Findings Of Fact At all times material hereto Respondent Marvin M. Kornicki has been a licensed real estate broker in the State of Florida, having been issued License Nos. 0265344 and 0252335. The last license issued was as a broker for Waterway Properties, Inc., t/a Waterway Properties. At all times material hereto, Respondent Waterway Properties, Inc., t/a Waterway Properties, has been a corporation registered as a real estate broker in the State of Florida, having been issued License No. 0265344. At all times material hereto, Respondent Kornicki was licensed and operating as the qualifying broker and an officer of Respondent Waterway Properties, Inc. On January 7, 1990, Respondents solicited and obtained an offer in the amount of $155,000 from Alda Tedeschi and John Tocchio, buyers, to purchase real property, to-wit: Unit 422 at Mariner Village Garden Condominium, Aventura, Florida, from Arthur Goldstein and Myra Goldstein, sellers. The buyers' offer reflected a $1,000 deposit to be held in trust by the Respondent Waterway Properties, Inc. The offer reflected that if the offer was not executed by and delivered to all parties, or fact of execution communicated in writing between the parties, on or before January 10, 1990, the deposit would be returned to the buyers and the offer would be withdrawn. The offer also reflected that "time is of the essence." On January 8, 1990, Respondents sent the buyers' offer to the sellers in New Jersey by air express. On January 10, 1990, the sellers signed the offer but made it a counteroffer by requiring the buyers to furnish an additional deposit of $14,500 by January 12, 1990, and requiring the buyers to sign a condominium rider and an agency disclosure form. The sellers returned the counteroffer with condominium rider and agency disclosure form to the Respondents. On January 12, 1990, Respondents sent the counteroffer, condominium rider, and agency disclosure form, together with a letter dated January 11, 1990, to the buyers for the buyers' initials and signatures. Although the buyers could not have received the counteroffer until after its expiration date, they advised Respondents by telephone that they had in fact initialed the counteroffer and mailed it back to Respondents. Respondents never received from the buyers that accepted counteroffer. The buyers subsequently verbally demanded the return of their $1,000 deposit, but Respondents wrote to the buyers on February 9, 1990, advising the buyers that they were in default. On February 8, 1990, Respondents had already disbursed the $1,000 deposit to Respondents' operating account since the sellers had told the Respondents to use the deposit to cover the costs incurred advertising the sellers' property. Since he was uncertain as to whether he had "conflicting demands upon an escrow deposit" Respondent Kornicki telephoned the Florida Real Estate Commission and discussed the matter with one of the Commission's attorneys. Because Respondent Kornicki believed that the buyers were "in default," Respondents failed to notify the Florida Real Estate Commission in writing that they had received conflicting demands. No explanation was offered as to why Respondent Kornicki believed the buyers were in default when the counteroffer could not have been signed by the buyers prior to its expiration and when Respondent Kornicki had never seen a fully executed document. Further, no explanation was offered as to why the sellers believed they were entitled to the money. Since that transaction, Respondents have experienced other transactions where conflicting demands were made. In those subsequent instances, they have timely notified the Florida Real Estate Commission in writing as to those conflicting demands. On June 18, 1990, Petitioner's investigator conducted an office inspection and escrow/trust account audit of Respondents' office and escrow/trust account. That audit revealed that Respondents wrote a trust account check on September 1, 1989, in the amount of $369.15, which was returned on October 3, 1989, for insufficient funds. A second trust account check in the amount of $800 was also returned for insufficient funds on October 3, 1989. Respondents had received rental monies from a tenant by check. Respondents had written checks out of those monies for the mortgage payment on the rental property, not knowing that the tenant's check would fail to clear. The worthless check written by the tenant caused these checks written by Respondents to be returned for insufficient funds. Respondents have changed their office policies so that they no longer accept checks from tenants except before tenants move into rental properties and the checks must clear before the tenants are allowed to take possession of the leased premises.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered: Finding Respondent Kornicki guilty of Counts I, III, V, VII, IX, and Finding Respondent Waterway Properties, Inc., guilty of Counts II, IV, VI, VIII, X, and XII; Dismissing Counts XIII and XIV; Ordering Respondent Marvin M. Kornicki to pay a fine of $1,000 to the Division of Real Estate within 60 days and revoking Respondents' licenses should such fine not be timely paid; Placing Respondents on probation for a period of one year if the fine is timely paid; Requiring Respondent Kornicki to complete and provide satisfactory evidence of having completed 60 hours of approved real estate post-licensure education for brokers, 30 hours of which shall include the real estate broker management course, during the probationary period; Establishing terms for the probationary period except that such probationary terms shall not require Respondent Kornicki to retake any state licensure examinations and Requiring Respondent Kornicki to appear before the Commission at the last meeting of the Commission preceding the termination of Respondents' probation. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 13th day of February, 1991. LINDA M. RIGOT 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 13th day of February, 1991. APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 90-5863 Petitioner's proposed finding of fact numbered 1 has been rejected as not constituting a finding of fact but rather as constituting a conclusion of law. Petitioner's proposed findings of fact numbered 2-4, 6-14, and 16-19 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed finding of fact numbered 5 has been rejected as being unnecessary for determination of the issues herein. Petitioner's proposed finding of fact numbered 15 has been rejected as not being supported by the weight of the credible evidence in this cause. COPIES FURNISHED: Darlene F. Keller, Division Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Jack McCray, Esquire Department of Professional Regulation Legal Division 1940 North Monroe Street Tallahassee, Florida 32399-0792 James H. Gillis, Esquire Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Marvin M. Kornicki Waterway Properties, Inc. 16560 Biscayne Boulevard North Miami Beach, Florida 33160
Findings Of Fact Edward D'Alesio, Jr., is a registered general contractor with the Board and holds license no. RG00A3370. Pursuant to an agreement signed on January 26, 1976, between Respondent and Mr. Wernley, Respondent agreed to construct a home for Mr. Wernley for a price of $39,500.00. On April 21, 1975, Mr. Wernley gave Respondent a check for $2,000 made payable to "D.R.G. Builders Trust Fund Account" which was deposited in the account of D.R.G. Builders. According to the terms of the agreement entered into by Mr. Wernley and Respondent, construction of the home was to be completed within 120 days. Evidence reveals that substantial progress was made toward construction of the Wernley home during August and September, 1975, however, little if any progress was made during late 1975. Mr. Wernley registered complaints to Respondent about the progress of construction Inasmuch as he (Wernley) had secured permanent financing at a favorable Interest rate which was due to expire during January or February, 1976. On March 11, 1976, Mr. Wernley demanded the return of his $2,000 security deposit which Respondent advised, by letter dated March 23, that he was unable to return due to financial difficulties. (See Petitioner's Exhibit #5) However, Respondent advised Mr. Wernley that he "would like to offer [him] the model home which was similar ... at the purchase price we had agreed upon." Respondent also agreed to assist in securing a competitive mortgage. Mr. Wernley was allowed five days to signify his acceptance of the model home which he (Mr. Wernley) rejected. Mr. Crass, Secretary-Treasurer for D.R.G. Builders, Inc., testified that the deposit monies used as mortgage commitments were issued and that at no time were monies diverted from one project to complete construction for other projects. Evidence reveals that during November, 1976, the Board through its investigator, Mr. Wallace Norman, issued a warning to Respondent for his failure to qualify D.R.G. Builders, however, Respondent took no action to correct this because at this juncture, the corporation had been dissolved by the State of Florida. Respondent also testified that the project was abandoned inasmuch as he was unable to secure additional financing from Southeast Mortgage Company. He testified that he had approximately 13 houses under construction and Southeast Mortgage Company shut off funds and demanded full payment of a $420,000 construction loan obligation. He testified that he needed approximately $60,000 to complete the houses under construction but was unable to secure additional financing. He testified further that the Wernley home was completed except the trim work during January of 1976. He advised Mr. Wernley during January, 1976, of the firm's cash flow problems and in an effort to amicably settle their differences, offered the model home which, according to his testimony, was equal or better, in all respects, than the home he contracted to build for the Wernleys. Respondent testified that he recently filed bankruptcy which should be final on June 20, 1977. Respondent takes the position that since he converted none of the money deposited by the Wernleys, it is D.R.G. Builders, Inc. that owes the Wernleys $2,000. However, it was noted under the bankruptcy proceeding liability list, that Wernley was a possible business obligation. Respondent testified further that he was advised by the Board's predecessor investigator that it was permissible to pull permits as an owner- builder and that Cooper City, the locality which issued the permits, through its building department, advised that the procedure which D.R.G. had utilized for at least 18 months was proper and acceptable.
