Findings Of Fact At all times material to these proceedings, the Respondent McVety was a licensed real estate broker in Florida, having been issued license numbers 0461636 and 0258678. On January 1, 1989, the Respondent purchased the company Realty Services of Southwest Florida, Inc., a Florida corporation. One of the services provided by the corporation was property management. Rents and security deposits were collected from tenants of residential leases on behalf of property owners. In some cases, Respondent McVety was acting as an agent on behalf of property owners through the corporation. In other cases, Respondent McVety or the corporation was the actual property owner. When Respondent McVety took over the management of the corporation after his stock purchase, he noticed that the escrow account into which security deposits were placed, was a non-interest bearing account. On January 23, 1989, the escrow account was changed by the Respondent from an non-interest bearing escrow account to an interest bearing account. The tenants were not notified that their security deposits were now bearing interest. On March 17, 1989, a routine audit was conducted of the Respondent's escrow accounts. During the audit, it was discovered that one hundred and seventeen of the one hundred and thirty leases stated that the security deposits were being held in an non-interest bearing account. The leases which stated that the deposits were in an interest bearing account were signed after the Respondent purchased the corporation. The one hundred and seventeen leases with a non-interest bearing escrow were signed by the tenants prior to the stock transfer. There were no allegations that interest had actually been paid by the bank on the escrow account or that there had been any failure by the Respondent to account for the interest to the tenants, the actual owners of the funds. In mitigation, the Respondent stated that once he was made aware of the problems and truly understood the Department's concerns, a letter was sent to each tenant explaining the placement of the security deposits into an interest bearing escrow account on January 23, 1989. These letters were sent on April 3, 1989. In addition, a new real estate lease was prepared on behalf of the corporation by an attorney. The purpose of the new lease was to explicitly state the rights and responsibilities of the parties regarding the interest on these accounts. In this case, no one was cheated, no secret commissions were earned, and the sums in question were trifling.
Recommendation Accordingly, based upon the foregoing, it is RECOMMENDED: That the Respondent McVety be found guilty of having violated Rule 21V- 14.014, Florida Administrative Code, and is therefore in violation of Section 475.25(1)(e), Florida Statutes. This violation was originally Count II of the Administrative Complaint. Counts I and II, having been withdrawn, are dismissed. That the Respondent McVety be issued a written reprimand as the penalty for the one violation. DONE and ENTERED this 30th day of January, 1990, in Tallahassee, Leon County, Florida. Copies furnished: John R. Alexander, Esquire DPR - Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 John A. McVety 3120 Grand Avenue Fort Myers, Florida 33901 Darlene F. Keller Executive Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 VERONICA E. DONNELLY 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 30th day of January, 1990. Kenneth E. Easley, Esquire General Counsel Department of Professional Regulation 1940 North Monroe, Suite 60 Tallahassee, FL 32399-0792
Findings Of Fact Louis S. Wooten, Sr. is a registered real estate broker holding license No. 0098381. Louis S. Wooten, Sr. did business at the times involved in the administrative complaint as Lou Wooten Realty. Adequate notice of this hearing was given Louis S Wooten, Sr. in the manner required by Chapter 120 and Chapter 475, Florida Statutes. Evidence was received concerning deposits and withdrawals by Louis S. Wooten, Sr. from the Louis S. Wooten, Sr. escrow account in Peoples First National Bank, Miami Shores, Florida, between August 1, 1975 and November 10, 1975, when this account was closed. These records were identified by John Fortnash, vice president of the bank. These records included the ledger for this account from May, 1975 to November, 1975, (Exhibit 1), the ledger from November, 1975, until November 1976, (Exhibit 2), the signature card showing Louis S. Wooten to be the only person authorized to draw on the account, (Exhibit 3), and sixteen (16) individual deposit slips received as Composite Exhibit 4. These records show no activity in the account subsequent to December 23, 1975, when this account had a balance of $22.00. Thereafter, the balance of this account decreased by $2.00 per month, a service charge, until November 10, 1976, when the balance reached zero and the account was closed. Concerning Count 1, Yvard Jeune and Rosita Jeune contracted on or about September 26, 1975, to purchase certain real property from Eddie Silver for $28,500. The Jeunes paid $100 as an initial deposit to Lou Wooten, Sr., and agreed to pay an additional $1,900 for a total deposit of $2,000. This additional $1,900 was paid to Lou Wooten Realty by manager's check on or about September 30, 1975. This manager's check was identified by Barry Eber, chief savings and loan officer for First Savings and Loan