Findings Of Fact Respondent is now and was at all times material to this action a licensed real estate broker in the State of Florida, holding license number 0064475. Respondent operated his own real estate brokerage firm under his license. The firm was located in Niceville, Florida. In addition to his real estate brokerage business Respondent maintained and managed his personal real estate investments. Several of these personal investments included rental property which Respondent would later sell. One such piece of property was located at 104 Perdido Circle, Niceville, Florida, and is the property involved in this action. Prior to July 6, 1985, the Respondent, as seller and not as a broker, advertised for sale the Perdido property. Sometime around July 6, 1985, Robert L. Mitchell and June F. Mitchell looked at the Perdido property. Frank Ray, a salesman for John Brooks Realty, an unrelated real estate firm showed the property to the Mitchells. They liked the property and wanted to buy it. Frank Ray made arrangements for himself and the Mitchells to meet with Respondent in order to discuss the terms of the potential purchase contract. They met on July 6, 1985. The meeting lasted approximately an hour to an hour and a half. During the lengthy meeting Respondent went over the purchase terms contained in the contract of sale. The Mitchells main concern was to have immediate occupancy of the house. Special terms were developed for renting the property. At some point during the meeting the down payment came under discussion. Originally, the Mitchells had planned on a $1500 down payment which was acceptable to Respondent. However, as the meeting progressed the Mitchells decided they would like to reduce the amount of the down payment. Respondent informed the Mitchells that the only way he could decrease the $1500 down payment was to make the money a non-refundable option payment. Respondent then marked out the $1500 down payment figure contained in the purchase contract and inserted a $1200 figure. Respondent concurrently added the language "option payment" next to the $1200 figure. The remainder of the contract was discussed and the Mitchells signed the amended document. The Mitchells then wrote a check to Respondent, personally, in the amount of $1200. The note section of the check the Mitchells wrote contained the language "house down payment." The exact discussion on the down payment/option is not clear. What is clear from the evidence is that neither party had a meeting of the minds over what the $1200 check was. The Mitchells being very inexperienced in real estate thought it was a down payment. Although it is doubtful the Mitchells understood the legal meaning of the term "down payment." Respondent thought it was a non- refundable option payment. Absolutely no evidence of fraud or misrepresentation on the part of Respondent was demonstrated. Likewise, there was no evidence that Respondent in any way used his knowledge or expertise in the real estate market improperly. The final result of the negotiations was that the Mitchells had entered into what on its face purports to be a rental contract with an option to buy. However, since there was no meeting of the minds over the option, the option was eventually unenforceable. Since there was no meeting of the minds regarding the $1200 the money was not properly escrowable property. In essence the $1200 was neither a down payment nor an option payment. This lack of escrowability is borne out by the sales contract which calls for another escrow agent. 1/ The Mitchells took possession of the property for approximately three months. The Mitchells failed to obtain financing. The contract was conditioned upon the Mitchells obtaining financing, and the transaction failed to close. A dispute arose between the parties concerning the down payment/option money. When the dispute could not be resolved by the parties, the Mitchells filed a lawsuit against Nevin H. Nordal demanding a refund of the $1200 "house down payment." As a result of the Mitchell's lawsuit the County Court, in Okaloosa County, Florida, Summary Claims Division, by Amended Final Judgment dated January 20, 1987, awarded the sum of $1,028,87. The judgment figure is the balance of the $1200 after deduction of a counterclaim of $171.13 for cleaning the house after the Mitchells evacuated the property. Additionally, the Respondent was required to pay costs in the sum of $57 for a total of $1,087.87 due the Mitchells. The judgment amount is bearing interest at a rate of 12 percent per annum. The County Court judgment contains no findings of fact as to the Judge's reasoning on the judgment award. The Mitchells have repeatedly demanded of the Respondent that he pay the judgment. He has repeatedly refused to pay the judgment. Respondent did account to the Mitchells for the money when he told them he had deposited the check and had spent the funds.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is therefore RECOMMENDED that the Administrative Complaint failed against Respondent, Nevin H. Nordal, be dismissed. DONE and ENTERED this 4th day of March, 1989, in Tallahassee, Leon County, Florida. DIANE CLEAVINGER 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 4th day of March, 1989.