Recommendation Based on the foregoing findings of fact and conclusions of law, I hereby recommend that the administrative complaint filed herein be dismissed in its entirety. RECOMMENDED this 30th day of June, 1977, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Barry Sinoff, Esquire 1010 Blackstone Building Jacksonville, Florida 32202 F. F. Mallard, Chief Investigator Florida Construction Industry Licensing Board Post Office Box 8621 Jacksonville, Florida 32211 Mr. Edward D'Alesio, Jr. 3760 North 55th Avenue Hollywood, Florida 33010 ================================================================= AGENCY FINAL ORDER ================================================================= BEFORE THE FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD, Petitioner,
Findings Of Fact Respondent (all references to Respondent are to Respondent Simmonds) is a licensed real estate broker in the State of Florida holding license numbers 0404486 and 0245930. His most current licenses are as a broker, c/o the corporate Respondent. He has been licensed about six years in Florida. The corporate Respondent (all references to the corporate Respondent are to Respondent L. G. Simmonds Realty, Inc.) is a corporation registered as a real estate broker in the State of Florida holding license number 0245825. At all material times, Respondent was licensed and operating as a qualifying broker and officer of the corporate Respondent. He is the sole shareholder of the corporate Respondent and the only broker employed by the corporate Respondent. Respondents were brokers in three sales transactions in which they received competing claims for earnest money deposits that they held in trust. The three contracts are the sale from Durant to Durant by contract dated February 13, 1987, and amended December 7, 1987; the sale from Dyer to James by contract dated August 27, 1988; and the sale from Kollar and Nilands Bar & Package, Inc. to Hamilton by contract dated October 11, 1988. Each of the three contracts is on a standard printed form. Each contract requires the corporate Respondent to hold the earnest money deposit in escrow and disburse it at closing, at which time the corporate Respondent earns its commission. Each contract provides that the corporate Respondent may interplead the funds in circuit court in the event of a dispute and further provides that the corporate Respondent shall comply with Chapter 475, Florida Statutes. The Durant contract provides for the corporate Respondent to hold a $1000 earnest money deposit. A dispute between the parties to the Durant contract arose, and Respondent contacted the Florida Real Estate Commission for advice. By letter dated November 22, 1988, Respondent informed the Florida Real Estate Commission of a demand by the seller for the deposit because the buyer had failed to follow through on his mortgage application. The letter states that Respondent is convinced that the seller is entitled to the deposit and that Respondent intends to pursue interpleader. By Notice dated February 2, 1989, the Florida Real Estate Commission informed Respondents that it could not issue an Escrow Disbursement Order because of the unenforceability of certain contractual language. Referring to Rule 21V-10.32, the letter advised Respondents that, within 30 days of receipt of the letter, they must pursue arbitration, with the consent of all parties, or a judicial adjudication, such as through interpleader. At some point, Respondents obtained an application for arbitration and sent it to the parties. By letter dated June 12, 1989, Respondents informed the Florida Real Estate Commission that they had sent an arbitration contract on March 21, 1989, to the seller, who had not yet responded to the request to arbitrate. Subsequently, Respondents retained counsel at their expense to discuss interpleading the funds in circuit court. Counsel advised them that the relatively modest sum involved, as a practical matter, precluded the judicial remedy because the attorneys' fees would exceed the amount in dispute. Eventually, the parties to the Durant contract settled their dispute, and Respondents disbursed the funds pursuant to the parties' stipulation. There is no evidence of a complaint about Respondents' handling of the earnest money deposits, nor is there any evidence that Respondent failed to account or deliver the deposit to any person as required by law. The Dyer contract also involved an earnest money deposit of $1000, which was later increased by addendum to a total of $3000. The Dyer contract, which also failed to close, provides for the corporate Respondent to hold the earnest money deposit. By letter dated March 2, 1989, Respondents informed the Florida Real Estate Commission that, as of the same day, they had received conflicting demands for the earnest money deposit. By Notice dated August 28, 1989, the Florida Real Estate Commission informed Respondents that it could not issue an Escrow Disbursement Order because of factual disputes that the Commission is not empowered to resolve. The Notice states that Respondents must "immediately" choose one of the remaining alternatives--arbitration or interpleader in circuit court. By letter dated September 8, 1989, Respondents informed the Florida Real Estate Commission that they would seek help through the Arbitration Society of Florida, Inc. It is unclear whether Respondents sent an arbitration application to the parties in the Dyer contract, but no arbitration ensued. The parties to the Dyer contract resolved their dispute in March, 1990, and Respondents disbursed the funds pursuant to the parties' stipulation. There is no evidence of a complaint about Respondents' handling of the earnest money deposits, nor is there any evidence that Respondents failed to account or deliver the deposit to any person as required by law. The Kollar contract resulted in the receipt by the corporate Respondent of an earnest money deposit of $10,000. This contract also failed to close. By letter dated January 19, 1989, Respondents informed the Florida Real Estate Commission of conflicting demands received the same day. The Commission issued an Escrow Disbursement Order on August 16, 1989, with which Respondents promptly complied. There is no evidence of a complaint about Respondents' handling of the earnest money deposit, nor is there any evidence that Respondents failed to account or deliver the deposit to any person as required by law. On January 30, 1990, Petitioner's investigator visited Respondents' office pursuant to a complaint that never provided any basis for disciplinary action. Respondent said that he was ill and asked her to reschedule the visit. They agreed to reset it for February 6, 1990. On February 6, 1990, Petitioner's investigator met Respondent at his office and asked for copies of all pending contracts, bank statements, deposit slips, cancelled checks, and similar materials so that she could reconcile the trust account. Respondent supplied her with all of these materials except for the cancelled checks, which he said were at the accountant's office. Respondent gave the investigator access to his office copier so that she could copy whatever she needed. She apparently copied various documents, but failed to copy the pending contracts. From February, 1988, through February, 1990, Respondents held 6-10 earnest money deposits. On February 6, Respondents had only three pending contracts for which they held deposits. These were the Dyer contract and two unidentified contracts with $3500 and $500 earnest money deposits. Respondents did not handle other trust funds, such as property management funds. Petitioner's investigator determined that the trust account was short $2897.73. She found pending contracts indicating that Respondents should be holding a total of $7000 in earnest money deposits, but she found a bank balance of only $4102.27, which included a deposit of $1392.26 made on February 5. Respondents' trust account has been short previously. For example, in August, 1989, the Dyer, Durant, and Kollar contracts, which were still outstanding, generated a trust account liability of $14,000, but the account balance was as low as $700. Respondent admits that he improperly removed funds from the trust account, without the parties' knowledge, to apply toward personal medical expenses that he had incurred. In the fall of 1989, he deposited into the trust account proceeds from a loan he had recently received. However, he removed additional trust funds when he later incurred more medical expenses. By February 6, Respondent knew that the trust account was short, but evidently did not know precisely by how much. His repeated vagueness concerning the specifics of trust account withdrawals and deposits from August, 1989, through February, 1990, discredits his testimony that he never withdrew more than the amounts of pending commissions, which were unearned in any event when withdrawn by Respondent. On February 7, Respondent deposited $2897.73 into the trust account to eliminate the deficiency found by Petitioner's investigator. During the following week, the investigator returned to Respondents' office. She requested Respondent to produce the same documents that she had examined previously, but Respondent refused on the grounds that he had already produced all the documents once and he was seeking legal counsel. The investigator contacted Respondent a couple more times concerning the requested documents, but Respondent continued to refuse to cooperate. Petitioner next tried to compel the production of the requested documents by service of an administrative subpoena. By subpoena duces tecum issued February 19, 1990, and served February 21, 1990, Petitioner demanded that Respondents produce, on February 26, 1990: All current pending sales contracts, on L. G. Simmonds Realty Escrow Account #144100004792 all bank deposit slips from 2/1/88-2/1/90, the check book for account #14410004792. Upon receipt of the subpoena, Respondent contacted his attorney, who prepared a petition to invalidate subpoena, which was served by mail on February 25, 1990, and received by Petitioner on February 28, 1990. The basic objections are that the subpoena is "unreasonably broad in scope and/or requires the production of irrelevant material" and that Respondents are entitled to know what complaint is being investigated prior to producing the information. Petitioner issued another administrative subpoena on March 12, 1990, which was served upon Respondents on March 26, 1990, and requested, by March 30, 1990: On L. G. Simmonds Realty Escrow Account #14410004792: All sales contracts for which L. G. Simmonds Realty, Inc. is holding escrow deposits, the 1/90 and 2/90 bank statements, cancelled checks, number 177 through 270. On March 29, 1990, Respondents' attorney served the same objections to the petition, and Petitioner received the objections on April 4, 1990.