The Issue The issues in the case are whether the allegations of the Administrative Complaint are correct, and, if so, what penalty should be imposed.
Findings Of Fact At all times material to this case, Respondent Clifford Altemare (Mr. Altemare) was a licensed real estate broker, holding Florida license BK-3062479. At all times material to this case, Respondent Altema Consulting Co., LLC (ACC), was a licensed real estate brokerage, holding Florida license CQ-1024239. Clifford Altemare was the owner, qualifying broker, and officer for ACC. On August 21, 2006, Mr. Altemare signed an agreement to represent for sale hotel property owned by Sweet Hospitality, LLC. The agreement stated that Mr. Altemare would receive an unidentified commission based on the sales price. On December 12, 2006, Mr. Altemare received an escrow deposit of $25,000 from Rakesh Rathee, who signed an agreement to purchase the hotel. The $25,000 deposit was transferred by wire from Rakesh Rathee into a corporate operating account of ACC. Mr. Altemare failed to place the $25,000 escrow deposit into an ACC escrow account. Apparently, because the seller decided not to sell the property, the proposed sale did not close, and the buyer demanded the return of the $25,000 deposit. There is no credible evidence that the seller has made any claim upon the deposit. Mr. Altemare has refused to return the $25,000 deposit to Rakesh Rathee. At the hearing, Mr. Altemare asserted that the deposit has not been returned to the buyer because of uncertainty as to whom the deposit should be refunded. There was no credible evidence offered at the hearing to support the assertion that someone other than Rakesh Rathee should received a refund of the $25,000 deposit.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate, enter a final order, stating that the Respondents violated Subsections 475.25(1)(b), (d), and (e), Florida Statutes (2006), and Florida Administrative Code Rule 61J2-14.010 and imposing a $15,000 administrative fine and a five-year suspension of licensure. DONE AND ENTERED this 12th day of May, 2010, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM 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 12th day of May, 2010. COPIES FURNISHED: Patrick J. Cunningham, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite N801 Orlando, Florida 32801 Clifford Altemare Altema Consulting Co., LLC 1047 Iroquois Street Clearwater, Florida 33755 Reginald Dixon, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Thomas W. O'Bryant, Jr., Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street, Suite N802 Orlando, Florida 32801
The Issue Whether Michael Jacob Piwko (Respondent), committed the violations alleged in the Administrative Complaint dated December 15, 2009, and, if so, what penalties should be imposed.
Findings Of Fact Petitioner is an agency of the State of Florida created by Section 20.165, Florida Statutes. Petitioner is charged with the responsibility of regulating the real estate industry in Florida pursuant to Chapters 455 and 475, Florida Statutes. As such, Petitioner is fully authorized to prosecute disciplinary cases against real estate licensees. Respondent was at the times material to this matter, the holder of a Florida real estate associate license, license number 707518, issued by Petitioner. As last known, Respondent was an active sales associate with All Star Investment Realty, Inc., 9425 Sunset Drive #180, Miami, Florida 33173. From January 2008 through May 2008, Respondent was employed as a sales associate with Enrique Piwko, the qualifying broker for All Star Investment Realty, Inc. In January of 2008, Joaquin Inigo, a buyer, sought to purchase a condominium in Tampa, Florida. He gave Respondent a deposit for the purchase, but was later advised the deal had “fallen through.” On or about May 17, 2008, Mr. Inigo executed a contract for purchase and sale seeking to acquire a second condominium, unit number 208, at 310 Crestwood Circle, Royal Palm Beach, Florida 33411. As part of the transactions with Respondent, Mr. Inigo tendered approximately $77,000.00 to Respondent to be applied to the purchase price of unit 208. Monies were tendered to Respondent directly because Mr. Inigo expected Respondent to get an employee discount related to the sale and pass that on to him. The closing date in July passed without unit 208 being conveyed to Mr. Inigo. Efforts to achieve a refund of the deposit monies were fruitless. Upon investigation of the matter, Petitioner discovered that Respondent never deposited Mr. Inigo’s funds in escrow with his broker. Petitioner did not negotiate the purchase of unit 208. Petitioner did not refund the deposit monies. All monies provided by Mr. Inigo to Respondent were for the purchase of unit 208 and were not a personal loan to Respondent. Respondent asserted in pleadings that the monies from Mr. Inigo were a personal loan. Respondent did not, however, present written evidence of the alleged loan or its terms and declined to respond to the investigatory efforts made by Petitioner. Petitioner did not present evidence regarding the cost of investigating this matter.