of Miami, and received as Exhibit 5. The Jeune contract was contingent upon FHA financing for the Jeunes. FHA financing was not approved, and the Jeunes requested return of their $2,000 in accordance with the terms of the contract. The Jeunes never received their money from Louis S. Wooten, even though they eventually brought suit against Wooten and obtained a judgment against him. The records of Wooten's escrow account do not show the deposit of the $1,900 received from the Jeunes. Regarding Count 2, on or about October 19, 1975, Emma Crockett made an offer to purchase certain real property and paid an earnest money deposit to Lou Wooten Realty in the amount of $1,000 which was receipted for by Mollie Johnson. Mollie Johnson identified the receipt signed by her and testified that this money was duly delivered to Lou Wooten. Subsequently, Crockett's offer of $29,500 was rejected by the seller, and on December 24, 1975, a demand was made for return of the deposit. The cancellation mark on the check, identified by Crockett and received as Exhibit 24, indicates that it was received by Wooten Realty. Crockett's deposit was never returned to her by Wooten. As noted above, the Lou Wooten escrow account was closed with a zero balance. Regarding Count 3, George D. Pratt, Jr. and his wife, Eloise, contracted to purchase certain real property from Gladys P. Smith on or about December 5, 1975. The Pratts paid an initial deposit of $100 to T.F. Chambers and subsequently paid an additional $665 in the form of a manager's check to Lou Wooten Realty. This manager's check was identified by Barry Eber, chief savings and loan officer, First Federal Savings and Loan of Miami, and received as Exhibit 6. Harriet Pooley, an employee of Lou Wooten Realty, identified a receipt to George D. Pratt, Jr. and Eloise in the amount of $665 which was received as Exhibit 18. A review of the ledgers of the Louis S. Wooten, Sr. escrow account indicates no deposits were made to this account subsequent to November 26, 1975. Regarding Count 4, Bettye Green paid Lou Wooten Realty a deposit of $150 on a transaction in which she and her husband offered to purchase real property owned by the Fidlers. The Greens defaulted on the contract, and were advised by their salesman, T.F. Chambers, that their deposit would be forfeited. No evidence was introduced by the Florida Real Estate Commission regarding any demand on the Fidler's behalf for the money. Regarding Count 5, Mary Redfield, a friend and representative of Goldie Brown and Bernard Brown, identified a copy of a manager's check earlier identified by Barry Eber, chief loan officer of First Federal Savings and Loan of Miami and received as Exhibit 7, as a copy of an original check for $1,500 given to her by Goldie Brown which was deposited to Wooten's escrow account. Redfield also identified a contract, Exhibit 16, and a closing statement, Exhibit 17, as documents given to her by Goldie Brown. T.F. Chambers was the salesman who handled this contract. Chambers appeared at closing, after having purchased Lou Wooten Realty from Louis S. Wooten, Sr.Chambers stated that the Wooten escrow account lacked sufficient funds to permit closing the transaction and that he had personally paid for a cashiers check in the amount of $680, the amount necessary to close the purchase. Chambers identified this check which, as a part of Exhibit 21, was received into evidence. Regarding Count 6, Alladar Paczier, counsel for Istvan and Julia Beres, identified a deposit receipt contract for a bar and restaurant (Exhibit 26) and a receipt for a $3,500 deposit signed by Louis Wooten (Exhibit 27). Paczier represented that Wooten failed to produce the deposit money at closing, and that when demand was made by Paczier of Wooten for the deposit, Wooten stated to him that he did not have the money.
Recommendation Based upon the foregoing findings of fact and conclusions of law, the Hearing Officer recommends that the Florida Real Estate Commission revoke the registration of Louis S. Wooten, Sr. DONE and ORDERED this 17th day of January, 1978, in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Joseph A. Doherty, Esquire Florida Real Estate Commission 400 Robinson Avenue Orlando, Florida 32801 Louis S. Wooten, Sr. 743 Fairlawn Drive Sebring, Florida 33870
The Issue The issue in this case is whether the Respondent's real estate broker's license should be revoked or otherwise penalized based upon the charges set forth in the Administrative Complaint.
Findings Of Fact Petitioner is a state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the state of Florida, in particular, Section 20.30, Florida Statutes, Chapters 120, 445 and 475, Florida Statutes, and the rules promulgated pursuant thereto. Respondent, Michael L. Liddle, is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0241275 in accordance with Chapter 475, Florida Statutes. The last license was issued to Respondent as a broker, c/o Liddle Property Services, Inc., 10877 Overseas Highway, Marathon, Florida 33050. In 1988, Respondent undertook to manage the rental of an apartment for Patricia D. King and her husband Leonard King. Chris Fullum, an employee of the Respondent, was handling the details of renting the apartment for the Kings. In conjunction with the rental of the Kings' apartment, Respondent sent the Kings a net rental income check dated October 1, 1988, for $612 which the