Findings Of Fact Frederick Hodgdon (Hodgdon) has held Florida real estate broker license 0206805 at all times pertinent to this case. Hodgdon is owner and qualifying broker for Pelican Realty of Marco Island, Inc., (Pelican Realty), through which Hodgdon conducts business and which also is named as a respondent. At all times pertinent, Pelican Realty has held Florida corporate real estate broker license 0223934. July 24 through August 6, 1984, respondents placed the following newspaper advertisement in the Sun-Daze: DO YOU KNOW ... that all Florida real estate brokers are agents for the seller and CANNOT legally propose any lower than listed prices or better terms for the benefit of the buyer? UNLESS ... the broker legally qualifies himself as an agent for the buyer. As a Buyer's Broker Pelican Realty CAN and DOES exactly this and a lot more! Buyers pay no fees or commissions. Call or send for our informative brochure, you will be glad you did. The real estate buyer's best bet for the best price is to have a Buyer's Broker. On February 19, 1986, respondents placed the following newspaper advertisement in the Marco Island Eagle: 1/ BUYER BEWARE! DON'T BUY REAL ESTATE ON MARCO ISLAND. ... before consulting an attorney or carefully reading Paragraph 5) and 7) of the 1985 Revision of the Sales Contract as approved by the Naples Area Board of Realtors and the Marco Island Area Board of Realtors and the Collier County Bar Association contract Revision Committee. The Contract states quote: "The Buyer has inspected the property sold by the Contract and there are no other inspections permitted or required. The property is acceptable in its AS IS condition as of date of this offer. INCREDIBLE! ... What happens to the unwitting Buyer who intends to have termite, structural and seawall inspections AFTER his offer is accepted? He just may have to buy a termite ridden house that needs a new roof and a seawall that is on the verge of collapse. Thats what! ... Taken at face value the Sales contract calls for the buyer to spend several hundred dollars for inspections BEFORE making an offer that may well be turned down. INCREDIBLE! .... Paragraph 7) states quote: "Buyer's decision to buy was based on Buyer's own investigation of the property and not upon any representation, warranty, statement or conduct of the Seller, or broker, or any of Seller's or broker's agents" (Excluding those rare occasions when the seller and his agents remain silent.) INCREDIBLE! ... The above subject sections of Paragraphs 5) and 7) of the 1985 Sales Contract in our opinion may well violate the Realtor's Code of Ethics Article 7) "to treat fairly all parties to the transaction." There is nothing Pelican Realty could say or do to better emphasize the Buyer's need to have an advocate on his side. ... As a Buyer's Broker we recommend striking out any and all terms and conditions of the Sales Contract that are prejudicial to the Buyer's best interests. ... Pelican Realty would appreciate the opportunity to discuss with any interested parties the many advantages of working with a Buyer Broker. Our services are at NO additional expense to the buyer. CALL US FOR FURTHER DETAILS. NOW!! On March 11, 1986, respondents placed the following newspaper advertisement in the Sun-News: CASH BACK FOR THE REAL ESTATE BUYER. THAT'S INCREDIBLE! Pelican Realty GUARANTEES CASH BACK to every buyer on every sale. The bigger the sale, the bigger the cash gift to the buyer. On top of this Pelican Realty (a Buyer's Broker) goes all out to get the lowest possible price for the buyer at NO additional cost to the buyer. Other realtors must get the highest price for the seller. The thousands you SAVE already belong to you. THINK ABOUT IT! Call us for further details NOW! "WE PAY OUR BUYERS TO DO BUSINESS WITH US" There is nothing false or fraudulent about the three advertisements. However, the following statements in the advertisements are deceptive or misleading in form or content: The representation in the July 24 through August 6, 1984, Sun-Daze advertisement that buyers pay no fees or commissions. In form, the buyer perhaps does not pay brokerage fees or commissions. But in substance, the buyer does indirectly pay his broker a brokerage fee or commission when the seller pays fees and commissions out of the proceeds of the sale. The representation in the July 24 through August 6, 1984, Sun-Daze advertisement that a buyer's broker "legally qualifies himself as an agent for the buyer." Although perhaps technically correct, this representation implies separate state regulation and qualification procedures for licensure as a buyer's broker. In fact and in law, any licensed real estate broker can become a buyer's broker simply by entering into an agreement with a buyer to be the buyer's broker. The representation in the March 11, 1986, News-Sun advertisement: "Other realtors must get the highest price for the seller." Read carefully in context, this representation is true--realtors other than those representing a buyer must try to get the highest price for the seller he represents (while being open, honest and fair to the buyer). But, as written, the representation could lead one to believe that the respondents have an ability no other realtors have when, in fact and in law, any realtor or other licensed real estate broker who represents a buyer can try to get the best price for the buyer. Although respondents have offered cash rebates, no client has seen the offer or asked for a rebate. Although respondents have maintained their innocence, they changed the ads to meet the criticism of the Department of Professional Regulation.
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 (1) reprimanding respondents, Frederick Hodgdon and Pelican Realty of Marco Island, Inc., and (2) fining them $500 each for violations of Section 475.25(1)(c), Florida Statutes (1985). RECOMMENDED this 21st day of July, 1987, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of July, 1987.
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint issued against him and, if so, what penalty should be imposed.
Findings Of Fact Based on the evidence adduced at the "formal hearing," and the record as a whole, the following findings of fact are made: Respondent is now, and has been since October of 2000, a licensed real estate sales associate in the State of Florida, holding license number 695252. He is currently associated with AAA Realty, Inc., a broker corporation doing business in Broward County, Florida. From March 1, 2001, through June 26, 2001, Respondent was an active real estate sales associate with Allen Real Estate, Inc. (Allen), a broker corporation doing business in St. Lucie County, Florida. From June 27, 2001, through August 13, 2001, Respondent was an active real estate sales associate with Realty Unlimited, Inc. (Unlimited), a broker corporation (affiliated with GMAC Real Estate) with offices in Port St. Lucie and Stuart, Florida. Unlimited is now, and has been at all times material to the instant case, owned by Kevin Schevers, a Florida-licensed real estate broker. Gary Sprauer is a Florida-licensed real estate sales associate. He is currently associated with Unlimited. Like Respondent, Mr. Sprauer began his association with Unlimited on June 27, 2001, immediately after having worked for Allen. Respondent and Mr. Sprauer worked as "partners" at both Allen and Unlimited. They had an understanding that the commissions they each earned would be "split 50-50" between them. On February 7, 2001, Allen, through the efforts of Respondent and Mr. Sprauer, obtained an exclusive listing contract (Listing Contract) giving it, for the period of a year, the "exclusive right to sell," in a representative capacity, commercial property located at 3800 South Federal Highway that was owned by Vincent and Renee Piazza (Piazza Property). Paragraphs 6 and 7 of the Listing Contract addressed the subjects of "compensation," "cooperation with other brokers," and "dispute resolution," respectively, and provided, in pertinent part as follows as follows: COMPENSATION: Seller will compensate Broker as specified below for procuring a buyer who is ready, willing, and able to purchase the Property or any interest in the Property on the terms of this Agreement or on any other terms acceptable to Seller. Seller will pay Broker as follows (plus applicable sales tax): 8% of the total purchase price or $15,000 maximum, no later than the date of closing specified in the sales contract. However closing is not a prerequisite for Broker's fee being earned. * * * (d) Broker's fee is due in the following circumstances: (1) If any interest in the Property is transferred . . . , regardless of whether the buyer is secured by Broker, Seller or any other person. * * * COOPERATION WITH OTHER BROKERS: Broker's office policy is to cooperate with all other brokers except when not in the Seller's best interest, and to offer compensation to: Buyer's agents, who represent the interest of the buyer and not the interest of Seller in a transaction, even if compensated by Seller or Broker Nonrepresentatives Transaction brokers. None of the above (if this box is checked, the Property cannot be placed in the MLS). * * * 10. DISPUTE RESOLUTION: This Agreement will be construed under Florida law. All controversies, claim and other matters in question between the parties arising out of or relating to this Agreement or the breach thereof will be settled by first attempting mediation under the rules of the American Arbitration Association or other mediator agreed upon by the parties. . . . Shortly after they left the employ of Allen and began working for Unlimited, Respondent and Mr. Sprauer showed Nicholas Damiano the Piazza Property. Mr. Damiano thereafter made a written offer to purchase the Piazza Property, which the Piazzas accepted, in writing, on July 4, 2001. The sales price was $165,000.00. Mr. Damiano put down a $10,000.00 deposit, which, in accordance with paragraph 2(a) of the contract between Mr. Damiano and the Piazzas (Sales Contract), was "held in escrow by [Unlimited]." The obligations of Unlimited, as escrow agent, were described in paragraph 6 of the Sales Contract, which provided as follows: ESCROW. Buyer and Seller authorize GMAC, Realty Unlimited Telephone: . . . Facsimile: . . . Address: . . . to receive funds and other items and, subject to clearance, disburse them in accordance with the terms of this Contract. Escrow Agent will deposit all funds received in a non- interest bearing account. If Escrow Agent receives conflicting demands or has a good faith doubt as to Escrow Agent's duties or liabilities under this Contract, he/she may hold the subject matter of the escrow until the parties mutually agree to its disbursement or until issuance of a court order or decision of arbitrator determining the parties' rights regarding the escrow or deposit the subject matter of the escrow with the clerk of the circuit court having jurisdiction over the dispute. Upon notifying the parties of such action, Escrow Agent will be released from all liability except for the duty to account for items previously delivered out of escrow. If a licensed real estate broker, Escrow Agent will comply with applicable provisions of Chapter 475, Florida Statutes. In any suit or arbitration in which Escrow Agent is made a party because of acting as agent hereunder or interpleads the subject matter of the escrow, Escrow Agent will recover reasonable attorneys' fees and costs at all levels, with such fees and costs to be paid from the escrowed funds or equivalent and charged and awarded as court or other costs in favor of the prevailing party. The parties agree that Escrow Agent will not be liable to any person for misdelivery to Buyer or Seller of escrowed items, unless the misdelivery is due to Escrow Agent's willful breach of this Contract or gross negligence. Paragraph 12 of the Sales Contract addressed the subject of "brokers" and provided as follows: BROKERS. Neither Buyer nor Seller has utilized the services of, or for any other reason owes compensation to, a licensed real estate broker other than: Listing Broker: Allen Real Estate, Inc. who is a transaction broker and who will be compensated by x Seller _ Buyer _ both parties pursuant to x a listing agreement _ other (specify) Cooperating Broker: GMAC Realty Unlimited who is a transaction broker who will compensated by _ Buyer x Seller _ both parties pursuant to _ an MLS or other offer of compensation to a cooperating broker _ other (specify) (collectively referred to as "Broker") in connection with any act relating to the Property, included but not limited to, inquiries, introductions, consultations and negotiations resulting in this transaction. Seller and Buyer agree to indemnify and hold Broker harmless from and against losses, damages, costs and expenses of any kind, including reasonable attorneys' fees at all levels, and from liability to any person, arising from (1) compensation claimed which is inconsistent with the representation in this Paragraph, (2) enforcement action to collect a brokerage fee pursuant to Paragraph 10, (3) any duty accepted by Broker at the request of Buyer or Seller, which duty is beyond the scope of services regulated by Chapter 475, F.S., as amended, or (4) recommendations of or services provided and expenses incurred by any third party whom Broker refers, recommends or retains for or on behalf of Buyer or Seller. The Damiano/Piazza transaction was originally scheduled to close on July 25, 2001. At the request of the Piazzas, the closing was rescheduled for August 7, 2001. A few days before August 7, 2001, Mr. Sprauer asked Respondent "where the closing was going to take place" and "what title company" would be handling the matter. Respondent replied that the closing was "going to be delayed again because Mr. Damiano . . . was going to have to have some type of cancer surgery." It turned out that the closing was not "delayed again." It took place on August 7, 2001. At the closing were Mr. Damiano, the Piazzas, Respondent, and the closing agent from the title company, First American Title Insurance Company (First American).3 Neither Mr. Schevers, nor Mr. Sprauer, was in attendance. Mr. Sprauer did not even know that the closing was taking place. He was under the impression, based on what Respondent had told him, that the closing had been postponed. Had he not been misinformed, he would have attended the closing. Respondent did not contact Mr. Sprauer following the closing to let him know that, in fact, the closing had occurred. Mr. Schevers, on the other hand, was made aware that closing would be held on August 7, 2001. He was unable to attend because he had "prior commitments." It was Respondent who informed Mr. Schevers of the August 7, 2001, closing date. The morning of August 7, 2001, Respondent went to Unlimited's Stuart office and asked Mr. Schevers for the $10,000.00 Unlimited was holding in escrow in connection with the Damiano/Piazza transaction, explaining that he needed it for the closing that was going to be held later that day. Before complying with Respondent's request, Mr. Schevers contacted First American and asked that he be faxed a copy of the United States Department of Housing and Urban Development Settlement Statement (HUD Statement) that First American had prepared for the closing. As requested, First American faxed a copy of the HUD Statement to Mr. Schevers. Upon reviewing the document, Mr. Schevers "immediately noticed that [it indicated that] the entire commission [of $7,000.00] was going to Allen." Mr. Schevers "then proceeded to call First American" and asked why Unlimited was not "reflected on this settlement statement." Mr. Schevers was told that a First American representative "would get right on it and get back to [him]." Mr. Schevers did not wait to hear back from First American before handing an "escrow check" in the amount of $10,000.00 to Respondent. He instructed Respondent, however, to "not give anybody this check unless that statement [the HUD Statement] [was] changed and reflect[ed] [Unlimited's]" share of the commission earned from the sale of the Piazza Property. He further directed Respondent to telephone him if this change was not made. Respondent did not follow the instructions Mr. Schevers had given him. He delivered the $10,000.00 "escrow check" to the closing agent at the closing, even though the HUD Statement had not been changed to reflect Unlimited's sharing of the commission. At no time during the closing did Mr. Schevers receive a telephone call from Respondent. According to the HUD Statement that Mr. Damiano, the Piazzas, and the closing agent signed at the closing, Allen received a commission of $7,000.00 "from seller's funds at settlement." The document makes no mention of any other commission having been paid as part of the closing. On or about August 9, 2001, Respondent received a "commission check" from Allen. The check was made payable to Respondent and was in the amount of $3,000.00. Under the "DOLLARS" line on the check, the following was typed: 4200 Total Comm[4] 1200 ADVANCE[5] Typed next to "MEMO" on the bottom left hand corner of the check was "DAMIANO-PIAZZA 165,000 S&L." It has not been shown that the "commission check" Respondent received from Allen was for anything other than the commission Allen owed Respondent for services performed when Respondent was still employed by Allen. Mr. Schevers' consent to Respondent's receiving this $3,000.00 "commission check" was neither sought nor given. Less than a week after the closing, having spotted Mr. Damiano mowing grass on a vacant lot that Mr. Damiano owned, Mr. Sprauer walked up to him and asked "how his surgery [had gone]." Mr. Damiano "acted very surprised [like] he didn't know what [Mr. Sprauer] was talking about." Mr. Damiano's reaction to his inquiry led Mr. Sprauer to believe "that the closing had probably taken place." He "immediately contacted [Mr. Schevers] and asked him to check into it." Mr. Schevers subsequently learned from First American that Allen "had gotten all of the [commission] check" at the closing. Mr. Schevers then telephoned Respondent. This was the first communication he had had with Respondent since before the closing. Respondent told Mr. Schevers that "he got the check" and "he would be right over with it." Respondent, however, did not keep his promise. After his telephone conversation with Respondent, Mr. Schevers discovered that Allen "had cut [Respondent] a check and [Respondent] had gone immediately and deposited it." This discovery prompted Mr. Schevers to place another telephone call to Respondent. This telephone conversation ended with Mr. Schevers telling Respondent "he was terminated." Mr. Schevers thereafter notified Petitioner in writing that Respondent was no longer associated with Unlimited. He also filed with Petitioner a complaint against Respondent alleging that Respondent had "acted inappropriately" in connection with the Damiano/Piazza transaction. Mr. Schevers had expected Unlimited to receive, for the role it played in the Damiano/Piazza transaction, "50 percent of the total commission," or $3,500.00, in accordance with the provisions of the "multiple listing service for St. Lucie County."6 He holds Respondent responsible, at least in part, for Unlimited's not receiving these monies.7 At the time of the Damiano/Piazza transaction, Unlimited had contracts with its sales associates which provided that the associates would receive "70 percent of the net" of any commission Unlimited earned as a result of the associates' efforts. Had Unlimited received a commission as a result of the Damiano/Piazza transaction, it would have "split" it with Respondent and Mr. Sprauer as required by the contracts it had with them.8
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Commission issue a final order dismissing the Administrative Complaint issued against Respondent in the instant case in its entirety. DONE AND ENTERED this 7th day of July, 2004, in Tallahassee, Leon County, Florida. STUART M. LERNER 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 7th day of July, 2004.
