The Issue The issue presented for decision herein is whether or not the Respondent, Frederick L. Lundeen, is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction by misrepresenting that money he borrowed from a one Julie Couch would be used for the purchase of a lot but, instead, he utilized the money in connection with the purchase of a house for use by his family and for payment of other vacation and travel expenses and refuses to repay the loan, in a manner violative of Section 475.25(1)(b), Florida Statutes.3
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received, and the entire record compiled herein, I hereby make the following relevant factual findings. Respondent, Frederick L. Lundeen, is a licensed real estate salesman and holds license number 0329068. On or about July 13, 1984, Respondent solicited and obtained $3,500 cash from Julie S. Couch (Couch) for the stated purpose of assisting Respondent in purchasing a lot on behalf of Keith and Beverly Rayburn, friends of the Couches. In connection therewith, Respondent executed and delivered to Couch a mortgage note dated July 13, 1984, to secure the $3,500 loan via certain real property owned by Respondent.4 Pursuant to the terms of the note executed by Respondent and given to Mrs. Couch, Respondent was to repay Couch the principal of $3,500 plus $1,000 interest due on or before July 27, 1984. On July 30, 1984, Respondent attempted to repay part of the loan via check dated July 30, 1984 drawn in the amount of $1,000. Respondent's check was returned unpaid by the Drawers Bank with the notification "insufficient funds." (Petitioner's Exhibits 3 and 4) Thereafter, Respondent advised Mrs. Couch that the money was used to pay for his moving, vacation and other relocation costs for his family. Keith Rayburn attempted to buy property from the Respondent which was owned by Southern Standards Corporation. At no time during the attempted purchase by Keith Rayburn did Respondent offer to loan him money to purchase a lot from Southern Standards Corporation. Respondent executed and drafted the terms of the note which was given to Julie Couch which memorialized the loan from Mrs. Couch to Respondent. In this regard, Respondent contends that Julie Couch's ex-husband suggested the terms and the rate of interest which he inserted into the note which memorialized the loan from Julie Couch. On the other hand, Julie Couch testified that it was Respondent who suggested the terms and the interest which he provided with the executed note given her. Based on all of the evidence introduced herein including the fact that Respondent misrepresented the purpose for which the money would be utilized, and his failure to call Gary Couch as a witness to substantiate his claim that it was he, Gary Couch, who suggested the terms under which the loan would be made, the testimony of Julie Couch in this regard is credited.5 Respondent has repaid approximately $1,250 of the $3,500 loan from Julie Couch. Respondent, based on advice of his counsel, refuses to repay any further amounts on this loan contending that the interest rates were usurious and, further, that the State, in the person of Petitioner, is attempting to use its "strongarm tactics" to exact money from Respondent which is a usurious transaction. Respondent also contends that because the interest rate charged by Mrs. Couch was in excess of 45 percent per annum, Mrs. Couch committed a third degree felony. As previously stated, the weight of the evidence reveals that it was Respondent who drafted the note and provided the terms for repayment. It is also clear that Respondent misrepresented to Mrs. Couch the purpose for which he would utilize the money that he borrowed from her. It is therefore concluded that by such acts Respondent engaged in acts of misrepresentation, false pretenses, trick and dishonest dealing in a business transaction.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is, therefore, RECOMMENDED: That the license of Respondent, Frederick L. Lundeen, be suspended for a period of one (1) year and that he be fined $1,000. RECOMMENDED this 21st day of October, 1985, in Tallahassee, Florida.6 JAMES E. BRADWELL , Hearing officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488- 9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of October 1985.
Findings Of Fact The Respondent Karen Kay Colucci, whose license No. is 0062107,is a registered real estate salesman in the State of Florida. The Respondent is employed by Magnolia Homes, Inc., 300 Embassy Boulevard, Port Richey, Florida. The owner of the business is David Lukacher. On May 20, 1976, Harvey Thompson and his wife Mary Thompson looked at model homes built by Magnolia Homes, Inc. They were assisted by a registered real estate salesman for Magnolia Homes, Inc., Patrick D. DePianto. Mr. and Mrs. Thompson told the real estate salesman that they wanted to build a house but wanted to sell their own house first. Mr. and Mrs. Thompson found a lot and model home they desired and then proceeded to Mr. DePianto's office to make a deposit. The office in which the transaction took place is a large room in which several people worked for the builder including the Respondent Karen Kay Colucci who is the sales manager. Mr. DePianto's desk and work area was in rather close proximity to Mrs. Colucci's desk and work area. Mrs. Colucci was not involved in the assistance to the Thompsons in locating a lot and model home and was not directly involved with Mr. DePianto and Mr. and Mrs. Thompson at the time the transaction under consideration took place. At the time of making the deposit Mr. and Mrs. Thompson asked Mr. DePianto if they could get their deposit back if they did not sell their home. Mr. DePianto called over to Mrs. Colucci and asked if a refund could be made if the Thompsons could not sell their house and, satisfied with the answer, assured the purchasers that there would be no problem. A check was written out for five hundred ($500) dollars and handed to Mr. DePianto and a receipt was written out by Mr. DePianto and handed to the Thompsons. There was no representation on the receipt written by Mr. DePianto concerning the refundability of the deposit. The Thompsons did not request that the representation be included on the receipt. Mr. and Mrs. Thompson left the office feeling that there would be no problem obtaining a refund of the deposit if they could not sell their home , although they were confident that the sale of their home was imminent. Thereafter the expected sale of Mr. and Mrs. Thompson's home was not consummated and the Thompsons asked Mr. DePianto for a refund of the deposit. Mr. DePianto asked for the request to be in letter form and Mr. Thompson complied. Thereafter he was advised by Mr. DePianto that the builder, Mr. David Lukacher, would not return the deposit but would hold the $500 until they were able to buy one of their homes and credit that amount to the purchaser. Mr. Thompson requested Mr. DePianto to put the discussion in letter form which Mr. DePianto did. Mr. Thompson wrote Mr. Lukacher a letter and called him on the telephone requesting that the deposit be refunded but no refund was forthcoming. Approximately six months later Mr. DePianto sent Mr. and Mrs. Thompson a check for $250, half of the deposit, plus 7 months of interest at 6 per cent per annum. The remainder of the deposit has not been returned to Mr. and Mrs. Thompson and Mr. Lukacher retains the $250, having previously sent $250 of the $500 deposit to Mr. DePianto. Petitioner Florida Real Estate Commission contends: that the Respondent Karen Kay Colucci knowingly misrepresented to the Thompson's that there would be no problem obtaining a refund of the $500 deposit if the Thompson's could not sell their home; that such representation means the Respondent is guilty of misrepresentation, false promises, false pretences, culpable negligence, or breach of trust in a business transaction and that therefore her license should be suspended. Respondent contends that she was doing other work at the time the subject transaction took place and that she had no involvement with the transaction between Mr. DePianto and the Thompsons. Respondent further contends that in reply to the question posed to her by Mr. DePianto in the busy office that a refund could be made providing Mr. Lukacher, the builder, approved it. The hearing Officer further finds: There is no consistent testimony by the witnesses as to exactly what was said in reference to a refund at the time Mr. and Mrs. Thompson were seated at the desk of Mr. DePianto. There is no consistent testimony as to what exactly Mr. DePianto asked the Respondent or what her answer was. Mr. and Mrs. Thompson failed to request that the receipt reflect that the deposit was conditional and would be returned if the Thompson's could not sell their home. Mr. DePianto did not make the receipt a conditional receipt. Mr. David Lukacher, the builder, refused to refund the deposit to the Thompsons, kept $250 of it, and sent Mr. DePianto the salesman, $250. Mr. DePianto refunded his share of the deposit plus interest to the Thompsons.