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Florida Real Estate Commission enter a final order reprimanding Respondents; imposing on each Respondent an administrative fine of $3000 (for a total from the two Respondents of $6000); requiring Respondent to complete an approved 60-hour course; suspending the licenses of both Respondents for a period of six months, commencing retroactive to when their licenses were revoked pursuant to the emergency order; placing both licenses on probation for a period of three years commencing the conclusion of the suspension; and requiring, during the period of suspension, that Respondents provide the Florida Real Estate Commission, or its signated representative, with escrow account status reports at such intervals as the Commission shall require. DONE and ORDERED this 9th day of October, 1990, in Tallahassee, Florida. ROBERT E. MEALE 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 9th day of October, 1990. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-4438 Treatment Accorded Proposed Findings of Petitioner 1-7: adopted. 8: rejected as subordinate. 9-10 (first sentence): adopted. 10 (second and third sentences): rejected as unsupported by the greater weight of the evidence. In fact, Respondent supplied the investigator with copies of the contracts on February 6, but refused subsequent requests to produce them. He indicated that he wanted to obtain advice of counsel. 11: rejected as subordinate. In addition, the implication that files of the Division of Real Estate were the sole source of information regarding the contracts is rejected as unsupported by the greater weight of the evidence. The investigator found in the EDO files of the Division of Real Estate a copy of the Dyer contract, which, as noted in the recommended order, was one of the three contracts generating the escrow account liability that the investigator calculated on February 6. Although she saw the other two contracts (in order to generate the liability), she never received copies of them, even through the final hearing. 12-19: adopted or adopted in substance. 20-21 (with respect to each paragraph, first sentence and first clause of second sentence): adopted. 20-21 (with respect to each paragraph, remainder): rejected as irrelevant. 22: adopted. 23: rejected as irrelevant. 24-27 and 30-33: adopted. 28 and 34: rejected as unsupported by the greater weight of the evidence and unnecessary. 29: rejected as unsupported by the greater weight of the evidence. Treatment Accorded Proposed Findings of Respondents 1-12: adopted or adopted in substance. 13: rejected as subordinate. 14-15: adopted. 16 and 19: rejected as unsupported by the greater weight of the evidence and legal argument. 17: rejected as unsupported by the greater weight of the evidence. 18: adopted. 20: rejected as irrelevant. 21: rejected as subordinate. 22: adopted. 23-24 and 26-27: rejected as recitation of testimony. 25: rejected as unsupported by the greater weight of the evidence. 28-33 (first clause of second sentence): adopted. 33 (second clause of second sentence): rejected as unsupported by the greater weight of the evidence and legal argument. 33 (remainder): adopted. 34-35: except as to the fact of the issuance of the subpoena and petition to invalidate, rejected as unnecessary. 36: rejected as unclear. Respondent gave the investigator a chance to see the three pending contracts generating the February 6 trust account liability, but never gave her copies of any of them when she later discovered that she had failed to copy them. She found a copy of the Dyer contract in the EDO file, but she never received copies of the other two contracts, even at the final hearing. The last sentence is rejected as unnecessary. The determination in the recommended order on this point was not dependent upon Respondents' handling of the subpoenas, but on their handling of repeated and reasonable requests for relevant information. 37: rejected as irrelevant. 38: adopted. 39: rejected as unnecessary. 40-43: adopted or adopted in substance. 44: adopted. 45: rejected as unnecessary. 46-49: adopted or adopted in substance. COPIES FURNISHED: Attorney Thomas V. Infantino Infantino and Berman Post Office Drawer 30 Winter Park, Florida 32790-0030 Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Attorney James H. Gillis Division of Real Estate Florida Real Estate Commission 400 W. Robinson St. Orlando, Florida 32801-1772 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 *Previously assigned DOAH Case No. 90-4319 closed as a duplicate.
The Issue The issue is whether Mr. Carlson is guilty of misconduct in his practice as a certified public accountant by making personal use of trust fund monies or by his firm's issuance of an audit report on a bank while one of the firm's partners was a shareholder in the bank.
Findings Of Fact Mr. Carlson has been licensed as a certified public accountant in Florida, holding license #AC0002345. His address is 930 North Chrome Avenue, Suite 2B, Homestead, Florida 33030. Mr. Carlson became a partner in an accounting firm known as Brown, Carlson, and Derrer in 1985. Prior to Mr. Carlson's association with Richard Brown, one of the partners in that firm, the Islamorada Bank was a major client of Mr. Brown. Brown had issued audit opinions on the financial statements of the bank without disclosing that Brown was a stockholder of the bank, and therefore lacked independence with respect to the bank. Financial statements for the year ending December 31, 1986, were issued on the letterhead of Brown, Carlson, and Derrer, and signed by Richard Brown, along with an audit opinion with respect to the financial statements of the Islamorada Bank. Brown's lack of independence was not disclosed in the audit opinion letter. Mr. Carlson had specifically asked Mr. Brown on all audits, including the audit of the Islamorada Bank, whether Brown was independent of the client, and Brown unequivocally told Carlson that he (Brown), was independent. Other members of the firm, including Roger Infante, also specifically inquired about Brown's independence and was assured that Brown was independent with respect to the Islamorada Bank. After the audit report on the financial statements of the Islamorada Bank for 1986 was issued, the firm of Brown, Carlson, and Derrer broke up in April, 1987. In connection with the breakup, Carlson discovered that Brown had held stock in the Islamorada Bank, and was not independent with respect to the bank. At that time, Mr. Carlson's lawyer advised him that: If he notified all shareholders of the bank, this would be improper because Carlson was currently in acrimonious litigation with Brown over the breakup of the accounting firm, and such action could be viewed as harassment; Brown still denied the lack of indepen- dence despite the appearance of shares in the bank on Brown's personal financial statements, and If Carlson failed to notify anyone, he might be guilty of a potential violation of his professional responsibility. Thus, Carlson's lawyer told him that no matter what he did, he could be guilty of wrongdoing. In order to resolve this problem, Carlson reported the situation to the Department of Professional Regulation. He did not attempt to recall the audit that Brown had done on the bank. A certified public accountant who owns even one share of stock in a company for which he issues financial statements lacks independence. Because Brown lacked independence and the financial statements were issued on the letterhead of Brown, Carlson, and Derrer, the firm also lacked independence. Willard Teft, a client of Mr. Carlson, established an educational trust fund known as a Clifford Trust. Those trust funds were delivered to Mr. Carlson and held in Carlson's trust account. Mr. Carlson failed to post and reconcile the Teft trust account from January 1, 1985 until May, 1988. The failure to perform the posting and reconciliations resulted in overdrafts against the Teft trust. These overdrafts consisted of payments to clients and fees paid to the accounting firm. Only after the Teft trust was reconciled did Mr. Carlson realized he had used money that was not his. The Teft trust should have had a balance of $7,500-10,000 at all times. Mr. Carlson should have known by looking at the balance of his trust account that he was misusing trust fund money. Mr. Carlson's misuse of the trust fund money constitutes misconduct in the practice of public accounting. The Teft trust account had been reconciled and posted to date before the Department began its investigation. All monies due to the trust because of overdrafts had been returned to the account before the Department's investigation. Mr. Carlson provided full and complete cooperation in the investigation conducted by the Department.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered finding Mr. Carlson guilty of violation of Section 473.323(1)(g), Florida Statutes, that he be reprimanded, and placed on probation with the usual probationary terms for a period of one year. RECOMMENDED this 22nd day of June, 1990, at Tallahassee, Florida. WILLIAM R. DORSEY, JR. 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 22nd day of June, 1990. COPIES FURNISHED: Tobi C. Pam, Esquire Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Victor K. Rones, Esquire MARGULIES AND RONES 16105 Northeast 18th Avenue North Miami Beach, Florida 33162 Kenneth E. Easley, General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Martha Willis, Executive Director Department of Professional Regulation Board of Accountancy Suite 16 4001 Northwest 43rd Street Gainesville, Florida 32606
The Issue The issues are whether Respondents committed fraud, in violation of Section 475.25(1)(b), Florida Statutes; failed to prepare monthly trust account reconciliations, in violation of Rule 61J2-14.012(2) and (3), Florida Administrative Code; failed to account for or deliver funds, in violation of Section 475.25(1)(d)1, Florida Statutes; and failed to preserve books and accounts, in violation of Rule 61J2-14.012(1), Florida Administrative Code.
