Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, as well as the parties' stipulations of fact, the following relevant facts are found: The petitioner Jose A. (Tony) Torres was employed by the respondent Office of the Comptroller, Department of Banking and Finance, Division of Finance from approximately June of 1963 until February of 1986. For about 13 years, he held the position of Area Financial Manager in the Tampa office and was responsible for and in charge of regulating mortgage brokerage businesses and licensees in ten counties along the west coast of Florida. By letter dated February 11, 1986, petitioner was notified of the respondent's intent to dismiss him from employment on the grounds that, in spite of prior warnings, he had obtained loans from licensed individuals and institutions he was responsible for regulating. Petitioner was given the opportunity to respond to this notice, did so and the respondent thereafter affirmed its intent to dismiss him. Petitioner did not contest or appeal his dismissal. On March 6, 1986, petitioner submitted to the respondent his application for registration as a mortgage broker. By Order dated and filed on May 23, 1986, respondent denied his application, concluding that petitioner does not have the requisite experience, background, honesty, truthfulness or integrity to act as a mortgage broker in Florida. The factual bases cited for this conclusion are that petitioner was arrested in September of 1979 for gambling; that he declared bankruptcy in 1980; and that he obtained loans in 1981, 1983, and 1984 from individuals and/or financial institutions which were licensed by the Division of Finance, and also that said loans have never been repaid. The Centro Asturiano Club is a private social club where gambling (poker) regularly occurs. On Friday, August 31, 1979, at approximately 3:00 p.m., petitioner and others were arrested for gambling at the Centro Asturiano. At the time of the arrest, the police seized certain items including a Smith and Wesson .38 caliber firearm and $670. A motion to suppress evidence and a motion to dismiss were ultimately granted and the petitioner was not convicted. The gambling arrest occurred on a regular business day in the Office of the Comptroller. Petitioner states that he was on annual leave at the time. An employee in his office observed petitioner's secretary make changes in the petitioner's leave slip forms on the afternoon of August 31, 1979. It was not established that such alterations were not proper. On May 30, 1980, petitioner filed a petition pursuant to Title 11, United States Code. An order for relief was entered under Chapter 7, with a Discharge of Debtor ordered on October 8, 1980, by the United States Bankruptcy Court for the Middle District of Florida (Bankruptcy No. 80-00750). At least six entities listed as creditors in petitioner's bankruptcy proceeding were licensees of the Department of Banking and Finance. At the time, petitioner was charged with examining and regulating those six entities in his capacity as the Area Financial Manager for the Division of Finance. In 1979 and/or 1980, petitioner's superiors in the Department admonished him to refrain from obtaining loans from the industry he regulated, and that such activity constituted a violation of Departmental policy and the Code of Ethics for Public Officers and Employees, Chapter 112, Florida Statutes. On March 1, 1983, petitioner obtained a signature loan of approximately $2,200 from the A. L. Machado, M.D. Pension Trust. Colonial Mortgage, Inc., which was then licensed with the Division of Finance as a mortgage broker, serviced the loan. Darrell T. DiBona, the director of Colonial, became licensed as an additional broker on June 19, 1983. The payment record on this loan, discovered during an examination by the Division of Finance in May of 1985, reflected that four interest payments had been made, but that the principal balance was still outstanding. Darrell T. DiBona made a check payable for one of the petitioner's interest payments owed to the Machado pension fund. The petitioner's version of the facts surrounding the Machado loan is not credible. He states that he had known Darrell T. DiBona for many years. DiBona handled petitioner's insurance needs, and petitioner, wishing to increase his coverage, had had a medical examination which indicated either an irregular heartbeat or fatty tissues in his blood. According to petitioner, he was having lunch with DiBona one day, and DiBona needed to stop by Dr. Machado's office on business. DiBona apparently handled pension funds for various physicians. While at Dr. Machado's office, the subject of petitioner's medical condition arose. Petitioner states that Dr. Machado offered to check his irregular heartbeat and gave him an EKG. During that examination petitioner asserts that he told Dr. Machado that he was having financial difficulties, and Dr. Machado offered to loan him $2,200. Petitioner insists that he made three or four payments on a note, and then paid it off in full in May or July of 1984. This latter payment, according to petitioner, was made in cash and handed to DiBona. Petitioner never received a receipt for the "$2,200 in cash plus the interest." Petitioner states that he subsequently asked for a receipt or the note on several occasions, but was told that it could not be found. The note and payment record were found by the respondent during an examination of Colonial Mortgage in May of 1985. As noted above, the payment record revealed that only three or four interest payments had been made. Dr. Machado has no recollection of examining petitioner in his office or otherwise discussing a loan with him. Had petitioner been examined by Dr. Machado, a ledger card or chart would have been prepared. No ledger card or chart for the petitioner could be discovered in Dr. Machado's office. Dr. Machado did not become aware that money from his pension fund was lent to petitioner until after DiBona's death. His office manager was then asked to write a letter stating that the petitioner's loan had been paid in full. Such a letter was written and petitioner picked up the letter from Dr. Machado's office. Although he had no knowledge concerning the loan, Dr. Machado agreed to sign the letter because he thought that petitioner could be one of DiBona's innocent victims. He, as well as other physicians, lost pension fund monies from accounts handled by Darrell DiBona. Beneficial Mortgage Company was licensed with the Division of Finance in November of 1984 as a mortgage broker. During that time, petitioner contacted the regional supervisor of Beneficial, who does not himself regularly take loan applications, regarding a home mortgage loan for his mother. On November 20, 1984, a $30,590 mortgage loan from Beneficial Mortgage was obtained, and petitioner co-signed the loan documents. The loan proceeds were utilized to pay off two prior mortgages, one of which was Colonial Mortgage. Petitioner's mother is elderly, speaks little English and petitioner often handled her financial affairs. According to the regional supervisor, petitioner was asked to co-sign the note in order to avoid any questions which might arise in the future regarding Mrs. Torres' competency to enter into such a transaction. As a co-signer, however, petitioner was guaranteeing the account. While the mortgage loan was for an amount less than the house was appraised and contained no preferential terms or rates, Beneficial required no standard credit report, income analysis or other financial documentation concerning the petitioner. Mrs. Torres' income and debt ratio were barely sufficient to make the monthly payments on the loan. Petitioner has two brothers and a sister who also live in Tampa. On December 6, 1984, petitioner obtained a $2,000 signature loan from N. D. Properties, Inc. N. D. Properties was solely owned at that time by Ben Langworthy, Jr., who also owned Diversified Mortgage Associates, Inc. At that time, both Diversified and Langworthy were licensed with the Department of Banking and Finance, Division of Finance. The petitioner made at least two loan payments directly to Ben Langworthy, who he knew was licensed by the Department. The $2,000 check given to petitioner was signed by Ben Langworthy. According to petitioner, Mr. Langworthy told him that N. D. Properties, Inc. was owned by two private investors. Petitioner's loan payment record with N. D. Properties shows that the loan has not been timely repaid.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the application of Jose A. (Tony) Torres for registration as a mortgage broker in Florida be DENIED. Respectfully submitted and entered this 3rd day of June, 1987, in Tallahassee, Florida. DIANE D. TREMOR 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 3rd day of June, 1987. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 86-2473 The proposed findings of fact submitted by the petitioner and the respondent have been fully considered and have been accepted and/or incorporated in this Recommended Order, except as noted below. Petitioner p.1, last paragraph: Rejected; legal conclusion as opposed to factual finding p.2, 2nd paragraph, 2nd sentence: Rejected, irrelevant and immaterial p.2, 3rd paragraph: Rejected; immaterial p.2, 5th paragraph: Rejected; argumentative p.3, 1st two paragraphs: Rejected; argumentative p.3, paragraphs 7, 8 & 9: Accepted, but not included as irrelevant to ultimate disposition p.4, last four paragraphs: Rejected; contrary to the greater weight of the evidence p.5, paragraphs 3 - 5: Rejected; contrary to the greater weight of the evidence p.7, paragraphs 1 and 3: Rejected; not proper factual findings p.8, paragraphs 1 through 7: Rejected; argumentative and improper factual findings Respondent #6: Rejected; not supported by competent, substantial evidence #20 & 21: Rejected; not supported by competent, substantial evidence COPIES FURNISHED: Dick Greco, Esquire Molloy, James & Greco, P.A. 501 East Kennedy Boulevard Suite 910 Tampa, Florida 33602 Sharon L. Barnett Assistant General Counsel Office of the Comptroller 1313 Tampa Street, Suite 713 Tampa, Florida 33602-3394 Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0305 Charles Stutts General Counsel Department of Banking and Finance The Capitol - Plaza Level Tallahassee, Florida 32399-0305 =================================================================