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Florida Real Estate Commission finding Respondent in violation of the provisions of law set forth in the Administrative Complaint as alleged by Petitioner, imposing an administrative fine in the amount of $2,000.00, and imposing a suspension of Respondent’s real estate license for a period of five years. DONE AND ENTERED this 18th day of June, 2010, in Tallahassee, Leon County, Florida. S J. D. PARRISH 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 18th day of June, 2010. COPIES FURNISHED: Joseph A. Solla, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite 801N Orlando, Florida 32801-1757 Heather A. Rutecki, Esquire Rutecki & Associates, P.A. Bank of America Tower 100 Southeast Second Street, Suite 4600 Miami, Florida 33131 Roger P. Enzor, Chair Real Estate Commission Department of Business and Professional Regulation 400 West Robinson Street, N801 Orlando, Florida 32801 Thomas W. O’Bryant, Jr., Director Division of Real Estate 400 West Robinson Street, N801 Orlando, Florida 32801 Reginald Dixon, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact Petitioner is the governmental agency responsible for issuing licenses to practice real estate. Petitioner is also responsible for regulating licensees on behalf of the state. Respondent, John P. Wickersham ("Wickersham"), is licensed as a real estate broker under license number 0095775. Respondent, Aladdin Real Estate of Rockledge ("Aladdin"), is a Florida corporation registered as a real estate broker under license number 0213244. Wickersham is the qualifying broker and corporate officer for Aladdin. Respondents maintain their escrow account at the Barnett Bank of Cocoa. On April 28, 1994, Ms. Marie Ventura, Petitioner's investigator, audited Respondents' escrow account. Ms. Ventura concluded that Respondents' escrow account had a liability of $46,287.30 and a reconciled balance of $43,557.26. Ms. Ventura concluded that Respondents' escrow account had a shortage of $2,730.04. Respondents provided Ms. Ventura with additional information. On May 16, 1994, Ms. Ventura concluded that Respondents' escrow account had a liability of $43,546.21 and a reconciled balance of $42,787.26. Ms. Ventura concluded that Respondents' escrow account had an excess of $11.05. Respondents never had a shortage in their escrow account. Respondents maintained an excess of $11.05 in their escrow account since September, 1993. In September, 1993, Respondents converted their method of bookkeeping to a computer system. The computer system failed to disclose an excess of $11.05 due to Respondents' misunderstanding of the appropriate method of labeling inputs to the software system. Respondents discovered and corrected the error prior to the formal hearing. Respondents properly made and signed written monthly reconciliation statements comparing their total escrow liability with the reconciled bank balances of their escrow account. Although Respondents did not use the form suggested in Rule 61J2- 14.012(2), Respondents satisfied the substance of the requirements for record keeping and reporting. Respondents maintained the information required in Rule 61J2-14.012(2) in bank statements, ledger cards, and checkbooks. At the time of the formal hearing, Respondents presented the information in a form that complied with the requirements of Rule 61J2-14.012(2). The shortage determined by Petitioner on April 28, 1994, was caused, in part, by errors made by Petitioner's investigator. It was the investigator's first audit, and the information provided by Respondents was not in an easily discernible form. However, Respondents never withheld any information, and Respondents maintained and provided all information required by applicable law.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent not guilty of violating Section 475.25(1)(b) and Rule 61J2-14.012(2). RECOMMENDED this 18th day of January, 1996, in Tallahassee, Florida. DANIEL 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 18th day of January 1996.
