The Issue The issue is whether Mr. Powell should be disciplined for irregularities in the handling of an escrow deposit by a real estate firm for which he was the qualifying broker.
Findings Of Fact The Respondent, Willie Powell, was at all relevant times a licensed real estate broker in the State of Florida, holding license number 0070494. Mr. Powell was the sole qualifying broker of Future Investments & Development II Co., Inc., trading as ERA Thompkins and Saunders Realty Company (hereafter, T & S), 2734 N.W. 183rd Street, Suite 206, Miami, Florida 33056. On or about November 12, 1990, Guillermo Castillo, a licensed real estate broker for Emerald Enterprises, Inc., received a listing agreement from Horace B. Miller to sell residential property (a duplex) owned by Miller located at 2331 N.W. 103rd Street, Miami, Florida. The property was listed with the Multiple Listing Service. On or about February 27 or 28, 1991, Mr. Castillo received a telephone call from Willie J. Thompkins of T & S saying he wanted to show the Miller property to a prospective buyer. On or about February 28, 1991, Mr. Castillo received through the mail slot at his office a written offer from George R. Howell of Dorchester, Massachusetts, to buy the Miller property, with a business card of Jerry Saunders of T & S. On or about March 6, 1991, Guillermo Castillo met with Horace Miller to review the Howell offer. At Miller's request, Castillo made some changes to the contract to reflect that Miller was selling the duplex in "as is" condition. Miller signed the contract and initialed the changes, and Mr. Castillo signed the contract on behalf of Emerald Enterprises, and called Willie J. Thompkins to tell him the contract had been signed. The next day, Mr. Castillo went to the office of T & S and dropped off the contract for the buyer to consider the seller's changes. A day or two later, a representative of T & S telephoned Guillermo Castillo and told Mr. Castillo that the buyer had accepted the seller's changes to the contract; Mr. Castillo then notified Miller. Mr. Castillo later received from T & S the signed contract with Mr. Miller's changes initialed by Mr. Howell. The contract was also signed by Mr. Thompkins of T & S. The contract called for a $1,000 deposit to be held in escrow by T & S (Exhibit 5, Paragraph IIa). Guillermo Castillo contacted T & S to check on the progress of the sale. He learned that J.P. Mortgage was handling the buyer's mortgage loan application. Castillo contacted J.P. Mortgage and was told that the loan was proceeding normally. After the contractual closing date of April 29, 1991, had passed without the closing taking place, Castillo contracted J.P. Mortgage again, but was told that they were no longer processing the loan. Castillo requested that J.P. Mortgage send him a letter to that effect, and he received a letter dated May 2, 1991, stating that J.P. Mortgage was withdrawing as the lender because the buyer failed to return the mortgage loan application. Castillo informed Horace Miller of the situation and Miller instructed Castillo to write to T & S making a claim to the buyer's deposit under the contract of sale. On May 4, 1991, Castillo sent a letter to T & S claiming the deposit for the seller. Paragraph Q of the contract provided for the seller to retain the buyer's deposit as liquidated damages if the buyer failed to perform the contract. On or about May 9, 1991, Guillermo Castillo received from Mr. Thompkins, the manger of T & S, a letter dated May 1, 1991, but postmarked May 6, 1991, ". . . requesting that the . . . file be cancelled" due to ". . . communication problems with . . . Mr. Howell," and citing unsuccessful attempts to contact Howell by telephone and by mail. When Castillo received that letter he contacted T & S to point out the seriousness of the matter and to press for forfeiture of the buyer's deposit. On May 9, 1991, Castillo received a telefax from Mr. Thompkins of T & S stating that the Howell deposit check had been returned for insufficient funds and attaching a copy of the returned check. Prior to his receipt of this telefax, Castillo had not taken any independent steps to verify whether T & S had actually received the Howell deposit. He had relied on the contract, which had been executed by a licensed salesman and believed he did not require further verification that the escrow deposit had been made. Neither Mr. Castillo nor Mr. Miller dealt with the Respondent, Mr. Powell, at any time concerning the sale of the Miller property. T & S received George Howell's $1,000 deposit in the form of a check on March 4, 1991, drawn on a Massachusetts bank and deposited it in its account with First Union National Bank which was used as the escrow account, account number 15462242336, on March 5, 1991. The check was charged back to the account twice, on March 11, 1991, and on March 26, 1991. Mr. Powell was a signatory on that escrow account. After Guillermo Castillo received the May 9, 1991, telefax, he notified Horace Miller. Mr. Miller had not taken any steps on his own to verify whether T & S had received the deposit because he had confidence in his broker to let him know right away if there were any problems with the sale. By May 9, 1991, Horace Miller had already incurred expenses preparing the property for closing, and had lost rent by terminating a tenancy in the property. Because the transaction never closed, Mr. Miller sustained financial damage, some of which he might have avoided if he had been notified earlier of the buyer's dishonored escrow deposit check. On or about May 28, 1991, Miller filed a complaint with the Department of Professional Regulation, which Sidney Miller investigated. He found that the person introduced to him during his investigation at T & S as Willie Powell was not actually the Respondent. In March 1991, Mr. Powell had not seen the bank statements for the T & S escrow account for several months, and had not signed the written monthly escrow account reconciliation statement for the month of October 1990 or for any subsequent month. Mr. Powell was serving as the qualifying broker of T & S for a salary of $75 per month and no commissions. He was not active in the management of the firm. He would come to the office of T & S approximately three days per week to check files and sign listing agreements, and he would call in to see if there were any problems, messages or documents to sign. He essentially loaned his brokers' license to those who operated T & S as an accommodation because he had known the Thompkins family for 25 years. Mr. Powell argues in his proposed order that "the adequacy of [Mr. Powell's] monthly reconciliations were impeded by frauds perpetrated upon him by persons at [T & S]" (PRO at page 9, paragraph 5). It is obvious that there were problems at T & S, since a person there misrepresented himself to the Department's investigator as Mr. Powell. The full extent of the misconduct there is unclear. There is no proof in this record that salespersons at T & S had fabricated escrow account statements for Mr. Powell. Had Mr. Powell proven that he performed monthly reconciliations with what turned out to be falsified records of T & S, his argument might be well taken. The record, unfortunately, shows that no reconciliations were done. Had Mr. Powell done them, the problem here should have been uncovered.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be issued finding Willie Powell guilty of violating Section 475.25(1)(b), Florida Statutes, finding him not guilty of violating Section 475.25(1)(d), Florida Statutes, and taking the following disciplinary action against him: Issuance of a reprimand. Imposition of an administrative fine in the amount of $1,000 to be paid within 30 days of the date of the final order adopting the recommended order. Placement of the license of Mr. Powell on probation for a period of one year beginning on the date of the final order and providing that during that period he shall provide satisfactory evidence to the Florida Department of Professional Regulation, Division of Real Estate, Legal Section, Hurston Building, North Tower, Suite N-308, 400 West Robinson Street, Orlando, Florida 32801-1772, of having completion a 30-hour postlicensure education course in real estate brokerage management, in addition to any other education required of him to remain current and active as a real estate broker in the State of Florida, and that he be required to submit to the Commission during that year his monthly trust account reconciliations. Cf. Rule 21V-24.002(3)(i), Florida Administrative Code, on penalties for violation of Rule 21V-14.012(2), Florida Administrative Code. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 16th day of July 1992. WILLIAM R. DORSEY, JR. Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this day of July 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-0192 Rulings on Findings proposed by the Commission: Adopted in Findings 1 and 2. Adopted in Finding 2. Adopted in Finding 3. Adopted in Finding 4. Adopted in Finding 5. Adopted in Finding 6. Adopted in Findings 7 and 8. Adopted in Finding 9. Adopted in Finding 12. Adopted in Finding 13. Adopted in Finding 11. Adopted in Finding 15. Rulings on Findings proposed by Mr. Powell: Adopted in Finding 1 with the exception of the license number. Adopted in Finding 3. Adopted in Finding 2. Adopted in Finding 4. Rejected as unnecessary. Adopted in Finding 5. Adopted in Finding 4. Adopted in Finding 6. Generally adopted in Finding 6. Implicit in Finding 10. Adopted in Finding 6. Adopted in Finding 6. Adopted in Findings 7 and 8. Adopted in Finding 9. Adopted in Finding 10. Rejected as subordinate to Finding 10. Adopted in Finding 13. Rejected as unnecessary, the reconciliation was not one done shortly following the month of March reconciling the account for March 1991. It was done during the investigation conducted by Mr. Miller and took place between approximately June 20 and July 10, 1991. Adopted in Finding 15. Rejected as unnecessary. Adopted in Finding 14. Rejected as unnecessary, or subordinate to Finding 10. Rejected as unnecessary. Rejected as unnecessary. COPIES FURNISHED: Theodore R. Gay, Esquire Department of Professional Regulation Suite N-607 401 Northwest 2nd Avenue Miami, Florida 33128 Harold M. Braxton, Esquire Suite 400, One Datran Center 9100 South Dadeland Boulevard Miami, Florida 33156 Darlene F. Keller Division Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792
The Issue The central issue in this case is whether Respondent is guilty of the violations alleged in the administrative complaint dated January 19, 1989; and, if so, what penalty should be imposed.