Findings Of Fact Documents introduced into evidence revealed that the Respondent Jeremiah C. Clarke is a registered real estate broker and Clarke Real Estate is an entity registered as a partnership broker and authorized to act as such with the Commission. On or about September 15, 1975, Jerry Kent, a salesman with Respondent, Clark Real Estate, obtained an oral open listing from Esther Braverman on a condominium unit denominated as "Apartment B-804, 1111 Crandon Boulevard, Key Biscayne, Florida." Pursuant thereto, salesman Kent showed the condominium unit to Jacques Benoist and Jeanine Benoist, his wife, who executed a deposit receipt contract to purchase a condominium unit on September 27, 1975. Esther Braverman, the seller, executed the contract during October of 1975. The deposit receipt contract provided for a $10,000 earnest money deposit to be held in the escrow account of the law firm of Snider, Young, Barrett, and Tannenbaum, P.A., attorneys for seller Braverman. Said deposit was made on September 27, 1975, by delivering a check to attorney Bruce L. Hollander, a member of the firm, who deposited the deposit in the firm's escrow account. (See Commission's Exhibit No. 9). The deposit receipt contract also obligated the seller, Esther Braverman, to pay Respondent Jeremiah C. Clark a commission of $7,875. Specifically, the contract provides that "I, or we, agree to pay to the above assigned broker a commission for finding the above signed purchaser for the above described property, the sum of $7,875 . . . ." Closing took place on January 19, 1976, at the offices of Washington Federal Savings and Loan Association, Miami Beach, Florida, from whom the Benoists had obtained financing for the purchase. At the closing on January 19, 1976, Esther Braverman signed and delivered a warranty deed made out to Jacques Benoist and Janine Benoist, transferring the property to the Bravermans. The warranty deed was recorded with the clerk of the Dade County Circuit Court by the lending institution, Washington Federal Savings and Loan Association. (See Respondent's Exhibits 1 and 2) At the closing, Jeremiah Clark was given a check representing the commission to Clarke Real Estate in the amount of $7,875. Thereafter, Jerry Clarke was requested by the lending institution to hold the funds in escrow until the bank dispursed the mortgage proceeds. He was then told that the mortgage proceeds would be paid within the following week. Respondent Clarke agreed, pursuant to a request from the seller's attorney, Bruce Hollander, to hold the commission check until January 27, 1976, without depositing same. Mr. Clarke held the commission check until January 29, 1976, as agree. On that day, he dispursed the proceeds to salesman Jerry Kent and the balance was credited to Clarke Real Estate. The mortgage funds were never disbursed because the lending institution could not obtain a quit-claim deed from the seller, Esther Braverman's former husband and therefore in the lending institution's opinion, the defect was not discovered until after the closing. On May 6, 1976, attorney Hollander acting for his law firm and the seller sent Respondent Jeremiah C. Clarke and Respondent Clarke Real Estate a letter stating that the mortgage proceeds had not been disbursed by the lending institution and requested a demand for the commission check. The Commission takes the position that the closing which occurred on January 19, was an escrow closing and that the Respondent Jeremiah Clarke was not authorized to disburse the proceeds from the commission check until notification that the mortgage proceeds were disbursed by the lending Institution. The Respondents, on the other hand, took the position that their only obligation was to find a purchaser who was ready, willing and able to complete the transaction, which acts were consummated by their salesman, Jerry Kent. Based on my examination of the document introduced herein, and the testimony adduced during the hearing, the undersigned concludes that the Respondent's position that it was entitled to receive the commission monies here in dispute has merit. Although the Commission takes the position that an escrow closing occurred, an escrow has been defined as a written instrument which by its term imports a legal obligation and which is deposited by the grantor, promisor, or obligor, or his agent with a stranger or third party to be kept by the depository until the performance of a condition or a happening of a certain event and then to be delivered over to the grantee, promisee, or obligee. It cannot be seriously contended herein that the Respondent Clarke was acting as an escrow for himself when consideration is given to the above definition of an escrow. See Love v. Brown Development Company, 131 So. 144. It is further essential to an escrow that delivery of the instrument be to a stranger or to a third person, that is, to one who is not a party to the instrument, or a person so free from any personal or legal identity with the parties to the instrument as to leave them free to discharge his duty as a depository to both parties without involving a breach of duty to either. For example, a deed delivered to a grantee cannot be regarded as held in escrow. Here, Respondent Clarke was in no way acting for anyone other than himself or as agent for his salesman, Jerry Kent, both of whom had a direct stake in the commission proceeds. Additionally, upon examination of the deposit receipt contract, the broker became entitled to the commission proceeds when the buyer (purchaser) was found. Additionally, and as an aside, it was noted that the lending institution in fact recorded its mortgage the day following the closing This would lead any examiner of the public records to believe that the lending institution was satisfied with the title as conveyed on the closing date. It was further noted that the Respondents had no indication that there was a problem with the title until approximately five months following the closing. Finally, the undersigned received a letter from attorney Lipcon dated August 1, 1975, advising that the civil case which was pending before the Dade County Circuit Court involving similar issues as posed herein before the commission had been fully and finally settled. There was a stipulation for dismissal signed by attorneys for each of the parties including the attorney for the firm that made the complaint against the Respondents stating in essence that the monies paid to Respondent Clarke and which was retained by him as full and final settlement of his brokerage commission were to be retained by Respondent Clarke as final payment of his commission in connection of the sale of the subject condominium. For all of these reasons, I shall recommend that the complaint filed herein be dismissed in its entirety.
Recommendation Based on the Findings of Fact and Conclusions of Law as found above, it is hereby recommended that the complaints filed herein be dismissed in their entirety. Recommended this 23rd day of August, 1977, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: At all times pertinent to this proceeding, respondent Alan Kaye was a licensed real estate broker in the State of Florida and respondent KNAC of Miami Realty, Inc. was a corporation registered as a real estate broker in the State of Florida. Respondent Alan Kaye was an officer of and qualifying broker for respondent KNAC of Miami Realty, Inc. Respondents secured a 90-day listing from Christina Trivino for the sale of her residence located at 271 N.W. 148th Street in North Miami, Florida. When that listing expired, respondents obtained an extension. On or about November 28, 1987, respondents solicited and obtained a sales contract for the purchase and sale of the Trivino property. In connection therewith, the purchasers, Marie C. Eduoard and Henry S. Roy, entrusted to the respondents a total earnest money deposit of $6,200.00, and the respondents placed the deposit in the escrow account of respondent KNAC of Miami Realty, Inc. In accordance with the provisions of the sales contract, the purchasers were to pay a total of $62,000 for the property, and assume the existing first mortgage in the principal amount of approximately $45,000. While the contract initially called for the closing to occur on or before February 15, 1988, Ms. Trivino was very anxious to close earlier due to some problems she was having with the Internal Revenue Service. Accordingly, the closing date was changed to occur on or before January 15, 1988. Among the terms of the sales contract was a provision that conditioned the sale upon the purchasers' assumption of the first mortgage in the principal amount of approximately $45,000. Paragraph 8 of the contract provided that If, after diligent effort on the part of the purchaser, the purchaser is unable to obtain said first mortgage, all monies deposited hereunder shall be refunded to purchaser and parties herewith agree to enter into a Release on Deposit Receipt; and this contract shall be declared null and void. At some point in time, it became known to the respondents and the seller Trivino that the bank which held the first mortgage on the subject property would not authorize an assumption of the mortgage by the purchasers without either a $3,000 paydown of the mortgage amount or the completion of qualifying papers by the purchasers. The testimony from Ms. Trivino and Mr. Kaye differ widely with regard to the dates upon which and the manner in which they became aware of this problem, as well as their communications with each other thereafter. Ms. Trivino testified that in early January, 1988, she became concerned about the status of the transaction and began making repeated calls to the respondents which calls were never returned. She admits talking with Todd Kaye, respondent's son, in the respondents' offices on January 5, 1988, whereupon the mortgage problem was discussed. At that time, needing "desperately" to sell the house, Ms. Trivino offered to hold a second mortgage for the purchasers in the amount of approximately $3,000.00. She states that she also spoke with the officials at the bank regarding the mortgage. In spite of numerous unreturned telephone calls, Ms. Trivino did not hear anything further from Mr. Kaye until his letter dated January 29, 1988. That letter informed Ms. Trivino of the mortgage situation and indicated that "there is some doubt whether or not the Buyer has this extra money." Mr. Kaye further informed Ms. Trivino that "for all practical purposes, since the closing has not taken place, due to no one (sic) fault, the contract is void." Ms. Trivino then had her employer, a licensed real estate broker, write a letter dated February 3, 1988, to Mr. Kaye requesting Mr. Kaye to retain the $6,200 deposit pending a determination of the matter. She asserts that she made numerous further attempts to contact Mr. Kaye regarding this matter, but he would not return her calls. According to Mr. Kaye, he delivered the sales contract to a title company in early December, 1987, with the requests that the title company do a title check, that the mortgage holder be contacted, and that a mortgage assumption package for the buyers be obtained. Mr. Kaye states that he was thereafter informed by the title company that the mortgage holder would not allow an assumption of the mortgage without a paydown of about $3,000. Mr. Kaye states that he communicated to the buyers the problem with the mortgage assumption and also communicated Ms. Trivino's offer to take a second mortgage for $3,000. According to Mr. Kaye, the buyers did not want a second mortgage and did not feel that they could qualify for an assumption of the first mortgage because they were unemployed at the time. Instead, they wanted a return of their $6,200 deposit. Mr. Kaye felt that the sales contract had become void because of the inability of the buyers to assume the first mortgage, as provided in Paragraph 8 of the sales contract. Accordingly, he returned the $6,200 deposit to the buyers on January 10, 1988. He did not request Ms. Trivino's consent nor did he notify Ms. Trivino that he had refunded the deposit to the buyers because he felt that Ms. Trivino was fully aware that "the deal was dead."
