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 issues posed for decision herein are whether or not the Respondent, Loretta Woloszyk, failed to account for or deliver a security deposit received by her, in violation of Section 475.25(1)(c), Florida Statutes, and whether or not Respondent derivatively violated Subsection 475.25(1)(a), Florida Statutes, in that she is guilty of a breach of trust in a business transaction and, therefore, violated Subsection 475.25(1)(a), Florida Statutes.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the following relevant facts are found. Loretta Woloszyk, Respondent herein, is presently registered with the Board of Real Estate as a broker/salesperson. On or about April 15, 1977, Respondent Woloszyk entered into a deposit receipt contract executed with John F. and Jeannine M. Chrest as purchasers of a house owned by Respondent Woloszyk located at 210 North G Street, Lake Worth, Florida. Pursuant to the terms of said deposit receipt contract, John E. Knowles signed as broker for receipt of a $300 cash deposit from the Chrests as purchasers. On or about April 22, 1977, the $300 deposit was placed in the escrow account of Sunshine Estates, Inc., the corporate broker by which the Respondent was employed. The deposit receipt contract was contingent upon the buyer qualifying for a Veterans Administration (VA) mortgage loan in the amount of $26,900. The relevant portion of the contract provided as follows: VA Appraisal: It is expressly agreed that, notwithstanding any other provisions of this contract, the purchaser shall not incur any penalty by forfeiture of earnest money or otherwise be obligated to complete the purchase of the property described herein, if the contract price or cost exceeds the reasonable value of the property established by the Veterans Administration. The purchaser shall, however, have the privilege and option of proceeding with the consummation of this contract without regard to the amount of the reasonable value established by the Veterans Administration. By letter dated May 25, 1977, the Chrests were notified that the subject property was appraised at $18,750, and thus was not acceptable under the minimum property appraisal standards of the Veterans Administration. With this notification, John Chrest went to the offices of Sunshine Estates, Inc., and demanded a return of his $300 earnest money deposit. John E. Knowles, as broker in receipt of the Chrests' $300 deposit, returned the $300 deposit check to Respondent Woloszyk, who deducted $200 from the Chrests' $300 deposit based on a separate rental transaction with the Chrests on the same subject property. During the hearing, John Chrest testified that he contacted Respondent for purchase of her residence situated in Lake Worth Farms. Mr. Chrest agreed during cross-examination that he initially contacted Respondent to "buy or rent Respondent's residence". He also testified that upon receipt of the VA appraisal at an amount below the agreed upon purchase price of $26,900, he agreed to pay to Respondent rent in the amount of $150 plus a $50 security deposit, which amount was deducted from the Chrests' security deposit. The FHA-VA deposit receipt contract contains a special condition entered by and between the parties (Woloszyk and the Chrests) indicating that "Buyer will pay rental of $225 per month until closing, beginning on or before May 1, 1977. Buyer will honor rental agreement for Kenneth Johnson, tenant, from April 1, 1977, to March 31, 1978, or $80 per month rent." Based thereon, and on John F. Chrest' s admission that be agreed to the rental fee which was deducted from his deposit received by Respondent Woloszyk, the administrative charges alleged are without basis. I shall so recommend.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is hereby, RECOMMEND: That the Administrative Complaint filed herein be DISMISSED in its entirety. RECOMMEND this 6th day of August, 1979, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of August, 1979 COPIES FURNISHED: John Namey, Esquire Department of Professional Regulation Board of Real Estate Post Office Box 1900 Orlando, Florida 32802 Ms. Loretta Woloszyk 733 Husiingbird Way, Apt. #3 North Palm Beach, Florida 33408
The Issue The purpose of the mandatory public hearing is to afford the public an opportunity to comment on the application from a foreign national for authority to organize Union Credit Bank, a proposed new bank to be located in Miami, Dade County, Florida.
Findings Of Fact On October 18, 1999, the Department received an application (Application) from a foreign national to organize a new bank, Union Credit. The proposed location of Union Credit was Miami, Dade County, Florida. The Department published a notice of receipt of the Application in the October 29, 1999, publication of the Florida Administrative Weekly. The Department has satisfied the notice requirements of Subsection 120.80(3)(a)1.a., Florida Statutes, and Rule 3C-105.103, Florida Administrative Code. By letter dated November 8, 1999, the Department made a timely request for additional information, including additional information from Union Credit's proposed officers and directors (Applicants). The Department did not receive all of the additional information that it had requested from the Applicants until March 1, 2000. On April 3, 2000, the Applicants, as required by federal law, filed a separate application with the Federal Deposit Insurance Corporation ("FDIC"). Identified on the Application are three individuals associated with Union Credit, Oddie Rishmague (O. Rishmague) , Miguel Rishmague (M. Rishmague), and Jorge Luis del Rosal, who are foreign nationals. Mr. O. Rishmague is a proposed director and the proposed sole owner. Mr. M. Rishmague is a proposed director, the proposed chairman of the board of directors, and a proposed officer. Mr. del Rosal is a proposed director. All other proposed officers and directors identified on the Application are citizens of the United States. The other proposed officers and directors are: John H. Blake, Alexander J. Evans, Robert Tamayo, Milton H. Lehr, and Grace V. McGuire. Mr. O. Rishmague, a proposed director and the proposed sole owner of Union Credit has more than 12 years of international banking experience. From 1988 to 1995, he served as Vice-Chairman of Banco Osorno. During his tenure, Banco Osorno grew from a small bank to the second largest bank in Chile. For the past five years, Mr. O. Rishmague has been a member of the board of directors of Corpbanca. In addition to his banking experience, Mr. O. Rishmague served as a director of Provida, a private company that manages $12 billion dollars of pension fund assets. Mr. Tamayo is the proposed president and chief executive officer for Union Credit. He has over 38 years of banking experience in the areas of international and domestic banking. From 1984 to July of 1993, Mr. Tamayo served as a Senior Vice President for Espirito Santos Bank of Florida, a state chartered domestic bank. From July of 1993 to 1999, he served as a Senior Vice President and General Manager of Banco Boliviano Americano’s Miami agency office. Mr. Lehr, a proposed director, has substantial banking experience. From 1976 to 1999 he served as a member of the board of directors of Republic National Bank of Miami. Mr. Blake, a proposed director, has over 13 years of banking experience. From 1986 to 1999 Mr. Blake served as a member of the board of directors of Republic National Bank of Miami. Mr. M. Rishmague, the proposed chairman of the board of directors, served two years as a member of the board of directors of Corpbanca. Ms. McGuire, a proposed director, is a self-employed bank consultant who has worked with numerous domestic and international banks on a variety of complex banking issues. Mr. del Rosal is a retired corporate executive. Mr. Evans is a certified public accountant. No evidence was