Findings Of Fact At all material times, Respondent Maria L. Nuevo (Respondent) was a licensed real estate broker, holding license number 3006548. Respondent was first licensed, as a real estate salesperson, in Florida in 1984 and became a broker in 1986. Respondent is president of, and qualifying broker for, Respondent Realco Realty, Inc. (Realco Realty), which is a corporation registered as a real estate broker, holding license number 1011738. In late August or early September 2000, Respondent prepared a Residential Sales and Purchase Contract (Contract) on behalf of Omar Canizares, as buyer, to purchase a residence at 10620 Southwest 139th Street in Miami (Property). The Contract provided for a purchase price of $260,000 and a deposit of $1000 to be held by Realco Realty. Respondent presented the Contract to Zoila de Castro, a real estate broker who was representing Antonio and Lorraine Lambo, and Mrs. Lambo. The record is poorly developed on these points, but it appears that Mr. and Mrs. Lambo jointly owned the Property and that both of them never signed the Contract. Respondent left the Contract with Mrs. Lambo because Mr. Lambo was out of town. A few days later, Ms. de Castro returned the Contract to Respondent, intending to convey a counteroffer that raised the purchase price to $265,000 and the deposit to $5000--to be paid within three days after the inspection. However, the Contract delivered by Ms. de Castro to Respondent is notable for two omissions--a signature of one of the Lambos and a deadline for Canizares' acceptance of the counteroffer. Ms. de Castro's testimony that she delivered to Respondent the only original contract with signatures of both Lambos is discredited for two reasons. First, Respondent would likely use the better version of the Contract--i.e., the one with both sellers' signatures--when providing a copy to the appraiser. Second, Ms. de Castro appears to have maintained, at best, an imperfect grasp of all that was transpiring in this attempted transaction and may be claiming to have delivered a fully signed contract--though still without a deadline for Mr. Canizares' acceptance--in order to place herself in a better light. At this point in the transaction, the lack of an enforceable agreement between Mr. Canizares and the Lambos should have been obvious to the Lambos' real estate broker, but it was not. The testimony depicts a series of unanswered letters and unsatisfied demands, as the Lambos initially tried to get the deal to close and eventually tried only to get the deposits, which they believed now totalled $5000. In fact, neither Respondent held any deposit. Although relieved from the obligation to collect another $4000 in deposit, due to the failure of the parties to come to an agreement, Respondents had misrepresented to the Lambos and Ms. de Castro that they held the initial $1000 deposit. Although Petitioner has failed to prove other fraudulent acts by either Respondent toward the Lambos or Ms. de Castro, Petitioner has proved another fraudulent act by Respondents in connection with this transaction. Exploiting Ms. de Castro's lack of diligence, Respondents appear to have shopped the Contract. On September 22, 2000, Respondent ordered an appraisal on a form showing the purchase price as $325,880. At the request of the appraiser, Respondent sent to the appraisal a copy of an altered Contract, which provided for a purchase price of $310,100 and reflected total deposits of $5000. The Lambos-Canizares sale never closed, and the Lambos never received any money representing the deposit that they claimed to be owed. Respondents opened an escrow account in September 2000, but had never performed written monthly escrow reconciliation for their trust account through the date of the audit in February 2001. Additionally, at the time of the audit, Respondents were unable to produce any documentation pertaining to their real estate practice. However, Respondents later produced banking records and reconciliations for January and February 2001, which were undoubtedly prepared after the February 2001 audit.
Recommendation It is RECOMMENDED that the Florida Real Estate Commission enter a final order revoking the real estate broker licenses of Maria L. Nuevo and Realco Realty, Inc. DONE AND ENTERED this 29th day of May, 2003, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of May, 2003. COPIES FURNISHED: Nancy P. Campiglia, Acting Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street, Suite 802, North Orlando, Florida 32801 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202 Christopher J. DeCosta Senior Attorney Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street, Suite N-809 Orlando, Florida 32801 Michael H. Wolf Michael H. Wolf & Associates, LLC. 3832 North University Drive Sunrise, Florida 33322
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: At all times material to these proceedings, petitioner, now 26 years of age, has been a resident of the State of Florida. Although he has never been declared incompetent, petitioner has suffered emotional and psychological problems before and since the execution of the Trust Agreement in dispute herein. The Agreement was executed and acknowledged in December of 1971, shortly after petitioner attained his majority. Originally names as trustees were petitioner's mother and Manufacturers Hanover Trust Company of New York, a corporate fiduciary having its principal place of business in New York City. Since the death of petitioner's mother in 1973, petitioner's uncle, James T. Lewis, Jr., and a New York attorney, Thomas P. Ford, have served as co-trustees with Manufacturers Hanover Trust Company. The situs of the trust corpus is New York. Pursuant to the provisions of Florida Statutes Chapter 199, petitioner filed intangible personal property tax returns for 1974 and 1975 reflecting the assets held under the Trust Agreement. (Exhibits 1 and 2). For the year 1974, petitioner paid intangible taxes in the amount of $3,268.29. The amount of $2,069.54 was paid for the year 1975. Contending that the intangible personal property taxes were paid in error, petitioner filed with the respondent Office of the Comptroller a request for refund. (Exhibit 4). By letter dated August 18, 1976, respondent Office of the Comptroller agreed with the position taken by the respondent Department of Revenue and denied petitioner's request for a refund. The basis for the Department of Revenue's determination was that petitioner had a taxable beneficial interest in the trust since his power to revoke and amend was not limited within the meaning of F.A.C. Rule 12B-2.02(3)(e). (Exhibit 5) Petitioner's right of revocation is reserved in Article Tenth of the Trust Agreement, which provides as follows: "The Settlor shall have the right at any time and from time to time, by an instru- ment in writing duly acknowledged and delivered to the Trustees, to revoke or amend this Agreement, in whole or in part with the written consent of the Trustees." (Exhibit 3, page 19) Article Ninth of the Trust Agreement provides that the Trust shall be governed and construed under the laws of the State of New York. (Exhibit 3) It was the testimony of one of the individual trustees and one of the officers of the corporate trustee (both residents of New York) that while there was no condition precedent to the initial request by petitioner for revocation or amendment of the Trust Agreement, the same could not be accomplished without the consent of the trustees. It would be the responsibility of the trustees to exercise their discretion as to whether the request was in the best interest of petitioner. These trustees did not consider their consent to be simply a ministerial duty, but rather a sound exercise of discretion. (Exhibits 6 and 7)
