The Issue Whether the Respondent's real estate salesman license should be disciplined because of the misconduct alleged in the Administrative Complaint.
Findings Of Fact The Department is the state agency charged with licensing and regulation of real estate salesman. At all times material to these proceedings, Respondent Spaniak was licensed as a real estate salesman in Florida, having been issued license number 0153115 in accordance with Chapter 475, Florida Statutes. The license expired on March 31, 1989, due to non-renewal. On or about October 15, 1985, Linda Myers, d/b/a Happy Days Ice Cream, leased space in a shopping center owned by Hancock Square Partnership, a Florida General Partnership, in order to operate an ice cream shop. Respondent Spaniak, Norbert Murray, and Timothy H. Heuer, were the three general partners within the Hancock Square Partnership. On May 2, 1988, Linda Meyers filed a third party complaint against the partnership, alleging that she entered into the lease based upon the representations of Respondent regarding the location within the shopping center she was leasing and the number of signed leases within the center. Both of these factors were considered essential by Linda Meyers in her decision to sign the lease and financially obligate herself to run the business. Based upon her reliance as to the Respondent's representations, Linda Meyers signed the lease. Once her business venture was begun, she discovered she was not given the location set forth in the lease, and very few businesses occupied the shopping center. As the ice cream shop relied on a large volume of walk-in business from the shopping center and an easily accessible location, Linda Meyers was not able to run a successful business in the location she was actually provided in the low occupancy shopping center. The Respondent misrepresented both the business location and the number of established businesses at the center. But for Respondent's misrepresentations, Linda Meyers would not have financially obligated herself to her financial detriment in the ice cream business. The misrepresentations contributed to her failure in the business and her loss of monies in the venture. A default judgement was entered against Respondent Spaniak in the third party complaint on October 19, 1988, for damages to Linda Meyers in the amount of $100,132.47. It was judicially determined that Respondent Spaniak materially misrepresented facts during the lease signing to Linda Meyers' detriment. The Respondent has not satisfied the judgement. In mitigation, the Respondent has voluntarily consented to the cancellation of his real estate salesman's license.
Recommendation Based upon the foregoing, it is RECOMMENDED: That Respondent, Charles Gary Spaniak be found guilty of the violation of Section 475.25(1)(b), Florida Statutes, based upon the material misrepresentations made to Linda Meyers, which induced her to sign a shopping center lease to her financial detriment. That the Respondent Spaniak's privilege to reinstate his real estate salesman's license be suspended for five years. DONE and ENTERED this 28th day of December, 1989, in Tallahassee, Florida. VERONICA E. D0NNE 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 28th day of December, 1989. APPENDIX Petitioner's proposed findings of fact are addressed as follows: Accepted. See HO #1 Accepted. See HO #2 Accepted. See HO #3 Accepted. See HO #4 Accepted. See HO #5 Accepted. See HO #6 Accepted. See HO #7 Accepted. See HO #8 Accepted. See HO #9 Accepted. See HO #10 COPIES FURNISHED: Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 James H. Gillis, Esquire Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Charles Gary Spaniak c/o NRC Realty, Inc. 12995 Cleveland Avenue, #150 Fort Myers, Florida 33907 =================================================================
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, I hereby make the following Findings of Fact: Respondent, Frank Fogliano, is now and was at all times material hereto, a licensed real estate broker in the State of Florida having been issued license numbers 0249363 and 0247571. The last licenses issued were as a broker with Interval Sales, Co., Inc., 606 North U.S. 1, Fort Pierce, Florida, and with Treasure Coast Business Consultants, Inc., 100 Avenue A, Fort Pierce, Florida. Respondent, Robert Jon Casazza, is now and was at all times material hereto, a licensed real estate salesman in the State of Florida having been issued license number 0379594. The last license issued was as a salesman with Interval Sales Co., Inc., (hereinafter Interval Sales) 606 North U.S. 1, Fort Pierce. Respondent, Interval Sales and Publishing, Inc. is now and was at all times material hereto a corporation registered as a real estate broker in the State of Florida having been issued license number 0246183. The last license issued was placed in limbo on January 29, 1987, when Respondent Fogliano, the qualifying broker, gave notice that he would no longer be associated with the corporation. From September 8, 1986, to January 29, 1987, Respondent Frank Fogliano was licensed and operating as the sole qualifying broker for Respondent Interval Sales and Publishing. From October 1, 1986, to January 29, 1987, Respondent Casazza was licensed as a real estate salesman in the employ of Respondent, Interval Sales and Publishing. At all times alleged herein, Respondents Fogliano and Casazza held a one-third interest each in Respondent Interval Sales and Publishing. From August 8, 1986, through March 11, 1987, the Respondents have been engaged in the business of offering for sale condominium timeshare units owned by individual unit owners. Respondents Fogliano and Casazza believed that the only effective way to stimulate buyer interest in the resale of timeshare units was through a marketing program and through the creation of lead generations. Conventional real estate operations will not normally list and sell timeshare units offered by individual unit owners. In an attempt to develop a viable program for the resale of timeshare units, Respondents Fogliano and Casazza formed two separate companies, Respondent Interval Sales and Publishing, and Interval Sales. Interval Sales and Publishing was formed for the purpose of marketing timeshare units and Interval Sales was formed for the purpose of obtaining listings and effecting the resale of the timeshare units. Respondent Fogliano was the qualifying broker for both corporations. Respondent Interval Sales and Publishing was conceived by Casazza and Fogliano as a marketing organization with the purpose of obtaining lead generations through the use of promotional devices such as vacations, cruises and social functions. Respondents believed that face-to-face sales presentations were the most effective way of attempting to resell timeshare units. From August 8, 1986 through March 11, 1987, Respondent Interval Sales & Publishing mailed thousands of postcards and other publications to individual timeshare unit owners. The letters advised the timeshare unit owners that Respondent Interval Sales & Publishing had a timeshare resale program available and needed additional units in its "sales" inventory. When interested timeshare unit owners called the toll-free number listed on the mailings, they were advised that Respondent Interval Sales & Publishing would assist them in the resale of their units for a $199.00 promotional fee. After interested owners entered the program, their "listing" was given either to Interval Sales or Respondent Fogliano as real estate broker. The $199.00 fee went directly to Respondent Interval Sales & Publishing. Approximately 1,000 individual time share unit owners entered the program and paid Respondent Interval Sales & Publishing, the $199.00 fee. Respondent Interval Sales & Publishing informed the timeshare owners that the $199 fee was for the purpose of paying the expenses of advertising, promotion, and giving of gifts to prospective purchasers. In an attempt to lure potential buyers and create a market for the resale of the timeshare units, Respondent Interval Sales & Publishing offered mini-vacations, gifts, cruises and sponsored social events. In addition, Respondent Interval Sales & Publishing contracted with various companies such as Vacation Time and Vacation International that would provide potential buyers in exchange for a fee and the opportunity to use the offered timeshare units as part of vacation package plans. The promotional activities of Respondent Interval Sales & Publishing resulted in approximately five to eight hundred prospective buyers visiting the various units. The prospective buyers were then given sales presentations by real estate sales personnel employed by Interval Sales. The $199 fee was not placed into an escrow or trust account maintained by Respondent Interval Sales & Publishing. The money was deposited into a bank account maintained by Respondent Fogliano as "real estate broker" and then delivered to Respondent Interval Sales and Publishing. Respondent Interval Sales & Publishing maintained a staff of approximately eight employees, including two secretaries. In addition, Respondent Interval Sales & Publishing employed the services of Larry Meadow, a certified public accountant who kept an accounting of all of the funds which came and went through the company. All of the funds obtained by Respondent Interval Sales & Publishing were expended on promotional activities, advertising, office expenses and salaries. Respondent Interval Sales and Publishing expended the money without having provided a formal accounting to the owners or to the Florida Real Estate Commission. Respondents Fogliano and Casazza were aware of the advance fee provisions of Chapter 475, Florida Statutes (discussed in Conclusions of Law Section) but did not consider the fees received by Interval Sales and Publishing to be advance fees as contemplated by the statutes because they were used for "marketing." Effective January 29, 1987, Fogliano terminated his licensing status with Respondent Interval Sales and Publishing but continued to hold a one-third interest in the company. Thereafter, Respondent Interval Sales and Publishing and Respondent Casazza continued with business as usual in the marketing of the timeshare units, i.e., soliciting $199 promotional fees from timeshare owners and attempting to create a cadre of interested buyers.