The Issue Whether Respondents committed the offenses set forth in the six-count Administrative Complaint dated October 15, 2003; and, if so, what penalty should be imposed.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: The Department of Business and Professional Regulation, Division of Real Estate (the "Department"), is the state agency charged with enforcing the statutory provisions pertaining to persons holding real estate broker and sales associate's licenses in Florida, pursuant to Section 20.165 and Chapters 455 and 475, Florida Statutes (2003). At all times relevant to this proceeding, Respondent Richard R. Page, was a licensed Florida real estate broker/officer, having been issued broker license no. KB-0148248. He was the qualifying broker for Aztec Realty. At all times relevant to this proceeding, Respondent Aztec Realty, was a corporation registered as a Florida real estate broker, having been issued corporate registration no. CQ-0156640. Aztec Realty's business location was 4456 Tamiami Trail, Charlotte Harbor, Florida 33980. Barbara Kiphart was a 13-year employee of the Department who had performed thousands of audits of broker records. After conducting agent interviews on an unrelated matter in the office of Aztec Realty, she informed Mr. Page that she planned to perform an audit of the corporation's escrow accounts. Ms. Kiphart testified that it was routine for the Department to perform such audits when visiting brokers' offices for other reasons. Ms. Kiphart informed Mr. Page that she would need all documents necessary to complete an audit of Aztec Realty's escrow accounts, including bank statements, account reconciliations, and liability lists. Mr. Page referred Ms. Kiphart to Cheryl Bauer, Aztec Realty's financial manager. With Ms. Bauer's assistance, Ms. Kiphart completed the audit on June 12, 2003. Three accounts were examined: the sales escrow account; the security deposit account; and the property management account. The sales escrow account was found to be in balance, with liabilities equal to the bank balance of $382,300.52. The security deposit account was found to have liabilities of $45,533.29 but only $16,429.84 in its bank balance, a shortage of $29,103.45. The property management account was found to have liabilities of $22,545.54 but only $16,594.71 in its bank balance, a shortage of $5,950.83. Ms. Kiphart testified that the security deposit account had not been reconciled in the year 2003, and she had no way of saying when it was last reconciled. She determined the account's balance from Aztec Realty's bank statements, but had to extrapolate the liabilities from a computer printout of security deposits. Ms. Bauer testified that she handles the finances for all aspects of Aztec Realty's real estate sales business, including the sales escrow account, and that she was able to provide all the information Ms. Kiphart needed to audit that account. However, Ms. Bauer had no responsibility for the other two accounts, both of which related to the rental property management side of Aztec Realty's business. She had to obtain information about those accounts from Jill Strong, her newly- hired counterpart in property management. At the time she provided the computer printout on the property management accounts to Ms. Bauer and Ms. Kiphart, Ms. Strong told them that she knew the numbers were inaccurate. Aztec Realty had purchased Tenant Pro, a new rental management software package, in 2001. In the course of approximately 18 months, Aztec Realty had three different employees in Ms. Strong's position. One of these short-term property managers had misunderstood the software for the security deposit account. Opening balances were entered for accounts that had, in fact, already been closed out with the deposits returned. This had the effect of inflating the apparent liabilities in that account. The previous property manager was also unable to print checks on the printer attached to her computer terminal. Ms. Bauer would print the deposit refund checks on her own printer, with the understanding that the property manager was recording these entries against the security deposit account. Ms. Strong discovered that these entries had not been recorded. Thus, monies that had been paid out to owners, renters, and vendors were never recorded anywhere besides a sheet that Ms. Bauer kept for printing out checks, again inflating the account's apparent liabilities. Ms. Strong had been working for Aztec Realty for about one month at the time of the audit. She was still in the process of sorting out the problems in the security deposit account, hence her statement to Ms. Bauer and Ms. Kiphart that she knew the numbers were inaccurate. Subsequent to the Department's audit, Ms. Bauer and Ms. Strong commenced their own audit of the security deposit and property management accounts. Their efforts were complicated by a storm and tornado that struck the area on June 30, 2003. The offices of Aztec Realty suffered over $100,000 in damage, including water damage to the roof that caused the office to be flooded. Records were soaked and Ms. Strong's computer was destroyed. By mid-July 2003, Ms. Bauer and Ms. Strong had completed their corrected audit of the security deposit account. They concluded that the actual shortfall in the account was $13,764.43. That amount was immediately transferred from the real estate operating account to the security deposit account to bring the latter account into balance. The real estate operating account was essentially Mr. Page's personal funds. As to the property management account, also referred to as a "rental distribution" account, Ms. Bauer and Ms. Strong performed a subsequent audit indicating that the account was out of balance on the positive side. They discovered that there were items paid out of the property management account that should have been paid from escrow and vice versa. When the audit brought the accounts into balance, the property management account was approximately $200 over balance. In an audit response letter to Ms. Kiphart dated July 16, 2003, Mr. Page acknowledged that the property management account had been improperly used to pay occasional expenses, but also stated that the practice had been discontinued. At the hearing, Mr. Page conceded that no reconciliations had been performed on the security deposit account or the property management account from at least January 2003 through May 2003. Mr. Page and Ms. Bauer each testified that the corrective actions taken in response to the audit have been maintained and that there have been no accounting problems since June 2003. Aztec Realty has contracted to sell its property management department. The evidence established that no client of Aztec Realty or other member of the public lost money due to the accounting discrepancies described above. Neither Mr. Page nor Aztec Realty has been subject to prior discipline. Mr. Page has worked in the real estate business in the Port Charlotte area for nearly 30 years and is a past president of the local association of realtors. He credibly expressed remorse and testified that, given his position in the community, he was "mortified" at having allowed his company to be placed in this position. Aztec Realty has operated for nearly 30 years and currently has 20 employees and approximately 65 agents.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order: Dismissing Counts II and III of the Administrative Complaint against Mr. Page; Dismissing Counts V and VI of the Administrative Complaint against Aztec Realty; Imposing an administrative fine against Mr. Page in the amount of $1,000 for the violation established in Count I of the Administrative Complaint; and Imposing an administrative fine against Aztec Realty in the amount of $1,000 for the violation established in Count IV of the Administrative Complaint. DONE AND ENTERED this 27th day of July, 2004, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON 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 27th day of July, 2004.