Recommendation Based upon the findings of fact and conclusions of law recited above, it is recommended that the Office of the Comptroller refund to petitioner the 1974 and 1975 intangible personal property taxes paid by him in the total amount of $5,337.83. Respectfully submitted and entered this 24th day of June, 1977, in Tallahassee, Florida. COPIES FURNISHED: Gerald A. Lewis, Comptroller State of Florida The Capitol Tallahassee, Florida 32304 Manley P. Caldwell, Jr. Caldwell, Pacetti, Barrow, and Salisbury Royal Park Building 324 Royal Park Way Palm Beach, Florida 33480 Edwin J. Stacker Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 DIANE D. TREMOR Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675
Findings Of Fact The Department rules on the Proposed Findings of Fact and Exceptions, submitted by the parties as follows: APPLICANT'S PROPOSED FINDINGS AND CONCLUSIONS Applicant's Proposed Finding numbers 1 and 2 are accepted to the extent that factual matters are discussed, consistent with the Final Order. Proposed Finding numbers 3-6 are accepted as consistent with the Final Order. PROTESTANT'S (FLORIDA BANKERS ASSOCIATION) PROPOSED FINDINGS ON BEHALF OF PROTESTANTS AND INTERVENORS Proposed Findings 1-32 concern proposed facts relevant to all applications, and Proposed Findings 45-55 concern proposed facts concerning the specific application of DBT Trust Company of Florida. Proposed Finding numbers 1-5, 10-17, 26-30 are accepted to the extent that they are generally consistent with the Hearing Officer's Finding or with the Final Order. Proposed Finding numbers 6-9, 18-25, 31 are rejected to the extent that they are inconsistent with the Hearing Officer's Findings of Fact or with this Final Order, or are otherwise irrelevant or immaterial. Proposed Finding numbers 45, 46, 51-55 are rejected to the extent that they are inconsistent with the Hearing Officer's Findings of Fact or with this Final Order, or are otherwise irrelevant or immaterial. Proposed Finding numbers 47-48 are accepted to the extent that they are generally consistent with the Hearing Officer's Findings of Fact or with the Final Order. PROTESTANT'S AND INTERVENOR'S EXCEPTIONS Exception numbers 1, 3-7 are rejected and the Hearing Officer's ruling is affirmed. Exception number 2 is rejected. Exception number 8 is misplaced. Many Findings of Fact submitted by the parties were not specifically incorporated into the Findings, but were consistent with the Findings, and have been accepted in this Final Order. Those that have not, are deemed inconsistent with the Hearing Officer's Findings, or are irrelevant or immaterial. Exception number 9 is rejected. All parties had an opportunity to challenge the incipient policy of the Department, pursuant to McDonald vs. Department of Banking and Finance, 346 So.2d 569 (1st DCA Fla. 1977) Exception number 10 was not considered a significant factor, and the Department followed its incipient policy and other trust company order regarding capital adequacy. Exception numbers 11-16 are rejected as inconsistent with the Hearing Officer's Findings of Fact, and the Final Order. Exception numbers 17-26 concern Proposed Findings which have been discussed above, and considered in paragraphs 6-9. SUPPLEMENTAL POST HEARING SUBMISSION OF FIRST NATIONAL BANK IN PALM BEACH AND BESSEMER TRUST COMPANY OF FLORIDA This submission is primarily limited to the issue of transfer accounts. Points 1-3 are rejected to the extent that they are inconsistent with the Hearing Officer's Findings of Fact, and the Final Order. The Hearing Officer made specific findings as the trier of fact, regarding the transfer of accounts, and those Findings have been adopted by the Comptroller. SCHEDULE "A" Thomas C. Oldham, Esquire Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 Stephen E. Day Attorney for Respondent Bankers Trust Company of Florida Taylor, Day, Rio & Mercier 701 Fisk Street, Suite 320 Jacksonville, Florida 32204 (904) 356-0700 John A. Jones Bruce Roberson Attorneys for DBT Trust Company of Florida Case No. 79-1228; 79-1234 Holland and Knight 610 North Florida Avenue Tampa, Florida 33601 (813) 223-1621 John Radey Holland and Knight Post Office Drawer 810 Tallahassee, Florida 32302 (904) 224-7000 J. Thomas Cardwell Attorney for Petitioner Florida Bankers Association and Intervenor Atlantic National Bank of Palm Beach County Akerman, Senterfitt and Eidson Post Office Box 231 Orlando, Florida 32802 (305) 843-7860 Bruce Culpepper Attorney for Petitioner Florida Association of Registered Bank Holding Companies, Inc. 350 East College Avenue Tallahassee, Florida 32301 (904) 222-6071 James G. Pressly, Jr. Attorney for Intervenor First National Bank in Palm Beach Attorney for Intervenor Bessemer Trust Company of Florida Gunster, Yoakley, Criser, Stewart and Hirsey, P.A. First National Bank Building Palm Beach, Florida 33480 (305) 655-1980 H. David Faust Attorney for Intervenor Bank of Palm Beach and Trust Company Attorney for Intervenor First Bank and Trust Company of Boca Raton Burns, Middleton, Farrell and Faust 205 Worth Avenue Palm Beach, Florida 33480 (305) 655-5311 Robert I. MacLaren, II Attorney for Intervenor Boca Raton National Bank Osborne and Hankins Post Office Drawer 40 855 South Federal Highway, Suite 200 Boca Raton, Florida 33432 (305) 395-1000 Ralph J. Blank, Jr. Attorney for Intervenor First National Bank and Trust Company of Riviera Beach Blank, Will and Benn Post Office Box 2100 West Palm Beach, Florida 33402 (305) 832-2889 John C. Miller, Jr. Attorney for All Intervenors Post Office Box 46 Mobile, Alabama 36601 (205) 432-1414 Phillip G. Newcomm Bowman Brown Arnold L. Berman Attorneys for Respondent U.S. Trust Company of Florida 1000 Southeast First National Bank Building Miami, Florida 33131 (305) 358-6300
The Issue Whether the Certificate of Registration of the Respondent as a real estate broker should be suspended or revoked For alleged violation of Sections 475.25(1)(a), 475.25(1)(c), 475.25(1)(i), and 475.25(3), Florida Statutes, as alleged in the Administrative Complaint filed February 11, 1976. A final hearing was scheduled to be held on June 29, 1976, but pursuant to Motion of Respondent was continued until July 6, 1976 and, pursuant to a further Motion of Respondent For continuance, the hearing was continued until November 15, 16, 1976. A prehearing Motion of Respondent to strike Counts I, II, III, V, VII, VIII, IX & X of the Administrative Complaint was denied at the commencement of the hearing. At the hearing, Petitioner moved to amend Count X of its Complaint to correct a typographical error as to the statutory provision alleged to have been violated. The Motion was granted and the said Count was amended to reflect an alleged violation of Section 475.25(3), F.S. rather than Section 475.25(1), F.S. Pursuant to further Motion of Petitioner, a typographical error appearing in Count VII of the Administrative Complaint relating to the address of the property in question shown in paragraph 1 thereof was corrected to read "1558". Pursuant to further Motion of petitioner, Count Seven was also amended to include an alleged violation of Section 475.25(1)(i), F.S. No objections to any of the above amendments were made by Respondent.