presented and there is nothing in the record to indicate that the presently identified proposed officers do not have sufficient financial institution experience, ability, standing, and reputation to indicate reasonable promise of successful operation. No evidence was presented and there is nothing in the record to indicate that the proposed directors do not have sufficient business experience, ability, standing, and reputation to indicate reasonable promise of successful operation. None of the proposed officers or directors have been convicted of, or pled guilty or nolo contendere to, any violation of Section 655.50, Florida Statutes, relating to the Florida Control of Money Laundering in Financial Institutions Act; Chapter 896, Florida Statutes, relating to offenses related to financial institutions; or any similar state or federal law. Mr. Blake and Mr. Lehr, proposed directors who are not proposed officers, have had at least one year of direct experience as a director of a financial institution within three years of the date of the Application. Mr. Tamayo, the proposed president and chief executive officer, has had at least one year of direct experience as an executive officer of a financial institution within the last three years. The Applicants seek to organize Union Credit to provide a variety of competitive deposit products and other related banking services, including residential and commercial lending, within the Miami area. Union Credit’s target customers include individual consumers, professionals, and both small and large businesses. The initial gross capital for Union Credit will be $10,000,000.00, and will be classified as follows: $5,000,000.00 of paid-in capital; $4,750,000.00 of paid-in surplus; and $250,000.00 designated as undivided profits. Union Credit is authorized to issue, at opening, 1,000,000 shares of common stock at $10.00 per share. The initial capitalization of Union Credit is adequate in relation to its proposed business activities. However, should Union Credit’s capital fall below $10,000,000.00 within its first three years of operation, Mr. O. Rishmague will immediately contribute, from his own personal assets, the funds necessary to maintain Union Credit’s capital at the level of $10,000,000.00, thus ensuring that Union Credit’s gross capital remains, at a minimum, at $10,000,000.00. Thereafter, Mr. O. Rishmague has committed to infuse additional capital, as may be appropriate, as Union Credit grows in asset size. The local conditions in Miami are favorable to Union Credit’s business plan. Union Credit’s financial plan also appears reasonable and attainable. The Department and Applicants recognize that the corporate name of Union Credit is not, and cannot, be reserved with the Department of State. The Department of State no longer reserves corporate names. Union Credit will have suitable quarters. It will be located at 1150 South Miami Avenue, Miami, Florida. No member of the public appeared at the public hearing or spoke in opposition to the Application. No one testified in opposition to the Application. The Applicants cause notice of the public hearing to be published in the Miami Herald on May 4, 2000. The notice complied with the requirements of Rule 3C-105.106(1), Florida Administrative Code. The Applicants satisfied the notice requirements of Subsection 120.80(3)(a)4, Florida Statutes. DONE AND ENTERED this 3rd day of July, 2000, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 3rd day of July, 2000. COPIES FURNISHED: Alcides I. Avila, Esquire Patricia M. Hernandez, Esquire Holland & Knight, LLP 701 Brickell Avenue, Suite 3000 Miami, Florida 33131 Robert Alan Fox, Esquire Department of Banking and Finance 101 East Gaines Street Fletcher Building, Suite 526 Tallahassee, Florida 32399-0350 Honorable Robert F. Milligan Office of the Comptroller Department of Banking and Finance The Capitol, Plaza Level 09 Tallahassee, Florida 32399-0350 Harry L. Hooper, General Counsel Department of Banking and Finance Fletcher Building, Suite 526 101 East Gaines Street Tallahassee, Florida 32399-0350
The Issue The issue is whether Respondents' real estate licenses should be disciplined on the ground that Respondents allegedly violated a rule and various provisions within Chapter 475, Florida Statutes, as charged in the Administrative Complaint.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: When the events herein occurred, Respondents, Edward D. Armbruster and Colleen Michele Armbruster, were licensed real estate brokers having been issued license numbers 0002159 and 0362890, respectively, by Petitioner, Department of Business and Professional Regulation, Division of Real Estate (Division). Respondents served as qualifying brokers and officers of Respondent, Armbruster Realty, Inc., a corporation registered as a real estate broker and located at 1031 West Nelson Avenue, DeFuniak Springs, Florida. The corporation holds license number 0211855, also issued by the Division. On July 10, 1996, Gerald and Joyce Singleton, who had just relocated to California, entered into a contract with James B. and Joyce Patten to sell their single-family residence located on Madison Street in the City of Freeport, Florida, for a price of $78,000.00. The contract called for the Pattens to pay $1,000.00 as an earnest money deposit, to be held in escrow by Respondents. The contract further provided that "[c]losing shall be within 30 days (more or less) after acceptance of this contract," and that "[i]n the event that buyer defaults and deposit is forfeited, it is agreed said deposit shall be divided equally between seller and broker." The transaction was handled by Geraldine Dillon (Dillon), a salesperson in Respondents' office, who is now retired. Because the Pattens had recently moved to Walton County from Washington State, and they were temporarily living with a relative in a mobile home, the time for closing was of the essence. Accordingly, the Pattens inserted into the contract a provision requiring that a closing be held within "30 days (more or less)." This meant that a closing should be held on or about August 10, 1996, give or take a few days. The parties acknowledge that property boundary problems were somewhat common in certain areas of Freeport, including the area where the subject property was located. To satisfy the bank and title company, a surveyor was engaged to prepare a survey of the property. However, the parties agree that the surveyor noted problems with the boundaries of the lot. When a second surveyor would not undertake the survey because of similar boundary problems, Joyce Patten, who was the principal negotiator for the couple, notified Dillon that they did not wish to close because of potential title problems and wanted a refund of their deposit. Notwithstanding this concern, Dillon advised Joyce Patten that a third surveyor would be hired, at the seller's expense, and he could "certify" the property. Although Joyce Patten expressed concern that the bank might not accept a third survey after two earlier ones had failed, and she did not want to pay for another survey, she did not instruct Dillon to stop the process. Accordingly, Dillon engaged the services of Tommy Jenkins, a local surveyor, to perform another survey. After a certified survey was obtained by Jenkins on August 12, 1996, which Respondents represent without contradiction satisfied the lender and title company, a closing was scheduled within the next few days. This closing date generally conformed to the requirement that a closing be held by August 10, 1996, "more or less." The seller, who by now had relocated to California, flew to Florida for the closing, and the title company prepared a closing statement and package. Just before the closing, however, Respondents learned through a representative of the title company that the Pattens were "cancelling the closing," apparently in violation of the