The Issue Whether either Respondent violated the provisions of chapter 475, Florida Statutes,1/ regulating real estate sales associates, as alleged in the administrative complaints, and if so, what sanctions are appropriate.
Findings Of Fact The Florida Real Estate Commission, created within the Department, is the entity charged with regulating real estate brokers, schools, and sales associates in the State of Florida. The Division of Real Estate is charged with providing all services to the commission under chapters 475 and 455, Florida Statutes, including recordkeeping services, examination services, investigative services, and legal services. In 2006, Ms. Linda Fiorello and Ms. Catherine Lichtman, associates at another brokerage, decided to open up their own real estate business, with each owning a fifty-percent share. They created Luxury Realty Partners, Inc. (“the corporation”), a licensed real estate corporation in the State of Florida. While Ms. Lichtman was initially the qualifying broker, she soon stepped down from that position and a series of other individuals served as brokers for the corporation. Neither Ms. Fiorello nor Ms. Lichtman was licensed as a real estate broker at any time relevant to the Administrative Complaints. The corporation sold, exchanged, or leased real property other than property which it owned and it was not an owner-developer. On April 23, 2010, Mr. Brian Davis was added as the sole officer and director of the corporation, and he became the qualifying broker. At all times material to the complaints, Ms. Fiorello and Ms. Lichtman were licensed as real estate sales associates in the State of Florida, Ms. Fiorello having been issued license number 659087 and Ms. Lichtman having been issued license number 3170761. They worked together at the corporation, nominally under the direction, control, and management of Mr. Davis. The corporation did not maintain an escrow account. Mr. Davis did not manage any of the corporation’s bank accounts. He was not a signatory on the operating account. He did not collect brokerage commissions or distribute them to sales associates. He testified he went into the office “maybe once, once or twice a month.” When he agreed to become the qualifying broker for the corporation, he did not even know all of the names of the agents he was supposed to be responsible for. Mr. Davis stated: Well, basically, I was just doing a favor and I was – I put my license there until one of the other two could get their Broker’s license. I was just really stepping in for a short term to – to fill the time frame until one of them could get their Brokerage license, and I didn’t go on any management or any other books or anything of that nature. As Ms. Patty Ashford, one of the sales associates testified, Mr. Davis was seldom in the office. Ms. Ashford would turn in her contracts to Ms. Fiorello or Ms. Lichtman, who would review them. Ms. Ashford testified that her commission checks were then paid by checks signed by Ms. Lichtman. In short, Mr. Davis effectively provided no direction, control, or management of the activities of the corporation or its sales associates. In December of 2009, Ms. Jennie Pollio was living at 10861 Royal Palm Boulevard in Coral Springs, Florida (the property), a Section 8 property that she had been renting from Mr. Jimmy Laventure for about nine years. The property was in foreclosure. Ms. Pollio thought that she might be able to buy the property. She consulted Ms. Victoria Guante, a real estate sales associate with Luxury Realty Partners, Inc. Ms. Pollio knew Ms. Guante because they both had sons who played baseball on the same team. Ms. Guante told Ms. Pollio to get $40,000.00 in cashier’s checks and put it in escrow with Luxury Realty Partners, Inc., so that she could make a strong offer and show that she really had the money. Although they were not produced as exhibits at hearing, Ms. Pollio testified that she signed a couple of different contracts for the property in early 2010. On or about April 29, 2010, Ms. Guante accompanied Ms. Pollio to the bank to get cashier’s checks. Ms. Pollio received five Bank of America cashier’s checks made out to “Luxury Partner Realty,” four in the amount of $9000.00, and one in the amount of $4000.00. Ms. Pollio understood that the property could be purchased for a total of $40,000.00, which included $37,000.00 for the property, and the balance in closing costs. The cashier’s checks were not given to a broker. Ms. Pollio gave the $40,000.00 to Ms. Fiorello as a deposit on the property when she met with her in the corporation office on State Road 7. Ms. Pollio made a copy of the cashier’s checks and Ms. Fiorello wrote a note on the bottom of the copy, “Received by Linda A. Fiorello for Luxury Escrow deposit on contract 10861 Royal Palm Blvd Coral Springs FL 33065” and gave it back to Ms. Pollio.2/ Although the payee name on the cashier’s checks was transposed, Ms. Pollio gave the checks to Ms. Fiorello as agent of the corporation as a deposit on the property, and Ms. Fiorello accepted the checks on behalf of the corporation for the same purpose. Ms. Fiorello did not advise Mr. Davis that the checks had been received. Instead, she deposited the checks in an account formerly belonging to Luxury Property Management, an entity unaffiliated with Luxury Realty Partners, Inc.3/ Luxury Property Management had never been a licensed real estate brokerage corporation, and was no longer in existence, as it had been dissolved. The account had never been properly closed. The account usually had a low balance. Just prior to the deposit of Ms. Pollio’s money, the balance was $10,415.15. Ms. Lichtman had no ownership or interest in Luxury Property Management, but she was aware of the account. The corporation did not have an escrow account, and the Luxury Property Management account was sometimes used to hold money “in escrow,” as Ms. Lichtman was aware. As he testified, Mr. Davis knew nothing about this account and did not authorize Ms. Fiorello to place Ms. Pollio’s deposit there. Ms. Fiorello’s contrary testimony that she told Mr. Davis of the transaction and had his authorization was not credible and is rejected. Ms. Guante was negotiating for the property on Ms. Pollio’s behalf. She testified: At that point the guy was asking (unintelligible) I think was sixty-five, and then we made the offer for $40,000.00. The guy came back and say “no,” and then we went back and make another offer for $50,000.00, and then by that time the guy still say “no.” And then her and I get into an argue because baseball game that don’t have nothing to do with the real estate and then she decided she don’t want me no more as her agent. Ms. Guante called Ms. Fiorello and told her that Ms. Pollio didn’t want to work with Ms. Guante anymore. Ms. Fiorello told Ms. Guante not to worry about it, that the corporation would handle the transaction for Ms. Pollio. On September 23, 2010, a check in the amount of $40,000.00 was written from the Luxury Property Management, LLC, account to Luxury Realty Partners. It is undisputed that the hand writing on the “amount” and “pay to the order of” lines on the check was that of Ms. Lichtman, while the signature on the check was that of Ms. Fiorello. This check, posted into the corporation’s operating account the same day, along with a check for $6000.00, left a balance of only $684.15 in the Luxury Property Management, LLC, account. The two sales associates gave completely different explanations for the check. Ms. Fiorello testified that she always left one or two signed checks locked in the office when she was out of town. She testified that only she and Ms. Lichtman had keys to the lock. Ms. Fiorello testified that without her knowledge, Ms. Lichtman had removed a signed check and filled in the top portion. She testified that although it was her account, she did not realize that the money had been removed until around May 2011, some eight months later.4/ On the other hand, Ms. Lichtman testified that on numerous occasions, the two associates would write out checks together, and that in this instance they discussed the transfer in connection with the opening of a Rapid Realty real estate office in New York which involved Ms. Fiorello’s son. Ms. Lichtman testified that