Findings Of Fact The Respondent was, at the time of the hearing and at all times material to this proceeding, registered with the Real Estate Commission as a real estate broker. During the period of the transactions involved in this proceeding the Respondent was operating and registered as an active broker and President of Fortiner Realty Company, which was a corporate real estate broker registered with the Commission. In Count One of the Complaint, the Respondent is charged with failing to maintain a security deposit in his trust account in connection with a real estate transaction involving Phillip E. Andrews and Betsy K. Andrews, as sellers, and Joseph T. Lyons and Marion C. Lyons, as purchasers. In Count Two of the Complaint the Respondent is charged with converting the deposit in the Andrews-Lyons transaction to his own use. During March, 1976, Claude I. Allen was employed at the Respondent's real estate office as a salesman. Allen negotiated a transaction between the Andrewses and the Lyonses. On March 17, 1976, the Lyonses made an offer to purchase the Andrews property and submitted a $1,000.00 deposit to Allen. On March 18, 1976 the $1,000.00 was deposited in the Respondent's trust account at the Palmer Bank of Ft. Myers. On March 22, 1976 the Andrewses accepted the offer and the Lyonses provided an additional $2,000.00 deposit to Allen. On that same date the $2,000.00 was deposited in the Respondent's trust account. The transaction closed on May 11, 1976. It was a smooth transaction. On May 110, 1976 $3,000.00 was withdrawn from the Respondent's trust account as a part of the transaction. During the entire time from March 17 through May 11, 1976, the monies deposited by the Lyonses remained on deposit in the Respondent's trust account. There is no evidence to support a finding either that the Respondent failed to maintain the $4,000.00 in the trust account, or that he converted any part of the deposit for his own use. In Count Three of the Complaint the Respondent is charged with failing to maintain a deposit in his trust account in connection with real estate transactions between Mac-Nel Ltd. and M & N Ltd. as sellers, and Stanley G. Courtney, as purchaser. In Count Four the Respondent is charged with converting all or part of the security deposit to his own use. The Respondent was one of several partners in Mac-Nel Ltd. and M & N Ltd. On august 28, 1976, Stanley G. Courtney entered into separate contracts to purchase all of the property owned by the two partnerships. Through six separate checks Courtney made a deposit of $13,500.00 to the Respondent to be placed in the Respondent's trust account. The evidence is unclear as to when or in what manner the deposit was placed in the trust account, or whether all of it was in fact placed in the trust account. The bank records reflect that $17,600.00 was placed in the Respondent's trust account on August 30, 1976, and it is possible that the Courtney checks formed a part of that deposit. During August and September, 1976, the Respondent's financial condition became grave. He had apparently defaulter on several notes to the Palmer Bank in which he had his trust account. The bank sued on the notes, and put a hold on the Respondent's accounts. In order to allow the Courtney transactions to close, the Respondent was able to withdraw allow a portion of the deposits made by Courtney form his trust account. He transferred his interest in the property to a Mr. Blankenship, so that Mr. Blankenship could close the transaction unfettered by the Respondent's financial plight. After he withdrew the money from his trust account, and forwarded it to Blankenship, the Respondent took no further part in the Courtney transaction either as a party to the transaction or as a broker. The closing of the transaction was delayed due in part to the Respondent's bankruptcy, however, it did close on October 29, 1976. Courtney was credited with the full amount that he had deposited with the Respondent. It is clear that the Respondent did not maintain all of the monies deposited by Courtney in the trust account. His reason for failing to do that was to permit the transaction to close even though the Respondent had gone bankrupt. The evidence would not support a finding that the Respondent converted any portion of the Courtney deposit to his own use. In Count Five of the Complaint the Respondent is charged with failing to maintain a deposit in his trust account in connection with a transaction involving Charles and Margaret Lathrop as sellers, and William and Jeannette Whitacre as purchasers. In Count Six the Respondent is charged with converting all or part of the deposit in that transaction to his own use. On or about June 29, 1976, the Whitacres entered into a contract to purchase property from the Lathrops. The transaction was negotiated by Mary E. Bishop, a saleswoman who was employed by the Respondent in his real estate company. The Whitacres delivered a $6,500.00 check to Mrs. Bishop as a deposit on the transaction. The bank records received into evidence do not clearly reveal when or in what manner the Whitacre's deposit was placed in the Respondent's trust account. The bank statements do show a $7,000.00 deposit made into the Respondent's trust account at the Palmer Bank of Ft. Myers on July 1, 1976, and it is possible that the Whitacre's check was a part of that deposit. Bank records from other trust accounts maintained by the Respondent such as that at the Cape Coral Bank do not reveal any deposit that could have been the Whitacre's check. The Lathrop/Whitacre transaction closed successfully on August 18, 1976, and the Whitacres were credited with the $6,500.00 that they had submitted to the Respondent's firm. It is apparent from the bank records that $6,500.00 was not on deposit at all times in the Respondent's trust account between July 1 and August 18, 1976. During most of that period the Respondent's balance in his trust account was less than $6,500.00. No evidence was offered from which it could be concluded that the Respondent made any specific use of the money deposited by the Whitacres. It is apparent, however, that the money was not used as intended, i.e., it was not maintained in the Respondent's trust account. In Count Seven of the Complaint the Respondent is charged with fraud, misrepresentation, and dishonest dealing in connection with his handling of the business of a partnership known as 27 Oaks Ltd. The Respondent was the general partner in 27 Oaks Ltd. He was responsible for carrying on the business of the partnership for the benefit of eight limited partners. The partnership owned property which it was seeking to develop and sell in small parcels. On November 19, 1975, a mortgage payment in the amount of $21,300.00 was due from the partnership. In accordance with the partnership agreement, the Respondent solicited funds from the limited partners so that the mortgage payment could be made by letter dated October 15, 1975. The evidence does not reveal whether the Respondent received sufficient contributions from the limited partners to pay the mortgage payment. The evidence reveals only that he received $9,997.00 from the limited partners in response to his solicitation. The Respondent did not make the mortgage payment when it was due, but instead received a ninety-day extension. The new date was February 19. The principal payment on the mortgage was not made on that date, but instead, the Respondent made payments on the interest due. Ultimately the payment was made in a manner satisfactory to the mortgagee by early June, 1976. The Real Estate Commission has charged that the Respondent received funds sufficient to make the mortgage payment in November, 1975, but that he applied the money to some other purpose. This contention is not supported by the evidence. The evidence does not reveal that the Respondent received sufficient money to make the mortgage payment. The bank records reveal that there was sufficient money in the 27 Oaks Ltd account to make the mortgage payment in November, and that the Respondent withdrew most of that money. The evidence does not establish that the Respondent improperly withdrew the money, or that the Respondent improperly withdrew the money, or that he put it to any but a valid partnership purpose. The Commission has also contended that the Respondent failed to maintain the monies he received from the limited partners in a trust account. Nothing in the partnership agreement requires that such monies be kept in a trust account, and the Respondent's failure to do so could not, therefore, constitute fraud or misrepresentation. Even if the contract were construed arguably to require that funds be placed in a trust account, certainly there are equally valid arguments that is does not. In Count Eight of the Complaint the Respondent is charged with fraud, misrepresentation, and dishonest dealing in connection with his handling of the affairs of a Florida limited partnership know as Randag Properties Ltd. During 1976 the Respondent was the sole general partner of Randag Properties Ltd. The partnership owned property which it was seeking to develop into