of the contents held in the account at any time prior to the items being declared unclaimed and then sold by the Department. § 717.12403, Fla Stat. See also § 655.937, Fla. Stat. (unless specifically provided otherwise in the lease or rental agreement, all lessees are permitted access to the safe deposit box and its contents). When the account was opened, Mr. Maher and Petitioner also agreed to be bound by the bank's Safe Deposit Box Rules and Regulations, which provide that each person had access to the "entire contents of the box." Dep't Ex. 4. Bank records reveal that between December 1996 and July 2005, Mr. Maher accessed the box nine times, while Ms. Mason never accessed the box. Neither person listed on the account attempted to remove any of the contents of the safe deposit box before the contents were treated as unclaimed property and sold. In 2015, SunTrust Bank reported to the Department an unclaimed safe deposit box in the names of James Maher or Helena Mason for the 2014 reporting year. The report was made after rent had not been paid on the box since 2010 and the account had become dormant for at least three years. If the contents of a safe deposit box are not returned to the owners of the account within a three-year dormancy period, the holder (the bank) must report and remit that property to the Department. Beginning no later than April 2012, the bank attempted to notify the two that the account was dormant. Dep't Ex. 4. The report states that Mr. Maher's address was listed as 2227 Catbriar Way, Oviedo, while Ms. Mason's address was listed as 1044 Chatham Pines, Apartment 20, Winter Springs. The report also states that the safe deposit box contained items of jewelry, coins, and miscellaneous personal papers, such as deeds, tax returns, surveys, and insurance policies. The jewelry and coins were sold by the Department pursuant to section 717.122, Florida Statutes, at an unclaimed property auction on July 13, 2017. The current amount held by the Department in the unclaimed property account is $18,871.46. Any person claiming an interest in unclaimed property may file a claim with the Department. § 717.124(1), Fla. Stat. Claims submitted to the Department must be made on prescribed forms together with documentation proving entitlement to the unclaimed property. Fla. Admin. Code R. 69G-20.0021(1). A claim form must be fully completed and manually signed by the claimant in order to be considered "complete." Fla. Admin. Code R. 69G- 20.0021(1)(b). The claimant must submit proof that he/she is the person listed on the account and entitled to the property. Fla. Admin. Code R. 69G-20.0021(4)(c)2. The Department always has construed a complete claim as one in which the claimant provides proof that he/she is the same individual listed on the account. If this is established, that person is "entitled" to the proceeds. The Department does not attempt to sort out who actually owned the contents of the safe deposit box before the contents were deemed to be unclaimed property. Therefore, the issue of which person listed on the account actually owned all or part of the contents is immaterial in determining who is entitled to the proceeds. On October 26, 2017, the Department received a claim filed on behalf of James Maher for the unclaimed property account. In support of his claim, Mr. Maher provided a copy of his driver's license and a Notice of Change in Benefits from the United States Social Security Administration, which demonstrated a connection to both the social security number submitted with his claim and the Catbriar Way address reported to the Department. The claim was deemed to be complete when it was filed on October 26, 2017. Mr. Graham, the director of the Department's Division of Unclaimed Property, gave a comprehensive description of the process used by the Department when conflicting claims are filed. His testimony was not disputed. He established that Mr. Maher's claim was "complete," "it meets every single item required to prove that it's right," and "it was done correctly." On November 13, 2017, the Department received a second claim filed by Asset Finders on behalf of Ms. Mason for the same unclaimed property account. In support of her claim, Asset Finders provided a copy of Ms. Mason's driver's license and the results of a search, which demonstrated a connection between Ms. Mason and the address reported by her to the Department. The claim was deemed to be complete when it was filed on November 13, 2017. After reviewing the competing claims, and verifying the information provided by the bank, on January 16, 2018, the Department issued a notice of intent to deny the claim filed on behalf of Ms. Mason and to approve the claim submitted by Mr. Maher. The basis for this decision was that Mr. Maher was the first person to submit a complete claim. This decision comports with the statutory mandate in the "Conflicting Claims Statute," section 717.1241(1)(a), which provides that the first person to submit a complete claim will be given the proceeds. Ms. Mason argues that the claim filed by Mr. Maher was incomplete because rule 69G-20.0021(1)(b) requires that the form must be signed by all persons making a claim, and Mr. Maher failed to secure her signature on his claim form before he submitted it to the Department. This construction of the rule would