Findings Of Fact At all times material to these proceedings, the Respondent McVety was a licensed real estate broker in Florida, having been issued license numbers 0461636 and 0258678. On January 1, 1989, the Respondent purchased the company Realty Services of Southwest Florida, Inc., a Florida corporation. One of the services provided by the corporation was property management. Rents and security deposits were collected from tenants of residential leases on behalf of property owners. In some cases, Respondent McVety was acting as an agent on behalf of property owners through the corporation. In other cases, Respondent McVety or the corporation was the actual property owner. When Respondent McVety took over the management of the corporation after his stock purchase, he noticed that the escrow account into which security deposits were placed, was a non-interest bearing account. On January 23, 1989, the escrow account was changed by the Respondent from an non-interest bearing escrow account to an interest bearing account. The tenants were not notified that their security deposits were now bearing interest. On March 17, 1989, a routine audit was conducted of the Respondent's escrow accounts. During the audit, it was discovered that one hundred and seventeen of the one hundred and thirty leases stated that the security deposits were being held in an non-interest bearing account. The leases which stated that the deposits were in an interest bearing account were signed after the Respondent purchased the corporation. The one hundred and seventeen leases with a non-interest bearing escrow were signed by the tenants prior to the stock transfer. There were no allegations that interest had actually been paid by the bank on the escrow account or that there had been any failure by the Respondent to account for the interest to the tenants, the actual owners of the funds. In mitigation, the Respondent stated that once he was made aware of the problems and truly understood the Department's concerns, a letter was sent to each tenant explaining the placement of the security deposits into an interest bearing escrow account on January 23, 1989. These letters were sent on April 3, 1989. In addition, a new real estate lease was prepared on behalf of the corporation by an attorney. The purpose of the new lease was to explicitly state the rights and responsibilities of the parties regarding the interest on these accounts. In this case, no one was cheated, no secret commissions were earned, and the sums in question were trifling.
Recommendation Accordingly, based upon the foregoing, it is RECOMMENDED: That the Respondent McVety be found guilty of having violated Rule 21V- 14.014, Florida Administrative Code, and is therefore in violation of Section 475.25(1)(e), Florida Statutes. This violation was originally Count II of the Administrative Complaint. Counts I and II, having been withdrawn, are dismissed. That the Respondent McVety be issued a written reprimand as the penalty for the one violation. DONE and ENTERED this 30th day of January, 1990, in Tallahassee, Leon County, Florida. Copies furnished: John R. Alexander, Esquire DPR - Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 John A. McVety 3120 Grand Avenue Fort Myers, Florida 33901 Darlene F. Keller Executive Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 VERONICA E. DONNELLY 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 30th day of January, 1990. Kenneth E. Easley, Esquire General Counsel Department of Professional Regulation 1940 North Monroe, Suite 60 Tallahassee, FL 32399-0792
The Issue The issues in this case include whether Respondent is guilty of having committed culpable negligence in a business transaction or failed to maintain trust funds in a proper account until disbursement was authorized and, if so, the appropriate penalty.
Findings Of Fact Respondent has been a licensed real estate broker in the State of Florida since 1983 and holds license number 0405933. His most current license was as a broker trading as Realty Trend. Respondent started Realty Trend in 1985 for the primary purpose of managing rental properties. Although he had little or no training or experience in accounting, Respondent retained considerable responsibility for the day-to- day bookkeeping associated with his business, though at times he employed a bookkeeper. Respondent maintained one account for sales transactions, in which he participated as the broker, and one account for property management activity. Respondent participated in few sales transactions and is phasing out of that part of the business. All escrow monies held by Respondent were kept in interest-bearing accounts. Although Respondent retained the interest, he disclosed this fact to the parties through the sales contract. Within about 18 months, Respondent had acquired about 100 properties to manage. Respondent decided to automate the bookkeeping and purchased a computer program that would write checks, track income and expenses, generate reports, and generally handle all aspects of bookkeeping. The program was designed to assist in property management operations. Emphasizing service to property owners, Respondent had always tried to send his checks for rent collected the past month between the tenth and fifteenth of each month. By August, 1989, Respondent had been warned by Petitioner that he had to allow two or three weeks for tenant's checks to clear and determine what emergency maintenance expenses might be incurred. Through a combination of ignorance about bookkeeping, his responsibilities as a broker holding escrow monies, and the property management computer program, Respondent mishandled his trust account. His repeated bookkeeping errors and failure to