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the Administrative Complaint filed against the respondents be DISMISSED. Respectfully submitted and entered this 15th day of March, 1989, in Tallahassee, Florida. 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 15th day of March, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-4062 The parties' proposed findings of fact have been fully considered and are accepted and/or incorporated in this Recommended Order, with the following exceptions: Petitioner 8. The evidence demonstrates that the amount of the deposit was $6,200 in lieu of $6,000. 13. Partially rejected based upon the seller's testimony that she spoke to Todd Kaye in respondent's offices on or about January 5, 1988. 15. Accepted with the addition of the fact that the respondent communicated this offer to the buyers. Respondent 4. The evidence demonstrates that the amount of the deposit was $6,200 in lieu of $6,000. 8. The date of "early December" is rejected as not established by competent, substantial evidence. 10. Rejected as not established by competent, substantial evidence. COPIES FURNISHED: James H. Gillis, Esquire DPR, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Manuel M. Arvesu, Esquire 100 North Biscayne Blvd. Miami, Florida 33132 Darlene Keller, Executive Director DPR, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 =================================================================
Findings Of Fact Respondent Donald E. Swagler is now and was at all times material a licensed real estate broker or broker/salesman in the State of Florida, having been issued license number 0139756, in accordance with Chapter 475, Florida Statutes. At all times alleged in the Administrative Complaint, respondent Donald Swagler was licensed and operating as a qualifying broker for and an officer of respondent Swagler Realty, Inc., which is now and was at all times material a corporation licensed as a real estate broker in the State of Florida, having been issued license number 0169035, in accordance with Chapter 475, Florida Statutes. At all times material, Fern Z. Taylor was a licensed real estate broker with an office in Bonita Springs, approximately a twenty-minute drive south from the offices of Swagler Realty Company in Ft. Myers. On April 10, 1980, Andrew W. Kuchmaner was working part-time as a licensed real estate salesman in the employ (as that term is defined in Section 475.01(2), Florida Statutes) of Swagler Realty Company. Kuchmaner was a new salesman and had not yet had occasion to present a buyer's purchase offer to a client seller. During the early months of 1980, Kuchmaner was also working in the employ of, and receiving a salary from, Jim Walter Homes Company. Philip R. and Susan B. Workman first met Kuchmaner in January or February 1980 while visiting a Jim Walter's Homes sales office in Ft. Myers where he was working in his capacity as a Jim Walter Homes salesman. Kuchmaner advised the Workmans to find and purchase a lot for the Jim Walter home they had selected, and then they could purchase the Jim Walter home. Jim Walter Homes Company requires lot ownership prior to building one of their homes. Prior to selecting a lot, the Workmans had already decided on the Jim Walter home they were going to purchase, and Kuchmaner was going to do the paperwork for Jim Walter. Throughout the first quarter of 1980, the Workmans searched for a lot on which to construct their home in the Bonita Springs area of southern Lee County. During their search, the Workmans came upon a vacant lot with a sign saying it was for sale by Fern Z. Taylor. Upon seeing her real estate for sale sign, the Workmans went to Fern Taylor's office to inquire about the property and seek her assistance in their purchase of a lot in the Bonita Springs area. Fern Taylor advised the Workmans that, in addition to the lot they had already seen bearing her sign, she had Dust that morning listed and had for sale another lot in the Bonita Springs area which they would be interested in seeing. Earlier that same morning, Taylor took a long distance telephone call from a Charles A. Bennett, a resident of Arizona. Bennett said he had a lot he wanted to sell and gave Taylor the price ($7,000) and a description--Lot 20, Block E, Rosemary Park No. 2, in Bonita Springs. Bennett had not seen the property in some time and gave no landmarks or street address for Taylor's guidance. Back in 1925, Rosemary Park No. 2 was subdivided into eight blocks of 24 140' x 50' lots each and two larger blocks containing 16 larger 162' x 300' lots each. One of the smaller lots bore the legal description: "Lot 20, Block E of Rosemary Park No. 2 according to the Plat thereof recorded in Plat Book 6 at Page 30, of the Public Records of Lee County. This is the lot Bennett owned and was trying to sell. It is located on First Street. In 1926, Rosemary Park No. 2 was re-subdivided. The two larger blocks of the prior subdivision were re-subdivided into eight blocks of 24 140' x 50' lots each. Unfortunately, in a stroke of singular lack of vision, the new blocks and lots were designated with the same letters and numbers already assigned to the smaller blocks and lots in the original 1925 subdivision. As a result, there is another lot in Rosemary Park No. 2 designated as Lot 20, Block E: Lot 20, Block E, Rosemary Park, resubdivision of the East 1/2 of No. 2, according to the plat thereof, as recorded in Plat Book 8, Page 32, in the Public Records of Lee County, Florida. This other Lot 20, Block E, is owned by the Fyfes of Maine and is on Fifth Street. Taylor, who was quite busy, quickly checked a plat book in her office to locate the lot and the tax rolls to attempt far to verify Bennett's ownership and left to put her sign on the lot she thought Bennett owned and was trying to sell. Through a combination of the confusing legal description, the incomplete description and paucity of information Bennett gave Taylor, and Taylor's admitted negligence, Taylor put her for sale sign on the Fyfes' lot on Fifth Street instead of on Bennett's lot on First Street. Taylor had no listing agreement with the Fyfes, and the Fyfes' property was not for sale. Fern Taylor drew a map for the Workmans providing them with directions to this purportedly newly listed lot on which she had placed her "For Sale" sign. In reliance on Fern Taylor's map and representations as to her listing agreement, the Workmans drove to the Fifth Street lot and viewed the property as well as Fern Taylor's "For Sale" sign. Approximately one week after seeing the Fifth Street lot, the Workmans summoned Andrew Kuchmaner to Bonita Springs to view the lot and give them his opinion as to how the Jim Walter home they had previously selected would sit on the lot. The Workmans had their minds pretty well made up that they wanted to purchase the Fifth Street lot before summoning Kuchmaner. Kuchmaner never took the Workmans to any property but, upon their request, traveled to Bonita Springs to meet them and was thereupon shown the Fifth Street lot. While viewing the Fifth Street lot, Kuchmaner advised the Workmans that the Jim Walter's home they had selected would sit nicely on that lot. He also told the Workmans for the first time that he had a real estate license and would be glad to help them out with placing an offer for the lot on their behalf. The Workmans used Kuchmaner to make their $6,000 offer on the lot to save time because it was late in the afternoon and they lived in North Ft. Myers. When Fern Taylor first met Kuchmaner, he had been represented to her by the Workmans as a Jim Walter salesman. Kuchmaner went to Taylor's office and requested she prepare the contract because he would have to go all the way back to Ft. Myers to write it up. Taylor provided Kuchmaner with the legal description "Lot 20, Block E, Rosemary Park #2" and advised him he would have to write his own contract. Kuchmaner also proposed to Taylor that they not tell Swagler or Swagler Realty about the sale so they could divide Swagler's quarter of the 10 percent commission ($150 of the total $600 commission). Taylor refused and told Swagler what had happened. Swagler had an angry confrontation with Kuchmaner and was about to fire him, but Kuchmaner begged for a second chance and promised not to try to cut Swagler out of a commission again. Swagler relented and kept Kuchmaner on as a salesman. Kuchmaner filled out a contract on a Swagler Realty form and brought it to Donald Swagler for his review. He advised Swagler that he had gotten the legal description from Fern Taylor and had been to see the property. Swagler generally does not sell property in the Bonita Springs area and is not familiar with the area. He relied on Taylor to provide an accurate legal description of the property being sold. Kuchmaner hand delivered the contract offering to purchase the Bennett parcel to Taylor. Taylor checked the contract before she sent it to Bennett to see that the legal was the same that she had, and it was. She also checked it again when it was sent back from Bennett. Fern Taylor had received and checked the contract, title insurance binder, seller's closing statement and a copy of the warranty deed from Bennett to Workman prior to the closing The Workmans had the property they thought they were purchasing surveyed by William R. Allen, a registered and licensed land surveyor. He received the request to survey the property from Susan Workman. Over the phone, she advised Mr. Allen she had purchased a lot in Rosemary Park, Specifically lot far 20, block E. Mr. Allen informed Mrs. Workman that there are two Block E's in Rosemary Park and that they should be careful. He inquired as to which street she had purchased property on and was told, "We're on Fifth Street." Allen surveyed the Fifth Street lot and certified his survery, using the actual legal description of the Fifth Street (Fyfes') lot. Allen never saw any document with the legal description of the Bennett lot. Fern Taylor did not know that the Workmans had ordered a survey and did not see a copy of the survey until well after the closing. Although she attended the closing, she saw no discrepancies among the documents cursorily reviewed at the closing. Neither did the Workmans or the closing agent. The evidence was not clear whether there was a copy of the survey among the documents at the closing. The lender (Jim Walter Homes) and the title insurance company got a copy of the survey before closing. Neither of their professionals noticed that the legal description on the survey (the Fyfe lot) did not match the legal description on the deed and other documents (the Bennett lot). When a real estate broker has placed his sign ("For Sale") on a parcel of property, it is a reasonable conclusion that he is authorized to sell that parcel. It is customary for a broker to rely on the listing broker to provide a correct legal description for the property they have listed. At no time before the closing did Swagler or Kuchmaner have reason to suspect that the Workmans were purchasing a parcel of property different from the parcel they believed they were purchasing. Neither Swagler nor Kuchmaner were at the closing of the Workmans' purchase. But their presence would not have made any difference. It is not the real estate broker's or salesman's lob to scrutinize the documents being signed to make sure the legal descriptions on all the documents match (unless he has reason to believe the legal descriptions might be wrong.) He has the right to rely on the other professionals--the listing broker (especially since Fern Taylor was familiar with the Bonita Springs area and Swagler was not), the lender's attorney, the title company, the closing agent and, if any, the surveyor and the buyer's attorney. Fern Taylor and perhaps others were culpably negligent. Swagler and Kuchmaner were not. What happened to the Workmans is not their fault.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Florida Real Estate Commission enter a Final Order dismissing the Administrative Complaint against respondents, Donald E. Swagler and Swagler Realty Company, in this case. RECOMMENDED this 9th day of February, 1987 in Tallahassee, Leon County, 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 9th day of February, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-3502 These rulings on proposed findings of fact are made in compliance with Section 120.59(2), Florida Statutes (1985). Petitioner's Proposed Findings of Fact. 1.-4. Accepted and incorporated. 5. Rejected as contrary to facts found. (Kuchmaner did not "solicit" or "obtain" them.) 6.-14. Accepted and incorporated. 15. Rejected as contrary to facts found. (Taylor's "investigation" or "attempt" to ascertain the legal description was deficiently and negligently performed.) 16.-17. Accepted and incorporated. First sentence, rejected as incomplete ("compare the deed" with what?); second sentence, rejected because it was not proved Taylor had access to a copy of the survey before the closing. Rejected as unnecessary and potentially misleading. (A Final Judgment was entered; Taylor paid the portion against her; the other defendants have not paid the portions against them.) Rejected. Swagler Realty Company was a defendant in the case; Donald E. Swagler was not. 21.-24. Accepted and incorporated. Rejected as not proved whether they "failed," "refused" or "neglected." (The fact is that neither has paid the Workmans any money in satisfaction of the portion of the Final Judgment against Swagler Realty Company.) Accepted but unnecessary. B. Respondents' Proposed Findings Of Fact. 1. Accepted but unnecessary. 2.-10. Accepted and incorporated. 11. Accepted but unnecessary. 12.-23. Accepted and incorporated. 24.-28. Accepted and incorporated. 29. Accepted but unnecessary. 30.-36. Accepted but cumulative. 37.-42. Accepted and incorporated, along with additional findings. 43. Accepted but unnecessary. COPIES FURNISHED: James H. Gillis, Esquire Division of Real Estate Post Office Box 1900 Orlando, Fl 32802 J. Michael Hussey, Esquire 3443 Hancock Bridge Parkway Suite 501 North Ft. Myers, Fl 33903 Van B. Poole Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Fl 32301 Wings S. Benton, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Fl 32301 Harold Huff Executive Director Division of Real Estate Post Office Box 1900 Orlando, Fl 32802