Findings Of Fact At all times relevant, Bangert was a licensed real estate salesman with State of Florida license number 0312002. On or about May 1, 1986, Cynthia Green (now Cynthia Tyson) listed her house at 408 Lakeview Drive, Altamonte Springs, Florida, under an exclusive right of sale contract with J. Scott Jones, a licensed real estate broker. Through his broker, Help U. Sell (Thomas Jafek and Thomas Jafek II), Bangert offered $64,900.00 to Ms. Tyson for the Lakeview house. The contract for sale offered a $1,000.00 deposit note, with two mortgages, including a balloon mortgage, payment of $3,000.00 fix-up costs by the seller, and cash to the seller at closing in the amount of $15,659.00 The offer was rejected by Ms. Tyson. J. Scott Jones negotiated over the telephone with Thomas Jafek II, and then with Bangert. The basic requirement of Ms. Tyson was that she wanted $50,000.00 net at closing. She also wanted a cash deposit, as she had a previous negative experience with a deposit note. J. Scott Jones does not recall that he told Bangert that a cash deposit was required, but he knows the issue came up sometime during the telephone discussion. He did not speak to both Jafek and Bangert at the same time. A second contract offer was signed by Bangert and was accepted by Ms. Tyson on August 30, 1986. The purchase price and method of payment was set out as follows: PURCHASE PRICE $ 68,500.00 PAYMENT: Deposit(s) to be held in escrow by Help-U-Sell of College Park, upon acceptance in the amount of $ 1,000.00 Subject to AND [sic] assumption of Mortgage in good standing in favor of To Be Obtained having an approximate present principal balance of $ 40,000.00 Purchase money mortgage and note bearing interest at 9 percent on terms set forth herein below, in the principal amount of 360 payments of 189.10 to Balloon at 60th mo. $ 23,500.00 Other Purchase Money Mortgage @ 10 percent in a single payment at 60th mo. $ 5,000.00 Balance to close (U.S. cash, LOCALLY DRAWN certified or cashier's check), subject to adjustments and prorations $ 68,500.00 (Petitioner's Exhibit #4) The Contract also provided for the $50,000.00 net at closing to the seller. Bangert gave Thomas Jafek a deposit note in the amount of $1,000.00. Jafek did not know how to put a note in a trust or escrow account, so he held it in his files at Help U. Sell. Jafek had dealt with Bangert before in real estate transactions and had acted before as the escrow agent. In those dealings Bangert only put down notes, never cash. Jafek understood that Bangert's role was as a principal buyer and that Bangert intended to assign the contract for sale. The transaction was initially scheduled to close on September 26, 1987. On September 30, 1986, the parties agreed to extend the closing until October 10, 1986. When J. Scott Jones met with Bangert to get the extension signed, he learned that a note, rather than cash deposit had been made. The transaction never closed. For reasons that are not material to this proceeding, Bangert did not appear at the closing. Cynthia Tyson retained an attorney, Garrick N. Fox, who sent letters to Jafek and to Bangert on October 17, 1986. The letter to Jafek provides, in pertinent part: As per the contract for sale and purchase, your company holds one thousand dollars in escrow and we may [sic) hereby make demand that you remit to this law office the one thousand dollars held in escrow as partial damages for the default of the contract. (Petitioner's Exhibit #6) The letter to Bangert does not mention the deposit, but states that the contract is in default. The final paragraph states: It is my sincere desire that we can settle this matter amicably without the necessity of litigation. If you can close on this contract forthwith, all of these problems can be settled. If not I would appreciate it if you would have your attorney contact [sic] so that we can immediately take the proper steps to minimize Miss Green's damages. (Petitioner's Exhibit #7) The attorney never made an oral demand on Bangert for the $1000.00. Jafek did not consider his letter to be a present demand, but rather a statement of intent to make a demand in the future. Jafek did not tender the note and the $1000.00 was not paid. Bangert had no intent to make a cash deposit. He claims that he told "Tom Jr." " (Thomas Jafek II) to type "a deposit note" on the second contract offer, but that even without that language, a note, rather than cash, was not precluded by the contract terms. Bangert intended that the transaction take place and did not have an intent or motive to defraud the seller. If the transaction had closed, he claims he would have honored the note. As far as he knows, Jafek still has the note. Bangert claims also that it was an oversight that he did not reveal his real estate license status on the contract. The Jafeks knew he was a real estate salesman. Further, he and Scott Jones were teaching at the same real estate school and he felt that Jones should have known his status. He did not intend to hide the fact of his license from anyone. His business in the last three years has been actively serving as a principal buyer and seller for other parties. Bangert's liability on his note is not at issue. In the absence of clear evidence of his knowledge of the seller's conditions, I cannot find that he is guilty of fraud in putting a note cash on deposit. Nor did he deliberately misrepresent a material fact to the seller by failing to disclose that he was a licensed real estate salesman. Ms. Tyson never met Bangert. Both parties were dealing at arms length through their own brokers. Conclusions of Law The Division of Administrative Hearings has jurisdiction over this matter pursuant to Section 120.57(1) F.S. and Section 455.225(4) F.S. Section 475.25(1) F.S. provides that the Florida Real Estate Commission may impose discipline if it finds that a licensee, (b) Has been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction... DPR has the burden of proving the allegations of this complaint through evidence that is clear and convincing. Ferris v. Turlington, 510 So.2nd 292 (Fla. 1987). It is apparent now that Ms. Tyson wanted a cash deposit as one condition of accepting an offer to buy her property. It is not clear that the condition was communicated to Bangert by either his broker, Thomas Jafek, II, or by Ms. Tyson's broker, J. Scott Jones. Without this material evidence it cannot be established that Bangert deliberately engaged in a subterfuge. Without evidence of dishonest or illicit intent, there is no guilt under Section 475.25(1)(b), F.S. Morris v. Department of Professional Regulation 474 So.2nd 841 (Fla. 5th DCA 1985). No rule nor provision of law has been cited to require a real estate licensee to reveal his status as such when engaging in the purchase and sale of property in his personal capacity. Nor was evidence produced that would establish and justify such a policy by the Board. In Santaniello v. Department of Professional Regulation 432 So.2nd 84 (Fla. 2nd DCA 1983), the court upheld the Board's right to determine that a broker violated Section 475.25(1)(b) F.S. when he failed to reveal that a purchaser was his mother-in- law. In that case, the court observed that the broker owed his allegiance to the sellers and was obligated to inform them of anything which might influence their decision to sell. Because of that, the existence of the mother-in-law relationship was deemed a material fact. No such foundation for a duty to inform was established here, therefore there was no violation of section 475.25(1)(b) F.S.
