Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: At all times pertinent to this proceeding, respondent Alan Kaye was a licensed real estate broker in the State of Florida and respondent KNAC of Miami Realty, Inc. was a corporation registered as a real estate broker in the State of Florida. Respondent Alan Kaye was an officer of and qualifying broker for respondent KNAC of Miami Realty, Inc. Respondents secured a 90-day listing from Christina Trivino for the sale of her residence located at 271 N.W. 148th Street in North Miami, Florida. When that listing expired, respondents obtained an extension. On or about November 28, 1987, respondents solicited and obtained a sales contract for the purchase and sale of the Trivino property. In connection therewith, the purchasers, Marie C. Eduoard and Henry S. Roy, entrusted to the respondents a total earnest money deposit of $6,200.00, and the respondents placed the deposit in the escrow account of respondent KNAC of Miami Realty, Inc. In accordance with the provisions of the sales contract, the purchasers were to pay a total of $62,000 for the property, and assume the existing first mortgage in the principal amount of approximately $45,000. While the contract initially called for the closing to occur on or before February 15, 1988, Ms. Trivino was very anxious to close earlier due to some problems she was having with the Internal Revenue Service. Accordingly, the closing date was changed to occur on or before January 15, 1988. Among the terms of the sales contract was a provision that conditioned the sale upon the purchasers' assumption of the first mortgage in the principal amount of approximately $45,000. Paragraph 8 of the contract provided that If, after diligent effort on the part of the purchaser, the purchaser is unable to obtain said first mortgage, all monies deposited hereunder shall be refunded to purchaser and parties herewith agree to enter into a Release on Deposit Receipt; and this contract shall be declared null and void. At some point in time, it became known to the respondents and the seller Trivino that the bank which held the first mortgage on the subject property would not authorize an assumption of the mortgage by the purchasers without either a $3,000 paydown of the mortgage amount or the completion of qualifying papers by the purchasers. The testimony from Ms. Trivino and Mr. Kaye differ widely with regard to the dates upon which and the manner in which they became aware of this problem, as well as their communications with each other thereafter. Ms. Trivino testified that in early January, 1988, she became concerned about the status of the transaction and began making repeated calls to the respondents which calls were never returned. She admits talking with Todd Kaye, respondent's son, in the respondents' offices on January 5, 1988, whereupon the mortgage problem was discussed. At that time, needing "desperately" to sell the house, Ms. Trivino offered to hold a second mortgage for the purchasers in the amount of approximately $3,000.00. She states that she also spoke with the officials at the bank regarding the mortgage. In spite of numerous unreturned telephone calls, Ms. Trivino did not hear anything further from Mr. Kaye until his letter dated January 29, 1988. That letter informed Ms. Trivino of the mortgage situation and indicated that "there is some doubt whether or not the Buyer has this extra money." Mr. Kaye further informed Ms. Trivino that "for all practical purposes, since the closing has not taken place, due to no one (sic) fault, the contract is void." Ms. Trivino then had her employer, a licensed real estate broker, write a letter dated February 3, 1988, to Mr. Kaye requesting Mr. Kaye to retain the $6,200 deposit pending a determination of the matter. She asserts that she made numerous further attempts to contact Mr. Kaye regarding this matter, but he would not return her calls. According to Mr. Kaye, he delivered the sales contract to a title company in early December, 1987, with the requests that the title company do a title check, that the mortgage holder be contacted, and that a mortgage assumption package for the buyers be obtained. Mr. Kaye states that he was thereafter informed by the title company that the mortgage holder would not allow an assumption of the mortgage without a paydown of about $3,000. Mr. Kaye states that he communicated to the buyers the problem with the mortgage assumption and also communicated Ms. Trivino's offer to take a second mortgage for $3,000. According to Mr. Kaye, the buyers did not want a second mortgage and did not feel that they could qualify for an assumption of the first mortgage because they were unemployed at the time. Instead, they wanted a return of their $6,200 deposit. Mr. Kaye felt that the sales contract had become void because of the inability of the buyers to assume the first mortgage, as provided in Paragraph 8 of the sales contract. Accordingly, he returned the $6,200 deposit to the buyers on January 10, 1988. He did not request Ms. Trivino's consent nor did he notify Ms. Trivino that he had refunded the deposit to the buyers because he felt that Ms. Trivino was fully aware that "the deal was dead."