Findings Of Fact At all times material to this case, Respondent Bruce D. Robertson ("Respondent") was a licensed real estate broker, license #0343680, operating as a president and qualifying broker for IDC Properties ("IDC") At all times material to this case, IDC was a corporation registered as a real estate broker, license #0234614, located at 17980 San Carlos Boulevard, Fort Myers Beach, Florida. By agreement dated January 16, 1990, the Respondent agreed to pay to salesperson Randy Thibault a commission of $10,362.50 upon the closing of the sale of property at "Old Pelican Bay, Inc.," to Paula E. Brown, hereinafter referred to as the "Brown transaction". On July 5, 1990, the Brown transaction closed. The Respondent received the commission funds related to the sale of the property. The Respondent subsequently issued a check in the amount of $10,362.50 payable to Mr. Thibault. When Mr. Thibault attempted to negotiate the check, he was informed that the Respondent had issued a stop payment order on the check. Mr. Thibault thereafter filed a civil complaint against the Respondent in the Circuit Court of the Twentieth Judicial Circuit in and for Lee County, Florida Case No. 90-5851-CA. The matter was heard in a bench trial. On October 3, 1991, Mr. Thibault obtained a Final Judgement in the amount of $11, 817.42 against IDC for the sum owed plus interest. On October 28, 1991, Mr. Thibault obtained a Final Judgement in the amount of $14,551.31 against IDC for the sum owed plus interest, attorney's fees and costs. On November 4, 1991, the Respondent filed a Notice of Appeal in the matter in the Second District Court of Appeal but subsequently abandoned the appeal. At hearing, the Respondent asserted that Mr. Thibault received his commission share at the closing. The Respondent presented no credible documentary evidence to support the claim. The Respondent also asserted that Mr. Thibault misled the Respondent as to Mr. Thibault's role in the sale of other unrelated property and that the Respondent intends to take legal action against him. The Respondent presented no credible documentary evidence to support the claim. The Respondent admitted that the Final Judgement obtained by Mr. Thibault remains unsatisfied and stated that stated that he will not pay the judgement pending resolution of the unrelated matter alleged above.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Professional Regulation, Division of Real Estate, enter a Final Order determining Bruce D. Robertson and IDC Properties, Inc., guilty of the violations set forth herein and revoking the licenses identified herein. DONE and ENTERED this 19th day of March, 1993, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 19th day of March, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-6308 The Petitioner's proposed findings of fact are accepted as modified and incorporated in the Recommended Order. The Respondent did not submit a proposed recommended order. COPIES FURNISHED: Darlene F. Keller, Director Division of Real Estate Department of Professional Regulation Hurston North Tower 400 W. Robinson Street Post Office Box 1900 Orlando, Florida 32802 Jack McRay, General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Steven W. Johnson, Esquire Division of Real Estate Department of Professional Regulation Hurston North Tower 400 W. Robinson Street Post Office Box 1900 Orlando, Florida 32802 Mr. Bruce D. Robertson IDC Properties, Inc. 17980 San Carlos Boulevard Fort Myers, Florida 33931
Findings Of Fact The Respondent, Llera Realty, Inc., is a corporate real estate broker, and J.M. Llera is the active real estate broker in that corporation. Llera Realty, Inc., and J.M. Llera represented the buyers in the negotiations for purchase and sale of the subject real property. Coral Realty Corporation is a corporate real estate broker, and Alberto E. Trelles is the active real estate broker with that corporation. Coral Realty Corporation and Alberto Trelles represented the seller in the negotiations for purchasee and sale of the subject property. The property in question was owned by Saul Lerner, who was represented in these negotiations by Julius Friedman, attorney at law. The purchasers were Messrs. Delgado, Salazar and Espino, who are officers of Inter-America Housing Corp., said corporation eventually being the purchaser of the subject property. Lerner made an oral open listing on a piece of real property which included the subject property. Trelles, learning of the open listing, advertised the property to various brokers. Llera was made aware of the availability of the property through Trelles' ad and presented the property to Delgado, Salazar and Espino. Lengthy negotiations followed during which various offers were tendered by the buyers through Llera to Trelles to Friedman in Lerner's behalf. These offers were rejected. Eventually, negotiations centered on a segment of the property, and an offer was made by the buyers for $375,000 on this 7.5-acre tract. This offer was made through Llera to Trelles to Friedman, and was also rejected by Lerner. The buyers then asked to negotiate directly with the seller and agreed to pay a ten percent commission to the brokers in the event of a sale. The buyers then negotiated with the seller and eventually reached a sales price of $410,000 net to the seller for the 7.5 acres which had been the subject of the preceding offer. Buyers executed a Hold Harmless Agreement with the seller for any commission that might become due, agreeing to assume all responsibility for such commissions. The buyers through their corporation, Inter-America Housing Corp., purchased the property and refused to pay commissions on the sale and purchase. Thereafter, the Respondents brought suit against the buyers and their corporation. The Respondent's suit alleges the facts stated above in greater detail and asserts that the buyers took the Respondent's commission money to which they were entitled under the oral agreement with the buyers and used this money to purchase a portion of the property. The Respondents asked the court to declare them entitled to a commission and declare an equitable lien in their behalf on a portion of the subject property together with punitive damages. In conjunction with this suit, counsel for the Respondents filed a Notice of Lis Pendens. The Respondents questioned the propriety of this in light of Section 475.42(1)(j), Florida Statutes, and were advised by their counsel that the filing of Lis Pendens in this case was proper. The court subsequently struck the Lis Pendens on motion of the defendant buyers; however, the court refused to strike the portion of the complaint asserting the right to and requesting an equitable lien in behalf of the Respondents.