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: An administrative fine of $3,000 be assessed against Respondent Interval Sales and Publishing, Inc. and the present suspension of license be continued until thirty days after the date of the Final Order. An administrative fine of $2,000 be assessed against Respondent Frank Fogliano and the present suspension of license be continued until thirty days after the date of the Final Order. An administrative fine of $1,000 be assessed against Respondent Robert Jon Casazza and the present suspension of license be continued until thirty days after the date of the Final Order. DONE and ORDERED this 10th day of August, 1987, in Tallahassee, Florida. W. MATTHEW STEVENSON 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 10th day of August, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-2585 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner Addressed in Conclusions of Law Section. Adopted in Finding of Fact 1. Adopted in Findings of Fact 2 and 4. Adopted in Findings of Fact 3. Adopted in Findings of Fact 4. Adopted in Findings of Fact 5. Adopted in Findings of Fact 6. Partially adopted in Finding of Fact 10, matters not contained therein are rejected as contrary to the weight of the evidence. Adopted in Finding of Fact 14. Adopted in Finding of Fact 16. Adopted in Finding of Fact 17. Partially adopted in Finding of Fact 17, matters not contained therein are rejected as contrary to the weight of the evidence. Rejected as contrary to the weight of the evidence. Rulings on Proposed Findings of Fact Submitted by the Respondent Addressed in Conclusions of Law Section. Adopted in Finding of Fact 2. Adopted in Findings of Fact 2 and 4. Adopted in Finding of Fact 5. Adopted in Finding of Fact 4. Adopted in Finding of Fact 5. Adopted in Finding of Fact 8. Adopted in Finding of Fact 9. Adopted in Finding of Fact 11. Adopted in substance in Finding of Fact 7. Adopted in substance in Finding of Fact 10. Adopted in substance in Finding of Fact 7. Rejected as contrary to the weight of the evidence. Adopted in Findings of Fact 10 and 16. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Michael J. Garavaglia, Esquire 3111 Cardinal Drive Vero Beach, Florida 32963 Van Poole, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Joseph A. Sole, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Harold Huff, Executive Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, I hereby make the following findings of fact: Phyllis I. Reaves is now and was at all times material to these proceedings, a licensed real estate salesman in the State of Florida having been issued license number 0351816. Annette J. Ruffin is now and was at all times material to these proceedings, a licensed real estate broker having been issued license number 0076385. From May 2, 1983 to October 18, 1984, Respondent Phyllis I. Reaves was licensed and operating as a real estate salesman in the employ of Respondent Annette J. Ruffin, as broker, c/o International Investment Development Center, Belleair, Florida or Century 21 A Little Bit Country, Brandon, Florida. At all time material hereto, Respondent Phyllis I. Reaves was a licensed mortgage broker in the State of Florida. DOAH CASE NO. 85-1008/1138. COUNT I No evidence was presented concerning the allegations in Count I.. COUNT II No evidence was presented concerning the factual allegations of Count II. COUNT III No evidence was presented concerning the allegations of Count III. COUNT IV On June 10, 1983, Respondent Reaves entered into a real estate sales contract with Emmett K. Singleton, as seller to purchase certain real estate through the use of a land trust. The sales contract listed a total purchase price of $67,000. C-21 A Little Bit Country was listed on the contract as escrow agent of the binder deposit. The property had an existing first mortgage of approximately $33,854. Respondent Reaves agreed to assume the new mortgage and requested that Mr. Singleton obtain a second mortgage in the principal amount of $26,400. Reaves agreed to assume this second mortgage amount while allowing Mr. Singleton to keep the proceeds. Mr. Singleton agreed that the balance of the sales price would be paid via a purchase money mortgage to Respondent Reaves in the principal amount of $9,643.99. Respondent Phyllis I. Reaves executed a Hold Harmless and Indemnity Agreement which read as follows: "Phyllis Reaves does agree to hold Emmett K. Singleton harmless and does idemnify him against any future liability or losses related to the mortgage on subject property at 1912 Hastings Drive, Clearwater, Florida." The sales transaction closed on July 7, 1983, and Respondent Reaves received a real estate brokerage commission in the amount of $1,955. The contract provided that the "listing agent agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." The purchase money mortgage note was actually signed by Michael R. Fisher, as trustee, and not by Respondent Reaves. Respondent Reaves requested that Mr. Singleton give her the mortgage payment booklets and she would assume and pay off the existing and second mortgages. Singleton trusted Reaves and relied upon her statements that she would do as she promised. Respondent Reaves failed to assume and pay the notes and mortgages and thereby caused the seller to become delinquent with the lenders. After closing, Respondent Reaves, acting as the owner, obtained tenants for the property and collected rental payments. Respondent Reaves solicited and obtained $3,000 in connection with a lease/option agreement. The lease/option agreement provided that the sales price of the home would be $78,000 in three years. The rent would remain at $495 per month for three (3) years. The agreement further provided that $3,000 per year would be paid for three (3) years which would reflect a total down payment of $9,000. This down payment was considered the "option consideration." The agreement provided that one third of the option money would be returned if the option were not exercised. The tenants paid Respondent Reaves a total of $3,000 of the option consideration. The renters became concerned when they began to receive notices from Freedom Mortgage Company stating that certain mortgages on the home were overdue. The renters did not exercise the option to buy the home. The renter requested, but did not receive, $1,000 of the $3,000 option consideration back from Respondent Reaves. COUNT V On July 6, 1983, Respondent Reaves entered into a real estate sales contract with Stephen B. Barnes, as seller, to purchase certain real estate through the use of a land trust. The property was not listed", but a broker from Tam-Bay Realty approached Barnes and stated that he had a buyer. The purchase and sale agreement provided for a total purchase price of $91,000. The agreement listed "C-21 A Little Bit Country" as escrow-agent for the binder deposit. In addition, the purchase and sales agreement provided that: "Listing agent Tam-Bay agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." The seller agreed that he would allow Respondent Reaves to assume the existing mortgage of approximately $52,990. Mr. Barnes then agreed to obtain a second mortgage in the amount of $18,925. The seller agreed that the balance of the sales price would be paid via a purchase money mortgage in the principal amount of $16,670.91 to be paid by Respondent Reaves. In addition, Mr. Barnes obtained a home improvement loan in the amount of $4,900. According to the agreements between Respondent Reaves and Mr. Barnes, Mr. Barnes was to keep the money obtained by the second mortgage and the home improvement loan. Respondent Reaves agreed to assume the existing mortgage, the second mortgage and the home improvement loan. Respondent Reaves advised Mr. Barnes to state to the lender that the purpose of the loans were for home improvements. Respondent Reaves executed a hold harmless and indemnity agreement which stated as follows: "Phyllis Reaves does