apartments. The Respondent was responsible for carrying on the partnership business. The property consisted of more than 40 acres on a river and a navigable canal. Part of the property was a small appendage which contributed little to the development potential of the property. In order to raise money to prepare the property for development, the Respondent sold the appendage to an ajoining property owner. That transaction closed on or about May 28, 1976. The Respondent had contributed more than $30,000 of his own money to the partnership in order to prepare the property for development. These expenditures included attorneys fees that he had incurred; a boundary survey, a high tide location survey, and a topographical survey; fees to the Florida Secretary of State's office; real estate taxes; land clearing expenses; and various miscellaneous expenditures. The Respondent had also made an advance to one of the limited partners. The Respondent applied most of the proceeds from the sale of the appendage to compensate himself for the expenditures that he had incurred. The Respondent had a disagreement with one of the limited partners, Mr. Swartz, as to whether the proceeds of the sale should be applied to compensate the limited partners for their initial investment or the Respondent for his expenditures. The Respondent's applying the proceeds to compensate himself does not appear to be contrary to the partnership agreement and it does appear that he had validly incurred expenses on behalf of the partnership to which he was entitled to be compensated. The Respondent ultimately resigned as the general partner on October 12, 1976, in order to save the partnership from the consequences of his bankruptcy, and was replaced by Swartz. Early in October, 1976, the Respondent issued a promissory note to the partnership, but there was no showing that this promissory note was the consequence of any fraud, but rather that it was for the purpose of placing the partnership in a favorable position in relation to the Respondent's bankruptcy. The Respondent ended up losing money through his participation in the partnership while the limited partners ended by making a substantial profit. All of the limited partners were advised of the sale of the appendage either prior to the sale or shortly after. There is no requirement in the partnership agreement that they be advised in advance of the sale, or that they assent to it. The Respondent is charged in Count Nine of the Complaint with fraud, misrepresentation, and dishonest dealing in connection with a business transaction that he had with William K. Gamble and Dorothy V. Gamble. The allegations in essence are that the Respondent received loans from the Gambles, and that he pledged certain property as security for the loans. He was required under the terms of the promissory notes and the collateral assignment that accompanied them to provide other adequate security in the event that he sold any of the property that served as collateral for the loans. It is alleged that the Respondent sold the property, did not advise the Gambles, and did not substitute any other property as security for the promissory notes. The only testimony offered to establish that the property that served as collateral was sold was the testimony of Mrs. Dorothy V. Gamble. Mrs. Gamble had no direct knowledge that the property was in fact sold. It is apparent from the evidence that the Respondent has defaulted on the promissory notes. In Count Ten of the Complaint it is alleged that the Respondent failed to maintain a deposit in his trust account in connection with a real estate transaction involving Herbert J. Haase and Katherine M. Haase, as trustees, the sellers, and Loyal H. Tingley as purchaser. In Count Eleven it is alleged that the Respondent converted all or part of the deposit to his own use. On or about August 6, 1976, Tingley entered into a contract to purchase property from the Haases. Herbert Haase was a real estate salesman employed in the Respondent's real estate firm, and he held title to the subject property in trust. The Respondent was the actual owner. Tom Carpenter, another salesman employed in the Respondent's firm, was the sales man in the transaction. Tingley delivered a $5,000 check to Carpenter as a deposit on the transaction. Another real estate broker, a Mr. Himmelrick, had negotiated mortgage modifications in connection with the sale. He and the mortgage bank insisted that the deposit be placed in Himmelrick's trust account. Accordingly, the Respondent deposited the $5,000 check from Tingley into his trust account, and delivered a $5,000 check from his trust account to Himmelrick. Carpenter advised Tingley that Himmelrick and the bank insisted upon having the $5,000 deposited in Himmelrick's trust account prior to the time that the check was forwarded from the Respondent's trust account to Himmelrick. Tingley consented to that arrangement. While it is true that the Respondent did not keep the $5,000 deposit in his trust account, his failure to do so was with the consent of the purchaser, and resulted only in the deposit being placed in the trust account of a participating realtor. The evidence would not sustain a finding that the Respondent converted any part of the deposit to his own use. In Count Twelve of the Complaint it is alleged that the Respondent issued over 22 checks drawn on his trust account wherein said checks were not honored for payment for the reason of insufficient funds; that the Respondent placed funds in his trust account that did not come from valid trust account sources; and that the Respondent caused his account to have a negative closing balance on May 13, 1876. The evidence would not sustain any finding that the Respondent issued checks which were not honored for payment. It is apparent from the bank records that several checks issued by the Respondent drawn on his trust account were not covered by the balance in the trust account. Bank records indicated a "OC" next to such withdrawals on the ledger sheets. The bank witnesses testified, however, that frequently such entries are honored by the bank and are not returned due to the insufficient funds. The evidence would not sustain a finding that the Respondent placed money in his trust account that came from sources there were not proper for placing in a trust account. Nothing in the bank records offered into evidence demonstrates which deposits may not have been valid trust account deposits. The deposit slips merely show the payor of the checks. The bank records do reveal that the Respondent's trust account balance in the Palmer Bank of Ft. Myers on May 13, 1976 was a negative balance of $732.60. On September 29, 1978, the Florida Real Estate Commission entered its final order finding the Respondent guilty of a of a violation of the Real Estate License Law. The Respondent's registration as a real estate broker was suspended for a period of ninety days. The Real Estate Commission Case Number was Progress Docket Number 3130. All of the events involved in the instant proceeding occurred prior to the time that the final order was entered in Case Number 3130 and indeed prior to the time that the Complaint was issued in Case Number 3130. The Respondent has enjoyed a very good reputation in his community for fair dealing, truthfulness and competence. None of the acts which the Respondent committed that led to the instant proceedings show that the Respondent has engaged in a course of conduct or in practices which demonstrate that he is so incompetent, negligent, dishonest and untruthful that the money, property, transactions and rights of others may not safely be entrusted to him. The Administrative Complaint in Case Number 3130 before the Florida Real Estate Commission was issued on January 14, 1977. In included twenty-seven counts. All of the allegations related to the Respondent's dealings with various real estate salesman, and his alleged failure to share real estate commissions with the salesmen. In connection with the transactions involved, it was asserted in several counts that the Respondent failed to place deposits properly in his trust account. None of the charges in the first administrative complaint are grounded upon the facts alleged in the instant Administrative Complaint. The facts involved in the instant proceeding did, however, all occur at about the same time as the facts alleged in the first complaint, and all occurred prior to the date that the Administrative Complaint was filed in Case Number 3130. New facts came to the attention of the Commission due in part to comments made to one of the present real estate commissioners by a Ft. Myers resident. With diligent inquiry it is possible that the Commission could have discovered the facts which have resulted in the instant proceeding and included them as additional counts in the complaint in Case Number 3130. It has not, however, been shown that the Commission had reason to believe that it should make such diligent search and inquiry. B
The Issue The issue in this case is whether the allegations of the Administrative Complaints are correct and, if so, what penalty should be imposed.