The Issue The issue is whether respondent acted as a mortgage lender within the meaning of Section 494.001(3), Florida Statutes, and thus is subject to Division licensure requirements.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Petitioner, Department of Banking and Finance, Division of Finance (Division), is a state agency charged with the responsibility of administering and enforcing the Florida Mortgage Brokerage and Lending Act which is codified in Chapter 494, Florida Statutes. Among other things, the Division regulates mortgage lenders and requires such persons or entities to secure a license. Respondent, White Pine Resouces, Inc. (WPR), is a Florida corporation formed in March 1986. Its sole shareholder is John R. Grass, a Pensacola attorney. Although the corporation was originally formed for a number of purposes, its primary activity is the real estate investment business. It holds no licenses issued by, or registrations with, the Division. WPR's current business address is 358-C West Nine Mile Road, Pensacola, Florida. WPR's principal source of money is Grass, or his professional association, who loan money to the corporation. In some cases, the money is used to acquire parcels of property for resale, make necessary repairs or improvements, and then provide owner financing to the buyer. In other cases, WPR loans money to persons needing to make improvements to their homes or rental property and takes back a second mortgage from the borrower. These types of transactions, which occurred during the years 1992-95, are found in documents offered in evidence as petitioner's exhibits 1-5. Respondent has also stipulated that several other transactions of this nature occurred during that same period of time. In every case, WPR was investing its own money or that of its principal. In 1992, a Division examiner analyst noted the following listing in the Yellow Pages section of the Pensacola telephone directory under the heading of "Mortgages": White Pine Resources Having Trouble With Financing Residential & Land Fast Service on 1st Mortgages The advertisement also contained respondent's street address and telephone number. In the 1993-94 telephone directory, WPR carried the following advertisement under the "Mortgages" section of the Yellow Pages: White Pine Resources Specialists! Bad Credit - We Can Help Vacant Land Loans In the 1995-96 telephone directory, WPR placed the following advertisement in the "Mortgages" section of the Yellow Pages: White Pines Resources A Private Investor Not a Mortgage Broker Specialists! We Can Help Vacant Land Loans Although the Division first noted one of WPR's Yellow Page advertisements in 1992, for some reason it did not conduct a formal investigation of respondent's activities until February 28, 1994. On that day, an examiner analyst made an unannounced visit to respondent's office for the purpose of inspecting its records to determine if WPR was acting as a mortgage lender. However, WPR's principal, John R. Grass, was not in the office, and the analyst simply left his business card and a message for Grass to contact him. The next morning, Grass telephoned the analyst's supervisor and advised him that since WPR was merely a private investor, and not a mortgage lender, it was not subject to the Division's regulation, and hence it would not provide copies of its records. A subpoena duces tecum was then issued by the Division, records were produced pursuant to the subpoena, and this controversy ensued. The parties agree, however, that this action was not prompted by complaints from consumers or other persons having dealings with WPR. The record indicates that a mortgage lender differs from a private investor in several material respects. An important distinction is that a private investor uses its own funds rather than those of another party. Also, a private investor does not buy or sell paper, does not escrow taxes, does not split or broker commissions, and does not close its own loans. In all of these respects, WPR had the attributes of a private investor. When mortgage brokerage firms are involved in transactions with private investors, they must supply the private investor with certain documents that are not provided to an institutional investor. Among others, they include a disclosure agreement, receipt of recorded instruments, an appraisal or waiver of the same, and title insurance. In addition, Division rules require that a mortgage brokerage firm record its transactions with private investors in a log journal known as DBF-MB-888. The evidence shows that for transactions between WPR and at least two mortgage brokerage firms during the years in question, the two firms recorded those transactions on DBF-MB-888. They also provided WPR with documents typically given to private investors. The Division has adopted Rule 3D-40.290(2), Florida Administrative Code, which provides that a person is deemed to be holding himself out to the public as being in the mortgage lending business if he advertises in a manner "which would lead the reader to believe the person was in the business of buying, making or selling mortgage loans." The rule has not been challenged and, for purposes of resolving this controversy, is presumed to be valid. In view of the representations that WPR provided "Fast Service on 1st Mortgages" and "Vacant Land Loans," it is fair to infer that the Yellow Page advertisements made by WPR would reasonably lead the reader to believe that WPR was in the business of buying, making or selling mortgage loans. Therefore, by virtue of advertising in the Yellow Pages, WPR is deemed to be holding itself out to the public as being in the mortgage lending business. During the years 1993-95, the Division routinely sent WPR questionnaires regarding various WPR transactions with licensed lenders. The transmittal letter accompanying the questionnaire noted that the Division was conducting "a routine examination" of the licensed lender (and not WPR), and WPR's comments would "be of material assistance to (the Division) in determining compliance with the Florida Mortgage Brokerage Act." By way of an estoppel defense, WPR has essentially contended that the questionnaires constituted a representation by the Division that WPR was merely a private lender. It further contends that, to its detriment, it relied upon that representation. But there is nothing in the documents that states that the Division considered WPR to be a private lender. Nor is there any evidence that the Division made any other oral or written representations to WPR that it did not need to secure a license. Finally, assuming arguendo that such a representation occurred, there was no showing that WPR relied to its detriment on such an alleged "misstatement of fact." WPR also raises the defense of laches arguing that it was severely prejudiced by the Division's delay in prosecuting this action. Except for testimony that respondent was forced to secure the services of an attorney to defend against this action, and its principal was required to attend a hearing, there was no showing of prejudice on the part of WPR.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Banking and Finance enter a final order requiring respondent to cease and desist from engaging in the mortgage lending business without a license. DONE AND ENTERED this 17th day of June, 1996, in Tallahassee, Florida. DONALD R. ALEXANDER, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of June, 1996. APPENDIX TO RECOMMENDED ORDER CASE NO. 95-0290 Petitioner: Because petitioner's post-hearing filing is more in the nature of a memorandum of law containing argument rather than proposed findings of fact, specific rulings have not been made. Respondent: Because respondent's post-hearing filing is more in the nature of a memorandum of law containing argument rather than proposed findings of fact, specific rulings have not been made. COPIES FURNISHED: Honorable Bob Milligan Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 Harry L. Hooper, III, Esquire Department of Banking and Finance Room 1302, The Capitol Tallahassee, Florida 32399-0350 Clyde C. Caillouet, Jr., Esquire 4900 Bayou Boulevard, Suite 103 Pensacola, Florida 32503 John T. Reading, Jr., Esquire 358-C West Nine Mile Road Pensacola, Florida 32534-1818
Findings Of Fact Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the state of Florida, in particular Section 20.30, Florida Statutes; Chapters 120, 455 and 475, Florida Statutes and the rules promulgated in accordance with those statutes. Respondent is now and was at all times associated with this administrative complaint a licensed real estate broker in the state of Florida having been issued license number 0251002 under the authority of Chapter 475, Florida Statutes. Respondent's last license was issued as a real estate broker with the firm of Eastern Marketing, Inc. which is located at 17841 U.S. Highway 441, 3 Mount Dora, Florida 32757. RESPONDENT'S ROLE At the time of the hearing, Respondent had been involved in the real estate profession for approximately 18 years. This real estate practice has been exclusively in the state of Florida. In addition to being a real estate broker, Respondent is licensed as a general contractor in Florida and as a mortgage broker in the state. His general contractor's license is a certified license. At times relevant to this inquiry, Respondent was a real estate broker with Collins and Associates, Inc., a real estate brokerage firm. He also had affiliation with Collins Builders, Inc., a licensed general contracting firm. He was a one half owner in Tallahassee Properties, a Florida general partnership in which the other ownership was held by W. Ronnie Collins, Respondent's brother. All of these firms did business in Florida and particular as these firms are involved with the issues in dispute, they did business in Tallahassee, Florida. At times relevant to this inquiry, Respondent was involved in a sales promotion program which has been referred to as a trade-in program. In essence, this program was designed to allow persons who had purchased residences from a firm or through affiliated Collins companies to turn over the initial residence to Tallahassee Properties in exchange for a new home bought from Collins Builders, Inc. with the builder using the real estate services of Collins and Associates, Inc. to sell the new home. The house that was being traded was deeded to Respondent or one of the companies with which he was affiliated. In this case, the company with which Respondent was affiliated with which had property deeded to it was Ralco, Inc. Those persons who were trading one home for another had been solicited by Collins and Associates, Inc. as a realtor in an advertising program. No realtor was involved in making commissions associated with the closing that took place between the sellers who were trading in a home and Tallahassee Properties, Respondent and Ralco, Inc. with whom he was affiliated. This arrangement was designed to stimulate sales of the new home being purchased. The traded homes typically had mortgages. Tallahassee Properties not only took possession of the traded or exchanged homes but was responsible for the activities associated with the closing of the transaction, to include assumption and payment of mortgages associated with the exchanged property. As grantee on the deeds in the traded homes Respondent and Ralco, Inc. were also responsible for assumption and payments. As Respondent identified in his testimony, he and his brother W. Ronnie Collins; Collins and Associates, Inc.; Collins Builders, Inc. and Tallahassee Properties were anticipated as being the individuals to apply for the assumption of loans with the lending agencies who held the mortgages on the traded property. W. Ronnie Collins was also one of the names in the overall scheme in which the traded-in property could be placed as grantee. Approximately 80 homes were traded over a period of 6 or 7 years. The properties in dispute in this case were among them. Respondent had authorized Tallahassee Properties and in particular his brother W. Ronnie Collins as managing partner of that partnership, to place the properties in Respondent's name, W. Ronnie Collins' name or any of several companies affiliated with Respondent in furtherance of identifying a grantee that the mortgage holder would allow to assume the mortgage. Respondent's expectation was that Tallahassee Properties and the title company involved in the closing of the transaction associated with the traded property would facilitate the assumption arrangement with the mortgage holder. The title company used in the cases that are at issue here was Capital Abstract and Title, Inc. In the closings for the traded homes, which are at issue in this case, the evidence presented at hearing which may be relied upon for fact finding did not reveal what attempts were made to have the mortgage holders for the traded homes ultimately accept the substitution of Respondent, his brother or one of the companies with which he was affiliated as parties responsible for the existing mortgages on the traded properties. The reason which Respondent gave for allowing his brother, W. Ronnie Collins to act in his behalf in Tallahassee Properties was that he felt that it was impossible for him to involve himself in that business and its day to day process and at the same time be active in Collins and Associates, Inc. and Collins Builders, Inc. Therefore, he allowed W. Ronnie Collins to act for him in the business of Tallahassee Properties. This explanation has not been disputed and being tenable is credited as true. In accepting deeds related to the traded property, as will be described in the individual instances that follow, Respondent recognized that he had obligated himself to take the responsibility for assumption of and payment of the mortgage. Respondent has no direct knowledge of whether any of the trade-in transactions were followed up by gaining permission from the mortgage holder to allow someone other than the original mortgagor to become responsible for the mortgage payments. The contracts for obtaining the traded-in homes were executed by Tallahassee Properties. Nonetheless, as described, Respondent was given a deed to some of the properties purchased, to include properties in dispute here. Respondent never orally or in writing advised the sellers of the traded