Recommendation Dismiss the complaint. DONE and ORDERED this 23rd day of May, 1978, in Tallahassee, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Kenneth A. Meer, Esquire Staff Counsel Florida Real Estate Commission 400 West Robinson Avenue Orlando, Florida 32801 Karen Kay Colucci Magnolia Homes, Inc. 300 Embassy Boulevard Port Richey, Florida 33568
Findings Of Fact Residential Realty, Inc. was incorporated by Ralph R. Voss, a non broker, some two years ago. He advertised for a registered broker to act as AFM and Mrs. Lucille Busch responded. Her broker's license was then inactive but since the job offered would not require full time participation she agreed to take it after consulting with her attorney and the FREC office in Ft. Myers. Mrs. Busch signed all checks drawn upon the escrow account and kept careful records involving this account. She conferred with Voss on office policies and on hiring or firing salesmen; however, as owner, it appears that Voss had the final say in policy matters if any dispute arose. Before assuming the duties as AFM Mrs. Busch, as noted above, received confirmation that such AFM participation was not in violation of the Real Estate License Law. She be lives that she was performing the duties required of a broker and that neither Voss, nor his successor Bach, held themselves out as brokers or performed the functions that can only be performed by a broker. Some twelve months ago Warren Bach and his wife purchased all shares of stock in Residential Realty, Inc. from Voss. Bach is a registered real estate salesman and he continued the office practices that existed under Voss with Mrs. Busch remaining AFM. When Bach purchased the realty corporation he too checked with an attorney and the Real Estate Commission office in Ft. Myers regarding the operation of Residential Realty, Inc. before continuing the status quo. Bach had been a real estate broker in Wisconsin for ten years before moving to Florida and purchasing Residential Realty, Inc. One sales person in Residential Realty, Inc., Mrs. Joan Edwards, obtained an exclusive listing on property owned by her parents-in-law. Bach subsequently obtained a purchaser and presented an offer to Edwards to purchase his property. The contract provided for a purchase price of $39,900 with a $100 down payment with an additional $900 to be paid by the buyer upon acceptance of the contract by the seller. This offer was presented to Edwards by Joan Edwards and Bach. Edwards modified the contract to a total price of $40,900, initialed this counter offer, but left the balance of the contract unchanged. The contract was returned to the purchaser by Bach and was accepted by him, but the additional $900 down payment required by the terms of the contract was never paid. Initially the buyer advised Bach that he would produce the $900 balance when he sold his home in Tampa, however, he never produced the $900 required by the contract and Bach failed to notify Edwards of this fact. Mrs. Busch, the AFM, became aware of the contract and the $900 discrepancy shortly after the contract was executed and she discussed this with Joan Edwards, the daughter-in-law of the seller. Mrs. Edwards testified that she became aware of the $900 problem about one week before the scheduled closing date while Mrs. Bach, who also worked in the real estate office, recalled numerous discussions about this additional deposit with Mrs. Joan Edwards several weeks before the scheduled closing. Regardless of the knowledge within the realty office, the seller was informed of the breach of the contract by the buyer by neither Bach nor his daughter-in-law, Joan Edwards, until only a few days before the scheduled closing. Bach assumed, incorrectly, that Mrs. Edwards would inform her parents-in-law- of the fact that the buyer had failed to produce the additional deposit. Bach considered the contract still valid although the buyer had failed to comply with the provision requiring him to make the additional $900 payment upon acceptance.
The Issue The issue to be resolved herein concerns whether the Petitioners are entitled to an award of attorney's fees in this proceeding. Embodied in that general issue are questions concerning whether the Petitioners are the prevailing parties; whether they meet the definition of "small business" parties, including the net worth amounts, enumerated in Section 57.111, Florida Statutes, as well as whether the disciplinary proceeding against both Petitioners was "substantially justified". See Section 57.111(3)(e) , Florida Statutes.