take corrective action allowed a sizable shortage to accumulate by the time Petitioner conducted a routine office audit on November 17, 1989. Respondent cooperated fully with the audit and promptly provided Petitioner's investigator with a box full of bank statements. His account was reaudited on January 8, 1990. Poor bookkeeping prevents a precise determination of the shortage, but it exceeds $10,000. It is difficult to understand how Respondent's books became so confused as to become nearly worthless. There was no evidence of fraudulent intent. It appears as likely that Respondent overpaid property owners as that he overpaid himself. Respondent's ongoing ignorance of his serious trust account shortages or, in the alternative, repeated failure to solve recognized trust account shortages represents culpable negligence. Even by the time of hearing, Respondent candidly admitted that he could not provide an accurate figure for the shortage and had not yet been able to repay the deficiency, although he intended to do so.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Florida Real Estate Commission enter a final order reprimanding Respondent; imposing an administrative fine of $500; requiring Respondent to complete an approved 60-hour course; suspending his license for a period of six months, commencing retroactive to the date on which Respondent cease operations due to the emergency suspension; and placing his license on probation for a period of three years following the conclusion of the suspension, during which time Respondent shall file escrow account reports with the Commission or other person designated by the Commission at such intervals as the Commission requires. DONE and ORDERED this 8 day of October, 1990, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8 day of October, 1990. COPIES FURNISHED: Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32801 Attorney Steven W. Johnson Division of Real Estate Florida Real Estate Commission 400 W. Robinson St. Orlando, FL 32801-1772 Thomas I. McIntosh 13542 N. Florida Ave. Tampa, FL 33613 Attorney Neil F. Garfield Envirwood Executive Plaza, Suite 200 5950 West Oakland Park Blvd. Lauderhill, FL 33313 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792
Findings Of Fact The Department is a 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, Chapters 120, 455 and 475, Florida Statutes (1991), and the rules promulgated pursuant thereto. The Respondents, Shirley M. Ferguson and Dosh Realty, Inc., are now, and were at all times material hereto, licensed real estate brokers in the State of Florida, having been issued license numbers 0393921 and 0252372, respectively, in accordance with Chapter 475, Florida Statutes. The last licenses issued were as brokers, c/o Dosh Realty, Inc., 595 N. Nova Road 105A, Ormond Beach, Florida 32174. At all times material hereto, Ms. Ferguson was licensed and operating as qualifying broker and officer of Dosh Realty, Inc. On or about August 1, 1990, Ms. Ferguson maintained and operated a branch office of Dosh Realty, Inc., at the Aliki Condominium located in Daytona Beach. On or about August 1, 1990, Ms. Ferguson and Carol Savage, a licensed salesperson, entered into an "Independent Contractor Agreement" whereby Ms. Savage agreed to act as a property management agent for Dosh Realty, Inc., at the Aliki Condominium. Ms. Savage's license was registered with Dosh Realty, Inc. The Independent Contractor Agreement between Ms. Ferguson and Ms. Savage specifically required that Ms. Savage set up "two rental accounts - Dosh Realty, Inc./ (condo name) - one account to be a general account for rentals, the other account to be a non-interest escrow account for security deposits." On August 1, 1990, Ms. Ferguson opened an account, number 1130222031, at Barnett Bank in Ormond Beach, Florida. Ms. Ferguson and Ms. Savage were signatories on the account. The account was not an escrow security account. Ms. Ferguson inquired of Ms. Savage about a rental escrow account for Aliki Condominium. Ms. Savage informed Ms. Ferguson that security deposits were not required or received and, therefore, no escrow account was necessary. Despite the requirement of the Independent Contractor Agreement that an escrow account be established, Ms. Ferguson did not require that Ms. Savage comply with the terms of the Independent Contractor Agreement. Between August 1, 1990, and July 20, 1991, Ms. Savage, in the course of her association with the Respondents, solicited and obtained tenants to lease condominium units at the Aliki Condominium. Ms. Savage informed Ms. Ferguson that the agreements for these rentals were verbal. Ms. Ferguson did not insist that written agreements be entered into. Between August 1, 1990, and July 20, 1991, Ms. Savage in fact received monies as security deposits for rentals at the Aliki Condominium. Not all of the monies received by Ms. Savage were deposited in an account of the Respondents. Respondents were not notified of the security deposits and the Respondents were not aware that the security deposits had been collected. On July 20, 1991, Ms. Ferguson became aware that Ms. Savage had been collecting security deposits from tenants of the Aliki Condominium. Ms. Ferguson learned that Ms. Savage had taken the deposits and had failed to deliver the deposits to the Respondents. On or about July 20, 1991, tenants of the Aliki Condominium began to demand a return of their security deposits and Ms. Savage left the State of Florida. Ms. Ferguson reported the foregoing events to the Department and ultimately filed a complaint against Ms. Savage. Ms. Savage ultimately surrendered her license with the Department for revocation. The Respondents have not returned the security deposits received by Ms. Savage at the Aliki Condominium. Although Ms. Ferguson was very cooperative during the Department's investigation of this matter and although Ms. Ferguson did inquire of Ms. Savage concerning the manner in which rentals were handled at Aliki condominium, Ms. Ferguson did not insist, as a condition for the continued use by Ms. Savage of Ms. Ferguson's brokers license and the brokers license of Dosh Realty, Inc., that Ms. Savage use written rental agreements, require deposits and use an escrow account. Ms. Ferguson acknowledged during the investigation of this matter that monies were received at Dosh Realty's branch office at the Aliki Condominium that were not deposited in an escrow account and that she accepted Ms. Savage's representation that no written leases were entered into at the Aliki Condominium.