Recommendation Based on the foregoing, it is hereby, RECOMMENDED: That the Administrative Complaint against Larry G. Bangert be dismissed. DONE and RECOMMENDED this 17th day of December, 1987 in Tallahassee, Florida. MARY CLARK Hearing Office 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 17th day of December, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-3044 The following constitute specific rulings on the findings of fact proposed by Petitioner. Adopted in paragraph #1. Adopted in paragraph #2. Adopted in substance in paragraphs #3 and #4. Adopted in substance in paragraph #4. Evidence did not establish that Bangert was aware of the cash deposit condition by Ms. Tyson. Rejected as contrary to the evidence. The face of the contract does not require cash. Adopted in paragraph #7. Adopted in paragraph #8. Adopted in paragraph #6. Adopted in substance in paragraph #7. Adopted in paragraph #11. Adopted in paragraph #7. Adopted in part in paragraph #10. Bangert contended that the contract did not specify cash. Rejected as cumulative. Adopted in paragraph #9. Rejected as immaterial. COPIES FURNISHED: Copies furnished: DOAH Case No. 87-3044 James R. Mitchell, Esquire Department of Professional Regulation Legal Division of Real Estate 400 West Robinson Street Tallahassee, Florida 32802 Larry G. Bangert 103 Cashew Court Longwood, Florida 32750 Harold Huff, Executive Director Florida Real Estate Commission 400 West Robinson Street Post Office. Box 1900 Orlando, Florida 32802 William O'Neil, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 =================================================================
The Issue This is a bid challenge case in which the primary issue is whether the Petitioner's bid is responsive to the RFP.
Findings Of Fact Some basic background facts The Department issued Request for Proposals No. 700:0652, Office Space (the "RFP"). The RFP requested bidders to submit proposals to provide 7,750 square feet of office space (+/- 3 percent) in Broward County to be leased by the Department for a probation and parole office. Under the RFP terms the space had to be available by June 1, 1993. Proposals had to be filed with the Department by January 5, 1993. In-Rel Acquisitions, Inc., and Janc, Inc., submitted bids. Pursuant to an evaluation of the bids conducted by the Department, In- Rel Acquisitions, Inc., was given a contingent award of the lease on March 31, 1993, as the vendor with the lowest price and the overall highest evaluation score. The contingent award letter of March 31, 1993, read as follows in pertinent part: It is the intent of the Department of Corrections to award the above referenced bid to In-Rel Acquisitions, Inc., as the vendor with the lowest bid price and the overall highest evaluation score. The award to In-Rel Acquisitions, Inc., is contingent upon: (a) obtaining the necessary zoning approval to operate a probation and parole office at the bid premises by May 6, 1993, and (b) the Department obtaining sufficient assurances from the Resolution Trust Corporation that the bid premises will not be taken over by the RTC and the Department's leasehold interest will not be affected. On May 18, 1993, the Department issued a letter awarding the subject lease to Janc, Inc., because the Department was of the view that In-Rel Acquisitions, Inc., had not met the conditions of the contingent award of March 31, 1993. The award letter of May 18, 1993, read as follows, in pertinent part: This letter is to inform you that the Department of Corrections has determined that the award of the lease for the above referenced bid is hereby made to Janc, Inc. The bid from In-Rel Acquisitions, Inc. has been rejected because it has not met either of the conditions stipulated on the March 31st award letter, and the property has not been properly maintained under the existing lease agreement. Both the contingent award letter of March 31, 1993, and the award letter of May 18, 1993, contained "boiler-plate" language advising the addressee of the basic details of the written protest process. In-Rel Acquisitions, Inc., filed a timely protest of the award to Janc, Inc. Facts about the zoning situation The award of the lease to In-Rel Acquisitions, Inc., was made contingent because the property was not properly zoned to support a probation and parole office for the Department. At the time of soliciting bids on the subject project, the Department was currently leasing the space proposed by In-Rel Acquisitions, Inc., and had done so for almost five years. Shortly after the deadline for the submission of bids, the Department was notified that it was in violation of the Plantation City Code because the office was not properly zoned, and the Department was subject to fines if it did not obtain proper zoning or leave the premises by June 1. The fine was at the rate of $200.00 per day. In-Rel Acquisitions, Inc., did not obtain necessary zoning approval by May 6, 1993. First, the zoning approval passed by the City of Plantation limited the hours of operation of the probation office. As approved by the City of Plantation, the Department can only operate its probation office Monday through Friday from 8:00 a.m. to 5:30 p.m., plus one evening a week until 7:00 p.m. These time limits do not satisfy the contingency placed in the March 31, 1993, award because the Department cannot operate a probation and parole office within these limited hours. The Department has 14,000 probationers in Broward County under its supervision. The caseload puts a severe strain on the caseworkers making it essential that they have flexible hours to get their job done. The caseload also requires working evenings and weekends. For example, some probation officers must maintain evening hours to test offenders for drugs. Although the officers could make the offenders visit the Department's office during the day, this would jeopardize the employment status of many offenders. Therefore, the Department needs flexible evening hours to do the drug testing. One of the major functions of the probation officer is to help rehabilitate the offender. That means that the Department must do what it can to help the offender stay employed. In addition, the probation officers need evening and weekend hours to do their paperwork, including preparing weekly reporting schedules, and recording their contacts. The officers also need evening hours to receive monetary payments due from offenders, meet with offenders who must report in person into the office each month, and counsel offenders in the office. Under the prior lease with In-Rel Acquisitions, Inc., the Department had operated and held evening hours at a minimum of three nights per week. This included both probation officers and offenders appearing at the office during the evenings. The RFP specifically notified bidders that there would be evening hours. Section B(14) of the RFP states: Staff of both sexes will be required to work in this facility during both daylight and evening hours. An environment in which staff can expect to be safe is essential. Section D(11) of the General Provisions of the subject RFP reads as follows: Federal, state, county, and local laws, ordinances, rules, and regulations that in any manner affect the items covered herein apply. Lack of knowledge by the bidder will in no way be a cause for relief from responsibility. The records of the City of Plantation meetings show that the May 5, 1993, vote was not final. A mandatory second reading of the zoning change took place on May 12, 1993, and the minutes were approved on May 19, 1993, and June 2, 1993, with respect to the first and second reading. Even if the zoning change with its limited hours had been sufficient to meet the terms of the contingent award, the limited zoning approval was not received before May 6, 1993; and therefore, the mandatory second reading of May 12, 1993, caused the limited zoning approval to be untimely. Finally, the limited and untimely zoning change as approved on May 5, 1993, was itself contingent on satisfying all concerns of the Landscape Architect. Facts regarding the RTC assurances The second award contingency required In-Rel Acquisitions, Inc., to provide the Department with sufficient assurances from the Resolution Trust Corporation (RTC) that the bid premises would not be taken over by the RTC and that the Department's leasehold interest would not be affected. The property submitted by In-Rel Acquisitions, Inc., was in litigation; the RTC as successor mortgagee, had filed or secured a Notice of Lis Pendens, an Amended Complaint, a Summary Final Foreclosure Judgment, and a Notice of Sale. The RTC has an interest in the property offered by In-Rel Acquisitions, Inc. Paragraph 1(E) of the Summary Final Foreclosure Judgment provides that the Summary Final Foreclosure Judgment shall eliminate the interest of anyone that has acquired an interest since the filing of the Lis Pendens, including the Department's leasehold interest if it were to enter into a lease on the property. The property bid by In-Rel Acquisitions, Inc., was subject to a second mortgage. The record does not reflect that the first mortgagee and the second mortgagee entered into any type of written agreement not to disturb the leasehold interest of the Department. By letter dated May 11, 1993, an attorney for the RTC responded to the Department's request for assurances. The May 11, 1993, letter included the following: Pursuant to your request of yesterday, I am writing to belatedly confirm the April 19, 1993 telephone conference had you, Robert Gellman of Real Estate Recovery, Inc., and I. This telephone conversation was had to provide the Department of Corrections (the "Department") with the assurances requested from the RTC in the Department's March 31, 1993 letter of intent to award the subject least [sic] to In Rel Acquisitions, Inc. During this discussion you expressed the concern of the Department that the RTC intended to take title to the property and would then utilize special powers and privileges to dispossess the Department. If that were to be the case, you indicated that the Department would want an assurance that it would receive 90-days' notice before it could be dispossessed. (You indicated that 90-days is how long it would take to complete the bid process that would have to precede the Department's move.) Robert Gellman indicated that he was pursing [sic] numerous