Findings Of Fact Based upon the prehearing stipulation filed by the parties, the testimony of the witnesses, and the documentary evidence received at the hearing, the following findings of fact are made: The Department is the state agency charged with the responsibility of regulating and disciplining real estate licensees. The Respondent, Charles P. Grimes, is, and has been at all times material to the allegations of the administrative complaint, licensed as a real estate broker in the State of Florida, license number 0034301. In November, 1980, a contract for sale and purchase of real estate was drafted between Dorothy Langham Scott, seller, and Phillip Crawford, buyer. The contract, which was subsequently executed by both parties, provided that a deposit in the amount of $18,500 was to be held in escrow by Respondent. A separate brokerage agreement between Respondent and the seller, executed November 30, 1980, provided that Respondent would receive a brokerage fee of ten percent of the total gross sales price. The brokerage agreement specified that "should the buyer default and not close the transaction in accordance with the Contract, the Broker shall not be entitled to any commission." The agreement further provided that Respondent would "use reasonable diligence and his best efforts to see that the transaction is closed in accordance with the executed Contract." The contract described in paragraph 3 did not close. Subsequently, the seller sued Respondent in the Circuit Court in Palm Beach County, Case no. 82-1974 CA (L) 01 B. On August 13, 1985, an amended final judgment was entered which provided, in part: The facts adduced at trial indicate that Crawford and Scott entered into a contract for the purchase and sale of certain real property, located in Putnam County and that for no apparent reason Crawford defaulted on the contract. The evidence is clear and convincing and unrefuted. Crawford has admitted several letters which he says were communicated to the attorney for Scott. However, the substantial weight of the evidence will not support his repudiation of the contract. Accordingly, it is clear that as between Scott and Grimes, the real estate agent who was allegedly holding the deposit under the provisions of the deposit receipt contract, Scott is entitled to a judgment for $18,500.00, plus its costs and attorney's fees. John L. Burns, an attorney who represented the seller, Scott, during the contract negotiations in November, 1980- January, 1981, received a letter from Respondent on December 12, 1980. That letter, dated December 5, 1980, provided: "I have enclosed the signed contract and have received the deposit check from Dr. Crawford." On or about January 29, 1981, Mr. Burns received a letter from Respondent which indicated that the contract would close in March, 1981. Respondent did not advise the seller that the deposit on the Crawford/Scott contract was not in escrow. Respondent erroneously assumed that a deposit from the buyer (which had been deposited on another contract for sale and purchase) could be applied to the contract. That deposit, in the amount of $20,000.00, was not transferred and was not used to satisfy the amended judgment entered in Scott's favor.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department of Professional Regulation, Florida Real Estate Commission, enter a final order finding the Respondent guilty of the violation of Section 475.25(1)(b), Florida Statutes, imposing an administrative fine in the amount of $1000.00, suspending his license for a period of 60 days, and placing the Respondent on probation for a period of two years. It is recommended that the Respondent be found not guilty of the other alleged violations. DONE and ENTERED this 18th day of December, 1989, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of December, 1989. APPENDIX TO CASE NO. 89-2517 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE DEPARTMENT: Paragraphs 1 through 4 are accepted. With regard to paragraph 5, it is accepted that on or about November 30, 1980, Respondent was attempting to procure the contract described; however, the exact date the parties executed the contract is not known. The contract was ultimately executed by both parties but did not close. Consequently, the proposed fact, as written, is not supported by the record. Paragraphs 6 and 7 are accepted. With regard to paragraph 8, it is accepted that the contract did not close and that a court of competent jurisdiction determined that the deposit should be awarded the seller; otherwise, the paragraph is rejected as outside the scope of this record. Paragraph 9 is accepted but is irrelevant. Paragraph 10 is accepted. Paragraph 11 is rejected as irrelevant. Paragraph 12 is accepted. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: None submitted. COPIES FURNISHED: James H. Gillis Senior Attorney Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Glenn M. Blake Blake & Torres, P.A. 200 South Indian River Drive Suite 101 Fort Pierce, Florida 34950 Darlene F. Keller Division Director Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 =================================================================
The Issue The issue is whether Petitioner’s application for licensure as a real estate broker should be approved.