Findings Of Fact Respondent is a registered real estate broker, Certificate No. Q056337. During the year in which the alleged statutory violations occurred, i.e., 1974, she was also registered under the trade name "Watson Real Estate". Also, effective November 4, 1974, she was additionally registered in the name of Connie B. Martin. Her place of business was listed at 17031 North Dixie Highway, North Miami Beach, Florida. (Petitioner's Exhibits 1, 2) On April 16, 1974, Respondent, in the name of "Connie Martin and/or Nominees" entered into an Agreement of Sale and Deposit Receipt with Richard Infante and Susan Infante, his wife, whereby Respondent agreed to purchase real estate located at 1558 N.W. 102nd Street, Miami, Florida, For the price of $24,607.50. The contract provided For a $1,000.00 security deposit by the purchaser in the Form of a check payable to "Watson Real Estate Trust Account" and the Agreement recited an acknowledgement of receipt of these escrow funds by Constance B. Mastellone For Watson Real Estate. The Agreement further provided that closing of the transaction would be on June 23, 1974 and that, in the event of failure or refusal of the purchaser to comply with the obligations thereunder, without fault on the sellers' part, all monies paid under the contract could be retained by the sellers as liquidated damages. Respondent did not place the $1,000.00 deposit in the Watson Real Estate Trust Account that was maintained in the City National Bank of Miami Beach, Miami Beach, Florida. Instead, she wrote a letter to the Infantes on the same day that the contract was executed advising them that the money was in an interest-bearing account at Chase Federal Savings, North Miami Beach, Florida. The letter stated that she preferred to handle the matter in that manner because there was a possibility she would not be able to obtain financing and close the purchase. Although Respondent testified that Mr. Infante called and told her that he had received the letter and had expressed no objection to this disposition of the funds, no written instrument or addendum to the contract in this respect was ever executed by the parties. (Petitioner's Exhibit 14; Respondent's Exhibit 16). The transaction with the Infantes did not close on the scheduled date because Respondent was unable to obtain mortgage financing. On July 1, 1974, Respondent, in the name of "Connie B. Martin, broker" as seller, entered into a deposit receipt agreement with Carrie Clark, as purchaser to sell the Infante property For the sum of $25,000.00. The deposit receipt reflected that the sum of $1,450.00 was acknowledged to be held in escrow by Watson Real Estate as a deposit on the property. There was no showing in this Agreement that Respondent did not hold title to the property at the time. The contract was contingent upon the delivery by the seller of an FHA appraisal of not less than $25,000.00. The Agreement reflected that "Watson Real Estate, Connie B. Martin, Broker" had received the aForesaid deposit. Under the same date of July 1, 1974, another deposit receipt was executed by Carrie Clark as buyer, whereby "Watson Real Estate Trust Account, Connie B. Martin", acknowledged receipt of $1,450.00 from Carrie Mae Clark on the same property as a deposit to be held in escrow by Watson Real Estate. This document showed the purchase price to be $24,607.50. It did not reflect the name of the proposed seller of the property. At the time she executed these documents, Clark did not know who owned the property in question. Respondent viewed Clark as her "Nominee, as referred to in the original contract with the Infantes, and had contracted with Clark on the assumption that she could deliver clear title to her when she had received the same from the Infantes. Respondent considered this transaction to be what she termed a "double closing". Her original contract with the Infantes provided that she would receive as "Watson Real Estate, Connie B. Martin, Broker", 40 percent of the real estate commission on the sale with 60 percent to be paid to the listing broker, Edwin C. Bagby. (Testimony of Respondent, Clark, Petitioner's Exhibit 8; Respondent's Exhibit 6). During the next several months after June, 1974, Respondent advised Infante and his attorney Benjamin Agronow, that she was endeavoring to sell the house to Clark. Infante was desirous of selling the property and did not press to close the transaction. He hereby tacitly agreed to an extension of the time For closing. However, when the Clark deposit receipt was submitted to Agronow in early November, 1974, he advised Infante that the changed method of financing therein would result in higher costs to him. By this time Infante wanted no further dealings with the Respondent and declined to consider the offer by Clark. Thereafter, on November 12, 1974, Agronow advised the Respondent that she had breached the contract of April 16, 1974 For, failure to close the transaction, and demanded delivery of the $1,000.00 deposit under the terms of the contract. It provided that upon default of the purchaser all monies paid thereunder could be retained by the seller as liquidated damages and the contract terminated. Respondent did not pay over the deposit funds to Infante. (Testimony of Respondent, Agronow, Infante (Deposition), Respondent's Exhibit 6, Petitioner's Exhibit 14). On May 25, 1974, Respondent, in the name of "Connie B. Martin and/or Nominees" as purchaser, entered into an Agreement Of Sale And Deposit Receipt with Ruth E. Higgins, as seller, to purchase property located at 1065 N.W. 127th Street, Miami, Florida, For the sum of $31,000.00. The contract provided For the payment of $1,000.00 in the Form of a check to "Watson Real Estate trust account", escrow agent, as a security deposit, and receipt was acknowledged of this amount on the same date by Constance B. Mastellone For Watson Real Estate Trust Account. The contract further provided that it was a "back-up" contract and would not become effective until the date that Higgins was notified that a previous contract with one Hyde was known to be void. Respondent was advised several months later that the Hyde transaction had failed. Neither the listing broker, Associates Real Estate, nor Higgins saw the $1,000.00 at the time the aForesaid agreement of May 25 was entered into by the parties. A letter of Respondent to Higgins on the same date as the contract was executed stated that Respondent held the deposit of $1,000.00 in her account with Chase Federal Savings, North Miami Beach, Florida, in an interest-bearing account. It further stated that Respondent did not want to lose the interest during the time spent waiting For a mortgage commitment. Respondent testified that Higgins called her on the phone and told her she had received the letter and accepted the provisions thereof. Respondent encountered difficulties in obtaining financing For the purchase due to a tight money market and there was also a title problem to be resolved. In any event, the deal did not go through and Respondent obtained a release of the deposit receipt to herself which was executed by Higgins on December 19, 1974. Respondent admitted at the hearing that at no time was the $1,000.00 deposit ever placed in the Watson Real Estate trust account. (Testimony of Respondent, Higgins, Shaeffer; Petitioner's Exhibit 15; Respondent's Exhibits 8, 10, 11, 12, 13). On December 10, 1974, Respondent's daughter, Pamela A. Mastellone entered into an Agreement Of Sale And Deposit Receipt as purchaser of the Higgins property For the sum of $34,000.00. This agreement provided For a security deposit in the sum of $3,000.00 in the Form of a check payable to Ruth E. Higgins. The check was issued by Connnie Mastellone" on December 10, 1974 and was drawn on the City National Bank of Miami Beach. The contract further provided that if it did not close by December 24, 1974, the contract would be null and void and the parties relieved of all obligations. The agreement provided For an even split of a 7.5 percent commission between Associates Realty and Watson Realty. Respondent testified that at the time she gave the check to Higgins, she asked her to hold it until a firm commitment from a mortgage company had been received. Higgins, on the other hand, testified that Respondent had asked her to hold it For two weeks. Respondent was unable to get mortgage financing For her daughter and the contract expired by its terms on December 24, 1974. On December 27, 1974, Higgins deposited the check For payment and it was returned For insufficient funds. (Testimony of Respondent, Shaeffer; Petitioner's Exhibits 16, 17, 18; Respondent's Exhibit 14). On June 18, 1974, Respondent in the name of "Connie B. Martin" as purchaser entered into an Agreement Of Sale And Deposit Receipt with Rose Gilbert, represented by Jean Fielding, Attorney in fact, to purchase real estate located at 16150 N.E. 12th Avenue, North Miami Beach, Florida, For the price of $26,000.00. The Agreement provided that upon signing of the contract, the purchaser would place $2,00.00 in escrow with Watson Real Estate Trust Account and receipt was acknowledged of this sum by Constance B. Mastellone For Watson Real Estate. The contract provided For a 50-50 commission split between Watson Real Estate and Pete Lipinsky, listing broker. At the time the contract was executed, Lipinsky told Respondent that if she did not place the money in escrow, he would "nail her hide to the wall". Respondent testified that she instructed her daughter, Pamela Mastellone, to go to the Chase National Bank and withdraw $2,100.00 and send the same to the Watson Realty Trust Account at City National Bank of Miami Beach. She further testified that it was not until she was investigated by petitioner that she learned her daughter had neglected to follow her instructions in this regard. The contract did not close on the agreed date and thereafter, on September 20, 1974, Respondent, in the