agree to hold Stephen. B. Barnes harmless and does indemnify him against any future liability or losses related to the mortgages on property at 13222 - 88 Place North, Seminole, Florida." The sales transaction closed on August 10, 1983, and Respondent Reaves received a real estate brokerage commission in the amount of $2,513.45 and a mortgage brokerage fee of $946.25. Respondent Reaves failed to assume and pay the notes and mortgages and thereby caused the seller to become delinquent with the lenders. COUNT VI On September 3, 1983 Respondent Reaves entered into a real estate sales contract with Floyd and Christine Erwin, as sellers, to purchase certain real estate through the use of a land trust. The contract concerned Floyd and Christine Erwins' home located at 2805 Candlewood Drive in Clearwater, Florida. The purchase and sale agreement provided for a total purchase price of $53,000. The agreement listed C-21 A Little Bit Country as escrow agent for the binder deposit. The agreement further provided that the "listing agent agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." Respondent Reaves agreed to assume the existing mortgages of $16,766.29 and $17,457.94. In addition, the sellers agreed to obtain a new mortgage in the principal amount of $4,900 and a $1,500 personal loan. Upon the advice of Respondent Reaves, the sellers stated to the lender that the purpose of the loans were for home improvements. Respondent Reaves and the sellers agreed that the sellers would keep the money obtained by the loans and that Respondent Reaves would assume the mortgages and make all of the required loan payments. The sellers agreed that the balance of the sales price was to be paid via a purchase money mortgage, payable by Respondent Reaves, in the principal amount of $12,375.77. Respondent Reaves executed a hold harmless and indemnity agreement which stated as follows: "Phyllis Reaves does agree to hold Floyd S. Erwin and Christine E. Erwin harmless and does indemnify them against any future liability or losses related to mortgages or liens on the subject property at 2805 Candlewood Drive, Clearwater, Florida." Floyd and Christine Erwin's home was listed with a broker, and the Erwins understood that Reaves was not their agent. Respondent Reaves told the Erwins that she was representing "some investors." The purchase money mortgage note was actually signed by "Michael R. Fisher, as trustee and not personally." Respondent Reaves made some payments on the purchase money mortgage note which was signed by Michael Fisher. The sales transaction closed on September 23, 1983, and Respondent Reaves received a real estate brokerage commission in the amount of $1,555.50. Respondent Reaves failed to assume and pay the mortgages and notes. Respondent Reaves has not made the payments due on the mortgages and notes and has caused the Erwins to become delinquent with their lenders. COUNT VII The evidence presented concerning Count VII consisted solely of documentary evidence. For reasons enumerated in the Conclusions of Law section, infra, the documents alone are insufficient to establish the basis of any offense. Therefore, a discussion of those documents would serve no useful purpose. COUNT VIII On October 16, 1983, Respondent Reaves entered into a real estate sales contract with Patricia and William Willis as sellers, to purchase certain real estate through the use of land trust. The contract concerned the Willis' home located at 417 North Missouri Avenue, Clearwater, Florida. The purchase and sale agreement provided for a total purchase price of $54,000. The agreement listed C-21 A Little Bit Country as escrow agent for the binder deposit. The agreement further provided that the listing agent ". . . agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." Respondent Reaves and the Willis' agreed that Respondent would assume the existing mortgage of $15,396.52. The sellers agreed to obtain the new mortgage in the principal amount of $34,100. The sellers agreed that the balance of the sales price would be paid via a purchase money mortgage in the principal amount of $8,898.45 to be paid by Respondent Reaves. Respondent Reaves agreed to assume the existing mortgage and the new mortgage in the amount of $34,100 and make all of the required loan payments. Respondent Reaves advised the Willis' to state to the lender that the purpose of the $34,100 mortgage loan was for home improvements. The Willis' applied for the loan but refused to state that the purpose of the loan was for home improvements. Respondent Reaves executed a hold harmless agreement which stated as follows: "Phyllis Reaves does agree to hold Patricia L. Carrah, a/k/a Patricia L. Willis and William Willis harmless and does idemnify them against any future liability for losses related to any mortgages or liens on the subject property " The sales transaction closed on November 23, 1983 and Respondent Phyllis Reaves received a real estate brokerage commission in the amount of $3,213 and a mortgage brokerage fee of $2,216. Respondent Reaves failed to assume the notes and mortgages and thereby caused the sellers to become delinquent with their lenders. COUNT IX No evidence was presented concerning the allegations of Count IX. COUNT X No evidence was presented concerning the allegations of Count X. COUNT XI No evidence was presented concerning the factual allegations of Count XI. COUNT XII No evidence was presented concerning the factual allegations of Count XII. COUNT XIII No evidence was presented concerning the factual allegations of Count XIII. No evidence was presented concerning the factual allegations of Count XIV. COUNT XV on January 13, 1984, Respondent Reaves entered into a real estate sales contract with Clifford and Virginia Miner, as sellers, to purchase certain real estate through the use of a land trust. The contract concerned the Miner's home located at 1247 Burma Avenue, Clearwater, Florida. The purchase and sale agreement provided for a total purchase price of $62,000. The agreement listed "C-21 A Little Bit Country" as escrow agent for the binder deposit. In addition, the agreement provided that the listing agent ". . . agrees to pay C-21 A Little Bit Country cooperating agent 3.5% of the total purchase price on closing." Respondent Reaves and the sellers agreed that Respondent Reaves would assume the existing mortgage of $34,424.82. Respondent Reaves advised the sellers to obtain a $20,000 second mortgage that she would also assume. The sellers were to obtain the mortgage and keep the money as their equity, and Respondent Reaves was to assume the mortgage and make the payments. The sellers agreed that the balance of the sales price was to be paid via a purchase money mortgage in the principal amount of $6,865.33, payable by Respondent Reaves. Respondent Reaves promised the sellers that she would make all the required loan payments and assume the mortgages. Respondent Reaves executed a hold harmless agreement which stated as follows: "Phyllis Reaves does agree to hold Clifford S. Miner and Virginia N. Miner, his wife, harmless and does idemnify them against any future liability or losses related to any mortgages or liens on the subject property . . . ." The purchase money mortgage note was actually signed by Michael R. Fisher, "as trustee and not personally." Respondent Reaves told Mr. Miner that the hold harmless agreement provided additional assurance that she would personally assume all of the mortgage and loans. The sales transaction closed on January 31, 1984, and Respondent Phyllis Reaves received a real estate brokerage commission in the amount of $1,823.25 and a mortgage brokerage fee of $949.48. Respondent Reaves failed to assume and pay the notes and caused the Miners to become delinquent with their lenders, requiring them to "catch up" on the delinquent loan. COUNTS XVI, XVII AND XVIII. The evidence presented concerning Count XVI, XVII and XVIII consisted solely of documentary evidence. For reasons enumerated in the Conclusions of Law section of this Recommended Order, the documents alone are insufficient to establish the basis of any offense. Therefore, a discussion of those documents would serve no useful purpose. COUNT XIX During the later part of 1984, an investigator, representing the Department of Professional Regulation, went to speak to Mrs. Ruffin at her "Little Bit of Country" office concerning this case. The investigator requested that he be provided with the records from all of Respondent Reaves' transactions. Respondent Ruffin stated that she was unaware of the particular real estate transactions in question, but that she would check and provide the records at a later date because she was in the process of moving the location of her office. After subpoena was served, Respondent's counsel provided one of the documents in question. COUNT XX Respondent Ruffin employed Respondent Reaves as a salesman. Respondent Ruffin thought of Respondent Reaves as "an independent contractor." Respondent Reaves decided on her own hours and took care of her own transportation. Respondent Ruffin and Respondent Reaves were on an 85%-15% split fee arrangement. Respondent Ruffin knew that Reaves was interested