she filled out the top portions of the check, and Ms. Fiorello then signed it. Ms. Lichtman testified that the $40,000.00 “represented monies coming back into Luxury Realty Partners from Rapid Realty.” Ms. Lichtman did not explain why funds from Rapid Realty to repay a loan from Luxury Realty Partners would have been deposited into the Luxury Property Management account, and records for the Luxury Property Management account do not reflect such deposits. On November 4, 2010, a little over a month later, Ms. Lichtman transferred $40,000.00 from the corporation operating account into an account for Chatty Cathy Enterprises, an account controlled by her, and inaccessible to Ms. Fiorello. Ms. Lichtman’s explanation for these transfers, that the $40,000.00 came from the New York real estate venture in repayment of a loan made from the corporation, was unpersuasive, and is rejected. First, the only documentary evidence of a loan made to the “start-up” was an unsigned half-page note dated April 30, 2010. That document indicated that an interest-free business loan in the amount of 25,000 would be made from the corporation to “Rapid Realty RVC and its owners” and that re- payment of the loan would be made in monthly payments to the corporation. No amount was specified for these payments. Similarly, there was no evidence of any repayment checks from Rapid Realty to Ms. Fiorello, Ms. Lichtman, or the corporation. A document dated November 5, 2010, purports to be a “formal release” of that loan. It states in part: The above stated note lists a dollar amount of $25,000 dollars which is inaccurate. The total balance of the loan was approximately $48,000 dollars that was loaned by Luxury Partners Realty (sic), Catherine A. Lichtman and Linda A. Fiorello. This is the formal dollar amount of the loan that is considered paid and satisfied in full. This release appears to be signed by Ms. Lichtman and Ms. Fiorello. Even assuming that the loan had been repaid in full by the New York venture (although no corporation account deposits indicate this), it is not credible that Ms. Lichtman believed she was personally entitled to a payment of $40,000.00 for repayment of a $48,000.00 loan made by the corporation. The spreadsheet of itemized expenses of the New York office and offered by Ms. Lichtman as proof of amounts loaned has no apparent correlation to a spreadsheet prepared by Ms. Lichtman purporting to show checks and cash amounts transferred to New York.5/ In January 2011, Ms. Teresa Ebech, the listing agent for the property with First United Realty, took another contract for the Royal Palm property to Ms. Pollio. This contract referenced a $40,000.00 deposit and listed “Luxury Property Mgt. Escrow” as the escrow. This contract indicated a total purchase price of $55,000.00, and called for a February 21, 2011, closing date. Ms. Pollio signed the contact. The closing did not occur. Ms. Pollio decided to stop trying to buy the property and get her money back. No other party ever acquired an interest or equity in the deposit. Ms. Pollio had difficulty getting in touch with Ms. Fiorello about getting her money back. When Ms. Pollio finally was able to ask Ms. Fiorello for a return of her deposit, Ms. Fiorello did not return it, but told Ms. Pollio that she should get it from Ms. Lichtman. On or about April 28, 2011, Ms. Pollio, with help from her friend, Ms. Joyce Watson, prepared a letter to cancel the contract. The letter noted that the $40,000.00 had been in escrow for over a year and stated that due to the inability of Luxury Realty Partners to close on the property, Ms. Pollio requested immediate return of the deposit. The letter was sent to Catherine Lichtman at the Luxury Realty Partners, Inc., address. Ms. Lichtman’s testimony that she never received the letter is discredited. Ms. Ashford, another real estate sales associate at the corporation, had never met Ms. Pollio, but was in the Luxury Realty Partners, Inc., office one day in May of 2011 when Ms. Pollio came in with her husband. Ms. Ashford testified: She came in with her husband pretty much screaming and yelling from the minute she stepped foot in the door. She was very angry, very upset. I looked at her and said, you know, Ma’am please calm down. She said I’m not calming down. She pointed at Cathy, she said she knows exactly why I’m f’in here. This has nothing to do with you. Ms. Lichtman asked Ms. Ashford to call her husband, which Ms. Ashford did, thinking this was unusual because he never had anything to do with what went on at the office. Ms. Pollio yelled at Ms. Lichtman, and Ms. Lichtman yelled back, each becoming more and more agitated. Ms. Lichtman then left the room and locked the door. The police were called, though Ms. Ashford was not sure if it was Ms. Pollio or her husband, or perhaps Ms. Lichtman’s husband, who called them. Ms. Ashford testified that when the police officer arrived, Ms. Lichtman lied and told him that her name was Victoria. The officer tried to calm both parties, and told them it was a civil matter. The police officer finally persuaded Ms. Pollio and her husband to leave. Ms. Ashford testified as follows about the conversation that took place between Ms. Lichtman and Ms. Ashford after Ms. Pollio left: Q What did you say? A I asked her point blank what the hell was going on and she responded. Q What did she respond? A That yes, she had her money. The money was-– Q When you said her money. What-–what are talking about? A She had Jennie’s money. Q She-- A It was a deal, a transaction. “She came into our office with cash coming out of her boobs and I don’t have to give it back.” Were her words. Q Did you tell Cathy that she had to return the money? A Yes, I did. I said “Cathy, its escrow money, it doesn’t matter where she got it from,” and Cathy went on about “it’s illegal she’s a dancer, she’s on Section 8. I’m going to report it to the IRS. She thinks she buying a f’in house.” Ms. Lichtman’s admission to Ms. Ashford after Ms. Pollio left showed that Ms. Lichtman knew that she had money in her possession that had been given by Ms. Pollio to buy a house. Ms. Ashford testified that she was upset, as an agent with the corporation, about what appeared to be going on. She and Ms. Fiorello met with Mr. Davis in April of 2011. Ms. Fiorello told Mr. Davis that Ms. Lichtman had stolen funds. Mr. Davis reviewed the January contract that Ms. Fiorello gave him, and concluded that it didn’t make much sense. He had not given any authorization to place escrow funds into the Luxury Property Management, LLC, account. He did not have access to that account or to any of the corporation’s operating accounts to determine if money was missing. After the meeting, Mr. Davis asked Ms. Lichtman what she knew about the accusation. Ms. Lichtman denied that she took any money from an escrow account. Mr. Davis called the Florida Real Estate Commission and reported the incident. At some point, Ms. Lichtman advised Ms. Pollio that the cancellation letter was not sufficient, and provided Ms. Pollio with a “Release and Cancellation of Contract for Sale and Purchase” form. Mr. Laventura signed the form in June 2011, and Ms. Pollio signed the form when she returned it to Ms. Lichtman at the Luxury Realty Partners, Inc., office. The form released Luxury Partner Realty from liability and indicated that the escrow agent should disburse all of the $40,000.00 deposit to Ms. Pollio. At the time of the final hearing, Ms. Pollio had yet to receive her $40,000.00 deposit back. The testimony and documentary evidence in this case clearly demonstrates a recurring and systematic disregard of the legal entities and procedures intended to provide structure and accountability to business and real estate transactions by both Ms. Fiorello and Ms. Lichtman. Ms. Fiorello and Ms. Lichtman employed a qualifying “broker” for the corporation, but intentionally assumed the responsibilities of that position themselves during the time relevant to the Administrative Complaints. In doing so, they each operated as a broker without being the holder of a valid and current active brokers’ license. No evidence was introduced at hearing to indicate that the professional license of either Ms. Fiorello or Ms. Lichtman has ever been previously subjected to discipline.