Findings Of Fact Petitioner has been a licensed real estate sales associate since 2000. His license number is 693538. Most of Petitioner’s work in the real estate industry has involved business transactions, but he has also handled transactions involving residential properties. On August 23, 2004, Petitioner filed an application for licensure as a real estate broker. Petitioner disclosed in the application that, in July 2003, his sales associate license was suspended by the Commission for 30 days and that he was placed on probation for a period of six months. That disciplinary action was based upon a single incident that occurred on or about November 7, 2001. Petitioner agreed to the disciplinary action as part of a “Stipulation” to resolve an Administrative Complaint charging him with fraud and misrepresentation in violation of Section 475.25(1)(b), Florida Statutes (2001), and with having operated as a broker without a license in violation of Sections 475.42(1)(a) and 475.25(1)(e), Florida Statutes (2001). The Administrative Complaint contained the following “essential allegations of material fact,” which were admitted by Petitioner as part of the Stipulation: On or about November 7, 2001, Respondent, a seller’s agent, facilitated a purchase and sale transaction between Buyer and Seller. On or about November 7, 2001, [Petitioner] was not registered with a broker.[1] The transaction referenced above failed to close. Buyer released a $1,000.00 payment to Seller. [Petitioner] submitted the $1,000.00 payment to Seller. [Petitioner] instructed [Seller] to execute a check in the amount of $500.00 payable to “Cash.”[2] [Petitioner] accepted the $500.00 payment as his own payment for services. The Final Order adopting the Stipulation was filed with the agency clerk on June 25, 2003. Petitioner’s suspension commenced on July 25, 2003, which is “thirty days from the date of filing of the Final Order.” The suspension ended 30 days later, on August 24, 2003. Petitioner’s probation ran “for a period of six (6) months from the Effective Date [of the Stipulation],” which was defined as the date that the Final Order was filed with the agency clerk. As a result, the probation period ran from June 25, 2003, to December 25, 2003. Petitioner was required to complete a three-hour ethics course and a four-hour escrow management course during the probation period, which he did. Petitioner has not been subject to any other disciplinary action. Petitioner has taken several continuing education courses in addition to those required as part of his probation. He is working towards certification by the Graduate Realtor Institute. Petitioner has taken the classes necessary to become a real estate broker, and he passed the broker examination. Petitioner has worked for broker Phillip Wetter since March 2005. Petitioner manages the day-to-day operation of Mr. Wetter’s brokerage firm. His responsibilities include preparing listings, negotiating contracts, and handling escrow funds. He has been involved in over 50 successful real estate transactions under Mr. Wetter’s supervision. According to Mr. Wetter, Petitioner is meticulous in his work, including his handling of escrow funds, and he always makes sure that he “dots all his ‘I’s’ and crosses all his ‘T’s’.” Petitioner acknowledged in his testimony before the Commission and at the final hearing that what he did in November 2001 was wrong. He credibly testified that he has learned from his mistake. In his testimony before the Commission and at the final hearing, Mr. Wetter attested to Petitioner’s honesty, ethics, good moral character, as well as his qualifications to be a broker. That testimony was unrebutted and is corroborated by the letters of support from Petitioner’s former clients that are contained in his application file, Exhibit R1. Mr. Wetter’s opinions regarding Petitioner’s fitness for licensure as a real estate broker are given great weight. Those opinions are based not only on his personal observations as Petitioner’s current qualifying broker, but also on his personal experience with Petitioner representing him in several business transactions while Petitioner was working for other brokers.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Division issue a final order approving Petitioner’s application for licensure as a real estate broker. DONE AND ENTERED this 22nd day of November, 2005, in Tallahassee, Leon County, Florida. S T. KENT WETHERELL, II 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 22nd day of November, 2005.
The Issue The issues are whether Respondent is guilty of violating a lawful order of the Florida Real Estate, in violation of Sections 475.42(1)(e) and 475.25(1)(e); committing fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction, in violation of Section 475.25(1)(b) (two counts); failing to account for or deliver funds, in violation of Section 475.25(1)(d)1; failing to maintain trust funds in a real estate brokerage escrow bank account or some other proper depository until disbursement is authorized, in violation of Section 475.25(1)(k); failing to provide a written agency disclosure, in violation of Section 475.25(1)(q); being found guilty for a second time of any misconduct that warrants suspension or of a course of conduct or practices that show such incompetence, negligence, dishonesty, or untruthfulness as to indicate that Respondent may not be entrusted with the property, money, transactions, and rights of investors or others with whom Respondent may maintain a confidential relation, in violation of Section 475.25(1)(o); and failing to preserve and make available to Petitioner all books, records, and supporting documents and failing to keep an accurate account of all trust fund transactions together with such additional data as good accounting practice requires, in violation of Rule 61J-14.012(4) and Section 475.25(1)(e).
Findings Of Fact At all material times, Respondent has been a licensed real estate broker, holding license numbers 0489551 and 3000384. Respondent is the qualifying broker for Buyers Realty of Naples, Inc., of which Respondent was a principal. Respondent has been disciplined once previously. On December 8, 1994, the Florida Real Estate Commission entered a final order, pursuant to a stipulation, ordering Respondent to pay an administrative fine of $500 and complete 30 hours of professional education. In late 1993, Respondent, Armand Houle, and Svein Dynge formed DSA Development, Inc. (DSA). Respondent, Houle, and Dynge were directors of the corporation. On December 1, 1993, Respondent, Houle, and Dynge formed Gulf Southwest Developers, Ltd. (GSD). DSA served as the sole general partner of GSD, whose original limited partners included Houle and several foreign investors represented by Dynge, but not Respondent or Houle. The investors formed GSD to assemble a vast tract of land in Collier County, through numerous purchases, for purposes of mining, development, and speculation. The initial investors contributed or agreed to contribute over $4 million to GSD. Respondent's role was to find suitable parcels of land and negotiate their purchase by GSD or its agent. GSD agreed to pay Respondent $1000 weekly for these services. GSD also authorized Respondent to take a broker's commission of 10 percent of the sales price for each fully executed contract presented to the closing agent. This is the customary broker's commission in the area for transactions of this type. Respondent's claim that he was entitled to a commission of 20 percent is rejected as unsupported by the evidence. There is some dispute as to whether the seller or the buyer was to pay the commission. The contracts provide that the commission was to be deducted from the seller's proceeds. However, regardless of the source of the commission, Respondent was entitled only to 10 percent, not 20 percent. Respondent knew that he was not entitled to 20 percent when he took the additional sum from GSD funds. Thus, the act of taking the funds constituted no less than concealment (due to his failure to disclose his withdrawals), dishonest dealing, culpable negligence and breach of trust, if not actual fraud. There is some evidence that Respondent took substantial sums from GSD without authorization. Without doubt, part of these sums represented the additional ten percent commission described in the preceding paragraph. Petitioner has attempted to prove that Respondent took sums in excess of the extra ten percent commission without authorization. However, as to such sums in excess of the additional ten percent commission, Petitioner has failed to prove by clear and convincing evidence either that Respondent took such additional sums or, if he did so, that these withdrawals were not authorized or at least ratified. As agent for GSD, Houle entered into numerous contracts in the second half of 1994 and first half of 1995. In each of these contracts, Respondent signed the contract below printed language stating that he, as broker, and Buyers Realty of Naples, Inc. had received the initial escrow deposit under the conditions set forth in the contract. At no time did Respondent or Buyers Realty of Naples, Inc. hold the escrowed funds in an escrow account under the name of Respondent or Buyers Realty. Respondent maintains that he transferred the funds to the title company to hold in escrow. The record does not permit a finding, by clear and convincing evidence, that he did not do so, although there is some evidence indicating that the title company did not hold such funds. However, it is sufficient that Petitioner has shown by clear and convincing evidence that neither Respondent nor Buyers Realty held these escrow funds, despite clear misrepresentations by Respondent in each contract that he or his company held these escrowed funds. Respondent's misrepresentations constitute fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing, and breach of trust. Petitioner failed to prove by clear and convincing evidence that Respondent did not make the required agency disclosures in a timely fashion or that Respondent did not make available to Petitioner's investigator the books and records that he is required to maintain. Likewise, Petitioner did not prove by clear and convincing evidence that Respondent failed to complete the education required by the prior final order or participated in the fraudulent endorsement of Houle's signature on checks by a secretary, who later obtained Houle's consent to the act.