name of "Constance B. Mastellone, Broker" entered into another Agreement Of Sale And Deposit Receipt with Gilbert on the same property For a price of $29,000.00. Although this Agreement provided For a security deposit of $2,600.00 to be placed in the Watson Real Estate Account, the parties understood that these were the same funds deposited under the Former contract. This deal closed on October 14, 1974. (Testimony of Respondent, Fielding, Lipinsky; Petitioner's Exhibits 6, 7; Respondent's Exhibits 1, 2). On May 28, 1974, Peter A. Mastellone and Respondent, in the name of "Constance B. Mastellone, Broker, and/or Nominees" was purchaser entered into an Agreement Of Sale And Deposit Receipt with Roy M. Hall and Kitty H. Hall, his wife, to purchase property located at 1517 N.W. 101st Street, Miami, Florida, For the price of $17,000.00. The contract provided For a $1,000.00 check payable to Watson Real Estate Trust Account as escrow agent as a security deposit, and receipt of the said deposit was acknowledged by Constance B. Mastellone on behalf of Watson Real Estate. The contract further specified that the property was being purchased For the purpose of resale and provided For a closing within 30 days. The contract provided that there would be no real estate commission paid on the transaction. Also, on May 28, 1974, Respondent directed letters to the Halls advising them that the $1,000.00 security deposit was in her account at Chase Federal Savings, North Miami Beach, an interest- bearing account, and that she did not want to place it in an escrow account where it would earn no interest. Respondent testified that the Halls orally agreed the deposit money could stay in the savings account of Respondent. This contract did not close, but on August 9, 1974, Respondent executed an FHA deposit receipt as seller whereby she agreed to sell the property to Nicholas Torek and Mary McDonnell Torek For the sum of $23,000.00. The document acknowledged the receipt of a $500.00 security deposit, which was in the Form of a check issued to Watson Real Estate by M.L. McDonnell on August 11, 1974, to be placed in the Watson Real Estate Account. Respondent was unaware at the time that McDonnell and Torek were not married. Torek had authorized McDonell to use his name on the instrument because they were planning to be married. Respondent sent them to a mortgage company to qualify For a mortgage. Several days later, she learned that they were not married and Torek came back and signed a new contract, which was also dated August 9, with the Halls at the same purchase price as his contract with Respondent. The latest agreement provided For a security deposit of $1,250.00 to be held in escrow by Watson Real Estate Trust Account and also provided For a real estate commission to Watson Real Estate of $3,750.00 to be paid by the Halls. An addendum to this contract was executed by Torek and Respondent, dated August 9, 1974, whereby Torek agreed that the $1,250.00 escrow should not be deposited in the trust account, but be given to Peter A. Mastellone For the purpose of making repairs on the property. It further provided that he would hold $850.00 toward closing costs and "prepayables". The document reflects the receipt of $2,100.00 by Peter A. Mastellone. Respondent testified that since $2,100.00 was all that was necessary to close the transaction, her husband returned $500.00 cash to Torek to reimburse McDonnell For her original deposit on the other contract. The Halls were not a party to the addendum to the contract and Torek was not aware that the Halls were the owners of the property until after the transaction was closed on October 4, 1974. Torek testified that he had not signed the second August 9 contract which had been executed by the Halls. However, Torek had agreed to close in his own name when he learned that McDonnell could not qualify For FHA financing. Torek was not concerned about the name in which the transaction was consummated but later, after disputes with McDonnell, quitclaimed his interest to her. Although McDonnell was present at the closing on October 4, the deed to the property was issued in the name of Torek only. McDonnell testified that Respondent had told her to sign the original contract In the name of Torek and in that way the deed would come out in her married name. McDonnell was surprised when the deed was issued only in the name of Torek. McDonnell was aware that the Halls owned the property and that Respondent was attempting to sell it in order to get out from under her own contract with the Halls. McDonnell was not aware that Torek had signed the subsequent agreement in his name only. (Testimony of Respondent, Torek, McDonnell, Petitioner's Exhibits 10, 11, 12, 13; Respondent's Exhibits 5 & 20).
Recommendation That the registration of Constance B. Mastellone as a real estate broker be suspended For a period of six months For violation of subsections 475.25(1)(a), 475.25(1)(c), and 475.25 (1)(i), Florida Statutes. DONE and ENTERED this 3rd day of January, 1977, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Manuel E. Oliver, Esquire Staff Attorney Florida Real Estate Commission 2699 Lee Road Winter Park, Florida James, A. Baccus, Esquire Attorney For Respondent Triangle Building 595 N.W. 91st Street Miami, Florida 33150 ================================================================= AGENCY FINAL ORDER ================================================================= FLORIDA REAL ESTATE COMMISSION ANATOL ARIAN, Petitioner, PROGRESS DOCKET NO. 2788 vs. DADE COUNTY DOAH NO. 76-472 CONSTANCE B. MASTELLONE, Respondent. /
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The Respondent was at all times material to this proceeding a licensed real estate broker in the state of Florida having been issued license number 0035275. The last license issued was as a broker, d/b/a Silver Springs Real Estate, Corp., 4121 East Silver Springs Boulevard, Ocala, Florida 32671. On or about August 3, 1984, the Respondent obtained Teri L. Lochman (Lochman) as a tenant of certain residential property belonging to Gail and Valerie Cox (Cox) that was involved in a sale to A. Pillot. In connection with this sale, a lease had been prepared between A. Pillot as Lessor and A. Alongi as Lessee. Lochman signed this lease as Lessee, and in connection with this lease, paid Respondent $1,600.00 representing $700.00 for the first month's rent, $700.00 for the last month's rent and $200.00 security deposit. These funds were paid by Lochman to Respondent in two separate checks in the amount of $500.00 and $1,100.00 dated August 5, 1984 and August 13, 1984, respectively. The Pillot/Cox escrow account, which had previously been established in Respondent's escrow ledger, was credited with these funds and the funds deposited in Respondent's real estate brokerage trust bank account, No. 805 0006583, in the Sun Bank of Ocala (Trust Account), on August 9, 1984 and August 17, 1984, respectively. Upon attempting to move into the home she had rented, Lochman discovered that Cox was still in possession because the sale had not gone through. At this point, August 17, 1984, Lochman and Cox signed an agreement which would allow Lochman to reside in the home rent free for two weeks while Cox was out of town in return for acting as a security guard. Sometime after the August 17, 1987 agreement was executed by Lochman and Cox, Lochman and Cox signed a handwritten month to month lease of the premises requiring Lochman to pay Cox $700.00 for the first month's rent, $700.00 for the last month's rent and a $200.00 damage deposit. This payment was conditioned upon Lochman receiving her refund from the Respondent. There was no credible evidence that Respondent agreed to release Cox from any previous agreement with Respondent wherein Respondent acted as agent for Cox in obtaining Lochman as a tenant or the handling of Cox's property, i.e. mowing grass or preparing house for rent. Additionally, there was no credible evidence that Respondent agreed to Lochman dealing directly with Cox. Respondent was at all times relevant to this proceeding acting as agent for Cox, and therefore, demanded from Cox her commission for obtaining Lochman as a tenant and reimbursement for other services rendered before returning Lochman's rental deposit. There is no credible evidence that the Respondent agreed to return Lochman's rental deposit without first obtaining her commission or reimbursement for other services rendered from Cox. There is no credible evidence to show that Cox paid Respondent her commission or reimbursed Respondent for other services rendered or that Cox made a demand on Respondent to pay the Lochman rental deposit to Lochman. There is credible evidence that Lochman made a demand on Respondent for the return of her rental deposit and that Respondent refused to return Lochman's rental deposit because there was a dispute between Respondent and Cox concerning Respondent's commission and reimbursement for other services rendered. Lochman did not pay Cox the rent for the month of September, 1984, therefore, she contends that Respondent only owes her $900.00 of the rental deposit. Upon Respondent's refusal to pay her the balance of the rental deposit, Lochman obtained a default judgment for $900.00 in civil court, however, and although the record is not clear, the default judgment may have been set aside. (See transcript, page 15, lines 9-13). The evidence is clear that check no. 257 drawn on the Trust Account in the amount of $1,465.00, paid on April 18, 1985, included $1,278.00 from the Pillot/Cox escrow account and depleted the funds in the Pillot/Cox escrow account. However, there was no evidence presented to show that the Lochman rental deposit was paid to Respondent. Likewise, there was no evidence presented to show that Cox did not receive the Lochman rental deposit. There was no evidence presented to show the payee on Check No. 257, or any other check, drawn on the Trust Account. There was no evidence presented to show that Respondent commingled trust funds and personal funds in the Trust Account in regard to deposits and withdrawals. There was insufficient credible evidence to show that Lochman was entitled to delivery of $900.00 or any funds from the Trust Account. There was no evidence that Respondent notified the Real Estate Commission (Commission) of the conflicting demands on the Lochman rental deposit or followed any of the procedures set forth in the statutes to resolve such a conflict.