contract. Shortly after the aborted closing, Joyce Patten requested that Dillon return their deposit. By this time, the Pattens had already entered into a second contract to buy another home in the same area and closed on that property before the end of August. Respondents were never informed of this fact by the Pattens. On August 21, 1996, Colleen Armbruster prepared a rather lengthy letter to the Pattens (with a copy to the sellers) in which she acknowledged that they had orally requested from Dillon that their escrow deposit be returned. The letter has been received in evidence as Petitioner's Exhibit 4. Armbruster stated that she was "perplexed" that they were demanding a refund of their earnest money deposit, given the fact that the seller had "met the terms and conditions of the sale." Armbruster outlined the three reasons in the contract which would allow the Pattens to withdraw without forfeiting their deposit, but noted that none were applicable here. Accordingly, she advised them that the seller would be consulted as to his wishes regarding the deposit, and that the Pattens should contact her if they had any questions. Through oversight, however, she did not include a notice to the Pattens that they must respond to her letter within a stated period of time reaffirming their demand for the trust funds, or the deposit thereafter would be disbursed pursuant to the contract. By failing to include this specific language, and sending the letter by regular rather than certified mail, return receipt requested, Respondents committed a technical, albeit minor, violation of an agency rule. Even so, the Pattens acknowledged receiving the letter, and there is no reason to believe that they did not understand its import, especially the requirement that they contact the broker if they disagreed with the proposed disbursement of the money. It can be reasonably inferred that the Pattens did not respond because they "figured [they weren't] going to be able to get [their] money back" due to their failure to perform. On September 13, 1996, the seller's attorney advised the Pattens by letter that the seller considered the deposit forfeited pursuant to paragraph 15(a) of the contract, which pertains to the "Default" provisions. The Pattens never responded to either letter, and they also failed to respond to telephone calls made by Respondents or their agents regarding this matter. In view of the Pattens' lack of response or reaffirmance of their demand, and the fact that they had already closed on another property, Respondents logically and fairly assumed that the Pattens were in agreement with the disbursement procedures outlined in Coleen Armbruster's letter of August 21. Accordingly, on September 17, 1996, Edward Armbruster, who had not been involved in this transaction to date, in good faith signed two disbursement checks giving $697.50 to the seller and retaining the balance for his firm. This division was consistent with the terms of the contract. In making this disbursement, there was no intent on the part of Respondents to trick, deceive, breach their trust, or in any way unlawfully deprive the Pattens of their deposit. Respondents did not notify the Florida Real Estate Commission (Commission) that they had received conflicting demands for a deposit, nor institute any other procedures regarding the deposit, since they no longer had any good faith doubt as to whom was entitled to their trust funds. This was because the Pattens had failed to respond to letters and telephone calls regarding the sellers' claim to the deposit. There is no evidence that Respondents have ever been the subject of prior disciplinary action during their lengthy tenure as licensees. At the same time, it is noted that Respondents acted in good faith throughout the process and genuinely believed that there was no dispute. It should also be recognized that, for at least part of the time, the Pattens were working two contracts simultaneously without advising the realtors.
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 finding Respondents guilty of a technical violation of Rule 61J2-10.032(1), Florida Administrative Code, and Section 475.25(1)(e), Florida Statutes, and that they be given a reprimand. All other charges should be dismissed. DONE AND ENTERED this 28th day of July, 1998, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 28th day of July, 1998. COPIES FURNISHED: Henry M. Solares, Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900 Christine M. Ryall, Esquire 400 West Robinson Street Suite N-308 Orlando, Florida 32801-1772 Edward D. Armbruster Colleen M. Armbruster Post Office Box 635 DeFuniak Springs, Florida 32433 Lynda L. Goodgame, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact At all times material here to, Respondent has been a licensed real estate broker under the laws of the State of Florida, having been issued license number 0044295. On or about June 4, 1981, Respondent, representing himself to Doris Colon as the duly appointed, qualified and acting broker for Alvin Katz if, and representing that Alvin Katzif was the owner of certain real property located at 636-638 Southwest Eighth Avenue, Miami, Florida, accepted from Colon a written offer to purchase said property. Colon's offer was accompanied by a deposit of $5,000, receipt of which was acknowledged by Respondent on or about June 6, 1981. That deposit was delivered to the Respondent, as broker, to be held by him in escrow under the terms of the Deposit Receipt. The vendor named in the Deposit Receipt Agreement Alvin Katzif, was unable to sell the property in accordance with the terms expressed in that Deposit Receipt Agreement. Therefore, the sale was never consummated. Approximately one month after signing the Deposit Receipt Agreement, Alvin Katzif advised Respondent that he did not hold title to the property and that there were numerous and diverse claims to the property. Respondent never placed Colon's $5,000 deposit in an escrow account but rather placed the deposit in a personal account. Colon, through counsel, made a demand for the $5,000 earnest money deposit. Respondent failed to provide Colon with an accounting or delivery of her deposit until such time as she obtained a civil judgment against him. At no time did Respondent request an escrow disbursement order or submit the matter to arbitration or seek interpleader. Respondent converted Colon's $5,000 earnest money deposit to his own use. On or about the same day that Colon gave Respondent her $5,000 deposit made payable to him, Respondent gave Colon a check for $10,000 made payable to her. The $10,000 paid to Colon was not a loan to her and had no relation to the Katzif/Colon transaction. Rather, the $10,000 was a deposit toward the purchase of a duplex owned by Colon in which Respondent was then living as a tenant and which he desired to purchase from Colon. That transaction was completed, and the closing took place on August 12, 1981. The closing statement reflects credit given to Respondent of $10,000 toward the purchase price of the duplex he bought from Colon. The duplex Colon sold to Respondent is located at 2931-41 Southwest Sixth Street, Miami, Florida. When Respondent gave Colon his $10,000 deposit toward the purchase price of the duplex which he bought from her, he took her to friends of his at Intercontinental Bank, where she opened an account. She then wrote the $5,000 check out of that account, which check was the deposit which accompanied her offer on the property she wished to purchase from Katzif. In other words, the only relationship between the $10,000 check given to Colon by Respondent and the $5,000 check given to Respondent by Colon is that the fact that Respondent gave Colon a $10,000 down payment on the duplex he was purchasing from her gave Colon the opportunity to make an offer on the Katzif property using $5,000 of the $10,000 as a deposit on the offer to Katzif.