Recommendation It is RECOMMENDED that the Florida Real Estate Commission enter a final order suspending Respondent's license for five years. DONE AND ENTERED this 4th day of September, 1997, in Tallahassee, Leon County, Florida. ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 4th day of September, 1997. COPIES FURNISHED: Geoffrey T. Kirk, Senior Attorney Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32802 James H. Gillis James H. Gillis & Associates, P.A. Law Offices of Gillis & Wilsen 1415 East Robinson Street, Suite B Orlando, Florida 32801-2169 Henry M. Solares Division Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900
Findings Of Fact The Petitioner is an agency of the State of Florida charged with the responsibility to license and regulate the licensure standards of real estate brokers and salespersons in the State of Florida and with prosecuting Administrative Complaints against the licensure status of those persons for alleged violations of the various provisions of Chapter 475, Florida Statutes (1991), and the rules promulgated thereunder. The Respondent at all times material hereto was a real estate broker- salesperson operating and licensed in the State of Florida having been issued license number 0162601. The last license issued the Respondent was effective on September 30, 1991 and accorded him the status of a "non-active broker" with an address at 5622 Thomas Drive, Panama City, Florida 32408. In 1987, Barbara Jean Parmer, also known as Barbara Jean Withers (hereafter Barbara Parmer), responded to a newspaper ad and rented a residential property from the Respondent. She gave the Respondent a damage deposit of approximately $395.00. Subsequent to renting the property, she expressed an interest in buying it from the Respondent and was advised by the Respondent that she could seek financing from his lender or she could make payments directly to the Respondent; and when he was fully paid, he would transfer the deed to her and pay off the existing first mortgage. This was the first occasion she had ever attempted to purchase a home. The Respondent told Barbara Parmer that the existing mortgage balance was $29,000.00 and that to sell her the property, he wanted a $5,000.00 down payment and $12,000.00 in "rent" for a total sales price of $46,000.00. In effect, the so-called payments would be payments toward purchase of his equity in the home. On October 9, 1987, the Respondent and Barbara Parmer executed a "Receipt for Deposit-Offer to Purchase-Contract for Sale" (contract) reflecting a $5,000.00 earnest money deposit for property located at 335 Gardenia Street, Panama City, Florida. On that day, Barbara Parmer gave the Respondent check number 108 for $5,000.00 as the down payment on the house. He cashed that check on October 12, 1987. The Respondent drafted the contract at issue and did not advise Barbara Parmer to have an attorney review the document. Barbara Parmer testified that she trusted the Respondent, in effect, because he was a real estate licensee. When she signed the contract and gave the earnest money deposit or down payment, she understood that she was contracting to purchase the property from the Respondent. Sometime after signing the contract and the tendering of the earnest money deposit, Barbara Parmer (then Withers) married David Parmer. Subsequent to the signing of the contract and the payment of the earnest money deposit, the Respondent advised the Parmers that he was getting divorced. He told them he did not want his wife to gain possession of the property and so suggested that Barbara Parmer go to Sun Bank to have the property transferred into her name, in other words, by re-financing the house with Sun Bank and thus paying off the existing first mortgage and any equity still owed the Respondent. After the Respondent told the Parmers about his impending divorce, Mr. Parmer asked the Respondent to return the $5,000.00 earnest money deposit. The Respondent advised that if he sold the house, he would return the deposit, which was being held in an account drawing interest, according to the Respondent. He also represented that he would not refund any of the money expended by them for improvements because he had not requested that any of the improvements be made. He had apparently taken the position in entering the arrangement with Barbara Parmer that it was a sale of the property under a "contract for deed" arrangement whereby title would pass only after his purchase price had been paid. In any event, Barbara Parmer went to Sun Bank and was advised by Loan Officer, Cindy McNeal, that the documents entered into between Barbara Parmer and the Respondent regarding purchase of the property were legally flawed in the opinion of Ms. McNeal and that Barbara Parmer should seek an attorney's advice. Sun Bank declined to refinance the property because Mr. Parmer was then unemployed due to an accident and was only receiving income from worker's compensation and no salary. After the conversation with the representative of Sun Bank, Barbara Parmer called Great Western, the holder of the first mortgage executed by the Respondent, to inquire as to the balance due on that first mortgage. Barbara Parmer received a document from Great Western dated November 13, 1990 indicating that the balance on the mortgage was approximately $33,000.00. In 1987, when she contracted with the Respondent to purchase the property, the Respondent had told her that the balance was approximately $29,000.00. The first mortgage was apparently an adjustable rate mortgage and either the represented $29,000.00 figure was inaccurate or the mortgage was in negative amortization or both. The Respondent never advised the Parmers of any negative amortization situation. Between October 9, 1987 and March or April of 1991, Barbara Parmer paid the Respondent between $400.00 and $500.00 per month toward purchase of the property. The checks for the monthly payments were payable to Respondent Melvin J. Powell and were negotiated by Powell. At the direction of the Respondent, the payments were made at the office of Sun Spot Realty. During this time, the Respondent's licensure was located and registered with Sun Spot Realty. The variation in the monthly payment was because the Respondent advised Barbara Parmer that the monthly payment on the first mortgage held by Great Western was $200.56 and that anything she paid over that amount would go toward the $12,000.00 equity she owed the Respondent pursuant to their agreement. Some months she paid different amounts over and above the amount represented by the monthly payment on the Great Western first mortgage. The Respondent gave Barbara Parmer a ledger sheet showing the dates she made payments on the property, the amount that went to Great Western to retire the first mortgage, and the amount that went to the Respondent toward the $12,000.00 second mortgage representing his equity, as well as the amounts contributed to interest, taxes, and insurance. During the approximately three and one-half years that she lived in the house, she made improvements to the property, including but not limited to: landscaping the front and back yards, pouring a foundation, erecting a metal shed, repairing the roof, painting the interior and exterior, replacing the walls and floor in the bathroom, wallpapering and finishing the kitchen, and installing a new dishwasher and a new hot water heater. Respondent never expended any funds for upkeep of the property during the time the Parmers occupied the house. The Parmers spent at least $5,000.00 on improvements to the property they were purchasing from the Respondent. The Respondent told them then to make whatever improvements they wished because the house was theirs. The Parmers would not have spent the money on the improvements had they not believed that they were purchasing the property. After attempting to obtain financing from Sun Bank, Barbara Parmer contacted Attorney Glenn Hess, who sent a letter to Respondent's counsel regarding Barbara Parmer's concerns. Prior to seeing Attorney Hess, the Respondent had admonished Barbara Parmer not to see an attorney, that the matter could be settled amicably between them, and he threatened to sue her if she did contact an attorney about her concerns. The Respondent told Mr. Parmer that Barbara Parmer had a legal contract to purchase the property and warned against them seeking legal advice by threatening to sue them for breach of contract if they did so. Attorney Hess advised Barbara Parmer that it would be uneconomical to file a lawsuit against the Respondent. Despite demand for return of the earnest money deposit, the Respondent never returned the deposit nor did he ever compensate the Parmers for the funds they expended on improvements to the property. They vacated the property on advice of their attorney. The Respondent never gave notice to the Parmers that he was claiming any of their funds for damage to the property or for breach of contract. When they vacated the property, there was no damage to the property other than a five-inch hole in one bedroom wall. Within two months of the Parmers moving out, the Respondent rented the property to another tenant for almost $100.00 per month more than the Parmers had been paying. On the advice of Attorney Hess, the Parmers filed a complaint against the Respondent with the Bay County Board of Realtors, Inc. Thomas S. Newbauer has been a licensed real estate broker since 1973 and serves as chairman of the Professional Standards Committee (hereafter Committee) of the Bay County Board of Realtors. The Committee hears cases and renders decisions on allegations of violations of the Board of Realtors' code of ethics. In September, 1991, Mr. Newbauer served as a member of the panel appointed by the Committee in considering the complaint filed by the Parmers against Respondent. A hearing was held by the appointed panel to consider the complaint filed by the Parmers against the Respondent. The Respondent was notified of the hearing and appeared and testified. On September 30, 1991, the ethics hearing panel of the Committee filed a decision regarding the Parmer complaint against the Respondent and determined that the Respondent had violated three articles of the realtor code of ethics and further that there might be grounds for investigation by the Florida Department of Professional Regulation. On October 1, 1991, Mr. Newbauer sent a letter to the Board of Directors of the Board of Realtors informing them of the determination of the panel of the Committee. The determination by the panel that the Respondent had violated the code of ethics was upheld by the Board. Paul R. Bratton, III has been a real estate investigator with the Department of Professional Regulation for some nine years. The Respondent told Mr. Bratton that he had kept the $5,000.00 earnest money deposit because the Parmers had breached the contract.