Findings Of Fact The Respondent is an agency of the State of Florida charged with licensing and regulating the practices of real estate salesmen and brokers by the various provisions of Chapter 475, Florida Statutes. Included within those duties is the duty to investigate conduct by realtors allegedly in violation of Chapter 475 and related rules and to prosecute administrative penal proceedings for which probable cause is found as a result of such investigations. At times pertinent hereto, both Ms. Maxwell and Ms. Cosyns, (then Pauline Sealey) were licensed realtors working as independent contractors for Mariner Properties, Inc. and V.I.P. Realty Inc. The complete file of the underlying proceeding DOAH Case No. 86-0140, was stipulated into evidence. That file included the Administrative Complaint filed against these Respondents and the Recommended and Final Order, which Final Order adopted the Recommended Order. The findings of fact in that Recommended Order are incorporated by reference and adopted herein. During the Petitioner's case, counsel for Petitioner voluntarily reduced the attorney's fees bills for both Petitioners such that Ms. Maxwell's bill is the total amount of $2,695.50 and Ms. Cosyns' bill is $17,200, rather than the original amounts submitted in the affidavit. Respondent acknowledged in its proposed Final Order that the fees and costs submitted by the Respondent were thus reasonable. The testimony the Petitioners presented through depositions, transcripts of which were admitted into evidence into this proceeding, was unrefuted. That testimony demonstrates that both Ms. Cosyns and Ms. Maxwell were prevailing parties in the administrative proceeding referenced herein brought by the Respondent, Department of Professional Regulation. They were individually named as Respondents in the Administrative Complaint whereby their professional licenses were subjected to possible suspension or revocation for alleged wrong doing on their part. There is no dispute that they were exonerated in that proceeding and are thus prevailing parties within the meaning of Section 57.111, Florida Statutes. The Petitioners are also "small business parties". In that connection, they both were independently licensed Real Estate professionals during times pertinent to the underlying proceeding and were acting in the capacity of independent contractors for all the activities with which the administrative complaint was concerned. Each established that her net worth is below the limit provided by Section 57.111 as an element of the definition of "small business party". The reasonableness of the fees having been established in the manner found-above and the Petitioners having established that they meet the definitional requirements of prevailing small business parties, there remains to be determined the issue of whether the proceedings against the two Petitioners were "substantially justified", that is, whether the proceeding had a "reasonable basis in law and fact at the time it was initiated by a State agency." See Section 57.111(3)(e), Florida Statutes. The facts concerning each Petitioner's case regarding the three counts of the Administrative Complaint relating to them are as found in the Recommended Order incorporated by reference herein. Respondent Maxwell was charged in the complaint with having worked in conjunction with an office manager, Mr. Hurbanis of V.I.P. Realty, in conspiring with him to submit a fraudulent real estate sales contract to a lending institution for purposes of financing. This allegedly involved submitting a contract to the lending institution with an inflated purchase price in order to secure one hundred percent financing, the scheme being more particularly described in that portion of the findings of fact in the Recommended Order related to Jean Maxwell. In fact, Ms. Maxwell did not work in the realty office as charged in the Administrative Complaint, but rather was employed by Mariner Properties, which may have been a related company. The contract in question, although alleged to be fraudulent was, in fact, a bona fide contract which was a legitimate part of the Real Estate transaction submitted to the bank for financing purposes, about which the bank was kept fully advised. All details of the transaction were disclosed to the lender. Maxwell was specifically charged with concealing the true contract from the lender in order to enhance the percentage of the purchase price that the bank would finance, done by allegedly inflating the purchase price in a second contract submitted to the bank. It was established in the disciplinary proceeding that no such concealment ever took place. In fact, Ms. Maxwell was purchasing a lot from her own employer, Mariner Properties. Two contracts were indeed prepared for the purchase of Lot 69, a single family lot on Sanibel Island. In fact, however, the difference of $42,875 and $49,500 in the stated purchase price, as depicted on the two contracts, was the result of continuing negotiations between Ms. Maxwell and the seller, who was also her employer. The difference in the two prices depicted on the contracts was the result of, in effect, a set-off to the benefit of Ms. Maxwell, representing certain employee discounts and real estate commission due from the employer and seller to Ms. Maxwell, the purchaser. As Petitioners' composite Exhibit 5 reflects, the lender involved, North First Bank of Ft. Myers, Florida, was fully apprised of all the details concerning this transaction at the time it was entered into and the loan commitment extended and closed. Mr. Allan Barnes, the Assistant Vice President of North First Bank revealed, in the letter contained in this exhibit in evidence, that there was no concealment or misrepresentation of the facts to his institution by Ms. Maxwell. This letter is dated April 18, 1984. The other related letter in that exhibit, of May 2, 1984 from attorney Oertel to attorney Frederick H. Wilson of the Respondent agency, thus constitutes notice to the agency well before the complaint was filed, that no concealment or misrepresentation to the lender involved had occurred and the charges were requested to be dismissed. In spite of the fact that the agency was on notice of this turn of events well before the filing of the Administrative Complaint, it proceeded to file the complaint and to prosecute it all the way up to the date of hearing, requiring Ms. Maxwell's attorney to attend the hearing to defend her interests. At the hearing, counsel for the Department acknowledged that there was no basis for prosecuting Ms. Maxwell and voluntarily dismissed the complaint as to her. The Respondent's witness, Investigator Harris, in his deposition taken September 11, 1984, acknowledged that he did not discuss any details concerning the investigation, with attorney Frederick Wilson, who prepared the complaint, nor did he confer with him by telephone or correspondence before the filing of the complaint. Therefore, the complaint was prepared solely on the basis of the investigative report. The investigative report came into evidence as Respondent's Exhibit 1. It reveals that Mr. A. J. Davis the president of Mariner Group and Mariner Properties, who was Jean Maxwell's employer and the owner of the lot in question, signed one contract and his Executive Vice President signed the other. In spite of this, the investigative report does not reveal that the investigator conferred with either Ms. Maxwell, or the sellers concerning this transaction. He conducted a general interview of A.J. Davis concerning the alleged "problem" in his office of "double contracting," but asked him no questions and received no comment about the Jean Maxwell transaction whatever. Nor did the investigator confer with Mr. Allen Barnes or any other representative of North First Bank. If the investigation had been more complete and thorough, he would have learned from Mr. Barnes, if from no one else, that the bank had knowledge of both contracts and all details of the transaction underlying them and there had been no concealment or misrepresentation of the facts regarding the transaction by Ms. Maxwell. This information was learned by attorney Oertel as early as April 18, 1984 by Mr. Barnes' letter, referenced above, and it was communicated to the agency by Mr. Oertel on May 2, 1984. Nevertheless, the complaint was filed and prosecuted through to hearing. Therefore, the prosecution and filing of the Administrative Complaint were clearly not substantially justified. If the Department had properly investigated the matter it would have discovered the true nature of the transaction as being a completely bona fide real estate arrangement. Former Respondent, Pauline Sealy Cosyns was charged with two counts, III and V, in the Administrative Complaint at issue. One count alleged, in essence, that Ms. Sealey had engaged in a similar fraudulent contract situation regarding the sale of her residence to a Mr. and Mrs. Thomas Floyd. The