in "buying a lot of property." Respondent Ruffin was basically aware of the method that Respondent Reaves was using to obtain property. Respondent Ruffin did not feel that the method was wrong, however, she did ask Respondent Reaves to leave employment after she received many calls complaining about Respondent Reaves and information that Respondent was in a "tight financial situation." Respondent Ruffin admitted that she had very little time to provide assistance or guidance to Respondent Reaves. DOAH CASE NO. 85-2454 COUNT I There was no evidence presented concerning the factual allegations of Count I. COUNT II There was no evidence concerning the factual allegations of Count II. COUNT III On October 2, 1984, an investigator, representing the Department of Professional Regulation, went to speak with Respondent Ruffin at her office. The investigator requested certain records relating to Respondent Reaves' transactions concerning the charges herein. Respondent Ruffin stated that she was unaware of the particular real estate transactions in question, but that she would check and provide the records at a later date because she was then in the process of moving her office. After a subpoena was served, Respondent Ruffin's attorney provided one of the documents in question. COUNT IV There was no evidence presented concerning the factual allegations of Count IV of DOAH Case No. 85-2454.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that Respondent Phyllis I. Reaves' license as a real estate salesman be revoked; and, RECOMMENDED that Respondent Annette J. Ruffin be issued a written reprimand and assessed an administrative fine of $500.00. DONE and ORDERED this 27th day of March, 1986, in Tallahassee, Florida. W. MATTHEW STEVENSON, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of March, 1986. APPENDIX The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner Adopted in Finding of Fact 1. Adopted in Findings of Fact 2 and 3. Adopted in Findings of Fact 8 and 11. Adopted in Finding of Fact 10. Adopted in Finding of Fact 10. Adopted in Finding of Fact 12. Adopted in Findings of Fact 15 and 16. Partially adopted in Finding of Fact 17. Matters not included therein are rejected as subordinate and/or unnecessary. Adopted in Finding of Fact 18. Adopted in Finding of Fact 20. Adopted in Findings of Fact 20 and 21. Adopted in Finding of Fact 23. Adopted in Finding of Fact 24. Adopted in Finding of Fact 26. Adopted in Findings of Fact 26 and 27. Adopted in Findings of Fact 31 and 32. Adopted in Finding of Fact 34. Adopted in Findings of Fact 37 and 38. Adopted in Findings of Fact 36 and 38. Adopted in Finding of Fact 40. Adopted in Finding of Fact 47. Adopted in Finding of Fact 49. Adopted in Findings of Fact 49 and 50. Adopted in Finding of Fact 55. Rejected as not supported by competent, substantial evidence. Rejected as not supported by competent, substantial evidence. Rejected as not supported by competent, substantial evidence. Rejected as not supported by competent, substantial evidence. Adopted in Finding of Fact 57. Adopted in Finding of Fact 58. COPIES FURNISHED: James H. Gillis, Esquire Division of Real Estate Post Office Box 1900 Orlando, Florida 32801 Gerald Nelson, Esquire 4950 West Kennedy Boulevard Tampa, Florida 33809 E. A. Goodale, Esquire 14320 Indian Rocks Road Largo, Florida 33540 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff, Executive Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802
The Issue The issue for determination at the final hearing was whether the Respondent violated the real estate licensing law, as alleged in the Administrative Complaint, by failing to account and deliver a deposit; failing to maintain a deposit in a real estate brokerage escrow account or some other proper depository until disbursement thereof was properly authorized; and/or being guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, and/or breach of trust in a business transaction.
Findings Of Fact Based on my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, I hereby make the following findings of fact: Respondent is now, and was at all times material hereto, a licensed real estate broker in the State of Florida having been issued license number 0360741. The last license issued was as a broker, c/o Consolidated American Realty Services, Inc., in Tampa, Florida. From June 6, 1983, through June 25, 1984, Respondent was licensed and operating as a real estate broker under the trade name, "Benjamin Realty," in Tampa, Florida. For sometime prior to June 2, 1984, Eileen Cumbie attempted to sell a lot owned by her located at 1102 26th Avenue, Tampa, Florida. On June 2, 1984, the Respondent contacted Ms. Cumbie and informed her that he had a client interested in purchasing the property. Ms. Cumbie informed the Respondent that as long as she netted a certain amount, she would be willing to sell the property. Ms. Cumbie allowed the Respondent to put together a contract for the sale of the lot. In connection therewith, the Respondent prepared a sales contract with Danilo Castellanos, as purchaser, and Eileen W. Cumbie, as seller, for the purchase and sale of the property. Pursuant to the purchase and sales agreement, the Respondent received in trust from Mr. Castellanos a $500 earnest money deposit via check dated June 2, 1984. On June 5, 1984, the Respondent deposited the check into his real estate brokerage account maintained at the Central Bank of Tampa, 2307 W. Rennedy Boulevard, Tampa, Florida. Mr. Castellanos entered into the contract for the benefit of his son and daughter-in-law who resided in New Jersey but were planning to relocate to the Tampa area. Mr. Castellanos' daughter-in-law went to look at the lot on June 10, 1984 and decided that she did not like the area in which it was located. The closing of the transaction was set for June 15, 1984. On approximately June 13, 1984, Mr. Castellanos' daughter- in-law informed the Respondent that they were no longer interested in purchasing the property. Ms. Cumbie was out of town during the time of the scheduled closing, but had prepared and signed all of the paperwork in advance. When she returned after June 15, 1984, she called Respondent to find out how the closing went. The Respondent informed her that the buyers failed to go through with the transaction. The contract provided in part as follows: ". . . If the buyer fails to perform this contract within the time specified herein, time being of the essence of this agreement, the deposit made by the buyer shall be disposed of in the following manner: To the Broker an amount equal to his earned commission, but not to exceed 1/2 of the deposit which shall discharge the sellers obligation to him for that service; remainder to the seller to be credited to him against his damages accrued by reason of the breach of contract. " After the transaction failed to close, Ms. Cumbie requested that Respondent give a portion of the deposit to her. The Respondent told Ms. Cumbie that he would give her the entire deposit because she had paid for the survey and a few other items to facilitate the closing of the transaction. Over the next several months, the Respondent, on several occasions, promised to deliver a check to Ms. Cumbie. However, the Respondent never delivered any such check to Ms. Cumbie. Because the Respondent failed to provide Ms. Cumbie with a share of the earnest money deposit, she initiated a civil action in the County Court of Hillsborough County. On October 15, 1985, Ms. Cumbie was awarded a final judgment in the amount of $250 against Respondent for her share of the forfeited earnest money deposit. As of the date of the final hearing, the Respondent had not satisfied the judgment and Ms. Cumbie had not received any proceeds from the forfeited earnest money deposit. Shortly after the transaction failed to close, the purchasers requested that the Respondent return the earnest money deposit to them. However, the Respondent informed them that they were not entitled to the return of the earnest money deposit. The earnest money deposit was never returned to the purchasers. On July 31, 1984, the balance in Respondent's escrow account was $568.83. However, on September 1, 1984, the balance in the Petitioner's escrow account fell to S18.83. From October 31, 1984 to January 1, 1986, the balance in the Petitioner's escrow account remained $3.83.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is therefore, RECOMMENDED that the registration of Fortunato Benjamin- Pabon as a real estate broker be revoked. DONE and ORDERED this 18th day of June, 1986, in Tallahassee, Florida. W. MATTHEW STEVENSON, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of June, 1986. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Department of Professional Regulation 400 W. Robinson Street Orlando, Florida 32801 Fortunato Benjamin-Pabon 2729 N. Ridgewood Avenue, #1 Tampa, Florida 33602 Harold Huff, Executive Director Department of Professional Regulation Division of Real Estate P. O. Box 1900 Orlando, Florida 32802 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact Kenneth W. Schneegold is a licensed real estate broker holding license no. 0078270 issued by the Department of Professional Regulations in the Division of Real Estate. The Respondent was president of Atlantis Properties, Inc., Florida Corporation. Atlantis Properties, Inc., and the Respondent were developers of a condominium to be built and known as Presidential Estates located in St. Petersburg, Florida. On or about January 10, 1981, Daniel K. Cullinan and J. Kent Staley entered into a written Reservation Agreement with Atlantis Properties, Inc., and the Respondent, as president, to reserve a unit within Presidential Estates. Pursuant to the Reservation Agreement a deposit of $1,000.00 was paid to ERA Kent Warren Realty in the form of a check received by the Respondent. The Reservation Agreement specified that the $1,000.00 deposit was to be held in the ERA Kent Warren Realty escrow account. The $1,000.00 deposit was paid in the form of a check signed by Daniel K. Cullinan on January 10, 1981. The deposit was placed into the escrow account of ERA Kent Warren Realty in the Pinellas Bank in St. Petersburg, Florida, on or about January 12, 1981. ERA Kent Warren Realty is the name under which the Respondent trades and the ERA Kent Warren Realty escrow account is the escrow account of the Respondent. This escrow account was maintained by the Respondent in his capacity as real estate broker. Pursuant to the terms of the Reservation Agreement, the $1,000.00 deposit was to be returned to the prospective buyer if one of the following occurred: In the event that the Agreement was terminated, the buyer would be entitled to an immediate and unqualified refund of reservation deposit. Said agreement could be terminated by the buyer upon written request at any time prior to the execution by the parties of a Purchase Agreement. The written notice was to be delivered by certified mail. The Agreement was also to terminate and the deposit would be returned if, by the first anniversary date of the Reservation Agreement, the purchase agreement had not been entered into by the parties. More than one year after the signing of the Reservation Agreement a purchase agreement had not been entered into by the parties. Cullinan made verbal demands upon the Respondent for return of his $1,000.00 deposit on several occasions. The Respondent did not account or deliver the $1,000.00 deposit to Cullinan. Cullinan sent a certified letter to the Respondent terminating the Reservation Agreement and requesting return of the $1,000.00 deposit. This written request was made on or about January 22, 1983. The certified letter was returned to Cullinan as unclaimed by the Respondent. The Respondent acknowledged that he was aware of Cullinan's request for the return of the $1,000.00 and also aware of his written request for the return of the $1,000.00 deposit. The Respondent communicated with Staley who did not demand termination of the agreement and return of the money from the Respondent. During the time from January 25, 1982, through February 28, 1983, prior to the return of the $1,000.00 deposit to Cullinan, the ERA Kent Warren Realty escrow account fell to a balance below $1,000.00 on no less that 16 occasions. The Respondent admits that his escrow account did fall below $1,000.00 on several occasions during the above mentioned time period. Cullinan nor Staley never gave their consent to the removal or use of the $1,000.00 deposit for any purpose other than those specified in the agreement. After complaint was lodged with the Division of Real Estate, the Respondent under compulsion from the Real Estate Commission paid the $1,000.00 deposit to Cullinan.
Recommendation Having found the Respondent guilty of violation Section 475.25 (1)(k), Florida Statutes, by failing to maintain monies in his escrow account properly it is recommended that the Respondent's license as real estate broker be suspended for a period of three months and that he be fined a sum of $1,000.00. DONE AND ORDERED this 27th day of November, 1984, at Tallahassee, Florida. STEPHEN F. DEAN 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 27th day of November, 1984. COPIES FURNISHED: James R. Mitchell, Attorney for Petitioner DPR-Division of Real Estate 400 W. Robinson St. P.O. Box 1900 Orlando, Florida 32802 Mr. Kenneth W. Schneegold 11360 Fourth Street, East Treasure Island, Florida 33706 Mr. Harold Huff Director, Division of Real Estate Department of Professional Regulation 400 West Robinson Street Orlando, Florida 32801
The Issue The issues for determination in this proceeding are whether Respondent violated Sections 475.426(1)(a) and 475.25(1)(a), (b), and (e), Florida Statutes, 1/ by: acting as a broker; failing to deposit money in escrow; committing fraud, deceit, or dishonesty; and, if so, what, if any, penalty should be imposed.
Findings Of Fact Petitioner is the governmental agency responsible for issuing licenses to practice real estate and for regulating licensees on behalf of the state. Respondent is a licensed real estate sales person under license number 0585127. In September, 1992, Respondent's real estate license had lapsed. It was renewed on October 22, 1992. The last license issued to Respondent was issued as a sales person at 457 Loma Bonita Drive, Davenport, Florida. Respondent is a British citizen doing business in Florida. Respondent owns 50 percent of the outstanding stock of Newbay Florida Associates ("Newbay") and Newbay Properties of Central Florida, Inc ("Newbay Properties"). Mr. Paul Chandler is a British citizen confined to a wheelchair by osteogenesis imperfecta, a bone disease. Mr. Chandler was injured in an automobile accident by a drunken driver in 1989. As a result, Mr. Chandler was awarded a jury verdict of $600,000. From the net proceeds of the jury verdict, Mr. Chandler purchased four houses in Florida from Respondent. The houses were for Mr. Chandler and members of his family who have disabilities similar to Mr. Chandler's. 2/ Mr. Chandler paid the remainder of his jury award, approximately $225,000, to Respondent to purchase a furniture franchise. The franchise was to be operated as Flamingo Interiors, Inc. ("Flamingo"), in Kissimmee, Florida. In September, 1992, Respondent and Mr. Chandler negotiated and executed a Franchise Rights Agreement (the "agreement"). The agreement identifies Mr. Chandler as the "franchisee" but otherwise conceals material facts and contains misrepresentations, false promises, false pretenses, and amounts to dishonest dealing by trick, scheme, or device. The agreement illustrates Respondent's fraud and breach of trust in a business transaction. The agreement contains the name "NEWBAY FLORIDA ASSOCIATES" across the top of the front page of the document. However, the agreement identifies the "franchisor" as Flamingo Interiors of Wells, Somerset, England. The agreement requires Flamingo Interiors to perform numerous obligations. The obligations include: setting up a retail store; providing all necessary training, licensing, qualifications, visas, and inventory; conveying an exclusive area of operation within an "eight (8) miles radius from the Newbay office;" and establishing the location and size of the retail store at the discretion of Newbay. The agreement represents that Newbay owns 25 percent of the outstanding stock in Flamingo Interiors. However, the agreement conceals Flamingo Interiors' place of formation, organization, and current status, and conceals Newbay's authority, or lack of authority, to bind Flamingo Interiors to the obligations of the franchisor in the agreement. Respondent is the only signatory to the agreement other than Mr. Chandler. Respondent signed the agreement on behalf of Newbay. No one from Flamingo Interiors is a signatory to the agreement. The purchase price under the agreement requires Mr. Chandler to deposit $45,000 upon execution of the agreement. The balance of $180,000 is to be paid by December 31, 1992. Mr. Chandler paid the $225,000 required under the agreement in three checks made payable to "Newbay Clients Account." Respondent represented that the amounts paid by Mr. Chandler would be held in the escrow account of Newbay Properties until the obligations of the franchisor were completed in accordance with the terms of the agreement. All negotiations were conducted in the offices of Newbay Properties. Newbay Properties had no escrow account. Respondent failed to place the $225,000 paid to him by Mr. Chandler into any escrow account. The obligations of the franchisor were never satisfied, in whole or in part. Neither Respondent, Newbay, nor Flamingo Interiors made any attempt to obtain performance of the obligations of the franchisor. After repeated efforts and requests by Mr. Chandler, Respondent failed to account for or return Mr. Chandler's money. Respondent never explained his failure to return the money deposited with Respondent by Mr. Chandler.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent not guilty of violating Sections 475.25(1)(k), 475.25(1)(e), and 475.42(1)(a); guilty of violating Section 475.25(1)(b); and revoking Respondent's real estate sales license. RECOMMENDED this 8th day of February, 1995, in Tallahassee, Florida. DANIEL S. MANRY 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 8th day of February 1995.