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, and the pleadings and arguments of the parties, it is RECOMMENDED that the Respondent be found guilty of having violated Section 475.25(1)(b), Florida Statutes, and that his Florida real estate license be suspended for a period of one year, that he be accorded a formal written reprimand, that he complete 60 hours of post-licensure continuing education for brokers within three years from the date of the Final Order entered in this cause, and that he pay a fine of $1,000.00 to the agency within 30 days of the filing of the Final Order in this cause. DONE AND ENTERED this 13th day of May, 1993, in Tallahassee, Florida. P. MICHAEL RUFF 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 13th day of May, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-3751 Petitioner's Proposed Findings of Fact 1-46. Accepted. Respondent's Proposed Findings of Fact The Respondent filed no separately-stated findings of fact but rather a one-page "Proposed Recommended Order" merely stating the conclusions that the Respondent was not guilty of the charges in Counts I and II of the Administrative Complaint and the statutes he was charged with violating. COPIES FURNISHED: Ms. Darlene F. Keller Division Director Department of Professional Regulation Division of Real Estate P.O. Box 1900 Orlando, FL 32802-1900 Jack McRay, Esq. General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792 Janine B. Myrick, Esq. Department of Professional Regulation Division of Real Estate Post Office Box 1900 Orlando, FL 32802-1900 Melvin J. Powell 2610 Dade Panama City, FL 32408 Melvin J. Powell 5622 Thomas Drive Panama City, FL 32408
Findings Of Fact The parties stipulated to facts set forth in paragraphs 1-8, below. Stipulated Facts The Petitioner is the Division of Real Estate of the Department of Professional Regulation. As such, Petitioner acts as the licensing and regulatory agency for real estate broker licensees. The Respondent is Harriet M. Arndt, holder, at all times pertinent to these proceedings, of license number 0002216 issued by Petitioner. Her address of record is One South Ocean Boulevard, Suite 322, Boca Raton, Florida 33431. On January 28, 1987, Respondent received in trust an earnest money deposit in the amount of $39,000 from a buyer for a piece of property listed with another realtor, Merrill Lynch Realty, Inc. At closing of the sales transaction on February 25, 1987, Respondent delivered a check drawn on her trust account in the amount of $15,600 and made payable to Merrill Lynch Realty, Inc. This payment represented payment of one half of the $31,200 real estate brokerage commission. The check was subsequently returned to Merrill Lynch Realty, Inc. due to "non-sufficient funds." On March 27, 1987, Respondent delivered a cashier's check in the amount of $15,600 to Merrill Lynch Realty, Inc., to replace the February 25, 1987, check. The Respondent's real estate brokerage trust account was overdrawn from January 8, 1987 through March 4, 1987, by amounts ranging from $12,991.39 to $14,306.53 on various days during that period. The Respondent failed to maintain the $39,500 earnest money deposit in her trust account from February 2, 1987 until February 25, 1987, because the trust account's daily balance was less than that amount during that period. The Respondent subsequently failed to maintain the $15,660 due to Merrill Lynch Realty Inc., in the trust account from February 25, 1987, through March 25, 1987, because the trust account's daily balance was less than $15,600. From March 19, 1987, through October 29, 1987, Petitioner's investigator requested Respondent to produce for inspection and copying those books and papers relating to Respondent's trust account which are maintained in connection with Respondent's real estate activities. The Respondent failed to make the requested trust account books and records available at any time. Other Facts The Respondent offered mitigating testimony establishing that she was initially licensed in 1978 and has never been censured by Petitioner for any professional violations. She is 57 years of age and her real estate license is her sole source of support. Further, Respondent has borrowed money from her children to make up the deficit in her trust account. The testimony of Respondent also established that she was introduced to a gentleman named Robert H. Lajoie by another realtor in December of 1986. Subsequently, on or about December 8, 1986, Respondent entered into a nefarious arrangement with Lajoie. Under terms of the arrangement, Lajoie gave Respondent a check for $25,500 as a deposit to purchase a property listed with Respondent. In turn, Respondent gave Lajoie back a cash deposit of $10,000 from her trust fund in connection with a contract between the two of them whereby Respondent was to purchase a property of Lajoie's. The closing of the sale of Lajoie's property to Respondent would not take place until May, 1987. Lajoie returned to his native Canada shortly after receiving the $10,000 cash payment from Respondent and died. Shortly thereafter, payment on Lajoie's $25,500 check to Respondent was stopped. The Respondent is not sure whether this action was taken by Lajoie prior to his death or by his estate subsequent to that event. It is Respondent's contention that the loss of the $10,000 cash deposit to Lajoie resulted in a negative net balance in her trust account and eventually all of her financial difficulties in this case. The Respondent was sent an overdraft notice by her bank on January 8, 1987, stating that her trust account was overdrawn by $13,500 and that a check for $25,500 had been returned. Subsequent overdraft notices dated January 13, 1987 and January 21, 1987, were received by Respondent noting the rejection of two of Respondent's checks; one in the amount of $294.90 and the other in the amount of $34.35. The notice of January 13, 1987, indicated a hold on the account in the amount of $2,862.94 against the account's balance of $3,006.19. The January 21, 1987, notice continued this hold on the account's balance of $2,891.45. The Respondent related a series of personal matters at hearing that had prevented her from keeping appointments with Petitioner's investigators to inspect her records. She agreed to make access to those records immediately available.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered finding Respondent guilty of the offenses charged in the administrative complaint, imposing an administrative fine of $1,000 and suspending her license for a period of six months. DONE AND RECOMMENDED this 22nd day of July, 1988, in Tallahassee, Leon County, Florida. DON W. DAVIS 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 22nd day of July, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-1472 The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings 1-2. Included in finding 1. 3-8. Included in findings 3-8 respectively. Respondent's Proposed Findings 1. Included in finding 2. 2-5. Included finding 10. Included in finding 3. Included in finding 4, 5, and 10. Included in finding 8 and 12. 9-10. Rejected. 11. Included in finding 9. COPIES FURNISHED: Steve W. Johnson, Esquire Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802 Robert E. Gordon, Esquire 2601 Tenth Avenue North Suite 314 Lake Worth, Florida 33461-3197 William O'Neil, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Darlene F. Keller, Acting Director Department of Professional Regulation Division of Real Estate 130 North Monroe Street Tallahassee, Florida 32399-0750
The Issue Whether the Certificate of Registration of the Respondent as a real estate broker should be suspended or revoked For alleged violation of Sections 475.25(1)(a), 475.25(1)(c), 475.25(1)(i), and 475.25(3), Florida Statutes, as alleged in the Administrative Complaint filed February 11, 1976. A final hearing was scheduled to be held on June 29, 1976, but pursuant to Motion of Respondent was continued until July 6, 1976 and, pursuant to a further Motion of Respondent For continuance, the hearing was continued until November 15, 16, 1976. A prehearing Motion of Respondent to strike Counts I, II, III, V, VII, VIII, IX & X of the Administrative Complaint was denied at the commencement of the hearing. At the hearing, Petitioner moved to amend Count X of its Complaint to correct a typographical error as to the statutory provision alleged to have been violated. The Motion was granted and the said Count was amended to reflect an alleged violation of Section 475.25(3), F.S. rather than Section 475.25(1), F.S. Pursuant to further Motion of Petitioner, a typographical error appearing in Count VII of the Administrative Complaint relating to the address of the property in question shown in paragraph 1 thereof was corrected to read "1558". Pursuant to further Motion of petitioner, Count Seven was also amended to include an alleged violation of Section 475.25(1)(i), F.S. No objections to any of the above amendments were made by Respondent.