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a Final Order finding that the Respondents have violated Sections 475.25(1)(b), (d) and (k), Florida Statutes (1991). It is further RECOMMENDED that Ms. Ferguson be reprimanded, placed on probation for one year and required to complete the 30 hour broker management course. DONE and ENTERED this day of July, 1992, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this day of July, 1992. APPENDIX Case Number 92-1990 The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Department's Proposed Findings of Fact Proposed Finding Paragraph Number in Order of Fact Number of Acceptance or Reason for Rejection 1 1. 2 2. 4 3. 5 4. See 5. See 8. 8 10. See 11. The exact amount of the deposits at issue was not proved by competent substantial evidence. Hereby accepted. 11 12. 12 13-14. 14 15. 15 See 17. The Respondents' Proposed Findings of Fact Proposed Finding Paragraph Number in Order of Fact Number of Acceptance or Reason for Rejection 1 1. 2 2. 3 3. 4 4. 5 5. 6 8. 7 11. See 9-10. 8 10-11. 9 12 and 13. The last sentence is not supported by the weight of the evidence and is not relevant. Although it is true that the exact monies Ms. Savage took were not received by the Respondents, they were responsible and could have returned monies of the Respondents. COPIES FURNISHED: Steven W. Johnson Senior Attorney Department of Professional Regulation Division of Real Estate Legal Section Hurston Building, North Tower #308 400 West Robinson Street Orlando, Florida 32801-1772 R. Michael Kennedy, Esquire Post Office Box 4319 South Daytona, Florida 32121 Jack Ray General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando Florida 32802-1900
The Issue The issue is whether Respondents are guilty of 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); failing to maintain trust accounts in an escrow account until disbursement is authorized, in violation of Section 475.25(1)(k); operating as a broker without holding a valid broker's license, in violation of Sections 475.42(1)(a) and 475.25(1)(e); failing to prepare the required written monthly escrow-statement reconciliations, as required by Rule 61J2-14.012(2) and (3), and thus Section 475.25(1)(e); failing to give written notice to a party to a transaction, before the party signs a contract, that the broker is a representative of another party, in violation of Rule 61J2-10.033 and Section 475.25(1)(q); failing to comply with Section 475.25(1)(q), and thus Section 475.25(1)(e); and, as to Respondent Dume, engaging for a second time in misconduct that warrants his suspension or engaging in conduct or practices that show he is so incompetent, negligent, dishonest, or untruthful that clients and their money cannot safely be entrusted to him, in violation of Section 475.25(1)(o). If either Respondent is guilty of any of these alleged violations, an additional issue is what penalty should be imposed.
Findings Of Fact Respondent Dume has been licensed in Florida as a real estate broker, and Respondent Southwest Florida Home Realty, Inc. has been licensed in Florida as a corporate broker. Petitioner did not file licensing documentation as an exhibit. Petitioner's witness testified that the licenses expired on September 30, 1995, for Respondent Dume and March 31, 1995, for Respondent Southwest Florida Home Realty. This testimony is hearsay and does not establish the licensing status of Respondents. In their proposed recommended order, Respondents propose a finding that they are now and have been at all material times licensed real estate brokers in Florida. The evidence does not support this assertion. However, the pleadings of the parties establish that Respondents were licensed at least up to the dates alleged by Petitioner. The Administrative Complaint alleges that Respondent Dume's license expired on September 30, 1995, and Respondent Southwest Florida Home Realty's license expired on March 31, 1995. The obvious inference from these allegations is that Respondents were licensed up to those dates. Combining these inferred allegations in the Administrative Complaint with the assertion of Respondents in their proposed recommended order that they are now and have been at all material times licensed, it is clear that the parties do not dispute that Respondents were licensed at least up to the dates set forth in the Administrative Complaint. The only real dispute as to licensing is whether Respondents were licensed after these dates, and the record supplies no answer to this question. By final order filed August 8, 1994, the Florida Real Estate Commission found both Respondents guilty of violating Sections 475.25(1)(b), (e), and (k) and Rule 61J2-14.012(2) and (3). The final order is based on an administrative complaint alleging, as of February 1 and 2, 1994, a shortage of about $6000 in one escrow account and an overage of about $400 in another escrow account. The administrative