resolutions to the pending litigation, some of which might involve the RTC's taking title to the property and others which might not. Mr. Gellman assured you, however, that the RTC perceived it to be in its own best interest, and in the interest of any subsequent landlord, that the Department be kept happy and its tenancy undisturbed. Mr. Gellman also explained that he could not agree to anything at the time, as the appropriate committee approval had to be secured, but that he anticipated no problem in obtaining the necessary approvals of any writing consistent with our discussions once those writings were prepared. (I believe at the time we contemplated a written lease and a written assurance letter from the appropriate RTC official.) You indicated that your concerns had been satisfied and that these assurances were sufficient to satisfy the Department. The three of us discussed that it would not make sense to begin drafting anything at that time as the issues regarding the property's zoning still had to be cleared up and our efforts might otherwise "be all for not." Accordingly, it was mutually decided that we would wait to see the outcome of the May 5, 1993 hearing on the zoning issue before proceeding further. In the interim you indicated that you would be providing us with a list of the specific items of tenant improvements that your local officials expected to have made to the property. (We received this list on May 3, 1993.) On May 5, 1993 the Plantation City Council approved In-Rel Acquisition Inc.'s, request for a rezoning of its property and for a "special use" condition by a 4-0 vote, thus effectively resolving the zoning issue. Yesterday you and I spoke on this issue and discussed the situation. I indicated that the RTC is now in a position to provide you with written assurance that it has no intention of dispossessing the Department or interfering with its lease tenancy (either under the old or the new lease), and that the Department's leasehold interest would not be affected by the RTC taking title to the property (if it ever does). I asked and you indicated that this would give you what you needed and everything would be fine. In addition, I indicated that once the lease by and between the Department and In Rel is finalized, the RTC, if it still owns the note and mortgage, would be able to approve same. In light of the foregoing your call to me this morning, indicating that the Department had decided to withdraw its award to In Rel Acquisitions, Inc. and make the award to "Viloci" (phonetic(?), the next ranked bidder. During this discussion you indicated that Viloci's legal counsel had stated that the RTC would never be able to provide the Department with the requisite assurances. It is unfair for you to make decisions based in whole or in part on any statements made by Viloci's counsel regarding what the RTC can and cannot do without giving us an opportunity to respond -- especially in light of your indications on April 19th and again yesterday that the Department was satisfied with the RTC. The record reflects that the "Notice of Sale" failed to contain language providing that the property would be sold subject to any leasehold interest, either previously or subsequently acquired.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that a Final Order be issued in this case dismissing the Petition of In-Rel Acquisitions, Inc., and awarding the subject lease to the Intervenor, Janc, Inc. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 17th day of September 1993. MICHAEL M. PARRISH 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 17th day of September 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-3438BID The following are the Hearing Officer's specific rulings on all proposed findings of fact submitted by all parties. Proposed Findings of Fact submitted by Petitioner Paragraph 1: First three sentences accepted in substance. Fourth sentence rejected as constituting primarily irrelevant or subordinate details. Last sentence reject as contrary to the greater weight of the evidence to the extent it is intended to imply that the zoning change obtained was sufficient. Paragraph 2 and 3: Rejected as contrary to the greater weight of the evidence. Paragraphs 4 and 5: Accepted in substance. Paragraph 6: The first two sentences are rejected as irrelevant or as subordinate and unnecessary details. Last sentence rejected as irrelevant and also as contrary to the greater weight of the evidence and as suggesting implications not warranted by the evidence. Paragraph 7: Rejected because it goes further than the evidence and suggests inferences not warranted by the evidence. Messrs. Gellman and Guerra told Mr. Ferst that they did not expect that the Department would have any problems with RTC, but the statements of Messrs. Gellman and Guerra stopped short of making any guarantees or of binding the RTC. Paragraph 8: Rejected as contrary to the greater weight of the evidence. Paragraph 9: Accepted in substance, with the deletion of the words "in ignoring the foregoing." Paragraph 10: Rejected as constituting a summary of a party's argument or statement of position, rather than a proposed finding of fact. Paragraph 11: First sentence is accepted in substance. Second sentence is accepted as literally true, but as also substantially irrelevant because during most of the original five-year lease there was no issue about hours of operation because there was no effort at restriction of hours of operation. The last sentence is rejected as not supported by persuasive competent substantial evidence. Paragraph 12: The first two sentences are rejected as constituting a summary of a party's argument or statement of position, rather than a proposed finding of fact. The third and fourth sentences are rejected because they go further than the evidence and suggest inferences not warranted by the evidence. As noted above, Messrs. Gellman and Guerra told Mr. Ferst that they did not expect that the Department would have any problems with RTC, but the statements of Messrs. Gellman and Guerra stopped short of making any guarantees or of binding the RTC. Paragraph 13: Rejected as constituting argument or proposed conclusions of law, rather than proposed findings of fact. Paragraph 14: First two sentences accepted in substance. Last sentence rejected as constituting argument or proposed conclusions of law, rather than proposed findings of fact. Paragraph 15: Rejected as constituting argument or proposed conclusions of law, rather than proposed findings of fact. Paragraph 16: It is accepted that Messrs. Gellman and Guerra made statements as to what they expected the RTC's position to be, but, as noted several times above, the statements of Messrs. Gellman and Guerra stopped short of making any guarantees or of binding the RTC. Proposed findings submitted by Respondent Paragraphs 1, 2, 3, 4, 5, 6, 7, 8 and 9: Accepted. Paragraph 10: Rejected as constituting subordinate and unnecessary restatement of a party's position. Paragraphs 11, 12 and 13: Accepted in substance. Paragraph 14: Rejected as repetitious. Paragraphs 15, 16 and 17: Accepted. Paragraph 18: First sentence is accepted. The second sentence is rejected as constituting argument, rather than proposed findings of fact. Paragraphs 19, 20, 21, 22, 23, 24, 25, 26, 27 and 28: Accepted in substance. Paragraph 29: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraph 30: Accepted. Paragraph 31 and 32: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraphs 33 and 34: Accepted in substance. Paragraphs 35 and 36: Rejected as irrelevant or as subordinate and unnecessary details. Paragraph 37: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraphs 38, 39, 40 and 41: Rejected as irrelevant or as subordinate and unnecessary details. Paragraphs 42, 43, 44 and 45: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraphs 46, 47, 48 and 49: Accepted in substance. Paragraph 50: Accepted. Paragraph 51: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraph 52: First sentence rejected as subordinate and unnecessary details. Second sentence rejected as repetitious. Paragraphs 53, 54 and 55: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraph 56: First sentence accepted in substance. Second sentence rejected as constituting argument, rather than proposed findings of fact. Paragraph 57: Accepted in substance. Paragraph 58: Rejected as irrelevant or as subordinate and unnecessary details. Paragraphs 59, 60, 61, 62, 63 and 64: Rejected as primarily constituting argument or proposed legal conclusion, rather than proposed findings of fact. Proposed findings submitted by Intervenor Although there are some differences in the numerical sequence, the vast majority of the proposed findings of fact submitted by the Intervenor are identical to those submitted by the Respondent. It would serve no useful purpose to repeat the rulings on all of those findings. The following rulings address the few proposed findings submitted by the Intervenor that are different from the ones submitted by the Respondent. Paragraph 11: Rejected as constituting subordinate and unnecessary restatement of a party's position. Paragraph 30: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraph 37: Rejected as irrelevant or as subordinate and unnecessary details. Paragraph 44: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraph 54: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraphs 55, 56, 57, 58, 59 and 60: Accepted in substance. Paragraph 61: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraphs 62, 63 and 64: Accepted in substance. Paragraphs 65, 66 and 67: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. COPIES FURNISHED: Michael S. Riley, Esquire 200 East Las Olas Boulevard, Suite 1400 Fort Lauderdale, Florida 33301 Steven S. Ferst, Esquire Assistant General Counsel Department of Corrections 2601 Blair Stone Road Tallahassee, Florida 32399-2500 Joseph J. Villacci, Esquire 315 Northeast Third Avenue, Suite 200 Fort Lauderdale, Florida 33301 Harry K. Singletary, Jr., Secretary Department of Corrections 2601 Blair Stone Road Tallahassee, Florida 32399-2500 Louis A. Vargas, General Counsel Department of Corrections 2601 Blair Stone Road Tallahassee, Florida 32399-2500
The Issue The issue to be determined in this proceeding is whether Respondent violated section 475.125(1)(b), Florida Statutes (2008), and if so, what penalty should be imposed?