Findings Of Fact Respondent is a registered real estate broker, Certificate No. Q056337. During the year in which the alleged statutory violations occurred, i.e., 1974, she was also registered under the trade name "Watson Real Estate". Also, effective November 4, 1974, she was additionally registered in the name of Connie B. Martin. Her place of business was listed at 17031 North Dixie Highway, North Miami Beach, Florida. (Petitioner's Exhibits 1, 2) On April 16, 1974, Respondent, in the name of "Connie Martin and/or Nominees" entered into an Agreement of Sale and Deposit Receipt with Richard Infante and Susan Infante, his wife, whereby Respondent agreed to purchase real estate located at 1558 N.W. 102nd Street, Miami, Florida, For the price of $24,607.50. The contract provided For a $1,000.00 security deposit by the purchaser in the Form of a check payable to "Watson Real Estate Trust Account" and the Agreement recited an acknowledgement of receipt of these escrow funds by Constance B. Mastellone For Watson Real Estate. The Agreement further provided that closing of the transaction would be on June 23, 1974 and that, in the event of failure or refusal of the purchaser to comply with the obligations thereunder, without fault on the sellers' part, all monies paid under the contract could be retained by the sellers as liquidated damages. Respondent did not place the $1,000.00 deposit in the Watson Real Estate Trust Account that was maintained in the City National Bank of Miami Beach, Miami Beach, Florida. Instead, she wrote a letter to the Infantes on the same day that the contract was executed advising them that the money was in an interest-bearing account at Chase Federal Savings, North Miami Beach, Florida. The letter stated that she preferred to handle the matter in that manner because there was a possibility she would not be able to obtain financing and close the purchase. Although Respondent testified that Mr. Infante called and told her that he had received the letter and had expressed no objection to this disposition of the funds, no written instrument or addendum to the contract in this respect was ever executed by the parties. (Petitioner's Exhibit 14; Respondent's Exhibit 16). The transaction with the Infantes did not close on the scheduled date because Respondent was unable to obtain mortgage financing. On July 1, 1974, Respondent, in the name of "Connie B. Martin, broker" as seller, entered into a deposit receipt agreement with Carrie Clark, as purchaser to sell the Infante property For the sum of $25,000.00. The deposit receipt reflected that the sum of $1,450.00 was acknowledged to be held in escrow by Watson Real Estate as a deposit on the property. There was no showing in this Agreement that Respondent did not hold title to the property at the time. The contract was contingent upon the delivery by the seller of an FHA appraisal of not less than $25,000.00. The Agreement reflected that "Watson Real Estate, Connie B. Martin, Broker" had received the aForesaid deposit. Under the same date of July 1, 1974, another deposit receipt was executed by Carrie Clark as buyer, whereby "Watson Real Estate Trust Account, Connie B. Martin", acknowledged receipt of $1,450.00 from Carrie Mae Clark on the same property as a deposit to be held in escrow by Watson Real Estate. This document showed the purchase price to be $24,607.50. It did not reflect the name of the proposed seller of the property. At the time she executed these documents, Clark did not know who owned the property in question. Respondent viewed Clark as her "Nominee, as referred to in the original contract with the Infantes, and had contracted with Clark on the assumption that she could deliver clear title to her when she had received the same from the Infantes. Respondent considered this transaction to be what she termed a "double closing". Her original contract with the Infantes provided that she would receive as "Watson Real Estate, Connie B. Martin, Broker", 40 percent of the real estate commission on the sale with 60 percent to be paid to the listing broker, Edwin C. Bagby. (Testimony of Respondent, Clark, Petitioner's Exhibit 8; Respondent's Exhibit 6). During the next several months after June, 1974, Respondent advised Infante and his attorney Benjamin Agronow, that she was endeavoring to sell the house to Clark. Infante was desirous of selling the property and did not press to close the transaction. He hereby tacitly agreed to an extension of the time For closing. However, when the Clark deposit receipt was submitted to Agronow in early November, 1974, he advised Infante that the changed method of financing therein would result in higher costs to him. By this time Infante wanted no further dealings with the Respondent and declined to consider the offer by Clark. Thereafter, on November 12, 1974, Agronow advised the Respondent that she had breached the contract of April 16, 1974 For, failure to close the transaction, and demanded delivery of the $1,000.00 deposit under the terms of the contract. It provided that upon default of the purchaser all monies paid thereunder could be retained by the seller as liquidated damages and the contract terminated. Respondent did not pay over the deposit funds to Infante. (Testimony of Respondent, Agronow, Infante (Deposition), Respondent's Exhibit 6, Petitioner's Exhibit 14). On May 25, 1974, Respondent, in the name of "Connie B. Martin and/or Nominees" as purchaser, entered into an Agreement Of Sale And Deposit Receipt with Ruth E. Higgins, as seller, to purchase property located at 1065 N.W. 127th Street, Miami, Florida, For the sum of $31,000.00. The contract provided For the payment of $1,000.00 in the Form of a check to "Watson Real Estate trust account", escrow agent, as a security deposit, and receipt was acknowledged of this amount on the same date by Constance B. Mastellone For Watson Real Estate Trust Account. The contract further provided that it was a "back-up" contract and would not become effective until the date that Higgins was notified that a previous contract with one Hyde was known to be void. Respondent was advised several months later that the Hyde transaction had failed. Neither the listing broker, Associates Real Estate, nor Higgins saw the $1,000.00 at the time the aForesaid agreement of May 25 was entered into by the parties. A letter of Respondent to Higgins on the same date as the contract was executed stated that Respondent held the deposit of $1,000.00 in her account with Chase Federal Savings, North Miami Beach, Florida, in an interest-bearing account. It further stated that Respondent did not want to lose the interest during the time spent waiting For a mortgage commitment. Respondent testified that Higgins called her on the phone and told her she had received the letter and accepted the provisions thereof. Respondent encountered difficulties in obtaining financing For the purchase due to a tight money market and there was also a title problem to be resolved. In any event, the deal did not go through and Respondent obtained a release of the deposit receipt to herself which was executed by Higgins on December 19, 1974. Respondent admitted at the hearing that at no time was the $1,000.00 deposit ever placed in the Watson Real Estate trust account. (Testimony of Respondent, Higgins, Shaeffer; Petitioner's Exhibit 15; Respondent's