Recommendation Upon consideration of the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that final orders be entered by the Florida Real Estate Commission: Finding Linda Fiorello in violation of sections 475.25(1)(k), 475.25(1)(d), 475.42(1)(d), 475.42(1)(a), 475.25(1)(b), and 475.25(1)(a), Florida Statutes, as charged in the Amended Administrative Complaint, and imposing an administrative fine of $10,000.00, reasonable costs, and revocation of her license to practice real estate; and Finding Catherine A. Lichtman in violation of section 475.25(1)(d), Florida Statutes, as charged in the Administrative Complaint, and imposing an administrative fine of $1000.00, reasonable costs, and revocation of her license to practice real estate. DONE AND ENTERED this 11th day of June, 2015, 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 11th day of June, 2015.
The Issue The central issue in this case is whether Respondent is guilty of the violations alleged in the Administrative Complaint; and, if so, what penalty should be imposed.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, I make the following findings of fact: Respondent, Naomi N. Radcliff, is licensed in Florida as a real estate broker (license No. 0369173) and has been at all times material to the Administrative Complaint. On December 2, 1987, Respondent submitted a Request for License or Change of Status form which sought to cancel the license. Thereafter, the Department reclassified Respondent as an inactive broker. In July, 1986, Randy Mangold and his wife entered into a contract to purchase real property located in Indian River Estates. Naomi Radcliff was the real estate agent who handled the transaction on behalf of the Mangolds. The Mangolds' contract provided for occupancy prior to closing with a security deposit for the rental in the amount of $1500. This amount was paid to Respondent. At closing the $1500 security deposit was to be applied to the buyers' closing costs. The Mangolds rented the home for a year and attempted to obtain financing for the purchase. When their mortgage application was denied, they elected to vacate the property. After they vacated the property, the Mangolds requested the return of the $1500 security deposit. Demands were made on Respondent who refused to return the deposit despite the fact that the Mangolds had fully paid all rents owed and had left the house in good condition. Finally, the Mangolds sued Respondent in the St. Lucie County Court and obtained a judgment for the $1500 security deposit. Respondent has not satisfied the judgment. At one point Respondent did give the Mangolds a check for $500 which was returned due to insufficient funds in the account. In December, 1986, Respondent acted as a rental agent for Walter Zielinski, an out-of-state owner. Mr. Zielinski owned two houses in Port St. Lucie, one of which was located at 941 Fenway. In early December, 1986, Respondent advised Mr. Zielinski that the tenants had left the home at 941 Fenway and that the unit was in fairly good condition. Sometime later in the month, Mr. Zielinski discovered the house was empty but that it had been damaged. There were holes in the wall in the utility room approximately two feet in diameter. The flooring in the utility room and kitchen was ripped up. There was a hole in the wall in the master bedroom. More important to Mr. Zielinski, the house was unsecured because the garage door latch was broken and the house was accessible through the garage. After discovering the unit was at risk for additional damage, Mr. Zielinski attempted to contact Respondent but numerous calls to Respondent, her place of work, and to a former employer proved to be unsuccessful. Finally, Mr. Zielinski obtained another real estate agent to represent the 941 Fenway home. The new agent, Cathy Prince, attempted to obtain from Respondent the keys, the security deposit, and the rent money belonging to Mr. Zielinski. In January, 1987, Mr. Zielinski came to Florida from Illinois to take care of the rental problems. Mr. Zielinski incurred expenses totalling $876.74 to repair the damages to 941 Fenway. Also, Mr. Zielinski wanted to collect the rents owed by Respondent for his other property and have the security deposit for the second property transferred to the new agent. Respondent issued a personal check for the security deposit which was returned for insufficient funds. A second personal check paid to Mr. Zielinski for the rent owed was accepted and cleared. According to Mr. Zielinski, Respondent did not maintain an office where he could find her during the latter part of December, 1986 through January, 1987. In March, 1987, the security deposit for Mr. Zielinski's second rental was paid to the new agent. The check was issued by Respondent's mother. Respondent never personally returned any calls to the new agent. In June, 1986, Alyssa and Jeffrey Maloy entered into a contract to purchase a house. Respondent handled the real estate transaction for the Maloys. The closing was to be December 9 or 10, 1986. Respondent held monies that were required to complete the Maloy closing. Respondent attended the closing but the check tendered to the closing agent, Chelsea Title, was drawn on an trust account which had been closed. The closing agent discovered the problem and requested sufficient funds. Respondent left the closing and returned some hours later with new checks drawn on another account. After checking with the bank, it was again discovered that the funds in the account were insufficient to cover the amount needed for closing. Finally, some days later the Respondent's brother delivered a certified check to cover the amount needed to close the Maloy transaction.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Department of Professional Regulation, Florida Real Estate Commission enter a Final Order suspending the Respondent's real estate broker's license for a period of five years. DONE and RECOMMENDED this 12th day of July, 1988, in Tallahassee, Florida. JOYOUS D. PARRISH 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 12th day of July, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-4631 Rulings on Petitioner's proposed findings of fact: Paragraphs 1-3 are accepted. With regard to paragraph 4, with the exception of the date referenced (November, 1986) the paragraph is accepted. Paragraph 5 is rejected a hearsay evidence unsupported by direct evidence of any source. The first sentence of paragraph 6 is accepted. The second sentence calls for speculation based on facts not in the record and is, therefore, rejected. Paragraphs 7-11 are accepted. With regard to paragraph 12, the first four sentences are accepted; with regard to the balance, the Respondent's brother did deliver funds to allow the Maloy transaction to close however the source of the funds is speculation based upon hearsay unsupported by the record. COPIES FURNISHED: Steven W. Johnson, Esquire Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Darlene F. Keller, Executive Director Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 William O'Neil, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Naomi N. Radcliff 1420 Seaway Drive Fort Pierce, Florida 33482
The Issue Whether Respondent, prior to being licensed as a real estate salesman, committed, among other things, fraud and misrepresentation in violation of Section 475.25(1) and negligence in violation of Section 475.25(3), Florida Statutes (1978), by selling promissory notes which he represented were secured by first mortgages, when they were, in fact, secured by subordinate mortgages; and, if so, the appropriate disciplinary penalty which should be imposed by the Board of Real Estate.