Findings Of Fact R. Granger Bruner is and at all material times has been licensed as a real estate broker, Florida license number 0010871. CASE NO. 90-2462 On or about September 9, 1989, Mr. Bruner obtained a contract from Alabama resident Earl W. Reed in which Mr. Reed offered to purchase certain property from owner Gary Salter. 1/ Mr. Reed, by his check, deposited with Mr. Bruner the sum of $1,000, as an earnest money deposit in connection with Mr. Reed's offer to purchase Mr. Salter's property. Mr. Bruner erroneously deposited Mr. Reed's earnest money deposit check into the Granger Bruner Realty operating account at People's National Bank of Niceville. Mr. Bruner's escrow account, where the earnest money deposit should have been held, was at the local Barnett Bank in the name of Granger Bruner Realty Trust Account. On or about September 14, 1989, the listing agent for Mr. Salter contacted Mr. Bruner's office and informed Mr. Bruner that Mr. Salter had withdrawn the property from the market. By letter dated September 21, 1989, Mr. Bruner notified Mr. Reed that the property had been withdrawn from the market and that the earnest money deposit was being returned. Enclosed with the letter was People's National Bank of Niceville check #509 drawn on the operating account of Granger Bruner Realty in the amount of $1,000 payable to Earl Reed. The letter and check were mailed to Mr. Reed at his address in Alabama. Mr. Reed apparently did not receive the letter or check, and became concerned about the return of his deposit money. The administrative complaint alleges that Mr. Reed continued to demand return of the deposit. Although the Department introduced a copy of Mr. Reed's complaint, Mr. Reed did not testify. The evidence does not establish that Mr. Reed made repeated demands on Mr. Bruner for return of the deposit. The complaint further alleges, but the evidence does not establish, that the September 21, 1989 check was not mailed until September 28, 1989. On September 30, 1989, Mr. Reed met in Crestview with Mr. Bruner and demanded the return of his earnest money deposit. Mr. Bruner issued check #2924 in the amount of $1,000 from Mr. Bruner's wife's personal account payable to Earl Reed. Mr. Bruner subsequently had a stop-payment order issued against the first check to Mr. Reed. CASE NO. 90-2463 Prior to October 6, 1989, Elaine Brantley, an auditor/investigator for the Department contacted Mr. Bruner and made an appointment to perform a routine audit on Mr. Bruner's accounts. Prior to October 6, 1989, Mr. Bruner was aware that his escrow account was short. On that date, Mr. Bruner deposited approximately $1,400 into his escrow account to cover the shortage. The deposit resulted in an overage in the account. Upon Ms. Brantley's arrival, Mr. Bruner informed her that the escrow account was short, that he'd gotten behind in bookkeeping, and that his secretary was depositing additional funds into the escrow account. Ms. Brantley had Mr. Bruner telephone the bookkeeping department at Barnett Bank. With Mr. Bruner's approval, Ms. Brantley asked for and obtained the balance of the escrow account by telephone from a bank employee. 2/ Mr. Bruner then informed Ms. Brantley that escrow account liabilities totaled $1,727.38. Ms. Brantley reviewed the account's check ledger and determined that the escrow account was indeed short. During the audit, Ms. Brantley noted an escrow account check #453 dated 7/25/89 in the amount of $500 made payable to Mr. Bruner. Ms. Brantley stated that Mr. Bruner said that he had disbursed the funds to himself to cover a mortgage payment he made to a third party identified as Ms. Penner. At hearing, Mr. Bruner testified that he had used his escrow account to cash a $400 check for another person, and that check #453 was drafted to recover his personal funds from the account. He stated that the check was written in error and that the transaction was not handled correctly. He admitted that he did not know the balance of the escrow account at the time the check was written. The recorded checkbook balance at the time was $340.19. At the time of the audit, Ms. Brantley also noted check #487 dated 9/26/89 in the amount of $500 to Ms. Penner. The evidence establishes that check #487 was Mr. Bruner's personal mortgage payment to Ms. Penner.