evidence in that proceedings revealed no concealment of any sales contract occurred whatever with regard to the lending institution or anyone else. The facts as revealed at hearing showed Ms. Cosyns and the Floyds, through continuing negotiations after the original sales contract was entered into, amended that contract and executed a second one, in order to allow Ms. Cosyns to take back a second mortgage from the Floyds. This was necessary because Mr. Floyd, an author, was short of the necessary down payment pursuant to the terms of the original contract, because his annual royalty payment from his publishers had not been received as the time approached for closing. The second contract was executed to allow for a second mortgage in favor of the seller, Ms. Cosyns, in order to make up the amount owed by the Floyds on the purchase price agreed upon, above the first mortgage amount. The testimony and evidence in the disciplinary proceeding revealed unequivocally that the lending institution, Amerifirst Mortgage Company, was fully apprised of the situation and of the reason for the two contractual agreements. The $24,000 second mortgage in question is even depicted on the closing statement issued by that bank. There was simply no concealment and no effort to conceal any facts concerning this transaction from the lender or from anyone else. The investigation conducted was deficient because the investigator failed to discuss this transaction with the lender or with the purchasers. He discussed the matter with Ms. Sealy-Cosyns and his own deposition testimony reveals, as does his investigative report, that he did not feel that he got a complete account of the transaction from her. She testified in her deposition, taken prior to the instant proceeding, that she indeed did not disclose all facts of the transaction to him because she was concerned that he was attempting to apprehend her in some "legal impropriety". Therefore, she was reluctant to be entirely candid. The fact remains, however, that had he conducted a complete investigation by conferring with the lender and the purchasers, he would have known immediately, long before the Administrative Complaint was filed and the matter prosecuted, that there was absolutely no basis for any probable cause finding that wrong-doing had occurred in terms of Section 475.25(1)(b), Florida Statutes. Thus, the facts concerning the prosecution as to Count III against Pauline Sealy-Cosyns, as more particularly delineated in the findings of fact in the previous Recommended Order, reveal not only that Ms. Cosyns was totally exonerated in the referenced proceeding, but that there was no substantial basis for prosecuting her as to this count at all. Concerning Count V against Ms. Cosyns, it was established through the evidence at the hearing in the disciplinary case that she was merely the listing agent and did not have any part to play in the drafting of the contract nor the presenting of it to the lender. Because there was no evidence adduced to show that she had any complicity or direct involvement in any fraudulent conduct with regard to the transaction involved in Count V of the Administrative Complaint at issue she was exonerated as to that count as well. It is noteworthy here that a statement was made by counsel for the agency, appearing at pages 20 and 21 of the transcript of the proceeding involving the Administrative Complaint, which indicates that the agency, based upon its review of certain documents regarding Counts III and V, before hearing, felt that indeed there might not be a disputed issue of material fact as to Mrs. Cosyns. The agency, although acknowledging that a review of the documents caused it to have reason to believe that it was unnecessary to proceed further against Ms. Cosyns nevertheless did not voluntarily dismiss those counts and proceeded through hearing. Be that as it may, the investigation revealed that Ms. Cosyns acknowledged that she knew that there were two contractual documents involved, but the investigation also revealed that Ms. Cosyns was only the listing agent. The selling agent was Mr. Parks. The investigation revealed through interviews with Ms. Cosyns, Mr. Parks and Mr. Hurbanis, the office Manager of V.I.P. Realty, that Ms. Cosyns, as listing agent, was merely present when the offer from the buyers was communicated to the office manager, Mr. Hurbanis, and ultimately to the sellers, the Cottrells. There was no reason for the investigator to believe that Ms. Cosyns had anything to do with the drafting of the contracts nor with the communication of them to the lending institution involved. That was done by either Mr. Parks or Mr. Hurbanis or by the buyers. The investigation (as revealed in the investigative report) does not show who communicated the contract in question to the lender. The investigation was simply incomplete. If the investigator had conferred with the buyers, the sellers and especially the lender, he could have ascertained-whether the lender was aware of all the facts concerning this transaction and whether there was any reason to believe that Ms. Cosyns had anything to do with the arrangement and the details of the transaction. It was ultimately established, by unrefuted evidence at hearing, that indeed Ms. Cosyns did not have anything to do with the transaction, nor the manner in which it was disclosed to the lender. The fact that she was aware that two contracts had been prepared did not give a reasonable basis for the investigator to conclude that she had engaged in any wrong-doing. The report of his interviews with Ms. Cosyns, Mr. Hurbanis and Mr. Parks, as well as Donna Ross, does not indicate that he had a reasonable basis to conclude that Ms. Cosyns had engaged in any fraudulent conduct with regard to the transaction, including the conveyance of a bogus contract to the lending institution involved, nor for that matter, that Mr. Hurbanis or Mr. Parks engaged in such conduct. In order to ascertain a reasonable basis for concluding whether Ms. Cosyns was involved in any wrongful conduct, he would have had to obtain more information than he did from these people or confer with the lender, the buyer or the seller, or all of these approaches, before he could have a reasonable basis to recommend to the prosecuting agency that an Administrative Complaint be filed against her concerning this transaction. In fact, he did not do so, but the Administrative Complaint was filed and prosecuted through hearing anyway, causing her to incur the above-referenced attorney's fees. It thus has not been demonstrated that there was any substantial basis for the filing and prosecution of Count V of the Administrative Complaint against Ms. Cosyn. Thus she is entitled to the attorneys fees referenced above with regard to the prosecution of the Administrative Complaint in question.
Findings Of Fact Respondent is licensed by the State of Florida as a real estate brokers and holds license No. 0002997. On May 7, 1979, Respondent acted in the capacity of a real estate broker in the transaction of the sale of a parcel of real property located in Polk County, Florida. The purchaser in that transaction was Margaret Rhoden, and the seller was June Davis, who was represented in the transaction by a relative, Henry Goodwin. On May 7, 1979, Margaret Rhoden entered into a Contract for Sale of Rea1 Estate for the purchase of a piece of property Frostproof, Florida, from June Davis. The full purchase price of the property was $3,500, which Ms. Rhoden paid to Respondent in cash on May 7, 1979, and obtained a receipt from Respondent for that amount. At the time the contract was entered into, Ms. Rhoden was advised that a deed should be forthcoming from the seller within two to four weeks. A date of June 20, 1979, was established to close the transaction, subject to a 120-day curative period should any cloud on the title be discovered. The contract between the parties provided that should any such cloud appear of record, the seller would have a period of 120 days after receipt of written notice prior to the date set for closing in which to attempt to cure the defect. The contract further provided that if title defects were not cleared within the l20-day period, the deposit would be returned to the buyer, or, at the buyer's option, the transaction should be closed in the same manner as if no defect had been found. A warranty deed purporting to transfer the property from the seller to the buyer was executed on June 7, 1979, and a title binder was issued on that same date. The title binder indicated an outstanding mortgage on a larger piece of property of which the parcel purchased by Ms. Rhoden was only a part. When efforts to clear this cloud on the title took longer than expected, Ms. Rhoden asked, and was granted, permission by the seller's agent to commence construction on the improvements on the property notwithstanding the fact that she knew that a cloud remained on the title to the lot, and the transaction