property that the routine mortgage payments associated with the traded property and the overall mortgage obligation would no longer be the responsibility of those sellers. In one of the cases which is at issue here involving the trade-in property of John M. and Jeanne B. Miller, Respondent stated that he received their traded property as grantee on the deed. In fact Ralco, Inc. was grantee. When asked about whether he had assumed the obligation for the mortgage that existed on that home, Respondent replied that he had assumed the loan. When asked if he explained the fact to that assumption to the Millers, he pointed out that he had never talked to the individuals. When asked if he had directed anyone in any of his companies or his real estate company in particular to explain the details of the transaction, Respondent pointed out that Collins and Associates, Inc. as realtor, and as a licensed broker had trained each associate to explain all of the rules and procedures associated with Fannie Mae, Freddie Mac, FHA, VA and HUD loans and that Respondent as the broker of those associates would expect that the associates would explain everything to the Millers. Whether the Millers were informed about such matters by Collins and Associates, Inc. employees was not proven. The traded in properties were rented, repaired and sold or kept in inventory by Tallahassee Properties. After purchase of the traded-in properties, Respondent's expectations as a partner in Tallahassee Properties was that the partnership would take possession of the properties and manage them and make payments on existing mortgages associated with any of those properties. Respondent believes that until the latter part of 1985 when he and some of his operations were involved in a Chapter 11 Federal Bankruptcy declaration, payments on the existing mortgages for traded properties were being made, in that had it not been so that he would have been notified. The record offers no proof that can be relied upon to satisfactorily corroborate or rebut this assumption on his part. The Chapter 11 bankruptcy proceeding was not caused by problems associated with the traded properties. Ralco, Inc. was not involved in the bankruptcy. Some of the traded properties in question were owned by Ralco as grantee. Although Ralco was not involved in the bankruptcy, it was unable to make payments because of the bankruptcy in that the houses in question had a negative cash flow and Respondent was unable to take funds from the bankruptcy court and place them with Ralco, Inc. to make the payments on mortgages that existed on the traded properties. Collins Builders, Inc. and Collins and Associates, Inc. were not involved in the closings of the traded property. Their involvement was with the new house being purchased following the trade. The closing associated with the new house under purchase was a separate closing and Collins and Associates, Inc. received a real estate commission for its participation. None of the exact details of the solicitation process by Collins and Associates, Inc. in which homeowners were encouraged to trade existing residences on other homes built by Collins Builders, Inc. were made known, so that it might be understood whether Collins and Associates, Inc. promised to make the attempt to have the lender accept a substitute for the original mortgagor on the mortgage indebtedness, to include the possibility of the outright release of the original mortgages from the debt obligation. Therefore, that solicitation process has no part to play in examining the issue of Respondent's conduct associated with the closings of the traded homes. In the latter part of 1985, following the filing of the petition under Chapter 11, Bankruptcy Laws, Respondent and Duval First Corporation with which he was affiliated were granted an order of relief on December 23, 1985 in Case Nos. 85-07179B and 85-07178C, respectively in the United States District Court, Northern District of Florida, Tallahassee Division. As part of the disposition in front of the bankruptcy court, the bankrupt estates and Real Estate Financing, Inc. agreed that the bankruptcy estates would surrender certain properties and the automatic stay in all expressed injunctions associated with those properties were lifted. The bankruptcy court held that pursuant to 11 U.S.C. 506, Real Estate Financing, Inc. would not be entitled to an unsecured claim against the bankrupt estates for debts secured by the lien on those properties. Those properties had been encumbered by a first mortgage in favor for Real Estate Financing, Inc. The Court found that the value of those properties was equal to or exceeded the debts secured by the mortgage lien of Real Estate Financing, Inc. as of the date of the Order for Relief. In that Order for Relief, Real Estate Financing, Inc. was allowed a secured claim for the full extent of the debt due as of the date of the Order for Relief plus interest accrued up to the extent of the value of each property and up to the date of November 18, 1986. The bankruptcy court did not hold that Real Estate Financing, Inc. was entitled to any unsecured claim for any pre-petition debt that was secured by the lien on its mortgages. Among the properties affected by this action were those properties of David Walsh, Troy Brewer, Sam Hinson, Harold C. Miller, Peter Hartman, and John Miller, all of whom are listed as individuals whose transactions with Respondent are found in the Administrative Complaint and about which Respondent is said to have violated the aforementioned disciplinary provisions of Chapter 475, Florida Statutes. By this arrangement in bankruptcy court, Respondent hoped to avoid the circumstance by which the mortgage was foreclosed leaving a deficiency against the original mortgagor/homeowner of the traded-in property which would in turn lead to some claim against the bankruptcy estates for the amount of the deficiency. Nonetheless, Real Estate Financing, Inc. proceeded to foreclose on its mortgages as subsequently discussed in commenting on the individual counts to the Administrative Complaint pertaining to individual homeowners. While the bankrupt estates would have preferred to deed back the property in lieu of foreclosure, it accepted the foreclosures given the protections to the bankrupt estates that have been identified in this discussion. It should also be mentioned that two of the accounts in the Administrative Complaint pertaining to Eric Larsen and Robert Aubin, to be discussed, were not part of this arrangement in the bankruptcy court associated with Real Estate Financing, Inc. At the closings on the traded homes in question some explanations about the mortgage assumptions were made by persons who may have been representing Tallahassee Properties or other Collins affiliates, but these persons are not clearly identified in the record as to their actual position with those organizations and how Respondent was accountable for their remarks. Those remarks will be discussed in the assessment of the individual counts that follow. Respondent, following the petition for bankruptcy in his own name and that of companies with which he was associated, wrote to advise homeowners who had traded in their homes about his perception of the homeowners' status following that bankruptcy. These letters were written on February 18, 1986 on stationary of the Respondent and were signed by him. In this correspondence, which is the same format in all instances, he would make reference to the date upon which the transaction closed at which time the homeowner deeded over the traded property to Respondent or a company with which he was affiliated. He described the existence of the prior mortgage to Real Estate Financing, Inc. with a loan number and the existence of the paragraph 17, "due on sale" clause and, according to the letter, that the loan was not paid off at the time of the closing and the assertion that the lender would not allow the assumption of that loan by Respondent or one of his companies. Again this record is silent on the subject of what attitude the lender held about this, or even the matter of whether an attempt was made to have the lender accept a new obligor. He described how the lender was not considering Respondent or his company as purchaser but that the original mortgagor was being considered. This was taken to mean that Respondent was trying to express that the lender was looking to the original mortgagor as a responsible entity on the mortgage. The letter described how Respondent or one of his companies had been renting and making payments since the time of closing until December 23, 1985 when declaration of the Petition in bankruptcy went forward. It described how the Respondent and his companies were unable to continue funding payments related to the mortgages on the traded property which was in the name of the homeowners who had traded the property. The letter went on to describe how the payments would be brought current until February 28, 1986. The letter is interpreted to suggest that beyond that point, the property would either be deeded back to the original owner or the lender would foreclose. The letter expressed a preference by Respondent that because, interpreting the letter again, there was no cash flow that he preferred to see the property deeded back to the original owner. The name Bobbie May was given as a contact person and a telephone number provided for the homeowners to call regarding the return of the property back to the original homeowner. The letter goes on to describe an apology from Respondent to the homeowners. Movaline Hill who was a property manager for Tallahassee Properties traded in homes, to include the homes in discussion in the Administrative Complaint, offered her testimony at hearing. The principal business of Tallahassee Properties as established in her testimony was to rent homes. Ms. Hill advertised the property for rent, collected the rent, made payments on existing mortgages on the homes, and took care of maintenance matters. Tallahassee Properties took the rent and put the payments in escrow. One of the homes that Ms. Hill was involved with had belonged to David Walsh. It was a traded home and she had discussed with Walsh getting payment cards or coupons for the mortgage that existed on the traded home. The mortgage company had sent these cards or coupons to Walsh and Hill desired to have them so that the payments on the mortgage could be made. In this connection, Hill wrote Walsh a letter. A copy of that letter may be found as Petitioner's Exhibit 20. It indicates enclosure of a recorded deed on the traded property of Mr. Walsh showing Respondent as having the title in his name. It further states that Mr. Walsh should sign and mail a pre-prepared letter to Real Estate Financing, Inc. telling that lender to change the mailing address and requesting new payment cards. The letter describes that Real Estate Financing, Inc. did not know that the title was no longer in Mr. Walsh's name and that the lender would not transfer the mortgage to anyone and asks Walsh not to send the copy of the deed to the Respondent to the lender. Emphasis is placed in this correspondence on not sending that information to the lender. Ms. Hill was not instructed by anyone to write the letter. The reason why Ms. Hill said that she put an indication in the letter that the transfer of the mortgage could not be done was based upon her assertion that she had been told this by the lender. What connection Respondent had with the letter, if any, was not established. The cards that she received from Mr. Walsh on coupons for payments would have his name struck over and Respondent's name placed on it and Hill would send the check to the mortgage company for payment of the mortgage. With Real Estate Financing, Inc., Ms. Hill was sending one or two checks per month that dealt with 15 or 20 mortgages. There would be a lump sum payment with account numbers and backup materials sent with the check. The backup materials would include the payment cards or coupons. During Ms. Hill's tenure with the Tallahassee Properties, she says that she kept the mortgage payments current. No evidence was presented to the contrary which is competent. From this it is found that mortgage payments were kept current for a period of time which is not specifically shown. She received no contact from the mortgage companies on the topic of any assumption packages for these loans being assumed. She did receive some coupon books with the Respondent's name affixed. Those latter circumstances were not shown to be associated with any of the traded properties that are at issue in this case. Charles O. Middleton testified at the hearing. He had worked in 1981, 1982 and up to September, 1983, with Capitol Abstract and Title, Inc. which served as a closing agent on traded properties that were picked up by Tallahassee Properties. His recollection of the events is that, as closing agent for the title company, he worked from a contract which identified the terms of the transaction. His recollection is that the transactions associated with a trade property and the new home being purchased after trade was handled together. This is in contrast to the understanding of those homeowners whose traded properties are the subject of this Administrative Complaint and Respondent. The explanation by those homeowners and Respondent that two separate closings were held, one for the traded property and one for the newly purchased property is accepted as factually correct. Middleton recalls that explanations were given by him as closing agent concerning the nature of the transaction to include the matters of the paragraph 17 "due on sale" clause. He describes this arrangement as involving an affidavit or hold harmless agreement that had to be signed. This included the initialing of the paragraphs within that agreement by the buyer and the seller. Again, none of the homeowners who sold traded property that is described in the Administrative Complaint recalls such explanations and documents and their recollection is deemed more creditable and is accepted in lieu of the comments by Mr. Middleton. Likewise, the document for purposes of explanation which was offered as Respondent's Exhibit 8 containing disclaimers about the paragraph 17, "due on sale" clause, while admitted, offers no insight into the nature of what