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law the Hearing Officer recommends that no action be taken against the real estate licenses of the Respondents. DONE AND ORDERED this 29th day of March, 1979, in Tallahassee, Leon County, Florida, STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Harold E. Scherr, Esquire Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32801 Peter M. Lopez, Esquire 202 Roberts Building 28 West Flagler Street Miami, Florida 33130 ================================================================= DISTRICT COURT OPINION ================================================================= NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DISPOSED OF LLERA REALTY, INC., J. M. IN THE DISTRICT COURT OF APPEAL LLERA, CORAL REALTY CORP. OF FLORIDA and ALBERTO TRELLES, THIRD DISTRICT JANUARY TERM, A.D. 1980 Appellants, vs. BOARD OF REAL ESTATE (formerly Florida Real Estate Commission), Appellee. / Opinion filed July 1, 1980. An Appeal from the Board of Real Estate. Lopez & Harris and Peter M. Lopez, for appellants. Howard Hadley and Kenneth M. Meer and Salvatore A. Cappino, for appellee. Before NESBITT, PEARSON, DANIEL, JJ., and PEARSON, TILLMAN (Ret.), Associate Judge. PEARSON, TILLMAN, (Ret.), Associate Judge. This appeal by respondents Llera Realty, Inc., J.M. Llera, Coral Realty Corp. and Alberto Trelles is brought to review the administrative decision of the Florida Real Estate Commission (now known as the Board of Real Estate), which suspended the licenses of the respondents for thirty days. The complaint filed by the Commission charge that the respondents had violated Section 475.42(l)(j), Florida Statutes (1977), by filing a notice of lis pendens on real estate in a court action brought to recover a real estate commission. 1/ The hearing officer entered a recommended order finding that the respondents had, in fact, recorded a lis pendens on real estate in order to collect the commission, and concluding that as a matter of law, the cited section was unconstitutional as applied in this case because "[o]n its face and without such limitations, the statute has a chilling effect on the right of the broker or salesman to seek redress in the courts because persons subject to the statute may have their license revoked or suspended and be prosecuted criminally." The commission rejected that portion of the hearing officer's conclusions of law which held the application of the statute to the respondents to be unconstitutional and, accordingly, the respondents were found guilty and their licenses suspended for thirty days. We affirm. The only substantial question argued in this court is whether the classification by the statute of real estate brokers and salesmen as a class of person who may not use the filing of a lis pendens in connection with a civil lawsuit filed in order to collect a real estate commission is a classification so unreasonable because real estate brokers and salesmen are privileged by the statutory law of this state in the collection of commissions. Section 475.41, Florida Statutes (1977), in effect, provides that only a real estate broker who is properly registered". . . at the time the act or service was performed "may maintain a court action for the collection of a commission for the sale of real estate. As stated in Quinn v. Phipps, 93 Fla. 805, 113 So. 419, 425 (1927), with regard to the real estate business, "No business known to modern society has a longer or more respectable history." In this regard, the statutory law of this state demands a high standard of those engaging in the real estate business. Section 475.17 et seq., Florida Statutes (1977), through the onus of revocation or suspension of registration, demands an exemplary level of behavior within the profession; Section 475.42, Florida Statutes (1977), enumerates various violations and the consequent penalties to be exacted against those who are not properly registered; and Sections 475.482 et seq., by creating the Florida Real Estate Recovery Fund to reimburse persons who have suffered monetary damages at the hands of those registered under this chapter, demonstrate this state's recognition of the sensitive and privileged position of those engaged in real estate to the public at large. Furthermore, it is well- established by the case law of this state that real estate brokers and salesmen occupy a position of confidence toward the public. See the discussion in Foulk v. Florida Real Estate Commission, 113 So. 2d 714, 717 (Fla. 2d DCA 1959). And see Gabel v. Kilgore, 157 Fla. 420, 26 So.2d 166 (1946); and Ahern v. Florida Real Estate Commission ex rel. O'Kelley, 149 Fla. 706, 6 So.2d 857 (1942). The work of real estate brokers and salesmen is intimately connected with the transfer of title to real estate. It is natural that their experience and knowledge in such matters should be greater than that of the people they serve in their profession. The denial to this privileged group of the availability of a lis pendens when used to collect a commission on the sale of the same real estate on which they have secured, or have attempted to secure, the transfer of title is not the denial of a right of access to the courts. It is simply the denial of a special tool which might be misused by some members of his privileged group to the disadvantage of the public. Finding no error, we affirm the administrative decision.