had not been closed. Construction was not completed on the improvements because Ms. Rhoden ran out of cash during the course of construction. She moved into the dwelling while it was still in a partially completed condition and, on September 8, 1979, with the permission of the seller's agent, received a loan of $3,000 from the $3,500 deposit she had placed with Respondent, Ms. Rhoden executed a promissory note dated September 8, 1979, in which she agreed to repay the $3,000 loan when clear title to the property was issued. Ms. Rhoden used the proceeds of this loan to make additional improvements on the property. On October 26, 1979, Respondent received both the warranty deed dated June 7, 1979, and the title binder issued on that date from the attorney for the seller. When approached by Ms. Rhoden, Respondent agreed to lend her the deed and title binder to attempt to obtain additional financing to complete construction on her home. The clear inference from the record in this proceeding is that there was never any understanding between Respondent and Ms. Rhoden that this deed could be recorded at this or any other juncture in this transaction. In fact, the contract entered into between the buyer and seller clearly called for the payment of the full purchase price of the property at closing, and the note subsequently executed by Ms. Rhoden conditioned the issuance of a warranty deed to her on the payment of the $3,000 face value of the note. Ms. Rhoden was unsuccessful in obtaining additional financing to complete construction on her home, probably due to the fact that when she sought that financing the outstanding mortgage on the property had still not been satisfied. When Respondent advised the seller's attorney that he had loaned the warranty deed to Ms. Rhoden for the purposes outlined above, he was advised that there was nothing to keep Ms. Rhoden from recording the deed, at which point Respondent apparently determined that it would be prudent for him to retrieve the deed from Ms. Rhoden's possession. Ms. Rhoden had her mother return the deed to Respondent in February of 1980. According to the testimony of both Ms. Rhoden and her mother, they felt the purpose for the returning of the deed was to have it recorded. Respondent denies any such understanding. In resolving this conflict in testimony, the clear inference from the circumstances involved in this transaction, including the wording of the contract of sale and the note executed by Ms. Rhoden, supports a finding that all of the parties to this transaction either knew, or should have known, that the recording of the deed at this juncture in the transaction would have been improper. Although the outstanding mortgage had been satisfied in January of 1980, Ms. Rhoden had not Performed her obligation under the contract of sale by paying the full purchase price. When Respondent had recovered the deed from Ms. Rhoden, he was advised by the attorney for the seller not to record the deed until he had received payment from Ms. Rhoden in accordance with the contract and the promissory note. As indicated above, the outstanding mortgage on the property was satisfied in January of 1980. On February 6, 1980, Respondent Prepared a closing statement reflecting the purchase price of the property as $3,500. From this amount he deducted a total of $478 for state documentary stamps, title insurance, Preparing the deed, and amount of real estate commission leaving a the apparently forwarded the note from Ms. Rhoden for $3,000, together with the $22.00 cash balance remaining from her initial $3,500 deposit to the seller along with the deed which the seller had earlier executed. Ms. Rhoden apparently never made or tendered payment of the $3,000 note, the transaction never closed, and at the time of final hearing in this cause an eviction action was apparently pending between the seller and Ms. Rhoden. Paragraph seven of the contract of sale executed between the seller and Ms. Rhoden Provides as follows: If Buyer fails to perform this contract, the deposit this day paid by Buyer as aforesaid shall be retained by or for the account of Seller as consideration for the execution of this agreement and in full settlement of any claims for damages.
Findings Of Fact The testimony revealed that during late December, 1975, Land Re-Sale Service, Inc., a Florida Corporation, filed application with the Florida Real Estate Commission seeking registration as a corporate real estate broker. The application revealed that Defendant Frank Viruet (FREC Progress Docket 2856) was to become the Active Firm Member Broker, and Vice President of the company; that Carol Bauman was to become Secretary-Treasurer and Director of the company; that Lee Klein was to become President and Director of the company. Testimony shows that Carol Bauman is the wife of Defendant Bernard Bauman (Progress Docket 2857); that Lee Klein is the sister of Carol Bauman and that Jeffrey Bauman (FREC Progress Docket 2858) is the son of Bernard Bauman. Subsequent to filing said corporate application For registration with the Commission, evidence reveals that the name was changed to Noble Realty Corporation and shortly thereafter to Deed Realty, Inc. and that along with each change, a new application For corporate registration was later filed with the commission. It was noted that the stated officers and active firm members broker remain as stated in the initial corporate application For registration. Thus, it can be concluded For all legal purposes that the above corporate entities are one and the same. Count I of the Administrative Complaint filed herein, reveals that according to the certificate filed with the Commission's chairman dated December 3, which was offered into evidence by Plaintiff and admitted, during the period November 1, 1975 to the date of said certificate, i.e., December 3, 1976, which covers all dates material to the complaint herein, no registration was issued to or held by either of said corporations, Land Re-Sale Service, Inc., Noble Realty Corporation or Deed Realty, Inc. This was further confirmed by the testimony of Bernard Bauman who was to have become a salesman associated with the above entities and by Frank Viruet, who was to have become the active firm member broker For the above entities. Approximately December 2, 1975, Land Re-Sale Service, Inc. entered into a written lease For office premises known as Room 212, Nankin Building, 16499 N.E. 19th Avenue, North Miami Beach, Florida For the period January 1 through December 31, 1976 (A copy of the lease was entered into evidence by stipulation.) The unrebutted testimony of Plaintiff Reagan reveals that he observed during his investigation of this cause a building directory on the ground entrance floor to the Nankin Building displaying the name Noble Realty, Inc., Room 212 and a similar display on the building directory which was located on the second floor. Plaintiff's witness Peter King, a representative of and For Southern Bell Telephone Company testified that on December 27, 1975, three phones were installed in Room 212 of the Nankin Building in the name of Land Re-Sale Service, Inc. and that from January 2 to January 16, approximately 575 calls were made from the stated phones all during evening hours to out-of-state numbers. Jeffrey Bauman admitted to having made phone calls to out-of-state numbers For purposes of soliciting real estate sales listings, but failed to recall specifically the number of calls nor did he have records to substantiate this fact. Bernard Bauman testified that from such solicitations, approximately 4 listings were obtained accompanied by an advance fee of $375.00 For each listing. When he was advised by the Commission's Investigator that the operation they were conducting was in violation of the licensing law by reason that no registration had been issued to the company and that all who are engaged in real estate activities therein were in violation of the license law (Chapter 475, F.S.) the premises were closed and all real estate activities ceased. This was further confirmed and unrebutted by plaintiff Reagan. As to Count II, the evidence established that, as stated above, the Defendants Bernard and Jeffrey Bauman had solicited real estate sales listings with representations to out-of-state property owners that listings would in fact be published and disseminated to brokers nationwide. Both Jeffrey and Bernard Bauman admitted that their listings were never published or otherwise disseminated to brokers. Bernard Bauman's testimony reveals that no monies received were returned to senders. There is no evidence introduced to show that Defendant Jeffrey Bauman knew, at the time of soliciting, that no bona fide efFort would be made to sell the property so listed with Noble Realty Corporation. As to Count III, plaintiff alleges that the above acts as set Forth above established a course of conduct by defendant upon which his revocation or registration should issue.