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the Administrative Complaint filed against the respondents be DISMISSED. Respectfully submitted and entered this 15th day of March, 1989, in Tallahassee, Florida. 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 15th day of March, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-4062 The parties' proposed findings of fact have been fully considered and are accepted and/or incorporated in this Recommended Order, with the following exceptions: Petitioner 8. The evidence demonstrates that the amount of the deposit was $6,200 in lieu of $6,000. 13. Partially rejected based upon the seller's testimony that she spoke to Todd Kaye in respondent's offices on or about January 5, 1988. 15. Accepted with the addition of the fact that the respondent communicated this offer to the buyers. Respondent 4. The evidence demonstrates that the amount of the deposit was $6,200 in lieu of $6,000. 8. The date of "early December" is rejected as not established by competent, substantial evidence. 10. Rejected as not established by competent, substantial evidence. COPIES FURNISHED: James H. Gillis, Esquire DPR, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Manuel M. Arvesu, Esquire 100 North Biscayne Blvd. Miami, Florida 33132 Darlene Keller, Executive Director DPR, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 =================================================================
Findings Of Fact The Respondent, Fred Mercuro, Jr., is a registered salesman of securities and has been since on or about May 12, 1976, and currently holds license Number 3946, which was issued by the Petitioner on or about January 1, 1978. On March 16, 1978, Respondent pled guilty to four counts of fraudulent sale of securities in violation of Section 517.301, Florida Statutes. The Respondent's plea of guilty was made in recognition of the following factual basis: That from June 1, 1974, to June 1, 1975, Respondent was president of Florida First Mortgages, Inc. During this period, Respondent employed, supervised and directed the activities of Clarence Stern and Martin Mayer, who held salesmen positions with Florida First Mortgages, Inc. During this period, Florida First Mortgages, Inc., sold notes for High Ridge Associates, Inc., which were backed by mortgages on property known as High Ridge Estates in Clay County, Florida. Under Respondent's direction and supervision and with his knowledge, employee Stern sold High Ridge notes and mortgages to Jacob Craig, David Wilding and Morris Feldman. Also under Respondent's direction and supervision and with his knowledge, Martin Mayer sold a High Ridge note and mortgage to Richard Sanders. Under Respondent's direction and supervision and with his knowledge, employees Stern and Mayer made the following statements to Jacob Craig, Morris Feldman, David Wilding and Richard Sanders: That the land upon which the investors were to receive mortgages was worth twice the amount invested or that the land was worth in excess of $5,000.00. Respondent made such statements in an effort to induce the above investors to believe that their investment was safe because of the value of the land and that the statement was made as an inducement to inflate the actual market value of the property. These statements respecting the market value were based upon an appraisal of High Ridge Estates prepared by Elmer Mullen which did not reflect the then existing fair market value of the High Ridge property, but rather, reflected the value of other developed properties sold by corporate sellers to out-of-state buyers over the phone on long-term agreements for deed. Respondent made no effort to determine the actual market value of the High Ridge property nor did he inform the investors that the appraisal was not based on actual sales of property in High Ridge Estates. The Circuit Court of the Fifteenth Judicial Circuit, Criminal Division, in and for Palm Beach County, Florida, in Criminal Information 77- 1933-CF, accepted the Respondent's plea of guilty, withheld adjudication of guilt and placed the Defendant Mercuro on probation for five years and fined him $5,000.00. As a condition of probation, Respondent Mercuro was required to voluntarily surrender, relinquish and divest himself of all licenses granted to him by the State of Florida with the exception of driving and fishing licenses within ninety (90) days of the date of the imposition of the Court's sentence. (See Petitioner's Exhibits 1 and 2.) Respondent offered no evidence to refute the documentary evidence received during the course of this hearing.