Kings attempted to deposit in their bank account. The escrow check from the Respondent was returned to the Kings on October 21, 1988, marked "NSF" (non-sufficient funds). At the request of Respondent, Ms. King attempted to redeposit the check, but it was returned again on November 1, 1988 marked "NSF" and "do not present again as a cash item enter only for collection." Ms. King filed a complaint with the Florida Department of Professional Regulation and sent a copy of her complaint letter to the Respondent on November 10, 1988. On November 15, 1988, she received a cashier's check from Respondent for the returned net rental income check plus returned check charges. In the latter part of 1988, Respondent managed the rental of an efficiency apartment (#116 Ocean Isles Fishing Village), for Marva Kay Mizell. In conjunction with the rental described in paragraph 7, the Respondent sent to Ms. Mizell her net rental income checks for September and October 1988 totaling $620.37. After Marva Kay Mizell deposited the checks, the checks were returned to her marked "NSF". Ms. Mizell sent a copy of the complaint she filed with the Department of Professional Regulation to the Respondent. Thereafter, on January 9, 1989, Respondent sent Marva Kay Mizell a cashier's check covering the returned net rental income checks plus returned check charges. On January 20, 1989 Respondent was interviewed in his office by Petitioner's investigator, George B. Sinden, who was accompanied by another investigator, William Reich. Respondent advised Petitioner's investigators that his bookkeeper had left his employ in August 1988, and Respondent had been lax in maintaining the escrow account during September and October of that year during which period of time approximately IS checks were returned for insufficient funds. At the January 20, 1989 meeting, Respondent further advised that he had "made all the checks good." In response to a request for documentation regarding the rentals he was managing, Respondent admitted he had no written rental agreements or leases. He offered as an explanation that his rentals were short term, i.e., one day to three months. Investigator Sinden determined from Respondent that Respondent typically maintains a "tally sheet" on each unit and sends the owner a monthly "recap" with their net rental income check each month. On January 20, 1989, an office inspection and audit of Respondent's escrow trust accounts was conducted by Petitioner's investigator George B. Sinden, assisted by Petitioner's investigator William Reich. Respondent's escrow accounts were found to be short in the amount of $1,236.19. There were no pending sales at the time of the audit. Respondent told Petitioner's investigators that he (Respondent) would deposit $1,236.19 into the escrow account and would provide proof thereof along with a copy of the last 13 bank statements, all returned checks and proof of payment by February 6, 1989, to the Miami FDPR office. As of February 23, 1989, the documentation promised by Respondent had not been received. As of March 28, 1989, very little documentation had been received by Petitioner's investigators. Efforts by Petitioner's investigators to contact Respondent have been unsuccessful and Respondent has failed to return phone calls from the investigators. Because of Respondent's lack of good accounting practices, both Ms. Mizell and Ms. King were unable to determine whether their real property had, in fact, been rented or leased during any given time or how often the units were rented.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order finding Respondent Michael L. Liddle guilty of all charges as alleged in Case No. 89-4981 and that the real estate broker's license of Respondent be revoked. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of February, 1990. J. STEPHEN MENTON 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 2nd day of February, 1990. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Michael L. Liddle c/o Liddle Property Services, Inc. 10877 Overseas Highway Marathon, Florida 33050 Darlene F. Keller Division Director Department of Professional Regulation Division of Real Estate Post Office Box 1900 Orlando, Florida 32801 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792 APPENDIX TO RECOMMENDED ORDER CASE NO. Case Number 89-4981 The Petitioner has submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Petitioner's Proposed Findings of Fact Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order where Accepted or Reason for Rejection 1. Adopted in substance in Findings of Fact 1. 2. Adopted in substance in Findings of Fact 2. 3. Adopted in substance in Findings of Fact 3. 4. Adopted in substance in Findings of Fact 4. 5. Adopted in substance in Findings of Fact 5. 6. Adopted in substance in Findings of Fact 6. 7. Adopted in substance in Findings of Fact 7. 8. Adopted in substance in Findings of Fact 8. 9. Adopted in substance in Findings of Fact 9. 10. Adopted in substance in Findings of Fact 10. 11. Adopted in substance in Findings of Fact 11. 12. Adopted in substance in Findings of Fact 12. 13. Adopted in substance in Findings of Fact 13. 14. Adopted in substance in Findings of Fact 14. 15. Adopted in substance in Findings of Fact 15. 16. Adopted in substance in Findings of Fact 16. 17. Adopted in substance in Findings of Fact 17. 18. Adopted in substance in Findings of Fact 18.