Findings Of Fact Petitioner is the state agency charged with regulating the practice of real estate professionals pursuant to section 20.125 and chapters 455 and 475, Florida Statutes. At all times material to the allegations in the Administrative Complaint, Respondent was a real estate associate licensed with All Pro Realty Co., Volusia County, Inc., d/b/a RE/MAX All Pro Realty, a real estate corporation (All Pro). Respondent's license number is 3051505. Respondent's broker at All Pro was Robert Millward. Respondent was the listing agent for a property located at 3301 Tropical Terrace, Deland, Florida (the Tropical Terrace property). Respondent specialized in handling the sale of foreclosure properties. The Tropical Terrace property was a foreclosure property, and was owned by Premier Asset Services (Premier). Sales for bank-owned properties such as the Tropical Terrace property that Respondent handled were different from most real estate transactions. For example, offers were communicated to Respondent, whether verbally with written follow-up, by fax or e-mail, or by a conventional real estate sales contract. If no offer was currently pending for a piece of property, the data related to the offer would be entered into a dedicated electronic communication system, referred to as the portal, for consideration by the seller. If the property was already under contract, the listing agent could not communicate any further offers on the property. It was not unusual for the potential buyer to receive no response if this was the case. If there were no pending offers on a property, the Seller, through use of the portal, would accept the offer, provide a counter-offer, or send the offer back for a "highest and best" offer. However, all transactions generated a generic counter-offer form with the final terms, even if the original offer was accepted. Any counter-offer would be sent to the buyer's agent for approval. If acceptable, the counter-offer would be initialed, and returned for submission to Premier. The documents required for submission were the FLA/BAR form, the counter-offer, an escrow check and a pre-qualification letter for financing purposes. Premier would not sign off on the purchase until the complete package was submitted. Once the complete package was reviewed, the asset manager for Premier would sign the contract and the entire packet would be returned to the seller's agent, either by fax or through the portal. Anthony Conklin wanted to purchase the Tropical Terrace property for investment purposes. He submitted an offer, through his realtor, Debbie Artzner, for $100,000, which was below the listed price for the property. Neither he nor his agent received any response to this offer. On March 11, 2009, Conklin signed another offer on the property for $105,000. Ms. Artzner faxed him the forms to sign and he faxed them back to her to submit to Respondent. Anthony Conklin did not sign the forms in her presence. There is some dispute as to whether the offer was actually forwarded to Respondent on March 11: Ms. Artzner says that she sent it by email but did not confirm that Respondent had received it. Ms. Artzner also stated that she would not have submitted an offer if there was an existing offer on the property. Respondent insists that there was in fact an existing offer on March 11 and denies receiving the Conklin offer. There is also no certainty that the exhibit identified as the March 11, 2009, offer and admitted as Petitioner's 2 is, in its entirety, the document that was actually signed by Mr. Conklin on that date. For example, the first page of the contract lists a price of $105,000, and has a deadline for acceptance of March 26, 2009. Pages one, four and five of the exhibit have no fax header on the bottom or top of the document, while pages two and three have two or three fax headers dated March 11, 2009, at the bottom of the document. The signature page, dated March 11, 2009, is page three. What remains unclear is whether the offer forwarded to Respondent for input in the portal resulting in a counter-offer that was accepted was the offer dated March 11, 2009, for $105,000, or was yet another offer for $108,000. In any event, on March 25, 2009, Premier issued a counter-offer for $108,000, and on March 26, 2009, the counter- offer was accepted. On March 31, 2009, Mr. Conklin wrote an escrow check for the purchase, and the documents necessary for Premier's asset manager's signature were uploaded to the portal. On April 6, 2009, the asset manager signed the contract and the entire package, including the FLA/BAR form, was returned for transmission to the Buyer, via the portal. The agreed-upon purchase price for the property was $108,000. At this point, the road to closing on the property became problematic. While Respondent claims there would have been no reason for her to not provide the entire package to the buyer's broker, Ms. Artzner claims that she did not receive it, and her testimony is credited. Multiple requests were made for a copy of the FLA/BAR form, which were not honored. When Ms. Artzner was unsuccessful in getting a copy of the form, which was needed for financing purposes, Mr. Conklin began calling Respondent directly. Respondent did not provide the form, but instead called Ms. Artzner's licensure into question. (Ms. Artzner, who testified on behalf of the Department, indicated that she has been licensed for 20 years.) No real basis for doubting her licensure was presented to justify such an accusation. This refusal to send the FLA/BAR form became a hurdle for completing the financing. After several attempts by both Mr. Conklin and Ms. Artzner, after approximately two weeks, a telephone conference call was arranged involving Mr. Conklin, Ms. Artzner, Respondent, and Andy Walker, who was assisting with the processing of Mr. Conklin's loan. According to Mr. Walker, Respondent remained unhelpful in providing documents when requested. Mr. Conklin and Respondent are like oil and water. Some evidence was presented to indicate the lack of the FLA/BAR form was not the only barrier to closing, but it certainly contributed to the delay. While Mr. Conklin should have worked through his realtor instead of calling Respondent directly, Respondent could have solved the document problem by simply forwarding a copy of the FLA/BAR form. Instead, she took the position that she had already provided it and did not need to do so again. At hearing, Respondent stated, "I don't want to sound arrogant or anything, but I really don't want to do anybody else's paperwork." Her testimony is consistent with the claims by others that she was uncooperative in getting the transaction ready to close, and it is so found. On April 30, 2009, Andy Walker received a fax that included a cover page and a copy of what purports to be the FLA/BAR contract (Petitioner's Exhibit 4). The document contains an offer price of $108,000, which while the ultimate price, is not the price Mr. Conklin claims was on the offer that was forwarded to Respondent. In addition, Mr. Conklin claims that the document contains a signature that purports to be his but is not. Mr. Conklin and the Department contend that Respondent forwarded this copy of the contract and that she knew or should have known that the signature on the document is not Mr. Conklin's. The fax sheet accompanying the document is from an establishment in Jacksonville called "The Retreat at St. Johns." The cover sheet indicates that it is addressed to "Conklin" at fax number 407-389-5111. However, there is no indication as to who sent the fax, and Respondent denies doing so. No persuasive evidence was submitted to demonstrate that Respondent was responsible for sending the fax or that she reviewed the signatures contained in the fax. While it is somewhat different from other examples of Mr. Conklin's signature in the documents, the differences are not so great that that they could not be attributed to the natural variances in a person's handwriting. Further, while the first five pages of Exhibit 4 have a fax header at the top indicating they were sent on April 30, 2009, the page with the disputed signature and the signature of the asset manager, Donna West, has no fax header. In short, no clear and convincing evidence was presented to demonstrate that Respondent was responsible for sending the fax. Further, no clear and convincing was presented to indicate that Mr. Conklin's signature contained in Petitioner's Exhibit 4 was forged or that Respondent had any involvement in crafting, reviewing, or transmitting Petitioner's Exhibit 4. Eventually, Mr. Conklin directed Ms. Artzner to prepare a new FLA/BAR contract with the agreed-upon purchase price in order to get the financing processed and approved. The transaction eventually closed and Mr. Conklin successfully purchased the property for the agreed-upon $108,000.