Recommendation Based upon the foregoing Findings of fact and Conclusions of Law, it is RECOMMENDED: That the Department of Professional Regulation, Division of Real Estate, enter a Final Order suspending the licensure of R. Granger Bruner for a period of 90 days, and imposing a total fine of $2,000, including $1,000 pursuant to Rule 2IV-24.001(3)(1), Florida Administrative Code, and $1,000 pursuant to Rule 21V-24.001(3)(c) and (f), Florida Administrative Code. It is further recommended that R. Granger Bruner be required to successfully complete a course of education related to management of operating and escrow trust accounts and be required to file escrow account status reports with the Commission at such intervals as the Commission deems appropriate. DONE and ENTERED this 17th day of April, 1991, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 17th day of April, 1991. APPENDIX TO RECOMMENDED ORDER CASE NO. 90-2462 The Petitioner did not file a proposed recommended order. The Respondent filed a "Proposed Order" which sets forth proposed findings of fact. The proposed findings are accepted as modified in the Recommended Order except as follows: "Proposed Order" Accepted as to failure to prove exact amount of escrow account shortage. Rejected as to whether a shortage existed, contrary to evidence. Rejected. The testimony at hearing that certain deposits were not received is contrary to information provided to auditor and was not credited. Although the testimony related to the escrow account balance was unsupported hearsay, the auditor's testimony related to deposits and liabilities was based upon admissions by the Respondent. See Section 90.803(18), Florida Statutes. Rejected, conclusion of law. Rejected, not supported by weight of evidence. 8-9. Rejected, unnecessary. 10. Rejected, immaterial. 11-12. Rejected, unnecessary. "Finding of Fact" The Respondent also filed a separate statement entitled "Finding of Fact" which includes additional proposed findings of fact. The proposed findings are accepted as modified in the Recommended Order. COPIES FURNISHED: James H. Gillis, Esquire Senior Attorney Department of Professional Regulation Division of Real Estate Hurston North Tower 400 W. Robinson Street P.O. Box 1900 Orlando, Florida 32802-1900 Bart O. Moore, Esquire Moore, Kessler & Moore 102 Bayshore Drive Niceville, Florida 32578 Darlene F. Keller, Director Division of Real Estate Department of Professional Regulation Division of Real Estate Hurston North Tower 400 W. Robinson Street P.O. Box 1900 Orlando, Florida 32802 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue Whether Respondents violated provisions of Part 1 of Chapter 475, Florida Statutes, and Florida Administrative Code, Subpart 61J2.
Findings Of Fact The Florida Department of Business and Professional Regulation, Division of Real Estate, and the Florida Real Estate Commission, regulate the sale of real estate in the State of Florida. The Department issues licenses to applicants certified to be qualified by the Florida Real Estate Commission. Ms. Wilf is currently licensed with the Department as a qualifying broker with Sharon L. Wilf Paradise Properties, Inc. She holds Broker License No. 0547485. Sharon L. Wilf Paradise Properties, Inc., is a licensed brokerage corporation located at 9535 Highway 98 East, Destin, Florida 32550. At all times relevant Ms. Wilf had substantial if not exclusive control over Sharon L. Wilf Paradise Properties, Inc. Pursuant to a complaint on September 7, 2000, the Department detailed Diana Woods to conduct an office inspection of Ms. Wilf's real estate practice. Ms. Woods contacted Ms. Wilf telephonically in December of 2000. Ms. Wilf said that she would be available in February 22, 2001, for an audit and inspection of Respondents' records. At the appointed time, however, Ms. Wilf was in Texas. On April 5, 2001, Ms. Wilf told Ms. Woods she was still in Texas. A visit was then scheduled for April 12, 2001, but at the appointed time Ms. Wilf was not there. Ms. Woods tried for April 18, 2001, but Ms. Wilf said that she was really busy and that her books were off-site and in the custody of her bookkeeper on that date. Ms. Wilf also asserted that her mother had suffered a stroke and asked for another date. Ms. Wilf agreed that Ms. Woods could inspect on May 8, 2001. On Sunday, May 6, 2001, Ms. Wilf called Ms. Woods to tell her that she was leaving for Texas and Louisiana on May 7, 2001. Ms. Woods went to Ms. Wilf's office on May 8, 2001, and no one was there. In a letter dated May 11, 2001, Ms. Woods gave Ms. Wilf three dates to be available for an inspection and demanded that she choose one. Ms. Wilf agreed to May 24, 2001. Ms. Wilf was present on that date when Ms. Woods arrived. However, Ms. Wilf's books and records were disorganized and incomplete. Ms. Woods returned on May 29, 2001, and examined Ms. Wilf's books and records. As a result of the inspection it was determined that as of May 29, 2001, Ms. Wilf's trust account showed a liability of $57,000 but there was $58,164.63 present in the account. This meant that she had an overage in the account of $1,164.63. Ms. Wilf could not provide an explanation as to why the account was out of balance. A review of Ms. Wilf's Monthly Reconciliation Statement Real Estate Trust Account (Reconciliation Statement) for the period February 1, 2000, to February 29, 2000, indicated that her trust account was short $14,096.40. Ms. Wilf explained this by saying she had mistakenly written two commission checks on that account. No corrective action was indicated. The Reconciliation Statement for the period April 1, 2000, to April 28, 2000, revealed a shortage of $26,381.20, in her trust account. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period April 29, 2000, to May 31, 2000, revealed a shortage of $137.28. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period July 1, 2000, to July 31, 2000, revealed a shortage of $8,492.58. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period September 1, 2000, to September 30, 2000, revealed a shortage of $5,443.05. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period October 1, 2000, to October 31, 2000, revealed a shortage of $2,407.71. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period November 1, 2000, to November 30, 2000, revealed a shortage of $1,828.96. There was no explanation for the shortage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period March 1, 2001, to March 31, 2001, revealed an overage of $7,827.74. There was no explanation for the overage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period March 1, 2000, to March 31, 2000, reflected a total shortage of $19,150.16, on the second page. This figure had a line drawn through it. On the third page, the document indicates an overage in an amount that cannot be determined due to handwriting that is indecipherable. It may be $1,847, or $1,849 and some cents. There was no explanation for the figures provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period June 1, 2000, to June 30, 2000, revealed an overage of $19,712.72. There was no explanation for the overage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period December 31, 2000, to January 31, 2001, revealed an overage of $3,452.13. The reason for the overage was, "? overpaid commission." No corrective action was indicated. The Reconciliation Statement for the period February 1, 2001, to February 28, 2001, revealed an overage of $9,556.31. There was no explanation for the overage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period May 1, 2001, to May 31, 2001, revealed an overage of $1,161.62. There was no explanation for the overage provided on the Reconciliation Statement. No corrective action was indicated. The Reconciliation Statement for the period June 1, 2001, to June 30, 2001, revealed an overage of $1,158.63. On the explanation page Ms. Wilf cited as a reason, "Overage from May 25, 2001 audit," and for corrective action taken, stated, "Plan to make correction July." The Reconciliation Statement for the period January 1, 2002, to January 31, 2002, revealed a shortage of $1,551.88. On the explanation page Ms. Wilf cited as a reason, "Force debit from Nov. 19-$6541.63-11-45 acct maint," and for corrective action taken, stated, "The force debit should have come from GOA acct. maint shouldn't be deducted bank to correct." The Reconciliation Statement for the period March 1, 2002, to March 29, 2002, revealed a shortage of $2,544.43. On the explanation page Ms. Wilf cited as a reason, "Debit from bank still not done," and for corrective action taken, stated, "Bank to correc-had Tracy call. The $10,000 from Embry-issued stop payment-see bank statement." The Reconciliation Statement for the period March 30, 2002, to April 30, 2002, revealed a shortage of $4,331.43. On the explanation page Ms. Wilf cited as a reason, "Same force debit-unauthorized debit of 10,000 on 4/4/02." No corrective action was indicated. The Reconciliation Statement for the period May 1, 2002, to May 31, 2002, revealed a shortage of $1,553.43. The reason given for the shortage was, "same." No corrective action was indicated. The Reconciliation Statement for the period June 1, 2002, to June 30, 2002, revealed a shortage of $1,555.43. The reason given for the shortage was, "Same. Should not have $2.00 fee." No corrective action was indicated. The Reconciliation Statement for the period June 29, 2002, to July 31, 2002, revealed a shortage of $1,553.43. The reason given for the shortage was, "Same." A Final Default Judgment in Favor of Plaintiff Anchors, Foster, McInnis & Keeff, P.A., and Against Sharon L. Wilf, Paradise Properties, Inc., in the amount of $12,951.33 was filed with the Clerk of Court of Okaloosa County on September 21, 2001. On November 19, 2001, a Writ of Garnishment was entered by the clerk for the identical amount, indicating that the judgment was unsatisfied at that time. Compass Bank debit memos indicate that some of the debt, in the amounts of $25, $75, and $6,591.63, on November 19, 2001, was extracted from Ms. Wilf's account pursuant to the garnishment. In a document entitled "vacant land contract," the sellers listed on the contract, Morris Lou Sobh and Georgia Sobh, sold property to Montana Land Company. James E. Clausel was the person who was authorized to sign for Montana Land Company. The signatures of the two sellers were cut from another document and pasted onto the "vacant land contract." Mr. Clausel was unaware that the signatures were not actual signatures. Ms. Woods contacted the Sobhs' on November 2, 2002, and they related to her that Ms. Wilf was not authorized to supply their signatures. Ms. Woods' testimony is hearsay which is insufficient to prove that the signatures supplied were not authorized. Moreover, Ms. Wilf stated under oath that she talked to the Sobhs' at or about the time the signatures were supplied, and she stated that they authorized her to supply the signatures. The evidence presented by the Department is insufficient to overcome Ms. Wilf's first-hand testimony. The Department provided Ms. Wilf's check no. 2459, in the amount of $17,400, payable to Lutz Brockstadt, and asserted that this represented the payment of a commission to a person not having a real estate license. However, Ms. Wilf testified that this represented rental revenue. Moreover, an Internal Revenue Service 1099-MISC indicates that the funds represented rental income. The evidence presented by the Department fails to meet the required burden of proof by clear and convincing evidence. Accordingly, it is not found that Ms. Wilf paid a commission to a person not holding a real estate license. The Department alleged that Ms. Wilf transferred $10,000 from her escrow account to her operating account on April 4, 2002. The evidence tending to prove this included a bank document dated April 4, 2002, reflecting the charge. The word "Tracy" is on the document, which indicates that it was accomplished by Tracy, whose full name is Tracy Tubb, and who was Ms. Wilf's bookkeeper. Whether or not Ms. Wilf authorized the act is unknown, although telephone records indicate long distance telephone calls were made to Ft. Walton on April 3 and 4, 2002, by Ms. Wilf. Ms. Tubb told Ms. Woods that she effected the transfer on Ms. Wilf's instructions. The evidence, on the whole, is insufficient to demonstrate that $10,000 was actually transferred by or at the direction of Ms. Wilf.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the licenses of Respondents Sharon L. Wilf and Sharon L. Wilf Paradise Properties, Inc. be revoked and that a $3,000 civil penalty be assessed jointly and severally against Respondents. DONE AND ENTERED this 8th day of January, 2004, in Tallahassee, Leon County, Florida. S HARRY L. HOOPER 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 8th day of January, 2004. COPIES FURNISHED: James P. Harwood, Esquire Department of Business and Professional Regulation Division of Real Estate Hurston Building, North Tower, Suite N802 400 West Robinson Street Orlando, Florida 32801 Sharon L. Wilf 9535 Highway 98, East Destin, Florida 32550 Jason Steele, Director Division of Real Estate Department of Business and Professional Regulation Hurston Building, North Tower Suite N802 400 West Robinson Street Orlando, Florida 32801 Nancy Campiglia, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
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.
The Issue The issue for consideration in this case is whether the Respondent's licenses as a real estate broker should be disciplined because of the matters set forth in the Administrative Complaint filed herein.