produce an absurd result and has been rejected. Petitioner also argues that she is the owner of the jewelry and therefore entitled to the proceeds. She testified that the jewelry was first owned by her grandmother, passed on to her mother, and then given to her in 1995. For safekeeping purposes only, Mr. Maher then placed the jewelry in the safe deposit box. On the other hand, Mr. Maher testified that the jewelry belonged to him, and he received it after his mother passed away in 1996. To resolve this dispute, however, it is unnecessary to determine who actually owned the jewelry. Once the contents are deemed to be unclaimed, ownership is not a statutory consideration in resolving conflicting claims.1/ In the same vein, Petitioner argues that a claimant must show entitlement to the property in order to prevail and Mr. Maher failed to do so. On this issue, the Department construes the statute to mean that if a claimant is the same person named on the account, he/she is "entitled" to the proceeds. This is a reasonable and logical interpretation of the statute. Mr. Maher satisfied this requirement. Petitioner argues that even though Asset Finders did not file her claim until November 13, 2017, she should prevail because she signed her claim form on October 21, 2017, before Mr. Maher signed and filed his claim. This contention is rejected, as the relevant statutory test is clear and requires the Department to award the proceeds to the claimant filing the first complete claim. Finally, Petitioner argues that she filed an affidavit with her application, while Mr. Maher did not. However, affidavits are required only if the proceeds from the sale are less than $250.00. § 717.124(3), Fla. Stat. By a preponderance of the evidence, Mr. Maher has established entitlement to the proceeds.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a final order approving the delivery of the proceeds from the sale of the contents of the safety deposit box to Mr. Maher. DONE AND ENTERED this 17th day of October, 2018, in Tallahassee, Leon County, Florida. S D. R. ALEXANDER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of October, 2018.
The Issue Whether the Respondent violated Subsection 475.25(1)(b), Florida Statutes, by failing to reconcile his accounts, having monies stolen from him by an employee, and withdrawing money from his escrow account as commissions. Whether the Respondent violated Subsection 475.25(1)(k), Florida Statutes, by failing to maintain funds paid to him as deposits for rentals, sales taxes, and security deposits in his escrow account until after the date of the rental.
Findings Of Fact The Respondent is a licensed real estate broker and was so licensed at all times relevant to the events which are a part of the Administrative Complaint. The Respondent holds license number 0177110 issued as a broker, t/a Sunspot Realty, 16428 West Highway 98A, Panama City, Florida 32407. On February 10, 1989, Elaine Brantley, an investigator for the Department of Professional Regulation, visited the Respondent's office for the purpose of conducting a financial audit of the records of the business. The Respondent was not present; and Teresa Tuno, the Respondent's secretary and wife, stated she would prefer that Brantley not review the records in her husband's absence. On February 14, 1989, Brantley telephoned the Respondent and made arrangements to audit Respondent's books on February 15, 1989. A review of the records by Brantley on February 15, 1989 revealed that the records were in a state of disarray and the ledgers were not posted. At that time, Brantley advised the Respondent that the records had to be put in order, the ledgers posted, and accounts reconciled by February 17, 1989, when she would reinspect the records. Brantley reinspected the records on February 17, 1989, and all the ledgers had been posted and the accounts had been reconciled through January. The audit revealed that Tuno had received $47,961.45 in security deposits, sales taxes, and rental deposits which were not refundable under the lease agreement. The audit revealed that the balance of the Respondent's escrow account was $33,321.45. The difference between the balance of the escrow account and the money received by the Respondent includes $8,000 which the Respondent paid to himself with checks drawn on the account for "commissions", and $6,540 which had been stolen by an employee of the Respondent. The monies stolen included cash deposits paid by rental customers to the employee and one check on the escrow account endorsed in blank and given to the employee to pay for items purchased for one of the rental units which the employee cashed and converted to his own use. The theft was reported to the local police and their investigation revealed that the employee had disappeared under suspicious circumstances, indicating foul play. The lease agreement states that a deposit of 50% of the rental rate was required to reserve a property and the deposit was refundable only if another tenant could be found for the same period. The Respondent's agreement with the owner of the property called for a commission of 30% of the rental receipts. However, there was no mention of when the commission was earned and under what circumstances it would be paid in the original rental agreement. Upon being criticized for