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the Administrative Complaint. DONE AND ENTERED this 25th day of May, 2011, in Tallahassee, Leon County, Florida. S LISA SHEARER NELSON 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 25th day of May, 2011. COPIES FURNISHED: Robert J. Riggio, Esquire Law Offices of Robert J. Riggio, P.A. 400 South Palmetto Avenue Daytona Beach, Florida 32114-4922 Joseph A. Solla, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite 801N Orlando, Florida 32801-1757 Thomas W. O'Bryant, Jr., Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Hurston Building-North Tower, Suite N801 Orlando, Florida 32801 Reginald Dixon, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue The issues are whether Respondent is guilty of failing to account for and deliver a share of a real estate commission, as required by Section 475.25(1)(d)1., Florida Statutes, and, if, so, what penalty should be imposed.
Findings Of Fact At all material times, Petitioner has been a licensed real estate broker, holding license number 0314643. Petitioner does business under the name, Blue Ribbon Realty. Petitioner employs several real estate salesmen in her brokerage business. Virginia M. Poole is a licensed real estate salesman. During 1988, she was looking for a house to buy. At the time, she was working in a hotel as a cashier. While working at the hotel, Ms. Poole met Mary Asian, who was also working at the hotel. At the same time, Ms. Asian was and remains a real estate salesman working at Blue Ribbon Realty. In a period of several weeks, Ms. Asian showed Ms. Poole several houses and presented at least one offer with a small deposit. One day while driving on her own, Ms. Poole came across a house that appealed to her. At or prior to this time, Ms. Poole had placed her salesman's license with Blue Ribbon Realty. Ms. Poole negotiated a sales contract with the seller. The contract was signed by Ms. Poole and the seller on November 10, 1988. By a separate commission agreement signed the same date, the seller agreed to pay Respondent a commission equal to 3% of the sales price. The closing took place on December 14, 1988. The closing agent duly paid Respondent the sum of $2172, which represents 3% of the purchase price. Respondent cashed the check and received the proceeds thereof. Under the agreement between Ms. Poole and Respondent, Ms. Poole was to be paid one-half of all commissions that she earned for Blue Ribbon Realty. At the closing, Ms. Poole asked about her share of the commission. Refusing to pay anything to Ms. Poole, Respondent told her, "You get it any way you can." Respondent believed that Ms. Asian, not Ms. Poole, was due the salesman's share of the commission, which by agreement was one-half of the sum paid to Blue Ribbon Realty. Ms. Poole, who never listed or sold any properties for the two or three months that her license was placed with Respondent, had placed her license with another broker over ten days in advance of the December 14 closing. Under the agreement between Respondent and her salesmen, no commission was due any salesman who left Blue Ribbon Realty more than ten days prior to a closing. The reason for this policy was that much work had to be done in the ten days preceding a closing, and it was unfair to require others to perform the work while paying the salesman's share of the commission to a departed salesman. After repeated attempts to obtain payment of the $1086 due her, Ms. Poole filed a legal action against Respondent in Orange County Court. The defenses raised by Respondent apparently proved unavailing. On April 12, 1989, Ms. Poole received a final judgment in the total amount of $1197.44, including interest and costs. Although the filing date does not appear from the face of the exhibit, a Notice of Appeal was served on Ms. Poole on June 30, 1989. Subsequent attempts to recover on the judgment were unsuccessful. At this point, Ms. Poole filed a complaint with Petitioner. Respondent never requested the Florida Real Estate Commission to issue an escrow disbursement order determining who was entitled to the disputed half of the commission, never sought an adjudication of the dispute by court through interpleader or other procedure, and never submitted the matter to arbitration with the consent of the parties. The only thing that Respondent has done in this regard is to deposit the contested sum in the trust account of her attorney, apparently pending the resolution of the appeal.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that Petitioner enter a Final Order finding Respondent guilty of failing to account or deliver a share of a commission to one of her salesmen, issuing a written reprimand, and imposing an administrative fine in the amount of $1000. ENTERED this 23 day of May, 1990, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 23 day of May, 1990. COPIES FURNISHED: Steven W. Johnson, Senior Attorney Division of Real Estate P.O. Box 1900 Orlando, FL 32802 Attorney Raymond O. Bodiford P.O. Box 1748 Orlando, FL 32802 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 1940 North Monroe Street Tallahassee, FL 32399-0792
The Issue The issue for consideration in this matter is whether Respondent's intended award of a lease for office space to Intervenor, Anthony Abraham Enterprise, is arbitrary and capricious and whether the proposal of the Petitioner, Adlee Developers, the current lessor, is responsive.
Findings Of Fact The parties agreed that on April 7, 1991, the Department issued an Invitation to Bid entitled, "Invitation To Bid For Existing Facilities State Of Florida Lease Number 590:2286, Dade County" This procurement was for the provision of 30,086 net rentable square feet to be used for office space in Dade County. A 3% variance was permitted. The facility was to house the District's Aging and Adult Services office which has been a tenant in Petitioner's building for several years and remained there during the pendancy of this protest process. According to the published advertisement, a pre-proposal conference was to be held on April 22, 1991, with all bids due by the bid opening to be held at 10:00 AM on May 30, 1991. The pre-bid conference was conducted by Philip A. Davis, then the District's facilities service manager and included not only a written agenda but also a review of the evaluation process by which each responsive bid would be examined. Petitioner asserts that the potential bidders were told, at that conference, that annual rental increases for the ten year lease period could not exceed five per cent (5%) and claims that Abraham's bid exceeded those guidelines. Thorough examination of the documentary evidence presented and the transcript of the proceedings, including a search for the reference thereto in Petitioner's counsel's Proposed Findings of Fact, fails to reveal any support for that assertion as to an increase limitation. The ITB for this procurement, in the section related to the evaluation of bids, indicated that pursuant to the provisions of Sections 5-3 and 5-11 of HRSM 70-1, dealing with the procurement of leased space, the responsive bids would be reviewed by an evaluation committee which would visit each proposed facility and apply the evaluation criteria to it in order to determine the lowest and best bidder. The evaluation criteria award factors listed in the ITB defined a successful bid as that one determined to be the lowest and best. That listing of evaluation criteria outlined among its categories associated fiscal costs, location, and facility. As to the first, the committee was to look at rental rates for both the basic term of the lease and the optional renewal period. The rates were to be evaluated using present value methodology applying the present value discount rate of 8.08% and rates proposed were to be within projected budgeting restraints of the Department. The total weight for the rental rate category was to be no more than 40 points with 35 points being the maximum for the basic term and 5 points for the option. Evaluation of the location was to be based on the effect of environmental factors including the physical characteristics of the building and the area surrounding it on the efficient and economical conduct of the operations planned therefor. This included the proximity of the facility to a preferred area such as a co-location, a courthouse, or main traffic areas. This item carried a maximum weight of 10 points. Also included in location were the frequency and availability of public transportation, (5 points); the proximity of the facility to the clients to be served, (5 points); the aesthetics of not only the building but the surrounding neighborhood, (10 points); and security issues, (10 points). The third major factor for evaluation was the facility itself and here the committee was to examine the susceptibility of the offered space to efficient layout and good utilization, (15 points), and the susceptibility of the building, parking area and property as a whole to possible future expansion, (5 points). In that regard, the Bid Submittal Form attached to the ITB called for the successful bidder whose property did not have appropriate zoning at the time of award to promptly seek zoning appropriate to the use classification of the property so that it might be used for the purposes contemplated by the department within 30 days. In the event that could not be done, the award could be rescinded by the department without liability. The committee could award up to 100 points. The basic philosophy of this procurement was found in paragraph 1 of the Bid Award section of the ITB which provided: The department agrees to enter into a lease agreement based on submission and acceptance of the bid in the best interest of the department and the state. After the bid opening, three of the four bids received, excluding Petitioner's which was initially determined to be non-responsive, were evaluated by the Department's bid evaluation committee according to the above point system which allowed no discretion or deviation from the formula in comparing rental rates between bidders. Once Petitioner's bid was thereafter determined to be responsive, it, too was evaluated by the committee. At this second evaluation session, relating to Adlee's bid only, the committee scored the bid and added its scores to the original score sheets upon which the other three bidders' scores had been placed. Abraham had the lowest