Findings Of Fact Respondent, George G. Walsh, is a licensed real estate broker in the State of Florida, holding license number 0117943. Mr. Walsh is the owner of and the qualifying broker for G. G. Jerry Walsh Real Estate, located in Panama city, Florida. In May 1989, Respondent was the acting broker for Howard Bilford of Miami, Florida. Mr. Bilford owned a five acre parcel of property located in Bay County, Florida. Around May 15, 1989, Tama and Paul Russ, through Mr. Walsh's office, entered into a contract for the purchase of Mr. Bilford's property. The purchase price of the property was $15,000. The Russ' gave Mr. Walsh a $500 binder for deposit in his escrow account. The $500 was placed in Respondent's escrow account. Simultaneous with the signing of the sales contract and deposit receipt agreement, Mr. Walsh also prepared an estimated closing cost statement. On that closing cost statement, Mr. Walsh estimated that a survey of the property would cost the Russ' $450. During this meeting, Mr. Walsh explained to the Russ' that, especially if a financial institution was involved in the financing of the property, there would be certain costs which they would probably have to pay up front. Part of those costs included a survey of the property. At about the same time, the Russ' made application for a loan to a credit union located in Panama City, Florida. At the time of the loan application, the loan officers Mrs. Stokes, prepared a closing cost statement estimating the loan closing costs which the Russ' would encounter. On the credit union's closing cost statement, the cost of a survey was estimated to be $150 to $200. Since it was the credit union that required the survey, the Russ' believed that that estimate was the more accurate. The Russ' simply could not afford a $500 survey. As part of the loan application, an appraisal of the property was required. The appraisal was ordered by the credit union on May 16, 1989, and was completed on May 31, 1989. Unfortunately, the property had been vandalized by unknown persons, and the mobile home which was on the property had suffered severe and substantial damage. The appraisal indicated that the real estate was worth $10,500. With such a low appraisal, the credit union would not lend the amount necessary to purchase the property at the negotiated price. In an effort to renegotiate the property's price, Tama Russ inspected the property and prepared a list of the items which would have to be repaired to make the mobile home liveable. At the same time, the Russ' placed no trespassing signs and pulled logs across the entry to the property. The Russ' also placed padlocks on the doors to the mobile home and removed the accumulated garbage inside the mobile home in an effort to secure the property. They made no other repairs to the property. On June 1, 1990, the Russ' told the loan officer to hold the loan application. At some point during this process, both Mr. Walsh and the Russ' became aware that the survey would cost a considerable amount more than had been expected. By using a favor with Mr. Walsingham of County Wide Surveying, Mr. Walsh obtained a survey price of $500 for the Russ'. In an effort to help the Russ' close on the property, Mr. Walsh contacted Mr. Bilford to see if he would agree to pay the $500 survey cost. Mr. Bilford so agreed, contingent on the closure of the transaction, and sent Mr. Walsh a check made out to County Wide Surveying in the amount of $500. At that point, the Russ' believed that they were no longer obligated to pay for the survey since Mr. Walsh told them that Mr. Bilford was to pay for the survey. On June 3, 1989, Mr. Bilford agreed to a renegotiated price of $10,500.00 on the property. Additionally the Russ' agreed to sign a ten year promissory note for $2,000 bearing 11% interest per annum. Since there were changes in the terms of the contract, the Russ' entered into a net contract with Mr. Bilford on June 3, 1989. The new contract expired on June 30, 1989. Around June 5, 1989, the Russ' learned that their credit had been preliminarily approved. However, such preliminary approval only indicated that the Russ' had sufficient income to proceed with the more costly loan underwriting requirements of the credit union. Such preliminary approval did not indicate that the loan would be finally approved by the financial institution. The preliminary approval was communicated to Mr. Walsh by Tama Russ. Ms. Russ intended the communication to mean that they had been preliminarily approved by the financial institution. Mr. Walsh in an abundance caution contacted Mrs. Stokes, the loan officer. Mrs. Stokes advised him that the Russ' credit had been preliminarily approved. She did not tell him that the loan had been finally approved. Through a misunderstanding of what Mrs. Stokes communicated to him, Mr. Walsh ordered the survey from County Wide Realty on June 7, 1989. There was no reliable evidence presented that the credit union had authorized him to order the survey. The credit union at no time during this process ordered the survey. Mr. Walsh testified that Ms. Russ told him to order the survey. Ms. Russ denies that she gave Mr. Walsh permission to order the survey. At best this evidence goes only to demonstrate Respondent's intent with regards to the actions he undertook in this case and removes this case from a Section 475.25(1)(b), Florida Statutes, violation. At some point Ms. Stokes left the employ of the credit union. On June 16, 1989, as part of her leaving, she unilaterally closed the Russ' loan application file and cancelled the loan application. Neither the Russ' nor Mr. Walsh were notified of the closure or the cancellation. The credit union's file fell into the void created between a change of employees. Because Mr. Walsh was unaware of Ms. Stokes' actions, Mr. Walsh, on July 13, 1989, after the expiration of the Russ' sales contract, contacted the credit union in order to obtain the loan closing package from the institution. The credit union had to hunt for the Russ' file. The credit union president called the Russ' about the loan and he was advised that they did not want the loan. The credit union's president then reviewed the loan file and noted that the Russ' had insufficient income to come up with the amount of the promissory note. He also thought the real estate constituted insufficient collateral for the loan. The loan application was officially denied on July 15, 1989. The Russ' were notified of the credit union's denial credit. The real estate transaction never closed. However, sometime after July 15, 1989, Mr. Walsh received the survey from County Wide. The survey indicates that the field work for the survey was completed on July 17, 1989, and that it was drawn on July 18, 1989. 1/ There was no reliable evidence which indicated any attempt had been made to cancel the survey. Sometime, after July 15, 1989, Tama Russ contacted Mr. Walsh in order to obtain the return of their $500 deposit. After many failed attempts to get the Russ' to voluntarily agree to pay for the cost of the survey, Mr. Walsh, around October, 1989, unilaterally paid the Russ' deposit to County Wide Realty. Mr. Walsh followed this course of action after speaking with some local FREC members who advised him that since FREC was swamped with deposit disputes that nothing would happen as long as he used his best judgment. The payment of the deposit to the surveyor, without prior authorization from the Ruse' violates Section 475.25(1)(d) and (k) Florida Statutes.