Findings Of Fact The Respondent Thomas P. Hoolihan is a licensed real estate broker. His last known address is 3440 N.W. Marinatown Lane, North Fort Myers, Florida 33903. Hoolihan is also president of Seago Group, Inc., a publicly held land development and rental corporation, of which Marinatown Realty, Inc., is a wholly owned subsidiary. In late 1977, Hoolihan met L. E. Hutchinson, the complainant in this case, through another broker for whom Hutchinson at the time was employed. In December 1977, Hoolihan and Hutchinson discussed the marketing of two condominium projects being developed by Hoolihan and reached an oral agreement whereby Hutchinson would be paid $18,000 in salary with a 1.5 percent commission on all sales. when the condominium units were completed and mostly sold, the parties' employment agreement was revised in late December 1979. Under the new agreement, Hutchinson was to receive $30,000 a year salary, commission on the remaining condominium units that had not yet closed and any commissions on outside property listings neither owned nor controlled by Seago. In return for the $30,000 guarantee, Hutchinson was to forego commissions on future properties owned or controlled by Seago Group, Inc. During the period from 1977-1978 when Hutchinson was receiving $18,000 plus a 1.5 percent commission, sales were handled through Lee Hutchinson Realty, Inc., which held license number 0182945. In early 1979, Marinatown Realty was incorporated to market Seago's real estate inventory, to identify and list outside properties and to act as a management agent for purposes of renting condominium units previously sold in recent projects. When Marinatown Realty was formed, the complainant became its active broker. While employed as the broker for Marinatown and receiving $30,000 a year as a salaried employee, Hutchinson held two other broker's licenses, one as L. E. Hutchinson Realty, Inc., and another as L. E. Hutchinson. In January 1980, Hoolihan agreed to pay a $15,000 bonus to Hutchinson in lieu of a salary increase. Since at that time sales were minimal, Hoolihan decided to pay the bonus in installments as sales occurred. Because Hutchinson left in May 1980, he received only $10,000 of the bonus which represented monies previously paid. On April 23, 1980, Hutchinson and Chuck Bundschu, a licensed real estate broker, negotiated and obtained a sales contract between Hancock Harbor Properties, Ltd., a wholly owned subsidiary of Seago Group, Inc., seller, and Frank Hoffer, buyer and licensed real estate broker, in which Hoffer offered to purchase approximately 3.16 acres of unimproved acreage for $500,000. Thomas P. Hoolihan, general partner of Hancock Harbor, executed the contract on behalf of the partnership. Prior to presenting the contract to Hoolihan, Bundschu, Hoffer and Hutchins on decided on a 30 percent, 40 percent, 30 percent, respective co- brokerage split on the $50,000 commission due on the sale of the Hancock Harbor Property. The co-brokerage fee split was typed on the bottom of the contract submitted to Hoolihan and was signed by the three brokers. The commission due to Hutchinson was made payable to L. E. Hutchinson Realty, Inc. On April 25, 1980, the contract with the original co-brokerage split was presented to Hoolihan who refused to agree to its co-brokerage split provision. In the presence of Hutchinson, Hoolihan informed Bundschu and Hoffer that he would not pay a commission to Hutchinson because he was a salaried employee of the Seago Group and not entitled to a commission on the sale of this property. Accordingly, the co-brokerage fee provision of the executed contract was never signed by the seller, Thomas P. Hoolihan. Instead, on April 25, 1980, Bundschu, Hoffer and Hoolihan agreed to a split of $20,000 to Hoffer and $15,000 to Bundschu in lieu of the split specified in the original contract. At the closing on July 18, 1980, which was held at Coastland Title Company, a closing statement was prepared which shows that real estate commissions were disbursed to Chuck Bundschu Realty, Inc. ($15,000), Marinatown Realty, Inc., ($15,000) and Hoffer's firm, Landco, Inc., ($20,000). The checks were written and disbursed following a conversation between an official of Coastland Title Company and Hoolihan in which Hoolihan informed the official that Hutchinson was a Seago employee and he would not agree to pay a $15,000 commission to him under such circumstances. On July 18, 1980, a check for $15,000 was issued by Coastland Title Company to Marinatown Realty, Inc. The $15,000 represented Hutchinson's share of the co-brokerage agreement. when received on July 18, 1980, by Billie Robinette, the broker for Marinatown Realty, the check was signed over by her to Seago Group, Inc., since in her opinion it did not represent commissions earned by Marinatown Realty. The oral agreement between Hutchinson and Hoolihan was to terminate at the end of April 1980, or approximately five days after the Hoffer contract was presented. Hoolihan offered to renew the contract without a provision for a guaranteed salary because Marinatown Realty had been consistently losing money since its incorporation. On May 6, 1980, Hoolihan received a letter of resignation from Hutchinson and concluded that his offer had been rejected In early May 1980, Hoolihan received a call from Ms. Robinette, who had