rental rates for the basic term of the lease and received the maximum award of 35 points for that category while Adlee received points. Abraham received an additional 2.29 points for the optional period rates while Adlee got 0. In the other categories, "location" and "facility", which comprised 60% of the points, Adlee's facility was routinely rated superior to Abraham's except for the area related to susceptibility for future expansion in which Abraham was rated higher by a small amount. Overall, however, Adlee was awarded 620.41 points and Abraham 571.03 points and as a result, Adlee was rated by the committee to be the lowest and best bidder. RCL, another bidder, was rated second, with Abraham third and DCIC fourth. Thereafter, the committee chairman, Mr. VanWerne, forwarded the new (and complete) evaluation results to the District Administrator on June 14, 1991 by an addendum dated June 27, 1991 which recommended award of the bid to Petitioner, Adlee Developers. No award was made at the time. Several factors not pertinent to the issues here caused that delay. Among the major of these was pending legislation which would have transferred the operation needing this space to another agency. This transfer was never consummated, however. On or before March 20, 1992, the new District Administrator, Mr. Towey, who had been appointed to his office in December, 1991, and who was made aware that this procurement had not been finalized, requested all available material on it so that he could study it and make his decision based on his own review of the submission. As a part of his determination process, he visited and inspected both the Adlee and the Abraham sites. One of the factors he considered was what appeared to be the significant monetary discrepancy between the two pertinent bids. Initial calculations indicated that Abraham's bid was approximately $835,000.00 lower than Adlee's over the ten year basic term of the lease. This amount was subsequently determined to be somewhat lower but the discrepancy is still significant. Nonetheless, because of that difference, Mr. Towey called a meeting with the members of the evaluation committee which had evaluated the bidders and had recommended Adlee. His stated reason for calling that meeting was to allow him to hear their reasons for rating the submissions as they had done and to take that information into consideration when he made his final decision. None of the committee members who testified at the hearing at Petitioner's behest indicated any feelings of pressure or intimidation by Mr. Towey. During his meeting with the committee members, Mr. Towey went over several of the evaluation criteria award factors to determine the committee's rationale. Of major importance was the issue of cost, of the availability of the facility to transportation to and from the building, employee security and the ability to control access to the facility, and the availability of on-site parking without cost to both employees and clients. It appears the Adlee facility is a multistory building with some parking available on site and would be easier to control. In addition, it is closer to public transportation access points. There is, however, some indication that on-site parking for clients would not be free and the closest free parking is some distance away. According to Adlee's representative, this matter would not be a problem, however, as adequate, free on site parking, which apparently was not initially identified as a problem, could be provided in any new lease. The Abraham facility is a one story building surrounded by on-site parking. In that regard, however, at hearing, Petitioner raised the claim that the Abraham site did not, in actuality, provide adequate parking because the zoning requirements of the City of South Miami, the municipality in which the facility is located, did not permit the required number of parking spaces to accommodate the prospective need. Petitioner sought and received permission to depose the Building and Zoning Director for the city, Sonia Lama, who ultimately indicated that the Abraham site was grandfathered in under the old zoning rule and, thereby, had adequate parking available. In any case, had this not been true, under the terms of the ITB, any zoning deficiencies could have been corrected after award, or the award rescinded without penalty to the Department. After the meeting with the committee, Mr. Towey indicated he would probably go against the committee's recommendation. One of his reasons for doing so, as he indicated to them, was the appearance certain amenities in the facility would give. In the period between the time the committee met and Mr. Towey was ready to decide, there were several newspaper articles published in the Miami area which were negative in their approach to Department leasing policies and this publicity had an effect on him. In his response to a reporter's question, in fact, Mr. Towey indicated he would not permit the lease of any property which contained such amenities while he was District Director. There is some evidence that the wet bar referred to here was a sink and counter used by agency employees to make coffee. However, before making his decision, Mr. Towey also met with Herbert Adler of Adlee. Mr. Towey advised him he was concerned about the fact that the Adlee property provided a wet bar, a private bathroom and some other amenities in that suite of offices occupied by the Department. Mr. Towey was adamant in his public and private pronouncements on the subject that there would be no such amenities in HRS offices in his District while he was in charge. At the meeting in issue, Mr. Adler made it very clear he was willing to remove all the offending amenities to bring the space into conformity with Mr. Towey's standards. Mr. Towey obviously took Adler at his word as he did not consider this matter to be an issue when he evaluated the bids. Based on his independent evaluation of the proposals, and considering all the pertinent factors, Mr. Towey decided not to concur with the committee's recommendation and instead recommended to the Department's Office of General Services that the bid be awarded to Abraham. Because his recommendation differed from that of the evaluation committee, under the provisions of Section 5-13, HRS Manual 70-1, he was required to forward additional justification for his position. In his forwarding memorandum dated March 20, 1992 to Mr. King Davis of the Department's Office of General Services, Mr. Towey listed as his reasons for disagreement with the committee's recommendation, (1) the lower term cost of Abraham's bid, (2) his opinion that the one story floor plan of Abraham was more convenient and accessible to clients, and (3) the provision for ample free parking at the Abraham site as opposed to the limited parking at the Adlee building. Petitioner claims that Mr. Towey's justification for disagreement was improper because, (a) the rental difference he cited was not based on the ITB formula and did not consider the difference in square footage offered; (b) the rental rate comparison compared a proposed lease with an existing lease, not with a proposal; and (c) the reference to on-site parking referred to the situation under the existing lease with Adlee and not to what could occur under a new lease. The major factor in Mr. Towey's decision was the price differential between the two offerings. While the difference may not have been as great as presented initially by the department staff, even taken in its most conservative light of about half that amount, and considering the appropriate figures, the difference was still considerable and significant. In the continuing period of budgetary austerity under which state operations have been and must continue to be conducted, the financial consideration loomed large in his thinking. As for the parking situation, no change for the better was provided for in Adlee's proposal and even if it were, it was but one of several factors. When Mr. Towey's March 20, 1992 memorandum in justification of his disagreement was evaluated at the Office of General services, it was determined that his decision was rational and objectively justified. Thereafter, by letter dated April 2, 1992, the Office of General Services authorized District 11 to award the lease to Abraham and this decision was transmitted to all responsive bidders by letter dated April 7, 1992. It was this action which prompted Petitioner's protest.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be entered dismissing the protest by Adlee Developers, Inc., of the award of procurement No. 590:2286 to Anthony Abraham Enterprises. RECOMMENDED this 10th day of July, 1992, in Tallahassee, Florida. ARNOLD H. POLLOCK, 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 10th day of July, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-2798 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: - 4. Accepted and incorporated herein. Accepted. Accepted that the pre-bid conference was held but reject the finding that a 5% limit was mentioned. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. & 11. Accepted and incorporated herein. 12. - 14. Accepted and incorporated herein. 15. - 19. Accepted and incorporated herein. Accepted and incorporated herein. Accepted. Accepted except for the next to last sentence which is rejected. Accepted. Accepted and incorporated herein. Accepted but not probative of any material issue. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. & 30. Rejected. - 33. Accepted and incorporated herein. FOR THE RESPONDENT AND INTERVENOR: & 2. Accepted and incorporated herein. 3. - 5. Accepted. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. - 16. Accepted and incorporated herein. 17. - 19. Accepted and incorporated herein. 20. & 21. Accepted and incorporated herein. Accepted and incorporated herein. - 25. Accepted. COPIES FURNISHED: Melinda S. Gentile, Esquire Ruden, Barnett, McClosky, Smith, Schuster & Russell 200 East Broward Blvd. P.O. Box 1900 Fort Lauderdale, Florida 33302 Paul J. Martin, Esquire Department of Legal Affairs The Capitol - Suite 1501 Tallahassee, Florida 32399-1050 Peter W. Homer, Esquire Greer, Homer & Bonner, P.A. 3400 International Place 100 S.E. 2nd Street Miami, Florida 33131 John Slye General Counsel Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32399-0700 Sam Power Agency Clerk DHRS 1323 Winewood Blvd. Tallahassee, Florida 32399-0700