Findings Of Fact Respondent Evers qualified for, and was issued real estate salesman's license no. 0132634 by the Board on June 28, 1974. His license, at his request, has been placed on inactive status since April, 1979. (Testimony of Evers, P.E. 1) During 1972 and 1973, Evers was a mortgage broker and registered security salesman licensed by the Florida Division of Finance and Department of Banking and Finance, Division of Securities. He was employed as a mortgage broker and security salesman by the Washington Development Corporation, with headquarters in St. Petersburg, Florida. (Testimony of Evers, P.E. 2) As a mortgage broker and security salesman, Evers agreed to advertise and sell promissory notes, secured by what purported to be first mortgages, prepared and executed by the Washington Development Corporation ("Corporation"). He was to receive a commission on each completed sale. The Corporation supplied Evers with advertising forms and its promissory notes and mortgage forms. Its salesman, Gary George, taught him how to effectively explain and sell the notes and mortgages, and pointed out the express provision in the mortgage form where the Corporation covenants that the property covered by the mortgage was free and clear of all encumberances except real estate taxes. . . ." George advised Evers to inform prospective purchasers that they would receive a first mortgage, advice which Evers customarily followed. Evers' representations made in connection with sales to Gerald Pendry, Richard C. Tymick, and Eva Baird form the basis for this disciplinary proceeding. [SALE OF NOTE AND MORTGAGE TO GERALD PENDRY] On April 1, 1973, Evers sold to Gerald C. Pendry and his wife a promissory note, with mortgage executed by the Corporation in the amount of $2,000. The mortgage covered Lot 1, Block 18, of the Carlton Village subdivision, Lake County7 Florida. The note obligated the Corporation to pay Pendry 1 percent interest per month, over a period of 24 months. The mortgage, on its face, purported to be a first mortgage. In negotiating the sale with Pendry, Evers expressly represented that the mortgage securing the note was a first mortgage, and such representation induced Pendry to purchase the note. (Testimony of Pendry, Evers, P.E. 4) Subsequently, the Corporation defaulted on its payments; when Pendry brought a foreclosure action against the mortgaged property, he learned that his mortgage was subordinate to a prior and superior mortgage held by Melvin J. Haber. As a result of his subordinate mortgage, Pendry suffered financial loss. (Testimony of Pendry, P.E. 3) [SALE OF NOTE AND MORTGAGE TO RICHARD C. TYMICK] On March 1, 1973, Evers sold to Richard C. Tymick and his wife two promissory notes, one in the amount of $2,500 and the other in the amount of $2,900, each executed and secured by a mortgage given by the Corporation. The mortgages securing the notes covered Lot 8, Block 41, and Lot 12, Block 22, Carlton Village subdivision, Lake County, Florida. The notes obligated the Corporation to pay interest of 1 percent per month over a 48-month period. In negotiating the sale of the two notes, Evers led Tymick to reasonably believe that the notes were secured by first mortgages. (Testimony of Tymick, P.E. 5) The Corporation subsequently defaulted on its payments under the note. When Tymick Instituted a foreclosure proceeding, he learned that his mortgages were subordinate and inferior to a prior mortgage covering the same property held by Melvin Haber. Because of the subordinate nature of his mortgage, Tymick suffered financial loss. (Testimony of Tymick, P.E. 3) [SALE OF NOTE AND MORTGAGE TO EVA BAIRD] On or about October 20, 1972, Evers sold two Corporation promissory notes, secured by mortgages, to Eva R. and Joseph T. Baird. The notes were issued in the total amount of $10,000. The mortgages covered lots located in the Carlton Village subdivision, Lake County, Florida, and Evers affirmatively represented to Eva Baird that they were first mortgages. Without such representation, Eva Baird would not have purchased the promissory notes in question. (Testimony of Eva Biard, P.E. 6) Tie Corporation eventually defaulted on its payments under the notes. It was not until Eva Baird initiated a foreclosure proceeding against the properties that she learned her mortgages were subordinate and inferior to prior mortgages covering the same properties. As a result of her inferior mortgages, she suffered financial loss. (Testimony of Eva Baird) In 1975, the Department of Banking and Finance, Division of Securities, brought a disciplinary action against Evers alleging that he committed fraud by selling the Corporation mortgages and notes to certain persons, including Pendry, Tymick and Baird. After a formal evidentiary hearing, the Department entered a final order dated December 22, 1976, concluding that Evers, by failing to disclose the existence of prior mortgages and ensure that the mortgages were first mortgages (as he represented), committed fraud and a violation of Section 517.301, Florida Statutes. As a result, the Department suspended Evers' security salesman's license for a period of one year. (P.E. 2) At the time he sold the notes and mortgages to Pendry, Tymick and Baird, Evers did not know that the Corporation's mortgages were not, in fact, first mortgages; he believed and wholly relied on Gary George's assurances to him that the mortgages were what they purported to be-first mortgages. He made no attempt to investigate or independently verify the status of these mortgages. Evers, however, had no intent to falsely represent these mortgages to the purchasers; neither did he intend to mislead or deceive them. (Testimony of Evers) [EVIDENCE IN MITIGATION] Evers did not learn that the mortgages in question were not first mortgages until the latter part of 1974. He then made an honest effort to notify and assist those persons who had purchased Corporation notes and mortgages through him. He helped to arrange legal representation for them and defray the cost of having abstracts of title prepared. (Testimony of Evers, R.E. 1-8) Evers suffered considerable financial loss and interruption of Iris livelihood because of his sale of Corporation mortgages and notes. Because he had also purchased a Corporation mortgage which later turned out to be other than a first mortgage, he lost $2,700. Because of the Board's investigation and prosecution of this case, he placed his real estate salesman's license on inactive status to avoid embarrassment to his employer. (Testimony of Evers) There is no evidence to indicate that Evers has been other than a competent and conscientious salesman since obtaining his real estate salesman's license in 1974. A registered real estate salesman who worked with Evers described him as an exceptional salesman who paid close attention to details and made a special effort to keep clients advised of his progress. (Testimony of James Bradfield)
Recommendation Conclusion: The Board is without statutory authority and jurisdiction to discipline the Respondent for misconduct which occurred prior to his being licensed as a real estate salesman. The Amended Administrative Complaint, and the charges therein, should he dismissed. Recommendation: That the Board dismiss its Amended Administrative Complaint. Background By Amended Administrative Complaint filed January 18, 1979, the Petitioner Hoard of Real Estate ("Board") charged Respondent Dovard J. Evers ("Evers") with three counts of violating Sections 475.25(1)(a) and 475.25(3), Florida Statutes (1978), by selling notes which he represented were secured by first mortgages when, in fact, they were secured by second mortgages. The alleged misconduct occurred during 1972 and 1973, before Evers qualified for and received his real estate salesmans license. On February 6, 1979, Evers timely requested a Section 120.57 hearing to dispute the allegations in the Board's Administrative Complaint and filed a Motion to Quash Complaint. After oral arguments, Evers' Motion to Quash was denied by the Board on March 14, 1979. It was not until February 13, 1980, that Evers' request for a hearing was forwarded to the Division of Administrative Hearings for assignment of a Hearing Officer. The final hearing was initially set for April 15, 1980. On April 11, 1980, upon motion of the Board and without objection by Evers, the hearing was continued in order to allow the Board to reconsider its decision to prosecute this complaint. Subsequently, final hearing was reset for July 7, 1980. At hearing, the Board called Gerald Pendry, Richard C. Tymick, and Eva Baird as its witnesses and offered Petitioner's Exhibits No. 1-6, 1/ inclusive, each of which was received into evidence. Respondent Evers called James Bradfield as his witness and testified in his own behalf. Evers offered Respondent's Exhibits No. 1-10, 1/ inclusive, each of which was received. At the outset, the Board dropped Count IV and moved to amend its complaint by adding an allegation that Evers' alleged misconduct was of such a nature that had the Board been aware of it at the time Evers applied for his real estate salesman's license the application would have been denied. The proposed amendment fell within the scope of the complaint, and the motion was granted. Evers also renewed his previous motion to quash the amended complaint on the ground that he was not a licensed real estate salesman at the time of the alleged misconduct; the motion was denied. At close of hearing, the parties requested the opportunity to submit memoranda of law by July 23, 1980, which request was granted. The parties further agreed that the thirty-day time period for filing the recommended order in this case would begin on July 23, 1980. Based upon the evidence submitted at hearing, the following facts are determined:
The Issue The issues are whether Respondent is guilty of issuing checks from his escrow account without sufficient funds so as to constitute culpable negligence, breach of trust, misrepresentation, or concealment, in violation of Section 475.25(1)(b), Florida Statutes; failing to reconcile escrow accounts, in violation of Section 475.25(1)(e) and (k), Florida Statutes, and Rule 61J2-14.012, Florida Administrative Code; employing an unlicensed person, in violation of Section 475.42(1)(c), Florida Statutes; failing to maintain business records, in violation of Section 475.5015, Florida Statutes; and violating a lawful order of the Florida Real Estate Commission by failing to pay a citation within the required time, in violation of Section 475.25(1)(e), Florida Statutes. If Respondent is guilty of any of these allegations, an additional issue is the penalty that should be imposed.