complaint alleges that Respondent Dume prepared written monthly escrow-account reconciliation statements. The final order reprimands each Respondent. As to Respondent Dume only, the final order imposes a $300 fine, suspends his license until the fine is paid, and places Respondent Dume's license on probation for one year, during which time he was required to "enroll in and satisfactorily complete a 30-hour broker management course." The final order states that a failure to complete all conditions of probation may result in the filing of a new complaint. The final order establishes that Respondents have been licensed brokers in Florida, but does not establish their licensing status as of anytime after the expiration of Respondent Dume's probation, which ended on September 8, 1995. In mid-September 1995, an investigator employed by Petitioner contacted Respondent Dume to determine whether he had complied with the final order of August 8, 1994. Respondent Dume admitted that he had not undertaken the required education. The investigator set up an office audit for November 1, 1995. On November 1, 1995, the investigator visited Respondents' office to conduct the audit. She had access to all relevant documents and found that Respondent Southwest Florida Home Realty, Inc. maintained an escrow account for real estate rental deposits. The investigator audited the period from January 31, 1995, through September 30, 1995. The investigator found that neither Respondent conducted written reconciliations of the escrow account during this period of time. The investigator found checks drawn on the escrow account improperly paid to another corporation owned by Respondent Dume and, in one case, paid to Respondent Dume personally. Two of the checks payable to the other corporation, which was not a licensed corporate broker, were dated September 30 and October 31, 1994. The investigator did not testify as to the date of the check paid personally to Respondent Dume. The investigator asked Respondent Dume about these disbursements. As to the check made to him personally, he explained that a bank would not cash his check and he needed funds. All of the checks paid to the other corporation or Respondent Dume personally were unauthorized and an improper use of escrow funds. Petitioner proved that the two checks to the corporation owned by Respondent Dume related to a time period not covered in the case resulting in the August 8 final order. When the investigator attempted to reconcile the escrow account for the period from January 31 through September 30, 1995, she found a shortage of about $31,500. Respondent Dume told her that he had repaid the escrow account about $20,000, but this was in January 1994. There is no evidence that any client has suffered any losses due to Respondents' failure to maintain the escrow account in the manner required by law. As already noted, the parties in effect agree that Respondents were licensed until certain dates in 1995, but the evidence fails to establish that Respondents' licenses expired after that time. But even if the evidence had proved the alleged expiration dates, the evidence would still be less than clear and convincing that Respondents conducted real estate business after those dates. There is even less evidence that Respondents failed to make required written disclosures in real estate transactions, as Petitioner has failed to prove any real estate transactions or the absence of any such disclosures.
Recommendation It is RECOMMENDED that the Florida Real Estate Commission enter a final order revoking the licenses of Respondent Dume and Respondent Southwest Florida Home Realty, Inc. ENTERED on December 2, 1996, in Tallahassee, Florida ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of December, 1996. COPIES FURNISHED: Steven D. Fieldman Chief Attorney Department of Business and Professional Regulation Division of Real Estate Hurston Building, North Tower 400 West Robinson Street Orlando, Florida 32801-1772 Frederick H. Wilsen Gillis and Wilsen 1415 East Robinson Street, Suite B Orlando, Florida 32801 Lynda L. Goodgame General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Henry M. Solares Division Director Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32802-1900
The Issue Whether the Respondent is guilty of fraud in violation of Section 475.25(1)(b), Florida Statutes. Whether the Respondent is guilty of having failed to account and deliver trust funds in violation of Section 475.25(1)(d), Florida Statutes. Whether the Respondent is guilty of having failed to immediately place upon receipt deposits received in trust and to maintain said trust funds in the real estate brokerage trust account until disbursement thereof was properly authorized in violation of Section 475.25(1)(k), Florida Statutes. Whether the Respondent is guilty of having failed to make available to the Petitioner or its authorized representative all bank statements for all escrow accounts including cancel led checks, all check books and pending contracts and all documents pertaining to all escrow accounts and for having failed to make available such books and accounts to the Petitioner or its authorized representative at a reasonable time during regular business hours, as required by Rule 21V-14.012, Florida Administrative Code, and therefore in violation of Section 475.25(1)(e), Florida Statutes. Whether the Respondent is guilty of having failed or refused to appear at the time and place designated on the Subpoena Duces Tecum, served October 10, 1988, with respect to an official investigation of alleged violations of Chapter 475, Florida Statutes, in violation of Section 475.42(1)(h), Florida Statutes, and Section 475.25(1)(e), Florida Statutes.