Recommendation Based on the foregoing findings of fact and conclusions, it is hereby, RECOMMENDED: That the Respondent's registration as a salesman of securities (license Number 3946) be REVOKED. RECOMMENDED this 3rd day of May, 1979, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings Room 101, Collins Building Mail: 530 Carlton Building Tallahassee, Florida 32301 (904) 488-9675
Findings Of Fact Respondent, Pedro F. Hernandez, was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0038833. Hernandez was at all times material hereto the owner and sole qualifying broker for Respondent, Pedro Realty, Inc., a Florida corporation, registered as a real estate broker, license number 0067966. On July 19, 1984, Pedro Realty, Inc., procured a contract between Orfa Martinez and Ana Flores, purchasers, and Mr. and Mrs. Hector Sierra, sellers, for the sale of the Sierra's home. Pursuant to the terms of the contract, the purchasers deposited $3,000.00 with Pedro Realty, Inc., to be held in escrow subject to the terms of the contract. Pertinent to this case, the contract provided: NEW INSTITUTIONAL FIRST MORTGAGE Purchaser shall obtain a first mortgage for the balance of the purchase price from a Federal Savings and Loan Association or other institutional lender at the prevailing interest rate . . . . Purchaser shall have only 45 days to apply for and obtain approval for said mortgage, and Purchaser shall make a diligent effort to obtain said mortgage . . . * * * MORTGAGE CONTINGENCY If, after diligent effort on the part of the Purchaser, the Purchaser is unable to obtain and/or qualify for said First Mortgage, all monies deposited hereunder shall be refunded to Purchaser and parties herewith agree to enter into a Release of Purchase and Sale Contract, and the contract shall be declared null and void. On July 21, 1984 the purchasers applied for a mortgage loan with Century Funding Corp. By letter of November 7, 1984, the purchasers and Pedro Realty, Inc. were notified that their application had been denied. In the interim the seller's attorney, by letter of September 21, 1984, notified the purchasers that the sellers considered the purchasers in default because of their failure to secure the new first mortgage within 45 days of the date of the contract. However, the sellers agreed to waive the default if the purchasers proceeded diligently with the lender. By October 24, 1984, the new first mortgage had still not been obtained. Consequently, the seller's attorney notified the purchasers and Pedro Realty, Inc., that the contract was in default and demanded that: Pedro Realty, Inc. release the deposit to me or my clients as partial damages. Upon the denial of their mortgage application, the purchasers demanded the return of their deposit from Pedro Realty, Inc. Subsequently, the attorney for Pedro Realty, Inc., by letter of November 30, 1984, advised all parties of the conflicting demands. His letter concluded: The purpose of this letter is to invite all interested parties to exert their best efforts to resolve this matter by immediately beginning serious discussions regarding the same. In the event an agreement is reached, it must be in writing signed by all parties. In the event an agreement is not reached by December 15th, we will have no alternative than to notify the Florida Real Estate Commission and interplead the 53,000.00 into the Registry of the Dade County Circuit Court. While some settlement discussion may have occurred between the principals in early December, 1984, it was unproductive. Clearly, no agreement was reached by December 15, 1984, and no discussions were held thereafter. However, Pedro Realty, Inc. took no further action until the Department advised it on March 8, 1985, that the purchasers had filed a complaint regarding their deposit. By letter of April 20, 1985, the attorney for Pedro Realty, Inc. requested that the Department provide him an escrow disbursement order form. However, on April 30, 1985, the Department refused his request and advised him that the request had to be submitted by the broker. On May 3, 1985 Pedro Realty, Inc. requested the escrow disbursement order form from the Department. The form was forwarded by the Department on May 10, 1985, and the completed form was filed with the Department May 23, 1985. On August 26, 1985 the Department issued an escrow disbursement order that the funds be disbursed to the purchasers
The Issue The issue is whether the Petitioner's application for registration as an associated person of Koch Capital, Inc. should be denied.
Findings Of Fact Petitioner, Glenn D. Whaley submitted a Form U-4, Uniform Application for Securities Industry Registration, seeking registration as an associated person of Koch Capital, Inc. One of the states in which Petitioner sought registration was the State of Florida. The Department of Banking and Finance (Department) is the Florida agency charged with the administration and enforcement of Chapter 517, Florida Statutes, the Florida Securities and Investor Protection Act (the Act), and its implementing rules. The Department denied Mr. Whaley's application for registration as an associated person in a letter dated August 27, 1990, based upon its determination that he had violated the Act, that he had filed an application for registration which contained a material false statement; and that his disciplinary history within the securities industry constituted prima facie evidence of his unworthiness to transact the business of an associated person. Mr. Whaley has been employed in the securities industry since approximately 1984, and has been employed with several different securities dealers, including Rothschild Equity Management Group, Inc. (Rothschild), Fitzgerald Talman, Inc., and H. T. Fletcher Securities, Inc. The effective date for Mr. Whaley's registration as an associated person of