Recommendation Based on the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, the pleadings and argument of the parties, it is therefore, RECOMMENDED that the Florida Real Estate Commission enter a Final Order finding Respondent guilty of violating Sections 475.25(1)(d) and 475.25(1)(k), Florida Statutes, issuing a letter of reprimand to Respondent with instructions to immediately replace the Russ' trust deposit and forthwith submit the matter to the commission for an escrow disbursement order and levying a $250 fine. IT IS FURTHER RECOMMENDED that the portions of the Administrative Complaint alleging violation of Section 475.25(1)(b) be dismissed. DONE and ENTERED this 29th day of January, 1991, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of January, 1991.
Findings Of Fact At all times relevant hereto, Phyllis A. Crosby, Respondent, was registered as a real estate broker by the Florida Board of Real Estate, and was qualifying broker for Crosby Realty Corporation, a corporate real estate broker (Exhibit 4). Crosby had actual knowledge of the hearing scheduled to be heard September 3, 1986, and failed to appear. William Nolte and Marilyn Nolte owned a duplex in Tampa, Florida that they desired to sell. They talked with Wade Black and Dale Peterson, real estate salesmen with American Realty Company, and agreed to give American Realty Company an exclusive right of sale agreement, a listing agreement to list the property for rent before sale, and to pay a $100 commission for each tenant. The exclusive listing agreement dated February 26, 1985 was attached to Exhibit 2, deposition of Marilyn Nolte, as Exhibit 2. Pursuant to these agreements, tenants for each of the apartments were obtained and a buyer for the property was subsequently found. In March 1985, Crosby purchased American Realty's assets which included the Nolte agreements. Salesmen licenses of Black and Peterson were transferred to Crosby Realty. Rental and deposit checks from the two tenants, totalling $1,130.00, were obtained by Black and/or Peterson and delivered to Respondent. This money was never deposited into Respondent's escrow account. The Noltes demanded remittance of the $1,130.00 minus $200 (commission), or $930.00 from Respondent on numerous occasions and made numerous phone calls to the Crosby Realty Company office to obtain this money without success. On March 13, 1985, a buyer for the Nolte property was secured by Tam- Bay Realty, and the property was sold with the closing taking place June 9, 1985. Prior to the closing, Nolte wrote to the American Title Company, who closed the transaction, regarding the $930.00 owed Nolte by Respondent and this $930.00 was deducted from the commission paid Respondent. At the closing, Respondent appeared, took the check representing Crosby Realty's Commission less the $930.00 deducted to pay Nolte, and left before the final papers were signed. No commission for the rentals of the sale was ever paid by Respondent to Black or Peterson. Respondent, during 1985, had three accounts in the Citrus Park Bank in Tampa. One was the Crosby escrow account, one was the Crosby Realty general account, and one was the Phyllis A. Crosby personal expense account. Numerous overdrafts were drawn on the general account and personal expenses account and the bank notified the Respondent that these overdraft charges would be deducted from her escrow account as a set-off to keep the bank from losing money because of these overdraft charges. During June 1985, the bank debited the escrow account $88.50 (debit memo Exhibit 1), the July statement contained a debit memo of $283.00, and in August, debit memos of $126.76 and $62.88 appeared. In September 1985, Citrus Park Bank closed all of Respondent's accounts. On April 29, 1985, Respondent leased office space and a townhouse from Carlton Properties in Tampa. She signed a three-year lease effective May 1, 1985, which provided for two months free rent for the office, with tenant to make a security deposit in the amount of $817.79 (which equals one month rent) due June 1, 1985. This deposit was never made and she was evicted in July. The townhouse lease provided for two weeks free rent with the security deposit due May 15, 1985. Respondent made this payment and one additional payment, but the check for the second payment was returned marked insufficient funds. She was evicted July 22, 1985. Respondent leased office space on July 9, 1985, from Ayers-Siera Insurance Association in the Carrolwood Village Center for a broker's office. She gave the lessor a check for $842.00 for the August rent and a security deposit. She moved into the office space and the check, written on the Crosby Realty general account, bounced. It was returned for collection twice, marked insufficient funds. When run through a third time, the check was returned marked "account closed." Eviction proceedings were instituted and Respondent's furniture was moved out of the office by the Sheriff in early October. The lessor has never received any monies from Respondent. In September or early October 1985, Respondent entered into a three year lease agreement with Paramount Triangle to lease office space commencing November 1, 1985. She moved her offices into that space and occupied the premises until April or May 1986 when she departed. During the period that Respondent occupied this office space, only one rental check from her was honored by the bank. Numerous checks given to Paramount Triangle for rent were not honored by the bank. Finally, the last check from Respondent dated March 6, 1986, which Paramount Triangle tried to deposit, was returned showing the account on which the check was drawn was closed on March 4, 1986. Pamela Glass was employed as a secretary by Respondent from July 6, 1986 through August 6, 1986. During this period, Respondent refused to accept certified mail and became very angry with Glass when she once signed for a certified letter addressed to Respondent. Glass received numerous phone calls from people complaining about not being paid for billing sent to Respondent. When her pay was not forthcoming at the end of the month, Glass quit. Glass also testified, without contradiction, that Respondent held accounts for utilities under various aliases she used for this purpose. Frank Maye, investigator for Petitioner, failed to get escrow account records from Respondent when requested and made appointments with her to audit her escrow accounts which were not kept by Respondent. Failing to obtain the records from Respondent, Maye subpoenaed the records from the bank.