the homeowners were told in the cases that are at issue here because it isn't the same form that Middleton recalls using in the transactions he participated in as closing agent and hasn't been shown to be a form used in any of the cases here. Middleton explained that in the transactions he was involved in, the homeowners were provided a copy of every document to be utilized in the closing and that the original documents had their pages turned while the copies for the homeowners were being examined at the same time. A brief explanation would be given about each document and the homeowners were asked if they wished to take some time to read the documents and to ask any questions. Middleton as closing agent would offer to answer questions or put them in touch with the lender and let the lender answer questions. In Middleton's estimation, it was the closing agent's responsibility to make sure that necessary documents were presented to the lenders in the assumption of the mortgage for the traded in property. Respondent had not instructed Middleton in any of the closings on the topic of what to do with closing documents that were used at the time of transaction. Middleton said that he was unable to produce any of the documents of explanation concerning the closings which he participated in for Capital Abstract and Title, Inc. because he has no access to those files. Middleton identified the fact that in a circumstance in which a home had a mortgage and an assumption was called for, an assumption packet would be customarily ordered at the time of the request for assistance in the closing, which he refers to as an order. Middleton identifies the fact that he is only vaguely familiar with the transactions that are at issue in this Administrative Complaint. He thinks he may have closed some of them but he has no specific recollection about that. As a consequence, he has no worthwhile knowledge of how many of those transactions had assumption packages completed. COUNT I Samuel Hinson, Jr. owned property in Arbor Hills which he had bought from Collins Builders, Inc. on June 30, 1982. This house was taken in trade for a house on Starmount. This Starmount home was also purchased from Collins Builders, Inc. and Collins and Associates, Inc. served as the real estate firm for the purchase of the new home as agent for the seller. Andrew Jackson Federal Savings financed the new purchase. The traded in home was sold to Tallahassee Properties with Capital Abstract and Title, Inc., serving as closing agent according to documents presented at hearing. Mr. Middleton did not appear for Capital Abstract at that closing. In the purchaser's closing statement, W. Ronnie Collins is shown as the representative for Tallahassee Properties. Two warranty deeds were made from Hinson in selling his Arbor Hill property. In deeding his Arbor Hill property on May 20, 1983, one of those went to the Respondent and the other to Tallahassee Properties. In both warranty deeds, the grantee promised to assume and pay an existing mortgage in favor of Real Estate Financing, Inc. The existing mortgage on the Arbor Hills property had the paragraph 17 clause which absent certain exceptions allowed Real Estate Financing, Inc. at its option to declare all sums secured by the mortgage to be immediately due and payable, if the property was sold or transferred without prior written consent from the lender. None of the exceptions pertained to this transaction between Hinson and either Respondent or Tallahassee Properties. The paragraph 17 clause also stated that the mortgage holder was considered to have waived its option to accelerate if prior to the sale or transfer, the mortgage holder reached agreement with the purchaser in writing that the credit of the purchaser was satisfactory to the mortgage holder, thus allowing the purchaser to become responsible for the mortgage. In that instance, interest payable on the sum secured by the mortgage would be at the rate requested by the mortgage holder. The mortgagor, Hinson, would be released from all obligations under the mortgage note if the purchaser was substituted on prior written approval. Hinson went into the transactions involving the sale of his Arbor Hill house and the purchase of the Starmount house with the impression that he had to sell the Arbor Hill house in order to purchase the Starmount house. This was his surmise. Money realized in the sale of the Arbor Hill house was used as a down payment for the Starmount home. Petitioner believed that he had an arrangement to purchase the Starmount home with Ralph Collins. In reality, he was purchasing the home from Collins Builders, Inc. with Collins and Associates, Inc. being the seller's broker. In Mr. Hinson's mind, Respondent and Collins Brothers, Inc. and the then Collins real estate firm through Century 21 were all the same. Going into the transaction, Hinson was not familiar with Tallahassee Properties and its business purpose. Respondent was at both closings, the closing to sell the Arbor Hill house and the closing to purchase the Starmount home. No one discussed the matter of the assumption of the mortgage associated with the Arbor Hills house during the course of the closing of that home. Hinson got the impression from events that Respondent had bought his Arbor Hills house and that everything was being paid off. This impression was not based upon anything Respondent said to him. Hinson, after the closings, requested his insurance company to write to First Alabama concerning the cancellation of his homeowners policy on Arbor Hills. His understanding was that the insurance company sent a letter to do this and that First Alabama sent back a letter saying that they needed certain information. That latter correspondence was then taken to the Respondent. Respondent, under those circumstances, stated to Hinson that it was a mistake and that he would handle it, but that it would take some time to get some of the paper work done. Respondent did not comment to Mr. Hinson on that occasion that he had not assumed the mortgage for the Arbor Hill property nor did he indicate that none of the companies with which he was affiliated had assumed the mortgage. Respondent made no comment whatsoever about assumption of the mortgage in this conversation shown by facts presented at hearing. Hinson then got a new payment book from First Alabama, which he received a couple of days after the insurance letter. This was taken to Respondent and Respondent said that he would take care of it, that it was just a mistake. Again, what was meant by this remark was not developed at hearing. Hinson got one of the February 18, 1986 letters from Respondent that has been referred to previously. Having received this correspondence, Hinson complained to the Tallahassee Board of Realtors. Out of the process of his complaint, Hinson met with Keith Kinderman, Respondent's counsel and the Respondent together with Eric Hoffman, counsel to Hinson. Respondent told Hinson he would help get information and that his counsel, Mr. Kinderman would help in getting some form of restitution and help clear Hinson's name and seek relief from the Capital Abstract and Title, Inc. who had closed the Arbor Hill home. In attempting to obtain a Visa credit card and a Sears credit card, Hinson has been denied that credit. The reason given for the denial is the circumstance associated with the Arbor Hills home and non-payment of the mortgage. The exact circumstance of the Arbor Hills property, concerning who holds it now was not proven at hearing by evidence that can be relied upon for fact finding. COUNT II David P. Walsh and Leila DeJarnette Walsh, his wife bought a home in Huntington Woods from Collins Builders, Inc. on December 23, 1981. This home was financed through Real Estate Financing, Inc. and carried a mortgage from that lender. The mortgage included a paragraph 17 whose language was the same as the Hinson home financed by Real Estate Financing, Inc. The Walshes traded in the Huntington Woods property for a home on Faversham Drive which was financed by Citizens and Southern Mortgage Company. Separate closings were conducted. One was for the sale of the Huntington Woods property with Respondent receiving a warranty deed for that property which property was to be taken over by Tallahassee Properties. The second closing was associated with the sale of the Faversham Drive property from Collins Builders, Inc. to the Walshes. In executing the warranty deed in favor of Respondent as grantee pertaining to the Huntington Woods property, a condition of the warranty deed was an agreement by the grantee to assume the mortgage held by Real Estate Financing, Inc. and pay Capital Abstract and Title, Inc. through some person other than Middleton was the closing agent at the transaction involving the sale of the Huntington Woods property, according to documents at the hearing. Both that sale and the purchase of the Faversham Drive property took place on March 30, 1983. The Walshes signed a document reference the escrow account held by Real Estate Financing, Inc. on its Huntington Woods property. There is no indication whether this was or was not signed by Tallahassee Properties or the Respondent and sent to the Real Estate Financing, Inc. pertaining to funds in the escrow account and insurance coverage being transferred from the Walshes to Tallahassee Properties or Respondent as contemplated by the form. The separate closing associated with the Faversham Drive property was done through Tallahassee Title Company. Respondent was at the closing associated with the homes. Mr. Walsh is not in a position to pay for mortgages on two homes. Mr. Walsh's understanding of the trade in of his Huntington Woods home for the Faversham Drive home was to the effect that he could buy a new home from the transaction and that he would no longer be liable for the traded home, that all paperwork would be taken care of. Some salesman involved in these transactions made these remarks to Mr. Walsh; however, he doesn't know who that person was. Consequently, it is not possible to attribute responsibility for those remarks to Respondent. Subsequent to the closings, the Walshes received correspondence purportedly from First Alabama having to do with Real Estate Financing, Inc.'s mortgage held on the Huntington Woods' property. This correspondence of April 4, 1983, by its terms, reminds the Walshes that the mortgage holder has received notification of cancellation of the homeowner's policy and that the Walshes were to provide insurance coverage at all times. What the real circumstances of the homeowners policy was is not proven by competent evidence. In connection with the transactions, Mr. Walsh describes that he felt that he was dealing with a reputable real estate broker and that they had his best interest in mind. He was not represented by counsel at the closings. Mr. Walsh received one of the February 18, 1986 letters from Respondent as previously described. Mr. Walsh hired a lawyer to try to address the situation of the Huntington Woods property without success in the endeavor. To his knowledge the Huntington Woods property has been foreclosed on. No proof which is competent has been presented in the hearing to describe the exact nature of the developments with the property. Nonetheless, Mr. Walsh has had problems receiving credit twice since that time. Before the situation with the property he had never had credit problems. Mr. Walsh was proceeding in these transactions on the basis on the belief that Tallahassee Properties and the Respondent were the same entities. COUNT III Troy A. Brewer and Tina J. Brewer, his wife purchased a home from Collins Builders, Inc. in Huntington Woods on December 30, 1981. This home was financed by Real Estate Financing, Inc. A mortgage was given by the Brewers in favor of Real Estate Financing, Inc. and it included a paragraph 17 assumption clause as described in the Hinson mortgage financed by that lender. On March 25, 1983, the Brewers traded their Huntington Woods property for a home on Faringdon Drive. The seller of the Faringdon Drive property was Collins Builders, Inc. In these transactions, the Huntington Woods property was deeded to Respondent with the provisor in the warranty deed that Respondent would assume and agree to pay for the mortgage in favor of Real Estate Financing, Inc. Mr. Brewer is not in a position to meet mortgage payments associated with two mortgages; one on the Huntington Woods property and one on the Faringdon Drive property. Therefore, he would not knowingly obligate himself to assume mortgages associated with both of those properties. In the transactions associated with the traded property and new home purchased, Mr. Brewer proceeded on the basis that the first home was being taken over by the Respondent and that the mortgage would be paid off after a month or so as a means for him to purchase the second home. What led him to believe this is not clear. Mr. Brewer's recollection is that he was told that everything would be taken care of and he would not have to worry about anything and there wouldn't be any problems about the house being traded and that he could stay in the home that he was selling until the new home had been built and that once built, all transactions would be taken care of. Both the traded property and the property being purchased were financed by Real Estate Financing, Inc. He was not represented by an attorney in these matters. Some undisclosed realtor had told Mr. Brewer he could have an attorney but that he really didn't need one. As shown in the testimony of Mr. Brewer given at hearing, he had spoken to Respondent at closing. He also had conversations with Jackie Collins whom he believed to be a representative of Respondent. Jackie Collins was understood by Mr. Brewer to be a realtor. Again, the exact nature of the affiliation of Jackie Collins to the Respondent or his companies was not established in this hearing. Mr. Brewer did state that at the closing he was told by Respondent that there would be no problems. The nature of that remark was not further developed under interrogation of the witness. Nor was the matter of Mr. Brewer's comment to the effect that he had questioned the fact that his first mortgage on the Huntington Woods home was not assumable and had made that question known at the closing, other than to state that