been employed as Hutchinson's secretary, regarding filling the open brokerage position at Marinatown Realty, Inc. Hoolihan discovered from Ms. Robinette that Hutchinson had paid himself 50 percent of the commissions due Marinatown Realty, Inc., for the management of condominium rentals. After examining the check stubs from Marinatown's bank account, Hoolihan took personal possession of all the books and records of the company and had the office locks changed. When he examined the books and records of the realty company, Hoolihan realized that his assumption that Hutchinson Realty, Inc., became inactive when Marinatown Realty, Inc. was formed in January 1979, was erroneous and that Hutchinson had operated his own realty company, L. E. Hutchinson Realty, Inc., while employed by Marinatown Realty, Inc. The Administrative Complaint in this case was filed on July 22, 1981. The preliminary investigative report compiled by Robert Corno, DPR Investigator, was filed on September 24, 1981 and the final investigative report was filed on September 30, 1981. The following is a synopsis of the investigator's findings and recommendation: That the COMPLAINANT [Hutchinson] worked for the SUBJECT [Hoolihan] and their contractual agreement was verbal. COMPLAINANT was paid on a salary/commission basis by companies of which SUBJECT is Chief Officer. That the COMPLAINANT filed civil action suit against SUBJECT in this case and it was dismissed with prejudice. That prior investigation by the DPR recommended that no action be taken against the SUBJECT in this case. That two weeks after this investiga- tion was undertaken, an Administrative Complaint was being filed by the DPR against the SUBJECT. That the existing BROKER for MARINATOWN REALTY, INC, was not involved in this case, and that since the time of the above referenced transaction, the SUB- JECT has acquired his BROKER'S license number 020462 which had no effect in this case. That conflicting statements by inter- viewers, namely former and present employees and other agents involved in this case revealed that there is a reasonable doubt for probable cause against the SUBJECT. (Respondent's Exhibit 1) As noted by Investigator Corno, this was the second time Marinatown Realty had been investigated in relation to this case. In both instances, a recommendation that no action be taken was apparently made. At the final hearing on December 1, 1981, counsel for the Department saw the complete investigative report, including the investigator's recommendation of a lack of probable cause, for the first time.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Administrative Complaint filed against Thomas P. Hoolihan be dismissed. DONE and ORDERED this 30th day of December, 1982, in Tallahassee, Florida. SHARYN L. SMITH, 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 30th day of December, 1982. COPIES FURNISHED: Xavier J. Fernandez, Esquire NUCKOLLS JOHNSON & FERNANDEZ Suite 10, 2710 Cleveland Avenue Fort Myers, Florida 33901 James A. Neel, Esquire 1315 Chalon Lane, S.W. Fort Myers, Florida 33903 William M. Furlow, Esquire Department of Professional Regulation - Legal Section 400 West Robinson Street Orlando, Florida 32801 C. 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 The issues for determination in this proceeding are whether Respondent violated Sections 475.25(1)(b), (e), and (k), Florida Statutes, 1/ by: committing fraud, deceit, dishonesty, or breach of trust in a business transaction; acting as a broker; and failing to place funds with her registered employer; 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 licensed as a real estate sales person under license number 0555229. The last license issued to Respondent was issued as a sales person percentage A.A. Carnes, Inc., 1399 W. Highway 434, Longwood, Florida 32750. In August, 1993, Respondent operated as a licensed real estate sales person for Mannix Realty, Inc. Respondent managed rental property located at 3551 Malona Drive in Orlando, Florida. The rental property was owned by Ramesh and Harjit Zala who lived outside the state (the "Zalas" property). On November 1, 1993, Respondent solicited and negotiated a lease agreement with Scott and Winifred Houldin at the monthly rental of $2,100 (the "tenants"). The tenants paid two months rent to Respondent as a reservation deposit. Respondent appropriated the reservation deposit and rental income for her own personal use. She failed to disclose the rental agreement, reservation deposit, or rental income to Mr. Amos W. Harris, Respondent's broker. Respondent requested the owners and the tenants to direct all correspondence to Respondent's home address. The owners and tenants complied with Respondent's request. Respondent did not disclose the transaction to Mr. Harris. Respondent neither accounted for nor returned the rental funds to her broker or to the owners. In August 1993, Respondent managed rental property located at 1346 Stearman Court in Orlando and owned by Robert and Patricia Sheetz (the "Sheetz" property). The owners lived outside the state. After Respondent assumed responsibility for the Sheetz property, the rental income declined and expenses increased. Although the Sheetz property was rented, Respondent failed to deliver the rental income from the Sheetz property. In December, 1993, the owners discovered that the rental property was in fact occupied. They informed Mr. Harris, and demanded delivery of the rental income. Mr. Harris was unaware that the property was rented or that Respondent had failed to deliver the rental income from the property. On December 29, 1993, Mr. Harris confronted Respondent. Respondent paid $475 of the rental income to the owners of the rental property. Mr. Harris subsequently terminated Respondent's employment.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent guilty of violating Sections 475.25(1)(b), (e), (k), and 475.42(1)(b); and revoking Respondent's real estate sales license. RECOMMENDED this 27th day of March, 1996, 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 27th day of March 1996.