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint issued against him and, if so, what penalty should be imposed.
Findings Of Fact Based on the evidence adduced at the "formal hearing," and the record as a whole, the following findings of fact are made: Respondent is now, and has been since October of 2000, a licensed real estate sales associate in the State of Florida, holding license number 695252. He is currently associated with AAA Realty, Inc., a broker corporation doing business in Broward County, Florida. From March 1, 2001, through June 26, 2001, Respondent was an active real estate sales associate with Allen Real Estate, Inc. (Allen), a broker corporation doing business in St. Lucie County, Florida. From June 27, 2001, through August 13, 2001, Respondent was an active real estate sales associate with Realty Unlimited, Inc. (Unlimited), a broker corporation (affiliated with GMAC Real Estate) with offices in Port St. Lucie and Stuart, Florida. Unlimited is now, and has been at all times material to the instant case, owned by Kevin Schevers, a Florida-licensed real estate broker. Gary Sprauer is a Florida-licensed real estate sales associate. He is currently associated with Unlimited. Like Respondent, Mr. Sprauer began his association with Unlimited on June 27, 2001, immediately after having worked for Allen. Respondent and Mr. Sprauer worked as "partners" at both Allen and Unlimited. They had an understanding that the commissions they each earned would be "split 50-50" between them. On February 7, 2001, Allen, through the efforts of Respondent and Mr. Sprauer, obtained an exclusive listing contract (Listing Contract) giving it, for the period of a year, the "exclusive right to sell," in a representative capacity, commercial property located at 3800 South Federal Highway that was owned by Vincent and Renee Piazza (Piazza Property). Paragraphs 6 and 7 of the Listing Contract addressed the subjects of "compensation," "cooperation with other brokers," and "dispute resolution," respectively, and provided, in pertinent part as follows as follows: COMPENSATION: Seller will compensate Broker as specified below for procuring a buyer who is ready, willing, and able to purchase the Property or any interest in the Property on the terms of this Agreement or on any other terms acceptable to Seller. Seller will pay Broker as follows (plus applicable sales tax): 8% of the total purchase price or $15,000 maximum, no later than the date of closing specified in the sales contract. However closing is not a prerequisite for Broker's fee being earned. * * * (d) Broker's fee is due in the following circumstances: (1) If any interest in the Property is transferred . . . , regardless of whether the buyer is secured by Broker, Seller or any other person. * * * COOPERATION WITH OTHER BROKERS: Broker's office policy is to cooperate with all other brokers except when not in the Seller's best interest, and to offer compensation to: Buyer's agents, who represent the interest of the buyer and not the interest of Seller in a transaction, even if compensated by Seller or Broker Nonrepresentatives Transaction brokers. None of the above (if this box is checked, the Property cannot be placed in the MLS). * * * 10. DISPUTE RESOLUTION: This Agreement will be construed under Florida law. All controversies, claim and other matters in question between the parties arising out of or relating to this Agreement or the breach thereof will be settled by first attempting mediation under the rules of the American Arbitration Association or other mediator agreed upon by the parties. . . . Shortly after they left the employ of Allen and began working for Unlimited, Respondent and Mr. Sprauer showed Nicholas Damiano the Piazza Property. Mr. Damiano thereafter made a written offer to purchase the Piazza Property, which the Piazzas accepted, in writing, on July 4, 2001. The sales price was $165,000.00. Mr. Damiano put down a $10,000.00 deposit, which, in accordance with paragraph 2(a) of the contract between Mr. Damiano and the Piazzas (Sales Contract), was "held in escrow by [Unlimited]." The obligations of Unlimited, as escrow agent, were described in paragraph 6 of the Sales Contract, which provided as follows: ESCROW. Buyer and Seller authorize GMAC, Realty Unlimited Telephone: . . . Facsimile: . . . Address: . . . to receive funds and other items and, subject to clearance, disburse them in accordance with the terms of this Contract. Escrow Agent will deposit all funds received in a non- interest bearing account. If Escrow Agent receives conflicting demands or has a good faith doubt as to Escrow Agent's duties or liabilities under this Contract, he/she may hold the subject matter of the escrow until the parties mutually agree to its disbursement or until issuance of a court order or decision of arbitrator determining the parties' rights regarding the escrow or deposit the subject matter of the escrow with the clerk of the circuit court having jurisdiction over the dispute. Upon notifying the parties of such action, Escrow Agent will be released from all liability except for the duty to account for items previously delivered out of escrow. If a licensed real estate broker, Escrow Agent will comply with applicable provisions of Chapter 475, Florida Statutes. In any suit or arbitration in which Escrow Agent is made a party because of acting as agent hereunder or interpleads the subject matter of the escrow, Escrow Agent will recover reasonable attorneys' fees and costs at all levels, with such fees and costs to be paid from the escrowed funds or equivalent and charged and awarded as court or other costs in favor of the prevailing party. The parties agree that Escrow Agent will not be liable to any person for misdelivery to Buyer or Seller of escrowed items, unless the misdelivery is due to Escrow Agent's willful breach of this Contract or gross negligence. Paragraph 12 of the Sales Contract addressed the subject of "brokers" and provided as follows: BROKERS. Neither Buyer nor Seller has utilized the services of, or for any other reason owes compensation to, a licensed real estate broker other than: Listing Broker: Allen Real Estate, Inc. who is a transaction broker and who will be compensated by x Seller _ Buyer _ both parties pursuant to x a listing agreement _ other (specify) Cooperating Broker: GMAC Realty Unlimited who is a transaction broker who will compensated by _ Buyer x Seller _ both parties pursuant to _ an MLS or other offer of compensation to a cooperating broker _ other (specify) (collectively referred to as "Broker") in connection with any act relating to the Property, included but not limited to, inquiries, introductions, consultations and negotiations resulting in this transaction. Seller and Buyer agree to indemnify and hold Broker harmless from and against losses, damages, costs and expenses of any kind, including reasonable attorneys' fees at all levels, and from liability to any person, arising from (1) compensation claimed which is inconsistent with the representation in this Paragraph, (2) enforcement action to collect a brokerage fee pursuant to Paragraph 10, (3) any duty accepted by Broker at the