in response "they" had assured him everything would be taken care of and he wouldn't have to worry about it. This was associated with some remarks to the effect that Mr. Brewer should not worry that "we" would take it all in and that "they" would transfer everything over and take it out of the Brewers' name, again not pursued as to who "they" and "we" were and whether Respondent was a "they" or "we" or was in attendance when a "they" or "we" made the comments if he was not a "they" or "we." On this subject, Mr. Brewer was of the understanding that the transfer of the mortgage from Mr. Brewer to Respondent had in fact been tentatively approved by Real Estate Financing, Inc. but this was not proven by competent proof either. Mr. Brewer received one of the February 8, 1986 letters from Respondent as previously described. He in turn composed a letter of complaint concerning the transactions associated with the traded property. The complaint is dated March 31, 1986 and is addressed "To whom it may concern". As a result of the non-payment of the Huntington Woods property, Mr. Brewer received a letter purportedly from First Alabama for Real Estate Financing, Inc. dated February 13, 1986 that indicated that payment for the mortgage in the Brewer property had not been paid in January and February, 1986 and under paragraph 18 of the mortgage, Mr. Brewer was being notified of the failure to make payments and the possibility of the pursuit of these delinquent payments through legal means. Whether the assertions in this unauthenticated hearsay document are true was not proven by competent evidence. Beyond that date, in an action in which Respondent and the Brewers were named as defendants, Federal National Mortgage Association by and through its agent Real Estate Financing, Inc. obtained a Summary Final Judgment of foreclosure on the Huntington Woods property on June 1, 1988. This points out that the Brewers were not released from the mortgage obligation as envisioned by paragraph 17. It does not address what attempts were made by Respondent or his companies to gain their release. As a result of the foreclosure, Mr. Brewer has had problems with his credit. Notwithstanding the foreclosure on the Huntington Woods property, there has been no deficiency judgment entered against Mr. Brewer, to his knowledge. COUNT V On November 30, 1983, Collins Company of Pensacola, Inc. conveyed property at Eldorado Drive in Pensacola, Florida to Harold C. Miller, Jr., a Collins employee. That property was subject to a mortgage from Real Estate Financing, Inc. which included a paragraph 17 as included in the facts pertaining to the Hinson transaction involving that lender. This house was purchased because of a transfer of Mr. Miller to Pensacola as a condition of his employment with the Collins Company. The Collins Company of Pensacola was responsible for paying the mortgages during that time frame. In conversation with Respondent, it was determined that Miller would buy the house and the Respondent would buy it back and in the interim, Mr. Miller would live rent free. On May 23, 1985, a quit claim deed was executed by Mr. Miller in favor of the Respondent returning possession of the Pensacola home. Because Respondent had told Mr. Miller that Respondent would make payments on this home, Mr. Miller did not make any payments. Mr. Miller speaks of a contract that was in writing and was involved in the closing on the Pensacola home when it was purchased and that there was a promise to assume the mortgage held by Real Estate Finance, Inc. This comment is made in a deposition of Mr. Miller which was entered as Exhibit 71 by the Petitioner. Whether this refers to an assumption by the Respondent or someone else is not clear. As pointed out by the deposition testimony, more importantly, this contract was not produced then and is not available now for consideration in the deliberation of this case. Mr. Miller bought another house from Collins Construction in Leon County which is at Foxcroft. At the time of the deposition it was occupied by Susan, Mr. Miller's wife. Real Estate Financing, Inc. sued the Respondent and Harold C. Miller, Jr. and Susan F. Miller, his wife, in a foreclosure associated with the Pensacola property and received a Final Judgement for foreclosure on May 11, 1988. This points out that the Millers were not released from the mortgage obligation. By the circumstances, Mr. Miller was persuaded that the Respondent would take care of the mortgage on the Pensacola home until it was paid off. What the payment history was on the mortgage prior to foreclosure has not been established in this record. In terms of any promises from Respondent about further obligations on the mortgage on the Pensacola home, Mr. Miller describes that Respondent never told him that he was relieved of that obligation or that he wasn't. Mr. Miller did not question the Respondent about this because he trusted him. COUNT VI On September 25, 1981, Collins Builders, Inc. sold a home to Peter A. Hartmann at Grantham Lane in Tallahassee, Florida. Mr. Hartmann borrowed money from Real Estate Financing, Inc. to purchase that home secured by a mortgage that included paragraph 17 the language of which is the same as in the Hinson transaction with Real Estate Financing, Inc. That property was subsequently deeded to Respondent on March 25, 1983. In the deed Respondent as grantee promises to assume and pay the Real Estate Financing, Inc. mortgage on the property. The Hartmann property upon which Real Estate Financing, Inc. held a mortgage was foreclosed upon in a suit by Federal National Mortgage Association by and through its agent Real Estate Financing, Inc. against Respondent and in Peter A. Hartmann. Action was taken by order of court on May 3, 1988 and the property sold on May 27, 1988 as evidenced by a Certificate of Sale from the Clerk of the Circuit Court, Second Judicial Court in and for Leon County, Florida. This points out that Mr. Hartmann was not released form the mortgage obligation. There is a potential for a deficiency judgement against Mr. Hartmann following that sale. The details of the Hartmann transaction were not presented at hearing through his testimony or anyone else. COUNT VII On April 22, 1982, Collins Builders, Inc., sold John A. Miller and Jeanne B. Miller, his wife, a home in Lakewood Estates. That home was secured by a mortgage in favor of Real Estate Financing, Inc. It contained a paragraph 17 which had the language set out in the Hinson transaction with Real Estate Financing, Inc. which has been described. The home at Lakewood Estates was traded for a home in Huntington Woods II. Those transactions took place on March 2, 1984, and on that date the Millers executed a deed to Ralco, Inc., one of Respondent's companies. The warranty deed contained language to the effect that Ralco, Inc. promised to pay on the mortgage held by Real Estate Financing, Inc. Bobbie G. May signed the contract for sales and purchase as representative of Ralco, Inc. The Huntington Woods II property that was bought by the Millers was bought from Collins Builders, Inc. with Bobbie G. May serving as representative for Collins Builders, Inc. in the contract for sale and purchase. The payments were not made as promised by Ralco, Inc. and Respondent sent the Millers one of the February 18, 1986 letters as previously described. Ultimately, Florida National Mortgage Association through Real Estate Financing, Inc. sued Ralco, Inc. and the Millers in foreclosure and obtained a summary Final Judgement of Foreclosure against those defendants. This points out that the Millers were not released from the mortgage obligation. This as with other foreclosures does not speak to attempts by Ralco, Inc. to be allowed to assume the mortgages in a novation. The property at Lakewood Estates which had been traded in was then sold June 28, 1988, as evidenced by a Certificate of Sale from the Clerk of the Circuit Court of the Second Judicial Circuit, in and for Leon County, Florida. That judgment against the Millers is shown on the credit report of John Henry Miller. Mrs. Miller understood that the mortgage payments on the traded home would be made until the property was sold by Ralco, Inc. Visits to the neighborhood where that traded home was found did not indicate any activities toward the sale by way of for sale signs. No one was living in the traded home at that time. The Millers were not represented by counsel during the course of the closings associated with the two homes. They were represented in the foreclosures suit. In reference to the credit circumstance of the Millers, in trying to buy a vehicle they had been denied credit once. They were eventually able to buy the vehicle. The Millers had been told when purchasing the initial home at Lakewood Estates that the reason for buying it would be the possibility of being able to trade for a larger home at some later date if needed. Again, it is not clear who made those statements to the Millers. On the day before the closing of the traded home, Mrs. Miller spoke with Sissie Collins whom she understood to be affiliated with Respondent or one of his companies. The record does not show what that affiliation would have been, if anything. In this conversation with Sissie Collins, Mrs. Miller pointed out to Ms. Collins that the loan with Real Estate Financing, Inc. was not assumable without qualifying. Moreover, Mrs. Miller believed that Respondent did not qualify for the loan and that it was not assumable unless he did. Sissie Collins stated that this was not a problem and that Real Estate Financing, Inc. or First Alabama allowed Respondent to assume a mortgage and make the payments until the property was sold and the mortgage was paid off and that Real Estate Financing, Inc. was fully aware of the circumstance. Whether this was true or not was not proven by competent evidence. What Respondent knew about these matters wasn't shown either. At the time of hearing, the Millers had not been called upon to pay any deficiencies associated with the foreclosure of their Lakewood Estates property. COUNT VIII Eric R. Larsen and Young Oak Larsen, his wife, purchased a home from a Collins Company in Huntington Woods Unit II. That house was eventually traded for a home in Cross Creek. The traded home was deeded to Respondent with the promise that Respondent would assume an existing mortgage on the Huntington Woods Unit II property which is owed to Andrew Jackson State Savings and Loan Association and make payments. The closing associated with the traded property took place on December 2, 1982. The new home was being purchased through the same lending institution as the traded home. The Larsens were not represented in the closings associated with the traded home and the purchased home. The closing of the traded home took place in offices of the Respondent's business. The second closing for the purchased home took place at the Andrew Jackson Federal Savings. When Mr. Larsen asked why the deed for his Huntington Woods II property was being made to the Respondent, he was told that it was to facilitate the assumption of the mortgage. By his remarks, Mr. Larsen is not clear on whether the Respondent attended the closing associated with the traded property. He does recall someone whose name is Chip who he thought was the real estate broker who worked with Respondent was at the closing. No further indication of who this man named Chip might be as to association with Respondent or his companies was shown in this record. The Larsens received a February 18, 1986 letter from Respondent as previously described, when the problems occurred about payments for the traded property, and at that time the mortgage was shown as being held by Colonial Mortgage Company. Mr. Larsen also received a letter on April 8, 1987, purportedly from Colonial Mortgage Company, which states that Mr. Larsen is not released from liability on the traded property and some comment about assumption packages having been sent on various dates and reminds Mr. Larsen that the loan could not be assumed without the prospective purchaser's credit having been approved. The letter describes other perceptions about the ability of the Respondent to take over responsibility for the mortgage on the traded property. All of the matters set out in this unauthenticated correspondence are hearsay and they cannot form the basis of fact-finding in terms of whether Respondent or his companies were ever allowed to assume the mortgage on the traded property. People who had a direct knowledge of the mortgage circumstance with Colonial Mortgage Company pertaining to this traded property as with other traded property on which a lender held mortgages and sent letters have not been presented to explain that circumstance by competent evidence. Likewise, the outcome of what has happened with the traded property in the Larsen transaction has not been proven by competent evidence. The explanation of the outcome with that property is hearsay which may not be used as a basis for fact finding. COUNT IX Robert R. and Patricia A. Aubin, husband and wife, traded property under the program which Respondent was affiliated with for taking in one residence and selling another. Mr. Aubin thought that this kind of transaction was common and that led to his telling his financing institution that the same builder was taking back the original home in order to build Mr. Aubin another house, thinking that this might simplify the transaction. In speaking to someone about the obligation to deal with the existing mortgage on the traded property, he identifies the person he was talking to as Ed Hines. Again, it is not clear what Mr. Hines' association was with the Respondent and his companies. The traded home was going to be given to Tallahassee Properties. Mr. Aubin was not certain of the arrangement Respondent had with his individual companies. Ultimately, there was a problem with the payments on the house that had been traded in. Respondent wrote the Aubins one of the February 18, 1986 letters reference the property at Huntington Woods Unit I. An arrangement was being made whereby Real Estate Financing, Inc. received $3,704.48 from Ralco, Inc. by a check of June 26, 1986. That check was issued after Ralco, Inc. conveyed the traded property back to the Aubins on June 17, 1986 and this resolved the problem for the Aubins.