The Issue By a four count Administrative Complaint, Petitioner alleges that Respondent is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction in violation of Section 475.25(1)(b), F.S.; guilty of having failed to account and deliver advance fees in violation of Section 475.452, F.S. and therefore in violation of Section 475.25(1)(e), F.S.; guilty of having failed to maintain trust funds ($22,066.25) in the trust account or some other proper depository until disbursement thereof was properly authorized in violation of Section 475.25(1)(k), F.S.; and having violated the provisions of a prior Final Order of the Florida Real Estate Commission in violation of Section 475.25(1)(e), F.S. BACKGROUND, PROCEDURE, AND PRELIMINARY STATEMENT All of the allegations of the Administrative Complaint herein arise from Respondent's performance under a prior settlement Stipulation and resultant Final Order of the Florida Real Estate Commission, requiring, among other matters, restitution by Kevin S. Hawkins, Respondent herein. Although the Department of Professional Regulation (DPR) initiated the instant proceeding by the above-referenced four count Administrative Complaint which had been referred to the Division of Administrative Hearings for evidentiary hearing pursuant to Section 120.57(1), F.S., DPR then moved to relinquish jurisdiction to the Florida Real Estate Commission upon grounds that the Stipulation in the prior case covered the contingency of non-performance of the required restitution and further provided, under such circumstances, for Respondent's appearance by informal hearing before the Commission. The prior Hearing Officer on the case denied that motion by an order entered June 2, 1988. At formal hearing, DPR renewed its motion to relinquish jurisdiction which the undersigned took under advisement for resolution within this Recommended Order. The motion is here denied and the reasons there for are addressed within the Conclusions of Law, infra. At formal hearing, Respondent's responses to Petitioner's Request for Admissions were recognized without objection. In anticipation that there might be no transcript, these admissions were admitted as Petitioner's Exhibit 1, for clarity of the record. Petitioner presented the oral testimony of Respondent Kevin S. Hawkins, James Mitchell, and Frederick Wilsen, and had eight exhibits admitted into evidence. Respondent presented the oral testimony of Margaret Tripp and Grant Bartells and testified on his own behalf. Respondent had four exhibits marked for identification, none of which were admitted in evidence. A transcript of the proceedings has been provided, and each party has submitted proposed findings of fact and conclusions of law outside the 10 day period stipulated/imposed at formal hearing. Because each party's proposals were late-filed and since each party filed formal proposals prior to completion of this Recommended Order, the respective proposals have been considered by the undersigned and the findings of fact therein are ruled upon in the Appendix to this Recommended Order, pursuant to Section 120.59(2), F.S. Likewise, the undersigned has not sua sponte struck Petitioner's proposals due to their submittal on the wrong size paper, in violation of Rule 22I-6.003(8), F.A.C.
Findings Of Fact Petitioner Department of Professional Regulation, Division of Real Estate is the state licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to the laws of the State of Florida, in particular, Section 20.30 and Chapters 120, 455, and 475, F.S., and the rules promulgated pursuant thereto. 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 0200419 in accordance with Chapter 475, F.S. The last license issued to Respondent was issued as a nonactive broker with a home address of P.O. Box 650488, Vero Beach, Florida 32965. The Florida Real Estate Commission rendered a Final Order filed April 24, 1987 which adopted a Stipulation entered into by the Respondent and the Commission. The Stipulation was drafted by Respondent's prior attorney and Mr. Mitchell, who at that time was the attorney for the Department of Professional Regulation, Division of Real Estate (DPR). The Stipulation terminated prosecution of Respondent on several cases by the DPR. Mr. Mitchell acknowledged that as DPR attorney he was the prime draftsman of the Stipulation, and that the restitution contemplated therein was a pro rata return of all time share auction monies held by Respondent or Resort Condominium Resales, a company owned and controlled by the Respondent, which company had also been named as a Respondent in the previous cases resulting in the Stipulation, but that full repayment to each investor of all monies invested by him/her with Respondent or with Respondent's company was never contemplated by the terms of the Stipulation. The Stipulation, in pertinent part being paragraph 7 provided as follows: Respondents agree to make restitution to all owners entitled to restitution of those advance fees being maintained by the Respondents. The Respondents shall make restitution within six (6) months of the filing of the Final Order of the Stipulation. Should restitution not be made as agreed herein, the Respondent shall appear before the Florida Real Estate Commission at a Section 120.57(2), F.S. informal hearing for