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 in the Administrative Complaint and revoking his real estate broker license number 0044295. DONE and RECOMMENDED this 10th day of August, 1983, 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 10th day of August, 1983. COPIES FURNISHED: Bruce D. Lamb, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Martin I. Carlin, Esquire 3000 Biscayne Boulevard, Suite 402 Miami, Florida 33137 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff, Executive Director Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 William M. Furlow, Esquire Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802
Recommendation Based upon the Findings of Fact and Conclusions of Law stated above the Hearing Officer would recommend that the Florida Real Estate Commission issue a letter of admonition to Leroy Wilson clarifying his responsibilities and the maintenance of his financial affairs and proper business office when operating as a broker. DONE and ORDERED this 22nd day of June, 1977, in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Manuel E. Oliver, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 Henry Latimer, Esquire Mavrides and Latimer 5353 Southwest 40th Avenue Fort Lauderdale, Florida 33314
The Issue Whether the Respondent's real estate license in Florida should be disciplined because the Respondent committed fraud, misrepresentation, dishonest dealing by trick, scheme or device, culpable negligence or breach of trust in a business transaction in violation of Subsection 475.25(1)(b), Florida Statutes. Whether the Respondent's real estate license should be disciplined because the Respondent failed to account and deliver funds in violation of Subsection 475.25(1)(b), Florida Statutes.
Findings Of Fact Petitioner is a state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular, Section 20.30, Florida Statutes, Chapters 120, 455 and 475, Florida Statutes, and the rules promulgated pursuant thereto. Respondent Joyce A. Wolford is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0313643 in accordance with Chapter 475, Florida Statutes. The last license issued was as a broker, t/a Blue Ribbon Realty, 1400 N. Semoran Boulevard, Orlando, Florida 32807. As To Counts I and II Diane Ortiz was employed by Respondent Joyce Wolford to perform various duties, including operating the computer and taking messages. During her employment with Respondent, Diane Ortiz completed a contract for sale and purchase of certain real property which was signed by Jane Evers as buyer. In conjunction with the Evers contract, Ortiz did receive an earnest money deposit in the form of a cashier's check for the sum of $1000 and made payable to Blue Ribbon Realty. The earnest money deposit check given by Evers was turned over to Respondent by Ortiz. The endorsement on the Evers deposit check was Blue Ribbon Realty. The sale was contingent on Evers' assumption of the existing mortgage. The mortgagee did not approve Evers, and the transaction did not close. Evers contacted Ortiz and Respondent on several occasions and demanded return of her $1,000 deposit. Evers met personally with Respondent and demanded return of the $1,000 deposit. Evers sent a written demand for the return of the deposit by certified mail to Respondent on August 9, 1989. Despite Evers repeated demands for return of the $1000 deposit, Respondent has not returned any money to Evers. Jane Evers filed a lawsuit against Respondent Joyce Wolford in the County Court for Orange County, Florida, for the sum of $1,000 and court costs. A Final Judgment in the civil lawsuit was rendered for Jane Evers against Joyce Wolford for $1,000 principal plus $73 in court costs on March 15, 1990. Respondent has not satisfied the Final Judgment awarded to Evers or any portion thereof. As To Counts III and IV Anthony Pellegrino did enter a contract to purchase certain real property known as Lakefront Motel near Clermont, Florida. Respondent Joyce Wolford did negotiate the contract. Pellegrino did give Respondent a $5,000 earnest money deposit in the form of a cashier's check to secure the contract for purchase of Lakefront Motel. The cashier's check given as a deposit by Pellegrino was endorsed to Blue Ribbon Realty account #0880510063. The Lakefront transaction did not close, and Pellegrino demanded that Respondent return the $5,000 earnest money deposit on several occasions. Respondent has not returned the $5,000 deposit or any portion thereof to Pellegrino. The $5,000 earnest money deposit for the Lakefront contract was transferred to a mortgage company for a transaction involving a condominium that Pellegrino sought to purchase. Said condominium transaction did not close. In neither case did Respondent request the Florida Real Estate Commission to issue an escrow disbursement order. On July 2, 1990, the Florida Real Estate Commission entered a Final Order in the case of Department of Professional Regulation v. Joyce Wolford, finding Respondent guilty of failure to account and deliver a commission to a salesman and imposing a reprimand and an administrative fine of $1000.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Respondent be found guilty of having violated Subsections 475.25(1)(b) and (d), Florida Statutes (1989), as charged in Counts I, II, III and IV of the Administrative Complaint. It is further recommended that Respondent's real estate license be suspended for two years, imposing an administrative fine in the amount of $1,000 and, upon completion of the suspension period, placing Respondent on probation for a period of two years with such conditions as the Commission may find just and reasonable. DONE AND ENTERED this 8th day of October, 1990, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of October, 1990. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's proposed findings of fact: Accepted in substance: Paragraphs 1,2,3,4,5,6,9,10,11,12,13,14,15,16,1,7,18,19,20,21,22,24 (in part), 25 Rejected as cumulative or irrelevant: 7,8,23,24 (in part) Respondent's proposed findings of fact: Accepted in substance: Paragraph 1 Rejected as against the greater weight of the evidence: Paragraph 2,3 COPIES FURNISHED: Janine B. Myrick, Esquire Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32801 Raymond Bodiford, Esquire 47 East Robinson Street Orlando, FL 32801 Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32801 Kenneth Easley General Counsel Department of Professional Regulation Northwood Centre 1940 North Monroe Street Suite 60 Tallahassee, FL 32399-0750
The Issue Whether Petitioner has forfeited his rights and benefits under the Florida Retirement System.