Findings Of Fact The facts here involved are undisputed. At all times here relevant Leroy Herron, Respondent, was registered with the Florida Real Estate Commission as a broker and active firm member of Chase Realty, Inc. Chase Realty, Inc. was a corporate broker, one hundred percent of whose stock was owned by Carl F. German, a non-registrant. At and prior to August 1977, Respondent Herron was employed at the Ramada Inn at Lake Worth as bartender. He had received his real estate broker's registration two or three years before, but had never actively participated in a real estate office or sold real estate. Carl F. German, a former comptroller for the business owning Ramada Inn, came into the Ramada Inn several times per month and during a conversation with Herron learned that Herron was a registered broker. German said he was in need of a broker and asked if Herron was interested. The conversation was general and no specific employment agreement was reached. Although German had Herron registered with the Petitioner as active firm member of Chase Realty, Inc., Herron was assigned no duties, provided with no office space or was ever invited to come to the office. German explained the firm's business at this time did not involve real estate sales and that he had Herron available in case a deal came up involving a real estate transaction. In August 1977 German brokered a deal to sell a liquor lounge known as Crazy Jim's to one Sheridan, who gave German a $5000 deposit on the transaction. Herron had no involvement in this deal and was totally unaware of it until Sheridan contacted him after he had, been unable to get his deposit back from German. The Deposit Receipt and Contract for Sale and Purchase (Exhibit 2) was prepared by the attorney for the seller and stated "This represents the purchase and sale of personal property only and the lease of the real estate." The contract provided for a commission of $5000 to Chase Realty, Inc. or one-half of the deposit in case the buyer forfeited. The $5000 down payment was deposited by German in an account of Chase Realty, Inc. on which German was the only authorized signature. When the transaction failed to close and the buyer demanded return of his deposit, German refused to return the deposit. A complaint by the buyer to the Petitioner led to the investigation and the charges here involved. German contends that the transaction was for the sale of a business only and that he was not involved with the lease recited in Exhibit 2, as that was between the buyer and the lessor. German readily acknowledged that he had made no specific arrangements with Herron to perform the functions of an active firm member broker but insisted that at this time the company was not engaged in any real estate transactions and that he had no need for a registrant. Upon being advised that he had been registered as active firm member of Chase Realty, Inc. Herron had his certificate removed from the Chase Realty Office and presumably placed his registration in an inactive status. He cooperated fully with the investigator for Petitioner and with the buyer regarding the return of the buyer's deposit. Carl F. German was tried on criminal charges resulting from the transaction leading to the charges preferred against Herron. Those criminal charges against German involved acting as a real estate broker without a license. The business card German showed to Herron had the name Carl F. German, President, Chase Realty, Inc. (address) Real Estate Brokers. Herron was not aware that German was not a registered real estate broker or that Herron was to be registered as the active broker of Chase Realty, Inc. when he agreed to have his license registered with Chase Realty, Inc.
The Issue Should Respondent's license as a real estate broker be revoked, suspended or otherwise disciplined?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: The Department is the agency charged with the responsibility of investigating and enforcing the provisions of Chapter 475, Florida Statutes. At all times material to this proceeding, Respondent was a licensed real estate broker in the State of Florida, issued license number 0152815 in accordance with Chapter 475, Florida Statutes. Robert L. Purlee and Doris A. Purlee (Purlees) conveyed certain real property located at Unit 1303-A, Jamestown Condominiums, within Pinellas County, Florida, to Ralph F. Marotte and Eve K. Marotte (Marottes), on June 18, 1993, for an agreed upon sum of $15,000, with installments due over a period of 120 months, at the rate of $181,99 per month, beginning July 15, 1993. Since there was no express language in the deed to express a contrary intent, the conveyance to the Marottes created an estate by the entirety which was not available to answer for the individual debts of either of the tenants. The Marottes executed a mortgage and ad promissory note creating a lien against the property in favor of the Purlees, to secure the timely payment of the sum owed by the Marottes. At the time the Marottes purchased the property in question from the Purlees, there were no other liens or encumbrances against the property. At the time the deed was recorded, there was two personal judgments filed of record against Ralph F. Marotte, individually, but no personal judgments filed of record against Ralph F. Marotte and Eve K. Marotte, jointly or as husband and wife, or Eve K. Marotte, individually. Since no copies of these judgments, certified or otherwise, were introduced as evidence, and David Eaton appeared to be confused about these judgments, this finding is based on the testimony of Eve K. Marotte which I find credible. On November 10, 1993, the Marottes authored and caused to be delivered to the Purlees a letter which provides in pertinent part: We are unable to financially own this unit, therefore, we wish to deed it back to you and your wife, and record it in the courthouse. Rather than go thru foreclosure proceedings and lawyer’s fees etc., thought the simplest best way for both of us is to just return the property back to you both, and have the tenant send her rent payment directly to you. We have prepared the deed - and after it is recorded - have the courthouse send it to you directly. (Emphasis Supplied) * * * On December 8, 1993, the Marottes authored and caused to be delivered to the Purlees a letter which provides in pertinent part: Attached is a copy of the Quit Claim Deed - which is being recorded and will be mailed to you directly. (Emphasis Supplied) * * * On January 6, 1994, the Marottes authored and caused to be delivered to the Purlees a letter which provides in pertinent part: We went to the courthouse to record the deed, and realized that we did not take the mortgage off, so we are enclosing a satisfaction of mortgage, so that we can turn the property back to you- and you will then own it free and clear as you did before. As soon as we received this paper from you, will turn over everything, to you, that is, keys, etc. (Inventory remains the same). (Emphasis Supplied) * * * From the notation on the quit claim deed it appears that the Marottes attempted to record the deed at the courthouse but changed their mind as indicated in the letter. The Purlees executed the satisfaction of mortgage and posted it with the United States Postal Service for delivery to the Marottes. Subsequently, the Purlees discussed the matter with their attorney, David A. Eaton, who advised the Purlees to have the satisfaction of mortgage retrieved from the postal service. This was accomplished, and the Marottes did not receive the satisfaction of mortgage. Therefore, the Marottes did not record the quit claim deed transferring title back to the Purlees. Based on the testimony of Eve K. Marotte which I find credible, Eve K. Marotte continued in her effort to deed the property back to the Purlees, and even discussed the possibility of satisfying the personal judgments against Ralph F. Marotte in the process. In fact, Respondent even arranged for the sale of the property but that did not prove fruitful either. At the time the Marottes attempted to deed the property back to the Purlees, the Marottes did not advise the Purlees of the personal judgments against Ralph F. Marotte, individually. Since the conveyance of the