Findings Of Fact Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to the laws of the State of Florida, in particular Section 20.30, Florida Statutes, Chapters 120,455 and 475, Florida Statutes, and the rules promulgated 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 0125817 in accordance with Chapter 475, Florida Statutes. The last license issued to the Respondent was as a broker with a business address of 1605 Main Street. Suite 810, Sarasota, Florida 34236 and a home address of 3409 Prudence Drive, Sarasota, Florida 34235. From on or about November, 1984 to on or about May, 1988, the Respondent was employed by the Boathouse on Longboat, Ltd., a Florida limited partnership, to sell condominium boat storage berths for the limited partnership in which Respondent was a limited partner. On April 15, 1988, Harold Kornhaus, made a offer to purchase a storage space in the amount of $19,500.00. The offer by Harold Kornhaus was not for a specific size storage berth but the berth was to be a specific size. An agent of the Respondent named Michael Tewksbury took the offer from Harold Kornhaus and stated he was obligated to present the offer to the Respondent. The Kornhaus offer was delivered to the Respondent who never presented it to the general partner, Barry R. Lewis. The Respondent changed the Kornhaus offer by changing the first page and indicating another seller, named Currier but otherwise left all other pages as drawn by Tewksbury. The Respondent represented individual limited partners at the expense of the partnership entity by having one of the limited partners, Currier, purchase a storage space at a reduced amount and then reselling that space at a profit to a purchaser, Kornhaus. The Respondent and /or his agent Tewksbury handled the transaction, and received a commission. In another transaction involving the Huntsman to Bradt contract written on April 28, 1988, the Respondent wrote an escrow check at closing on April 28, for $1,950.00, which check was dishonored due to insufficient funds on account. Herbert Jacobs, chairman of Ajax Paving Industries, Inc., of Florida, a renter of space at the Boathouse of Longboat, decided to buy a storage space for his company. The Respondent arranged to sell a storage space to William Pettibon, who was a limited partner. The contract selling William Pettibon a storage space was written on February 1, 1988, for storage space #2325. On April 1, 1988, the Respondent arranged to sell Pettibon's unit #2325 to Herbert Jacobs, chairman of Ajax Paving Industries, Inc. On April 28, 1988, the limited partnership records show the bank balance in the Respondent's escrow account should have been $44,436 when in fact there was a negative balance of $1,120.82. Naples Federal Savings and Loan Association loaned approximately $987,500.00 to the limited partnership. One of the conditions of the loan was that Respondent's escrow account pertaining to all sales contracts, deposits, etc., for the limited partnership be placed with Naples Federal. On February 26, 1987, Respondent wrote a letter to William T. Kirtley, attorney for the limited partnership, and stated that the total balance in the Boathouse escrow account was $82, 109.85. The Respondent could not make a proper accounting of his escrow account on that date, and misrepresented to Mr. Kirtley that he had in excess of $80,000 in his escrow account. On December 22, 1987, the Respondent wrote check No. 151 from the escrow account to Mr. Edward Lerian "Larry" Ay, Jr., in the amount of $11,500. Mr. Ay was a contracted buyer of a boat storage unit and had made a personal loan to the Respondent in the amount of $10,000 in December, 1986. The $11,500 check from the Respondent to Mr. Ay was repayment of the loan, plus $1,500 in interest. Mr. Ay thought that he was loaning money to the Boathouse of Longboat, Ltd., the limited partnership, but such was not the case. The Respondent had no valid reason for writing Mr. Ay a check from the escrow account. The Respondent did not have the prior consent of the general partner for either the loan or the use of escrowed funds. On October 27, 1987, Respondent wrote two checks from the escrow account to David Buyher in respective amounts of $5,317.50 and $187.50. The checks represented repayment of a loan, with interest, made to Respondent by Buyher in 1986. Respondent was without authority to use escrow funds for said purposes. On February 26, 1988, the Respondent wrote check number 203 from the limited partnership escrow account in the amount of $616.73 to the "Mountain Chalet" in Snowmass Village, Colorado. The funds were used for the personal lodging and other services of the Respondent and was done without authority. On March 28, 1988, Respondent wrote check No. 236 in the amount of $10,873.11 to himself. On April 28, 1988 Respondent wrote check No. 258 in the amount of $14,600 also to himself. The two checks referred to above were