Findings Of Fact Prior to April 29, 1993, Travis Pitts was the Clerk of the Circuit Court in Washington County, Florida, and a constitutional officer. See Article V, Section 1, Florida Constitution. Petitioner had been elected and seated in the Clerk's office in January 1981. Subsequently, he was reelected twice to the Clerk's position. As Clerk, Petitioner received a salary from the Clerk's office. Petitioner served as the Clerk of Washington County until February 19, 1990, when he was suspended by Executive Order No. 90-51, by then Robert Martinez. As an elected official, Petitioner was both a public officer and a public employee of Washington County who performed the constitutional duties of Clerk as well as other duties taken on by the Clerk's Office. Petitioner's duties included serving as custodian of all county funds and court funds for Washington County. All the funds belonged to Washington County and were only cared for by its officers. Mr. Pitts was a member of the Elected State and County Officers Class of the Florida Retirement System (FRS). The Petitioner was suspended because on February 19, 1990, he was charged by information with one count of grand theft. The information stated as follows: . . . Travis W. Pitts . . . did knowingly and unlawfully obtain or use or endeavor to obtain or use the property of another, to-wit: money, of the value of $300.00 or more, with the intent to temporarily or permanently deprive Washington County of a right to the money or benefit therefrom, or with the intent to temporarily or permanently appropriate the money to his own use . . . Although not specified in the information, the case against Petitioner centered upon four separate types of monies constituting the alleged theft, as follows: Insurance premium funds; Travel advances; One $4,582.00 withdrawal of certain funds by Pitts; and Clerk's office cash collections [one $2,000.00 amount, and one $1,440.00 amount]. In regard to the insurance premiums, all of the constitutional officers for Washington County, along with the Board of County Commissioners, held a group health insurance policy with Administrative Systems of Tennessee, Inc. (ASTI) an out-of-state insurance carrier. The evidence did not show that Petitioner negotiated with ASTI for the insurance policy on behalf of the other county employees. Each of the constitutional officers, and the Board of County Commissioners, submitted their monthly insurance premium payments directly to Petitioner, as Clerk who, in turn, mailed one premium payment check per month to the insurance carrier. Essentially, beginning in December 1985, and continuing until September 1986, the first year of the insurance contract with the health insurance carrier, Petitioner deposited each of the constitutional officer's premium payments, and the Board of County Commissioner's premium payments, into a Clerk's office account, and thereafter sent one Clerk's office account check to the insurance carrier for that month's premium payment. However, beginning October 1986, and continuing until September 1988, the second and third years during which the health insurance policy was in effect, Petitioner deposited the constitutional officer's premium payments and the Board of County Commissioner's insurance premium payments directly into one of Petitioner's personal checking accounts, and wrote one personal check for each month's premium amount which check was forwarded to the insurance carrier. During this time, Mr. Pitts personal account was chronically overdrawn in excess of the amount deposited for the insurance premiums. The testimony at the Final Hearing was that the documents and records from the insurance carrier indicated that each of Petitioner's personal checks was forwarded by U.S. Mail to the insurance carrier, and that the carrier deposited such checks in the carrier's account anywhere from sixty (60) days to over one hundred (100) days after the Constitutional Officers and the Board of County Commissioners had submitted their premium payment checks to Petitioner. Petitioner therefore had the use of the insurance premium funds sixty (60) to one hundred (100) days after the date that he had deposited those checks into his personal account, which funds were used to cover the overdrafts in his personal account. Eventually, in September of 1988, the policy was cancelled for nonpayment of premiums. The nonpayment was voluntary on the part of the insureds who desired to cancel the policy. The evidence was clear that all insurance premium monies were accounted for and that there was no money missing. However, there appeared no reason that the premium monies were deposited in Pitts' personal account since the Board and other employees paid their premiums to Pitts in a timely manner. Testimony at the Final Hearing regarding travel advances was that Petitioner had drawn funds from the Clerk's office operating account on four separate occasions, and that Petitioner had drawn funds from the Board of County Commissioner's accounts on two separate occasions. All six of these withdrawals were to be used for travel which was to be taken by Petitioner in the future. The testimony differed as to when actual travel was taken, and differed as to whether travel was taken at all. The essence of such testimony was that the travel advances were taken by Petitioner, sometimes well in advance of actual travel, and that the amounts of the advances did not bear any relationship to actual travel expenses for individual trips. The testimony was clear, however, that when Petitioner was suspended from office on February 19, 1990, or within a day or two thereafter, Petitioner returned all such money which had been outstanding at that time from previous travel advances to the Clerk's office. Again, the problem with the travel advances was that the funds were deposited in Petitioner's overdrawn personal bank account and were immediately used for the overdrafts. Moreover, the reason for the travel advances is at best unclear and tenuous since Petitioner had the authority to immediately reimburse himself after any travel expense had been incurred. The overall impression was that the Petitioner was taking money from the Clerk's office account to cover an overdrawn bank account and calling the withdrawn clerk's funds advance travel. Testimony at the Final Hearing regarding the $4,582.00 withdrawal amount was that a check dated December 15, 1988, a check in the amount of $4,582.00, was written on the Washington County Clerk's operating account made payable to Travis W. Pitts, signed by Petitioner, and thereafter deposited to Petitioner's personal account. Such funds were not redeposited into the Clerk's office operating account until mid to late January, 1989. The testimony was that Petitioner therefore had the use of the funds for a four to five week period. Petitioner testified that such funds were withdrawn for the sole purpose of his making one insurance premium payment to the health insurance carrier, and that the funds were re-deposited after the insurance carrier did not deposit one of Petitioner's individual checks made payable to the insurance carrier. Finally, testimony at the Final Hearing regarding cash collections of the Clerk's office was that on December 30-31, 1988, Petitioner removed $2,000.00 in cash, followed by his removal of $1,440.00 in cash, from the "cash drawer" of the Clerk's office, and, in turn, Petitioner submitted one personal check in the amount of $2,000.00, and one personal check in the amount of $1440.00, into the Clerk's office "cash drawer." These two checks were thereafter deposited by the Clerk's office into the Clerk's accounts, but one check did not "clear" Petitioner's personal bank account for ten (10) days and the other check did not clear Petitioner's personal bank account for seven (7) days. The cash was deposited by Mr. Pitts into his personal bank account which was overdrawn. Before the two checks cleared Pitts' account, the cash went immediately to pay the overdraft and was used to pay other personal bills. The evidence