The Issue The issue in this case is whether Respondent, Lee H. Davis, committed the offenses alleged in an Administrative Complaint issued against him on August 16, 1999.
Findings Of Fact Petitioner, the Department of Business and Professional Regulation, Division of Real Estate (hereinafter referred to as the "Division"), is an agency of the State of Florida. The Division is charged with the responsibility for, among other things, regulating the practice of persons holding real estate brokers' and real estate salespersons' licenses in Florida. Section 20.165, and Chapters 455 and 475, Florida Statutes. Respondent, Lee H. Davis, is and was at all times relevant to this matter licensed as a real estate broker in Florida, issued License Number 0186063. The last license issued was as an involuntary inactive broker, c/o 815 New Waterford Drive, No. 204, Naples, Florida 34104. On or about August 24, 1995, Respondent executed a form 400.5 and submitted it to the Division to register as a salesperson with Sentry Realty and Property Management, Inc. ("Sentry"). At all times relevant to these proceedings, Respondent was registered with the Division as employed by Sentry. On or about September 7, 1995, Respondent facilitated a contract for sale and purchase (the "contract") between Robert Trindle as buyer and John Petracelli as seller/builder for property described as Hallandale Park, Plat Book 12, Page 37, Block 37, Lots 6,7,8, a/k/a approximately 2801 North East 214 Street, North Miami Beach, Florida. Mr. Trindle testified that he intended to purchase a townhouse to be built by Mr. Petracelli as part of a project to include 40 to 50 townhouses. The contract provided that a $3,900 deposit was to be held by "Lee H. Davis Escrow Agent." Mr. Trindle gave Respondent two checks totaling $3,900, as the earnest money deposit on the purchase price of $130,000. The first check, dated October 9, 1995, was for $1,000. The second check, dated November 3, 1995, was for $2,900. The checks were made out to "Lee H. Davis-- Escrow." Also noted on the checks was "Davena Group Inc.," which Mr. Trindle understood to be Respondent's real estate company. Each check was negotiated by Respondent within a week of its receipt. At the time of this transaction, Respondent's registered broker was John Brouillette of Sentry. Respondent did not place the escrow deposit with Mr. Brouillette, who testified that he knew nothing of the transaction at the time it occurred and never saw the contract. Respondent represented to Mr. Trindle that he would maintain the escrow deposit as broker during this transaction. Mr. Trindle did not give Respondent permission to transfer the escrow deposit to the builder/seller, Mr. Petracelli. Correspondence from Respondent indicated that he did turn the escrow deposit over to Mr. Petracelli, without informing Mr. Trindle. Mr. Petracelli never built the promised townhouses. Rather, he left the country, absconding with Mr. Trindle's escrow deposit along with monies provided by other purchasers and/or investors in the project. Mr. Trindle attempted to contact Respondent regarding the status of his escrow deposit, but was unable to reach him prior to the filing of his complaint with the Division. As of the date of the hearing, the earnest money deposit had not been returned to Mr. Trindle.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Petitioner finding that Respondent has violated Subsections 475.25(1)(b), 475.25(1)(d)1, 475.25(1)(e), 475.25(1)(k), and 475.42(1)(d), Florida Statutes, as alleged in the Administrative Complaint issued against Respondent, and that Respondent's real estate license be revoked. DONE AND ENTERED this 13th day of March, 2001, in Tallahassee, Leon County, Florida. ___________________________________ LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 13th day of March, 2001. COPIES FURNISHED: Sunia Y. Marsh, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Suite N-308A Orlando, Florida 32801-1772 Lee H. Davis 815 New Waterford Drive, No. 204 Naples, Florida 34104 Herbert S. Fecker, Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that all charges against Respondent be DISMISSED. DONE and ENTERED this 5th day of April, 1982, in Tallahassee, Florida. DONALD R. ALEXANDER 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 5th day of April, 1982.
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 revoking the license of Respondent, Annette J. Ruffin, to be a real estate broker. RECOMMENDED this 27th day of May, 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 27th day of May, 1987.
The Issue The issue for consideration in this case is whether the Respondents' Florida licenses as real estate broker, salesperson and brokerage corporation, respectively, should be disciplined because of the matters alleged in the Administrative Complaint filed herein.