Findings Of Fact Respondent became a licensed real estate salesperson in 1987. The following year, he became a licensed real estate broker, and he has remained a broker continuously since that time. From September 30, 1996, through January 30, 2000, Respondent was the qualifying broker of Express Realty and Investments, Inc. (Express Realty). At no time relevant to this case was Novellete Faye Hanse a Florida-licensed real estate broker or real estate salesperson. At all relevant times, Ms. Hanse was the office manager of Express Realty. Respondent formed Express Realty in 1995. Respondent was the sole director and president. Ms. Hanse's son was an officer of Express Realty from the time of its formation. Respondent met Ms. Hanse in 1991. She informed Respondent that she was a licensed mortgage broker. Respondent and Ms. Hanse agreed in late 1991 to form a joint real estate/mortgage broker operation in a single office. However, when Hurricane Andrew struck in 1992, Respondent, who has been a licensed general contractor since 1978, engaged exclusively in construction until 1995. Respondent formed Express Realty to pursue the prior plan of a joint real estate/mortgage broker operation. The two businesses occupied an office building owned by Ms. Hanse, who did not charge Respondent's business any rent. The address was 6306 Pembroke Road in Miramar. Express Realty served as an escrow agent in a contract dated May 9, 1999, for the sale and purchase of real property located at 6360 Southwest 23rd Street in Miramar. In this capacity, Express Realty, held various funds in escrow for the closing. For the closing, Express Realty issued two checks payable to the closing agent, totaling $19,169.08, and drawn on its escrow account. The checks, which are dated July 15, 1999, and signed by Ms. Hanse, bear the name, "Express Realty & Investments, Inc. Escrow Account" and bear the address 6306 Pembroke Road in Miramar. The bank failed to pay these checks due to insufficient funds. After receiving a complaint that Express Realty had failed to produce these escrow funds at the closing, Petitioner's investigator conducted an audit of Respondent's escrow account. At the audit, which took place the day prior to the day scheduled, the investigator found Ms. Hanse, but not Respondent, at the Express Realty office. Despite repeated requests on and after the day of the office visit, the investigator could not obtain relevant records from Ms. Hanse or Respondent concerning the real estate transaction for which Express Realty had issued escrow checks with insufficient funds. On August 23, 1999, the Florida Real Estate Commission issued a citation to Respondent at 6306 Pembroke Road in Miramar. The citation was served on Respondent within one week of the date of issuance. The $100-citation was for the failure to give the required disclosure or notice in a real estate transaction. The citation gave Respondent 30 days to contest the citation or 60 days to pay the citation. After the deadline, the investigator contacted Respondent and asked him about the citation. Respondent stated that he had forgotten about it. When Respondent still failed to pay the citation, the investigator called again, and Respondent stated that he had mailed the money, but it had been returned due to a faulty address. Respondent paid the citation approximately four months after it had been served on him. Shortly after Respondent belatedly paid the citation, Petitioner received another complaint concerning a contract for the sale and purchase of real property located at 850 Southwest 9th Avenue in Hallandale. In this transaction, Ms. Hanse represented herself to be a licensed real estate broker, showed the property to prospects, and accepted $5000 in escrow on behalf of Express Realty. In July 2000, Petitioner's investigator conducted an audit of Express Realty's escrow account. Again, the investigator was unable to find any documents by which he could undertake an independent reconciliation of the account or otherwise document the role of Express Realty in the subject transaction. At the hearing, Respondent claimed that he was unaware that Ms. Hanse had been conducting real estate business without his authority in the name of Express Realty. Although he admitted that she was an employee of Express Realty, he disclaimed any knowledge that she had removed him from the escrow account and otherwise taken over the management of the real estate broker company. However, Respondent could not explain why, after his claimed discovery of these misdeeds in the summer of 1999, he did nothing to prevent Ms. Hanse from continuing to use Express Realty as the means by which to conduct unlicensed real estate activities, as she did a few months later. Under the circumstances, Petitioner proved that Respondent was at all times aware that Ms. Hanse was conducting unlicensed real estate activities through Express Realty.
Recommendation It is RECOMMENDED that the Florida Real Estate Commission enter a final order finding Respondent guilty of the allegations contained in Counts I-IV and VI of the Amended Administrative Complaint, imposing a $5000 administrative fine, and suspending his license for three years; provided, however, if Respondent fails to pay the fine in full within 180 days of the final order, his license shall be revoked without further notice. DONE AND ENTERED this 9th day of July, 2002, in Tallahassee, Leon County, Florida. ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (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 9th day of July, 2002. COPIES FURNISHED: Jack Hisey, Deputy Division Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Dean Saunders, Chairperson Florida Real Estate Commission Division of Business and Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Hardy L. Roberts, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 Juana Carstarphen Watkins Senior Attorney Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32801 Wayne Wagie 11900 North Bayshore Drive, Unit No. 5 Miami, Florida 33181
The Issue Whether respondents' licenses as real estate brokers and salespersons should be disciplined for alleged misrepresentation, fraud, breach of trust, culpable negligence, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, violation of a duty imposed by statute and contract, and aiding and conspiring with other persons engaged in misconduct-- all in violation of Section 475.25(1)(b), Florida Statutes (1981).