demonstrated and the testimony presented to the jury at the criminal trial was that Petitioner had the use of the Clerk's funds for ten (10) days and seven (7) days, respectively. Petitioner testified that he was personally responsible for all cash receipts in the Clerk's office, and that for reasons of safety he had removed the cash from the cash drawer, and replaced such cash with his personal checks. Petitioner stated that on December 31, the upcoming three day weekend would place the cash at risk by being inside the Clerk's office. Petitioner testified that he therefore removed that cash, replaced the cash with personal checks, and thereby removed the danger of theft or loss. Testimony at Final Hearing also demonstrated that Petitioner, along with other courthouse employees, and judges, court reporters, and members of the public, cashed checks from the cash available in the Clerk's cash drawer, and that the cashing of such checks was "standard practice." However, the checks cashed by other employees were never for the amounts which Petitioner "cashed checks" and never with the factual scenario accompanying Petitioner's check cashing and checking account. In sum, the total amount of funds taken by Mr. Pitts from the Clerk's office for which he was charged for theft was $137,870.00. On August 3, 1990, following a jury trial in Washington County Circuit Court Case No. 90-00025CF, Petitioner was found guilty of grand theft. The jury verdict entered by the jury stated: VERDICT WE, THE JURY, FIND AS FOLLOWS, AS TO THE DEFENDANT IN THIS CASE: The Defendant is guilty of theft of money with a value of $300.00 or more, as charged. On October 6, 1990, in Washington County Circuit Court Case No. 90- 00025CF, the judge withheld adjudication of guilt and sentenced Petitioner to six months of community control followed by four years probation. The judge also sentenced Petitioner to 400 hours of community service hours and imposed a fine of $5,000.00 and court costs of $225.00. No restitution was ordered. Mr. Pitts appealed the verdict to the First District Court of Appeal in Case No. 90-3305. He subsequently filed a notice of voluntary dismissal which was granted by the court. Thereafter, the Senate and the State of Florida appointed B. J. Driver, as a Special Master, to conduct preliminary and final hearing on the suspension of Mr. Pitts from office. The Special Master was to provide the Senate with a report of his investigation for the Senate's subsequent action. The hearing was conducted on September 20, 1991. On February 20, 1993, the Senate considered the report and recommendation of the Special Master and voted in open session to sustain Executive Order 90-51, as amended by Executive Order 91-248, and remove Mr. Travis W. Pitts from the Office of Clerk of the County and Circuit Court of Washington County. Subsequently, by report and order dated April 29, 1993, the Florida Senate in In re: Executive Suspension of Travis W. Pitts, Clerk of he Circuit Court, Washington County, Florida the order removing Petitioner from the Office of Clerk of the Circuit Court, was filed with the Department of State and in the permanent record of the Florida Senate.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Division enter a final order forfeiting Petitioner's right to his pension and refunding any amounts he has paid in, if any. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 25th day of March 1994. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of March, 1994.
Findings Of Fact Respondent is and at all material times has been a licensed mortgage broker in the State of Florida. He holds license number HK0008557. In 1986, he was employed by Cityfed Mortgage Company. In July, 1986, Respondent met John and Audrey-Ann Marzano, husband and wife, at a party at the home of a mutual friend, Barbara Fieste. The Marzanos and Respondent agreed that he would pre-qualify them for a mortgage in order to determine the maximum amount of a mortgage loan that they could anticipate receiving. On or about October 22, 1986, the Marzanos signed a contract to purchase a home in a subdivision known as Coventry in the Melbourne area. The contract was prepared by Ms. Feiste, who was not a licensed real estate broker or salesman. Respondent, who was a licensed real estate broker or salesman at the time, reviewed the contract to determine its sufficiency from the point of view of a mortgage lender. No counterparts or copies of the contract remain in existence. Respondent was to deliver the signed contract offer to the seller or its attorney, but never did so. On October 22, 1986, the Marzanos delivered to Respondent a check drawn on their personal checking account in the amount of $2500 and payable to "EMBY Associates." "EMBY Associates" was a corporation that Respondent had recently formed or was about to form. This payment represented the Marzanos' earnest money deposit that was to accompany the contract offer. Respondent deposited the check in his personal checking account on October 23, 1987. He endorsed the check, "EMBY Assoc" and, beneath that, "MB Reed." After receiving the check from the Marzanos, Respondent or someone at his direction added to the payee line on the check, "or MB Reed." Respondent deposited the Marzanos' check into an account that he had opened about ten days earlier. Either Respondent or Ms. Feiste could sign checks drawn on the account. In fact, the account belonged to Respondent, who signed all of the checks drawn on it during the months of October and November, 1987. Ms. Feiste was on the account only in the event that Respondent died or became disabled. The Marzanos' bank honored the check and debited their account in the amount of $2500. Between the opening of the account and the day that Respondent deposited the Marzanos's check, he had written checks in the total amount of $2570.22 against total deposits during the same period of $937.04. All of the checks drawn on the account were for personal expenses of Respondent. The single largest check was in the amount of $2025 representing rent for Respondent's personal residence. The monthly statement dated November 3, 1986, shows that one of Respondent's checks was returned for insufficient funds one week after he deposited the Marzanos' check. The monthly statement dated December 3, 1986, shows that 19 of Respondent's checks were returned for insufficient funds between November 14 and December 3, 1986. The contract signed by the Marzanos was never signed by the seller. Notwithstanding the fact that Respondent stressed to the Marzanos the importance of acting quickly on the house due to its favorable price, he allowed them to submit a contract without a deadline for the time for acceptance. After making the offer, the Marzanos applied for a mortgage with Cityfed Mortgage Company through Respondent. Weeks passed with the Marzanos hearing nothing about their offer. Finally, they demanded that Respondent return to them their money. Respondent offered different explanations as to what had happened to their money, but declined to repay them the $2500 that they had entrusted to him. Repeated demands were unsuccessful and the Marzanos never received their money back. Respondent testified that he took $2500 in cash in a sealed envelope to the receptionist of the law firm that represented the seller. He testified that he neither asked for nor received a receipt and that that was the last that he saw of the money. An attorney representing the firm testified that the firm had never accepted a cash earnest money deposit. Respondent testified that the source of the cash was the repayment by a Mr. Hamel of the final installment of a note, of which Respondent had no copy. Respondent omitted mention of this critical fact in his lengthy answer to the Administrative Complaint or in any of his statements to investigators. Respondent's testimony that he delivered $2500 cash is implausible. In fact, he used the Marzanos' money for personal expenditures and never transferred cash representing their earnest money deposit to anyone.