request of Buyer or Seller, which duty is beyond the scope of services regulated by Chapter 475, F.S., as amended, or (4) recommendations of or services provided and expenses incurred by any third party whom Broker refers, recommends or retains for or on behalf of Buyer or Seller. The Damiano/Piazza transaction was originally scheduled to close on July 25, 2001. At the request of the Piazzas, the closing was rescheduled for August 7, 2001. A few days before August 7, 2001, Mr. Sprauer asked Respondent "where the closing was going to take place" and "what title company" would be handling the matter. Respondent replied that the closing was "going to be delayed again because Mr. Damiano . . . was going to have to have some type of cancer surgery." It turned out that the closing was not "delayed again." It took place on August 7, 2001. At the closing were Mr. Damiano, the Piazzas, Respondent, and the closing agent from the title company, First American Title Insurance Company (First American).3 Neither Mr. Schevers, nor Mr. Sprauer, was in attendance. Mr. Sprauer did not even know that the closing was taking place. He was under the impression, based on what Respondent had told him, that the closing had been postponed. Had he not been misinformed, he would have attended the closing. Respondent did not contact Mr. Sprauer following the closing to let him know that, in fact, the closing had occurred. Mr. Schevers, on the other hand, was made aware that closing would be held on August 7, 2001. He was unable to attend because he had "prior commitments." It was Respondent who informed Mr. Schevers of the August 7, 2001, closing date. The morning of August 7, 2001, Respondent went to Unlimited's Stuart office and asked Mr. Schevers for the $10,000.00 Unlimited was holding in escrow in connection with the Damiano/Piazza transaction, explaining that he needed it for the closing that was going to be held later that day. Before complying with Respondent's request, Mr. Schevers contacted First American and asked that he be faxed a copy of the United States Department of Housing and Urban Development Settlement Statement (HUD Statement) that First American had prepared for the closing. As requested, First American faxed a copy of the HUD Statement to Mr. Schevers. Upon reviewing the document, Mr. Schevers "immediately noticed that [it indicated that] the entire commission [of $7,000.00] was going to Allen." Mr. Schevers "then proceeded to call First American" and asked why Unlimited was not "reflected on this settlement statement." Mr. Schevers was told that a First American representative "would get right on it and get back to [him]." Mr. Schevers did not wait to hear back from First American before handing an "escrow check" in the amount of $10,000.00 to Respondent. He instructed Respondent, however, to "not give anybody this check unless that statement [the HUD Statement] [was] changed and reflect[ed] [Unlimited's]" share of the commission earned from the sale of the Piazza Property. He further directed Respondent to telephone him if this change was not made. Respondent did not follow the instructions Mr. Schevers had given him. He delivered the $10,000.00 "escrow check" to the closing agent at the closing, even though the HUD Statement had not been changed to reflect Unlimited's sharing of the commission. At no time during the closing did Mr. Schevers receive a telephone call from Respondent. According to the HUD Statement that Mr. Damiano, the Piazzas, and the closing agent signed at the closing, Allen received a commission of $7,000.00 "from seller's funds at settlement." The document makes no mention of any other commission having been paid as part of the closing. On or about August 9, 2001, Respondent received a "commission check" from Allen. The check was made payable to Respondent and was in the amount of $3,000.00. Under the "DOLLARS" line on the check, the following was typed: 4200 Total Comm[4] 1200 ADVANCE[5] Typed next to "MEMO" on the bottom left hand corner of the check was "DAMIANO-PIAZZA 165,000 S&L." It has not been shown that the "commission check" Respondent received from Allen was for anything other than the commission Allen owed Respondent for services performed when Respondent was still employed by Allen. Mr. Schevers' consent to Respondent's receiving this $3,000.00 "commission check" was neither sought nor given. Less than a week after the closing, having spotted Mr. Damiano mowing grass on a vacant lot that Mr. Damiano owned, Mr. Sprauer walked up to him and asked "how his surgery [had gone]." Mr. Damiano "acted very surprised [like] he didn't know what [Mr. Sprauer] was talking about." Mr. Damiano's reaction to his inquiry led Mr. Sprauer to believe "that the closing had probably taken place." He "immediately contacted [Mr. Schevers] and asked him to check into it." Mr. Schevers subsequently learned from First American that Allen "had gotten all of the [commission] check" at the closing. Mr. Schevers then telephoned Respondent. This was the first communication he had had with Respondent since before the closing. Respondent told Mr. Schevers that "he got the check" and "he would be right over with it." Respondent, however, did not keep his promise. After his telephone conversation with Respondent, Mr. Schevers discovered that Allen "had cut [Respondent] a check and [Respondent] had gone immediately and deposited it." This discovery prompted Mr. Schevers to place another telephone call to Respondent. This telephone conversation ended with Mr. Schevers telling Respondent "he was terminated." Mr. Schevers thereafter notified Petitioner in writing that Respondent was no longer associated with Unlimited. He also filed with Petitioner a complaint against Respondent alleging that Respondent had "acted inappropriately" in connection with the Damiano/Piazza transaction. Mr. Schevers had expected Unlimited to receive, for the role it played in the Damiano/Piazza transaction, "50 percent of the total commission," or $3,500.00, in accordance with the provisions of the "multiple listing service for St. Lucie County."6 He holds Respondent responsible, at least in part, for Unlimited's not receiving these monies.7 At the time of the Damiano/Piazza transaction, Unlimited had contracts with its sales associates which provided that the associates would receive "70 percent of the net" of any commission Unlimited earned as a result of the associates' efforts. Had Unlimited received a commission as a result of the Damiano/Piazza transaction, it would have "split" it with Respondent and Mr. Sprauer as required by the contracts it had with them.8
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Commission issue a final order dismissing the Administrative Complaint issued against Respondent in the instant case in its entirety. DONE AND ENTERED this 7th day of July, 2004, in Tallahassee, Leon County, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 7th day of July, 2004.
The Issue Whether Respondent violated provisions of chapter 475, Florida Statutes (2016),1/ regulating real estate sales brokers, as alleged in the Administrative Complaint; and, if so, what sanctions are appropriate.