Exhibits 8, 10, 11, 12, 13). On December 10, 1974, Respondent's daughter, Pamela A. Mastellone entered into an Agreement Of Sale And Deposit Receipt as purchaser of the Higgins property For the sum of $34,000.00. This agreement provided For a security deposit in the sum of $3,000.00 in the Form of a check payable to Ruth E. Higgins. The check was issued by Connnie Mastellone" on December 10, 1974 and was drawn on the City National Bank of Miami Beach. The contract further provided that if it did not close by December 24, 1974, the contract would be null and void and the parties relieved of all obligations. The agreement provided For an even split of a 7.5 percent commission between Associates Realty and Watson Realty. Respondent testified that at the time she gave the check to Higgins, she asked her to hold it until a firm commitment from a mortgage company had been received. Higgins, on the other hand, testified that Respondent had asked her to hold it For two weeks. Respondent was unable to get mortgage financing For her daughter and the contract expired by its terms on December 24, 1974. On December 27, 1974, Higgins deposited the check For payment and it was returned For insufficient funds. (Testimony of Respondent, Shaeffer; Petitioner's Exhibits 16, 17, 18; Respondent's Exhibit 14). On June 18, 1974, Respondent in the name of "Connie B. Martin" as purchaser entered into an Agreement Of Sale And Deposit Receipt with Rose Gilbert, represented by Jean Fielding, Attorney in fact, to purchase real estate located at 16150 N.E. 12th Avenue, North Miami Beach, Florida, For the price of $26,000.00. The Agreement provided that upon signing of the contract, the purchaser would place $2,00.00 in escrow with Watson Real Estate Trust Account and receipt was acknowledged of this sum by Constance B. Mastellone For Watson Real Estate. The contract provided For a 50-50 commission split between Watson Real Estate and Pete Lipinsky, listing broker. At the time the contract was executed, Lipinsky told Respondent that if she did not place the money in escrow, he would "nail her hide to the wall". Respondent testified that she instructed her daughter, Pamela Mastellone, to go to the Chase National Bank and withdraw $2,100.00 and send the same to the Watson Realty Trust Account at City National Bank of Miami Beach. She further testified that it was not until she was investigated by petitioner that she learned her daughter had neglected to follow her instructions in this regard. The contract did not close on the agreed date and thereafter, on September 20, 1974, Respondent, in the name of "Constance B. Mastellone, Broker" entered into another Agreement Of Sale And Deposit Receipt with Gilbert on the same property For a price of $29,000.00. Although this Agreement provided For a security deposit of $2,600.00 to be placed in the Watson Real Estate Account, the parties understood that these were the same funds deposited under the Former contract. This deal closed on October 14, 1974. (Testimony of Respondent, Fielding, Lipinsky; Petitioner's Exhibits 6, 7; Respondent's Exhibits 1, 2). On May 28, 1974, Peter A. Mastellone and Respondent, in the name of "Constance B. Mastellone, Broker, and/or Nominees" was purchaser entered into an Agreement Of Sale And Deposit Receipt with Roy M. Hall and Kitty H. Hall, his wife, to purchase property located at 1517 N.W. 101st Street, Miami, Florida, For the price of $17,000.00. The contract provided For a $1,000.00 check payable to Watson Real Estate Trust Account as escrow agent as a security deposit, and receipt of the said deposit was acknowledged by Constance B. Mastellone on behalf of Watson Real Estate. The contract further specified that the property was being purchased For the purpose of resale and provided For a closing within 30 days. The contract provided that there would be no real estate commission paid on the transaction. Also, on May 28, 1974, Respondent directed letters to the Halls advising them that the $1,000.00 security deposit was in her account at Chase Federal Savings, North Miami Beach, an interest- bearing account, and that she did not want to place it in an escrow account where it would earn no interest. Respondent testified that the Halls orally agreed the deposit money could stay in the savings account of Respondent. This contract did not close, but on August 9, 1974, Respondent executed an FHA deposit receipt as seller whereby she agreed to sell the property to Nicholas Torek and Mary McDonnell Torek For the sum of $23,000.00. The document acknowledged the receipt of a $500.00 security deposit, which was in the Form of a check issued to Watson Real Estate by M.L. McDonnell on August 11, 1974, to be placed in the Watson Real Estate Account. Respondent was unaware at the time that McDonnell and Torek were not married. Torek had authorized McDonell to use his name on the instrument because they were planning to be married. Respondent sent them to a mortgage company to qualify For a mortgage. Several days later, she learned that they were not married and Torek came back and signed a new contract, which was also dated August 9, with the Halls at the same purchase price as his contract with Respondent. The latest agreement provided For a security deposit of $1,250.00 to be held in escrow by Watson Real Estate Trust Account and also provided For a real estate commission to Watson Real Estate of $3,750.00 to be paid by the Halls. An addendum to this contract was executed by Torek and Respondent, dated August 9, 1974, whereby Torek agreed that the $1,250.00 escrow should not be deposited in the trust account, but be given to Peter A. Mastellone For the purpose of making repairs on the property. It further provided that he would hold $850.00 toward closing costs and "prepayables". The document reflects the receipt of $2,100.00 by Peter A. Mastellone. Respondent testified that since $2,100.00 was all that was necessary to close the transaction, her husband returned $500.00 cash to Torek to reimburse McDonnell For her original deposit on the other contract. The Halls were not a party to the addendum to the contract and Torek was not aware that the Halls were the owners of the property until after the transaction was closed on October 4, 1974. Torek testified that he had not signed the second August 9 contract which had been executed by the Halls. However, Torek had agreed to close in his own name when he learned that McDonnell could not qualify For FHA financing. Torek was not concerned about the name in which the transaction was consummated but later, after disputes with McDonnell, quitclaimed his interest to her. Although McDonnell was present at the closing on October 4, the deed to the property was issued in the name of Torek only. McDonnell testified that Respondent had told her to sign the original contract In the name of Torek and in that way the deed would come out in her married name. McDonnell was surprised when the deed was issued only in the name of Torek. McDonnell was aware that the Halls owned the property and that Respondent was attempting to sell it in order to get out from under her own contract with the Halls. McDonnell was not aware that Torek had signed the subsequent agreement in his name only. (Testimony of Respondent, Torek, McDonnell, Petitioner's Exhibits 10, 11, 12, 13; Respondent's Exhibits 5 & 20).