Recommendation In consideration of the facts found and the conclusions of law reached, it RECOMMENDED: That a Final Order be entered which dismisses the Administrative Complaint. DONE and ENTERED this 20th day of October, 1989, at Tallahassee, Florida. CHARLES C. ADAMS, 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 20th day of October, 1989. APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 89-3850 The following discussion is given concerning the proposed fact-finding offered by the parties. PETITIONER'S FACTS Paragraph 1 is utilized. Paragraph 2 is not necessary to the resolution of the dispute. Paragraph 3 is not necessary to the resolution of the dispute. 4-5. Paragraphs 4 and 5 are set out in the findings of fact. 6-10. Paragraphs 6-10 are subordinate to facts found. Paragraph 11 has not been proven. Paragraph 12 is correct in terms of Hinson's decision to convey the property; however, what Hinson was allowed to believe concerning the matter of assumption as it might show culpability on the part of the Respondent has not been proven. This matter set forth in paragraph 13 has not been proven. Paragraph 14 is not necessary to the resolution of the dispute. Paragraph 15 is not necessary to the resolution of the dispute. Paragraph 16 has not been proven as to any financial losses due to dishonest acts or false promises of the Respondent. Hinson was found to have been denied credit cards. The latter sentence in paragraph 16 is speculation and not fact. Paragraph 17 is subordinate to facts found. Paragraph 18 in the suggestion that the Respondent through his real estate office and salesmen made representations and promises to the Walshes was not proven in the sense that persons involved with the Walshes and the transaction to trade in the home were not sufficiently identified to understand how those persons were affiliated with the Respondent. Paragraph 19 is accepted as to the documents and promises by the Respondent. Again, what the association was of the other person identified as the salesman may have been is not clear in this transaction. Paragraph 20 is subordinate to facts found. Paragraph 21 is subordinate to facts found. Paragraph 22 is not proven in the first sentence. The second sentence is subordinate to facts found. Paragraph 23 was not proven. Paragraph 24 is subordinate to facts found. Paragraph 25 is subordinate to facts found except in its suggestion that the Walshes had been deceived in the sense of the idea of the mortgage not having been assumed or attempts made to have it assumed. Paragraph 26 is contrary to facts found. Paragraph 27 is subordinate to facts found. Paragraph 28 is subordinate to facts found except as it identifies the nature of the salesperson and what the affiliation was with Collins and Associates insufficient proof was made to show the true nature of the position of the salesperson in Collins and Associates, Inc., if any, and what Respondent had in mind and any instructions to this person who was reportedly the salesperson. Paragraph 29 is subordinate to facts found as to promises in the document system responsibilities of Respondent. Otherwise it is not accepted. Paragraph 30 is subordinate to facts found except as to its suggestion that deceit has been proven relating to the Respondent's attempts to have the mortgage assumed. Paragraph 31 is subordinate to facts found. Paragraph 32 is subordinate to facts found. Paragraph 33 is subordinate to facts found. Paragraph 34 is subordinate to facts found except as to the suggestion that this problem of the foreclosure dissolved the marriage. Paragraph 35 in its first sentence is contrary to the Impression of the facts. There was a discussion and a decision reached to buy the house, whether Respondent was acting as a real estate broker individually or as a builder developer is unclear. Whether he made his employee buy the house or directed him to is not accepted as a fact. Paragraph 36 is subordinate to facts found. Paragraph 37 is subordinate to facts found. Paragraph 38 was not proven on the issue of whether Respondent applied for an assumption. The Final Judgment of closure was proven. Paragraph 39 is subordinate to facts found. Paragraph 40 is subordinate to facts found. Paragraph 41 is subordinate to facts found in a suggestion of an agreement to take over the Huntington Woods property. Reference to the allegations and the foreclosure petition are not necessary to the resolution of the dispute and do not constitute an explanation of how Respondent may have carried out his promise to take over responsibilities for the mortgage and the traded property which is the true issue. Likewise, paragraph 42 where it is acknowledged in that suit the agreement to assume the mortgage does not answer the issue of whether attempts were made to bring about that assumption. Paragraph 43 is subordinate to facts found. Paragraph 44 and its suggestion as to any intended action on the part of a mortgage insurer has not been proven by competent evidence. Paragraph 45 is subordinate to facts found. Paragraph 46 is subordinate to facts found. Paragraph 47 in the suggestion of activities by a salesperson of Collins and Associates has not been shown in terms of the affiliation with the Respondent's companies or with the Respondent in terms of the details of that affiliation sufficient to show that Respondent is culpable for any acts of his employees. Respondent through Ralco, Inc. had agreed to assume and pay for the existing mortgage on the traded property. Paragraph 48 is subordinate to facts found. Paragraph 49 is subordinate to facts found. Suggestion by counsel that Respondent's admission of 86 coincide with the fact finding in paragraph 50 is erroneous as is reference to page 11 in the transcript which speaks of the admissions. Paragraph 51 is subordinate to the facts found. Paragraph 52 is subordinate to the facts found with the exception that the Respondent was not shown to have been deceitful in saying that the mortgage had not been allowed for assumption in that no competent proof was offered as to the attitude of the lender concerning the assumption. Paragraph 53 is subordinate to the facts found. Paragraph 54 is correct in terms of the credit report on foreclosure, otherwise it is rejected as heresay. Paragraph 55 is inaccurate when it suggests that proof was made that Respondent did not take care of the assumption in the Larsen trade-in property. Paragraph 56 is subordinate to the facts found. Paragraph 57 constitutes legal argument. RESPONDENT'S FACTS 1-7. Paragraphs 1-7 are subordinate to facts found. The first sentence of Paragraph 8 is contrary to facts found. The remaining sentences within paragraph 8 are subordinate to facts found. Paragraph 9 is subordinate to facts found. In paragraph 10, Charles Middleton was not shown to have been the closing agent for Capital Abstract and Title, Inc. in the transactions which are at issue here. In paragraph 11, Respondent was responsible for applying for the mortgage assumptions but the proof was not made that he did not do so or that he did. Paragraph 12 is subordinate to the facts found. Paragraph 13 is subordinate to the facts found. Paragraph 14 is hearsay and may not form the basis of the fact finding. Paragraph 15 is hearsay and may not form the basis of the fact finding. Paragraph 16 is subordinate to the facts found. Paragraph 17 is subordinate to the facts found. Paragraph 18 is subordinate to the facts found. Paragraph 19 is subordinate to the fact found. Paragraph 20 is not accepted. Paragraph 21 is not accepted. Paragraph 22 is subordinate to the facts found. Paragraph 23 is not relevant. Paragraph 24 is the reputation of the Respondent is only relevant if culpability has been shown. It has not been. 25. Paragraph 25 is subordinate to facts found. Paragraph 26 is not accepted in terms of what position Chip Miller held and what capacity he was acting in when involved in the Hinson transaction as employee of Collins and Associates, or Tallahassee Properties or exactly what capacity. Paragraph 27 is subordinate to the facts found. Paragraph 28 is subordinate to the fact found. Paragraph 29 is heresay and not accepted. Paragraph 30 is contrary to the impression of the credit circumstance of Mr. Hinson. Whatever the current credit report may say, Mr. Hinson's credit had been hurt. Paragraph 31 is true. Paragraph 32 is subordinate to the facts found except for deprivation of credit. Paragraph 33 is not necessary to the resolution of dispute. Paragraph 34 is subordinate to facts found. Paragraph 35 is subordinate to facts found. Paragraph 36 is contrary to facts found. Paragraph 37 is contrary to facts found. Paragraph 38 is subordinate to facts found. Paragraph 39 is subordinate to facts found. Paragraph 40 is subordinate to facts found. Paragraph 41 is subordinate to facts found, except as to credit. Paragraph 42 is subordinate to facts found. Paragraph 43 is subordinate to facts found, except in its suggestion of what capacity Sissie Collins really served which is not established. Paragraph 44 is subordinate to facts found, except not proven that mortgage assumption tentatively approved. He did make representations as the mortgage grantee. Paragraph 46 is subordinate to the fact found. Paragraph 47 is subordinate to the facts found. Paragraph 48 is contrary to facts found. There is no paragraph 49. Paragraph 50 is subordinate to the facts found. Paragraph 51 is subordinate to the facts found, except as to credit. Paragraph 52 is subordinate to the facts found. 53.-55. Paragraphs 53-55 are subordinate to the facts found. Paragraph 56 is contrary to facts found. Paragraph 57 is subordinate. Paragraph 58 is not necessary to the resolution of the dispute. Paragraph 59 is subordinate to the facts found. 60.-62 Paragraphs 60-62 are subordinate to the facts found. 63.-64. Paragraphs 63-64 are subordinate to the facts found. Paragraph 65 is subordinate to facts found. Paragraph 66 is subordinate to the facts found. Paragraph 67 is subordinate to the facts found. Paragraph 68 is subordinate to the facts found. Paragraph 69 is subordinate to the facts found. Paragraph 70 is subordinate to the facts found. 71.-72. Paragraphs 71-72 are subordinate to the facts found. Paragraph 73 in the first sentence is subordinate to the facts found. The second sentence has to do with whether Andrew Jackson gave preliminary approval for the assumption of the mortgage on the traded property and is heresay not accepted. Paragraph 74 is not necessary to the resolution of the dispute. Paragraph 75 is subordinate to the facts found. 76.-77. Paragraphs 76 and 77 are accepted as true but are not needed. 78.-79. Paragraphs 78-79 are subordinate to the facts found. 80. In this instance and all that have discussed before, Respondent did make representations through the February 18, 1986 letters. 81-82. Paragraphs 81-82 are subordinate to facts found. 83. Paragraph 83 is subordinate to facts found. 84.-85. Paragraphs 84-85 are subordinate to facts found. Suggestion that the paragraph 86 relates back to initial paragraphs is acknowledged and accepted in the manner that has been described in the discussion at the paragraphs set forth in the proposed fact finding. Paragraph 87 is legal argument. COPIES FURNISHED: Darlene F. Keller, Executive Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 James H. Gillis, Esquire DPR-Division of Real Estate Legal Section 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32817 William M. Furlow, Esquire Katz, Kutter, Haigler, Alderman, Eaton, Davis, Marks, P.A. Post Office Box 1877 Tallahassee, Florida 32302-1877 Keith Kinderman, Esquire 906 Thomasville Road Tallahassee, Florida 32303 Kenneth E. Easley, General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 =================================================================