Findings Of Fact The Department is the state agency charged with regulating the practice of real estate pursuant to section 20.165 and chapters 455 and 475, Florida Statutes. Ms. Murata is a licensed real estate broker in Florida, having been issued license numbers BK 3266198, 3326041, 3330594, 3334183, 3338731, 3345773, 3346456, 3346845, 3350300, 3364670, 3366527, 3366441, 3368235, 3369788, 3372663 and 3378303. Ms. Murata is under the jurisdiction of Petitioner and subject to applicable statutes and rules. Ms. Murata is the owner of the Florida Qualifying Broker of Record Service and maintains the Internet website, http://floridabrokerofrecord.com, which states its business model to be an opportunity for Florida real estate sales associates to run their own real estate companies without having to share their commissions with the broker of record. Friendly International Realty, LLC ("Friendly"), was formed in June 2011. From March 3, 2016, to June 7, 2016, Ms. Murata was the qualifying real estate broker for Friendly. Ms. Murata agreed to receive a monthly fee of $289.00 in exchange for being the qualifying broker of record for Friendly. Ms. Murata did not physically visit the license location of Friendly, at 937 Northeast 125th Street, North Miami, Florida, 33161, during the time that she was the qualifying broker. Ms. Murata was not a signatory on any escrow account used by Friendly. Ms. Murata did not keep any of Friendly's brokerage records. From March 4, 2016, to November 21, 2016, Jean Berthelot was a registered real estate sales associate with Friendly. He acted as an independent contractor. Ms. Murata was aware that Mr. Berthelot was doing business on the Multiple Listing Service ("MLS"). After she became the broker for Friendly, Ms. Murata activated one sales associate to help Mr. Berthelot. Joan Feloney is the owner of the subject property. Audrey Flanders is a real estate broker acting on behalf of Ms. Feloney in her efforts to lease the subject property. Ms. Flanders received a contract to enter into a lease from Tamara Stanton, a real estate sales associate at Friendly, on behalf of Paul Allicock. Ms. Feloney accepted the offer. Mr. Allicock paid $2,350.00 to Friendly toward lease of the subject property in the form of signed money orders dated March 6 and March 18, 2016. The money was placed in a Friendly escrow account. These money orders were paid to engage the services of Friendly and Ms. Murata as broker in the rental of the subject property. Pursuant to a written statement signed by Ms. Feloney, $550.00 of this amount was to be paid to Friendly, and $1,650.00 was to be paid to Ms. Feloney. A lease agreement between Mr. Allicock as tenant and Ms. Feloney as landlord and owner of the subject property was executed on March 21, 2016. Mr. Berthelot wrote a check from the Friendly escrow account to Ms. Feloney for $1,650.00 on the same date. Ms. Feloney attempted to deposit the check, but on April 14, 2016, the check was returned to her marked "NSF," indicating that insufficient funds were in the account. She was charged a $15.00 return item fee. Under the agreement between Ms. Murata and Friendly, Mr. Berthelot was not authorized to have an escrow account or otherwise hold funds or assets on behalf of a third party. As for brokerage transactions, he was supposed to e-mail transactional records to Ms. Murata or place them in a dropbox. Neither Ms. Stanton nor Mr. Berthelot ever placed documents in the dropbox. But, as Ms. Murata told Investigator Percylla Kennedy, she did learn that Friendly was doing business on the MLS. Ms. Murata became aware of the Friendly escrow account on April 26, 2016, in connection with a complaint about a transaction unrelated to this Administrative Complaint. She discussed the escrow account with Mr. Berthelot on April 27, 2016. Ms. Murata requested that Mr. Berthelot close the escrow account, submit proof that he had closed the account, and turn over all contracts between Mr. Berthelot and current clients. Ms. Murata did not want to perform a reconciliation of the escrow account. As she testified in deposition: Q: When you learned that there were third party funds being held by Friendly International Realty, did you demand the records of that account so you could perform a reconciliation? A: No, because [sic] was to be closed, because I did not want to manage an escrow account. So when I discovered what he was doing, the agreement was that he was going to close it immediately. I was not going to manage an escrow account for him, so I demanded, what I demanded was proof that the account was closed and proof that he had engaged in a written agreement with a title company for all escrow funds. Q: Approximately when did you make that demand? A: The moment that Jessica Schuller came up and he confessed that he had kept the account from his previous broker. That he had not told me because he was going to close it. I threatened I was going to resign once he paid those funds to Jessica. But then I agreed to continue if he closed that account immediately. On May 10, 2016, a complaint was filed with the Department against Ms. Murata, as broker of Friendly, regarding the lease transaction involving the subject property. After Ms. Murata became aware that Friendly owed money to Ms. Feloney, she maintained regular contact with her brokerage in an attempt to ensure that the money owed to Ms. Feloney was paid. Ms. Murata cooperated with the Department's investigation. Ms. Feloney, through Audrey Flanders, requested on June 2, 2016, that the $1,650.00 and an additional service charge of $82.00 be paid within 15 days or a case would be filed with the state attorney's office. The parties stipulated that on June 7, 2016, Ms. Murata resigned from her position as broker of record for Friendly. She testified that she resigned because she had not received the documents or actions that she had requested of Mr. Berthelot. Ms. Murata did not write a check to Ms. Feloney to pay the amount Friendly owed her because, with an investigation underway, Ms. Murata did not want it to be construed as an admission that she had personally collected funds from Mr. Allicock. She also evidently believed that since she had resigned, she was not professionally responsible for obligations that arose during the time that she had been the broker. Ms. Murata convincingly testified that in another, unrelated, situation, she became involved as the broker to resolve a potential dispute by ensuring that the party entitled to funds was paid. On June 25, 2016, a Bad Check Crime Report was filed with the Broward County State Attorney's Office. By letter dated June 8, 2016, the Department requested that Ms. Murata provide copies of monthly reconciliation statements; bank statements and records; and sales, listing, and property management files of Friendly. As Ms. Kennedy testified, Ms. Murata never provided those accounts and records to the Department, saying she did not have them. While Ms. Murata insists that any failure was only because Mr. Berthelot actively kept information from her, the parties stipulated that Ms. Murata failed to maintain control of, and have reasonable access to, some of the documents associated with the rental of the subject property. Mr. Trafton, an experienced real estate broker and expert in real estate brokerages, reviewed chapter 475; Florida Administrative Code Rule Title 61J; the deposit paperwork of Mr. Allicock; the Bad Check Crime Report; the investigative report; and the Administrative Complaint. He prepared an expert report to the Department. As Mr. Trafton testified, the usual and customary standard applicable to brokers is that they must promptly deliver funds in possession of the brokerage that belong to other parties. Mr. Trafton also testified that the standard of care applicable to a broker in supervising sales associates requires active supervision. He also testified that a broker must maintain the records of the brokerage. Mr. Trafton testified that in his opinion, Ms. Murata failed to meet these standards. Ms. Murata failed to promptly deliver funds to Ms. Feloney that were in possession of the brokerage. Ms. Murata failed to manage, direct, and control Real Estate Sales Associate Berthelot to the standard expected of a broker of record. She did not actively supervise him, instead relying completely on Mr. Berthelot and other associates to provide her any information she needed to know. Ms. Murata failed to preserve accounts and records relating to the rental or lease agreement of the subject property. Petitioner did not clearly show that Respondent was guilty of either "culpable negligence" or "breach of trust." As Investigator Kennedy testified, and as corroborated by cost summary reports maintained by the Department, from the start of the investigation of this complaint through September 14, 2017, costs incurred by the Department were $1,443.75, not including costs associated with an attorney's time.
Recommendation Upon consideration of the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Florida Real Estate Commission: Finding Maria Camila Murata in violation of sections 475.25(1)(d)1., 475.25(1)(u), and 475.25(1)(e) as charged in the Administrative Complaint; imposing an administrative fine of $2,250.00; imposing license suspension for a period of two months; and imposing costs related to the investigation and prosecution of the case. DONE AND ENTERED this 2nd day of January, 2018, in Tallahassee, Leon County, Florida. S F. SCOTT BOYD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of January, 2018.