Findings Of Fact On March 25, 1981, Elaine P. Stein, a licensed real estate salesperson, showed Mordechai and Nuti Antebi a house for sale at 1704 North 44th Avenue, Hollywood, Florida. The house was owned by Wayne L. and Gladys E. Hunter and listed with Murray Realty. The listing broker for Murray Realty was Warren Stein, and the salesperson directly involved in the listing was Alex Olson. Elaine Stein was a salesperson in the Emerald Hills office of Chinelly Real Estate, Inc.; the manager for that office was Frederick A. Lewis, a licensed real estate salesperson. (Testimony of Stein, Antebi, Olson, Lewis.) The Antebis, who were in the process of selling their present Pembroke Pines house through the Hollywood Hills office of Chinelly Real Estate, Inc., liked the house and expressed a desire to purchase it. They were told that if they assumed the existing mortgage on the Hunters' house, the interest rate would escalate on the day of closing. (Testimony of Olson, Stein.) The Antebis and Ms. Stein then returned to the Emerald Hills office where a written offer was prepared by Ms. Stein, Vilma Sardiello--a licensed real estate salesperson who frequently worked with her--and Alex Olson, the listing Murray Realty salesperson. Ms. Antebi told Ms. Stein and Ms. Sardiello that she had only $500 to place as an earnest money deposit. The purchase price was $106,000. Ms. Stein then spoke with Mr. Lewis, who advised her that the problem could be handled by executing an assignment of funds. Such an assignment would allow proceeds from the scheduled sale of the Antebis' Pembroke Pines house to be used in the Hunter-Antebi transaction. Ms. Stein, who was unfamiliar with assignments, then procured a written assignment of funds from Ms. Antebi for the sum of $19,500 and prepared a written offer. Ms. Antebi signed the offer and provided a $500 earnest money deposit. (Testimony of Stein, Olson, Sardiello, Antebi; P-1, R-1.) Immediately thereafter, Alex Olson, Murray Realty's listing agent, telephoned the offer to the Hunters in Ocala, Florida. He informed them that the Antebis were offering to purchase their house for $106,000, consisting of a $20,00 deposit, $15,000 at closing, and assumption of the current mortgage of approximately $43,000 at the prevailing interest rate. In addition, the Hunters were to take back a $28,000 purchase money mortgage at 12 percent for five years, with only interest payable monthly (He did not inform them that $19,500 of the $20,000 deposit was in the form of, an assignment of funds from the sale of the Antebis' Pembroke Pines house. He was unaware of the assignment, which Ms. Stein had inadvertently failed to disclose in the written offer.). The Hunters telegraphed their acceptance of the offer pursuant to Mr. Olson's instructions. (Testimony of Olson, W. Hunter, G. Hunter, Antebi, Stein; P-1, P- 4.) After receiving the Hunters' telegram, Ms. Stein realized that the phrase, "assignment of funds," had been mistakenly omitted from the written offer. She alerted Mr. Lewis, who, in turn, contacted Mr. Olson on March 26, 1981, and advised him that $19,500 of the deposit would come from an assignment of the proceeds from the sale of Antebis' Pembroke Pines house. Mr. Olson responded that he would not transmit another offer to the Hunters without a written letter from Chinelly Real Estate, Inc., verifying the amount of deposit held in escrow on the Hunter-Antebi transaction. (Testimony of Olson, Lewis, Stein.) Consequently, on March 26, 1981, Mr. Lewis telephoned Ann Shetter, bookkeeper and accounts supervisor at Chinelly Real Estate, Inc.`s main office. He asked her for the amount of money on deposit in the escrow account for the Antebi transaction. She replied that there was $8,000 held in escrow on the Antebi transaction; but she failed to indicate whether she was referring to the Hunter-Antebi transaction or the Antebi sale of their Pembroke Pine house which was being handled by another Chinelly Real Estate, Inc., office at that time. Mr. Lewis reasonably (although mistakenly) assumed that she was referring to the Hunter-Antebi transaction, the only Antebi transaction being handled by his office (He was unaware that the Antebis' Pembroke Pines house was being sold by another office of Chinelly Real Estate, Inc.). Instead, Ms. Shetter was referring to $8,000, which was being held in escrow, on the Antebis' sale of their Pembroke Pines house. (Testimony of Lewis, Shetter.) Mr. Lewis then in response to Mr. Olson's request, signed and delivered an escrow letter to Mr. Olson on March 26, 1981, verifying that Chinelly Real Estate, Inc., was holding $8,000 in escrow on the Hunter-Antebi transaction. (Testimony of Lewis; P-6.) Mr. Olson then telephoned the Hunters in Ocala on March 26, 1981, and told them that the deposit would be $8,000 instead of $20,000, and that $27,000 would be paid at closing instead of the agreed upon $15,000 (These changes did not affect the total purchase price.). He also told them that be felt an $8,000 deposit would be sufficient. The Hunters agreed to the changes and at Mr. Olson's request, sent a confirming telegram to the Emerald Hills office of Chinelly Real Estate, Inc. (Testimony of Olson, Hunter, Stein; P-5.) Shortly thereafter, Mr. Olson picked up the revised contract which had been prepared by Ms. Stein and signed by the Antebis; without reading it, he sent it to the Hunters for execution. This contract, fully executed by buyers and sellers, provided for a purchase price of $106,000, an initial $500 deposit, an additional deposit paid to Chinelly Real Estate, Inc.`s trust account on or before March 26, 1981, in the amount of $7,500, an assumption by buyers of an existing first mortgage held by American Savings and Loan at prevailing interest rate in the principle amount of $43,000, a $28,000 purchase money mortgage bearing interest at 12 percent for five years, interest only, payable monthly, balloon in five years, and approximately $27,000 due at closing, including $12,000 provided by assignment of funds from the sale of the Antebis' current house. (Testimony of Stein, Olson, W. Hunter, G. Hunter; P-2.) On April 9, 1981, Nancy Gooch, vice-president in charge of processing transactions for Chinelly Real Estate, Inc., discovered the discrepancy in the Hunter-Antebi transaction, that the contract indicated that $8,000 would be deposited in the firm's escrow account while, in fact, only $500 had been deposited. She alerted her boss, John Chinelly, Jr., a licensed real estate broker, who, upon further investigation, found the Lewis letter which mistakenly represented that $8,000 was held in escrow on the Hunter-Antebi transaction. (Testimony of Chinelly; P-9.) Mr. Chinelly, who was about to depart on a four-day religious retreat, called in Reginald D. Lucas, general sales manager and a licensed real estate broker, and instructed him to find out the facts surrounding the discrepancy and solve the problem. On April 9-10, 1981, Mr. Lucas called Mr. Lewis and obtained his explanation of the escrow discrepancy; after discussing alternative courses of action, Mr. Lucas told him to meet with Ms. Stein and Ms. Sardiello and decide how they would solve the problem. Various options discussed included: (1) canceling the transaction, (2) persuading the Antebis to place an additional $7,500 into escrow, and (3) depositing the personal funds of Mr. Lewis, Ms. Stein, and Ms. Sardiello to cover the escrow shortage. On Friday, April 10, 1981, and during the ensuing weekend, they discussed among themselves possible penalties, such as loss of their jobs and licenses, and what course of action would be ethical and proper. After Ms. Stein failed to persuade Ms. Antebi to place an additional $7,500 into escrow, the three real estate salespersons--Mr. Lewis, Ms. Stein, and Ms. Sardiello--reluctantly agreed to each loan the Antebis $2,500 to make up for the Hunter-Antebi escrow shortage (They obtained a promissory note dated April 10, 1981, from the Antebis requiring repayment when the Pembroke Pines house was sold.). (Testimony of Lucas, Stein, Lewis; R-5.) Mr. Lewis, Ms. Stein, and Ms. Sardiello acted on their belief that Murray Realty and the Hunters had been told of the escrow discrepancy and consented to their loaning money to the Antebis to make up for the difference. Mr. Lucas led them to believe that such was the case. Between April 10 and 13, 1981, he had telephoned Mr. Olson to tell him about the escrow shortage. Because Mr. Olson was out of town, he spoke with Warren Stein (unrelated to Elaine Stein), the listing broker for Murray Realty. He and Mr. Stein agreed that they should promptly notify the Hunters of the situation. (Testimony of Lewis, Stein, Sardiello, Lucas.) Shortly thereafter, on April 13, 1981, Mr. Lucas went to Mr. Stein's Murray Realty office for the purpose of jointly notifying the Hunters. In the ensuing telephone call, the Hunters were told of a problem with the escrow account, that the three sales persons--Ms. Stein, Ms. Sardiello, and Mr. Lewis- -had agreed to make up for the shortage by depositing $7,500 of their own money into escrow, and that the closing would be unaffected. The Hunters knew of and consented to the three salespersons contributing $7,500 into escrow (There is conflicting testimony on whether the Hunters were told of this $7,500 contribution. The Hunters deny it while Mr. Lucas insists they were told of and consented to the arrangement. Mr. Lucas's testimony on this question is accepted as persuasive. The Hunters' testimony conflicts with the statements contained in their complaint filed with the Department.). (Testimony of Lucas; R-7.) When Mr. Olson returned to Murray Realty on April 14, 1981, and learned of the events which had transpired in his absence, he requested written verification from John C. Chinelly, Jr., that the three real estate salespersons had placed the $7,500 in escrow. Mr. Chinelly verified that the money had been placed into escrow and wrote a letter to Murray Realty confirming that fact. At that time, Mr. Chinelly--based on his conversations with Mr. Lucas and Mr. Stein--also believed that the Hunters had consented to the salespersons depositing the additional $7,500 into escrow. (Testimony of Chinelly, Olson, Lucas; P-7.) Closing of the Hunter-Antebi transaction was scheduled for April 28, 1981. At closing, the Antebis complained about the condition of the roof, pool, and air conditioner. The Antebis also did not have sufficient funds to close the transaction. The transaction failed to close. (Testimony of Stein, Antebis, Olson.) Subsequently, the Antebis closed on the scheduled sale of their Pembroke Pines house. As a condition to this closing, $7,500 was placed into escrow pending a court decision on a complaint for interpleader filed in Broward County Circuit Court by Chinelly Real Estate, Inc., concerning the Hunter-Antebi transaction. At all times material to the proceeding, respondents John C. Chinelly, Sr., Richard M. Chinelly, Paul James Fleck, Nancy J. Gooch, Mary E. Hulsey, James A. Chinelly, John C. Chinelly, Jr., Shana Munden, Joseph Tresser, Reginald D. Lucas, Harold E. Whitter, Asa F. Brand, Josephine B. Shanefelt, Brett A. Slabe, William F. Kuemerle, Jr., and Marshall Feinsilber were the qualifying brokers for Chinelly Real Estate, Inc.