used to obtain cashiers checks to be used at real estate closings. Respondent was fired as the real estate broker for the Boathouse of Longboat, Ltd., in May, 1988. In August and September, 1988, during Petitioner's investigation, several appointments were made with the Respondent to review the Respondent's escrow account which appointments the Respondent cancelled. On the day of the fifth appointment, the Respondent called and cancelled. The Respondent stated he would not permit the account to be reviewed without a subpoena. On or about October 10, 1988, the Respondent was served with a Subpoena Duces Tecum commanding him to produce for inspection and copying at 1605 Main Street, Suite 810, Sarasota, Florida 34236 on October 10, 1988, at 10:00 a.m., for the Department of Professional Regulation "all bank statements for all escrow accounts including cancelled checks from September 1, 1987 to the present time. All checks books and pending contracts and all other documents appertaining to all escrow accounts." Respondent did not comply with the Subpoena Duces Tecum on October 10, 1988. On or about October 14, 1988, a Subpoena Duces Tecum was properly served on Thomas E. Finley, First Vice President or the Custodian of Records, Naples Federal Savings and Loan Association, 5801 Pelican Bay Boulevard, Naples, Florida 33941-3004 commanding that such Custodian of Records appear at the Petitioner's Office of Investigative Services on October 18, 1988, at 11:00 a.m., and have with him "all bank statements and checks from June 1, 1987, through June 30, 1988, appertaining to the escrow account of Michael H. Diffley, account number 1600070019531." Naples Federal Savings and Loan Association provided the May 31, 1988, statement of Respondent's aforementioned account.
Recommendation Based upon 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 which finds as follows: Respondent Michael H. Diffley guilty of fraud, violating the provisions of Subsection 475.25(1)(b), Florida Statutes, as alleged in Count I of the Administrative Complaint; Respondent Michael H. Diffley guilty of having failed to account and deliver funds, violating the provisions of Subsection 475.25(1)(d), Florida Statutes. Respondent Michael H. Diffley guilty of having failed to maintain funds in trust, violating the provisions of Subsection 475.25(1)(k), Florida Statutes; Respondent Michael H. Diffley guilty of violating the provisions of Rule 21V-14.012, Florida Administrative Code, for having failed to preserve and make available to the Department account records kept in accord with good accounting prac- tices, and therefore guilty of violating Subsection 475.25(1)(e), Florida Statutes; and Respondent Michael H. Diffley guilty of having violated Subsection 475.42(1)(h), Florida Statutes, by having failed to appear at the time and place required by subpoena, and therefore violated Subsection 475.25(1)(e), Florida Statutes. It is further recommended that the Final Order entered by the Florida Real Estate Commission revoke the Respondent's real estate license for the above- stated violations of Chapter 475, Florida Statutes. It is further recommended that the Final Order entered by the Florida Real Estate Commission impose an administrative fine in the amount of $1,000 for each of five (5) counts of the Administrative Complaint for a total administrative fine in the amount of $5,000 to be paid within thirty (30) days of the Final Order of the Florida Real Estate Commission. DONE AND ENTERED this 8th day of January, 1990, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of January, 1990. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Proposed Findings of Fact submitted by the Petitioner: Paragraphs 1 through 39- accepted in substance, except for paragraph 5 which is rejected as unnecessary and paragraph 31 which is in the nature of argument. Proposed Findings of Fact submitted by the Respondent: Paragraphs 1 and 2 - rejected as argumentative. COPIES FURNISHED: James H. Gillis, Esquire Senior Attorney Department of Professional Regulation Post Office Box 1900 Orlando, FL 32302 Kenneth M. Meer, Esquire 423 Country Club Drive Winter Park, FL 32789 Darlene F. Keller Division Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32802 Kenneth E. Easley General Counsel Department of Professional Regulation Northwood Centre 1940 North Monroe Street Suite 60 Tallahassee, FL 32399-0792
Recommendation Based upon the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Florida Real Estate Commission enter a final order holding Respondent, Stephen E. Schiller, t/a Allstate Realty, guilty of violating Section 475.25(1)(b) and (k), Florida Statutes (1985), under Counts I and II of the Administrative Complaint in this case, and suspending his real estate broker's license no. 0374362 for one year. DONE and ORDERED this 27th day of August, 1986 in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of August, 1986.