property to the Marottes created an estate by the entirety, the property would not have been subject to any judgments against Ralph F. Marotte, individually upon the Marottes deeding the property back to the Purlees. There was no intent on the part of the Respondent to “saddle” the Purlees with Ralph F. Marotte’s personal judgments. Likewise, there was no intent on the part of Respondent to mislead or misrepresent the circumstances surrounding the attempt to “deed back” the property or to induce the Purlees to execute a satisfaction of mortgage so that the Marottes could record such satisfaction or mortgage without recording the quit claim deed and thereby have the property free and clear of the mortgage. Although the Marottes did make some of the mortgage payments, they did not make all of the payments as contemplated by the mortgage and promissory note. Their failure to make mortgage payments was due to their financial condition and not that the Marottes were intentionally attempting to deprive the Purlees of the property without paying for the property. The Marottes collected some rent from the property but apparently did not apply this money toward the mortgage payment. However, there was no evidence, other than the requirement of making the mortgage payments, that the Marottes were required to pay the rent over to the Purlees. On or about November 6. 1995, the Purlees filed a complaint with the Circuit Court of the Sixth Judicial Circuit of the State of Florida, in and for Pinellas County, against the Marottes alleging, inter alia, that Respondent committed fraud and dishonest dealing in a real estate transaction. On a Motion for Summary Judgment filed by the Purlees, the court entered a Final Judgment Against Licensed Real Estate Broker, Eve K. Marotte, for Monetary Damages Arising Out of Fraudulent Conduct in a Real Estate Brokerage Transaction on March 1, 1996. Additionally, the court entered a Final Judgment Against Eve K. Marotte and Ralph F. Marotte for the total sum of $95, 454.95 which included $22, 284.54 in actual damages, $66,853.62 in trouble damages pursuant to Section 772.11, Florida Statutes, $5,250.00 in attorney’s fees, and $1,066.79 in taxable costs. Because of this judgment and other financial and personal circumstances surrounding the Respondent’s life at that time, the Respondent filed for bankruptcy which eventually “wiped out” this judgment. Subsequently, the Purlees filed a separate proceeding for foreclosure of the mortgage, and obtained title to the property by foreclosure sale on or about August 1997. Between the time of the initiation of the foreclosure proceeding and gaining title to the property, the Purlees had a receiver appointed to receive the rent on the property. Although David Eaton testified that the Marottes failed to turn over rents during this period, there is insufficient evidence to show that the Marottes received any rent during this period or that the property was rented at all times during this period. Clearly, after engaging an attorney and obtaining the large judgment, the Purlees were not interested in taking the property back without the judgment being satisfied. Likewise, it is equally clear that Respondent was not financially able to pay the judgment. Respondent did not intentionally or otherwise misrepresent the facts in order to induce the Purlees to accept the deed back and release her from her obligation, or act in a fraudulent manner in order to convince the Purlees to release Respondent from her obligation, or act dishonestly in her dealings with the Purlees.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Real Estate Commission enter a final order dismissing both Count I and Count II of the Administrative Complaint. DONE AND ENTERED this 19th day of December, 1997, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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) 921-6947 Filed with the Clerk of the Division of Administrative Hearings this 19th day of December, 1997. COPIES FURNISHED: Henry M. Solares Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Lynda Goodgame General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Geofrrey T. Kirk, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Suite N-308 Orlando, Florida 32801 Eve K. Marotte, pro se 2616 46th Terrace North St. Petersburg, Florida 33714
Findings Of Fact During all times material to the Complaint Respondent Genaro O. DiDiego was licensed as a real estate broker under Chapter 475, Florida Statutes. From May 1, 1976 until February 7, 1977, Mr. DiDiego did business under the trade name "Lauderdale Realty" in the Miami Beach Area. In the spring of 1976 Ms. Arlene Channing through a salesman, Anita Kandel, employed by Lauderdale Realty met the Respondent. Ms. Channing was naive about the real estate business and any related transactions. After their initial meeting the Respondent attempted to interest Ms. Channing in a variety of business ventures. Eventually she became involved in two. One was the Choice Chemical Company loan and the other was the Qualk Building purchase. On May 10, 1976, Ms. Channing loaned Mr. DiDiego $30,000.00 for his purchase of stock in the Choice Chemical Company. This loan was to be secured by a note and mortgage from Mr. DiDiego to Ms. Channing in the principal sum of $30,000.00 with interest at 10 percent until the principal was paid. The note and mortgage were due and payable within 18 months. Specifically, the security was 50 percent of the outstanding stock of Choice Chemical Corporation and also Lauderdale Realty's lots and telephone land operation. The security was to be held in escrow by Gerald S. Berkell, who at that time was counsel to Mr. DiDiego. In fact no such security was ever delivered into escrow. From the facts and circumstances of the transactions between Ms. Channing and Mr. DiDiego, it is found that Mr. DiDiego never intended to secure the $30,000.00 loan. That security was a material inducement to Ms. Channing for the loan. The principal sum of the loan, $30,000.00, was deposited into the account of Lauderdale Realty, account number 60-943-7 at County National Bank of North Miami Beach. Subsequently on April 18, 1978, Ms. Channing filed an action in the Circuit Court of the Eleventh Judicial Circuit in and for Dade County, Florida, against Mr. DiDiego for the unlawful conversion of her $30,000.00. On June 19, 1978, a final judgement by default was entered against Mr. DiDiego in the amount of $30,000.00 plus legal interest. The Qualk Building purchase concerned a building represented to Ms. Channing to cost $700,000.00. Mr. DiDiego induced her to invest $150,000.00 in the purchase of the Qualk Building. To effect the purchase, Mr. DiDiego and Ms. Channing entered into a limited partnership agreement in which Mr. DiDiego would be the general partner, investing $1,000.00 and Ms. Channing would be a limited partner, investing $150,000.00. Subsequently Ms. Channing deposited $150,000.00 into the Lauderdale Realty escrow account. Her check dated June 18, 1976, in the amount of $150,000.00 was deposited in Account number 60-944-8 for Lauderdale Realty. In fact, the total purchase price for the Qualk building was $585,000.00. The building was however encumbered by first and second mortgages totaling $535,855.90. The total amount therefore required to close was less than $33,000.00. These facts were known to Respondent but were not disclosed to Ms. Channing. From the facts and circumstances of this transaction, it is found that the facts were misrepresented to Ms. Channing for the purpose of inducing her to part with her $150,000.00. Ms. Channing never received any accounting for her investment and she subsequently brought an action in the Circuit Court of the Eleventh Judicial Circuit in and for Dade County, Florida. On July 8, 1977, final judgment was entered against Respondent, Genaro O. DiDiego in the amount of $150,000.00 less $32,662.84, which were actually applied to the purchase price of the Qualk building, and less $9,780.00 which represents a portion of the income of the Qualk Building paid by Respondent to Ms. Channing. In entering its final judgment, the Court found that Respondent breached His fiduciary duty to Ms. Channing. This judgment has never been satisfied.