Recommendation Based on the foregoing, it is RECOMMENDED: That the two administrative complaints and all charges against respondents be dismissed, with prejudice. DONE AND RECOMMENDED this 14th day of June, 1982, in Tallahassee, Florida. R. L. CALEEN, JR., 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 14th day of June, 1982. COPIES FURNISHED: Harold M. Braxton, Esquire 45 Southwest 36 Court Miami, Florida 33135 Howard Todd Jaffe, Esquire 1915 Harrison Street Hollywood, Florida 33020 Rodger L. Spink, Esquire 6600 Taft Street, Suite 404 Hollywood, Florida 33024 Michael J. Garavaglia, Esquire 3111 Cardinal Drive Vero Beach, Florida 32960 Vilma Sardiello 5207 Hayes Street Hollywood, Florida 33020 Frederick H. Wilsen, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Carlos B. Stafford Executive Director Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802 Samuel R. Shorstein, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue Whether Respondent, Andrey Barhatkov, committed the violations alleged in the Administrative Complaint, and, if so, what discipline should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, the following Findings of Facts are made: 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 20.165 and Chapters 120, 455, and 475, Florida Statutes, and the rules promulgated pursuant thereto. Respondent is, and was at all times material hereto, a licensed Florida real estate sales associate issued License No. 660647 in accordance with Chapter 475, Florida Statutes. The last license issued to Respondent was as a sales associate with All American Realty, Inc., 227 North John Young Parkway, Kissimmee, Florida 34741. On or about July 5, 2005, Respondent prepared a residential sale and purchase contract on behalf of a buyer and faxed the contract to Jerome Fortson, who is not a licensed Florida real estate sales associate, broker associate, or broker, for Mr. Fortson to present to the buyer and obtain the buyer's signature. Having obtained the buyer's signature, Mr. Fortson later appeared on behalf of the buyer at the closing. Respondent was not present at the closing. Respondent admitted that he had Mr. Fortson show the real estate property to the buyer, that he had an arrangement with Mr. Fortson to show properties for him, and that Mr. Fortson was to report back to him for follow-up. Respondent acknowledged that Mr. Fortson was a mortgage broker and that they had an informal business referral agreement wherein Mr. Fortson would arrange financing for buyers that he had shown properties. In the course of this activity, Mr. Fortson, who represented himself as a sales representative for the buyer, contacted the listing agent for information regarding the property and showed the property. Respondent never met the buyer. The real estate agent representing the seller was not aware of Respondent's involvement in the transaction until he requested his share of the commission.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Petitioner, Department of Business and Professional Regulation, Division of Real Estate, enter a final order finding that: (1) Respondent, Andrey Barhatkov, violated Subsections 455.227(1)(j) and 475.42(1)(e), Florida Statutes; Respondent's license as a real estate salesperson be suspended for one year, followed by one year of probation; Respondent be fined $2,000; (4) Respondent be required to attend such remedial ethics and educational courses as are determined appropriate by Petitioner; and (5) Respondent be required to pay the costs of the investigation and prosecution of this case. DONE AND ENTERED this 25th day of June, 2009, in Tallahassee, Leon County, Florida. S JEFF B. CLARK 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 25th day of June, 2009. COPIES FURNISHED: Thomas W. O'Bryant, Jr., Director Division on Real Estate Department of Business and Professional Regulation 400 West Robinson Street Hurston Building, Suite N802 Orlando, Florida 32801 Ned Luczynski, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Andrey Barhatkov 408 Pinewood Drive Davenport, Florida 33896 Patrick J. Cunningham, Esquire Department of Business and Professional Regulation 400 West Robinson Street Hurston Building, Suite N801 Orlando, Florida 32801
The Issue The issues are whether Respondent is guilty of violating a lawful order of the Florida Real Estate, in violation of Sections 475.42(1)(e) and 475.25(1)(e); committing fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction, in violation of Section 475.25(1)(b) (two counts); failing to account for or deliver funds, in violation of Section 475.25(1)(d)1; failing to maintain trust funds in a real estate brokerage escrow bank account or some other proper depository until disbursement is authorized, in violation of Section 475.25(1)(k); failing to provide a written agency disclosure, in violation of Section 475.25(1)(q); being found guilty for a second time of any misconduct that warrants suspension or of a course of conduct or practices that show such incompetence, negligence, dishonesty, or untruthfulness as to indicate that Respondent may not be entrusted with the property, money, transactions, and rights of investors or others with whom Respondent may maintain a confidential relation, in violation of Section 475.25(1)(o); and failing to preserve and make available to Petitioner all books, records, and supporting documents and failing to keep an accurate account of all trust fund transactions together with such additional data as good accounting practice requires, in violation of Rule 61J-14.012(4) and Section 475.25(1)(e).