this practice by Brantley, the Respondent repaid the total amount of the draws. Subsequently, he had a new agreement drawn purporting to authorize early payment of management fees. The new agreement states in pertinent part: Owner agrees to compensate Agent a commission of 30% of rental receipts with the exception of long term winter rentals which will be at a rate of 20%. Agent is authorized to draw management fees upon receipt of tenant's non-refundable reservation deposit. The balance of the escrow account was sufficient to meet any potential demands against it. Had the property been leased to another renter for the same period of time, the second renter's deposit would have been deposited to the account making up the funds refunded to the first renter. The audit also revealed that the Respondent had paid monies from the escrow account to a maintenance company operated by the Respondent for work performed on various of the properties. However, the Respondent had not debited the individual property accounts at the time the check was drawn. Each of the properties had a sufficient individual balance to pay for work charged against the property. The appropriate entries were made eventually in the ledgers for the property by the Respondent. The Respondent has amended his agreement with property owners to permit him to bill for repairs on their property on a cost-plus-10% basis to eliminate this problem. None of the actions by the Respondent resulted in financial loss to any of his clients, and the Respondent was cooperative and candid with the auditor.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Respondent: Be required to pay an administrative fine of $1,000 for violation of Section 475.25(1)(k), Florida Statutes, by distributing commissions to himself; Be required to pay an administrative fine of $1,000 for violation of Section 475.25(1)(k), Florida Statutes, by distributing payments to a maintenance company which he owned without debiting individual property accounts; and Be required to enroll and satisfactorily complete a course on maintenance of escrow funds and accounts. DONE AND ORDERED this 6th day of December, 1989, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN 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 6th day of December, 1989. APPENDIX A TO RECOMMENDED ORDER, CASE NO. 89-2681 The Respondent filed a letter in place of proposed findings which contained legal argument which was read and considered. It did not contain any findings. The Petitioner filed proposed findings which were read and considered as follows: Paragraphs 1-3 Adopted Paragraph 4, 1st sentence Adopted Paragraph 4, 2nd sentence Rejected as irrelevant Paragraphs 5-7 Adopted Paragraphs 8-10 Rejected. The terms of the contracts do not address when Tuno was entitled to his commission. Under the terms of the contracts the renters were not entitled to a refund of their advance deposit after a reservation was made unless a new renter could be found for the same time, in which case that renter would have to make a deposit. When Tuno was entitled to his commission was not addressed in the contracts. While findings that Tuno violated the provisions of statute relating to maintenance of funds in his escrow account; this failure was based upon the lack of clarity in the contracts and the high standard of conduct in maintaining escrow accounts which is required of licensees. COPIES FURNISHED: Ms. Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street P. O. Box 1900 Orlando, Florida 32801 Kenneth E. Easley, Esquire General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Steven W. Johnson, Esquire Department of Professional Regulation Division of Real Estate 400 West Robinson Street P. 0. Box 1900 Orlando, Florida 32802 Mr. Robert P. Tuno 16428 West Highway 98A Panama City, Florida 32407
Findings Of Fact Ann Doris Richman is a licensed real estate salesman holding license number 0073487. She was employed by Parman Florida, Inc., and her qualifying broker was John P. Schlicher. On April 20, 1985, Ms. Richman obtained a $1,000. deposit check and a written offer from James A. Angleton, Jr., to purchase condominium unit number 503 at the Charter Club Condominium, 600 Northeast 36th Street, Miami, Florida, at a price of $70,000.00. The offer stated that the transaction was to close within 180 days from receipt of an abstract or, at the purchaser's option, sooner if it was possible to do so. Mr. Angleton was to assume the existing mortgage. The brokerage fee for the transaction was to be $4,200.00. Mr. Angleton informed Ms. Richman that the $1,000.00 check which accompanied his Condominium Deposit Receipt Contract was not good, and would be replaced if the owners of the condominium unit accepted his offer. The owners of the condominium unit resided in Costa Rica and were not readily accessible to Ms. Richman. The $1,000.00 check was brought to the attention of Ms. Richman's broker, Mr. Schlicher, but was not deposited because Ms. Richman had been told that it was not good. The check was kept in the file with the contract. Toward the end of May, 1985, the owners of the apartment came to the Parman office in Miami and were shown the Angleton purchase offer, but the owners would not sell for the $70,000.00 Angleton offered, because it would not have covered the mortgage and the