Findings Of Fact At all times pertinent to the allegations of misconduct in the Administrative Complaint, the Petitioner, Division of Real Estate, was the state agency charged with the responsibility for the licensing and regulation of the real estate profession in this state. The Respondent, Richard L. Bohner, was licensed as a real estate broker in Florida operating, with his wife, Kirsten, Bohner Real Estate, located at 205 E. Osceola Street in Stuart, Florida. On October 1, 1989, Mr. Bohner as owner/lessor, entered into separate rental agreements with Trudy Dohm and Thelma Reynolds, with Bohner Real Estate identified as agent, for the lease for 12 months each of apartments number 105 and 204, respectively, at 1674 S.E. St. Lucie Blvd. in Stuart, Florida, for a monthly rental of $350.00 each. Each lease provided for the placement of a security deposit and last month's rental in advance; those sums, according to the terms of the lease, to be held by the agent, Bohner Real Estate, in a non- interest bearing escrow account at the Florida National Bank in Stuart. In actuality, the sums above-mentioned were, in each case, deposited into an account at the First National Bank and Trust Company in Stuart. This account, number 8000030400, was held in the name of Richard L. Bohner or Kirsten L. Bohner, Trust account. This account was an interest bearing account and, over the time in question, also received several large deposits of funds by or on behalf of the Respondent, Richard L. Bohner which were his personal funds and not funds received as a part of or in conjunction with his activities as a real estate broker or those of Bohner Real Estate. For the most part, the funds placed in that account were Bohner's personal funds and security deposits and last month's rent on apartments in the building owned as a personal investment by Mr. and Mrs. Bohner. On February 20, 1990, Sharon Thayer, an investigator for the Department, in the normal course of business, went to the Respondent's real estate office, unannounced as was her prerogative, and asked to speak with Mr. Bohner. He was not present at the time and she asked Mrs. Bohner, who was present, to produce the Respondent's books for the brokerage's escrow account, which she did. In the course of their conversation, Mrs. Bohner identified herself as being in partnership with the Respondent and admitted to assisting him in the maintenance of the escrow account. When Ms. Thayer asked for the backup documents for the escrow account, these were produced. Ms. Bohner also provided Ms. Thayer with copies of the bank account she maintained. On inquiry, Mrs. Bohner said the deposits thereon were, in the main, representative of rental and security deposits from tenants on leases which Bohner Real Estate managed. Ms. Thayer asked about the large deposits made on May 3, June 7, and July 7, 1989. These were for $104,542.50, $50,000.00, and $4.600.00 respectively. In response, Mrs. Bohner indicated these were personal monies which came from personal sources and funds which had been put in that account because that's where they would get the most interest. They were not escrow funds related to the real estate brokerage. Ms. Thayer made an appointment to return to the brokerage office on February 23, 1990 to speak with Respondent. When she did so, Mr. Bohner accounted for the trust liability of $6,885.00 which existed on that date. This sum was verified with the bank by phone. The trust account had an overage of somewhat more than $881.00 which Respondent explained as accrued interest not removed from the account. Mr. Bohner admitted at hearing that he earned interest on the security and rental deposits he held in that account and used that earned interest to offset the low rentals he charged his tenants. He asserted, and there was no evidence to rebut this assertion, that the only security and rental deposits placed in that account were from tenants in the apartment building he and his wife owned personally. Neither he nor Bohner Real Estate managed or served as rental agent for any rental properties owned by others. It is so found. Ms. Thayer pointed out, and it is accepted as fact, that a broker is required to reconcile his trust account on a monthly basis and file a monthly reconciliation form which accounts for overages and shortages. Respondent admits he had not completed or filed these reconciliations because neither he nor Bohner Real Estate has a trust or escrow account into which client funds are deposited. He manages no property from which rents would be collected other than his own, and when he takes a deposit on a sale or transfer, a separate trust account is opened for that particular transaction with any interest earned going to the buyer. Petitioner showed, through the testimony of Ms. Casale, the bank records custodian, that the largest deposit in issue, that one in excess of $100,000.00, was the result of the maturity of a certificate of deposit that was transferred to the account in question. Respondent did not endorse the check for deposit or sign any deposit document. He submitted a letter from the bank chairman to support his thesis that he was not a party to the transfer, but the letter, admitted over objection by counsel for Petitioner, indicates the deposit was made by the bank's investment counselor who handled the transaction consistent with telephone instructions given her by the Respondent. This is a collateral matter, however. When Ms. Thayer completed her audit, she prepared and filed a report on which she indicated, inter alia, that the office met inspection standards and that the property management escrow/trust account was satisfactory. She noted an overage of $889.31 in the account and that it was an interest bearing account although the leases state it would be non-interest bearing. No deadline was given for the correction of this item. Mrs. Bohner admits that when she gave the apartment security escrow account to Ms. Thayer at her request and described it as a trust account, she was not thinking. In fact, and it is so found, neither Respondent nor Bohner Real Estate have a trust account for the business and have not had one for several years. She reiterates Mr. Bohner's assertion that the only money usually kept in the account referenced by Ms. Casale and referred to by Ms. Thayer, is money received as security deposits and last month's rental from tenants in their own building. In the absence of any evidence to the contrary, it is so found.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be entered in this case dismissing all allegations of misconduct by Respondents as outlined in the Administrative Complaint filed herein. RECOMMENDED in Tallahassee, Florida this 1st day of April, 1992. ARNOLD H. POLLOCK 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 1st day of April, 1992. APPENDIX TO RECOMMENDED ORDER The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: - 3. Accepted and incorporated herein. Accepted. - 7. Accepted and incorporated herein. Accepted and incorporated herein. First sentence accepted and incorporated herein,. Balance is not Finding of Fact but lore legal conclusion. Accepted and incorporated herein. Accepted and incorporated herein. FOR THE RESPONDENTS: None submitted. COPIES FURNISHED: Theodore Gay, Esquire Department of Professional Regulation 401 NW Second Avenue, Suite N-607 Miami, Florida 33128 Richard L. Bohner Bohner Teal Estate 205 East Osceola Street Stuart, Florida 34994 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate 400 W. Robinson Street Post Office Box 1900 Orlando, Florida 32802 - 1900