The Issue The Administrative Complaint presents essentially the same factual allegations in its various counts supporting different legal violations. These factual allegations are summarized as follow: Reinlie represented to Estelle Pitts that if she put up the earnest money deposit for her son, William Lambert, on the commercial property that Lambert wanted to purchase in the form of notes secured by mortgages on her house: (1) the mortgages and notes would not be a lien on her property; (2) the mortgages and notes would not be recorded; (3) the mortgages and notes would be returned to her when Lambert obtained financing for the property he desired to purchase; (4) the mortgages and notes merely showed good faith on Lambert's part regarding his offer to purchase; (5) Lambert's contract for purchase was contingent upon the sale of commercial property which he owned in South Florida; and (6) even if the sale to Lambert did not go through, Mrs. Pitts would not be responsible for the mortgages and notes. Contrary to his representations, Reinlie recorded the various mortgages and notes executed by Estelle Pitts. Contrary to his representations, Reinlie advised Estelle Pitts that she would be responsible for the mortgages and notes, and that if said notes were not satisfied "foreclosure proceedings would be initiated." Petitioner called Estelle Pitts, who testified concerning the representations made by Reinlie. Reinlie testified, denying that he had made said representations. William Lambert was the only other person present when most of these alleged representations were made. Lambert, who had suffered a physically debilitating stroke, could not attend the hearing, and his deposition was received into the record. Lambert's recollection of the events was wholly supportive of neither his mother's nor Reinlie's recollection of the events. None of the witnesses were disinterested: Reinlie's license was in jeopardy; Mrs. Pitts' home was in jeopardy; and Lambert is Mrs. Pitts' son. The conflicts in testimony can only be resolved from extrinsic facts and the credibility of the witnesses. Having considered the facts, the testimony of Reinlie is deemed more credible. Both parties submitted post hearing proposed findings of fact in the form of a proposed recommended order. To the extent the proposed findings of fact have not been included in the factual findings in this order, they are specifically rejected as being irrelevant, not being based upon the most credible evidence, or not being a finding of fact.
Findings Of Fact The following Findings of Fact are based upon the prehearing stipulation of the parties: At all times in question, the Respondent, James Reinlie, Jr., was a registered real estate broker in the State of Florida and is the holder of license number 0112757. The parties were duly noticed pursuant to the provisions of Chapter 120, Florida Statutes (1981). William C. Lambert, Estelle Pitts' son, did not have the necessary money with which to furnish a deposit to the sellers of the Robin Hood Motel at the time the contract for sale and purchase and the addendums thereto were executed. A contract for sale and purchase was executed on August 11, 1979, and August 13, 1979, between Irene B. Smith, seller, and William C. Lambert, Sr., buyer, for the purchase of the Robin Hood Motel, located at 1150 North Atlantic Avenue in Daytona Beach, Florida. Respondent Reinlie was a co-broker on that contract. On August 13, 1979, an addendum to the contract for sale and purchase was executed between Irene B. Smith, seller, and William C. Lambert, Sr., buyer. On January 7, 1980, and January 8, 1980, a second addendum was executed under the original contract for sale and purchase between Irene B. Smith, Gilbert Brown and Liselotte M. Brown, sellers, and William C. Lambert, Sr., buyer. On August 13, 1979, a mortgage deed and mortgage note were executed by Estelle Pitts and Linda L. Smith (Mrs. Pitts' daughter) as mortgagor, to B.I.C. Realty, Inc., escrow account, as mortgagee, said note in the principal amount of $5,000 and secured by a first mortgage on 900 West New York Avenue, Deland, Florida, also known as: . . . the east 60' of the north 150' of Lot 1, Block I, Stetson Home Estates MB 10, page 79, Volusia County, Florida; Said property is the residential home of Estelle Pitts with title in the names of Estelle Pitts and Linda L. Smith. On October 16, 1979, a second mortgage was executed by Estelle Pitts and her daughter, Linda L. Smith, dated November 1, 1979, and secured by a mortgage note in the amount of $5,000 on the residential home of Estelle Pitts, said property being described in detail in paragraph 7 above. On October 16, 1979, a third mortgage was executed by Estelle Pitts and her daughter, Linda L. Smith, dated November 1, 1979, and secured by a mortgage note in the amount of $5,000 on the residential home of Estelle Pitts, said property being described in detail in paragraph 7 above. On August 17, 1979, Respondent Reinlie took the first mortgage deed and mortgage note to The Abstract Corporation and instructed that it be recorded in the public records of Volusia County, Florida, said first mortgage deed and mortgage note in the amount of $5,000 dated August 11, 1979, and executed August 13, 1979. On November 29, 1979, Reinlie took the second mortgage deed and note to The Abstract Corporation and instructed that it be recorded in the public records of Volusia County, said second mortgage deed and note in the amount of $5,000 dated November 1, 1979, and executed October 16, 1979. On December 4, 1979, Reinlie took the third mortgage deed and note to The Abstract Corporation and instructed that it be recorded in the public records of Volusia County, said third mortgage deed and note in the amount of $5,000 dated December 1, 1979, and executed October 16, 1979. On May 2, 1980, Estelle Pitts notified Reinlie that she wanted the aforesaid mortgages and notes returned to her immediately. On May 14, 1980, Reinlie notified Mrs. Pitts that he would not return the mortgages and notes and had been advised by the "former" owners of the Robin Hood Motel that they desired to pursue their full deposit, plus