Findings Of Fact At all times pertinent to the issues herein, the Petitioner, Division of Real Estate, was the state agency in Florida responsible for the regulation of the real estate profession and the licensing of real estate professionals. Respondents Frank E. Smith, Elaine M Smith, and Sunshine Properties of Tampa, Inc., were licensed real estate professionals, a broker, a sales person, and a brokerage corporation respectively. Respondent Frank E. Smith was the qualifying broker for Respondent, Sunshine Properties of Tampa, Inc.. On or about July 23, 1991, the Respondents and Carolyn Chaple entered into a management agreement whereby Respondent agreed to rent and manage Ms. Chaple's residence located in Tampa. The terms of the management agreement signed by Ms. Chaple and Ms. Smith called for the company to render a monthly statement of receipts, charges and disbursements, and to remit the net proceeds each month to Ms. Chaple whose address was listed in the agreement as P.O. Box 12003, Brooksville, Florida 34601. For performing this service, Respondents were to receive a commission of 8% of the monthly gross receipts. The agreement also called for the Respondents to: ... hire, discharge and pay all engineers, janitors and other employees; to make or cause to be made all ordinary repairs and replacements necessary to preserve the premises in its present condition and for the operating efficiency thereof and all alterations required to comply with lease requirements, and to do decorating on the premises; to negotiate contracts for nonrecurring items not exceeding $100.00 and to enter into agreements for all necessary repairs, maintenance, minor alterations and utility services; and to purchase supplies and pay all bills. An amendment to the agreement, initialed by Ms. Chaple only, made the provision subject to a lease agreement purportedly attached but which was not offered into evidence. Ms. Chaple contends that lease provided she would be responsible only for those repairs costing in excess of $250.00 and which she had approved. This added provision was not, however, initialed by Respondents and, therefore, never became a binding part of the management agreement, regardless of what Ms. Chaple intended. Ms. Smith asserts that if Ms. Chaple had insisted on that change, she would not have entered into the agreement. It is found, therefore, that there was no agreement limiting Ms. Chaple's liability for repairs. Pursuant to the management agreement, Respondents solicited and obtained tenants for Ms. Chaple's property. Respondent admittedly did not send a copy of the first lease to Ms. Chaple, but the tenancy was short lived and terminated when the tenant moved out owing rent. Ms. Chaple claims the Respondents did not advise her of this situation. Instead, she claims, she heard of it from neighbors. However, on December 30, 1991, Respondents obtained another lessee for the property at a rental of $600.00 per month for 12 months. Respondents' fee was %8 of that ($48.00) resulting in a net monthly rental to Ms. Chaple, exclusive of repair expenses if any, of $552.00 per month. Ms. Chaple claims that though she repeatedly asked for a copy of the management agreement she had signed, she never got one. When she began to ask for accountings, she says she got some but not all. By the same token, she claims she did not get all the receipts relating to the repair work done on her property. Between December 4, 1991 and August 16, 1992, Ms. Chaple wrote several detailed letters to the Respondents requesting information on the status of the first tenancy and efforts being made to receive compensation, and detailed explanations for expenditures made and charged to her on the account statements that were sent. She also complained of the lateness of the statements, of the Respondents' notice of intended termination of the agreement, and an explanation of large expense charged almost every month. Respondents claim they furnished Ms. Chaple a copy of the management agreement on at least 3 separate occasions by mailing a copy to her Brooksville address, that address listed for her in the agreement. Ms. Chaple, however, was living in Houston, Texas during all this period and requested the use of the Brooksville address, apparently her father's post office box. Respondents also claim they sent Ms. Chaple a monthly statement of account along with her net rent check each month. Every check sent was cashed by Ms. Chaple indicating she received them. There is no explanation as to why she did not also receive the account statements. In light of Ms. Chaple's moves, and the use of an intermediary to transmit mail, it cannot be said Respondents did not send the agreements. This is not to say Ms. Chaple did receive them all, merely that the Respondents dispatched them to her. Ms. Chaple also claimed she never got a copy of a lease from the Respondents. Respondent, Elaine Smith, admits this indicating she did not send copies of leases to owners as a matter of practice. It is noted that Ms. Chaple repeatedly requested itemized explanations for the major expenditures deducted from the rent each month and characterized on the account statement solely as "maintenance." The management agreement obliging the owner to pay for such expenditures as a deduction from rent is silent on the need on the Respondents to explain such deductions. The agreement obliges the agent to "render a monthly statement of receipts, disbursements and charges and to remit each month the net proceeds to the [owner]." While it may be true the monthly statement of accounting showing "maintenance" might be acceptable evidence to the Internal Revenue Service, when, as here, such expenses are relatively large and frequent, it is not at all unusual or unreasonable for the owner to request and expect to receive an explanation of those deductions. To be sure, Respondents did send some receipts as requested, but it is clear they did not do so in all cases. Clearly the mere use of the word, "maintenance" does not constitute a sufficient showing of "disbursements" or "charges" as are called for in the agreement. This is so especially in light of the fact Respondents also operated a maintenance company through which they contracted for almost all maintenance and repair work except air conditioning. The charge to the owners was cost plus 10%. Ms. Chaple ultimately filed a complaint with the Division which, on March 18, 1992, sent its investigator, J.L. Graham, to the Respondents' office. As a part of her investigations, Ms. Graham did an audit of the Respondents' escrow accounts maintained at the Sun Bank in Tampa. She discovered that Respondents maintained a security escrow account which