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint? If so, what disciplinary action should be taken against her?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: The Department is a state government licensing and regulatory agency. Respondent is now, and has been at all times material to the instant case, a licensed real estate broker in the State of Florida holding license number 0005609. She is 72 years of age. The money she earns as a real estate broker helps to supplement her retirement income. In the almost 40 years that she has been broker, the only complaint that has been made against her in connection with the practice of her profession is the complaint that is the subject of the instant case. Peter Rettig is a longtime acquaintance of Respondent's. He too is a Florida real estate broker. Rettig is the operating and qualifying broker for La Costa Real Estate, Inc. In September of 1993, as a favor to Rettig, Respondent agreed to act, without compensation, as Rettig's escrow agent. Thereafter, Rettig deposited trust funds received from his buyer/clients in the "Mary A. Belotto Escrow Account" (account number 3431110272) that Respondent had established at Barnett Bank. On various occasions from September of 1993, to July of 1994, Respondent, unthinkingly, appropriated a portion of these funds for her own personal use, but acted swiftly to replace the appropriated funds with her own personal funds. As a result, no one was actually harmed by her actions. During this period of time, Respondent was suffering from severe emotional distress and a resulting inability to think clearly due to the death of her husband and the subsequent death of a close friend who had provided her with needed assistance and support following her husband's death. On January 18, 1995, Edward Gruskin, an investigator with the Department, conducted an office inspection/audit of La Costa Real Estate, Inc. and the "Mary A. Belotto Escrow Account." The inspection/audit revealed that Respondent had engaged in the conduct previously described in Finding of Fact 11 of this Recommended Order and that, in addition, she had failed to prepare and sign monthly reconciliation statements for her escrow account. Respondent now realizes that she erred in engaging in such conduct and in failing to prepare and sign these reports. She has apologized for making these errors and has promised, with apparent sincerity, not to repeat them in the future.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is hereby RECOMMENDED that the Commission enter a final order finding Respondent guilty of the violations alleged in the Administrative Complaint and fining her $250.00, issuing her a reprimand, and placing her on probation for a period of three years for having committed these violations. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 14th day of September, 1995. STUART M. LERNER 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 14th day of September, 1995. APPENDIX TO RECOMMENDED ORDER The following are the Hearing Officer's specific rulings on the findings of fact proposed by the parties in their proposed recommended orders: The Department's Proposed Findings 1-2. Accepted and incorporated in substance, although not necessarily repeated verbatim, in this Recommended Order. 3. Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer. 4-5. Accepted and incorporated in substance, except for 5c. and 5d., which have not been incorporated in this Recommended Order because they would add only unnecessary detail to the factual findings made by the Hearing Officer. Respondent's Proposed Findings First unnumbered paragraph: To the extent that this proposed finding states that Respondent is 72 years of age and has been a real estate broker in the State of Florida for almost 40 years, it has been accepted and incorporated in substance. Second unnumbered paragraph: Accepted and incorporated in substance. Third unnumbered paragraph: Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer. Fourth and fifth unnumbered paragraphs: Accepted and incorporated in substance. Sixth unnumbered paragraph: Rejected as a finding of fact because it is more in the nature of argument than a finding of fact. Seventh unnumbered paragraph- First sentence: Accepted and incorporated in substance; Second sentence: Rejected as a finding of fact because it is more in the nature of argument than a finding of fact. COPIES FURNISHED: Daniel Villazon, Esquire Senior Attorney Department of Business and Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Mary A. Belotto 1571 Southeast 23rd Avenue Pompano Beach, Florida 33062 Henry M. Solares, Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Lynda L. Goodgame, Esquire General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact The Department rules on the Proposed Findings of Facts and Exceptions, submitted by the parties as follows: APPLICANT'S PROPOSED FINDINGS AND CONCLUSIONS Applicant's Proposed Findings numbers 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 23, 24, 27, 28, and 29 are accepted to the extent that they are not inconsistent with the Findings of Fact rendered by the Hearing Officer. Applicant's Proposed Finding number 22 is accepted to the extent that factual matters are discussed. However, to the extent that it suggests that "public convenience and advantage" will be promoted by establishment of the trust company, the Department rejects this conclusionary statement as inconsistent with the Department's conclusion as to this criterion based on the reasons as discussed in paragraph three (3) contained in the Conclusions of Law of the Final Order. Applicant's Proposed Finding number 25 concerning the telephone survey has been dealt with in the Hearing Officer's Finding number 13, as adopted by the Department. Applicant's Proposed Finding number 26 concerns several counter- arguments addressing contentions proposed by the Protestants. As to (1) "Concentration", (2) "Dual Banking", and (3) "Siphoning of Capital". To the extent that no significant findings of fact, if any, were premised on these contentions, there is no necessity to respond. A portion of the Hearing Officer's Finding of Fact number 10, was excepted to, concerning the "concentration" argument, and will be treated below in paragraph 9. Number 4 concerning injury to existing institutions has been dealt with in the Final Order in paragraph 4 of the Conclusions of Law, as to the "reasonable promise". The Applicant's Conclusions of Law numbers 1, 4, 5, 6, 7 are accepted. Numbers 2, 3, and 8 are rejected as contrary to the Conclusions of the Final Order. PROTESTANT'S (FLORIDA BANKERS ASSOCIATION) PROPOSED FINDINGS Protestant's Proposed Findings numbers 1, 2, 3, 4, 5, 13, 18, 19, 20, 21, 23, 29, 30, 34, and 35 are accepted to the extent that they are generally consistent with the Hearing Officer's Findings or with the Final Order. Protestant's Proposed Findings numbers 6, 7, 8, 9, 10, 12, 14, 15, 16, 17, 22, 24, 25, 26, 27, 28, 31, 32, 33, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, and 47 are rejected to the extent that they are inconsistent with the Hearing Officer's Findings or with this Final Order, or are otherwise irrelevant or immaterial. APPLICANT'S EXCEPTIONS The Applicant's Exceptions numbers 1, 2, 3, 4, 5, 6, and 10 concern Proposed Findings that were not specifically referenced in the Hearing Officer's Report. However, they are generally consistent with the Hearing Officer's Findings and have been accepted by the Department to the extent that they are consistent with the Final Order. Exception 7, concerning Proposed Finding number 18, has been discussed above in paragraph 1. Exception 8, concerning Proposed Finding number 22, has been discussed above in paragraph 2. Exception number 9, concerning objection to portions of Finding of Fact number 10, is rejected. The first sentence of the Finding may speak in terms of "national trust business", but is viewed in terms of trust business throughout the nation. In no wise does it imply that there is a national market for personal trust business. The language should be viewed in the context of the overall finding. Exception number 10 is duly noted and reflected in the Final Order. Exception number 11 has been addressed in the Final Order in paragraph 4 of the Conclusions of Law as to "resonable promise." CERTIFICATE OF SERVICE I HEREBY CERTIFY that the original of the foregoing was filed with the Clerk of the Department of Banking and Finance and that a true and correct copy of the foregoing was sent by Certified U.S. Mail, Return Receipt Requested, to: Thomas J. Cardwell, Esquire, Post Office Box 231, Orlando, Florida 32802; Robert A. White, Esquire, Aubrey Kendall, Esquire, and Paul Brenner, Esquire of the firm Mershon, Sawyer, Johnston, Dunwoody and Cole, 1600 Southeast First National Bank Building, Miami, Florida 33131; Howard A. Setlin, Esquire, 1111 Lincoln Road Mall, Suite 600, Miami Beach, Florida 33139; Bruce Culpepper, Esquire, 350 East College Avenue, Tallahassee, Florida 32301; Robert Asti, Esquire, 2400 First Federal Building, Miami, Florida 33131; Richard R. Paige, Esquire, Alfred I. DuPont Building, Miami, Florida 33131; Charles Cane, Esquire, 801 Hallandale Beach Boulevard, Hallandale, Florida 33009; and G. Kenneth Kemper, Esquire, 9999 N.E. 2nd Avenue, Suite 200, Miami Shores, Florida 33138, on this 24 day of January, 1980. FRANKLYN J. WOLLETT Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32301 (904) 488-9886