Recommendation In light of the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED That the license of Genaro O. DiDiego as a real estate broker be revoked by the Board of Real Estate, Department of Professional Regulation. DONE and RECOMMENDED this 3rd day of November, 1980, in Tallahassee, Florida. MICHAEL P. DODSON 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 3rd day of November, 1980. COPIES FURNISHED: Tina Hipple, Esquire Staff Attorney Department of Professional Regulation 2009 Apalachee parkway Tallahassee, Florida 32301 C. B. Stafford Board Executive Director Board of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Genaro O. DiDiego 3745 N.E. 171st Street North Miami Beach, Florida 33160
Findings Of Fact Upon consideration of the oral and documentary evidence presented at the hearing, the following facts are found: At all times pertinent to this case, Respondent Gustave A. Miller was a licensed real estate broker with license number 0060208, and Respondent Pamela Michaels was a licensed real estate salesman with license number 0059873. At all times pertinent to this case, Respondent Miller operated Gus Miller Real Estate, Inc., 5505 E. Colonial Drive, Orlando, Florida; and Respondent Michaels was a salesperson working for him at that office. On or about November 15, 1981, Respondent Michaels prepared a contract for the sale of property owned by Betty B. Stahl (1/2 interest) and Helen Vierbickas or Flora Belle Turner Van Trease (1/2 interest) in Orlando, Florida, to Timothy Karl Kunke and Shawna Jean Kunke. Purchase price was to be $64,000 with $1,000 paid as deposit. Buyer was to apply and qualify for a loan guaranteed by the Federal Housing Administration (FHA). Seller was to clean and paint the inside of the house, but did not enter into a contract with Respondents to accomplish this work. The contract contained the usual provision for the division of forfeited deposit in the event of buyer default. Due to a death in the buyer's family, he was not able to qualify for an FHA loan, and without any coordination with or approval of seller, Respondent Miller deducted $235 from the deposit held by him, as his fee for painting the property, and refunded $765 to the Kunkes. Thereafter, on or about December 4, 1982, Respondent Michaels presented a second contract for the sale of the same property to Mrs. Stahl, although the majority of her dealings were actually with Mr. Stahl, who was advising his wife. The buyer listed this time was Robert G. McRae, and the contract reflected a deposit in the amount of $4,000 paid by check to Gus Miller Real Estate, Inc. This contract, which was accepted by the sellers, also called for the buyer to apply for and qualify for an FHA loan, and seller agreed to pay the discount points on that loan, not to exceed 3 percent. Though the $4,000 was reflected as paid on the front of the contract, the provision reflecting the receipt of earnest money to be held in escrow on the bottom of the reverse side of the contract was not filled in or signed by either Respondent, even though Respondent Miller's firm name was stamped in. Nonetheless, when Mr. Stahl asked Respondent Michaels about the check at the time the contract was signed by Mrs. Stahl, Michaels assured him they had it in their possession and agreed to send him a photocopy of it, which she failed to do. In the prehearing stipulation, Respondents agreed that no deposit had been paid. At some point in time, Respondents admitted they did not have the deposit. Mrs. Vierbickas, a friend of Mrs. Stahl's sister, Mrs. Van Trease, was told by Respondent Michaels that they did not have the check, but she is unsure when she was told this. I find, nonetheless, that Respondents continued to represent to the Stahls that the deposit had been received and was being held by them until after the transfer was cancelled for other reasons. McRae signed the contract on December 4, 1981. That same day, he was taken by Respondent Michaels to the Orlando office of Countrywide Funding Corporation where, before an employee of that Company, Joyce Freed, he filled out an application for an FHA mortgage in the amount of $61,300. On that same visit, he signed a certificate that the property to be covered by the mortgage would serve as his primary home. He also acknowledged in writing that he understood FHA financing could not be utilized for any purpose other than owner- occupied properties. He subsequently signed additional documents in relation to the loan in which he affirmed that the property to be financed would be occupied by him, even after the mortgage commitment was received from the FHA. On January 11, 1982, McRae certified on a U.S. Department of Housing and Urban Development (BUD) form that he intended to occupy the property. Coincidentally, that same day, a lease was signed by a Barbara Sullivan, on behalf of herself and her husband, purporting to lease the home McRae was then occupying for one year at $650 per month with an advance deposit of $1,300 paid. McRae was not asked to sign this lease, which was witnessed by both Respondents and notarized by Respondent Miller. McRae did not receive any rent from this lease, which was not a bona fide conveyance of an interest in the property. It was not intended to convey the property, but was generated by Respondents for some purpose not related to a tenancy by the Sullivans. McRae testified that when Michaels took him to Countrywide's office, he did not intend to occupy the property to be purchased, but instead intended for his daughters to live there. However, when he saw from the forms he was signing that there was a requirement for the property to be owner-occupied, he, at that moment, changed his mind; and when he signed the documents, minutes thereafter, he intended to move in. I find this testimony to be unworthy of belief. During the period from the date of the sales contract with McRae to the date of the proposed closing, the interest rate went up higher than was called for in the contract, and McRae refused to close. Sometime later, in late February, 1982, a Larry Werts came to the property in question and discussed with Mr. Stahl the possible purchase of Mrs. Stahl's one-half interest in the property for $27,500 in cash. Werts was, however, unable to secure this much cash. Thereafter, he indicated he would make an offer on the entire parcel through Respondent Michaels; and subsequently, Respondents, together, brought a contract to Mrs. Stahl, signed by Werts, which reflected a purchase price of $50,000. The Stahls rejected this offer as being too low.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the license of each respondent be suspended for one year, that each respondent pay an administrative fine of $1,000, and that each respondent be reprimanded in writing, but that the execution of the suspension be deferred for one year with a provision for automatic recission. RECOMMENDED this 31st day of May, 1983, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of May, 1983. COPIES FURNISHED: Tina Hipple, Esquire Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802 Robert W. Olsen, Esquire 205 N. Rosalind Avenue Post Office Box 1767 Orlando, Florida 32802 Mr. Fred Roche Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Harold Huff Executive Director Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802 William M. Furlow, Esquire Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802