the violation of failing to abide by a lawful order of the Commission pursuant to Section 475.25(1)(e), F.S. The Stipulation contained no mention of any specific amount of restitution to be made and the DPR staff in general had no prior experience with the handling of time share auction cases of similar nature, so in order to facilitate and ensure the Respondent's compliance with the Stipulation/Final Order, DPR provided an investigator, Grant Bartells, to monitor the Respondent's efforts at compliance. DPR and its several attorneys interpreted the Stipulation/Final Order to require that a bank account of several commingled funds totalling upwards of $300,000 should be reduced to a zero balance by October 25, 1987. Contrariwise, Respondent and the DPR investigator, Bartells, interpreted it to mean that by that date all restitution checks should be mailed out to those persons who had been determined by Respondent and Bartells to be owed any restitution. Mr. Bartells and an associate travelled to Respondent's office in Vero Beach and spent several days going over his books. Respondent provided Margaret Tripp to assist them in their review of his affairs. Approximately, May 31, 1987, the sum of $211,357.81 was agreed between Bartells and his associate and Respondent to be the opening or beginning balance of funds available from auction proceeds for purposes of the agreed pro rata restitution of advance fees. In reaching this amount, Bartells subtracted the amounts owed by Respondent for the expenses attendant upon holding two time share auctions he had held previously. The Administrative Complaint herein does not address this use of the funds, and, indeed, Mr. Mitchell and Mr. Wilsen conceded that it was appropriate for Bartells and the Respondent to have made such a deduction before commencing the restitution process. The Respondent issued or caused to be issued between June 22, 1987 and July 28, 1987 approximately 715 checks as pro rata restitution to investors. Before this was done, the DPR investigators checked, reviewed, and audited the amounts. Although this check, review, and audit were not of the same quality as a certified public accountant might have performed, and although Mr. Bartells relied in large part on the cooperation and candor of Respondent and Miss Tripp to show him the account these monies were from and to explain the amounts, nature, and sources of those monies, Bartells' methods were in accord with DPR standard operating procedure for analogous cases. On or about June 22, 1987, the Respondent also issued or caused to be issued and delivered check #1136 in the amount of $21,647.25 made payable to Resort Condominium Resales. On or about June 26, 1987, the Respondent also issued or caused to be issued and delivered check #1137 in the amount of $419.00 also made payable to Resort Condominium Resales. Before making these payments/withdrawals against the $211,357.81 res established by consent and cooperation between the DPR investigators and Respondent, the Respondent represented orally to Mr. Bartells that the amounts reflected in the two checks were earned commissions and asked what he should do with them. It was Respondent's position that these amounts had been inadvertently and improperly commingled in the restitution account as part of the $211,357.81 when they should not have been because they were never part of the time share auction deposit proceeds (advance monies). Mr. Bartells responded, "If you had a deal and a contract and it is completed; both parties are satisfied, I don't see how anybody can tell you you can't take your commissions but you never should have put them in there." Mr. Bartells readily admitted that he had no actual, explicit authority delegated by DPR or the Commission to render legal opinions, but every element of this case bespeaks his apparent authority to bind the agency in all matters regarding the restitution process. In reliance on Mr. Bartells' statement and apparent authority, Respondent paid to his company the two checks totalling $22,066.25. Except for the testimony of Mr. Mitchell that in drafting the original Stipulation he did not contemplate that any monies would be taken out of the escrow account or otherwise retained for Respondent's use, there is no record evidence to suggest that the total $22,066.25 was not earned commissions as represented by Respondent. At the time of entering into the Stipulation, no one totalled what was in the Respondent's existing account which started at upwards of $600,000, and in the course of drafting the Stipulation, there was never any discussion as to the amount of money remaining in the account. In the course of the restitution process, the monitor for DPR, Mr. Bartells, relied largely on Respondent's representations, and no one from DPR reviewed any underlying documentation of the amounts and accounts voluntarily offered up by Respondent. No one at DPR seems to have questioned how $600,000 became $300,000, and the further reduction to a starting figure of $211,357.81 was both contemplated by the original Stipulation and was retroactively authorized by Mitchell's and Wilsen's testimony at formal hearing. Although Mr. Mitchell conceded that the Respondent would be entitled to any commissions the Respondent had earned, Mitchell did not find the Respondent's representations to be credible. Because the prior cases against Respondent which had been settled by the Stipulation/Final Order had included counts involving failure to account for funds, Mitchell did not believe that the two check amounts Respondent paid to his company were, in fact, Respondent's earned commissions on purchase money. However, Respondent's testimony