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record and the candor and demeanor of the witnesses, it is, therefore, RECOMMENDED that the Commission enter a Final Order finding the Respondent guilty of failing to notify the Commission of the conflicting demands on the trust funds and failing to follow the procedures set forth for resolving such conflict in violation of Section 475.25(1)(d), Florida Statutes and that Respondent's real estate broker's license be suspended for a period of six (6) months, stay the suspension, place the Respondent on probation for a period of six (6) months under the condition that the issue of conflicting demands on the trust funds be resolved within sixty (60) days and under any other conditions the Commission feels appropriate, and assess an administrative fine of $300.00 to be paid within sixty (60) days of the date of the Final Order. It is further RECOMMENDED that the Final Order DISMISS Counts I, III, IV and V of the Administrative Complaint filed herein. Respectfully submitted and entered this 1st day of May, 1987, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 1st day of May, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-2387 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties in this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner 1.-2. Adopted in Finding of Fact 1. 3. Adopted in Findings of Fact 8 and 9. 4.5 Rejected as not supported by substantial competent evidence in the record. Additionally, Petitioner has treated certain facts in this case as background in unnumbered paragraphs which I have numbered 6-10. Adopted in Finding of Fact 2 as clarified. Adopted in Finding of Fact 4 except for the phrase that Respondent agreed to the return of the rental deposit which is rejected as not being supported by substantial competent evidence in the record. I did not find Lochman's testimony credible in this regard. Adopted in Findings of Fact 8 and 9 as clarified. Adopted in Finding of Fact 10 as clarified. This paragraph is a statement of Lochman's testimony and not presented as a fact, therefore, is rejected. Rulings on Proposed Findings of Fact Submitted by the Respondent For the reasons set forth in the Background portions of this Recommended Order, there has been no rulings of Respondent's Proposed Findings of Fact. COPIES FURNISHED: Van Poole, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff Executive Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32801 James H. Gillis, Esquire Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Jeffrey J. Fitos, Esquire Valley Forge Military Academy Wayne, Pennsylvania 19087
Findings Of Fact At all times relevant hereto, respondent, Annette J. Ruffin, held real estate broker license number 0076385 issued by petitioner, Department of Professional Regulation, Division of Real Estate. When the events herein occurred, respondent was owner and broker for Century 21 A Little Bit Country at 915 Lithia Pinecrest Road, Brandon, Florida. She is presently employed by U. S. Homes Corporation in Tampa, Florida. James and Shirley Yaksic wished to sell their residence at 3512 Plainview Drive in Brandon, Florida. They listed their property with Century 21 Solid Gold Properties II, Inc. in Brandon in December, 1983. Deborah Cassidy was a salesman at respondent's office, and knew her parents, J. R. and Helen Anderson, were in the market for a new home. With Cassidy's assistance, the Andersons executed a contract on February 16, 1984, to purchase the Yaksics' residence. The contract called for a purchase price of $65,000 with a down payment of $10,000, including a $500.00 cash deposit which was given to respondent's firm several days after the contract was executed. The deposit was placed in Ruffin's escrow account on February 28, 1984. The Andersons were also required to seek VA financing on the balance owed. After the contract was accepted by the Yaksics on February 17, Helen Anderson made application on February 23 for a $55,000 VA loan with Norwest Mortgage, Inc., a lending institution in Tampa. Florida. Since her husband was in New York State, only Helen signed the loan application agreeing to allow verification of all representations made in the application. While filling out the loan application at Norwest, Helen Anderson learned that the Veterans Administration allowed applicants to apply for loans equal to 100% of the value of the property. Since the Andersons preferred to make no down payment, Helen Anderson wrote Norwest in early March requesting that their loan application be increased from $55,000 to $65,000. She also noted that she did not sign the "disclosure statement" on behalf of her husband since "it would be incorrect." In response to this Letter, Norwest wrote the Andersons in early April requesting a number of items needed to process the application as well as an amendment to the contract reflecting that the sellers agreed to 100% financing by the buyers. The Andersons did not respond to this inquiry. In addition, they never, advised the sellers that they had changed their loan application to 100% financing, and that the sellers would be required to pay more discount points at closing. Because no amendment to the contract was ever filed, Norwest processed the application for a $55,000 loan. Due to insufficient income and excessive obligations, the application was denied. The Andersons were so notified by letter dated May 3, 1984. After Helen Anderson received the denial letter she telephoned respondent's office manager on several occasions to seek a refund of her deposit. This information was apparently conveyed to Ruffin by the office manager. About the same time the sellers were advised by the listing salesman that the Andersons did not intend to close. On May 5, the sellers wrote a letter to Solid Gold requesting that it notify the selling broker to not "release the binder to the buyers as we are entitled to this money." For some reason, a copy of this letter was not mailed to respondent until May 31, and she received it in early June. Even though Ruffin may have been orally advised in early May of the Yaksics' intended claim by the listing office, she had no concrete evidence of this intention until she received their letter in early June. On June 29, 1984, Helen Anderson wrote respondent's office manager a letter requesting a return of her deposit no later than July 9. She also indicated the letter was being sent pursuant to instructions received from petitioner. On July 2, Ruffin replied by letter stating that "we cannot release your deposit as the house was off the market for such a long time," and that Norwest had advised her that the Andersons "did not bring in a lot of the information until it was too late." After Helen Anderson filed a complaint with the Department of Professional Regulation (DPR), DPR wrote respondent a letter dated July 19, 1984, stating in part that Anderson had been refused her deposit and that its records did not show that respondent had notified DPR of conflicting demands for that money. On July 30, 1984, respondent replied to DPR's inquiry and gave her version of the circumstances surrounding the transaction. After receiving no reply to this letter, she wrote a second letter in late December, 1984 to the Division of Real Estate (Division) requesting advice on the deposit matter. The Division sent a her form for requesting an escrow disbursement order on January 4, 1985 which was returned by respondent within a few weeks. An escrow disbursement order was eventually issued by the Division on April 19, 1985 directing her to refund the deposit to the Andersons. She did so on May 5, 1985. In conjunction with its investigation, DPR obtained copies of respondent's escrow account bank statements during the period when the Andersons' deposit was retained by Ruffin. Although the $500.00 deposit should have been maintained in that account from February, 1984 until disbursement in May, 1985, her account dropped below $500.00 on sixteen separate days during this period of time, and continuously from February 28 through April 30, 1985. Respondent, who has been a broker since 1977, maintained a record of all escrow deposits and expenditures in a ledger book which reflected when the Anderson money was deposited and when it was paid out. Although she inferred the problem may have been attributable to her bookkeeper, no adequate explanation was given as to why her bank balances dropped below $500.00 on a number of occasions. She acknowledged that she learned of the conflicting demands in May, 1984, but felt that she could still "solve" the credit problem of the Andersons. She stated that she intended to give notice to the Division of the conflicting claims on the deposit and needed no encouragement from the Division to do so. There is no evidence that respondent has ever been disciplined on any other occasion since first receiving her salesman license around twelve years ago.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty as set forth in the Conclusions of Law portion of this order. All other charges should be DISMISSED. It is recommended that respondent's broker license be suspended for ninety days and that she be fined $500.00. DONE and ORDERED this 5th day of September, 1985, in Tallahassee, Florida. DONALD R. ALEXANDER Bearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, FL 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of September, 1985.