expenses, under the contract and, if necessary, would foreclose the mortgages and notes in order to enforce their legal rights. On May 19, 1982, Reinlie executed three satisfactions of mortgages on the three mortgages and notes referred to in paragraphs 7, 8 and 9 above upon the advice of counsel. The following Findings of Fact are based upon testimony and evidence adduced at the hearing: Reinlie did not state to Mrs. Pitts that the mortgages would not be recorded and would not be a lien on her property. (See Lambert deposition, pages 11 and 12.) William Lambert was aware that the mortgages and notes were to be recorded and would be a lien on his mother's property. Mrs. Pitts did not understand the transaction and the terms thereof, although Lambert explained it to her. (See Lambert deposition, page 13.) The contract for purchase was not contingent upon the sale of Lambert's motel in Hollywood, Florida. Lambert signed the contract and was presumably aware of its terms. Reinlie did not represent to Mrs. Pitts that the contract for purchase was contingent upon the sale of her son's motel in Hollywood. (See transcript, page 20.) It was Lambert's intent to replace the mortgages on his mother's home with cash he would obtain from the sale of his motel in Hollywood. By substitution of the cash for the mortgages and notes, it was Lambert's understanding that his mother's home would not be "used," i.e., that her home was not in danger of foreclosure. However, Lambert realized that the money would have to be substituted for the mortgages and notes. Lambert felt that he could sell his Hollywood motel prior to the closing date on the Robin Hood Motel. Had Lambert sold his motel in Hollywood prior to said closing, the mortgages and notes on his mother's house would have been cancelled, i.e., "returned" to her. Lambert initially advised Reinlie that his mother owned her home free and clear. At that time, both Lambert and Reinlie were seeking the means for Lambert to come up with the earnest money deposit, which does show a "good faith offer." Reinlie suggested the use of Mrs. Pitts' home to secure the deposit. Lambert discussed this matter with his mother, who agreed and executed the various mortgages and notes. Reinlie did not make the primary approach to Mrs. Pitts, and it was Lambert who primarily explained the transaction to her. Both Lambert and Mrs. Pitts stated that they failed to understand the terms and effect of the mortgages and notes. The addendum to the contract provides that the buyer will provide the seller within five days of the date of the contract a mortgage title binder showing the $5,000 deposit mortgage to be a first mortgage. Their failure to understand the transaction was not due to any misrepresentations or lack of explanation to them by Reinlie. The original closing date was set for late October 1979. When Lambert was unable to sell his Hollywood motel, Reinlie arranged for extensions of the closing date, the first until early December, and the second until January 1980. The considerations for these two extensions were the second and third mortgages and notes. After these were prepared, without signatures, they were delivered to Lambert, who in turn returned each of the executed documents to Reinlie shortly before Reinlie recorded them. Reinlie was not present when said mortgages and notes were executed. Around Thanksgiving 1979, when it became evident that Lambert was having difficulty closing, Reinlie suggested that the contract, which was similar to an option, be sold. Although the contract would have had to be discounted, it would have reduced the potential loss. Reinlie attempted unsuccessfully to do this. Reinlie's suggestion of this course of action did not assure the sale of the contract. (See transcript, page 91.) By late January 1980, when Lambert could not close, Reinlie attempted to obtain an additional extension, which the sellers refused to grant. At that time, the contract for purchase was in default. In the spring of 1980, the sellers made demand upon Reinlie for their deposit money. Reinlie advised both Lambert and Mrs. Pitts of the sellers' demand and sought to obtain mortgage financing for Mrs. Pitts in lieu of initiating a foreclosure action. Mrs. Pitts did not elect to borrow the money. Lambert tendered $5,000 to Reinlie in order to settle the matter, which was rejected by the sellers. The sellers renewed their demand that Reinlie pay them their escrowed deposit. In a meeting with the sellers, Rein lie pointed out that if he foreclosed the mortgages there would be additional delay and legal costs. Because the notes had an interest rate of ten percent and were secured by the mortgages, Reinlie suggested that nothing be done during the life of Mrs. Pitts, but a claim be made against her estate. The sellers determined that this was a better approach than forcing Reinlie to foreclose on the mortgages. Thereafter, all of the parties determined that they desired to settle the matter. Reinlie advised the sellers that he would release the mortgages and notes to Mrs. Pitts if they, in turn, would release him from his obligation to pay them the escrowed money. This was finally done and the matter resolved on that basis.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law that the Respondent, James Reinlie, Jr., did not violate Sections 475.25(1)(b), (d) or (j), Florida Statutes, it is recommended that the charges filed against him in the Administrative Complaint be dismissed. DONE and RECOMMENDED this 25th day of May, 1983, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, 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 25th day of May, 1983. COPIES FURNISHED: John G. DeLancett, Esquire James R. Mitchell, Esquire 801 North Magnolia Avenue, Suite 402 Post Office Box 6171-C Orlando, Florida 32853 Irving Gussow, Esquire Highway 17-92 Post Office Box 965 Fern Park, Florida 32730 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff, Executive Director Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 William M. Furlow, Esquire Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 =================================================================