Rothschild in the State of Florida was April 18, 1985. In October 1985, Department examiner Michael Blaker, conducted an examination of the books and records of Rothschild. The examination revealed violations of the provisions of the Act, including the sale of securities by unlicensed representatives. The commission reports and sales journals prepared by Rothschild revealed that Mr. Whaley, while unregistered with the Department, had effectuated approximately sixteen (16) sales of securities during the period of April 1 through 17, 1985. On May 15, 1989, the State of Missouri Commissioner of Securities issued a cease and desist order against Fitzgerald Talman, Inc. and Glenn D. Whaley. The order found that Mr. Whaley had offered for sale and sold securities on behalf of Fitzgerald Talman, Inc. in the State of Missouri without benefit of registration for himself or the securities. On or about November 8, 1989, the Department issued an Administrative Charges and Complaint against Mr. Whaley seeking revocation of his registration as an associated person of H. T. Fletcher Securities, Inc. based on his failed to timely notify the Department of the Missouri Cease and Desist Order, as required by Rule 3E-600.010(1)(a), Florida Administrative Code. The Administrative Charges and Complaint were served on November 13, 1989. On or about December 12, 1989, the Department issued a Default Final Order revoking Mr. Whaley's registration with H. T. Fletcher Securities, Inc., based upon his failure to request a hearing regarding the Administrative Charges and Complaint. The Form U-4 requires the applicant to swear and affirm that the information on the application is true and complete to the best of his knowledge and that false or misleading answers will subject him to administrative penalties. The Form U-4 application contains no disclosure of the Department's December 1989, revocation of Petitioner's registration with H. T. Fletcher Securities, Inc., as required by Question 22E.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Banking and Finance enter a Final Order denying the application of Mr. Whaley for registration as an associated person of Koch Capital, Inc., in the State of Florida. RECOMMENDED this 25th day of January, 1991, at Tallahassee, Florida. WILLIAM R. DORSEY, JR. 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 25th day of January, 1991. COPIES FURNISHED: Margaret Karniewicz, Esquire Department of Banking and Finance The Capitol, Legal Section Tallahassee, Florida 32399-0350 Glenn D. Whaley 5400 Northwest Fifth Avenue Boca Raton, Florida 33487 Honorable Gerald Lewis, Comptroller Department of Banking and Finance The Capitol Tallahassee, Florida 32399-0350 William G. Reeves, General Counsel Department of Banking and Finance The Capitol Plaza Level, Room 1302 Tallahassee, Florida 32399-0350
The Issue The issue posed for decision herein is whether or not James T. Speaks, Respondent, engaged in conduct amounting to a failure to maintain in an escrow bank account deposits he received as a selling broker which were entrusted to him in the course of his brokerage activities until a proper or authorized disbursement of such monies was made. Based on its Administrative Complaint filed on May 17, 1978, the Florida Real Estate Commission, Petitioner, seeks to revoke, annul, suspend or otherwise discipline licensee James T. Speaks, who holds Florida Real Estate License No. 0083459, based on conduct which will be set forth herein in detail.
Findings Of Fact Based on the testimony presented during the course of the hearing, the following relevant facts are found: During October of 1976, Donna W. Ross was a listing broker to sell the property of Katherine Scanlon. During mid-October, 1976, Respondent Speaks located purchasers for the Scanlon property and submitted an offer to the listing broker, which offer was accepted by the seller. Respondent Speaks deposited a $1,000.00 binder deposit in his escrow account. (See FREC Composite Exhibit No. 7.) The closing of the real estate transaction in the Scanlon property took place in Attorney David Booher's office who, based on evidence received during the course of the closing, questioned Respondent Speaks as to the negotiability of a $1,000.00 check Respondent Speaks presented as a refund of the escrow deposit he had tendered to secure the deposit receipt contract for the Scanlon property. Virginia RawIs, who was formerly employed by Booher and Crabtree, Realtors, called the Barnett Bank of Regency to verify if sufficient funds were on deposit in Respondent Speaks' account and was advised that sufficient monies were not on deposit to cover the check. At that juncture, Respondent Speaks acknowledged that he had tendered a check which was drawn on an account without sufficient funds to cover it and agreed that the $1,000.00 binder deposit should be deducted from his commission monies due. This agreement was acceptable to all parties concerned at the closing and another check representing the commission monies due Respondent Speaks, less the $1,000.00 deposit, was drawn and made payable to Speaks. Donna W. Ross, the listing broker, was also present during the hearing and verified the testimony of Attorney Booher respecting the presentation by Respondent Speaks of the $1,000.00 check which was not secured by sufficient funds. As noted in the appearance section of this Recommended Order, the Respondent, James T. Speaks, did not appear during the hearing although copies of the Notice of Hearing were mailed to his last known addresses.
Recommendation Based on the foregoing findings of fact and conclusions of law, I hereby recommend that the Registered Real Estate Broker license of Respondent, James T. Speaks, be suspended for a period of two (2) years. RECOMMENDED this 5th day of January, 1979, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675