Recommendation That the registration of Constance B. Mastellone as a real estate broker be suspended For a period of six months For violation of subsections 475.25(1)(a), 475.25(1)(c), and 475.25 (1)(i), Florida Statutes. DONE and ENTERED this 3rd day of January, 1977, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Manuel E. Oliver, Esquire Staff Attorney Florida Real Estate Commission 2699 Lee Road Winter Park, Florida James, A. Baccus, Esquire Attorney For Respondent Triangle Building 595 N.W. 91st Street Miami, Florida 33150 ================================================================= AGENCY FINAL ORDER ================================================================= FLORIDA REAL ESTATE COMMISSION ANATOL ARIAN, Petitioner, PROGRESS DOCKET NO. 2788 vs. DADE COUNTY DOAH NO. 76-472 CONSTANCE B. MASTELLONE, Respondent. /
The Issue The issue for consideration in this case is whether the Respondent's licenses as a real estate broker should be disciplined because of the matters set forth in the Administrative Complaint filed herein.
Findings Of Fact At all times pertinent to the allegations of misconduct in the Administrative Complaint, the Petitioner, Division of Real Estate, was the state agency charged with the responsibility for the licensing and regulation of the real estate profession in this state. The Respondent, Richard L. Bohner, was licensed as a real estate broker in Florida operating, with his wife, Kirsten, Bohner Real Estate, located at 205 E. Osceola Street in Stuart, Florida. On October 1, 1989, Mr. Bohner as owner/lessor, entered into separate rental agreements with Trudy Dohm and Thelma Reynolds, with Bohner Real Estate identified as agent, for the lease for 12 months each of apartments number 105 and 204, respectively, at 1674 S.E. St. Lucie Blvd. in Stuart, Florida, for a monthly rental of $350.00 each. Each lease provided for the placement of a security deposit and last month's rental in advance; those sums, according to the terms of the lease, to be held by the agent, Bohner Real Estate, in a non- interest bearing escrow account at the Florida National Bank in Stuart. In actuality, the sums above-mentioned were, in each case, deposited into an account at the First National Bank and Trust Company in Stuart. This account, number 8000030400, was held in the name of Richard L. Bohner or Kirsten L. Bohner, Trust account. This account was an interest bearing account and, over the time in question, also received several large deposits of funds by or on behalf of the Respondent, Richard L. Bohner which were his personal funds and not funds received as a part of or in conjunction with his activities as a real estate broker or those of Bohner Real Estate. For the most part, the funds placed in that account were Bohner's personal funds and security deposits and last month's rent on apartments in the building owned as a personal investment by Mr. and Mrs. Bohner. On February 20, 1990, Sharon Thayer, an investigator for the Department, in the normal course of business, went to the Respondent's real estate office, unannounced as was her prerogative, and asked to speak with Mr. Bohner. He was not present at the time and she asked Mrs. Bohner, who was present, to produce the Respondent's books for the brokerage's escrow account, which she did. In the course of their conversation, Mrs. Bohner identified herself as being in partnership with the Respondent and admitted to assisting him in the maintenance of the escrow account. When Ms. Thayer asked for the backup documents for the escrow account, these were produced. Ms. Bohner also provided Ms. Thayer with copies of the bank account she maintained. On inquiry, Mrs. Bohner said the deposits thereon were, in the main, representative of rental and security deposits from tenants on leases which Bohner Real Estate managed. Ms. Thayer asked about the large deposits made on May 3, June 7, and July 7, 1989. These were for $104,542.50, $50,000.00, and $4.600.00 respectively. In response, Mrs. Bohner indicated these were personal monies which came from personal sources and funds which had been put in that account because that's where they would get the most interest. They were not escrow funds related to the real estate brokerage. Ms. Thayer made an appointment to return to the brokerage office on February 23, 1990 to speak with Respondent. When she did so, Mr. Bohner accounted for the trust liability of $6,885.00 which existed on that date. This sum was verified with the bank by phone. The trust account had an overage of somewhat more than $881.00 which Respondent explained as accrued interest not removed from the account. Mr. Bohner admitted at hearing that he earned interest on the security and rental deposits he held in that account and used that earned interest to offset the low rentals he charged his tenants. He asserted, and there was no evidence to rebut this assertion, that the only security and rental deposits placed in that account were from tenants in the apartment building he and his wife owned personally. Neither he nor Bohner Real Estate managed or served as rental agent for any rental properties owned by others. It is so found. Ms. Thayer pointed out, and it is accepted as fact, that a broker is required to reconcile his trust account on a monthly basis and file a monthly reconciliation form which accounts for overages and shortages. Respondent admits he had not completed or filed these reconciliations because neither he nor Bohner Real Estate has a trust or escrow account into which client funds are deposited. He manages no property from which rents would be collected other than his own, and when he takes a deposit on a sale or transfer, a separate trust account is opened for that particular transaction with any interest earned going to the buyer. Petitioner showed, through the testimony of Ms. Casale, the bank records custodian, that the largest deposit in issue, that one in excess of $100,000.00, was the result of the maturity of a certificate of deposit that was transferred to the account in question. Respondent did not endorse the check for deposit or sign any deposit document. He submitted a letter from the bank chairman to support his thesis that he was not a party to the transfer, but the letter, admitted over objection by counsel for Petitioner, indicates the deposit was made by the bank's investment counselor who handled the transaction consistent with telephone instructions given her by the Respondent. This is a collateral matter, however. When Ms. Thayer completed her audit, she prepared and filed a report on which she indicated, inter alia, that the office met inspection standards and that the property management escrow/trust account was satisfactory. She noted an overage of $889.31 in the account and that it was an interest bearing account although the leases state it would be non-interest bearing. No deadline was given for the correction of this item. Mrs. Bohner admits that when she gave the apartment security escrow account to Ms. Thayer at her request and described it as a trust account, she was not thinking. In fact, and it is so found, neither Respondent nor Bohner Real Estate have a trust account for the business and have not had one for several years. She reiterates Mr. Bohner's assertion that the only money usually kept in the account referenced by Ms. Casale and referred to by Ms. Thayer, is money received as security deposits and last month's rental from tenants in their own building. In the absence of any evidence to the contrary, it is so found.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be entered in this case dismissing all allegations of misconduct by Respondents as outlined in the Administrative Complaint filed herein. RECOMMENDED in Tallahassee, Florida this 1st day of April, 1992. 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 1st day of April, 1992. APPENDIX TO RECOMMENDED ORDER 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: - 3. Accepted and incorporated herein. Accepted. - 7. Accepted and incorporated herein. Accepted and incorporated herein. First sentence accepted and incorporated herein,. Balance is not Finding of Fact but lore legal conclusion. Accepted and incorporated herein. Accepted and incorporated herein. FOR THE RESPONDENTS: None submitted. COPIES FURNISHED: Theodore Gay, Esquire Department of Professional Regulation 401 NW Second Avenue, Suite N-607 Miami, Florida 33128 Richard L. Bohner Bohner Teal Estate 205 East Osceola Street Stuart, Florida 34994 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate 400 W. Robinson Street Post Office Box 1900 Orlando, Florida 32802 - 1900
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.