had a shortage of $5,780.00 and a rental escrow account which had a shortage of $4,261.31. Respondents admit a shortage had existed ever since the business was purchased in 1986 and claim that due to the shrinking inventory of properties they managed, the need to pay $500.00 a month on the purchase price, and $1,300.00 a month on obligated rent, they did not have sufficient income from operations to reimburse the accounts the amount of the shortages. There is no evidence that Respondents misappropriated any of the funds represented by the shortages and it is accepted they did not cause or increase either shortage. However, it is equally true they did nothing to eradicate or reduce either, routinely drawing their lawful commissions which were placed in the company's operating account and used to pay routine expenses. In any event, within 2 days of Ms. Graham's inspection, Respondents borrowed the money to reimburse the escrow accounts for the amount of the shortages in full. Ms. Graham also found that Respondents failed to prepare and sign written monthly reconciliations of the escrow accounts and had no supporting documentation for the accounts other than the check register, leases and the management agreements. Respondents' books were primarily kept in a computer and the information in support of the escrow accounts was not being kept in a manner readily accessible to the Division's representatives. Mr. Smith admits he did not do the required reconciliations, claiming that between the computer records and the bank statements, he knew what was going on. This is insufficient to satisfy the Division's requirements. Mr. Smith contends that immediately after the audit, he began doing the required reconciliations and would be willing to furnish them to the Division on a repeated basis if necessary. Respondents also failed to prepare and furnish to the tenants of clients' properties the required disclosure of agency relationship, notifying the tenants in writing that they, Respondents, represented the respective landlords, not them. Respondents asserted they made it clear to each tenant that they did not own the units being rented, but this does not meet the rule or statutory requirement. Review of the corporation records also revealed that Mrs. Smith, a licensed salesperson, was listed as an officer of the brokerage corporation. Respondents admit this but claim they did not know it was improper and that their accountant failed to so advise them. Gennie Amick has known and been friends with Respondents for more than 7 years. She has used their services in the past as managers of property she then owned and both her son and her daughter do so at the present time. They have had absolutely no complaints about the Respondents' management. Ms. Amick knows Mrs. Smith very well and considers her to be a very honorable person. Respondent's integrity has never been questioned, to the best of Amick's knowledge, and she goes out of her way to help her clients, doing more than her contract requires of her. Mr. Smith is also an honorable person. Because of Ms. Amick's trust in the Respondents, she loaned them $6,000.00 when she learned of their difficulties with the Division and this loan was repaid when Respondents thereafter mortgaged their home. Respondents have owned Sunshine Properties of Tampa, Inc. since they bought it in 1986, paying $20,000.00 for the business. They put $1,500.00 down and agreed to pay the balance off at $500.00 per month. They also agreed with the seller to rent his office for $1,300.00 per month. It was these commitments, and the shrinking of the client list, which prevented them from making up the shortages in the escrow accounts. Mr. Smith has been in the real estate business, both in Florida and elsewhere, since 1967. He has been licensed as a broker since 1988 and he and his wife have operated Sunshine, which does not handle sales, only property management, since 1986. It is their livelihood. He became the qualifying broker for the firm in 1988. Neither he nor Mrs. Smith has been the subject of a complaint before now. At no time did either Respondent intend to break any rules or to unlawfully profit by their improper actions. They claim any infractions are as a result of ignorance rather than design and so it would appear. Their relationship with Ms. Chaple was less than an acceptable business relationship, yet Ms. Chaple did not make a good witness. It appeared she had her own agenda to follow and her memory of facts seemed selective. She appears to be difficult to deal with and it is reasonable to believe that much of the difficulty she had with the Respondents was as a result of her own attitude and approach.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore recommended that a Final Order be entered placing all Respondents' licenses on probation for a period of 1 year under such terms and conditions as may be prescribed by the Division and imposing an administrative file of $500.00 upon each Respondent Smith for a total fine of $1,000.00. RECOMMENDED this 18th day of February, 1993, 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 18th day of February, 1993. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-3898 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: 1. - 5. Accepted and incorporated herein. Accepted and incorporated herein except for the word, solicited. & 8. Accepted and incorporated herein, Rejected as not established by clear and convincing evidence. Accepted and incorporated herein. Accepted and incorporated herein. FOR THE RESPONDENT: 1. - 4. Accepted and incorporated herein 5. Accepted to the extent that the evidence shows the agree-ment and accountings were sent to the best evidence available to the Respondents. 6. Not a Finding of Fact but a Conclusion of Law, 7. & 8. More a comment on the state of the evidence, than a Finding of Fact. 9. & 10. Accepted and incorporated herein. 11. - 14. Accepted. Rejected as implying the disclosures made satisfied the rule requirements. Accepted. & 18. Accepted as to what Respondent's did and that no harm to the public or any client resulted, but rejected to the extent public benefit is asserted. 19. & 20. Accepted but relevant only to the quantum of punishment to be imposed. 21. - 23. Accepted. 24. - 26. Accepted and incorporated herein. COPIES FURNISHED: James H. Gillis, Esquire DPR, Division of Real Estate Hurston Building - N308 400 West Robinson Street Orlando, Florida 32801-1772 Sheldon L. Wind, Esquire 110 E. Hillsborough Avenue Tampa, Florida 33504 Jack McRay General Counsel DPR 1940 North Monroe Street Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate 400 W. Robinson Street P.O. Box 1900 Orlando, Florida 32802-1900