that he created the $211,357.81 reimbursement account in question after the Stipulation/Final Order was entered into and accidently commingled the funds then in his haste to comply with the Stipulation/Final Order is credible and unrefuted. The foregoing finding in no way reflects unfavorably on Mr. Mitchell's credibility, but never having audited or had hands-on experience with the specific monies, as did Bartells and Respondent, Mitchell's impressions alone cannot refute the fact evidence of the other witnesses. Mitchell merely felt that these amounts constituted advance monies which were covered by the restitution Stipulation, but there is no clear, affirmative proof that such is, in fact, the case. At some point before or after October 24, 1987 (six months after the Final Order), Respondent learned that some of the checks which he had sent to parties who had been determined to be entitled to pro rata restitution had not cleared the bank. Some checks were returned to Respondent as unclaimed mail; some were not returned but nonetheless never were cashed. As of February 23, 1988, the balance in the account established for restitution remained at $10,079.33, so Respondent, in responding to DPR inquiries, requested the assistance of the DPR by two letters of that date. The tone of these letters suggests nothing other than an effort on Respondent's part to comply with the spirit of the Stipulation and Final Order. For instance, in one letter he states: Please find my statement regarding compliance with paragraph 7e. Current balance is 10,079.33. I'll await directions as how you want me to handle these funds. Enclosed you'll find the restitution records your [sic] asked for. In the other letter, the Respondent states: All checks were mailed & some did not get delivered. I complied with the stipulation to the best of my ability. I would like to turn the remaining funds over to the state and be done with this matter, as I am know [sic] longer acting as a salesman or broker, and have found employment elsewhere. The Stipulation is silent as to what Respondent should do under the circumstances. Mr. Mitchell acknowledged that no discussions preliminary to the drafting of the Stipulation either covered or anticipated that mailed checks might be returned to the Respondent. Respondent telephoned the Commission requesting information as to what to do with the $10,079.33 and was given no definitive answer. Respondent did not request an informal hearing before the Commission because he believed he had made complete pro rata restitution under the terms of the Stipulation/Final Order (see Findings of Fact 6-8, supra), and because he feared that under the terms of the Stipulation/Final Order making a request for an informal hearing before the Commission would constitute an admission that he had "violated" the Stipulation by "failing to abide by a lawful order of the Commission." Frederick Wilsen, Senior DPR attorney, described himself as "in a quandary" over what to do when he received the Respondent's letters since an informal hearing before the Commission had not been requested and since the account was not reduced to zero. Therefore, the Administrative Complaint herein was initiated.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Florida Real Estate Commission enter a Final Order dismissing the four counts of the Administrative Complaint against Respondent and including an advisory paragraph, as is appropriate within its agency expertise, setting forth a method for Respondent to follow in disbursing the $10,079.33 balance of the account. DONE and RECOMMENDED this 19th day of December, 1988, at Tallahassee, Florida. ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of December, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-2272 The following constitute specific rulings upon the parties' respective proposed findings of fact (PFOF) pursuant to Section 120.59(2), F.S. Petitioner's PFOF 1-11 Accepted, but not necessarily adopted. Where not adopted, the proposals have been modified to eliminate subordinate and unnecessary material. 12-13 Address mixed questions of law and fact as set forth in the COL of the Recommended Order, and are rejected in part as conclusions of law (COL), not findings of ultimate fact. To the extent they may contain any assertion of fact over law they are rejected as not supported by the greater weight of the record evidence as a whole. See all FOF and COL. Respondent's PFOF 1 Covered in the introductory material. 2-3 Accepted. 4-6 Accepted except where subordinate and unnecessary. Addresses a mixed question of law and fact as set forth in the RO's COL, and is rejected in part as a COL, not a finding of ultimate fact. To the extent it contains assertions of fact over law, it is accepted as modified within the Recommended Order (RO) so as to conform to the greater weight of the credible record as a whole. Accepted as modified in FOF 11 to reflect an ambiguity in the record. Rejected as a COL or mere argument of counsel; also cumulative Rejected as a COL; covered in the COL of the RO. 11-15, and 17-20 Except where accepted within the RO, these proposals are rejected as subordinate, unnecessary, and/or cumulative. 16 Accepted. 21-22 Rejected as merely argument of counsel or recitation of testimony. COPIES FURNISHED: Darlene F. Keller, Executive Director Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 James H. Gillis, Esquire 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 John Joseph McHugh, Esquire 333-17th Street, Suite U Vero Beach, Florida 32960 Bruce D. Lamb, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 =================================================================