Findings Of Fact At all material times, Respondent has been a licensed real estate broker, holding license numbers 0489551 and 3000384. Respondent is the qualifying broker for Buyers Realty of Naples, Inc., of which Respondent was a principal. Respondent has been disciplined once previously. On December 8, 1994, the Florida Real Estate Commission entered a final order, pursuant to a stipulation, ordering Respondent to pay an administrative fine of $500 and complete 30 hours of professional education. In late 1993, Respondent, Armand Houle, and Svein Dynge formed DSA Development, Inc. (DSA). Respondent, Houle, and Dynge were directors of the corporation. On December 1, 1993, Respondent, Houle, and Dynge formed Gulf Southwest Developers, Ltd. (GSD). DSA served as the sole general partner of GSD, whose original limited partners included Houle and several foreign investors represented by Dynge, but not Respondent or Houle. The investors formed GSD to assemble a vast tract of land in Collier County, through numerous purchases, for purposes of mining, development, and speculation. The initial investors contributed or agreed to contribute over $4 million to GSD. Respondent's role was to find suitable parcels of land and negotiate their purchase by GSD or its agent. GSD agreed to pay Respondent $1000 weekly for these services. GSD also authorized Respondent to take a broker's commission of 10 percent of the sales price for each fully executed contract presented to the closing agent. This is the customary broker's commission in the area for transactions of this type. Respondent's claim that he was entitled to a commission of 20 percent is rejected as unsupported by the evidence. There is some dispute as to whether the seller or the buyer was to pay the commission. The contracts provide that the commission was to be deducted from the seller's proceeds. However, regardless of the source of the commission, Respondent was entitled only to 10 percent, not 20 percent. Respondent knew that he was not entitled to 20 percent when he took the additional sum from GSD funds. Thus, the act of taking the funds constituted no less than concealment (due to his failure to disclose his withdrawals), dishonest dealing, culpable negligence and breach of trust, if not actual fraud. There is some evidence that Respondent took substantial sums from GSD without authorization. Without doubt, part of these sums represented the additional ten percent commission described in the preceding paragraph. Petitioner has attempted to prove that Respondent took sums in excess of the extra ten percent commission without authorization. However, as to such sums in excess of the additional ten percent commission, Petitioner has failed to prove by clear and convincing evidence either that Respondent took such additional sums or, if he did so, that these withdrawals were not authorized or at least ratified. As agent for GSD, Houle entered into numerous contracts in the second half of 1994 and first half of 1995. In each of these contracts, Respondent signed the contract below printed language stating that he, as broker, and Buyers Realty of Naples, Inc. had received the initial escrow deposit under the conditions set forth in the contract. At no time did Respondent or Buyers Realty of Naples, Inc. hold the escrowed funds in an escrow account under the name of Respondent or Buyers Realty. Respondent maintains that he transferred the funds to the title company to hold in escrow. The record does not permit a finding, by clear and convincing evidence, that he did not do so, although there is some evidence indicating that the title company did not hold such funds. However, it is sufficient that Petitioner has shown by clear and convincing evidence that neither Respondent nor Buyers Realty held these escrow funds, despite clear misrepresentations by Respondent in each contract that he or his company held these escrowed funds. Respondent's misrepresentations constitute fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing, and breach of trust. Petitioner failed to prove by clear and convincing evidence that Respondent did not make the required agency disclosures in a timely fashion or that Respondent did not make available to Petitioner's investigator the books and records that he is required to maintain. Likewise, Petitioner did not prove by clear and convincing evidence that Respondent failed to complete the education required by the prior final order or participated in the fraudulent endorsement of Houle's signature on checks by a secretary, who later obtained Houle's consent to the act.
Recommendation It is RECOMMENDED that the Florida Real Estate Commission enter a final order suspending Respondent's license for five years. DONE AND ENTERED this 4th day of September, 1997, in Tallahassee, Leon County, Florida. ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 4th day of September, 1997. COPIES FURNISHED: Geoffrey T. Kirk, Senior Attorney Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32802 James H. Gillis James H. Gillis & Associates, P.A. Law Offices of Gillis & Wilsen 1415 East Robinson Street, Suite B Orlando, Florida 32801-2169 Henry M. Solares Division Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900
Findings Of Fact In September of 1976, Mr. and Mrs. Robert B. Kenney went to 8521 Madonna Place in Sarasota, Florida, in response to a newspaper advertisement. There they found respondent, who showed them through the house at that address, saying she was a friend of the owners who were offering it for sale. Respondent told the Kenneys that she was a registered real estate salesperson employed by Marjorie McCrory Real Estate, and gave them her card. But she said there would be no commission on any sale, because the owners were her friends and had helped her with babysitting. On October 2, 1976, the Kenneys entered into a written agreement with Mr. and Mrs. Robert C. Tritschler, owners of the house respondent had shown them. By this con tract, which was received in evidence as petitioner's exhibit No. 3, the Kenneys agreed to buy the house in the event that they were able to sell their mobile home within thirty days' time and in the event that they were able to obtain financing for 80 percent of the agreed purchase price. The Kenneys were unable to obtain such financing and were also unable to sell their mobile home within thirty days of the signing of the contract. On October 5, 1976, the Kenneys drew a check to respondent's order in the amount of one thousand dollars ($1,000.00), on which was written "Earnest Money-Escrow." The check was delivered to respondent. On October 6 1976, respondent endorsed the check arid deposited it in a savings account. Afterwards, she showed the Kenneys her newly acquired pass book, on which was written "Sherry Gayer, Escrow Account for Robert L. Kenney." After the Kenneys' efforts to meet the conditions of the contract proved unavailing, they demanded the return of the money they had given respondent. Her refusal resulted in litigation which was settled when the Kenneys agreed to accept five hundred dollars ($500.00), plus the interest that had accrued on the entire one thousand dollars ($1 000.00) while it had been on deposit in respondent`s account. The other five hundred dollars ($500.00) went to the Tritschlers, in accordance with the terms of the settlement agreement.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner suspend respondent's license for sixty (60) days. DONE and ENTERED this 10th day of March, 1978, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 904/488-9675 COPIES FURNISHED: Mr. Joseph A. Doherty, Esquire Florida Real Estate Commission 400 West Robinson Avenue Orlando, Florida 32801 Ms. Sherry L. Gayer 2116-59th Street Sarasota, Florida 33580
Findings Of Fact Horacio A. Sotolongo (Respondent) is, and at all times involved in the Administrative Complaint was, a real estate broker registered with the FREC. Respondent was served with a copy of the Administrative Complaint and requested a hearing on the charges. Thereafter Respondent was notified of the time and place of the scheduled hearing by Registered/Certified Mail sent to the last address registered with the FREC. In May, 1974 Respondent negotiated the sale of a tract of land near Stuart, Florida between Hypoloxo Enterprises, Inc. seller, and Harry Soccorso, buyer. When the buyer was unable to close the transaction Respondent procured another buyer to whom the contract was assigned by the original buyer. Respondent told the seller that the new buyer (Enrique Torres) was the owner of the Florida Lumber Company located in Miami and that Torres could not speak English. The property was deeded to Torres in accordance with the contract. Subsequent thereto Torres became delinquent in his mortgage payments and quitclaimed the property back to the seller in satisfaction of the mortgage. At no time was Torres more than an employee of Florida Lumber Company and he owned no stock and held no corporate office in this company. Torres is fluent in English and was so fluent at the time of the transaction. On August 29, 1974 Respondent produced a potential buyer for property owned by Ft. Pierce Sand and Minerals, Inc. and presented an offer to purchase the property for $150,000 under terms specified in the offer. Although the contract recited an earnest money deposit by buyer of $5,000, only $2,500 was received by Respondent. The offer was not accepted by the seller and buyer demanded return of his deposit. Upon receipt of the check representing the earnest money deposit Respondent did not deposit it in his escrow account but cashed the check at the First National Bank and Trust Company of Tequesta on which the check had been drawn. At the time of receipt of the $2,500 deposit Respondent's escrow account balance was zero and there has been no activity in the account since that time. The $2,500 deposit was returned to the buyer some two months after the offer had been refused by the seller.