brokerage fee. They made certain handwritten changes to the contract, i.e., that the sales price would be $77,500.00, that the purchaser would deposit an additional $2,000.00 upon execution of the contract, and that the closing date was to be October 1, but sooner if possible. The brokerage fee was reduced to $3,000.00 Ms. Richman then called Mr. Angleton to tell him that the sellers had rejected his offer and made a counter-offer. Mr. Angleton did not come into the office of Parman Florida, Inc. until late June 1985. He initialed the changes the sellers had made on the contract and replaced the original $1,000.00 check with another check, which promptly was deposited. Ms. Richman changed the date at the foot of the contract when the replacement check was received from April 5, 1985 (the date Angleton's original offer had been made and the first $1,000.00 check had been given), to June 24, 1985, the date Angleton accepted the changes made in the contract by the sellers and made the new $1,000.00 deposit. Although the counter-offer included the additional requirement, which the sellers had interlineated by hand and Angleton had initiated, that an additional $2,000.00 deposit would be made upon the execution of the contract, Angleton made no additional $2,000.00 deposit then or at any other time. Ms. Richman never told the sellers the additional $2,000.00 deposit was not received. Angleton has stated various times when he claims to have made the $2,000.00 additional cash deposit the sales contract called for. He has said the cash was provided several days after June 24, 1985 (Tr. 41), and in late May 1985 (Tr. 43). Mr. Angleton and his lawyer, a Mr. Tryson, attempted, in December 1985, to secure the return of the $2,000.00 cash Angleton claims to have given Ms. Richman. In Tryson's letter of December 26, 1985, to Ms. Richman, Tryson stated that the $2,000.00 cash had been given after September 20, 1985. See Finding of Fact 9, post. Mr. Angleton is not only very confused as to the time the deposit was supposed to have been made, but he is wrong on the issue whether he gave a $2,000.00 cash deposit to Ms. Richman. No such thing happened. Ultimately, the sale was cancelled by the sellers because the closing did not take place within the time required by the contract. Mr. Angleton took the position, through his attorney, that the sellers had failed to deliver evidence of good title on a timely basis. The sellers made no claim to the $1,000.00 deposit, and Angleton's lawyer demanded from Ms. Richman on December 26, 1985, the return of the $3,000.00 deposit which Angleton claimed to have made. Angleton received a refund of $1,000.00, the amount of the check which was given on June 24, 1985, and had been deposited by Parman Florida, Inc.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED THAT: As to Count One, Respondent be found guilty of culpable negligence, reprimanded and fined $250.00, and As to Count Two, that count of the Administrative Complaint should be dismissed. DONE AND ORDERED this 24th day of March, 1987, in Tallahassee, Florida. WILLIAM R. DORSEY, JR 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 24th day of March, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-3284 The following constitute my specific rulings pursuant to Section 120.59(2), Florida Statutes (1985), on the proposed findings of fact submitted by the parties. Rulings on Proposed Findings of Fact Submitted by Petitioner Covered in Finding of Fact 1. Rejected as unnecessary. Covered in Finding of Fact 2. Covered in Finding of Fact 5. Rejected as unnecessary. Rejected as irrelevant to this matter. Covered in Finding of Fact 6. Rejected as subordinate to the findings made in Findings of Fact 6. Generally covered in Finding of Fact 7, but the date the counteroffer was acceptable was June 24, 1985, not June 25, 1985. Covered in Finding of Fact 7. Covered in Finding of Fact 8. Rejected because no $2,000.00 additional deposit was made by Mr. Angleton. Covered in Finding of Fact 6, although there was no proof that all $3,000.00 of the sales commission would have gone to Richman. Covered in Finding of Fact 8. Covered in Finding of Fact 10. Rejected as irrelevant. Rulings on Proposed Findings of Fact Submitted by Respondent Rejected as unnecessary. Covered in Finding of Fact 2. Covered in Finding of Fact 5. Sentences 1 and 2 covered in Findings of Fact 3 and 5. The remainder rejected as unnecessary. Sentences 1 and 2 rejected as unnecessary. Sentence 3 adopted in Finding of Fact 10. Rejected as unnecessary. Covered in Finding of Fact 7. Covered in Finding of Fact 8. Rejected as unnecessary. Rejected as recitations of testimony not findings of fact. Rejected as unnecessary. Rejected as unnecessary. Rejected as irrelevant and unnecessary. Rejected as argument, not findings of fact. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Division of Real Estate/DPR 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Allen P. Reed, Esquire 901 Brickell Avenue Miami, Florida 33131 Harold Huff, Executive Director Division of Real Estate/DPR 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Van Poole, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Joe Sole, General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 =================================================================
